Title
Recommendation to Approve the City of Alameda Investment Policy. [City Council and SACIC] (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
From: Kevin Kennedy, City Treasurer
EXECUTIVE SUMMARY
The City Council will consider approving updates to the City of Alameda’s (City) Investment Policy (Policy) (Exhibit 1). Each year, the City Treasurer and the Finance Director review the Policy for changes and revisions that may be needed to comply with applicable sections of the California Government Code or any other changes to keep the Policy updated to current business practices.
BACKGROUND
Section 5-2 of the Alameda City Charter requires the City Treasurer to annually recommend to the City Council, at a public meeting, an Investment Policy for the City Council’s approval. The City Treasurer and Finance Director have reviewed and recommended these proposed changes to the Policy. The Policy was last reviewed and adopted by City Council on September 16, 2025.
The Policy affirms the fiduciary responsibility to safeguard public assets and identify the opportunities for a systematic investment process. Priority is placed first on securing the safety of the principal and the liquidity needed for payroll and other City obligations, then on the investment's yield.
The policy has been developed in accordance with standards and policies established by the California Debt and Investment Advisory Commission (CDIAC) and the Association of Public Treasurers of the United States and Canada (APTUSC).
The Policy provides for staff to submit quarterly Investment Transaction Reports to the City Council. Investment Transaction Reports include summaries of all transactions within the investment portfolio and a statement confirming that current liquidity is adequate to meet expenditures for the next six months, as required by the California Government Code.
DISCUSSION
The City Treasurer and Finance Director are proposing certain changes, as listed below and in the attached redline version, to the Policy to reflect actual practice, ensure compliance with the statutes of the California Government Code governing the investment of public funds, and provide further clarity regarding changes to socially responsible investments.
Under Section IX, Authorized Investment, Maximum Maturities and Investment Amounts, staff recommends updating the investment type for Commercial Paper in accordance with Senate Bill 595, passed October 3, 2025, and updating the timeframe for the quarterly Investment Transactions Reports per the California Government Code. Please see below for a summary of the changes:
• Commercial Paper (Senate Bill 595):
o Extend sunsetting provision from January 1, 2026, to January 1, 2031.
o Update term limit from 270 days to 397 days.
• Quarterly Investment Transactions Report (California Government Code):
o Update the last paragraph of the Investment Policy citing an investment transactions report needing to be filed with the City Council no later than 60 days after the quarter end to no later than 45 days after the quarter end.
The City Treasurer and Finance Director continue to review the portfolio and its performance quarterly. The recommended changes, which are reflected in the attached Policy.
ALTERNATIVES
• City Council may choose not to approve the above changes; however, this will result in having an Investment Policy that is not compliant with SB 595 or the California Government Code.
• City Council may provide additional changes to the Investment Policy to the extent that it still must comply with the California Government Code and provide sufficient ability and flexibility to manage the City’s investment portfolio.
FINANCIAL IMPACT
There is no financial impact resulting from the approval of this Policy.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This activity complies with Section 5-2 of the Alameda City Charter, which provides that the Treasurer shall annually recommend to Council an investment policy.
Receiving this report is in alignment with the City’s most recent Strategic Plan under the priority to Practice Fiscally Responsible, Equitable and Inclusive Governance.
CLIMATE IMPACTS
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378 (b)(4) of the CEQA Guidelines, because it involves governmental fiscal activities (approval of the investment policy), which does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Approve the City of Alameda Investment Policy.
Respectfully submitted,
Kevin Kennedy, City Treasurer
Ross McCarthy, Finance Director
Exhibit:
1. Investment Policy