Agenda packet — Aliso Viejo City Council, September 7, 2022

1 AGENDA

ALISO VIEJO CITY COUNCIL
WEDNESDAY, SEPTEMBER 07, 2022
6:00 PM CLOSED SESSION
7:00 PM REGULAR MEETING
FOLLOWED BY PUBLIC FACILITIES CORPORATION MEETING*

City Hall
Council Chambers
12 Journey
Aliso Viejo, Ca

Mayor Ross Chun
Mayor Pro Tem Richard W. Hurt
Councilmember Tiffany Ackley
Councilmember David C. Harrington
Councilmember Mike Munzing

SPECIAL NOTICE REGARDING COVID-19

On March 4, 2020, Governor Newsom proclaimed a State of Emergency in California as a result of the threat of COVID -19. On September 16, 2021, Assembly Bill 361 (AB 361) was signed by Governor Newsom, to allow for the City Council to attend City Council meetings telephonically and for the public to participate in the City Council meeting by electronic means.

Given the health risks associated with COVID-19, state and local officials are recommending measures to promote social distancing; therefore, the City of Aliso Viejo will not have the Council Chambers open to the public for this meeting. Members of the pub lic may access the meeting live using any of the following sources:

• Cox Communications Channel 851
• AT&T U-Verse Channel 99
• Online at www.avcity.org/agendas
• Online via GoToWebinar at https://attendee.gotowebinar.com/register/3269013421609753613

Public comments may be submitted by calling (949) 425-2509 to leave a recorded message by 4:00 pm on the day of the meeting or via email to [email protected]. Alternatively, public comments may be submitted by logging onto the meeting through this link and using the “Raise Hand” feature:
https://attendee.gotowebinar.com/register/3269013421609753613. Comments are limited to three minutes each.
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WELCOME to the City of Aliso Viejo City Council meeting.

It is the City’s intention to comply with the Americans with Disabilities Act (ADA). If you need special assistance to participate in the meeting, the City will make reasonable arrangements to ensure accessibility and/or accommodations. [28 CFR 35.102-35.104 ADA Title II] Please contact the City Clerk’s Office at (949) 425-2505 at least 48 hours prior to the meeting.

Regular meetings of the City Council are held on the first and third Wednesday of the month at the City Hall Council Chambers, 12 Journey, Aliso Viejo. Copies of the agenda are available in the lobby at City Hall on the Thursday preceding a regularly scheduled City Council meeting. All communications recei ved by the City regarding an agenda item have been included in the agenda materials. Supplemental documents relating to specific agenda items, including communications received after agenda delivery, are presented at the dais and in the Public Copy agenda binder at the time of the meeting. Supplemental documents are also available for review in the City Clerk’s office, 12 Journey, Aliso Viejo. For more information, please contact City Hall at (949) 425- 2505.

This meeting will be broadcast live on Cox Communications Channel 851, AT&T U -Verse Channel 99 and the City's website. By attending the City Council Meeting, you are giving your permission to be televised. The Council Meetings are rebroadcast on Wednesday at 7:00 p.m. on Cox Communications Channel 851, AT&T U -Verse Channel 99, and can be viewed on the internet at www.avcity.org.

DAVID A. DOYLE SCOTT C. SMITH MITZI ORTIZ

CITY MANAGER CITY ATTORNEY CITY CLERK

PLEASE SILENCE ALL CELL PHONES AND OTHER

ELECTRONIC EQUIPMENT WHILE CITY COUNCIL IS IN SESSION

CALL TO ORDER: CONVENE SPECIAL MEETING

PUBLIC COMMENTS:

CLOSED SESSION:

CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) Number of potential cases: 2

PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to Government Code Section 54957
Title: City Manager

CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code section 54957.6
Agency designated representatives: Mayor and Mayor Pro Tem Unrepresented employee: City Manager

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CALL TO ORDER: CONVENE REGULAR MEETING

ROLL CALL

PLEDGE OF ALLEGIANCE:

REPORT FROM CLOSED SESSION:

1. SPECIAL PRESENTATIONS:

1.1. PROCLAMATION - NATIONAL PREPAREDNESS MONTH
Proclamation

1.2. PRESENTATION BY FAMILIES FORWARD

2. ADDITIONS, DELETIONS, REORDERING TO THE AGENDA:

3. COMMUNITY INPUT:

Members of the public wishing to address the City Council can submit public comments by calling (949) 425- 2509 to leave a recorded by 4:00 pm on the day of the meeting or via email to [email protected]. Written comments will be read into the record and recorded messages will be aired during the meeting. Alternatively, public comments may be submitted by logging onto the meeting through this link and using the “Raise Hand” feature: https://attendee.gotowebinar.com/register/3269013421609753613. Comments are limited to three (3) minutes each. In compliance with the Brown Act, no discussion or action may be taken on comments received at this time, except the City Council may briefly respond to statements made or questions posed.

4. CONSENT CALENDAR:

All matters listed on the Consent Calendar will be acted upon by one vote unless members of the City Council, or staff request a matter to be discussed and/or removed from the Consent Calendar for separate action. Items removed from the Consent Calendar wi ll be discussed and voted upon immediately following City Council action on the remainder of the Consent Calendar.

4.1. WAIVE THE READING OF ALL ORDINANCES AND RESOLUTIONS Recommended Action: Approve the reading by title only of all ordinances and resolutions wherein the titles appear on the public agenda; said titles shall be determined to have been read by title, and further reading is waived. 3 4

4.2. RESOLUTION EXTENSION AUTHORIZING VIRTUAL C ITY COUNCIL MEETINGS PURSUANT TO ASSEMBLY BILL 361
Recommended Action: Move to reconfirm findings under Assembly Bill 361 and extend Resolution No. 2021-27 to continue virtual City Council meetings.

Staff Report
Attachment 1 - Resolution No. 2021-27

4.3. APPROVAL OF MINUTES
Recommended Action: Approve the Minutes as submitted for the August 17, 2022 Special Meeting and the August 17, 2022 Regular Meeting.

Draft Minutes - August 17, 2022 Special Meeting
Draft Minutes - August 17, 2022 Regular Meeting

4.4. ACCOUNTS PAYABLE
Recommended Action:

1. Ratify accounts payable checks and electronic funds transfers issued August 11, 2022, in the amount of $808,902.23; and

2. Ratify accounts payable checks and electronic funds transfers issued August 18, 2022, in the amount of $482,874.53.

Staff Report
Attachment 1 - Accounts Payable Report

4.5. TREASURER’S STATEMENT – JULY 2022
Recommended Action: Approve July 2022 Treasurer’s Statement Staff Report
Attachment 1 - Jul'22 Treasurer's Report

4.6. INVESTMENT POLICY FOR FISCAL YEAR 2022-23
Recommended Action: Adopt a Resolution approving the Investment Policy for Fiscal Year 2022-23 and rescinding Resolution No. 2021-23 in its entirety.

Staff Report
Attachment 1 - Resolution
Attachment 2 - FY 2022-23 Investment Policy
Attachment 3 - FY 2022-23 Investment Policy (Redlined)
Attachment 4 - Resolution No. 2021-23

4.7. FIRST AMENDMENT TO THE AGREEMENT FOR SOLID WASTE CONSULTING

SERVICES
Recommended Action:

1. Approve a First Amendment to the Agreement with HF&H Consultants, LLC for Solid Waste Consulting Services to extend the term for two (2) years and to increase the agreement amount by $50,000 for a total agreement amount of $100,000;

2. Authorize the City Manager to approve additional funding to the agreement in an amount not to exceed $15,000, if necessary; and

3. Authorize the City Manager to execute the First Amendment to the Agreement.

Staff Report
Attachment 1 - Agreement Amendment
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4.8. FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT WITH LYON’S SECURITY SERVICE, INC. FOR FACILITY RESERVATION SECURITY SERVICES

HELD AT ALISO VIEJO RANCH
Recommended Action: Approve and authorize the City Manager to execute the First Amendment to the Professional Services Agreement with Lyon’s Security Service, Inc. for facility reservation security services held at Aliso Viejo Ranch to extend the term for three years and amend the compensation rates.

Staff Report
Attachment 1 - Agreement Amendment

4.9. PROPERTY ACQUISITION – 38 COLONIAL WAY
Recommended Action:

1. Approve the purchase and sale agreement for 38 Colonial Way, Aliso Viejo, CA 92656 in the amount of $227,000 and direct the City Manager to take all necessary steps to close escrow and complete the purchase of the property;

2. Find that the purchase of th e property is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Sections 15301 (Existing Facilities);

3. Authorize the appropriation of Development Impact funds in the amount $95,076 to the Fiscal Year 2022-23 Budget for the purchase; and

4. Find that the purchase of the property is in conformance with the City’s General Plan Confirms with the General Plan.

Staff Report
Attachment 1 - Purchase Agreement

4.10. RESOLUTION AMENDING CITY EMPLOYEE SALARY SCHEDULE FOR IT ANALYST

POSITION
Recommended Action: Adopt a Resolution amending employee salary schedule for IT Analyst position.

Staff Report
Attachment 1 - Resolution
Attachment 2 - Salary Schedule

5. PUBLIC HEARINGS:

5.1. FENNEL MEDITERRANEAN KITCHEN AND BAR AT 26611 ALISO CREEK ROAD,

SUITE A OF THE ALISO VIEJO TOWN CENTER (ADMINISTRATIVE USE PERMIT AND

SITE DEVELOPMENT PERMIT TO ESTABLISH A NEW RESTAURANT SERVING FULL

ALCOHOL AND PERFORM TENANT IMPROVEMENTS INCLUDING EXTER IOR

MODIFICATIONS)
Recommended Action: Continue the public hearing to a date uncertain.

Staff Report

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6. DISCUSSION:

6.1. AMENDMENT TO ALISO VIEJO MUNICIPAL CODE CHAPTER 10.06, PEDESTRIAN, BICYCLE, AND SKATEBOARD REGULATIONS, AND CHAPTER 11.10, PARKS, TO

REGULATE ELECTRIC BICYCLES, BOARDS, AND OTHER MOTORIZED

RECREATIONAL OF ELECTRIC TRANSPORTATION
Recommended Action:

1. Find that the proposed Ordinance is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Sections 15378(a), 15301(c), and 15061(b)(3); and

2. Introduce for first reading an Ordinance titled: AN ORDINANCE OF THE CITY

COUNCIL OF THE CITY OF ALISO VIEJO, CALIFORNIA, AMENDING CHAPTER

10.06 (PEDESTRIAN, BICYCLE, AND SKATEBOARD REGULATIONS) OF TITLE 10 (STREETS AND SIDEWALKS) AND CHAPTER 11.10 (PARKS) OF TITLE 11 (PARKS AND PUBLIC SPACES) OF THE ALISO VIEJO MUNICIPAL CODE,

ESTABLISHING REGULATIONS RELATING TO ELECTRIC BICYCLES,

MOTORIZED SCOOTERS, AND OTHER ELECTRICALLY MOTORIZE D BOARDS ON SIDEWALKS AND PARKS IN THE CITY.

Staff Report
Attachment 1 - Proposed Ordinance
Attachment 2 - Draft Ordinance (Redlined)

7. CITY MANAGER' S REPORT:

8. ANNOUNCEMENTS / COUNCIL COMMENTS / COMMITTEE UPDATES:

9. ADJOURNMENT:

The next regularly scheduled City Council meeting is September 21, 2022.

*Aliso Viejo Public Facilities Corporation (PFC) Board of Directors Annual Meeting to be held immediately following City Council Regular Meeting. (Please refer to September 7, 2022 PFC Agenda.)

6 Proclamation
National Preparedness Month

WHEREAS, National Preparedness Month, occurring annually in September since 9/11, creates an ideal opportunity for every resident of Aliso Viejo, California, to join citizens across the United States in preparing their homes, families, businesses, and communities for any type of emergency, including natural disasters, public health emergencies, and potential terrorist attacks; and

WHEREAS, the City of Aliso Viejo is currently responding to and recovering from the unprecedented impacts of the COVID-19 pandemic while concurrently preparing for heat waves, power outages, and the threat of wildfires and earthquakes; and

WHEREAS, the Federal Emergency Management Agency announced the 2022 National Preparedness Month theme of "A Lasting Legacy,” and

WHEREAS, planning now, before the next disaster, is the best way to improve community recovery from disasters; and

WHEREAS, the City of Aliso Viejo partners with county, federal, state, local, private, and volunteer agencies to provide public education and volunteer programs, such as Community Emergency Response Team, to educate individuals on local hazards and how to prepare for them, and on how to take action; and

WHEREAS, all residents of Aliso Viejo are urged to plan ahead for disasters and encourage their family and friends to also do so by participating in preparedness activities, registering for AlertOC and Nixle mass notification systems, and visiting the City’s preparedness website at:

AVcity.org/DisasterPreparedness for essential preparedness tips and information;

NOW , THEREFORE, the Aliso Viejo City Council hereby proclaims Sept ember 2022 as National Preparedness Month, and calls on all government agencies, private organizations, and the people and businesses of the City of Aliso Viejo to develop their own emergency preparedness plans, and work together toward creating a stronger, more resilient community.

Dated this 7th day of September, 2022

____________________________
Ross Chun, Mayor

7 City of Aliso Viejo

AGENDA ITEM
DATE: September 7, 2022
TO: Mayor and City Council
FROM: Mitzi Ortiz, Director of Government Services
SUBJECT: RESOLUTION EXTENSION AUTHORIZING VIRTUAL CITY COUNCIL MEETINGS PURSUANT TO ASSEMBLY BILL 361
Recommended Action:

Move to reconfirm findings under Assembly Bill 361 and extend Resolution No. 2021-27 to continue virtual City Council meetings.

Fiscal Impact:

None.

Background:

Assembly Bill 361 (“AB 361”), effective October 1, 2021, waives certain provisions of the Ralph M. Brown Act and allows legislative bodies to meet virtually until January 1, 2024, provided there is a state of emergency and either:

1. state or local officials have imposed or recommended measures to promote social distancing; or

2. the legislative body determines by majority vote that meeting in person would present imminent risks to the health and safety of attendees.

Under AB 361, the City is not required to allow public access at teleconference locations; however, the City must provide access to meetings via a call-in option or internet-based service option so that members of the public may address the City Council in real time.

Additionally, every 30 days the City Council must reconsider the state of emergency and make the determination to continue meeting virtually in accordance with AB 361.

Discussion:

On October 20, 2021, the City Council adopted Resolution No. 2021-27 authorizing virtual City Council meetings under AB 361, having found and determined that (1) a state of emergency related to COVID-19 is currently in effect; (2) state and local officials have 8

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recommended measures to promote social distancing in connection with COVID-19; and (3) due to the COVID-19 emergency, meeting in person would present imminent risks to the health and safety of attendees. At subsequent meetings, the City Council has reconfirmed the findings and extended the resolution pursuant to AB 361.

Staff will agendize this matter for consideration at each City Council meeting until such time as the state of emergency has been terminated or the City Council determines that conditions no longer exist to prevent meeting safely in person.

Staff recommends that the City Council reconfirm the findings in Resolution No. 2021-27 continue to exist and approve the extension of the resolution.

