City Council and Successor Agency
to the Brea Redevelopment
Agency Agenda
Closed Session - 6:15 p.m.
General Session - 7:00 p.m.
Tuesday, August 18, 2026, 7:00 PM
COUNCIL CHAMBERS
1 Civic Center Circle
Brea, California 92821
Cecilia Hupp, Mayor Marty Simonoff, Mayor Pro Tem
Christine Marick, Council Member Blair Stewart, Council Member Steven Vargas, Council Member This agenda contains a brief general description of each item that the Council will consider. The City Clerk has on file copies of written documentation relating to each item of business on this agenda available for public inspection. Contact the City Clerk’s Office at (714) 990-7756 or view the agenda and related materials on the City’s website at https://www.cityofbrea.gov/1857/Meetings-and-Agendas. Materials related to an item on this agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the City Clerk’s Office at 1 Civic Center Circle, Brea, CA during normal business hours. Such documents may also be available on the City’s website, subject to staff’s ability to post documents before the meeting.
Procedures for Addressing the Council
The Council encourages interested people to address this legislative body by making public comments. Public comments may be made during public hearing items or during designated agendized and non-agendized public comment periods. Public comments are limited to five (5) minutes per speaker, unless a different time is announced by the Mayor/presiding Chair.
The Council encourages free expression of all points of view. To allow all persons the opportunity to speak, please keep your remarks brief. If others have already expressed your position, you may simply indicate that you agree with a previous speaker. If appropriate, a spokesperson may present the views of your entire group. State law generally prohibits the City Council from responding to or acting upon matters not listed on this agenda. Council rules prohibit clapping, booing, or shouts of approval or disagreement from the audience.
In-Person Option – Members of the public can provide in-person comments in the Council Chambers. Speakers who wish to address the Council must do so by submitting a speaker card. Members will be called on in the order that cards are received, and all in-person public comments will be heard prior to virtual public comments.
Virtual Option – Members of the public may provide live comments during the designated public comment period by Zoom or conference call. To join by Zoom, click the following link or enter it into your web browser https://cityofbrea-net.zoom.us/j/82834064814 Meeting ID: 828 3406 4814. To join the conference call, dial (213) 338-8477 and when prompted, enter the Meeting ID followed by "#". You will be prompted by the City Clerk when it is time for each comment period and you may request to speak by raising your hand on Zoom or dialing *9 from your phone.
Written Comments – Written comments may be submitted in advance of the meeting by emailing [email protected]. Written comments received by 3 p.m. on the day of the meeting will be provided to the Council, made available to the public at the meeting, and included in the official record of the meeting.
Special Accommodations
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (714) 990-7757. A notification 48 hours prior to the meeting will enable City staff to make reasonable arrangements to ensure accessibility. (28 CFR 35.102.35.104 ADA Title II) Important Notice
The City of Brea shows both live broadcasts and replays of City Council meetings on Brea Cable Channel 3 and over the Internet at www.cityofbrea.gov. Your attendance at this public meeting may result in the recording and broadcast of your image and/or voice as previously described.
Reminder: Please silence all cell phones and other electronic equipment while the Council is in session.
1. CLOSED SESSION - EXECUTIVE CONFERENCE ROOM 3RD FLOOR - TIME 6:15 P.M.
1.A. Call to Order/Roll Call
1.B. Public Comment
1.C. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(2) - Anticipated Litigation.
Significant Exposure to Litigation: 1 potential case. Facts and Circumstances: Urban Habitat Claim.
1.D. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(4) - Anticipated Litigation.
Initiation of Litigation: 1 potential case.
1.E. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(1) - Existing Litigation.
Name of Case: City of Brea v. Schwarze Industries (Case No. 30-2024-01437243-CU-BC-CJC).
2. GENERAL SESSION - COUNCIL CHAMBERS PLAZA LEVEL - 7:00 P.M.
2.A. Call to Order/Roll Call
2.B. Pledge of Allegiance
2.C. Invocation: Pastor Eric Clausen, Christ Lutheran
2.D. Community Announcements
2.E. Community Development/Public Works Update
2.F. Public Comment - Agenda Items
The City Council will address comments on agenda items during this section and speakers will be called in the order received. Comments relating to public hearing items will be heard during the public hearing.
2.G. Response to Public Inquiries
3. CONSENT CALENDAR
The City Council/Successor Agency approves all Consent Calendar matters with one motion unless Council/Agency or Staff requests further discussion of a particular item. Items of concern regarding Consent Calendar matters should be presented during "Public Comment - Agenda Items."
3.A. July 21, 2026 Regular City Council Meeting Minutes — 1. Approve.
