Berkeley City Council
June 27, 2023

3 therefor. In the event there are insufficient Unrestricted Moneys received by the City to permit the deposits into the Special Account of the full amount of the Pledged Revenues to be deposited in the applicable month, by the last business day of such month, then the amount of such deficiency shall be satisfied and made up from any other moneys of the City lawfully available for the payment of the Notes and the interest thereon.

All Pledged Revenues, as and when received, shall be depos ited by the City in to the Special Account, which will be held by the City for the payment of the principal of and interest on the Notes at maturity. Amounts deposited by the City in to the Special Account shall be applied solely for the purpose of paying the principal of and interest on the Notes. Such amounts shall be invested by the City in legal investments, as permitted by Section 53601 of the Government Code of the State. See “CITY INVESTMENT POLICY AND PORTFOLIO.”

Available Sources of Repayment

The Notes, in accordance with State law, are general obligations of the City, but are payable only out of Unrestricted Moneys, which include the taxes, income, revenues, cash receipts and other moneys that are received by the City for the General Fund for fiscal year 2023- 24 and that are generally available for payment of current expenses and other obligations of the City. The Constitution of the State substantially limits the City's ability to levy ad valorem taxes.

See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS.” The City may, under existing law, issue the Notes only if the principal of, and interest on, the Notes will not exceed 85% of the estimated uncollected Unrestricted Moneys that will be available for the repayment of the Notes.

The Note coverage ratio is shown in the following table and is the ratio of estimated Unrestricted Moneys to the amount of Unrestricted Moneys needed to pay principal of and interest on the Notes.

4 The table below gives detail as to the sources of estimated Unrestricted Moneys and the Note Coverage Ratio.

CITY OF BERKELEY
Estimated Unrestricted Moneys
Fiscal Year 2023-24

Source Amount
Available Cash Balance, July 1, 2021 $68,755,415
Taxes (including property tax, sales tax and other taxes) 222,794,315 Other Revenue 74,430,566
Proceeds of the Notes(1)* 24,004,531
Transfers In 14,246,281

TOTAL UNRESTRICTED MONEYS* $404,231,107

ESTIMATED PRINCIPAL PLUS INTEREST NEEDED FOR NOTE REPAYMENT * $24,801,350

NOTE COVERAGE RATIO* 16.3x

* Preliminary; subject to change.
(1) Excluding purchaser’s discount and costs of issuance.

Source: City of Berkeley Finance Department.

Monthly Cash Flows

The City has prepared the accompanying monthly General Fund cash flow statements covering fiscal year 2022-23 and the projected fiscal year 2023-24. The General Fund is used to finance the ordinary operations of the City and is available for any legal auth orized purposes.

While expenditures generally occur evenly throughout the fiscal year, cash receipts occur unevenly. As a result, the General Fund cash balance tends to show a deficit during parts of the fiscal year. The projections are based on the City’s budget and current financial condition.

5 City of Berkeley
Fiscal Year 2022-23 Actual and Projected General Fund Cash Flows (1)

July August September October November December January February March April May June TOTAL Beginning Balance $1,951,374 $4,539,579 $2,071,381 ($5,406,993) ($9,220,099) $36,055,241 $29,124,949 $33,148,004 $52,454,488 $87,364,185 $86,194,794 $68,755,415 $1,951,374

CASH RECEIPTS
Property Tax $8,367,660 $6,092,350 $2,211,295 $6,500,498 $45,309,511 $1,241,510 $1,116,654 $12,283,900 $26,835,967 $3,705,092 $6,493,468 $124,205,086 $8,367,660 Sales Tax 1,699,066 1,424,792 1,699,483 1,842,605 1,239,340 1,598,062 1,800,621 1,523,287 1,468,261 2,253,396 1,220,716 19,654,225 1,699,066 Other Taxes 3,676,685 2,297,588 3,432,967 3,230,678 11,592,370 5,482,967 12,960,005 13,317,414 16,687,704 2,348,458 1,612,180 78,935,004 3,676,685 License and Permits 148,072 74,387 76,437 49,486 50,517 59,409 74,557 44,042 42,643 419,293 217,794 1,412,436 148,072 Franchises 151,863 8,275 -- 156,067 -- 7,849 28,719 -- 1,223,317 143,966 -- 1,720,056 151,863 Subventions & Grants -- 46,916 7,221 21,896 35,375 -- 9,371 194,696 -- -- 194,718 551,226 -- Service Fees 860,937 755,822 900,975 685,710 716,845 287,617 1,280,683 911,954 661,900 876,511 627,819 9,095,309 860,937 Fines and Penalties 425,551 442,246 566,840 508,899 593,419 374,267 429,018 561,084 525,528 479,354 479,527 5,944,366 425,551 Rents and Royalties 28,454 18,655 23,909 21,873 10,055 13,802 15,714 21,768 20,211 20,211 20,310 230,421 28,454 Interest Income and CalPERS Discount 282,075 1,005,683 501,927 967,850 1,317,736 421,133 282,353 1,456,041 730,172 1,028,909 1,821,288 10,313,437 282,075 Miscellaneous 18,636 8,832 8,380 16,269 91,432 132,574 19,312 82,702 73,296 4,570 171,560 689,929 18,636 Transfers In/Indirect Costs 438,828 436,682 1,360,339 439,308 581,163 2,618,842 435,142 432,665 2,608,474 436,639 1,906,254 14,246,281 438,828 CalPERS Prepayments from Other Depts 3,421,030 3,421,030 3,421,030 3,421,030 5,131,545 3,421,030 3,421,030 3,421,030 3,421,030 5,131,545 4,105,236 44,473,386 3,421,030 TRAN Proceeds -- -- -- -- -- -- -- -- -- -- -- -- --
TOTAL RECEIPTS $19,518,857 $16,033,256 $14,210,803 $17,862,169 $66,669,308 $15,659,061 $21,873,178 $34,250,584 $54,298,502 $16,847,944 $18,870,869 $311,471,162 $19,518,857

CASH DISBURSEMENTS
General Government $3,559,188 $2,908,099 $2,841,442 $2,685,409 $2,684,839 $3,764,414 $3,097,071 $2,946,611 $3,266,735 $3,116,670 $3,468,888 $5,579,997 $39,919,362 Public Safety 7,910,046 10,112,631 10,331,663 10,879,156 9,915,165 14,083,376 10,746,613 10,017,939 10,156,444 9,808,182 9,701,978 17,774,348 131,437,541 Highways and Streets 202,542 432,255 793,841 399,360 750,722 490,557 216,595 423,318 409,686 303,306 184,651 429,463 5,036,297 Health and Human Service 864,602 1,220,600 1,639,662 1,103,704 1,263,666 1,494,102 1,304,754 1,369,436 1,171,534 1,307,607 1,056,149 3,563,134 17,358,949 Culture - Recreation 638,827 764,144 1,051,321 973,494 638,850 785,373 598,040 595,838 707,330 783,633 744,618 1,630,126 9,911,593 Urban Redevelopment/Housing 528,309 1,566,606 404,971 1,048,379 633,222 1,827,689 1,008,896 1,218,175 1,345,650 1,756,142 1,092,067 2,942,272 15,372,377 Econ Dev & Assistance 106,216 263,564 455,476 399,786 440,606 385,298 417,492 116,054 380,764 113,381 106,234 275,436 3,460,308 Debt Service 15,897,554 162,752 162,752 3,699,891 6,848,205 162,752 3,699,891 162,752 162,752 3,699,885 162,752 162,752 34,984,690 Debt Service: Workers Comp Loan Repayment 2,000,000 -- 320,326 -- -- 400,407 -- -- 343,206 -- -- 423,287 3,487,226 Debt Service: 2016 Parking Revenue Bonds 2,200,000 -- -- -- -- -- -- -- -- -- -- -- 2,200,000 Transfers Out/Other 1,800,000 -- -- -- -- -- -- -- -- -- -- -- 1,800,000 Transfer Out to Pension Section 115 Trust Fund 44,473,386 -- -- -- -- -- -- -- -- -- -- -- 44,473,386 Transfer Out of Excess of Property Transfer Tax -- -- -- -- -- -- -- -- -- -- -- -- -- Transfer Out to Stabilization Reserve Fund -- -- -- -- -- -- -- -- -- -- -- -- -- Transfer Out to Catastrophic Reserve Fund 2,000,000 (500,000) 500,000 500,000 (1,500,000) (2,000,000) 1,500,000 1,000,000 (3,000,000) (1,500,000) 1,500,000 3,000,000 1,500,000 Prepayment to CalPERS $82,180,670 $16,930,652 $18,501,455 $21,689,177 $21,675,275 $21,393,968 $22,589,353 $17,850,123 $14,944,100 $19,388,805 $18,017,336 $35,780,815 $310,941,729 TRAN Principal Pledge $3,559,188 $2,908,099 $2,841,442 $2,685,409 $2,684,839 $3,764,414 $3,097,071 $2,946,611 $3,266,735 $3,116,670 $3,468,888 $5,579,997 $39,919,362 TRAN Interest Pledge 7,910,046 10,112,631 10,331,663 10,879,156 9,915,165 14,083,376 10,746,613 10,017,939 10,156,444 9,808,182 9,701,978 17,774,348 131,437,541 Advances from GF/(Repayment to GF) 202,542 432,255 793,841 399,360 750,722 490,557 216,595 423,318 409,686 303,306 184,651 429,463 5,036,297 TOTAL DISBURSEMENTS 864,602 1,220,600 1,639,662 1,103,704 1,263,666 1,494,102 1,304,754 1,369,436 1,171,534 1,307,607 1,056,149 3,563,134 17,358,949

Interfund Borrowings $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $--

Net Cash Flow ($66,804,040) $2,588,205 ($2,468,198) ($7,478,374) ($3,813,106) $45,275,340 ($6,930,292) $4,023,055 $19,306,484 $34,909,697 ($1,169,392) ($16,909,946) $529,433

Ending Balance $1,951,374 $4,539,579 $2,071,381 ($5,406,993) ($9,220,099) $36,055,241 $29,124,949 $33,148,004 $52,454,488 $87,364,185 $86,194,794 $69,284,848 $69,284,848

(1) Cash and investment balances provided in the table above represent the City’s available cash balance (i.e., General Fund cash and investments less the Stabilization and Catastrophic Reserve Fund cash balances and short term liabilities).

Source: City of Berkeley.

6 City of Berkeley
Fiscal Year 2023-24 Projected General Fund Cash Flows (1) (Including the Notes)

July August September October November December January February March April May June TOTAL Beginning Balance $68,755,415 $25,955,905 $28,544,110 $26,075,912 $18,597,538 $14,784,432 $60,059,772 $41,204,480 $45,227,535 $64,534,019 $99,443,716 $86,349,324 $68,755,415

CASH RECEIPTS
Property Tax $4,047,181 $8,367,660 $6,092,350 $2,211,295 $6,500,498 $45,309,511 $1,241,510 $1,116,654 $12,283,900 $26,835,967 $3,705,092 $6,493,468 $124,205,086 Sales Tax 1,884,596 1,699,066 1,424,792 1,699,483 1,842,605 1,239,340 1,598,062 1,800,621 1,523,287 1,468,261 2,253,396 1,220,716 19,654,225 Other Taxes 2,295,988 3,676,685 2,297,588 3,432,967 3,230,678 11,592,370 5,482,967 12,960,005 13,317,414 16,687,704 2,348,458 1,612,180 78,935,004 License and Permits 155,801 148,072 74,387 76,437 49,486 50,517 59,409 74,557 44,042 42,643 419,293 217,794 1,412,436 Franchises -- 151,863 8,275 -- 156,067 -- 7,849 28,719 -- 1,223,317 143,966 -- 1,720,056 Subventions & Grants 41,032 -- 46,916 7,221 21,896 35,375 -- 9,371 194,696 -- -- 194,718 551,226 Service Fees 528,535 860,937 755,822 900,975 685,710 716,845 287,617 1,280,683 911,954 661,900 876,511 627,819 9,095,309 Fines and Penalties 558,632 425,551 442,246 566,840 508,899 593,419 374,267 429,018 561,084 525,528 479,354 479,527 5,944,366 Rents and Royalties 15,458 28,454 18,655 23,909 21,873 10,055 13,802 15,714 21,768 20,211 20,211 20,310 230,421 Interest Income and CalPERS Discount 498,271 282,075 1,005,683 501,927 967,850 1,317,736 421,133 282,353 1,456,041 730,172 1,028,909 1,821,288 10,313,437 Miscellaneous 62,367 18,636 8,832 8,380 16,269 91,432 132,574 19,312 82,702 73,296 4,570 171,560 689,929 Transfers In/Indirect Costs 2,551,946 438,828 436,682 1,360,339 439,308 581,163 2,618,842 435,142 432,665 2,608,474 436,639 1,906,254 14,246,281 CalPERS Prepayments from Other Depts 2,736,824 3,421,030 3,421,030 3,421,030 3,421,030 5,131,545 3,421,030 3,421,030 3,421,030 3,421,030 5,131,545 4,105,236 44,473,386 TRAN Proceeds 24,004,531 -- -- -- -- -- -- -- -- -- -- -- 24,004,531 TOTAL RECEIPTS $39,381,161 $19,518,857 $16,033,256 $14,210,803 $17,862,169 $66,669,308 $15,659,061 $21,873,178 $34,250,584 $54,298,502 $16,847,944 $18,870,869 $335,475,692

CASH DISBURSEMENTS
General Government $3,559,188 $2,908,099 $2,841,442 $2,685,409 $2,684,839 $3,764,414 $3,097,071 $2,946,611 $3,266,735 $3,116,670 $3,468,888 $5,579,997 $39,919,362 Public Safety 7,910,046 10,112,631 10,331,663 10,879,156 9,915,165 14,083,376 10,746,613 10,017,939 10,156,444 9,808,182 9,701,978 17,774,348 131,437,541 Highways and Streets 202,542 432,255 793,841 399,360 750,722 490,557 216,595 423,318 409,686 303,306 184,651 429,463 5,036,297 Health and Human Service 864,602 1,220,600 1,639,662 1,103,704 1,263,666 1,494,102 1,304,754 1,369,436 1,171,534 1,307,607 1,056,149 3,563,134 17,358,949 Culture - Recreation 638,827 764,144 1,051,321 973,494 638,850 785,373 598,040 595,838 707,330 783,633 744,618 1,630,126 9,911,593 Urban Redevelopment/Housing 528,309 1,566,606 404,971 1,048,379 633,222 1,827,689 1,008,896 1,218,175 1,345,650 1,756,142 1,092,067 2,942,272 15,372,377 Econ Dev & Assistance 106,216 263,564 455,476 399,786 440,606 385,298 417,492 116,054 380,764 113,381 106,234 275,436 3,460,308 Debt Service: Workers Comp Loan Repayment 15,897,554 162,752 162,752 3,699,891 6,848,205 162,752 3,699,891 162,752 162,752 3,699,885 162,752 162,752 34,984,690 Debt Service: 2016 Parking Revenue Bonds 2,000,000 -- 320,326 -- -- 400,407 -- -- 343,206 -- -- 423,287 3,487,226 Transfers Out/Other 2,200,000 -- -- -- -- -- -- -- -- -- -- -- 2,200,000 Transfer Out to Pension Section 115 Trust Fund 1,800,000 -- -- -- -- -- -- -- -- -- -- -- 1,800,000 Transfer Out of Excess of Property Transfer Tax 44,473,386 -- -- -- -- -- -- -- -- -- -- -- 44,473,386 Transfer Out to Stabilization Reserve Fund -- -- -- -- -- -- 11,925,000 -- -- -- 11,925,000 -- 23,850,000 Transfer Out to Catastrophic Reserve Fund -- -- -- -- -- -- -- -- -- -- -- 951,350 951,350 Prepayment to CalPERS 2,000,000 (500,000) 500,000 500,000 (1,500,000) (2,000,000) 1,500,000 1,000,000 (3,000,000) (1,500,000) 1,500,000 3,000,000 1,500,000 TRAN Principal Pledge $82,180,670 $16,930,652 $18,501,455 $21,689,177 $21,675,275 $21,393,968 $34,514,353 $17,850,123 $14,944,100 $19,388,805 $29,942,336 $36,732,165 $335,743,079 TRAN Interest Pledge $3,559,188 $2,908,099 $2,841,442 $2,685,409 $2,684,839 $3,764,414 $3,097,071 $2,946,611 $3,266,735 $3,116,670 $3,468,888 $5,579,997 $39,919,362 Advances from GF/(Repayment to GF) 7,910,046 10,112,631 10,331,663 10,879,156 9,915,165 14,083,376 10,746,613 10,017,939 10,156,444 9,808,182 9,701,978 17,774,348 131,437,541 TOTAL DISBURSEMENTS 202,542 432,255 793,841 399,360 750,722 490,557 216,595 423,318 409,686 303,306 184,651 429,463 5,036,297

Interfund Borrowings $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $--

Net Cash Flow ($42,799,510) $2,588,205 ($2,468,198) ($7,478,374) ($3,813,106) $45,275,340 ($18,855,292) $4,023,055 $19,306,484 $34,909,697 ($13,094,392) ($17,861,296) ($267,387)

Ending Balance $25,955,905 $28,544,110 $26,075,912 $18,597,538 $14,784,432 $60,059,772 $41,204,480 $45,227,535 $64,534,019 $99,443,716 $86,349,324 $68,488,028 $68,488,028

(1) Cash and investment balances provided in the table above represent the City’s available cash balance (i.e., General Fund cash and investments less the Stabilization and Catastrophic Reserve Fund cash balances and short-term liabilities).

Source: City of Berkeley.

7 CITY INVESTMENT POLICY AND PORTFOLIO

The authority to invest the City’s funds is derived from a resolution adopted annually by the City Council delegating to the Director of Finance and the Treasurer of the City the authority to invest these funds within the guidelines of Section 53600 et seq. of the Government Code of the State (the “Government Code”). The Government Code also directs the City to present an annual investment policy (the “Investment Policy”) for confirmation to the City Council. The City Council voted to affirm the Investment Policy and designate the investment authority on July 1, 2022. The Investment Policy may be revised by the City Council at any time.

The objectives of the Investment Policy are preservation of capital, liquidity and yield. The Investment Policy addresses the soundness of financial institutions in which the City may deposit funds, types of investment instruments permitted by the City and the Government Code, investment duration and the amount which may be invested in certain instruments. The Investment Policy also reflects and supports the City’s policy positions on important social and environmental issues, as contained in formal City Council actions including the Nuclear -Free Berkeley Act, the Responsible Investment Ordinance, the Oppressive States Contract Resolution and Divestment from Publicly -Traded Fossil Fuel Companies and Gun Manufacturers and Tobacco companies. Summarized below are the permitted investments under the Investment Policy. These policies may further restrict investment options available to the City.

Authorized Investment Type
Maximum
Maturity
Maximum
Percentage/Dollar
of Portfolio
Maximum
Investment
in One
Issuer
Bank/Time Deposit Accounts 5 years 100% N/A
Money Market Funds N/A 100 N/A
Repurchase Agreements 1 year 10 N/A
Reverse Repurchase Agreements 7 days 10 N/A
Banker’s Acceptances 7 days 40 30%
U.S. Government Securities
(Treasury bills, Notes and Bonds) 10 years* 100 N/A
U.S. Agency Securities by Agency 10 years* 100 N/A
Negotiable Certificates of Deposit 10 years* 30 $250,000 Local Agency Bonds 5 years* 100 N/A
Commercial Paper 180 days 25 $5M or 2%
Medium Term Notes 10 years
30 years* 30 30%
Public Bank Obligations
5 years
10% of
unrestricted
investments N/A

Source: City of Berkeley
* Maturities over five years, up to 30 years, are authorized for Retiree Medical Plan Trust and debt service reserve funds.

8 As of March 31, 2023, the City portfolio included $522,457,468 in pooled investments. The average life of the investments was 1,322 days and the weighted yield was 2.238%. The following is the market value of investments held by the City as of March 31, 2023:

Security
Market
Value
% of Total
Portfolio
Certificates of Deposit $497,698 0.1%
Medium Term Notes 124,256,703 23.8
Federal Agency 392,797,667 75.2
Municipal Bonds 4,905,400 0.9
TOTAL(1): $522,457,468(1) 100.0%

(1) Totals do not sum due to rounding.

Source: City of Berkeley Finance Department.

SPECIAL RISK FACTORS

The following information should be considered by prospective investors in evaluating the Notes; however, this information does not purport to be an exhaustive listing of the risks and other considerations, which may be relevant to an investment in the Notes.

Bankruptcy Considerations

In 1994, Orange County, California issued its 1994 -1995 Tax and Revenue Anticipation Notes (the “ Orange County Notes” ) under the same sta tutory authority as the Notes. On December 6, 1994, Orange County filed a petition in bankruptcy. Subsequently, Orange County declined to set aside the taxes and revenues it had pledged for the repayment of the Orange County Notes and a noteholder brought suit to compel Orange County to do so. A March 8, 1995, ruling of the United States Bankruptcy Court for the Central District of California, held that the lien securing the Orange County Notes did not attach to revenues received by Orange County after the filing of its bankruptcy petition on December 6, 1994, and therefore, Orange County was not required to set aside the revenues pledged under the note resolution following the bankruptcy.

The Bankruptcy Court ruled that under the United States Bankruptcy Co de (the “Bankruptcy Code”), the lien did not attach to revenues received by Orange County after December 6, 1994 , because the lien was a consensual security interest rather than a statutory lien. In July 1995, the United Stated District Court for the Centr al District of California reversed the decision of the Bankruptcy Court. Orange County appealed the decision of the District Court to the United States Court of Appeals for the Ninth Circuit. Before the Ninth Circuit rendered a decision , the parties settled their disputes. Accordingly, if the City were to file for bankruptcy, it is not clear whether it would be required to set aside revenues pledged under the Resolution as described above.

In addition, the Pledged Revenues and other moneys that will be set aside to pay the Notes will be held in the City’s General Fund, and these funds will be invested in the pooled investment fund. Should the City go into bankruptcy, a court might hold that the owners of the Notes do not have a valid lien on the Pledged Rev enues. In that case, unless the owners could “trace” the funds, the owners would merely be unsecured creditors of the City. There can be no assurance that the owners of the Notes could successfully so “trace” the Pledged Revenues.

9 Limitations on Remedies

The rights of the owners of the Notes are subject to the limitations on legal remedies against cities in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. Additionally, enforceability of the rights and remedies of the owners of the Notes and the obligations incurred by the City, may become subject to the following: the Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditor’s rights generally, now or hereafter in effect; equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Constitution; and the reasonable and necessary exercise in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the owners of the Notes to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation, or modification of their rights.

COVID-19 Pandemic

The ongoing spread of the COVID-19 coronavirus pandemic, and responses intended to slow its spread, may result in material adverse impacts to the City and its finances. There can be no assurances that the spread of the virus and the related shelter in plac e orders and social distancing requirements imposed by the State of California, or other State or local mandates and/or other responses intended to slow its spread will not materially adversely impact the revenues received by the City.

The City is not yet able to fully predict the effect it COVID-19 may continue to have on the financial performance or operations of the City. The COVID-19 pandemic and the governmental actions to respond to it resulted in a significant contraction of the national, state an d local economies, including with respect to unemployment rates. In addition, stock markets in the U.S. and globally experienced sharp declines in market value following the onset of the outbreak that were attributed to COVID -19 concerns and, although rebo unds have since occurred, no assurance can be given as to the future impact of COVID-19 on the City.

The City cannot predict future impacts of COVID-19, or other pandemics, on the City and its finances . Future costs to the City could also be increased in the event that a sustained deterioration in global stock market values as an economic consequence of the COVID -19 pandemic negatively impacts the market value of assets held to fund the City’s pension plans, requiring future unanticipated increases in req uired plan contributions. Accordingly, prospective investors should consider that COVID-19 may adversely impact the City and its finances.

Climate Change

The adoption by the State of the California Global Warming Solutions Act of 2006 (AB 32) and subsequent companion bills demonstrate the commitment by the State to take action and reduce greenhouse gases (“GHG”) to 1990 levels by 2020 and 80% below 1990 levels by 2050.

The State Attorney General’s Office, in accordance with SB 375, now requires that local governments examine local policies and large-scale planning efforts to determine how to reduce greenhouse gas emissions. Additionally, the State adopted Senate Bill No. 32, which established a revised statewide GHG emission reduction target of 40% below 1990 levels by 2030.

10 The City is vulnerable to the impacts of climate change. The severity of these impacts will depend on the amount of greenhouse gas emissions produced worldwide over the coming decades and the City’s ability to adapt to the changing climate. These impacts will continue to grow in intensity and will disproportionately affect vulnerable communities such as the elderly, children, people with disabilities, and people with low incomes. In order to mitigate climate change locally, the City developed the Berkeley Climate Action Plan (CAP). The CAP sets a target of achieving 80% GHG reductions below 2000 levels by 2050. The City also has goals to achieve net zero carbon emissions by 2050, become a fossil fuel free city, and reach 100% renewable electricity citywide by 2035. From 2000 to 20 20, the City reduced its greenhouse gas emissions by 31% despite a population increase of approximately 18% in that same period . Community- wide emissions in 2019 decreased 26% from the 2000 baseline and decreased 4% from 2018.

The City has moved beyond its initial emissions reduction goal and, on May 11, 2021, the City Council committed to become zero net emissions by 2045, requiring an additional 74% reduction of GHG emissions. The City’s mitigation efforts include developing plans, programs and policies to:

• Reduce energy use in building construction and operation, in transportation by shifting travel to walking, biking, and transit, and by minimizing landfilled waste; • Clean the electricity used in the City and
• Electrify transportation and buildings to significantly reduce natural gas and petroleum use.

It is also critical that the City adapt to current and projected climate change impacts, including sea level rise, dr ought, severe storms, and extreme heat, in order to protect its community, infrastructure, buildings, and economy. The City has several plans that address climate adaptation including the Local Hazard Mitigation Plan, the Resilience Strategy, and the Climate Action Plan. The City is also developing a sea level rise plan for the Berkeley Marina and a green infrastructure plan. Some key climate resilience actions that the City is taking include implementing green infrastructure projects and identifying opport unities for clean energy assurance solutions, such as solar plus storage, for buildings. The City also actively participates in regional organizations such as the Bay Area Climate Adaptation Network to develop regional strategies and solutions to adapt to climate change.

Climate change will have new, direct impacts and will also exacerbate existing local natural hazards. Rising sea levels have the potential to impact infrastructure and community members in west Berkeley and the Berkeley waterfront. This c ould increase the City’s exposure to tsunami inundation and to flooding of critical infrastructure in these areas, which includes sanitary sewers, state highways, and railroad lines. Increased temperatures, when coupled with prolonged drought events, can i ncrease the intensity of wildfires that may occur, and pose significant health and safety risks for vulnerable communities. Shorter, more intense wet seasons could make flooding more frequent, and may increase the landslide risk in the Berkeley hills.

California may experience greater water and food insecurity, and drought may become a more persistent issue as the effects of climate change deepen.

Cybersecurity

The City and its departments face multiple cyber threats including, but not limited to, hacking, viruses, malware and other attacks on computers and other sensitive digital networks and systems. There have been, however, only limited cyber-attacks on the computer systems of the City. No assurances can be given that the security and operational control measures of the

11 City will be successful in guarding against any and each cyber threat and attack . The results of any attack on the computer and information technology systems could have a material adverse impact on the operations of the City and damage the digital networks and systems. The resulting costs and/or impacts on operations and General Fund revenues could be material.

CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES

AND APPROPRIATIONS

Limitations on Revenues

Article XIIIA of the California Constitution . Article XIIIA of the State Constitution, adopted and known as Proposition 13, was approved by the voters in June 1978. Section 1(a) of Article XIIIA limits the maximum ad valorem tax on real property to one percent of “full cash value,” and provides that such tax shall be collected by the counties and apportioned according to State law. Section 1(b) of Article XIIIA provides that the one -percent limitation does not apply to ad valorem taxes levied to pay interest and redemption charges on (i) indebtedness approved by the voters prior to July 1, 1978, or (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two -thirds of the votes cast on the proposition, or (iii) bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the district, but only if certain accountability measures are included in the proposition. The tax for payment of the City’s general obligation bonds falls within the exception for bonds approved by a two-thirds vote.

Section 2 of Article XIIIA defines “full cash value” to mean the county assessor’s valuation of real property as shown on the fiscal year 1975-76 tax bill, or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred. The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. Legislation enacted by the State Legislature to implement Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above.

