Yes, we are.
Recording in progress.
I'm going to send an interference to a meeting today.
I'm going to say it for 22nd, like I said, it's 4 o'clock.
But I thought, would you please take their roll?
May I present this?
Present.
Vice Mayor Perros-Walton?
Present.
And Council Member Aguilar will not be present today.
And would you please make that motion?
After each agenda item is presented, the mayor will ask for committee member comments and
then take public comment.
you will have two minutes for your comment. The combat manner will appear for the convenience
of the speaker and attendees. This is one time we will take our first item item 2A to review the
proposed changes to the fiscal year 2020 masterpiece schedule. I think we have finance assistant
finance director Subba here. There you are. The floor is yours. Yes, thank you. I'm Felicia
Mrs. Silva, Assistant Finance Director, Mayor Gonzalez.
I need to be here to present the fiscal year 2027
proposed masterpiece schedule update.
We do bring this forward every year
to update the Council approved fees
while we ensure, you know, cost accessibility
while trying to maximize cost recovery.
Looking at the background of the authority
to be able to charge the fees,
We're looking at Proposition 26,
California Government Code 66014
and the key point here is we are allowed to charge fees
for cost recovery of services, but reasonable fees.
So always looking at the estimated reasonable costs
for our fees.
And additional authority, we have Proposition 218.
We see this governing our bees associated with our utilities,
such as wastewater and sewer water.
We also have development impact bees,
which are bees that are designed
to mitigate the impact of development on the community.
So, for example, we have our park acquisition
and improvement bee and traffic mitigation bees,
or impact bees.
looking at where we've been and where we're headed.
We did do an in-depth fee study
that we presented to Council last year.
This presentation to Council with proposed fees
builds on that fee study.
It also incorporates any fees
that were approved throughout the year
to give us the quote-unquote master fee schedule.
Typically, again looking at trying to make sure
that we're balancing cost recovery and accessibility,
we adjust by inflation for most of our services.
For fees that are related to construction related activities,
we have what we call the construction cost index
for the Bay Area that we use, which is set at 2.8%,
and then we also have some fees that are governed
by state statute or municipal code that may have a cap
or may other lies be inflated based
on that governing information.
And then some other fees may be updated
regarding market alignment and or direct costs
depending on, again, looking at our estimated reasonable costs
and trying to maximize cost recovery when we can.
I do wanna point out that the revenue impact
associated with the recommended fees
included in a proposed fiscal year 2027 mid-cycle budget. In addition to fees we
also have three taxes that are by Chapter 2 of the Municipal Code allowed
to be adjusted for inflation and that's our business license tax, our emergency
medical services tax, as well as our emergency communication systems access
tax. Again looking at that CPI index for our region in the Bay Area, we're
proposing a 3% CPI increase, and what we're asking from finance committee
today, we're asking that finance committee recommend that the Master B
schedule be presented to city council for adoption by resolution, and we're
also recommending that the 3% CPI increase that we're proposing for those
three taxes be presented to City Council for adoption of ordinances and with that
I'm here to answer any questions and we also have some of the departments here
for any questions regarding specific fees.
Do we have any questions?
So we'll pass the floor over to Vice Mayor.
Thank you for all your work into getting us here today.
I wanted to focus my first round of questioning on parking fees.
And do we have the City Manager's Office here to discuss parking?
Yeah, he's, oh, he's always right, they're coming out.
Thank you.
And I know that the parking, the new parking fees,
and it has all been revamped due to usage
and kind of just bringing it up to,
well I don't know when was the last time
if they were reviewed, but what we have here today,
I did want to elevate some of the concerns
from the downtown businesses that they came to council,
particularly around the east 14th delineation.
The east side of east 14th of the best building
is having parking meters, but not the other side.
I do notice that there are some,
the zones have been changed
and the hour maximum has been changed.
Can you talk a little bit about
The fast building, walk three, downtown core, the one, two, three, there's two downtown
cores and a downtown corner of the downtown south.
