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Annual Review of the City’s Statement of Investment Policy
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TO: Honorable Mayor and City Councilmembers
FROM: Colleen Tribby, City Manager
Prepared By: Jay Baksa, Finance Director
EXECUTIVE SUMMARY:
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The City Council will consider a resolution completing the annual review of the Statement of Investment Policy. The Policy has been updated to reflect changes to state law, align the Policy with current investment management best practices, and formally recognize the Finance and Investment Committee’s role in reviewing the City’s investment reports and Investment Policy prior to consideration by the City Council.
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STAFF RECOMMENDATION:
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recommendation text
Adopt the Resolution Approving the Annual Review of the Statement of Investment Policy and Delegation of Authority to Complete Investment Transactions.
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FINANCIAL IMPACT:
None
DESCRIPTION:
Background
An investment policy establishes the framework for how the City invests public funds until those funds are needed for operations or capital projects. It identifies the investments the City may purchase, sets limits intended to manage risk and improve diversification, and establishes requirements for oversight and reporting to the City Council. California Government Code Section 53600.5 establishes the objectives that govern the investment of public funds, in priority order: safety of principal, liquidity sufficient to meet the City’s cash flow needs, and return on investment.
The City’s Investment Policy, originally adopted on August 21, 2007 and last amended on September 16, 2025, implements those objectives locally and gives Staff and the City’s investment advisor clear parameters within which to operate. The Policy requires annual review by the City Council by the second meeting in September (Section XVIII). Although annual review of the City’s Policy is not required by state law, it is recommended by the California Debt and Investment Advisory Commission (CDIAC). CDIAC is a state commission within the California State Treasurer’s Office that provides California local agencies with information, education, and technical assistance on investing public funds and developing investment policies.
Recommended Policy Updates
As part of this year’s review, Staff consulted with the City’s investment advisor, Chandler Asset Management, to identify recommended updates to the Policy. The proposed amendments fall into three categories:
1. Updates necessary to reflect changes to state law (Sections IX, XI, and XIII);
2. Changes intended to align the Policy with current investment management best practices (Sections IX and XIII); and
3. Revisions recognizing the role of the Finance and Investment Committee (FIC) in reviewing the City’s investment reports and Policy prior to consideration by the City Council (Sections XVII and XVIII).
Section IX - Authorized and Suitable Investments
Staff proposes revising Section IX to reduce the maximum exposure to a single investment issuer from 20% to 10% of the portfolio. This change is recommended by Chandler to reduce concentration risk and further diversify the City’s investment portfolio.
Additionally, changes to state law require updates to the Policy’s commercial paper provisions. The amendments make two changes. First, the maximum maturity for eligible commercial paper increases from 270 days to 397 days. Second, the existing provision allowing up to 40% of the portfolio in commercial paper, which is currently set to expire in 2026, would be extended to 2031. If state law is not extended again, that limit would return to 25%. As of June 30, 2026, the City held no commercial paper. Extending the provision preserves the City’s authority to invest in commercial paper should market conditions warrant, and keeps the Policy aligned with state law; it does not reflect a planned change to the portfolio.
Section XI - Prohibited Investment Practices and Instruments
The proposed amendment to Section XI updates the sunset date, from 2026 to 2031, for the state law provision permitting investment in certain securities backed by the United States Government that could result in zero or negative interest accrual if held to maturity. As of June 30, 2026, the City held no investments of this type. As with commercial paper, the amendment keeps the Policy’s timeline consistent with state law and does not reflect a planned change to the portfolio.
Section XIII - Term of Investments
Staff proposes revising Section XIII to clarify that an investment’s maturity and eligibility under the Policy are measured from the settlement date rather than the trade date. This amendment aligns the Policy with state law and Chandler’s recommended investment management practices.
Sections XVII and XVIII - Report Information and Review of Investment Policy
Under the proposed language, applicable investment reports and the annual review of the Policy would first be presented to the FIC for review before being presented to the City Council. Related reporting and review timeframes would also be updated to accommodate this process. Following the FIC’s review and input, Staff will present the proposed amendments to the Policy to the City Council for consideration, consistent with the annual review requirement in Section XVIII of the Policy.
FIC Review
At its Special Meeting on September 1, 2026, the FIC received a report on proposed updates to the City of Dublin’s Statement of Investment Policy, consistent with its role in providing guidance on financial matters, including the investment of City funds. Following discussion, the FIC supported the updates and recommended that the item be brought to the City Council for consideration and approval.
STRATEGIC PLAN INITIATIVE:
None
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The City Council Agenda was posted.
ATTACHMENTS:
1) Resolution Approving the Annual Review of the Statement of Investment Policy and Delegation of Authority to Complete Investment Transactions
2) Exhibit A to the Resolution - Statement of Investment Policy for the City of Dublin
3) Statement of Investment Policy for the City of Dublin (Redlined)