DATE: March 18, 2026
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Title
Investment Portfolio Review and FY 2026 Statement of Investment Policy Update
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RECOMMENDATION
Recommendation
That the Council Budget and Finance Committee (CBFC) receives and comments on the City of Hayward Portfolio Update (Attachment I) and approves of the proposed updates to the Fiscal Year 2026 Statement of Investment Policy (Attachment IIs and III).
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SUMMARY
Every year, the City’s investment manager, PFM Asset Management (PFM), provides a Portfolio Update to the Council Budget and Finance Committee (Attachment I). The update reflects current economic events and a review of Hayward’s current portfolio. PFM also provides a quarterly Investment Performance Review to the City’s internal Investment Advisory Committee.
In addition, PFM reviews the City’s Statement of Investment Policy (Policy) annually for conformance with any updated laws and best practices. The Policy requires that City Council approve any recommended changes. A summary of changes is outlined in the Memorandum from PFM Asset Management to City of Hayward (Attachment II). Attachment III reflects the proposed changes using tracked changes for visibility. The changes are minor and reflect updates to Government Code Section 53601.
The memorandum also highlights new training and reporting requirements that do not require changes to the City’s policy. PFM can outline these requirements at the March 18 meeting.
In addition, there is an existing recommendation to integrate an ESG (Environmental, Social, and Governance) lens, which was requested by Council Member Syrop at the November 1, 2023, CBFC meeting. Due to the transitions in Finance Department leadership, this work was previously paused. PFM presented to the Investment Advisory Committee on this topic and will provide background to the CBFC at the March 18 meeting. Staff will then work with PFM to evaluate this item as part of the Fiscal Year 2027 Statement of Investment Policy. In the meantime, there are restrictions on the portfolio managed by PFM that have been put in place by the City of Hayward that do reflect the City’s values including issues related to nuclear weapons and specific corporations.
Staff requests that the Committee recommend approval of the FY 2025 Statement of Investment Policy (the Policy). If approved, this item will be presented to the full City Council for review and approval.
ATTACHMENTS
Attachment I City of Hayward Portfolio Report March 2026
Attachment II Memo from PFM Asset Management to the City of Hayward
Attachment III Fiscal Year 2026 Statement of Investment Policy