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Fiscal Year 2025-2026 City Treasurer's Quarterly Investment
��taTINGTo2 ,{ 2000 Main Street, A of s aA ": C .i. Huntington Beach,CA ><� F 92648 City of Huntington Beach o RECEIVED & FILED File #: 26-029 MEETING DATE: 2/17/2026 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Jason Schmitt, City Treasurer VIA: Jason Schmitt, City Treasurer PREPARED BY: Jason Schmitt, City Treasurer Subject: Receive and File the City Treasurer's Q2 FY2025-2026 Quarterly Investment Report Statement of Issue: Receive and File the City Treasurer's Q2 FY2025-2026 Quarterly Investment Report, pursuant to Section 18.0 of the Investment Policy of the City of Huntington Beach. Financial Impact: Not Applicable Recommended Action: Receive and file the City Treasurer's Q2 FY2025-2026 Quarterly Investment Report, pursuant to Section 18.0 of the Investment Policy of the City of Huntington Beach. Alternative Action(s): Do not approve the recommended action, and direct staff accordingly. Analysis: Not Applicable Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable -Administrative Item City of Huntington Beach Page 1 of 2 Printed on 2/11/2026 powered by Legistar" File #: 26-029 MEETING DATE: 2/17/2026 For details, visit www.huntingtonbeachca.gov/strategicplan. Attachment(s): 1. Treasurer's Quarterly Investment Report for December 2025 2. PowerPoint Presentation Treasurer's Quarterly Investment Report for December 2025 City of Huntington Beach Page 2 of 2 Printed on 2/11/2026 powered by LegistarT" eyee.""ISe". [ '" NUI(F1DkFitDH tiEA&H City Huntingtonof Beach Quarterly Investment Report December 2025 tly INGT ,,,•..•.•••, CIS ..... cPORATeo•••••<• 9`\ abik • • UNT`( i11# Prepared by: Jason Schmitt City Treasurer 1 4 00 N, n , . HtlN3tNGl2Jtl BEACH �? INVESTMENT PORTFOLIO SUMMARY As of December 31, 2025 Portfolio Investments Book Value% Book Yield Years to Par Value Book Value Market Value. of Port Book Yield Contribution Maturity Cash/Money Market $18,136,122.32 $18.136,12232 $18,136.122.32 4.13% 3.62% 0.15% 0.00. Local Govt Inv Pools(LGIP) $61,259,430.12 $61,259,430.12 $61259,430.12 13.95% 3.95% 0.55% 0.00 05.Treasurtes $86,000.000.00 $85,587.224.24- $86,172,260,00 19.49% 3.64% 0.71% 1.74 Supranational $50000,00000 $49.776,273.53 $5033435000 11.33% 4.03% 0.46% 1.98 U.S.Agencies $132.455000.00 $132692,00408 $132,993,142.50 30.21% 3.14% 0.95% 1.83 Corporates $91,762000.00 $91,765.950.54 $92.,100.646.38 20.89% 4.18% 087% 2.01 Total $439,612,552.44 $439,217,004.83 $440,995,951.32 100.00% 3.69% 1.54 Funds within this portfolio with overnight availability are invested in the California Asset Management Program "CAMP" and a money market fund. The CAMP account is considered a "Local Government Investment Pool" or "LGIP" for reporting purposes above. Other funds are invested in U.S. Treasuries, Supranational Securities (International Bank of Reconstruction and Development "IBRD", Inter- American Development Bank "IADB"), U.S. Agencies, and Corporate bonds. Only the investment types allowed under California Government code Section 53601 and the City's Investment Policy Statement are utilized. For the quarter and fiscal year ending December 31, 2025, the market value of the portfolio surpassed the book value of the portfolio at $441.0 million versus $439.2 million. This was due to the decrease in overall market interest rates over the last year, which served to increase the prices (value) of the existing securities in the portfolio. This was a reversal as within the last year we had seen primarily increasing market interest rates, which had led to the portfolio market value being lower than the book value. As investments are primarily held to maturity, the market value is only a point-in-time measurement and no gain is realized. 2 D „ c±mp ,:gs^.+<a i§ rum" '� ae,•D k...'a ,yD s ' X`a� thirie***S.". FB NUNII'NUION BEACH PORTFOLIO BREAKOUT BY SECTOR As of December 31, 2025 Sector Breakdown Cash I Money Market Corporates 4.13% 20.89% Local Goat Inv Pools(1 G1P) 13.95% U.S Treastxies 1949% US,Agencies 3021% Supranational 11.33% Book Value of Port The largest holding by security type at month-end was U.S. Agency securities at approximately 30`)/0of the total overall portfolio versus 33% as of September 30, 2025. This was followed by Corporate securities at approximately 21% of the total portfolio as of December 31, 2025 versus 22% as of September 30, 2025. INVESTMENT PORTFOLIO EARNINGS As of December 31, 2025 Period Earnings Summary(31 Days) Fiscal YTD Summary(184 Days) Net Period Earnings $1,292,605.59 Net Period Earnings $7,516,917.03 Last FY Period Net Earnings $988,460.84 Last FY Period Net Earnings $5,832,617.42 Avg Daily Book Balance $418,952,607.72 Avg Daily Book Balance $414,286,752.84 Net Effective Annual Return 3.694% Net Effective Annual Return 3.631% 3 **•40".4 [ 9 , iunnNCAutterscHIre . Earnings for the month of December 2025 were $1,292,606, an increase of approximately 31% from the same month in the prior year. Fiscal year-to-date earnings of $7,516,917 increased approximately $1 ,684,300 or 29% from the previous fiscal year. These higher earnings were due to the increase in interest rates and the higher average portfolio balance. The effective rate of return for December was 3.69%, with a fiscal year-to-date return of 3.63% vs. 3.08% during the same period last year. At the end of December, the 12-month moving average of the interpolated 1.5-year U.S. Treasury was 3.88%. The portfolio will lag the benchmark, as it will take time for previously purchased securities bought in a lower interest rate environment during the pandemic to mature and the funds to be reinvested. PORTFOLIO BREAKOUT BY MATURITY As of December 31, 2025 Maturity Distribution 4-5Yr/ CASH 2.96% / ._...__ 18.08 3-4Yr /` 16.86% 2-3Yr _ .. 15.92% 0-1Yr ._. 25.844% 1-2Yr 20.35% Book Value% of Portfolio 4 V"r HUN11%blON I/LACII + 4 Cash and LGIP funds as of December 31, 2025 stood at $79,395,552, which was $20,537,256 greater than as of September 30, 2025. Overall, Cash/Money Market and Short-Term Investments (defined as < 1 year maturity) accounted for 44% of the total portfolio with another 20% being Medium-Term Investments (defined as 1-2 year maturity). This heavy weighting toward short-term instruments is driven by early property tax remittances in mid-December that will be re-invested in longer-term securities in Q3 FY2025-2026. COMPLIANCE SUMMARY As of December 31, 2025 Holdings Compliance Summary Investment U,e i I Issuer Limit Maximum Maturtty I Credit Ratings I Actual Min Rating Actual Min Rating Unlit Actual i Compliant Limit Actual Compliant Limit Actual Compliant short Term Long Term Complant U.S.Treasuries 100.00% 19.49% Yes—1 100.00% 1949% Yes 5.O0Years 358Years Yes NIA *A Yes Supranatinnal 30.00% 17.33%. Yes 100.00% 5.63% Yes %005%ars 3.50Years Yes WA AAA/Asa/AAA Yes U.S.Agencies 100.00% 1 3021% Yes 100.00% 18L0% Yes 5.00Years 4.98Vears Yes NA N/A Yes Corporates 30.00% 2089% Yes 10.00% 3.37* Yes 5.005%sn 4,73Ycas Yes N/A A(A2/A Yes Cash Compliance Summary %of Cash Account Account Description Portfolio Portfolio %hwestatde Dollar Portfolio Maximum Current Book Value Investable Value Compliant Maximum 003.CAMP California Asset Management Program 13.95% $75.000.000.00 561,259,430.12 $13,740,569.88 Yes 1CIP 13.95% $61,259,430.12 Yes 104FUZXX First American Treasury Obligations 15.00% 4,13% 10.87% 518,136,122.32 S47.746,428.40 Yes Cash/Money Market 15.00% 4.13% 10.87% 518,136,122.32 Yes There were no compliance issues during this period with either cash or investment holdings. 5 e H ✓ ECONOMIC AND MARKET OVERVIEW Market Summary: October 1, 2025 - December 31, 2025 Date Fed Funds Rate 2-Year 10-Year S&P 500 DJIA 6/30/2025 4.25% - 4.50% 3.72% 4.24% 6,204.95 44,094.77 9/30/2025 4.00% - 4.25% 3.60% 4.16% 6,688.46 46,397.89 12/31/2025 3.50% - 3.75% 3.47% 4.18% 6,845.50 48,063.29 6/30 - 9/30 Change -25bps -12bps -8bps 7.79%0 5.22% 10/1 - 12/31 Change -50bps -13bps +2bps 2.35% 3.59% On December 10, 2025, the FOMC decided to lower the target range for the federal funds rate by 0.25% percentage points from 3.75% to 3.50% after releasing a statement saying that economic activity continued expanding at a moderate pace but job gains slowed and the unemployment rate increased from the prior quarter. This FOMC decision marked the 3rd rate cut in 2025, resulting in a total reduction of 0.75% from 4.25% to 3.50% across the year. Markets: The yield on the 10-year U.S. Treasury finished the quarter at 4.18%, down from 4.16% at the end of the previous quarter. Over the last six months, these rate reductions have led the 2-Year Treasury yield to decline by 0.25% while the 10-Year Treasury yield has only declined by 0.06% during the same period due to continued long-term uncertainties regarding the strength of the U.S. dollar. The S&P 500 increased by 2.4% and the DJIA increased by 3.6% over the last quarter and by 7.8% and 5.2% respectively over the last six months. Employment: Total non-farm payroll employment increased by 50,000 and the unemployment rate edged up to 4.4%. Job gains increased in food/drinking services, healthcare, and social assistance, partially offset by losses in retail trade. 6 unt a-- Portfolio Summary i/,e< ..f.\ City of Huntington Beach x Portfolio:CITY ' R^ a`j Reporting Date:(FY2026) N,"anrl 0'`Z' 12/01/2025-12/31/2025 Full Accrual Basis LPar Value Period Earnings Summary(31 Days) Fiscal YTD Summary(184 Days) Period Transactions(Par) ' Net Period Earnings $1,292,605.59 Net Period Earnings $7,516,917.03 Redemptions 1 $5,000,000 Total Par Value $439,612,552.44 I Last FY Period Net Earnings $988,460.84 Last FY Period Net Earnings $5,832,617.42 Purchases 2 $23,000,000 j Avg Daily Book Balance $418,952,607.72 Avg Daily Book Balance $414,286,752.84 ' Total Activity 3 $28,000,000 Net Effective Annual Return 3.694% Net Effective Annual Return 3.631% _ Fiscal YTD Transactions(Par) Redemptions 16 $73,875,000 Purchases 8 $53,000,000 I Book Value Total Activity 24 $126,1375,000 Total Book Value $439,217,004.83 City Portfolio Certification I certify that this report and the corresponding pages attached accurately reflect all portfolio combined investments and conforms with all California state statutes and the Huntington Beach investment policy filed on December 19,2023.The investment program herein shown provides sufficient cash flow liquidity to meet the next six month's obligations.Market values are provided by US Bank via Interactive Data Corp(IDC) The City Portfolio uses a 12 month moving average of the 1.5Yr Treasury for comparison purposes.This period,that rate is equal to:3.880% r City Treasurer __ 12/31_/2025_ f Jason Schmitt Title Date Market Value L- Portfolio Investments i Book Value Book Yield Years to i J Par Value Book Value Market Value Book Yield %of Port Contribution Maturity I Total Market Value $440,995,951.32 Cash/Money Market $18,136,122.32 $18,136,122.32 $18,136,122.32 4.13% 3.62% 0.15% 0.00 Local Govt Inv Pools(LGIP) $61,259,430.12 $61,259,430.12 $61,259,430.12 13.95% 3.95% 0.55% 0.00 U.S.Treasuries $86,000,000.00 $85,587,224.24 $86,172,260.00 19.49% 3.64% 0.71% 1.74 Supranational $50,000,000.00 $49,776,273.53 $50,334,350.00 11.33% 4.03% 0.46% 1.98 U.S.Agencies $132,455,000.00 $132,692,004.08 $132,993,142.50 30.21% 3.14% 0.95% 1.83 Corporates $91,762,000.00 $91,765,950.54 $92,100,646.38 20.89% 4.18% 0.87% 2.01 Total $439,612,552.44 $439,217,004.83 $440,995,951.32 100.00% 3.69% 1.54 7 r* '!'G , Portfolio Summary Y City of Huntington Beach . Portfolio:CITY 4 oe Reporting Date:12/31/2025 �; �,;`;� ' P g r+t+ " Last Pricing Date:12/31/2025 Total Cash&Investments Portfolio Characteristics I Maturity Distribution Par Value 4-5Yr' I CASH Weighted Avg 2.96% 18.08% I Portfolio Book Yield 3.69% 3.58% a s, Coupon 3-4Yr Total Par Value $439,612,552.44 16.86% Portfolio Market 3.72% Composite Rating AA2 Yield Number of Securities Effective Duration 1.26 Held 69 2-3Yr 15.92% "__ _.