Carlsbad investment committee appoints vice chair and reviews $900M portfolio as yields rise

The City of Carlsbad Investment Review Committee appointed Laura Rocha as vice chair and received an overview of the city’s Treasury operations and its fiscal year 2023–24 fourth-quarter investment results at a public meeting called to order at about 11 a.m.

Chair Zach Horace moved through introductions and presented the Treasury Department overview, saying the department’s investment program rests on three priorities: safety, liquidity and yield. Horace described the city’s approach as a fixed-income, buy-and-hold program with no equities permitted and a maximum five-year maturity across the portfolio. He said the policy requires that roughly two-thirds of the approved operating budget—about $279,300,000—mature within the next 12 months to ensure liquidity for obligations.

The committee approved a motion to appoint Ms. Rocha as vice chair. A committee member moved the appointment, it was seconded and the motion passed unanimously with committee member Rocha noted absent for the vote.

Horace then presented the fourth-quarter portfolio review covering April 1 through June 30, 2024. He reported 108 investment transactions during the period and a weighted-average portfolio yield that rose to 2.88% as of June 30, 2024. Horace said pooled-cash comparisons showed “Camp holding steady at about 5.4% with LAFE increasing from 4.27 up to 4.48%,” and that the portfolio’s par value reached just over $900,000,000. He attributed most portfolio increases to revenues exceeding expenditures.

A committee member asked whether the interim handling of transactions had changed since the prior treasurer. Horace responded, “my function… during this interim period is to maintain the philosophy,” adding it is not his intent to “make any drastic changes” to transaction structure while the city awaits the newly elected city treasurer. The member requested a future agenda item that would provide greater detail on transaction mechanics—who places trades, what brokers are used and whether process changes could yield cost savings.

There was no formal action on the Treasury overview or the quarterly review beyond receiving the reports. The committee voted to approve the remaining 2024 meeting and a proposed 2025 calendar (Feb. 20, May 15, Aug. 21 and Nov. 20); the motion passed unanimously with Rocha absent. Chair Horace closed the meeting and adjourned.

What happens next: staff will present any proposed structural changes to the committee after a newly elected city treasurer takes office; the next quarterly review was scheduled for Nov. 21, 2024.