STAFF REPORT - CITY COUNCIL/SUCCESSOR AGENCY/PUBLIC FINANCE AUTHORITY

The total cash and investment portfolio book value (cost) held by the City as of March 31, 2026 was $29,583,197.

The cash and investments held by the City include the following components: Managed Investment Portfolio ($20,119,977), State of CA Local Agency Investment Fund ($6,806,701),California Asset Management Program (CAMP) Pooled Investment Fund ($3,245), Cash/Time Deposits ($2,544,333), and accrued interest on investments ($108,941). (Earned interest is the interest earned on investments over a specific time period, accrued interest is the interest that an investment has earned, but hasn’t yet been received, and paid interest is the interest that has already been received as payment). 

Cash and investments held by the City and the trustees continue to be invested in accordance with the Government Code and the City’s Investment Policy. 

During the quarter, one U.S. Treasury Note in the amount of $1,337,100 matured and two Corporate Bonds were purchased for a total of $1,177,523. Two-year Treasuries were yielding 3.47% at the beginning of the quarter and ended the quarter at 3.79%, which was a increase of 32 basis points for the quarter.

As of March 31, 2026, the Weighted Yield to Maturity on the Managed Investment Portfolio was 3.79%. At the end of this quarter, the Weighted Average Maturity of the Managed Investment Portfolio was 2.31 years.

The Federal Open Market Committee (FOMC) meets approximately every six weeks and determines the level of the Federal Funds Rate. At the March 18th meeting, the FOMC voted to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent.

Summary from the March 18th meeting:
“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the U.S. economy are uncertain. The Committee is attentive to the risks to both sides of its dual mandate. 

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.  

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”