Date: February 17, 2026
To: MAYOR AND CITY COUNCIL
From: EUGENE SOLOMON, CITY TREASURER
Subject: CITY TREASURER’S SECOND QUARTER 2025-26 REPORT
EXECUTIVE SUMMARY
The City Treasurer manages the City’s cash flows while earning a competitive rate of return on investments within the constraints of the City’s investment policy and state law.
This City Treasurer’s report for the second quarter of fiscal year 2025-2026 details the composition of the investment portfolio and investment transactions that occurred during the period from October to December 2025. Meeder Investment serves as an investment advisor to the City Treasurer. The Meeder Investment report with this package includes a comprehensive analysis of the City’s investment portfolio and investment market trends.
Notable sections of this report include:
• Treasurer’s Portfolio Summary
• Investment Reporting Guidelines
• Investment Report by Meeder Investment
o Portfolio Summary
o Investment Policy Compliance Report
o Investment Activity Report
o Economic and Market Update
City Treasurer’s Portfolio Summary
The market value of the City’s general investment portfolio changed to $79.75MM from $72.91MM at the end of the prior quarter. This change in the investment portfolio resulted from anticipated fluctuations in cash flow trends for both general operations and the capital improvement program's revenue and spending.
Investment portfolio liquidity is 44.4% of the portfolio, having maturities of one year or less. The Bank of America General Fund Checking Account ending balance was $10,424,788. It earned a rate of 2.9% to offset the expenses of banking support services.
Administrative Report
QOQ Comparison of Investment Portfolio Positions
Portfolio positions at the end of each quarter are listed by investment type, dollar amount, and percentage mix of the overall general investment portfolio:
Composition of Portfolio 2020-Present
Comparison of Investment Portfolio Positions
FY 2025-2026
FY 2024-2025
Investment Type % %
Cash in Banks $11,795,033 * $10,424,788 *
Money Market $9,330,381 12.75% $7,801,389 9.77%
CAMP $12,401,737 16.95% $12,530,377 15.69%
Local Agency Investment Fund $108,917 0.15% $15,110,107 18.92% Federal Agency Issues $24,834,595 33.94% $24,874,731 31.15% Commercial Paper $0 0.00% $0 0.00%
Corporate Medium Term Notes $10,565,811 14.44% $10,583,199 13.25% Bank Certificates of Deposit $0 0.00% $0 0.00%
Treasuries $15,928,128 21.77% $8,948,228 11.21%
Total: Investment Portfolio $73,169,570 100% $79,848,030 100.00% Weighted Average Maturity (Yrs) 0.75 0.54
Portfolio Effective Rate of Return 3.23% 3.28%
L.A.I.F. Yield 4.21% 3.97%
Yield on Benchmark 4.34% 4.25%
Interest earned YTD $575,653.23 1,074,634.23
General Fund Contribution (60%) $345,392 $644,781
Comparison of Investment Portfolio Positions F.Y. 2025-2026 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Investment Type % % %
Cash in Banks $7,621,789 * $25,487,932 * $13,508,000 * $ 9,865,121 * Money Market $6,410,529 6.86% $125,864 0.17% $10,816,724 12.84% $ 22,461,667 24.88% Local Agency Investment Fund $104,103 0.11% $105,337 0.14% $106,563 0.13% $ 107,737 0.12% Federal Agency Issues $35,668,724 38.19% $31,704,178 41.47% $28,743,576 33.69% $ 24,794,460 27.18% Commercial Paper $0 0.00% $0 0.00% $0 0.00% $ - 0.00%
