TO: Chair and Members of the Investment Advisory Committee
THRU: Trang Nguyen, Finance Director
FROM: Garrett Smith, City Treasurer
1. Subject
title
Investment Portfolio Update for October, November, and December of 2025.
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2. Summary
These reports provide a compilation of three-monthly Treasurer’s Reports to the City Council for the second quarter of Fiscal Year 2025-2026. Included in the reports are an economic update and detail of the City’s portfolio holdings, monthly transactions, and consolidated information on all cash and investments.
3. Recommended Action
recommendation
Receive and file.
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4. Discussion and Background
The City’s Fiscal Year 2025-26 Statement of Investment Policy has been adopted by the City Council of the City of Orange on 8/12/2025 as Resolution 25-0474 and is in accordance with the California Government Code Sections 53600 et seq. Per the Investment Policy, three monthly investment reports are to be submitted to the City Council within 45 days following the end of the quarter.
As required by the City’s present Investment Policy, the City Treasurer’s report delineates all investments made by the City Treasurer for the City, its special funds, and the Successor Agency funds, by investment type and by broker.
The monthly Compliance Report certifying compliance of all investments with both the Government Code and the City’s Investment Policy is included.
The Investment Portfolio Statement accurately reflects all investments held by the City and its agents as of the end of the month. A summary of Treasurer’s cash and investments is also included.
Summary of Cash and Investments:
The cash and investment report provides a summary of the cash and investment accounts held by the City as quarter ending December 31, 2025. As of December 31, 2025, the book value of the City’s total investment portfolio was $159,899,724 million, of which $92.8 million, or 58%, was managed by Chandler Asset Management (Chandler), the City’s investment manager. The remaining balance $67.1 million of the portfolio was managed by City staff of which $41.2 million was invested in the Local Agency Investment Fund (LAIF) and $25.9 million held in the City’s operating checking account.
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Cash & Investments Balance₁ |
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Chandler Investments: |
$92,776,109 |
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LAIF, City: |
$35,538,464 |
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LAIF, Successor Agency: |
$5,646,952 |
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Wells Fargo Bank: |
$25,938,199 |
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Balance at 12/31/2025 |
$159,899,724 |
(1)Represents the bank balance. Includes operating cash and investments (valued at cost). Does not include deposits with administrator, impress cash, fiscal agent cash and investments, and deferred compensation.
Pursuant to California Government Code Section 53646(b)(3), the City certifies that the reported cash and investment balances are sufficient to meet anticipated expenditures for the next six months.
In summary, cash and investments as of December 31, 2025 totaled just under $160 million. The City’s balances by fund are presented in the table below.
The City invests a large portion of its portfolio in Federal Agency Securities and U.S. Treasury Notes due to safety and preservation of capital to prevent loss. The City also invests a portion of its funds in LAIF which offers same day liquidity. Additionally, the City invests in high quality corporate notes, asset backed securities, and supranational agency bonds to obtain higher yields and add diversity to the portfolio. As of December 31, 2025 the City investments consisted of the following and are compliant with the Investment Policy:
Cash Transactions:
The City’s total cash increased by about $15.5 million from the last quarter’s total to just under $160 million largely from the annual property tax disbursement received in December. Total cash fluctuates over the course of the fiscal year due to cyclical events. All cash disbursements are within the FY 2025-26 budget and all check registers are presented to the City Council monthly.
Treasurers’ Comments:
Over the last quarter, discussion started on the possibility of changing investment strategies / methods - i.e. more in LAIF, more or all in the money market (which is not allowable), invest inhouse without an advisor and potentially switching advisors to name a few. A special meeting in December was not attainable, I think it would be of benefit to discuss where council sees the investment side of things going and hash out any inconsistencies to eliminate confusion on the dais, with staff as well as with the community. I will be sure to reiterate allowable investments versus non allowable in my next live report.
Q2 FY26 was right in line with the Chandler benchmark. We saw some shift in Treasury notes rising to 41% from 35% and Corporate notes dropping to 25% from 27%. Additionally, Agency dropped from 19% to 14%.
The investment portfolio as a whole, is in a healthy state and in full compliance with city and state regulations. I will continue to look for options on maximizing our returns.
In addition to the investment portfolio being in good standing, we also saw dividends on our Wells Fargo side. The interest rates do fluctuate on a monthly basis - the values are below for reference: (average of 3.76%)
October 2025 = $37,369
November 2025 = $40,068
December 2025 = $60,779
TOTAL = $138,216
5. ATTACHMENTS
• Chandler Monthly Investment Report October 2025
• Chandler Monthly Investment Report November 2025
• Chandler Monthly Investment Report December 2025
• Chandler Investment Report for the Period Ending December 31, 2025