Q4 FY25/26 Investment Review
City Council
September 1, 2026
01 Safety
Principal Preservation
Protect every public dollar
first and invest only in
high-grade instruments that
safeguard capital under all
market conditions
02 Liquidity
Ready Cash Access
Maintain enough liquidity to
meet every operating,
payroll, and emergency
obligation without forced
sales
03 Yield
Market-Rate Returns
Pursue competitive,
risk-adjusted returns, but
only after safety and
liquidity have been fully
assured
Investment Policy Principles
Our investment policy provides guidelines for prudent investment with an absolute investment priority of safety, liquidity, and yield
Q4 FY2025/26 Investment Performance
Huntington Beach finished the quarter with a $473 million investable fund balance, yielding a 3.94% quarterly return and outperforming recent quarters
Portfolio Return (%)
FY25-26
YTD 3.74%
FY24-25
PTD 3.24%
18-Month
Index 3.75%
Sector Breakdown
$473M
TOTAL
Cash/LGIP ($26M)
Commercial Paper ($10M)
Agencies ($138M)
Corporates ($110M)
Treasuries ($71M)
Supranationals ($50M)
$ Returns
Portfolio generated $16.4M across year (+$3.4M vs. FY2024/25) Acceleration
Returns accelerating each quarterly (3.94% for Q3 vs. 3.74% for year) ✓ Benchmark
YTD returns in line with benchmark as low-yield bonds roll-off ↻ Roll-Offs
Final $16M in sub-3% yield bonds maturing in Q1 2026/27 Municipals ($68M)
Long-Term Investment Performance
Our investment income for all fund balances in FY2025/26 ended up at $16.4 million, beating our Treasury forecast by nearly $1.5 million and our Q4 return set another quarterly record Consistent Growth
Return grew from 1.22% → 3.94% over last 3 years
Exceeded Target
FY2025/26 annual income of $16.4M exceeded $15.0M target Income Growth
Annual income increased nearly 5x over last 4 years
Rate Momentum
Quarterly rate increase reflects roll-offs but slowing as predicted $3.5
$5.9
$10.0
$13.0
$16.4
FY22 FY23 FY24 FY25 FY26
Net Annual Investment Income ($M)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Portfolio Return (%)
FY23 FY24 FY25 FY26
1.22%
3.94%
Q3 2025/26 Portfolio Concentration
Issuer Concentration
Treasuries and Federal Home Loan Bank are the only 10%+ issuers $Interest Rate Exposure
16% of HB bonds are callables but maturities are timed to gaps ✓
Portfolio Duration
Shifted ~20% of portfolio from short-term to long-term bonds Yield Enhancement
~40% of portfolio in higher-yield sectors vs. ~20% last year We purchased $130 million in securities this quarter that reduced our issuer concentration and evened out the portfolio across maturity dates
Bond Maturity
$456M
TOTAL
< 1 Year (27%)
1-2 Years (16%)
2-3 Years (24%)
3-4 Years (18%)
4-5 Years (15%)
Q4 FY2025/26 Investment Compliance
Overall bond
portfolio meets
compliance
requirements for:
✓ Investment limits
✓ Issuer limits
✓ Maximum
maturities
✓ Credit ratings
(87% are AAA or
AA rated)
Overall cash/LGIP
portfolio meets
compliance for:
✓ Investable limits
✓ Portfolio share
The cash and bond portions of the portfolio are both fully compliant this quarter with the City’s Investment Policy Statement and the California General Code
West Orange County Water Board
Huntington Beach has the opportunity this year to remit $2.6 million from the West Orange County Water Board back into our Enterprise Funds to help with upgrading existing city water infrastructure ❖ Joint Powers Authority between
Huntington Beach, Seal Beach, Garden
Grove, and Westminster
❖ Formed in 1955 to transport water via
two large-capacity pipes and provide
dependable water supply
❖ Members cities paid in $6 million
from 2019-2025 for Cathodic
Protection Program of aging pipes
❖ Engineering consultant determined
Cathodic Protection not feasible due
to narrow pipe segments
❖ Board has stockpiled $7.6 million in
funds when $1-2 million needed,
creating opportunity to return $4.6
million to members and have buffer
Remittance
$4.6M
TOTAL
Huntington
Beach (56%)
Westminster (26%)
Seal Beach (14%)
Garden Grove (4%)
Huntington Beach would receive $2.6
million back from Board, while
Westminster receives $1.2 million,
Seal Beach receives $650K, and
Garden Grove receives $200K
City Treasury
Priorities
Transparency
Accountability
Community
Investment
Policy
Clear
Reporting
Centralized
Taxes/Fees
Website and
User Guide
Water Usage
and Alerts
Easier
Payments
Online Tax
Filings
Payment
Kiosks
Financial Portfolio Resident Self-Service
Comprehensive Access Future Initiatives
Transparency
We focused on providing meaningful transparency to residents by simplifying how we are structured/ communicate and increasing resident access/self-service capabilities for what matters to them Record Returns Incremental Revenue
Future Initiatives
Broker
Network
Diverse
Portfolio
Refund and
Collections
TOT and STR
Compliance
Streamlined
Processes
Advanced
Technology
Managed
Cash Flows
UUT and Oil
Well Audits
Accountability
We delivered on practical solutions that have allowed our office to generate record financial returns this year and stretch every tax dollar even further for our residents Reduced Cost Structure
Resident Engagement Business Building
Economic Empowerment Future Initiatives
Online
Surveys
Community
Coffees
Finances
and Scams
Tax Prep
Services
ADA
Grants
Workforce
Development
Non-Profit
Partnerships
“One-Stop”
Grant Shop
Community
Most importantly, we committed to listening to our community members and delivering on what our small businesses and residents have told us they need to keep their American Dream within reach Questions?