Can you tell a little bit about what that, what's the delineation of those zones?
Certainly, there is a map available on marketsell.com that has kind of a map of overview of where
those different areas are.
With regards to the best billing, I can talk about that, and I have to provide some information,
as well as the relationship of that parking lot to the west side, because as you have
correctly noted, there's been some feedback from the business community in highlighting
those distinctions.
And so what I would say is the west side, the reference as I understand it, is related
to basically the parking lot by the Safeway and the Washington Plaza, the reason that
those stalls are free is because of the existence of what is known as a morea, which is an acronym
Essentially, it's a historic agreement between the city of Santa Ana and the Regency Center because that many decades
It's been a long time ago in a very different world and in that document
Basically establishes that we're prohibited from charging for parking in those areas in perpetuity
And there's no sunset date to it. This is the legacy a legacy document
It goes back before any of us through here or involved with the city of Santa Ana. We're going to see so that's a challenge
These are the the best building parking lot, which is city-owned is not subject to the Mireya
That is currently charged at a dollar an hour
currently
and which is
It was actually modified and in deference is not a feedback from the business community. We are also
actively evaluating that lot in particular and in coordination with
a city manager and others to explore that rate going forward and I would go to the fee schedule here of course
you know, essentially setting a ceiling for lack of a better term and so based on data and usage and analysis
Which is ongoing. We do have the authority to modify that further
actively explore how to say we're actively exploring what's going on with the best building parking lot and
Where do you go from there related to that? We also conducted a
Public meeting with
over a dozen, maybe 15 to 18 business owners
who self-identified as business owners
with concerns about downtown parking.
We ran them a few weeks ago.
We allowed them to bear their concerns.
We provided insights and information
on the broken program in general.
And then we agreed that they were going to kind of
collaborate with themselves and one of themselves
following the meeting, and they sent a view
that we provided, and we are deliberating
entirely on our side as well.
And we're gonna regroup again with the dinosaurs
for other modifications to the program
to further address the concerns they have.
I would say just from a philosophical perspective,
that my philosophy has informed that for most fees
that are included in each of the packets tonight
is the notion that basically,
and this is consistent with most cities all over the area,
including Oakland, including Berkeley,
including Alameda, and San Francisco,
the downtown core where we call that
kind of premier parking area,
that is where it's important to have the East collective
to ensure basically that the marketing fund is solvent
and is no longer requiring the several hundred thousand
dollars a year to hang in the South City
from the general fund and consistent with the
finance committee's earlier direction
and the council's earlier direction
to ensure that that budget is balanced.
And so we're basically ready to say is this new paradigm
And it was consistent with that feedback we brought now
after significantly on our work over the past year or two.
We've now brought that budget back in the black,
so no requires that subsidy.
And these fees that are outlined in the proposal
are tonight are a part of that, I guess a bigger package
for lack of a better term.
And you answer your question about the zones
and how there has been a modification.
A lot of that is based on analysis of vacancy rates
and where people are barking and kind of maybe
kind of the idea with this best practice that the down is not the core. The core
that's closest to the main business area should be the most, you know,
it's product that I turn should cost the most. And then as you get further out to
the outside areas that it costs less. With that said, the best building lot,
because of its unique nature of being an off-street area as opposed to on-street parking,
we are focusing on that. Acknowledging that there's, you know, a number of
spaces that are typically available there, but we're also kind of at the beginning
being saved as right now with this new paradigm.
So we're collecting that data right now,
and typically, that's why this is the look
at these things for at least a year,
to observe how the turnover is,
how people adapt it to the new race,
and we have the ability to optimize that over time,
or modify it, and as I said, these are cap,
and they're going to be caps, and so to the extent,
you know, demand is low, that's an opportunity,
perhaps you tweak the race, et cetera.
I don't know if that addressed anyone,
or is it a long-winded response, but does that capture that?
It doesn't, I appreciate the context.
I'll leave the parking fees there.
