PREPARED BY: ARTURO CASTILLO DATE OF MEETING: 06/15/2026
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTIONS OF THE CITY COUNCIL OF THE CITY OF SAN PABLO AND THE SAN PABLO LOCAL SUCCESSOR AGENCY BOARD APPROVING AND ADOPTING A REVISED INVESTMENT POLICY FOR FY 2026-27
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
Continue Best Management Practices, Fiscal Excellence, and Fiscal Transparency is an adopted City Council Priority contained in the adopted Fiscal Year 2025-2027 City Council Priority Workplan, effective April 7, 2025.
RECOMMENDATION:
Staff recommends that the City Council and the Local Successor Agency (LSA) each adopt the attached resolutions approving a revised version of the City’s and LSA’s Investment Policy (Policy) for FY 2026-27.
BACKGROUND
California Government Code Section 53646 allows the Treasurer or Chief Financial Officer (CFO) to render annually to the City Council and the LSA Board of Directors a statement of investment policy and requires that any change in the policy be considered at a public meeting. The Policy is reviewed annually to ensure it comports with current City and LSA objectives. Further, Government Code Section 53607 requires that a legislative body delegate investment authority to the CFO annually.
The City’s and LSA Board of Directors’ Investment Policy sets forth the City’s and LSA investment objectives, risk preferences, authorized investments, and other investment-related priorities. A thoughtful and comprehensive investment policy not only provides a level of accountability for investment officials, but it also promotes public trust in investment decisions. Developing, reviewing, and monitoring the City’s and LSA Board of Directors’ Investment Policy serves as an important tool of communication between the investment official, City management, and the City Council and LSA Board of Directors.
Prior to January 1, 2005, State law required the City Treasurer to render to the City Council and LSA Board of Directors an annual Investment Policy. Although the law changed to eliminate this requirement, an annual review of the Policy for legal compliance and subsequent submittal to the City Council and LSA Board of Directors is good fiscal practice.
Mark Shuster, Managing Partner with Shuster Advisory Group, LLC (“Shuster”), and Shuster team members, have regularly met with staff to review the City’s investment portfolio, including discussion on updating the City’s and LSA Policy and any recommended changes to the Policy. The last update to the City’s Investment Policy Statement occurred on July 21, 2025.
Shuster Advisory Group, LLC (Shuster) is an independent investment advisory firm and fiduciary. They provide governmental and institutional retirement plan consulting services as well as private wealth management. Shuster is a SEC-Registered Investment Advisor with over $11 billion in assets under management focusing on serving the unique needs of governmental agencies and special districts serving over 100 cities, agencies and public entities. Shuster serves as a fiduciary to plan investments and provides investment selection, monitoring, and management.
The proposed revised Investment Policy was presented to the City’s Budget, Fiscal & Legislative Standing Committee (BFLSC) on June 10, 2026, to advise the City Council in its consideration of the proposed updates to the Policy.
ANALYSIS
The current Investment Policy complies with the requirements of California Government Code Section 53601 (“the Code”), though updates to the Code over the years have allowed for increased investment flexibility without sacrificing core principles of safety and liquidity. Staff, based on advice from Shuster, recommends updating the City’s and LSA’s Investment Policy to utilize the opportunities available with the current version of the Code.
To that end, staff, with the advice of Shuster, recommends the following updates:
1. Updating maximum maturity for Prime Commercial Paper from 270 days to 397 days, pursuant to Government Code Section 53601(h);
2. Updating Eligible Banker’s Acceptances portfolio limit from 30% to 40%, pursuant to Government Code Section 53601(g);
3. Updating maximum maturity for Repurchase Agreements from 30 days to 1 year, pursuant to Government Code Section 53601(j);
4. Clarifying that the current maximum allowance for any Local Agency Investment Fund (LAIF) account is $75 million;
5. Enhancing the reporting data inputs for more informative monitoring of the City’s bond portfolio’s exposures and risk across security types; and
6. Adding a Weighted-Average-Life definition to the Glossary section.
Budget, Fiscal & Legislative Standing Committee (BFLSC) Review
On June 10, 2026, the BFLSC (Mayor Pabon-Alvarado and Council Member Ponce) reviewed the Shuster Advisory Group, LLC Investment Policy Statement to be formally considered and approved by the City Council and LSA Board of Directors on June 15, 2026.
FISCAL IMPACT
There is no explicit financial impact to updating the City’s and LSA Investment Policy. However, there is an implicit impact given the broader opportunity to invest in Government Code Section 53601 eligible securities.
ATTACHMENTS:
Att A. Resolution 2026-### City Investment Policy
Att B. Resolution 2026-### LSA Investment Policy
Att C. Revised Investment Policy (with tracked changes)
Att D. Revised Investment Policy