Attachment:

1. Resolution No. 2021-27
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RESOLUTION NO. 2021-27

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALISO

VIEJO, CALIFORNIA, AUTHORIZING VIRTUAL CITY COUNCIL
MEETINGS PURSUANT TO ASSEMBLY BILL 361

WHEREAS, the Aliso Viejo City Council (“Council”) is committed to preserving and nurturing public access and participation in meetings of the Council; and

WHEREAS, with the exception of closed sessions, all meetings of the Council are open and public, as required by the Ralph M. Brown Act (Cal. Gov. Code 54950 – 54963), so that any member of the public may attend and participate in the Council’s meetings; and

WHEREAS, starting in March 2020, in response to the spread of COVID-19 in the State of California, the Governor issued a number of executive orders aimed at containing the COVID-19 virus; and

WHEREAS, among other things, these orders wa ived certain requirements of the Brown Act to allow legislative bodies to meet virtually; and

WHEREAS, pursuant to the Governor’s executive orders, the Council has been holding virtual meetings during the pandemic in the interest of protecting the health and safety of the public, staff, and Councilmembers; and

WHEREAS, the Governor’s executive order related to the suspension of certain provisions of the Brown Act expires on September 30, 2021; and

WHEREAS, on September 16, 2021 the Governor signed Assembly Bill 361 (in effect as of October 1, 2021 – Government Code Section 54953(e)), which allows legislative bodies to meet virtually provided there is a state of emergency, and either (1) state or local officials have imposed or recommended measures to promote social distancing; or (2) the legislative body determines by ma jority vote that meeting in person would present imminent risks to the health and safety of attendees; and

WHEREAS, such conditions now exist in Orange County, specifically, a state of emergency has been proclaimed related to COVID-19, state and local officials are recommending measures to promote social distancing, and because of the ongoing threat of COVID-19, meeting in person would present imminent risks to the health and safety of attendees;

NOW, THEREFORE, BE IT RESOLVED BY THE ALISO VIEJO CITY COUNCIL AS FOLLOWS:

Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. 10

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Section 2. Remote Teleconference Meetings. Consistent with the provisions of Government Code Section 54953(e), the Council finds and determines that (1) a state ofemergency related to COVID-19 is currently in effect; (2) state and local officials have recommended measures to promote social distancing in connection with COVID-19; and (3) due to the COVID-19 emergency, meeting in person would present imminent risks to the health and safety of attendees. Based on such facts, findings and determinations, the Council authorizes staff to conduct remote teleconference meetings of the Council under the provisions of Government Code Section 54953(e).

Section 3. Effective Date of Resolution. This Resolution shall take effect upon adoption and shall be effective for 30 days unless earlier extended by a majority vote of the Council in accordance with Section 4 of this Resolution.

Section 4. Extension by Motion. The Council may extend the application of this Resolution by motion and majority vote by up to 30 days at a time, provided that it makes all necessary findings consistent with and pursuant to the requirements of Section 54953(e)(3).

PASSED, APPROVED AND ADOPTED this 20th day of October, 2021.

Tiffany Ackley
Mayor
APPROVED AS TO FORM: ATTEST:

Scott C. Smith Mitzi Ortiz, MMC
City Attorney City Clerk
Mitzziiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Ortiz,z,z,z,,z,z,z,z,,zz,zz,,,z,,z,,zz,,z,zz,,zz,z,zzzzz,z,,z,zzzz,,,zz,,,z,z,, MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMC City Clerk
11

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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

CITY OF ALISO VIEJO )
I, MITZI ORTIZ, City Clerk of the City of Aliso Viejo, California, DO HEREBY CERTIFY that foregoing Resolution No. 2021-27 was duly passed and adopted by the City Council of the City of Aliso Viejo at their regular meeting held on the 20th day of October 2021, by the following roll call vote, to wit:

AYES: Mayor Ackley, Mayor Pro Tem Chun, Councilmembers Harrington, Hurt and Munzing
NOES: None
ABSENT: None

MITZI ORTIZ, MMC

CITY CLERK
(SEAL)

MITZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZI ORTITITITITTITITTITITITITIITIITITITTITITITTITTITITITITTTITTITITITITTITITTTTTTITITITTTTITIITITITITITTTITITITTTITITITITTTTTITITTTTTTITTITTIITITTTITIITITITTIITTTITIITIITIIITTIITTITITIITTTTTTTITTTTTTTITITTTTTTTITTTTTTTTTTTTTTTTTTTTTTTTT ZZZ,ZZZZZZZZZZZZZZZZZZZZZ MMC

CITY CLERK
12

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Special Meeting Minutes

CITY OF ALISO VIEJO

CITY COUNCIL MINUTES

SPECIAL MEETING
August 17, 2022, 6:30 P.M.

Council Chambers, City Hall, 12 Journey
Aliso Viejo, California
City Council conducted this meeting in accordance with California Government Code Section 54953(e)(2) and COVID-19 pandemic protocols.

CALL TO ORDER: Mayor Chun called the Special Meeting of the City Council of the City of Aliso Viejo to order 6:30 p.m.

ROLL CALL:

PRESENT: MAYOR ROSS CHUN (via teleconference)
MAYOR PRO TEM RICHARD HURT (via teleconference)
COUNCILMEMBER TIFFANY ACKLEY (via teleconference)
COUNCILMEMBER DAVID C. HARRINGTON (via teleconference)
COUNCILMEMBER MIKE MUNZING (via teleconference)
ABSENT: NONE
STAFF PRESENT: DAVID A. DOYLE, CITY MANAGER
SCOTT C. SMITH, CITY ATTORNEY

ANN EIFERT, FINANCIAL SERVICES DIRECTOR
PUBLIC COMMENTS:

None.

CLOSED SESSION:

CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code section 54956.8
Property: 120 Playa Circle, Aliso Viejo, 92656
Agency Negotiators: City Manager
Negotiating Parties: City of Aliso Viejo, Alyssa Walker and/or their authorized agent(s) Under Negotiation: Price and terms of payment
REPORT FROM CLOSED SESSION:

City Attorney Scott Smith stated no reportable action was taken. 13

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Special Meeting Minutes
ADJOURNMENT: Mayor Chun adjourned the meeting at 6:39 p.m. to the August 17, 2022 Regular City Council Meeting.

Respectfully submitted: Approved by:
________________________ ________________________

MITZI ORTIZ, MMC ROSS CHUN

CITY CLERK MAYOR
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Regular Meeting Minutes

CITY OF ALISO VIEJO

CITY COUNCIL MINUTES

REGULAR MEETING
August 17, 2022, 7:00 P.M.

Council Chambers, City Hall, 12 Journey
Aliso Viejo, California
City Council conducted this meeting in accordance with California Government Code Section 54953(e)(2) and COVID-19 pandemic protocols.

CALL TO ORDER: Mayor Chun called the Regular Meeting of the City Council of the City of Aliso Viejo to order at 7:26 p.m.

ROLL CALL:

MITZI ORTIZ, CITY CLERK

ANN EIFERT, FINANCIAL SERVICES DIRECTOR

SHAUN PELLETIER, PUBLIC WORKS DIRECTOR

SO KIM, COMMUNITY DEVELOPMENT DIRECTOR

JOHN KANLUND, ASSOCIATE PLANNER

LIZZY MENDOZA, RECREATION & COMMUNITY SERVICES MANAGER

ISAAC AZIZ, INFORMATION TECHNOLOGY MANAGER
CAPT. SCOTT MERRILL, CHIEF OF POLICE SERVICES
PLEDGE OF ALLEGIANCE: Mayor Pro Tem Hurt led the pledge of allegiance.

REPORT FROM CLOSED SESSION:

City Attorney Scott Smith stated there was no reportable action.

1. SPECIAL PRESENTATIONS:
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Regular Meeting Minutes

1.1. FEATURED BUSINESS OF THE MONTH - COLD STONE CREAMERY Mayor Chun introduced the video and presented the certificate of recognition to Owner Lawrence Cassel. Mr. Cassel expressed his appreciation.

1.2. TRUSTED PARTNER RECOGNITIONS - SOUTH COUNTY OUTREACH AND FAMILY

ASSISTANCE MINISTRIES
Mayor Chun presented the certificates of recognition to South County Outreach President LaVal Brewer and Family Assistance Ministries Chief Executive Officer Elizabeth Andrade. Mr. Brewer and Ms. Andrade expressed their appreciation.

1.3. STATE OF THE CITY VIDEO
Mayor Chun presented the State of the City video.

2. ADDITIONS, DELETIONS, REORDERING TO THE AGENDA:

City Manager David Doyle introduced Community Development Director So Kim Mayor Chun expressed condolences on the passing of Valentino Rodriguez.

3. COMMUNITY INPUT:

None.

4. CONSENT CALENDAR:

Unless otherwise indicated below, the following pertains to all items on the Consent Calendar.

Motion: Councilmember Munzing moved and Mayor Pro Tem Hurt seconded to approve the recommended actions. Motion carried 5-0.

4.2. RESOLUTION EXTENSION AUTHORIZING VIRTUAL C ITY COUNCIL MEETINGS PURSUANT TO ASSEMBLY BILL 361
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Regular Meeting Minutes
Recommended Action: Move to reconfirm findings under Assembly Bill 361 and extend Resolution No. 2021-27 to continue virtual City Council meetings.

4.3. APPROVAL OF MINUTES
Recommended Action: Approve the Minutes as submitted for the July 20, 2022 Regular Meeting.

4.4 ACCOUNTS PAYABLE
Recommended Action:

1. Ratify accounts payable checks and electronic funds transfers issued July 25, 2022, in the amount of $750,932.53;

2. Ratify accounts payable checks and electronic funds transfers issued July 28, 2022, in the amount of $1,154.11; and

3. Ratify accounts payable checks and electronic funds transfers issued August 4, 2022, in the amount of $2,263,912.05.

4.5. TREASURER’S STATEMENT – JUNE 2022
Recommended Action: Approve June 2022 Treasurer’s Statement.

4.6. CONTRACT WITH CT CONSTRUCTION SERVICES FOR CITY HALL SUITE 200

IMPROVEMENTS
Recommended Action:

1. Award a contract in the amount of $106,491 to CT Construction Services, Inc. for the City Hall Suite 200 Improvements project;

2. Authorize the City Manager to execute a contract with CT Construction Services, Inc.; and

3. Authorize City staff to make tot al compensation to CT Construction Services, Inc. up to $106,491 plus $21,298 (20% of the contract amount) to allow for contingencies, totaling $127,789.

5. PUBLIC HEARINGS:

5.1. FENNEL MEDITERRANEAN RESTAURANT (PA22- 011): AN ADMINISTRATIVE USE

PERMIT TO ESTABLISH AN ALCOHOLIC BEVERAGE CONTROL (ABC) LICENSE TYPE 47 (ON-SALE GENERAL – EATING PLACE) IN CONJUNCTION WITH A NEW 5

RESTAURANT (FENNEL MEDITERRANEAN RESTAURANT) AND A SITE

DEVELOPMENT PERMIT (SDP) FOR EXTERIOR MODIFICATIONS TO THE BUILDING

INCLUDING THE ENCLOSURE OF AN EXISTING PATIO WITHIN AN EXISTING TENANT SPACE LOCATED AT 26611 ALISO CREEK ROAD, SUITE A (ALISO VIEJO

TOWN CENTER)
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Regular Meeting Minutes
City Manager David Doyle provided an overview. Mayor Chun opened the public hearing.

There were no comments.

Recommended Action: Staff recommends the City Council continue the public hearing to September 7, 2022.

Motion: Mayor Pro Tem Hurt moved and Councilmember Ackley seconded to approve the recommended action. Motion carried 5-0.

5.2. PLANNING APPLICATION PA22- 012: SITE DEVELOPMENT PERMIT (SDP) FOR

EXTERIOR MODIFICATIONS TO THE BUILDING AND COMMON AREAS, AND AN EXCEPTION PERMIT (EP) TO ALLOW THE OUTDOOR PATIO TO EXCEED 1,000 SQUARE FEET (PROPOSED AT 1,215 SQUARE FEET) AND PROJECT DESIGN

FEATURES TO MITIGATE THE OPERATIONAL SOUND IMPACTS ON

SURROUNDING BUSINESSES AND SENSITIVE USES, LOCATED IN AN EXISTING TENANT SPACE OF THE COMMONS (26541 ALISO CREEK ROAD, #F); AND A

CONDITIONAL USE PERMIT (CUP) TO ESTABLISH AN ALCOHOLIC BEVERAGE CONTROL (ABC) LICENSE TYPE 47 (ON-SALE GENERAL – EATING PLACE AND

BEER AND WINE FOR OFFSITE CONSUMPTION) FOR A FULL- SERVICE RESTAURANT (EUREKA!) OFFERING OUTDOOR DINING WITH LATE NIGHT HOURS City Manager David Doyle introduced Associate Planner John Kanlund, who provided an overview. Staff responded to questions regarding exterior building façade and sidewalk access. Applicant Mark Fernandez , Golden Property Development LLC, provided additional information. Mayor Chun opened the public hearing. There were no comments.

Councilmembers commented on the matter. Mayor Chun closed the public hearing.

Recommended Action:

1. Open and conduct the continued public hearing;

2. Find that the request is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Sections 15301 (Existing Facilities);

3. Adopt Resolution No. 2022-22 approving a Conditional Use Permit (CUP) to establish an Alcoholic Beverage Control (ABC) License Type 47 (On-Sale General – Eating Place and Offsite consumption) in conjunction with a new restaurant “Eureka!”; and

4. Adopt Resolution No. 2022-23 approving a Site Development Permit (SDP) to allow for exterior modifications including a new outdoor dining area, a new color scheme for the facade, and new landscaping, and an Exception Permit (EP) to allow the size of the outdoor dining area to exceed the code limit of 1,000 square feet (proposed at 1,215 square feet) and use design features to mitigate the operational sound impacts of the patio on surrounding businesses and sensitive uses for an existing tenant space of The Commons located at 26541 Aliso Creek Road, #F.

Motion: Councilmember Harrington moved and Councilmember Ackley seconded t o approve the recommended actions. Motion carried 5-0.

6. DISCUSSION:
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Regular Meeting Minutes

6.1. SELECTION OF VOTING DELEGATE FOR LEAGUE OF CALIFORNIA CITIES ANNUAL

BUSINESS MEETING
City Manager David Doyle provided an overview.

Recommended Action: Designate a voting delegate and up to two alternates for the League of California Cities Annual Business Meeting to be held on September 9, 2022 at the Long Beach Convention Center.

Motion: Councilmember Munzing moved and Councilmember Ackley seconded to appoint Mayor Chun as voting delegate and Mayor Pro Tem as alternate. Motion carried 5-0.

7. CITY MANAGER' S REPORT:

City Manager David Doyle announced Red Cross Blood Drive to be held from 12:00 p.m. to 6:00 p.m. on September 14, 2022 at Aliso Viejo Ranch; Movie Night to be held at 6:00 p.m. on August 26, 2022 at Aliso Viejo Middle School; Aliso Viejo Trails and Creek Clean- Up to be held from 8:00 a.m. to 11:00 a.m. on September 17, 2022 at Aliso Viejo Ranch; registration for fall recreation programs.

8. ANNOUNCEMENTS / COUNCIL COMMENTS / COMMITTEE UPDATES:

Councilmember Harrington: None
Councilmember Munzing:
 Attended Aliso Viejo Chamber of Commerce Networking Breakfast  Attended AVCA Concerts in the Park
Councilmember Ackley: None
Mayor Pro Tem Hurt:
 Encouraged residents to use Orange County Public Library services Mayor Chun:
 Attended Eagle Scout Court of Honor for Thara Venkateswaran  Attended Shakespeare by the Sea at Soka University
 Attended tour at Families Forward
 Expressed appreciation to participants in Walk Your Dog With The Mayor event  Attended Furry Friends Pet Fair
 Attended Grand Opening for Aliso Creek Dental
 Attended tour at Glaukos facility
 Attended presentation by Impact Schools founder
19

Page 6 of 6 ends

Regular Meeting Minutes

9. ADJOURNMENT: Mayor Chun adjourned the meeting in memory of Valentino Rodriguez at 8:34 p.m. to the regularly scheduled meeting of September 7, 2022.

Respectfully submitted: Approved by:
________________________ ________________________

MITZI ORTIZ, MMC ROSS CHUN

CITY CLERK MAYOR
20 City of Aliso Viejo

AGENDA ITEM
DAT
E: September 7, 2022
TO: M
ayor and City Council
FR
OM: Ann Eifert, Director of Financial Services
SUBJ
ECT: ACCOUNTS PAYABLE
Recommended Actions:

1. Rat
ify accounts payable checks and electronic funds transfers issued August 11, 2022, in the amount of $808,902.23; and

2. Ratify accounts payable checks and electronic funds transfers issued August 18, 2022, in the amount of $482,874.53.

Fiscal Impact:

Expenditures in the amount of $1,291,776.76.

Background:

The City issues accounts payable checks on bi-weekly basis and presents it to City Council for ratification at its next regularly scheduled City Council meeting.

Discussion:

The attached register containing checks and electronic funds transfers dated August 11 , 2022, through August 18 , 2022, for $ 1,291,776.76 is being presented for ratification. All payments have been made in compliance with the City’s purchasing policy and procedures.

