L PUBLIC"
uui
Board Package
City of Beaumont, CA (257428)
[01-01-2026]--[03-31-2026]
01/01/2026 - 03/31/2026
Dated: 04/23/2026
Locked Down
TRUST
ADVISORS
PUBLIC
TRUST
A! V ISORS
Table of Contents
Dated: 04/23/2026
Risk Summary (1) (City of Beaumont, CA (257428))
Performance Overview (City of Beaumont, CA (257428))
Index Comparison (City of Beaumont, CA (257428))
GAAP Financials (City of Beaumont, CA (257428))
Current Holdings (City of Beaumont, CA (257428))
Realized Gain/Loss (City of Beaumont, CA (257428))
Income Detail (City of Beaumont, CA (257428))
Issuer Concentration (> $550K) (City of Beaumont, CA (257428)) Historical Trends (City of Beaumont, CA (257428))
Credit Events (City of Beaumont, CA (257428))
1 5
8 11
12 13
14 15
16 17
PUBLIC'
TRUST
ADV ISORS
Risk Summary (1)
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Balance Sheet
Book Value + Accrued
79,363,372.05
Net Unrealized Gain/Loss
33,176.42
Market Value + Accrued
79,396,548.47
Asset Class
Cash (0.002%)
Money Market
Funds (0.919%)
Fixed Income
(99.079%)
Chart calculated by: Base Market Value + Accrued
Cash and Fixed Income Summary
Risk Metric
Value
Cash
1,615.03
MMFund
729,909.22
Fixed Income
78,665,024.22
Duration
1.753
Convexity
0.044
WAL
1.857
Years to Final Maturity
1.864
Years to Effective Maturity
1.857
Yield
3.815
Book Yield
3.975
Avg Credit Rating
AA+/Aa1/AA+
Security Type
MUNI (0.252%)
ABS (1.634%)
CORP (5.283%)
MMFUND -'
(0.919%)
US GOV
(91.909%)
Chart calculated by: Base Market Value +Accrued
Issuer Concentration
Issuer Concentration
% of Base Market
Value + Accrued
Other
0.002%
United States
91.909%
U.S. Bancorp
0.919%
State of Hawaii
0.252%
PepsiCo, Inc.
0.556%
Hyundai Auto Receivables Trust 2023-B
0.422%
Eli Lilly and Company
1.457%
Deere & Company
1.381%
Capital One Financial Corporation
1.212%
Apple Inc.
0.944%
Amazon.com, Inc.
0.945%
—.
100.000%
Footnotes: 1,2
Market Sector
Cash (0.921%)
Asset Backed
(1.634%)
Industrial
(5.283%)
Government
(91.909%)
Chart calculated by: Base Market Value + Accrued
1 PUBLIC
TRUST
ADVISORS
Risk Summary (1)
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Time To Maturity
30%
a)
25%
Y
`ro 20%
m o 15%
0 10%
5%
W 0%
• Ending Years to Effective Maturity • Ending Years to Final Maturity Credit Duration Heat Map
Rating,
1-2,
3-4,
5-7,
10- 15,
0-1
2-3
4-5
7-10
15-30
AAA
0.000%
0.000%
0.000%
0.000%
3.500%
0.000%
0.000%
0.000%
0.000%
AA
50.795%
- -
0.000%
6.509%
37.259%
0.000%
A
0.000%
0.000%
0.000%
0.000%
1.937%
0.000%
0.000%
0.000%
0.000%
BBB
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
BB
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
B
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
CCC
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
CC
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
C
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
NA
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
Duration
Base Market Value + Accrued
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0 I
0.00-0.25 0.25-0.50 0.50-0.75 0.75-1.00 1.00-2.00 2.00-3.00
2 PUBLIC'
TRUST
A D r ISORS
Risk Summary (1)
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
MMF Asset Allocation
US Treasury
Allocation (48.000%) --- Repo
Allocation (52.000%)
Chart calculated by: Base Market Value
Industry Group
Other
(1.230%)
Machinery -Diversified
(1.381%)
Pharmaceuticals
(1.457%)
Sovereign
(91.909%)
Chart calculated by: Base Market Value + Accrued
Industry Sector
Asset Backed
Securities (1.634%)
Communications
(1.889%)
Consumer,
Non -cyclical (2.012%)
Government
(92.161%)
Chart calculated by: Base Market Value + Accrued
Industry Subgroup
Other
(1.230%)
Machinery -Farm
(1.381%)
Medical -Drugs
(1.457%)
Sovereign
(91.909%)
Chart calculated by: Base Market Value + Accrued
Page
242 of 19
o
3 PUBLIC
TRUST
ADVISORS
Risk Summary (1)
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
1: * Grouped by: Issuer Concentration. 2: * Groups Sorted by: % of Base Market Value + Accrued.
4 Performance Overview
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Base Returns
0.4%
-0.29/8
-0.4%
01' 01' �6 �6 �6 �6 �6 1`O �6 �6 26 �6 26 �6 �6
�yo �o �o �o do Zo �o do �o do �o do do �o
\03\ \,.o\ �\,...`� �\ ., �0 tio�\ �\ �2,�� 1,, �\o,�� �\\�� �\Q' �\Q' �\b 0 0 0 0 0 0 0 0 0 0 0 0 0 0
— Total Return — Income Return — Price Return
Beta Distribution
Summary
8%
6%
c
4%
)
CC
° 2%
-2%
Prior Month
Prior Quarter
• Total Return
Prior Year
0Income Return • Price Return
Month to Date
Index Return • Excess Return
Quarter to Date Year to Date
age ] L44 o
5 Performance Overview
01/01/2026 - 03/31/2026
Return to Table of Contents
PUBLIC'
TRUST
A r) 4` ISO RS
City of Beaumont, CA (257428)
Dated: 04/23/2026
Portfolio Summary
Asset Class ll
Base Market Value + Accrued
Cash
1,615.03
Money Market Funds
729,909.22
Fixed Income
78,665,024.22
Total
79,396,548.47
Footnote: 1
Cash and Fixed Income Summary
Risk Metric
Value
Cash
1,615.03
MMFund
729,909.22
Fixed Income
78,665,024.22
Duration
1.753
Convexity
0.044
WAL
1.857
Years to Final Maturity
1.864
Years to Effective Maturity
1.857
Yield
3.815
Book Yield
3.975
Avg Credit Rating
AA+/Aa1/AA+
Compliance Status
Compliant
Account
Policy Name
Total Rules Compliant Rules Violating Rules
Equity Summary
Equity Metric
Equity
Beta
R Squared
Trailing P/E
Dividend Yield
Value
0.00 Compliance Overview
Status
As of
Compliant
03/31/2026
Reconciliation Status
Custody Reconciliation Status
Custody Last Reconciled For
Trading System Last Reconciled For
Reconciled
04/22/2026
04/22/2026
Page
24.5 o
9 o
6 PUBLIC'
TRUST
ADVISORS
Performance Overview
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Index: NO BENCHMARK REQUIRED.
1: * Grouped by: Asset Class.
PUBLIC
Index Comparison
O1/O1/2O26 - O3/31/2O26
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Index Comparison Summary
a)
U
6 0
a)
o
Duration
Yield Years to Effective Years to Final
Maturity Maturity
Index Comparison Market Sector
a)
U
C
o
Government Municipal Industrial Asset Backed Cash
Index Comparison Duration
LO b h O 4J rb O x oO
ti ^� p h. A' O' N4D' nb OJ`ai?
\4o
Index Comparison Credit Rating
6 0%
o
AAA AA A BBB Non -Invest Not Rated
Page
247 of 19
o
8 Index Comparison
01/01/2026 - 03/31/2026
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PUBLIC'
TRUST
A r) 4r ISO RS
City of Beaumont, CA (257428)
Dated: 04/23/2026
Index Com•arison Summa
Risk Metric
Portfolio
Index
Difference
Duration
1.753
---
---
Yield
3.815
Years to Effective Maturity
1.857
---
Years to Final Maturity
1.864
--
Average Credit Rating
AA+
---
Footnote: 1
Index Comparison Market Sector
Market Sector
Portfolio
Index
Difference
Government
91.909%
---
---
Municipal
0.252%
—
Industrial
5.283%
---
---
Asset Backed
1.634%
Cash
0.921%
---
---
Footnote: 2
Index Comparison Duration
Duration Portfolio
Index
Difference
< 0
0.000 %
---
---
0-1
11.945%
1 - 2
50.795%
---
--
2-3
37.259%
3 - 4
0.000%
---
---
4-5
0.000%
-
--
5-7
0.000%
7-10
0.000%
10 - 15
0.000%
--
---
15-30
0.000%
30 +
0.000%
---
---
No Duration
0.000%
—
Footnote: 3
Index Comparison Credit Rating
Credit Rating Portfolio Index
Difference
AAA 3.500% ---
--
AA 94.564%
A 1.937% ---
---
BBB 0.000% —
Non -Invest 0.000% ---
Not Rated 0.000% —
—
Footnote: 4
age ] L4ti o
9 PUBLIC
TRUST
ADVISORS
Index Comparison
01/01/2026 - 03/31/2026 Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Index: NO BENCHMARK REQUIRED.
1: * Grouped by: Risk Metric. 2: * Grouped by: Market Sector. 3: * Grouped by: Duration. 4: * Grouped by: Credit Rating.
10 PUBLIC
TRUST
ADVISORS
GAAP Financials
01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Balance Sheet
As of:
City of Beaumont, CA
12/31/2025 03/31/2026
Book Value
Accrued Balance
Book Value + Accrued
Net Unrealized Carrying Value Gain
Carrying Value and Accrued
77,811,700.22
722,018.48
78,533,718.70
592,170.09
79,125,888.79 79,396,548.47
78,661,642.47
701,729.58
79,363,372.05
33,176.42
Income Statement
City of Beaumont, CA
Begin Date 01/01/2026
End Date 03/31/2026
Net Amortization/Accretion Income
Interest Income
Dividend Income
Foreign Tax Withheld Expense
Misc Income
Net Allowance Expense
Income Subtotal
Net Realized Gain/Loss
Net Holding Gain/Loss
Impairment Loss
Net Gain/Loss
Expense
Net Income
Transfers In/Out
Change in Unrealized Gain/Loss
720,675.35
0.00 0.00
0.00 0.00
55,021.36
0.00 0.00
0.00 53,956.64
720,675.35
55,021.36
829,653.35
0.00 -558,993.67
Statement of Cash Flows
City of Beaumont, CA
Begin Date 01/01/2026
End Date 03/31/2026
Net Income
Amortization/Accretion on MS
Change in Accrued on MS
Net Gain/Loss on MS
Change in Unrealized G/L on CE
Subtotal
Purchase of MS
Purchased Accrued of MS
Sales of MS
Sold Accrued of MS
Maturities of MS
Net Purchases/Sales
Transfers of Cash & CE
Total Change in Cash & CE
Beginning Cash & CE
Ending Cash & CE
-53,956.64
-74,675.86
-55,021.36
0.00 -10,636,210.94
-32,820.87
9,940,331.68
127,785.63
0.00 829,653.35
-183,653.86
-600,914.50
0.00 45,084.99
686,439.26
731,524.25
11 Current Holdings
Base Currency: USD As of 03/31/2026 Return to Table of Contents PUBLIC
TRUST
A ! VISORS
City of Beaumont, CA (257428)
Dated: 04/23/2026
Security Type
Base Original Units Base Current Units Final Maturity
Base Original Cost Base Book Value Base Net Total
Unrealized Gain/
Loss
Base Interest/ Base Accrued Market Base Market Value Base Market Value + Dividend Due Balance Price Accrued
ABS 1,850,000.00 1,307,550.58 02/12/2027 1,187,110.78 1,287,975.26 8,460.93 0.00 1,256.28 99.1570 1,296,436.20 1,297,692.47 CASH
1,615.03 1,615.03 03/31/2026
1,615.03 1,615.03
0.00 0.00
0.00 1.0000
1,615.03 1,615.03
CORP 4,175,000.00 4,175,000.00 09/08/2026 3,932,193.54 4,156,467.64 12,764.40 0.00 25,215.73 99.8655 4,169,232.04 4,194,447.77 MMFUND
729,909.22 729,909.22 03/31/2026
729,909.22 729,909.22
0.00 1,615.03
0.00 1.0000
729,909.22 729,909.22
MUNI
US GOV
195,000.00
72 320 000.00
195, 000.00 10/01/2026
72 320 000.00 03/26/2028
195,000.00
72 164 889.85
195,000.00
72 290 675.32
802.19 0.00 4,473.30 100.4114
11.148.90
0.00 670,784.27 99.9803
195,802.19
72 301 824.22
200,275.49
72,972,608.49
79,271,524.25 78,729,074.83 02110/2028 78,210,718.42 78,661,642.47 33,176.42 1,615.03 701,729.58 99.0499 78,694,818.89 79,396,548.47 * Grouped by: Security Type. * Groups Sorted by: Security Type. * Weighted by: Base Market Value + Accrued. * Holdings Displayed by: Position.
12 Realized Gain/Loss
Base Currency: USD 01/01/2026 - 03/31/2026
Return to Table of Contents
PUBLIC
TRUST
! VISOR S
City of Beaumont, CA (257428)
Dated: 04/23/2026
Security Type
ABS
BS Class Market Sector Ending Base Current Units
Base Disposed Book Value Base Total Impairment Loss Base Net Total Gain/Loss Ending Market Value + Accrued Asset Backed 1,307,550.58
-126,774.44 0.00
0.01 1,297,692.47
CASH
RCV Cash
1,615.03 0.00 0.00
0.00 1,615.03
CORP
ST Industrial
4,175,000.00
0.00 0.00
0.00 4,194,447.77
0.00 729,909.22
MMFUND
CE Cash
729,909.22
-5,173,749.17 0.00
0.00 -9,758,535.88
MUNI
US GOV
ST
Municipal
Govemment
195,000.00
72,320,000.00
0.00 0.00
0.00 55,021.35
200275.49
72,972,608.49
78,729,074.83
-15,059,059A9 0.00
55,021.36 79,396,548.47
* Grouped by: Security Type. * Groups Sorted by: Security Type. * Weighted by: Ending Market Value + Accrued. * Holdings Displayed by: Lot.
13 Income Detail
Base Currency: USD 01/01/2026 - 03/31/2026
Return to Table of Contents
PUBLIC
TRUST
! VISOR S
City of Beaumont, CA (257428)
Dated: 04/23/2026
Security Type BS Class
ABS --- 1,307,550.58
CASH RCV
Ending Base Current Units Base Accretion Income Base Misc Income Base Expense Base Interest/Dividend Income Base Amortization Expense Base Net Income
10,556.14 0.00
0.00 7,903.30
0.00 18,459.45
1,615.03 0.00
0.00 0.00
0.00 0.00
0.00 CORP 4,175,000.00
MMFUND
21,943.51 0.00
0.00 27,746.88
0.00 4,465.53
0.00 2,236.65
0.00 678,322.99
0.00 49,690.39
0.00 4,465.53
CE 729,909.22
ST
0.00 0.00
MUNI
US GOV
195,000.00
72,320,000.00
0.00 0.00
40,513.81 0.00
0.00 2,236.65
-19,056.82 754,801.34
78,729,074.83
73,013.46 0.00
0.00 720,675.35
-19,056.82 829,653.35
* Grouped by: Security Type. * Groups Sorted by: Security Type. * Weighted by: Ending Base Market Value + Accrued. * Holdings Displayed by: Lot.
14 PUBLIC'
TRUST
ADVISORS
Issuer Concentration (> $550K)
Base Currency: USD As of 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Issuer Concentration
Capital One
Financial Corporation (1.228%)
Deere &
Company (1.399%)
Eli Lilly
and Company (1.475%)
United
States (93.055%)
Chart calculated by: Base Market Value + Accrued
Issuer Concentration Security Type
Ending Base Current Units Ending Effective Final Maturity Base Net Market Base Net FX Unrealized Base Market Value + Accrued % of Base Market Maturity
Unrealized Gain/Loss Security Gain/Loss Value + Accrued United States
Eli Lilly and Company
Deere & Company
Capital One Financial Corporation
Amazon.com, Inc.
Apple Inc.
U.S. Bancorp
US GOV
CORP
CORP
ABS
CORP
CORP
MMFUND
72,320,000.00 03/26/2028 03/26/2028
1,145,000.00 01/09/2027 02/09/2027
1,100,000.00 06/17/2026 06/17/2026
975,000.00 09/15/2026 09/15/2026
750,000.00 05/12/2026 05/12/2026
750,000.00 08/04/2026 08/04/2026
729,909.22 03/31/2026 03/31/2026
11,148.90 0.00 72,972,608.49 93.055%
4,407.18 0.00 1,156,675.82 1.475%
2,056.55 0.00 1,096,712.79 1.399%
6,014.45 0.00 962,639.21 1.228%
996.29 0.00 750,646.98 0.957%
2,836.51 0.00 749,336.58 0.956%
0.00 0.00 729,909.22 0.931%
77,769,909.22 02/13/2028 02/14/2028 27,459.88 0.00 78,418,529.08 100.000% * Grouped by: Issuer Concentration. * Groups Sorted by: Base Market Value + Accrued. * Filtered By: Base Market Value + Accrued > 550,000.00. * Weighted by: Base Market Value + Accrued.
15 PUBLIC
Historical Trends
Base Currency: USD 01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
4 3.9
3.8 3.7
3.6 3.5
3.4 Yield
ti0 ti0 ti0 �`° ti0 ti0 �O rV �O ti0 ti0 ti� ti0 00
rL' r�O rL0 rL0 rL0 ' r�0 rL0 r�0 rL0 rL0 r�0 rL' L0
Off\ \4 N rl.�\ r'�\\ Off\ ��� (j,'`� r)C Off\ '� 4ri.4 () �,\ C. Q. O)� QI OZ Oe OW O1 O� 03\ 03\ 03� O�� Off\
Yield Base Market Value + Accrued Period Begin
Period End Duration Complex Credit Years to Effective Maturity Years to Final Maturity Rating
01/03/2026
01/10/2026
01/17/2026
01/24/2026
01/31/2026
3.516
3.562
3.616
3.615
3.561
79,155,385.47 01/01/2026
79,141,351.99 01/04/2026
79,109,587.79 01/11/2026
79,163,850.85 01/18/2026
79,302,803.96 01/25/2026
1.748 AA+
1.799 AA+
1.779 AA+
1.760 AA+
1.812 AA+
1.849
1.906
1.882
1.863
1.918
1.858
1.915
1.890
1.871
1.926
3.530 79,405, 306.11 02/01/2026
3.452
3.512
3.434
3.591
3.746
3.916
3.935
02/07/2026 1.794 AA+
1.899 1.907
79,587,556.85 02/08/2026
79,552,764.01 02/15/2026
79,726,653.42 02/22/2026
79,537,225.67 03/01/2026
79,362,709.81 03/08/2026
79,170,022.90 03/15/2026
79,207,922.23 03/22/2026
02/14/2026
02/21/2026
02/28/2026
03/07/2026
03/14/2026
03/21/2026
03/28/2026
1.777 AA+
1.757 M+
1.738 AA+
1.823 AA+
1.802 AA+
1.781 AA+
1.762 AA+
1.881
1.858
1.837
1.930
1.910
1.888
1.868
1.889
1.865
1.845
1.937
1.917
1.894
1.875
3.815 79,396,548.47 03/29/2026
03/31/2026 1.753 AA+
1.857 1.864
* Weighted by: Base Market Value + Accrued.
16 PUBLIC
TRUST
ADVISORS
Credit Events
Base Currency: USD 01/01/2026 - 03/31/2026
Return to Table of Contents
City of Beaumont, CA (257428)
Dated: 04/23/2026
Account
Identifier Description
Effective Date
Agency Old Value New Value Event Type
* Grouped by: Event Type. " Groups Sorted by: Event Type. * Filtered By: Agency x DBRS and Agency x Moodys.
17 Additional Disclosure:
This information is for the sole purposes of the client and is not intended to provide specific advice or recommendations. Please review the contents of this information carefully. Should you have any questions regarding the information presented, calculation methodology, investment portfolio, security detail, or any other facet of this information, please feel free to contact us.
Public Trust Advisors, LLC (Public Trust) statements and reports are intended to detail our investment advisory activity as well as the activity of certain client accounts managed by Public Trust. The custodian bank maintains the control of assets and executes and settles all investment transactions. The custodian statement is the official record of security and cash holdings transactions. Public Trust recognizes that clients may use these reports to facilitate record keeping; therefore, it is recommended that the client reconcile this information with their custodian bank statement. Many custodians use a settlement date basis that may result in the need to reconcile due to a timing difference. The underlying market value, amortized cost, and accrued interest may differ between the custodian and this statement or report. This can be attributed to differences in calculation methodologies and pricing sources used.
Public Trust does not have the authority to withdraw funds from or deposit funds to the custodian. Our clients retain responsibility for their internal accounting policies, implementing and enforcing internal controls, and generating ledger entries or otherwise recording transactions. The total market value represents prices obtained from various sources; it may be impacted by the frequency at which prices are reported, and such prices are not guaranteed. Prices received from pricing vendors are generally based on current market quotes but when such quotes are not available, the pricing vendors use a variety of techniques to estimate value. These estimates, particularly for fixed -income securities, may be based on certain minimum principal amounts (e.g. $1 million) and may not reflect all the factors that affect the value of the security including liquidity risk. The prices provided are not firm bids or offers. Certain securities may reflect N/A or unavailable where the price for such security is generally not available from a pricing source. The market value of a security, including those priced at par value, may differ from its purchase price and may not closely reflect the value at which the security may be sold or purchased based on various market factors. The securities in this investment portfolio, including shares of mutual funds, are not guaranteed or otherwise protected by Public Trust, the FDIC (except for certain non-negotiable certificates of deposit), or any government agency unless specifically stated otherwise.
Clients may be permitted to establish one or more unmanaged accounts for the purposes of client reporting. Clients may also be permitted to provide externally managed assets for the purposes of client reporting. Public Trust defines unmanaged accounts or assets as one where the investment direction remains the sole responsibility of the client rather than the Investment Manager. Unmanaged accounts or external assets do not receive ongoing supervision and monitoring services. The Investment Manager does not make any investment recommendations and may not charge a fee for reporting on these accounts or assets. The primary purpose for this service is to include unmanaged accounts or assets owned by the client in the performance reports provided by the Investment Manager. The Investment Manager assumes no liability for the underlying performance of any unmanaged accounts or assets, and it is the client's sole responsibility for the accuracy or correctness of any such performance.
Beginning and ending balances are based on market value plus accrued interest on a trade date basis. Statements and reports made available to the end user either from Public Trust or through the online reporting platform may present information and portfolio analytics using various optional methods including, but not limited to, historical cost, amortized cost, and market value. All information is assumed to be correct, but the accuracy has not been confirmed and therefore is not guaranteed to be correct. Information is obtained from third party sources that may or may not be verified. The data in this report is unaudited and is only applicable for the date denoted on the report. Market values may change day-to-day based on numerous circumstances suchas trading volume, news released about the underlying issuer, issuer performance, etc. Underlying market values may be priced via numerous aspects as certain securities are short term in nature and not readily traded. Performance results are shown net of all fees and expenses and reflect the reinvestment of dividends and other eamings.
Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. Past performance is no guarantee of future results. Any financial and/or investment decision may incur losses.
The investment advisor providing these services is Public Trust Advisors, LLC, an investment adviser registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940, as amended. Registration with the SEC does not imply a certain level of skill or training. Public Trust is required to maintain a written disclosure brochure of our background and business experience. If you would like to receive a copy of our current disclosure brochure, Privacy Policy, or Code of Ethics, or have any questions regarding your account please contact us.
Public Trust Advisors
717 17th St. Suite 1850
Denver, CO 80202
SI
PUBLIC AGENCY
■ RETIREMENT SERVICES
CITY OF BEAUMONT Account Report for the Period
PARS Post -Employment Benefits Trust
Gustavo Romo
Interim City Manager
City of Beaumont
550 East 6th St.
Beaumont, CA 92223
3/1/2026 to 3/31/2026
Account Summary
Source
Balance as of
3/1/2026
Contributions
Balance as of
Earnings Expenses Distributions Transfers 3/31/2026
PENSION
$4,786,698.46 $0.00
-$189,908.61 $2,335.48 $0.00
$0.00 $4,594,454.37
Totals
$4,786,698.46 $0.00
-$189,908.61 $2,335.48 $0.00
$0.00 $4,594,454.37
Investment Selection
Source
PEN ON Moderate - Strategic Blend
Investment Objective
Source
PENSION
The dual goals of the Moderate Strategy are growth of principal and income. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. The portfolio will be allocated between equity and fixed income investments.
Investment Return
Source 1 -Month 3 -Months 1 -Year
PENSION
-3.97%
-0.89%
1143%
3 -Years
Annualized Return
5 -Years 10 -Years
10.21%
Plan's Inception Date
3/14/2022
Information as provided by US Bank, Trustee for PARS; Not FDIC Insured; No Bank Guarantee; May Lose Value Past performance does not guarantee future results. Performance returns may not reflect the deduction of applicable fees, which could reduce returns. Information is deemed reliable but may be subject to change.
Investment Return: Annualized rate of return is the return on an investment over a period other than one year multiplied or divided to give a comparable one-year return.
Account balances are inclusive of Trust Administration, Trustee and Investment Management fees Headquarters - 4350 Von Karman Ave., Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org
BEAUMONT
-C A L I F O R N A -
Staff Report
TO: Honorable Mayor and Members of the City Council
FROM: Lisa Leach, CPA, Interim Finance Director
DATE: May 5, 2026
SUBJECT: 2026 Financial Policies Update
Description: Review of the 2026 Financial Policies Manual Background and Analysis:
Financial policies provide guidelines for financial decision -making and are central to a strategic, long-term approach to financial management. Governments adopt formal financial policies to institutionalize good financial management practices, clarify strategic intent, promote long-term thinking, manage risks, and set decision -making boundaries. GFOA best practices recommend governments formally adopt financial policies. Financial policies, which are adopted by City Council, provide written guidance for how local government officials and staff should approach fiscal issues and core financial areas.
