Brief

The Office of Finance submitted the 2026-27 Annual Statement of Investment Policy on June 5, 2026, setting out the City's framework for investing municipal reserves, pension funds, and other public money. The statement typically establishes return targets, risk tolerances, approved investment types, and oversight procedures. It was referred to the Budget and Finance Committee on June 9 and remains pending there.

Full summary

City Treasurer Diana Mangioglu submitted the 2026-27 Statement of Investment Policy to the Council on June 5, 2026, as required each year under the City Administrative Code. The policy, effective July 1, 2026, governs how the City Treasurer and Office of Finance manage the City's general investment pool. It does not cover pension funds, deferred compensation plans, bond proceeds, or special investment pools, which operate under separate rules. The Office of Finance reviewed the policy against the California Government Code and determined no changes from the prior year were necessary. The policy establishes three ranked investment objectives: protecting principal first, maintaining sufficient liquidity to meet daily operating needs second, and earning a market rate of return third. The City's general pool is divided into three actively managed portfolios benchmarked to ICE Indices: a Core portfolio for daily cash flow needs, a Reserve portfolio aimed at optimizing long-term returns, and an Extended Reserve portfolio for further yield enhancement. Investment officers are held to the Prudent Investor standard under California Government Code Section 53600.3, and all transactions must comply with state law governing local agency investments. Permissible investments include U.S. Treasury and agency obligations, municipal bonds, commercial paper, negotiable certificates of deposit, repurchase agreements, money market funds, medium-term corporate notes rated A or better, and supranational obligations rated AA or better, among others. Riskier derivative instruments such as inverse floaters, range notes, and mortgage interest-only strips are explicitly prohibited. The policy caps single-issuer concentration at 10 percent of the portfolio (excluding Treasuries and agencies), allows securities with maturities beyond five years for reserve funds with Council authorization, and sets a maximum final maturity of 30 years for Treasuries, agency securities, and local agency bonds. Up to five million dollars is allocated to a Linked Banking Program that rewards community-oriented local financial institutions. Oversight requirements include daily compliance reviews by finance staff, monthly reports to the City Council from the City Treasurer detailing portfolio performance and a six-month liquidity outlook, and an annual audit by the City Controller's Office. The file was referred to the Budget and Finance Committee on June 9, 2026, where it remains pending.

Activity (2)

• 2026-06-09 Office of Finance document(s) referred to Budget and Finance Committee.
• 2026-06-05 Document submitted by Office of Finance, dated June 5, 2026.

Documents (1)

• 2026-06-05 Report from Office of Finance · report