TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Libby Bretthauer, Finance Director
Emy-Rose Hanna, Budget & Financial Analyst
SUBJECT:Title
Adoption of Annual Investment Policy for Fiscal Year 2025-2026 and Delegation of Responsibility for Investing Funds to the City Treasurer (No Budget Impact) (Finance Director Bretthauer).
ADOPT ANNUAL INVESTMENT POLICY
Body
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RECOMMENDATION:
The Finance Subcommittee and City staff recommend that the City Council adopt the Fiscal Year (FY) 2025-2026 Investment Policy and continue the existing delegation of responsibility for investing funds to the City Treasurer.
FISCAL IMPLICATIONS:
There are no fiscal implications associated with the recommended action.
BACKGROUND:
Consistent with California Government Code Section 53646, the City’s adopted Financial Policies state that the Finance Subcommittee and City Council shall annually review and update, as appropriate, the City’s Investment Policy. Furthermore, the Investment Policy shall be adopted by the City Council based upon the Finance Subcommittee’s recommendations.
The Finance Subcommittee reviewed and approved the FY 2025-2026 Investment Policy at its July 28, 2025 meeting, in advance of the City Council’s review.
DISCUSSION:
The City’s Investment Policy was last certified by the California Municipal Treasurers Association (CMTA) in FY 2021-2022. Following the common practice of re-submitting every three to four years, the City will submit the FY 2025-2026 Investment Policy to CMTA for Certification.
The CMTA Investment Policy Certification recognizes and validates that the City of Manhattan Beach’s Investment Policy adheres with the State of California Government Code and meets the program requirements within 18 different topic areas deemed to be best practices for investment policies. The topics include:
1. Scope
2. Prudence
3. Objective
4. Delegation of Authority
5. Ethics and Conflicts of Interest
6. Authorized Financial Dealers and Institutions
7. Authorized and Suitable Investments
8. Review of Investment Portfolio
9. Investment Pools/Mutual Funds
10. Collateralization
11. Safekeeping and Custody
12. Diversification
13. Maximum Maturities
14. Internal Controls
15. Performance Standards
16. Reporting
17. Investment Policy Adoption
18. Glossary
As required by the City’s Financial Policies, the annual review of the City’s current Investment Policy was recently conducted by City staff and the City’s investment brokers, taking into consideration current laws and regulations as well as changing market conditions. City staff also reviewed current investment statutes, local agency investment guidelines by the California Debt and Investment Advisory Commission (CDIAC), and CMTA’s Investment Policy Certification Program guidelines for any updates to the program.
During this review, it was determined that no substantive changes to the Investment Policy were needed this year. However, only minor and immaterial edits were made to reflect updated terminology for clarity and consistency throughout the Policy.
The changes were reviewed and approved by the Finance Subcommittee on July 28, 2025, for recommendation to the full City Council.
Delegation of Investment Authority to the City Treasurer
Pursuant to the California Government Code Section 53607, the legislative body (City Council) of the local agency may invest funds of the local agency or delegate that responsibility to the Treasurer of the local agency. The Treasurer assumes full responsibility for all investment transactions and makes a monthly report of those transactions to the legislative body until the delegation is revoked or expired. The legislative body may renew the delegation of authority each year.
The City Council has previously delegated Investment Authority to the City Treasurer, most recently in September 2024. Staff recommends that the City Council renew that delegation of responsibility for FY 2025-2026. This recommendation, if accepted, continues the long-standing City Council delegation of authority to the City Treasurer that is vital to the efficient operation of the City’s treasury management.
PUBLIC OUTREACH:
After analysis, staff determined that public outreach was not required for this Policy.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Investment Policy for Fiscal Year 2025-2026 (Redline Version)
2. Investment Policy for Fiscal Year 2025-2026 (Clean Version)