As part of the budget process, each year, the City's financial policies will be reviewed and updated by the finance department and prepared for City Council adoption. The financial policies will also be used during the Citywide audits to assess compliance and risk and will be included in the Cities budget book. Attached is the proposed 2025 City of Beaumont Financial Policies with no recommended updates. The 2026 City of Beaumont Financial Policies were posted to the Finance and Audit Committee meeting on April 27, 2026, but due to lack of quorum, the item was not discussed.
On April 28, 2026 at the budget workshop council discussed the Fund Balance Policies.
Staff would like to highlight the sections below in preparation for the next workshop:
A. General Fund Reserves or Ending Fund Balance Policy. Working Capital Reserve Requirement to remain at 16% of the operating budget. This allows sufficient cash flow throughout the year when revenue receipts are not timely to expenditures. Budget Stabilization Reserve set at $5M to provide city staff time to address an economic downturn without having to dip into the Working Capital Reserve. Emergency Disaster Reserve set at $1M to provide funds that may not be available within the budget to address unforeseen emergency disaster
brought upon by nature or human. NOTE: The Government Finance Officers Association recommends, at a minimum, that general purpose governments, regardless of size, maintain unrestricted fund balance in their General Fund of no less than two months of regular General Fund of no less than two months of regular General Fund operating revenues or regular General Fund operating expenditures.
B. Enterprise Reserves or Ending Fund Balance. The City will show adequate progress towards increasing Enterprise Fund reserves or Unassigned Fund Balance ultimately to 25% of the Enterprise Fund Balance. The City has established a Repair and Replace Reserve. Any funds remaining from a budget year will first address any shortfalls in the operating reserve requirement. Any surplus funds over the operating requirement will be placed in the Repair and Replace fund to meet ongoing capital maintenance needs. These fund balances will be maintained for the following purposes: a) Provide sufficient working capital to meeting daily cash needs to avoid using short-term debt instruments. b) Provide a reserve to absorb emergency expenditures caused by natural disasters such as fire, flood, or earthquake. c) Cover any unanticipated deficit resulting from a shortfall in actual revenues in a given budget year or unanticipated cuts by the State Legislature and Governor of City revenues.
Fiscal Impact:
No fiscal impact is expected for the 2026 Financial Polices update. The cost to prepare this report is $200.
Recommended Action:
Approve the 2026 City of Beaumont Financial Policies.
Attachments:
A. 2026 City of Beaumont Financial Policies Manual
City of Beaumont -Finance Department Policies and Procedures Manual 2026 City of Beaumont
Finance Department
Policies and Procedures Manual
Council Adopted TBD
BEAUMONT
1
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Table of Contents
Introduction 8
AccountingPolicies 9
Introduction 9
Scope 9
Responsibility 9
Accounting Standards 9
GASB 87 — Lease Materiality Policy 10
GASB 96 Subscription -Based Information Technology Arrangement (SBITA) Materiality Policy 11
Measurement Focus 12
Basis of Accounting 12
Assets, Liabilities and Fund Equity 13
Taxes and Other Revenues 16
Revenue Collections 19
Chart of Accounts 19
Periodic Journal Entries 19
Financial Reports 20
Independent Audits 20
Financial Management Policies 21
Introduction 21
Scope 21
Responsibility 21
Financial Policy Goals 21
Affiliated Agencies 22
Annual Budget 22
Budget Goals 22
Budget Appropriations 23
Appropriations Limit 23
Proposition 218 23
Budget Control and Monitoring 24
Review Council Actions 24
Additional Operating Budget Direction 24
Fund Balances 25
Fund Management 28
Enterprise Funds 28
Financial Planning Goals 28
Financial Plans and Forecasts 29
Capital and Other Asset Plans 29
Revenue Goals 30
Unfunded Mandates 30
Interest Earnings 30
Internal Control 31
Budget Adoption Procedures 31
Debt Policy 33
Introduction 33
Long Range Financial Planning and Integration with Capital Improvement Program 33 2
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Debt Limits 34
Debt Structure 34
Credit Objectives 34
Refunding Debt 35
Costs and Fees 35
Method of Debt Offering 35
Types of Debt Financing 36
Statement of Investment Policy 38
Introduction 38
Governing Authority 38
Scope 38
Responsibility 38
Pooling of Funds 39
Objectives 39
Standard of Care 39
Indemnification 40
Ethics and Conflicts of Interest 40
Delegation of Authority 40
Finance Committee 40
Authorized Financial Institutions, Depositories, Broker Dealers, and Competitive Transactions40 Security Safekeeping and Delivery Procedures 41
Internal Controls 42
Authorized Investments 42
Bond Proceeds 47
Note on Credit Quality Requirements 47
Note on Maximum Maturity Limitation 47
Note on Diversification Requirements 47
Note on Other Requirements 47
Prohibited Investments and Practices 48
Managing Portfolio and Investment Risks 48
Performance Standards & Evaluation 49
Reporting and Disclosure 49
Policy Review and Adoption 50
City of Beaumont Investment Policy 50
Glossary of Terms 50
CapilalAssets Policies 60
Objectives 60
Overview 60
Responsibility 61
Definitions 61
Capital Expenditure Definition and Capitalization Policy (Accounting and Financial Reporting)62 Capitalization Valuations 63
Depreciation 64
Inventory Control Policy 65
Impairment 66
Disposal of Fixed Assets 67
System Design 67
Capital Improvement Policies 69
3
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Introduction 69
Scope 69
Responsibility 69
New Construction 69
Capital Project Funding and Construction Categories 69
Capital Project Financing 70
Five -Year Capital Improvements Plan 71
Utility Coordination 71
Five -Year Capital Improvements Plan (CIP) Preparation 71 Capital Project Priority Criteria Considerations 71
Capital Projects Priority Ranking 73
2018-03 Restated Bond Accounting Policies And Procedures 74 Purpose 74
Distribution and Training 74
Timelines 75
Project Cost Approval Processing 75
Trustee Notification 75
Payment Check Processing and Reviews 76
Recordkeeping 76
Exhibit A 77
Schedule 1 78
Restated Bond Disclosure Procedures And Policies 79
Purpose 79
Distribution 79
Background 79
Engagement of Outside Disclosure Counsel 80
Disclosure Process 81
Land Assessment/Tax-Backed Securities 82
Formal "Page Turning" Session 83
Recordkeeping 84
Governing Principles for City Officials and Staff 84
Annual Continuing Disclosure Requirements 85
Training 87
Certificate of Receipt and Understanding 88
Exhibit A 89
Amended and Restated Special Assessment and Community Facilities District Goals and Policies 94 Purpose 94
Policy 94
Finance Staff Review 95
Resource Consultants 95
Eligible Public Facilities, Services And Priority 95
Credit Quality — Value -To -Lien Ratio 96
Security 97
Equity Of Special Tax Formulas And Maximum Special Taxes 98 Terms And Conditions Of Bonds 99
Agreements 100
Use Of Consultants 100
Acquisition Provisions 100
4
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Disclosure To Purchasers 101
Property Owner Support 101
Land Use Approvals 101
Exceptions To These Policies 101
Application Process 102
Special Assessment District Formation Proceedings Format 102 Mello -Roos Community Facilities District Formation Proceedings 103 Roles And Responsibilities 104
Definitions 105
Application 106
Purchasing and Procurement Procedures 114
Ordinance Summary 114
Notes and Exceptions 117
Public Projects 117
Informal Competitive Bidding (Chapter 3.01.09) 117
Exemptions to Competitive Procurement Procedures for Professional Services (3.02.05) 119 Why Purchase Orders? 119
Purchase Order Exceptions 119
Requisition Approval Timing 120
City Departments 120
Approval Levels 120
Finance Department 121
Invoices 121
Prepayments 121
Purchase Order Changes 121
Vendor Limit 122
Recycled Content Paper and Recovered Organic Waste Product Procurement Requirements 122 Grant Policies and Procedures 127
Definition and Purpose 127
Scope 127
Central Responsibility 127
Grant Application Procedures 128
Grant Acceptance Procedures 129
Grant Master File and Fiscal File 130
Grant Monitoring and Reporting 131
Indirect Costs 132
Personnel 132
Grant -Related Procurement and Policy Issues 133
Classification of Grant Revenue 134
Year-end Procedures 134
Grant Closeout 135
Detailed Federal Grant Procurement Policy 135
City Manager Exemption 145
Device 148
Replacement Period 148
Petty Cash Policy 149
Purpose 149
Restrictions 149
5
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Maintaining the Fund 149
Reimbursement of the Fund 150
Exceptions 150
Petty Cash Gift Cards/Certificates 150
Confidential Funds 151
Unclaimed Money Policy 153
Purpose 153
Policy 153
Procedures 153
Glossary 153
Attachments 154
Attachment 1 155
Attachment 2 156
Attachment 3 157
Procurement Card Program Policy 158
Program Introduction 158
Process 158
Card Restrictions 159
Area of Responsibility 159
Procedures for the Cardholder 161
Definitions 164
General Cal -Card Infornlation 164
Electronic Funds Policy 166
Introduction 166
Incoming EFTs: 167
Outgoing EFTS: 167
Fedwire Payments to Vendors (Domestic or International) 167 Employee Direct Deposits 168
When Fraud is Identified 169
Banking Definitions 169
Policy and Procedure Management 169
Deposit -Based Funds Policy 171
Purpose 171
Policy 171
Procedures 172
Donation Acceptance Policy 173
Purpose 173
Definitions 173
General Guidelines 173
Policy 175
Vehicle/Facility/Equipment/IT Internal Service Funds Policy 178 Purpose 178
The purpose of this policy is to provide the City with a process to control unpredictable budgetary variations from year to year by determining where vehicles, equipment, facility and IT infrastructure are in their lifecycle and applying consistent budgetary allocations to a replacement 6
City of Beaumont -Finance Department Policies and Procedures Manual 2026 fund to strategically address aging assets 178
Committee 178
A committee shall be established with responsibility of reviewing aging schedules of such assets and determining the retirement of aging assets and replacement of vehicles, equipment or IT infrastructure as needed. The Committee will follow the Fixed Asset Policy set forth by the City Council on useful life of such assets which is presented below: 178 Required Committee Members: 179
Summary of Review Committee Responsibilities 179
Committee Meeting 179
Fund Replenishment 179
Replacements 180
Component Cost 180
Multi -Functional Units 181
Enhancements 181
Economic Analysis and Revenues 182
Economic Analysis and Revenues 182
Pension Funding Policy 183
Purpose 183
Background 184
Funding Guidelines and Policy Parameters 185
Illustration Of Funding Guidelines and Policy Parameters 189 Governance Procedures 189
Annual Communication and Reporting 189
7
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Introduction
The City of Beaumont has adopted Accounting, Financial management, Investment, Fixed asset, Grant, Procurement, Budget, Capital Improvement and various other policies to provide the framework for managing the City's financial resources and assuring uniformity in all Financial operations. These policies are designed to:
1. Contribute to the confidence in the City operations and the commitment of the City Council, City Manager, and staff to sound fmancial practices.
2. Save time and energy of the City Council and appointed officials. Once certain fmancial decisions are made at the policy level, those policies may be applied to individual situations and issues.
3. Direct attention of the City Council, City Manager, department heads and the public to the City's total fmancial condition and link day-to-day operations with long-range fmancial planning.
4. Contribute to the stability and expeditious handling of the City's financial affairs. The City Council, City Manager and depai tment heads may change overtime, but sound financial accounting policies will be in existence to guide whoever holds these positions. 8
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Accounting Policies
Introduction
The City's accounting policies are the specific principles, guidelines, basis, conventions, rules, regulations and practices applied by the City of Beaumont in accounting for the collection and disbursement of financial resources and in preparing and presenting accurate financial statements of fiscal transactions. Sound and practical accounting policies are the foundation of accurate accounting and reporting of financial information. The City's accounting policies help ensure that the institutional memory of how and why things were done in the past is not lost and serve as an important tool to capture how things are currently done. Accounting policies provide guidelines to support daily operations and sound administrative and policy decision making.
Scope
The City's accounting policies apply to all personnel, departments, divisions, and offices of the City government as well as all associated accounting funds under the direct authority of the City of Beaumont.
These accounting funds include, but are not limited to, the General Fund, Special Revenue Funds, Enterprise Funds, Internal Service Funds, Debt Service Funds, Capital Projects Funds, Private -Purpose Trust Funds and Agency Trust Funds. These accounting policies are also applicable to the City's blended component units, including the Beaumont Utility Authority, the Beaumont Parking Authority, Beaumont Financing Authority, and the Beaumont Public Improvement Authority.
Responsibility
The City Manager is ultimately responsible for the City's implementation and compliance with these policies unless the City Council authorizes exceptions. Under the direction of the City Manager, the Finance Director will review, develop, and implement a system of processes and procedures to ensure compliance with these policies throughout the entire organization. The City Manager will work with the Finance Director to ensure these policies are updated on a timely basis.
Accounting Standards
The annual budget and audited financial statements of the City of Beaumont are prepared in conformity with Generally Accepted Accounting Principles (GAAP) as applicable to government entities. Generally Accepted Accounting Principles (GAAP) are national accounting standards adopted by the Governmental Accounting Standards Board (GASB). The Governmental Accounting Standards Board (GASB) is the nation-wide accepted standards body for establishing governmental accounting and financial reporting principles.
The City also complies with Financial Accounting Standard Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedure.
Beaumont's budget and audited financial statements present the financial position of the City government and its blended component units. Blended component units are entities for which the City is considered to 9
City of Beaumont -Finance Department Policies and Procedures Manual 2026 be fmancially accountable. This includes the Beaumont Utility Authority, the Beaumont Finance Authority, Beaumont Parking Authority, and the Beaumont Public Improvement Authority. These organizations are technically separate legal government entities but are in substance part of the City of Beaumont's government operations. The City Council acts as the board of directors for the Beaumont Utility Authority, Beaumont Parking Authority, the Beaumont Financing Authority, and the Beaumont Public Improvement Authority. City employees serve as the staff for all four of these governmental units. The budget and other financial information from these government entities is combined with the budget and financial data of the City of Beaumont. The Beaumont Utility Authority, Beaumont Parking Authority, Beaumont Financing Authority and the Beaumont Public Improvement Authority have a June 30 date for the end of their fiscal year.
GASB 87 — Lease Materiality Policy
PURPOSE
The purpose of the Lease Materiality Policy is to establish the dollar threshold at which City of Beaumont accounts for leases for external financial reporting purposes.
ADOPTION AND REVIEW
This policy shall be reviewed periodically for recommended revisions in order to maintain the policy in a manner that reflects the ongoing fmancial goals of the City of Beaumont and compliance with Generally Accepted Accounting Principles (GAAP). Finance Department management shall adopt and revise the policy as necessary.
POLICY
3.1. In accordance with Governmental Accounting Standard Board (GASB) Statement No. 87, Leases, a lease is defined as a contract that conveys control of the right to use another entity's nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange -like transactions (i.e., buildings, land, vehicles, and equipment). Any contract that meets this definition should be accounted for under the lease guidance as identified in GASB Statement No. 87. Subject to certain provisions and exceptions noted in the guidance, leases are generally reported as follows in a government's external financial statements:
3.1.1 Lessee: A lessee should recognize a lease liability and a lease asset at the commencement of the lease term. A lessee should reduce the lease liability as payments are made and recognize an outflow of resources (i.e., expense) for interest on the liability. The lessee should amortize the lease asset in a systematic and rational manner over the shorter of the lease term or the useful life of the underlying asset.
3.1.2 Lessor: A lessor should recognize a lease receivable and a deferred inflow of resources at the commencement of the lease term. A lessor should recognize interest revenue on the lease receivable and an inflow of resource (i.e., revenue) from the deferred inflows of resources in a systematic and rational manner over the term of the lease.
3.2. Effective July 1, 2024, The City of Beaumont has established a materiality dollar threshold for determining the inclusion or exclusion of leases in the external financial statements, both as lessee and lessor. At the commencement of the lease term, City of Beaumont will analyze the terms and 10
City of Beaumont -Finance Department Policies and Procedures Manual 2026 provisions of the lease agreement (contract) in order to calculate the value of the underlying asset.
3.2.1 An individual lease agreement (contract) that generates a right -to -use underlying asset value calculated at greater than or equal to $25,000 will be included in the external financial statements.
3.2.2 A lease agreement (contract) with an underlying asset value less than $25,000 may be included in the external financial statements at the discretion of City of Beaumont Finance management should it be determined that its exclusion might otherwise cause the financial statements to be incomplete or misleading in some manner.
GASB 96 - Subscription -Based Information Technology Arrangement (SBITA) Materiality Policy
PURPOSE
The purpose of the Subscription -Based Information Technology Arrangement (SBITA) Materiality Policy is to establish the dollar threshold at which the City of Beaumont accounts for SBITAs for external financial reporting purposes.
ADOPTION AND REVIEW
This policy shall be reviewed periodically for recommended revisions in order to maintain the policy in a manner that reflects the ongoing financial goals of the City of Beaumont and compliance with Generally Accepted Accounting Principles (GAAP). Finance Department management shall adopt and revise the policy as necessary.
POLICY
3.1. In accordance with Governmental Accounting Standard Board (GASB) Statement No. 96, Subscription -Based Information Technology Arrangements, a SBITA is defined as a contract that conveys control of the right to use another party's (a SBITA vendor's) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time m an exchange or exchange -like transactions. Any contract that meets this definition should be accounted for under the SBITA guidance as identified in GASB Statement No. 96.
3.2. Subject to certain provisions and exceptions noted in the GASB guidance, SBITAs are generally reported as a right -to -use subscription asset — an intangible asset — and a corresponding subscription liability in a government's external financial statements:
3.3. Effective July 1, 2024, City of Beaumont has established a materiality dollar threshold for determining the inclusion or exclusion of SBITAs in the external financial statements. At the commencement of the SBITA term, City of Beaumont will analyze the terms and provisions of the agreement (contract) in order to calculate the fixed and fixed in -substance future payments to the end of the subscription term.
33.1 An individual agreement (contract) that generates future payments over the subscription term 11
City of Beaumont -Finance Department Policies and Procedures Manual 2026 calculated at greater than or equal to $25,000 will be included in the external financial statements.
3.3.2 An agreement (contract) that generates future payments over the subscription term calculated at less than $25,000 may be included in the external financial statements at the discretion of City of Beaumont Finance Department management should it be determined that its exclusion might otherwise cause the financial statements to be incomplete or misleading in some manner.
Measurement Focus
The accounting and reporting treatment applied to a Fund is determined by its measurement focus. All Governmental Funds (General Fund, Special Revenue Funds and Debt Service Funds) are accounted for on a flow of current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Governmental Fund operating statements and budgets present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.
All Proprietary Funds (Internal Service Funds and Enterprise Funds) and all Fiduciary Funds are accounted for on a flow of economic resources measurement focus. This means that all assets and all liabilities (whether current or non -current) associated with this activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary Funds operating statements present increases (revenues) and decreases (expenses) in net total assets.
Basis of Accounting
Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the City's financial statements. The Basis of Accounting relates to the timing of revenue recognition in the City's fmancial statements regardless of Measurement Focus applied. The accounting basis in the City's annual budget is the same as accounting basis in the City's annual audited financial statements.
1. Governmental Fund Types (Tax Supported Activities). The modified accrual basis of accounting is used by the City of Beaumont to apply revenues to expenditures in its Governmental Funds. Under the modified accrual basis of accounting revenues are recorded when they become measurable and available to pay for expenditures of the current period. "Measurable" means that the amount of the transaction can be determined. "Available" means collectible within the current period or soon enough thereafter to pay liabilities.
Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met.
Taxes, intergovernmental revenues, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and are therefore recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current period is considered to be susceptible to the accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. 12
City of Beaumont -Finance Department Policies and Procedures Manual 2026 The City of Beaumont considers all revenues available if they are collected within sixty (60) days after the end of the fiscal year. Revenues that are accrued include property taxes, franchise fees, interest revenue and charges for service. Sales taxes and motor vehicle license fees collected and held by the state at year end on behalf of the City are also recognized as revenue. Licenses, permits and fines are accrued when received as they are not measurable until received in cash. Investment earnings are recorded as earned. Other receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time.
Entitlements and shared revenues are recorded at the time of receipt or earlier if accrual criteria are met.
Expenditure -driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met.
The City reports deferred revenue on its balance sheet. Deferred revenues arise when potential revenue meets the asset recognition criteria but does not meet both the "measurable" and "available" revenue criteria for recognition in the current period. Deferred revenues also arise when the City receives resources before it has a legal claim to them, such as when grant monies are received prior to the incurring of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized.
2. Proprietary Fund Types (Business -Type Activities) and Fiduciary Fund Types (Resources Held in Trust). Expenditures are generally recognized in Enterprise Funds, Internal Service Funds, Private Purpose Trust Funds, and Agency Trust Funds under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt which is recognized when due. Certain compensation absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Under this method revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
Assets, Liabilities and Fund Equity
1. Cash and Investments. Cash and cash equivalents represent the City's cash bank accounts including, but not limited to, certificates of deposit, money market funds and cash management pools for reporting purposes. Additionally, investments with maturities of three months or less when purchased are included as cash equivalents.
The City maintains a cash and investment pool that is available for use by all Funds. Interest earnings as a result of this pooling are distributed to the appropriate funds based on month -end cash balances in each fund. Cash is divided into three risk levels in accordance with standards that have been developed by the Governmental Accounting Standards Board (GASB) in Statement No. 3:
A. Category 1 Investments. Insured or collateralized investments with securities held by the City of Beaumont or by its agent in the City's name.
B. Category 2 Investments. Collateralized investments with securities held by the pledging financial institution's trust department or agent in the City's name.
C. Category 3 Investments. Uncollateralized investments. This includes any bank balance that 13
City of Beaumont -Finance Department Policies and Procedures Manual 2026 is collateralized with securities held by the pledging financial institution, or by its trust department or agent, but not in the City of Beaumont' name.
In accordance with Governmental Accounting Standards Board (GASB) 31, all City investments are stated at fair value. Fair value is based on the quoted market prices as of the valuation date. Aside from investments clearly identified as belonging to a specific fund, any unrealized gain/loss resulting from the valuation will be recognized within the General Fund to the extent cash and investments' balance exceeds the cumulative value of those investments subject to Governmental Accounting Standards Board (GASB) 31.
The fair value of the City's investment in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 is reported in the City's financial records and financial statements at amounts based on the pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
2. Internal Controls. The internal control structure of the City of Beaumont is designed to ensure that the assets of the City are protected from loss, theft, or misuse. It is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. Internal controls within the City of Beaumont address the following issues:
A. Control of Collusion. Collusion occurs where two or more employees work in conjunction to defraud the City. The City has an organizational structure and operational policies and procedures that are designed to prevent collusion.
B. Separation of Transaction Authority from Accounting and Record Keeping. The City has segregated job duties so that the person who authorizes or performs the transactions is different from the person who records or otherwise accounts for the transaction. The City's Finance Department has divided duties and record keeping among employees with a Finance Director overseeing day-to-day operations.
C. Custodial Safekeeping. Funds collected by the City are deposited into the bank once a week.
Any small amounts of cash held at the end of the day are placed in a safe. Securities purchased from any bank or dealer (including appropriate collateral) for short-term or long-term cash investments are placed with an independent third party for custodial safekeeping.
D. Avoidance of Physical Delivery of Securities. The City avoids the physical delivery of securities. Book -entry securities are easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.
E. Clear Delegation of Authority to Subordinate Staff Members. Staff members in the Finance Department have a clear understanding of their authority and responsibilities to avoid improper actions. Clear designation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities.
F. Written Confirmation of Transactions for Investments and Wire Transfers. Due to the 14
City of Beaumont -Finance Department Policies and Procedures Manual 2026 potential for error and improprieties arising from telephone and electronic transactions, all transactions are supported by written communications and approved by the authorized supervisor.
Written communications may be via -email if on letterhead and if the safekeeping institution has a list of authorized signatures.
G. Wire Transfer Agreement with Lead Bank. The City has a wire transfer agreement with its bank that addresses controls, security provisions and responsibilities of each party making and receiving wire transfers.
3. Accounts Receivable. Billed but unpaid services provided to individuals or non -Government entities are recorded as "accounts receivable." The Proprietary Funds include a year-end accrual for services through the end of the fiscal year, which have not yet been billed. Accounts receivables are reported in net of an allowance for uncollectible accounts in the Enterprise Funds.
4. Compensated Absences. It is the City's policy to permit employees to accumulate earned (but unused vacation), sick pay and compensatory time benefits up to the limits imposed in the City of Beaumont Personnel Manual. Vested or accumulated vacation, holiday and sick leave along with any compensatory time that is expected to be paid with expendable available financial resources is reported as an expenditure and fund liability in the Governmental Fund that will pay for it. Amounts not expected to be liquidated with expendable available financial resources are reported in the General Long -Term Debt Account Group. No expenditure is reported for these amounts. Vested leaves in Enterprise Funds are recorded as an expense and liability as the benefits accrue.
5. Long -Term Liabilities. The City reports long-term debt of Governmental Funds at face value. Long- term liabilities for all Governmental Funds and Fiduciary Funds do not affect net current assets and are not included on their respective balance sheets in previous years. Long-term liabilities of proprietary and non -expendable trust funds are accounted for in the respective funds.
6. Inventory. Inventory is valued at the cost that approximates market, using first -in, first -out (FIFO) method. The consumption method is used to account for the inventory of Governmental Funds including the General Fund, Special Revenue Funds and Capital Projects Funds. The value of the City's office supply inventory is not considered material and as a result, no inventory value is shown in the City's financial statements or in the annual budget.
7. Bond Discounts. In Governmental Funds, bond premiums, discounts, and issuance costs are recognized in the current period. Bond discounts are presented as a reduction of the face amount of the bonds payable. Issuance costs are reported as an expenditure of the period. For Proprietary Funds, bond premiums and discount, with issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs are reported as deferred charges.
