City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: FEBRUARY 24, 2026 FROM: FINANCE DEPARTMENT WARDS: ALL
SUBJECT: FISCAL YEAR 2025/26 FIRST QUARTER CASH, INVESTMENTS, AND DEBT REPORT ISSUE:
That the City Council receive and provide input on the Fiscal Year 2025/26 First Quarter Cash, Investments, and Debt Report.
RECOMMENDATION:
That the City Council receive and provide input on the Fiscal Year 2025/26 First Quarter Cash, Investments, and Debt Report.
BACKGROUND:
The Cash, Investments, and Debt report is prepared quarterly to provide an overview of the City's cash and investment portfolio, and debt management activities and portfolio. It is staff’s intention to provide the Cash, Investments and Debt Report at the same City Council meeting as the Quarterly Financial Report for the General Fund and other City funds, in order to provide a comprehensive review of all City Finance activities.
On January 13, 2026, the City Council received for consideration the Fiscal Year 2024/25 Fourth Quarter Cash, Investments and Debt Report.
DISCUSSION:
Quarterly Cash and Investment Report
Sound investment practices are an essential component of the City’s strong fiscal management. The Finance Department is responsible for managing the City’s investment portfolio, focusing first on the safety of investments, and then on liquidity and an appropriate rate of return. The investment results and portfolio composition are summarized and reported to the City Council quarterly and presented to the Finance Committee annually.
As of September 30, 2025, the City’s pooled investment portfolio’s market value was $979 million. The market value of investments held for the Section 115 Pension Trust Fund, fiscal agents (bond proceeds and reserve funds primarily), and other miscellaneous cash amounts to an additional $406 million. The weighted average yield of the pooled investment portfolio is 3.8% as of September 30, 2025.
The authority to manage the City’s investment program is provided by the California Government Code Sections 53600-53610, which allow the City Council to delegate to the Treasurer/Chief Financial Officer (CFO) the authority to invest or to reinvest all funds of the City for a one-year period. In accordance with the City Charter and under authority granted by the City Council, the CFO is designated the responsibilities of the Treasurer and is responsible for investing the unexpended cash in the City Treasury consistent with the City’s adopted investment policy.
The Cash and Investment Report, including a listing of cash balances by fund, is included in Attachment 1. These cash balances reflect each fund’s share of the City’s pooled investment portfolio. Also shown are interfund loan receivables, which are treated as available cash due to the CFO/Treasurer’s authorization to move loan receivables to other funds as needed.
All listed funds have a positive cash balance except for the following funds as of September 30, 2025:
Convention Center Fund ($287,825): The negative balance in the pooled investment portfolio is offset by $2,868,666.44 in miscellaneous cash holdings, resulting in a net positive cash position of $2,580,841.44.
Federal and Special Program Funds: The following funds have temporary negative cash balances resulting from a timing difference between eligible program expenditures and corresponding grant reimbursements.
Urban Areas Security Initiative: ($1,895,774)
Housing Opportunities for Persons with AIDS: ($969,934) Neighborhood Stabilization Program: ($127,517)
Capital Outlay Grants ($1,200,573): The negative balance is due to a timing difference between eligible capital project expenditures and the corresponding grant reimbursements.
Transportation Uniform Mitigation Fee (TUMF) Fund ($5,021,298): The negative balance reflects a timing difference between capital project expenditures and project funding revenue receipts.
Debt Service Fund – General ($19,466,475): This negative balance is fully offset by pending cash transfers due from various funds related to their share of the Pension Obligation Bond (POB) and other debt service payments.
Central Stores Fund ($816,813): The negative balance stems from inflationary impacts on inventory replenishment costs, accumulation of stale inventory, and increased inventory purchases undertaken to ensure adequate stock levels in response to extended delivery lead times. Inventory is sold at average cost, which understates current replacement costs due to older inventory, and can contribute to a temporary negative cash position.
Quarterly Debt Report
The Finance Department is responsible for managing the City’s debt portfolio, including issuing new debt and monitoring opportunities to refinance existing debt obligations. The Quarterly Debt Report (Attachment 2) summarizes the composition of the City’s debt portfolio, details the revenue sources utilized to pay the debt service associated with each outstanding obligation, and presents the total principal and interest payments made in the first quarter of Fiscal Year (FY) 2025/26 by debt classification and fund.
