REPORT TO COUNCIL
SUBJECT
Title
Adopt the City's Investment Policy for Fiscal Year 2025/26 and Receive the Annual Performance Report for Fiscal Year 2024/25
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, Council approved a three-year contract with Chandler Asset Management, Inc. (Chandler) with an option to extend for two additional years on April 24, 2018 (RTC No. 18-0281). On July 30, 2024, the Council approved an additional two-year contract extension (RTC No. 24-0703).
Chandler investment managers have been managing City investments since July 2018. They have 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 consider changes to its investment policy at a public meeting.
Council Policy 7.1.2 Investment and Cash Management requires that the Investment Policy be reviewed and adopted annually within 120 days of the beginning of each fiscal year. This review ensures consistency with the City's overall investment objectives and that the policy conforms to current laws and is responsive to financial and economic trends.
The key provisions of the existing Investment and Cash Management Policy are as follows:
1. Safety of principal is the foremost objective of the investment program. The City's portfolio is diversified by type of investment, issuer, and maturity date. Diversification is required to minimize exposure to potential market and credit risk. The investment policy outlines the percentage of funds that can be allocated to each investment type and issuer, as well as the maximum maturity of each investment. The policy allows a maximum maturity of seven years for U.S. Treasury, U....
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