Since its adoption, Article XIIIA has been amended a number of times. These amendments have created a number of exceptions to the requirement that property be reassessed when purchased, newly constructed or a change in ownership has occurred. These exceptions include certain transfers of real property between family members, certain purchases of replacement dwellings for persons over age 55 and by property owners whose original property has been destroyed in a declared disaster, and certain improvements to accommodate disabled persons and for seismic upgrades to property. These amendments have resulted in marginal reductions in the property tax revenues of the City.

Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIIIA.

Article XIIIC and Article XIIID of the California Constitution . On November 5, 1996, the voters of the State approved Proposition 21 8, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the California Constitution and contains a number

12 of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges.

On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability o f the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. The amendments to Article XIIIC define “taxes” that are subject to voter approval as “any levy, charge, or exaction of any kind imposed by a local government,” with certain exceptions.

Taxes. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City (“ general taxes”) require a majority vote; taxes for specific purposes (“ special taxes”), even if deposited in the City’s General Fund, require a two -thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues fo r the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

Property-Related Fees, Charges and Assessments . Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property - related fees, charges, and assessments for municipal services and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.

Reduction or Repeal of Taxes, Fees and Charges . Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund. If such repeal or reduction occurs, the City’s ability to pay debt service on the Notes could be adversely affected.

Burden of Proof. Article XIIIC provides that local government “bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more tha n necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity .” Similarly, Article XIIID provides that in “any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance” with Article XIIID.

Impact on City’s General Fund . The approval requirements of Artic les XIIIC and XIIID reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be

13 given that the City will be able to impose, extend or increase the taxes, fees, charges or taxes in the future that the City may need to meet increased expenditure needs.

The City does not believe that any material source of General Fund revenue is subject to challenge under Articles XIIIC or XIIID.

Judicial Interpretation. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.

Expenditures and Appropriations

Article XIIIB of the California Constitution. In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and local governments are subject to an annual “appropriations limit” or “Gann Limit” imposed by Article XIIIB of the State Constitution, which effectively limits the amount of such revenues that government entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” exclude tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds.

Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in cases of emergency; however, the appropriations limit for the three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two -thirds of the legislative body of the local government.

The State and each local government entity have their own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Each school district is required to establish an appropriations limit each year.

In the event that a school district’s revenues exceed its spending limit, the district may increase its appropriations limit to equal its spending by taking appropriations limit from the State.

Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes” for the preceding two -year period exceed the aggregate limit, the excess must be returne d to the agency’s taxpayers through tax rate or fee reductions over the following two years.

14 Future Initiatives

Article XIIIA, Article XIIIB, Article XIIIC, Article XIIID and Proposition 111 were each adopted as measures that qualified for the ballot pursuant to California’s initiative process. From time to time other initiative measures could be adopted, further affecting City revenues or the City’s ability to expend revenues. The nature and impact of these measures cannot be predicted by the City.

LEGAL OPINION

The statements of law and legal conclusions set forth in this Official Statement under the heading “TAX MATTERS” have been reviewed by Bond Counsel. Bond Counsel's employment is limited to a review of the legal proceedings required for the authorization of the Notes and to rendering the opinion discussed below. Such opinion will not consider or extend to any documents, agreements, representations, offering circulars or other mater ial of any kind concerning the Notes not mentioned in this paragraph. Bond Counsel takes no responsibility for the accuracy, completeness or fairness of this Official Statement. Bond Counsel’s compensation is contingent upon the delivery of the Notes. Certain legal matters will be passed upon for the City by the City Attorney.

TAX MATTERS

In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Notes is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Tax Code") that must be satisfied subsequent to the issuance of the Notes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the Notes.

Tax Treatment of Original Issue Discount and Premium . If the initial offering price to the public at which a Note is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a Note is sold is greater than the amount payable at maturity thereof, then such difference constitutes "original issue premium" for purposes of federal income taxe s and State of California personal income taxes. De minimis original issue discount and original issue premium are disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Note on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates) . The amount of original issue discount accruing

15 during each period is added to the adjusted basis of such Notes to d etermine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Note . The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Notes who purchase the Notes after the initial offering of a substantial amount of such maturity. Owners of such Notes should consult their own tax advisors with respect to the tax consequences of ownership of Notes with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Notes under federal alternative minimum taxes.

Under the Tax Code, orig inal issue premium is amortized on an annual basis over the term of the Note (said term being the shorter of the Note's maturity date or its call date) . The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Note for purposes of determining taxable gain or loss upon disposition . The amount of original issue premium on a Note is amortized each year over the term to maturity of the Note on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates) . Amortized Note premium is not deductible for federal income tax purposes. Owners of premium Notes, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Notes.

In the further opinion of Bond Counsel, interest on the Notes is exempt from California personal income taxes.

Owners of the Notes should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Notes may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Notes other than as expressly described above.

A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX C.

16 CONTINUING DISCLOSURE

The City has covenanted for the benefit of the holders of the Notes to provide notices of the occurrence of certain enumerated events. The notices of enumerated events will be filed by the City with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the notices of enumerated events is summarized under the caption “APPENDIX D – Form of Continuing Disclosure Certificate.” These covenants have been made in order to assist the purchaser of the No tes in complying with Rule 15c2 - 12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”).

The City and its related governmental entities have previously entered into numerous disclosure undertakings under the Rule in connection with the issuance of long-term obligations See Note 8 of the City’s Annual Comprehensive Financial Report attached to this Official Statement as APPENDIX B.

In the previous five years, the City failed to timely file a material event notice in connection with a rating change for one series of the City’s outstanding bonds. To ensure future compliance with its continuing disclosure undertakings, the City has developed procedures for including all required continuing disclosure information in the s upplementary section of its audited financial statements. In addition, the City has engaged NHA Advisors, LLC, to review this information annually to ensure compliance with its continuing disclosure undertakings , including the undertaking to be entered into in connection with the Notes.

ABSENCE OF MATERIAL LITIGATION

No litigation is pending or threatened concerning the validity of the Notes, and a certificate to that effect will be furnished by the City at the time of the original delivery of the Notes. The City is not aware of any litigation pending or threatened questioning the political existence of the City or contesting the City's ability to receive ad valorem taxes or to collect other Unrestricted Moneys or contesting the City's ability to issue and retire the Notes.

There are a number of lawsuits and claims pending against the City. The aggregate amount of the uninsured liabilities of the City, and the timing of any anticipated payments of judgments that may result from suits and claims, will not, in the opinion of the City, materially affect the finances of the City or impair its ability to repay the Notes. A certificate of the City to this effect will be available at the time of original delivery of the Notes.

17 UNDERWRITING

The Notes were purchased by __________ (the “Purchaser”) at a price of $________ (representing $________ aggregate principal amount of the Notes plus a purchase premium of $_________, less a Purchaser’s discount of $______). The purchase contract for the Notes provides that the Purchaser will purchase all the Notes if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase contract, the approval of certain legal matters by counsel and certain other conditions.

The Purchaser may offer and sell Notes to certain dealers and others at prices lower than the offering price stated on the cover page hereof. The offering price may be changed from time to time by the Purchaser.

MUNICIPAL ADVISOR

The City has retained NHA Advisors , LLC, San Rafael, California, as municipal advisor (the “Municipal Advisor”) in connection with the preparation of this Official Statement and with respect to the issuance of the Notes. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for th e accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor is a municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other publ ic securities. The Municipal Advisor’s compensation is contingent upon the delivery of the Notes.

RATING

S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC , has assigned a rating to the Notes as shown on the cover of this Official Statement. The City supplied certain information to the rating agency to be considered in evaluating the Notes. The rating issued reflects only the views of such rating agency, and any explanation of the significance of such rating should be obtained from the rating agency. There is no assurance that the rating will be retained f or any given period of time or that the same will not be revised downward or withdrawn entirely by such rating agency if, in its judgment, circumstances so warrant. Any downward revision or withdrawal of the rating obtained may have an adverse effect on the market price of the Notes.

18 ADDITIONAL INFORMATION

The purpose of this Official Statement is to supply information to purchasers of the Notes.

Quotations from and summaries and explanations of the Notes and the Resolution and of statutes and documents contained herein do not purport to be complete, and reference is hereby made to the Resolution, statutes and documents for full and complete statements of their provisions.

Additional information can be obtained from the City’s Director of Finance.

This Official Statement speaks only as of its date , and the information presented in this Official Statement is subject to change. Any statements in this Official Statement involving matters of opinion, whether or not expres sly stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement among the City and any purchaser or owners of the Notes. This Official Statement and its distribution have been authorized and approved by the City Council of the City.

CITY OF BERKELEY

By:

City Manager

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APPENDIX A

CERTAIN INFORMATION CONCERNING THE CITY OF BERKELEY

Introduction

The City of Berkeley, California (the “City”) is located in Alameda County (the “County”) on the east side of the San Francisco Bay, approximately 10 miles northeast of San Francisco.

The City encompasses a total area of approximately 19 square miles and had an estimated population of 123,562 as of January 1, 2023, giving it the highest population density of any city in the East Bay. The City is defined to a large degree, both culturally and economically, by the presence of the University of California campus located on the eastern side of the City. The University of California is a major component of the City's economy, employing more than 227,000 full and part-time workers across all University of California campuses statewide.

The City is among the oldest in California. The City was founded in 1864, incorporated as a town in 1878, and incorporated as a city in 1909. The City's first charter was adopted in 1895.

Population

Population figures for the City, County and State for the last five years are shown in the following table.

CITY OF BERKELEY
Population Estimates
As of January 1

Year
City of
Berkeley
County of
Alameda
State of
California
2019 122,297 1,659,608 39,605,361
2020 122,364 1,663,114 39,648,938
2021 120,418 1,663,371 39,286,510
2022 123,188 1,644,248 39,078,674
2023 123,562 1,636,194 38,940,231

Source: State Department of Finance estimates (as of January 1).

City Government

The City operates under a Council-Manager form of government. The City is governed by a nine-member City Council, eight of whom are elected by district, plus the Mayor, who is elected on a city-wide basis. The Mayor and the City Council members serve four-year terms. The Council appoints a City Manager who is responsible for daily administration of City affairs and preparation and submission of the annual budget under the direction of the Mayor and the City Council for the Mayor's submission to the City Council. The City Manager appoints a Director of Finance to supervise the City's financial affairs. The Director of Finance also serves as the City's Treasurer.

The City Attorney, City Clerk and Director of Finance are appointed by the City Manager subject to City Council approval. The City Auditor is elected at the sa me time as the Mayor.

Current members of the City Council are shown below:

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Member District Term Expires
Jesse Arreguín Mayor 11/30/2024
Rashi Kesarwani 1 11/30/2026
Terry Taplin 2 11/30/2024
Ben Bartlett 3 11/30/2024
Kate Harrison 4 11/30/2026
Sophie Hahn 5 11/30/2024
Susan Wengraf 6 11/30/2024
Rigel Robinson 7 11/30/2026
Mark Humbert 8 11/30/2026

CITY FINANCIAL INFORMATION

Although the City is including information about the City’s finances in this Appendix A, it is important to understand that the Notes described in this Official Statement are voter -approved general obligations of the City payable solely from the levy and collection of ad valorem property taxes, unlimited as to rate or amount, and are not payable from the general fund of the City.

Possible Impacts of COVID-19

As described in this Official Statement, while indications are that the COVID-19 pandemic is transitioning to its endemic stage, many variables will continue to contribute to the economic impact of the COVID -19 pandemic and the recovery. The ultimate impact of COVID -19 on the City’s operations and finances is not fully known, and it may be some time before the full impact of the COVID -19 pandemic is known . The Notes described in this Official Statement are not secured by the City’s general fund, but rather are voter-approved general obligations of the City payable solely from the levy and collection of ad valorem property taxes, unlimited as to rate or amount, and are not payable from the general fund of the City. See “SPECIAL RISK FACTORS – COVID-19 Pandemic.”

Accounting Policies and Financial Reporting

The accounts of the City are organized on the basis of funds and account groups, to account for different activities. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which the spending activities are controlled. The City’s general fund and other governmental fund types use the modified accrual basis of accounting. All of the City’s other funds, including proprietary fund types and fiduciary fund types use the accrual basis of accounting. The basis of accounting for all funds is more fully explained in the “Notes to the Financial Statements” contained in APPENDIX B.

The City Council employs, at the beginning of each fiscal year, an in dependent certified public accountant who, at such time or times as specified by the City Council, at least annually, and at such other times as he or she shall determine, examines the combined financial statements of the City in accordance with generally accepted auditing standards, including such tests of the accounting records and such other auditing procedures as such accountant considers necessary.

As soon as practicable after the end of the fiscal year, a final audit and report is submitted by such

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accountant to the City Council and a copy of the financial statements as of the close of the fiscal year is published.

The City, all its funds and the funds of certain other component entities of the City are audited annually by a certified public accountin g firm. The firm of Badawi and Associates, Certified Public Accounts, Oakland, California, is the City’s current auditor (the “ Auditor”). The annual comprehensive financial report of the City for fiscal year 2021-22 is attached hereto as APPENDIX B. The City’s financial statements are public documents and are included within this Official Statement without the prior approval of the Auditor.

The Governmental Accounting Standards Board (“GASB”) published its Statement No. 34 “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments” on June 30, 1999. Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States.

Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government -wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmenta l funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of Statement No. 34.

Comparative Financial Statements

The following tables provide a recent history of the City’s Comparative Balance Sheet, and both a recent history of General Fund revenues, expenditures, transfers, and ending fund balances and recently budgeted amounts.

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CITY OF BERKELEY

GENERAL FUND BALANCE SHEET
(Fiscal Year Ending June 30)
(Dollar amounts in thousands)

Actual Actual Actual Actual
2018-19 2019-20 2020-21 2021-22
ASSETS:

Cash and investments in treasury* $107,360 $136,050 $146,849 $171,955 Receivables (net of allowance as applicable):

Accounts 4,980 3,131 4,782 5,384
Interest 778 398 834 1,078
Taxes 9,953 6,502 13,092 10,795
Subventions/grants 450 1,582 1 --
Due from other funds 6,973 7,533 12,814 17,740
Notes receivable 3,697 4,820 6,197 13,818
Other 320 5 5 5
Prepaid Items -- -- -- --
Total assets 134,512 160,020 184,574 220,776

LIABILITIES:

Accounts payable 6,736 8,755 10,444 7,094
Accrued salaries and wages 5,989 7,009 8,081 8,934
Accrued interest payable -- 694 740 445
Advances from other funds 4,059 3,113 1,760 814
Deposits held 781 770 921 886
Unearned revenue -- -- -- --
Tax and revenue anticipation notes 14,000 34,780 42,405 44,660 Other liabilities 3,899 3,975 4,955 6,129
Total liabilities 35,463 59,095 69,307 68,962

Deferred Inflows of Resources 5,813 2,856 3,385 3,770

FUND BALANCES
Reserved for:

Assigned to 42,667 44,705 19,577 12,163
Nonspendable -- -- -- --
Restricted and Committed 3,697 4,820 35,941 60,697
Unreserved/Unassigned, report in:

General fund 46,872 48,544 56,364 75,184
Total fund balances 92,236 98,069 111,882 148,043

Total liabilities and fund balances $135,512 $160,020 $184,574 $220,776

* Cash and investments in treasury includes restricted cash and investments.

Source: City of Berkeley, Annual Comprehensive Financial Reports.

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CITY OF BERKELEY

STATEMENT OF GENERAL FUND

REVENUES, EXPENDITURES, TRANSFERS AND BALANCES
(Fiscal Year Ending June 30)
(Dollar amounts in thousands)

Actual

Actual

Actual

Actual
2018-19 2019-20 2020-21 202122
REVENUES:

Taxes $173,216 $182,470 $187,395 $225,100
Licenses and Permits 1,405 2,099 1,805 1,580
Subvention and Grants/Intergovernmental 1,868 1,771 3,700 652 Service Fees 8,433 8,597 6,990 7,806
Fines and Forfeitures 5,443 4,166 3,579 4,967
Rents 289 203 189 294
Franchises 1,800 1,812 1,714 1,713
Private contribution -- 179 184 45
Interest 6,915 9,287 8,110 (10,069)
Other 1,722 356 74 506
TOTAL REVENUES 201,090 210,941 213,740 232,595

EXPENDITURES:

General Government 27,410 24,693 27,357 29,693
Public Safety 103,084 118,793 120,179 124,901
Highways and Streets 2,904 2,289 3,163 3,833
Health and Human Services 13,319 20,423 19,320 17,897 Culture-Recreation 5,943 7,014 7,362 8,708
Community Development 8,264 9,041 9,258 12,693
Economic Development 2,845 5,879 2,534 3,005
Debt Service 270 473 139 98
TOTAL EXPENDITURES 164,040 188,605 189,313 200,827

Excess Revenues Over (Under) Expenditures 37,050 22,334 24,427 31,767

Transfers In(out)/Other (27,699) (17,502) (10,614) 4,394

Net Change in Fund Balance 9,351 4,883 13,813 36,161

Fund Balance, July 1 83,885 93,236 98,069 111,882
Prior Period Adjustment

Fund Balance, June 30* $93,236 $98,069 $111,882 $148,043

* Totals may not sum due to rounding.

Source: City of Berkeley Annual Comprehensive Financial Reports

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General Fund Budget

Budgetary Process and Administration. The City employs a two-year budget process.

In year one of the biennial budget cycle, the City Council formally adopts authorized appropriations for the first fiscal year and approves “planned” appropriations for the second fiscal year. In year two, the City Council considers revisions and formally adopts authorized appropriations for the second fiscal year. Although the budget cycle covers a two-year period, the City Charter requires that the City Council adopt an annual appropriations ordinance for each budget year.

From January to May of each year, the City Council meets publicly to discuss policies and priorities for the upcoming budget. The City Manager prepares a proposed budget based on input from department heads and presents this to the City Council by the first Monday in May of a budget year or as fixed by the City Council. The City also maintains additional budgetary controls to ensure compliance with the annual appropriated budget. The City Manager is authorized to transfer budgeted amounts within funds as deemed necessary to meet the City’s needs; however, revisions that alter the total budget or move amounts from one fund to another must be approved by the City Council.

Revenues and expenditures relating to the City’s general governmental operations are budgeted and accounted for in the City’s general fund, including public safety, highways and streets, health, housing and human services, culture and recreation, community development and economic development. General taxes and fees support most of these activities. The “business” or proprietary activities of the City are accounted for in each of eight enterprise funds, which include those established for Refuse Collection, Marina Operations, Sanitary Sewers, Clean Storm Water, Permit Service Center, Off-Street Parking, Parking Meter, and Building Purchases & Management. These activities are intended to be completely or largely self-supporting through user fees and charges.

The balance of this Appendix is concerned with the operations and performance of the City’s General Fund, unless otherwise noted.

Adopted Biennial Budget . The City generally adopts a biennia l budget, adopting its Fiscal Years 2022-23 and 2023-24 biennial budget on June 28, 2022. For Fiscal Year 2022-23, the City authorized operating and capital budget expenditures of $ 754.2 million based on revenues of approximately $608.1 million. For Fiscal Year 2023-24, the City authorized operating and capital budget expenditures of $726.0 million based on revenues of approximately $604.0 million. In both fiscal years, prior year savings (accumulated fund balance), bond proceeds collected in prior fisca l years and/or anticipated grant funding offset the net increase in expenditures among the different funds to balance the budget.

The General Fund comprises less than one-half of the total budget, with the remainder of the budget consisting of various special funds that are restricted in purpose. Fifty-five percent of the City’s General Fund revenue is derived from real and unsecured property, sales and soda taxes, and business license taxes.

For Fiscal Year 2022-23, baseline revenues for the general fund are projected to be $258.7 million, while baseline expenditures are projected to be $280.7 million, resulting in a deficit of $22 million. For Fiscal Year 2023-24, baseline revenues for the general fund are projected to be $262.2 million, which baseline expenditures are projected to be $274.0 million, resulting in a deficit of $11.8 million. Accumulated fund balance, largely from Fiscal Year 2021 -22 excess

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property tax transfer, addressed the operational shortfall in both fiscal year s, along with the use of remaining unspent American Rescue Plan Act funds in Fiscal Year 2023-24.

Preliminary Five-Year Forecast

On June 8, 2023, the Budget and Finance Policy Committee was presented with a preliminary five-year forecast, showing A structural annual deficit in Fiscal Years 2022-23 through 2026-27. The following table shows the projected revenues and expenditures over the next five fiscal years for the City’s General Fund and Special Funds.

CITY OF BERKELEY
Preliminary Five-Year Forecast
Fiscal Years 2022-23 through 2026-27

2022-23 2023-24 2024-25 2025-26 2026-27
Beginning Fund Balance $71,577,871 $65,156,400 $56,294,337 $32,248,907 $14,807,120 Total Revenues 265,958,729 266,418,324 269,654,570 277,558,213 285,676,851 Total Expenditures 272,380,200 275,280,387 293,700,000 295,000,000 299,600,000 Annual Surplus/(Shortfall) (6,421,471) (8,862,063) (24,045,430) (17,441,787) (13,923,149) Projected Ending Balance 65,156,400 56,294,337 32,248,907 14,807,120 883,971

Source: City of Berkeley Annual Comprehensive Financial Reports

Given the decreasing level of precision to be expected in the later years of a multi -year forecast, the significance of the projections in the out years is not so much in terms of their absolute amounts, but rather in the relative size of the decrease or increase from the prior year.

This information should be used to provide a multi-year perspective to budgetary decision-making, rather than as a precise prediction of what will occur.

General Fund Reserves

Establishment of General Fund Reserve . On December 13, 2016, the City Council adopted a General Fund reserve policy, establishing a General Fund reserve (the “Reserve”), to prepare for the impact of economic cycles and catastrophic events and assure fluctuations in revenue do not impede the City’s ability to meet expenditure obligations. When revenues fail to meet the City’s normal operating requirements, or the need for disbursements temporarily exceeds receipts, the Reserve, upon a 2/3 vote of the City Council, may be used in accordance with the standards set forth therein.

The Reserve is composed of two elements, a Stability Reserve and a Catastrophic Reserve:

1) A Stability Reserve is maintained to mitigate loss of service delivery and financial risks associated with unexpected revenue shortfalls during a single fiscal year or during a prolonged recessionary period. The purpose of the Stability Reserve is to provi de fiscal stability in response to unexpected downturns or revenue shortfalls, and not to serve as a funding source for new programs or projects.

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2) A Catastrophic Reserve is maintained for the purpose of sustaining General Fund operations in the case of a public emergency, such as a natural disaster or other catastrophic event. The Catastrophic Reserve will be used to respond to extreme, onetime events, such as earthquakes, fires, floods, civil unrest, and terrorist attacks. The Catastrophic Reserve will not be accessed to meet operational shortfalls or to fund new programs or projects.

The Reserve is accounted for in the Unassigned fund balance of the City’s balance sheet.

Target Reserve Levels . 55% of the Reserve is allocated to the Stability Reserv e and 45% to the Catastrophic Reserve.

The long-term goal for the Reserve is a minimum of 30% of the adopted General Fund revenues, to be achieved by 2026 -27 (“ Long-Term Goal ”). Based on a risk assessment (according to best practices), to be updated at l east every five years, the City Council may consider increasing or lowering the Reserve level.

As of July 1, 2023 , the Stability Reserve is projected to have $22,260,236, and the Catastrophic Reserve is projected to have $16,894,828, which total 15.14% of adopted General Fund revenues, significantly below the long-term goal.

Replenishment of the General Fund Reserve . The City Manager will recommend a replenishment schedule for all monies proposed for appropriation from the Reserve. The replenishment schedule will be adopted simultaneous with the appropriation to withdraw Reserve funds or, if infeasible due to emergency circumstances, no more than three months from the date of the withdrawal appropriation. Repayment shall begin no more than five years from the date of withdrawal and be completed within 10 years from the date of withdrawal.

While staff envisions that, in most cases, repayment will start as soon as possible, the repayment guidelines are meant to reflect a commitment to maintain a sufficien t Reserve, while also recognizing that a use of Reserve amounts may occur during an economic downturn, and it may be necessary to postpone repayment while the economy improves. In Fiscal Year 2021-22, the City repaid $ 3,646,005 to the Stability Reserve, an d $3,025,000 is expected to be repaid in Fiscal Year 2022-23. In Fiscal Year 2021-22, the City repaid $ 2,974,913 to the Catastrophic Reserve and $2,475,000 is expected to be repaid in Fiscal Year 2022-23.

Unfunded Liability Obligations and Unfunded Infrastructure Needs

General. On February 23, 2023, the City Manager presented a biennial report of the City’s unfunded liability obligations and unfunded infrastructure needs (the “ Report”). The Report includes, among other things:

1. Employee and retiree benefit costs over a 10-year horizon

2. Costs for current active employees including:
a. total payroll costs for active employees during the current year; b. projected payroll costs for the same number of employees for the next 10 -year period.

3. A summary of all current City obligations including:
a. general obligation bonds;

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b. certificates of participation;
c. loans;
d. all other current long-term obligations.

4. Summary of all capital assets and infrastructure including:
a. Appraisal of Public Buildings valued at $5 million or more b. Condition of Streets and Roads, projecting costs to bring streets and roads condition to an average Pavement Condition Index of 75 within 5 years. c. Sewers: updated asset management plan for public sewers including projected costs for succeeding 5 years a nd projected revenue from sewer fees for the succeeding 5 years.

Certain provisions of the Report, which is available on the City’s internet website but is not incorporated by reference herein, are described below. The link to the Report on the City’s internet website is the following: https://berkeleyca.gov/sites/default/files/legislative-body-meeting- attachments/ITEM%204%20SUPPLEMENTAL%20(UNFUNDED%20LIABILITIES).pdf. The information contained within the website may not be current and is not incorporated in this Official Statement by reference.

The Report concludes that maintaining a careful balance between cash on hand to fund daily operations and liquidity to cover unfunded liabilities is a key challenge for all governments, and reports that liabilities tied to benefits total $613.8 million (of which only 72.0% is funded), and the City’s unfunded infrastructure requires a total of $2.23 billion.

Unfunded Liabilities. Due to projected increases in expenses, primarily pension and medical expenses, the City is projecting a General Fund structural deficit.

The City provides retirement benefits to its employees through three plans in the California Public Employees’ Retirement System (“ CalPERS”). See “ - Retirement Programs” below for additional information. The City has a significant pension liability that is anticipated to grow, increasing by more than $40 million over the next ten years, which will put a strain on resources and services.

In addition, the City’s retiree health plans are significantly underfunded, as detailed in the Report.

Unfunded Infrastructure Needs. The City has an extensive portfolio of capital assets and infrastructure, including 95 buildings, 254 miles of public sanitary mains and 130 miles of sewer laterals, 216 centerline miles (450 lane miles) of public streets, 52 parks, 2 pools, 3 camps and 42 facilities served by the City’s IT systems. In addition, Berkeley is a relatively older city, and faces related challenges with its aging infrastructure. Despite the passage of several local bond measures to support capital facilities, there are significant unfunded needs related to parks, pools, camps, waterfront property, streets, sidewalks, storm drain/watershed, sewer, transportation and buildings/facilities. As needed improvements continue to be deferred, operating and maintenance costs rise and rehabilitation and replacement costs increase substantially. The Report details available annual funding and unfunded needs for capital and major maintenance.

As a result of the age of the City’s infrastructure and limited resources allocated to infrastructure, the projected costs of the City’s aging infrastructure needs are anticipated to reach more than $2.23 billion by Fiscal Year 2024-25.

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The Report also highlights t hat the City is located on the east side of the San Francisco bay, and has waterfront property with docks, pilings, parking lots and streets that have reached the end of their useful life. The City’s mechanism for managing its waterfront revenues and expenditures (the “ Marina Fund”) is projected to have insufficient funding due to decreasing revenues and increasing expenditures, a trend that could be aggravated by failure to maintain the marina infrastructure. The City has created the Berkeley Marina Area Specific Plan to address an estimated $113 million in infrastructure repairs but has not identified any specific funding sources.

State Budget and its Impact on the City

Fiscal Year 2022-2023 State Budget. On January 10, 2022, the Governor released the proposed State budget for fiscal year 2023-24 (the “Proposed 2023-24 State Budget”). The Proposed 2022-2023 State Budget is anticipated to represent a $286.4 billion operating budget that is balanced.