Thank you so much.
I don't have any other questions on the fees.
I don't know, they are, we have any comments.
I just have one question before you take that one.
There was a reference,
and it might have just been a contextual reference,
reference to storm water,
and I was looking through the presentation
to see if I could find one.
Is there a change to stormwaterness?
There is no change that is presented as part of this new study.
If so, it would come separately under a 2018 notice.
Thank you.
Okay.
With that being said, can we go to public comment on the item?
You did not receive any comments.
Thank you.
So we'll close public comment on the side of any discussion.
Okay.
So I'll turn to the council member, vice mayor.
are you comfortable providing a recommendation
to the full city council
that they would vote with stature at the nation.
Okay, so, we are, like the census living,
so we're the city council with unanimous agreement
that's present to accept stature at the nation.
So, at this time, we'll move to item 2B.
As a board, we've got a finance director,
I'm here to introduce the item and bring anyone forward with you.
Great.
Thank you, Mayor and members of the committee.
The item that we're going to discuss this afternoon in the court for the 2025 calendar
year investment report.
So that was through December 31, 2025.
This afternoon we have a meet spike with P.S.M.A.M who is the managing director with P.M.M.A.
with P.M.M.A. who managed the city portfolio.
And so I'm going to turn it over to Monique.
We have two slides and then have opportunity
answering questions that the committee may ask.
Good afternoon, thank you so much for having me.
We're really excited to deliver this report to the committee.
this is the first full quarter of performance
that we're reporting on.
I'm so excited to tell you what we've been working on
with staff.
So I'm going to start by just making a couple of comments
about the economy at large and using the portfolio
that we manage on behalf of the city as a backdrop.
The fourth quarter of 2025 had a lot of major events.
Primary reports was that the U.S. Government
shut down for 42 days during the quarter between October 1st and November 12th.
The impact of that significantly relates to the market what is halting the
collection of key economic indicators that require the federal reserve who sets
the overnight target rate to rely on survey-based and anecdotal evidence and
private tabular reports to inform their decision-making. A couple of other things
during the quarter, the labor market softened a bit, the unemployment rate
edged higher, ending the quarter at 4.4%, and inflation moved lower, but they
remain above the Fed's 2% target. So practically, although that resulted in this
event making a decision during the quarter to deliver two 25 basis point cuts
to the Fed's target rate, lowering the Fed's target range to 3.50
to 3.75 percent. During the quarter, interest rates on maturities under 10
years essentially lowered and longer term maturities increase. Our activity
during the quarter was focused on a few things against this backdrop. One, working
with the city to rebound the liquidity portion of the portfolio. With the core
portion of the portfolio, we helped move approximately 8 million dollars from the
portfolio to equity investments to show up the city's liquidity position. We also
worked to diversify the portfolio into different sectors allowed by the city's
investment policy. We made significant movements to sectors like the corporate
sector, other sectors allowed by your policy including certificates, deposits,
commercial mortgage backed securities which were federal agency securities as
well and some commercial paper. So really diversify again into some sectors a lot
higher policy and reduce the US Treasury allocation to fund those purchases. The
portfolio yield helps a 4.16 percent which is a very attractive yield
versus the market. We are managing the city's portfolio against a benchmark
which is the zero and five year treasury index.
If you look at the duration distribution
in the bottom right, which is very similar
to a maturity distribution,
you can see how the portfolio stacks up to the benchmark.
On an average, we're slightly longer
than the benchmark duration,
but really investing around two years
on the average for the city.
The portfolio credit quality remains so late
and as we diversify into those other sectors
we stayed with very high quality investments.
In terms of return for the portfolio,
we're really happy with the first quarter performance.
We were essentially two basis points
ahead of your benchmark.
Since we are through the first quarter,
we do have another update, excellent performance
for the first quarter as well.
We have exceeded benchmark performance
and now you tie the two quarters together
for about 10 basis points ahead of the benchmark,
so in a really, really good position.