Corporate Medium Term Notes $12,463,061 13.35% $12,495,672 16.69% $12,527,582 14.93% $ 10,548,423 11.74% Bank Certificates of Deposit $247,995 0.27% $0 0.00% $0 0.00% $ - 0.00% Treasuries $38,496,825 41.22% $31,755,588 41.53% $32,804,960 38.41% $ 32,890,362 36.09% Total: Investment Portfolio $93,391,237 100% $76,186,640 100.0% $84,999,404 100.00% $ 90,802,649 100.00% Weighted Average Maturity (Yrs) 1.45 1.46 1.12 0.76
Portfolio Effective Rate of Return (YTD) 3.21% 3.08% 3.26% 3.07% L.A.I.F. Yield 4.58% 4.52% 4.31% 4.27%
Yield on Benchmark 4.21% 4.38% 4.45% 4.40%
Interest earned YTD $615,313.46 $1,070,841.28 $1,604,265 $2,793,124 General Fund Contribution (60%) $369,188 $642,505 $962,559 $1,675,874 Comparison of Investment Portfolio Positions F.Y. 2024-2025 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
FY 2023-2024
FY 2022-2023
Investment Type %
Cash in Banks $6,469,818 * 13,256,219 * $11,755,717 * $ 10,560,379.31 * Money Market $8,733,993 8.78% $19,612,340 19.53% $15,881,678 15.37% $ 18,202,927.12 16.95% Local Agency Investment Fund $98,106 10.00% $100,842 0.10% $101,853 0.10% $ 102,941.43 0.10% Federal Agency Issues $49,969,031 50.24% $48,017,978 47.81% $48,066,986 46.52% $ 46,615,560.54 43.42% Commercial Paper $0 0.00% $0 0.00% $0 0.00% $ - 0.00%
Corporate Medium Term Notes $6,905,358 6.94% $2,921,402 2.91% $4,468,652 4.32% $ 8,405,345.37 7.83% Bank Certificates of Deposit $991,797 1.00% $991,856 0.99% $991,914 0.96% $ 247,964.77 0.23% Treasuries $32,755,612 32.94% $28,785,152 28.66% $33,811,331 32.72% $ 33,785,898.60 31.47% Total: Investment Portfolio $99,453,897 100% $100,429,570 100.0% $103,322,415 100.00% $ 107,360,637.83 100.00% Weighted Average Maturity (Yrs) 1.96 1.73 1.54 1.39
Portfolio Effective Rate of Return (YTD) 2.82% 2.96% 2.71% 2.78% L.A.I.F. Yield 3.55% 3.93% 4.25% 4.33%
Yield on Benchmark 2.66% 3.10% 3.53% 3.95%
Interest earned YTD $675,178.00 $1,260,353.00 $2,023,050 $2,773,041 General Fund Contribution (60%) $405,107 $756,212 $1,213,830 $1,663,824.86 Comparison of Investment Portfolio Positions F.Y. 2023-2024 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Investment Type %
Cash in Banks $10,955,229 * 9,223,658 * $6,359,470 * $ 9,742,075 * Money Market $0 0.0% $5,149,678 4.38% $13,392,052 11.33% $ 8,931,843 7.80% Local Agency Investment Fund $16,071,480 14.5% $27,137,556 23.1% $5,225,372 4.42% $ 1,087,813 0.95% Federal Agency Issues $53,439,957 48.3% $47,448,367 40.4% $56,867,881 48.12% $ 56,918,780 49.70% Commercial Paper $0 0.0% $0 0.0% $0 0.00% $0 0.00%
Corporate Medium Term Notes $6,981,521 6.3% $8,847,387 7.5% $8,866,737 7.50% $ 8,885,872 7.76% Bank Certificates of Deposit $1,239,564 1.1% $991,622 0.8% $991,680 0.84% $ 991,738 0.87% Treasuries $32,895,368 29.7% $27,910,842 23.8% $32,831,737 27.78% $ 37,713,483 32.93% Total: Investment Portfolio $110,627,890 100% $117,485,452 100.0% $118,175,459 100.00% $ 114,529,529 100.00% Weighted Average Maturity (Yrs) 1.99 1.72 1.97 1.91
Portfolio Effective Rate of Return (YTD) 1.51% 1.71% 2.10% 2.29% L.A.I.F. Yield 1.60% 2.17% 2.83% 3.17%
Yield on Benchmark 0.97% 1.38% 1.76% 2.19%
Interest earned YTD $425,011.78 $952,194.05 $1,695,368 $2,435,724 General Fund Contribution (60%) $255,007 $571,316.00 $1,017,221 $1,461,434.40 Comparison of Investment Portfolio Positions F.Y. 2022-2023 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Yields: The book yield of the portfolio is 3.41%. The effective rate of return for the fiscal year to date is 3.28%. The book yield is a snapshot on a specific day whereas the effective rate of return is annualized return generated for the period.
