CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:
Quarterly Treasurer’s Report for the quarter ending June 30, 2026 RECOMMENDED ACTION:
Review and accept the Quarterly Treasurer’s Report for the quarter ending June 30, 2026 STAFF CONTACT:
Marisol Gómez, Director of Finance and Administrative Services (650) 501-0257
[email protected] <mailto:[email protected]>
Lucy Xie, Deputy Finance Director
(650) 501-6014
[email protected] <mailto:[email protected]>
BACKGROUND/DISCUSSION:
The City Council adopted Administrative Policy 39 - Investment Policy to reflect current law and best practices in accordance with Government Code Section 53600 et seq. The policy provides guidelines for prudent investments and efficient cash management and requires the City to provide the governing body a report regarding the City’s investment activities on a quarterly basis to ensure “compliance” with the statement of investment policy.
The investment policies and practices of the City of Pacifica are strictly based on state law and prudent money management. The investment of funds for the City is directed to the goals of safety, liquidity, and yield, while meeting the cash flow needs of the City through prudent investment of unexpended cash.
Cash and investments held by the City and the trustees are invested in accordance with the City’s Investment Policy and the authority governing investments set forth in the California Government Code, Sections 53601 through 53659. The investment policy for bond proceeds is contained in the relevant bond documents approved by the City Council at the time of the issuance of the debt.
The total cash and investment portfolio book value (cost) held by the City as of June 30, 2026 was $62,726,066. In accordance with GASB 31, the State provides a factor that can be multiplied by the City’s share of the LAIF pool to determine the market value each quarter. Other than LAIF, the fair market value of all other investments is equal to the book and par value.
The City’s current cash and investment holdings include the following components: Managed Investment Portfolio ($0), State of CA Local Agency Investment Fund ($49,610,511), California Asset Management Program (CAMP) Pooled Investment Fund ($0), Cash/Time Deposits ($8,646,972), and accrued interest on investments ($0). Earned interest is the interest generated by an investment over a specific time period. Accrued interest is interest that has Pacifica City Council 2
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been earned but not yet been received, while paid interest is interest that has already been received by the City.
The City’s cash and investment portfolio increased by $8,342,825 from $54,383,241 reported for the previous quarter ending March 31, 2026. The increase reflects approximately $23.9 million in cash receipts from various revenue sources, including the second installment of property taxes received in April, offset by approximately $15.6 million of cash disbursements. These disbursements included $7.7 million for payroll and benefits, and $7.9 million for other payments. At the end of the quarter, the City maintained sufficient liquidity to meet its anticipated expenditures for the next six months.
As of June 30, 2026, the City did not hold investments in its Managed Investment Portfolio; therefore, the Weighted Yield to Maturity and Weighted Average Maturity measures have not been applicable for this and prior reporting periods, as the majority of City funds were held in liquid accounts, and no investments matured or were purchased during the quarter.
In May 2026, the City retained Optimized Investment Partners to assist with investment portfolio management, with the goals of improving investment returns while maintaining the safety of principal, sufficient liquidity for City operations, and compliance with the City’s Investment Policy and applicable California Government Code requirements. Finance staff is currently working with Optimized Investment Partners to establish the necessary accounts and begin diversifying the City’s investments.
Going forward, investment activity will be managed in coordination with Optimized Investment Partners, the City Manager, and the Administrative Services Director. As investments are made, future quarterly investment reports will include applicable portfolio performance measures, including yield and maturity statistics.
Federal Reserve and Interest Rate Environment:
At its June 17, 2026 meeting, the Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 3.50% to 3.75%. The Federal Reserve noted that economic activity continued to expand at a solid pace and unemployment remained relatively stable, while inflation remained above the Federal Reserve’s 2% target.
During the quarter, the yield on two-year U.S. Treasury securities increased from approximately
3.79% at the beginning of the quarter to 4.14% at quarter-end, an increase of 35 basis points.
Treasury yields serve as an important benchmark for the returns available on high-quality fixedincome investments and provide context for evaluating the City’s investment performance and opportunities. The increase in yields during the quarter generally improved the return available on newly purchased short-term investments. As the City begins diversifying its investment holdings, staff and the City’s investment advisor will continue to evaluate available investment opportunities consistent with the City’s priorities of safety, liquidity, and yield.
ALTERNATIVE ACTION:
There is no reasonable alternative to this informational item, as not accepting the 4th Quarter Treasurer’s Report will not change the City’s cash position as of the end of the quarter ending June 30, 2026.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
Approval of the 4th Quarter Treasurer’s Report is consistent with the following Council adopted Goals:
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• Enhance organizational and fiscal stability: Preparation and presentation of the Quarterly Treasurer’s Report support prudent cash management, financial oversight, and adherence to the City’s adopted Investment Policy and fiscal controls. • Broaden public communications and collaboration: Filing of the Quarterly Treasurer’s Report promotes transparency and accountability by providing the City Council and community with timely information regarding the City’s cash position and investment activity.
FISCAL IMPACT:
There is no fiscal impact associated with this report, as it is retrospective in nature and reflects prior-period activity; however, the Quarterly Treasurer’s Report outlines fiscal transactions that directly affect the City’s financial standing.
ORIGINATED BY:
Administrative Services
ATTACHMENT LIST:
Attachment 1 - Summary of Cash and Investments as of June 30, 2026 (PDF) Attachment 2 - Portfolio Summary and Key Statistics for the Quarter Ended June 30, 2026 (PDF)
Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (PDF)