Redondo Beach commission adopts minor changes to investment policy, accepts quarterly treasury report

The Budget and Finance Commission on Aug. 14 approved two routine items from the City Treasurer: modest language changes to the City of Redondo Beach Investment Policy and the treasurer's fourth-quarter fiscal report for 2024-25.

The commission voted unanimously to recommend a revision of the investment policy that raises the city's dollar cap for deposits in the Local Agency Investment Fund (LAIF) from $65,000,000 to $75,000,000, the maximum amount permitted by state law, and to update policy language to mirror recent state changes regarding joint powers authorities. Commissioners then received and filed the treasurer's quarterly portfolio report.

Those actions came during the city treasurer's presentation. Eugene Solomon, Redondo Beach City Treasurer, said the adjustments were largely ministerial and intended to align the policy with state code and with the city's practice of bringing the policy to the commission annually. Solomon introduced staff and outside advisors who participated in the presentation, including Nilesh Mehta and Rick Phillips of METRE Investments, who described portfolio composition and performance.

In the quarterly report METRE reported a portfolio effective yield near 3.07% for the quarter and noted the portfolio's weighted average maturity remained short (under two years) because the city held more liquid assets in response to cash-flow needs. Solomon and METRE explained LAIF (the Local Agency Investment Fund) behaves like a liquid money-market vehicle; METRE reported a typical LAIF allocation across treasuries, agencies, certificates of deposit, commercial paper and a very small allocation to corporate bonds.

Commissioners asked several technical questions about allocation between money-market vehicles and CAMP (the California Asset Management Program), maturity distribution, the portfolio's weighted average maturity, and the city's plan for reinvesting about $8 million of maturing securities through October. METRE and the treasurer said staff intends to reinvest a material portion of maturing amounts out to longer maturities as monthly cash balances stabilize, while preserving liquidity to meet near-term obligations.

The presentation included a fiscal-impact summary showing year-to-date investment interest of approximately $2.79 million, about 60% of which was credited to the general fund; the treasurer noted the city exceeded its budgeted interest contribution for the fiscal year. Commissioners also discussed benchmarking and the difficulty of comparing municipal portfolios across jurisdictions because of differing cash-flow patterns and restricted funds.

The commission's approval was by voice vote; the treasurer said he would forward the policy changes to city council as the next step.

The commission also accepted METRE's management report and voted to file the fourth-quarter report as part of the commission record. No public comments opposed the actions.

The treasurer and METRE representatives said they would add more detail in future reports about the split between CAMP and other money-market holdings and would continue monthly reporting of maturities and reinvestment plans.

Ending: The commission moved on after the treasurer items to the capital improvement presentation and other agenda business.