Payments have been reviewed and approved by the appropriate departmental staff. The issued accounts payable checks and electronic funds transfers have been reviewed and deemed accurate by the Director of Financial Servic es.

Attachment:

1. Accounts Payable Report
21 Accounts Payable
08/11/2022
Description (Item)Vendor Name Amount
101 - GENERAL FUND

LAW ENFORCEMENT-CONTRACT
LIC GRANT REIMB COVID ARPA PP13 CREDITCOUNTY OF ORANGE (15,493.94) AUG'22 CONTRACT PAYMENT CREDITCOUNTY OF ORANGE (2,027.32) AUG'22 IN CAR VIDEOCOUNTY OF ORANGE 7,823.85
AUG'22 BODY WORN CAMERACOUNTY OF ORANGE 13,912.44
AUG'22 LAW ENFORCEMENTCOUNTY OF ORANGE 798,643.94
LAW ENFORCEMENT-CONTRACT TOTAL: 802,858.97
GENERAL FUND TOTAL: 802,858.97
215 - PUBLIC SAFETY GRANTS

LAW ENFORCEMENT-OTHER
AUG'22 MOTORCYCLE REPLACEMENT COSTSCOUNTY OF ORANGE 65.92 AUG'22 E CITATION REPLACEMENT COSTSCOUNTY OF ORANGE 91.82 AUG'22 E CITATION RECURRING COSTSCOUNTY OF ORANGE 291.45 AUG'22 MDC REPLACEMENTCOUNTY OF ORANGE 1,550.49
AUG'22 MDC RECURRINGCOUNTY OF ORANGE 4,043.58
LAW ENFORCEMENT-OTHER TOTAL: 6,043.26
PUBLIC SAFETY GRANTS TOTAL: 6,043.26
GRAND TOTAL: 808,902.23
22 Accounts Payable
Description (Item)Vendor Name Amount
101 - GENERAL FUND
REF0011546163-7/7 SDP-2022-0001/COMMONS PHCALIFORNIA NEWSPAPERS PARTNERSHIP 607.60 REF0011545955-7/7 PA22-011/FENNEL PUBLIC HEARINGCALIFORNIA NEWSPAPERS PARTNERSHIP 576.60 REF0011545741-7/7 PA22-012/EUREKA PUBLIC HEARINGCALIFORNIA NEWSPAPERS PARTNERSHIP 570.40 SEP'22 DENTAL INSURANCECHOICE BUILDER 2,352.72
SEP'22 VISION INSURANCECHOICE BUILDER 349.86
MAY'22 CAA ENG 5049 COX UTILITYCHARLES ABBOTT ASSOC INC 120.51 MAY'22 CAA ENG 5005 SCE - SADDLEBACKCHARLES ABBOTT ASSOC INC 1,132.82 MAY'22 CAA ENG 2248 SUMMIT IV 15-25 ENTERPRISECHARLES ABBOTT ASSOC INC 718.20 MAY'22 CAA ENG 5004 MNWDCHARLES ABBOTT ASSOC INC 626.67 MAY'22 CAA ENG 5002 AT&TCHARLES ABBOTT ASSOC INC 626.67 MAY'22 CAA ENG 5003 COXCHARLES ABBOTT ASSOC INC 433.85
MAY'22 CAA ENG 5046 NX UTILITIESCHARLES ABBOTT ASSOC INC 337.44 MAY'22 CAA ENG 5064 CLEAR THOUGHT CONTCHARLES ABBOTT ASSOC INC 192.82 MAY'22 CAA ENG 5008 THE GAS COMPANYCHARLES ABBOTT ASSOC INC 168.72 MAY'22 CAA-7 COMPUTER STATIONS LEASE CREDITCHARLES ABBOTT ASSOC INC (350.00) P#20-1036/11 CALEDON COURT-WILLARD WOODWORKS INCWILLARD WOODWORKS INC 750.00 P#21-1894/EP21-11-107-SURETY REFUND-OAKBROOK LNDSCOAKBROOK LANDSCAPE AND POOL CONSTRUCTION INC 3,000.00 P#21-1894/47 SILKWOOD-OAKBROOK LANDSCAPE & POOLOAKBROOK LANDSCAPE AND POOL CONSTRUCTION INC 500.00 P#21-1373/26881 ALISO CREEK RD-CORESTATES CONS.CORESTATES CONSTRUCTION SERVICES, INC 1,500.00 P#21-1373/26881 ALISO CREEK RD-CORESTATES CONS.CORESTATES CONSTRUCTION SERVICES, INC 1,500.00 REFUND OF CAND. STMT OVRPYMT-ACKLEY FOR CC 2022ACKLEY FOR CITY COUNCIL 2022 45.00 15,759.88

CITY COUNCIL
RH-5/4-5/5 SCAG CONF-MILEAGE REIMBRICHARD HURT III 141.57 CITY COUNCIL TOTAL: 141.57

CITY MANAGER
DD-FY22-23 OCCMA MEMBERSHIP DUESOC CITY MANAGERS' ASSN 432.00 CITY MANAGER TOTAL: 432.00

HUMAN RESOURCES
JUN'22-ML SECURE LIVE SCAN FEESCHARLES C STILL 57.00
JUL'22-SK/EM SECURE LIVE SCAN FEESCHARLES C STILL 124.00 LM-CPRS SPECIALIST JOB PLACEMENT ADUS BANK PURCHASING CARD PROGRAM 75.00 HUMAN RESOURCES TOTAL: 256.00

CITY CLERK
REF0011545822-7/7 NOTICE OF ELECTION-ENGLISHCALIFORNIA NEWSPAPERS PARTNERSHIP 312.48 REF0011545830-7/7 NOTICE OF ELECTION-SPANISHCALIFORNIA NEWSPAPERS PARTNERSHIP 322.40 CC-ELECTION SUPPLIES-BINDERSSTAPLES ADVANTAGE 57.00
CC-OFFICE SUPPLIESSTAPLES ADVANTAGE 127.07
CITY CLERK TOTAL: 818.95

FINANCE
SEP'22 ADMIN FEECHOICE BUILDER 35.00
AUG'22-CH-CASH COURIER SERVICEGARDAWORLD 439.14
AE-FY22-23 CMTA MEMBERSHIP DUESUS BANK PURCHASING CARD PROGRAM 95.00 AE-FY22-23 CSMFO MEMBERSHIP DUESUS BANK PURCHASING CARD PROGRAM 110.00 JUL'22 CUSTODIAN CHARGESUS BANK N.A. - CUSTODY 177.25
FINANCE TOTAL: 856.39

INFORMATION TECHNOLOGY
7/10-8/9/22 ACCT#0202-CH-TV/CABLECOX COMMUNICATIONS, INC 173.86 7/19-8/18/22 ACCT #9302-CH-IT SERVER ROOMCOX COMMUNICATIONS, INC 85.39 JUL'22 NETWORK SUPPORT & SECURITY ENGINEERNATHAN M KEETER 416.67 7/6-8/5/22 CH AT&T POT LINESAT&T 3,200.30
6/22 FINANCE PRINTER TONERAMERICOMP GROUP IMAGING LLC 652.94 AUG'22 CH GOTO VOIP SERVICE & SUPPORTGOTO COMMUNICATIONS 1,858.66 6/23-7/22/22 CH MICROSOFT 365 E3 LICENSESTANGENT COMPUTERS INC 2,291.47 08/18/2022
23 Description (Item)Vendor Name Amount
AUG'22 OFFSITE BACKUP STORAGE SERVICE-ZERTOLUNAVI, INC 1,639.90 FY22-23 NEOGOV SUBSCRIPTIONGOVERNMENTJOBS.COM INC 6,049.23 INFORMATION TECHNOLOGY TOTAL: 16,368.42

NON-DEPARTMENTAL
8/31/22 - 8/30/23 WEBSITE MAINT & HOSTINGCIVICPLUS INC 4,625.87 PLATES & BADGES - EM & JAJ&M TROPHIES INC 80.92
JUL'22 VISTA PARK LIGHTING MAINTPEAK LIGHTING & ELECTRIC INC 105.01 8/1-8/31/22 RICOH 2504EX SUITE 200-COPIESRICOH USA 21.00 5/1-7/31/22-RICOH PRO 5200S COPIESRICOH USA 520.05
5/1-7/31/22 RICOH 2504 (SUITE 200)-COPIESRICOH USA 0.09 7/1-7/31/22-RICOH 2504EX (FRONT COUNTER)-COPIESRICOH USA 149.98 AUG'22 CITY HALL FIRST AID SUPPLIESCINTAS CORPORATION NO. 2 153.07 KB-RAV4TIRES-PEPBOYSUS BANK PURCHASING CARD PROGRAM 766.89 KB-CHEVY 2500 TIRES-AMERICA'S TIRESUS BANK PURCHASING CARD PROGRAM 1,011.42 7/29/22-DH & RH COUNCIL MAILFEDERAL EXPRESS 26.50
CEN-OFFICE & BREAKROOM SUPPLIESSTAPLES ADVANTAGE 362.17 QUADIENT POSTAGE 8/9/22 THROUGHQUADIENT FINANCE USA, INC 500.00 FY22-23 POLLUTION LIABILITY INSURANCECALIFORNIA JPIA 1,783.00 5/29-8/28/22 POSTAGE MACHINE LEASEQUADIENT LEASING USA INC 590.39 SEP-DEC'22 STORAGE UNIT RENT #519ALISO VIEJO SELF STORAGE 1,265.00 SEP-DEC'22 STORAGE UNIT RENT #535ALISO VIEJO SELF STORAGE 1,505.00 NON-DEPARTMENTAL TOTAL: 13,466.36
C. S. ADMINISTRATION
180 VETERANS BRUNCH INVITATIONS 2022SOLINK INC 139.00
6 MAGIC SNOW MACHINES FOR 2022 TREE LIGHTING EVTMAGICSNOW SYSTEMS 2,762.05 NL-7/14 INTERVIEW PANEL LUNCH-OPAHUS BANK PURCHASING CARD PROGRAM 113.90 NL-PET FAIR SUPPLIES-AMAZONUS BANK PURCHASING CARD PROGRAM 26.70 NL-PET FAIR SUPPLIES-AMAZONUS BANK PURCHASING CARD PROGRAM 22.62 NL-PET FAIR SUPPLIES-AMAZONUS BANK PURCHASING CARD PROGRAM 15.06 NL-7/12 COMBO LOCK-HOME DEPOUS BANK PURCHASING CARD PROGRAM 44.13 C. S. ADMINISTRATION TOTAL: 3,123.46

IGLESIA PARK
JUL'23 IGLESIA PARK MAINTENANCEPV MAINTENANCE INC 242.30 KB-CABINET REPAIR MATERIALS-HOME DEPOTUS BANK PURCHASING CARD PROGRAM 13.20 JUL'22 ACCT#7997 IGLESIA PARK ELECTRICITYSO CAL EDISON 143.22 IGLESIA PARK TOTAL: 398.72

IGLESIA BUILDING
JUL'22 ACCT#7997 IGLESIA BLDG ELECTRICITYSO CAL EDISON 2,026.58 IGLESIA BUILDING TOTAL: 2,026.58

PLANNING
AUG'22 DENTAL - IZZAK MIRELESCHOICE BUILDER (11.32)
AUG'22 VISION - IZZAK MIRELESCHOICE BUILDER (6.48)
JUL'22-10.25HRS AFFORDABLE HOUSING PROFESSIONAL SRREBECCA J CAHA 1,537.50 PLANNING TOTAL: 1,519.70

BUILDING
MAY'22 MAY'22 CAA BUILDING SRV-PERMIT TECHCHARLES ABBOTT ASSOC INC 415.16 MAY'22 CAA BUILDING SERVICESCHARLES ABBOTT ASSOC INC 39,653.85 BUILDING TOTAL: 40,069.01

CODE ENFORCEMENT
MAY'22 CAA CODE ENFORCEMENTCHARLES ABBOTT ASSOC INC 6,413.22 CODE ENFORCEMENT TOTAL: 6,413.22

ENGINEERING (GENERAL)
AUG'22 PUBLIC WORKS WAREHOUSE LEASEPV MAINTENANCE INC 1,035.00 FY22-23 WCB ALISO CREEK RESTORATION MATCHING FUNDSLAGUNA CANYON FOUNDATION 15,000.00 MAY'22 CAA NPDES COSTSCHARLES ABBOTT ASSOC INC 42,807.87 MAY'22 PUBLIC WORKS FACILITY MAINT-ADMINCHARLES ABBOTT ASSOC INC 72.31 ENGINEERING (GENERAL) TOTAL: 58,915.18

STREET MAINTENANCE
JUL'22 STREET MAINTENANCE (45%)PV MAINTENANCE INC 23,447.45 MAY'22 CAA STREET MAINTENANCECHARLES ABBOTT ASSOC INC 3,071.87 STREET MAINTENANCE TOTAL: 26,519.32
24 Description (Item)Vendor Name Amount

LAW ENFORCEMENT-OTHER
6/26 BIOHAZARDOUS CLEANUP-ALISO CREEK& 73OCEAN BLUE ENVIRONMENTAL SERVICES INC 826.00 LAW ENFORCEMENT-OTHER TOTAL: 826.00

ANIMAL CONTROL
FY20-21 TRUE UP ADJUSTMENTCITY OF MISSION VIEJO (42,267.21) JUL-SEP'22 ANIMAL CONTROL SERVICESCITY OF MISSION VIEJO 110,669.00 ANIMAL CONTROL TOTAL: 68,401.79
GENERAL FUND TOTAL: 256,312.55
102 - GEN. FD-CITY HALL

NON-DEPARTMENTAL
JUL'22 CH FIRE ADD ON FIRE EQUIPMENTSONITROL ORANGE COUNTY LLC 100.00 JUL'22 CH FIRE ALARM MONITORINGSONITROL ORANGE COUNTY LLC 90.00 JUL'22 CITY HALL LIGHTING MAINTPEAK LIGHTING & ELECTRIC INC 99.00 KB-CH RESTROOMS PLUMBING REPAIR-HOME DEPOTUS BANK PURCHASING CARD PROGRAM 28.42 KB-BATTERIES FOR RESTROOM EQUIP-HOME DEPOTUS BANK PURCHASING CARD PROGRAM 36.35 AUG'22 CITY HALL ELEVATOR MONITORING SRVTHURSTON ELEVATOR CONCEPTS INC 131.00 AUG'22 -JUN'22- 35 PLAYA HOA FEESHARBOR STATION MAINTENANCE 1,925.00 JUL'22 ACCT#7189 CITY HALL ELECTRICITYSO CAL EDISON 8,127.82 JUL'22 MTR#6544 CITY HALL GAS SERVICETHE GAS COMPANY 143.73 JUL'22 CH-SHERIFF'S DEPT KEYSKINNEY'S KEYS 18.23
NON-DEPARTMENTAL TOTAL: 10,699.55
GEN. FD-CITY HALL TOTAL: 10,699.55
103 - GF-AV RECREATION SERVICES

