TO: Honorable Mayor and Members of the City Council
THRU: Trang Nguyen, Finance Director
FROM: Garrett Smith, City Treasurer
1. Subject
title
Investment Portfolio Update for July, August, and September 2026
body
2. Summary
These reports provide a compilation of three-monthly Treasurer’s Reports to the City Council for the first quarter of Fiscal Year 2026-2027. 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.
end
4. Fiscal Impact
None.
5. Strategic Plan Goals
Goal 2: Enhance Economic Development and Achieve Fiscal Stability.
6. Discussion and Background
The City’s Fiscal Year 2026-27 Statement of Investment Policy was adopted by the City Council on August 11, 2026 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 September, 2026. As of September, 2026, the book value of the City’s total cash and investment portfolio was $149,416.260, of which approximately $111 million, or 74%, was managed by Chandler Asset Management (Chandler), the City’s investment manager. The remaining balance of just over $38 million was managed by City staff - of which $27.6 million was invested in the Local Agency Investment Fund (LAIF) and almost $10.5 million held in the City’s operating checking account.
|
|
Cash & Investments Balance₁ |
|
Chandler Investments: |
$111,293,532 |
|
LAIF, City: |
$21,533,021 |
|
LAIF, Successor Agency: |
$6,067,686 |
|
Wells Fargo Bank: |
$10,522,021 |
|
Balance at 12/31/2025 |
$149,416,260 |
(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 September 30, 2026, totaled just over $149.4 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, negotiable CDs, and supranational agency bonds to obtain higher yields and add diversity to the portfolio. As of September 30, 2026, the City investments consisted of the following and are compliant with the Investment Policy.
Cash Transactions:
The City’s total cash and investment decreased by almost $27 million from the last quarter, bringing the total to just over $149.6 million. Total cash fluctuates over the course of the fiscal year due to cyclical events. All cash disbursements are within the FY 2026-27 budget and all check registers are presented to the City Council monthly.
Treasurers’ Comments:
Our investment portfolio is in full compliance and staying at a healthy yield. As we move through the calendar year, bonds have had a rocky go. Municipal bonds experienced a challenging third quarter, with the broad market returning approximately negative 6.35%, including interest income and changes in market value. Rising interest rates were a major driver. When market yields rise, the market value of existing bonds generally fall even for high-quality investments. Longer-term bonds experienced greater losses, reinforcing the importance of matching investment maturities with the timing of the City’s cash needs. We are looking at different approaches as we continue through the end of the calendar year. Higher yields also create opportunities to earn more on newly invested funds. The priority remains balancing income with safety & access to cash.
7. ATTACHMENTS
• Attachment 1 - Chandler Monthly Investment Report July 2026
• Attachment 2 - Chandler Monthly Investment Report August 2026
• Attachment 3 - Chandler Monthly Investment Report September 2026
• Attachment 4 - Chandler Investment Report for the Period Ending September 30, 2026