FROM:
Finance
SUBJECT:
Title
2026-27 Statement of Investment Policy
End
RECOMMENDATION:
Recommendation
Adopt the City of Fontana Statement of Investment Policy for Fiscal Year 2026-27.
End
COUNCIL GOALS:
• To create a team by working together to provide stability and consistent policy direction.
DISCUSSION:
The City of Fontana Statement of Investment Policy (Policy) requires an annual review and adoption by the City Council. The Policy was last updated in June 2025. The Policy is being presented at this time to ensure that the requirements of the Policy are consistent throughout the fiscal year. The Policy has been certified by the Association of Public Treasurers of the United States and Canada (APT US&C).
There are some minor changes being proposed to the policy including the following:
• Section III - Safekeeping and Custody:
o Clarified safekeeping, custodial, and collateralization requirements for deposits.
o Added collateralization requirements (110% for government securities and 150% for mortgage notes) for bank deposits and clarified that pledged collateral must be held by a third-party custodian for the City's sole benefit.
• Section IV - Authorized Investments, Investment Types:
o Section (3) U.S. Government Securities: Added clarification that the maturity of Agency Mortgage-Backed and Asset Backed Securities is measured using Weighted Average Life (WAL).
o Section (6) Commercial Paper: Updated maturity period to three hundred ninety-seven days.
o Updated investment category table for consistency.
• Section IV - Authorized Investments, Investment Maturities:
o Section (2) Weighted Average Life: Added a definition of WAL as a measure of expected principal repayment timing and investment risk.
o Section (6) Maximum Maturity: Added clarifying language explaining how the maximum five (5) year maturity is measured by settlement date and WAL for Agency and Non-Agency Mortgage-Backed Securities or Asset-Backed securities.
• Section VII - Investment Reporting:
o Added Weighted Average Life (WAL) reporting and monitoring requirements for structured securities, including monthly compliance reporting and review thresholds for securities approaching or exceeding policy limits.
o Added monitoring requirements for securities exceeding four-year WAL.
The Investment Review Committee will meet quarterly to discuss the status of current investments, strategies for future investments, and other matters deemed relevant. Additionally, upon approval of this item, the Authorized Investment Officers will be as follows:
Authorized Investment Officers:
City Manager
Chief Financial Officer/Deputy City Treasurer
Deputy Finance Officer
Revenue and Operations Manager
Accounting Manager
FISCAL IMPACT:
None.
MOTION:
Approve staff recommendation.