RECREATION SERVICES
7/18 FRUIT TREE REPLACEMENTS AT GOLD COAST FARMAARON FLORA 380.00 JUL'22 AV RANCH MAINTENANCEPV MAINTENANCE INC 2,816.55
AUG'22 AVR BARN DOOR REPAIRUNITED BUILDING AND DEVELOPMENT SERVICES LLC 3,350.00 AUG'22-AVR-CASH COURIER SERVICEGARDAWORLD 439.14
JUL'22 AV RANCH JANITORIAL SERVICESTEAM ONE MANAGEMENT SERVICES 5,300.00 7/6-8/5/22 AVR AT&T POT LINES & INTERNETAT&T 930.05
JUL'22 26.5HRS AVR EVENT SECURITY SERVICESLYONS SECURITY SERVICE IN 2,173.00 JUL'22 AVR LIGHTING MAINTPEAK LIGHTING & ELECTRIC INC 221.01 AUG'22 AVR FIRST AID SERVICESCINTAS CORPORATION NO. 2 204.78 KB-CLEANING EQUIP FOR MODULAR WALLS-WALMARTUS BANK PURCHASING CARD PROGRAM 138.78 KB- FARM EXT LIGHT-HOME DEPOTUS BANK PURCHASING CARD PROGRAM 57.02 KB-AVR VINYL FLOOR REPAIR KITS-HOME DEPOTUS BANK PURCHASING CARD PROGRAM 15.58 KB-AVR RECESSED FLOOR BOX COVERPLATE-MR SUPPLYUS BANK PURCHASING CARD PROGRAM 66.61 LM-7/11 CITY DAY CAMP MOVIE TICKETSUS BANK PURCHASING CARD PROGRAM 148.50 LM-7/14 CITY DAY CAMP MOVIE TICKETSUS BANK PURCHASING CARD PROGRAM 162.90 LM-7/14 CITY DAY CAMP MOVIE TICKETSUS BANK PURCHASING CARD PROGRAM 162.90 LM-7/14 CITY DAY CAMP MOVIE TICKETSUS BANK PURCHASING CARD PROGRAM 162.90 LM-7/28 CITY DAY CAMP LEGOLAND TICKETSUS BANK PURCHASING CARD PROGRAM 767.92 LM-7/28 CITY DAY CAMP LEGOLAND TICKETSUS BANK PURCHASING CARD PROGRAM 767.92 LM-7/14 CITY DAY CAMP DAVE & BUSTERSUS BANK PURCHASING CARD PROGRAM 700.00 LM-7/28 CITY DAY CAMP LEGOLAND TICKETSUS BANK PURCHASING CARD PROGRAM 767.92 LM-AV RANCH LID HOLDERS STAFF BADGES-AMAZONUS BANK PURCHASING CARD PROGRAM 20.66 NL-DAY CAMP WRISTBANDS FOR EXCURSION-AMAZONUS BANK PURCHASING CARD PROGRAM 14.00 NL-7/20 DAY CAMP EXCURSION FOOD FOR STAFF SUBWAYUS BANK PURCHASING CARD PROGRAM 29.55 NL-7/13 DAY CAMP EXCURSION FOOD FOR STAFF SUBWAYUS BANK PURCHASING CARD PROGRAM 22.86 NL-7/7 DAY CAMP EXCURSION PRKG-KNOTT'S BERRY FARMUS BANK PURCHASING CARD PROGRAM 25.00 NL-7/10 DAY CAMP SUNSCREEN-AMAZONUS BANK PURCHASING CARD PROGRAM 33.60 NL-7/13 DAY CAMP EDIBLE CRAFT SUPPLIES-SMART&FINALUS BANK PURCHASING CARD PROGRAM 28.74 JUN'22 CITY DAY CAMP EXCURSIONS TRANSPORTATIONCAPISTRANO UNIFIED SCHOOL DISTRICT 2,887.50 SUMMER22-PAB004/PAK008/PAM008 SWIM-28PARTPREMIER AQUATIC SERVICES 7,057.50 SUMMER2022-LMS007 LITTLE MERMAIDS-3PARTICIPANTSCHAD BEELER 361.60 SUMMER2022-CKC007 CULINARY KIDS-27PARTICIPANTSCULINARY COOKINGS KIDS LLC 3,285.00 SU22-PAE040/38/10/33/25/08/32/42/LATE PU-57PARTLAURELINDA HAUKSSON 7,797.00 SUMMER2022-BTS005/006BASKETBALL-21PARTICIPANTSBREAKTHROUGH SPORTS LLC 3,026.40 SUMMER2022-DST002 SCIENCE CAMP-18PARTICPANTSDESTINATION SCIENCE EDUCATION FOR EVERY CHILD 3,091.20 SUMMER2022-VOC004 VOLLEYBALL-6PARTICIPANTSEDWIN RATLEDGE 774.00 SUMMER2022-SKT003/004 SKATEBOARDING-26PARTICIPANTSCORAL BAY HOME LOANS 3,642.00 25 Description (Item)Vendor Name Amount
SUMMER22-SKY010 SPORT CAMP-14PARTICPANTSSKYHAWKS SPORTS ACADEMY, INC 1,488.00 RCS-OFFICE SUPPLIESSTAPLES ADVANTAGE 213.58
JUL-SEP'22 AQUAPONICS MAINTENANCEHASA INC 440.00
AUG'22 AVR GOTO VOIP SERVICE & SUPPORTGOTO COMMUNICATIONS 679.29 6/23-7/22/22 AVR MICROSOFT 365 E3 LICENSESTANGENT COMPUTERS INC 425.53 JUL'22 ACCT#4551 THE FARM ELECTRICITYSO CAL EDISON 1,144.98 JUL'22 ACCT#6247 AV RANCH TRACKED CHARGESSO CAL EDISON 1,353.61 JUL'22 ACCT#6247 AV RANCH ELECTRICITYSO CAL EDISON 4,505.13 RECREATION SERVICES TOTAL: 62,080.21
GF-AV RECREATION SERVICES TOTAL: 62,080.21
203 - GAS TAX

TRAFFIC ENGINEERING
JUL'22 TRAFFIC SIGNAL MONITORINGHARTZOG & CRABILL INC 1,000.00 TRAFFIC ENGINEERING TOTAL: 1,000.00

STREET MAINTENANCE
JUL'22 STREET MAINTENANCE (GAS 55%)PV MAINTENANCE INC 28,658.00 AUG'22 DATABASE MAINTENANCE & 30 TICKETSUNDERGROUND SERVICE ALERT OF SOUTHERN CA 60.75 JUL'22 GS1 MEDIANS ELECTRICITYSO CAL EDISON 70.39
JUL'22 STREET LIGHTS LS2 ELECTRICITYSO CAL EDISON 1,112.67 JUL'22 STREET LIGHTS LS1 ELECTRICITYSO CAL EDISON 15,395.46 JUL'22 STREET LIGHTS TC1 ELECTRICITYSO CAL EDISON 3,194.64 STREET MAINTENANCE TOTAL: 48,491.91
GAS TAX TOTAL: 49,491.91
251 - FEDERAL GRANTS

GEN-FEDERAL GRANT
AE-AF 38 COLONIAL WAY INSPECTION FEEUS BANK PURCHASING CARD PROGRAM 481.28 APR-JUN'22 COVID RELIEF HUNGER&HOMELESS PREVENTIONSOUTH COUNTY OUTREACH 24,357.99 APR-JUN'22 FAIR HOUSING FOUNDATION SERVICESFAIR HOUSING FOUNDATION 628.81 GEN-FEDERAL GRANT TOTAL: 25,468.08
FEDERAL GRANTS TOTAL: 25,468.08
260 - CITY FAC.-CONF. CENTER

GEN-CONFERENCE CENTER
KB-HOME DEPOT - AV CENTER DOOR REPAIRUS BANK PURCHASING CARD PROGRAM 5.52 GEN-CONFERENCE CENTER TOTAL: 5.52
CITY FAC.-CONF. CENTER TOTAL: 5.52
261 - CITY FAC.-AQUATIC CENTER

GEN-AQUATIC CENTER
7/19-8/18/22 ACCT#6701-AQ CTR INTERNETCOX COMMUNICATIONS, INC 497.36 AUG'22-AQ CTR-CASH COURIER SERVICEGARDAWORLD 439.14
JUL'22 AQ CTR LIGHTING MAINTPEAK LIGHTING & ELECTRIC INC 119.73 KB-AQ CTR SPA PUMP MOTOR SEAL-SUPERIOR POOLUS BANK PURCHASING CARD PROGRAM 28.36 KB-AQ CTR TAP &DYE SET FOR REPAIR-HARBOR FREIGHTUS BANK PURCHASING CARD PROGRAM 63.06 KB-AQ CTR FILTER PIPE REPAIR-HOME DEPOTUS BANK PURCHASING CARD PROGRAM 135.70 AQ CTR-JUL'22 SWIM INSTRUCTOR AD-INDEEDPREMIER AQUATIC SERVICES 300.00 AQ CTR-SWIM GRADUATION TOY BIN/KICK STICKS-AMAZONPREMIER AQUATIC SERVICES 241.83 AQ CTR-JUL'22 LIFEGUARD AD-INDEEDPREMIER AQUATIC SERVICES 493.00 AQ CTR-JUL'22 GENERAL HIRING AD -FACEBOOKPREMIER AQUATIC SERVICES 376.74 AQ CTR- OFFICE SUPPLIESSTAPLES ADVANTAGE 44.71
JUL'22 MTR#2349 AQ CTR GAS SERVICETHE GAS COMPANY 1,908.78 APR'22 CREDIT MEMO - TITAN WINDER COVERSKNORR SYSTEMS INC (459.80) JUN'22 AQC MONTHLY MAINTENANCEKNORR SYSTEMS INC 1,792.64 AQ CTR-7/26 GOGGLESSTGSD, INC 1,918.08
AQ CTR-4/28 SWIM DIAPERS/PULL BOUYS/KICKBOARDSFINIS, INC 665.99 AQ CTR-5/9 SWIM DIAPERS/PULL BOUYS/KICKBOARDSFINIS, INC 238.26 AQ CTR-7/1 SWIM DIAPERS/PULL BOUYS/KICKBOARDSFINIS, INC 100.32 GEN-AQUATIC CENTER TOTAL: 8,903.90
CITY FAC.-AQUATIC CENTER TOTAL: 8,903.90
26 Description (Item)Vendor Name Amount
311 - STREET IMPROVEMENTS

STREETS & HIGHWAYS
7/26-7/31 ALISO CREEK RD REHAB-ENTERPRISE TO SR73LOCAL AGENCY ENGINEERING, INC 225.31 JUL'22 ALISO CREEK RD REHAB-ENTERPRISE TO SR73ENGINEERING RESOURCES OF SOUTHERN CALIFORNIA 7,965.24 JUL'22 #128 ENTERPRISE REHAB-ACR TO AVP DESIGNENGINEERING RESOURCES OF SOUTHERN CALIFORNIA 13,235.76 STREETS & HIGHWAYS TOTAL: 21,426.31
STREET IMPROVEMENTS TOTAL: 21,426.31
332 - STORM WATER

DRAINAGE IMPROVEMENTS
JUL'22 #030 WOOD CANYON WETLANDS MAINTPV MAINTENANCE INC 2,123.00 DRAINAGE IMPROVEMENTS TOTAL: 2,123.00
STORM WATER TOTAL: 2,123.00
741 - RENEWABLE FARMS
JUL'22 RENEWABLE FARMS-RETENTION PAYMENTAARON FLORA (5,151.50) JUL'22 RENEWABLE FARMS-PAYMENTAARON FLORA 51,515.00
46,363.50
RENEWABLE FARMS TOTAL: 46,363.50
GRAND TOTAL: 482,874.53
27 City of Aliso Viejo

AGENDA ITEM
DATE: September 7, 2022
TO: Mayor and City Council
FROM: Ann Eifert, Director of Financial Services/City Treasurer SUBJECT: TREASURER’S STATEMENT – JULY 2022
Recommended Action:

Approve July 2022 Treasurer’s Statement.

Fiscal Impact:

No Fiscal Impact
Background:

Per City policy, the Finance Department presents the monthly Treasurer’s Statement for the City Council’s review and approval. This statement shows the cash balances for the various funds, with a breakdown of bank account balances, investment account balances and the effective yield earned from investments.

Discussion:

The City’s portfolio consists of investments in Certificates of Deposits (CD), Medium Term Notes, US Treasury bonds, Federal Agency (Government Sponsored Enterprises (GSE)) bonds, Corporate Notes (CN), and Local Agency Investment Fund (LAIF). All funds invested with LAIF are available for withdrawal within 24 hours.

With Proposition 1A, the State does not have the ability to borrow from funds invested in LAIF. CD’s are insured by Federal Deposit Insurance Corporation (FDIC). FDIC is an independent agency created by Congress in 1933 to supervise banks, insure deposits, and help maintain a stable and sound banking system. Investments in agencies are backed by the implied guarantee of the U.S. government. All CN’s purchased are rated “AA” or better by a nationally recognized rating agency.

Interest is credited to the City’s bank account on a monthly basis. All deposits in excess of FDIC insurance limits are collateralized by the financial institution in accordance with government codes.
28

Page 2 of 2 ends

Fund transfers for capital projects and reimbursement of fiscal charges for the CFD 2005- 01 are completed on a quarterly basis.

Attachment:

1. Jul’22 Treasurer’s Statement
29 TREASURER'S MONTHLY CASH STATEMENT

BEGINNING TRANSFERS ENDING

BALANCE RECEIPTS DISBURSEMENTS IN (OUT) BALANCE
GENERAL FUND 8,118,065.07 $ 2,006,015.74 $ 4,119,653.85 $ 6,004,426.96 $ TCRF 78,264.08 $ 78,264.08
GAS TAX FUND 817,305.45 $ 100,187.16 172,018.69 745,473.92 MEASURE M 1,196,180.20 $ 153,563.77 876.00 1,348,867.97 SB1-RMRA 663,933.49 $ 93,759.54 757,693.03 PUBLIC SAFETY GRANTS 145,417.98 $ 9,247.23 136,170.75 (1) AIR QUALITY IMPRVMNT FD 1,071,335.55$ 1,071,335.55 INTEGRATED WASTE MGMT FD 86,192.00$ 86,192.00 OTHER GRANTS (314,028.55) $ (314,028.55)
TECHNOLOGY GRANT 204,466.69 $ 3,420.89 815.00 207,072.58 DEVELOPMENT IMPACT 1, 410,622.33$ 1,410,622.33
FEDERAL GRANTS 2,846,205.15 $ 107,677.54 108,819.86 2,845,062.83 CITY FACILITY - AV CTR 179,758.92 $ 179,758.92 CITY FACILITY - AQUATIC CTR 104,216.38$ 132,615.74 152,108.83 84,723.29 STREET IMPROVEMENTS 147,722.98 $ 4,029.78 96,328.48 55,424.28 (2) CAPITAL IMPROVEMENTS 144,733.77$ 144,733.77 - (2) STORM WATER - $ - (2) COP CAPITAL - $ - (2) COP (8,274.33) $ (8,274.33)
AV RANCH FOUNDATION 50.00 $ 50.00
CFD 2005-01 (3,899.98) $ 39,349.33 42,555.33 (7,105.98) RENEWABLE FARMS 55,096.50 $ 52,951.00 19,641.50 88,406.00 COMMUNITY TRUST 7,840.68 $ 300.00 7,540.68 TOTALS 16,951,204.36 $ 2,693,570.49 $ 4,867,098.54 $ - $ 14,777,676.31$ SUMMARY OF CASH:

DEMAND DEPOSITS: GENERAL ACCOUNT 3,479,134.11 $

SAVINGS ACCOUNT: MONEY MARKET 25,698.39 $
INVESTMENTS: LOCAL AG ENCY INVESTMENT FD 11,272,843.81$ TOTAL CASH 14,777,676.31 $
Years to Maturity for July 2022 1.13
Weighted Average Yield for July 2022 1.650%
All investments are placed in accordance with the City of Aliso Viejo's Investment Policy.

The above summary provides sufficient cash flow liquidity to meet the next six month's estimated expenditures.

Other monies held include Cash with Fiscal Agent, Investments, Payroll and AV Center. 30,975,137.47$ Cash With Fiscal Agent COPS/CFD 2005-01 4,609,474.98
Cash With Investment Advisor City Investments 24,110,300.54 AV Center 2,064,150.80
PR Account 188,303.15
Petty Cash 2,908.00
GRAND TOTAL OF CITY FUNDS 45,752,813.78 $
(1) Public Safety Grant includes the MDC and PVS Program Costs budgeted with SLESF funds. (2) Transfers in and out are done on a quarterly basis.

Street Improvements include the Slurry Seal, Traffic Management and Street Improvement Projects.

Capital Improvements include park and AV Ranch improvement projects.

Storm Water includes the Dairy Fork and Wood Canyon Emergent Wetland Project.