8. Called Developer Bonds. Revenues from called developer bonds arising from contract defaults are deferred and recognized as revenues when the related costs to complete the project are incurred by the City.
9. Unappropriated Fund Balance and Unreserved Cash and Investments. The Unappropriated Fund Balance in Governmental Funds and Unreserved Cash and Investments balances in Proprietary Funds indicate that portion of Fund Equity which is available for appropriation in future periods.
Restricted Fund Balances or Reserved Fund Equity indicates that a portion of Fund Balance or Fund Equity has been segregated for specific purposes or is not available for appropriation. Reservations of 15
City of Beaumont -Finance Department Policies and Procedures Manual 2026 retained earnings are limited to outside third -party restrictions.
10. Contributed Capital. Contributed capital are non -cash assets recorded in Enterprise Funds and General Fund and primarily represents infrastructure such as water lines, sewer lines or assets received from other funds, developers, or customers. Contributed capital designations in the Enterprise Funds cannot be spent for operating or capital needs.
Taxes and Other Revenues
1. Property Taxes. Riverside County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions. Property tax is imposed on real property (land and permanently attached improvements such as buildings) and tangible personal property (moveable property) located within the state. The California property tax is ad valorem, based on the value of the property rather than on a fixed amount or benefit to the property or persons. Intangible assets and rights are not subject to taxation except to the extent that they are necessary to put real property interests to beneficial or productive use. Taxable property includes land, improvements, and other properties that are accounted for on the property tax rolls, which are primarily maintained by the Riverside County Assessor.
Tax rolls contain an entry for each parcel of land, including parcel number, owner's name, and value.
The amount of the tax is based on an annually determined assessed valuation. The property tax is paid to the county tax collector and allocated to local taxing agencies. The property tax is guaranteed by placing a lien on the real property. For this reason, types of properties are distinguished as secured or unsecured.
Certain special exemptions to the standard assessment rules are provided in the State Constitution and state law. These exemptions include federal and state-owned property, municipal owned property except property outside the legal boundaries of the agency, homeowners' property tax exemption, property owned, irrevocably dedicated to religious, hospital, cemeteries and schools and the California Air Patrol; Williamson Act; disabled veterans; and other exemptions.
Property taxes are levied in equal installments on November 1 and February 1. They become delinquent respectively on December 10 and April 10. The lien date is March 1 of each year. Property taxes are accounted for in the City of Beaumont General Fund. The City is permitted by Article XIIIA of the State of California Constitution (known as Proposition 13) to levy a maximum of $1.00 per $100 of full cash value.
Property tax revenues are recognized when they become measurable and available to finance current liabilities. The City considers property taxes as available if they are collected within 60 days after the end of the fiscal year.
Property tax on the unsecured roll is due on the March 1 lien date and become delinquent if unpaid on August 31. However, unsecured property taxes are not susceptible to year-end accrual. Taxes on individual pieces of property may be delinquent up to five years before the property is sold for delinquent taxes.
Under state statute, the County Treasurer, acting as a tax collector, must settle and disburse all current tax collections to all taxing units by the end of March following the taxing year. Delinquent taxes are collected throughout the year and dispersed to the taxing units on a routine basis.
The City receives property taxes under the "Teeter Plan." The Teeter Plan allows cities to collect 100% of assessed taxes each year in lieu of receiving only those taxes collected by the County. Riverside County receives the penalties and interest when delinquent taxes are collected in future years. The County benefits by charging interest substantially higher than market rates when the delinquent taxes are collected. 16
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2. Sales and Use Taxes. California sales tax is imposed on retailers for the privilege of selling tangible personal property. A portion of the tax is a state tax, and a portion is locally imposed. The tax base for the sales tax is the retail price of tangible personal property. Tangible personal property is any material asset, such as household goods and business equipment which is readily moveable and not permanently attached to real property. Sales tax applies to a transaction if (1) the seller's registered place of business in California participates in the sale and (2) title to the goods passes to the customer within the state.
The use tax complements the sales tax. It is imposed on the storage or use, or other consumption in California of property purchased from a retailer in cases where the sales tax is not collected. While sales tax is imposed on the seller, the use tax is imposed on the purchaser and at the same rates as the sales tax. The use tax was first imposed in 1935, in order to discourage buying from out of state solely for the purpose of avoiding state sales tax, and thereby placing California retailers at a competitive disadvantage. On April 25, 2019, Governor Newsom signed AB 147, which imposes the obligation to collect applicable transactions and use tax on all sales made for delivery in any city or county that impose a transactions and use tax and applies to a retailer whether inside or outside of California if, during the preceding or current calendar year, the total combined sales of tangible personal property in California or for delivery in California by the retailer and all persons related to the retailer exceed $500,000. Sales and use taxes are collected by the California Department of Tax and Fee administration (CDTFA) and remitted to the City quarterly. Sales and use taxes are recorded as revenues when received by the California Department of Tax and Fee administration (CDTFA).
3. Franchise Fees. Revenue received from the Gas Company for the ability to lay and use pipes and appurtenances for the transmitting and distribution of gas pursuant to Ordinance No. 339.
Revenue is remitted on a yearly basis, anticipated in April, for the prior year.
Revenue received from Southern California Edison for the use, construction, and transmission and distribution of electricity to the public for all purposes pursuant to Ordinance No. 251.
Revenue is remitted on a yearly basis, anticipated in April, for the prior year.
Revenue received from Waste Management for the exclusive franchise to collect, remove, and dispose of solid waste in the City's service area pursuant to the Collection Services Agreement for the Provision of Residential and Commercial Garbage, Recyclable Materials and Organic Wase Collection Services. Revenue is remitted on a quarterly basis.
Cable and Video franchise fees are collected from Charter and Frontier as "rent" or "toll" for the use of the streets and rights -of -way of a municipality. Payments are received on a quarterly basis. Additionally, Franchises are required to remit payment for the support of Public, Educational, and Governmental Access (PEG) fee. These payments are remitted on a quarterly basis.
4. Utility User Tax (UUT) A Utility User Tax is imposed for the consumption of utility services, including (but not limited to) electricity, gas, water, sewer, telephone, sanitation, and cable television.
This tax is the responsibility of the consumer. The tax is collected by the utility company as part of its normal billing processes and remitted to the City on the consumer's behalf. The revenue received from this tax can be used for general business purposes. Revenue is received on a monthly basis for monies collected in the prior month.
5. Transient Occupancy Tax (TOT) A Transient Occupancy Tax is imposed on occupants staying in room(s) within a hotel, motel, inn, etc for a period less than 30 days. Owners of these establishments are responsible for collecting TOT from it's consumers and remitting the funds back to the City. Revenue 17
City of Beaumont -Finance Department Policies and Procedures Manual 2026 is received on a quarterly basis.
6. Business License Tax The City imposes a business license tax on person(s) or entities for the privilege of conducting business within the City. The tax is most commonly based on gross receipts or levied at a flat rate. However, the business license tax can also be based on number/type of employees, units/spaces for rent, manufacturing weight, etc.... Majority of revenue is received between June and July as business license renewals are due June 30 of each year. However, revenues are received throughout the year due to new applications and late renewals.
7. Development Impact Fee Revenues The City seeks to recover some of the cost of growth through development impact fees on new developments in the City of Beaumont. As Beaumont's population grows, the demand for the expansion of public infrastructure and the purchase of capital equipment needed to serve new development in the City increases.
State law allows (State Mitigation Fee Act, Government Code 66000 et. seq.) and fairness dictates that the new residents creating the need for expanded infrastructure and additional equipment capital costs should make a contribution to their acquisition in the form of development impact fees. Development impact fees are collected by the City of Beaumont for the expansion of public infrastructure and facilities and the purchase of capital equipment needed for new development in the City. All development impact fees are deposited in separate special revenue and expenditure accounts in a separate Special Revenue Fund specifically designated for the particular development impact fee. Development impact fees can only be spent for capital purchases due to growth and are not used for salary or maintenance or operation expenditures.
California Government Code Section 65940.1 and Section 66016.5 require cities, counties, and special districts to update development impact fee information which includes:
Nexus Studies — Local agencies must prepare and adopt an impact fee nexus study to establish the legal and policy basis for adopting or increasing development impact fees. Nexus studies must be updated at least once every eight years. The City of Beaumont will make all attempts to update the nexus study at least every five -years.
8. Other Revenues Outside of taxes, the City earns revenues through regulatory fees and services rendered. These revenues are received throughout the year. Below is a listing of other revenue sources but is not inclusive of all revenues.
Regulatory fees include the following:
• Building and zoning permits;
• Zoning Variances and changes;
• Building and safety inspections;
• Fire inspections;
• Planning services;
• Permits;
• Alarm permits;
• Pet licenses;
Services provided include but are not limited to:
• School Resource Officers;
• Livescan services;
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 • Graduation patrol;
• Football patrol;
• Park rentals;
• Building rentals
Revenue Collections
The City will use all cost-effective means available to collect revenues due.
The Finance Department is responsible for ensuring all Accounts Receivable are properly pursued and accounted for, which includes an aging of each receivable and the development of a bad debt policy. The Finance Department will ensure, on an annual basis, that a report is provided to the City Council on the condition of the City's collection efforts and any accounts receivable and the development of a bad debt policy. The Finance Department will ensure, on an annual basis, that a report is provided to Council on the condition of the City's collection efforts and whether any accounts receivable should be written off.
The Mayor and City Council must approve any fee waivers.
Chart of Accounts
The City Chart of Accounts is a carefully arranged system classifying financial transactions for budgeting, accounting, and reporting purposes. The Chart of Accounts does the following:
1. Defines each account in order to assure uniform treatment in the classification recording and summarization of accounting transactions.
2. Provides a consistent basis for reporting accounting financial and related information to facilitate effective and meaningful communications with the public, bond investors, City departments City Manager and City Council.
3. Provide flexibility for other reporting needs as required for ongoing operations of the City.
Periodic Journal Entries
The Finance Director is responsible for seeing that the following journal entries are prepared and posted as appropriate to the General Ledger:
1. Monthly or Quarterly Postings to General Ledger. Monthly postings to the General Ledger include, but are not limited to, payroll related postings, including deferred compensation and contributions to the California Public Employees' Retirement System, tax receipts, wire transfers, bank account charges, investment earnings, transfers between funds, voided and non -sufficient fund checks, budget appropriation changes, reconciliation adjustments and miscellaneous entries including reclassifications.
2. Annual Postings to General Ledger. Annual postings to the General Ledger include, but are not limited to, accounts payable from invoices, accounts receivable from billings, grant accruals and/or deferrals, land transactions, fiscal agent activity on Community Facilities District (CFD) bonds or other bond issues, interest on notes receivable, capital asset transactions, reimbursements due to and due from accounts, deferred revenue and other accruals as required. 19
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Financial Reports
The City staff prepares appropriate monthly financial statements reflecting the operations of individual Funds for internal use by the City Council, City Manager, department heads and the general public. The City adheres to a policy of full and open public disclosure of all financial documents.
Independent Audits
An independent audit of the City's financial statements is conducted each year by an independent Certified Public Accounting firm. The City also participates in a number of federal and state assisted grant programs, which are subject to annual financial and compliance audits.
Staff will regularly use competitive processes to select and rotate new independent auditors that will be responsible for the annual audit of financial records in accordance with state and federal guidelines and generally accepted auditing standards.
The Annual Comprehensive Financial Report (ACFR) or audited financial statements along with the Management Letter and responses from management, will be completed and shared with the City Council. 20
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Financial Management Policies
Introduction
The City of Beaumont is accountable to the community for the use of public dollars. Municipal resources will be used wisely to ensure adequate funding for the services, public facilities, and infrastructure necessary to meet the community's present and future needs. Financial management policies serve as the blueprint to achieve the fiscal stability and accountability required to meet the City's goals and objectives.
Scope
The City's financial management policies apply to all personnel, depaitiiients, divisions, and offices of the City government as well as all associated accounting funds under the direct authority of the City of Beaumont. These accounting funds include, but are not limited to, the General Fund, Special Revenue Funds, Enterprise Funds, Internal Service Funds, Debt Service Funds, Capital Projects Funds, Private -Purpose Trust Funds and Agency Trust Funds. These financial management policies are also applicable to the City's blended component units, including the Beaumont Utility Authority, Beaumont Parking Authority, Beaumont Financing Authority and Beaumont Public Improvement Authority.
Responsibility
The City Manager is ultimately responsible for the City's implementation and compliance with these policies, unless the City Council authorizes exceptions. Under the direction of the City Manager, the Finance Director will review, develop, and implement a system of processes and procedures to ensure compliance with these policies throughout the entire organization. The City Manager will work with the Finance Director to ensure these policies are updated on a timely basis.
Financial Policy Goals
The objectives for comprehensive management policies are to:
• Guide City Council and City Management decisions that have significant fiscal impact. • Support the planning for financial sustainability and long-term needs. • Maintain and protect City assets and infrastructure.
• Set forth operating principles that minimize the financial risk in providing City services. • Optimize the efficiency and effectiveness of services to reduce the costs and improve service quality.
• Employ balanced and fair revenue policies that provide adequate funding for desired programs. • Promote sound financial management by providing accurate and timely information on the City's financial condition to the City Council and community.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 • Maintain and enhance the City's credit ratings and prevent default on any municipal financial obligations.
• Ensure the legal and ethical use of financial resources consistently with Council policy through an effective system of internal controls.
• Promote cooperation and coordination within the City, and other governments and with the private sector in the financing and delivery of services.
• Provide the appropriate level of accountability in the use of public resources.
Affiliated Agencies
If agencies have been created through Council action, intergovernmental agreements, and state and federal laws, they should be managed with the same financial standards as City agencies. To protect the City's fiscal status and avoid an adverse effect on the City, affiliated agencies will be accountable for fmancial compliance and reporting standards as described in the City's Financial Management Policies. The City may audit financial records or performance data to ensure funds are spent in accordance with Council directions and policies. Affiliated agencies include, but are not limited to, agencies created by Council action, agencies with leadership appointed by the City Council and agencies that receive a majority of funds from the City.
Annual Budget
The annual budget is the primary mechanism for the implementation of City Council policies and the achievement of their goals and objectives. The budget is a policy document, operations guide, financial plan and a communications device. It is the single most important means of setting spending policies and priorities of the City. It constitutes approval by the City Council of service levels and operating programs and provides resources to finance them. Expenditures must be kept within total appropriations for all Accounting Funds.
Budget Goals
The City will develop and implement a budget process that will:
• Make prudent use of public resources.
• Include financial forecast information for resources, uses and ending fund balances to ensure that the City is planning adequately for current and future needs. • Provide adequate opportunity for public review and input. • Provide adequate opportunity for City Council review and deliberations. • Provide information on accomplishments and strategic goals. • Comply with City Code, State of California Local Budget Law, bond covenants and other promulgations.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 The City Manager will develop and present a proposed City budget to the Mayor and City Council for consideration and adoption. The City Manager's proposed budget will opine on the short and long-term financial condition of the City, identify policy and financial and service issues, identify any use of one-time funds to support ongoing operations or key changes from previous years, identify funding requirements and sources of funds, provide supplemental information on programs and service areas, include budget and performance details for all City organizations and related recommendations to the City's vision and goals.
The Finance Department will issue guidelines and rules for the preparation and review of the department budget requests to the Mayor and City Council, including a proposed annual budget process and calendar.
The proposed process and calendar will support community input and Council deliberations.
Budget Appropriations
All Accounting Funds are included in the annual budget and all revenues and other financing sources are appropriated by the City Council each fiscal year in the annual budget. All Accounting Funds included in the City's annual audited financial statements are reviewed by the City's independent certified public accountants. The accounting basis in the City's annual budget is the same as the accounting basis used by the City's annual audited financial statements. Annual operating budgets in the General Fund and Enterprise Funds are carefully reviewed to ensure that budget appropriations are conservative because the City feels government units' function more efficiently under conservative budgets than where excess funds are made available.
Appropriations Limit
Under Article XIIIB of the California Constitution (the GANN Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must be either refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements.
Proposition 218
Proposition 218, approved by the voters in November 1996, regulates the City's ability to impose, increase and extend taxes, assessments, and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218 maybe subject to a protest hearing process. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may be rescinded in the future by the voters. Therefore, the City's ability to finance the services for which the taxes, assessments and fees are imposed may be significantly impaired. Under Proposition 218:
1. Revenues derived from a property related fee must not exceed the funds required to provide the proportionate cost of the property related service. (The total cost limitation)
2. Revenues derived from the fee must not be used for any purpose other than for that which the fee is imposed. (The proportional cost limitation)
3. Fees may not be imposed for a service unless the services is actually used by, or immediately available to, the owner of the property subject to the fee. Fees based on potential or future use of a service are not permitted and stand-by charges must be classified as assessment subject to the ballot protest and proportionality requirements for assessments. (The future services prohibition) 23
City of Beaumont -Finance Department Policies and Procedures Manual 2026
4. No fee or charge may be imposed for general governmental services, such as police, fire, ambulance, or libraries, where the service is available to the public in substantially the same manner as it is to property owners. (The general government service prohibition) A public agency has the burden to prove compliance with these provisions if a fee is challenged in court.
Budget Control and Monitoring
The City Council appropriations and control points will be at the depai anent level within each accounting fund. These City Council adopted appropriations and employee counts cannot be exceeded without City Council approval. The City Manager will have the authority to amend budgets within a departmental appropriation but changes in employee counts must be approved by the City Council. The Finance Department will maintain a system of tools for departments to manage their budgets and for financial monitoring and control of the City's budget during the fiscal year. This system will provide the departments, Mayor and City Council with information on revenue, expenditures and budget performance at both the department and fund level. The system will include provisions for amending the budget during the year in order to comply with this policy and State of California budgetary statutes.
The City Manager, through the Finance Department, will periodically report to the City Council financial status reports on revenues and expenditures to date, and the estimated year-end fund balances. The City Manager will, on a quarterly basis, review all City financial operations, report to Council on financial results and recommend financial actions necessary to meet the adopted budget's financial planning goals.
The mid -year budget monitoring report, audited financial statements, audit opinion and management letter will be presented to the Mayor and City Council for review and discussion as an action item on a City Council agenda. Any additional financial resources, whether additional projected revenues produced them or higher beginning fund balances, should be set aside for the next budget cycle. Any negative financial results should be highlighted, and a proposed plan of action should be provided to the Mayor and City Council for review and approval. General Fund discretionary resources that exceed budgeted amounts should be added to the General Fund contingency, except for funds allocated to infrastructure maintenance or replacement.
Review Council Actions
The City Manager, through the Finance Department, will review any proposed City Council actions. The objective of these reviews will be to ensure compliance with the City's budget direction and identify financial and service issues for the Council. The Finance Department will identify financial and service issues for the City Council. The Finance Department will establish and issue procedures and forms to submit fiscal impact statements for proposed Council actions.
Additional Operating Budget Direction
1. Balanced Budget. Financial resources shall be equal to or exceed expenditures in each accounting fund. Each City fund must identify on -going financial resources that at least match expected ongoing requirements. One-time resources and non -recurring ending balances may either be applied to reserves or used to fund one-time expenditures; they will not be used to fund ongoing programs, except as provided in Section 2. Each year the Finance Director will provide the City Council with the amount of discretionary revenue that is estimated to be non -recurring for the General Fund.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026
2. One-time Funds. One-time funds can be used for ongoing expenditures only as a plan for:
(1) Transitioning to a permanent funding source,
(2) leading to organized program elimination, or
(3) as part of verifiable plan to address an existing recessionary period. Scenario 3 should be documented in the City's multi -year financial forecast.
3. General Discretionary Revenues. Unless otherwise explicitly stated by the Mayor and City Council, the City will not dedicate discretionary revenues for specific purposes in the General Fund.
This will preserve the ability of the Mayor and Council to determine the best use of available revenues to meet changing service requirements.
4. Transfers Between Funds. A schedule of all transfers between funds will be identified, explained, and appropriated in the Proposed and Adopted Budget. Any additional budget transfers between accounting funds will require City Council action.
5. Efficiency and Effectiveness. The City will optimize the efficiency and effectiveness of its services to reduce costs and improve service quality. The City will coordinate its service delivery with other applicable public and private service providers and seek the most cost-effective method for service delivery.
6. Self-Supporting/Full Cost Recovery Basis. The City will attempt to recover the costs of services providing a private benefit to users through the imposition of user fees and charges. The fees and charges will be based on cost accounting standards consistent with state or federal law when applicable. Fees and charges should include full costs i.e., direct, indirect, depreciation, interest charges, etc. and the Finance Director will ensure an annual user fee and charges schedule is regularly updated and approved by Council.
7. Recovery of Indirect or Overhead Costs. The City will endeavor to recover indirect or overhead costs through their allocation towards the calculation of user fees and charges or inter -fund charge.
However, a reasonable cost allocation methodology must be used consistent with Generally Accepted Accounting Principles (GAAP).
8. Contingencies. The City will budget a contingency account for each operating fund adequate to address reasonable but unforeseen requirements within the fiscal year.
9. Unexpended Appropriations at the End of the Fiscal Year. Unexpended appropriations cannot be used in subsequent fiscal years unless re -appropriated by the City Council.
Fund Balances
1. Definition and Purpose.
A. Governmental Funds. Accountants employ the term "Fund Balance" to describe the net assets of Governmental Funds calculated in accordance with generally accepted accounting principles (GAAP). Budget professionals commonly use this same term to describe the net assets of Governmental Funds calculated on a government's budgetary basis. In both cases, "Fund Balance" is intended to serve as a measure of the financial resources available in a Governmental Fund. It is essential the City of Beaumont maintain adequate levels of fund balance to provide working capital, mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) and to 25
City of Beaumont -Finance Department Policies and Procedures Manual 2026 ensure stable tax rates. Fund balance levels are also a crucial consideration in long-term financial planning.
B. Enterprise and Fiduciary Funds. The "Cash and Investment Fund Balance" is that portion of fund equity that can be used for operating, capital and debt service expenditures, and is intended to serve as a measure of the financial resources available in an Enterprise Fund. It is essential the City of Beaumont maintain adequate levels of cash and investment fund balances to provide working capital, mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) and to ensure stable utility rates. Cash and investment fund balance levels are also a crucial consideration in long-term financial planning.
Credit rating agencies carefully monitor levels of fund balance in a government's General Fund to evaluate a government's continued creditworthiness. Those interested primarily in a government's creditworthiness or economic conditions are likely to favor higher levels of fund balance. Opposing pressures often come from employee unions, taxpayers, and citizens' groups, which may view high levels of fund balance as "excessive."
2. Classification of Governmental Fund Balances.
Governmental Fund balances are classified into the following categories:
A. Nonspendable Fund Balances. Non -Spendable Fund Balances consist of items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.
B. Restricted Fund Balances. Restricted Fund Balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributions, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.
C. Committed Fund Balances. Committed Fund Balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body through City Council resolutions, etc., and that remain binding unless removed in the same manner.
D. Assigned Fund Balances. Assigned Fund Balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the City Manager for that purpose.
E. Unassigned Fund Balances. This category is for any balances that have no restrictions placed upon them.
3. Fund Balance Policy Considerations.
In establishing a policy governing the level of unrestricted (unreserved) fund balance in governmental funds and cash and investment fund balance in its Enterprise Funds, the City Council takes into consideration the following factors:
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 A. The predictability of its revenues and the volatility of its expenditures (i.e., higher levels of unrestricted (unreserved) fund balance may be needed if significant revenue sources are subject to unpredictable fluctuations or if operating expenditures are highly volatile).
B. The availability of resources in other funds as well as the potential drain upon General Fund resources from other funds (i.e., the availability of resources in other funds may reduce the amount of unrestricted (unreserved) fund balance needed in the General Fund, just as deficits in other funds may require that a higher level of unrestricted (unreserved) fund balance be maintained in the General Fund.
C. Liquidity (i.e., disparity between financial resources actually become available to make payments and the average maturity of related liabilities may require that a higher level of resources be maintained.)
D. Designations (i.e., the City of Beaumont may wish to maintain higher levels of Unrestricted (unreserved) fund balance to compensate for any portion of unrestricted (unreserved) fund balance already designated for a specific purpose).
4. Fund Balance Policies.
A. General Fund Reserves or Ending Fund Balance Policy. Working Capital Reserve Requirement to remain at 16% of the operating budget. This allows sufficient cash flow throughout the year when revenue receipts are not timely to expenditures. Budget Stabilization Reserve set at $5M to provide city staff time to address an economic downturn without having to dip into the Working Capital Reserve. Emergency Disaster Reserve set at $1M to provide funds that may not be available within the budget to address unforeseen emergency disaster brought upon by nature or human. NOTE: The Government Finance Officers Association recommends, at a minimum, that general purpose governments, regardless of size, maintain unrestricted fund balance in their General Fund of no less than two months of regular General Fund of no less than two months of regular General Fund operating revenues or regular General Fund operating expenditures.
B. Enterprise Reserves or Ending Fund Balance. The City will show adequate progress towards increasing Enterprise Fund reserves or Unassigned Fund Balance ultimately to 25% of the Enterprise Fund Balance. The City has established a Repair and Replace Reserve. Any funds remaining from a budget year will first address any shortfalls in the operating reserve requirement.
Any surplus funds over the operating requirement will be placed in the Repair and Replace fund to meet ongoing capital maintenance needs.
These fund balances will be maintained for the following purposes:
a) Provide sufficient working capital to meeting daily cash needs to avoid using short-term debt instruments.
b) Provide a reserve to absorb emergency expenditures caused by natural disasters such as fire, flood, or earthquake.
c) Cover any unanticipated deficit resulting from a shortfall in actual revenues in a given budget year or unanticipated cuts by the State Legislature and Governor of City revenues. 27
City of Beaumont -Finance Department Policies and Procedures Manual 2026 When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the City's policy is to apply restricted fund balances first, then unrestricted fund balances as they are needed.
