FINANCE DEPARTMENT
DATE: January 21, 2026
TO: Honorable Mayor and City Council
VIA: Damien O’Bid, City Manager
FROM: Angela Courter, Administrator Services Director
SUBJECT: INVESTMENT REPORT FOR THE QUARTER ENDED
DECEMBER 31, 2025
Attached for your information is the quarterly report of investments as of December 31, 2025.
The total cash and investment portfolio book value (cost) held by the City as of December 31, 2025 was $14,947,417.
The cash and investments held by the City include the following components:
Managed Investment Portfolio ($6,254,576), State of CA Local Agency Investment Fund ($8,006,651), California Asset Management Program (CAMP) Pooled Investment Fund ($20,409), Sonoma County Investment Pool ($1,619), Cash/Time Deposits ($627,808), and accrued interest on investments ($36,354). (Earned interest is the interest earned on investments over a specific time period, accrued interest is the interest that an investment has earned, but hasn’t yet been received, and paid interest is the interest that has already been received as payment).
Cash and investments held by the City and the trustees continue to be invested in accordance with the Government Code and the Council Investment Policy as adopted on May 9, 2023.
Council Information
FY 2025-26 Q2 Quarterly Investment Report
December 31, 2025
Two-year Treasuries were yielding 3.60% at the beginning of the quarter and ended the quarter at 3.47%, which was a decrease of 13 basis points for the quarter.
As of December 31, 2025, the Weighted Yield to Maturity on the Managed Investment Portfolio was 4.13%.
At the end of this quarter, the Weighted Average Maturity of the Managed Investment Portfolio was 2.16 years.
The Federal Open Market Committee (FOMC) meets approximately every six weeks and determines the level of the Federal Funds Rate. At the December 10th meeting, the FOMC voted to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3-3/4 percent.
Summary from the December 10th meeting:
"Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.
In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3-3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation Council Information
FY 2025-26 Q2 Quarterly Investment Report
December 31, 2025
pressures and inflation expectations, and financial and international developments."
Finance staff hired Optimized Investment Partners in May 2023 to help improve the investment returns for the city and to ensure compliance with California Government Code by ensuring safety of principal and sufficient liquidity for operations. Ongoing portfolio management activity will continue to be performed in partnership with Optimized Investment Partners, the City Manager, and the Administrator Services Director.
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.
If you have any questions, please feel free to contact me at 707-665-4236.
Par Value (1) Market Value (2) Book Value (3)
Cash & Investments Held by City
Investment Portfolio
Managed Investments
U.S. Bank Custodial Cash Account $ 87,881 $ 87,881 $87,881 0.59% U.S. Treasury Bill/ Note 3,285,000 3,235,048 $3,203,701 21.49% Federal Agency Bond 800,000 790,424 $747,994 5.02%
Certificate of Deposit 2,215,000 2,238,918 $2,215,000 14.85% Managed Investments Subtotal $ 6,387,881 $ 6,352,271 $6,254,576 41.95% Pooled Investments
State of CA Local Agency Investment Fund $ 8,006,651 $ 8,006,651 $8,006,651 53.70% CAMP 20,409 20,409 $20,409 0.14%
Sonoma County Investment Pool 1,619 1,619 $1,619 0.01%
Pooled Investments Subtotal $ 8,028,679 $ 8,028,679 $8,028,679 53.84% Investment Portfolio Subtotal $ 14,416,559 $ 14,380,950 $14,283,255 95.79% Cash/Time Deposits $ 627,808 $ 627,808 $627,808 4.21%
Funds Available for Investment $ 15,044,367 $ 15,008,758 $14,911,063 100.00% Accrued Interest $ 36,354 $ 36,354 $36,354
Total Cash & Investments Held by City $ 15,080,721 $ 15,045,112 $14,947,417 Notes:
1. Par value is the principal amount of the investment on maturity.
2. Market values contained herein are received from sources we believe are reliable; however, we do not guarantee their accuracy.
3. Book value is par value of the security plus or minus any premium or discount on the security.
City of Cotati
Portfolio Assets % of Portfolio
Summary of Cash and Investments for the Quarter Ended December 31, 2025
2.16 4.13%
*Note: Cash/time deposits not included in WYTM
Excludes Pooled Investments and U.S. Bank Custodial Cash Account Under 1 Year
Maturity Dec 2025 Sep 2025 Change 1 - 2 Years
3-Month 3.67% 4.02% -0.35% 2 - 3 Years
1-Year 3.48% 3.68% -0.20% 3 - 4 Years
2-Year 3.47% 3.60% -0.13% 4 - 5 Years
3-Year 3.55% 3.61% -0.06% Total
5-Year 3.73% 3.74% -0.01%
10-Year 4.18% 4.16% 0.02%
Oct
Nov
Dec 2025 Dec 2024 Dec 2023 Dec 2022 Dec
3.47% 4.25% 4.23% 4.41% Total for Quarter
Note: Interest Earnings figures do not include capital gains or losses $ 138,357 165,384 $ (27,027) $
$ 3,408 61,107 $
$ 54,628 $ (20,759) 33,869 $
2-Year U.S. Treasury Yield - Historical Data 43,381 $ (9,676) $ $ 13% 800,000
$ 100% 6,300,000
Interest Earnings FY 24-25 FY 25-26 Change
$ 57,698
$ 53,057
$ 28% 1,783,000
$ 18% 1,118,000
$ 13% 815,000
U.S. Treasury Yields - Quarterly Comparison $ 28% 1,784,000 Book Value (COST) 14,283,255 $
Market Value 14,380,950 $
Weighted Average Maturity (in years)
Weighted Yield to Maturity*
Portfolio Maturity PAR Maturing % Maturing
City of Cotati
Investment Portfolio Summary and Key Statistics
Portfolio Key Statistics
PAR Value 14,416,559 $
Investment Report for the Quarter Ended December 31, 2025
53.70%
21.49%
14.85%
5.02%
4.21% 0.59%
0.14%
0.01%
LOCAL AGENCY INVESTMENT FUND 53.70%
U.S. TREASURY BILL/NOTE 21.49%
CERTIFICATE OF DEPOSIT 14.85%
FEDERAL AGENCY BOND 5.02%
CASH/TIME DEPOSITS 4.21%
INVESTMENT CASH ACCOUNT 0.59%
CAMP 0.14%
Sonoma County Investment Pool 0.01%
0%
5%
10%
15%
20%
25%
30%
Under 1
Year
1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years
28% 28%
18%
13% 13%
Portfolio Maturity Distribution