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Oxnard CFO: $160 million locked into low‑yield five‑year investments from 2021; council asked about missed returns
Summary
Chief Financial Officer Javier Chargo Lastero told council that roughly $160 million of the city's investment portfolio was locked into five‑year maturities in 2021, producing returns below 1%; he said the city typically holds such investments to maturity and recommended shorter tenures if similar low‑rate conditions recur.
Council member Perello questioned the city—s investment portfolio after reviewing a report that showed some investments yielding less than 1% over multi‑year terms.
Javier Chargo Lastero, identified himself as Chief Financial Officer for the City of Oxnard, and explained that market conditions in 2021 led the city to invest roughly $160 million in five‑year instruments that now yield below 1% because rates were low at the time of purchase. "When you lock investment for 5 years, asset interest rate, in this case, in 2021, was at the bottom of the market," he said, adding that when interest rates subsequently rose the market value of those investments declined and the city typically holds those securities to maturity rather than realize a loss.
Chargo Lastero cited the California Government Code and the city—s investment policy in setting a five‑year maximum term for certain local government investments. He told the council that the city is holding those investments until maturity to avoid realizing losses and that material portions of the portfolio were affected by that 2021 decision.
Asked whether he would recommend repeating that strategy if the city faced the same conditions again, Chargo Lastero said he would likely prefer shorter tenures in the future to preserve flexibility and allow reinvestment as rates rise. He noted the market average has recovered and was "close to 4 and a half percent" at the time of his remarks, making the previously locked 1% holdings an opportunity cost relative to current market yields.
The council accepted the report and the item was considered as part of the information consent agenda, which the council approved by roll call 7‑0.