When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses unrestricted resources in the following order: committed, assigned, and unassigned.
When the unrestricted (unreserved) fund balance of the General Fund exceeds the amount needed for the above purposes, the City Manager through the Finance Department will bring an item to Council for options of use that meet the strategic goals that have been established within the budget process.
Restricted (reserved) fund balances in the General Fund, Special Revenue Funds, and Capital Projects Funds will be separated out and identified in the City's accounting records, financial statements, budgets, and audit reports. This same policy is followed with respect to restricted amounts in the cash and investment balances of the Enterprise Funds. The purpose of this policy is to show the City Council, staff, and the public what funds in these balances are unrestricted and what funds are to be used for specific purposes.
Fund Management
Creation of new funds or elimination of existing funds shall be done by the Finance Department or City Council action. A review and report by the Finance Department will be required prior to City Council action. The Finance Department will conduct an annual review and, as part of the budget, explain the purpose of each fund and assess if each fund is needed.
Departments or programs that are primarily funded by user fees and charges should be segregated into their own funds or fund accounts to assist in cost accounting and ensuring fees and charges are recovering an adequate portion of costs.
Enterprise Funds
Budgets for Enterprise Funds will include the required level of debt service coverage for the fund and a description of the relationship between operating budgets and construction budgets.
Financial Planning Goals
The City of Beaumont will prepare long-range financial plans to guide the Mayor and City Council in adopting the City budget and to assist the City Council in ensuring the delivery of needed services through inevitable economic cycles. The fmancial plans will help the Mayor, Council and community evaluate the financial impact of all programs within the regional and local economic conditions. The plans will also assist in coordinating funding needs among enterprise, special revenue, and General Fund functions.
Financial planning and budgeting will be based on the following principles:
1. Revenue estimates will be prepared on a conservative basis to minimize the possibility that economic fluctuations could surprise the City and jeopardize ongoing serve delivery during the fiscal year.
2. Expenditure estimates will anticipate needs that are reasonably predicable. 28
City of Beaumont -Finance Department Policies and Procedures Manual 2026
3. Forecasts will rely on a common set of basic economic assumptions that will be established, updated, and distributed by the Finance Department.
Financial Plans and Forecasts
Prior to the initiation of the annual budget process, the Finance Department will prepare an annual City financial assessment report. This report will include a comprehensive overview of the City's financial condition.
Five-year financial forecasts and plans will be prepared annually for the General Fund, General Fund departments, major Enterprise Funds, Special Revenue Funds, and other funds that materially affect the City. Plans will be based on current service levels and funding sources, as well as anticipated changes to service levels and funding. If appropriate, the plans will identify additional resources needed to continue current service levels or identified service adjustments.
General Fund departments will forecast and monitor their own revenues and expenditures. The Finance Department will assist departments in developing appropriate systems, will retain fiscal oversight responsibility for the entire City and will publish regular financial status reports on revenues and expenditures.
Enterprise Fund and Special Revenue Fund forecasts will identify any impact on rates. The forecasts will discuss how standards for debt service coverage and operating reserves are established and maintained.
Departments that manage Enterprise and Special Revenue Funds will prepare and coordinate with the Finance Department on the presentation of regular status reports on revenues and expenditures.
Capital and Other Asset Plans
The departments that are responsible for major infrastructure and utility improvements will complete 10 or 20 -year master plans to support growth and replacement needs. The master plans must support and reconcile with the City's major planning documents.
The City will annually prepare a Citywide five-year Capital Improvements Plan (CIP) that provides the Mayor and City Council with an overview of the condition of its infrastructure. It should include prioritized department needs for capital replacement, additions, and major maintenance. The plan will include estimated project costs and operating costs and will identify funding sources. Staff will ensure the proposed funding is in fact an eligible source under state law. It will highlight what projects are fully funded and which ones are not.
The City will annually adopt a Capital Budget that will include estimated resources and capital expenditures based on the first year of the current Capital Improvements Plan. Other major asset categories critical to service delivery such as facilities, fleet and technology will also have master plans to ensure their timely replacement.
The City will identify and include costs of future maintenance needs and operating costs of new capital improvements and equipment prior to funding as part of the Capital Budget.
In general, all assets will be maintained at a level that protects capital investment and minimizes future maintenance and replacement costs. A high priority will be placed on maintenance where deferring maintenance will result in greater costs to restore or replace neglected facilities such as roads. Each department with major capital assets will maintain accurate information on the condition and lifespan of its 29
City of Beaumont -Finance Department Policies and Procedures Manual 2026 major assets to assist in long-term planning, such as a pavement management index (PMI). Each department with major capital assets will develop replacement costs data for major assets to assist in City asset management and investment decisions.
Maintenance and operations of major capital assets should be given priority over acquisition of new assets.
Revenue Goals
1. The City will maximize and diversify its revenue base to raise sufficient revenue to support essential City services and to maintain services during periods of declining economic activity. The City's overall revenue structure will be designed to recapture some of the financial benefits resulting from City economic and community development investments. Revenue collection efforts that produce positive net income for City service delivery will be the highest budget priority.
2. Departments that primarily or exclusively operate with non -General Fund revenue will minimize reliance on General Fund support for discrete programs that are not supported with fees.
Unfunded Mandates
The City will oppose state or federal actions that mandate expenditures that the Mayor and City Council consider unnecessary and unfunded. The City will pursue intergovernmental funding to support the incremental cost of such mandates.Risk Management
The City will maintain adequate levels of insurance and implement a risk management program for public liability, workers' compensation, and related exposures. The program will emphasize avoidance of risk whenever possible, funding for losses which cannot be avoided and transfer of risk to third parties whenever appropriate.
The risk management program will include the systematic and continuous identification of loss perils and exposures, the analysis of these in terms of frequency and severity probabilities, the appropriate application of sound risk control procedures and the financing of potential claims and administration costs within the City budget.
The City will use outside claims administrators.
As part of the annual budget process, staff will segregate and report to the Mayor and City Council the past results of the risk management program, its relative financial status and plans for the future. Resources will be established to fund open claims liabilities, incurred but not reported (IBNR) claims and a catastrophic reserve or insurance as annual recommended by an independent actuary, or as authorized by Generally Accepted Accounting Principles (GAAP).
Interest Earnings
The Finance Department will assign interest earnings and expenses to the appropriate accounting fund based on available cash balances consistent with generally accepted accounting principles (GAAP).
Investment policies will be reviewed annually and brought to the Mayor and Council for approval. 30
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Internal Control
The City Manager, through the Finance Director, will be responsible for implementing and maintaining a comprehensive system of internal controls that provides reasonable assurance that the City is operating in a way that is consistent with the desires of the City Council. Separation of duties, administrative policies and procedures, accounting and reporting tools and an overall organizational culture will be designed and encouraged to ensure the public's assets are protected and the City's business practices are in compliance with state and federal law, sound ethical principles, best management practices and City Council policy.
Budget Adoption Procedures
Budgetary procedures for the City have been established by the City Council, which require the legal adoption of a budget for all Accounting Funds. The following are the administrative procedures followed by the City in its budgetary process. (Please also see Figure 1.)
1. Budget Preparation. Assistant City Manager, Deputy City Manager, Director, or Departmental Director meet with employees and prepare proposed operating and capital budgets, as well as department goals and performance standards for the coming fiscal year based on guidance provided by the Finance Director, City Manager and City Council. The Assistant City Manager, Deputy City Manager, Director, or Departmental Director submit these proposed budgets along with proposed goals and performance standards to City Manager no later than March 1. The Finance Director and City Manager takes information prepared by Assistant City Manager, Deputy City Manager, Director, or Departmental Director and prepares the proposed budget for the coming fiscal year for the City Council.
2. Budget Presentation. During the month of May, the City Manager, authorized by the City Council to act as the Budget Officer, submits a proposed operating and capital budget for all Governmental, Proprietary, Fiduciary Funds and other accounting funds to the City Council for the subsequent fiscal year. The budget documents illustrate proposed financing sources along with the proposed operating and capital budget expenditures.
3. Budget Work Meetings. The Finance and Audit Committee will hold one or more public meetings to review the long-term fiscal forecast and the City Council will hold one or more public budget work meetings to review the proposed annual budget.
Figure 1
Annual Budget Calendar
Annual Budget Event
Time
Comments
Assistant City Manager, Deputy
City Manager, Director, or
Departmental Director submit
proposed operating and capital
budgets, goals and performance
standards to City Manager.
March 1
City Manager and Finance Director take
information prepared by Assistant City
Manager, Deputy City Manager, Director, or
Departmental Director and prepare the
proposed budget for coming fiscal year.
31
City of Beaumont -Finance Department Policies and Procedures Manual 2026 City Manager presents proposed
budget to City Council.
May and June
Proposed operating and capital budgets for all
Accounting Funds are distributed to public, press
and City Council. Copies are available for public
review at City Hall and on City website.
City Council reviews budget in work
meetings
May and June
City Council conducts reviews during work
meetings.
Public Hearing
June
Public is invited to comment on proposed annual
budget. City Council makes final budget changes.
City Manager incorporates changes made by City
Council into final budget document.
Budget Adoption by City Council
June 30
Final budget is adopted by the City Council.
Since City revenues are highly dependent upon
the actions of the State Legislature, final budget
adoption may be delayed in any given year until
state budget is adopted.
4. Budget Public Hearing. A public hearing is held to receive comments on all aspects of the proposed budget. A notice in the local newspaper precedes the hearing. This notice is given at least ten days before the hearing and includes the time, date and place of the hearing. All budget documents are required to be available at least seven days prior to the public hearing.
5. Budget Adoption. A fmal budget is adopted by the City Council for the subsequent fiscal year beginning July 1. Since city revenues are highly dependent upon the actions of the State Legislature, final budget adoption may be delayed in any given year until the Governor and State Legislature adopt a state budget.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Debt Policy
Introduction
The following policy is enacted in an effort to standardize the issuance and management of debt by the City of Beaumont and its component units. The primary objective is to establish conditions for the use of debt, to minimize the City's Debt Service requirements and cost of issuance, to retain the highest practical credit rating, to maintain full and complete financial disclosure and reporting, and to maintain financial flexibility for the City. The policies apply to all debt issued by the City and its component units.
Regularly updated debt policies are an important tool to ensure the use of the City's resources to meet its commitments, to meet the needs of the citizens of Beaumont and to maintain sound financial management practices. These guidelines are for general use and allow for exceptions in extraordinary conditions.
Long Range Financial Planning and Integration with Capital Improvement Program
The City shall integrate its debt issuance with its Capital Improvement Program (CIP) spending to ensure that planned financing conforms to policy targets regarding the level and composition of outstanding debt. This planning considers the long-term horizon, paying particular attention to financing priorities, capital outlays and competing projects. Long-term borrowing shall be confined to the acquisition and/or construction of capital improvements and shall not be used to fund operating or maintenance costs. For all capital projects under consideration, the City shall set aside sufficient revenue from operations to fund ongoing normal maintenance needs and to provide reserves for periodic replacement and renewal. The issuance of debt to fund operating deficits is not permitted. The issuance of short-term cash -flow instruments is excluded from this limitation.
The City's Capital Improvement Program is a multi -year financial planning and management tool that identifies public facility and equipment requirements. It identifies a full range of capital needs, provides for the ranking of the importance of such needs, and identifies the funding sources that are available to cover the costs of the projects. When the CIP identifies project funding through the use of debt financing, financial analyses and projections will have already been completed which demonstrate the feasibility of issuing the debt. The City Manager will evaluate capital project requests and recommend the CIP to the City Council for approval.
The City may consider financing the capital needs of its revenue -producing enterprise activities through the issuance of revenue -secured debt obligations. Prior to issuing such debt, the City will develop financial plans and projections showing the feasibility of the financing, including an analysis of the required rates and charges needed to support the financing and the impact on ratepayers, property owners and other affected parties.
The City will use the following criteria to evaluate pay-as-you-go financing:
1. Current revenues and adequate fund balances are available so project phasing can be accomplished.
2. Existing debt levels adversely affect the City's credit rating. 33
City of Beaumont -Finance Department Policies and Procedures Manual 2026
3. Market conditions are unstable or present difficulties in marketing debt instruments.
The City will use the following criteria to evaluate long-term fmancing:
1. Revenues designated as security for Debt Service are deemed to be sufficient and reliable so that long-term financing can be marketed with investment grade credit ratings.
2. The project securing the financing is of the type that will support an investment grade credit rating, except Private Placements and Equipment Leases which are not rated.
3. Market conditions present favorable interest rates and demand for City financing.
4. The project is mandated by State and/or Federal requirements, and current resources are insufficient or unavailable.
5. The project is immediately required to meet or relieve capacity needs and current resources are insufficient or unavailable.
6. The life of the project or asset to be financed will exceed the term of the debt.
Debt Limits
The City will keep outstanding debt within the limits prescribed by State of California statutes and at levels consistent with credit objectives. There is no statutory restriction on the amount of revenue bonds that can be outstanding at any given time. However, each proposed financing will be individually assessed by the Finance Director and subject to the approval of the City Council.
Debt Structure
The City will normally issue debt with an average term of 25-30 years or less. The structure should approximate level debt service for the term where it is practical. Debt will be structured in such a way as to avoid increasing debt service payments in subsequent years, with the exception of the first and second year of a debt payoff schedule. Variable rate debt may be considered for utility debt when determined to be in the best interest of the City. There will always be at least interest paid in the first fiscal year after debt issuance and principal starting no later than the second fiscal year. Capitalized Interest will not be for a period of more than one year except for a City initiated project where the construction period exceeds one year.
Credit Objectives
The City of Beaumont seeks to maintain the highest possible credit ratings for all categories of long- term debt that can be achieved without compromising delivery of basic City services and achievement of City policy objectives. Accordingly, the City seeks to achieve a rating no lower than investment grade and, for obligations of the City or its component units, the target optimal rating is A from a Nationally Recognized Statistical Ratings Organizations (NRSRO).
The City recognizes that external economic, natural, or other events may from time to time affect the creditworthiness of its debt. Nevertheless, the City is committed to ensuring that actions within its control are prudent and well planned.
The City may seek to use credit enhancement (letters of credit, bond insurance, surety bonds, etc.) when it proves cost-effective or provides additional security for the payment of debt service. Generally, when practical, selection of credit enhancement providers will be subject to a competitive process developed by the Finance Director. Credit enhancement may be used to improve or establish a credit rating on a 34
City of Beaumont -Finance Department Policies and Procedures Manual 2026 City debt or to provide supplemental security for debt service on non -City debt as long as the use of such credit enhancement meets the City's debt financing goals and objectives.
Refunding Debt
Periodic reviews of all outstanding debt will be undertaken by the Finance Director and the City's Municipal Advisor to determine refunding (refinancing) opportunities.
The purpose of the refinancing may be to:
1. Achieve or monetize Debt Service savings.
2. Update or revise covenants on an outstanding debt issue.
3. Restructure Debt Service associated with an issue.
4. Alter debt characteristics such as call provisions or payment dates.
Generally, the City will strive to achieve a minimum of three percent (3%) net present value savings of the refunded Bonds, net of issuance costs and any cash contributions in the case where the primary objective of the refinancing is to achieve debt service savings. A higher minimum threshold of five percent (5%) for savings in the case of advance refunding.
Costs and Fees
All costs and fees related to the issuance of debt will be paid out of debt proceeds. An amount will be determined at the time of the issuance to reimburse the City for costs incurred based on the time factors and complexity of the issue. Where applicable, the annual, recurring costs to the City of administering the debt are charged to the appropriate Debt Service, Enterprise or Agency fund.
Method of Debt Offering
The City shall evaluate the best method of sale for each proposed bond issue. • Competitive sale. In a competitive sale, bids for the purchase of the bonds are coordinated with the City's Municipal Advisor who assists in awarding to an underwriter whose confirming bid represents the lowest true interest cost to the City.
• Negotiated sale. When a negotiated sale is deemed advantageous in consultation with the City's Municipal Advisor, the Finance Director shall negotiate the most competitive pricing on debt issues and underwriter discounts in order to ensure the best value to the City. In a negotiated sale, the underwriter may be selected based on a formal RFP process. The City, with the assistance of its Municipal Advisor, shall evaluate the RFP on prices, interest rates, fees, and discounts.
Criteria for selection will be determined on a case -by -case basis. No debt issue will be sold on a negotiated basis without an independent municipal advisor. • Private placement. In certain instances, the City may determine to utilize private placements or offerings to specially defined or otherwise limited investor types, but will only do so in the absence of other avenues for acquiring the required capital in a more cost-effective manner or in instances where the purpose is determined to be of significant strategic importance to the City.
Any and all private placement offerings which do not include a private placement memorandum (executed by the City) in compliance with Securities and Exchange Commission Rule 15c2-12 35
City of Beaumont -Finance Department Policies and Procedures Manual 2026 prepared by counsel delivery, a 10b5 Opinion, shall require the purchaser(s) to each deliver a "Sophisticated Investor Letter" prepared in a form acceptable to the City's bond counsel where the buyer(s) represent they have completed their own due diligence regarding the investment, have not relied on information provided by the City except as explicitly stipulated therein, and are able and qualified to purchase without an official statement or disclosure document prepared in compliance with federal and/or state securities laws. The City's Municipal Advisor should provide the City with an analysis comparing a public offering to a placement to determine which method is most economical.
Types of Debt Financing
GENERAL OBLIGATION BONDS
The City may issue general obligation bonds for essential projects where there is no other funding source available to meet project costs. The following criteria will be used to evaluate the financing:
1. The likelihood of obtaining voter approval of the debt has been researched and determined to be optimistic.
2. The project is essential to meet or relieve capacity needs and no other resources are available to finance it.
3. The project has been presented to City Council either through the CIP or through regular council reports. The useful life of the project or asset to be financed is at least equal to the term of the Bonds to be issued.
When issuing debt, the City shall strive to use special assessment, revenue, or other self- supporting bonds in lieu of general obligation bonds.
MUNICIPAL NOTES
The City Council may authorize the issuance of municipal notes as an interim financing mechanism in anticipation of future revenues at the recommendation of the Finance Director. Types of such notes could include, but are not limited to, Tax Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes, or Grant Anticipation Notes.
REVENUE BONDS
The City Council may authorize the issuance of Revenue Bonds as a means of financing capital facilities.
The following criteria will be used to evaluate the financing:
1. Revenues available for Debt Service are deemed to be sufficient and reliable so that the bonds can be marketed with investment grade credit ratings. Where appropriate, revenues for the term of the bonds shall be projected or confirmed by an independent revenue consultant selected in the sole discretion of the City.
2. The project securing the financing is of the type that will support an investment grade credit rating.
3. Market conditions present favorable interest rates and demand for City financing.
4. The project has been presented to City Council either through the CIP or through regular council reports.
5. The project is essential to meet or relieve capacity needs and current resources are insufficient or unavailable.
6. The useful life of the project or asset to be financed is at least equal to the term of the Bonds to be 36
City of Beaumont -Finance Department Policies and Procedures Manual 2026 issued.
These types of obligations are often structured as Utility Revenue Bonds, Lease Revenue Bonds or Certificates of Participation (COP 's). If so structured, debt service shall not exceed the fair rental value of the leased asset for the term of the lease.
INTERFUND LOANS
From time to time, interfund borrowings may be necessary from one fund to another fund that is experiencing a temporary cash shortage. Under generally accepted accounting principles (GAAP), funds that are not included in the non -spendable, restricted, or committed fund balance may make temporary loans to other funds.
Interfund loans are categorized into two types:
1. Cash advances at the end of the fiscal year to remove negative cash balance for special revenue funds. Many special revenue funds that account for grant funded projects experience negative cash balance at the end of the fiscal year due to the timing on grant funding. The negative cash situation will be resolved when grant reimbursement is received. The Finance Director is authorized to approve cash advances from the General Fund to the special revenue funds under this circumstance.
2. Interfund loans that provide for advance spending for a capital project or debt repayment. Such loans must be approved by the City Council.
Interest will be paid by the borrowing fund to the lending fund, during the time the loan is outstanding.
The rate is determined by the Finance Director on a case -by -case basis.
These interfund loans typically have an approved repayment schedule; however, earlier repayment of the debt may occur based on available monies in the borrowing fund and approval of the Finance Director.
Interfund loans shall not hinder the accomplishment of any function or project for which the lending fund was established.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Statement of Investment Policy
Introduction
In accordance with the charter of the City of Beaumont and under authority granted by the City Council, the City Manager is designated the responsibility for investing the unexpended cash in the City Treasury and the overall conduct of the City's investment program. The intent of this Investment Policy is to formalize the framework for the investment activities that shall be exercised to ensure the effective and judicious fiscal and investment management of the City's funds. The City's portfolio shall be designed and managed in such a manner as to comply with state and local laws, provide for daily cash flow requirement, ensure consistency with the prioritized objectives of safety, liquidity, and return, and in a manner consistent with prudent investment management and worthy of the public trust.
Governing Authority
The City's investment program shall be managed in conformance with federal, state, and other legal requirements, including California Government Code Sections 16429.1-16429.4, 53600-53609, and 53630- 53686. This Investment Policy was endorsed and adopted by the City Council and is effective May 18, 2021. This Investment Policy shall replace all previous versions.
Scope
The City's investment policies apply to all personnel, departments, divisions, and offices of the City government as well as all associated accounting funds under the direct authority of the City of Beaumont.
These accounting funds include, but are not limited to, the General Fund, Special Revenue Funds, Enterprise Funds, Internal Service Funds, Debt Service Funds, Capital Projects Funds, Private -Purpose Trust Funds and Agency Trust Funds. These investment policies are also applicable to the City's blended component units, including the Beaumont Utility Authority ,Beaumont Public Improvement Authority, Beaumont Financing Authority, and Beaumont Parking Authority.
The City commingles its investable assets to maximize interest earnings and to increase efficiencies with respect to investment pricing, safekeeping, and administration. Investment income will be allocated to the various funds based on their respective percentage participation in the total fund and in accordance with generally accepted accounting principles.
Proceeds arising from the issuance of debt shall be invested in accordance with the provisions of their governing bond documents and in a manner consistent with the City's general investment philosophy as outlined in this Investment Policy.
Responsibility
The City Manager is ultimately responsible for the City's implementation and compliance with these policies unless the City Council authorizes exceptions. Under the direction of the City Manager, the Finance Director will review, develop and implement a system of processes and procedures to ensure compliance with these policies throughout the entire organization. The City Manager will work with the Finance Director to ensure these policies are updated on a timely basis. 38
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Pooling of Funds
The City of Beaumont consolidates cash balances from all eligible funds to maximize investment earnings.
Funds held by the Trustee are not eligible to be pooled. The City schedules its collection of receipts, deposits of funds and disbursements of monies to ensure maximum availability of cash for temporary investment purposes. Investment income is allocated to the various Funds based on their respective participation and in accordance with Generally Accepted Accounting Principles (GAAP).
Objectives
The prioritized objectives of the City's investment program are to preserve principal (safety), ensure sufficient liquidity (liquidity), and generate a market rate of return (return).
1. Safety: Safety of principal is the foremost investment objective of the City's investment program.
Investment shall be undertaken in a manner designed to ensure the preservation of capital in overall portfolio growth. The City shall seek to preserve principal by mitigating credit risk and interest rate risk.
2. Liquidity: The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. Because not all liquidity needs can be anticipated, the investment portfolio shall focus on securities with active secondary and resale markets.
3. Return: The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints of safety and liquidity.
Set forth in section 17 of this Investment Policy are certain strategies and principles utilized by the City to manage investment risks.
Standard of Care
The standard of prudence to be used by City investment officials shall be the "Prudent Investor Standard" and shall be applied in the context of managing the overall portfolio. As set forth in the California Government Code 53600.3, the Prudent Investor Standard states:
"...all 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, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, 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 this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law." Consistent with the objectives set forth in section vi of this Investment Policy, in addition to safeguarding invested principal and ensuring sufficient liquidity for the City, a prudent investor should also seek to optimize portfolio return subject to these constraints. 39
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Indemnification
The City Manager, Finance Director, Finance Committee, City Council and other authorized persons responsible for managing or overseeing City funds, acting in accordance within written procedures and the intent and scope of this Investment Policy and exercising due diligence, shall be relieved of personal liability for an individual security's credit risk or market price changes, provided that deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments.
Ethics and Conflicts of Interest
Officers and employees involved in the investment process will refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Consistent with the requirements of the California fair Political Practices Commission, employees and investment officials will disclose any material interest in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio.
Employees and officers will refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City of Beaumont.
Delegation of Authority
The authority to manage the City's investment program is provided by the California Government Code Sections 53600 et seq. Authority to manage the City's investment program is granted to the City Manager and his or her designee. Responsibility for the operation of the investment program is hereby delegated to the Finance Director, who shall act in accordance with this investment policy. The Finance Director shall establish procedures for the operation consistent with this investment policy and may authorize other finance department staff to initiate investment transactions. All participants in the investment process shall seek to act responsibly as custodians of the public trust. No officer or designee may engage in an investment transaction except as provided under the terms of this policy and supporting procedures.
The City may contract with one or more external investment managers to assist in the management of the City's investment portfolio in a manner consistent with the City's objectives. Such external managers may be granted discretion to purchase and sell investment securities in accordance with this Investment Policy.
Such managers must be registered under the Investment Advisers Act of 1940 and specialize in the management of public funds fixed income portfolios.
Finance Committee
A Finance Committee is established to provide general oversight and direction concerning policy related issues concerning management of the City's investment portfolio. The committee shall meet quarterly unless circumstances require more frequent meetings.