Investment Portfolio Performance vs. Benchmark: At the end of the quarter, the yield on the City’s general investment portfolio was 3.41%. This yield provided an 84 basis point disadvantage to the yield provided by the investment portfolio benchmark, U.S.
Treasury Note 0-5 year index (30 month moving average), which yielded 4.25%.
The 30 month moving average is used to represent a market rate of return.
Mark to Market: The City Treasurer compares market values of the portfolio holdings to their original cost. At the close of the quarter, the net asset value is $0.99. That means the Market Value is slightly below the cost of investments. The difference between the book value (cost) of investments at $79,848,030 and the current market value at $79,745,980 is $-102,051.
Cash in Banks:
As of 12/31/2025
General Fund
$ 10,424,788.40
Workmen’s Compensation Fund
$ 922,730.45
Successor Agency of RDA
$ 1,656,911.66
Trust Account
$ 7,614.40
Housing Authority BLKPNDG
$ 2,948,536.45
Financing Authority
$ 3,544,875.44
Parking Authority
$ 1,062.02
Measure R Local Return
$ 1,835,878.63
City of Redondo Beach - FSA
$ 128,939.97
Total $21,471,337.42
All Agency, Authority, and Miscellaneous Funds in Banks Bank Account Descriptions
General Fund - 201
Into the City’s general checking account are deposited most of the City’s revenue, including General Fund taxes, grant revenue (except that for the Housing Authority), Harbor Enterprise rental income, and sewer fees. From the general checking account are automatic transfers to the payroll and warrant accounts (as payments clear the bank) and purchases of investments.
Workmen’s Compensation Fund - 210
A Bank of America checking account has been established for the payment of workers’ compensation claims. The City’s third-party administrator, AdminSure, writes the checks from this account on the City’s behalf. Monthly, the City replenishes the account with a City Council-approved accounts payable check.
Successor Agency of RDA - 213 / Successor Agency of RDA - 694 The Successor Agency to the former Redevelopment Agency maintains both a Bank of America checking account (with a larger balance) and a Bank of America interest checking account (with a smaller balance). A few years ago, the bank changed the accounts to this structure from a checking account and a savings account. The checking account activity reflects biannual deposits of Redevelopment Property Tax Trust Fund (RPTTF) revenue as a result of the Recognized Obligation Payment Schedule (ROPS) process, whereby the City reports to the Department of Finance the amount of funding necessary to make its Redevelopment Agency debt service payments (together with the applicable administrative costs). Those debt service payments are then made from this checking account, and the administrative cost reimbursement is transferred to the City’s general checking account. The activity in the interest checking account is currently only deposits of interest earned.
Trust Account - 212
The Police Department deposits bail money into this checking account and then transfers these funds to the courts by way of checks. The balance of the account has been $7,364.40 for several years, but it could be higher at the end of the month/quarter if a check is outstanding at the time.
Housing Authority – 207/Housing Authority – 023
The Housing Authority maintains both a checking account and a government money market savings account. Into the checking account are deposited grant funds from HUD for the operation of the Fair Housing and Section 8 housing programs. Payments to landlords are then made monthly from this account, and periodically, a check is written to the City as reimbursement for administrative costs paid by the City on the Housing Authority’s behalf. The activity in the government money market savings account is currently only deposits of interest earned.
Financing Authority -168
The Community Financing Authority (CFA), a joint powers authority of the City and the Parking Authority, was formed January 31, 2012 when the Kincaid’s Restaurant lease was transferred from the Public Financing Authority (PFA), a joint powers authority of the City and the Redevelopment Agency, upon the Redevelopment Agency’s elimination by the State. The Financing Authority checking account is used for the lease-related transactions, including rental income, loan payments, sewer user fees, and possessory interest property tax payments.