__ Book Value Weighted Avg 1.54 Median Security Size $5,000,000.00 0-lYr Maturity(Yrs)/WALHeld £ I 25.84% Total Book Value $439,217,004.83 Weighted Avg 561 Net Asset Value $1.00405 21-2Yr Maturity(Days) (NAV) 0.35%��\ Book Value%of Portfolio Issuer Holdings-Top 10 Callable Breakdown I 1Sector Breakdown 0.00% 10.00% 20.00% Call Refunding - Options Options Cash/Money Market Value T- �i9„ 19.49% Market Onetime(lx) 2.28% 0.00% Corporates • 4.13% FHLB- I, 18.60% 20.89% Local Govt Inc Pools(LGIP) Total Market Value $440,995,951.32 CAMP- ,,, 13.95% Monthly(Dm) 0.00% 0.00% 13.95% ;'FNMA- 6.38% 0`• Quarterly(Dq) 4.10% 0.00% IBRD- 5.63% Semi-Annual U.S.Treasuries IADB-.+ 4.55% (Ds) 1.14% 0.00% 19.49% FUZXX- 4.13% Annual(Da) 3.42% 0.00% U.S.Agencies 30.21% FFCB-MI4.10% Supranational Gain/Loss Est. $1,778,946.49 Anytime(Cc) 0.D0% 14.62% 11.33% BMY,',\; 3.37% HD-'< 2.31% Total 10.93% 14.62% Book Value%of Port Asset Maturities by Month $Millions I 35 39 20 26 22 30 25 30 25 15 8 II ill5 5il ill 11 5 5 5 5 5 4 5 10 5 10 5 mr. cm. rr ryorybl ^ory� ryo^,, ory� ryOryb ryory'o iiiryory� ry: ryo''6" r1o'v� ry ryo~� pry' 4\ ,,, \ h4 by `Ym Ory� 'vQ * OryQ ' o^,� ry ry� ry ry� ry� ry� ry� ry� ry '�� ry '� ry 8 Atoiracry�. e o` eF 5j Holdings Compliance Summary I ys f City of Huntington Beach p ', _ Portfolio:CITY \c ooNTrce', Reporting Date:12/31/2025 Holdings Compliance Summary Investment Limit Issuer Limit Maximum Maturity Credit Ratings Limit Actual Compliant Limit Actual Compliant Limit Actual Compliant Actual Min Rating Actual Min Rating Compliant Short Term Long Term U.S.Treasuries 100.00% 19.49% Yes 100.00% 19.49% Yes 5.00 Years 3.58 Years Yes N/A N/A Yes Supranational 30.00% 11.33% Yes 100.00% 5.63% Yes 5.O0Years 3.50Years Yes N/A AAA/Aaa/AAA Yes U.S.Agencies 100.00% 30.21% Yes 100.00% 18.60% Yes 5.00 Years 4.98 Years Yes N/A N/A Yes Corporates 30.00% 20.89% Yes 10.00% 3.37% Yes 5.00Years 4.73 Years Yes N/A A/A2/A Yes Cash Compliance Summary 1 %of Cash Account Account Description Portfolio %of %Investable Dollar Portfolio Maximum Current Book Value Investable Value Compliant Maximum Portfolio 003-CAMP California Asset Management Program 13.95% $75,000,000.00 $61,259,430.12 $13,740,569.88 Yes LGIP 13.95% $61,259,430.12 Yes 104-FUZXX First American Treasury Obligations 15.00% 4.13% 10.87% $18,136,122.32 f $47,746,428.40 Yes ` ,. Cash/Money Market 15.00% 4.13% 10.87% 4,Z • $18,136,122.32 f Yes "The investment portfolio has been reviewed and is in full compliance with the established investment guidelines regarding credit quality,maturity,and sector allocation.All holdings meet or exceed the minimum credit rating requirements as outlined in the policy.No investments are below the permitted credit thresholds.Portfolio maturities are structured to remain within the approved limits.The weighted average maturity(WAM)and final maturity constraints are in compliance witl policy requirements.Investments are diversified across approved sectors and remain within the specified sector concentration limits.No sector exposures exceed established maximum thresholds. 9 Reporting Period: Bond Redemption Activity Report Portfolio:CITY 12/31/2025 City of Huntington Beach Accounting ID Transaction Type CUSIP Description Price Settlement Posted Date Par Value Principal Accrued Interest Total I Date 4426 Full Call 3134HAU43 FHLMC 4.625 12/18/2029 100.00000 12/18/2025 12/18/2025 5,000,000.00 5,000,000.00 0.00 5,000,000.00 Activity Total 5,000,000.00 5,000,000.00 0.00 5,000,000.00 Report Run Date: Jan 15,2026 10 Reporting Period: Bond Purchase Activity Report Portfolio:CITY 12/31/2025 City of Huntington Beach Accounting ID Transaction Type CUSIP Description Price Settlement Posted Date Par Value Principal Accrued Interest Total Date 4446 Buy 91282CGL9 T 4.000 02/15/2026 100.03500 12/22/2025 12/22/2025 15,000,000.00 15,005,250.00 210,326.09 15,215,576.09 4447 Buy 3136GCBX2 FNMA 4.15012/24/2030 100.00000 12/24/2025 12/24/2025 8,000,000.00 8,000,000.00 0.00 8,000,000.00 Activity Total 23,000,000.00 23,005,250,00 210,326.09 23,215,576.09 Report Run Date: Jan 15,2026 i1 Reporting Period: Cash By Structure Report Portfolio:CITY 12/31/2025 City of Huntington Beach Accounting ID Ticker Pool Description Type Par Value Book Value Market Value Rate %of Portfolio 104 FUZXX First American Treasury Obligations Cash/Money Market 18,136,122.32 18,136,122.32 18,136,122.32 3.620 4.13% Cash/Money Market 18,136,122.32 18,136,122.32 18,136,122.32 4.13% 003 CAMP California Asset Management Program LGIP 61,259,430.12 61,259,430.12 61,259,430.12 3.950 13.95% LGIP 61,259,430.12 61,259,430.12 61,259,430.12 13.95% Cash Holdings 79,395,552.44 79,395,552.44 79,395,552.44 18.08% Report Run Date: Jan 15,2026 12 Reporting Period: Bond Holdings By Sector Report Portfolio:CITY 12/31/2025 City of Huntington Beach Settlement Book Years to (%)of Moodys CUSIP Ticker Coupon Maturity Date Short Description Par Value Book Value Market Value Date Yield Maturity Portfolio Rating:.. 91282CGL9 T 4.000 02/15/2026 U.S.Treasury Note 12/22/2025 15.000,000.00 15,004,295.45 15,004.350.00 3.712 0.123 3.42% Aal 91282CHM6 T 4.500 07/15/2026 U.S.Treasury Note 03/12/2024 5,000,000.00 5,002,953.51 3025,650.00 4.380 0.534 1.14% Aa1 91282CCP4 T 0.625 07/31/2026 U.S.Treasury Note 09/30/2021 5,000,000.00 4,990,841.48 4.916,150.00 0.950 0.578 1.14% Aa1 91282CCW9 T 0.750 08/31/2026 U.S Treasury Note 09/23/2021 1,000.000.00 999,094.01 981,710.00 0.890 0.663 0.23% Aa1 91282CCW9 T 0.750 08/31/2026 U.S Treasury Note 11/23/2021 5,000,000.00 4,982,851.97 4,908,550.00 1.285 0.663 1.13% Aa1 91282CEW7 T 3.250 06/30/2027 U.S.Treasury Note 12/29/2022 5,000,000.00 4,949,196.32 4.982,800.00 4.000 1.492 1.13% Aa1 91282CEW7 T 3.250 06/30/2027 U.S.Treasury Note 12/22/2023 5,000,000.00 4,950,924.57 4,982,800.00 3.960 1.492 1.13% Aa1 91282CKZ3 T 4.375 07/15/2027 U.S.Treasury Note 11/04/2024 5,000,000.00 5,020,337,74 5.066.400.00 4.090 1.533 1.14% Aa1 91282CF82 T 2.750 07/31/2027 U.S.Treasury Note 01/19/2024 5,000,000.00 4,903,121.18 4,943,550.00 4.080 1.577 1.12% Aa1 91282CHKO T 4.000 06/30/2028 U.S.Treasury Note 09/18/2024 5,000,000.00 5,065,966,69 5,058,600.00 3.431 2.494 1.15% Aa1 91282CHQ7 T 4 125 07/31/2028 U.S.Treasury Note 01/16/2024 10,000,000.00 10.069,030.76 10,149,200.00 3.831 2.579 2.29% Aa1 91282CKX8 T 4.250 06/30/2029 U.S.Treasury Note 01/06/2025 5,000,000.00 4.987,813.26 5,105,650.00 4.327 3.493 1.14% Aa1 91282CKX8 T 4.250 06/30/2029 U.S.Treasury Note 01/10/2025 10,000,000.00 9,949,178.92 10,211.300.00 4.411 3.493 2.27% Aal 91282CFC0 T 2.625 07/31/2029 U.S.Treasury Note 01/23/2025 5,000,000.00 4,711,616.37 4.835.550.00 4.419 3.578 1.07% Aa1 U.S.Treasuries 86,000,000.00 85,587,224.24 86,172,260.00 19.49% 45906M2L4 IBRD 0.650 02/24/2026 Intl Bank for Recon and Dev 04/30/2021 5,000,000.00 4,998,416.72 4,976,950.00 0.670 0.14E 1.14% Aaa 459058KJ1 IBRD 3.125 06/15/2027 Intl Bank for Recon and Dev 01/10/2025 5,000,000.00 4,919,992.69 4.968.650.00 4.295 1.451 1.12% Aaa 45818WFN1 IADB 4.850 07/19/2027 Inter-American Development Bank 05/29/2024 10,000,000.00 10,011,505.66 10,139,200.00 4.770 1.544 2.28% Aaa 45818WFN1 IADB 4.850 07/19/2027 Inter-American Development Bank 04/22/2025 5,000,000.00 5,078.479.55 5,069,600.00 3.782 1.544 1.16% Aaa 45818WEQ5 IADB 3.B00 06/09/2028 Inter-American Development Bank 09/21/2023 5,000,000.00 4,910,726.33 4.976,850.00 4.622 2.437 1.12% Aaa 459058Kf9 IBRD 3.500 07/12/2028 Intl Bank for Recon and Dev 11/13/2023 5,000,000.00 4,858,385.35 4,989,200.00 4.760 2.527 1.11% Aaa 459058KT9 IBRD 3.500 07/12/2028 Intl Bank for Recon and Dev 12/06/2023 5,000,000.00 4.903,371.29 4,989.200.00 4.350 2.527 1.12% Aaa 459058KW2 IBRD 4.625 08/01/2028 Intl Bank for Recon and Dev 01/25/2024 5,000,000.00 5,057,767,53 5.126,700.00 4.130 2.582 1.15% Aaa 45950K0H0 IFC 4.250 07/02/2029 International Finance Corp 10/23/2024 5,000,000.00 5,037,628.42 5,098,000.00 4.011 3.499 1.15% Aaa Supranational 50,000,000.00 49,776,273.53 50,334,350.00 11.33% 3130AKN36 FHLB 0.525 01/15/2026 Federal Home Loan Bank 01/15/2021 5,000,000.00 4,999,961.11 4,994,450.00 0.545 0.038 1.14% Aa1 3130AKN85 FHLB 0.550 01/20/2026 Federal Home Loan Bank 01/20/2021 5,000.000.00 4,999,973.61 4,992,350.00 0.560 0.052 1.14% Aa1 3130AKUS3 FHLB 0.500 01/28/2026 Federal Home Loan Bank 01/28/2021 5,000,000.00 5,000,000.00 4,988,800.00 0.500 0.074 1.14% Aa1 3130ALEY6 FHLB 0.800 03/04/2026 Federal Home Loan Bank 06/10/2021 5,000,000.00 5,000,000.00 4,976,450.00 0.800 0.170 1.14% Aal 3130AM1N3 FHLB 1.030 05/26/2026 Federal Home Loan Bank 05/26/2021 5,000,000.00 5,000,000.00 4,948.400.00 1.030 0.397 1.14% Aa1 3130AMFS6 FHLB 0.750 06/12/2026 Federal Home Loan Bank 06/17/2021 5,000,000.00 4,997,309.19 4,936,350.00 0.873 0.444 1.14% Aa1 3130AVW57 FHLB 3.750 06/12/2026 Federal Home Loan Bank 05/09/2023 3,000,000.00 2,999,396.79 3,002,610.00 3.796 0.444 0.68% Aa1 3133EPNG6 FFCB 4.375 06/23/2026 Federal Farm Credit Bank 06/23/2023 3,000,000.00 2,999,785.00 3.010,800.00 4.391 0.474 0.68% Aa1 13130AQ7E7 FHLB 1.500 06/30/2026 Federal Home Loan Bank 12/30/2021 5,000,000.00 5,000,220.99 4.949,600.00 1.339 0.493 1.14% Aa1 3130AUMC5 FHLB 3.750 07/20/2026 Federal Home Loan Bank 01/19/2023 5,000,000.00 5,000,000.00 5,002.450.00 3.750 0.548 1.14% Aa1 3130AQS79 FHLB 2.250 08/07/2026 Federal Home Loan Bank 02/07/2022 5,000,000.00 5,000,000.00 4.958.650.00 2.250 0.597 1.14% Aa1 3133EPGT6 FFCB 3.875 04/26/2027 Federal Farm Credit Bank 04/26/2023 5,000,000.00 4,998,103.30 5,018,900.00 3.906 1.314 1.14% Aa1 3133EPJP1 FFCB 3.625 05/12/2027 Federal Farm Credit Bank 05/12/2023 5,000,000.00 4,995,277.53 5,005,800.00 3.700 1.358 1.14% Aa1 3130AW4N7 FHLB 3.630 06/04/2027 Federal Home Loan Bank 05/18/2023 5,000,000.00 5,000,000.00 5.003250.00 3.630 1.421 1.14% Aa1 14.................A.. 3133EPMV4 FFCB 4.125 06/15/2027 Federal Farm Credit Bank 06/15/2023 5,000,000.00 4.999,654.31 5,041;100.00 4.130 1.451 1.14% Aa1 3130AWWN6 FHLB 4.500 09/10/2027 Federal Home Loan Bank 12/05/2023 4,455,000.00 4,462,848.95 4,524.052.50 4.383 1.689 1.02% Aal 3130AWC24 FHLB 4.000 06/09/2028 Federal Home Loan Bank 06/13/2023 5,000,000.00 5,002,248.78 5.055,900.00 3.979 2.437 1.14% Aa1 3130AWC24 FHLB 4.000 06/09/2028 Federal Home Loan Bank 06/27/2023 5,000,000.00 4,998,645.06 5,055,900.00 4.012 2.437 1.14% Aa1 3136GA.134 FNMA 4.300 06/09/2028 Fannie Mae 06/26/2025 5,000,000.00 5.004,007.58 5,014,550.00 4.110 2.437 1.14% Aal : 3136GAEQ8 FNMA 4.220 07/07/2028 Fannie Mae 04/07/2025 5,000,000.00 5,000,000.00 5,019,250.00 4.220 2.513 1.14% Aal 313081600 FHLB 4.625 06/08/2029 Federal Home Loan Bank 07/19/2024 5,000,000.00 5,080,591.36 5.164,250.00 4.100 3.433 1.16% Aal i 313081BC0 FHLB 4.625 06/08/2029 Federal Home Loan Bank 07/25/2024 5,000,000.00 5,070,917.57 5,164,250.00 4.162 3.433 1.15% Aa1 3134H8NT4 FHLMC 4.070 06/08/2029 Freddie Mac 05/01/2025 5,000,000.00 5,000,000.00 5,004,250.00 4.070 3.433 1.14% Aal 3130B1BC0 FHLB 4.625 06/08/2029 Federal Home Loan Bank 05/12/2025 4,000,000.00 4.083,062.95 4.131,400,00 3.964 3.433 0.93% Aa1 31360A159 FNMA 4.170 07/09/2029 Fannie Mae 07/09/2025 5,000,000.00 5.000,000.00 5,014,400.00 4.170 3.518 1.14% Aal 3136GA7A1 FNMA 4.710 07/13/2029 Fannie Mae 01/23/2025 5,000,000.00 5,000,000.00 5,015,300.00 4.710 3.529 1.14% Aal j 3136GCBX2 FNMA 4.150 12/24/2030 Fannie Mae 12/24/2025 8,000.000.00 8,000,000.00 7.997,680.00 4.150 4.977 1.82% Aa1 Report Run Date: Jan 21,2026 13 Reporting Period: Bond Holdings By Sector Report Portfolio:CITY 12/31/2025 City of Huntington Beach Settlement CUSIP Ticker Coupon Maturity Date Short Description Se Date Par Value Book Value Market Value Book Years to 06)of Moodys Yield Maturity Portfolio Rating U.S.Agencies 132,455,000.00 132,692,004.08 