Total dollar return for the border was $1.89 million.
That includes $1.6 million in real interest earnings,
as well as about $29,000 in market value appreciation
for the securities in the portfolio.
The last slide I had speaks to some of the things
that we are considering in the market,
and I want to preface this by saying
that these views are as of the end of the fourth quarter.
And what a difference a couple of us makes.
So I'll make some comments about where we sit today.
I'd like to direct your attention
to sort of the color coding.
In typical fashion, green generally is good,
red generally means bad.
And this isn't necessarily that this is horrible.
It's more our views, our outlook on these various categories.
So monetary policy-wise, I think the end of it
who were fairly probabilistic, be expected to seize the moderate press in 2026 and 2027
based on where the market was going at the time, but one thing that hasn't been that
positive in the U.S. has been consumer behavior and consumer spending, so those are fairly neutral.
Someone asked you to pause for just a second.
If I had another Council Member here, I'd be able to continue.
That's a great one.
Thank you. Thank you for pausing. We're back.
Thank you.
Consumer spending. I'm going to jump around this a little bit.
Consumer spending has been the, you know, really foundation of the economy for the past couple of years
and still has been open in the fourth quarter
and in the current quarter.
We're seeing significant spending
that continues to drive the U.S. economy.
And that's something that the Fed is taking into account.
And I'd like to make some notes on the first quarter
of this year, because as I mentioned,
what a difference a couple of months make.
After the end of the fourth quarter,
geopolitics has really overtaken macroeconomic
fundamentals as the market worker focus.
At the end of the year, we expected
to see two more rate cuts, perhaps in 2026, maybe
1 in 2027.
The expectation for that has essentially
disappeared as the Fed travels with the implications
from the conflicts in the Middle East.
Those are basically influencing near-term inflation risks.
But one of the things that's really important about that
There's nothing the Fed can do about the conflict in the middle of use and so what that really means is their
Policy with regard to rate changes is on hold and so that resolves itself
So during the first quarter this year
They did not make any moves in regard to interest rates and rates have been in a range of 3.5 to 3.75 percent
at the bottom of the curve
The good news is that the two year area that per river investing on behalf of the city on average has risen by 32
Basis going to start in that same period
So we've been able to invest in the first quarter and some really higher yielding investments and taking advantage of those great movements
We've continued our strategy of diversifying
portfolio into the different sectors allowed by your investment policy and you know these
regulators, labor market, inflation, those have gotten a bit softer since the board, but again consumer spending has held strong,
so they're still fairly positive. And we're waiting to see what that is if this issue
in the Middle East resolves itself. I think it's still a view, for the most part, from economists and market participants,
that this is a temporary issue, that it resolves quickly, should not have lingering effects on the
information story for the long term.
So I'll pause there for questions
and perhaps go back to the portfolio exhibit as an anchor.
It's okay, so vice-parents,
questions or lessons at first?
Okay, question number one, the benchmark.
Can you tell me what that means?
Yeah, that's a great question.
So I would consider the benchmark a proxy
for investment returns essentially
and investment characteristics.
The benchmark that we utilize in consultation with staff
is the zero to five year US Treasury index.
Practically what that is is it's a basket or holdings
of all the US Treasuries in the market,
every single one of them with a maturity between
zero and five years.
And so using that basket of securities as a proxy,
we can look at the maturity range of the investments
in that category that are treasuries.
We know that the duration of that category.
And so when we compare the portfolio to that benchmark,
what we're really saying is,
we don't want the city's portfolio
to be too far afield of this benchmark
in terms of duration and maturity characteristics.
It is a U.S. Treasury index,
meaning it only comprises U.S. Treasuries,
because that gives us a really clear picture
of the additional value we're getting
or investing outside of the Treasury sector,
vis-a-vis diversifying into corporate notes,
commercial paper, and other types of securities.
Okay, so just to understand,
our portfolio has
28% of its value in securities or in a year of duration.
