Redondo Beach treasurer reports Q3 investment performance; commission accepts report

Redondo Beach City Treasurer Eugene Solomon presented the city’s third-quarter investment and portfolio report and the Budget & Finance Commission voted to accept and file the document.

The report, delivered by Solomon and Deputy City Treasurer Nilesh Mehta with commentary from Greg Balz of METR Investments on Zoom, summarized the city’s portfolio, quarterly returns and recent transactions. Solomon told the commission the portfolio met cash-flow needs for the quarter and reported a year-to-date interest-earnings figure that the presentation listed in different slides as $1.6 million and noted the general fund’s share is approximately 60%, about $963,000 toward the general fund year to date. Solomon said total portfolio value was roughly $85,000,000 in the current year compared with about $103,000,000 at the same point last year.

Mehta reviewed sector and maturity breakdowns and trading activity. Slides showed 38.4% of the portfolio in U.S. Treasuries, 33.69% in U.S. agencies, roughly 15% in corporate bonds and about 13% in money-market funds. Maturity distribution was presented as roughly 33% maturing within one year, 41% maturing between one and two years, and about 12% maturing between two and three years. Mehta said the quarter included one purchase (U.S. Treasury coupon 2.25%, maturity 02/15/2027) and one redemption.

Commissioners asked about the risk of locking into longer maturities if the Federal Reserve subsequently cuts rates and about contingency plans for possible mismatches between lower short-term yields and higher inflation-driven costs. Mehta described a weekly cash-flow analysis used to time purchases and ensure funds are available for debt service, payroll and accounts payable. He said staff seek opportunities to “lock in” yields when cash-flow conditions allow, but balance that against liquidity needs to avoid forced sales that could realize losses. Mehta also listed short-term liquid balances the city can access: about $8.9 million in a subsidiary account, about $13 million in the CAMP (California Asset Management Program) account and roughly $2 million in a money-market account.

Commissioners and the investment advisor also discussed macroeconomic risks — tariffs, inflation measures and yield-curve dynamics — and how those broaden the range of possible outcomes for municipal portfolios. Balz summarized recent economic drivers and said the market still expected several rate cuts later in the year but that uncertainty remained.

After discussion, Commissioner Samples moved to accept and file the treasurer’s Q3 investment report; a second was given and the motion passed unanimously.

The commission did not request immediate additional action on investments; commissioners asked staff to continue weekly cash-flow analyses and to follow up on questions about reserve classification and the CalPERS reserve fund.