132,993,142.50 30.21% 717081OV2 PFE 2.750 06/03/2026 Pfizer Inc 01/18/2023 5,000,000.00 4,972,827.65 4,978,050,00 4.142 0.419 1.13% A2 110122CN6 BMY 3.200 06/15/2026 Bristol-Myers Squibb 11/16/2022 5,000,000.00 4,973,319.78 4.986,500.00 4.480 0.452 1.13% A2 931142EM1 WMT 3.050 07/08/2026 Wahnart 05/15/2023 4,257,000.00 4,242,469.99 4.242,696.48 3.752 0.515 0.97% Aa2 904764AU1 UNANA 2.000 07/28/2026 Unilever 05/15/2023 2,505,000.00 2,481,425.32 2,479,899.90 3.752 0.569 0.56% Al 037833DN7 AAPL 2.050 09/11/2026 Apple 12/06/2023 5,000,000.00 4,918,216.08 4.944,000.00 4.583 0.693 1.12% Aaa 713448DN5 PEP 2.375 10/06/2026 Pepsi 12/26/2023 5,000,000.00 4,932,281.25 4,949,950.00 4.273 0.761 1.12% Al 24422EXR5 DE 4.900 06/11/2027 John Deere 01/06/2025 5,000,000.00 5,029,714.29 5,084,450.00 4.460 1.440 1.15% Al 437076DB5 HD 4.875 06/25/2027 Home Depot 08/23/2024 5,000,000.00 5,053,346.77 5.084,550.00 4.061 1.478 1.15% A2 438516CX2 HON 4.650 07/30/2027 Honeywell 08/15/2024 5,000.000.00 5,035,881.26 5,064,150.00 4.137 1.574 1.15% A2 023135BC9 AMZN 3.150 08/22/2027 Amazon 08/23/2024 5,000,000.00 4,931,807.69 4,959,350.00 4.040 1.637 1.12% Al 14913UAR1 CAT 4.400 10/15/2027 Caterpillar 09/10/2024 5,000,000.00 5,043,029.60 5.059,350.00 3.886 1.785 1.15% A2 110122DE5 BMY 3.900 02/20/2028 Bristol-Myers Squibb 01/24/2025 5,000,000.00 4.930,887.34 5,009,850.00 4.600 2.136 112% A2 1667561381 CVX 4.475 02/26/2028 Chevron 09/03/2025 5,000,000.00 5,068,586.62 5.077,750.00 3.776 2.152 1.15% Aa2 24422EX130 DE 4.950 07/14/2028 John Deere 03/27/2024 5,000,000.00 5,032,518.62 5,134,650.00 4.662 2.533 1.15% Al 437076DC3 HD 4.750 06/25/2029 Home Depot 06/26/2025 5,000,000.00 5.087,869.13 5,126,200.00 4.185 3.480 1.16% A2 110122CP1 BMY 3.400 07/26/2029 Bristol-Myers Squibb 09/18/2025 5,000,000.00 4,913,947.59 4.905,450.00 3.923 3.565 1.12% A2 1732!4 BK3 C 4.838 08/06/2029 Citi8roup/Citibank NA 09/03/2025 5,000,000.00 5,119,639,91 5,116,300.00 4.095 3.595 1.17% Aa3 532457CQ9 LP/ 4.200 08/14/2029 Eli Lilly&Co 07/15/2025 5,000,000.00 4,998,181.65 5,048,450.00 4.210 3.617 1.14% Aa3 48130C4W2 1PM 4.05D 09/23/2030 JP Morgan 09/23/2025 5,000,000.00 5000,000.00 4.849,050.00 4.050 4.726 1.14% Al • Corporates 91,762,000.00 91.765,950.54 92,100,646.38 20.89% 11111 Bond Holdings 360,217,000.00 359,821,452.39 361,600,398.88 81.92% . Report Run Date: Jan 21,2026 14 1 `wins 04ti,, o ,,,,,,$ s City of Huntington Beach .y.. c. ;.A ; Portfolio:CITY v 4eF�otuTv c Reporting Date:12/31/2025 Portfolio Ratings Par Value Book Value Market Value Book Yield Book Yield Effective Duration Effective Duration Years to Maturity (%)Book Value Contribution Contribution AAA 55,000,000.00 54,694,489.61 55,278,350.00 4.08 0.51 1.75 0.22 1.86 12.45% AA1 218,455,000.00 218,279,228.32 219,165,402.50 3.34 1.66 1.36 0.68 1.79 49.70% AA2 9,257,000.00 9,311,056.61 9,320,446.48 3.77 0.08 1.29 0.03 1.41 2.12% AA3 10,000,000.00 9,929,989.35 10,007,800.00 4.13 0.09 2.39 0.05 2.63 2.26% Al 27,505,000.00 27,595,579.39 27,614,299.90 4.26 0.27 2.12 0.13 2.43 6.28% A2 40,000,000.00 40.011,109.12 40,214,100.00 4.18 0.38 1.70 0.16 1.86 9.11% NR 1 79,395,552.44 79,395,552.44 79,395,552.44 3.87 0.70 0.00 0.00 I 0.00 18.08% J Rating Total 439,612,552.44 439,217,004.83 440,995,951.32 3.69 1.26 1 100.00% 15 .-1 ' o f,,,,, !,9,y6�t Statement of Cash Receipts and Disbursements and n Summary of Cash by Fund ps , -r4TpsA City Treasurer's Office ��ea 1.:. "1 December 2025 Cash Receipts and Disbursements December 2025 December 2024 Y/Y Percent Change Receipts General Fund Property Tax $ 28,856,204 $ 21,433,013 35% Local Sales Tax 3,756,087 3,902,573 -4% Public Safety Sales Tax 290,575 282,770 3% Transient Occupancy Tax(TOT) 957,825 953,287 0% Utility Users Tax(UUT) 1,711,602 632,281 171% Other Revenue 5,391,577 5,699,051 -5% Total General Fund Revenue 40,963,870 32,902,974 24% Total All Other Funds Revenue 25,371,215 21,008,154 21% Total Receipts $ 66,335,085 $ 53,911,128 23% Disbursements General Fund Personnel Services (11,884,646) (12,903,173) -8% Operating Expenses (4,915,812) (3,807,718) 29% Capital Expenditures - - 0% Non-Operating Expenses (302,936) (302,936) 0% Total General Fund Disbursements (17,103,393) (17,013,827) 1% Total All Other Funds Disbursements (13,264,002) (17,034,933) -22% Total Disbursements (30,367,395) (34,048,761) -11% Net Change in Cash Flow $ 35,967,690 $ 19,862,367 81% Summary of Cash by Fund December 2025 December 2024 Y/Y Percent Change General Fund $ 111,771,676 $ 103,896,602 8% General Fund Other 5,524,777 2,622,246 111% Capital Projects Funds 54,023,497 48,624,041 11% Debt Service Funds 44,820,687 38,013,090 18% Enterprise Funds 94,031,219 89,914,247 5% Trust and Agency Funds 9,514,699 12,956,082 -27% Internal Service Funds 68,941,853 48,958,819 41% Special Revenue Funds 58,463,604 52,498,764 11% General Ledger Cash Balances * $ 447,092,012 $ 397,483,890 12% Total cash will differ from investment portfolio total due to outstanding checks and/or other timing differences. Note: Above information was obtained from the City's accounting system records.The above information includes receipts from maturing investments and payments for purchased investments in the city investment portfolio.This statement is prepared in compliance with the City's Charter. 16 ,,,,,,,,,e4r4r,„,.. /ivir • ...... 11 N G 7 Ilk \\S,c ik �.+�• I Ifs,�0RPORAT�!•!!+ .6 \ , .. 4, --______. _ ___ __ ..... ________ ____ __ _ _ __ _ ___%...<<‘ Ilk _,...-- _ -57 Illi, ____ , — ,,,,,,,,m. c-')•• __ , . „,,, "if,. , • ,,.... , '-` = - /y\\, , • Q2 FY25-26 Investment Review • -f �� .., ;� ) - ,+ '.ccCity Council `:+ I February 17, 2026 !64. e8 n ‘','' 0. <ic,I . AO ! 17 1g©9 , �,• ecOZ, T \ 411 Vji ..,,,, AgrAlefflr Investment Policy Principles Our city's investment policy is designed to provide guidelines for the prudent investment of all city cash balances with an absolute investment priority of safety, liquidity, and yield in that order CITY OF HUNTINGTON BEACH #1 STATEMENT OF INVESTMENT POLICY # F,,: Safety 2026 #3 Yield p 4 ilk :4;`. �. Prudent Investor . ti COL, Y�'�a`; " Standard Q2 FY25-26 Investment Performance Huntington Beach has -$44014 in investable reserves across short-term and long-term instruments at quarter- end, yielding a 3.63% return for this quarter and outperforming prior quarter and last year's performance Portfolio Return (%) Sector Breakdown $50 FY25-26 YTD 3.63% $86 FY24-25 PTD 3.08% $440 $133 18-Month $61 3.88% $18. Index Cash/CDs LGIP Agencies Corps Treasuries Supras Total • YTD Transactions: 8 purchases ($53 million) and 16 redemptions ($74 million) • Returns: Portfolio has generated $7.5 million in 6 months, which is $1 .7 million higher than last year • Acceleration: Returns are accelerating on quarterly basis (3.63% YTD FY25-26 vs. 3.59% for Q1 FY25-26) • Roll-Offs: $50 million in pandemic era purchases with < 2% yield rolling-off across next 12 months Long-Term Investment Performance Huntington Beach's net annual investment income has nearly quadrupled over the last 4 years and our effective quarterly rate of return has increased from 1.2% to 3.7% Portfolio Return (%) Net Annual Investment Income ($M) 4.0% 3.5% 3.0% 3.70% $15.0 $13.0 2.5% 2.0% $10.0 1 .5% 1.0% 1.22% $5.9 0.5% $3.5 0.0% 91 R2Q3R419 1 Q23Q4� 1 Q2Q3Q4Q1 I FY23 FY24 FY25 FY26 FY22 FY23 FY24 FY25 FY26 (Est) Q2 FY25-26 Investment Portfolio Compliance Both the bond and cash portions of the investment portfolio are in full compliance with our city's Investment Policy and California General Code requirements Haaidir,gsCompliante5ummary Overall bond portfolio meets compliance InvetneetLimit Issuer Unlit Maximum h4aturi+ Credit Ratings requirements for: Artual Min Rat ng=Actual Mtn Ratirg umt AL-ha; Compliant ;m A�toaf cnla t;>It Af cm �n: or<rer longTesm cnC4 • Investment limits • Issuer limits U,S.Treasuries 100OC% 19,49% ' Yes E 100.51iE 19A4= Yes 5.D3Years 358Year: 'Yes , VA lith Yesi • Maximum maturities _ Suptanatianai 30. 11.33% Yes l�taJ% 5:63% Yes SODYears 350Year Yes NA AM/l4at7cAA Yes • Credit ratings (81% are , AAA or AA rated) US.Agenctes 10OOD% 30.21° Yes ''ll TA I 4&bQ% Yes S.QOYears 4.98Yeazs Yes 1,1[4 t i114 1 Yes 1 Corporates 30,E 2O.8g Yc7s 10 1.1. 3.3 E: Yes 31:03Years 4,73Years Yes NA NAVA Yes Overall cash/LG I P portfolio meets compliance for: ___ Cash Compliance Summary • Investable limits %M • Portfolio share Cast Acu nt AccountDes€riptirat Portlriia ° %Investable Dollar PortfulieMaaetran Cursed B 'daitte 1r ve5tatde‘hl,....,e Compizet Mautn Porfft�li4 5433?CAMP Calit r4aAssetMarayemetProgram 13.95% S75,O0O,0CX $11254,430,12 53?40,564-SSA YFs Current Cash/LGIP levels LC,(P 13.45� 551,259,430.12 �� would cover p in 104Fil first Am emetTreusumyOM atians 15CO%_ 4.13% 15407% S1813612732 147,?46.42840 Yes sales and property taxes for 18 months with a —$19 Cmhilkney Mar4:et 15.00% 4,13% 10.87% $18,136,12232 Yes _ �� „� million buffer Q2 FY25-26 Investment Portfolio Concentration Issuer concentration is nicely balanced within the investment portfolio, but there is an upside opportunity to rebalance portfolio sector weighting to capture incremental yield with very limited risk exposure t'o,,*t Holding,. t yap le ctor Breakdown 0,00% � _t "r°'-, 20:00 Cash 0 Money 19.49 Market Corporates 4.23'96 20.89% HL 0 . it Local Govt Inv Posts(LGIP) i JkP p 13 9"f7 13E S e 6_3B% Ft C7 4IP'5.63 �U.S TI'easu€ies IADO k` .55 Iq.^ 9°t Fuzxx 4.13% US.Agencies 30.21% FFCB- 4„1 Supranationaf 11.33% B144Y 3.37 Het-All2.31% Book Value % of Port • Issuer Concentration: Nicely balanced with only 10%+ concentrations in Treasuries, LGIP, and Federal Home Loan Bank (-40% of which matures in next six months) and only 11% of bonds being callable • Sectors: Current portfolio weighted toward Cash/LGIP, Treasuries, and Agencies but opportunity to rebalance with upcoming maturities and authorization of new broker/dealers for Huntington Beach Q2 FY25-26 Investment Portfolio Timeline Recent Department of Justice actions regarding the Federal Reserve have increased the likelihood of an outsize rate drop in May-November 2026 that we may want to buffer against in our portfolio Portfolio Mix (%) Yield (%) ■Sept 30th ■Jan 31 st 4.36% 0 3.85% 3.97% 17 /o ❑ < 1 Year 3.57% 1-2 Years 44°/o ❑ 2-3 Years 0 3-4 Years 16% 0 4-5 Years 20% LGIP Money Market • Financial Returns: Yields on —40% the <1 Year investments has declined 35-50 basis point in just the last 3-4. months as funds re-ratchet rates to reflect the recent FMOC rate reductions with additional reductions likely • Yield Curve: The inverted curve has now flattened, making 3-5 years investments equally/more attractive Opportunity: The city has a unique opportunity before May to lock-in 3-5 year returns for much of its portfolio J 2026 Broker/Dealer Process and Results We have completed our first comprehensive broker/dealer process in over a decade and significantly shifted our broker/dealer network to reduce fees and portfolio risk 1 ) Conducted robust due diligence on 10 broker/dealers — 3 incumbents and 7 new options 2) Exited two incumbents broker/dealers as they were not local and shifting risk to the city 3) Retained SAAS analytics program that is fully integrated with our ERP platform to keep costs low 4) Added six new broker/dealers, five of whom are local and two who are woman/veteran owned 5) New broker/dealers are all highly active in major gold-star treasury associations, generally have 20+ years of industry experience, and include chartered CFAs with higher fiduciary obligations 6) New brokers/dealers provide access to investment sectors offering higher yields than Treasuries without material incremental risk (e.g., asset-backed Agencies bonds) 7) New protocol will require triple bids for all trades to ensure city is securing lowest investment fees and require all broker/dealers to be re-certified each fiscal year Internal and