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Page 1 of 2 <br />Item #5 <br /> CITY COUNCIL AGENDA REPORT <br /> <br />June 17, 2025 <br />Finance <br /> <br />TITLE: ADOPT A RESOLUTION APPROVING FISCAL YEAR 2025/26 INVESTMENT <br />POLICY AND GUIDELINES <br /> <br />SUMMARY <br />Pursuant to California Government Code Section 53646(a)(2), the City’s Investment Policy and <br />Guidelines may be submitted to the City Council annually for adoption. Various sections of the <br />Investment Policy and Guidelines were updated in the prior two fiscal years, making the policy <br />more comprehensive and reflecting the requirements in the California Government Code. This <br />year’s updates comprise changes to maximum maturities for municipal securities, aligning <br />language for investments in Local Government Investment Pools, and prohibiting securities <br />with trade settlement exceeding 45 days. This report satisfies the legal requirement that the <br />City Council adopt an annual investment policy. <br /> <br />RECOMMENDATION <br />Adopt a resolution approving the Investment Policy and Guidelines for Fiscal Year 2025/26. <br /> <br />BACKGROUND <br />California Government Code Section 53646 provides for the City Council to adopt an annual <br />investment policy. The proposed Investment Policy and Guidelines for FY 2025/26 and the <br />adopting resolution are provided as Attachments 3 and 2, respectively. <br /> <br />While an investment policy is legally required, it also provides the framework for a prudent <br />investment program and helps fulfill the City’s fiduciary responsibilities. The formal investment <br />policy is necessary to identify investment objectives, define risk tolerance, assign <br />responsibility, and establish control over the investment process. <br /> <br />DISCUSSION <br />Safekeeping for cash and investments is one of the most important responsibilities of the City. <br />The investment policy directs investment activities and protects the government from potential <br />losses stemming from unsuitable investment practices. <br /> <br />Staff proposes modifying the policy language in various paragraphs, including: <br />• Limiting California and Local Agency obligations and Municipal Securities from Other <br />States to a maximum maturity not to exceed 5 years (similar to U.S. Treasury and U.S. <br />Agency obligations)—page 7. <br />• Aligning language for investments in Local Government Investment Pools consistent <br />with the Government Code—page 9. <br />• Prohibiting securities with trade settlement periods exceeding 45 days, consistent with <br />provisions of Senate Bill 1489—page 10. <br /> <br />Page 86 of 864