Title
Acceptance of the Quarterly Investment Report for the quarter ended December 31, 2025.
Body
Summary:
Chapter 2, Administration, Article VII (Finance), All of Division 2 (Investment Policy), Section 2-274 Reporting, of the Code of Ordinances of the City of Deer Park, requires the Investment Officers to prepare and submit to City Council an investment report no less than on a quarterly basis. This requirement is in compliance with the Texas Public Funds Investment Act, V.T.C.A., Government Code Ch. 2256 as amended (the "Act"). The City's Investment Officers have worked with the Investment Advisor to prepare this report for the quarter ended December 31, 2025 and each has signed the report.
At December 31, 2025, all City funds were held in various depository accounts or in accounts at TexPool, TexSTAR, or Texas CLASS, which are local government investment pools authorized by the Investment Policy. All three pools continue to maintain their AAAm rating by Standard & Poor's, which is the highest rating a local government investment pool can achieve.
Cash and investment activity included on the attached report is summarized below:
Cash in Wells Fargo (Depository Bank) $35,864,567.44
Money Market Accounts 8,639,737.23
Certificates of Deposit 22,881,931.45
Securities 23,055,009.13
TexPool 50,714,285.63
TexSTAR 3,227,925.28
Texas CLASS 20,174,046.67
Total Book Value $164,557,502.83
Working with the City's investment advisor, the City has diversified the portfolio during the last several years with current investments of $54,576,677.81 in various depository banks invested in money market accounts, certificates of deposit (CDs), and securities. At the end of the quarter, these investments represent about 33% of the portfolio. Cash balances held in the primary depository bank represent about 22% of the portfolio at December 31, 2025.
These depository investments are earning between .48% and 4.66%. Comparatively, rates in the investment pools averaged 3.83%, 3.83%, and 3.74% for the quarter in TexPool, TexSTAR, and Texas CLASS, respectively. The City also executed one trade in the first quarter. A treasury note was purchased with a maturity date of February 2027 yielding 3.55%. Additionally, the City moved $4.5MM into the Interbank Money Market Account as it was offering more competitive rates than securities and CDs for much of Q1. The City will continue to review and evaluate investment opportunities for safety, liquidity, and yield.
At the end of 2025-2026’s first quarter, investments in TexPool totaled $50,714,285.63, which is a decrease of $7,314,087 from the previous quarter. Investments in TexSTAR totaled $3,227,925.28, which is a $31,323 increase from the prior quarter. Investments in Texas CLASS totaled $20,174,046.67, which is a decrease of $947,774 from the previous quarter. These increases in balances were due to interest earnings in the pools and decreases were related to bond funded project expenditures.
The Federal Open Markets Committee (FOMC) decreased the federal funds rate .25% at the October 29th meeting, and then another .25% at the December 10th meeting, lowering the target range to 3.50% - 3.75%.
Fiscal/Budgetary Impact:
N/A.
Recommended action
Accept the Investment Report for the Quarter Ended December 31, 2025.