External Initiative Updates Beyond investment strategy, we are focused on deploying automation in cash collection/disbursement efforts and deploying community programming to help residents achieve their American Dream I. ---- (-- Internal Initiatives External Initiatives • Deploy Al-based system to identify Provide overview of Treasurer Office services unpermitted short-term rental operators and solicit community feedback ✓ Partner with bank to simplify processes via Partner with Police Department to expand tax, electronic data feeds investment, and identity scam classes ✓ Complete collections process for dormant citations issued during pandemic n Expand local access to free tax preparation V Comprehensive audits of hotel TOT payments V Introduce workshops and 1-on-1 counseling p e g ✓ Adopt technology to streamline collections related to personal finances and investments and increase administrative efficiencies for seniors, working age adults, and youth K0 .. nstall self-service kiosks and QR codes to Install self-service short-term rental operator trainings acilitate electronic payments 2000 Main Street, .A' �NTINGcsts ....4, Huntington Beach,CA 92648 • City of Huntington Beach v�cF °N\�o APPROVED 7-0 ��UNTY CP File #: 25-877 MEETING DATE: 11/18/2025 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and CityCouncil Members Y SUBMITTED BY: Jason Schmitt, City Treasurer VIA: Jason Schmitt, City Treasurer PREPARED BY: Jason Schmitt, City Treasurer Subject: Adopt Resolution No. 2025-68 approving the 2026 Investment Policy and Receive and File the City Treasurer's Q1 FY2025-2026 Investment Report Statement of Issue: Pursuant to the California Government Code, the Treasurer of the local agency may render an annual statement of investment policy to the legislative body for consideration and adoption. The City Treasurer, with the assistance of the Investment Advisory Board, has prepared the updated investment policy. Receive and File the City Treasurer's Q1 FY2025-2026 Investment Report, pursuant to Section 18.0 of the Investment Policy of the City of Huntington Beach. Financial Impact: Not Applicable. Recommended Action: Adopt Resolution No. 2025-68, "A Resolution of the City Council of the City of Huntington Beach Approving the Statement of Investment Policy 2026." Receive and File the City Treasurer's 91 FY2025-2026 Investment Report, pursuant to Section 18.0 of the Investment Policy of the City of Huntington Beach. Alternative Action(s): Do not approve recommended action and direct staff accordingly. Analysis: The City Treasurer is responsible for the administration of the investments of the City of Huntington Beach. The purpose of the Investment Policy is to establish cash management and investment guidelines for the investment of the City's unexpended cash balances, which exclude employee retirement funds, funds governed by bond indenture agreements, or other funds managed separately. City of Huntington Beach Page 1 of 2 Printed on 11/12/2025 powered by LegistarTM' 36 File #: 25-877 MEETING DATE: 11/18/2025 This policy shall apply to each investment transaction and the entire portfolio, which must comply with the California Government Code, Section 53600 through 53683, and all other applicable laws and regulations. The City's Investment Policy may be rendered annually to the City Council to ensure its consistency with the overall objectives of preservation of principal, liquidity, and return. The attached Investment Policy has been reviewed by the City's Investment Advisory Board and approved as to form by the City Attorney. The investment policy has been previously reviewed and certified by the California Municipal Treasurer's Association and will be review and certified again this year after Council approval. The CMTA was founded in 1958 with a mission to lead in promotion and enhancing the fiduciary responsibility and integrity of individuals responsible for public funds. The Investment Advisory Board reviewed the policy at its October 23, 2025 meeting. Environmental Status: This project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15031c under Class 1 of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. Strategic Plan Goal: Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the City's priority initiatives and projects. For details, visit www.huntingtonbeachca.gov/strategicplan. Attachment(s): 1. Resolution No. 2025-68 2. City of Huntington Beach Investment Policy 2026 3. Q1 FY2025-2026 Investment Report 4. Q1 FY2025-2026 City Treasurer Presentation City of Huntington Beach Page 2 of 2 Printed on 11/12/2025 powered by LegistarT"' 37 HUH 10N BEQCtd City Huntingtonof Beach QuarterlyInvestment Report September 2025 Air �� ��NT I N G Tp .. e \�9� • � � \ \ 6'�.••:B rl, )sag P+'��t� �/ Prepared by: Jason Schmitt City Treasurer D� 59 HUNTINGTON BEACH INVESTMENT PORTFOLIO SUMMARY As of September 30, 2025 Portfolio Investments Par Value Book Value Market Value Book Value Book Yield Book Yield Years to %of Port Contribution Maturity Cash 1 Money Market $12097,563.18 $12,097,563.18 $12,097.563.18 2.96% 3.97% 0.12% 0.00 local Govt Inv Pools(LGIP) $46.760,732.86 $46.760,732.86 $46.760,732.86 11.45% 4.36% 0.50% 0.00 U.S.Treasuries $71.000,000.00 $70,533,034.17 $70.951.130.00 1726% 3.63% 0.63% 2.34 Supranational $55.000.000.00 $54.749,90226 $55.164.503.00 13.40% 3.71% 0.50% 2.03 U.S.Agencies $132.455.000.00 $132,709,189.92 $132.600,938.65 32.48% 3.08% 1.00% 1.92 Corporates $91.762,000.00 $91.694,884.52 $91031,110.44 22.44% 4.18% 0.94% 2.26 Total $409,075,296.04 $408.545,306.91 $409,605,275.13 100.00% 3.68% 1.81 Funds within this portfolio with overnight availability are invested in the California Asset Management Program "CAMP" and a money market fund. The CAMP account is considered a "Local Government Investment Pool" or "LGIP" for reporting purposes above. Other funds are invested in U.S. Treasuries, Supranational Securities (International Bank of Reconstruction and Development "IBRD", Inter- American Development Bank "IADB"), U.S. Agencies, and Corporate bonds. Only the investment types allowed under California Government code Section 53601 and the City's Investment Policy Statement are utilized. For the quarter and fiscal year ending September 30, 2025, the market value of the portfolio surpassed the book value of the portfolio at $409.6 million versus $408.5 million. This was due to the decrease in overall market interest rates over the last year, which served to increase the prices (value) of the existing securities in the portfolio. This was a reversal of much of the fiscal year as within the last year we had seen primarily increasing market interest rates, which had led to the portfolio market value being lower than the book value. As investments are primarily held to maturity, the market value is only a point-in-time measurement and no gain is realized. 2 60 .,ate 13 HUNTINGTON BEACH PORTFOLIO BREAKOUT BY SECTOR As of September 30, 2025 Sector Breakdown Cash?Money Market Corporates - / 2.96: 2 .44% :` Local Govt Inv Pools(LGIPI 11.45% 0 U.S.Treasuries I� 1726% U.S.Agencies Supranational 3248% 13.40'% Book Value % of Port The largest holding by security type at month-end was U.S. Agency securities at approximately 33% of the total overall portfolio versus 35% as of June 30, 2025. This was followed by Corporate securities at approximately 22% of the total portfolio as of September 30, 2025 versus 18% as of June 30, 2025. INVESTMENT PORTFOLIO EARNINGS As of September 30, 2025 Period Earnings Summary(30 Days) Fiscal YTD Summary (92 Days) Net Period Earnings St_745.0.30.67 Net Period Earnings S3,755.651,19 Last FY Period Net Earnings $948.660.13 Last FY Period Net Earnings $2,900,87854 Avg Daily Book Balance S410,610.851.89 Avg Daily Book Balance $420.236.180.94 Net Effective Annual Return 3.752% Net Effective Annual Return 3.593% Earnings for the month of June 2025 were $1 ,245,031, an increase of approximately 31% from the same month in the prior year. Fiscal year-to-date earnings of $3,755,651 increased approximately $854,733 or 29% from the previous fiscal year. These higher earnings were due to the increase in interest rates and the higher average balance of the portfolio. The effective rate of return for September 3 61 NUNTINGTON BEACH was 3.75%, with a fiscal year-to-date return of 3.59%. At the end of September, the 12-month moving average of the interpolated 1.5-year U.S. Treasury was 4.00%. The portfolio will lag the benchmark, as it will take time for previously purchased securities to mature and for funds to be reinvested. PORTFOLIO BREAKOUT BY MATURITY As of September 30, 2025 Maturity Distribution 4-5Yr/ I CASH 245% — / 14 415<, 3-4Yr / 18.12% d$ea7 0-1Yr 2-3Yr --fit 24.84% 1-2Yr 2L84% Book Value % of Portfolio Cash and LGIP funds as of September 30, 2025 stood at $58,858,295, which was $342,640 lower than as of June 30, 2025. Overall, Cash/Money Market and Short-Term Investments (defined as < 1 year maturity) accounted for 39% of the total portfolio with another 22% being Medium-Term Investments (defined as 1-2 year maturity). COMPLIANCE SUMMARY As of September 30, 2025 Ho$Iirk Compliance Summary Investment Limit Issuer Limit Maximum Maturity Credit Ratings Limit Actual Corrplant Limit Actual Connpkant unit Actual Compliant Achral Min Rating Actual Min Rating Compliant Short Terre long Tenn U.S.Treasuries 100 00% 1726% Yes 100.0094 1726% Yes 5.00 Year. 3.83 Years Yes N/A NiA Yes Supranatiaul 30.00% 13.40% Yes 100.00% 727% Yes 500 Years 375 Years Yes N/A AAA/Aaa/AAA Yes U S.Agencies 100.00% 32.48% Yes 100.00% 2000% Yes 500 Years 4.21 Years Yes N/A NIA Yes Corporates 30.00% 22.44% Yes 1000% 3.62% Yes 500 Years 4.98 Years Yes N/A A/A2/A Yes 4 62 [ HUNTINGTON BEACH Cash Compliance Summary I %of Cash Account Account Description Portfolio P%rtTofoGo %Investable Dollar Portfolio Maximum Current Book Value InveAablo Value Compliant Maximum 003-CAMP Cali8omia Asset Management Program 1145% $75.000.000.00 $46.760.732.86 $28239.267 14 Yes LGIP 1145% $46,760,732.86 Yes 104-FUZXX FirA Amencan Treasury Obigations 15.00% 2.96% 12.04% 812097,563.18 549,184232_86 Yes Cash/Money Market 15.00% 296% 12.04% 812,097,563.18 Yes There were no compliance issues during this period with either cash or investment holdings. ECONOMIC AND MARKET OVERVIEW Market Summary: July 1, 2025 - September 30, 2025 Treasury Markets Date Fed Funds Rate 2-Year 10-Year S&P 500 DJIA 3/31/2025 4.25%-4.50% 3.89% 4.23% 5,611.85 42,001.76 6/30/2025 4.25%-4.50% 3.72% 4.24% 6,204.95 44,094.77 9/30/2025 4.00%-4.25% 3.61% 4.15% 6,688.46 46,397.89 3/31-6/30 Change Flat -17bps +1bps 10.6% 5.0% 7/1-9/30 Change -25bps -11bps -9bps 7.8% 5.2% On September 17, 2025, Chairman Powell described the Federal Reserve's quarter-point rate cut as a "risk management cut," to balance a cooling labor market with persistent inflation risk. He indicated a cautious approach to future decisions and that future cuts would depend on incoming data. Powell's remarks noted that while some officials favored more aggressive cuts due to labor market pressure, the overall outlook, especially concerning inflation, suggested a gradual path forward. Markets: The yield on the 10-year U.S. Treasury finished the quarter at 4.15%, down from 4.23% at the end of the previous quarter. The S&P 500 increased by 7.8% and the DJIA increased by 5.2%. Employment: Due to the government shutdown, the Bureau of Labor Statistics has delayed the release of September unemployment report. The September 5th release showed that August non-farm payroll employment rose modestly by 22,000, showing little change since April. The unemployment rate held steady at 4.3%. Job gains in health care were largely offset by losses in the federal government and mining, quarrying, and oil and gas extraction. 