CITY OF ALISO VIEJO
July 31, 2022
30 Investment Type Original
Cost
Par
Value
Market
Value *
% of
Portfolio
Federal Agency Coupon Securities $ 9,224,549 $ 9,235,000 $ 9,128,597 26.07% LAIF $ 11,272,844 $ 11,272,844 $ 11,272,844 31.86%
Medium Term Notes $ 2,000,620 $ 2,000,000 $ 1,951,287 5.65% FDIC CDs $ 5,139,897 $ 5,145,000 $ 4,933,019 14.53%
Treasury Coupon Securities $ 7,745,235 $ 8,000,000 $ 7,786,729 21.89% Portfolio: $ 35,383,144 $ 35,652,844 $ 35,072,476 100.00% Years To Maturity 1.13
Weighted Average Yield 1.650%
*Market Values obtained from US Bank Treasury Division
City of Aliso Viejo
Portfolio Summay
As of 7/31/2022
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36 LAIF Regular Monthly Statement
https://laifms.treasurer.ca.gov/RegularStatement.aspx
Local Agency Investment Fund
P.O. Box 942809
Sacramento, CA 94209-0001
(916) 653-3001

CITY OF ALISO VIEJO

DIRECTOR OF FINANCIAL SVCS/ CITY TREAS
12 JOURNEY , #100
ALISO VIEJO, CA 92656
Account Number: 98-30-007
July 2022 Statement
Effective
Date
Transaction
Date
Tran
Type Confirm
Number
Web
Confirm
Number Authorized Caller Amount
7/15/2022 7/15/2022 QRD 1709811 N/A SYSTEM 22,774.36
7/27/2022 7/27/2022 RD 1710938 1671236 ANN EIFERT 2,500,000.00 Account Summary
Total Deposit: 2,522,774.36 Beginning Balance: 8,750,069.45 Total Withdrawal: 0.00 Ending Balance: 11,272,843.81
37 July 1.090
June 0.861
May 0.684

0.00002057622201151

0.987125414
LAIF Earnings Ratio(2):

LAIF Fair Value Factor(1):

PMIA Daily(1): 0.99%

0.75LAIF Apportionment Rate(2):

PMIA Quarter to Date(1): 0.69%
311PMIA Average Life(1):

Treasuries

68.57%
Agencies

18.86%
Certificates of
Deposit/Bank Notes

5.59%
Time
Deposits

2.01%
Commercial
Paper

4.40%
Corporate
Bonds

0.21%
Loans

0.36%
Notes: The apportionment rate includes interest earned on the CalPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a).

Source:
(1) State of California, Office of the Treasurer
(2) State of Calfiornia, Office of the Controller
PMIA Average Monthly
Effective Yields(1)
PMIA/LAIF Performance Report
as of 08/10/22
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 06/30/22
Chart does not include $4,432,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.

Pooled Money Investment Account
Monthly Portfolio Composition (1)
07/31/22
$229.9 billion
38 City of Aliso Viejo

AGENDA ITEM
DATE: September 7, 2022
TO: Mayor and City Council
FROM: Ann Eifert, Director of Financial Services/City Treasurer SUBJECT: INVESTMENT POLICY FOR FISCAL YEAR 2022-23
Recommended Action:

Adopt a Resolution approving the Investment Policy for Fiscal Year 2022-23 and rescinding Resolution No. 2021-23 in its entirety.

Fiscal Impact:

The adoption of the Investment Policy will allow for the continual investment of the City’s idle cash which will provide additional revenue to the City.

Background:

California Government Code Section 53646 and best management practices dictate that local agencies prepare and update an investment policy on an annual basis. The City’s Investment Policy complies with the California Government Code and the guidelines recommended by the State and California Municipal Treasurer’s Association.

The investment policy states the goals of the City’s investment activities, the types of investments allowed by the Government Code, and reporting requirements. The City’s investment goals are, in order of priority, safety, liquidity, and yield. The purpose of the Investment Policy is to identify the policies and procedures that enhance opportunities for a prudent and systematic investment process and to organize and formalize investment- related activities.

Discussion:

Submitted for Council’s review and adoption is the FY 2022-23 Investment Policy, its accompanying resolution, and an administrative policy containing guidelines for investments and internal control. Proposed updates are being recommended to provide clarification, maintain consistency with current and best practices, and enhance opportunities for the City to achieve its investments goals as stated in the policy. Notable recommended changes are highlighted below:
39

Page 2 of 2 ends

 Supranational Securities - Supranational securities are defined as United States dollar denominated senior unsecured, unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD or World Bank), International Finance Corporation (IFC), or Inter-American Development Bank (IADB). These organizations were established by international treaties, are headquartered in Washington D.C., and incorporated into U.S. Federal Law by Congressional Acts. California Government Code §53601(q) permits the securities of these three organizations to be incorporated into local agency investment portfolios. Securities eligible for investment shall have a maximum remaining maturity of five years or less and be eligible for purchase and sale within the United States. Supranational securities eligible for investment shall be rated "AA" or better from at least two NRSROs. Investments in supranational securities shall not exceed 20% of the City’s investment portfolio.  Reporting – Staff recommends revising the monthly Council treasurer’s report to be submitted to Council within 45 days of the last day of the month, instead of the current 30 days. Although staff will continue to strive to submit reports within 30 days, increasing the deadline will provide flexibility in the event of a cancelled Council meeting or other unexpected delays.

Attachments:

1. Resolution Adopting FY 2022-23 Investment Policy

2. Investment Policy & Investment Guidelines, Strategy & Internal Control – Clean

3. Investment Policy & Investment Guidelines, Strategy & Internal Control – Redline

4. Resolution No. 2021-23
40 RESOLUTION NO. 2022-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALISO
VIEJO, CALIFORNIA, REPEALING RESOLUTION NO. 2021-23, AND ADOPTING AN INVESTMENT POLICY FOR FISCAL YEAR 2022-23
WHEREAS, Government Code Section 53600 et seq. sets forth the State of California’s policy with regard to the importance of the solvency and creditworthiness of each individual local agency and the protection thereof; and WHEREAS, the City of Aliso Viejo is a local agency subject to the provisions of Government Code Section 53600 et seq.; and
WHEREAS, Government Code Section 53646 requires local agencies, such as the City of Aliso Viejo to consider annually a statement of investment policy, after review and consideration at a public meeting; and
WHEREAS, at a regular public meeting of the City Council the Council considered a statement of investment policy for the City, entitled City of Aliso Viejo Statement of Investment Policy for Fiscal Year 2022-23attached hereto as Exhibit “A” and incorporated herein;

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALISO VIEJO AS FOLLOWS:

Section 1. The statement of investment attached hereto as Exhibit “A” entitled City of Aliso Viejo Statement of Investment Policy for Fiscal Year 2022-23 is adopted as the City’s Investment Policy.

Section 2. Resolution No, 2021-23 is hereby repealed
Section 3. This Resolution shall be effective July 1, 2022.

Section 4. The City Clerk shall certify as to the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED this 7th day of September, 2022. __________________________
Ross Chun
Mayor
41 APPROVED AS TO FORM: ATTEST:

__________________________ __________________________
Scott C. Smith, City Attorney Mitzi Ortiz, MMC, City Clerk 42 STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

CITY OF ALISO VIEJO )
I, MITZI ORTIZ, City Clerk of the City of Aliso Viejo, California, DO HEREBY CERTIFY that the foregoing is the original of Resolution No. 2022-__ duly passed and adopted by the City Council of the City of Aliso Viejo at their regular meeting held on the 7th day of September, 2022, by the following roll call vote, to wit:

AYES:

NOES:

ABSENT:
___________________________

MITZI ORTIZ, MMC

CITY CLERK
43 City of Aliso Viejo 2022-23 Investment Policy Page i EXHIBIT “A”

CITY OF ALISO VIEJO

STATEMENT OF INVESTMENT POLICY
FOR FISCAL YEAR 2022-23
AS ADOPTED SEPTEMBER 7, 2022

CITY COUNCIL

Mayor Ross Chun
Mayor Pro Tem Richard Hurt
Council Member Tiffany Ackley
Council Member Dave Harrington
Council Member Mike Munzing
44 City of Aliso Viejo 2022-23 Investment Policy Page ii

TABLE OF CONTENTS

Statement of Investment Policy 1
Objectives 1
Scope of Funds 2
Prudent Investor Standard 2
Investment Philosophy 2
Delegation of Authority 3
Public Trust 3
Ethics and Conflicts of Interest 3
Internal Investment Controls 4
Investment Policy Adoption 5
Indemnification of Investment Officials 5
Investment Portfolio Compliance 5
Reporting 6
Authorized and Suitable Investments 6
Ratings and Rating Agencies 8
Prohibited Investments 8
Collateralization 9
Investment Pools 9
Money Market Mutual Funds 9
Maturity Limits 10
Qualifications for Financial Institutions and Broker/Dealer’s 10 Diversification Guidelines and Risks 11
Safekeeping and Custody 12
Performance Standards and Evaluation 12
Qualifications and Continuing Education 12
APPENDIX A: Glossary of Terms
APPENDIX B: Qualified Broker/Dealers
APPENDIX C: Administrative Policy: Investment Guidelines, Strategy, and Internal Control
45 City of Aliso Viejo 2022-23 Investment Policy Page 1 Statement of Investment Policy
This Statement of Investment Policy (“Policy”), as set forth by the City of Aliso Viejo (“City”), provides the guidelines for prudent investment of the City’s idle or reserve cash and outlines the policies essential to ensuring the safety and financial strength of the City’s investment portfolio.

This Policy is based on the principles of prudent money management and conforms to all applicable Federal and State Laws governing the investment of public funds. In instances in which the Policy is more restrictive than Federal or State Law, the Policy will supersede.

Objectives
It is the policy of the City to invest public funds in a manner which will provide for the preservation of capital while meeting the daily cash flow requirements of the City and attaining a market average rate of return within an acceptable and defined level of risk.

The Policy has three primary objectives, in order of priority:

1. Preservation of Capital (Safety) – the protection of principal is the foremost consideration when undertaking investment decisions that affect public funds. The objective is to mitigate credit risk and interest rate risk.

Credit Risk
Credit Risk is the risk of loss of principal due to the failure of the security issuer.

Credit Risk can be mitigated by:
 Limiting investments to the safest types of securities.  Pre-qualifying accountants, auditors, financial institutions, broker/dealers, financial advisors, and other outside consultants with which the City does business.  Diversifying the investment portfolio so that potential losses are minimized.

Interest Rate Risk
Interest rate risk is the risk that the market value of securities will fall due to a rise in general market interest rates. It is the policy of the City to hold individual securities to maturity in an effort to meet liquidity demands. Interest rate risk can be mitigated by:
 Holding individual securities to maturity - Structuring the investment portfolio so that securities mature to meet cash flow requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity.  Employing a laddering strategy whereby staggering maturities of individual securities so that bonds come due in increments, assuring an overall liquidity pattern.
 Limiting maturities of individual securities and the average maturity of the overall portfolio.

46 City of Aliso Viejo 2022-23 Investment Policy Page 2

2. Liquidity – the investment portfolio shall remain sufficiently liquid to meet all daily cash flow and operating requirements that may be reasonably expected or anticipated.

3. Return or Yield – attain a rate of return consistent with the primary objectives of safety and liquidity, throughout budgetary and economic cycles.

Scope of Funds
The investment policy applies to all financial assets and investment activities of the City, except for proceeds of debt issuance. Debt proceeds shall be invested in accordance with the “Permitted Investments” provisions for each specific bond indenture.

The Policy applies to the following funds and is accounted for in the City’s annual audited financial statements.

A. General Fund
B. Special Revenue Funds
C. Debt Service Funds
D. Capital Improvement Funds
E. Enterprise Funds
F. Internal Service Funds
G. Agency Funds

Prudent Investor Standard
The standard to be used by investment officials shall be that of a “prudent person” and shall be applied in the context of managing all aspects of the City’s investment portfolio The Prudent Investor Standard:

Governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of sections 16429.1 and 53600 through 53684 of the California Government Code and considering individual investments as a part of an overall strategy, a trustee is authorized to acquire investments as authorized by law.

Investment Philosophy
It is the investment philosophy of the City to make investment decisions based on an overall passive management style that embodies a prudent investor standard and such that investments are purchased to generally match expected future cash outflows and with the intent to hold until maturity.

Accordingly, the City’s conservative philosophy prohibits active trading and speculation; i.e., the purchase of securities with the intent to profit from favorable market changes in market prices or market conditions. Leveraging or borrowing money for the purpose of investing is specifically prohibited. However, the City may elect to sell a security prior to its maturity and 47 City of Aliso Viejo 2022-23 Investment Policy Page 3 record a capital gain or loss in order to improve the quality, liquidity, or yield of the portfolio in response to market conditions or City needs.

Delegation of Authority
The City’s Resolution No. 2003-018 appoints the Director of Financial Services to also serve as City Treasurer. The Treasurer, or his or her designee, has the authority to manage the City’s investment portfolio in accordance with California Government Code Sections 53600 and 53630 et seq. and all related State and Federal laws.

The Treasurer will provide prior written notification to the City Manager and City Council regarding the designation of responsibilities.

The Treasurer shall establish written procedures for the operation and management of the City’s investment portfolio consistent with this investment policy. The procedures should include reference to safekeeping, repurchase agreements, wire transfer agreements, banking service contracts, collateral or depository agreements, competitive bid process, and due diligence. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction, except as provided under the terms of this policy and the investment procedures established by the Treasurer and approved by the City Manager.

The City may also engage Securities and Exchange Commission registered external investment advisor to manage the City’s investment program.

Public Trust
All participants in the investment process shall act as custodians of public funds. Investment officials shall recognize that the investment portfolio is subject to public review and evaluation.

The overall program shall be designed and managed with a degree of professionalism that is worthy of public trust. In a diversified portfolio, it must be recognized that occasional measured losses are inevitable and must be considered in the context of the overall portfolio’s investment return, provided that adequate diversification has been implemented.

Ethics and Conflicts of Interest
Elected officials and employees of the City involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions under the Political Reform Act and Government Code Section 1090 et seq. Elected officials and employees shall disclose to the City Manager any material interests in financial institutions that conduct business with the City, and they shall further disclose any personal investment position or financial asset that could be related to the performance of the City’s investment program.

Elected officials and employees shall subordinate their personal investment transactions to those of the City particularly with regard to the time of purchases and sales.

Any firm proposing to provide any type of investment service to the City shall acknowledge their familiarity with the provisions of the Political Reform Act, Government Code Section 81000 et seq. and CA Code of Regulations 18110 et seq. and the provisions limiting contractual conflicts of interest under Government Code Section 1090 et seq. Any firm proposing to provide any type of investment service to the City shall also acknowledge their familiarity with and agree to abide by any Federal or State law, regulation, rule, or policy pertaining to or limiting campaign contributions by such firms, their employees, spouses, or agents. 48 City of Aliso Viejo 2022-23 Investment Policy Page 4 All persons, firms, broker/dealers, financial institutions, and advisors providing investment services or bond issue assistance shall disclose to the City Manager and the Treasurer all fee sharing, fee-splitting, and commission arrangements with other entities or persons prior to the City agreeing to buy an investment or issue bonds.

Internal Investment Controls
The Treasurer will implement and maintain a system of internal investment controls and segregate responsibilities of investment functions in order to prevent fraud, theft, loss of principal, loss of control over funds, inaccurate reporting, and negligence.

The Treasurer will assign designee(s) to assist in carrying out these functions and will establish an Oversight Reviewer function that may be carried out by a designated member of staff, independent individuals, or independent expert contractor to perform specified tasks.

In addition to the specified requirements placed on investment types, quality, maturity, and diversification, further controls will include:
 Safekeeping of Securities
To protect against losses caused by the collapse of individual securities dealers, all securities owned by the City are required to be held by a third-party safekeeping institution. Third-party safekeeping institutions may not act as custodians for any securities which that institution has issued or sold to the City.

Collateral must be held at safekeeping, as defined in the Safekeeping and Custody section of the Policy.

Payment procedures for all securities transactions will be Delivery v. Payment (DVP)  Competitive Bidding of Investments
The City’s investment procedures require that approved broker/dealers compete for investment purchases and sales in order for the City to obtain the highest yield available in the market and to ensure that investment transactions are free from favoritism.

Qualified Bids will be required for purchase of all investment transactions. The Treasurer shall select the best bid and is required to keep a record of each investment transaction. The Treasurer will rotate the purchase of investments among the pool of qualified broker/dealers.