Voters approved Proposition 1A in November 2004 to amend the State Constitution to place constraints on the State’s ability to divert certain specified revenues from local agencies to the State. Subsequently, in November 2010, voters approved Proposition 22 to amend the State Constitution to further constrain or eliminate the State’s ability to redirect revenues from local agencies. “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Proposition 1A” and “– Proposition 22.”

Additional Information. Information about the Proposed 2023-24 State Budget and other State budgets is available at www.ebudget.ca.gov. An impartial analysis of the budget is posted by the Legislative Analyst Office at www.lao.ca.gov. In addition, various State official statements, many of which contain a summary of the current and past State budgets, may be found at the website of the State Treasurer, www.treasurer.ca.gov. The information referred to in this paragraph is prepared by the respective State agency maintaining each website and not by the City. The City takes no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness of information posted there, and such information is not incorporated in this Official Statement by these references.

Ad Valorem Property Taxes

Tax Levies and Collections. Property taxes collected by the City increased $25.8 million, or 23.0%, to $ 138.4 million in fiscal 2021-22, up from $ 112.6 million in fiscal year 2020-21, primarily as a result of increases in the following revenue sources:

• Real property taxes increased $2.5 million, or 3.7%, to $70.6 million in fiscal year 2021-22, up from $ 68.1 million in fiscal year 2020-21. This increase was consistent with the fiscal year 2021-22 increase in assessed valuation of 4.48%.

• Property transfer taxes increased $13.2 million, or 50.0%, to $39.6 million in fiscal year 2021-22, up from $ 26.4 million in fiscal year 2021-22. This resulted primarily from a 59.7% increase in the dollar value of property sales during fiscal year 2021-22.

• Property transfer tax-Measure P increased $8.9 million, or 76.1%, to $20.6 million in fiscal year 2021-22, from $11.7 million in fiscal year 2020-21. This

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increase resulted from an 88.6% increase in the dollar value of property sales for properties selling for more than $1.5 million in fiscal year 2021-

22. • Vehicle in-lieu taxes increased $0.6 million, or 4.4%, in fiscal year 2021-22, to $ 15.0 million from $ 14.4 million in fiscal year 2020-21. This was consistent with the 4.48% increase in fiscal year 2021-22 assessed values reported by the County.

Taxes are levied for each fiscal year on taxable real and personal property that is situated in the City as of the preceding January 1. A supplemental roll is developed when property changes hands, which produces additional revenue.

A ten percent penalty attaches to any delinquent payment for secured roll taxes. In addition, property on the secured roll with respect to which taxes are delinquent becomes tax - defaulted. Such property may thereafter be redeemed by pa yment of the delinquent taxes and the delinquency penalty, plus a redemption penalty to the time of redemption. If taxes are unpaid for a period of five years or more, the property is subject to auction sale by the County Tax Collector.

In the case of uns ecured property taxes, a 10% penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of 1.5% per month begins to accrue beginning November 1 of the fiscal year, and a lien is recorded against the assessee. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on specific property of the taxpayer; (3) filing a certificate of delinquency for recording in the County Recorder’s office in order to obtain a lien on specified property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee.

The County levies (except for levies to support prior voter -approved indebtedness) and collects all property taxes for property falling within that county’s taxing boundaries. The City does not participate in the Teeter Plan.

Other General Fund Revenues and Transfers

In addition to property taxes, the City has several other major tax and fee revenue sources, as described below. The following table summarizes the City’s actual audited general fund revenues and transfers from fiscal year 2018-19 through fiscal year 2021-22.

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CITY OF BERKELEY

GENERAL FUND REVENUES AND TRANSFERS

Actual

Actual

Actual

Actual
Revenue Revenue Revenue Revenue
FY 2019 FY 2020 FY 2021 FY 2022
Real Property $59,178,773 $63,192,678 $68,166,155 $70,657,482 Unsecured Property 2,878,275 3,164,168 3,448,412 4,422,414 Supplemental Taxes 2,174,903 2,334,597 2,249,517 2,317,723 Property Transfer Tax 19,952,981 22,095,507 21,469,955 42,901,750 Property Transfer Tax-Measure P 2,932,313 9,512,603 10,919,576 20,591,313 Sales Tax 18,663,550 17,557,539 15,792,305 18,928,278
Soda Tax 1,547,349 1,331,313 953,069 1,025,800
Business License 19,848,804 20,863,685 17,809,332 20,324,937 Business License – Cannabis Recreation 1,168,794 1,300,887 1,712,641 1,250,792 Measure U1 4,828,443 5,597,359 4,818,740 4,913,872
Utility Users Tax 13,973,744 13,475,915 13,892,200 14,750,065 Hotel Tax 7,995,188 6,387,495 2,292,480 5,727,046
Vehicle In-Lieu 12,540,784 13,356,044 14,380,453 15,006,003 Parking Fines 6,002,211 3,900,595 3,571,391 4,765,819
Moving Violations 177,824 200,894 131,756 156,253
Interest 4,334,404 6,702,564 5,917,722 6,694,122
Ambulance Fees 4,424,808 4,996,193 3,081,204 3,833,730
Franchise Fees 1,821,316 1,839,102 1,726,470 1,720,056
Other Revenue 18,662,025 20,074,732 18,514,060 17,185,630 Transfers 5,356,132 5,386,188 21,180,762 29,445,571
TOTAL $208,462,620 $223,364,309 $232,028,200 $286,618,657

Source: City of Berkeley Budget Office. Revenues were recorded using the budget basis of accounting (i.e., Cash).

Sales and Use Tax. The sales tax is an excise tax imposed on retailers for the privilege of selling or leasing tangible personal property. The use tax is an excise tax imposed for the storage, use, or other consumption of tangible personal property purchased from any retailer. The total sales tax rate within the City is currently 9.25%. The proceeds of sales and uses taxes imposed within the City are distributed by the State to various agencies, with the City receiving

1.0% of the amount collected.

Collection of the sales and use tax is administered by the California Department of Tax and Fee Administration (the “ CDTFA”). This process was formerly administered by the State Board of Equalization. The Taxpayer Transparency and Fairness Act of 2017, which took effect July 1, 2 017, restructured the State Board of Equalization and separated its functions among three separate entities: the State Board of Equalization, the CDTFA and the Office of Tax Appeals.

The State Board of Equalization will continue to perform the duties assig ned to it by the state Constitution, while all other duties will be transferred to the newly established CDTFA and the Office of Tax Appeals. CDTFA will handle most of the taxes and fees previously collected by the State Board of Equalization, including sales and use tax. According to the CDTFA, it distributes quarterly tax revenues to local jurisdictions (like the City) using the following method:

Using the prior year’s like quarterly tax allocation as a starting point, the CDTFA first eliminates nonr ecurring transactions such as fund transfers, audit payments and refunds, and then adjusts for growth, in order to establish the estimated base amount.

The CDTFA disburses 90% of the base amount to each local jurisdiction in three monthly installments (advances) prior to the final computation of the quarter’s actual receipts. Ten

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percent is withheld as a reserve against unexpected occurrences that can affect tax collections (such as earthquakes, fire or other natural disaster) or distributions of revenue such as unusually large refunds or negative fund transfers. The first and second advances each represent 30% of the 90% distribution, while the third advance represents the remaining 40%. One advance payment is made each month, and the quarterly reconciliation payment (clean-up) is distributed in conjunction with the first advance for the subsequent quarter. Statements showing total collections, administrative costs, prior advances and the current advance are provided with each quarterly clean-up payment.

The CDTFA receives an administrative fee based on the cost of services provided by the Board to the City in administering the City’s sales tax, which is deducted from revenue generated by the sales and use tax before it is distributed to the City.

Sales tax revenues increased $2.4 million or 13.4% to $19.98 million in fiscal year 2021- 22 from $17.62 million in fiscal year 2020-21. The City currently projects that sales tax revenue will increase by 4.07% and 2.0%, respectively in fiscal years 2023-24 and 2024-25.

CITY OF BERKELEY

TAXABLE TRANSACTIONS
(Figures in Thousands)

2018 2019 2020 2021 2022
Retail and Food Services:

Apparel Stores $52,991 $42,772 $20,385 $37,143 $43,166
Gen. Merchandise Stores 20,782 21,434 16,902 19,066 22,498 Food Stores 149,662 155,025 169,569 144,467 115,170
Eating and Drinking Places 374,792 391,474 208,146 283,279 366,323 Home Furnishings and Appliances 69,746 66,188 45,479 87,133 59,435 Bldg. Materials, Farm Implements 109,052 101,937 113,116 141,811 152,845 Auto Dealers, Auto Supplies 119,883 119,679 94,927 114,276 135,123 Gas/Service Stations 93,694 94,217 57,950 87,759 110,009 Other Retail Stores 262,209 261,020 188,434 236,279 245,362 Total Retail and Food Services 1,252,813 1,263,746 914,910 1,151,213 1,249,931 All Other Outlets 361,292 372,108 315,081 341,988 431,788 TOTAL ALL OUTLETS 1,614,105 $1,635,854 $1,229,990 $1,493,201 $1,681,719

Source: State Department of Tax and Fee Administration.

Factors that have historically affected sales tax revenues include the overall economic growth of the Bay Area, competition from neighboring cities, the growth of specific industries within the City, the City’s business attraction and retention efforts, and catalog and Internet sales.

Utility Users Tax. The City imposes a 7.5% tax on users of gas, electricity and telephone, as well as cellular telephone services for billing addresses within the City. The tax is not applicable to State, County, or City agencies, or to insurance companies and banks. Some of the factors affecting this revenue stream include consumer demand for these utilities, legi slative and regulatory action, rate changes, and the evolution of technology. Approximately 62% of the utility users tax revenue is generated from utility usage from gas and electric services and 38% from telecommunications during fiscal year 2021-22. For fiscal year 2021-22, utility users tax revenue totaled $15.0 million, which was $1.1 million or 8.1% more than the $13.9 million received in fiscal year 2020-21. Utility users tax is projected to decrease in fiscal year 2022 -23 by approximately

6.44% and level off in fiscal year 2023-24, before increasing slightly in fiscal year 2024-25.

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Business License Tax. The City requires all businesses within the City to be licensed and imposes a business license tax on all business locations and a new license reg istration fee on applicants for a new license. The annual tax is generally determined based on the type of business and the business’s gross receipts. The tax rate varies between $0.60 per $1,000 gross receipts for grocers, on the low end, and $50.00 per $ 1,000 gross receipts for adult cannabis sales on the high end. Most types of businesses are required to pay a minimum tax of at least $51 per year. The overall revenue from this tax is dependent on the number of license renewals each year and the growth of businesses and industries within the City and the Bay Area more generally. The City is currently projecting a decrease of approximately 6.88% of business license tax in fiscal year 2022 -23 and then remain flat in fiscal year 2023 -24 before increasing by 2.0% in fiscal year 2024-25.

Property Transfer Tax . The City’s transfer tax rate is 1.5% for properties with a consideration up to $1.8 million and 2.5% for transferred properties with a consideration over $1.5 million. The $1.5 million threshold will be adjusted annually to capture approximately the top 33% of such transfers based on transfers that occurred in the 12 months preceding September 1 of the preceding year. However, the threshold cannot be reduced below $1.5 million, meaning that the tax on pro perties transferred for $1.5 million or less would remain at 1.5%, notwithstanding any adjustment. The tax is due when the transfer is recorded with the County. Title companies collect the tax as part of the sale closing process and remit the funds to the County when sales or transfers are finalized. The County remits the amounts due monthly, and the amounts are credited to the general fund. A buyer of residential housing built before 1989 may voluntarily choose to reserve up to one-third of the transfer tax to perform seismic upgrades. Buyers typically have up to one year to complete the work and file for a rebate. Previously, title companies held the reserved amount in escrow until the work was completed, but since May 2007, the City has held the money in escrow accounts, with the interest going to the City.

Prior to fiscal year 2017 -18, it was the City Council’s policy that property transfer tax in excess of $10.5 million was treated as one -time revenue to be transferred to the Capital Improvement Fund for capital infrastructure needs, but that amount was increased to $12.5 million in fiscal year 2017-18.

Parking Fines. The City issues and adjudicates citations and civil penalties for parking violations through its own administrative structure. It has a great degree of control over the administration of parking fines, although issuing agencies within the County try to standardize parking penalties to the extent possible. Revenue from parking fines is affected by the penalties imposed for violations, the number of employees issuing tickets, how many tickets employees are able to issue, and the number of working parking meters, among other factors. Currently, the City must remit an additional $12.50 per citation to the State/County for State and County construction funds, Maddy emergency medical fund, and DNA identification fund.

Vehicle in Lieu Fees. Vehicle license fees (“VLF”) imposed for the operation of vehicles on state highways are collected by the State Department of Motor Vehicles in lieu of per sonal property taxes on vehicles. In connection with the offset of the VLF, the State Legislature authorized appropriations from the State General Fund to “backfill” the offset so that local governments, which receive all of the vehicle license fee revenues, would not experience any loss of revenues. The legislation that established the VLF offset program also provided that if there were insufficient State General Fund moneys to fully “backfill” the VLF offset, the percentage offset would be reduced proport ionately (i.e., the license fee payable by drivers would be increased) to assure that local governments would not be underfunded.

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As part of the 2004 Budget Act negotiations, an agreement was made between the State and local government officials under whi ch the VLF rate was permanently reduced from 2% to

0.65%. In order to protect local governments, the reduction in VLF revenue to cities and counties from this rate change was replaced by an increase in the amount of property tax they receive.

Commencing in fiscal year 2004 -05, local governments began to receive their full share of replacement property taxes, and those replacement property taxes now enjoy constitutional protection against certain transfers by the State because of the approval of Proposition 1A at the November 2004 election.

As a part of its fiscal year 2009 -10 budget, California increased the vehicle license fee from 0.65% to 1.15% for registration fees due on or after the May 19, 2009 special election. This provision expired on July 1, 2011 . On July 1, 2011, vehicle license fees returned to 0.65%, and the City is unaware of any current State legislative efforts likely to increase these in fees in the future.

Vehicle in-lieu taxes increased $ 0.63 million or 4.35% in fiscal year 2021-22 to $ 15.0 million from $12.4 million in fiscal year 2021-22. This was consistent with the 4.5% increase in fiscal year 2020-21 assessed values reported by the County.

Other Revenues. The City also collects additional general fund revenues from franchise fees, transient occupancy taxes, ambulance fees, a tax on sugar -sweetened beverages, and other more minor sources. Under the City’s cable and electric and gas franchise fee arrangements, the local cable provider pays an annual franchise fee of 5% of gross revenues, and the electricity and gas providers pay the greater of 2% of gross receipts attributable to miles of line operated or 0.5% of gross receipts. The transient occupancy tax, also known as the hotel tax, is a 12% tax on the room charge for rental of transient lodging, which was significantly reduced due to restrictions on travel and events due to COVID -19. The City also has an agreement with the County to be the exclusive provi der of all emergency ground ambulance services within the City; the specific ambulance fee depends on the type of service delivered and is billed to clients or their insurance companies. Finally, other more minor revenue sources include payments for moving violations, interest on existing funds, and other service fees.

Retirement Programs

PERS Plan Description . The City contributes to three plans in California Public Employees’ Retirement System (“PERS”). The first plan covers all of the City’s full-time and part- time benefited sworn uniformed fire employees and all chiefs (and is referred to as the Safety Fire Plan in this Official Statement). The second covers all of the City’s full-time and part-time benefited sworn uniformed police employees and all chiefs (and is referred to as the Safety Police Plan in this Official Statement). The third plan covers all remaining eligible City employees (and is referred to as the Miscellaneous Plan in this Official Statement). These plans are agent multiple-employer defined benefit pension plans administered by PERS, which acts as a common investment and administrative agent for participating public employers within the State of California.

PERS Plan Eligibility. For a more detailed discussion of the eligibility requ irements for the City’s PERS retirement plans, see Appendix B, Note 12.

PERS Plan Contributions. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the PERS Board of Administration (the “ Board of Administration”). For the measurement period ended June 30, 2021 (the measurement date),

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the average active employee contribution rate is 8.0% of annual pay for the Miscella neous Plan and 9.0% of annual pay for the Safety Plan (Fire and Police), and the employer contribution rate is 32.479% of annual payroll for the Miscellaneous Plan, 48.235% of annual payroll for the Public Safety Fire Plan, and 66.606% of annual payroll for the Public Safety Police Plan. The contribution requirements of the plan members are established by State statute, and the employer contribution rates are established and may be amended by PERS.

Implementation of GASB Nos. 68. Commencing with fiscal year ended June 30, 2015, the City implemented the provisions of GASB Statement Nos. 68, which require certain new pension disclosures in the notes to its audited financial statements commencing with the audit for fiscal year 2014-15. Statement No. 68 generally requires the City to recognize its proportionate share of the unfunded pension obligation by recognizing a net pension liability measured as of a date (the measurement date) no earlier than the end of its prior fiscal year. As a result of the implementation of GASB Statement Nos. 68, the City reflected a restatement of its beginning net position as of July 1, 2014.

For a more detailed discussion of the eligibility requirements for the City’s retirement plans, see Appendix B, Note 12 for detailed information about the actuarial assumptions underlying the contributions. The City’s fiscal year 2021-22 contributions to the pension plans and the funded status of the pension plans are set forth below.

Fiscal Year
Ended
Total Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Employee
Payroll
Plan Net
Pension
Liability as a
Percentage
of Covered
Employee
Payroll
Contributions
Employer
PERS – Miscellaneous Plan
6/30/2021 $1,150,466,172 $946,389,527 $204,076,645 82.26% $106,633,060 191.38% $26,643,623

PERS – Public Safety Fire Plan
6/30/2021 $299,157,455 $248,128,384 $51,029,071 82.94% $18,330,455 278.38% $9,176,919

PERS – Public Safety Police Plan
6/30/2021 $463,555,530 $332,552,929 $131,002,601 71.74% $25,356,914 516.63% $16,765,193

Recent Actions by PERS. At its April 17, 2013, meeting, the Board of Administration approved a recommendation to change the PERS amortization and smoothing policies. Prior to this change, PERS employed an amortization and smoothing policy that spread investment returns over a 15 -year period with experience gains and losses paid for over a rolling 30 -year period. After this change, PERS will employ an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period. The new amortization and smoothing policy were used for the first time in the June 30, 2013, actuarial valuations in setting employer contribution rates for fiscal year 2015-16.

On February 18, 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20 -year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years,

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the cost of those benefits will increase as a result. The Board of Administration also assumed earlier retirements for Police 3% at 50, Fire 3% at 55, and Miscellaneous 2.7% at 55 and 3% at 60, which will increase costs for those groups. As a result of these changes, rates will increase beginning in fiscal year 2016-17 (based on the June 30, 2014, valuation) with full impact in fiscal year 2020-21.

On November 18, 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate - its assumed rate of investment return - in years of good investment returns, help pay down the pension fund's unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. The policy establishes a mechanism to reduce the discount rate by a minimum of 0.05 percentage points to a maximum of 0.25 percentage points in years when investment returns outperform the existing discount rate, currently 7.5%, by at least four percentage points. PERS staff modeling anticipates the policy will result in a lowering of the discount rate to 6.5% in about 21 years, improve funding levels gradually over time and cut risk in the pension system by lowering the volatility of investment returns. More information about the funding risk mitigation policy can be accessed through PERS’ web site at the following website address: https://www.calpers.ca.gov/page/newsroom/calpers - news/2015/adopts-funding-risk-mitigation-policy. The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City and is not incorporated in this Official Statement by reference.

On December 21, 2016, the Board of Administration voted to lower its discount rate from the current 7.5% to 7.0% over three years according to the following schedule.

Fiscal Year Discount Rate
2018-19 7.375%
2019-20 7.250
2020-21 7.000

For public agencies like the City, the new discount rate would take effect July 1, 2018.

Lowering the discount rate means employers that contract with PERS to administer their pension plans will see increases in their normal costs and unfunded actuarial l iabilities. Active members hired after January 1, 2013, under the Public Employees' Pension Reform Act will also see their contribution rates rise. The three -year reduction of the discount rate will result in average employer rate increases of about 1 percent to 3 percent of normal cost as a percent of payroll for most miscellaneous retirement plans, and a 2 percent to 5 percent increase for most safety plans.

Additionally, many PERS employers will see a 30 to 40 percent increase in their current unfunded accrued liability payments. These payments are made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.

On November 15, 2021, the CalPERS Board selected a new asset allocation mix that will guide the fund’s investment portfolio for the next four years, while at the same time retaining the reduction of discount rate from 7.0% to 6.8%. Notable changes for employers include a decrease in median total employer contribution rates, from less than 1% in miscellaneous plans to a decrease of more than 2% in some safety plans. Contribution changes will take effect in fiscal year 2023-24 for public agencies.

Dollar Contribution Based on Projected PERS Rate Increases . The City’s projected annual financial contributions as a result of the PERS rate changes for the next four years are shown in the table below, with dollar amounts shown in millions:

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2020-21 2021-2022 2022-2023
Projected
2023-2024
Projected
Miscellaneous(1) $35.87 $39.19 $41.64 $40.57
Police 16.66 17.99 20.04 20.32
Fire 9.47 10.06 10.58 10.24
Total $61.99 $67.24 $72.27 $71.13

Berkeley Police Retirement Income Benefit Plan. Prior to December 22, 2012, the City maintained the Berkeley Police Retirement Income Benefit Plan (“ BPRIBP”), a single-employer defined benefit income plan, for its police retirees and surviving spouses. Effective September 19, 2012, police retired on or after this date are no longer covered by BPRIBP. The City replaced this plan with the “Retiree Health Premium Assistance Coverage Plan.”

The City’s fiscal year 2021-22 contribution to the BPRIBP and the funded status of the BPRIBP is set forth below.

Fiscal Year
Ended
Total Pension
Liability
Plan Fiduciary
Net Position
Plan Net
Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Payroll
Plan Net
Pension
Liability as a
Percentage
of Covered
Employee
Payroll
Contributions
Employer
6/30/2022 $64,814,093 $4,629,686 $60,184,407 7.14% $21,718,842 379.40% $2,147,614

For a more detailed discussion of the BPRIBP, see APPENDIX B to this Official Statement.

Peace Officers Research Association of California. Effective December 23, 2012, the City established a new sick leave program called Peace Officers Research Association of California (“PORAC”). If a sworn member of the Berkeley Police department has an accrued sick leave balance on December 23, 2012 , that exceeds 200 hours, one half of all those hours in excess of 200 shall be maintained in a separate account. The financial value of those hours shall be converted and deposited into the employee’s PORAC medical trust account over five successive years in equal installments commencing on January 1, 2013. The conversion was at the employee’s rate of pay on December 23, 2012. The City may accelerate the payment of hours to be converted. The remaining fifty percent of the sick leave balance in excess of 200 hours was credited into the employee’s separate “catastrophic/service time” bank no later than February 1, 2013, up to a maximum of 500 hours.

The City’s contribution to PORAC for the calendar year ending December 31, 2022, was $425,865.

Safety Members Pen sion Fund. In addition, the City maintains the Safety Members Pension Fund (“ SMPF”), a defined benefit plan for fire and police officers who retired prior to March 1973. In March 1973, all active fire and police officers were transferred from SMPF to PERS. The City pays the benefits to SMPF members on a pay-as-you-go basis, primarily through a Funding Agreement, purchased by the Berkeley Civic Improvement Corporation on behalf of the City in 1989. For the fiscal year ended June 30, 2022, the City’s contribution to SMPF was $493,937.

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The funded status of the SMPF as of June 30, 2022, the most recent actuarial date, is set forth below:

Actuarial
Valuation
Date
Plan
Fiduciary Net
Position
Total Pension
Liability
Plan Net
Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Payroll
Plan Net
Pension
Liability as a
Percentage
of Covered
Employee
Payroll
6/30/2022 -- $1,134,809 $1,134,809 --% N/A N/A

For a more detailed discussion of the SMPF, see APPENDIX B of this Official Statement.

Post-Employment Health Benefits

The City offers certain post-employment health benefits to retirees. There are three plans:
(i) the City of Berkeley Fire Employees Retiree Health Plan (“ FRHF”), (ii) the City of Berkeley Miscellaneous Employees Retiree Health Plan (“ RHPAP”) and (iii) the Police Retiree Premium Assistance Plan (“PRPAP”).

The City has adopted Government Accounting Standards Board Statement 7 5 which requires governmental agencies to change their accounting for Other Post-Employment Benefits (“OPEB”) from pay-as-you-go to an accrual basis.

See Appendix B, Note 3 for information about the City’s OPEB liabilities.

City of Berkeley Fire Employees Retiree Health Plan. The FRFH is a single-employer defined benefit medical plan. To be eligible for benefits, sworn Fire employees must retire from the City on or after July 1, 1997, be vested in a PERS pension, and retire from the City on or after age 50. Benefits commence immediately upon retirement. Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The amount the City contributes toward the Fire Employees Retiree Health Plan is 4. 5% per year regardless of the amount of increase in the underlying premium rate. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City Labor Negotiating Team, and are approved by the City Manager and City Council. As of June 30, 2022, there were 130 active employees, 58 retirees deferred and 38retirees receiving benefits.

The City’s targeted funding policy is equal to the service cost for active employees plus an amount to amortize unfunded liabilities over 30 years (rolling 30-year amortization) as a level percentage of payroll. The City strives to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.

For the FRFH, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for fiscal year 2021-22 and the four preceding years were as follows:

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Fiscal Year
Ended Annual OPEB Cost
Percentage of
Annual OPEB Cost
Contributed

Net OPEB
Liability
6/30/2018 $2,163,028 34% $17,251,382
6/30/2019 2,326,493 36 19,633,312
6/30/2020 2,104,622 36 21,177,486
6/30/2021 2,575,970 35 23,873,248
6/30/2022 1,354,619 39 18,507,610

The funded status of the FRFH as of June 30, 2022, the date of the most recent actuarial report, is set forth below:

Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability (AAL)-
Unit Credit
Unfunded
Actuarial
Accrued
Liability-
UAAL
Funded
Ratio
Covered
Payroll
UAAL
as
Percentage
of covered
Payroll
7/1/2022 $11,768,942 $30,276,552 $18,507,610 38.9% $16,924,571 109.35%

City of Berkeley Miscellaneous Employees Retiree Health Premium Assistance Plan. The RHPAP is a single-employer defined benefit medical plan. It provides retiree health benefits to eligible retirees and his/her spouse or domestic partner. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City and are approved by the City Council.

Retirees who are at least age 50, with at least 8 years of service with the City at the time of separation from service are eligible to receive retiree health benefits commencing at age 55.

Benefits are payable for the retiree’s lifetime and continue for h is or her covered spouse’s/domestic partner’s lifetime. The City pays the monthly cost of the monthly premiums up to a participant’s applicable percentage of the base dollar amount and subject to annual 4.5% increases regardless of the amount of increase i n the underlying premium rate. As of June 30, 2022, there were 1,085 active employees.

The City’s targeted funding policy is equal to the normal cost for active employees plus an amount to amortize unfunded liabilities over 30 years as a level percentage of payrolls. The City is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City negotiating staff, and approved by the City Council.

For the RHPAP, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2021-22 and the four preceding years were as follows:

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Fiscal Year
Ended
Annual
OPEB Cost
Percentage of
Annual OPEB Cost
Contributed
Net OPEB
Obligation
6/30/2018 $4,729,448 42.3% $34,215,614
6/30/2019 5,051,655 43.3 37,219,746
6/30/2020 5,534,572 32.7 60,659,492
6/30/2021 4,871,995 42.9 41,895,470
6/30/2022 2,071,289 50.2 29,470,744

The funded status of the RHPAP as of June 30, 2022, the most recent actuarial report, is set forth below:

Actuarial
Valuation
Date
Actuarial
Accrued
Liability (AAL)
Actuarial
Value of
Assets
Unfunded
Actuarial
Accrued
Liability-
UAAL
Funded
Ratio
Covered
Payroll
UAAL
as
Percentage
of covered
Payroll
7/1/2022 $59,184,799 $29,714,055 $29,470,744 50.2% $102,205,676 28.839%

Police Retiree Premium Assistance Plan. Effective September 19, 2012, the City replaced the “Berkeley Police Retirement Income Benefit Plan” with the “Retiree Health Premium Assistance Coverage Plan” for any police employees hired on or after that date, as well as any current employees who retire on or af ter such date. Under the newly established retiree health premium assistance plan, benefits will be the paid by the City directly to the provider who is providing retiree health coverage to the retiree or his or her surviving spouse. The maximum amount will be equal in value to the City sponsored health plan.