5 63 '_: Portfolio Summary ,oss� City of Huntington Beach f„ ^` Portfolio:CITY r,•v:ar -*rip; Reporting Date:(FY2026) ` 09/01/2025-09/30/2025 -_.- Full Accrual Basis Par Value Period Earnings Summary(30 Days) L Fiscal YTD Summary(92 Days) Period Transactions(Par) Net Period Earnings $1,245,030.67 Net Period Earnings $3,755,651.19 Redemptions 2 $10,000,000 Total Par Value $409,075,296.04 - - • Last FY Period Net Earnings $948,660.13 Last FY Period Net Earnings $2,900,87854 Purchases 4 $20,000,030 Avg Daily Book Balance $410,610,851.89 Avg Daily Book Balance $420,236,180.94 ' Total Activity 6 $30,000,000 Net Effective Annual Return 3.752% Net Effective Annual Return 3.593% Fiscal YTD Transactions(Par) Redemptions 13 560,875,000 Purchases 6 $30,000,000 Book Value Total Activity 19 $90,875,000 Total Book Value S408,545,306.91 City Portfolio Certification I certify that this report and the corresponding pages attached accurately reflect all portfolio combined investments and conforms with all California state statutes and the Huntington Beach investment policy filed on December 19,2023.The investment program herein shown provides sufficient cash flow liquidity to meet the next six month's obligations.Market values are provided by US Bank via Interactive Data Corp(IDC) , / "",��' City Treasurer 09/30/2025 -- Jason Schmitt Title Date Portfolio Investments Market Value Book value IBook Ylekl I Years to Par Value Book Value Market Valise %of Port Book Yield Contribution Maturity Total Market Value $409,605,975.13 Cash/Money Market $12,097,563.18 S12,097.563.18 I $12,097,563.18 2.96% 3.97% 0.12% I 0.00 Local Govt Inv Pools(LGIP) $46,760,732.86 $46,760,732.86 $46,760,732.86 1L45% I 4.36% I 0.50% I 0.00 U.S.Treasuries $71,000,000.00 $70,533,034.17 $70,951,130.00 17.26% 3.63% 0.63% 2.34 Supranational $55,000,030.00 $54,749,90226 $55,164,500.00 13.40% _ 3.71% 0.50% 2.03 U.S.Agencies $132,455,000.00 $132,709,189.92 $132,600,938.65 32.48% 3.08% 1.00% 1.92 Corporates $91,762,000.00 $91,694,88452 $92,031,110.44 22.44% I 4.18% 0.94% 2.26 Total $409,075,296.04 $408,545,306.91 $409,605,975.13 100.00% I 3.68% 1.81 64 ^ \ Portfolio Summary City of Huntington Beach /` ''i Portfolio:CITY i r Reporting Date:09/30/2025 1 Last Pricing Date:09/30/2025 Total Cash&Investments Portfolio Characteristics Maturity Distribution Par Value 4-5Yr CASH - Weighted Avg 2AS% 14.41% Portfolio Book Yield 3.68% Coupon 3.55% 3-4Yr Total Par Value $409.075,296.04 18.12% Portfolio Market 3.90% Composite Rating .AA2 Yield Num Effective Duration 1.51 Hdd�rof Securities 70 .. 0- -24 84%]Vr 2-9Yr Book Value Weighted Avg L81 Median Secoity Size ES,OOD,000.00 18a4% Maturity(Yrs)/WAL Held Total Book Value 5408,545,306.91 Weighted Avg Net Asset Value 1 2Yr Maturity(Days) 661 $1.00260 21. (NAV) d1% Issk Value%of Portfolio Issuer Holdings-Top 10 Callable Breakdown Sector Breakdown - 0.00% 10.00% 20.00% Cal Reding tun Optlona Options Cash/Money Market Value J FHLB MI*: '''0 CoNorates z Market %t Onetime(11) 3.67% 0.00% T Mir 17.26% 22.44% [oral Gout Ina Total Market Value $409,605,975.1331 Pooh(IGIP) CAMP r't`.. 11A5% Moltitly(Dm) 0.00% 0.0096 11.45% IBRD ft 7.27% 41 U.S.Treasuries QuartMY1001 8.57% 0.0096 17.26% FNMA . 5.63% - - 14"AlalaW 1.22% 0.00% IADB III 4.90% LDd FFCB 111 4.40% Annual(Da) 3.67% 0.0096 Lis-Armies Supranational BMY If 3.62% 32.48% 13.40% Gain/Cuss Est f1,060,66822 I FUZxx Il 2.96% Anytime(Cc) 4.81% 10159% HD I. 2.49% Total 21.95% 10.89% Book Value%of Pont __ Asset Maturities by Month $Millions 35 39 22 30 30 26 25 7. 25 15ill5 3 5 5 5 Ill rn E'1.1� 5 5 5 5 5 4 5 l 1�0 5 10 5 5 '� fr iv T rT ram+ rT 'T "en 4. 4 c� 4. 'T ' II 5 i r 'T 'T =a s 1tI O2` 1' ,1 I I ,f ,(� �3 °j o0 4i o 9I I A• I o "fa 1 e e 4.' 4v a 1' ,1 e 1 1 e ~ FF ,t' 4` i '�ry ,9" re"' re ryM1 / 1�•y a �O~,. hOry ,,4 . U 65 elkmyiHoldings Compliance Summary City of Huntington Beach �9 z) Portfolio:CITY '�F�ouN>rcA��� Reporting Date:09/30/2025 Holdings Compliance Summary Investment Limit Issuer Limit Maximum Maturity Credit Ratings Limit Actual Compliant Limits Actual Compliant Limit Actual Compliant Actual Min Rating Actual Min RatingShort Term Long Term Compliant U.S.Treasuries 100.00% 17.26% Yes 100.00% 17.26% Yes 5.00 Years 3.83 Years Yes N/A N/A Yes Supranational 30.00% 13.40% Yes 100.00% 7.27% Yes 5.00 Years 3.75 Years Yes N/A AAA/Aaa/AAA Yes U.S.Agencies 100.00% 32.48% Yes 100.00% 20.00% Yes 5.00 Years 4.21 Years Yes N/A N/A Yes Corporates 30.00% 22.44% Yes 10.00% 3.62% Yes 5.00 Years 4.98 Years Yes N/A A/A2/A Yes Cash Compliance Summary %of Cash Account Account Description Portfolio Portfolio %Investable Dollar Portfolio Maximum Current Book Value Investable Value Compliant Maximum 003-CAMP California Asset Management Program 11.45% $75,000,000.00 $46,760,732.86 S28,239,267.14 Yes LGIP 11.45% $46,760,732.86 Yes ......... .Obligations .... ........ .__. ......_....... _ 104-FUD0( First American Treasury Obli 15.00% 2.96% 12.04% $12,097,563.18 $49,184,232.86 Yes Cash/Money Market 15.00% 2.96% 12.04% $12,097,563.18 Yes 'The investment portfolio has been reviewed and is in full compliance with the established investment guidelines regarding credit quality,maturity,and sector allocation.All holdings meet or exceed the minimum credit rating requirements as outlined in the policy.No investments are below the permitted credit thresholds.Portfolio maturities are structured to remain within the approved limits.The weighted average maturity(WAM)and final maturity constraints are in compliance with policy requirements.Investments are diversified across approved sectors and remain within the specified sector concentration limits.No sector exposures exceed established maximum thresholds. 66 Reporting Period: Bond Redemption Activity Report Portfolio:CITY 09/30/2025 City of Huntington Beach Accounting ID Transaction Type Cusip Description Price Settlement Posted Date Date Par Value Principal Accrued Interest Total 4372 Maturity 931142EW9 WMT 3.90009/09/2025 100.00000 09/09/2025 09/09/2025 5,000,000.00 5,000,000.00 0.00 5,000,000.00 4331 Maturity 3130AMQ54 FH LB 0.70009/16/2025 100.00000 09/16/2025 09/16/2025 5,000,000.00 5,000,000.00 0.00 5,000,000.00 Activity Total 10,000,000.00 10,000,000.00 0.00 10,000,000.00 Report Run Date: Oct 21,2025 67 Reporting Period: Bond Purchase Activity Report Portfolio:CITY 09/30/2025 City of Huntington Beach Settlement I Accounting ID Transaction Type Cusip Description Price Date Posted Date Par Value Principal Accrued Interest Total 4442 Buy 17325FBK3 C 4.83808/06/2029 102.61600 09/03/2025 09/03/2025 5,000,000.00 5,130,800.00 18,142.50 5,148,942.50 4443 Buy 166756BB1 CVX 4.47502/26/2028 101.58900 09/03/2025 09/03/2025 5,000,000.00 5,079,450.00 4,350.69 5,083,800.69 4444 Buy 110122CP1 BMY 3.40007/26/2029 98.14100 09/18/2025 09/18/2025 5,000,000.00 4,907,050.00 24,555.56 4,931,605.56 4445 Buy 48130C4W2 1PM 4.05009/23/2030 100.00000 09/23/2025 09/23/2025 5.000.000.00 5,000,000.00 0.00 5,000,000.00 Activity Total 20,000,000.00 20,117,300.00 47,048.75 20,164,348.75 Report Run Date: Oct 21,2025 68 Reporting Period: Cash By Structure Report Portfolio:CITY 09/30/2025 City of Huntington Beach Accounting ID Ticker Pool Description Type Par Value Book Value Market Value Rate %of Portfolio 104 FUZXX First American Treasury Obligations Cash/Money Market 12,097,563.18 12,097,563.18 12,097,563.18 3.970 2.96% Cash/Money Market 12,097,563.18 12,097,563.18 12,097,563.18 2.96% 003 CAMP California Asset Management Program LGIP 46,760,732.86 46,760,732.86 46,760,732.86 4.360 11.45% LGIP 46,760,732.86 46,760,732.86 46,760,732.86 1145% Cash Holdings 58,858,296.04 58,858,296.04 58,858,296.04 14.41% Report Run Date: Oct 20,2025 69 Reporting Period: Bond Holdings By Sector Report Portfolio:CITY 09/30/2025 City of Huntington Beach CUSIP Ticker Coupon Maturity Dale Short Description ption Par Value Book Value Years to (%)of Moody. Dale re Market Value Yield Maturity Portfolio Raring 91282CHM6 T 4.500 07/15/2026 U.S.Treasury Note 03/12/2024 5,000.030.00 5.004,346.96 5,027,850.00 4.380 0.786 1.22% Aal 1 91282CCP4 T 0.625 07/31/2026 U.S.Treasury Note 09/30/2021 5,000,000.00 4.986,848.19 4,871.950.00 0.950 0.830 1.22% Aal _.. ':91282CCW9 T 0.750 08/31/2026 U.S.Treasury Note 09/23/2021 1.000,000.00 99 B,749.58 973,230.00 0.890 0.914 0.24% Aal -91282CCW9 T 0.750 08/31/2026 U.S.Treasury Note 11/23/2021 5.000,000.00 4,976,332.88 4,866,150.00 1.285 0.914 1.22% Aol 91282CEW7 T 3.250 06/30/2027 US.Treasury Note 12/29/2022 5,000,000.00 4,940,620.29 4,967,600.00 4,030 1.744 1.21% Aal 9121320E067 T 3.250 06/30/2027 US.Treasury Note 12/22/2023 5,000,000.00 4,942,640.28 4,967,600.00 3.960 1.744 1.21% 801 91282CKZ3 T 4.375 07/15/2027 U.S.Treasury Note 11/04/2024 5,000,030.00 5,023,678.94 5,062,700.00 4.090 1.785 1.23% Aa1 912020982 T 2,750 07/31/2027 US.Treasury Note 01/19/2024 5,000,030.00 4,887,647.48 4,921,900.00 4.080 1.829 1.20% Aal 912820800 T 4.000 06/30/2028 U.S.Treasury Note 09/18/2024 5,000.030.00 5.072,628.53 5,049,050.00 3.431 2.746 1.24% Aal 91282CHQ7 T 4.125 07/31/2028 U.S.Treasury Note 01/16/2024 10.000,000.00 10,075,772.62 10,132,800.03 3.831 2.831 247% Aal 912820K08 T 4.250 06/30/2029 US.Treasury Note 01/06/2025 5,000,000.00 4,986,934.60 5,099,4003.00 4.327 3.745 1.22% 001 9128200(8 T 4.250 06/30/2029 U.S.Treasury Note 01/10/2025 10.000,00000 9,945.514.71 10,198.800.00 4.411 3.745 2.43% A41 91282CFCC T 2,625 07631/2029 U.S.Treasury Note 01/23;2025 5,000,003.00 4,691,319.13 4,812,103.00 4419 3.530 1.15% Aal US.Treasuries 71.000,000.00 70.533,034.17 70,951,130.00 1726% 459058/L8 IBRD 0.500 10/28/2025 Intl Bank for Recoil and Dev 01/12/2021 5,000,003.00 4,999,956.98 4,986,003.00 0,512 0.074 1,22% Aaa 45906M2L4 IBRD 0.650 02/24/2026 Intl Bank for Bacon and Dev 04/30/2021 5,000,000.00 4,995,728.14 4,931,050.00 0.870 0.400 1.22% Aaa 459058101 IBRD 3.125 06/15/2027 Intl Bahr for(earn and Dev 01/10/2025 5,000,000.00 4,906.250.97 4,952,550.00 4.295 1.703 1.20% Aaa 4S818WFN1 IADB 4.850 07/19/2027 Inter-American Development Bank 05/29/2024 10,000000.00 10,013,361.42 10,114,900,00 4.770 1.796 2.45% Aaa 45818WFN1 IADB 4.850 07/19/2027 Inter-American Development Bank 04/22/2025 5,000,000.00 5,091,137.55 5,057,450.00 3.782 1,796 1.25% Aaa 45818WE05 IADB 3.800 06/09/2028 Inter-American Development Bank 09/21/2023 5.000,00000 4,901,575.27 4,953,750.00 4.622 2.689 1.20% Aaa 45905BKT9 IBRD 3.500 07/12/2028 Intl Bank for Recon and Dev 11/13/2023 5,000,000.00 4,844,394.88 4,975,950.00 4.760 2.779 1.19% Aaa 45905BKT9 IBRD 3.500 07/12/2028 Intl Bank for Recon and Dev 12/06/2023 5,000,011100 4,893,825.09 4975.950.00 4.350 2.779 1.20% Aaa '459058KW2 IBRD 4.625 08/01/2028 Intl Bank for Bacon and Dev 01/25/2024 5,000,000.00 5.063,357.93 5.126,550.00 4.130 2.834 1.24% Aaa 45950KDH0 IFC 4.250 07/02/2029 International Finance Corp 10/23/2024 5.000,000.00 5,040,314.03 5,090,350.00 4,011 3.751 1.23% Aaa Supranational 55,000,000.00 54.749,902.26 55.164,500.00 1340% 3135GA2Z3 FNMA 0.560 11/17/2025 Fannie Mae 01/11/2021 3.000,000.03 3,000.086.94 2,986,440.00 0.500 0.129 0.73% Aa1 3130AKN36 FHLB 0.525 01/15/2026 Federal Home Loan Bank 01/15/2021 5,000,000.00 4,999.711.11 4.949.450.00 0.545 0.290 1.22% Aa1 31304KN85 FHLB 0.550 01/20/2026 Federal Hone Loan Bark 01/20/2021 5,000,000.00 4,999,848.61 4.948.750.00 0.560 0.304 1.22% Aal 31304K US3 FHLB 0.500 01/28/2026 Federal Home Loan Bank 01/28/2021 5,000,030.00 5,000,030.00 4,945,150.00 0.500 0.326 1.22% Pal 3130ALEY6 FHLB 0.800 03/04/2026 Federal Home Loan Backe 06/10/2021 5.000,000.00 5.000,000.00 4,934.300.00 0800 0.422 1.2256 Aa1 3130AMJN3 FHLB 1,030 05/26/2026 Federal Home Loan Bank 05/26/2021 5000,000.00 5.000,000.00 4,911.050.00 1.030 0.649 1.22% Aal 3130AMF56 FHLB 0.750 06/12/2026 Federal Home Loan Bark 06/17/2021 5,ODD,000.00 4,995,805.01 4,899,100.00 0,873 0.695 1.22% Aal 3130AVWS7 FHLB 3.750 06/12/2026 Federal Home Loan Bank 05/09/2023 