Subject: Receive the Treasurer's Investment Report for Quarter Ending December 31, 2025.

Summary

The City of Cupertino's Treasurer's Investment Report for the quarter ending December 31, 2025, indicates a strong financial position with the total General Ledger cash and investments increasing by $7.6 million to $309.0 million. The total bank balance for all City funds reached $310.05 million.

Key Investment Portfolio Performance:

• The main investment portfolio, managed by Chandler Asset Management, had a total market value of $207.3 million (up from $205.1 million last quarter), reflecting an unrealized gain of $2.14 million. It achieved a 1-year total rate of return of 6.06%, outperforming its benchmark (ICE BofA 1-5 Year US Treasury & Agency Index) which returned 5.73%. The portfolio maintains an average credit quality of AA.
• The PARS Section 115 Trusts (Pension and OPEB), managed by US Bank, collectively totaled $72.33 million. The Pension Trust grew to $26.23 million (up $0.6 million), and the OPEB Trust reached $46.10 million (up $0.1 million), both primarily due to investment gains. Both trusts delivered a 3-month investment return of 2.27% and impressive 1-year returns of 16.36% and 16.40% respectively.
• The Local Agency Investment Fund (LAIF), used for short-term liquidity, held $73.25 million and earned a quarterly interest rate of 4.20%.
• The City's Wells Fargo operating checking account held $7.02 million and earned 3% interest.

All City investments are reported to be in compliance with state law and the City's Investment Policy, with sufficient liquidity to meet expenditure requirements for the next six months.

Citizen Impact

The City's strong investment performance, including $2.14 million in unrealized gains and robust returns on pension and OPEB trusts, helps ensure the long-term fiscal health of the city. This financial stability supports funding for essential public services and future retiree benefits, potentially reducing the burden on taxpayers for these costs.

Confidence

high