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February 10, 2026
ITEM TITLE
Policy and Investment Report: Amend City Council Policy No. 220-01, Delegate Investment Activity Authority to the Director of Finance/Treasurer, and Accept the Investment Report for Quarter Ending December 31, 2025
Report Number: 26-0009
Location: No specific geographic location
Department: Finance
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution acknowledging receipt of City Council Policy No. 220 -01 Investment Policy and Guidelines, amending the existing policy, delegating investment activity authority to the Director of Finance/Treasurer, and accepting the investment report for the quarter ending December 31, 2025.
SUMMARY
State law allows the City Council to delegate each year to the City Treasurer authority to manage the City’s investments. The law also allows the City Treasurer to bring the City’s Investment Policy to the City Council annually to reaffirm or make any changes to the existing policy . City Council Policy No. 220 -01, the Investment Policy and Guidelines, provides guidelines on the investment of idle funds and provides the various investments opportunities allowable by State law. The City Council last reviewed and approved the Policy on February 11, 2025. Staff are recommending minor revisions to enhance clarity, maintain alignment with State law, and update the Policy to reflect the new City Council Policies format adopted in September 2025.
Additionally, this report provides an update on how the City of Chula Vista’s money was invested during the quarter that ended on December 31, 2025. State law and the City’s Investment Policy require the City to provide this report every quarter.
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ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA), and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines beca use the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
Investment Policy
The Policy was last updated on February 11, 2025, through Resolution 2025 -020. It provides guidance on how to invest idle City funds and how to manage cash efficiently. The goal of the Policy is to improve the City’s financial position while keeping invested funds safe.
The Policy lists the types of investments allowed under California Government Code Section 53600 et seq.
When making investment decisions, the City first prioritizes protecting the principal, second ensuring funds are available when needed, and third earning the highest reasonable return.
Under Section XIX of the Policy, the Finance Director/Treasurer must pre sent the Policy to the City Council each fiscal year for approval. Staff are recommending minor revisions to enhance clarity, maintain alignment with State law, and update the Policy to reflect the new City Council Policies format adopted in September 2025
Quarterly Investment Report
As shown in the table below , as of December 31, 2025, the City held a total of $777,797,748 million in cash and investments. Of this amount, $655,570,419 is managed directly by the City, and $122,227,329 million is held by outside trustees.
Summary of Cash and Investments as of December 31, 2025 Cash and Investments Book Value
Managed Investment Portfolio $ 607,077,143 State of California Local Agency Investment Fund 16,325,663 County of San Diego Pooled Investment Fund 26,978 Total Investments Held by the City 623,429,784 Cash/Time Deposits 32,140,635
Total Cash and Investments Held by the City 655,570,419
Cash and Investments Held by Bank Trustee 122,227,329 Total Cash and Investment Portfolio $ 777,797,748
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Cash and investments held by the City and the trustees continue to be invested in accordance with the Government Code and City Council Policy 220-01 Investment Policy and Guidelines as adopted by Resolution No. 2025-020 on February 11, 2025.
During the quarter, the City transferred $10.0 million to the State of California Local Agency Investment Fund (LAIF) and received $20.0 million from the Bank of New York, the City’s custodian bank, to maintain adequate cashflows during the quarter. A total of 19 investments matured, and 1 investment was call ed early by the issuer, providing $94.5 million in proceeds. The City reinvested funds by purchasing 10 new investments, including one corporate bond ($5.0 million) and nine U.S. Treasury notes ($72.7 million). The Finance Department continues to actively manage the portfolio based on financial and economic conditions. No other significant activity occurred beyond routine investment transactions.
The City’s investment portfolio earned an average return of 4.19%, which was slightly higher than the previous quarter. The average portfolio maturity increased from 1.90 to 1.95 years.
The Federal Open Market Committee (FOMC) meets approximately every six weeks to set the target range for the federal funds rate. At its most recent meeting, the FOMC noted that the economy continues to grow at a moderate pace; however, job growth has slowed, and the unemployment rate has increased slightly.
Inflation has risen and remains above the Committee’s long-term target.
In response to incr eased economic uncertainty and heightened risks to employment, the Federal Reserve lowered the target range for the federal funds rate to 3.50%–3.75%. The Committee will continue to closely monitor incoming economic data and adjust monetary policy as appro priate to support maximum employment and maintain inflation near its long-term objective.
The Finance Department, with the assistance of Chandler Asset Management, Inc, continues to manage the City’s investment portfolio in accordance with the State law and City Council Policy 220-01 Investment Policy and Guidelines. Considering the projected timing of cash receipts and disbursements and the structure of the Pooled Investment Portfolio, the City will be able to comfortably meet overall cash flow needs over the next six months.
In accordance with City Council Policy 220-01 Investment Policy and Guidelines, the City Investment Report for the Quarter Ended December 31, 2025 (Attachment 2) includes the following sections:
Portfolio Summary (pg. 1)
Statement of Compliance (pg. 2)
Holdings Report (pg. 5)
U.S. Treasury Yields and Interest Earnings (pg. 14)
Transaction Ledger (pg. 15)
Portfolio Maturity Distribution (pg. 17)
Corporate Bonds Sector Distribution (pg. 20)
Glossary (pg. 22)
DECISION-MAKER CONFLICT
Staff have reviewed the decision contemplated by this action and have determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100, et seq.).
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Staff are not independently aware and have not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Considering the projected timing of cash receipts and disbursements and the structure of the Pooled Investment Portfolio, the City should be able to comfortably meet overall cash flow needs over the next six months. There is no direct current-year fiscal impact as a result of this action.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact as a result of this action.
ATTACHMENTS
1. Summary of Cash and Investments as of December 31, 2025
2. Investment Report for the Quarter Ended December 31, 2025
3. Council Policy 220-01 Investment Policy and Guidelines – Redline Version Staff Contact: Galen Fleming, Fiscal Services Analyst, Finance Department Sarah Schoen, Director of Finance/Treasurer