3.000000.00 2,999,059.60 3.001.470.00 3.796 0.695 0.73% Aal 3133EPNG6 FFCB 4.375 06/23/2026 Federal Farm Credit Bank 06/23/2023 3,000,000.00 2,999,672.50 3,011.820.00 4.391 0.726 0.73% Aal 3130407E7 FHLB 1.500 06/30/2026 Federal Home Loan Bank 12/30/2021 5,000,000.00 5,000,332.10 4,920,750.00 1.339 0.745 1.22% Aal 3130AUMC5 FHLB 3.750 07/20/2026 Federal Home loan Bank 01/19/2023 5,000,000,00 5,000,000.00 4,999,900.00 3.750 0,799 1.22% 801 31304Q579 FHLB 2,250 08/07/2026 Federal Home Loan Bank 02/07/2022 5,000,000.00 5,000,030.00 4.938,403.00 2.250 0.849 1.22% Aal 3133EPGT6 FFCB 3.875 04/26/2027 Federal Farm Credit Bank 04/26/2023 5,000,000.00 4,997,743.92 5,014,400.00 3.906 1.566 1.22% Aal ' 3133EPJP1 FFCB 3.625 05/12/2027 Federal Farm Credit Bank 05/12/2023 5,000,000.00 4,994,411.91 4,995,250.00 3.700 1,610 1,22% Aa1 31304W4N7 FHLB 3.630 06/04/2027 Federal Home Loan Bank 05/18/2023 5,000,000.00 5,000,000.00 4,994,050.00 3.630 1.673 1.22% Aol 3133EPMV4 FFCB 4.125 06/15/2027 Federal Farm Credit Bank 06/15/2023 5.000,000.00 4,999,594.93 5.035.600,00 4.130 1.703 122% Aal 31304W06N6 FHLB 4.500 09/10/2027 Federal Home Loan Bank 12/05/2023 4,455.00.00 4,464,008.90 4,521.958.65 4.383 1.941 1,09% Aa1 3130AWC24 FHLB 4.000 06/09/2028 Federal Home Loan Bank 06/13/2023 5,000030.00 5,002,479.29 5.045.850.00 3.979 2.689 1.22% Aa1 131308W024 FHLB 4.000 06/09/2028 Federal Home Loan Bank 06/27/2023 5.000,030.00 4,998,506.17 5.045,850.00 4,012 2.689 122% 801 313604134 FNMA 4.300 06/09/2028 Fannie Mae 06/26/2025 5,000,000.00 5,006,290.38 5.018.500.00 4.110 2.689 123% Aa1 3136GAEQ8 FNMA 4,220 07/07/2028 Fannie Mae 04/07/2025 5,000,003.00 5.000,000.00 5.016,050.00 4.220 2.765 1.22% Aa1 313081800 FHLB 4.625 06/08/2029 Federal Home Loan Bank 07/19/2024 5.000,030.00 5,086454.92 5,155,010.00 4,100 3.685 1.25% Aa1 313091BC0 FHLB 4.625 06/08/2029 Federal Home Loan Bank 07/25/2024 5,003,030.00 5,076,077.30 5155,000.00 4.162 3.685 1.24% Aal 3134HBNT4 FHLMC 4,070 06/08/2029 Freddie Mac 05/01/2025 5,000,000.00 5,000,000.00 4,997,900.00 4.070 3.685 1.22% Aal 3130B1BCO FHLB 4.625 06/08/2029 Federal Home Loan Bank 05/12/2025 4.000,000.00 4,089,106.33 4,124,000.00 3.964 3.685 1.00% A01 3136GA/59 FNMA 4.170 07/09/2029 Fannie Mae 07/09/2025 5.000.00000 5,000,000.00 5.013.400.00 4.170 3.770 1.22% 801 l 313604741 FNMA 4.710 07/13/2029 Fannie Mae 01/23/2025 5,000,00000 5,000,003.00 5,018,250.00 4.710 3.781 1.22% 801 13134H8043 FHLMC 4.625 12/18/2029 Freddie Mac 12/20/2024 5000,00003 5.000,000.00 5,003,300.00 4625 4.214 1.22% Aal Report Run Date: Oct 20,2025 70 Reporting Period: Bond Holdings By Sector Report Portfolio:CITY 09/30/2025 City of Huntington Beach CUSIP Ticker Coupon Maturity Date Short Description Settlement Par Value Book Value Market Value BOok Yearsto ry61ot MOodys Date Yield Maturity Portfolio Rating U.S.Agencies 132,455,000,00 132,709,189.92 132,600,938.65 3248% 717081 DV2 PFE 2.750 06/03/2026 Pfizer Inc 01/18/2023 5.000.000.00 4,956,738.77 4.958,55000 4.142 0.671 1.21% A2 110122CN6 BMY 3.200 06/15/2026 Bristol-Myers Squibb 11/16/2022 5,00000000 4,958,678.20 4,975,200.00 4.480 0.704 1.21% A2 1931142EM1 WMT 3.050 07/08/2026 Walmart 05/15/2023 4.257,000.00 4,235,476.94 4,235.161.59 3.752 0.767 1.04% Aa2 904764621 UNANA 2.000 07/28/2026 Unikver 05/15/2023 2505,000.00 2.471,175.46 2,466.848.85 3.752 0.821 0.60% Al 037833057 AAPL 2.050 09/11/2026 Apple 12/06/2023 5000,000.00 4,888,773.87 4,919,150.00 4.583 0.945 1.20% Asa 7134480N5 PEP 2.375 10/06/2026 Pepsi 12/26/2023 5.000,000.00 4,910,118.75 4,929,200.00 4.273 1.013 1.20% AI 24422E0R5 DE 4.900 06/11/2027 John Deere 01/06/2025 5.000,000.00 5,034,857.14 5,081.700.00 4.460 1.692 1.23% Al '.43707613135 HD 4.875 06/25/2027 Home Depot 08/23/2024 5.000,000.00 5,062,872.98 5,082,]50.00 4.061 1.730 1.24% A2 _.. ... 4885160X2 HON 4.650 07/30/2027 Honeywell 08/15/2029 5,000.000.00 5,041,872.56 5,059,300.00 4.137 1.826 1.23% A2 023135BC9 AMZN 3.150 08/22/2027 Amazon 08/23/2024 5,000,000.00 4,921,423.08 4,945,550.00 4.040 1.889 1.2096 Al 14913UAR1 CAT 4.400 10/15/2027 Caterpillar 09/10/2024 5,000,000.00 5,049,043.05 5,054,450.00 3.886 2.037 1.24% A2 110122DE5 BMY 3.900 02/20/2028 Bristol-Myers Squibb 01/24/2025 5,000.000.00 4,922,798.73 5,000403.00 4.600 2.387 1.20% A2 766756881 CVO 4.475 02/26/2028 Chevron 09/03/2025 5000,000.00 5,076,872.25 5,069,800.00 3.776 2.404 1.24% 0.32 244220)80 DE 4.950 07/14/2028 John Deere 03/27/2024 5.000,030.00 5,035,724.18 5,134,550.00 4.662 2.784 1.23% Al 437076DC3 HD 4.750 06/25/2029 Home Depot 06/26/2025 5.000,000.00 5,094,330.09 5,120,300.00 4.185 3.732 1.25% A2 11101220P1 BMY 3.400 07/26/2029 Bristol-Myers Squibb 09/18/2025 5,000,000.00 4,907,920.57 4,875,300.00 3.923 3.817 1.20% A2 _.. ._.. j 17325F8K3 C 4.638 08/06/2029 Cltigroup/Citibank NA 09/03/2025 5,000.000.00 5428,151.84 5,120,800.00 4.095 3.847 1.26% Aa3 532457CQ9 LLV 4.200 08/14/2029 EII Lilly S Co 07/15/2025 5.000,000.03 4,998,056.06 5,035,400.00 4.210 3.869 1.22% Aa3 48130C4W2 JPM 4.050 09/23/2030 JP Morgan 09/23/2025 5,000,000.00 5,000,000.00 4,966,700.00 4.050 4.977 1.22% Al Corporates 91,762,000.00 91,694,884.52 92,031,110.44 22.44% Bond Holdings 350,217,000.00 349,687,010.87 350,747,679.09 85.59% Report Run Date: Oct 20,2025 • 71 ?d Statement of Cash Receipts and Disbursements and Summary of Cash by Fund .''`'. ,; i City Treasurer's Office 'i�ov.- ;./ September 2025 Cash Receipts and Disbursements September 2025 September 2024 Y/Y Percent Change Receipts General Fund Property Tax $ 1,450,780 $ 1,387,322 5% Local Sales Tax 4,073,387 3,304,656 23% Public Safety Sales Tax 243,023 230,367 5% Transient Occupancy Tax(TOT) 1,759,126 1,786,747 -2% Utility Users Tax(UUT) 2,104,715 2,117,599 -1% Other Revenue 4,343,627 5,066,154 -14% Total General Fund Revenue 13,974,659 13,892,845 1% Total All Other Funds Revenue 16,159,344 17,957,224 -10% Total Receipts $ 30,134,003 $ 31,850,068 -5% Disbursements General Fund Personnel Services (11,715,420) (12,930,897) -9% Operating Expenses (3,879,276) (3,500,068) 11% Capital Expenditures - - 0% Non-Operating Expenses - (5,833) -100% Total General Fund Disbursements (15,594,696) (16,436,798) -5% Total All Other Funds Disbursements (16,448,599) (16,577,705) -1% Total Disbursements (32,043,294) (33,014,503) -3% Net Change in Cash Flow $ (1,909,291) $ (1,164,435) 64% Summary of Cash by Fund September 2025 September 2024 Y/Y Percent Change General Fund $ 93,400,969 $ 93,736,679 0% General Fund Other 5,627,520 2,400,532 134% Capital Projects Funds 56,182,764 52,485,272 7% Debt Service Funds 44,682,758 38,494,433 16% Enterprise Funds 85,545,586 83,792,953 2% Trust and Agency Funds 2,781,157 8,924,289 -69% Internal Service Funds 66,776,423 45,248,219 48% Special Revenue Funds 58,287,895 55,779,212 4% General Ledger Cash Balances * $ 413,285,071 $ 380,861,589 9% Total cash will differ from investment portfolio total due to outstanding checks and/or other timing differences. Note: Above information was obtained from the City's accounting system records.The above information includes receipts from maturing investments and payments for purchased investments in the city investment portfolio.This statement is prepared in compliance with the City's Charter. 72 ///�►..� i'AV v G r0�f I N - 4/ N.. C •.•. -toRP0RATF •••• • o • 6� \ al • _ - - \ <(" \ QI FY25-26 Investment Review c and 2026 Investment Policy _ _ - - - - - i = Discussion - �--_" -j��� � ` CityCouncil isiwaisla_ _- . November 18, 2025 • 40, $ • - - -- v 7 •••;FB. . - PO :• O •• 1 7, 1 9 09 , .•• • 0 F ••........•- CtI# D P .III// SUPPLEMENTAL � COMMUNICATION Meeting Date: i 1/i 0/ 2-5- Agenda Item No.; q ( -gam) Pe 14ij Li Investment Policy Principles Our city's investment policy is designed to provide guidelines for the prudent investment of all city cash balances with an absolute investment priority of safety, liquidity, and yield in that order CITY OF HUNTING 10\ BEACH `` �,.,� #2 Safet STATEMENT OF IWESTMEtiT POLICY ' liquid ity 2025 #3 Yield f,• \\\NTING70y'N,� '�4 '*} � C U 9 I _ 1V 1 O �'.. i „Prf Q \ r o�=,, Prudent Investor ``�eUUNTV CPS Standard 2026 Investment Policy Review We have revised the 2026 Investment Policy to incorporate upcoming California General Code changes, refine permissible portfolio investments, and simplify language to increase readability Process Steps ✓ Ensured complete alignment with 2026 Code revisions CITY OF HUNTING'ON BEAU! V Benchmarked policy against 7 California municipalities and 6 Treasurer peer reviews to capture best practices V Solicited Investment Advisory Board feedback STATEMENT OF I\«STMENT POI,I('i' V Increased transparency and readability of policy Submitting new policy to CMTA and APT for"scoring" 2025 2026 Major Policy Changes 1) State Law: (a) Extend Commercial Paper maturity from 270 4 oTINGT0 \` 365 Days and (b) Eliminate Orange County Treasury Pooled Octett ePe, Funds from acceptable investments s 2) Investments: (a) Eliminate Reverse Repurchase Agreements 9 Q and Bankers Acceptances and (b) Increase Joint Powers -7CF- \�oQ�� Authority limit to 25% of portfolio from $75 million COUNTY CPS 3) Maturities: Shorten Certificates of Deposit from 5 4 3 years 4) Portfolio: Reduce allowable portfolio share in 4+year maturities from 50% 4 25% 2026 Compliance Requirements Huntington Beach's investment, issuer, and maturity requirements are either in line or more conservative than California Government Code requirements California Government Code Limits Policy Limits Investment Type Investment Issuer Maturities Investment Issuer Maturities U.S.Treasury Securities 100% None 5 Years 100% None 5 Years U.S.Government Agency Securities 100% None 5 Years 100% None 5 Years Commercial Paper 40% 10% 1 Year 40% 10% 1 Year Certificates of Deposit 30% None 5 Years 30% 10% 3 Years Repurchase Agreements 100% None 1 Year 100% None 90 Days Money Market Mutual Funds 20%of Agency Funds 10%of Agency Funds N/A 15%of Agency Funds 10%of Agency Funds N/A Local Agency Investment Fund $75M per account N/A N/A $75M per account N/A N/A Municipal Debt 100% None 5 Years 100% 10% 5 Years Medium-Term Notes 30% None 5Years 30% 10% 5Years Joint Power Authority 100% None N/A 25% None N/A SupranationalSecurities 30% None 5Years 30% None 5Years Investment Performance — Safety \ _ / As safety of principal is our paramount priority, we have constructed a bond portfolio mix that fully complies with California General Code and ensures that Huntington Beach does not sustain losses City Investment Portfolio Compliance Check ($ Millions) Portfolio Issuer Category Maturity Share Share Quality Overall $391 $410 U.S.Treasury $378 Securities 5 Years Compliant $299 U.S.Government $265 Agency Securities 5 Years Compliant Supranational "AA"(or Securities 5 Years 30% 30% Higher) Compliant Medium-Term "A"(or Notes 5 Years 30% 10% Higher) Compliant Money Market "AAA"(or Mutual Funds 60 Days 15% 10% Higher) Compliant • State and Local2021 2022 2023 2024 2025 Investment Pools $75M $75M Compliant 4 Losses: Portfolio has experienced no losses and Treasurer held lower-yield bonds to ensure no losses • Compliance: Portfolio must pass maturity, category/issuer concentration, and bond ratings checks • Ratings: All holdings rated "A-" or higher with non-corporate bonds all AA+ or AAA (^'80% are AAA/AA rated) • Diversification: Portfolio has no issuer > 10% except US Treasuries, Federal Home Loan Bank, and State Pool Sources of Fund Balance Increases (FY2018-FY2024) Huntington Beach's reserves increased by—$160M from FY2018-FY2024, with that increase distributed across the General, Infrastructure, Pension, and Internal Services Funds FY2018-FY2024 Fund Balance Changes ($ Millions) $21 $15 $415 $33 $36 $59 • Workers Comp: $11 M • Equipment: $8M • General Liability: $2M • Economic Uncertainty: $24M • Restricted: $15M • HB Recovery: $10M • Pension/GL/115 Trust: $10M FY18 