Westminster City Council/Successor Agency to the Westminster Redevelopment Agency
SUBJECT
Title
Amending the City of Westminster Statement of Investment Policy.
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From: Erin Backs, Finance Director
Requested by: Administration
Prepared by: Erin Backs, Finance Director
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RECOMMENDED ACTION
Recommendation
Adopt a Resolution entitled, "A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF WESTMINSTER, CALIFORNIA, AMENDING THE STATEMENT OF INVESTMENT POLICY."
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BACKGROUND
Staff recently reviewed the City's Investment Policy which was approved by the City Council on November 12, 2025. The policy calls for an annual review by the Investment Committee to ensure the policy's consistency with the global objective of preservation of investment principal, sufficient liquidity, rate of return, and its relevance to current laws and financial trends. As defined by the policy, the Investment Committee consists of the City Manager, City Treasurer (Finance Director) and Assistant Finance Director, or other City Manager designee which currently is the Assistant City Manager. A thorough review was conducted to ensure compliance with changes in State law and/or other regulations governing investment of public funds. The policy also calls for an annual review by the City Council at a public meeting.
The City's Investment Policy guides the investment of over $130 million in City and Successor Agency funds. California Government Code Section 53600 et seq. sets specific rules for how public agencies can invest their idle cash and limits the types of investment vehicles public agencies can utilize.
The policy was reviewed by the City's external investment advisor, Chandler Asset Management, who recommended the City adopt the following changes to more clearly align the City policy with state code.
Most of the upcoming changes relate to two California Senate bills, Senate Bill 1438 and Senate Bill 1439, which take effect January 1, 2027.
Senate Bill 1438
Senate Bill 1438 (SB 1438) substantially reorganizes the California Government Code (CGC) provisions that govern how local agency investment and deposit public funds. The legislation centralizes definitions in Section 53600, retains the statewide-concern finding in Section 53601, consolidates governance requirements in Section 53602, relocates the eligible investment list to Section 53603, and moves deposit-placement services to Section 53604. Most core investment authorities remain unchanged, but the section numbers and many internal cross-references change.
SB 1438 also makes the following changes:
• Expands qualifying commercial paper issuers to include federally or state-chartered banks and federally or state-licensed branches of foreign banks.
• Adds the Inter-American Investment Corporation to the list of qualifying supranational issues.
• Removes the January 1, 2031 sunset for the higher commercial paper investment limit applicable to certain local agencies with at least $100 million in investment assets.
• Removes the sunset for an exception on zero-interest accruals for certain U.S. government securities during negative-rate periods.
Senate Bill 1439
Senate Bill 1439 (SB 1439) serves primarily as a companion technical-corrections measure. For local agency investments, it updates and conforms statutory references affected by the SB 1438 reorganization and helps ensure that reporting requirements, cross-references, and related provisions remain consistent with the new statutory structure established by SB 1438, but it does not materially expand or restrict local investment authority. It does include language allowing certain qualifying institutions to use a letter of credit issued through the institution's regional Federal Home Loan Bank.
FISCAL IMPACT
The recommended changes to the investment policy result in no fiscal impact.
LEGAL REVIEW
The City Attorney’s Office has reviewed as to form.
CONCLUSION
The City investment policy requires an annual review. The proposed changes implement SB 1438 which contains the main changes to investment rules and the organization of the law, and SB 1439, which makes related technical updates to ensure the provisions work together.
ATTACHMENTS
1. Draft Resolution Updating the City’s Investment Policy
2. Proposed Investment Policy 11-18-26
3. Proposed Investment Policy 11-18-26 redline version
REVIEWED BY
Erin Backs, Finance Director
City Attorney’s Office
Christine Cordon, City Manager