pages: CityCouncil/2007-09-18.pdf, 3
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CityCouncil | 2007-09-18 | 3 | the right track; peers provide feedback on the City's strategies; the asset managers have done quite well; he is more comfortable and confident with the money being in professional hands; the current environment is volatile. Mayor Johnson inquired whether the City has a multi-year Contract [with the asset managers]. The City Treasurer responded in the affirmative; stated the Contract can be terminated, and the City can replace the asset managers at any time. Vice Mayor Tam stated that municipalities are ultra conservative with investments; the total rate of return is 3.3%; most pension funds have a 6% to 8% return; inquired what is the main difference in the spread of the portfolios; further inquired whether the City has opportunities to earn more money. The City Treasurer responded an Orange County manager was involved in some esoteric strategies that ended pushing Orange County into bankruptcy stated the City's investment parameters are very restricted; the City can invest in 0-5 year maturity bonds ; many pension funds invest in long-term bonds, which pay a higher interest rate; the City tries to provide a benchmark that is relevant to what can be done; bonds benefit from bad financial news and gain value when interest rates go down; interest rates go down when the economy is slow; the City has a high quality portfolio; what is going on today does not impact the City's portfolio but might impact finances in other ways. Councilmember deHaan stated the flattening hurts because the budget anticipates growth. The City Treasurer stated the portfolio will generate enough income only if the budget grows at the rate of inflation; concerns are with the revenue side; more will be known in the next couple of months. Vice Mayor Tam moved approval of the staff recommendation. Councilmember Gilmore seconded the motion, which carried by unanimous voice vote - 5. ( 07-450 ) Recommendation to approve the agreement relating to Combustion Turbine Project Number One. Councilmember deHaan inquired where the combustion turbine is Regular Meeting Alameda City Council 3 September 18, 2007 | CityCouncil/2007-09-18.pdf |