Reserves General Pension Infrastructure Internal Service Other FY24 Reserves City Reserve Funds Investment Performance — Liquidity Accurate cash flow management and a portfolio with ample short-term cash cushion is critical given our large monthly cash flow movements and large capital projects Net Cash Position ($ Millions) Portfolio Mix (%) $35 $25 t$51 Million +$36 Million 21% 0 < 1 Year $15 ❑ 1-2 Years 39% $5 ❑ 2-3 Years -$Can-24 Apr-24 4 Jan-25 Apr-25 18% ID 3-5 Years -$15 -$66 Milli' 22% -$25 •• Cash Flow: Varies across months primarily due to timing of property tax receipts and sales tax true-ups • Cash Cushion: Portfolio contains -$60 million in fully liquid funds and "65% that could be liquidated easily • Cash Flow Modeling: Treasury partnering with all city departments to build detailed 18-month cash flow models and 5-year capital improvement plan model to optimize maturity timing for longer-dated bonds Investment Performance - Yield Financial returns for Huntington Beach's portfolio has increased significantly since 2022 due to increasing interest rates and an inverted yield curve Effective Return (%) Returns Across Maturities (Months) 5% 4.5% - 4% 3.59% -0.5% 4.0%E 200% 17 /03.5%41%1 .26%.00%Q 3.0% - —2022 —2025 0% 2.5% - 2013 2015 2017 2019 2021 2023 2025 1 3 6 12 24 Observations • Movement from 1% 4 3% effective returns and reserve expansion since 2022 increased earnings by—$10 million annually • Interest rates returning to historical norms after"free money" period of the Federal Reserve surrounding the pandemic Current inverted yield curve is an anomaly—2022 curve where longer-term investments have higher returns is the norm J Investment Performance - Yield As the yield curve returns to normalcy over the next few years, Huntington Beach has a window to capture some incremental upside from increasing average bond duration and expanding our corporate bond mix Portfolio Years to Maturity Portfolio Share in Corporate Bonds (%) 3.0 - 22% 2.5 - 2.23 2.73 1.74 % 15% 2.0 - 2.45 1 .81 14 1 .5 - 11% 1 .0 - 5% 0.5 - 0.0 - 2013 2016 2019 2022 2025 2013 2016 2019 2022 2025 Opportunity to capture -'10-20bps without threatening Huntington Beach's liquidity position by: (1 ) purchasing longer-term bonds with maturities that align with our cash flow troughs and (2) expanding portfolio share of high-grade corporate bonds by 3-5% Q1 FY25-26 Investment Performance Huntington Beach has '$410M in investable reserves across short-term and long-term instruments, yielding a 3.59% return for this quarter versus 3.24% return for FY2024-2025 Portfolio Return (%) Sector Breakdown 3.59% 3.24% $55 $71 $92 $410 $133 $12 $47 Q1 FY25-26 FY24-25 Cash/CDs LGIP Agencies Corps Treasuries Supras Ti Compliance Check Portfolio Issuer / \ Category Maturity Share Share Quality Overall 6 purchases ($30 million) and 13 U.S.Treasury Securities 5 Years Compliant redemptions ($61 million) U.S.Government Agency • Portfolio meets maturity threshold with Securities 5 Years Compliant < 25% having 4+ year duration Supranational Securities 5 Years 30% 30% "AA"(or Higher) Compliant • City does not have Bankers Medium-Term Notes 5 Years 30% 10% "A"(or Higher) Compliant Money Market Funds 60 Days 15% 10% AA"A "(or Higher) Compliant Acceptances, Repurchase State/Local Investment Pools $75M $75M Compliant \ Agreements, or Certificates of Deposit Q1 FY25-26 Investment Performance Template - Summary Future City Council presentations will focus on three quarterly investment summary documents— the first will be an overall portfolio return for the period 11111111111111rillisraarnine5Summaiy13ODays) Fiscal YIDSurnmary ' r' I I l'eriodIr ctioni(Itar) I Net Period latrines S1.245.030 tiST Net Period Earnings S3.755.65119 Redemptions 7 S10.000.000 Last rY Period Net Earnings S948,660.13 Last FY Period Net Earnings $2,900.878.54 Purchases 4 S20.000.000 Aggregate Avg Daily Book Balance 4410410.85189 Avg Daily Book Balance 1420,236,180.94 ' Total ALtiv 6 S30.000.000 transactions Net Effective Annual Retw n 3.752'4 Net Effective Annual Return 3.593% FISC YTD Transactions(Par) ► and dollars RLJ�ny' s 13 $60.875.000 during Purchases 6 S30,000.000 quarter Total Activity 19 890,875,000 City Portfolio Certification l certify that the.report and the corresponding pages attached accurately reflect all portfolio combined investments and conforms with all Cal itorria statLtes and the ,ti.ntingicn Be.arh inve-trrrnt poli.-y filed on December 19.7023.The Investment proer pm herein-town provides so ffirient rash flaw lig i.irity in ruret th ,,t,,;a ir, nth ii obligations-Market values are provided by us Bank via Interactive Data Corp IIDC) Effective return and r �� p investment cash Y lnr> City Treasurer 09/30;2025 Jason Schmitt Title f,atr — balance for quarter Portfolio Inv c.st rne nts Par Yakre Book value Market Value Book Porte Book yield Book yield YI Years to r 1 %ofy Cash r`Mrrtry Markt-t S12.097.563.In S12.097.563 16 S12.097.563 le 2 96% 3.97% 012% 0.00 Local Govt Inv Pools fLGIP1 546.760.73286 $46.760,732.06 S46.760.73286 1145% 4.36% 0.50% 0.00 Average time left for U.S.-treasuries 571.1300.000.00 $70.533,034.17 S70.951.130.00 17.26% 3.63% 0.63% 2.34 cupranatinnat 555,000,000.00 $54,749,902.26 $55.164.50000 1340% 3.71% 050% 2.03 maturity on U.S.Agencies $132455.000.00 8132.709.189.92 5132.600.938-65 3248% 3.06% 1.006 192 Corporates $91.762.00a00 $91.694.884.52 S92031.110.44 22.44% 4.18% 0.94% 2.26 investments by type Total 5409.075296.04 5408,545.306_91 5409.605.975.13 100_00% 3.68% L81 Q1 FY25-26 Investment Performance Template - Portfolio Future City Council presentations will focus on three quarterly investment summary documents - the second will be a portfolio breakdown by maturity, investment type, and issuer concentration P0I21o1i0 characteristics maturity Distribution 9 5Yr/ I _CASI Portfolio Book Yield 3.685E Weighted Avg ?,5% 2.15M Coupon 3-4Yr/ '"' ` Overall portfolio {brtfol"o Market 3.90% Composite Rating AA2 Yield _ investment distribution I �. Fffertvetltlrati0n ,s� helilberofSecurities 7C I __ by time to maturity and 0 1vr 23Yr _ � 2{�"'i investment t e Weighted Avg Medan Security Sae se.a+x r type MaturityiYrcl.rlVAI 1.61 Held ¢5,000.000.00 1-2Yr / Weighted Avg Net Assay Value 21.897'i `�-� Maturity,Daysl 641 (NAV; fi1.()d260 \ -----____.„...,..„„. 6.1....„,,,4 I Meek Value%of Portfolio suer Holdings Top 10 Callable Breakdown .01196 :U.IX.'% LK1W'S -_.. .. J ---I Call Refunding Opbern OP4ion; ;Moor I R 7(1" I -t Onetime114 a67'6 0.00% corerat>c ` zsea. T ffiii 17.265E 121dk: \/�!~ ''%Local Govt km, r �• Paoli,LGIPI LAMS'-�11.4i% Monthly'Dent 0.00% 0_f30% /� 13A59i r 18R0� >•727% r15 Troasurioz QUatcedYIN) O.3%. I` Relatively issuer 17.26% FNMA 5.635t aue .a_9oa6 ��o�slnual i 22%. .0B � \.' ► concentration for city's FFCB- 114409f Annual IDA a67% 0.63% bond portfolio US.Agcncic: Sursrmarional Y 13.62%. - 3218ii / 13.104: WI me:lc) 4 81% 10.89%t FU ty696 Hf) 249% Total 21.955E 10.89% Q1 FY25-26 Investment Performance Template - Compliance Future City Council presentations will focus on three quarterly investment summary documents - the third will be a comprehensive compliance check relative to our City Investment Policy Ho:dir•5C .. . West-rent Liu- Issuer Limit Maximum Maturity edit Rat rigs Overall bond rout Pedal C2r Gant Limit Actual 0 Actual Mir P.a-.irg Adua Mr Rating _ portfolio p artp5�rt Jill Actual Complr3nt ;ha-tTerm Loig em "o • .m compliance check u5. reasure: locum 17.26% fa: 10230% 17.26% Net `.CO Your, 3 e 3 rear, en N'A r.:'A r based on SJaranatioral 30D09: 13.10% fr 10100% 737% No, :.CO Year: 375 fear; Yes N+A .,tA.i.aa,L;.:. er U.S.Agencies 100.00% 32.48% em 100.00% 2000% Ye. 2.00 Years 425 fear, fa NiA r,.:, ,-es investment/issuer Corporate; 30,,' 22.44% V., 10.00% 3.52% Nos 5.00Years A92eear. feu N%A .. ves limits, maturities, • • and credit ratings Cash Compiarre Summary %Ci Compliance Cash Account Account oescripton P9110 P No10 %erestabk Dollar Portfolio Maximo :welt Book Value h3estab5 Value Compkart Ma70mum check for cash 303-CAMP Califon afesetMa-wen-Marc;ram 11.-I.% 5;50,3000.00 SL6.76375285 S23239,267.24 Yes LC1P 11.45% $46,76272286 Yes 1 . and money 1(4-FUZXY. Flrt Amer carireaaryObligabxs 15A09> 2_46% 12.04% 512.097,36318 549.18z.232:35. 9es market holdings Cash!Morey Market 15.00% 29616 120416 512.097,56318 'ref (including government pools) Internal and External Initiatives Beyond investment strategy, we are focused on deploying automation in cash collection/disbursement efforts and deploying community programming to help residents achieve their American Dream (-- Internal Initiatives i- External Initiatives ❑ Adopt technology to streamline collections ❑ Provide overview of Treasurer Office services and increase administrative efficiencies and solicit community feedback ❑ Install self-service kiosks and QR codes to ❑ Introduce workshops and 1-on-1 counseling facilitate electronic payments related to personal finances and investments ❑ Deploy AI-based system to identify for seniors, working age adults, and youth unpermitted short-term rental operators ❑ Partner with Police Department to expand tax, ❑ Partner with bank to simplify processes via investment, and identity scam classes electronic data feeds ❑ Complete collections process for dormant ❑ Expand local access to free tax preparation citations issued during pandemic ❑ Develop short-term rental operator trainings O Comprehensive audits of hotel TOT payments "04,,,......., // \ -1' I N G T0* . ', \ \ .... v., •.•''coRPORAT'••. \ .• \� FD % -- -� ••• < \ QI FY25-26 Investment Review - 0. -47 \ - // / , • c') and 2026 Investment Policy ii ri r _ -�-�-- : Discussion • - ii � _ Q ' cityCouncil ^- � : 4 , A November 18, 2025 ) .°• t< 6;'. --. - - --- P'S) , i 4. ••••,7 7, 19 0 1 .•' i •s...• 0pVUNTNCKF 1111111111 73 Investment Policy Principles Our city's investment policy is designed to provide guidelines for the prudent investment of all city cash balances with an absolute investment priority of safety, liquidity, and yield in that order • CITY OF HUNTINGTON BEACH � ► #1 JO #2 Safety STATEMENT OF INVESTMENT POLICY •Liquidity 2025 #3 Yield #/#\NT I N G/ ,y /o Off_,:`�enio.ir.a.,�.�9� spy••. . 70/g' Prudent Investor zc`�coUtvr?ttio Standard 2026 Investment Policy Review We have revised the 2026 Investment Policy to incorporate upcoming California General Code changes, refine permissible portfolio investments, and simplify language to increase readability Process Steps ✓ Ensured complete alignment with 2026 Code revisions CITY OF HUNTINGTON BEACH ✓ Benchmarked policy against 7 California municipalities and 6 Treasurer peer reviews to capture best practices STATEMENT OF INVESTMENT POLICY : , ✓ Solicited Investment Advisory Board feedback ✓ Increased transparency and readability of policy Submitting new policy to CMTA and APT for"scoring" 2025 . 1' 2026 Major Policy Changes �,,..�- ._ 1) State Law: (a) Extend Commercial Paper maturity from 270 4 1oi#10TINGTO� 365 Days and (b) Eliminate Orange County Treasury Pooled 1 O f.- PA:ii/o.�,A 1f ••• 70\ Funds from acceptable investments Uf 2) Investments: (a) Eliminate Reverse Repurchase Agreements 9.