If the City utilizes an external investment advisor, the advisor shall send its approved list of broker/dealers to the City annually and follow its policies and procedures for competitive bidding.
 Annual Management Review and Audit
An annual audit of the City’s Investment Policy, practices, procedures, and portfolio status will be conducted by an independent auditor of all items including, but not limited to, items specified in the Audit Checklist provided in the City’s Procedure Manual. The auditor will provide the City with written observations and recommendations regarding the adequacy of investment controls.  Segregated Investment Execution, Recordkeeping and Reporting An independent member of City staff will record the Treasurer’s investment records or confirmations to the City’s general ledger. In addition, independent staff will 49 City of Aliso Viejo 2022-23 Investment Policy Page 5 perform the monthly reconciliation of bank, broker/dealer, and safekeeping confirmations.
 Secondary Approval Required
The City Manager will review and approve the establishment of investment accounts, broker/dealer, and financial institution relationships and any agreements or contracts related to investments or investment related activity.
 Wire Transfer Controls
All City wire transfers will be executed in accordance with a written agreement specifying control procedures required for wire transfers of funds, including the establishment of repetitive wires to pay for securities transactions with approved securities dealers as well as any other routine money transfers. All other non-repetitive wires require City Manager approval prior to release.

Investment Policy Adoption
The City Council’s primary responsibilities over the investment function includes establishing investment policies, annually reviewing such policies, appointing a City Treasurer, reviewing monthly investment reports issued by the Treasurer, authorizing bond documents and financing transactions, and adopting recommended changes to the City’s Investment Policy as necessary.

The City’s investment policy shall be adopted by resolution of the City Council. The policy shall be reviewed annually by the City Council and any modifications made thereto must be approved the City Council.

Indemnification of Investment Officials
Any investment officer exercising his/her authority with due diligence, prudence, and care and in accordance with the Investment Policy and all written procedures shall be relieved of personal responsibility and liability for an individual security’s losses or losses incurred by the portfolio. However, any investment officer also bears the responsibility of reporting deviations from expectations in a timely manner to City Council and appropriate action is taken to control adverse developments and mitigate loss of principal.

Investment Portfolio Compliance
Should the portfolio, for any reason, fall out of compliance with this Investment Policy, immediate liquidation of securities in order to bring the portfolio back into compliance will not be required. However, the Treasurer must take action to bring the portfolio into compliance within 12 months from the date the portfolio was determined to be in non- compliance with the provisions of this Investment Policy. Additionally, adequate disclosure of all instances of noncompliance, and the efforts undertaken to bring the portfolio into compliance, must be made on the monthly Treasurer’s Report. 50 City of Aliso Viejo 2022-23 Investment Policy Page 6 Reporting
The Treasurer shall submit a “Monthly Treasurer’s Report” to the City Manager and City Council within 45 days following the last day of the month to be agendized for official action at a regular Council meeting thereafter. These reports shall disclose information relevant to the risk characteristics of the City’s investment portfolio and shall include the following information:

Monthly Treasurer’s Report
A. Cash receipts, disbursements, and balances in total.

B. A summary of the investment portfolio.

C. An asset list showing the issuer, type of investment, par value, maturity date, and interest rate.

D. Average rate of return on the City’s investment portfolio.

E. Maturity aging grouped by type of investment.

F. Diversification of the investment portfolio.

G. A listing of individual investment transactions during the month, as required by Government Code section 53607.

H. A statement of ability to meet upcoming operating expenses and spending requirements for the next six months.

I. A statement of compliance with the Investment Policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio, and a timetable for resolution.

Annual Report
The annual report will be prepared by the City Treasurer and submitted to the City Manager each fiscal year to ensure consistency. The annual report will include an overall analysis of the portfolio and shall suggest policies and improvements to enhance the City’s investment program. These enhancements will be annually considered by City Council and the authority to amend the Policy rests with City Council.

Authorized and Suitable Investments
Investment of City funds is governed by the California Government Code Sections 53600, 53601, 53601.5, 53601.6, 53635, and 53635.5 et seq. Within the context of the limitations, the following investments are authorized, as further limited herein:
51 City of Aliso Viejo 2022-23 Investment Policy Page 7 Matrix of Suitable Investment Options and Restrictions
Investment Type: Maximum
Maturity:

Maximum
percentage of
Portfolio:

Maximum Par Value
per Issuer:

Credit Quality and
Requirements:

U.S. Treasury
Bills, Notes and
Bonds

5 Years

100 percent

N/A
Explicit Full Faith and Credit
Guarantee of United States
Government

Federal Agency
Obligations

5 Years 60 percent
35% per agency

Implied Guarantee of the United
States Government
Bankers’
Acceptances
(BA’s)

180 Days

20 percent

5% per issuer
Domestic banks only - deemed
eligible for purchase by the
Federal Reserve Bank

Certificates of
Deposit or Time
Deposits*
(CD’s)

5 Years

30 percent

5% per issuer
Senior debt only from top 15
percent of peer group rated
banks, savings & loans and credit
unions. Defined by Section 5102
of the Financial Code.

Negotiable
Certificates of
Deposit

5 Years

30 percent

$250,000
Brokered CD’s insured by FDIC
for a maximum of $250,000 per
issuer.

Local Agency
Investment Fund
(LAIF)

N/A

100 percent

$75,000,000
(per entity)
Treasurer will review investment
policies and practices to
determine if consistent with the
Policy

Commercial Paper

270 Days

20 percent

5% of portfolio
Highest letter and number rating
as provided for by a nationally
recognized statistical-rating
organization (NRSRO)

Money Market
Mutual Funds

N/A

10 percent

10% per fund
(SEC Registered)
($1.00 NAV)
Highest rating from NRSRO.

Must also comply with Govt.

Code 53601(l) and 53601.6 (b)
and the weighted average to
maturity is less than 180 days.

Repurchase
Agreements*

92 Days

20 percent

20%
Signed security loan agreement
on file. Underlying securities
maintained at 102% of original
value. Reverse repurchase
agreements are specifically not
authorized under the Policy.

Supranational
Securities

5 Years

20 percent

10 % per issuer
United States dollar
denominated senior
unsecured unsubordinated
obligations issued or
unconditionally guaranteed
by the International Bank
for Reconstruction and
Development,
International Finance
52 City of Aliso Viejo 2022-23 Investment Policy Page 8 Corporation, or Inter-
American Development
Bank; rated AA or better
by two NRSROs.

Medium Term
Corporate Notes

5 Years

30 percent

5% of portfolio
Rated “A-” or better by a
nationally recognized rating
service. Code 53601 (k).
* Denotes a collateral requirement either initially, or at a pre-determined threshold. Please refer to Collateral section of the Policy for specific requirements.

Ratings and Rating Agencies
When possible, two ratings should be obtained to determine if an investment meets the Policy’s quality standard. Currently under this Policy, only Standard and Poor’s (S&P) and Moody’s Investor Service (Moody’s) are recognized investment ratings providers, and the City has established the following minimum standards to be applied at time of purchase and for reporting purposes:

Investment Type: Standard & Poor’s Moody’s

Banker’s Acceptances A1 P1
Commercial Paper A1 P1
Certificates of Deposit AA- Aa3
Money Market Mutual Funds AAA Aaa
Medium Term Corporate Notes A- A3
Supranational Securities AA Aa2
Repurchase Agreement – Provider AA Aa

Prohibited Investments
State and Federal laws notwithstanding, any investment not specifically described herein including, but not limited to, reverse repurchase agreements, derivatives, options, futures, zero coupon bonds, inverse floaters, range notes, first mortgages or trust deeds, collateralized mortgage obligations (CMO’s), limited partnerships, real estate investments trusts (REIT’s), open-end mutual funds, closed-end mutual funds, mutual funds with a weighted average maturity greater than 180 days, unregulated and/or uninsured investment pools, common stock, preferred stock, commodities, precious metals, securities with high price volatility, limited marketability (less than three active bidders), securities that may default on interest payments, and any other speculative investment deemed inappropriate under the Prudent Investor standard are strictly prohibited. In addition, any investment transaction that might impair public confidence in the Aliso Viejo City government is to be avoided.

53 City of Aliso Viejo 2022-23 Investment Policy Page 9 Collateralization
Collateral for Certificates of Deposit (CD) and Negotiated Certificates of Deposit (NCD) must comply with Government Code, Chapter 4, Bank Deposit Law Section 16500 et seq. and the Savings and Loan and Credit Union Deposit Law Government Code Section 16600 et seq.

In addition, if the CD is not FDIC insured or goes over the FDIC $250,000 limit, collateral is required equal to 100 percent of principal.

Collateral for Repurchase Agreements shall be 102 percent of market value of principal and accrued interest. Collateral can be either US Treasury securities or Federal Agency securities.

This will provide an addition level of security due to inevitable changes in market conditions.

Investment Pools
Government sponsored investment pools (Pools) are permitted under California Government Code Section 53601 et seq. and are an excellent short-term investment option for cash management facilities. These pools can provide safety, liquidity, and yield in a single diversified investment. However, thoughtful investigation and due diligence are required both initially at time of purchase and on an ongoing basis with analysis to determine that the investment pool is being managed in a manner consistent with the objectives of the Policy. The following guidelines include, but are not limited to:
 The Pool shall have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations, or shall be insured by a municipal insurance corporation.  The Pool marks to market weekly at a minimum.
 The Pool provides comprehensive, timely monthly reports which include detailed transaction listings, report realized and unrealized gains and losses, provide accurate market values for each security, provide quality rating for individual securities, take delivery DVP, provide third party safekeeping of all investments, and for whom an audit is conducted annually by an independent auditor with no relationship to the Pool.

Money Market Mutual Funds
Money market mutual funds provide another safe, liquid, and diversified investment option for the City’s surplus capital. However, certain conditions need to be met both initially and on an ongoing basis. The money market may only invest in US Government securities permitted under this policy and under California Government Code Section 53601 et seq. with final stated maturities of one year or less “Government Money Market Funds.” In order to be an eligible money market investment under this section, the primary objective of the money market, as stated in the funds’ prospectus, is to maintain a constant $1.00 Net Asset Value (NAV). The following additional guidelines include, but are not limited to:
 The money market only invests in US Government securities, and the weighted average maturity of the portfolio is less than 180 days. 54 City of Aliso Viejo 2022-23 Investment Policy Page 10  The fund shall be registered with the SEC.
 The money market shall have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations and shall maintain these ratings for the duration of the investment.

Maturity Limits
The longer the maturity of securities, the greater the market volatility. Therefore, the maximum maturity limit for any given security in the investment portfolio shall not exceed five (5) years.

It is also important to note that specific investments, detailed under the “Authorized and Suitable Investments” section, may be restricted to a shorter maturity.

The weighted average life of the portfolio may not exceed three (3) years in duration.

At a minimum, 15 percent of the portfolio shall remain liquid, accessible on demand by the City without restriction or penalty.

The investment portfolio shall be structured for liquidity purposes; therefore, 40 percent of the portfolio shall mature within 365-days .

Maturities will be selected based on a sufficiently detailed cash flow projection that facilitates selecting investment maturity dates to approximately match the projected dates of budgeted expenditures. Once cash flow needs are matched, maturities are selected based on a “laddering strategy” and the shape of the yield curve.

Extensions in the maximum maturity and average weighted life of the portfolio must be supported by detailed cash flow forecasts demonstrating the adequacy of cash from maturing assets to meet one hundred twenty-five percent (125%) of monthly expenditures for each prospective quarter, ending with the current maximum including capital expenditures funded on a pay-as-you-go basis. Recommendations to extend maturities must be reviewed and approved by the City Manager and City Council.

Qualifications for Financial Institutions and Broker/Dealer’s The Treasurer will maintain a list of qualified financial institutions and broker/dealers authorized to transact business with the City, as stated in Appendix “B”.

If the City utilizes a SEC registered external investment advisor, the advisor shall maintain a list of authorized broker-dealers and complete the appropriate due diligence required by the SEC. The external investment advisor may use its own list of approved broker/dealers and financial institutions for investment purposes on behalf of the City. The investment advisor shall submit the list of approved broker/dealers to the Finance Director/City Treasurer on an annual basis. The Finance Director/City Treasurer may restrict the use of a broker/dealer which may be deemed unsuitable.

The financial entities eligible to transact investment business with the City are:

I. Federal Reserve Bank:

Direct purchase of U.S. Treasury Bills, Notes, and Bonds using primary government dealers as designated by the Federal Reserve are exempt from quality requirements and are encouraged due to commission or mark-up discounts.

II. Nationally or State Chartered Banks, Savings and Loans, and Credit Unions:

The City may purchase investments offered from Banks, Savings and Loans, and Credit 55 City of Aliso Viejo 2022-23 Investment Policy Page 11 Unions provided the institutions are:
 Nationally or State Chartered Institutions.
 Registered as investment securities dealers.
 Ranked in the top 15 percent of institutions within their respective peer group.  The signatures of two individuals shall be required for the opening and closing of any bank account (the Treasurer, City Manager, Mayor, or Mayor Pro Tem).

The Accounting Officer, who is independent of the investment function, shall keep a record of all opened and closed accounts. On an annual basis, the Accounting Officer shall provide a list of accounts to the independent auditor.

III. Broker/Dealers:

The City will purchase investments from primary dealers whenever possible. However, if an investment deemed appropriate for the portfolio is not available through the primary market, then the Treasurer may use an authorized broker/dealer from the pre-approved list of broker/dealers on record.

For a broker/dealer to be considered for placement on the pre-approved list, they must comply with the following:
 Primary or Regional dealers that qualify for SEC Rule 15c3-1  Provide audited financial statements from the two most frequent years  A statement certifying that the institution has reviewed the City’s Investment Policy and California Government Code Section 53600 et seq. and that all securities offered to the City shall comply fully with all provisions of the Policy and the California Government Code.
 The signatures of two individuals shall be required for the opening and closing of any broker/dealer account (the Treasurer, City Manager, Mayor or Mayor Pro Tem). The Accounting Officer, who is independent of the investment function, shall keep a record of all opened and closed accounts. On an annual basis, the Accounting Officer shall provide a list of accounts to the independent auditor.
 Settlement of securities traded through qualified broker/dealers shall occur trade date plus one or two days (depending upon security type), the current industry standard. New issue securities may have longer settlements, but none shall be greater than three weeks.

The Treasurer is responsible for ensuring that settlement occurs in a timely matter and that execution confirmations reflect accurate trade data. In addition, investment transactions are required to be Delivery v. Payment (DVP).

Diversification Guidelines and Risks
The City recognizes diversification is an investment strategy that will mitigate risk in the investment portfolio. The City’s investment portfolio shall be diversified to avoid incurring unreasonable and avoidable risks with regard to specific investment types. Within investment types, the City shall also maintain a mix of securities to avoid concentrations within individual financial institutions, geographic areas, industry types, and maturities. 56 City of Aliso Viejo 2022-23 Investment Policy Page 12 The City will only invest in fixed rate, fixed maturity securities and, with the exception of U.S.

Treasury securities or the Local Agency Investment Fund (LAIF), no more than 60 percent of the investment portfolio shall be invested in any single investment type or financial institution.

Safekeeping and Custody
All security transactions, including collateral for repurchase agreements and certificates of deposit, shall be transacted on a Delivery vs. Payment (DVP) basis. This means that the securities shall be delivered to the City or the City’s designated custodian upon receipt of payment by the City.

All securities that may be purchased, including collateral, shall be held by a third-party custodian designated by the Treasurer whenever possible. These securities shall be held in the City’s name and control, and the third-party custodian shall be evidenced by safekeeping receipts. The third-party custodian shall send the City, on a monthly basis, a summary of safekeeping assets, and this statement shall be reconciled to the City’s records on a monthly basis. Securities held in custody for the City shall be independently audited on an annual basis to verify investment holdings.

Performance Standards and Evaluation
Investment performance is continually monitored and evaluated by the City Treasurer.

Investment activity reports are generated on a monthly basis for presentation to the City Manager and City Council.

The weighted average maturity of the pooled portfolio shall not exceed three years and shall be designated to attain a market average rate of return. The market average rate of return will be determined by a custom benchmark that represents the prominent and persistent characteristics of the portfolio.

An annual audit of the City’s Investment Policy, practices, procedures, and portfolio status will be conducted by an independent auditor of all items including, but not limited to, items specified in the Audit Checklist provided in the City’s Procedure Manual. The auditor will provide the City Manager and City Council with written observations and recommendations regarding the adequacy of investment controls.