Parking Authority - 675
The Parking Authority was established on March 3, 1969, under the provisions of the Streets and Highways Code of the State of California. Its primary purpose has been to provide public off-street parking within the City. The Parking Authority is currently inactive, with a little more than $5,000 remaining in a Bank of America interest checking account and a little less than $5,000 remaining in a LAIF account from its previous activities.
Measure R Local Return - 874
Measure R monies come from a 2008 voter-approved ½ cent sales tax levied within Los Angeles County for public transportation purposes. Per a Los Angeles County Metropolitan Transportation Authority (LACMTA) audit recommendation, Measure R monies are to be maintained in a separate bank account. Because expenditures from the Measure R Fund (primarily for capital improvement projects) are paid through the City’s accounts payable system and “General Fund” bank account, this separate Measure R Local Return interest checking account is funded by periodic transfers from the “General Fund” bank account instead of Measure R monies being deposited directly to the account.
City of Redondo Beach – FSA - 825
The City contracts with Sterling to offer its employees Flexible Spending Accounts (FSAs), which allow the employees to set aside, before taxes, a portion of their yearly income to pay for qualified medical and/or dependent care expenses. These funds withheld from the employees’ paychecks are transferred to this separate checking account each pay period. The medical and dependent care expenses are then paid by Sterling from this account.
LAIF Balances:
LAIF ACCOUNT DECEMBER 2025
ACCOUNT NAMES
GENERAL ACCOUNT $ 15,110,107.04
SUCCESSOR AGENCY FOR RDA $ 2,103,479.76
PUBLIC FINANCING AUTHORITY $ 2,203,804.47
PARKING AUTHORITY $ 5,826.60
Total: $ 19,423,217.87
Trading Activity
During the quarter, the City purchased zero securities. Also, two securities were redeemed.
Fiscal Impact
Interest earned year to date is $1,074,634 for the entire portfolio. The General Fund contribution rate of our investment portfolio is approximately 60% of the total interest earned, thus contributing approximately $644,781 to the General Fund through investment activity. Budgeted contribution of interest to the general fund for the entire fiscal year is $1,500,000.
Investment Reporting Guidelines
The second quarter reporting indicates a “Not Compliant” alert in the City’s Corporate Issuer Concentration section. The Treasurer’s Office has investigated this alert and resolved this reporting as a feature within the Clearwater reporting system not reflective of descriptions within our Investment Policy, Government Code, and GFOA guidelines The Corporate Issue Concentration limits are in compliance based on the date of purchase, which is in line with our Investment Policy requirements. (City Investment Policy Section 21) Please note the following guidelines from the Government Finance Officers Association Financial Management Checklists for Elected Officials.
Always remember whose money it is (it’s the community’s, not yours)—and act accordingly in a responsible stewardship capacity.
The generally accepted objectives in managing public funds, in priority order, are:
• Safety
• Liquidity
• Yield
An investment manager’s objective is to earn a reasonable rate of return on the city’s investments, while preserving capital in the overall portfolio. It should never be an investment manager’s goal to earn maximum returns on the city’s portfolio, as this would expose the city to an unacceptable level of risk. Failures in public investing occur when either:
• Policies were not clear.
• Policies were inappropriate.
• Policies were not followed.
• Oversight was inadequate.
Questions to Ask:
• Do you review the investment policy?
• Do you understand the city’s investment program?
• Do you receive and review periodic investment reports? • Are they clear, concise? Are they readable? Do you fully understand them? (If you can’t, this is more likely to be because they’ve been presented poorly, and may reflect problems, than any “technical” problems with your ability to understand them because it’s too “complex.” First, it’s the job of your staff to make them readable and understandable; and secondly, if the city’s portfolio is genuinely that complex, perhaps it shouldn’t be.)
• Are there lots of investments and transactions? Why? Most cities do not have portfolios that justify “active” management with lots of sales, purchases, and trades.
• Are your investments diversified? Or have you placed “all of your eggs in one basket?”
• What ongoing oversight is there? By whom?
Submitted by:
Eugene Solomon, City Treasurer