COUNCIL COMMUNICATION
TO: Honorable Mayor and Council
FROM: Jill Olsen, Administrative Services Director
SUBJECT:TItle
Investment Report as of March 31, 2026 (Jill Olsen)
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FUNDING SOURCE:
N/A
PURPOSE:
To provide the March 31, 2026 Investment Report to Council.
BACKGROUND:
This investment report conforms to the City's adopted Investment Policy, which includes allowable investments under State law. The investment objectives of the City include safety, liquidity and yield - in that order. Standards of care have been used in making investment decisions for the City. Investments are purchased with the intention to hold to maturity, generally follow a two-year ladder plan, and are held by an independent third-party custodian.
As of March 31, 2026, the weighted average rate of return for the City’s investment portfolio (excluding LGIP and JPMorgan Chase) was 3.74 percent with an average yield to maturity of 3.91 percent and the average years to maturity is 2.3 years. As a point of comparison, the current yield for the Arizona State Treasurer’s Local Government Investment Pool (LGIP) 700, which invests in medium-term securities backed by the U.S. Government, was 3.57 percent for the quarter ending March 31, 2026. The LGIP’s Pool 700 holdings are very similar to those of the City’s investment portfolio and therefore, provide a reasonable benchmark for comparison.
In the third quarter (of the fiscal year), unemployment in Arizona was at 4.5% in January. The unemployment rate in Mohave County is not currently available for the quarter. Arizona’s seasonally adjusted jobless rate of 4.5% in January was slightly above the U.S. rate of 4.3% in January. Inflation is the principal driver of rates in terms of market acceptance. With economic policy uncertainty in the near term, national growth has occurred at a slow pace, but is projected to modestly increase. This projection is driven by tight financial conditions caused by tariff-induced inflationary pressures as well as military conflicts in the Middle East. Income and sales growth are forecasted to slowly rise in nominal terms this year. The March Federal Reserve policy rate is at 3.50% to 3.75%, which is equal to the December rate. Supply chain disruptions have improved, but overall market conditions remain a concern.
COMMUNITY IMPACT:
No direct impact. Indirect impact to the community is an increase or decrease in investment earnings based on the market environment, which helps fund government and enterprise activities.
FISCAL IMPACT:
N/A
ATTACHMENTS:
Investment Report - March 31, 2026
SUGGESTED MOTION:Recommended Action
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