Qualifications and Continuing Education
The City Treasurer shall be a City employee or contract employee. The Treasurer shall be selected on the basis of educational background and experience relevant to the Treasury function.

The City recognizes the need for and is committed to providing ongoing education specific to the investment function for the Treasurer and other City staff and officials involved in the investment process.
57 Appendix A

GLOSSARY OF TERMS
Accrued Interest - Interest earned but not yet received.

Active Deposits - Funds which are immediately required for disbursement.

Agencies - Federal agency securities and/or Government-sponsored enterprises.

Amortization - An accounting practice of gradually decreasing (increasing) an asset's book value by spreading its depreciation (accretion) over a period of time.

Asking Price - The price a broker/dealer offers to sell securities. See Offer Bankers' Acceptance (BA) - A “draft” or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.

Basis Point - One basis point is one hundredth of one percent (.01).

Bear Market - A period of generally pessimistic attitudes and declining market prices.

Bid - The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer.

Bond - A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.

Book Value - The value at which a debt security is shown on the holder's balance sheet. Book value is acquisition cost less amortization of premium or plus accretion of discount.

Broker - A broker brings buyers and sellers together for a commission.

Bull Market - A period of generally optimistic attitudes and increasing market prices.

Callables - Securities that the issuer has the right to redeem prior to maturity.

Certificate of Deposit - A time deposit with a specific maturity, evidenced by a certificate.

Large-denomination CD's are typically negotiable. CD's may be eligible for FDIC insurance.

Collateral - Securities, evidence of deposit, or pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposit of public moneys.

Commercial Paper - Short-term, unsecured promissory notes issued by a corporation to raise working capital. These negotiable instruments are purchased at a discount to par value or at par value with interest bearing.

Comprehensive Annual Financial Report (CAFR) - The official annual financial report for the City. It includes government-wide and fund financial statements prepared in conformity with Generally Accepted Accounting Principals (GAAP).

Constant Maturity Treasury (CMT) - An average yield of a specific Treasury maturity sector for a specific time frame, or an index of the average yield on United States Treasury securities adjusted to a constant maturity. This is a market index for reference of past direction of interest rates for the given Treasury maturity range.

Coupon - The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value.

Credit Analysis - A critical review and appraisal of the economic and financial conditions or of the ability to meet debt obligations.
58 Appendix A
GLOSSARY OF TERMS (continued)
Current Yield - The interest paid on an investment expressed as a percentage of the current price of the security.

Custody - A banking service that provides safekeeping for the individual securities in a customer's investment portfolio under a written agreement which also calls for the bank to collect and pay out income, to buy, sell, receive, and deliver securities when ordered to do so by the principal.

Debenture - A bond secured only by the general credit of the issuer.

Delivery v. Payment (DVP) - Delivery of securities with a simultaneous exchange of payment for the securities.

Demand Deposit Account - Accounts whose balance is available to meet immediate cash needs (maturities up to 7 days).

Derivatives - (1) Financial instruments whose return profile is linked to, or derived from, the security and may include a leveraging factor, or (2) financial contracts based upon notional amount whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities, or commodities).

Discount - The difference between the cost of a security and its value at maturity when quoted at lower than face value.

Discount Securities - Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U. S. Treasury Bills.

Diversification - Dividing investment funds among a variety of securities offering independent return and risk profiles.

Duration - The weighted average maturity of a bond's cash flow stream, where the present value of the cash flows serves as the weights; the future point in time at which, on average, an investor has received exactly half of the original investment in present value terms; a bond's zero-coupon equivalent; the fulcrum of a bond's present value cash flow time line.

Fannie Mae - Trade name for the Federal National Mortgage Association (FNMA).

Federal Credit Agencies - Agencies of the Federal Government set up to supply credit to various classes of institutions and individuals, e.g., Savings and Loans, small business firms, students, farmers, farm cooperatives, and exporters.

Federal Deposit Insurance Corporation (FDIC) - Insurance provided to customers of a subscribing bank, which guarantees deposits to a set limit (currently $100,000) per account.

Federal Funds Rate - The rate of interest at which Federal funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations.

Federal Home Loan Banks (FHLB) – Government-sponsored wholesale banks which lend funds and provide correspondent banking services to member commercial banks, thrifty institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank. 59 Appendix A
GLOSSARY OF TERMS (continued)
Federal Home Loan Mortgage Corporation (FHLMC) - The FHLMC was created under the Federal Home Loan Mortgage Act, Title III of the Emergency Home Finance Act of 1970 as a stockholder-owned government-sponsored enterprise. Freddie Mac, as the corporation is called, is charged with providing stability and assistance to the secondary home mortgage market by buying first mortgages and participation interests and reselling these securities in the form of guaranteed mortgage securities. Although agency obligations are not explicitly guaranteed by the federal government, the rating agencies believe that in the unlikely event of financial difficulties, the federal government will support the agency to the extent necessary to provide for full and timely payment on their securities.

Federal National Mortgage Association (FNMA) - FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD).

It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.

Federal Open Market Committee (FOMC) - Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.

Federal Reserve System - The central bank of the U. S. which consists of a seven-member Board of Governors, 12 regional banks, and 5,700 commercial banks that are members.

Fed Wire - A wire transmission service established by the Federal Reserve Bank to facilitate the transfer of funds through debits and credits of funds between participants within the Fed system.

Freddie Mac - Trade name for the Federal Home Loan Mortgage Corporation (FHLMC).

Ginnie Mae - Trade name for the Government National Mortgage Association (GNMA).

Government National Mortgage Association (GNMA) - Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by the full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FmHA mortgages. The term "pass-throughs" is often used to describe Ginnie Maes.

Inactive Deposits - Funds not immediately needed for disbursements.

Interest Rate - The annual yield earned on an investment, expressed as a percentage.

Investment Agreements - An agreement with a financial institution to borrow public funds subject to certain negotiated terms and conditions concerning collateral, liquidity, and interest rates.
60 Appendix A
GLOSSARY OF TERMS (continued)
LAIF (Local Agency Investment Fund) - A special fund in the State Treasury which local agencies may use to deposit funds for investment. There is no minimum investment period, and the minimum transaction is $5,000, in multiples of $1,000 above that, with a maximum balance of $75,000,000 for any agency. It offers high liquidity because deposits can be converted to cash in 24 hours and no interest is lost. All interest is distributed to those agencies participating on a proportionate share basis determined by the amounts deposited and the length of time they are deposited. Interest is paid quarterly. California Government Code §16429.3 states, in part:
"money placed with the State Treasurer for deposit in the Local Agency Investment Fund by cities, counties, or special districts shall not be subject to impoundment or seizure by any state official or state agency."

Liquidity - Refers to the ability to rapidly convert an investment into cash with minimal risk of losing some portion of principal and/or interest.

Local Government Investment Pool (LGIP) - The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment.

Market Value - The price at which a security is trading and could presumably be purchased or sold.

Master Repurchase Agreement - A written contract covering all future transactions between the parties to repurchase and/or reverse repurchase agreements that establishes each party's rights in the transactions. A master agreement will specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller- borrower.

Maturity - The date upon which the principal or stated value of an investment becomes due and payable.

Medium Term Corporate Notes - Unsecured promissory notes issued by a corporation organized and operating in the United States. These are negotiable instruments and are traded in the secondary market. Medium term corporate notes can be defined as extended maturity commercial paper. Local agencies are restricted by the Government Code to investments in corporations rated in the top three note categories by Moody's Investors Service, Inc., and/or Standard and Poor's Corporation. For medium term notes, eligible purchases consist of instruments that have a rating of "A" or better by both Moody's Investors Service, Inc., and Standard and Poor's Corporation.

Money Market - The market in which short-term debt instruments (bills, commercial paper, banker's acceptances, etc.) are issued and traded.

Negotiable Certificates of Deposit - Unsecured obligations of the financial institution, or bank, bought at par value with the promise to pay face value plus accrued interest at maturity.

They are high-grade negotiable instruments, paying a higher interest rate than regular certificates of deposit. The primary market issuance is in multiples of $1,000,000; the secondary market usually trades in denominations of $500,000, although smaller lots are occasionally available. As a matter of practice, only the ten largest U.S. banks where there is a secondary market established for continued liquidity would be considered for investment. 61 Appendix A
GLOSSARY OF TERMS (continued)
NRSRO - Nationally recognized statistical-rating organization New Issue - Term used when a security is originally "brought" to market.

Offer - The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Asking Price and Bid.

Open Market Operations - Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserve into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool.

Paper Gain or Loss - Term used for unrealized gain or loss on securities being held in a portfolio based on comparison of current market quotes and their original cost. This situation exists as long as the security is held while there is a difference between cost value (book value) and the market value.

Perfected Delivery - Refers to an investment where the actual security or collateral is held by an independent third party representing the purchasing entity.

Portfolio - Collection of securities held by an investor.

Primary Dealer - A group of government securities dealers that submit daily reports of market activity and security positions held to the Federal Reserve Bank of New York and are subject to its informal oversight.

Prudent Person Rule - An investment standard. In some states, the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state - the so-called legal list. In other states, the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.

Purchase Date - The date in which a security is purchased for settlement on that or a later date.

Qualified Public Depositories - A financial institution that does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less approved by the Public Deposit Protection Commission to hold public deposits.

Rate of Return - The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

Repurchase Agreement (RP or REPO) - A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money, or increasing bank reserves.
62 Appendix A
GLOSSARY OF TERMS (continued)
Reverse Repurchase Agreement (Reverse REPO) - A transaction where the seller (City) agrees to buy back from the buyer (bank) the securities at an agreed upon price after a stated period of time.

Risk - Degree of uncertainty of return on an asset.

Safekeeping - See Custody.

Secondary Market - A market made for the purchase and sale of outstanding issues following the initial distribution.

Securities and Exchange Commission - Agency created by Congress to protect investors in securities transactions by administering securities legislation.

SEC Rule 15(C)3-1 - See Uniform Net Capital Rule.

Settlement Date - The date on which a trade is cleared by delivery of securities against funds.

Spread - a) The yield or price difference between the bid and offer on an issue; b) the yield or price difference between different issues.

Structured Notes - Notes issued by government-sponsored enterprises (FHLB, FNMA, etc.) and corporations that have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) in their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options, and shifts in the shape of the yield curve.

Supranational - A supranational entity is formed by two or more central governments with the purpose of promoting economic development for the member countries. Supranational institutions finance their activities by issuing debt, such as supranational bonds. The three U.S. based supranationals are International Bank for Reconstruction and Development, the International Finance Corporation, and the Inter-American Development Bank.

Swap - The sale of one issue and the simultaneous purchase of another for some perceived advantage.

Treasury Bills - A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.

Treasury Bonds - Long-term coupon-bearing U. S. Treasury securities issued as direct obligations of the U. S. Government and having initial maturities of more than ten years.

Treasury Notes - Medium-term coupon-bearing U. S. Treasury securities issued as direct obligations of the U. S. Government and having initial maturities from two to ten years.

Uniform Net Capital Rule - Securities and Exchange Commission requirement that member firms, as well as nonmember broker-dealers in securities, maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio.

Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

U.S. Government Agencies - Instruments issued by various U.S. Government Agencies, most of which are secured only by the credit worthiness of the particular agency.

Yield - The rate of annual income return on an investment, expressed as a percentage. It is obtained by dividing the current dollar income by the current market price of the security. 63 Appendix A
Yield to Maturity - The rate of income return on an investment, minus any premium or plus any discount, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond, expressed as a percentage. 64 Appendix B

QUALIFIED BROKER/DEALERS

The City has qualified the following Broker/Dealer’s:
 Cantella & Co. Inc
 Great Pacific Securities
 Higgins Capital
 Morgan Stanley
 Multi-Bank Securities, Inc
 Mutual Securities, Inc
 Raymond James & Associates, Inc.
 Time Value Investments
 UBS Financial Services, Inc
 Wedbush Securities
65 Appendix C

ADMINISTRATIVE POLICY

Investment Guidelines, Strategy, and Internal Control

66 City of Aliso Viejo

ADMINISTRATIVE POLICY

SUBJECT

INVESTMENT GUIDELINES, STRATEGY

AND INTERNAL CONTROL
APPROVED BY:

Dave Doyle
CITY

MANAGER
PROCEDURE NO.

11 EFF. DATE

7/1/2015
Rev
7/1/2017
PAGE

1 of 4

PURPOSE

The purpose of th is policy is to establish a framework for the investment of surplus City funds within the established internal control procedures for treasury functions.

POLICY

INVESTMENT GUIDELINES AND STRATEGY

GUIDELINES

1. Investment Transaction - Every investment transaction must be authorized and reviewed by the Director of Finance/City Treasurer or his/her designee.

2. Pooled Cash - Whenever practical, local agency cash is consolidated into one bank a ccount and invested on a pooled concept basis. Interest earnings are allocated monthly according to month -end cash and investment balances for each fund.

3. Competitive Bids - Purchases and sales of securities are made on the basis of competitive offers and bids.

4. Cash Forecast - The cash flow for the City is analyzed with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements.

5. Investment Limitations - Security purchases and holdings are maintained within statutory limits imposed by the California Government Code.

6. Liquidity - The marketability of a security is considered at the time of purchase, as the security may have to be sold at a later date to meet unanticipated cash demands.

7. Diversification - The portfolio should consist of various types of securities, issuers, and maturities.

STRATEGY

1. Economic Forecasts - Economic Forecasts are obtained periodically from economists and financial experts through bankers and brokers to assist the Director of Finance/City Treasurer or his/her designee with the formulation of an investment strategy for the local agency.

2. Implementing Investment Strategy - Investment transactions are executed to conform to anticipated interest rate trends and the current investment strategy plan.

67 City of Aliso Viejo

ADMINISTRATIVE POLICY

SUBJECT

INVESTMENT GUIDELINES, STRATEGY

AND INTERNAL CONTROL
APPROVED BY:

Dave Doyle
CITY

MANAGER
PROCEDURE NO.

11 EFF. DATE

7/1/2015
Rev
7/1/2017
PAGE

2 of 4

3. Rapport - A close working relationship is maintained with public works, city staff, and large vendors of the city.

The objective is to pinpoint when large disbursements will clear the City's bank account. It is essential for good cash control that such large expenditures be anticipated, estimated as to d ollar amount, and communicated to the Director of Finance/City Treasurer or his/her designee for liquidity planning purposes.

4. Preserve Portfolio Value - Field standards are developed in order to maintain earnings near the market and to preserve the value of the portfolio.

INTERNAL CONTROL

I. OBJECTIVES OF INTERNAL CONTROL

1. To effectively and efficiently conduct business, including adherence to financial and management policies.

2. Safeguarding its assets and prevention or detection of errors and fraud.

3. Timely preparation of accurate and reliable financial information.

4. Compliance with applicable laws and regulations.

II. COMPONENTS OF INTERNAL CONTROL

1. Control Environment - The control environment is the set of standards, processes, and structures that provide s the basis for carrying out internal control across the organization. Management establishes the tone at the top regarding the importance of internal control , including expected standards of cond uct, organizational structure, and assignment of authority and responsibility.

2. Risk Assessment - Risk assessment involves a dynamic process for identifying and analyzing risks in a chieving the entity’s objectives. Risk assessment requires management to consider the impact of possible changes in the internal and external environment that may render established internal controls ineffective.

3. Control Activities - Control activities are the actions established through policies and procedures to ensure that management’s directives to mitigate risks are achieved . Segregation of duties is typically built into the development of control activities and may include authorizations, verifications, reconciliations, and reviews.

4. Communication - Communication occurs both internally and externally and provides the organization with the information needed to carry out day-to-day activities.

5. Audits – Audits are the process through which activities can be monitored and evaluated for any internal control deficiencies and communicated to management for taking corrective action.

68 City of Aliso Viejo

ADMINISTRATIVE POLICY

SUBJECT

INVESTMENT GUIDELINES, STRATEGY

AND INTERNAL CONTROL
APPROVED BY:

Dave Doyle
CITY

MANAGER
PROCEDURE NO.

