March 17, 2026
Finance Department
DATE: March 17, 2026
TO: Mayor Martinez and Members of the City Council
FROM: Shasa Curl, City Manager
Emily Combs, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Subject:
Annual Review and Update of Financial Policies
FINANCIAL IMPACT: There is no fiscal impact associated with this item.
PREVIOUS COUNCIL
ACTION:
None.
STATEMENT OF THE
ISSUE:
The Government Finance Officers Association (GFOA)
recommends that financial policies be formally adopted
and reviewed annually as part of the budget process.
Consistent with this recommendation, as well as past
practice and best practices, staff is bringing forward
updates to the OPEB Funding Policy, Pension Funding
Policy, Investment Policy, and Unclaimed Funds Policy
for Council consideration.
RECOMMENDED ACTION:
ADOPT a resolution to APPROVE updates to the
Financial Policies - Finance Department (Emily Combs
510-620-6790/Mubeen Qader 510-412-2077/Jerry Gurule
510-620-6591).
DISCUSSION:
The Finance Department has undertaken a comprehensive review of our existing Financial Policies to ensure the policies align with the California Government Code, AGENDA
REPORT
March 17, 2026
Government Finance Officers Association (GFOA) recommended best practices, and standards set forth by the California Municipal Treasurers Association (CMTA). These policies serve as essential guidelines for City staff, ensuring adherence to financial standards across all operational facets.
GFOA recommends that governments formally adopt financial policies and review them annually as part of the budget process. Following our assessment, we have provided updates to the Other Post Employment Benefit (OPEB) Funding Policy, the Pension Funding Policy, the Investment Policy, and the Unclaimed Funds Policy.
OPEB Funding Policy
City staff recommends amending Section D. 3. b of the Funding Guidelines to specify exclusions when calculating the 10 percent allocation of the year-end operating surplus.
The revised section shall read as follows:
The City shall place 10 percent of the year-end operating surplus in the General Fund in excess of the City’s Cash Reserve Policy into the Trusts. The Operating Surplus is calculated as Total Actual Revenues minus Total Actual Expenditures including Transfers In and Transfers Out with the following exclusions:
Revenues received per Resolution No. 98-24
Grant revenues and expenditures
Section 115 Trust revenues and expenditures
Depreciation expenditures
Pension Funding Policy
City staff recommends amending Section D.2. of the Funding Guidelines to specify exclusions when calculating the 10 percent allocation of the year-end operating surplus.
The revised section shall read as follows:
The City shall place 10 percent of the year-end operating surplus in the General Fund in excess of the City’s Cash Reserve Policy into the Trusts. The Operating Surplus is calculated as Total Actual Revenues minus Total Actual Expenditures including.
Transfers In and Transfers Out with the following exclusions:
Revenues received per Resolution No. 98-24
Grant revenues and expenditures
Section 115 Trust revenues and expenditures
Depreciation expenditures
March 17, 2026
Investment Policy
Annually, the State Treasures office and The California Debt and Investment Advisory Commission (CDIAC) update and issue, in January, the Local Agency Investment Guidelines (LAIG). The LAIG is intended to aid local officials in their efforts to implement existing laws pertaining to the investment of public funds. Each year, CDIAC staff convenes a working group of public and private sector professionals to support its efforts to revise and update these Guidelines. Finance staff reviewed the LAIG effective January 1, 2026, to update the Investment Policy accordingly.
The policy has been updated to include clarifying language that aligns with California Government Code Section 53600 and permitting the investment of specific securities with maturities in excess of five years, contingent upon a resolution by the City Council no less than three months prior to investment. These securities include Bonds, Notes, Treasury Notes, Mortgage-Backed Securities and Asset-Backed Securities. In addition, the California Government Code has updated eligible Commercial Paper from may not exceed 270 days maturity to 397 days maturity.
Unclaimed Funds Policy
The procedure for managing unclaimed checks has been revised to occur on a quarterly basis rather than every six months. This more frequent schedule allows the City to identify and process outstanding unclaimed checks in a timely manner, ensuring that funds are either returned to their rightful owners or appropriately transferred according to policy. By increasing review frequency, oversight is strengthened and financial management is improved, leading to greater compliance and adaptability. Quarterly assessments provide regular updates to stakeholders and support proactive measures in handling unclaimed checks throughout the year.
Next Steps
City staff recommends that the City Council approve the proposed updates to the financial policies. City staff will continue to review the policies annually to ensure they remain consistent with the California Government Code, applicable legislation, City Council goals and priorities, and best practices.
DOCUMENTS ATTACHED:
Attachment 1 – Guiding Fiscal Policy
Attachment 2 – OPEB Funding Policy
Attachment 3 – Pension Funding Policy
Attachment 4 – Cash Reserve Policy
Attachment 5 – Debt Policy
Attachment 6 – Grant Management Policy
Attachment 7 – Investment Policy
Attachment 8 – Unclaimed Funds Policy
March 17, 2026
Attachment 9 – Purchasing Policy
Attachment 10 – Employee Meal and Food Policy
Attachment 11 – Travel Expense Policy and Procedures
Attachment 12 – FasTrak Policy and Procedures
Attachment 13 – Accounts Payable ACH Policy
Attachment 14 – Resolution Adopting Financial Policies