Whereas this is, I think it's interesting,
bonds that would mature in less than a year or key bills.
Yeah.
How about 26% of the benchmark.
Yeah, I would continue the first part of your sentence
by saying whereas in the Treasury market 26% of the US Treasury market with
maturity between zero and five years is in the zero to one year category in terms of
duration less than a year. So a full last sentence. Of the US Treasuries with
maturities under five years 26% has a duration less than a year. You're talking
the entire flow to the system. So this benchmark represents all the U.S.
Treasuries with maturity under five years. Okay so the median security is less
than two years. And for that benchmark of conceptually risk-free assets its
average returns at the 3.76 in the north. Well these these portfolios is these
portfolio statistics in the top left represent the city's portfolio. So the
portfolio has a yield at cause of 4.16 percent and that tells you that you held
all the securities until they're maturity you don't do anything with the
portfolio, you will have earned 4.16%. The Yield App market tells you what a third-party
buyer would yield if they purchased your portfolio from you today.
I guess what I'm curious about is if I had just invested in this benchmark, what would
my return be?
So the return for the benchmark is represented on this page.
And this is the return over the border.
The portfolio market value earnings at the top
don't represent benchmark earnings.
It's just what the portfolio earned.
That interest plus the change in market value
translates into a total return number of 1.12%.
the benchmark over the same period returned 1.10%.
One of the things I do point out is that,
although it was a treasury benchmark,
a lot of volatility in the market had an impact on changes.
And so not only is the income track here,
but the market value change
in the treasury index is cracked as well.
And when the interest rates decline, market values rise.
And so we've seen a lot of market value
volatility pushing Treasury yields and returns higher over the period.
But this is a metric that you are going to look at when you're comparing the portfolio to the benchmark.
For comparison purposes over the first quarter of the year,
the city's portfolio returned 53 basis points over the first quarter, and the benchmark returned 43 basis points over the quarter, and that's
the quarter ending March 31st, 2026.
so that's not yet represented here because this is their fourth quarter returns.
So we can go back to the first slide.
So given the credit quality here in the Southwest quadrant, given this quality distribution,
What should we expect as the risk premium over the treasury index?
That is a great question.
So if we had the return or the market yield of the benchmark,
I could tell you that right away.
One of the things I will speak on,
and we included in our full quarter report in the packet.
It essentially helps you see what the excess returns are
over the period for various sectors.
So for example, during the quarter,
looking at various indexes, and we sort of adjusted it
because the target is zero to five, agency, ABS sector.
But during the quarter,
US Treasury is returned for one to five a year,
just to get a sense of the market.
5.74 for the year ending 12, 31, 2025,
whereas the corporate A to triple A index
returns 6.31% for the year.
Over the quarter, all of the sectors
for fairly even.
And so when we have a US Treasury return of 1.12,
the corporate index only returned to 1.19.
And that really reflects a lot of the volatility
about what was happening during the first quarter of the year.
And so we really like to look at risk frames
over a longer run framework, just to get a better sense.
And as I mentioned, I think the first quarter,
you start to see the benefit of that diversification.
One of the things I will point out
in terms of using securities other than treasuries
is that higher income premium that you get,
the additional income does help to shoulder
some of that volatility.
This past quarter there was positive market value gains
in the portfolio.
Some quarters you'll see negative market value gains.
Negative market value losses in the portfolio
and the higher income from the diversification
helps settle some of that volatility?
So, the short answer or the short,
just contextual reason of the question is that
I would never judge anything on one quarter.
That doesn't make any sense.
But to understand the risk premium
that we should be earning
because we're not in fully in U.S. Treasuries,
That's important, and that's totally model-of-all.
We can say, we should, given this risk profile on X percent
and N M L A and X percent and A minus,
so we should be able to have an estimate that we are going
to get 75 MIPS basis points above the risk-free.
Whatever that number happens, we don't know what it is,
but that's what finance experts will tell us, such as yourself.