11 EFF. DATE

7/1/2015
Rev
7/1/2017
PAGE

3 of 4
III. ELEMENTS OF INTERNAL CONTROL

1. Organization - Responsibility for the performance of duties should be assigned and lines of authority and reporting clearly identified and delineated.

2. Segregation of functions - Segregation of functions reduces the risk for an individual to be able to perpetrate and conceal errors or commit fraud in the normal course of duty. If two parts of a transaction are handled by different individuals, collusion is necessary to conceal errors or commit fraud. Functions that should be considered when evaluating segregation of duties are authorization, execution, recording, custody of assets, and reconciliation.

3. Authorization - All transactions should be approved by an authorized individual. The responsibilities and limits of authorization should be clearly delineated. The individual or group authorizing a specific transaction or granting general authority for transactions should be in a position commensurate with the nature and significance of the transactions.

4. Controls over an accounting system - Controls over an accounting system include the procedures, both manual and computerized, carried out independently to ascertain that transactions are complete, valid, authorized, and properly recorded.

IV. LIMITATIONS OF INTERNAL CONTROL
Internal control, no matter how well-designed, implemented, and conducted, can only provide reasonable assurance to management of the achievement of an entity’s objectives. Inherent limitations of internal control may include:

1. Recurring, rather than unusual, types of transactions.

2. Human error due to misunderstanding, carelessness, fatigue, or distraction.

3. Potential for collusion that circumvents controls defined by the segregation of functions.

4. Possibility of a management override of the system, despite an otherwise effective system of internal control.

69 City of Aliso Viejo

ADMINISTRATIVE POLICY

SUBJECT

INVESTMENT GUIDELINES, STRATEGY

AND INTERNAL CONTROL
APPROVED BY:

Dave Doyle
CITY

MANAGER
PROCEDURE NO.

11 EFF. DATE

7/1/2015
Rev
7/1/2017
PAGE

4 of 4

SEGREGATION OF RESPONSIBILITIES FOR TREASURY FUNCTIONS

Function ________ Responsibility ______ _

1. Formal investment policy should be
* Prepared by Director of Finance/City Treasurer * Approved by City Council

2. Develop Investment Strategy Director of Finance/City Treasurer or Registered Investment Advisor

3. Receive quotes and recommend investments for purchase Director of Finance/City Treasurer, Financial Services Manager

4. Approve investment transactions Director of Finance/City Treasurer, City Manager

5. Execute investment transactions Director of Finance/City Treasurer

6. Approve investment transactions for compliance with Financial Services Manager Investment policy and/or State law

7. Record investment transactions in the City’s financials Financial Services Manager/Financial Analyst

8. Verify investment Director of Finance/City Treasurer i.e., match broker confirmation to City records Financial Services Manager

9. Confirm LAIF and Bank Wires Director of Finance/City Treasurer Financial Services Manager/Financial
Analyst

10. Safeguard assets and records:
* Reconciliation of City’s records to bank statements Financial Services Manager/Financial and safekeeping of records Analyst

* Annual review of (a) financial institution's financial condition, Director of Finance/City Treasurer, and (b) safety, liquidity, and potential yields of investment City Manager instruments

11. Annual review of investment portfolio External Independent Auditors

The segregation of responsibilities as outlined herein is intended to enhance the City’s internal controls over treasury functions. It should be noted that from time to time, due to the limited size of the Financial Services staff, segregation of responsibilities may be amended in order to fulfill the business needs of the organization. 70 City of Aliso Viejo 2020212-232 Investment Policy Page i EXHIBIT “A”

CITY OF ALISO VIEJO

STATEMENT OF INVESTMENT POLICY
FOR FISCAL YEAR 20221-232
AS ADOPTED SEPTEMBER 17,
20212022

CITY COUNCIL

MAYOR TIFFANY
ACKLEYMayor Ross Chun

MAYOR PRO TEM ROSS
CHUNMayor Pro Tem
Richard Hurt

COUNCILMEMBER DAVE
HARRINGTONCouncil Member
Tiffany Ackley
71 City of Aliso Viejo 2020212-232 Investment Policy Page ii

COUNCILMEMBER RICHARD
HURTCouncil Member Dave
Harrington

COUNCILMEMBER MIKE
MUNZINGCouncil Member Mike
Munzing
72 City of Aliso Viejo 2020212-232 Investment Policy Page iii

TABLE OF CONTENTS

Statement of Investment Policy 1
Objectives 1
Scope of Funds 2
Prudent Investor Standard 2
Investment Philosophy 2
Delegation of Authority 3
Public Trust 3
Ethics and Conflicts of Interest 3
Internal Investment Controls 4
Investment Policy Adoption 5
Indemnification of Investment Officials 5
Investment Portfolio Compliance 5
Reporting 6
Authorized and Suitable Investments 6
Ratings and Rating Agencies 8
Prohibited Investments 8
Collateralization 8
Investment Pools 9
Money Market Mutual Funds 9
Maturity Limits 9
Qualifications for Financial Institutions and Broker/Dealer’s 10 Diversification Guidelines and Risks 11
Safekeeping and Custody 11
Performance Standards and Evaluation 11
Qualifications and Continuing Education 12
APPENDIX A: Glossary of Terms
APPENDIX B: Qualified Broker/Dealers
APPENDIX C: Administrative Policy: Investment Guidelines, Strategy, and Internal Control
73 City of Aliso Viejo 202219-230 Investment
Policy

Page 1 ends

Statement of Investment Policy
This Statement of Investment Policy (“Policy”), as set forth by the City of Aliso Viejo (“City”), provides the guidelines for prudent investment of the City’s idle or reserve cash and outlines the policies essential to ensuring the safety and financial strength of the City’s investment portfolio.

The Policy has three primary objectives, in order of priority:

Credit Risk
Credit Risk is the risk of loss of principal due to the failure of the security issuer.

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Policy

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2. Liquidity – the investment portfolio shall remain sufficiently liquid to meet all daily cash flow and operating requirements that may be reasonably expected or anticipated.

3. Return or Yield – attain a rate of return consistent with the primary objectives of safety and liquidity, throughout budgetary and economic cycles.

The Policy applies to the following funds and is accounted for in the City’s annual audited financial statements.

A. General Fund
B. Special Revenue Funds
C. Debt Service Funds
D. Capital Improvement Funds
E. Enterprise Funds
F. Internal Service Funds
G. Agency Funds

Accordingly, the City’s conservative philosophy prohibits active trading and speculation; i.e., the purchase of securities with the intent to profit from favorable market changes in market prices or market conditions. Leveraging or borrowing money for the purpose of investing is specifically prohibited. However, the City may elect to sell a security prior to its maturity and 75 City of Aliso Viejo 2020221-232 Investment
Policy

Page 3 ends

record a capital gain or loss in order to improve the quality, liquidity, or yield of the portfolio in response to market conditions or City needs.

The Treasurer will provide prior written notification to the City Manager and City Council regarding the designation of responsibilities.

The City may also engage Securities and Exchange Commission registered external investment advisor to manage the City’s investment program.

Elected officials and employees shall subordinate their personal investment transactions to those of the City particularly with regard to the time of purchases and sales.

Page 4 ends

All persons, firms, broker/dealers, financial institutions, and advisors providing investment services or bond issue assistance shall disclose to the City Manager and the Treasurer all fee sharing, fee-splitting, and commission arrangements with other entities or persons prior to the City agreeing to buy an investment or issue bonds.

Collateral must be held at safekeeping, as defined in the Safekeeping and Custody section of the Policy.

Page 5 ends

perform the monthly reconciliation of bank, broker/dealer, and safekeeping confirmations.
 Secondary Approval Required
The City Manager will review and approve the establishment of investment accounts, broker/dealer, and financial institution relationships and any agreements or contracts related to investments or investment related activity.
 Wire Transfer Controls
All City wire transfers will be executed in accordance with a written agreement specifying control procedures required for wire transfers of funds, including the establishment of repetitive wires to pay for securities transactions with approved securities dealers as well as any other routine money transfers. All other non-repetitive wires require City Manager approval prior to release.

Investment Policy Adoption
The City Council’s primary responsibilities over the investment function includes establishing investment policies, annually reviewing such policies, appointing a City Treasurer, reviewing quarterly monthly investment reports issued by the Treasurer, authorizing bond documents and financing transactions, and adopting recommended changes to the City’s Investment Policy as deemed necessary.

Page 6 ends

Reporting
The Treasurer shall submit a “Monthly Treasurer’s Report” to the City Manager and City Council within 30 45 days following the last day of the month to be agendized for official action at a regular Council meeting thereafter. These reports shall disclose information relevant to the risk characteristics of the City’s investment portfolio and shall include the following information:

Monthly Treasurer’s Report
A. Cash receipts, disbursements, and balances in total.

B. A summary of the investment portfolio.

C. An asset list showing the issuer, type of investment, par value, maturity date, and interest rate.

D. Average rate of return on the City’s investment portfolio.

E. Maturity aging grouped by type of investment.

F. Diversification of the investment portfolio.

G. A listing of individual investment transactions during the month, as required by Government Code section 53607.

H. A statement of ability to meet upcoming operating expenses and spending requirements for the next six months.

Authorized and Suitable Investments
Investment of City funds is governed by the California Government Code Sections 53600, 53601, 53601.5, 53601.6, 53635, and 53635.5 et seq. Within the context of the limitations, the following investments are authorized, as further limited herein:
79 City of Aliso Viejo 2020221-232 Investment
Policy

Page 7 ends

Matrix of Suitable Investment Options and Restrictions
Investment Type: Maximum
Maturity:

Maximum
percentage of
Portfolio:

Maximum Par Value
per Issuer:

Credit Quality and
Requirements:

U.S. Treasury
Bills, Notes and
Bonds

5 Years

100 percent

N/A
Explicit Full Faith and Credit
Guarantee of United States
Government

Federal Agency
Obligations

5 Years 60 percent
35% per agency

Implied Guarantee of the United
States Government
Bankers’
Acceptances
(BA’s)

180 Days

20 percent

5% per issuer
Domestic banks only - deemed
eligible for purchase by the
Federal Reserve Bank

Certificates of
Deposit or Time
Deposits*
(CD’s)

5 Years

30 percent

5% per issuer
Senior debt only from top 15
percent of peer group rated
banks, savings & loans and credit
unions. Defined by Section 5102
of the Financial Code.

Negotiable
Certificates of
Deposit

5 Years

30 percent

$250,000
Brokered CD’s insured by FDIC
for a maximum of $250,000 per
issuer.

Local Agency
Investment Fund
(LAIF)

N/A

100 percent

$75,000,000
(per entity)
Treasurer will review investment
policies and practices to
determine if consistent with the
Policy

Commercial Paper

270 Days

20 percent

5% of portfolio
Highest letter and number rating
as provided for by a nationally
recognized statistical-rating
organization (NRSRO)

Money Market
Mutual Funds

N/A

10 percent

10% per fund
(SEC Registered)
($1.00 NAV)
Highest rating from NRSRO.

Must also comply with Govt.

Code 53601(l) and 53601.6 (b)
and the weighted average to
maturity is less than 180 days.

Repurchase
Agreements*

92 Days

20 percent

20%
Signed security loan agreement
on file. Underlying securities
maintained at 102% of original
value. Reverse repurchase
agreements are specifically not
authorized under the Policy.

Supranational
Securities

5 Years

20 percent

10 % per issuer
United States dollar
denominated senior
unsecured unsubordinated
obligations issued or
unconditionally guaranteed
by the International Bank
for Reconstruction and
Development,
International Finance
80 City of Aliso Viejo 2020221-232 Investment
Policy

Page 8 ends

Corporation, or Inter-
American Development
Bank; rated AA or better
by two NRSROs.

Medium Term
Corporate Notes

5 Years

30 percent

Investment Type: Standard & Poor’s Moody’s

81 City of Aliso Viejo 2020221-232 Investment
Policy

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Collateralization
Collateral for Certificates of Deposit (CD) and Negotiated Certificates of Deposit (NCD) must comply with Government Code, Chapter 4, Bank Deposit Law Section 16500 et seq. and the Savings and Loan and Credit Union Deposit Law Government Code Section 16600 et seq.

In addition, if the CD is not FDIC insured or goes over the FDIC $250,000 limit, collateral is required equal to 100 percent of principal.

Collateral for Repurchase Agreements shall be 102 percent of market value of principal and accrued interest. Collateral can be either US Treasury securities or Federal Agency securities.

This will provide an addition level of security due to inevitable changes in market conditions.

Money Market Mutual Funds
Money market mutual funds provide another safe, liquid, and diversified investment option for the City’s surplus capital. However, certain conditions need to be met both initially and on an ongoing basis. The money market may only invest in US Government securities permitted under this policy and under California Government Code Section 53601 et seq. with final stated maturities of one year or less “Government Money Market Funds.” In order to be an eligible money market investment under this section, the primary objective of the money market, as stated in the funds’ prospectus, is to maintain a constant $1.00 Net Asset Value (NAV). The following additional guidelines include, but are not limited to:
 The money market only invests in US Government securities, and the weighted average maturity of the portfolio is less than 180 days. 82 City of Aliso Viejo 2020221-232 Investment
Policy

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 The fund shall be registered with the SEC.
 The money market shall have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations and shall maintain these ratings for the duration of the investment.

It is also important to note that specific investments, detailed under the “Authorized and Suitable Investments” section, may be restricted to a shorter maturity.

The weighted average life of the portfolio may not exceed three (3) years in duration.

At a minimum, 150 percent of the portfolio shall remain liquid, accessible on demand by the City without restriction or penalty.

The investment portfolio shall be structured for liquidity purposes; therefore, 25 40 percent of the portfolio shall mature within not exceed a 36590-days weighted average maturity.

I. Federal Reserve Bank:

II. Nationally or State Chartered Banks, Savings and Loans, and Credit Unions:

The City may purchase investments offered from Banks, Savings and Loans, and Credit 83 City of Aliso Viejo 2020221-232 Investment
Policy

Page 11 ends

Unions provided the institutions are:
 Nationally or State Chartered Institutions.
 Registered as investment securities dealers.
 Ranked in the top 15 percent of institutions within their respective peer group.  The signatures of two individuals shall be required for the opening and closing of any bank account (the Treasurer, City Manager, Mayor, or Mayor Pro Tem).

III. Broker/Dealers:

For a broker/dealer to be considered for placement on the pre-approved list, they must comply with the following:
 Primary or Regional dealers that qualify for SEC Rule 15c3-1  Provide audited financial statements from the two most frequent years  A statement certifying that the institution has reviewed the City’s Investment Policy and California Government Code Section 53600 et seq. and that all securities offered to the City shall comply fully with all provisions of the Policy and the California Government Code.
 The signatures of two individuals shall be required for the opening and closing of any broker/dealer account (the Treasurer, City Manager, Mayor or Mayor Pro Tem). The Accounting Officer, who is independent of the investment function, shall keep a record of all opened and closed accounts. On an annual basis, the Accounting Officer shall provide a list of accounts to the independent auditor.
 Settlement of securities traded through qualified broker/dealers shall occur trade date plus three one or two days (T3) (depending upon security type), the current industry standard. New issue securities may have longer settlements, but none shall be greater than three weeks.

Diversification Guidelines and Risks
The City recognizes diversification is an investment strategy that will mitigate risk in the investment portfolio. The City’s investment portfolio shall be diversified to avoid incurring unreasonable and avoidable risks with regard to specific investment types. Within investment types, the City shall also maintain a mix of securities to avoid concentrations within individual financial institutions, geographic areas, industry types, and maturities. 84 City of Aliso Viejo 2020221-232 Investment
Policy

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The City will only invest in fixed rate, fixed maturity securities and, with the exception of U.S.

Treasury securities or the Local Agency Investment Fund (LAIF), no more than 60 percent of the investment portfolio shall be invested in any single investment type or financial institution.

Performance Standards and Evaluation
Investment performance is continually monitored and evaluated by the City Treasurer.

Investment activity reports are generated on a monthly basis for presentation to the City Manager and City Council.

In addition to the three-year maturity average, the portfolio shall be structured for liquidity purposes, and 25 percent of the investment portfolio shall not exceed 90 days weighted average maturity. The independent auditor will annually verify that the portfolio conforms to the maturity requirements described above.