Debt Summary Analysis
The City’s outstanding principal varies as a result of debt service payments, bond calls, new debt issuances, and refunding and defeasance activity. At the close of the first quarter of FY 2025/26, the City’s outstanding principal balance decreased a net $44,499,407 compared with the balance at the end of the fourth quarter, due to the issuance of bonds to refinance the 2015A Sewer Bonds in addition to the below principal paydowns.
Debt service principal payments were made on the following bonds during the quarter:
Bank of America Capital Lease #2 (Vehicles)
Bank of America Capital Lease #3 (Heavy Vehicles and Equipment) JP Morgan Capital Lease #621 – Water Vehicles
Airport, Parking, Reid Park, Riverside Golf Course, Refuse and Utilities Plaza Interfund Loans Convention Center Expansion Loan
Sewer Revenue Bonds 2018A
Tax Allocation Refunding Bonds 2014A, 2018A
Sycamore Canyon Business District
Hunter Park Assessment District
Riverwalk Assessment District
Riverwalk Business Assessment District
Riverwalk Vista CFD 2006-1, and Improvement Area No. 2 Series A, and B Highlands CFD 2014-2 2016 Series A and B
Kunny Ranch CFD 2013-1 Series 2024
Orangecrest CFD 2015-1 Series 2020B
Pomelo CFD 2015-2 Series 2022
The following chart illustrates the composition of the City’s debt portfolio at the end of the first quarter. The majority of the City’s debt is held by the Enterprise funds, primarily issued to finance capital projects, with repayment offset by the revenues generated by the newly financed facilities. The General Fund and Measure Z carry the next largest percentage of debt, providing financing for projects and equipment related to public safety, downtown revitalization, and public facility and infrastructure improvements. Debt service for the City’s Pension Obligation Bonds is allocated across multiple funds, aligning payments with departmental staffing costs.
For the purposes of this report, the Sewer, Water, Electric, Refuse, Special Transit, Entertainment, Convention Center, and Parking funds are consolidated under the classification of Enterprise Funds. Measure Z and the General Fund are grouped together. Measure A is classified under Capital Projects Funds. While the Assessment Districts, Galleria Agreement, and Community Facilities Districts are part of the City debt portfolio, they are not classified as City obligations. They are offset by individual Assessment and Community Facilities Districts which are separate legal entities from the City, formed to issue debt and levy assessments and/or special tax to finance improvements related to development in those districts.
The following chart displays the City’s debt service obligations at the end of the first quarter of FY 2025/26 using the same classification methodology, depicting annual aggregate principal and interest payments on all City debt by fund. As illustrated, the City maintains a stable debt service curve resulting in steadily decreasing annual payments and minimizing large upward spikes that could negatively affect the City’s ability to meet debt service obligations in any given fiscal year.
Debt Related Activities in the First Quarter
Finance staff regularly monitors the market to identify opportunities for maximizing debt service savings through refunding and issuing debt when rates are most favorable.
Other debt related activities conducted in the first quarter include:
Finalized the 2025A Sewer Revenue Bond Issuance Refinancing of the 2015A Sewer Revenue Bonds closing date on August 28, 2025.
Finalized the renewal process for Riverside Public Utilities’ Revolving Lines of Credit (RLOC) to support liquidity, align with fiscal policy, and preserve strong credit ratings. The RLOC closed June 2, 2025.
Finalized the renewal process for Riverside Public Utilities’ Letter of Credit in connection with the 2011 RPU Variable Water Revenue Bonds closing on September 18, 2025.
Held the Public Hearings to finalize the levy for the City’s Landscape Maintenance and Citywide Street and Lighting Districts for FY 2025/26.
Filed the FY 25/26 Q3 Cash, Investments and Debt Report Finalized the Ordinance adoptions for the City’s Community Facilities District Programs to levy for FY 25/26 Finalized the levy process for the City’s Business Districts in Arlington, and the Auto Center Adopted a Resolution of Intention to form Community Facilities District 2025-2 Sagecrest FISCAL IMPACT:
There is no fiscal impact associated with this report.
Prepared by: Meline Carranza, Debt and Treasury Manager Approved by: Sergio Aguilar, Deputy Finance Director
Certified as to
availability of funds: Julie Nemes, Interim Finance Director Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: Rebecca McKee-Reimbold, Interim City Attorney Attachments:
Cash and Investment Report – Q1
Quarterly Debt Report – Q1
FY 2025/26 First Quarter Investments and Debt Report ● Page 5