And so that we can then as a council have an expectation of how we will do better or
worse as things evolve, not only the advanced piece of context.
In the past, one of the things that I struggled with is we were always beating benchmark.
I was like, okay, well, so what?
Well, of course we're beating benchmark because we're making riskier investments than benchmark.
And so I hope that we can get in the future as we continue this relationship is an understanding
of what we should be expecting, what the market tells us that we should be expecting and then
how performance is comparing to that and maybe some discussion about why, we were just reporting
weighted and such and such and that sector took a hit this quarter.
Thank you for that feedback. Mayor Gonzalez, perhaps next time, while we're close down,
we can do a deeper dive into some of the exhibits in the 40-year report. We talk about spread products,
sector spreads versus treasury as a baseline. I need to talk a little bit more about expected returns for
diversified portfolios and how we're covering the city's portfolio to continue to be a strong performer,
needs to be the broader market.
Okay, so let's go to your public comment on the sign up.
We do not receive any comments.
Okay, it's such an interesting topic.
Thank you very much for coming to join us.
And so at this point in time, we will move forward with
consider a recommendation to,
well we accept the investment report,
and then we're going to move the council,
that council head out this message report by resolution. You have yet as
consent of this president. At this point in time, I'm going to item 2C. Item 2C is the op-ed
trust, pension trust investment report to the end of last year with the Assistant Finance Director, Lucia Soto, who's here.
Thank you Mayor Gonzalez, members of the Finance Committee, Lucia Soto, Assistant Finance Director,
I'm the director here to present the calendar year 2025
or for report.
So this would be October through December 2025.
We're looking at our other post employment benefit,
also known as OPEB and pension trust investment report.
And these funds are held separately in trust
for those future benefits.
So it is different than the cash,
city's cash report that we just heard
from our other investment advisor.
And with that being said,
moving on to what we saw in the fourth quarter.
And it was a little sluggish.
We're looking at, for our OPEB trust,
we had earnings of 1.54%, about 370,000.
If we're looking at the calendar year,
much more favorable, 10.73%,
and returns of 2.4 million,
and inception to date a little over 5%.
Moving on to the pension trust.
Again, looking at Q4 calendar year.
So October 3rd, December 2025.
Or return on investment of about $688,000.
1.89% for the quarter.
One year return, 12.86%.
And then inception to date return of 4.64%.
So that being said, looking at, again, just at the quarter,
a little sluggish and looking ahead to Q1
in the next calendar year, the current calendar year,
so from January to March.
We are seeing that geopolitical conflict impact return,
so we would expect to see some negative returns,
but our investment advisor,
they're actively managing the portfolio,
And again, they have a long term view
that the market will correct
and we will continue to see more favorable returns
as we move forward in the calendar year.
And with that, happy to answer any questions you might have.
And this investment report we're just,
we're asking committee to accept the report.
You have a question that we have.
Sorry.
I'm sorry.
I just wanted to add a comment to this particular item.
to kind of set the stage.
It's something that we bring to you on a quarterly basis.
But we are planning the next Finance Committee in Maine
to bring forward a much deeper dive
on both the OPEC and the pension trust.
I think it's been a little over a year.
So I want to bring that item back for a deeper dive
on where we stand with both of those trusts
and strategies and ways that we want potential to use that,
either in the near future
or in the later term and then subsequently in June,
we are planning to bring forward for discussion
different ways in which we can amend our best strategies.
I know that's been a conversation as we've presented
these quarterly reports in the past.
So the next two finance committees will focus
more heavily on the city's pension and OPEB trust
and today is really just kind of an overview
the performance of the quarter ending December 31st, 25.
Thank you for asking my questions.
Oh.
No, they do have one other question.
Because as I'll also tie that into our CalPERS
unfunded liability, will we at that time,
or soon thereafter, be getting another report from CalPERS?
So I would recommend that we revisit that.
