Finance and Management Committee
November 18th, 2025
AGENDA REPORT
TO: Jestin D. Johnson FROM: Bradley Johnson
City Administrator Director of Finance
SUBJECT: Cash Management Report For FY
2025-2026 First Quarter Ended
September 30, 2025
DATE: October 31st, 2025
City Administrator Approval Date:
RECOMMENDATION
Staff Recommends That The City Council Receive The Informational Cash Management Report For Fiscal Year 2025-2026 First Quarter Ended September 30, 2025.
EXECUTIVE SUMMARY
As a continued best practice and in accordance with the City’s Investment Policy, the Finance Department submits a quarterly informational cash management report to the City Council. For Fiscal Year 2025-2026 First Quarter ending September 30, 2025, the City’s Operating Pool Portfolio had a balance of $2.09 billion and yielded 3.98 percent, while the Successor Agency’s Portfolio had a balance of $16.99 million and yielded 4.18 percent.
BACKGROUND / LEGISLATIVE HISTORY
The Cash Management Report summarizes the characteristics of the investment portfolios for the quarter. The City and Successor Agency’s Portfolio composition includes safety, creditworthiness, liquidity, and diversity. As of September 30, 2025, the portfolios comply with the Investment Policy of the City for Fiscal Year (FY) 2025-26. The portfolios’ credit quality remains high and well within Investment Policy parameters. Liquidity remains sufficient to meet projected cash flow needs for the next six months.
Attachment A provides each portfolio’s current market value and yield as of September 30, 2025, as well as comparisons to other market benchmarks. This report confirms that no leverage (use of debt to supplement investments) was utilized, nor were derivatives (such as interest rate swaps, futures, or options) held during the reporting period. Also included are reviews of key economic factors that may affect the portfolio’s potential investment results.
Jestin Johnson (Nov 13, 2025 10:44:52 PST)
11/13/2025
Jestin D. Johnson, City Administrator
Subject: Cash Management Report For FY 2025-2026 First Quarter Ended September 30, 2025 Date: October 31, 2025 Page 2
Finance and Management Committee
November 18, 2025
ANALYSIS AND POLICY ALTERNATIVES
Cash Position
The City’s Operating Pool Portfolio balances decreased from $2.28 billion as of June 30th, 2025, to $2.09 billion as of September 30, 2025. This net balance decrease was mainly due to the following: receipt of $23.25 million in property tax revenues, offset by debt service payments of approximately $72.53 million. The remaining balance decrease of approximately $142.90 million is due to the receipt of other revenues, such as Sales Tax, offset by operational expenses such as payroll and vendor payments.
The Successor Agency’s portfolio decreased from a balance of $21.97 million as of June 30, 2025, to a balance of $16.99 million as of September 30, 2025. The portfolio decreased due to the transfer of $4.77 million to the trustee for debt service payments and other vendor payments.
The City’s and Successor Agency’s investment portfolios are effectively managed for safety, liquidity, and yield in compliance with the City’s Investment Policy, which supports the Citywide priority of a responsive and trustworthy government.
Yield Comparison
The effective rate of return on total assets in the City’s Operating Pool Portfolio for the month ending September 30, 2025, was 3.98 percent. The effective rate of return on total assets in the Successor Agency’s Portfolio for the month ending September 30, 2025, was 4.21 percent. The yields differ between the City and Successor Portfolios because the Successor Portfolio has a lower fund balance and a shorter investment horizon due to cash flow needs. The City Portfolio has typically a more stable long-term investment horizon, allowing for longer-term securities that typically have higher yields. Note that the current yield curve is relatively inverted up to one year, as short-term securities are yielding higher than long term securities.
The City Portfolio outperformed the one-year government agency benchmark, which had a yield of 3.79 percent, as the 1-year government agency yield has already priced in future interest rate expectations, and City Portfolio underperformed the Local Agency Investment Fund (LAIF), which had a yield of 4.21 percent.
The performance comparison to LAIF should be considered in the context of LAIF’s historical tendency to lag market changes in rising and falling interest rate environments. Moreover, the City does not actively sell securities in the portfolio to take advantage of cyclical swings in the market, which could result in the loss of principal. Rather, the primary investment objective of the City for the portfolio is to maximize safety, liquidity, and return in that respective order.
Jestin D. Johnson, City Administrator
Subject: Cash Management Report For FY 2025-2026 First Quarter Ended September 30, 2025 Date: October 31, 2025 Page 3
Finance and Management Committee
November 18, 2025
FISCAL IMPACT
This item is for informational purposes only and does not have a direct fiscal impact or cost.
PUBLIC OUTREACH / INTEREST
This item did not require additional public outreach other than posting on the City’s website.
COORDINATION
This report was prepared by the Finance Department and the Treasury Bureau.
SUSTAINABLE OPPORTUNITIES
Economic: The Cash Management Report summarizes the characteristics of the investment portfolios for the quarter. The portfolios’ credit quality remains high and well within the City’s Investment Policy parameters. Liquidity for both portfolios remains sufficient to meet the City’s projected needs.
Environmental: To the extent that new investment opportunities are found in companies, if or when financially prudent, that are involved in environmentally positive activities, the City will consider investing in these companies (i.e., Commercial Paper, Medium Term Notes, etc.) if permitted by the City Investment Policy.
Race & Equity: There are no race & equity opportunities associated with this report.
Jestin D. Johnson, City Administrator
Subject: Cash Management Report For FY 2025-2026 First Quarter Ended September 30, 2025 Date: October 31, 2025 Page 4
Finance and Management Committee
November 18, 2025
Bradley Johnson (Nov 13, 2025 09:41:19 PST)
ACTION REQUESTED OF THE CITY COUNCIL
Staff Recommends That The City Council Receive The Informational Cash Management Report For Fiscal Year 2025-2026 First Quarter Ended September 30, 2025.
For questions regarding this report, please contact David Jones, Treasury Administrator, at (510) 238-6508.
Respectfully submitted,
BRADLEY JOHNSON
Director of Finance
Finance Department
Reviewed by:
David Jones, Treasury Administrator
Treasury Bureau
Max Kumar, Investment & Operations Manager
Treasury Bureau
Prepared by:
Vivian Woo, Treasury Analyst III
Treasury Bureau
Attachments (1):
A: Cash Management Report for Fiscal Year 2025-2026 First Quarter Ended September 30, 2025