In order to be eligible for the Retiree Health Premium Assistance Coverage a “Retiree” must meet all of the following criteria:

(a) A person who is vested in, and
(b) Has reached the age of 50, and
(c) Has retired from the City at age 50 or thereafter, and (d) Has applied for and is receiving a pension from at the time of retirement.

The maximum amount the City will contribute toward the payment of medical insurance premiums is based on the employee’s years of service as a sworn member of the Berkeley Police Department at time of retirement. The retiree must have at least 10 years of service as a sworn member of the Berkeley Police Department to qualify for this benefit.

Years of Service City Percentage
10 to 14 25%
15 to 19 50
20 or more 100

Beginning September 19, 2012, each month after the employee retires the City will pay the health care service provider an appropriate percentage based on years of service above an amount equal to $1,200 per month for two -party coverage for the retiree and a qualifying spouse/domestic partner or $600 per month for single party coverage. Upon death of either the retiree or the retiree’s spouse, the City will only pay the appropriate percentage of the single party rate to the provider on behalf of the surviving retiree or spouse/domestic partner. If there is no spouse/domestic partner at the time of retirement, the City shall only pay the single party rate.

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The retiree and/or surviving spouse/domestic partner will be responsib le for payment of the difference between the amount the City contributes toward payment of the premium and the actual premium cost. The funds for this difference will come from the retiree’s retirement account and the retiree must authorize such withdrawal of funds.

Beginning July 1, 2013 and effective each July 1 thereafter, the base rates the City contributes toward payment of the premium amount described in the preceding paragraph shall be increased by either the amount Kaiser increases the retiree medical premium for that year, or 6%, whichever is less. The retiree and/or surviving spouse/domestic partner shall pay the difference between the amount the City contributes toward payment of the premium and the actual premium cost. As of June 30, 2022, there were 158 active employees, 24 active retirees, and 17 retirees entitled to, but not yet receiving, benefits.

For the retiree health premium assistance plan, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for fiscal year 2021-22 and the four preceding years were as follows:

Fiscal Year
Ended Annual OPEB Cost
Percentage of
Annual OPEB Cost
Contributed

Net OPEB
Liability
6/30/2018 $4,929,429 6.0% $41,652,588
6/30/2019 5,155,293 6.0 46,252,565
6/30/2020 4,432,549 4.0 57,472,394
6/30/2021 5,076,625 5.0 49,355,501
6/30/2022 4,636,861 6.2 32,429,614

The actuarial cost method used for determining the benefit obligations is the Projected Unit Credit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on the assumptions and census data described this report. The Actuarial Accrued Liability (AAL) is the actuarial prese nt value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service to data over service at expected retirement. The Normal Cost is the actuarial p resent value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution, the Unfunded AAL is amortized as a level percentage of payroll over 30 years.

As of July 1, 2021, the most recent actuarial valuation date, the plan was 6.2% funded.

The actuarial accrued liability for benefit was $34.6 million, and the actuarial value of assets was $2.1 million, resulting in an unfunded accrued liability of $ 32.4 million. The covered payroll (annual payroll of active employees covered by the plan) was approximately $ 21.7 million. The fair value of the assets was determined using market values as of the date of the actuarial report.

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Funded status of the plan as of June 30, 2022, the most recent actuarial valuation date is as follows:

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Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability (AAL)-
Unit Credit
Unfunded
Actuarial
Accrued
Liability-
UAAL
Funded
Ratio
Covered
Payroll
UAAL
as
Percentage
of covered
Payroll
7/1/2022 $2,148,963 $34,578,577 $32,429,614 6.2% $21,681,336 149.6%

Defined Contribution Plans

The City offers certain supplemental retirement and income plans to retirees. See Appendix B, Note 12 for information about the City’s defined contribution plans.

Labor Relations

As of May 23, 2023, the City employed approximately 1,735 full-time equivalent budgeted employees. There are six employee unions as shown below. In addition, the City employs approximately 115 unrepresented employees that include Executive Management, Confidential professional or Confidential Office support positions. The City has not experienced any work stoppages or strikes by its employees.

CITY OF BERKELEY
Labor Relations
Labor Organization Employees
Contract
Expiration
Date
Berkeley Fire Fighters Association/I.A.F.F. Local 1227 132 06/20/2023 Berkeley Police Association 144 06/30/2023
I. B. E. W. Local 1245 8 06/30/2025
Service Employees International Local 1021
Maintenance and Clerical Chapters
440 06/26/2024
Service Employees International Local 1021 Community
Services and Part-Time Recreation Leaders
Association Chapters
304 06/26/2024
Public Employees Local 1 186 06/26/2024
Unrepresented Employees 115 06/26/2024

Source: City of Berkeley.

Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to, or restriction of assets; errors or omissions; injuries to employees; or acts of God.

The City is self -insured for liability claims below $350,000. The City is a member of the Bay Cities Joint Powers Insurance Authority (“BCJPIA”). The BCJPIA consists of 20 municipal or public agency members, all located within the metropolitan San Francisco Bay Area. The BCJPIA provides general liability, auto liability, and errors and omissions coverage between $350,000 and $1,000,000. The California Affiliated Risk Management Authority (“CARMA”) provides additional

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coverage to the BCJPIA and its member entities for claims in excess of $1,000,000, up to $29,000,000.

The City is self-insured for workers’ compensation. Payments are made to the Workers’ Compensation Self-Insurance Internal Service Fund by transfers from the City’s general fund and other funds of the City on a pay-as-you-go basis.

The City requires pre -employment physical examinations for high r isk, high hazard employees as well as annual examination for all uniformed officers. As part of its workers’ compensation program, copies of all injured employee medical reports are monitored by a third - party agent to ensure that injured employees receive proper care.

At June 30, 2022, $6,084,219 and $37,111,000 have been accrued for public liability and workers’ compensation claims, respectively. These accruals represent estimates of amounts to ultimately be paid for reported claims and, upon past experience, recent claim settlement trends and other information. It is the City’s practice to obtain an actuarial study on an annual basis.

Although the amount of actual losses incurred through June 30, 2022 are dependent on future developments, based upon inf ormation from the administrators and others involved with the administration of the programs, the City’s management believes that the aggregate accrual is adequate to cover such losses.

City Debt Structure

Short-Term Debt. The City has issued Tax and Revenue Anticipation Notes (“TRANs”) in each recent year. The City’s TRANs are a general obligation of the City, payable from the City’s general fund and any other lawfully available moneys. The fiscal year 2022-23 TRANs have an outstanding principal amount of $28,000,000 and mature on July 25, 2023.

General Fund Obligations. The City currently has outstanding long -term General Fund debt and lease obligations described below. The City has never defaulted on the payment of principal of or interest on any of its indebtedness.

Certificates of Participation . On June 2, 2021, Berkeley Joint Powers Financing Authority (the “ Authority”) executed and delivered certificates of participation in the aggregate principal amount of $3,975,000 (the “Certificates of Participation”). The City’s underlying rental obligation is a general fund obligation of the City. The bonds bear interest at rates between 2.00%-5.00%, and the final maturity date is October 1, 2039. As of April 1, 2023, the principal balance outstanding was $3,975,000.

Lease Revenue Bonds. In October 2012, Authority issued lease revenue bonds on behalf of the City in the aggregate principal amount of $27,260,000 to refund the Authority’s 1999 Lease Revenue Bonds and 2003 Certificates of Participation. The City’s underlying rental obligation is a general fund obligation of the City. The bonds bear interest at rates between 3.00%-5.00%, and the final maturity date is October 1, 2037. As of April 1, 2023, the principal balance outstanding was $14,940,000.

General Obligation Bonds . The City has previously issued general obligation and general obligation refunding bonds that are secured by ad valorem taxes levied and collected in the City.

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Employment

The unemployment rate in the Oakland-Hayward-Berkeley MD was 3.9% in March 2023, unchanged from a revised 3.9% in February 2023, and above the year-ago estimate of 3.6%. This compares with an unadjusted unemployment rate of 4.8% for California and 3.6% for the nation during the same period. The unemployment rate w as 3.8% in the County and 4.0% in Contra Costa County.

The table below list employment by industry group for Alameda and Contra Costa Counties for the years 2018 to 2022.

OAKLAND- HAYWARD-BERKELEY MD
(Alameda and Contra Costa Counties)
Annual Averages Civilian Labor Force, Employment and Unemployment, Employment by Industry
(March 2022 Benchmark)

2018 2019 2020 2021 2022
Civilian Labor Force (1) 1,401,700 1,403,400 1,362,300 1,352,300 1,382,300 Employment 1,357,700 1,360,500 1,239,100 1,268,700 1,333,200 Unemployment 44,000 42,900 123,200 83,600 49,100
Unemployment Rate 3.1% 3.1% 9.0% 6.2% 3.6%
Wage and Salary Employment: (2)
Agriculture 1,300 1,400 1,500 1,600 1,900
Mining and Logging 200 200 200 200 300
Construction 74,900 75,500 70,700 73,000 74,300
Manufacturing 100,600 101,000 98,700 105,200 111,000
Wholesale Trade 47,500 45,400 42,100 41,300 41,200
Retail Trade 114,500 111,800 101,100 105,300 105,200
Transportation, Warehousing, Utilities 42,300 43,700 45,200 48,600 54,100 Information 27,600 27,600 25,800 25,000 24,900
Finance and Insurance 37,500 37,200 35,900 34,700 34,200 Real Estate and Rental and Leasing 17,800 18,100 16,700 16,800 18,200 Professional and Business Services 189,500 193,200 184,800 189,900 195,800 Educational and Health Services 194,300 198,400 191,300 198,200 207,400 Leisure and Hospitality 117,700 121,000 84,700 91,700 103,900 Other Services 41,000 41,200 33,100 35,000 38,500
Federal Government 13,400 13,400 14,200 13,500 13,100
State Government 39,400 39,600 38,200 37,900 33,700
Local Government 121,800 121,800 113,500 111,900 116,200 Total, All Industries (3) 1,181,300 1,190,300 1,097,700 1,129,700 1,176,300

(1) Labor force data is by place of residence; includes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: State of California Employment Development Department.

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The following tables show the major employers in the City and the County.

CITY OF BERKELEY
Major Employers
2022

Employer
Number of
Employees
% of Total
Employment
University of California Berkeley 12,944 19.95%
Lawrence Berkeley National Laboratory 3,469 5.35
Sutter East Bay Medical Foundation/Hospitals 1,898 2.93 Berkeley Unified School District 1,697 2.62
City of Berkeley 1,510 2.33
Bayer Corporation 1,099 1.69
Kaiser Permanente Medical Group 886 1.37
Touchstone Golf LLC 782 1.21
Siemens Corporation/Healthcare Diagnostics, Inc. 628 0.97 Lifelong Medical Care 501 0.77

Source: City of Berkeley, Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022.

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COUNTY OF ALAMEDA
Major Employers (Listed Alphabetically)
May 2023

Employer Name Location Industry
Alameda County Law Enforcement Oakland Government Offices-County Alameda County Sheriff's Dept San Leandro Government Offices-County Alameda County Sheriff's Ofc Oakland Sheriff
Alta Bates Summit Med Ctr Alta Berkeley Hospitals
Alta Bates Summit Med Ctr Lab Oakland Laboratories-Medical BART PD Oakland Transit Lines
California State Univ East Bay Hayward Schools-Universities & Colleges Academic Cooper Vision Inc Pleasanton Optical Goods-Wholesale
Dell EMC Pleasanton Computer Storage Devices (mfrs)
East Bay Mud Oakland Water & Sewage Companies-Utility
Ebmud Oakland Utilities
Grifols Diagnostic Solutions Emeryville Pharmaceutical Research Laboratories Kaiser Permanente Oakland Med Oakland Hospitals
Lawerence Berkeley Lab Berkeley Laboratories-Research & Development Lawrence Livermore Natl Lab Livermore University-College Dept/Facility/Office Peoplesoft Inc Pleasanton Computer Software-Manufacturers Sanfrancisco Bayarea Rapid Oakland Transit Lines
Transportation Dept-California Oakland Government Offices-State UCSF Benioff Children's Hosp Oakland Hospitals
University of CA Berkeley Berkeley Schools-Universities & Colleges Academic University of CA-BERKELEY Berkeley University-College Dept/Facility/Office University-Ca-Berkeley Dept Berkeley University-College Dept/Facility/Office Valley Care Health System Livermore Health Services
Washington Hospital Healthcare Fremont Health Care Management Western Digital Corp Fremont Computer Storage Devices (mfrs)

Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2023 2nd Edition.

Effective Buying Income

“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after -tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s i ncome, rental income (which includes imputed rental income of owner -occupants of non -farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this tota l are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City of Berkeley, the County of Alameda, the State and the United States for the period 2019 through 2023.

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CITY OF BERKELEY AND COUNTY OF ALAMEDA
Effective Buying Income
As of January 1, 2019 through 2023

Year

Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective Buying
Income

2019 Berkeley $5,517,451 $72,412
Alameda County 67,609,653 79,446
California 1,183,264,399 62,637
United States 9,017,967,563 52,841

2020 Berkeley $5,843,576 $76,294
Alameda County 72,243,436 84,435
California 1,243,564,816 65,870
United States 9,487,165,436 55,303

2021 Berkeley $6,203,796 $79,437
Alameda County 77,794,202 88,389
California 1,290,894,604 67,956
United States 9,809,944,764 56,790

2022 Berkeley $6,646,946 $88,676
Alameda County 85,225,529 99,940
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

2023 Berkeley $6,074,419 $88,720
Alameda County 80,766,211 98,721
California 1,461,799,662 77,175
United States 11,454,846,397 65,326

Source: Claritas, LLC.

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Construction Activity

Provided below are the building permits and valuations for the City of Berkeley for calendar years 2018 through 2022.

CITY OF BERKELEY
Total Building Permit Valuations
(Valuations in Thousands)

2018 2019 2020 2021 2022
Permit Valuation
New Single-family $13,808.7 $9,666.3 $6,444.7 $13,533.1 $9,058.9 New Multi-family 24,506.9 7,513.6 12,643.5 53,032.6 12,373.6 Res. Alterations/Additions 80,130.0 40,596.9 26,204.9 47,099.2 28,834.2 Total Residential 118,445.6 57,776.8 45,293.1 113,664.9 50,266.7

New Commercial 18,732.1 10,816.3 25,867.1 15,167.2 5,577.0 New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 3,236.6 4,718.7 272.0 1,760.3 3,501.9
Com. Alterations/Additions 52,522.6 12,885.4 23,290.5 65,213.8 13,158.1 Total Nonresidential 74,491.3 28,420.4 49,429.6 82,141.3 22,237.0

New Dwelling Units
Single Family 63 46 21 69 40
Multiple Family 129 42 117 286 72
TOTAL 192 88 138 355 112

Source: Construction Industry Research Board, Building

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APPENDIX B

THE CITY’S ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR YEAR ENDED JUNE 30, 2022

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APPENDIX C

FORM OF OPINION OF BOND COUNSEL

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APPENDIX D

FORM OF CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (the “ Disclosure Certificate ”) is executed and delivered by the City of Berkeley (the “ City”) in connection with the issuance by the City, of the $_________ City of Berkeley 2023-24 Tax and Revenue Anticipation Notes (the “Notes”). The Notes are being issued pursuant to a resolution adopted by the City Council of the City on June 27, 2023 (the “Resolution”). The City covenants and agrees as follows:

Section 1. Purpose of the Disclos ure Certificate . This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Notes and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2 - 12(b)(5).

Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Dissemination Agent” shall mean NHA Advisors, LLC, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.

“Listed Events ” shall mean any of the events li sted in Section 3(a) of this Disclosure Certificate.

“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.

“Participating Underwriter ” shall mean any of the original underwriters of the Notes required to comply with the Rule in connection with offering of the Notes.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Section 3. Reporting of Significant Events.

(a) Pursuant to the provisions of this Section 3, the City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Notes:

(1) Principal and interest payment delinquencies.

(2) Non-payment related defaults, if material.

(3) Unscheduled draws on debt service reserves reflecting financial difficulties.

(4) Unscheduled draws on credit enhancements reflecting financial difficulties.

(5) Substitution of credit or liquidity providers, or their failure to perform.

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(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.

(7) Modifications to rights of security holders, if material.

(8) Bond calls, if material, and tender offers.

(9) Defeasances.

(10) Release, substitution, or sale of property securing repayment of the securities, if material.

(11) Rating changes.

(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.

(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an 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, if material.

(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(15) Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material.

(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.

(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of s uch occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Notes under the Resolution.

(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), and (a)(14) of this Section 3 contain the qualifier

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“if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law.

(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the followi ng occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.

(e) For purposes of Section 3(a)(15) and (16), “financial obligation ” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

Section 4. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Notes. If such termination occurs prior to the final maturity of the Notes, the City shall give notice of such termination in the same manner as for a Listed Event under Section 3(b).

Section 5. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure C ertificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent.

The initial Dissemination Agent shall be NHA Advisors, LLC.

Section 6. Amendment; Waiver . Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) if the amendment or waiver relates to the provisions of Section 3(a) it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Notes, or type of business conducted;

(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Notes, after taking into account any amen dments or interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is approved by holders of the Notes, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Notes.

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Section 7. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to includ e any information in any notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.

Section 8. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate any holder or beneficial owner of the Notes may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

Section 9. Duties, Immunities and Liabilities of Dissemi nation Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys ’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Notes.

Section 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriters and holders and beneficial owners from time to time of the Notes and shall create no rights in any other person or entity.

Date: _______, 2023

CITY OF BERKELEY

By
City Manager

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APPENDIX E

DTC AND THE BOOK-ENTRY ONLY SYSTEM

The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Notes, payment of principal, interest and other payments on the Notes to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownersh ip interest in the Notes and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

Neither the issuer of the Notes (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Notes (the “ Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Notes, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Notes, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Notes, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current " Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount , and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limi ted-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commerc ial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“ Direct Participants ”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in depos ited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.

Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust

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companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation (“ DTCC”). DTCC is the holding company for DTC, National Securities Cleari ng Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Dir ect and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indi rect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to a ny statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI

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Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent on payable dat e in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bea rer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

10. Issuer may decide to discontinue use of the system of book -entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

11. The information in this section concerning DTC and DTC’s book -entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected]

ACTION CALENDAR
June 27, 2023
(Continued from May 23, 2023)
TO: Honorable Members of the City Council
FROM: Vice Mayor Ben Bartlett (Author), Mayor Jesse Arreguin (Co-Sponsor), Councilmember Kate Harrison (Co-Sponsor), and
Councilmember Mark Humbert (Co-Sponsor)
SUBJECT: Adopting a temporary exemption from the collection of taxes under BMC Chapter 9.04.136(D): Tax Rate for Non-Medical and Medical Cannabis Businesses

RECOMMENDATION
1) Adopt a temporary exemption (per 9.04.136(D)) on the collection of the taxes for all non-medical and medical cannabis businesses, retroactive to January 2023 and ending July 2025; Waive any late penalties that may have accrued since January 2023; any and all tax payments already made to the City for Q1 2023 will apply as a credit against a future tax or fee payment to the City; and
2) Refer to the City Manager and Cannabis Commission and/or its successor, the Planning Commission, to analyze and develop an ordinance adjusting local cannabis business tax rates by February 2025 that are in balance with the state cannabis tax rates, with an eye to the ability for the cannabis industry to become a sustainable economic driver for the City of Berkeley.
3) Licensed cannabis businesses in Berkeley will pay the business license tax that applies to their respective area of the market during the moratorium, like retail, manufacturing, etc.

BACKGROUND
On November 8, 2016, California voters passed Proposition 64, the Adult Use of Marijuana Act (AUMA). This proposition legalized the use of cannabis for adults over 21 years old. Berkeley voted overwhelmingly for Proposition 64, with 85% approving the measure. The State of California developed state-wide regulations for recreational cannabis, allowing temporary licenses for adult-use businesses effective January 1, 2018.

In September 2017, the Berkeley City Council adopted amendments to B.M.C. Chapter

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 2 12.26 to permit temporary licenses for existing medical cannabis dispensaries, allowing them to sell adult-use cannabis in the City effective January 1, 2018. To date, five of the six existing permitted dispensaries have received city and state licenses and are selling adult-use cannabis.

Since long-standing dispensaries began selling adult-use cannabis on January 1, 2018, there have been many questions regarding the local cannabis tax rate. In addition to State and sales taxes, local taxes have added significant costs to cannabis products and may discourage business, especially as other nearby cities adopt lower tax rates.

In 2018, the City set tax rates at 5% based on the best information possible at the time.

Since then, the cannabis industry in California has seen its growth stall, and in the last year, the bottom has fallen out, leading to an industry-wide collapse. ● During the COVID pandemic, cannabis was deemed essential, yet was left out of the state and federal relief provided to other business owners, including but not limited to relief for wages paid to employees on leave for COVID-related workplace exclusions, the Paycheck Protection Program (PPP) loans, and Small Business Administration loans.
● The costs of compliance with state and local regulations for the cannabis business are extremely high.
● Nearly all of what would otherwise be considered a standard business tax deduction are not applicable because of Internal Revenue Code Section 280E, which disallows all ordinary business expenses and still unjustly applies to state legal tax businesses.
● The unlicensed market and organized cartels continue to thrive under this system, undercutting the legal market. Berkeley is not immune to this. In the first months of 2023, two unlicensed operations within the City were shut down. One facility had 14,000 plants and hundreds of pounds of cannabis concentrate on site.
● Licensed cannabis cannot compete.

The compounding effect of these added costs of doing business with the state and local taxes and fees and lack of access in much of the state drives the cannabis consumer to the unlicensed market, which is currently more than twice the size of the regulated one– and half the price.

Last year, the State had an opportunity to adjust the tax rates for cannabis businesses and provide relief for those struggling to make it into the legal market. Instead of providing that relief, the state shifted the tax burden to retailers and cannabis consumers and will

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 3 likely increase those excise taxes in the future. This change in state tax collection had a chilling effect on an already struggling industry, and the shift negatively impacted urban regions of the state that predominantly have retail cannabis as the main license type.

Berkeley wants to see its legal cannabis businesses thrive so they can continue providing high-wage jobs and access to safe, tested cannabis to the people of Berkeley and those who come to Berkeley.

Taxes Applicable to Non-Medical Cannabis Businesses
There are a number of taxes applicable to adult-use cannabis businesses, including:
● State Cannabis Excise Tax
○ Effective January 1, 2018, a 15% excise tax is imposed upon retail purchasers of all cannabis and cannabis products, except for those possessing a state cannabis medical card. The 15% excise tax is calculated based on the average market price from the retail sale, which leads to an actual current effective tax rate of around 27%. ○ Beginning this year, that excise tax was shifted to retail. Because of the way the tax is calculated, this amounted to a tax increase. ● Local Sales Taxes
○ The City of Berkeley and Alameda County's combined sales tax is 10.25% ● City of Berkeley Business License Tax
○ Measure S, adopted by Berkeley voters in 2010, set the business license tax rate for Non-Medical Cannabis Businesses authorized pursuant to Proposition 19 at 10% or $100.00 for every $1,000 of gross receipts. The measure included language allowing the City Council to lower the tax rate by ordinance, which the Council did in 2018 to 5% or $50 for every $1000. ■ A note about Measure S - This ballot measure was expressly written to accompany Proposition 19 from 2010, which would have legalized cannabis and did not set a state tax rate. That ballot initiative did not pass.
■ Cities like Berkeley and Oakland, which set high local tax rates in anticipation of Proposition 19 passing, have seen an exodus of the supply chain businesses that can leave and a loss of customers to its brick-and-mortar dispensaries as other jurisdictions have come online with much lower taxes. This also leads the more price-driven customers to jurisdiction shop when choosing where to buy their

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 4 cannabis, particularly where delivery from neighboring regions is widely available.
○ The business license tax rate for Medical Cannabis Businesses is currently 2.5% of gross receipts.

Other Cannabis Tax Rates in the region
Different jurisdictions in Alameda County have set their cannabis tax rates at a range of levels. Over the next year, there will be efforts to lower the local rates in most of these jurisdictions.

Oakland: has seen an exodus of supply chain businesses to lower tax rate jurisdictions.

Hayward: voters approved up to 15% but have set the effective rate at 6% and is having trouble attracting cannabis businesses.

San Leandro: Measure NN approved in November 2016, was a voter-approved gross receipts tax on cannabis businesses of up to 10%. It is currently 6% and will increase over time. All cannabis businesses must have annual audits.

Emeryville: Has set tax rates at 3% for retail, 2% for manufacturing, and 1% for distribution.

City of Alameda: Currently has no cannabis tax for its cannabis businesses. The City Council chose not to pursue any additional cannabis taxes for the foreseeable future to allow licensed businesses to get on their feet. Cannabis businesses pay regular business license taxes.

City and County of San Francisco: Have continually delayed the implementation of a cannabis-specific tax to help the flailing industry. Cannabis businesses pay regular business taxes.

In order for Berkeley to remain competitive and attract new cannabis businesses, it should consider lowering its business license tax on Non-Medical Cannabis businesses.

FISCAL IMPACTS OF RECOMMENDATION
Reducing the business license tax rate for Non-Medical Cannabis Businesses may reduce tax receipts to the General Fund. However, a lower tax rate will make Berkeley cannabis businesses more competitive in the regional market and may result in greater business activity and tax revenues to the City. According to the FY 2023 Mid-Year Budget

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 5 Update, Recreational Cannabis Taxes have produced $1,643,749 in receipts as of February 2023.

ENVIRONMENTAL SUSTAINABILITY
No identifiable environmental effects or opportunities are associated with this report's subject.

CONTACT
Ben Bartlett, Councilmember/Vice-Mayor, District 3 510-981-7130 Attachments:

1. Ordinance: BMC Chapter 9.04.136

2. CDTFA total cannabis sales data from 2021 through Q4 2022 show unexpected and continual losses.

3. MJ Biz article: “California localities extend tax relief to marijuana companies in the absence of state action,” February 28, 2022

4. Letter from hi fidelity

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 6 Attachment 1
https://berkeley.municipal.codes/BMC/9.04.136

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 7

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 8 Attachment 2
https://www.cdtfa.ca.gov/dataportal/charts.htm?url=CannabisTaxRevenues

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 9 Attachment 3
https://mjbizdaily.com/california-localities-extend-tax-relief-to-marijuana-companies/

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 10

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 11

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 12

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 13

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 14 Attachment 4

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

INFORMATION CALENDAR
June 27, 2023
To: Honorable Mayor and Members of the City Council
From: Dee Williams-Ridley, City Manager
Submitted by: Sharon Friedrichsen, Budget Manager
Subject: Voluntary Time Off Program for Fiscal Year 2024

INTRODUCTION
As a citywide cost-saving measure, the City Manager is designating 16 Voluntary Time Off (VTO) days in Fiscal Year 2024 (July 1, 2023 to June 30, 2024) and authorizing certain City offices and non-essential services to temporarily close for those days.

CURRENT SITUATION AND ITS EFFECTS
The proposed 16 VTO dates will fall on a schedule similar to Fiscal Year 2023, with City offices generally closing on every second Friday, with additional days the last week in December 2023 (December 26 - December 29). The following are the proposed VTO Days:

Date (2023) Day Date (2024) Day
July 14 Friday January 12 Friday
August 11 Friday February 9*** Friday
September 15* Friday March 8 Friday
October 13 Friday April 12 Friday
November 9** Thursday May 10 Friday
December 8 Friday June 14 Friday
December 26 Tuesday
December 27 Wednesday
December 28 Thursday
December 29 Friday
10 days (2023) 6 days (2024)
* VTO day in September is moved to September 15 to minimize the impact on payroll processing.
** Friday, November 10, 2023 is the observed Veteran’s Day Holiday. *** Monday, February 12, 2024 is the observed Lincoln’s Birthday Holiday.

Voluntary Time Off Program for FY 2024 INFORMATION CALENDAR June 27, 2023

The purpose of VTO days is to generate savings to help balance the budget. The program is projected to achieve a savings of $261,628 on an all funds basis in Fiscal Year 2023. The actual savings per VTO day since FY 2021 was lower than previous fiscal years because of city building closure and staff working remotely due to the COVID-19 pandemic. Nonetheless, the program is still recommended to continue in Fiscal Year 2024.

