Finance Committee Agenda and Packet 2019 05 17

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City Council Finance Committee Meeting Minutes 04/22/19 Page 2 of 8 Finance Committee Member Lipton approved the April 1, 2019 meeting minutes as presented. PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA None. PRESENTATION FROM CHANDLER ASSET MANAGEMENT, INVESTMENT ADVISOR Ms. Julie Hughes from Chandler Asset Management, the City's Investment Advisor, presented to the Finance Committee an update on various economic indicators and on the performance of the City's investment portfolio. The key economic information provided by Ms. Hughes included: • No rate increases by the Feds are anticipated through year-end, though Feds are projecting one rate hike in 2020 • Global and Domestic economic growth has slowed due to various factors (trade disputes, recent government shutdown, and Brexit uncertainty), but with strong labor market, economy is still expected to grow 2-2.5%. • 2-year and 10-year Treasury yields declined; 10-year yield is lower than 3- month yield (inverted yield curve) and typically indicates recession, but economic forecasts do not call for a recession • The Unemployment Rate remained unchanged at 3.7% in March • The Consumer Price Index (CPI) increased 1.9% year -over -year in March • The Consumer Confidence Index eased with consumers less upbeat about the labor market • The Leading Economic Indicators (LEI) rose slightly in February following no change in January. The Gross Domestic Product (GDP) was revised down and growth is expected to slow this year to 2-2.5% Ms. Hughes reviewed the City's current Investment Portfolio and provided information on the portfolio objectives, strategies, and performance. These highlights included: • Our portfolio is benchmarked against the 2 Year Held -to -Maturity Treasury Index • Compliance with Colorado state law and the City's Investment Policy • Average Purchase Yield 2.30% • All City investments are in AA+ or Aaa quality investments • The City's investments have continued to perform above the compared index (2.40%), with a historical market yield as of 3/31/19 of 2.46% 3