Authorized Financial Institutions, Depositories, Broker Dealers, and Competitive Transactions
In circumstances where the investment portfolio is managed internally, the requirements set forth in Sections A and B, below, shall apply:
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City of Beaumont -Finance Department Policies and Procedures Manual 2026
1. The City shall maintain a list of financial institutions and depositories authorized to provide investment services. In addition, the City shall maintain a list of approved security broker/dealers selected by conducting a process of due diligence. These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission ("SEC") Rule 15C3-1 (uniform net capital rule). The Finance Director will determine which financial institutions are authorized to provide investment services to the City. Institutions eligible to transact investment business with the City include:
a) Primary government dealers as designated by the Federal Reserve System b) Regional broker/dealers qualified under SEC Rule 15C3-1 c) Nationally or state -chartered banks
d) The Federal Reserve Bank
e) Direct Issuers of securities eligible for purchase
2. Investment staff shall review broker/dealers who would like to transact with the City to determine if they are adequately capitalized and make markets in the securities appropriate to the City's needs.
The Investment Officer shall send a copy of the current investment policy to all broker/dealers approved to transact with the City. Financial institutions which desire to become qualified broker/dealers for investment transactions (and which are not transacting solely through an investment advisor) must provide the City with a statement certifying that the institution has reviewed the California Government Code Section 53600 et seq. and the City's Investment Policy.
The selection of broker/dealers shall be at the sole discretion of the City.
3. Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the investment adviser, provided such broker/dealers meet the requirements set forth in section A, above.
4. Public deposits will be made only in qualified public depositories as established by State statutes.
Deposits will be insured by the Federal Deposit Insurance Corporation (FDIC), or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with state statutes. A written contract of deposit of public funds must be obtained from the financial institution, indicating the institution's policy and process of FDIC insurance and collateralization.
5. It is the policy of the City to require competitive bidding from at least three broker/dealers for investment transactions that are not classified as "new issue" securities whenever possible and practical. Such competitive bidding can be executed through competitive bidding or through the use of a nationally recognized trading platform. In such circumstances where competitive price comparisons are not available, best efforts will be made to document quotations for comparable or alternative securities.
Security Safekeeping and Delivery Procedures
Third -Party safekeeping: To protect against fraud, embezzlement, or losses caused by collapse of an individual securities dealer and to enhance access to securities and interest payments, all securities owned by the City shall be held in safekeeping by a third -party bank trust department acting as agent for the City under the terms of a duly executed custody agreement. In connection with the City's annual independent 41
City of Beaumont -Finance Department Policies and Procedures Manual 2026 audit, securities held in custody are audited to verify investment holdings. No outside broker/dealer or advisor may have access to the City funds, accounts or investments, and any transfer of funds to or through an outside broker/dealer must be approved by the City Council.
Delivery -Versus -Payment: All trades of marketable securities shall be cleared and settled on a standard delivery -versus -payment ("DVP") basis to ensure that securities are deposited in the City's safekeeping account prior to the release of funds.
Internal Controls
A system of internal controls has been established to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties, or unanticipated changes in financial markets. Internal controls deemed most important include control of collusion, separation of transaction authority from accounting and record keeping, custodial safekeeping, avoiding physical delivery of securities, clear delegation of authority to subordinate staff members, written confirmation of transactions for investments and wire transfers and development of a wire transfer agreement with the lead bank and third -party custodian. Furthermore, an independent analysis by an external auditor shall be conducted annually to review internal control, account activity, and compliance with policies procedures, and applicable laws.
Authorized Investments
The investment of City funds shall be made in accordance with Sections 53600 et seq. of the California Government Code and in accordance with this Investment Policy. Permitted investments for the City shall include the following security types and related credit quality, maturity, and diversification constraints.
1. Municipal Bonds: Bonds issued by the City, the State of California, any other of the 49 states in addition to California, and any local agency within the state of California. This authorization includes the ability to invest in obligations payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by a state or any local agency in the state of California or by a department, board, agency, or authority of a state or any local agency in the state of California. a) Credit Quality: Securities in this category shall have a minimum credit rating of A (or its equivalent) by at least one nationally recognized statistical rating organization at the time of purchase.
b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the portfolio may be invested in any single issuer. No more than 30% of the portfolio may be invested in this category.
2. U.S. Treasury Obligations: United States Treasury bills, notes, bonds, and certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
a) Credit Quality: No minimum credit rating required for securities in this category. b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: There are no dollar or percentage limits on securities in this category. 42
City of Beaumont -Finance Department Policies and Procedures Manual 2026
3. Federal Agency and Government Sponsored Enterprise Obligations: Federal agency or United States government -sponsored -enterprise obligations, participants, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government -sponsored enterprises.
a) Credit Quality: No minimum rating required for securities in this category. b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: There are no dollar or percentage limits individual issuers in this category.
4. Commercial Paper: Commercial paper of "prime" quality and issued by a corporation organized and operating in the United States with total assets of at least $500 million. a) Credit Quality: Securities in this category must be rated "A-1" (or the equivalent) or higher by at least one nationally recognized statistical rating organization. In addition, debt other than commercial paper (if any) issued by corporations in this category must be rated at least "A" (or the equivalent) or better by at least one nationally recognized statistical rating organization. b) Maximum Maturity: 270 days at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the City's portfolio may be invested in any single issuer of commercial paper. For purposes of this issuer limitation, holdings of commercial paper and medium -term notes of a single issuer shall be limited to 10% of total portfolio assets. No more than 25% of the total portfolio may be invested cumulatively in commercial paper or asset - backed commercial paper as defined in Section 6, below. No more than 10% of the outstanding commercial paper of any single issuer may be purchased.
5. Asset -Backed Commercial Paper: Asset -Backed Commercial paper of "prime" quality and issued by an entity organized within the United States as a special purpose corporation, trust, or limited liability company.
a) Credit Quality: Securities in this category must be rated "A-1" (or the equivalent) or higher by at least one nationally recognized statistical rating organization. In addition, the issuing entity must have program wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond. b) Maximum Maturity: 270 days at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the City's portfolio may be invested in any single issuer of commercial paper. For purposes of this issuer limitation, holdings of commercial paper and medium -term notes of a single issuer shall be limited to 10% of total portfolio assets. No more than 25% of the total portfolio may be invested cumulatively in asset -backed commercial paper or commercial paper as defined in Section 5, above. No more than 10% of the outstanding commercial paper of any single issuer may be purchased.
6. Federally Insured Time Deposits: Non-negotiable certificates of deposit in state or federal chartered deposit insurance.
a) Credit Quality: Securities in this category shall be limited to the maximum amount covered 43
City of Beaumont -Finance Department Policies and Procedures Manual 2026 by federal deposit insurance.
b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the portfolio may be invested in any single issuer of non- negotiable or negotiable certificates of deposit. No more than 15% of the portfolio may be invested in any combination of non-negotiable certificates of deposit as set forth in subsections 6, 7, and 8 hereto. No more than 30% of the portfolio may be invested in any combination of non-negotiable or negotiable certificates of deposit.
7. Collateralized Time Deposits: Non-negotiable certificates of deposit in state or federally chartered banks, savings and loans, or credit unions in excess of federal deposit insurance limits which are fully collateralized in accordance with state law.
a) Credit Quality: Securities in this category exceeding federal deposit insurance limits shall be collateralized in accordance with state law and be issued by institutions which have long-term debt obligations rated "A" (or the equivalent) or better and short-term debt obligations, if any, rated "Al" (or the equivalent) or better by at least two nationally recognized statistical rating agencies.
b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the portfolio may be invested in any single issuer of non- negotiable or negotiable certificates of deposit. No more than 15% of the portfolio may be invested in any combination of non-negotiable certificates of deposit as set forth in subsections 7, 8, and 9 hereto. No more than 30% of the portfolio may be invested in any combination of non-negotiable or negotiable certificates of deposit.
8. Certificate of Deposit Placement Services: Non-negotiable certificates of deposit at a commercial bank, savings bank, savings and loan association, or credit union that that uses a private sector entity to assist in the placement of deposits (e.g., CDARS).
a) Credit Quality: The full amount of each deposit and the interest that may accrue on each such deposit shall at all times be insured by federal deposit insurance. b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the portfolio may be invested in any single issuer of non- negotiable or negotiable certificates of deposit. No more than 15% of the portfolio may be invested in any combination of non-negotiable certificates of deposit as set forth in subsections 7, 8, and 9 hereto. No more than 30% of the portfolio may be invested in any combination of non-negotiable or negotiable certificates of deposit.
9. Negotiable Certificates of Deposit: Negotiable certificates of deposit issued by a nationally or state -chartered bank, a savings association, or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union, or a federally licensed or state -licensed branch of a foreign bank.
a) Credit Quality: Securities in this category exceeding federal deposit insurance limits shall be issued by institutions which have long-term debt obligations rated "A" (or the equivalent) or 44
City of Beaumont -Finance Department Policies and Procedures Manual 2026 better and short-term debt obligations, if any, rated "A-1" (or the equivalent) or better by at least two nationally recognized statistical rating agencies. b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the portfolio may be invested in any single issuer of non- negotiable or negotiable certificates of deposit. No more than 30% of the portfolio may be invested in any combination of non-negotiable or negotiable certificates of deposit.
10. Repurchase Agreements: Repurchase agreements with specific terms and conditions may be transacted with banks and brokers. Such investments must be subject to a "Master Repurchase Agreement" substantially in the form developed by the Securities Industry and Financial Markets Association ("SIFMA").
a) Credit Quality: Repurchase agreements shall be collateralized with U.S. Treasury and Federal Agency securities (as authorized herein) maintained at a value of at least 102% of the market value of the repurchase agreement. Securities used as collateral for repurchase agreements shall be delivered to the City's custodian bank.
b) Maximum Maturity: 1 year at the time of entry.
c) Diversification: There are no dollar or percentage limits on securities in this category.
11. Medium -Term Corporate Notes: Medium -term corporate notes shall mean all corporate and depository institution debt securities issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
a) Credit Quality: Securities in this category shall be rated in the "A" category or better by at least two nationally recognized statistical rating organizations at the time of purchase. b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 5% of the portfolio may be invested in any single issuer. No more than 10% of the total portfolio may be invested in the commercial paper and medium - term notes of a single issuer. No more than 30% of the portfolio may be invested in this category.
12. Money Market Mutual Funds: Money market mutual funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15U.S.C. Sec. 80a-1 et seq.) meeting the credit quality requirements set forth below or retaining an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience managing money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000).
a) Credit Quality: Attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. b) Maximum Maturity: No maturity restrictions apply.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 c) Diversification: No more than 20% of the portfolio may be invested in this category.
13. Mortgage Pass -Through and Asset -Backed Securities: Mortgage pass -through securities, collateralized mortgage obligations, mortgage -backed or other pay -through bond, equipment lease - backed certificate, consumer receivable pass -through certificate, or consumer receivable -backed bonds meeting the requirements set forth below.
a) Credit Quality: Securities eligible for investment under this subdivision not issued or guaranteed by an agency or issuer identified in subdivision (2) or (3) shall be rated in a rating category of "AA" or its equivalent or better by an NRSRO and have a maximum remaining maturity of five years or less.
b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: With the exception of obligations issued or guaranteed by an agency or issuer identified in subdivision (2) or (3) no more than 5% of the portfolio may be invested in any single issuer. No more than 10% of the total portfolio may be invested in this category.
14. State of California Local Agency Investment Fund: The State of California Local Agency Investment Fund ("LAIF") managed by the State of California Treasurer's Office. a) Credit Quality: No credit rating requirements exist for LAIF. In addition, should LAIF invest in securities or instruments prohibited or not specifically authorized by the City's Investment policy, the City is not prohibited from investing in LAIF provided sufficient information is available to allow the City to understand the risks associated with investing in LAIF. b) Maximum Maturity: No maturity restrictions apply.
c) Diversification: The City may invest up to the maximum amount permitted by California state law.
15. Joint Powers Authority Pools: Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in securities authorized by California Government Code Section 53601 subdivisions (a) to (r), inclusive, and that has retained an investment adviser that is registered or exempt from registration with the Securities and Exchange Commission having not less than five years of experience investing in the securities and obligations authorized by California Government Code Section 53601 and having at least five hundred million dollars ($500,000,000) under management.
a)
b)
c)
Credit Quality: There are no credit rating requirements for Joint Powers Authority Pools.
Maximum Maturity: No maturity restrictions apply.
Diversification: The City may invest up to the maximum amount permitted by California law.
16. Supranational Securities: United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter -American Development Bank eligible for purchase and sale within the United States.
a) Credit Quality: Securities in this category shall be rated in the "AA" category or better by at least one nationally recognized statistical rating organization at the time of purchase. 46
City of Beaumont -Finance Department Policies and Procedures Manual 2026 b) Maximum Maturity: Five years at the time of purchase as measured by the settlement date. c) Diversification: No more than 10% of the portfolio may be invested in any single issuer. No more than 15% of the portfolio may be invested in this category.
Bond Proceeds
Proceeds arising from the issuance of debt shall be invested in accordance with the provisions of their governing bond documents and in a manner consistent with the City's general investment philosophy as outlined in this Investment Policy. Bond proceeds are not eligible as a part of the City's pooled funds.
Securities authorized by the bond indenture or similar investment documents that are not authorized by the City's Investment Policy will be considered approved investments for bond proceeds when the bond indenture or similar authorizing document is approved by the City Council. Bond reserve funds, escrow funds and any funds approved by the City Council may be invested in securities with maturity limits of five years or an appropriate longer period. The bond indenture shall provide any specific restrictions or limitations on either the nature or the duration of the investments and should be the governing document.
Note on Credit Quality Requirements
Should the credit rating of a security owned by the City be downgraded to a level below that required by this Investment Policy, the City will review the credit situation and determine if such securities should be sold or retained in the portfolio based upon its remaining term to maturity, the credit outlook for the issuer, and other relevant facts and circumstances. If the decision is made to retain a downgraded security, it will be closely monitored by the City and reported quarterly to the Finance Committee.
Note on Maximum Maturity Limitation
The five-year maturity limitation of this Investment Policy shall be measured as of the transaction settlement date. In accordance with section 53601 of the California Government Code, this five-year maturity limitation may be extended if deemed prudent by the Investment Officer and provided that the City Council has approved such investment either specifically or as part of an investment program approved by the legislative body no less than three months prior to the investment.
Note on Diversification Requirements
The diversification requirements set forth above relating to the maximum allowable percentage for a particular issuer or investment type shall apply at the time of purchase. Due to fluctuations in the aggregate invested balance, these maximum percentages may be exceeded from time to time and shall not require liquidation to realign the portfolio. However, consideration should be given to this matter when future purchases are made.
Note on Other Requirements
Should any investment fall out of compliance with any other guidelines of this policy after its purchase, the City will review the situation and determine if such securities should be sold or retained in the portfolio based upon its remaining term to maturity, the credit outlook for the issuer, and other relevant facts and circumstances. If the decision is made to retain such a security, it will be closely monitored by the City and reported quarterly to the Finance Committee.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Prohibited Investments and Practices
Provided below are certain prohibited investments and investment practices intended to help safeguard invested balances.
1. In accordance with California Government Code section 53601.6, investments in inverse floaters, range notes, mortgage -derived interest -only strips are prohibited. In addition, the purchase of any security that could result in zero interest accrual if held to maturity is also prohibited except for the purchase securities issued or backed by the United States government in the event of, and for the duration of, a period of negative market interest rates.
2. Investments not specifically described herein are prohibited.
3. The purchase or sale of securities on margin is prohibited.
4. The purchase of securities denominated in foreign currencies is prohibited.
5. The purchase or sale of securities done solely to speculate on the direction of future interest rates is prohibited.
Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. At maturity or liquidation, any such monies shall be reinvested only as provided for in this policy.
Managing Portfolio and Investment Risks
Safety of principal is the foremost investment objective of the City. Each investment transaction shall seek to ensure that capital losses are avoided, whether from securities default, broker/dealer default, or erosion of market value. The overall program shall be designed and managed with a degree of professionalism that is worthy of the public trust. In a diversified portfolio, it must be recognized that occasional measured losses are inevitable and must be considered within the context of the overall portfolio's investment return, provided that adequate diversification has been implemented. The City shall seek to preserve principal by mitigating credit risk and market risk as set forth below.
Mitigating Credit Risk: Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The City shall seek to mitigate credit risk by adopting the following strategies:
1. Adhering to the diversification requirements set forth in Section XIII of this policy which limits the amount of the total portfolio that may be invested in any single issuer.
2. Utilizing an active management strategy that allows for the sale of securities prior to their scheduled maturity dates for purposes of improving the portfolio's credit quality, liquidity, yield, or return profile in response to changing market conditions or City circumstances.
3. Reviewing downgraded securities. Should the credit rating of a security owned by the City be downgraded to a level below that required by this Investment Policy, the City will review the credit situation and determine if such securities should be sold or retained in the portfolio based upon its 48
City of Beaumont -Finance Department Policies and Procedures Manual 2026 remaining term to maturity, the credit outlook for the issuer, and other relevant facts and circumstances.
4. Monitoring any downgraded securities. If the decision is made to retain a downgraded security, it will be closely monitored by the City and reported quarterly to the Investment Committee.
Mitigating Interest Rate Risk: Market risk is the risk that the value of a security or portfolio will fluctuate due to changes in the general level of interest rates. The City understands that while longer -term portfolios have the potential to generate higher investment returns over time, they also exhibit a greater volatility of return. In addition, the City further recognizes certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded call options, will affect the market risk characteristics of the portfolio differently. Accordingly, the City will mitigate market risk by adopting the following strategies:
1. The City shall maintain sufficient balances in short-term investments to provide liquidity for expected and contingent expenditures thereby limiting the need to sell securities prior to maturity.
Liquidity funds shall be maintained in short-term investments such as LAIF, deposit accounts collateralized in accordance with state law, and money market funds and instruments with minimal market risk.
2. Longer -term securities shall be scheduled to mature in advance of known expenditure requirements whenever possible.
3. The City shall avoid the purchase of securities for the sole purpose of short-term speculation.
4. The maximum stated final maturity of any security in the portfolio shall be five years, except as otherwise stated in this Investment Policy.
5. The maximum percentage of callable securities (excluding securities with "make whole" call provisions) held in the portfolio shall be 20%.
6. The weighted average duration of the actively managed portion of the portfolio, i.e., non -liquidity funds, shall be maintained in a range of +/- 25% the duration of a market benchmark as selected by the City based upon the City's risk tolerances and investment objectives.
Performance Standards & Evaluation
Consistent with the City's circumstances and risk tolerances, the investment performance objective for the managed portfolio shall be to earn a total rate of return over market cycles that is approximately equal to the return on the City's chosen benchmark index.
Reporting and Disclosure
In accordance with Government Code Section 53646(8)(1), the City Treasurer shall submit to the Finance Committee a quarterly report that will then be taken to the City Council. The report shall include a complete description of the portfolio, the type of investments, the issuers, maturity dates, par values and the current market values of each component of the portfolio, including funds managed for the City of Beaumont by third party contract managers. The report will also include the source of the portfolio valuation. As specified in Government Code 53646(e), if all funds are placed in the Local Agency Investment Fund 49
City of Beaumont -Finance Department Policies and Procedures Manual 2026 (LAIF), FDIC insured accounts and/or county investment pool, the foregoing report elements may be replaced by copies of the latest statements from such institutions. The report must also include a certification that (1) all investment actions executed since the last report have been in full compliance with the investment policy, and, (2) the City of Beaumont will meet its expenditures obligations within the cash flow needs.
Policy Review and Adoption
The City of Beaumont's investment policy shall be adopted by resolution of the City Council on, at minimum, an annual basis. This investment policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of principal, liquidity, and return as well as its relevance to current law and financial and economic trends. In accordance with Senate Bi11 564 and Senate Bi11 866, effective January 1, 1996, the City staff brings forward each year the City's Investment Policy for review by the City Council. Any amendments to the policy shall be forwarded to City Council for approval.
City of Beaumont Investment Policy
Glossary of Terms
This Glossary of Terms is provided for general reference purposes only and does not constitute or reflect an exhaustive or exclusive list of terms and definitions that may be applicable to the City of Beaumont's Investment Policy Statement. The definitions included herein do not modify or otherwise amend or supersede any of the terms of this Investment Policy Statement or applicable State or Federal law.
ACCRUED INTEREST: The amount of interest that is earned but unpaid since the last interest payment date.
ADJUSTABLE -RATE NOTE: (See Floating Rate Note)
AGENCY SECURITIES: (See U.S. Government Agency Securities) AMORTIZATION: The systematic reduction of the amount owed on a debt issue through periodic payments of principal.
ASSET -BACKED COMMERCIAL PAPER: A short-term investment vehicle with a maturity date that is typically between 90 and 270 days. A bank or other financial institution typically issues the security itself.
The notes are backed by the company's physical assets such as trade receivables. Companies will use an asset -backed commercial paper to fund short-term financing needs.
AVERAGE LIFE: The average length of time that an issue of serial bonds and/or term bonds with a mandatory sinking fund feature is expected to be outstanding.
ASKED PRICE: The price at which securities are offered from a seller.
ASSET BACKED SECURITIES (ABS): (See Receivable -Backed Securities) BANKERS' ACCEPTANCE (BA): Negotiable money market instruments issued primarily to finance international trade. These are time drafts in which a bank "accepts" as its financial responsibility to pay the principal at maturity even if the importer does not. In essence, these are bank obligations collateralized by goods being shipped between an exporter and an importer. 50
City of Beaumont -Finance Department Policies and Procedures Manual 2026 BASIS POINT: When a yield is expressed as percentage terms (e.g., 2.25%), the digits to the right of the decimal point are known as basis points. One basis point equals 1/100 of one percent. Basis points are used more often to describe changes in yields on bonds, notes and other fixed -income securities.
BENCHMARKS: Indexes created to include multiple securities representing some aspect of the total market. Benchmarks are often used as a standard against which the performance of a security, mutual fund, or investment manager may be measured.
BID PRICE: The price at which a buyer offers to buy a security.
BOND INDENTURE: The contract associated with a bond. The terms of a bond indenture include a description of the bond features, restrictions placed on the issuer, and the actions that will be triggered if the issuer fails to make timely payments.
BOND PROCEEDS: The proceeds from the sale of bonds, notes, and other obligations issued by an entity, and reserves and funds maintained by an entity for debt service purposes.
BOOK ENTRY: The system, maintained by the Federal Reserve, by which most money market securities are "delivered" to an investor's custodian bank. The Federal Reserve maintains a computerized record of the ownership of these securities and records any changes in ownership corresponding to payments made over the Federal Reserve wire (delivery versus payment). The owners of these securities do not receive physical certificates.
BOOK VALUE: The original cost of the investment, plus accrued interest and amortization of any premium or discount.
BROKER: A broker brings buyers and sellers together and is compensated for his/her service.
CALLABLE BONDS: Bonds that may be redeemed by the issuing company prior to the maturity date.
CALL PRICE: The price at which an issuer may redeem a bond prior to maturity. The price is usually at a slight premium to the bond's original issue price to compensate the holder for loss of income and ownership.
CALL RISK: The risk to a bondholder that a bond may be redeemed prior to maturity.
CAPITAL GAIN/LOSS: The profit or loss realized from the sale of a capital asset.
CERTIFICATE OF DEPOSIT (CD or NCD): A deposit of funds at a bank for a specified period of time that earns interest at a specified rate. Commonly known as "CDs" or "negotiable CDs." CERTIFICATE OF DEPOSIT PLACEMENT SERVICES: The purpose of the Certificate of Deposit Account Registry Service (CDARS) is to help people who invest in certificate of deposits (CDs) keep their money insured while also staying below the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 per depositor per bank.
COLLATERAL: Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public moneys.
COLLATERLIZED TIME DEPOSIT: A Time Deposit supported by collateral. 51
City of Beaumont -Finance Department Policies and Procedures Manual 2026 COLLATERALIZED MORTGAGE OBLIGATION (CMO): A type of mortgage -backed security that contains a pool of mortgages bundled together and sold as an investment. Organized by maturity and level of risk, CMOs receive cash flows as borrowers repay the mortgages that act as collateral on these securities.
In turn, CMOs distribute principal and interest payments to their investors based on predetermined rules and agreements.
COMMERCIAL PAPER (CP): Short-term unsecured promissory notes issued by corporations for maturities of 270 days or less.
CONVEXITY: A measure of a bond's price sensitivity to changing interest rates. A high convexity indicates greater sensitivity of a bond's price to interest rate changes.
CREDIT OUTLOOK: (See Rating Outlook)
CREDIT QUALITY: The measurement of the financial strength of a bond issuer. This measurement helps an investor to understand an issuer's ability to make timely interest payments and repay the loan principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest rate paid by the issuer because the risk of default is lower. Credit quality ratings are provided by nationally recognized statistical rating organizations.
CREDIT RISK: The risk to an investor that an issuer will default in the payment of interest and/or principal on a security.
CREDIT WATCH: Indicates that a company's credit is under review and credit ratings are subject to change. Positive (+) credit watch indicates that the credit rating is under review for possible upgrade.
Negative credit watch (-) indicates that the credit rating is under review for possible downgrade.
Evolving/Neutral credit watch indicates that credit rating is under review with direction uncertain.
COUPON: The rate at which a bond pays interest.
CURRENT YIELD: The annual income from an investment divided by the current market value. Since the mathematical calculation relies on the current market value rather than the investor's cost, current yield is unrelated to the actual return the investor will eam if the security is held to maturity.
CUSTODIAN: A bank or other financial institution that keeps custody of stock certificates and other assets.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.
DELIVERY VERSUS PAYMENT (DVP): Delivery of securities with a simultaneous exchange of money for the securities.
DERIVATIVE: A security whose interest rate of principal amount may vary and are determined by a market index or a combination of market indexes.
DISCOUNT: The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as Treasury bills and bankers' acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity 52
City of Beaumont -Finance Department Policies and Procedures Manual 2026 without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.
DIVERSIFICATION: An investment principle designed to spread the risk in a portfolio by dividing investments among different sectors, industries and companies.
DOLLAR -WEIGHTED AVERAGE MATURITY: A calculation that expresses the "average maturity" of an investment portfolio using each investment's maturity weighted by the size of that investment.
DOWNGRADE: A negative change in the credit rating of a security.
