Staff Report
PREPARED BY: STEPHEN CONWAY
FINANCE DIRECTOR
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 08/15/2017
ITEM NO: 4
DATE: AUGUST 4, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: RECEIVE THE FOURTH QUARTER INVESTMENT REPORT (APRIL THROUGH
JUNE 2017) FOR FISCAL YEAR 2016/17.
RECOMMENDATION:
Receive the Fourth Quarter Investment Report (April through June 2017) for Fiscal Year
2016/17.
DISCUSSION:
As of June 30, 2017 the Town’s weighted portfolio yield of 1.25% continues to outperform the
Local Agency Investment Fund (LAIF) yield of 0.98% (difference of 27 basis points). As a result,
staff continues to replace matured or called investments with similar investments with respect
to maturity and credit quality. For the quarter, the Town’s weighted average rate of return
increased 27 basis points (0.27%) from 0.98% to 01.25%.
The meeting of the Federal Open Market Committee (FOMC) concluded on June 14, 2017 with
the generally anticipated decision to increase the federal funds rate 25 basis points from 1.0%
to 1.25%. The FOMC statement pointed to strengthening labor market conditions,
improvements in household spending, and business fixed investment. In July 2017 Chairman
Yellen stated that because of the continuing evolution of the economy, FOMC expects to
continue its strategy of gradually raising interest rates over time to achieve two primary goals:
maximum employment and stable prices.
Because of the rising interest rate forecast, the Town’s investment strategy continues to focus
on the purchase of new short-term (two years or less in maturity) investments as the rewards
for longer term investments (three to five year maturity) do not have adequate spreads to
justify the risk of holding longer term maturities.
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SUBJECT: RECEIVE FOURTH QUARTER INVESTMENT REPORT (APRIL THROUGH JUNE 2017)
FOR FISCAL YEAR 2016/17
DATE: AUGUST 4, 2017
S:\COUNCIL REPORTS\2017\08-15-17\Investment Report\Staff Report - Investment Report 4th Qtr FINAL.docx 8/10/2017 12:43 PM SLL
CONCLUSION:
Staff recommends that the Town Council receive the Fourth Quarter Investment Report (April
through June 2017) for Fiscal Year 2016/17.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Fourth Quarter Investment Report for FY 2016/17 (April through June 2017)