REPORT TO COUNCIL
SUBJECT
Title
Adopt the City’s Investment Policy for Fiscal Year 2026/27 and Receive the Annual Performance Report for Fiscal Year 2025/26
Report
BACKGROUND
The City Council first adopted a policy governing the investment of City funds on July 30, 1985. This policy is reviewed and updated annually.
To support the management of an increasingly complex investment environment and growing portfolio, the City has contracted with Chandler Asset Management, Inc. (Chandler) since 2018. On August 11, 2026, the Council approved a three-year services agreement with Chandler and authorized the City Manager to execute up to two one-year extensions if costs and services remain acceptable to the City (RTC No. 26-0659). Chandler manages the long-term portion of the City’s portfolio, while staff manages the liquid/short-term portion. Chandler has also advised the City on annual investment policy amendments to adapt to changing laws and best practices.
EXISTING POLICY
State law (Government Code 53464(a)(2)) requires the legislative body of a local agency to annually consider changes to its investment policy at a public meeting.
Council Policy 7.1.2 – Investment and Cash Management. The Investment Policy shall be reviewed and adopted annually within 120 days of the beginning of each fiscal year to ensure consistency with the City's investment objectives, conformance to current laws, and responsiveness to financial and economic trends.
The key provisions of the existing Investment and Cash Management Policy are as follows:
Safety – Safety of principal is the foremost objective of the investment program. The City’s portfolio is diversified by investment type, issuer, and maturity date. Diversification is required to minimize exposure to market and credit risk. The investment policy outlines the percentage of funds that can be allocated to each investment type and issuer, and the maximum maturity of each investment. The policy allows a maximum maturity of ...
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