Voluntary Time Off Salary Savings
Fiscal Year Number of VTO
Days
Base Salary
Savings
Savings Per
VTO Day
2013 28 $ 578,044 $ 20,644
2014 16 $ 389,706 $ 24,357
2015 16 $ 366,853 $ 22,928
2016 16 $ 367,821 $ 22,989
2017 16 $ 402,070 $ 25,129
2018 16 $ 475,400 $ 29,713
2019 17 $ 524,086 $ 30,829
2020 16 $ 467,108 $ 29,194
2021 17 $ 251,229 $ 14,778
2022 16 $ 251,148 $ 15,697
2023 16 $ 261,628 * $ 16,352
*Annualized projection
The VTO program is recommended to continue in Fiscal Year 2024 and will be reevaluated at a later time to determine whether the VTO program will also be implemented in Fiscal Year 2025. As shown in the chart below, the average savings per VTO day within the last decade ranged from $14,800 to $30,800. $30,
829
$14,
778
$0
$5,
000
$10,
000
$15,000
$20,
000
$25,
000
$30,
000
$35,
000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Savings Per VTO Day

Voluntary Time Off Program for FY 2024 INFORMATION CALENDAR June 27, 2023

In Fiscal Year 2023, staff considered the impact that the VTO days had on City services. It was determined that the VTO days were, in general, not having a significant detrimental effect on the City’s ability to provide quality services. Potential inconveniences to residents were mitigated in several ways, including keeping the 311 Customer Call Center open on VTO days, adjusting due dates for fines, and posting clear signs in advance of closure dates.

BACKGROUND
The concept for a VTO program was proposed in 2004 by the labor unions representing non-sworn employees as an alternative to a mandatory closure of City offices (“furloughs”) and staff layoffs. The VTO program designates certain days City offices are closed to the public while allowing staff to take paid or unpaid leave, or voluntarily report to work. The VTO closures have permitted staff to reduce their vacation leave balances, and eliminate the costly past practice of buying back vacation leave balances, which in turn has allowed the City to reduce its cost to pay out accrued vacation leave upon an employee’s separation from employment. It has also been used by departments to help them reach their annual target savings.

Likewise, the City Council approved a recommendation that designates any Statewide Election, including Primary and Special Statewide Elections, as VTO days1. Election Day occurs on the Tuesday after the first Monday in November of each even-numbered year, with the corresponding Primary Day occurring on the Tuesday after the first Monday of March.

Service Impacts: The VTO program has generated minimal complaints from the public regarding the office closures and reduced services because many key services remain open to the public, while other services can be provided on a callback basis.

During VTO days, customer service counters at the Finance Customer Service Center and Permit Service Center are closed to the public. When Customer Service Center offices are closed, customers may access the drop box which is located outside 1947 Center building. Customers are redirected to access the drop box through signage to the Rent Board Office at 2125 Milvia Street on VTO days in the last week of December.

When the Permit Service Center is closed, building inspection services continue to be available to the public when City approvals are required for time-sensitive projects. The permit mailbox has been configured to accept emails from applicants on VTO days including applications for all types of building related permits. In addition, Permit Service Center cashiers work most of the VTO days to return customer calls and process 1 https://records.cityofberkeley.info/PublicAccess/api/Document/AfIClpxxSiesVU%C3%81UeV6uHvDcSM3 47Ko0EvBQfWOAcMZctkvZVLhegoOT5Gsbt38OjQY6FVXdfzeIiGPO5gabOg4=/

Voluntary Time Off Program for FY 2024 INFORMATION CALENDAR June 27, 2023

payments. The City will continue to notify the public of City VTO closure dates through public noticing, the press, voicemail messages, and signage.

The Voluntary Time Off Program for Fiscal Year 2024 is a Strategic Plan Priority, advancing our goal to provide an efficient and financially-healthy City government.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
VTO days may reduce vehicle miles traveled associated with City employees’ work commute. Otherwise, there are no identifiable environmental and climate effects or opportunities associated with the subject of this report.

POSSIBLE FUTURE ACTION
We are continuing the VTO program in Fiscal Year 2024. However, the City Manager will reassess the economic impact as well as the cost benefit to the public of continuing these temporary closures of City offices for Fiscal Year 2025.

FISCAL IMPACTS OF POSSIBLE FUTURE ACTION
Cost savings are achieved on an annual basis from the VTO program. Since Fiscal Year 2013, annual cost savings ranging from $251,000 to $578,000 have been achieved from the VTO program.

CONTACT PERSON
Aram Kouyoumdjian, Director of Human Resources, 981-6800 Sharon Friedrichsen, Budget Manager, 981-7000

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

INFORMATION CALENDAR
June 27, 2023
To: Honorable Mayor and Members of the City Council
From: Dee William-Ridley, City Manager
Submitted by: Sharon Friedrichsen, Budget Manager
Subject: Status Report - Berkeley’s Financial Condition (FY 2012 – FY 2021):

Pension Liabilities and Infrastructure Need Attention

INTRODUCTION
On May 24, 2022, the City Auditor submitted a Financial Conditions audit report1 to City Council with recommendations to build on the City’s financial strengths in order to: (1) help address the City’s unfunded capital and deferred maintenance needs and pension liabilities; (2) help the City prepare for unforeseen economic challenges by assessing the risk of the reserves, and ensuring that enterprise funds can balance and avoid recurring shortfalls and (3) to update the City’s debt policy to help strengthen the City’s ability to assess its general obligation debt capacity.

The purpose of this information item is to update City Council on the status of implementation of the audit report’s recommendations. This is the second status report regarding this audit. We previously issued a report on December 13, 2022.2

CURRENT SITUATION AND ITS EFFECTS
The City Auditor’s report included five recommendations. As of the writing of this report, two recommendations have been partly implemented and three recommendations have been started. Please see Attachment 1 for a detailed table of audit report recommendations and implementation progress. The next status report to Council is expected to be presented in May 2024.

BACKGROUND
The audit provides a high-level overview of the City’s financial condition over 10 fiscal years. By broadening the scope of financial reporting to incorporate long-term financial trends, financial condition analysis can introduce long-term considerations into the 1 Audit-Berkeley's Financial Condition (FY 2012 - FY 2021): Pension Liabilities and Infrastructure Need Attention: https://berkeleyca.gov/sites/default/files/documents/2022-05- 24%20Item%2018%20Berkeley%E2%80%99s%20Financial%20Condition.pdf 2 https://berkeleyca.gov/sites/default/files/documents/2022-12- 13%20Item%2024%20Status%20Report%20-%20Berkeley%20s%20Financial.pdf

Audit Recommendation Status- Berkeley’s Financial Condition INFORMATION CALENDAR 6/27/23

budgeting process, clarify the City’s fiscal strengths and weaknesses, and help highlight financial risks that the City needs to address including its unfunded capital and pension liabilities.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACT
There are no identifiable environmental effects or opportunities associated with the subject of this report.

POSSIBLE FUTURE ACTION
The City Manager’s Office will continue to work on implementing the various recommendations, including conducting a risk assessment of the General Fund reserve and developing recommendations regarding fund balance for the various enterprise funds. The Finance Department will continue to assess the debt capacity threshold and update the debt management policy. In addition, the City Manager’s Office will continue to assess Council fiscal policies and make recommendations regarding long-term funding strategies to address the City’s pension and capital infrastructure liabilities.

FISCAL IMPACTS OF POSSIBLE FUTURE ACTIONS
The audit recommendations are intended to build on the City’s financial strengths and help mitigate risks associated with the City’s unfunded liabilities.

CONTACT PERSON
Sharon Friedrichsen, Budget Manager, 510.981.7000
Attachments:

1. Audit Findings, Recommendations, and Status Updates

Finding Department Status of Audit Recommendations,
Corrective Plan, and Progress Summary
Previous
status update
The COVID-19 pandemic
slowed the City’s
progress toward its 2027
reserve funding goal.

1.1 To better prepare the City for
unforeseen economic challenges,
we recommend that the City
Manager complete the risk
assessment required by the City’s
reserve policy as scheduled and
propose to the City Council a plan
to replenish the Stability and
Catastrophic Reserves based on the
results of the assessment. This may
include revising the funding goal
for 2027 to align with the City’s
financial reality and projected risk
level.

City Manager Started:

Staff have entered into a contract with
the Government Finance Officers
Association (GFOA) for technical
assistance with the analysis of the
reserves policy. GFOA has developed a
distinctive risk-based approach to
analyzing reserves that considers specific
risk conditions faced by a local
government. This includes the use of
“probability management technology” to
assess risk and develop models regarding
appropriate reserve levels. The
consultant at the GFOA is currently
building the model for the City’s exposure
to extreme events, such as floods,
earthquakes, fires, high heat, and
landslides, and developing a range of
potential financial impacts from extreme
events that would influence the reserves.

Started
All of the City’s
enterprise funds faced
at least one annual
shortfall between FY
2016 and FY 2021.

1.2 To ensure the City’s enterprise
funds can balance and avoid
recurring annual shortfalls, we
recommend the City Manager
assess the appropriate fund
balance for each of the City’s
enterprise funds, report findings to
the City Council and explore
financial policy options to manage
enterprise fund balances.

City Manager Started:

City staff are conducting research and
formed an internal working group to
discuss current approaches utilized by
departments and best practices as the
first step in developing fund balance
policies.

Started
Recommendation
Issue Date: May 5, 2022
Audit Title: Berkeley’s Financial Condition (FY 2012-FY 2021): Pension Liabilities and Infrastructure Need Attention

The City’s limit for
general obligation bond
debt is set at 15 percent
of total assessed
property value.

2.1 To strengthen the City’s debt
management, we recommend that
the Finance Department update
the Debt Management Policy. The
Finance Department may consider
revising its current general
obligation bond threshold of 15
percent of assessed property value
or building upon the City’s existing
general obligation bond debt limit
by considering additional debt
capacity factors such as debt per
capita, debt to personal income,
and/or debt service payments as a
proportion of General Fund
revenues.

Finance
Department
Started:

The Finance Department has been
working on updating the debt
management policy, especially in light of
current interest rates promulgated by the
Federal Reserve Board. The updated debt
management policy is scheduled to be
considered by Council on June 27, 2023.

Started
The City has taken steps
to increase pension
funding.

3.1 To maximize the benefit of the
Section 115 Trust, we recommend
that the City Manager present a
plan for adoption by the City
Council to assure sufficient
contributions to the Trust. This may
include taking the steps proposed
by the Budget and Finance
Committee to increase
contributions to the Trust. It may
also include a strategy to ensure
that the City is able to meet its
yearly contribution goals, such as
allocating contributions at the
beginning of the budget cycle.

City Manager Partly Implemented:

The City budgeted funds for the Section
115 Trust and adopted fiscal policies to
fund the Section 115 Trust as part of the
FY 2023/24 biennial budget process. The
City’s actuary has recommended
maintaining the target contribution goal
of $5.5 million.

Partly
Implemented
The City reported $1.2
billion in unfunded
capital and deferred
maintenance needs in FY
2021.

4.1 To address rising costs for unmet
capital needs, we recommend that
the City Manager collaborate with
the Department of Public Works to
implement a funding plan aimed at
1) reducing the City’s unfunded
capital and deferred maintenance
needs, and 2) ensuring regular
maintenance of city assets to
prevent excessive deferred
maintenance costs in the future.

This may include prioritizing capital
assets that generate the highest
deferred maintenance costs.

City Manager Partly Implemented :

The City has updated its fiscal policies to
include strategies, such as the use of
investment revenues over the baseline
budget, to increase funding for unfunded
capital and deferred maintenance needs.

Partly
Implemented

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.cityofberkeley.info/manager

INFORMATION CALENDAR
JUNE 27, 2023
To: Honorable Mayor and Members of the City Council
From: Dee Williams-Ridley, City Manager
Submitted by: Henry Oyekanmi, Director, Finance Department Subject: FY 2023 Third Quarter Investment Report: Ended March 31, 2023

SUMMARY
The City’s investment policy requires that a quarterly investment report be submitted to the City Council on the status of the investment portfolio. The report includes all investments managed by the City of Berkeley and provides information on the types, values (par, book, and market), term, and yield of each security.  The return on pooled investments for the quarter ended March 31, 2023 was 2.76%, 13 basis points more than the 2.63% earned by the State Local Agency Investment Fund (State LAIF), which is the benchmark for investment performance used by the City. The return on pooled investments of 2.76% for the quarter ended March 31, 2023 was 37 basis points more than the rate of 2.39% earned in the quarter ended December 31, 2022.
 The average return on all Retiree Medical Trust Fund investments was 5.08% for the quarter ended March 31, 2023.

CURRENT SITUATION AND ITS EFFECTS
Attached is a summary of quarterly reports for fiscal year 2023 Third Quarter ending March 31, 2023 representing the status of the City’s investment portfolio. The report includes all investments managed by the City of Berkeley and provides information on the values (par, book, and market), term, and yield of each security.

Summary information by type of security and detailed information on each security is provided on Exhibit 2-A. An evaluation of portfolio performance for this accounting period compared to the previous three accounting periods is also included in Attachment 1.

Investment Report: FY2023 2nd Qtr. INFORMATION CALENDAR Ended March 31, 2023 JUNE 27, 2023

A. Portfolio Results
As a result of the differences in the investment policies of different cities, including responsible investing policies, maturity restrictions, investment restrictions, etc., it was difficult for the City of Berkeley to come up with a reasonable performance measure for pooled cash investments. In order to provide some measure of the relative performance of the City’s investment returns, many years ago the City established the State Local Agency Investment Fund (LAIF) as the performance measure to be reported in the quarterly investment reports, since many local governments invested significant portions of their investment portfolios in LAIF.

LAIF was intended to be a reference point to compare the City’s investment performance against, rather than a true performance measure, since most cities typically earn a yield higher than LAIF in normal interest rate environments, and because LAIF’s average maturity of its investments is generally shorter than most cities. As a result, past City Councilmembers requested that information about the rates earned by other California cities be included in the quarterly investment reports for comparison purposes, despite the differences in the investment policies of the various cities.

1. Liquidity of Portfolio:

The average investment in the pooled portfolio matures in 1,322 days as of March 31, 2023. This is 1 day less than the 1,323 maturity days as of December 31, 2022.

2. Comparison of Results to Performance Measures – Pooled investments:

Quarter Ended March 31, 2023
The City’s yield on investments for the quarter ended March 31, 2023 was 2.76%, an increase of 37 basis points (.37%) from the 2.39 earned during the quarter ended December 31, 2022. The average yield on a 90-day Treasury bill at the end of the quarter ended March 31, 2023 was 4.69%, an increase of 35 basis points (0.35%) from the 4.34% at the end of the previous quarter, primarily as a result of the Fed raising the Federal Funds rate by .25% on February 1, 2023 and .25% on March 2, 2023.

As summarized in Table 1, staff’s overall results were above the performance measure for the quarter by 13 basis points. Staff’s performance was above the performance measure in January by approximately 19 basis points (+.19%); over the performance measure in February by approximately 30 basis points (+.30%); and, was under the performance measure in March by approximately 8 basis points (-.08%). The performance measure for the return on investments is compared to the rate of return of the State LAIF.

Investment Report: FY2023 2nd Qtr. INFORMATION CALENDAR Ended March 31, 2023 JUNE 27, 2023

Table 1
For Quarter Ending March 31, 2023
Period City State LAIF Difference
Jan-23 2.62% 2.43% +0.19%
Feb-23 2.92% 2.62% +0.30%
Mar-23 2.75% 2.83% -0.08%
Jan 1-Mar 31

2.76% 2.63% +0.13%

3. Investment Results-Retiree Health Insurance Funds:

Average interest rates earned on the retiree health insurance trust funds for the quarter ended March 31, 2023 compared to the quarter ended December 31 2022, were as follows:

Table 2

EARNED INTEREST RATES
For Quarter Ended 3/31/2023 Compared To 12/31/2022
Trust Fund 3rd Qtr.
3/31/23
2nd Qtr.
12/31/22
Retiree Medical Trust Fund (Misc. Employees) 5.41% 5.18% Fire Retiree Medical Trust Fund 5.22% 3.96%
Police Retiree Medical Trust Fund 4.62% 3.61%
The rates earned on these plans are expected to continue to increase, as staff plans to use the investment authority granted by Council to purchase long-term bonds as rates move higher.

Details related to retiree health trust fund investments are in Attachment 3, Exhibits 3- A, 3-B, and 3-C of this report.

B. Discussion of Interest Rate Environment and Outlook
In its March 22, 2023 statement, the Federal Open Market Committee said recent indicators point to modest growth in spending and production. Job gains have picked up in recent months, and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated.

Investment Report: FY2023 2nd Qtr. INFORMATION CALENDAR Ended March 31, 2023 JUNE 27, 2023

The U. S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.

Yield Trend
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate between 4-3/4 to 5%-percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will consider the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

In addition, the Committee will continue to reduce its holdings of Treasury securities and agency debt and mortgage-backed securities, as described in its previously announced plans.

The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of its policies as it affects the economy. The Committee would be prepared to adjust monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will consider a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Since the Federal Reserve change its zero-interest rate policy in March 2017 to combat high inflation, the Federal Reserve Board has raised the Federal Funds rate nine times for a total of 5.00%-5.25%, as follows:

Table 3

DATE RATE CHANGE FEDERAL FUNDS RATE
03/17/22 .25% .25%-.50%
05/05/22 .50% .75%-1.00%
06/16/22 .75% 1.50%-1.75%
07/27/22 .75% 2.25%-2.50%
09/21/22 .75% 3.00%-3.25%
11/02/2022 .75% 3.75%-4.00%
12/14/2022 .50% 4.25%-4.50%

Investment Report: FY2023 2nd Qtr. INFORMATION CALENDAR Ended March 31, 2023 JUNE 27, 2023

2/1/2023 .25% 4.50%-4.75%
3/23/2023 .25% 4.75%-5.00%
5/3/2023 .25% 5.00%-5.25%
Since the rate hike on March 23, 2023, there have been three regional bank failures (Silicon Valley Bank, Signature Bank and First Republic Bank), and several other regional banks are under significant pressure. Therefore, it is likely that the Fed will be extremely cautious before raising the Federal Funds rates much higher. In addition, these developments will probably result in (1) banks’ raising their lending standards and reducing the number of loans granted; and (2) an increase in the probability of a slowdown in the US economy in 2023. Berkeley has already started feeling the effects in the form of a substantial slowdown in the sales of real properties in the third quarter of FY 2023.

Change in Strategy
Prior to the Fed’s change in monetary policy starting March 17, 2022, staff’s basic strategy consisted of not purchasing any Agency or Medium-Term corporate note securities with a maturity beyond three years, unless the securities were step-up securities (i.e., securities whose interest rates increased periodically, if they were not called). After the Fed’s change in monetary policy in March 2022, the City’s investment strategy changed to extending the investment maturities of securities purchased beyond three years and locking in rates. This should result in an increase in interest income during FY 2023 and beyond.

As a result of the Fed’s sharp increase in interest rates and the move to sell Agency and Mortgage-Backed securities from its Balance Sheet, there is an increasing probability of a downturn or recession in the US in 2023, which could force the Federal Reserve to start reducing the Federal Funds rate later in 2023 or early 2024, if inflation continues to decline. The Yield curve has been inverted (i.e., short-term interest rates are higher than long-term interest rates) for many months and market interest rates have already started to decline. For example, the Two-Year Treasury has declined from nearly 5.01% on March 6, 2023 to 4.15% on May 17, 2023, while the Five-Year Treasury has declined from 4.45% in November 2022 to 3.59% on May 17, 2023.

On a long-term basis, the City’s earned rate is expected to be above the City’s benchmark (State LAIF) and the City’s return is expected to be comparable to rates earned by most other cities in California. A sample of rates earned by Northern and Southern California cities is reflected in table 3 below (previously only Northern California cities were included):

Investment Report: FY2023 2nd Qtr. INFORMATION CALENDAR Ended March 31, 2023 JUNE 27, 2023

Table 4
Other California Cities
Earned Interest Rates
For the Quarter Ending March 31, 2023
City Rates Earned
Oakland 3.45%
Burbank 2.80%
Berkeley 2.76%
San Jose 2.65%
San Francisco 2.29%
Sacramento 2.24%
San Diego 2.23%
Palo Alto 2.18%

BACKGROUND
 Pooled Investments
Short-term cash is invested primarily in government sponsored enterprises (referred to as Federal Agency securities) notes, medium-term corporate notes and municipal securities for periods of one to five years. Additional cash is invested in a money market fund or overnight securities to meet the liquidity needs of the City.

In some cases, the City may have investments with a current market value that is greater or less than the recorded cost. These changes in market value are due to fluctuations in the market and have no effect on yield, as the City does not intend to sell securities prior to maturity.
 Retiree Health Trust Fund Investments
The City agreed to provide retiree Health insurance coverage for fire, police and miscellaneous employees under certain terms and conditions. An actuarial study commissioned by the City many years ago determined that, in addition to City Contributions, an average rate of return of 7% on miscellaneous employees trust fund assets invested must be achieved to fund the retiree health benefit at the desired 70% level. Primarily as a result of the Federal Reserve Board’s decision to keep short-term rates near zero from 2008 to March 2020, the average rate currently earned is significantly below that 7% level. City Finance Department staff manages these investment portfolios.

ENVIRONMENTAL SUSTAINABILITY
There are no identifiable environmental effects or opportunities associated with the subject of this report.

Investment Report: FY2023 2nd Qtr. INFORMATION CALENDAR Ended March 31, 2023 JUNE 27, 2023

CONTACT PERSON
Henry Oyekanmi, Director, Finance Department, 981-7326

ATTACHMENTS

1. Portfolio Evaluation FY 2023 Third Quarter

2. Investment Report Analysis FY 2023 Third Quarter
a. Exhibit 2-A: Pooled Cash and Investments
b. Exhibit 2-B.1 through 2-B.3: Interest Earnings January 1, 2023 – March 31, 2023
c. Exhibit 2-C: Book Value By Investment Type
d. Exhibit 2-D: Current Holdings vs. Policy Limits
e. Exhibit 2-E: Investment Portfolio Trend

3. Summary of Pooled and Cash Investments FY 2023 Third Quarter –Trust Funds a. Exhibit 3-A: Retiree Medical Trust Funds –Misc.
b. Exhibit 3-B: Retiree Medical Trust Funds –Fire
c. Exhibit 3-C: Retiree Medical Trust Funds –Police

Attachment 1
Portfolio Evaluation
Quarter Ended March 31, 2023
Quarter Ending
Total Portfolio
Pooled Cash and Investments (COB) 667,712,171$ 657,109,639$ 595,920,437$ 698,786,628$ Pooled Cash and Investments (Trust) 54,330,791 51,469,759 50,385,235 49,954,298 Total Cash and Investments 722,042,962$ 708,579,398$ 646,305,672$ 748,740,926$ Average Life of Investment Portfolio
Pooled Investments (CoB) 1,322 1,323 1,337 1,386
Trust Investments 8.047 years 7.586 years 1.91 years 2.069 years Weighted Yield
Pooled Investments (CoB) 2.761% 2.394% 1.830% 1.293%
Trust Investments 5.081% 4.670% 4.094% 4.398%
Prime Rate 8.000% 7.500% 6.250% 4.750%
91-day Treasury Bill Rate 4.693% 4.343% 3.247% 1.626%
2-year Treasury Note Rate 4.025% 4.426% 4.279% 2.953%
Cash and Investments Maturity
Within one year 208,919,256$ 28.93% 223,131,582$ 31.49% 199,265,720$ 30.83% 327,419,689$ 43.73% Between 1 to 3 years 103,151,808 14.29% 103,795,200 14.65% 89,762,997 13.89% 65,308,653 8.72% Between 3 to 5 years 317,003,276 43.90% 316,456,840 44.66% 314,751,739 48.70% 329,817,379 44.05% Between 5 to 10 years 81,672,587 11.31% 55,998,303 7.90% 42,525,217 6.58% 11,272,605 1.51% Over 10 years 11,296,035 1.56% 9,197,473 1.30% - 0.00% 14,922,600 1.99% Total 722,042,962$ 100.00% 708,579,398$ 100.00% 646,305,672$ 100.00% 748,740,926$ 100.00% September 2022December 2022March 2023 June 2022

Attachment 2
Pension and OPEB
Investments Pooled Investments Trust Investments Total
Portfolio 551,342,456$ 46,
310,302$ 597,652,757$
Unrecognized gain/(loss) (28,884,987) (1,100,564) (29,985,552) Total Investments 522,457,468 45,209,737 567,667,205 Cash Pooled Cash
Pension and OPEB
Trust Cash Total
Cash with Fidelity Money Market 138,059,863 - 138,059,863 Cash with Fiscal Agents 298,523 - 298,523 Cash Deposits in Banks 16,017,371 - 16,017,371 Pooled Cash Adjustment (9,121,054) 9,121,054 - Total Cash 145,254,703 9,121,054 154,375,757 Adjusted Grand Total (All Cash and Investments) 667,712,171$ 54,330,791$ 722,042,962$ Pooled Cash Portfolio Breakdown As of March 31, 2023 Book Value Market Value Investments 551,342,456$ 522,457,468$
Note: The pooled cash includes Rent Board cash $3,640,481.83 Investment Report Analysis
As of March 31, 2023

Exhibit 2-A
CUSIP Investment # Issuer Book Value Par Value Market Value Current
Rate
YTM/C
365
Maturity
Date
Days To
Maturity
Moody's
Rating
Certificates of Deposits
254673RD0 14539 Discover Bank 250,000.00 250,000.00 248,837.50 3.300 3.300 07/05/2023 95 N/A 795450T47 14540 Sallie Mae Bank 250,000.00 250,000.00 248,860.00 3.300 3.300 07/03/2023 93 N/A Subtotal and Average 500,000.00 500,000.00 497,697.50 3.300 94 Medium Term Notes
88579YAR2 14659 3M COMPANY 4,877,033.94 5,000,000.00 4,806,650.00 3.000 4.120 08/07/2025 859 A1 008252AM0 14582 Affiliated Managers Group 1,016,092.67 1,000,000.00 988,700.00 4.250 2.300 02/15/2024 320 A3 037833AK6 14536 Apple Inc 4,996,630.41 5,000,000.00 4,990,800.00 2.400 3.225 05/03/2023 32 AAA 04685A2L4 14590 Athene Global Funding 5,967,960.38 5,950,000.00 5,613,706.00 2.500 2.320 01/14/2025 654 A1 04685A2L4 14602 Athene Global Funding 4,938,349.01 5,000,000.00 4,717,400.00 2.500 3.250 01/14/2025 654 A1 20030NBN0 14563 Comcast Corp 5,029,389.44 5,000,000.00 4,883,950.00 3.375 3.100 08/15/2025 867 A3 233851CU6 14571 Daimler Finance 5,043,123.77 5,000,000.00 4,775,400.00 3.450 3.190 01/06/2027 1,376 A2 233851CU6 14574 Daimler Finance 3,781,085.26 3
,725,000.00 3,557,673.00 3.450 3.000 01/06/2027 1,376 A2 24422EUM9 14554 John Deere Cap 5,008,507.22 5,000,000.00 4,958,950.00 3.650 3.300 10/12/2023 194 A2 24422EWK1 14663 John Deere Cap 4,980,038.13 5,000,000.00 4 ,973,650.00 4.150 4.250 09/15/2027 1,628 A2
375558BF9 14570 Gilead Sciences 5,069,441.29 5,000,000.00 4,894,400.00 3.650 3.118 03/01/2026 1,065 A3 540424AQ1 14555 Loews Corporation 4,995,903.93 5,000,000.00 4,966,250.00 2.625 3.350 05/15/2023 44 A3 30303M8G0 14660 Meta Platforms Inc 4,832,249.22 5,000,000.00 4,829,050.00 3.500 4.360 08/15/2027 1,597 A1 617446HD4 14670 Morgan Stanley 10,849,579.17 10,000,000.00 11,718,800.00 7.250 6.000 04/01/2032 3,288 A1 68389XAS4 14548 Oracle Corp 5,002,979.97 5,000,000.00 4,971,150.00 3.625 3.388 07/15/2023 105 BAA2 747525AT0 14564 Qualcomm Inc 4,992,144.39 5,000,000.00 4,905,650.00 2.900 3.050 05/20/2024 415 A2 747525AU7 14587 Qualcomm Inc 6,145,833.43 5,963,000.00 5,769,023.61 3.250 2.435 05/20/2027 1,510 A2 828807CS4 14606 Simon Property Group 4,998,239.08 5 ,000,000.00 4,882,250.00 3.375 3.353 10/01/2024 549 A3 07330MAA5 14588 Truist Bank 5,235,944.65 5,000,000.00 4,628,700.00 3.800 2.365 10/30/2026 1,308 A2 Subtotal and Average 97,760,525.36 96,638,000.00 95,832,152.61 3.520 1,103 Federal Agency Coupon Securities
3133ENVS6 14650 Federal Farm Credit Bank 5,000,000.00 5,000,000.00 4,988,550.00 2.030 2.030 05/02/2023 31 AAA 3133ENN22 14664 Federal Farm Credit Bank 4,983,795.80 5,000,000.00 4,970,550.00 3.750 3.890 09/22/2025 905 AAA 3 133ENP95 14666 Federal Farm Credit Bank 4,982,632.39 5,000,000.00 5,022,750.00 4.250 4.400 09/30/2025 913 AAA 3133ENS50 14667 Federal Farm Credit Bank 4,999,296.90 5,000,000.00 5,045,350.00 4.125 4.128 10/14/2027 1,657 AAA 3133ENN30 14668 Federal Farm Credit Bank 4,631,807.27 5,000,000.00 4,901,200.00 3.875 4.863 09/20/2032 3,460 AAA 3133ENV72 14669 Federal Farm Credit Bank 4,985,134.02 5,000,000.00 5,079,200.00 4.500 4.600 07/27/2026 1,213 AAA 3130ATDK0 14661 Federal Home Loan Banks 4,996,347.97 5,000,000.00 4,971,500.00 3.875 3.989 12/08/2023 251 AAA Subtotal and Average 34,579,014.35 3 5,000,000.00 34,979,100.00 3.976 1,180 City of Berkeley
Pooled Cash and Investments
As of March 31, 2023