DURATION: A measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed -income security. This calculation is based on three variables:
term to maturity, coupon rate and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.
EMBEDDED CALL OPTION: A feature of a financial instrument that lets issuers take specified actions at some future time. Embedded call options are provisions included in some fixed -income securities that allow the issuer to call back (redeem) the issue at a date earlier than the legal final maturity date.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system. The FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships.
FEDERAL FUNDS RATE: Interest rate charged by banks with excess reserves at a Federal Reserve district bank to banks needing overnight loans to meet reserve requirements. A target rate is set by the FOMC.
FEDERAL OPEN MARKET COMMITTEE (FOMC): This committee sets 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: A U.S. centralized banking system, which has supervisory powers over the 12 Federal Reserve banks and member banks.
FEDERALLY INSURED TIME DEPOSIT: A Time Deposit insured by the FDIC.
FITCH, INC: (see Nationally Recognized Statistical Rating Organization) FIXED -INCOME SECURITIES: Securities that return a fixed income over a specified period.
FLOATING RATE NOTE: A debt security whose interest rate is reset periodically (monthly, quarterly, annually) and is based on a market index (e.g., Treasury bills, LIBOR, etc.).
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP): GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.
53
City of Beaumont -Finance Department Policies and Procedures Manual 2026 INTEREST: The amount earned while owning a debt security, generally calculated as a percentage of the principal amount.
INTEREST RATE RISK: The risk of potential investment losses that result from a change in interest rates.
INTERNAL CONTROLS: An internal control structure designed to ensure that the assets of the entity are protected from loss, theft, or misuse. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management.
INVERSE FLOATER: A bond or other type of debt whose coupon rate has an inverse relationship to a benchmark rate. An inverse floater adjusts its coupon payment as the interest rate changes.
INVESTMENT COMPANY ACT OF 1940: Federal legislation which sets the standards by which investment companies, such as mutual funds, are regulated in the areas of advertising, promotion, performance reporting requirements, and securities valuations.
INVESTMENT MANAGERS: An investment manager is a person or organization that makes investment decisions about portfolios of securities on behalf of clients under the investment objectives and parameters the client has defined.
JOINT POWERS AUTHORITY (JPA): An entity permitted under the laws of some U.S. states, whereby two or more public authorities (e.g., local governments, or utility or transport districts), not necessarily located in the same state, may jointly exercise any power common to all of them.
LETTER OF CREDIT: A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.
LIQUIDITY: The speed and ease with which an investment can be converted to cash.
LOCAL AGENCY: County, city, city and county, including a chartered city or county, school district, community college district, public district, county board of education, county superintendent of schools, or any public or municipal corporation.
MAKE -WHOLE CALL PROVISION: A type of call provision on a bond allowing the issuer to pay off remaining debt early. The issuer typically has to make a lump -sum payment to the investor. The payment is derived from a formula based on the net present value (NPV) of previously scheduled coupon payments and the principal that the investor would have received.
MARGIN: The collateral that an investor is required to deposit with their broker or an exchange to cover the credit risk the holder poses for the broker or the exchange when trading with borrowed or leveraged funds.
MARK -TO -MARKET: The market valuation for every security in a portfolio used in determining its total market value and the Net Asset (NAV) in the case of mutual funds or other pooled investment products. 54
City of Beaumont -Finance Department Policies and Procedures Manual 2026 MARKET RISK: The risk that changes in overall market conditions or interest rate may adversely affect current market prices.
MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.
MASTER REPURCHASE AGREEMENT: A written contract between the parties of a repurchase agreement establishing each party's rights in all current and future transactions until termination of the contract by either party.
MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.
MEDIUM -TERM NOTES (MTN): Debt securities issued by a corporation or depository institution with a maturity ranging from nine months to five years. The term "medium -term note" refers to the time it takes for an obligation to mature and includes other corporate debt securities originally issued for maturities longer than five years, but which have now fallen within the five- year maturity range. MTNs issued by banks are also called "bank notes."
MONEY MARKET: The market in which short-term debt instruments (Treasury bills, discount notes, commercial paper, bankers' acceptances, etc.) are issued and traded.
MONEY MARKET MUTUAL FUNDS: An investment company that pools money from investors and invests in a variety of short-term money market instruments.
MOODY'S INVESTORS SERVICE, INC: (See Nationally Recognized Rating Services) MORTGAGE DERIVED INTEREST ONLY STRIP: A security based solely on the interest payments from a pool of mortgages. Once the principal on the mortgages or bonds has been repaid, interest payments stop, and the value of the IO falls to zero.
MORTGAGE PASS -THROUGH SECURITIES: A security created when one or more mortgage holders form a collection (pool) of mortgages and sells shares or participation certificates in the pool. The cash flow from the collateral pool is "passed through" to the security holder as monthly payments of principal, interest, and pre -payments.
MUNICIPAL BONDS: Bonds, notes and other securities issued by a state, municipality, or county.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO): Firms that review the creditworthiness of the issuers of debt securities and express their opinion in the form of letter ratings (e.g., AAA, AA, A, BBB, etc.). The primary rating agencies are the following: Standard & Poor's Corporation; Moody's Investor Services, Inc.; and Fitch, Inc.
NEGOTIABLE CD: (See Certificates of Deposit)
NET ASSET VALUE (NAV): A per-share valuation of a mutual fund based on total assets minus total liabilities.
NEW ISSUE SECURITIES: A new issue refers to a bond offering that is made for the first time.
NON -CALLABLE: Bond that cannot be called at the option of the issuer. 55
City of Beaumont -Finance Department Policies and Procedures Manual 2026 OFFER PRICE: The price asked by a seller of securities.
PAR or PAR VALUE: The amount of principal that must be paid at maturity. Also referred to as the face amount of a bond, normally quoted in $1,000 increments per bond.
PHYSICAL DELIVERY: The delivery of an investment to a custodian bank in the form of a physical certificate and/or supporting documents evidencing the investment (as opposed to "book entry" delivery).
PORTFOLIO: A group of securities held by an individual or institutional investor.
PREMIUM: The difference between the par value of a bond and the market value of the bond, when the market value is above par.
PRICE RISK: The risk that the price of a bond sold prior to maturity will be less than the price at which the bond was originally purchased.
PRIMARY DEALER: Banks and securities brokerages authorized to buy and sell government securities in direct dealings with the Federal Reserve Bank of New York in its execution of Federal Open Market Operations.
PRIME RATE: The base rate that banks use in pricing commercial loans to their best and most creditworthy customers.
PRINCIPAL: The face value or par value of an investment.
PRINCIPAL PAYDOWNS: A reduction in the principal amount owed on a loan or other debt often associated with mortgage -backed or other paythrough security structures subject to prepayments.
PROSPECTUS: A legal document that must be provided to any prospective purchaser of a new securities offering registered with the SEC. This can include information of the issuer, the issuer's business, the proposed use of proceeds, the experience of the issuer's management, and certain certified financial statements.
RANGE NOTE: A range note or range accrual is a structured product based on an underlying index whose returns are maximized if that index stays within the investor's defined range. Commonly referred to as range accrual note, it is a type of financial derivative.
RATING OUTLOOK: The potential direction of the credit rating assigned by a NRSRO for a specific company.
REINVESTMENT RISK: The risk that coupon payments (or other payments received) cannot be reinvested at the same rate as the initial investment.
RECEIVABLE -BACKED SECURITIES: Securities collateralized with consumer receivables, such as automobile loans, credit card receivables, or home equity loans, which are owned by the issuer, but placed with a trustee for the benefit of the investor.
RECEIVABLE PASS -THROUGH CERTIFICATE: A debt obligation that is backed by a portfolio of receivables, normally issued by a bank or financial institution. The interest and principal of the obligation is paid out of the cash flow generated by the receivable's portfolio. 56
City of Beaumont -Finance Department Policies and Procedures Manual 2026 REFUNDED BOND: A bond secured by an escrow fund that is sufficient to pay off the entire issue of bonds at the next call date (pre -funded) or maturity (escrowed to maturity).
REGISTERED STATE WARRANT: A short-term obligation of a state governmental body issued in anticipation of revenue.
REPURCHASE AGREEMENT (REPO): The purchase of securities, on a temporary basis, with the seller's simultaneous agreement to repurchase the securities back at a later date at a specified price that includes interest for the buyer's holding period.
RULE 2a-7 OF THE INVESTMENT COMPANY ACT: Applies to all money market mutual funds and mandates such funds to maintain certain standards, including a 13 -month maturity limit and a 60 -day average maturity on investments, to help maintain a constant net asset value of one dollar ($1.00).
RULE G-37 OF THE MUNICIPAL SECURITIES RULEMAKING BOARD: Federal regulations to sever any connection between the making of political contributions and the awarding of municipal securities business.
SAFEKEEPING: Storage and protection of a customer's financial assets, valuables, or documents, provided by an institution serving as an Agent or Custodian and, where control is delegated by the customer.
SECURITIES & EXCHANGE COMMISSION (SEC): The federal agency responsible for supervising and regulating the securities industry.
SETTLEMENT DATE: The date when a trade is final, and the buyer must make payment to the seller while the seller delivers the assets to the buyer.
SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION (SIFMA): A not -for- profit trade association that represents securities brokerage firms, investment banking institutions, and other investment firms.
SINKING FUND: Money accumulated on a regular basis in a separate custodial account that is used to redeem debt securities or preferred stock issues.
STANDARD & POOR' S CORPORATION: (See Nationally Recognized Rating Services) STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND (LAIF): A voluntary program created by statute began in 1977 as an investment alternative for California's local governments and special districts. This program offers local agencies the opportunity to participate in a major portfolio, which invests hundreds of millions of dollars, using the investment expertise of the State Treasurer's Office professional investment staff at no additional cost to the taxpayer.
STRUCTURED INVESTMENT VEHICLE (SIV): A pool of investment assets that attempts to profit from credit spreads between short-term debt and long-term structured finance products such as asset -backed securities (ABS). Funding for SIVs comes from the issuance of commercial paper that is continuously renewed or rolled over; the proceeds are then invested in longer maturity assets that have less liquidity but pay higher yields.
SUPRANATIONAL: An entity that is formed by two or more central governments with the purpose of promoting economic development for the member countries. Examples include the International Bank for 57
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Reconstruction and Development, International Finance Corporation, and the Inter -American Development Bank.
SURETY BOND: A promise to be liable for the debt, default, or failure of another. It is a three -party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).
THIRD -PARTY CUSTODIAL AGREEMENT: (See Custodian)
TOTAL RETURN: The sum of all investment income plus changes in the capital value of the portfolio.
For mutual funds, return on an investment is composed of share price appreciation plus any realized dividends or capital gains. This is calculated by taking the following components during a certain time period:
Total Return $ = (Ending value — Beginning value) + Coupons and Dividends Received Total Return % = Total Return $/Beginning Value x 100
TRADE DATE: The date and time corresponding to an investor's commitment to buy or sell a security.
U.S. GOVERNMENT AGENCY SECURITIES: Debt securities issued by U.S. Government sponsored enterprises and federally related institutions. These government agencies include Federal Home Loan Banks (FHLB), Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac), Federal National Mortgage Association (FNMA or Fannie Mae), Federal Farm Credit Banks (FFCB), Resolution Trust Corporation (RTC), and Tennessee Valley Authority (TVA).
U.S. TREASURY SECURITIES: Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the U.S. and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.
Treasury Bills: Non -interest -bearing discount securities with maturities under one year issued by the U.S Treasury.
Treasury Notes: Interest -bearing obligations of the U.S. Treasury with maturities ranging from two to ten years from date of issue.
Treasury Bonds: Interest -bearing obligations issued by the U.S. Treasury with maturities that range from ten to thirty years from date of issue.
UNIFORM NET CAPITAL RULE: SEC Rule 15C3-1 outlining capital requirements for broker/dealers.
VARIABLE RATE NOTE: (See Floating Rate Note)
VOLATILITY: A degree of fluctuation in the price and valuation of securities.
WEIGHTED AVERAGE MATURITY (WAM): The average maturity of all the securities that comprise a portfolio. According to SEC rule 2a-7, the WAM for SEC registered money market mutual funds may not exceed 60 days and no one security may have a maturity that exceeds 397 days. 58
City of Beaumont -Finance Department Policies and Procedures Manual 2026 WHEN ISSUED (WI): A conditional transaction in which an authorized new security has not been issued.
All "when issued" transactions are settled when the actual security is issued.
YIELD: The annual rate of return on a debt investment computed as though held to maturity expressed as a percentage.
YIELD TO CALL (YTC): The rate of return an investor earns from a bond assuming the bond is redeemed (called) prior to its nominal maturity date.
YIELD TO MATURITY (YTM): The rate of return earned on an investment considering all cash flows and timing factors: interest earnings, discounts, and premiums above par.
ZERO -COUPON BONDS/U.S. TREASURY STRIPS: A bond which represents ownership of a single coupon or principal payment due on a U.S. Treasury bond. Zeros or strips mature at face value at a specified date in the future and make no payments until that date. They always sell at a discount from face value. 59
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Capital Assets Policies
Objectives
The purpose of this policy is: (1) to describe the policies and procedures utilized in the City's capital asset management system, and (2) put guidelines in place to account for and depreciate the City's capital assets.
The primary goals of this policy are:
• To ensure that the City's capital assets are accounted for in conformance with the generally accepted accounting policies; and
• To establish a consistent and cost-effective way to account for the City's capital assets.
Overview
This Capital Asset Management policy is in accordance with generally accepted accounting principles and closely conforms to the capital asset accounting practices as recommended by the Government Finance Officers Association (GFOA). The Government Finance Officers Association recommends that every state and local government consider the following applicable guidelines in establishing capitalization thresholds for capital assets:
• Capital assets should be capitalized only if they have an estimated useful life of at least two years following the date of acquisition.
• Capitalization thresholds should be applied to individual assets rather than to group of similar items (e.g., desks, tables). However, for assets that qualify for capitalization and depreciation under the "group method", see Capitalization Section for the appropriate threshold application. • As a general rule, capitalization thresholds should be designed to encompass approximately 80% of a government's total non -infrastructure assets.
• In no case should a government establish a capitalization threshold of less than $5,000 for any individual item.
• Governments should exercise control over their non -capitalized capital assets by establishing and maintaining adequate internal control procedures at the department level.
Capital assets are recorded as expenditures in governmental funds at the time the assets are received, and the liability is incurred. These assets will be capitalized at cost in the government wide financial statements.
Per le 34:
• Capital Assets are defined as land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.
• Infrastructure Assets are defined as long lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.
Examples include roads, bridges, drainage systems, sewer systems and lighting systems. 60
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Responsibility
The City Manager is ultimately responsible for the City's implementation and compliance with these policies unless the City Council authorizes exceptions. Under the direction of the City Manager, the Finance Director will review, develop, and implement a system of processes and procedures to ensure compliance with these policies throughout the entire organization. The City Manager will work with the Finance Director to ensure these policies are updated on a timely basis.
Definitions
The City of Beaumont will apply the following definitions to its capital asset policies and procedures.
Buildings. Structures of a fixed or semi -fixed nature, which provide shelter and/or create interior space.
Buildings also include picnic shelters, storage sheds and restrooms.
Construction in Progress. Assets that are being built that are not usable at the end of the fiscal year, such as an incomplete building, waterline, sewer line, storm drain line, street, road, traffic signal, or other public improvement or infrastructure.
Capital Expenditure. A capital expenditure is an outlay for fixed assets, including land, building, machinery, equipment, construction in progress, design in progress, improvements and infrastructure with an original cost of $10,000or more. The capitalization threshold for land improvements shall be $25,000 whereas building improvements shall be $50,000.
Design in Progress. Capital improvement projects that are in planning or the design stage. The expenditure of these projects is capitalized at year-end if the design has exceeded$ 10,000.
Equipment. Moveable personal property with a useful life of more than one year and a value of $10,000or more. Such items as furniture, machines, tools, vehicles, and computers are included in this category.
Capital Asset. Tangible and intangible property owned by the City with a value of $10,000or more and a useful life of at least one year.
Improvements. Physical property of a fixed nature that is added (affixed) to land or buildings. These assets include ground improvements, sidewalks, driveways, landscaping, sprinklers, fences, parking lots, etc.
Building improvements include such items as carpeting, air conditioning systems or improvements through remodeling.
Infrastructure. Includes bridges, traffic signals, streets, roads, curbs, gutters, sidewalks, water lines, sewer lines and storm drain lines.
Intangibles. Items such as software (not replacement or upgrades).
Land. Includes the investment in real property or the ownership of ground space such as parcels, easements, and rights -of -way.
Streets and Roads. Includes all streets and roads that have pavement as well as curb, gutter and sidewalk.
Street Drainages. Includes storm drainage piping and manholes underneath streets and roads. 61
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Traffic Signals. All traffic lighting systems that control traffic.
Vehicles. All vehicles and rolling stock equipment that are maintained by the Public Works Department or Community Services Department.
Capital Expenditure Definition and Capitalization Policy (Accounting and Financial Reporting)
Capital Expenditures for capital assets, including land, buildings, machinery, equipment, construction in progress, design in progress, improvements, and infrastructure with an original cost of $10,000or more and a useful life of at least two -years, will be subject to accounting and reporting (capitalization). All costs associated with the purchase or construction of the asset are part of the capitalization threshold including ancillary costs such as freight, transportation charges, site preparation expenditures, professional fees, warranties, taxes and legal claims directly attributable to the asset acquisition. Specific capitalization guidelines are described:
1. Capitalization Threshold. An exception to the $10,000 threshold is land and some infrastructure.
All costs associated with the purchase or acquisition of land parcels, rights -of -way, or easements, are capitalized, regardless of cost.
2. Fixed Asset Components. For the purpose of capitalization, the threshold will generally not apply to components of capital assets. For example, a keyboard, monitor and central processing unit purchased as components of a computer system will not be evaluated individually against the capitalization threshold. The entire computer system will be treated as a single capital asset provided the entire system meets the $10,000 threshold.
Individual assets that cost less than $10,000 but operate as part of a network system may be capitalized in the aggregate using the "group method" if the estimated average useful life of the individual asset is at least (3) years. A network, or group is determined to be where individual components may be below $10,000 but are independent, and the overriding value to the City is on the entire network and not the individual assets (e.g., computer systems and telephone systems). In this case, the entire network or group will be capitalized as one system with many components to the system.
3. Grants. Any asset required to be controlled and separately reported pursuant to grant conditions or any other externally imposed reporting requirement, will be capitalized, regardless of cost. For example, a grant program that has funded the acquisition of a capital asset may impose a requirement that the capital asset be tracked and identified as a grant -funded asset.
4. Dedications and Donations. When an asset is acquired through dedications, donations, developer funding, or in -lieu of fees, the asset will be recorded at its estimated fair market value at the date of acquisition, as determined by the appropriate City department using an appropriate method to determine value. If the donation is a combination of land, structure, equipment, etc., the fair values will be segregated as applicable.
5. Repairs and Maintenance. The following criteria are the basis for distinguishing costs as either 62
City of Beaumont -Finance Department Policies and Procedures Manual 2026 capital or repair and maintenance expense:
• With respect to improvements on non -infrastructure and infrastructure under the Basic Approach, costs should be capitalized if the useful life of the asset is substantially extended, or the cost results in a substantial increase in the capacity or efficiency of the assets. Otherwise, the cost should be expensed as repair and maintenance.
• With respect to improvements on infrastructure under the Modified Approach, costs should be capitalized if expenditures substantially increase the capacity or efficiency of an infrastructure.
Otherwise, costs, including those that preserve the useful life of an infrastructure asset, are expensed.
6. Improvements. Improvements to existing capital assets will be presumed (by definition) to extend the useful life of the related capital assets, and therefore, will be subject to capitalization only if the cost of the improvement meets the $10,000 threshold. Therefore, an improvement to a capital asset that had an original cost of less than$10,000, but now exceeds the threshold as a result of the improvement, should be combined as a single asset at the total cost (original cost plus the cost of the improvement) and capitalized.
7. Capital Projects. Capital projects will be capitalized as "design in progress" or "construction in progress" until completed. The costs associated with the capital project include direct costs, such as labor and materials, as well as indirect and ancillary costs. The City utilizes the Project Accounting module of the financial software to track and report project budgets, actual costs, encumbrances, revenue sources and status of projects.
Capitalization Valuations
The objective of capital asset accounting is to account for the City's historical acquisition cost, not present market or replacement values of City capital assets. Therefore, capital assets are valued at historical cost. In those instances where historical costs are not available, capital assets are valued at estimated historical cost.
Donated capital assets are valued at their estimated fair market value on the date donated. In valuating capital assets, the following guidelines are used.
1. Buildings. Costs include all expenditures in connection with their acquisition such as purchase price or construction cost, fixtures attached to the structure, architect's fees, engineering fees, and insurance during construction.
2. Construction in Progress. Assets are recorded in the same manner as assets acquired by purchase or construction contract. Costs that are capitalized are service charges, materials, and architects and engineering payments and retentions.
3. Design in Progress. Costs that are capitalized include service charges, materials and architects and engineering payments and retentions.
4. Equipment. Costs include all expenditures including the purchase price (before trade-in allowance) freight charges, taxes and installation costs.
5. Improvements. Costs include all expenditures in connection with their acquisition such as purchase price or construction costs, materials costs, installation costs, fixtures, architect's fees, engineering fees, freight charges, taxes and insurance during construction. 63
City of Beaumont -Finance Department Policies and Procedures Manual 2026
6. Infrastructure. Costs include all expenditures in connection with their construction including labor costs, material costs, installation costs, engineering fees, freight charges, sales taxes and insurance during construction.
7. Land. Costs include all expenditures in connection with land acquisition such as purchase price, appraisal fees, title policy fees, demolition, site clearance, etc.
8. Street Drainage. Costs include all expenditures in connection with their construction including materials costs, installation costs, engineering fees, freight charges, sales taxes and insurance during construction.
9. Streets and Roads. Costs include all expenditures in connection with their construction including material costs, installation costs, engineering fees and insurance during construction.
10. Traffic Signals. Costs include purchase price, freight charges, taxes and installation charges.
11. Vehicles. Costs include purchase price, sales tax, freight charges and installation costs.
Depreciation
1. Principles and Guidelines. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charge to depreciation expense each year represents that year's pro rata share of the cost of the capital -asset.
General Accounting Standards Board (GASB) Statement 34 requires that all capital assets with limited useful lives be depreciated over their estimated useful lives. Alternatively, the "modified approach" may be used for certain capital assets. Depreciation is not provided under this approach, but all expenditures for these assets are expensed, unless they are additions or improvements.
Except for streets and roads covered by the "modified approach," depreciation is booked on capital assets. Depreciation of all capital assets is charged as an expense against operations each year. The total amount of depreciation taken over the years, called accumulated depreciation, is reported on the balance sheet as a reduction in the book value of the capital assets.
Depreciation is used solely in Proprietary Fund Types. Depreciation is important in these funds because it is included as an operational expense of these funds. Unlike Governmental Fund Types, capital assets are reported in the balance sheet accounts of each Proprietary Fund. The use of these assets over a period of time is charged as a depreciation expense.
2. Depreciation Method. Depreciation is provided using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated.
3. Estimated Useful Life.
The City has established recommended useful lives for capital assets as follows:
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City of Beaumont -Finance Department Policies and Procedures Manual 2026
ASSET CLASS
USEFUL LIFE
Building and Improvements
10 — 30 years
Infrastructure
10 — 50 years
Street Drainage
40 — 50 years
Curb, Gutter and Sidewalk
40 years
Traffic Signals
20 years
Equipment and Machinery
3 - 20 years
Furniture and Fixtures
3 - 20 years
Vehicles
5 - 10 years
Inventory Control Policy
1. Inventory Control Criteria. Inventory control is applied only to movable assets and not to land, buildings or other immovable assets. Certain assets subject to inventory control will be accounted for and controlled through the same systems and procedures used to account and control capital assets subject to capitalization. Capital assets will be subject to inventory control if they meet at least one of the following criteria:
A. The capital asset has a useful life that exceeds two years.
B. The original cost of the capital asset is equal to or greater than$10,000.
C. Any asset less than $10,000 as requested from a department. This may include certain machinery and equipment that, due to their portability, character or value outside of the office are susceptible to loss, theft, misplacement or borrowing. It may also include any asset that has been requested by a department to be controlled in order to satisfy an internal (operational) or external federal or state regulatory requirement.
D. Any asset required to be controlled and separately reported pursuant to grant conditions or any other externally imposed reporting requirement. For example, a grant program that has funded the acquisition of a capital asset may impose a requirement that the capital asset be tracked and identified as a grant funded asset.
2. Annual Review and Certification. Each Depai lment Head holds ultimate responsibility for safeguarding their capital assets against theft or loss. At the end of each fiscal year, the Finance Department will forward to each department a listing of their capital assets for review and certification.
It is the responsibility of the Department Head to verify and certify the accuracy of the information contained in that report. Any discrepancies must be reported to the Finance Department.
3. Fixed Asset Report. All depaitnients involved in the construction or dedication of improvements or infrastructure assets must complete a capital asset report when filing a Notice of Completion or Acceptance. The report must be forwarded to the Finance Department for inclusion in the City's capital asset database and the City's engineers for inclusion on the City's Geographic Information Systems (GIS) database.
4. Transfers of Fixed Asset. Requests for transfers of capital assets will be in writing and submitted to the Finance Department and City Manager for approval. The Finance Department will be responsible for making the appropriate transfers on the City's computerized Capital Asset database and keeping a file of all transfers.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Impairment
As part of the periodic inventory of capital assets, a measurement of physical condition will also be performed. The Government Accounting Standards Board (GASB) Statement No. 42 Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries will be applied. The City is required to evaluate prominent events or changes in circumstances affecting capital assets to determine whether impairment has occurred.
"Impairment" may include physical damage, enactment or approval of laws or regulations, changes in environmental factors, technical changes, or evidence of obsolescence, changes in the manner or duration of use of an asset, and construction stoppages.
