STAFF REPORT
City of Lancaster
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3/24/2026
TN
Date:March 24, 2026
To: Mayor Parris and City Council Members
From: George N. Harris II, Senior Director/Treasurer – Administrative Services Subject: Adopt Resolution updating a Policy for the Investment of Public Funds Recommendation:
Adopt Resolution No. _____, rescinding Resolution No. 18-06 in its entirety, and establishing a policy for the investment of public funds for the City of Lancaster.
G.C. Section 84308: No
Fiscal Impact:
None
Background:
Investing funds is a crucial component of a sound financial and cash management program. A formal investment policy is necessary to identify investment objectives, define risk tolerance, assign responsibility, and establish control over the investment process. The Investment Policy of the City of Lancaster (the City), in conformance with State laws, is intended to provide guidelines to the City Treasurer for the prudent investment of the City's temporary idle cash not governed by bond indentures or bond resolutions, and to outline policies for maximizing the efficiency of the City's cash management system. All City funds will be invested in accordance with this Investment Policy and with applicable sections of the California Government Code. Staff have recently undertaken a thorough review of the City’s current Investment Policy with the assistance of the City’s investment advisory firm, Cutwater Asset Management, dba Insight Investments. Although language throughout the policy has been updated to reflect current definitions, only one adjustment to our existing investment policy is recommended.
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The City is legally authorized to invest in medium-term notes issued by corporations and operating within the United States or by depository institutions licensed by the United States or any state and operating with the United States, with a final maturity not exceeding five years, and rated at least AA. No more than 5% of the City’s total portfolio shall be invested in any one issuer, and the aggregate investment shall not exceed 30% of the City’s total portfolio.
This change represents a 10% increase over the previous 20% aggregate investment of the City’s total portfolio, thus allowing the City to realize greater investment earnings.
No other changes have been made and the guiding principles previously adopted by the City Council remain a controlling focal point of the policy. These principles include the “prudent person rule”, which states that investments should be made with the same judgment and care that persons of prudence, discretion and intelligence would exercise for their own affairs. The objectives of the City’s investment program have been expanded beyond the previous objectives of safety, liquidity and yield to include diversification and regulatory and legal compliance.
Attachment:
Resolution No. _____
Final Draft Proposed Investment Policy
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No other changes have been made and the guiding principles previously adopted by the City Council remain a controlling focal point of the policy. These principles include the “prudent person rule”, which states that investments should be made with the same judgment and care that persons of prudence, discretion and intelligence would exercise for their own affairs. The objectives of the City’s investment program have been expanded beyond the previous objectives of safety, liquidity and yield to include diversification and regulatory and legal compliance.