Exhibit 2-A
CUSIP Investment # Issuer Book Value Par Value Market Value Current
Rate
YTM/C
365
Maturity
Date
Days To
Maturity
Moody's
Rating
City of Berkeley
Pooled Cash and Investments
As of March 31, 2023
Medium-Term Notes - Callable
05531FBF9 14561 BB&T Corporation 5,023,233.26 5 ,000,000.00 4,906,150.00 3.750 3.012 12/06/2023 249 A3 22553PWD7 14652 Credit Suisse AG 5,000,000.00 5,000,000.00 4,541,100.00 4.050 4.050 05/25/2025 785 A3 22553PXJ3 14655 Credit Suisse AG 5,000,000.00 5,000,000.00 4,367,400.00 5.000 5.001 05/31/2032 3,348 A3 693475AV7 14557 PNC Financial Services 5,004,752.69 5,000,000.00 4,905,950.00 3.500 3.425 01/23/2024 297 A3 751212AC5 14566 Ralph Lauren 5,070,203.41 5,000,000.00 4,890,750.00 3.750 3.106 09/15/2025 898 A3 91159HHU7 14562 US Bancorp 5,111,139.17 5,000,000.00 4,813,200.00 3.950 2.848 11/17/2025 961 A2 Subtotal and Average 30,209,328.53 30,000,000.00 28,424,550.00 3.569 1,087 Federal Agency Callable
3133EN6K1 14676 Federal Farm Credit Bank 5,000,000.00 5,000,000.00 4,849,250.00 4.220 4.220 01/23/2030 2,489 AAA 3133EN6K1 14677 Federal Farm Credit Bank 5,000,000.00 5,000,000.00 4,849,250.00 4.220 4.220 01/23/2030 2,489 AAA 3133EPAJ4 14679 Federal Farm Credit Bank 5,000,000.00 5,000,000.00 4,998,400.00 4.000 4.000 02/09/2033 3,602 AAA 3130ARXL0 14649 Federal Home Loan Banks 5,000,000.00 5 ,000,000.00 4,889,800.00 3.000 3.000 05/25/2023 54 AAA 3130ATH42 14665 Federal Home Loan Banks 8,000,000.00 8,000,000.00 7,960,240.00 4.700 4.700 09/29/2027 1,642 AAA 3130AULM4 14678 Federal Home Loan Banks 5,000,000.00 5,000,000.00 4,953,700.00 5 .620 5.620 01/26/2033 3,588 AAA
33,000,000.00 33,000,000.00 32,500,640.00 4.330 2,249 Federal Agency Continuously Callable
31422XJW3 14638 Farmer Mac 10,000,000.00 10,000,000.00 9,280,600.00 1.500 0.300 07/20/2026 1,206 N/A 31422XZ47 14681 Farmer Mac 5,000,000.00 5,000,000.00 5,017,400.00 5.675 5.675 03/20/2030 2,545 N/A 3133ENUV0 14644 Federal Farm Credit Bank 5,000,000.00 5,000,000.00 4,717,450.00 4.000 4.000 04/19/2032 3,306 AAA 3133ENVV9 14647 Federal Farm Credit Bank 5,000,000.00 5,000,000.00 4,847,400.00 3.630 3.630 05/03/2027 1,493 AAA 3133ENWW6 14653 Federal Farm Credit Bank 4,994,971.34 5,000,000.00 4,785,150.00 4.370 4.384 05/17/2032 3,334 AAA 3133EN5C0 14675 Federal Farm Credit Bank 4,994,255.79 5,000,000.00 4,967,750.00 5.370 5.394 12/27/2028 2,097 AAA 3130AMAV4 14611 Federal Home Loan Banks 5,600,000.00 5 ,600,000.00 5,060,216.00 1.250 1.125 04/29/2027 1,489 AAA 3130ALZA5 14612 Federal Home Loan Banks 9,000,000.00 9,000,000.00 8,389,800.00 0.750 0.500 04/29/2026 1,124 AAA 3130AMEX6 14613 Federal Home Loan Banks 15,000,000.00 15,000,000.00 13,910,850.00 0.750 0.500 05/27/2026 1,152 AAA 3130AMF72 14615 Federal Home Loan Banks 15,000,000.00 15,000,000.00 13,773,600.00 0.650 0.650 05/27/2026 1,152 AAA 3130AMFQ0 14616 Federal Home Loan Banks 15,000,000.00 15,000,000.00 13,789,500.00 1.150 1.020 05/26/2026 1,151 AAA 3130AMFT4 14617 F
ederal Home Loan Banks 10,000,000.00 10,000,000.00 9,168,200.00 0.625 0.625 05/27/2026 1,152 AAA 3130AMG22 14618 Federal Home Loan Banks 20,000,000.00 20,000,000.00 18,391,200.00 0.800 0.500 05/27/2026 1,152 AAA 3130AMGG1 14619 Federal Home Loan Banks 10,000,000.00 10,000,000.00 9,235,600.00 0.600 0.600 05/26/2026 1,151 AAA 3130AMFN7 14620 Federal Home Loan Banks 10,000,000.00 10,000,000.00 9,252,100.00 0.750 0.500 05/26/2026 1,151 AAA 3130AMG55 14622 Federal Home Loan Banks 10,000,000.00 10,000,000.00 8,979,400.00 1.375 1.219 05/27/2027 1,517 AAA 3130AMG22 14624 Federal Home Loan Banks 10,000,000.00 1 0,000,000.00 9,195,600.00 0.800 0.500 05/27/2026 1,152 AAA 3130AMLS9 14627 Federal Home Loan Banks 10,000,000.00 10,000,000.00 9,215,800.00 0.875 0.800 06/17/2026 1,173 AAA 3130AMN24 14628 Federal Home Loan Banks 10,000,000.00 10,000,000.00 9,187,100.00 1.150 1.034 06/03/2026 1,159 AAA 3130AMN57 14629 Federal Home Loan Banks 20,000,000.00 20,000,000.00 18,346,800.00 1.100 1.013 06/03/2026 1,159 AAA 3130AMP71 14630 Federal Home Loan Banks 20,000,000.00 2 0,000,000.00 1 8,385,000.00 1 .200 1.077 06/18/2026 1,174 AAA

Exhibit 2-A
CUSIP Investment # Issuer Book Value Par Value Market Value Current
Rate
YTM/C
365
Maturity
Date
Days To
Maturity
Moody's
Rating
City of Berkeley
Pooled Cash and Investments
As of March 31, 2023
3130AMPL0 14631 F ederal Home Loan Banks 15,000,000.00 1 5,000,000.00 13,775,850.00 1.150 0.375 06/08/2026 1,164 AAA 3130AMMW9 14632 Federal Home Loan Banks 10,000,000.00 10,000,000.00 9,214,500.00 1.000 0.500 06/10/2026 1,166 AAA 3130AMWM0 14634 Federal Home Loan Banks 4,250,000.00 4,250,000.00 3,884,925.00 1.050 0.500 06/30/2026 1,186 AAA 3130AN5U0 14642 Federal Home Loan Banks 10,000,000.00 10,000,000.00 9,226,000.00 0.875 0.500 07/29/2026 1,215 AAA 3130ANJY7 14643 Federal Home Loan Banks 40,000,000.00 40,000,000.00 36,036,000.00 1.000 0.400 08/26/2026 1,243 AAA 3130ARTE1 14645 Federal Home Loan Banks 6,425,000.00 6,425,000.00 6,088,137.25 4.100 4.100 04/26/2032 3,313 AAA 3130ARX71 14648 Federal Home Loan Banks 5,000,000.00 5,000,000.00 4,877,450.00 3.000 3.000 05/23/2025 783 AAA 3130ARYA3 14651 Federal Home Loan Banks 5,000,000.00 5,000,000.00 4,883,100.00 4.000 4.000 05/26/2027 1,516 AAA 3130AS7K9 14654 Federal Home Loan Banks 5,000,000.00 5,000,000.00 4,797,500.00 4.440 4.440 05/26/2032 3,343 AAA 3130ASGF0 14656 Federal Home Loan Banks 5,000,000.00 5,000,000.00 4,932,300.00 4.000 4.000 06/30/2025 821 AAA 3 130ATDV6 14662 Federal Home Loan Banks 5,000,000.00 5,000,000.00 4,955,850.00 5.000 5.000 09/30/2027 1,643 AAA 3134GXRS5 14646 Federal Home Loan Mortgage Co 5,000,000.00 5,000,000.00 4,871,050.00 3.100 3.100 04/29/2025 759 AAA 3134GXC28 14657 F
ederal Home Loan Mortgage Co 5,000,000.00 5,000,000.00 4,936,050.00 4.100 4.107 07/18/2025 839 AAA 3134GXC36 14658 Federal Home Loan Mortgage Co 5,000,000.00 5,000,000.00 4,942,700.00 4.000 4.000 12/30/2024 639 AAA 350,264,227.13 350,275,000.00 325,317,928.25 1.384 1,340 Municipal Bonds
13063DGB8 14559 General Obligation Unlimited 5,029,360.32 5,000,000.00 4,905,400.00 3.375 3.087 04/01/2025 731 AA2 Subtotal and Average 5,029,360.32 5,000,000.00 4,905,400.00 3.087 731 Total Investments and Average 551,342,455.69 550,413,000.00 522,457,468.36 2.238 1,322 Total Investments (Book Value) 551,342,455.69
Cash 145,254,703.00
Total Investments (Book Value) and Cash 696,597,158.69
Increase / (Decrease) in Market Value of Securities (28,884,987.33) Total Investments (Market Value) and Cash 667,712,171.36

Pooled Investments Selected Funds
Interest Earnings
Exhibit 2-B.1
Sorted by Fund - Fund
January 1, 2023 - January 31, 2023
Yield on Average Book Value
Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted InterestAnnualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
5,000,000.0014656 5,000,000.00 4.000MC5 06/30/2025 16,666.67 0.00 16,666.673.925010 5,000,000.003130ASGF0 10,000,000.0014628 10,000,000.00 1.150MC5 06/03/2026 9,583.33 0.00 9,583.331.128010 10,000,000.003130AMN24 5,000,000.0014654 5,000,000.00 4.440MC5 05/26/2032 18,500.00 0.00 18,500.004.356010 5,000,000.003130AS7K9 10,000,000.0014627 10,000,000.00 0.875MC5 06/17/2026 7,291.67 0.00 7,291.670.859010 10,000,000.003130AMLS9 10,000,000.0014624 10,000,000.00 0.800MC5 05/27/2026 6,666.67 0.00 6,666.670.785010 10,000,000.003130AMG22 5,000,000.0014662 5,000,000.00 5.000MC5 09/30/2027 20,833.33 0.00 20,833.334.906010 5,000,000.003130ATDV6 20,000,000.0014618 20,000,000.00 0.800MC5 05/27/2026 13,333.33 0.00 13,333.330.785010 20,000,000.003130AMG22 10,000,000.0014619 10,000,000.00 0.600MC5 05/26/2026 5,000.00 0.00 5,000.000.589010 10,000,000.003130AMGG1 10,000,000.0014620 10,000,000.00 0.750MC5 05/26/2026 6,250.00 0.00 6,250.000.736010 10,000,000.003130AMFN7 10,000,000.0014622 10,000,000.00 1.375MC5 05/27/2027 11,458.33 0.00 11,458.331.349010 10,000,000.003130AMG55 4,995,253.3614661 5,000,000.00 3.875FAC 12/08/2023 16,145.83 443.57 16,589.403.910010 4,995,017.273130ATDK0 20,000,000.0014629 20,000,000.00 1.100MC5 06/03/2026 18,333.33 0.00 18,333.331.079010 20,000,000.003130AMN57 5,000,000.0014649 5,000,000.00 3.000MC4 05/25/2023 12,500.00 0.00 12,500.002.944010 5,000,000.003130ARXL0 4,250,000.0014634 4,250,000.00 1.050MC5 06/30/2026 3,718.75 0.00 3,718.751.030010 4,250,000.003130AMWM0 5,000,000.0014648 5,000,000.00 3.000MC5 05/23/2025 12,500.00 0.00 12,500.002.944010 5,000,000.003130ARX71 10,000,000.0014642 10,000,000.00 0.875MC5 07/29/2026 6,319.44 0.00 6,319.440.744010 10,000,000.003130AN5U0 6,425,000.0014645 6,425,000.00 4.100MC5 04/26/2032 21,952.08 0.00 21,952.084.023010 6,425,000.003130ARTE1 40,000,000.0014643 40,000,000.00 1.000MC5 08/26/2026 33,333.33 0.00 33,333.330.981010 40,000,000.003130ANJY7 20,000,000.0014630 20,000,000.00 1.200MC5 06/18/2026 20,000.00 0.00 20,000.001.177010 20,000,000.003130AMP71 5,000,000.0014651 5,000,000.00 4.000MC5 05/26/2027 16,666.67 0.00 16,666.673.925010 5,000,000.003130ARYA3 10,000,000.0014632 10,000,000.00 1.000MC5 06/10/2026 8,333.33 0.00 8,333.330.981010 10,000,000.003130AMMW9 15,000,000.0014631 15,000,000.00 1.150MC5 06/08/2026 14,375.00 0.00 14,375.001.128010 15,000,000.003130AMPL0 8,000,000.0014665 8,000,000.00 4.700MC4 09/29/2027 31,333.33 0.00 31,333.334.612010 8,000,000.003130ATH42 5,600,000.0014611 5,600,000.00 1.250MC5 04/29/2027 5,833.33 0.00 5,833.331.226010 5,600,000.003130AMAV4 967,741.9414678 5,000,000.00 5.620MC4 01/26/2033 3,902.78 0.00 3,902.784.748010 0.003130AULM4 9,000,000.0014612 9,000,000.00 0.750MC5 04/29/2026 5,625.00 0.00 5,625.000.736010 9,000,000.003130ALZA5 15,000,000.0014616 15,000,000.00 1.150MC5 05/26/2026 14,375.00 0.00 14,375.001.128010 15,000,000.003130AMFQ0 15,000,000.0014613 15,000,000.00 0.750MC5 05/27/2026 9,375.00 0.00 9,375.000.736010 15,000,000.003130AMEX6 10,000,000.0014617 10,000,000.00 0.625MC5 05/27/2026 5,208.33 0.00 5,208.330.613010 10,000,000.003130AMFT4 15,000,000.0014615 15,000,000.00 0.650MC5 05/27/2026 8,125.00 0.00 8,125.000.638010 15,000,000.003130AMF72

Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund
Exhibit 2-B.1
Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted Interest
January 1, 2023 - January 31, 2023
Interest Earnings
Pooled Investments Selected Funds
Annualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
4,994,858.0514653 5,000,000.00 4.370MC5 05/17/2032 18,208.33 45.91 18,254.244.303010 4,994,833.613133ENWW6 4,984,213.8214669 5,000,000.00 4.500FAC 07/27/2026 18,750.00 372.89 19,122.894.517010 4,984,015.353133ENV72 4,994,049.9614675 5,000,000.00 5.370MC5 12/27/2028 22,375.00 83.41 22,458.415.295010 4,994,005.563133EN5C0 4,999,265.0314667 5,000,000.00 4.125FAC 10/14/2027 17,187.50 12.92 17,200.424.051010 4,999,258.153133ENS50 4,623,811.3414668 5,000,000.00 3.875FAC 09/20/2032 16,145.83 3,240.18 19,386.014.937010 4,622,086.733133ENN30 4,981,201.5514666 5,000,000.00 4.250FAC 09/30/2025 17,708.33 579.57 18,287.904.323010 4,980,893.693133ENP95 1,451,612.9014676 5,000,000.00 4.220MC4 01/23/2030 4,688.89 0.00 4,688.893.803010 0.003133EN6K1 1,451,612.9014677 5,000,000.00 4.220MC4 01/23/2030 4,688.89 0.00 4,688.893.803010 0.003133EN6K1 4,982,449.4114664 5,000,000.00 3.750FAC 09/22/2025 15,625.00 545.59 16,170.593.821010 4,982,159.023133ENN22 5,000,000.0014644 5,000,000.00 4.000MC5 04/19/2032 16,666.67 0.00 16,666.673.925010 5,000,000.003133ENUV0 5,000,000.0014650 5,000,000.00 2.030FAC 05/02/2023 8,458.33 0.00 8,458.331.992010 5,000,000.003133ENVS6 5,000,000.0014647 5,000,000.00 3.630MC5 05/03/2027 15,125.00 0.00 15,125.003.562010 5,000,000.003133ENVV9 5,000,000.0014646 5,000,000.00 3.100MC5 04/29/2025 12,916.67 0.00 12,916.673.042010 5,000,000.003134GXRS5 5,000,000.0014657 5,000,000.00 4.100MC5 07/18/2025 17,083.33 0.00 17,083.334.023010 5,000,000.003134GXC28 5,000,000.0014658 5,000,000.00 4.000MC5 12/30/2024 16,666.67 0.00 16,666.673.925010 5,000,000.003134GXC36 10,868,991.5914670 10,000,000.00 7.250MTN 04/01/2032 60,416.67 -7,866.48 52,550.195.693010 10,873,178.59617446HD4 4,988,834.8314536 5,000,000.00 2.400MTN 05/03/2023 10,000.00 3,158.99 13,158.993.106010 4,987,153.43037833AK6 250,000.0014539 250,000.00 3.300SCD 07/05/2023 700.68 0.00 700.683.300010 250,000.00254673RD0 250,000.0014540 250,000.00 3.300SCD 07/03/2023 700.68 0.00 700.683.300010 250,000.00795450T47 4,999,535.9414542 5,000,000.00 3.000MTN 02/11/2023 12,500.00 579.30 13,079.303.080010 4,999,227.60084670BJ6 10,000,000.0014638 10,000,000.00 1.500MC5 07/20/2026 6,166.67 0.00 6,166.670.726010 10,000,000.0031422XJW3 5,005,101.2514548 5,000,000.00 3.625MTN 07/15/2023 15,104.17 -859.60 14,244.573.351010 5,005,558.7868389XAS4 4,979,116.7914663 5,000,000.00 4.150MTN 09/15/2027 17,291.67 373.35 17,665.024.177010 4,978,918.0724422EWK1 5,011,804.6514554 5,000,000.00 3.650MTN 10/12/2023 15,208.33 -1,336.21 13,872.123.259010 5,012,515.8624422EUM9 4,989,012.0914555 5,000,000.00 2.625MTN 05/15/2023 10,937.50 2,792.78 13,730.283.240010 4,987,525.61540424AQ1 5,005,957.6614557 5,000,000.00 3.500MC3 01/23/2024 14,583.33 -488.29 14,095.043.315010 5,006,217.56693475AV7 5,032,379.2314559 5,000,000.00 3.375MUN 04/01/2025 14,062.50 -1,223.34 12,839.163.004010 5,033,030.3613063DGB8 5,030,253.7214561 5,000,000.00 3.750MC3 12/06/2023 15,625.00 -2,844.89 12,780.112.991010 5,031,767.9305531FBF9 5,119,836.7214562 5,000,000.00 3.950MC3 11/17/2025 16,458.33 -3,524.50 12,933.832.974010 5,121,712.6791159HHU7 5,031,937.1714563 5,000,000.00 3.375MTN 08/15/2025 14,062.50 -1,032.42 13,030.083.049010 5,032,486.6920030NBN0 6,154,923.8114587 5,963,000.00 3.250MTN 05/20/2027 16,149.79 -3,683.69 12,466.102.385010 6,156,884.48747525AU7 4,990,722.4614564 5,000,000.00 2.900MTN 05/20/2024 12,083.33 576.21 12,659.542.987010 4,990,415.77747525AT0 5,076,082.7214566 5,000,000.00 3.750MC3 09/15/2025 15,625.00 -2,382.47 13,242.533.072010 5,077,350.81751212AC5 5,074,337.3814570 5,000,000.00 3.650MTN 03/01/2026 15,208.33 -1,984.03 13,224.303.068010 5,075,393.40375558BF9 3,784,149.5514574 3,725,000.00 3.450MTN 01/06/2027 10,709.38 -1,241.74 9,467.642.946010 3,784,810.48233851CU6 5,045,479.9014571 5,000,000.00 3.450MTN 01/06/2027 14,375.00 -954.77 13,420.233.132010 5,045,988.08233851CU6 1,019,886.8614582 1,000,000.00 4.250MTN 02/15/2024 3,541.67 -1,537.51 2,004.162.314010 1,020,705.21008252AM0

Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund
Exhibit 2-B.1
Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted Interest
January 1, 2023 - January 31, 2023
Interest Earnings
Pooled Investments Selected Funds
Annualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
5,249,501.7614588 5,000,000.00 3.800MTN 10/30/2026 15,833.33 -5,491.34 10,341.992.320010 5,252,418.6707330MAA5 4,931,250.7814602 5,000,000.00 2.500MTN 01/14/2025 10,416.67 2,876.41 13,293.083.174010 4,929,719.7904685A2L4 5,970,028.2614590 5,950,000.00 2.500MTN 01/14/2025 12,395.83 -837.97 11,557.862.279010 5,970,474.2804685A2L4 4,997,997.6614606 5,000,000.00 3.375MTN 10/01/2024 14,062.50 97.83 14,160.333.336010 4,997,945.59828807CS4 5,000,000.0014655 5,000,000.00 5.000MC3 05/31/2032 21,306.82 0.00 21,306.825.017010 5,000,000.0022553PXJ3 5,000,000.0014652 5,000,000.00 4.050MC3 05/25/2025 16,875.00 0.00 16,875.003.974010 5,000,000.0022553PWD7 4,866,273.3514659 5,000,000.00 3.000MTN 08/07/2025 12,500.00 4,360.50 16,860.504.079010 4,863,952.4488579YAR2 4,824,359.1514660 5,000,000.00 3.500MTN 08/15/2027 14,583.33 3,197.28 17,780.614.339010 4,822,657.3730303M8G0 545,413,000.00Subtotal 535,248,825.56 2.247 1,021,364.75-13,952.561,035,317.31531,385,278.90 Fund: Fidelity MM - Trans
14,001,542.6814190 14,047,823.03 0.002RRP 21,383.66 0.00 21,383.661.798030 0.00SYS14190 14,047,823.03Subtotal 14,001,542.68 1.798 21,383.660.0021,383.660.00 Fund: Fidelity MM - Regular
132,223,455.1114265 112,099,349.73 0.003RRP 471,757.77 0.00 471,757.774.201040 156,327,591.96SYS14265 112,099,349.73Subtotal 132,223,455.11 4.201 471,757.770.00471,757.77156,327,591.96 671,560,172.76Total 681,473,823.35 2.617 1,514,506.18-13,952.561,528,458.74687,712,870.86

Pooled Investments Selected Funds
Interest Earnings
Exhibit 2-B.2
Sorted by Fund - Fund
February 1, 2023 - February 28, 2023
Yield on Average Book Value
Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted InterestAnnualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
5,000,000.0014656 5,000,000.00 4.000MC5 06/30/2025 16,666.67 0.00 16,666.674.345010 5,000,000.003130ASGF0 10,000,000.0014628 10,000,000.00 1.150MC5 06/03/2026 9,583.33 0.00 9,583.331.249010 10,000,000.003130AMN24 5,000,000.0014654 5,000,000.00 4.440MC5 05/26/2032 18,500.00 0.00 18,500.004.823010 5,000,000.003130AS7K9 10,000,000.0014627 10,000,000.00 0.875MC5 06/17/2026 7,291.67 0.00 7,291.670.951010 10,000,000.003130AMLS9 10,000,000.0014624 10,000,000.00 0.800MC5 05/27/2026 6,666.67 0.00 6,666.670.869010 10,000,000.003130AMG22 5,000,000.0014662 5,000,000.00 5.000MC5 09/30/2027 20,833.33 0.00 20,833.335.432010 5,000,000.003130ATDV6 20,000,000.0014618 20,000,000.00 0.800MC5 05/27/2026 13,333.33 0.00 13,333.330.869010 20,000,000.003130AMG22 10,000,000.0014619 10,000,000.00 0.600MC5 05/26/2026 5,000.00 0.00 5,000.000.652010 10,000,000.003130AMGG1 10,000,000.0014620 10,000,000.00 0.750MC5 05/26/2026 6,250.00 0.00 6,250.000.815010 10,000,000.003130AMFN7 10,000,000.0014622 10,000,000.00 1.375MC5 05/27/2027 11,458.33 0.00 11,458.331.494010 10,000,000.003130AMG55 4,995,676.2814661 5,000,000.00 3.875FAC 12/08/2023 16,145.83 443.56 16,589.394.329010 4,995,460.843130ATDK0 20,000,000.0014629 20,000,000.00 1.100MC5 06/03/2026 18,333.33 0.00 18,333.331.195010 20,000,000.003130AMN57 5,000,000.0014649 5,000,000.00 3.000MC4 05/25/2023 12,500.00 0.00 12,500.003.259010 5,000,000.003130ARXL0 4,250,000.0014634 4,250,000.00 1.050MC5 06/30/2026 3,718.75 0.00 3,718.751.141010 4,250,000.003130AMWM0 5,000,000.0014648 5,000,000.00 3.000MC5 05/23/2025 12,500.00 0.00 12,500.003.259010 5,000,000.003130ARX71 10,000,000.0014642 10,000,000.00 0.875MC5 07/29/2026 7,291.67 0.00 7,291.670.951010 10,000,000.003130AN5U0 6,425,000.0014645 6,425,000.00 4.100MC5 04/26/2032 21,952.08 0.00 21,952.084.454010 6,425,000.003130ARTE1 40,000,000.0014643 40,000,000.00 1.000MC5 08/26/2026 33,333.33 0.00 33,333.331.086010 40,000,000.003130ANJY7 20,000,000.0014630 20,000,000.00 1.200MC5 06/18/2026 20,000.00 0.00 20,000.001.304010 20,000,000.003130AMP71 5,000,000.0014651 5,000,000.00 4.000MC5 05/26/2027 16,666.67 0.00 16,666.674.345010 5,000,000.003130ARYA3 10,000,000.0014632 10,000,000.00 1.000MC5 06/10/2026 8,333.33 0.00 8,333.331.086010 10,000,000.003130AMMW9 15,000,000.0014631 15,000,000.00 1.150MC5 06/08/2026 14,375.00 0.00 14,375.001.249010 15,000,000.003130AMPL0 8,000,000.0014665 8,000,000.00 4.700MC4 09/29/2027 31,333.33 0.00 31,333.335.106010 8,000,000.003130ATH42 5,600,000.0014611 5,600,000.00 1.250MC5 04/29/2027 5,833.33 0.00 5,833.331.358010 5,600,000.003130AMAV4 5,000,000.0014678 5,000,000.00 5.620MC4 01/26/2033 23,416.67 0.00 23,416.676.105010 5,000,000.003130AULM4 9,000,000.0014612 9,000,000.00 0.750MC5 04/29/2026 5,625.00 0.00 5,625.000.815010 9,000,000.003130ALZA5 15,000,000.0014616 15,000,000.00 1.150MC5 05/26/2026 14,375.00 0.00 14,375.001.249010 15,000,000.003130AMFQ0 15,000,000.0014613 15,000,000.00 0.750MC5 05/27/2026 9,375.00 0.00 9,375.000.815010 15,000,000.003130AMEX6 10,000,000.0014617 10,000,000.00 0.625MC5 05/27/2026 5,208.33 0.00 5,208.330.679010 10,000,000.003130AMFT4 15,000,000.0014615 15,000,000.00 0.650MC5 05/27/2026 8,125.00 0.00 8,125.000.706010 15,000,000.003130AMF72

Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund
Exhibit 2-B.2
Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted Interest
February 1, 2023 - February 28, 2023
Interest Earnings
Pooled Investments Selected Funds
Annualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
4,994,901.8214653 5,000,000.00 4.370MC5 05/17/2032 18,208.33 45.91 18,254.244.764010 4,994,879.523133ENWW6 4,984,569.3614669 5,000,000.00 4.500FAC 07/27/2026 18,750.00 372.89 19,122.895.001010 4,984,388.243133ENV72 4,994,129.4914675 5,000,000.00 5.370MC5 12/27/2028 22,375.00 83.41 22,458.415.862010 4,994,088.973133EN5C0 4,999,277.3414667 5,000,000.00 4.125FAC 10/14/2027 17,187.50 12.92 17,200.424.485010 4,999,271.073133ENS50 4,626,900.7114668 5,000,000.00 3.875FAC 09/20/2032 16,145.83 3,240.18 19,386.015.462010 4,625,326.913133ENN30 4,981,754.7614666 5,000,000.00 4.250FAC 09/30/2025 17,708.33 579.56 18,287.894.785010 4,981,473.263133ENP95 5,000,000.0014676 5,000,000.00 4.220MC4 01/23/2030 17,583.33 0.00 17,583.334.584010 5,000,000.003133EN6K1 3,571,428.5714679 5,000,000.00 4.000MC4 02/09/2033 12,222.22 0.00 12,222.224.461010 0.003133EPAJ4 5,000,000.0014677 5,000,000.00 4.220MC4 01/23/2030 17,583.33 0.00 17,583.334.584010 5,000,000.003133EN6K1 4,982,969.6214664 5,000,000.00 3.750FAC 09/22/2025 15,625.00 545.60 16,170.604.230010 4,982,704.613133ENN22 5,000,000.0014644 5,000,000.00 4.000MC5 04/19/2032 16,666.67 0.00 16,666.674.345010 5,000,000.003133ENUV0 5,000,000.0014650 5,000,000.00 2.030FAC 05/02/2023 8,458.33 0.00 8,458.332.205010 5,000,000.003133ENVS6 5,000,000.0014647 5,000,000.00 3.630MC5 05/03/2027 15,125.00 0.00 15,125.003.943010 5,000,000.003133ENVV9 5,000,000.0014646 5,000,000.00 3.100MC5 04/29/2025 12,916.67 0.00 12,916.673.368010 5,000,000.003134GXRS5 5,000,000.0014657 5,000,000.00 4.100MC5 07/18/2025 17,083.33 0.00 17,083.334.454010 5,000,000.003134GXC28 5,000,000.0014658 5,000,000.00 4.000MC5 12/30/2024 16,666.67 0.00 16,666.674.345010 5,000,000.003134GXC36 10,861,491.2614670 10,000,000.00 7.250MTN 04/01/2032 60,416.67 -7,866.47 52,550.206.307010 10,865,312.11617446HD4 4,991,846.7914536 5,000,000.00 2.400MTN 05/03/2023 10,000.00 3,159.00 13,159.003.436010 4,990,312.42037833AK6 250,000.0014539 250,000.00 3.300SCD 07/05/2023 632.88 0.00 632.883.300010 250,000.00254673RD0 250,000.0014540 250,000.00 3.300SCD 07/03/2023 632.88 0.00 632.883.300010 250,000.00795450T47 1,785,683.2514542 0.00 3.000MTN 02/11/2023 4,166.67 193.10 4,359.773.183010 4,999,806.90084670BJ6 10,000,000.0014638 10,000,000.00 1.500MC5 07/20/2026 12,500.00 0.00 12,500.001.629010 10,000,000.0031422XJW3 5,004,281.6614548 5,000,000.00 3.625MTN 07/15/2023 15,104.17 -859.61 14,244.563.711010 5,004,699.1868389XAS4 4,979,472.7614663 5,000,000.00 4.150MTN 09/15/2027 17,291.67 373.35 17,665.024.625010 4,979,291.4224422EWK1 5,010,530.6314554 5,000,000.00 3.650MTN 10/12/2023 15,208.33 -1,336.21 13,872.123.609010 5,011,179.6524422EUM9 4,991,674.8814555 5,000,000.00 2.625MTN 05/15/2023 10,937.50 2,792.77 13,730.273.586010 4,990,318.39540424AQ1 5,005,492.1014557 5,000,000.00 3.500MC3 01/23/2024 14,583.33 -488.29 14,095.043.671010 5,005,729.27693475AV7 5,031,212.8214559 5,000,000.00 3.375MUN 04/01/2025 14,062.50 -1,223.35 12,839.153.327010 5,031,807.0213063DGB8 5,027,541.2414561 5,000,000.00 3.750MC3 12/06/2023 15,625.00 -2,844.89 12,780.113.314010 5,028,923.0405531FBF9 5,116,476.2714562 5,000,000.00 3.950MC3 11/17/2025 16,458.33 -3,524.50 12,933.833.295010 5,118,188.1791159HHU7 5,030,952.8114563 5,000,000.00 3.375MTN 08/15/2025 14,062.50 -1,032.42 13,030.083.376010 5,031,454.2720030NBN0 6,151,411.5814587 5,963,000.00 3.250MTN 05/20/2027 16,149.79 -3,683.68 12,466.112.642010 6,153,200.79747525AU7 4,991,271.8514564 5,000,000.00 2.900MTN 05/20/2024 12,083.33 576.20 12,659.533.306010 4,990,991.98747525AT0 5,073,811.1514566 5,000,000.00 3.750MC3 09/15/2025 15,625.00 -2,382.46 13,242.543.402010 5,074,968.34751212AC5 5,072,445.6914570 5,000,000.00 3.650MTN 03/01/2026 15,208.33 -1,984.04 13,224.293.399010 5,073,409.37375558BF9 3,782,965.6114574 3,725,000.00 3.450MTN 01/06/2027 10,709.38 -1,241.74 9,467.643.262010 3,783,568.74233851CU6 5,044,569.5614571 5,000,000.00 3.450MTN 01/06/2027 14,375.00 -954.77 13,420.233.468010 5,045,033.31233851CU6

Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund
Exhibit 2-B.3
Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted Interest
February 1, 2023 - February 28, 2023
Interest Earnings
Pooled Investments Selected Funds
Annualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
1,018,420.9114582 1,000,000.00 4.250MTN 02/15/2024 3,541.67 -1,537.52 2,004.152.565010 1,019,167.70008252AM0 5,244,260.1114588 5,000,000.00 3.800MTN 10/30/2026 15,833.33 -5,491.34 10,341.992.571010 5,246,927.3307330MAA5 4,933,993.3114602 5,000,000.00 2.500MTN 01/14/2025 10,416.67 2,876.40 13,293.073.512010 4,932,596.2004685A2L4 5,969,229.3014590 5,950,000.00 2.500MTN 01/14/2025 12,395.83 -837.96 11,557.872.524010 5,969,636.3104685A2L4 4,998,090.9414606 5,000,000.00 3.375MTN 10/01/2024 14,062.50 97.83 14,160.333.693010 4,998,043.42828807CS4 5,000,000.0014655 5,000,000.00 5.000MC3 05/31/2032 21,192.27 0.00 21,192.275.525010 5,000,000.0022553PXJ3 5,000,000.0014652 5,000,000.00 4.050MC3 05/25/2025 16,875.00 0.00 16,875.004.400010 5,000,000.0022553PWD7 4,870,430.9014659 5,000,000.00 3.000MTN 08/07/2025 12,500.00 4,360.50 16,860.504.513010 4,868,312.9488579YAR2 4,827,407.6214660 5,000,000.00 3.500MTN 08/15/2027 14,583.33 3,197.28 17,780.614.801010 4,825,854.6530303M8G0 545,413,000.00Subtotal 546,721,572.92 2.568 1,077,225.59-14,338.791,091,564.38546,371,326.34 Fund: Fidelity MM - Trans
14,049,542.4014190 14,095,965.40 0.002RRP 48,142.37 0.00 48,142.374.467030 14,047,823.03SYS14190 14,095,965.40Subtotal 14,049,542.40 4.467 48,142.370.0048,142.3714,047,823.03 Fund: Fidelity MM - Regular
110,327,148.1114265 109,977,704.31 0.003RRP 378,354.58 0.00 378,354.584.470040 112,099,349.73SYS14265 109,977,704.31Subtotal 110,327,148.11 4.470 378,354.580.00378,354.58112,099,349.73 669,486,669.71Total 671,098,263.42 2.921 1,503,722.54-14,338.791,518,061.33672,518,499.10

Pooled Investments Selected Funds
Interest Earnings
Exhibit 2-B.3
Sorted by Fund - Fund
March 1, 2023 - March 31, 2023
Yield on Average Book Value
Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted InterestAnnualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
5,000,000.0014656 5,000,000.00 4.000MC5 06/30/2025 16,666.67 0.00 16,666.673.925010 5,000,000.003130ASGF0 10,000,000.0014628 10,000,000.00 1.150MC5 06/03/2026 9,583.33 0.00 9,583.331.128010 10,000,000.003130AMN24 5,000,000.0014654 5,000,000.00 4.440MC5 05/26/2032 18,500.00 0.00 18,500.004.356010 5,000,000.003130AS7K9 10,000,000.0014627 10,000,000.00 0.875MC5 06/17/2026 7,291.67 0.00 7,291.670.859010 10,000,000.003130AMLS9 10,000,000.0014624 10,000,000.00 0.800MC5 05/27/2026 6,666.67 0.00 6,666.670.785010 10,000,000.003130AMG22 5,000,000.0014662 5,000,000.00 5.000MC5 09/30/2027 20,833.33 0.00 20,833.334.906010 5,000,000.003130ATDV6 20,000,000.0014618 20,000,000.00 0.800MC5 05/27/2026 13,333.33 0.00 13,333.330.785010 20,000,000.003130AMG22 10,000,000.0014619 10,000,000.00 0.600MC5 05/26/2026 5,000.00 0.00 5,000.000.589010 10,000,000.003130AMGG1 10,000,000.0014620 10,000,000.00 0.750MC5 05/26/2026 6,250.00 0.00 6,250.000.736010 10,000,000.003130AMFN7 10,000,000.0014622 10,000,000.00 1.375MC5 05/27/2027 11,458.33 0.00 11,458.331.349010 10,000,000.003130AMG55 4,996,140.4914661 5,000,000.00 3.875FAC 12/08/2023 16,145.83 443.57 16,589.403.910010 4,995,904.403130ATDK0 20,000,000.0014629 20,000,000.00 1.100MC5 06/03/2026 18,333.33 0.00 18,333.331.079010 20,000,000.003130AMN57 5,000,000.0014649 5,000,000.00 3.000MC4 05/25/2023 12,500.00 0.00 12,500.002.944010 5,000,000.003130ARXL0 4,250,000.0014634 4,250,000.00 1.050MC5 06/30/2026 3,718.75 0.00 3,718.751.030010 4,250,000.003130AMWM0 5,000,000.0014648 5,000,000.00 3.000MC5 05/23/2025 12,500.00 0.00 12,500.002.944010 5,000,000.003130ARX71 10,000,000.0014642 10,000,000.00 0.875MC5 07/29/2026 7,291.67 0.00 7,291.670.859010 10,000,000.003130AN5U0 6,425,000.0014645 6,425,000.00 4.100MC5 04/26/2032 21,952.08 0.00 21,952.084.023010 6,425,000.003130ARTE1 40,000,000.0014643 40,000,000.00 1.000MC5 08/26/2026 33,333.33 0.00 33,333.330.981010 40,000,000.003130ANJY7 20,000,000.0014630 20,000,000.00 1.200MC5 06/18/2026 20,000.00 0.00 20,000.001.177010 20,000,000.003130AMP71 5,000,000.0014651 5,000,000.00 4.000MC5 05/26/2027 16,666.67 0.00 16,666.673.925010 5,000,000.003130ARYA3 10,000,000.0014632 10,000,000.00 1.000MC5 06/10/2026 8,333.33 0.00 8,333.330.981010 10,000,000.003130AMMW9 15,000,000.0014631 15,000,000.00 1.150MC5 06/08/2026 14,375.00 0.00 14,375.001.128010 15,000,000.003130AMPL0 8,000,000.0014665 8,000,000.00 4.700MC4 09/29/2027 31,333.33 0.00 31,333.334.612010 8,000,000.003130ATH42 5,600,000.0014611 5,600,000.00 1.250MC5 04/29/2027 5,833.33 0.00 5,833.331.226010 5,600,000.003130AMAV4 5,000,000.0014678 5,000,000.00 5.620MC4 01/26/2033 23,416.67 0.00 23,416.675.514010 5,000,000.003130AULM4 9,000,000.0014612 9,000,000.00 0.750MC5 04/29/2026 5,625.00 0.00 5,625.000.736010 9,000,000.003130ALZA5 15,000,000.0014616 15,000,000.00 1.150MC5 05/26/2026 14,375.00 0.00 14,375.001.128010 15,000,000.003130AMFQ0 15,000,000.0014613 15,000,000.00 0.750MC5 05/27/2026 9,375.00 0.00 9,375.000.736010 15,000,000.003130AMEX6 10,000,000.0014617 10,000,000.00 0.625MC5 05/27/2026 5,208.33 0.00 5,208.330.613010 10,000,000.003130AMFT4 15,000,000.0014615 15,000,000.00 0.650MC5 05/27/2026 8,125.00 0.00 8,125.000.638010 15,000,000.003130AMF72

Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund
Exhibit 2-B.3
Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted Interest
March 1, 2023 - March 31, 2023
Interest Earnings
Pooled Investments Selected Funds
Annualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
4,994,949.8714653 5,000,000.00 4.370MC5 05/17/2032 18,208.33 45.91 18,254.244.303010 4,994,925.433133ENWW6 4,984,959.6114669 5,000,000.00 4.500FAC 07/27/2026 18,750.00 372.89 19,122.894.517010 4,984,761.133133ENV72 4,994,216.7814675 5,000,000.00 5.370MC5 12/27/2028 22,375.00 83.41 22,458.415.295010 4,994,172.383133EN5C0 4,999,290.8614667 5,000,000.00 4.125FAC 10/14/2027 17,187.50 12.91 17,200.414.051010 4,999,283.993133ENS50 4,630,291.7014668 5,000,000.00 3.875FAC 09/20/2032 16,145.83 3,240.18 19,386.014.930010 4,628,567.093133ENN30 4,982,360.6814666 5,000,000.00 4.250FAC 09/30/2025 17,708.33 579.57 18,287.904.322010 4,982,052.823133ENP95 5,000,000.0014676 5,000,000.00 4.220MC4 01/23/2030 17,583.33 0.00 17,583.334.141010 5,000,000.003133EN6K1 5,000,000.0014679 5,000,000.00 4.000MC4 02/09/2033 16,666.67 0.00 16,666.673.925010 5,000,000.003133EPAJ4 5,000,000.0014677 5,000,000.00 4.220MC4 01/23/2030 17,583.33 0.00 17,583.334.141010 5,000,000.003133EN6K1 4,983,540.6114664 5,000,000.00 3.750FAC 09/22/2025 15,625.00 545.59 16,170.593.820010 4,983,250.213133ENN22 5,000,000.0014644 5,000,000.00 4.000MC5 04/19/2032 16,666.67 0.00 16,666.673.925010 5,000,000.003133ENUV0 5,000,000.0014650 5,000,000.00 2.030FAC 05/02/2023 8,458.33 0.00 8,458.331.992010 5,000,000.003133ENVS6 5,000,000.0014647 5,000,000.00 3.630MC5 05/03/2027 15,125.00 0.00 15,125.003.562010 5,000,000.003133ENVV9 5,000,000.0014646 5,000,000.00 3.100MC5 04/29/2025 12,916.67 0.00 12,916.673.042010 5,000,000.003134GXRS5 5,000,000.0014657 5,000,000.00 4.100MC5 07/18/2025 17,083.33 0.00 17,083.334.023010 5,000,000.003134GXC28 5,000,000.0014658 5,000,000.00 4.000MC5 12/30/2024 16,666.67 0.00 16,666.673.925010 5,000,000.003134GXC36 10,853,258.6514670 10,000,000.00 7.250MTN 04/01/2032 60,416.67 -7,866.47 52,550.205.701010 10,857,445.64617446HD4 4,995,152.8114536 5,000,000.00 2.400MTN 05/03/2023 10,000.00 3,158.99 13,158.993.102010 4,993,471.42037833AK6 250,000.0014539 250,000.00 3.300SCD 07/05/2023 700.68 0.00 700.683.300010 250,000.00254673RD0 250,000.0014540 250,000.00 3.300SCD 07/03/2023 700.68 0.00 700.683.300010 250,000.00795450T47 1,612,903.2314681 5,000,000.00 5.675MC5 03/20/2030 7,093.75 0.00 7,093.755.178010 0.0031422XZ47 10,000,000.0014638 10,000,000.00 1.500MC5 07/20/2026 12,500.00 0.00 12,500.001.472010 10,000,000.0031422XJW3 5,003,382.0414548 5,000,000.00 3.625MTN 07/15/2023 15,104.17 -859.60 14,244.573.352010 5,003,839.5768389XAS4 4,979,863.5014663 5,000,000.00 4.150MTN 09/15/2027 17,291.67 373.36 17,665.034.177010 4,979,664.7724422EWK1 5,009,132.2314554 5,000,000.00 3.650MTN 10/12/2023 15,208.33 -1,336.22 13,872.113.261010 5,009,843.4424422EUM9 4,994,597.6414555 5,000,000.00 2.625MTN 05/15/2023 10,937.50 2,792.77 13,730.273.237010 4,993,111.16540424AQ1 5,004,981.0814557 5,000,000.00 3.500MC3 01/23/2024 14,583.33 -488.29 14,095.043.316010 5,005,240.98693475AV7 5,029,932.5314559 5,000,000.00 3.375MUN 04/01/2025 14,062.50 -1,223.35 12,839.153.005010 5,030,583.6713063DGB8 5,024,563.9414561 5,000,000.00 3.750MC3 12/06/2023 15,625.00 -2,844.89 12,780.112.995010 5,026,078.1505531FBF9 5,112,787.7314562 5,000,000.00 3.950MC3 11/17/2025 16,458.33 -3,524.50 12,933.832.979010 5,114,663.6791159HHU7 5,029,872.3414563 5,000,000.00 3.375MTN 08/15/2025 14,062.50 -1,032.41 13,030.093.050010 5,030,421.8520030NBN0 6,147,556.4414587 5,963,000.00 3.250MTN 05/20/2027 16,149.79 -3,683.68 12,466.112.388010 6,149,517.11747525AU7 4,991,874.8714564 5,000,000.00 2.900MTN 05/20/2024 12,083.33 576.21 12,659.542.986010 4,991,568.18747525AT0 5,071,317.7914566 5,000,000.00 3.750MC3 09/15/2025 15,625.00 -2,382.47 13,242.533.075010 5,072,585.88751212AC5 5,070,369.3114570 5,000,000.00 3.650MTN 03/01/2026 15,208.33 -1,984.04 13,224.293.071010 5,071,425.33375558BF9 3,781,666.0714574 3,725,000.00 3.450MTN 01/06/2027 10,709.38 -1,241.74 9,467.642.948010 3,782,327.00233851CU6 5,043,570.3614571 5,000,000.00 3.450MTN 01/06/2027 14,375.00 -954.77 13,420.233.133010 5,044,078.54233851CU6

Maturity
Date
Current
Rate
Ending
Par Value
AverageSecurity
TypeFund
Exhibit 2-B.3
Book Value
Beginning
Book Value
Adjusted Interest Earnings
Accretion
Amortization/
Earnings
Adjusted Interest
March 1, 2023 - March 31, 2023
Interest Earnings
Pooled Investments Selected Funds
Annualized
YieldCUSIP Investment #
Interest
Earned
Fund: Pooled Investment - Long Term
1,016,811.8314582 1,000,000.00 4.250MTN 02/15/2024 3,541.67 -1,537.51 2,004.162.321010 1,017,630.18008252AM0 5,238,519.0814588 5,000,000.00 3.800MTN 10/30/2026 15,833.33 -5,491.34 10,341.992.324010 5,241,435.9907330MAA5 4,937,003.5914602 5,000,000.00 2.500MTN 01/14/2025 10,416.67 2,876.41 13,293.083.170010 4,935,472.6004685A2L4 5,968,352.3314590 5,950,000.00 2.500MTN 01/14/2025 12,395.83 -837.97 11,557.862.280010 5,968,798.3504685A2L4 4,998,193.3214606 5,000,000.00 3.375MTN 10/01/2024 14,062.50 97.83 14,160.333.336010 4,998,141.25828807CS4 5,000,000.0014655 5,000,000.00 5.000MC3 05/31/2032 20,161.29 0.00 20,161.294.748010 5,000,000.0022553PXJ3 5,000,000.0014652 5,000,000.00 4.050MC3 05/25/2025 16,875.00 0.00 16,875.003.974010 5,000,000.0022553PWD7 4,874,994.3514659 5,000,000.00 3.000MTN 08/07/2025 12,500.00 4,360.50 16,860.504.072010 4,872,673.4488579YAR2 4,830,753.7114660 5,000,000.00 3.500MTN 08/15/2027 14,583.33 3,197.29 17,780.624.334010 4,829,051.9330303M8G0 550,413,000.00Subtotal 547,962,161.36 2.328 1,083,508.67-14,531.861,098,040.53546,356,987.55 Fund: Fidelity MM - Trans
14,097,739.6014190 14,150,965.72 0.002RRP 55,000.32 0.00 55,000.324.594030 14,095,965.40SYS14190 14,150,965.72Subtotal 14,097,739.60 4.594 55,000.320.0055,000.3214,095,965.40 Fund: Fidelity MM - Regular
110,959,355.7014265 123,908,897.44 0.003RRP 431,193.13 0.00 431,193.134.576040 109,977,704.31SYS14265 123,908,897.44Subtotal 110,959,355.70 4.576 431,193.130.00431,193.13109,977,704.31 688,472,863.16Total 673,019,256.67 2.746 1,569,702.12-14,531.861,584,233.98670,430,657.26

Exhibit 2-C
Certificates of Deposit - S & L
$497,698 0.07%
Medium Term Notes
$124,
256,703 18.61%
Federal Agency
$392,797,667 58.83%
Municipal Bonds
$4,905,400 0.73%
Bank and Money Market
Account $145,254,703

21.75%
Pooled Cash and Investments
(Market Value)
as of March 31, 2023

Exhibit 2-D
$145,254,703
$497,698
$124,
256,703
$392,797,667
$4,905,400
$667,712,171
$200,313,651
$200,313,651
$667,712,171
$667,712,171

BANK ACCOUNTS

CERTIFICATES OF DEPOSITS

MEDIUM TERM NOTES

FEDERAL AGENCY BONDS

MUNICIPAL BONDS
City of Berkeley
Current Holdings vs. Policy Limits
as of March 31, 2023
Policy Limits
Current Holdings

Exhibit 2-E
-
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Investment Value
Pooled and Trust
Cash and Investment Portfolio Trend
as of March 31, 2023

Attachment 3
As of March 31, 2023
Pooled Cash
Investments Gain/Loss on & Investments
Pooled Cash (Book Value) Investments (Market Value)
Retiree Medical Trust Fund
Fund No.
721 BHA 164,708$ 439,418 24,610 628,736$ 722 M1=IBEW (47,279) 94,581 (3,890) 43,412 723 M2=Local 1 3,210,013 8,389,450 119,811 11,719,274 724 MUI=Z1 443,532 1,606,603 (82,294) 1,967,840 725 MUI=Z2 to Z6 712,069 2,248,749 (50,162) 2,910,656 726 M535= Local 535 2,710,022 7,920,965 (203,417) 10,427,569 727 M3=Local 790 1,732,740 5,056,505 (21,725) 6,767,520 Total Retiree Medical Trust Fund 8,925,805 25,756,270 (217,068) 34,465,006 Fire Medical Trust Fund
736 Fire Medical Trust Fund (429,264) 13,840,675 (515,848) 12,895,563 Total Fire Medical Trust Fund (429,264) 13,840,675 (515,848) 12,895,563 Police Medical Trust Fund
731 Police EE Retiree HLT Assistance Plan 219,401 2,371,047 (145,840) 2,444,608 701 Safety Members Pension Fund 180,593 - - 180,593 706 Police Medical Trust Fund 224,519 4,342,310 (221,808) 4,345,021 Total Police Medical Trust Fund 624,513 6,713,357 (367,648) 6,970,222 Total Trust Funds 9,121,054$ 46,310,302$ (1,100,564)$ 54,330,791$ Summary of Pooled Cash and Investments - Trust Funds
(Market Value)

Exhibit 3-A
As of March 31, 2023
CUSIP Investment # Issuer Par Value
Beginning Book
Value
Ending Book
Value Market Value Maturity Date
Moody's
Rating
Current
Rate
Annualized
Yield Interest Earned
Amortization/
Accretion
Adjusted Interest
Earnings
Federal Agency Coupon Securities
3133EFQT7 14361 Fed Farm Credit Bank 2,600,000.00 2,605,275.32 2,604,820.55 2,493,166.00 11/25/2025 AAA 2.700 2.661 17,550.00 (454.77) 17,095.23 Medium Term Notes - Callable
665859AX2 14671 Northern Trust Corp 10,000,000.00 10,016,749.30 10,016,323.59 10,661,200.00 11/02/2032 A2 6.125 6.183 153,125.00 (425.71) 152,699.29 Continous Callable Bonds
797440CD4 14680 San Diego Gas & Electric 2,000,000.00 - 1,979,000.83 2,059,700.00 04/01/2053 A1 5.350 5.267 6,241.67 40.83 6,282.50 Municipal Bonds
786091AG3 14316 SACGEN 5,000,000.00 5,139,591.54 5,126,082.68 5,212,100.00 08/01/2025 A1 7.250 6.093 90,625.00 (13,508.86) 77,116.14 Savo Island Loan
SYS10988 10988 EMPMED 150,000.00 150,000.00 150,000.00 150,000.00 09/01/2025 N/A 8.000 8.027 2,968.84 - 2,968.84 Preferred Securities
00206R706 14591 AT&T Inc. 1,680,033.60 1,680,033.60 1,680,033.60 1,418,028.36 N/A N/A 4.640 4.652 19,270.78 - 19,270.78 00206R706 14596 AT&T Inc. 1,680,008.40 1,680,008.40 1,680,008.40 1,418,007.09 N/A N/A 4.643 4.654 28,918.04 - 28, 918.04
00206R706 14597 AT&T Inc. 2,520,000.00 2,520,000.00 2,520,000.00 2,127,000.00 N/A N/A 4.596 4.624 19,154.67 - 19,154.67 Total 25,630,042.00 23,791,658.16$ 25,756,269.65$ 25,539,201.45$ 5.406 337,854.00$ (14,348.51)$ 323,505.49$ Total Investments (Book Value) 25,756,269.65$
Gain/Loss on Investments (217,068.20)
Total Investments (Market Value) 25,539,201.45
Temporarily Invested with Pooled Cash & Investments 8,
925,805.00
Total Pooled Cash and Investments 34,465,006.45$
Adjusted Interest Earnings
Retiree Medical Trust Fund
Fund 721 - 727
Investments Interest Earnings
January 01 to March 31, 2023
January 01 to March 31, 2023
Interest Earnings