A capital asset is impaired if both:
1. The decline in the ability to use an asset is large in magnitude (>$100,000).
2. The event is outside the normal life cycle of a capital asset.
In the case of theft, fire, flood, obsolescence, or other event regarding the usefulness of an asset, departments need to evaluate the usefulness or availability of that asset in the future. This may require outside assistance from an appraiser and/or the Finance Department to determine significance and applicability. Impairment must be conspicuous — e.g., known to the City that a material event has occurred.
To measure the amount of the impairment, the depaitment will need to work with the Finance Department to determine if the above factors exist. If so, the portion of the asset to be adjusted would depend on the usefulness after repair (if applicable.) Usefulness assessments will need to be known as soon as possible.
Other items will need to be known include:
1. What is the estimated cost to restore the asset to full utility?
2. What would be the current cost to replace the asset?
3. What is the salvage value, if any?
If there is impairment, these items will be used to measure impairment given the facts of the occurrence.
Once known, this information must be communicated to the Finance Director in writing so the asset value may be adjusted on the City's Asset Register.
Additionally, impairment losses should be reported in financial statements in accordance with the guidance provided by GASB. If not otherwise apparent from the face of the financial statements, the description, amount, and financial statement classification of impairment losses should be disclosed in the notes to the financial statements. If evidence is available to demonstrate that the impairment will be temporary, the capital asset should not be written down.
Impaired capital assets that are idle should be disclosed, regardless of whether the impairment is considered permanent or temporary.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Disposal of Fixed Assets
Disposal Authority. No capital assets may be disposed of without the approval of the City Council or the City Manager and Finance Department. Disposal of all land and buildings and all other capital assets with a value of over $10,000 must have City Council approval. If it is determined that the capital assets sold as a unit have a value less than$10,000 , the property may be disposed of in a manner approved by the Department Head, Finance Department, and the City Manager. Capital assets will only be disposed of after checking with other City departments to see if they can use the property.
Disposal Value. It is the responsibility of each depar Intent to appraise capital assets designated as surplus prior to sale.
Disposal Methods. Capital Assets may be disposed of in the following ways:
1. Sealed bids after at least three public notices have been published in the newspaper.
2. Public auction after at least three notices have been published in the newspaper.
3. Traded in to reduce the purchase price of a new replacement for a capital asset.
4. Taken to a federal or state surplus property facility and sold through that facility.
5. Sold or donated to another government agency.
6. Recycled and disposed of as junk to a landfill or other appropriate waste removal facility.
7. Other method approved by the City Council or the City Manager where it is believed that the highest price can be obtained for the capital asset. The City Council or City Manager will determine the most appropriate method of disposing of capital assets.
Proceeds from Sales and Auctions. All proceeds from the sale of capital assets will be allocated to the City's General Fund unless the property was originally purchased with monies from a specific City Accounting Fund, in which case, the proceeds will be returned to that specific Accounting Fund, or to the Internal Service Fund which will be used to replace that asset.
System Design
The City utilizes Tyler Fixed Assets module software which is an internet based solution to tracking and managing the capital assets and related depreciation. Assets are added to the software as identified for capitalization. The software system has been established to include the following data:
• Date Placed in Service
• Fixed Asset ID number
• Description
• Asset Control Account
• Estimated Useful Life
• Serial Number (if applicable)
• Department
• Location
67
City of Beaumont -Finance Department Policies and Procedures Manual 2026 • Total Cost
• Useful Life
• Current Depreciation Expense
• Accumulated Depreciation
• Disposition Date
• Method of Disposition
• Sale Price
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Capital Improvement Policies
Introduction
Capital improvement policies ensure that limited capital improvement funds are expended efficiently, effectively and provide the maximum public benefit. The Capital Improvement Plan (CIP) outlines a schedule of public service expenditures. The CIP does not address all of the capital expenditures for the City, but provides for large, physical improvements which are permanent, including the basic facilities, services and installations needed for the functioning of the community. These include utilities, municipal facilities and other miscellaneous projects. A capital improvement project is an investment of public and/or private funds of at least $25,000 and a useful life of more than two years.
Scope
The City's capital Improvement policies apply to all personnel, departments, divisions, and offices of the City government as well as all associated accounting funds under the direct authority of the City of Beaumont. These accounting funds include, but are not limited to, the General Fund, Special Revenue Funds, Enterprise Funds, Internal Service Funds, Debt Service Funds, Capital Projects Funds, Private -Purpose Trust Funds and Agency Trust Funds.
These capital improvement policies are also applicable to the City's blended component units, including the Successor Agency to the Beaumont Redevelopment Agency, Beaumont Utility Authority, Beaumont Conservation Authority and Beaumont Public Financing Authority.
Responsibility
The City Manager is ultimately responsible for the City's implementation and compliance with these policies, unless the City Council authorizes exceptions. Under the direction of the City Manager, the Public Works Director and Finance Director will review, develop and implement a system of processes and procedures to ensure compliance with these policies throughout the entire organization. The City Manager will work with the Public Works Department and Finance Director to ensure these policies are updated on a timely basis.
New Construction
New residential, commercial and industrial developments must be approved by the City Engineer and be fully completed before acceptance by the City. The City requires surety bonds in a form approved by the City Attorney to guarantee the construction of off -site improvements in all new developments. The improvements that must be installed in each development are water lines, sewer lines, flood control facilities, underground electrical lines, underground telephone lines, underground natural gas lines, underground cable television lines, curbs, gutters, sidewalks and a finished street, with enough road base and asphalt depth to last at least 15 years. Construction standards to achieve this useful life have been determined and adopted by the City.
Capital Project Funding and Construction Categories
Beaumont capital projects may be divided into four categories. They are current -year funded projects, Five -Year Capital Improvements Plan (CIP) projects, planned, but unfunded projects, and unfunded future needs projects. 69
City of Beaumont -Finance Department Policies and Procedures Manual 2026
1. Category 1 Projects: Current -Year Funded Projects. This category includes projects that funding has been appropriated in the current fiscal year's capital budgets and legal contracts have been signed to commit these funds. The City Council has determined through the annual budgeting process that these projects are in the best interest of the public's health, safety, and welfare. These projects have been carefully planned to maximize the benefits derived through the use of the City's limited resources. Projects that generate future revenues that will fund future services and projects and benefit the entire community will receive first priority for funding.
2. Category 2 Projects: Five -Year Capital Improvement Plan (CIP) Projects. This category includes projects where funding will come from projected revenues in the second through fifth year of the Five -Year Capital Improvements Plan (CIP). The fiscal year in which anticipated funding has been reserved may change due to the available revenues. All projects in this category must be tied to a projected funding source.
3. Category 3 Projects: Planned but Unfunded Projects. This category includes projects that are planned and required to maintain established levels of services throughout the City for the existing population. Typically, these projects are needed as a result of deteriorating infrastructure, updates to various General Plan Elements, or are in areas where minimum levels of service are not currently being met. These projects are not intended to promote residential growth, but to sustain municipal services for the existing residents. If a funding source becomes available, a project in this category may be moved to a Category 2 Project.
4. Category 4 Projects: Unfunded Future Needs Projects. Projects under this category are a condition of future growth and will generally be included in undeveloped areas. It is the intent of the City that development should pay for public improvements to meet established minimum levels of service. In this category, projects are not anticipated to be upgraded to a higher category without revenue generating potential.
Capital Project Financing
Capital improvements and equipment purchases are financed in accordance with the following policies:
1. General Fund and Enterprise Fund Equipment Purchases. City departments within the General Fund will finance equipment purchases from current year appropriations. Multi -year equipment lease -purchase agreements will be avoided except in rare cases.
2. General Infrastructure Construction Projects. Capital projects for general governmental purposes such as land purchases, building construction, road construction, street paving, storm drain installation and other major improvements are financed from revenues allocated to the General Capital Projects Fund. The General Capital Projects Fund contains revenues from unrestricted sources as well as restricted sources such as development impact fees or federal, state and county grants. Major capital improvements that cannot be delayed until the required funds are accumulated may be financed by issuing general obligation bonds, revenue bonds (where permissible), or by a combination of any of these methods.
3. Enterprise Fund Construction Projects. All capital projects in the Enterprise Funds are paid from resources provided by development impact fees, contributed capital revenues and net income from operations. If these sources cannot provide sufficient resources for Enterprise Fund improvements, construction of these improvements may be financed by general obligation bonds, revenue bonds or by a combination of any of these methods.
4. Special Assessment Districts. Capital improvements or public services that benefit a given area may be financed in accordance with state law by special assessment districts. These districts are established where the 70
City of Beaumont -Finance Department Policies and Procedures Manual 2026 majority of the residents or businesses want specific improvements or public services and consent to pay for them over time. In these cases, the City finances the specific capital improvements with bonds and public services through a special tax or special annual assessment. Property owners then pay the principal and interest for capital improvements over a designated time period.
Five -Year Capital Improvements Plan
The Five -Year Capital Improvements Plan (CIP) is a multi -year guide to the construction of public improvements such as roads, storm drains, curbs, gutters, sidewalks, recycled water facilities, sewer facilities, storm drainage facilities and other needed City improvements. It is through this process that the long-range plan for the orderly maintenance and improvement of Beaumont's physical fixed assets can be accomplished. This document is intended to serve as a planning tool and is structured to present a meaningful perspective of the community's long-range needs.
The Five -Year Capital Improvements Plan (CIP) determines the budgeted capital projects for the current fiscal year only. There are no specific appropriations established via the adoption of the Five -Year Capital Improvements Plan (CIP) with the exception of the current fiscal year. Subsequent year appropriations and actual funding sources are identified as part of the preparation of the annual budget.
Utility Coordination
All capital construction and maintenance projects are coordinated with Southern California Edison, The Gas Company, Time -Warner Communications, Beaumont Water District, and other utilities. This saves Beaumont residents money and will avoid tearing out improvements after they have been installed.
Five -Year Capital Improvements Plan (CIP) Preparation
Each department is asked every year to identify potential capital projects and their estimated cost. Financial forecasts for the General Fund, Special Revenue Funds and Enterprise Funds are then prepared to identify what monies will be available for future projects. Projects that cannot be funded from money generated through the general course of business must be financed with development impact fees, grants, bonds or must be postponed or cancelled.
During the City Council budget work sessions, potential capital projects are discussed enabling the City Council to review staff recommended projects and make any necessary changes. When consensus is reached on the capital projects and proposed funding sources, the Public Works Depai intent and Finance Department will prepare a formal Five -Year Capital Improvement Plan (CIP) document that will be presented to the City Council. The adoption of this document commits the City Council to spend money on projects listed in the current fiscal year only. The City can face significant changes in economic conditions, funding sources and political priorities every year. Therefore, the Five -Year Capital Improvements Plan (CIP) must be annually updated.
Capital Project Priority Criteria Considerations
Capital projects are prioritized using revenue generating and cost avoidance considerations; health, safety, welfare considerations and Strategic Goals.
1. Revenue Generating and Cost Avoidance Considerations. Projects that enhance revenues or reduce costs will be given first priority in order to improve the financial position of the City and enhance the ability to do future projects or deliver high levels of municipal services. New commercial, residential, and industrial development must pay for its infrastructure either by constructing these items or paying impact fees. 71
City of Beaumont -Finance Department Policies and Procedures Manual 2026
2. Health, Safety and Welfare Considerations. One of the primary purposes of government is to provide for the health, safety, and welfare of its citizens. The City must provide safe drinking water, safe streets, safe sidewalks as well as adequate police protection, solid waste disposal, and storm water disposal and treatment of municipal sewage.
3. Level -of -Service Considerations. Many older City developments were constructed decades ago, and many newer developments do not meet minimum levels of service as established by the federal government, state government, City government or generally accepted engineering standards.
4. Maintenance Considerations. All public improvements must be maintained after the construction is completed. Maintenance staffing and equipment are critical elements that must be considered in project prioritization and must be funded on an on -going basis with revenue sources other than capital improvement funding. The nature of some projects may cause a reduction in maintenance.
5. Aesthetic Considerations. Community appearance and aesthetics are important elements in the quality of life in the community. City aesthetics and appearance helps attract new residential, commercial and industrial developments to the City. Beaumont has buildings and public infrastructure that need to be replaced and upgraded to create a more attractive community.
6. Leverage and Timing Considerations. Projects that may be funded by entitlement grants or competitive grants from the federal, state and county governments will be considered based on the availability of funds and the requirements of the granting agency. In addition, the City Council may accelerate capital projects where the City has the opportunity to participate in partnership with other public or private entities or where timing is critical, or funding may be lost.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Capital Projects Priority Ranking
Priority I: IMPERATIVE (Must -Do) — Projects that cannot reasonably be postponed in order to avoid harmful or otherwise undesirable consequences.
A. Corrects a condition dangerous to public health or safety B. Satisfies a legal obligation
C. Alleviates an emergency service disruption or deficiency D. Prevents irreparable damage to a valuable public facility.
Priority II: ESSENTIAL (Should -Do) — Projects that address clearly demonstrated needs or objectives.
A. Rehabilitates or replaces an obsolete public facility or attachment
B. Stimulates economic growth and private capital investment C. Reduces future operating and maintenance costs
D. Leverages available state or federal funding.
Priority III: IMPORTANT (Could -Do) — Projects that benefit the community but may be delayed without detrimental effects to basic services.
A. Provides a new or expanded level of service
B. Promotes intergovernmental cooperation
C. Reduces energy consumption
D. Enhances cultural or natural resources.
Priority IV: DESIRABLE (Other Year) — Desirable projects that are not included within five-year program because of funding limitations. 73
City of Beaumont -Finance Department Policies and Procedures Manual 2026 2018-03 Restated Bond Accounting
Policies And Procedures
Finance Department Amended and Restated Policies and Procedures Manual
BOND PROCEEDS TRACKING POLICIES - ACCOUNTS PAYABLE
APPLICABLE TO DEVELOPMENT -BASED FINANCINGS BY EACH OF
CITY OF BEAUMONT
BEAUMONT FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 93-1
AND
ANY ADDITIONAL COMMUNITY FACILITIES DISTRICT APPROVED BY THE
CITY OF BEAUMONT
The accounts payable function must be coordinated closely with the Public Works depaitinent ("PW") and in addition must process payments in a timely and professional manner in accordance with the applicable Indenture or Trust Agreement.
Care must be taken to see that payments are both accurate and timely. Internal control over disbursements requires proper supporting documentation to ensure that the City only pays legitimate transactions for acquisition of goods or services. No one person shall process a complete cycle of transaction from origination to completion.
Purpose
The purpose of this Policies and Procedures Manual is to memorialize, identify and communicate key principals and procedures to be used to track and account for the expenditure of proceeds from debt obligations — particularly obligations issued by the Beaumont Financing Authority (the "BFA") secured by land assessment/tax-backed securities — and land assessment/tax-backed securities issued by Community Facilities District No. 93-1 (the "District") or any community facilities district subsequently authorized or approved by City of Beaumont. In 2017, the BFA consented to a Cease -and -Desist Order with the U.S. Securities and Exchange Commission (the "SEC Order") related to certain past disclosure decisions. This Policies and Procedures Manual is intended, in part, to ensure that City officials and staff remain in full compliance with the obligations under past or future bond documents and with the SEC Order.
Distribution and Training
This Policies and Procedures Manual shall be provided to all officials and staff that are involved with the accounting of bond proceeds (including, but not limited to, the payment of costs or expenses that are to be ultimately paid with bond proceeds).
Periodic training, taking place not less than annually, for the Finance Director and other appropriate officials and staff of the City and the BFA involving with the accounting of bond proceeds is coordinated by the Finance Director, who is responsible for ensuring compliance with this Policies and Procedures Manual and for implementing and maintaining a record (including attendance) of such trainings. These training sessions are provided to assist officials and staff with the accounting of bond proceeds and recordkeeping. 74
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Timelines
The Developer is responsible for submitting requests for reimbursement to the Finance Department for review and processing, including all necessary documentation in an orderly form. The Finance Department must notify PW (Public Works) when documentation is received in order to have it reviewed by the project engineer.
Project Cost Approval Processing
The PW (Public Works) depai .iiient is to assign a project engineer to perform review of documentation received from the Developer or Vendor for reimbursement. The Project Engineer is to establish a list of the eligible projects as stated in the applicable Indenture or Trust Agreement.
The Project Engineer is to review all contracts and costs for the public improvements including change orders, invoices, proof of payment and lien releases, and certified payroll (when required).
A report documenting the eligible projects, construction cost review, determination of eligible costs, and recommendation for payment is to be prepared by PW department and provided to Finance Department for release of funds.
Trustee Notification
1. A written requisition of the District is prepared by the Finance Director for the release of construction bond proceeds. (NOTE: Funds are to be disbursed to the City and remittance to the applicable developer or vendor is to be made by the City through the established accounts payable process). A form of written requisition is attached hereto as Exhibit A.
2. The standard requisition form is to be used identifying the bond issue, improvement area and Trustee account number.
3. Requisitions are to be maintained in numerical sequence, assigned manually, as follows:
Fiscal Year Beginning - 3 Digit sequence (i.e., 2017-001, 2017-002, 2017-003)
4. Request must have Schedule 1 attached. Schedule 1 is to contain the wire transfer instructions, total amount, and detailed purpose/use of funds.
5. Request must contain a copy of the report prepared by the PW department.
6. Request must contain Letter(s) of Request from the developer.
7. Trustee Notification documents are to be presented to the City Manager for approval.
8. Trustee Notification documents are to then be presented to City Council for approval. Written Requisition is to be signed by an authorized representative.
9. Finance Director is to transmit Trustee Notification documents to the Trustee representative for disbursement of funds.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Payment Check Processing and Reviews
1. The Trustee Notification documents are considered the supporting documents for the disbursement of funds to the developer or vendor.
2. A check request form is completed by the Finance Director and is submitted with the Trustee Notification documents to accounts payable for payment processing.
3. Finance Director is to monitor cash flow so that developer/vendor payment is not made prior to the receipt of construction bond proceeds.
Recordkeeping
The Finance Director is to maintain a spreadsheet for each financing totaling the amount of expenditures for each type of improvement financed. At the end of each year, the spreadsheet shall be updated based on the Written Requisitions honored.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Exhibit A
CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 93-1
SPECIAL TAX BONDS,
(IMPROVEMENT AREA NO. )
ACCOUNT NUMBER
WRITTEN REQUISITION OF THE DISTRICT
NO.
The undersigned is an Authorized Representative of the City of Beaumont Community Facilities District No. 93-1 (the "District") hereby requests Wilmington Trust, National Association, as successor trustee to Union Bank, N.A. (the "Trustee") under that certain Indenture of Trust dated as of January 15, 1994, as amended and supplemented to date by the Supplemental Indenture dated as of (the "District Indenture"), by and between the District and the Trustee, to pay to the Persons listed on Schedule I attached hereto, the amounts shown for the purposes indicated from the Construction Fund established and maintained under the Indenture.
The District hereby certifies that (a) each obligation mentioned therein is a proper charge against such Construction Fund and has not previously been disbursed by the Trustee from amounts in such Construction Fund, (b) all conditions precedent with respect to such disbursement have been satisfied, and (c) the amount of such disbursement is for a Project Cost as defined herein, (d) is accompanied by a bill or statement of account (if any) for each obligation and (e) no Event of Default has occurred under the Indenture, (f) this request meets the requirements of the Indenture.
A11 payments shall be made in accordance with the payment instructions set forth on Schedule I attached hereto, and the Trustee shall have no duty or obligation to authenticate such payment instructions or authorization thereof.
Dated:
CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO.93-1
By:
Authorized Representative
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Schedule 1
WRITTEN REQUISITION OF THE DISTRICT
Name/Address (Wire/Check)
CITY OF BEAUMONT
Wells Fargo
ABA
Acct
Amount Purpose
2. 3.
City will process payment directly to
Instructions have been provided to City with documentation received to support the costs being claimed, enumerated above.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Restated Bond Disclosure Procedures
And Policies
CITY OF BEAUMONT
AMENDED AND RESTATED DISCLOSURE PROCEDURES
APPLICABLE TO EACH OF
CITY OF BEAUMONT
BEAUMONT FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 93-1
AND
AMY ADDITIONAL COMMUNITY FACILITIES DISTRICT APPROVED BY THE
CITY OF BEAUMONT
Purpose
The purpose of these Amended and Restated Disclosure Procedures (the "Procedures") is to memorialize and communicate key principles and procedures in connection with obligations, including notes, bonds and certificates of participation, issued by the City of Beaumont (the "City"), and to memorialize and communicate key principles and procedures in connection with obligations issued by the Beaumont Financing Authority ("BFA"), the Community Facilities District No. 93-1 (the "District") or any other community facilities district (each, an "Additional District") subsequently authorized or approved by the City. Because the governing body of BFA and its officers/staff are the same as the City, and because the governing body of the District and its staff are the same as the City, all references in these Procedures to "City" shall also refer to BFA in the case of land assessment/tax- backed securities that secure payment of obligations issued by BFA, and the District (and any Additional District) in the case of Mello -Roos bonds and other land assessment/tax-backed securities issued by the District (or such Additional District).
In 2017, the BFA consented to a Cease -and -Desist Order with the U.S. Securities and Exchange Commission (the "SEC Order") related to certain past disclosure decisions. These Procedures are intended, in part, to ensure that City officials and staff remain in full compliance with the obligations under past or future bond documents and with the SEC Order.
Distribution
The Procedures shall be provided to all members of the Beaumont City Council, the City Manager, all members of the City's Finance Department, the City Attorney and any other member of the City staff involved in the City's disclosure obligations.
Background
From time to time, the City issues certificates of participation, revenue bonds, notes or other obligations, the District or any Additional District may issue Mello -Roos bonds or other land assessment/tax-backed securities, and the BFA 79
City of Beaumont -Finance Department Policies and Procedures Manual 2026 may issue obligations in various forms, including among others debt secured by and payable from debt obligations issued by the District or any Additional District (collectively, "Obligations"), in order to fund or refund capital investments, new development within the City, other long-term programs and working capital needs. In offering Obligations to the public, and at other times when the City, BFA, the District or any Additional District, as the case may be, makes certain reports, the City, BFA, the District and any Additional District, as the case may be, must comply with the Anti -Fraud Rules of federal securities laws even though material portions of official statements are written by developers, their counsel and other market participants. Although BFA is essentially a conduit issuer and its official statements primarily related to housing development disclosure versus disclosure regarding the City, BFA nevertheless has responsibility for compliance with the Anti -Fraud Rules. The same holds true for securities issued directly by the District or any Additional District. As used herein, "Anti -Fraud Rules" refers to Section 17 of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934, and regulations adopted by the Securities and Exchange Commission under those Acts, particularly Rule 1 Ob-5 under the 1934 Act.
At their core, these rules require all material information relating to the offered Obligations be provided to potential investors. The information provided to potential investors must not contain any material misstatements, and the City must not omit material information which would be necessary to provide to investors a complete and transparent description of the Obligations and the City's financial condition. In the context of the sale of securities, a fact is considered to be material if there is a substantial likelihood that a reasonable investor would consider it to be important in determining whether or not to purchase the securities being offered.
When the City issues Obligations, two central disclosure documents are prepared: (1) a preliminary official statement ("POS"); and (2) a final official statement ("OS", and collectively with the POS, "Official Statement").
The Official Statement generally consists of (a) the forepart (which describes the specific transaction including maturity dates, interest rates, redemption provisions, the specific type of financing, the leased premises (in certificate of participation financings) and other matters particular to the financing, including, depending on the type of financing, the City's or enterprise's financial condition, the development within the community facilities district, the developer and its development and financing plan, and (b) various other appendices, including the City's audited financial report (for City general fund or enterprise fund financings), form of the proposed legal opinion, and form of continuing disclosure undertaking. Investors use the Official Statement as one of their primary resources for making informed investment decisions regarding the City's Obligations.
Engagement of Outside Disclosure Counsel
For every Obligation, the City shall engage outside legal counsel with expertise in securities laws for advice with respect to the City's disclosure obligations and requirements under the federal securities laws ("Disclosure Counsel"). Disclosure Counsel assists the City in preparing the Official Statement and reviews all new data and updates to the Official Statement. Throughout the process of receiving and incorporating material, Disclosure Counsel provides advice as to standards of materiality and other securities law issues. Disclosure Counsel has a confidential, attorney -client relationship with officials and staff of the City.
Disclosure Counsel provides a negative assurance letter as to the disclosure set forth in the Official Statement for each City Obligation. The letter advises the City and the Obligations underwriters that as a matter of fact and not opinion that no information came to the attention of the attorneys working on the transaction which caused them to believe that Official Statement as of its date and as of the date of their letter (except for any financial, statistical, economic or demographic data or forecasts, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, and other customary exclusions), contained or contains any untrue statement of a material fact omitted or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Disclosure Process
The City Manager shall be primarily responsible for the administration of these Procedures as they pertain to primary market disclosure. The City Manager shall delegate to other officers' responsibilities for certain of these functions as the City Manager from time to time determines. As used herein, "Finance Staff shall mean the City Manager and its delegates.
When the City decides to issue Obligations, the Finance Staff request the involved departments to commence preparation of the portions of the Official Statement for which they are responsible. Finance Staff and the City Attorney are separately responsible for reviewing and preparing or updating certain portions of the Official Statement which are within their particular area of knowledge. Additionally, all participants in the disclosure process are separately responsible for reviewing the entire Official Statement. Disclosure Counsel assists the Finance Staff in determining the materiality of any particular item, and in the development of specific language in the Official Statement. For general fund financings, Disclosure Counsel also assists the City in the development of a "big picture" overview of the City's financial condition, included in the forepart of the Official Statement. This overview highlights particular areas of concern. The Finance Staff schedules one or more meetings or conference calls of the financing team working group (which includes City officials, the City's financial advisor, Disclosure Counsel, bond counsel, the underwriter of the Obligations, and their counsel, and, for land secured financings, the developer, its attorneys, and consultants), and new drafts of the Official Statement are circulated and discussed.
