TO:City Council
FROM:Investment Review Committee
DATE:December 2, 2025
SUBJECT: City Investment Review Committee Annual Report RECOMMENDATION:
1. Receive and file report.
2. Find that this action is not a project as defined under section 15378(b)(5) of the California Environmental Quality Act Guidelines.
LEVINE ACT ITEM: No
FINANCIAL IMPACT:
No Additional Funding Requested. Minimal staff time to complete annual report is included in the Adopted FY 2025-26 General Fund Budget.
BACKGROUND:
The City invests and manages approximately $385 million in its investment portfolios. These funds include operating funds, bond project and reserve funds, and funds of the former redevelopment agency. The portfolios are invested in accordance with State Law and the City’s Investment Policy.
In 1997, City Council created a five-member advisory committee to periodically monitor the City Treasurer’s compliance with the Investment Policy. The City Investment Review Committee’s (Committee) policies and procedures are set forth in Resolution No. 2017-021. The establishment of the Committee is a practical way to provide oversight and to ensure the City Treasurer invests in a prudent and responsible manner.
The five Committee members must be residents of the City with applicable work experience, training, and background in finance and investments. The members are appointed by City Council to serve two-year staggered terms. The current members are:
Original Current 2-Year
City Investment Review Committee Annual Report
December 2, 2025
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8 Appointment Term Expiration
Davin Carey 2021 2025
Anthony Gonzales 2021 2025
Sheila Moore 2022 2026
John Short 2007 2025
Cody Sorenson 2020 2026
The functions and duties of the Committee are:
1. Periodically monitor the City Treasurer’s compliance with the Investment Policy and its reporting provisions.
2. Provide a written statement of its findings to City Council on a quarterly basis.
3. Submit an annual report to City Council summarizing the work of the Committee and any recommendations for modification to the Investment Policy.
DISCUSSION/ANALYSIS:
The Committee last presented its annual report to City Council on December 3, 2024. The Committee held regularly scheduled meetings in February, May, August, and November of 2025. Written reports of the Committee’s findings, as well as meeting agendas and notes, were sent to City Council each quarter. The Committee finds that the investment portfolio is a mix of low-risk investments in compliance with the Investment Policy.
The terms of members Carey, Gonzales, and Short end on December 31, 2025. A 30-day application filing period for the three vacancies was opened on August 18, 2025. The application filing period was extended until October 2, 2025. Six applications were received. The reappointment of Davin Carey and the appointments of Christopher Sisson and Jacqueline Cross were approved by City Council on November 4, 2025.
During the year, the Committee provided guidance on investment options in the current market environment. In September, the Federal Open Market Committee (FOMC) resumed normalizing interest rates with a quarter-point rate cut. This was the first decrease since December 2024. The FOMC determined that recent indicators suggest economic growth moderated in the first half of the year with job gains slowing, unemployment edging higher, and inflation somewhat elevated. The FOMC dropped the federal Funds policy target rate another quarter-point in October to a range of 3.75-4 percent. The FOMC will continue to assess incoming data, the evolving outlook, and balance the risks when evaluating the target rate at future meetings.
City Investment Review Committee Annual Report
December 2, 2025
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8 The following table demonstrates the change in rates year over year:
September 2025 September 2024
City Portfolio 3.12% 2.48%
Local Agency Investment Fund 4.21% 4.58%
2-Year Treasury Note 3.61% 3.64%
5-Year Treasury Note 3.74% 3.56%
The portfolio is comprised of approximately 180 securities. Over the last year, the portfolio yield increased by 64 basis points to 3.12 percent from 2.48 percent. The book value of the City’s operating portfolio for the quarter ending September 30, 2025, was $380.2 million, approximately $19.6 million more than the $360.6 million balance the previous September.
The Committee reviews the City’s Investment Policy (Policy) annually and recommends changes to City Council. This year the Committee proposes several modifications to the Policy.
Existing law allows for a maximum commercial paper term of up to 297 days. In addition, local agencies with a portfolio of $100 million or more can invest up to 40 percent of their portfolios in eligible commercial paper until January 1, 2026, after which, the maximum decreases to 25 percent. Furthermore, while zero-interest accrual investments are not typically allowed, an exception was made for securities issued by or backed by the United States government during periods of negative market interest rates until January 1, 2026.
Senate Bill 595 (SB 595) was signed into law on October 1, 2025, and is effective as of January 1, 2026. The bill allows local agencies to invest in commercial paper with a maturity of up to 397 days to align State regulations with Securities and Exchange Commission definitions for money market requirements. It also extends the sunset provisions of January 1, 2026, for the above allowances to January 1, 2031.
The Policy has been amended to reflect these changes. The Policy currently has a commercial paper limit of 25 percent and there is no proposed change to increase the limit in accordance with the sunset provision extension. The maximum maturity for commercial paper has been increased to 397 days and the sunset date for purchasing government securities or government backed securities has been updated from 2026 to 2031.
In addition to the State law changes, the Committee is suggesting an additional change to the Policy. The Policy currently separates money market funds and mutual funds into two separate investment types and allows for a 15 percent limit for each type. Government Code Section 53601(l) allows for these options but City Investment Review Committee Annual Report
December 2, 2025
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8 with a 20 percent limit between the two. In the Policy’s current format, it would be possible to exceed the combined 20 percent combined limit. The Committee recommends limiting the maximum allowable amount to be invested in money market funds and mutual funds combined to 20 percent as authorized by Section 53601(l).
Staff will present the Policy to City Council for its annual approval as required by the Policy in January 2026.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Anthony Gonzales, Investment Review Committee Chair Jane Adelmann, Investment Advisor
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