� .?. Q and Bankers Acceptances and (b) Increase Joint Powers 2111\ • oetll Authority limit to 25% of portfolio from $75 million cF�,pU /�//A1 '� 3) Maturities: Shorten Certificates of Deposit from 5 4 3 years 4) Portfolio: Reduce allowable portfolio share in 4+year P> maturities from 50% 4 25% 75 2026 Compliance Requirements Huntington Beach's investment, issuer, and maturity requirements are either in line or more conservative than California Government Code requirements California Government Code Limits Policy Limits Investment Type Investment Issuer Maturities Investment Issuer Maturities U.S.Treasury Securities 100% None 5 Years 100% None 5 Years U.S. Government Agency Securities 100% None 5 Years 100% None 5 Years Commercial Paper 40% 10% 1 Year 40% 10% 1 Year Certificates of Deposit 30% None 5 Years 30% 10% 3 Years Repurchase Agreements 100% None 1 Year 100% None 90 Days Money Market Mutual Funds 20% of Agency Funds 10% of Agency Funds N/A 15%of Agency Funds 10%of Agency Funds N/A Local Agency Investment Fund $75M per account N/A N/A $75M per account N/A N/A Municipal Debt 100% None 5 Years 100% 10% 5 Years Medium-Term Notes 30% None 5Years 30% 10% 5Years Joint Power Authority 100% None N/A 25% None N/A Supra national Securities 30% None 5Years 30% None 5Years 76 Investment Performance — Safety As safety of principal is our paramount priority, we have constructed a bond portfolio mix that fully complies with California General Code and ensures that Huntington Beach does not sustain losses City Investment Portfolio Compliance Check ($ Millions) Portfolio Issuer Category Maturity Share Share Quality Overall $391 $410 U.S.Treasury $378 Securities 5 Years Compliant $299 U.S.Government $265 Agency Securities 5 Years Compliant Supranational "AA" (or Securities 5 Years 30% 30% Higher) Compliant Medium-Term "A"(or Notes 5 Years 30% 10% Higher) Compliant Money Market "AAA"(or Mutual Funds 60 Days 15% 10% Higher) Compliant State and Local 2021 2022 2023 2024 2025 Investment Pools $75M $75M Compliant 1. Losses: Portfolio has experienced no losses and Treasurer held lower-yield bonds to ensure no losses • Compliance: Portfolio must pass maturity, category/issuer concentration, and bond ratings checks • Ratings: All holdings rated "A-" or higher with non-corporate bonds all AA+ or AAA ("80% are AAA/AA rated) • Diversification: Portfolio has no issuer > 10% except US Treasuries, Federal Home Loan Bank, and State Pool 1 Sources of Fund Balance Increases (FY2018-FY2024) Huntington Beach's reserves increased by"$160M from FY2018-FY2024, with that increase distributed across the General, Infrastructure, Pension, and Internal Services Funds FY2018-FY2024 Fund Balance Changes ($ Millions) $21 $15 $415 $33 $36 WRIF7 $59 • Workers Comp: $11 M $251 • Equipment: $8M • General Liability: $2M • Economic Uncertainty: $24M • Restricted: $15M • HB Recovery: $10M • Pension/GL/115 Trust: $10M FY18 Reserves General Pension Infrastructure Internal Service Other FY24 Reserves City Reserve Funds 78 Investment Performance — Liquidity Accurate cash flow management and a portfolio with ample short-term cash cushion is critical given our large monthly cash flow movements and large capital projects Net Cash Position ($ Millions) Portfolio Mix (%) $35 $25 +$51 Million +$36 Million 21 % ❑ < 1Year $15 ❑ 1 -2 Years 39% $5 ❑ 2-3 Years 18% El 3-5 Years n-24 Apr-24 ' 4 Jan-25 Apr-25 -$15 -$66 Million 22% -$25 • Cash Flow: Varies across months primarily due to timing of property tax receipts and sales tax true-ups • Cash Cushion: Portfolio contains —$60 million in fully liquid funds and —65% that could be liquidated easily • Cash Flow Modeling: Treasury partnering with all city departments to build detailed 18-month cash flow models and 5-year capital improvement plan model to optimize maturity timing for longer-dated bonds 79 Investment Performance - Yield . Financial returns for Huntington Beach's portfolio has increased significantly since 2022 due to increasing interest rates and an inverted yield curve Effective Return (%) Returns Across Maturities (Months) 5% 4.5% • - 4% 3.59% I5°1III 4.0% - E 2.00% 3.5% - +1.6% 126%.00%0.76% 3.0% - —2022 —2025 0% 2.5% - 2013 2015 2017 2019 2021 2023 2025 1 2 3 6 12 24 36 60 Observations • Movement from 1% 3% effective returns and reserve expansion since 2022 increased earnings by"$10 million annually • Interest rates returning to historical norms after"free money" period of the Federal Reserve surrounding the pandemic Current inverted yield curve is an anomaly—2022 curve where longer-term investments have higher returns is the norm J Investment Performance - Yield110" As the yield curve returns to normalcy over the next few years, Huntington Beach has a window to capture some incremental upside from increasing average bond duration and expanding our corporate bond mix Portfolio Years to Maturity Portfolio Share in Corporate Bonds (%) 3.0 - 22% 2.5 - \\ 2.23 2.73 1 .74 15% 2.0 - 2.45 1 .81 14% 1 .5 - 11% 1 .0 - 5 0.5 - 0.0 - 2013 2016 2019 2022 2025 2013 2016 2019 2022 2025 Opportunity to capture '10-20bps without threatening Huntington Beach's liquidity position by: (1) purchasing longer-term bonds with maturities that align with our cash flow troughs and (2) expanding portfolio share of high-grade corporate bonds by 3-5% J 81 Q1 FY25-26 Investment Performance Huntington Beach has —$410M in investable reserves across short-term and long-term instruments, yielding a 3.59% return for this quarter versus 3.24% return for FY2024-2025 Portfolio Return (%) Sector Breakdown 3.59% 3.24% $55 -I $71 92 , 4 $410 $133 $12 $47 Q1 FY25-26 FY24-25 Cash/CDs LGIP Agencies Corps Treasuries Supras Total Compliance Check Portfolio Issuer Category Maturity Share Share Quality Overall �• 6 purchases ($30 million) and 13 U.S.Treasury Securities 5Years Compliant redemptions ($61 million) U.S. Government Agency • Portfolio meets maturity threshold with Securities 5 Years Compliant < 25% having 4+ year duration Supranational Securities 5 Years 30% 30% "AA" (or Higher) Compliant • Medium-Term Notes 5 Years 30% 10% "A" (or Higher) Compliant City does not have Bankers Money Market Funds 60 Days 15% 10% "AAA"(or Higher) Compliant Acceptances, Repurchase State/Local Investment Pools $75M $75M Compliant \ Agreements, or Certificates of DeposiV Q1 FY25-26 Investment Performance Template - Summary Future City Council presentations will focus on three quarterly investment summary documents —the first will be an overall portfolio return for the period Earnings 5ummnryr(30 Days) Fiscal YTD Summary(42 Period Tr ctionrs(Par) Net Period Earnings S125..030.b7 fV et Period Earnings 53,755,651.14 Redemptions 2 #10.000.000 Last FYr Period Net Earnings $948,660-13 LastFYPeriodNetEarnings $2,900,87E154 Purchases 4 320,000,aoo Aggregate Avg Daily Book Balance S410,610,85189 Avg Deily Book Balance 44.20,236,180.44 lal 6 S39 000,000 transactions Net Effective Annual Return 3.7 5216 Het Effective Annual Return 3.593/6 F7uq f YTD Transactions(Par) I and dollars 13 $60,875,000 during Purchases $30,OOO,C0�0 quarter Total Activity 19 $90,a7s,o0o City Portfolio Certification �� I certify that this report and the corresponding pages attached accurately reflect all portfolio combined investments and conforms with all California statutes and the Huntington Beach investment policy filed on December 19.2023.The investment program herein shown provides sufficient cash flow liquidity to meet t i c+rt sire month's obligations_Market values are provided by Us Bank via Interactive Data Corp(ipc Effective return and .ot�iv 4,,ACt investment cash r _- City) > Trrasorrr 0'9/3Of2025 balance for quarter Jason 5cimtt Trl Fr Da tr Portfolio Investments Par value e Book Value ook Will. Market Vslue lino*Yield Bo*Yield Years to \ X of Port Contribution Maturity Cash/Money Market $12.097.563.10 $12.097.563.16 $12.097.56316 2.96% 3.97% 0.12% 0.00 Local Govt Inv Pools(LGIPh 346.760.732_66 $46,760.732_86 $46.760,73296 1L45% 4.36% 0.50% 0_00 Average time left fo r U.S.Treasuries 371,000,000.00 S70,533.034_17 S70,951,130.00 17.269E 3.6396 0.63% 2.34 suia ational $55,000.00000 $54,7493'02.26 $55,164.50000 23. 0% 3.71% 050% 203 '�* maturity on U.3.Agencies S132455,000.00 S132,709,139.92 $132.600.933_65 3248% 3.03% 1.00% L92 Cot{An at... S91_762.000.00 191.69,4.884.52 492,031,110.44 22.44% 4.16% 0-44% 2^6 investments by ty p e Total 1409,075296.04 $406,545,306.91 1409,605,975_13 100_00% 3b894 L81 83 Q1 FY25-26 Investment Performance Template - Portfolio Future City Council presentations will focus on three quarterly investment summary documents — the second will be a portfolio breakdown by maturity, investment type, and issuer concentration Portfolio Characteristics Maturity Distribution e-5Yr/ ' CASs Welg�ll�ed Avg 215Yi "? 11_11% Portfolio BookYield 3.68% Coupon 3.559G 3i6'r j ,o 18.12% Overall portfolio Portfol Market Yield 3.9056 Composite Ming AA2 : . ^ investment distribution Effective turaltion 1.52 Hd"'en"°` 70Securities o-1Yr by time to maturity a n d ~74_a,rc 1a34 J investment type Weighed Avg 1 81 �Sec�ttY lSite $5,000,000.00 Maturity IYrs1/WAL Held Weighted Avg Net Asset Value 1-2Yr Maturity{Daysi 661 (NAV) ;1o0260 1 Y..k Value%.f Portfolio ssuer Holdings-Top 10 Callable Breakdown .00% 1U.C9% 20.00% Call Refunding Options Options - /Maw LB- MINIMI 20.t)gi°4 Oriente(IA3.b2% 0.00% Corporate. 2f6 - T. 1226% . 224 9C 1 Local Gov!Inv Pooh¢GlP) CAMP--�11.45% Monthly ION 0'00% 0-00% 11.15% IBRICI-3.1111111117 77X ; US T.26-K i.s Relatively issuer Quanah[aU sarz SLOCIA / vss% FNMA- 5.63% Semi-Annual 122Yr QaP°( 111r. �.s 4.90% ios, concentration for city's FFCBA-N4 4034 Annwl Pat 3.-67% o-00% bond portfolio S U .Agencies 11,,,, Supranational Anytime KO 4.81% 10.89% Ft/ 31111Z9676 HD 2.49% Tot8I 21.95% 10 89% , .1•, A-.f art 84 Q1 FY25-26 Investment Performance Template - Compliance Future City Council presentations will focus on three quarterly investment summary documents - the third will be a comprehensive compliance check relative to our City Investment Policy I-$oldin.CO e'.e Imssttnent 'r Issuer Limit Maadmum Maturity drtRatings Overall bond e nit Actual Compliant Drat Actual Coupfatt LimbActual Complurt nn ASWai Min Rating Actual Min Rating - portfolio L 5htrtTe Long Tenn nt compliance check US.Treasuries 100.00% 1726% Yes 100.D0% 17.26% Yes 5.150 Years 38.3 Years Yes N/A N/A Yes based on Supranational 30.00% 13.40% Yes 1C/0.00% 7.271 Yes 5.00 Years 3755 Years Yes N/A AAA/Aaa/AAA Yes U.S,Agencies 100.6076 32.40% Yes 100.00% 1000% Yes 1.00 Years 421 Years Yes NIA N/A Yes investment/issuer o Corporates 3000 22.44% • Yet 10A0% 162% Yet 5.00Years 4.9BYears Yet N/A A/A2JA Yes limits, maturities, •• • and credit ratings Cash Compliance Summary %rat Compliance Cash Account Account Deesaiphon Portfolio Kul oun %kwesbble Dollar Portfolio Maximum Current Boot Value Investable Valise Complurt Maximum Portfolio for cash 003-CAMP Caifoma Asset Management Program 11.45% $75,000,000.0D $46.760,73286 $28239,267.14 Yes LW 1L45% 146.760.73285 Ye, and money 104-FULOC Fat American Treasury Obligations 15.00% 296% 120416 5120975631E S49,164232_86 Yes market holdings Cash/Morey Market 15.00% 2969 12.04X $12,097,56118 Yes (including government poolq) Internal and External Initiatives Beyond investment strategy, we are focused on deploying automation in cash collection/disbursement efforts and deploying community programming to help residents achieve their American Dream -- r Internal Initiatives External Initiatives ❑ Adopt technology to streamline collections ❑ Provide overview of Treasurer Office services and increase administrative efficiencies and solicit community feedback ❑ Install self-service kiosks and QR codes to ❑ Introduce workshops and 1-on-1 counseling facilitate electronic payments related to personal finances and investments ❑ Deploy AI-based system to identify for seniors, working age adults, and youth unpermitted short-term rental operators ❑ Partner with Police Department to expand tax, ❑ Partner with bank to simplify processes via investment, and identity scam classes electronic data feeds ❑ Complete collections process for dormant ❑ Expand local access to free tax preparation citations issued during pandemic ❑ Develop short-term rental operator trainings ❑ C\ omprehensiveauditsofhotelTOTpayme ,)nts 86 NOTE TO FILE Please be advised that the City Treasurer's Quarterly Investment Reports are now presented on a fiscal year basis versus a calendar year, as of Q1 FY2025-2026, per the City Treasurer