During this part of the process, there is substantial contact among City staff, other members of the financing team and Disclosure Counsel, to discuss issues which may arise, determine the materiality of particular items and ascertain the prominence in which the items should be disclosed.
Prior to distributing a POS to potential investors, there is a formal meeting which includes City officials involved in the preparation of the POS and the underwriters and their counsel, during which the Official Statement is reviewed in its entirety, page by page or section by section, to obtain final comments and to allow the underwriters to ask questions of the City's senior officials. This is referred to as a "due diligence" meeting.
The City Manager or its delegate (if involved in the due diligence meeting described above and, if applicable, the "page turning" session described below under "LAND ASSESSMENT/TAX-BACKED SECURITIES") is authorized to cause to be "deemed final" by the City or the BFA (or by the District or an Additional District for obligations issued directly to the public market by such entity), as applicable, the Preliminary Official Statement for purposes of Rule 15c2-12 of the Securities Exchange Commission. Between the POS and final OS, any new changes and developments will have been incorporated into the Official Statement if required by the entity responsible for the applicable portion of Appendix A. If necessary to reflect developments following publication of the POS or OS, as applicable, supplements will be prepared and published.
In connection with the closing of the transaction, one or more senior City officials execute a certificate stating that the Official Statement, as of the date of each OS and as of the date of closing, does not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements contained in the Official Statement in light of the circumstances under which they were made, not misleading.
The information contained in the Official Statement is primarily developed by Finance Staff, the City Attorney, or the developer. In addition, the City's financial adviser participates throughout the process of preparing the Official Statement and developing the structure of the financing. 81
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Land Assessment/Tax-Backed Securities
The following principles apply specifically to land assessment/tax-backed securities that secure payment of obligations issued by BFA, and the District (and any Additional District) in the case of Mello -Roos bonds and other land assessment/tax-backed securities issued by the District (or such Additional District).
Appraiser. Where the financial advisor, developer, Disclosure Counsel (or bond counsel), and/or underwriter determines that an appraisal is required for disclosure, the Official Statement should contain a description of the following:
• How the appraiser was selected (e.g., by RFP or direct selection). • The basic qualifications of the appraiser; and
• A summary of the primary criteria that resulted in the final appraisal of the relevant property. The City shall require the appraiser to review such information for accuracy. Further, Disclosure Counsel and/or bond counsel shall discuss and decide whether and to what extent written assurances as to the accuracy of such information may be needed from the appraiser.
Developer Questionnaire. The City shall require the developer to submit and certify as to accuracy and completeness a detailed questionnaire covering the developer and the proposed project (the "Developer Questionnaire") at the start of each new money financing through Land Assessment Tax -Backed Securities and for which there will be ongoing vertical development or a significant portion of the project site (e.g., greater than 20%) will be owned by the developer at the time of issuance.
A sample of a Developer Questionnaire is attached hereto as Exhibit A. However, each Developer Questionnaire should be tailored to the specific transaction at hand. The Developer Questionnaire should mirror the type of questionnaires underwriters will require for similar developer -driven financings. Each Developer Questionnaire should cover topics specific to the developer, such as:
• The ownership structure of the developer and all affiliates relevant to the project, including entity type (e.g., corporation, partnership, LLC) and percentage of controlling interests of members/partners/etc. • If publicly traded, instructions or a website link for how investors can access annual and other disclosures on EDGAR.
• General background and experience of the developer and its affiliates, as applicable. • A history of previous projects developed by the developer and/or relevant entities with controlling interests, which shall include, without limitation, information concerning material delays in construction, history of defaults, etc.
Each Developer Questionnaire should also contain relevant details concerning the development at issue, such as:
• Location.
• Size.
• How long the developer has owned the development site. 82
City of Beaumont -Finance Department Policies and Procedures Manual 2026 • Information concerning environmental diligence, applicable zoning, and related issues. • Whether the developer or related entities are under investigation or subject of current inquiry by any federal or state regulatory agencies.
The City shall require that each Developer Questionnaire be signed and certified as true and complete by the developer. The City Finance Director shall be responsible for double-checking the receipt of the Developer Questionnaire.
Offering statements for Land Assessment/Tax-Backed Securities respecting districts under development shall provide the following:
• Total development budget (including public infrastructure improvements and the home developments). • A listing of sources of funds (e.g., developer equity, line of credit, commercial loan, other equity investor funds).
• The status of such funding sources (e.g., if a construction loan, the extent to which it has been funded).
If a financing occurs while material portions of the project are under development, the offering statement shall disclose the status of construction and projected costs to complete (whether based on the initial budget or otherwise).
For developments that contain 500 or more units, discussion should occur among bond counsel, Disclosure Counsel, the financial advisor, the underwriter, and other relevant participants as to whether a market absorption or feasibility study is needed for the Offering Statement. The City shall give deference to the determinations of the financial advisor, Disclosure Counsel and bond counsel over recommendation from other participants like the developer and its counsel.
Formal "Page Turning" Session
Prior to the due diligence meeting described under "DISCLOSURE PROCESS" above, there shall be a formal "page turning" session where the special tax consultant, Disclosure Counsel, bond counsel, financial advisor, the developer and its counsel, the City Manager, the City Attorney, any other relevant City officials as identified by the City Manager, review key portions of the preliminary official statement and, to the extent of changes other than those reflecting pricing terms following sale, the final official statement. This type of "page turning" session is a very important element of the disclosure process. The City Finance Director shall be responsible for ensuring that such "page turning" session occurs prior to the Preliminary Official Statement or similar offering statement being made available to investors.
Prior to printing the Official Statement, the City shall require the developer to deliver a "10b-5" certificate to the City covering those portions of the Preliminary Official Statement relating to the developer, its project and its financing plans. Additionally, prior to printing the Preliminary Official Statement, the City Manager and its delegates, and Disclosure Counsel or bond counsel, shall have reviewed and agreed upon the form of developer counsel opinion required, if any, and the form of written assurances, if any, from the special tax consultant and financial advisor as to accuracy and completeness of relevant portions of the Preliminary Official Statement in connection with the financing. The City Finance Director shall be responsible for double-checking the receipt of all 10b-5 and related certificates, instruments or opinions required to be delivered by the developer in a land assessment/tax-backed securities offering.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Recordkeeping
• BFA, the City, the District, or any Additional District, as applicable, shall retain in a central depository for a period of five years from the date of delivery of any series of bonds the following materials:
• The printed copy of the Preliminary Official Statement and final Official Statement (or similar offering documents).
• The executed copies of all opinions, letters or other certifications concerning the accuracy or adequacy of disclosure provided by the developer, developer's counsel, Disclosure Counsel, bond counsel and all other participants in the financing pursuant to these Procedures. • The Developer Questionnaire, if applicable.
• The bond purchase agreement.
• Copies of any "deemed final" certification provided by an official with the City, BFA, the District or an Additional District, as the case may be, to the underwriter of bonds in accordance paragraph (b)(1) of Rule 15c2-12 of the Securities Exchange Commission; and
• Any written certification or opinions executed by a developer, its counsel, the special tax consultant, financial advisor, and any other financing participants outside the City delivered at the time of delivery of the related series of bonds.
It is not necessary that drafts of such instruments be retained, only final copies.
Governing Principles for City Officials and Staff
• The following principles govern the work of the respective staffs that contribute information to the Official Statement:
• City staff involved in the disclosure process are responsible for being familiar with federal securities laws as they relate to disclosure.
• City staff involved in the disclosure process should be instructed to err on the side of raising issues when preparing or reviewing information for disclosure. Officials and staff are encouraged to consult with Disclosure Counsel if there are questions regarding whether an issue is material. • City staff involved in the disclosure process, along with the developer, special tax counsel, the financial advisor and all other participants in preparing portions of an offering statement and that are involved in any meetings where portions of an offering statement are reviewed or discussed should be instructed that general disclosure of a potential risk is no substitute for known facts specific to that risk, and that participants should strive to ensure known facts are disclosed.
• Care should be taken not to shortcut or eliminate any steps outlined in the Procedures on an ad hoc basis.
However, the Procedures are not necessarily intended to be a rigid list of procedural requirements, but 84
City of Beaumont -Finance Department Policies and Procedures Manual 2026 instead to provide guidelines for disclosure review. If warranted, based on experience during financings or because of additional SEC pronouncements or other reasons, the City should consider revisions to the Procedures
• The City must make sure that the particular officials involved in the disclosure process are of sufficient seniority such that it is reasonable to believe that, collectively, they are in possession of material information relating to the City and its finances,
• Any concerns regarding the accuracy of an Official Statement should be immediately reported to the City Attorney or the City's Disclosure Counsel.
• Care should be taken that any information produced and maintained for public consumption, and which may be relied upon by an investor in making an investment decision in the primary or secondary market, does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. • Consideration should be made, based on consultation with Disclosure Counsel (or, if there is not Disclosure Counsel, bond counsel) as to whether a public statement by a City official or the response by the City to an investor inquiry (e.g., a question from one of BFA's investors) may be material enough to merit a voluntary filing on ENN.A to ensure that Obligations are trading based on equal access to material information. • The City Manager shall review these Procedures on an annual or bi-annual basis and may, from time to time, as may be necessary, update these Procedures in consultation with Disclosure Counsel and/or bond counsel.
• The City Finance Director, together with Disclosure Counsel and/or bond counsel, shall review the continuing disclosure section of the preliminary offering statement particularly that portion describing the five-year compliance history of the District or of any other obligated person under the purview of BFA or the City before it is finalized and sent to prospective investors.
Annual Continuing Disclosure Requirements
In connection with the issuance of Obligations, the City has entered into a number of contractual agreements (each a "Continuing Disclosure Certificate" and, collectively, "Continuing Disclosure Certificates") to provide annual reports related to its financial condition (including its audited fmancial statements) as well as notice of certain events relating to the Obligations specified in the Continuing Disclosure Certificates. Continuing Disclosure Certificates that are entered into in the future should not be "canned" and Disclosure Counsel (or, if there is not Disclosure Counsel, bond counsel or underwriter's counsel) shall prepare the continuing disclosure agreement based upon the specific transaction at hand.
The City must comply with the specific requirements of each Continuing Disclosure Certificate. The City's Continuing Disclosure Certificates generally require that the annual reports be filed within a certain number of days after the end of the City's fiscal year, and event notices are generally required to be filed within 10 days of their occurrence.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Specific events which require material event notices generally consist of the following'
1. Any of the following events with respect to the Obligations (in a timely manner not more than ten (10) business days after the event):
A. Principal and interest payment delinquencies.
B. Unscheduled draws on debt service reserves reflecting financial difficulties.
C. Unscheduled draws on credit enhancements reflecting financial difficulties.
D. Substitution of credit or liquidity providers, or their failure to perform.
E. Issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (RS Form 5701 TEB).
F. Tender offers.
G. Defeasances
H. Rating changes.
I. Bankruptcy, insolvency, receivership, or similar event of the obligated person.
2. Any of the following events with respect to the particular Obligations, if material:
A. Unless described in paragraph 5(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the particular Obligations or other material events affecting the tax status of the Series 2013 Bonds.
B. Modifications to rights of holders of the particular Obligations.
C. Optional, unscheduled, or contingent calls of the particular Obligations.
D. Release, substitution, or sale of property securing repayment of the particular Obligations.
E. Non-payment related defaults.
F. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms. 1 The list set forth above is applicable for transactions after December 1, 2010. Continuing disclosure undertakings for transactions prior to that date contained a similar, but less extensive list of material events. 86
City of Beaumont -Finance Department Policies and Procedures Manual 2026 G. Appointment of a successor or additional trustee or the change of name of a trustee.
The City Finance Director shall be responsible for preparing and filing the annual reports and material event notices required pursuant to the Continuing Disclosure Certificates. Particular care shall be paid to the timely filing of any changes in credit ratings on Obligations (including changes resulting from changes in the credit ratings of insurers of particular Obligations).
Moreover, with regard to the filing of annual financial statements, the City Finance Director, and the City Manager (or its delegate) shall maintain calendar reminders for the filing of such statements. The City shall consider the use of a dissemination agent or other reminder resources provided by the Municipal Securities Rulemaking Board or similar authorities to assist in the timely filing of materials on EMMA.
The BFA shall have Disclosure Counsel (or, if there is no Disclosure Counsel, bond counsel) to BFA prepare a checklist for the specific items required to be filed on an annual basis (the "Annual Report Checklist"). The Annual Report Checklist should be modified by Disclosure Counsel (or, if there is not Disclosure Counsel, bond counsel) as new issues are sold, and by BFA or its counsel as issues of BFA debt are paid off and no longer outstanding. A separate Annual Report Checklist should be prepared and similarly modified for any District or Additional District obligations hereafter issued.
The City Finance Director, at the time of each annual filing, shall execute the Annual Report Checklist and then deliver it to the City Manager. The City Manager, or its delegate, shall review the filings on EMMA against the Annual Report Checklist as a double-check for compliance accuracy.
Upon the advice of Disclosure Counsel or bond counsel, the BFA may identify a different compliance method if determined to be more effective or feasible than the Annual Report Checklist.
The City Manager (or its delegate) shall double-check the timeliness of filing of audited financial statements and annual reports against the Annual Report Checklist or different compliance method described above.
When a continuing disclosure agreement requires data that does not exist or that the BFA cannot obtain, the City Finance Director will consult with bond counsel and/or Disclosure Counsel on how to report such information.
Training
The City will provide training for the staff involved in the preparation of the Official Statement, which will be coordinated by the City Manager and the City Attorney, with the assistance of Disclosure Counsel. The City Manager shall be primarily responsible for maintaining a record (including attendance) of such training. Training will be provided at least annually or prior to the offering of any new Obligation. The training sessions shall be provided to assist staff members involved in identifying relevant disclosure information to be included in the Official Statement. The training sessions also provide an overview of federal laws relating to disclosure, situations in which disclosure rules apply, the purpose of the Official Statement, a description of previous SEC enforcement actions and a discussion of recent developments in the area of municipal disclosure. Attendees at the training sessions shall be provided with the opportunity to ask questions of Disclosure Counsel concerning disclosure obligations and are encouraged to contact Disclosure Counsel at any time if they have questions.
The City Finance Director shall receive training from bond counsel or Disclosure Counsel on the mechanics for making filings on as well as the information required to be filed in the District's (and any Additional Districts') annual reports. This training will take place after the Annual Report Checklist is prepared or a more effective or 87
City of Beaumont -Finance Department Policies and Procedures Manual 2026 feasible compliance method is established.
Certificate of Receipt and Understanding
I certify that I have received a copy of the City of Beaumont's Restated Disclosure Procedures. I have reviewed and understand its contents and agree to abide by the principles and requirements in the Amended and Restated Disclosure Procedures.
Name Date
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Exhibit A
DEVELOPER QUESTIONNAIRE
This questionnaire is intended to provide information that will be used by Disclosure Counsel in connection with the preparation of the Preliminary Official Statement and the final Official Statement for the bonds proposed to be issued by (the "District"). Although the bonds are exempt from the requirement that they be registered with the Securities and Exchange Commission, they are subject to the anti -fraud provisions of the federal securities laws and the laws of the State of California. Therefore, it is critical that the Preliminary Official Statement and final Official Statement not contain any material misstatements or omissions. Accordingly, the information that you provide in response to this Questionnaire must be complete and accurate in every respect.
As used herein the term "Property" refers to all of the property within the District. The term "Project" refers to the proposed improvements to be made within the District including all residential and commercial development.
I. Ownership
(a) Name of the developer (the "Developer") of the property (the "Property") within the District:
(b) Please describe the ownership structure of the Developer. Include a description of any partnership, limited liability company or other arrangements, names of all general partners, members and officers.
Attach resumes of key individuals and a copy of any partnership agreements, operating agreements, articles of incorporation and bylaws.
(c) Please attach copies of the Developer's most recent annual and quarterly financial statements. If the Developer is a publicly held company, please provide copies of the most recent IOQ or 10K filing. (d) Include at least one reference from a bank or financial institution.
Note: Financial statements and information obtained from bank references are necessary as part of the due diligence process required to issue the bonds. Any nonpublic information will remain strictly confidential unless and until published as part of the Official Statement. (e) Who is the contact person for the Project?
Name:
Title:
Phone Number:
E -Mail:
(f) Please provide the contact information of the attorney who will be representing the Developer in connection with the issuance of bonds by the District. 89
City of Beaumont -Finance Department Policies and Procedures Manual 2026 Name:
Title:
Phone Number:
E -Mail:
(g)
Please attach your most recent copy of a preliminary title report for the Property.
II. Project Information
(a). Name of Project
(b). Location of Project
(c) Description of Project
(i) Number of gross acres:
(ii) Number of developable acres:
(d) How long has Developer owned the Property?
(e) Describe the existing land uses on the Property:
(f) Please summarize the existing entitlements for the Project (i.e., the number and type of residential units, commercial square footage, industrial square footage, recreation uses, other public uses) and provide a list of the governmental approvals that govern development of the Property. (g) Please attach a copy of each Purchase and Sale Agreement including any amendments executed by the Developer for Property in the District.
(h) Please summarize the improvements to be completed by the Developer with respect to the Project and the status of the construction of the improvements and a timeline for completion. (i) Please provide a budget for the improvements to be installed by the Developer and describe how the improvements are to be fmanced.
(j) Please answer the following questions and provide any of the following received with respect to the Property.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 (i) Has an environmental impact report been approved for this Project? YES NO.
(ii) Has a Phase I Environmental Site Assessment been prepared for the Property? YES NO. If yes, please provide a copy of all assessments prepared. (iii) Has a soils report been prepared for the Project? YES NO. If yes, please provide copies of all reports.
(k) List any approved tentative, final or parcel maps applicable to development of the Project and provide a copy of all conditions for development.
(1) Are any impact fees owing as a condition to develop? YES NO. If yes, please describe, list below and provide copies of any agreements or documents which contain such conditions. (m) Are there any endangered species habitat on the Property? YES NO. If yes, please describe.
(n) Are there any legal impediments that could delay or prevent the buildout of the Project as planned? YES NO. If yes, please describe.
(o) Are you aware of any proposed restrictions on the rate of future growth in the jurisdiction where the Project is to be located which may impact the development of the Project (i.e., proposed growth control ordinances or initiatives or limitations on water availability? YES NO. If yes, please explain. p) Are there any geological impediments (earthquake faults, flood zones, high ground water, soil slippage, etc.) to buildout of the Project? YES NO. If so, please describe. (q) What are your long-term plans for any portion of the Property not already conveyed to merchant 91
City of Beaumont -Finance Department Policies and Procedures Manual 2026 builders? For any portion to be constructed by Developer please describe planned improvements and timing. (r) Are there any existing trust deeds/loans on the Property? YES NO.
Please state the name of the lending institution, the approximate maximum loan amount and the approximate current balance of the loan. (s) Has construction financing for the Project been obtained? YES NO. If yes, Please describe the source and amount of such loan and any acquisition and development loans and provide copies of all loan agreements and promissory notes. If no, describe whether any loans are required to develop. (t) Other than the District, is there any existing or proposed community facilities district or assessment district that includes all or a portion of the Property? YES NO. If yes, please describe the name, dollar amount and a contact person for information regarding each district. (u) Have any property taxes or assessments on the Property been delinquent at any time during the past 3 years? YES NO. If yes, please explain.
(v) Please attach a copy of the most recent tax bill for each parcel of the Property and evidence that current installments due have been paid (in the form of a copy of check, wire or receipt for payment). (w) Has any claim been made, or suit been filed, or is any claim or suit now threatened against the Developer or the Property with respect to the Project? YES NO.
If yes, please attach a copy of the complaint, or if unavailable, please list the court in which the action is pending and the case number, or if the claim or action has not yet been filed, please attach any documents summarizing the claims or action.
III. Related Project Information
(a) Has an absorption study been done for the Project within the last 2 years? Yes No. If yes, please provide a copy.
(b) Has an appraisal been done for the Property within the last two years? Yes No. (c) Is any of the Property (other than the portions thereof that have been improved with completed residential or commercial structures currently for sale? Yes No. If yes, please provide a copy of the sale terms.
IV Experience and Financial Capacity of Developer
(a) Has the Developer, or any individual or entity which has an ownership interest in the Developer, ever 92
City of Beaumont -Finance Department Policies and Procedures Manual 2026 defaulted on the payment of a special tax or an assessment on property owned by it? YES NO. If yes, please explain.
(b) Is the Developer, or any individual or entity which has an ownership interest in the Developer, now in default on any loans, lines of credit or other obligation, or has the Developer (or related entity) been in default on any loans or lines of credit or other obligation in the past five years? YES NO. If yes, please explain.
(c) Has the Developer, or any individual or entity which has an ownership interest in the Developer, ever filed for bankruptcy or been declared bankrupt? YES NO. If yes, specify the date and location of the court where the bankruptcy action took place.
(d) Have you prepared a business plan and/or pro forma for the proposed Project? YES NO. If yes, please attach a copy. If no, please prepare a detailed pro forma and provide it as soon as possible. (e) Has the Developer, or any individual or entity which has an ownership interest in the Developer, ever failed to comply within the last five years with the terms of any agreement to provide continuing disclosure with respect to a bond issue? YES NO. If yes, please describe the bond issue and the nature of the failure to comply.
V. Notice Regarding Disclosure
The Securities and Exchange Commission recently adopted amendments (the "Amendments") to Rule 15c2-12 under the Securities Exchange Act of 1934 relating to certain required disclosure information that must be made available to prospective purchasers of municipal bonds. Under the Amendments, certain material information must be disclosed (i) in connection with the initial offering of bonds with respect to "material persons"; and (ii) on an ongoing basis with respect to "obligated persons." Whether a property owner/developer might be a material person, or an obligated person will depend on all of the facts and circumstances. If the information you provide in response to this questionnaire indicates this might be the case, the financing team will review with you the information that may need to be disclosed to potential bond investors in order to satisfy the Amendments.
The undersigned hereby certifies that all responses provided herein are true and correct.
By:
By:
[President/CEO/CFO/or Equivalent]
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 Amended and Restated Special Assessment
and Community Facilities District Goals and
Policies
Purpose
Pursuant to Section 53312.7 of the California Government Code, the City Council of the City of Beaumont (hereafter the "City Council") hereby states its goals and policies concerning the use of Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (hereafter the "Mello Roos Act") in providing adequate public capital infrastructure, facilities, equipment and public services for the residents of the City of Beaumont (the "City"). The following goals and policies shall apply to all community facilities districts (each a "Community Facilities District) and to all assessment districts (each an "Assessment District" and together with any Community Facilities District, the "Districts") under the improvement acts of 1911, 1913, 1915 and 1972 (the "Improvement Acts") hereafter formed by the City.
Policy
The City has developed the following Policies and Procedures on financing facilities and/or services through the formation of community facilities districts as guidelines to assist concerned parties in following the City's approach to special assessment and community facilities district financing. It is the City's goal to support projects that address a public need and provide a public benefit. Proposed projects requesting special assessment or community facility district debt financing will be evaluated to determine if such financing is financially viable, provide a public benefit and are in the best interest of the City, and current and future City and project residents.
These Policies and Procedures are designed to comply with Section 53312.7 of the Government Code.
The City will consider developer or property owner -initiated applications requesting the formation of community facilities or special assessment districts and the issuance of bonds to finance eligible public facilities and/or public services necessary to serve newly developing projects. The following criteria will be applied to all districts by the City staff with final determination and findings to be made by the City Council:
1) When public financing of project public facilities will result in a significant public benefit or address City identified needs.
2) When a Specific Plan has been adopted on the property, or the City has negotiated and executed a Development Agreement addressing project implementation, either of which includes requirements to form a District to finance public improvements or services. 3) Each time a District is formed to finance public facilities for the benefit of a development project, the City will require in those situations where maintenance requirements will exceed normal City standards or where such development requires the provision of additional services, the creation of an alternative financing mechanism to pay for such maintenance requirement or such additional services.
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City of Beaumont -Finance Department Policies and Procedures Manual 2026 4) Existing neighborhoods may apply to the City for the use of a District to finance local or neighborhood -serving facilities. The City will apply applicable provisions of these policies to those financing programs for existing neighborhoods.
The City may initiate Districts by itself at any time to assist in mitigating service impacts or for any other reason.
The City shall make the determination as to whether a proposed District shall proceed under the provisions of the Improvement Acts or the Mello -Roos Act. The City may confer with consultants and the applicant to learn of any unique district requirements such as facilities serving the regional area or long-term development phasing prior to making any final determination.
All City and consultant costs incurred in the evaluation of new development district applications and the establishment of districts will be paid by the applicant(s) by advance deposit increments. The City shall not incur any non -reimbursable expense for processing assessments or community facilities districts. Expenses not chargeable to the district shall be borne by the applicant.
Finance Staff Review
All proposed Districts shall be reviewed by the City Finance staff for adherence to the policy prior to being presented to the City Council. Any variances from policy as well as any other material information will be noted by the Finance staff and reported to the City Council with recommendation for action.
Resource Consultants
Bond Counsel
Financial/ Municipal Advisor
Assessment Engineer or Special Tax Consultant
Appraiser
Economist/Market Absorption Specialist
Bond Underwriter
Disclosure Counsel
Trustee/Fiscal Agent
The City shall have the sole discretion as to selection of consultants and determination of fees and expenses of all consultants necessary for the formation of a Special District and the issuance of bonds. Prior consent of the applicant(s) shall not be required in the determination by the City of the consulting and fmancing team. Costs of the applicant(s) and any costs of consultants working on behalf of the applicant(s) are not eligible for reimbursement from a future issuance of bonds.
No firm may serve as both design engineer and engineer of work and assessment engineer or special tax consultant on the same project, pursuant to Section 87100 of the Government Code.
Eligible Public Facilities, Services And Priority
Priority for CFD financing shall be given to public facilities and services directly benefiting the City as well as those improvements identified by the City as the most necessary to serve the specific needs of the portion of the City in which the CFD will be located. The financing of public facilities to be owned and operated by public 95