Fremont City Council Meeting: 06/02/26 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Plans, Policies and Studies
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5720) DOC ID: 5720
Updated: 5/28/2026 1:39 PM by Dina Lewis Page 1
Annual Approval of Investment Policy - Annual Approval of Investment Policy and Delegation of Authority to City Treasurer to Manage Investments Contact Persons:
Name: Lauren Chu David Persselin
Title: Management Analyst Finance Director
Div/Dept: Finance Department Finance Department
Phone: (510) 494-4635 510-494-4631
E-Mail: [email protected] [email protected]
Executive Summary: In accordance with California Government Code Section 53646(a)(2), the City Treasurer presents the City’s Annual Investment Policy for the City Council’s consideration and approval at a public meeting. Additionally, the City Council may elect to delegate its authority to invest and reinvest City funds to the City Treasurer for up to one year pursuant to Government Code Section 53607.
Staff recommends that the City Council adopt a resolution approving the City’s investment policy for FY 2026/27 and delegate the City Council’s authority to invest and reinvest public funds, and to sell or exchange securities so purchased, to the Finance Director/Treasurer for one year or until earlier revoked by the City Council.
Background: California Government Code Section 53601, et seq. allows the City Council to invest money in its treasury not required for its immediate needs. The investments must be made in accordance with the City’s Annual Investment Policy, approved by the City Council during a public meeting (Gov. Code Section 53646(a)(2)). The City Council may delegate its authority for conducting investment transactions to the City Treasurer annually, for up to one year (Gov. Code Section 53607). On May 6, 2025, the City Council approved the City’s current Investment Policy and delegated investment authority to the City Treasurer for FY 2025/26.
Discussion/Analysis:
City Investment Policy
Once adopted by Council, the Investment Policy sets portfolio management objectives and practices, specifies allowable investment instruments, states the criteria for purchasing those securities, prohibits certain types of security purchases, and fixes the maximum investment horizon (generally five Council Staff Report (ID # 5720) Meeting of June 2, 2026 Updated: 5/28/2026 1:39 PM by Dina Lewis Page 2
years). The Treasurer uses these guidelines to manage and safeguard the investment of all public funds held by the City, except for bond proceeds.
Bond proceeds are invested in accordance with financing documents approved by the City Council when bonds are first issued. These investment transactions are executed by the trustees of the respective bond issues under the direction of City staff.
On April 1, 2025, the City Council approved the appointment of PFM Asset Management LLC (“PFM”) to provide investment advisory services to the City. Although PFM actively manages the portion of the City’s cash portfolio not needed to meet near-term obligations, fiduciary responsibility for investments remains with the City. The Treasurer and Finance Department staff ensure that all investments are consistent with the Investment Policy approved by the Council and provide oversight with appropriate checks and balances over the investment process.
Proposed Revisions to Investment Policy
As part of its portfolio management services, PFM has reviewed the City’s proposed FY 2026/27 Investment Policy and has determined that it is in compliance with all applicable California Government Code statutes regulating the investment of public funds. However, PFM has suggested two revisions with which staff concurs.
Senate Bill 595, which took effect on January 1, 2026, changed Government Code Section 53601, the section that governs the investment of public funds, to increase the allowable maturity of commercial paper from 270 to 397 days. Also, Government Code Section 53601.6, which authorizes investment in U.S. government securities with zero or negative yields during periods of negative interest rates, was extended through January 1, 2031.
Delegation of Authority to the City Treasurer
Staff recommends that the City Council delegate its authority to invest and reinvest public funds, and to sell or exchange securities so purchased, to the Finance Director/Treasurer for one year or until earlier revoked by the City Council, in accordance with Government Code Section 53607.
Under the delegated authority, the City Treasurer will continue to make a monthly report of investment transactions to the City Council. Each monthly Cash and Investments Report (“Treasurer’s Report”) describes the portfolio’s Council Staff Report (ID # 5720) Meeting of June 2, 2026 Updated: 5/28/2026 1:39 PM by Dina Lewis Page 3
composition and recent performance and reports the month’s investment transactions. Within each Treasurer’s Report, the Treasurer certifies that all investments were made in compliance with the Investment Policy and that there are adequate funds to pay City obligations for at least six months.
Fiscal Impact: None.
Environmental Review: Action on this item represents a fiscal, organizational and administrative governmental activity that will not result in physical changes in the environment. Therefore, it is not a project subject to review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378.
ATTACHMENTS:
• Draft Resolution - 2026-27 Investment Policy
Recommendation: Adopt a resolution approving the City’s Investment Policy for FY 2026/27 and delegating the City Council’s authority to invest and reinvest public funds, and to sell or exchange securities so purchased, to the Finance Director/Treasurer for one year or until earlier revoked by the City Council.