Exhibit 3-B
CUSIP Investment # Issuer Par Value
Beginning Book
Value
Ending Book
Value Market Value Maturity Date
Moody's
Rating
Current
Rate
Annualized
Yield Interest Earned
Amortization/
Accretion
Adjusted Interest
Earnings
Medium Term Notes
6174467X1 14318 Morgan Stanley DW DTC#0015 2,000,000.00 2,022,365.72 2,020,435.79 1,982,600.00 11/24/2025 BAA1 5.000 4.629 25,000.00 (1,929.93) 23,070.07 Federal Agency Coupon Securities
3133EFQT7 14362 F
ed Farm Credit Bank 2,300,000.00 2,
304,666.63 2,304,264.34 2,205,493.00 11/25/2025 AAA 2.700 2.661 15,525.00 (402.29) 15,122.71 Federal Agency Continuously Callable
3130AUB78 14672 F
ederal Home Loan Banks 4,000,000.00 4,
000,000.00 4,000,000.00 4,010,280.00 12/28/2037 AAA 6.230 6.317 62,300.00 - 62,300.00 3130AUB86 14673 Federal Home Loan Banks 2,996,000.00 2,996,000.00 2,996,000.00 2,999,475.36 12/29/2042 AAA 6.540 6.631 48,984.60 - 48,984.60 Preferred Securities
00206R706 14592 A
T&T Inc. 1,679,983.20 1,
679,983.20 1,679,983.20 1,417,985.82 N/A N/A 4.596 4.624 19,154.10 - 19,154.10 00206R706 14594 AT&T Inc. 839,991.60 839,991.60 839,991.60 708,992.91 N/A N/A 4.640 4.652 9,635.24 - 9,635.24 Total 13,815,974.80$ 13,843,007.15$ 13,840,674.93$ 13,324,827.09$ 5.223 180,598.94$ (2,332.22)$ 178,266.72$ Total Investments (Book Value) 13,840,674.93$
Gain/Loss on Investments (515,847.84)
Total Investments (Market Value) 13,324,827.09
Temporarily Invested with Pooled Cash & Investments (429,264.00) Total Pooled Cash and Investments 12,895,563.09$
Fire Retiree Medical
Fund 736
Adjusted Interest Earnings
January 01 to March 31, 2023As of March 31, 2023
Investments Interest Earnings
Interest Earnings
January 01 to March 31, 2023

Exhibit 3-C
CUSIP Investment # Issuer Par Value
Beginning Book
Value
Ending Book
Value Market Value Maturity Date
Moody's
Rating
Current
Rate
Annualized
Yield Interest Earned
Amortization/
Accretion
Adjusted Interest
Earnings
Medium Term Notes
6174467X1 14319 Morgan Stanley DW DTC#0015 500,000.00 505,591.43 505,108.95 495,650.00 11/24/25 BAA1 5.000 4.629 6,250.00 (482.48) 5,767.52 Federal Agency Coupon Securities
3133EFQT7 14363 F ed. Farm Credit Banks 2,300,000.00 2,304,666.63 2, 304,264.34 2,205,493.00 11/25/25 AAA 2.700 2.661 15,525.00 (402.29) 15,122.71 Federal Agency Continuously Callable
3130AUB86 14674 Federal Home Loan Banks 2,224,000.00 2,224,000.00 2,224,000.00 2,226,579.84 12/29/42 AAA 6.540 6.631 36,362.40 - 36,362.40 Preferred Securities
00206R706 14593 AT&T Inc. 1,679,983.20 1,679,983.20 1,679,983.20 1,417,985.82 N/A N/A 4.596 4.624 19,154.10 - 19,154.10 Total 6,703,983.20$ 6,714,241.26$ 6,713,356.49$ 6,345,708.66$ 4.615 77,291.50$ (884.77)$ 76,406.73$ Total Investments (Book Value) 6,713,356.49$
Gain/Loss on Investments (367,647.83)
Total Investments (Market Value) 6,345,708.66
Temporarily Invested with Pooled Cash & Investments 624,513.00 Total Pooled Cash and Investments 6,970,221.66$
Police Retiree Medical
Fund 731 and 706
Adjusted Interest Earnings
Investments Interest Earnings
As of March 31, 2023 January 01 to March 31, 2023
Interest Earnings
January 01 to March 31, 2023

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

INFORMATION CALENDAR
June 27th, 2023
To: Honorable Mayor and Members of the City Council
From: Dee Williams-Ridley, City Manager
Submitted by: Jennifer Louis, Chief of Police
Subject: Update on the Implementation of Fair and Impartial Policing Task Force Recommendations

INTRODUCTION
On February 23rd, 2021 during a City Council Special Meeting, Council referred the recommendations from the Mayor’s Fair and Impartial Policing (FIP) Task Force to the Berkeley Police Department for implementation. Quarterly updates were requested by Council and the last quarterly update was provided on March 14, 2023.

The following information summarizes the overall work undertaken by the City since the February 2021 direction from Council. Key updates since the last report in March include:

1. Berkeley City Council’s referral to the budget process for $100,000 for consultant work to design and assist with implementing a comprehensive Early Intervention and Risk Management System. This study could support expansion of the existing departmental early warning system.

2. An update on implementation progress related to the Specialized Care Unit.

3. The impending contract with Citygate to conduct a departmental capacity study.

CURRENT SITUATION AND ITS EFFECTS
This report provides a quarterly update on the implementation of the Task Force recommendations. Implementation of the FIP Task Force recommendations remains a priority of the Berkeley Police Department. The Professional Standards Division is responsible for managing the project of implementing the recommendations.

Implementation of the recommendations has necessitated the amendment of departmental policies and establishment of new protocols. As part of the process, members of BPD have met on several occasions with Council and Mayor

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

representatives, Police Review Commission and now Police Accountability Board members, FIP Task Force members, and the Police Accountability Board Subcommittee on FIP recommendation implementation. During these meetings, the substance and progress on the implementation of the recommendations were discussed and BPD has been provided feedback and background on the various intentions with each respective recommendation.

The Berkeley Police Department remains committed to equitable and unbiased policing.

A policy in the form of a special order has been released to ensure that current and future members of the Berkeley Police Department carry forward and build upon this important foundational work initiated by the Fair and Impartial Task Force.

The following outlines the specific Task Force recommendations and the respective progress:

Implement a New Evidence-Based Traffic Enforcement Model Task Force Recommendations:
 Focusing the basis for traffic stops on safety
Implementation:

Officers have been provided data regarding primary collision factors and have been directed to enforce those violations wherever they are observed. In addition to focusing on enforcement of primary collision factor violations, sworn personnel are also expected to make investigative stops related to criminal intelligence and information brought forth by the community or our investigations. BPD has implemented and conducted departmental training on a three-prong approach that focuses on primary collision factors, community member reports of dangerous driving or safety issues and community caretaking. Community caretaking considers safety violations that aren’t always noted as the primary collision factor but can be a significant contributing factor in serious collisions.

Status:

Recommendation implementation complete and evaluation and transparency efforts are ongoing. Training for all sworn personnel has concluded. The Traffic Division and the National Highway Traffic Safety Administration continuously collect and provide the Berkeley Police Department with data on primary collision factors and statistics on violations that impact public safety. This data provides officers with current information on what to educate the community on and what violations to focus enforcement towards. The department will continue to review and evaluate data on traffic offenses that affect community safety. This will drive the primary focus on ongoing enforcement and education efforts. Stop data related to this recommendation is shared with the public via BPD’s Transparency

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

Hub. Additionally, the focus of traffic enforcement has been formalized as a departmental directive contained within a special order.

Task Force Recommendation:
 Use a clear, evidence-based definition for stops of criminal suspects Implementation:

The Police Department is establishing a precision based policing model that considers data and public safety. This model aims to reduce the number of stops that studies have shown had minimal impact on public safety.

Data driven-tools that enable close to real-time dashboard tracking of calls for service demands have been provided to the Community Services Bureau and Patrol Watch Commanders to help guide officers in their enforcement focus.

The Department implemented a system that employs a feedback loop with information flowing both ways. The system provides the tracking of calls for service with the goal of call analysis for patrol deployment strategies and also allows officers in the field to communicate their observations to the Community Service Bureau. This feedback loop provides information back to the Community Services Bureau and creates an accountability measure so strategies can be evaluated.

Status:

Recommendation implementation complete and ongoing efforts include the development of data-driven tools to enhance a precision-based policing model and approach to enforcement stops. The goal is to have data-driven approaches to violence prevention programs and real time crime and call analysis for patrol deployment strategies. Ensuring that we implement approaches that identify and work to reduce racial disparities will be a cornerstone to our evidence-based approaches. The Berkeley Police Department will continue to only use race and ethnicity as determining factors in stops only when paired with clear, evidence- based criteria. The Transparency Hub streamlines the collection and dissemination of police data. This system allows for exploration of different evidence-based approaches.

Task Force Recommendation:
 Reaffirming and clarifying that the Berkeley Police Department will only use race and ethnicity as determining factors in stops only when paired with clear, evidence-based criteria.

Implementation:

Penal code 13519.4 is existing California law that prohibits racial profiling. BPD Policy 401 (Fair and Impartial Policing) also prohibits racial profiling. Section

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

401.2 explicitly states, “Officers shall not consider race, ethnicity, national origin, gender, age, religion, sexual orientation/identity or socio-economic status in establishing either reasonable suspicion or probable cause, or when carrying out other law enforcement activities…”
The above policies were reviewed in light of the task force recommendations and found to affirm and clarify police officer responsibilities in stops.

Status:

Recommendation implementation complete and ongoing efforts include: BPD will continue to conduct ongoing training in topics such as implicit bias, racial profiling, and procedural justice concepts. BPD will hold all members to Departmental Policies, especially those strictly and clearly prohibiting racial profiling. Further, stops will be information and evidence based. The BPD Data Analyst Team will continue to develop tools to focus internal efforts using evidence and information and share data publicly about enforcement and related results.

Implement Procedural Justice Reforms
Task Force Recommendation:
 Refer amendments to existing BPD policy and the creation of an Early Intervention System (EIS) related to traffic, bike and pedestrian stops.

Implementation:

The current Early Warning System was originally issued in 2004 and revised in 2008. The system mandates the monitoring of officer’s behavior and performance to include, but not limited to attendance, complaints, use of force incidents, and other factors. The Early Warning System serves as a program that identifies and address behavior or training issues before they become a disciplinary matter. Amendments have been made to the Department’s Early Warning System policy (Policy 1041) to including the monitoring of stop data for individual officers.

Status:

Implementation complete via issuance of updated policy reflecting recommendations. Pursuant to the FIP recommendation and after meeting with the FIP task Force stakeholders, language was added to the current Early Warning System policy to include data around traffic, bicycle, and pedestrian stops as a category that supervisors will consider for early intervention if merited.

Ongoing efforts include implementing new systems for the monitoring of officer’s individual stop data by their respective supervisors. The Audits and Inspections Sergeant will also conduct separate and random quarterly audits of officer’s stop data, complaints, uses of force incidents and body-worn camera videos and

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

report the findings to the Chief of Police. Results of these audits are provided to the Police Accountability Board. Additionally, the City Council has referred $100,000 to the June, 2023 Budget Process to enter into a contract to design and assist with implementing a comprehensive Early Intervention and Risk Management System.

Task Force Recommendation:
 Adopt a policy to require written consent for all vehicle and residence searches and update the consent search form in alignment with best practice and community feedback.

Implementation:

A revised written consent form has been created and amendments have been made to our existing search and seizure policy to require written consent for all consent searches. The Department implemented a redesigned Consent Search Form incorporating the collaborative feedback from multiple discussions with the Police Accountability Board.

Status:

Implementation completed via issuance of updated form reflecting recommendations.

Task Force Recommendation:
 Limit warrantless searches of individuals on supervised release status such as Post Release Community Supervision (PRCS), probation, or parole.

Implementation:

On February 10, 2021, updates were completed on Policy 311. Sections 311.5 and 311.6 were modified to reflect the above limitations to warrantless searches.

The above policies were reviewed and modified in line with the task force recommendations and departmental goals to build trust and collaborate with the community to address crime and safety concerns.

Status:

Recommendation implemented. The update to Policy 311 limits the searches conducted on individuals on supervised release status. On April 18, 2022, the Public Safety Committee made a recommendation for a policy change to this recommendation. On July 26th, 2022 the City Council approved Policy 311 and on August 2nd, 2022 the policy was updated and released. The Department has trained on these updates and will continue to assess and review the impacts of these searches in consideration and support of the tenets of FIP.

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

Task Force Recommendation:
 Address Profiling by Proxy (PAB Policy Development, Dispatcher Training).

Implementation:

The Communications Center Operation Manual has been amended to address handling cases involving profiling by proxy. All dispatchers have reviewed the amended manual and are instructed to be cognizant and screen for profiling by proxy calls.

Status:

Recommendation implemented. Berkeley Police Department will continue to educate and train dispatchers on how to identify and address biased based reporting. Officers and supervisors are also expected to screen profiling by proxy calls. The Department as a whole will continue to seek out and train on anti-bias, implicit bias, and profiling by proxy topics to strengthen our ability to identify and address biased based reporting.

Task Force Recommendation:
 Fire racist police officers identified through social media and other media screens.

Implementation:

The following existing policies dictate procedures for investigating employees in this area; these policies adhere to due process and Government Section 3300:

Policy 1029 (Employee Speech, Expression and Social Networking) provides accountability to employee personal social media posts. Section 1029.4(b) states “Speech or expression that, while not made pursuant to an official duty, is significantly link to, or related to, the Berkeley Police Department and tends to compromise or damage the mission, function, or reputation of professionalism of the Berkeley police Department or its employee.

PR 232 (Controversial Discussion), PR 235 (Acts –Statements-By employees), PR 238 (Organizational Membership), and PR 250 (enforcement of Law, Impartiality) are also policies that provide accountability for any racist behaviors.

The above policies were reviewed in light of the task force recommendations and found to provide necessary authority to investigate allegations of racism.

Departmental policy clearly identifies discrimination based upon a person’s race as misconduct, and requires reporting and prompt investigating of any allegation of racism. Any employee who becomes aware of or observes any discrimination

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

on the basis of a protected class is required to notify a supervisor by the end of their shift or within 24 hours if they are off duty.

Status:

Recommendation implemented, however the Berkeley Police Department is committed to continuing to explore additional lawful methods to identify and address potentially racist behaviors or actions by our members. If at any time the police department becomes aware of any issues related to these concerns, the matter would be thoroughly investigated and employees will be held accountable.

Task Force Recommendation:
 Require regular analysis of BPD stop, search, and use of force data; Implementation:

The Open Data Portal (ODP) is a public facing website that gives the public access to police data and is accessible through the City’s website. This allows for open and independent analysis and review to foster police accountability and transparency.

The Department will not only collect and report on stop, search and use of force data, but will regularly analyze the data via the Data Analyst Team. That analysis will at a minimum help direct policy, training, and resource allocation.

Status:

Implementation of recommendation complete and the Department will continue ongoing evaluation and data sharing. BPD is committed to transparency and is continuously exploring different ways to provide the public with access to more police data. The Data and Policy Analysis Team developed a Transparency Hub that will facilitate independent review and analysis of police data. This hub was launched after several community and internal stakeholder groups had an opportunity to view and collaborate on design. The Transparency Hub hosts BPD's Open Data Portal along with tools to help the public visualize and analyze the department's data, including interactive dashboards summarizing stop and search data, calls for service, and use of force data. The Transparency Hub updates in near-real time and gives the public access to datasets reaching further back in time than had been available. The 'Crime Mapper' page on the Transparency Hub that includes additional data on cases has been implemented and is now live.

Task Force Recommendations:
 Make resources on police-civilian encounters more publicly available such as through RAHEEM.org;

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

 For any individual detained, BPD officers shall provide a business card with information on the commendation and complaint process with the Police Accountability Board and the Berkeley Police Department, Internal Affairs Bureau.

Implementation:

BPD Officers shall offer business cards to all detained individuals with information, a QR code and links to the BPD website which provide community members with information on making a commendation or complaint about an interaction with BPD. In addition to the information on how to make a complaint, a link is provided to the ACLU webpage containing information on police-civilian encounters.

Status:

Recommendation implemented. All business cards will continue to be printed with the above information. These resources ensure police accountability as well as provide ways the community can comment on the service BPD has provided.

Refer the following recommendations summarized below to the Reimagine Public Safety process
Task Force Recommendations:
 Create a formalized feedback system to gauge community response to ongoing reforms and ensure this constructive input system is institutionalized with the Police Review Commission or its successor and includes a basic report card and quarterly neighborhood check-ins; Conduct a baseline community survey
Implementation:

BPD actively supported and participated in the work of the Reimagine Public Safety Task Force by providing data and information, answering questions, providing hands-on experience and discussing opportunities, impacts and effects of recommendations. Several community surveys were conducted by consultants as part of the overall Reimagine Public Safety process.

Status:

Initial implementation complete. To support feedback systems, the Berkeley Police Department will be seeking ongoing community input and feedback around reform efforts via the Transparency Hub.

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

Acknowledge and reaffirm the following recommendations summarized below that are already underway
Task Force Recommendation:
 BPD released stop, arrest, calls for service and use of force data from 2012 to present to the Working Group;
Implementation:

The police department released the requested historical data in December of 2020. BPD stop, arrest, and calls for service data are regularly updated in the Open Data Portal and will be updated in near real time on the Transparency Hub.

Status:

Recommendation implemented.

Task Force Recommendation:
 Fund and implement a specialized care unit (SCU) for mental health crises; Implementation:

After completing a competitive proposal process in summer of 2022, and obtaining City Council approval on December 13, Bonita House has been selected as the provider for the Specialized Care Unit. In collaboration with HHCS and the City of Berkeley, Bonita House will implement the SCU pilot program using the recommendations from RDA (a consulting firm contracted by the city) as well as accompanying Steering Committee analysis.

Status:

Implementation is in progress and being managed by the Health, Housing and Community Services (HHCS) Department. The contract with the Bonita House was finalized and posted early this year. HHCS coordinates with Bonita House, other City departments, including Fire and PD, and the SCU Steering Committee on a regular basis to receive program updates on the SCU as well as provide support for implementation. In recent months, the Bonita House team started hiring for the SCU and selected an operating location on the Berkeley/Oakland border. Additionally, SCU vehicles have been purchased and are in the process of being built out for the team. HHCS hopes to launch the SCU in a ramp up state at some point this summer, but this is dependent on the hiring of staff and receiving necessary equipment.

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

Task Force Recommendation:
 Conduct a Capacity Study of police calls and responses and use of officer time outside of case work.

Implementation:

The City’s Auditor’s report was released which analyzed Computer Aided Dispatch data. Recommendations from this analysis were provided to the Police Department and findings were referred to the Reimagine Public Safety Task Force.

Status:

Implementation in progress. An assessment of overall staffing levels as well as patrol beat specific analysis has been referred to the budget process via the Council’s direction on Reimagining Public Safety. Internally the Data Analysts Team has been directed to continue their work to refine the way and type of data that is collected, and analyze call response time to support the likely upcoming consultant work. The Berkeley Police Department has completed a Request for Proposal (RFP) for qualified consultants to conduct a comprehensive police organizational workload study to assess our organizational structure, resource allocation, and geographical patrol boundaries. Citygate has been selected to conduct the workload study. A contract with Citygate is anticipated to be executed in the near future.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
There are no identifiable environmental effects or opportunities associated with the subject of this report.

POSSIBLE FUTURE ACTION
The Police Department will continue to work toward the full implementation of the Task Force recommendations.

FISCAL IMPACTS OF POSSIBLE FUTURE ACTION
Staff time and additional training time to be determined at a later date.

CONTACT PERSON
Jennifer Louis, Chief of Police, (510) 981-5700

Progress of the Implementation of FIP Recommendations INFORMATION CALENDAR June 27th, 2023

Supporting Materials:
1: Berkeley Police Policy and Training Materials
https://cityofberkeley.info/safety-health/police/policy-training-materials 2: California Legislative Information
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=13519.

4.&nodeTreePath=7.5.1.2&lawCode=PEN

3. Reimagine Task Force and National Institute for Criminal Justice Reform (NICJR) Survey
https://berkeley-rps.org/wp-content/uploads/2021/10/Berkeley-Community- Engagement-Report-v7.pdf

4. RDA Consulting Final Report on Specialize Care Unit
https://www.cityofberkeley.info/uploadedFiles/Clerk/Level_3_-_Commissions/Berkeley- MH-SCU_Final-Recommendations_FINAL.pdf

Zero Waste Commission

INFORMATION CALENDAR
June 27, 2023
To: Honorable Mayor and Members of the City Council
From: Zero Waste Commission
Submitted by: Steve Sherman, Chair, Zero Waste Commission Subject: Zero Waste Commission Fiscal Year 2023-24 Work Plan

INTRODUCTION
The Zero Waste Commission (ZWC) is responsible for making recommendations on city-wide zero waste policies and goals, including commercial and residential refuse, recycling, and compost services, hard to recycle materials programs, budgets, rates, and other decisions relating to reducing solid waste in the City of Berkeley. The ZWC adopted the FY 2023-24 Work Plan on May 23, 2023.

M/S/C: Ayes: 4 ; Abstain: 0 ; Absent: (2)

CURRENT SITUATION AND ITS EFFECTS
Over the last few years, the City of Berkeley, along with the rest of the world, has made its best efforts to survive during Covid-19. Operations and staff have suffered from low- staffing/high vacancies following the initial lock-down period and subsequent supply- chain issues and labor shortage. The City of Berkeley is enacting important changes and improvements to its Zero Waste services and long-term plans, including:
 Continuing the process to design and build the replacement of the Solid Waste & Recycling Transfer Station (SW&RTS), which is currently nearing submission for the required CEQA process,
 Adapting to changes in the recycling export markets and determining which materials should be accepted in any of our streams, and assessing what else can be diverted from landfill through near approaches and partnership programs,  Berkeley’s compliance with SB1383 and its Food Recovery Mandates,  Implementing the Single Use Foodware and Litter Reduction Ordinance and Pre- check Bag Reduction Ordinance
 Participating in the Zero Waste Strategic Plan Development process, and  Reviewing and recommending to Council which State and Regional Bills to support in order more gainfully achieve our zero waste goals.

ZWC supports the development of the Zero Waste Strategic Plan, and SW&RTS replacement, as well as seeks to evaluate and/or recommend new or proposed local

Zero Waste Commission 2023-24 Work Plan INFORMATION CALENDAR June 27, 2023

legislation or programs that could target some remaining components of avoidable waste in our community.

These projects advance the City’s Strategic Plan goals to:

1. Provide state-of-the-art, well-maintained infrastructure, services, and facilities

2. Be a global leader in addressing climate change, advancing environmental and social justice, and protecting the environment.

The following goals have been identified for the upcoming year:

Goal Resources Program activities Outputs Outcomes
Transfer
Station Rebuild
City Staff,
Consultants (when
hired)
Stay abreast of
CEQA progress
status; Consultant
presentation for next
phase TBD
Recommendations to
Council as
appropriate when
process proceeds to
next phase.

State-of-the-Art
facility that replaces
outdated, aged
structure; increase
public interaction.

Zero Waste
Strategic Plan
Abbe &
Associates, City
Staff
Presentations for
updates ZW plan
throughout process
(total 3). Disseminate
information to
increase public input,
including individual
commissioners.

Recommendations to
Council as needed.

To support the
development of a
comprehensive and
detailed plan suited
to achieve City’s ZW
goals.

Food Recovery
and Organics
Diversion
SB1383
City Staff,
Community
Partners
Continue updates
from staff, explore
community compost
opportunities, invite
Berkeley Food
Network to present.

Recommendations to
Council as needed.

To help achieve
compliance with
SB1383
requirements and
promote local
resiliency.

Zero Waste
Ordinances
(SU Foodware
& Litter
Reduction, Pre-
Check-out
Bags
Reduction,
future &
proposed, etc.)
City Staff, Ecology
Center, UC
Berkeley/Cal Zero
Waste, Grocery
Association/BIDs
Review progress of
Foodware Reduction
Ordinance; offer staff
support for
successful
implementation of
Pre-checkout Bag
Reduction Ordinance.

Explore sustainable
alternatives for
banned
materials/products.

Recommendations to
Council as needed.

Support Reusables
Foodware Pilot
program with
recommendations.

Engender community
partnerships for
innovative reuse
programs.

To increase Council’s
awareness of status
an ordinance’s
Implementation
progress and/or
viability of
implementation plan.

Review &
Assessment of
Accepted
Materials:

Inclusion or
Exclusion in
City Collection
Services
City Staff, Urban
Ore, CCC,
Ecology Center,

CAW, NCRA,
CPSC, Status of
Materials Markets,
StopWaste, Local
Partners
Presentations at
ZWC by community
partners, specialists.

Review existing
ordinances and
recommend changes;
support or suggest
Commission
feedback to City
Partners and Council
To help Council have
an accurate
understanding of our
collection services
and if they are
achieving our ZW
and
environmental/social
justice goals.

Zero Waste Commission 2023-24 Work Plan INFORMATION CALENDAR June 27, 2023

Goal Resources Program activities Outputs Outcomes
new or proposed
ordinances.

Review of State
& Regional
Proposed
Legislation/Bills
that the City of
Berkeley
Should Support
City Staff,
Californians
Against Waste,

CPSC, NCRA
Presentations by
outside organizations
that align with City’s
ZW goals.

Research/vet
proposed laws.

Recommendations
for Council Support
To establish strong
State and Regional
Laws that support
our ZW goals and
potentially reduce
staff time to
implement.

BACKGROUND
 Transfer Station Replacement: Community meetings were held in 2019 for design of replacement input. First Carbon Solutions has been retained to conduct the CEQA certification process for the replacement project.  Zero Waste Strategic Plan: Currently in progress.
 Food Recovery & Organics Diversion SB 1383 requires reduction of organic waste disposal 50% by 2020 and 75% by 2025. Starting in 2022, all CA jurisdictions will need to provide organic waste collection services to all residents and businesses. Berkeley will be required to use products made from this recycled organic material, such as renewable energy, compost, and mulch. Food service businesses must donate edible food to food recovery organizations. This will help feed the almost 1 in 4 Californians without enough to eat. California has a 2025 goal to rescue 20% of edible food currently thrown away, and redirect it.  Single-Use Foodware & Litter Reduction Ordinance: All of the phases of the ordinance have been enacted. Phase 2, requiring disposable foodware to be compostable and includes a 25 cent charge for disposable cups, took effect on 1/1/2020. Phase 3, mandating reusables for dine-in, took effect on 7/1/2020.

Enforcement of all phases was relaxed due to the pandemic; staff is currently aggressively working to affirm and monitor compliance.
 Plastics - Feasibility of Recyclability: Due to declining infrastructure/operations and unreliable markets for many grades and compositions of plastics, the City’s municipal collection program will require reassessment of which plastics should be acceptable in its stream, and how to locate and support new regional facitilites for processing materials that currently have markets out of the region, State or country.
 Proposed State and Regional Legislation that Council Can Support: Berkeley can officially show support for proposed legislation that helps to further the City’s current zero waste goals.

ENVIRONMENTAL SUSTAINABILITY

Zero Waste Commission 2023-24 Work Plan INFORMATION CALENDAR June 27, 2023

Potential to reduce quantity of material sent to landfill and reduce consumption of new materials.

POSSIBLE FUTURE ACTION
Future Action Items that ZWC may send to City Council include:
 Recommendation to support a Regional Deconstruction Ordinance  Recommendation to adopt the new Zero Waste Strategic Plan  Resolution to support a Citywide Reusable Food Container program  Resolution to support an expanded coordinated effort with UCB during Cal moveout months

FISCAL IMPACTS OF POSSIBLE FUTURE ACTION
Reusable Food Container pilot program and other reuse programs require funding.

CONTACT PERSON
Julia A. Heath, Recycling Program Manager, Public Works, (510) 981-6357

Communications

All communications submitted to the City Council are
public record. Communications are not published directly to the City’s website. Copies of individual communications are available for viewing at the City Clerk Department and through Records Online.

City Clerk Department
2180 Milvia Street
Berkeley, CA 94704
(510) 981-6900

Records Online
https://records.cityofberkeley.info/

To search for communications associated with a particular City Council meeting using Records Online:

1. Select Search Type = “Public – Communication Query (Keywords)”

2. From Date: Enter the date of the Council meeting

3. To Date: Enter the date of the Council meeting (this may match the From Date field)

4. Click the “Search” button

5. Communication packets matching the entered criteria will be returned

6. Click the desired file in the Results column to view the document as a PDF