I think at the end of the summer or early fall after the updated actuaries are released
from CalPERS, it's typically in July or August that we receive that information and so once
we have that updated information which will incorporate the most recent returns on their
investments, I think it would be at the time to have a conversation and bring CalPERS here
to provide a presentation today.
And the last rule was approximately a few years ago, would it have been December to
If we could, at some point before that, talk about what it is that they'll be discussing
so that the presentation is not just a canned presentation, but it really helps us address
the questions that we have, that would be useful.
Yeah, we absolutely can have some of those conversations to try to be ready for that technical conversation.
So we're closing public comment on this item and you're asking us to adopt it, but there
was a distinction for this one.
We're not recommending it to the City Council?
No, this is for committee acceptance.
Okay, is that why a policy or how can you explain the difference to me?
and you want to? Both items are requesting that the council accept or speak to the committee
accept the report, the investment report that Monique Spikes provided where there are specific government codes that are required through council adopted by resolution, so that's why there's a little bit of a difference in that request and recommendation.
Okay, then I will add a question. I want to start with a second manager, but it may come to you very quickly.
Would it be good practice for the City Council to accept this as well?
Yes, the Council can accept this as well.
That wasn't my question. My question is, is it good practice?
Well, I don't like creating bureaucracy and headache, right? But if it's good practice,
That's why, if you don't know right now, I want to get back to that, that's fine too, but I think it's an important question is about governance.
I prefer to talk about that separately, because I think it's a deeper conversation.
Perfect, we'll come back to that later.
So with that, I think you have consensus from committee members, seeing that in us, you have consensus that we as a committee accept this.
Okay, so with that we are done with item 2c, moving to public comments.
Items that are not on our agenda, closing it.
Do we have any?
We do.
Closing it on item number 4.
Do you have any comments?
Okay, my comment is the second by the Seattle for 2b I think it was.
There was a discussion about changing the term structure to increase our liquidity.
That was a request to make us more liquid, and I didn't know if that was just an errant
comment or if there is any conscious decision to make us more liquid.
Thank you for that question.
There was a need in the end of the calendar year for an increase of liquidity for the city.
There was a number of changes that took place over the last couple of years in the investment strategy.
And so one in particular was investing in our portfolio with our previous investment manager.
And we were making certain payments to CalPERS on a quarterly basis.
We found it to be more lucrative and in a way to save the city more money to make the annual pre-payment
rather than a pesos into the portfolio. And so as a result, we are right-sizing our portfolio to match the city's budget needs.
PSM AM is a new
managing director for us for our portfolio.
We believe that the amount that is currently in the portfolio is the output amount
to allow us to have the equivalent of these
that we need at the time.
And I don't anticipate that we will liquidate any more funds
in that portfolio in the near future.
Okay, so with respect to that,
I would ask that we just have a brief 15-minute conversation
at some other point to better understand the details.
I understand the concept.
Right.
Because there's so much money involved,
I think it'd be useful to just flush out the details
a little bit.
and the second element of that,
so setting aside liquidity for the purpose
that was described, there's just a general comment.
It is we're holding funds, again, this is a lot of money,
as we're holding funds and we're setting
in our term structure that duration,
it strikes me, should at least somewhat mirror
what we, when we expect to use the funds.
And I'm unclear if that's consciously being done,
not being done, so if you want to discuss that a little bit
now, we can talk, take it offline,
but just that concept of how we're determining duration.
I appreciate the question.
I think we have a more in-depth conversation,
but just high-level comment here is that,
when we moved to PFM and we did change our strategy
from a zero to three year aspect strategy, to a zero to five.
With exactly the comment that you made
that we were trying to be thoughtful in our investments
that longer term duration investments had higher yields.
But wanting to ensure that we had funds available
should the city need them for we look what it means.
But I'm happy enough for the conversation
on how we came up with that mix in a online conversation
that wanting the record to reflect that we have changed our strategy for and everything.
Thank you.
That's all that I have on number four.
I think we were clear, correct?
It's our time of adjournment.
It is 4.45 and we are adjourned.