Title
Review of 2025Q4 Investment Report through December 31, 2025
Staffreport
COUNCIL PRIORITY
• Fiscal Sustainability and Transparency
SUMMARY
City of San Leandro Investment Report for the quarter ending December 31, 2025 is for information only.
RECOMMENDATION
Staff recommends the City Council Finance Committee review the City’s Investment Report for the quarter ending December 31, 2025.
BACKGROUND
The purpose of the City of San Leandro Investment Report is to inform the City Council of the investment portfolio status as of the quarter ending, December 31, 2025. The City’s Investment Policy Statement requires quarterly reporting on specific investments, amounts invested with approved institutions, purchases, maturity dates and interest yields.
In July 2025, through a request for proposal process, the City transitioned investment management services from Chandler Asset Management to PFM Asset Management (PFMAM), a subsidiary of U.S. Bancorp Asset Management, Inc.
Analysis
CITY INVESTMENT REPORT
As of December 31, 2025, the City's investment portfolio had a market value of $163.3 million, invested through the City’s investment advisor, PFMAM; $21.5 million on deposit with Local Agency Investment Fund (LAIF), and $14.9 million in the City’s general bank accounts.
This report focuses on the quarterly investment report ending December 31, 2025 prepared by PFMAM, who manages the City’s investment portfolio. (Attachment A).
The rate of return for cash deposits at LAIF for the quarter was 4.20%, the bank transactions yielding 0.17% rate of return, while the average market yield for the PFMAM managed funds was 3.76%. The total return on the PFMAM managed investments for the three month period was 1.12%, compared to the benchmark of 1.10%. LAIF’s investment return is an annualized number reflecting the earnings rate for the three months ended December 31, 2025 (the quarterly apportionment rate), while the PFMAM total return reflects the portfolio’s realized earnings and unrealized market value changes for the past three months, and the number is not annualized.
The City’s investment policy establishes criteria for the standard for portfolio performance. The PFMAM managed fund criteria are compared with the ICE Bank of America 0-5 Year U.S. Treasury Index. This index is an unmanaged index tracking performance of direct sovereign debt of the U.S. Government having a maturity of less than five years. The benchmark’s yield as of December 31, 2025 was 3.51%. The market yield on the PFMAM managed funds was 3.76%.
Amounts invested with LAIF are liquid, funds can be withdrawn with minimal notice as City operations may require. The rate of return earned by LAIF follows fixed income security rates.
PFMAM manages 88% of the portfolio with a market value of $163,304,505. These investments have maturities of five years and under, with the average maturity at 2.05 years.
FUTURE REPORTING
California Government Code Section 53646 states that the Finance Director may render a quarterly report on the status of the City’s investment portfolio to the City Manager and the City Council. The quarterly report shall be submitted within 45 days following the end of the quarter covered by the report.
Given that the Council Finance Committee meets monthly, it will be difficult to meet the 45-day requirement. To ensure that the City complies with California Government Code Section 53646, all future quarterly investment reports will be presented directly to the City Council for acceptance of the investment report.
ATTACHMENTS
• Attachment A: 2025Q4 Investment Report, Prepared by PFMAM
• Attachment B: Presentation of 2025 Q4 Investment Report
PREPARED BY: Nicole Gonzales, Finance Director