Turlock treasurer reports strong liquidity, modest returns; proposes shifting into 4'5-year bonds

Treasurer Abraham presented the city's investment portfolio and told the council the city is meeting its stated objectives of safety, liquidity and modest return.

"Our main objective is safety of principal," Abraham said, describing the portfolio's emphasis on short-term, high-quality bonds and a duty to diversify under the California Government Code and the city's policy. He said the portfolio produced a 2.67% return over the first six months of the year, which he characterized as roughly $7,700,000 for the city.

Abraham said the city maintains ample liquidity — "over a $120,000,000 that is on demand" in cash and money-market-type vehicles — and has been reallocating some short-term holdings into 4'5-year maturities to lock rates amid expectations that short-term yields may decline. "In the 4 to 5 years, it's gone up from 20,000,000 at the beginning of the year to about 60,000,000," he said.

He compared the portfolio's performance to benchmarks, noting that different treasury buckets are not strictly apples-to-apples but provide context. Abraham said the portfolio's yield-if-held-to-maturity is expected to be about 4% annually for the next two years.

Abraham said he will make modest changes to the monthly treasurer's report (adding a cover sheet to explain changes) and will propose updates to the city's investment policy, last revised two years ago, to ensure consistency with regulation. He said he plans to return in six months with a full-year 2025 review.

Council members asked no substantive follow-ups during the presentation. The treasurer's report was informational; no formal action was taken.