Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended December 31, 2025. (No general fund impact) (Haynes/Sorensen)

Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended December 31, 2025.

The County Treasury investment portfolio is summarized in Attachment A (Investment Summary) and includes the Treasurer's Investment Pool and the investment accounts managed by the Treasury that are not pooled together for investment returns. The pooled portfolio includes county funds, deposits from special districts, and school districts, totaling $1.07 billion as of December 31, 2025.  

The portfolio consisted of 1.4% ($15.1 million) in cash at the bank, 32.3% ($346.7 million) in short-term investments in government investment pools such as the Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP), and 66.3% ($712.3 million) in an investment pool that is actively managed by the County’s investment advisor, PFM Asset Management, LLC (PFM). These investments consist mostly of fixed income securities as authorized by government code, such as: U.S. Treasuries; securities issued by federal agencies, such as Fannie Mae, Freddie Mac, and Federal Home Loan Bank; corporate notes; commercial papers; and certificates of deposit.

The investment details for the pooled portfolio along with the investment performance are shown in Attachment B (PFM Performance Report) while the non-pooled holdings are shown in Attachment C (Non-pooled Holdings).  The non-pooled portfolio of $155.1 million consists of specific investments for various entities and programs. These include $43.7 million in government medium-term funds (LAIF and CAMP) for various districts and the 2017 Lease Revenue Bonds, $30.8 million in investments managed by PFM for various county programs (Landfill Closure, Cache Creek, etc.), $80.6 million in section 115 trusts held by PARS for County OPEB (Other Post-Employment Benefits) and pension funding, and $4,900 in cash in money market accounts.

PFM reported that the government shutdown disrupted economic data collection, increasing reliance on private sources. Economic momentum slowed as unemployment rose to 4.4% and core inflation eased but stayed above target. The Fed cut rates twice, bringing the range to 3.50%–3.75%, and signaled further cuts ahead. Inflation moderated, GDP growth remained strong at 4.3%, and the yield curve steepened as short-term rates fell. Bond volatility dropped to a four-year low, and Treasuries and investment-grade sectors delivered positive returns, led by longer-duration bonds and agency-backed MBS.

Cash Balances
Attachment D (Cash Balances) depicts the cash balances of the three major operating funds of the County and their combined balance. December 31, 2025, the unaudited balance was $63.6 million, which represents an increase of $10.2 million from the prior quarter, partly due to net operating revenues and expenditures.

Other agencies with deposits in the pool include: school districts, special districts, and cities. A copy of the report is posted and available on the Department of Financial Services website. The Financial Oversight Committee reviews investment performance quarterly. All reports from the County's investment advisor, PFM Asset Management LLC, are available in the County Treasurer's office.