3.B. August 11, 2026 Special City Council Meeting Minutes — 1. Approve.
3.C. ILJAOC Facial Recognition Participating Agency Agreement — 1. Approve an agreement with the Integrated Law & Justice Agency for Orange County (ILJAOC) to allow the Brea Police Department to become a participating agency with access to the ILJAOC Facial Recognition System (FRS).
3.D. Acceptance of Integrated Crime Center (ICC) Citywide Camera Network, CIP 7719 — 1. Accept the Project as complete and authorize City Clerk to file and record Notice of Completion; and — 2. Authorize the City Clerk to release the Performance Bond upon acceptance of the Warranty Bond, and release the Payment Bond upon further notification from the Public Works Department; and — 3. Accept the Warranty Bond.
3.E. Curtis Theatre Lighting Equipment Purchase
— 1. Approve the recommended vendor, Sound Productions, to provide lighting equipment to the Curtis Theatre, and;
— 2. Approve the purchase of lighting equipment for a total cost not-to-exceed $150,000.
3.F. Approval of the City of Brea Master Employee Pay Schedule to Comply with CalPERS Regulations — 1. Adopt Resolution No. 2026-60 establishing the updated City of Brea Master Employee Pay Schedule, confirming the pay rates/ranges as of January 3, 2026, July 18, 2026, and January 2, 2027, for all City of Brea established positions in order to comply with CalPERS regulations.
3.G. Statement of Investment Policy for the City/Brea Successor Agency to the Brea Redevelopment Agency — 1. Review and approve the City of Brea/Successor Agency to the Brea Redevelopment Agency Statement of Investment Policy.
3.H. Investment Policy Guidelines for the City of Brea's Employee Benefits Fund Pension Plan — 1. Review and approve the Investment Policy Guidelines for the City of Brea’s Employee Benefits Fund Pension Plan through Public Agency Retirement Services (PARS).
3.I. Investment Policy Guidelines for the City of Brea's Other Post Employment Benefits (OPEB) Trust Fund — 1. Review and approve the Investment Guidelines for the City's Other Post Employment Benefits (OPEB) Trust Fund through Public Agency Retirement Services (PARS).
3.J. City of Brea Response to the 2025-2026 Orange County Grand Jury Report, “California Housing Mandates:
The Unintended Reshaping of Orange County Neighborhoods” — 1. Authorize the Mayor, on behalf of the Brea City Council, to respond to the Orange County Grand Jury Report, “California Housing Mandates: The Unintended Reshaping of Orange County Neighborhoods”; and — 2. Authorize the City Manager, or their or designee, to make non-substantive edits to the City's response and submit the response to the Orange County Grand Jury.
3.K. Memorandum of Agreement between the City of Brea and the County of Orange Regarding Receiving Regional Housing Needs Assessment Allocations Progress Credits for the Mercury Senior Apartments Project
— 1. Find the Memorandum of Agreement with the County of Orange Regarding Receiving Regional Housing Needs Assessment Allocations Progress Credits for the Mercury Senior Apartments Project ("Memorandum of Agreement") exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3);
— 2. Approve the Memorandum of Agreement; and
— 3. Authorize the City Manager, or their designee, to make non-substantive changes and execute the Memorandum of Agreement.
3.L. Approve Amendments for Additional As-Needed Arovista Park Services — 1. Approve Amendment No. 4 with BKF Engineers in the amount not-to-exceed $30,000 resulting in a total contract amount not-to-exceed $134,100 for as-needed civil engineering services. — 2. Approve Amendment No. 1 with David Volz Design in the amount not-to-exceed $30,000 resulting in a total contract amount not-to-exceed $105,000 for as-needed landscape design services. — 3. Approve Amendment No. 2 with Shucri Yaghi Consulting Engineers, Inc. in the amount not-to-exceed $30,000 resulting in a total contract amount not-to-exceed $170,300 for as-needed structural engineering services.
— 4. Approve Amendment No. 2 with Telacu Construction Management in the amount not-to-exceed $80,000 resulting in a total contract amount not-to-exceed $969,479 for as-needed construction management services.
3.M. Amend CIP 7946 Western Extension to the Tracks at Brea FY2026-27 Budget — 1. Adopt Resolution No. 2026-61 amending the FY 2025-27 Operating and Capital Improvement Program Budget for the Western Extension to the Tracks at Brea (CIP 7946).
3.N. Monthly Report of Investments for the City of Brea for Period Ended July 31, 2026 — 1. Receive and file.
3.O. July Outgoing Payment Log and City Disbursement Registers for July 17, July 24, July 31, and August 7, 2026 — 1. Receive and file.
4. CITY/SUCCESSOR AGENCY - CONSENT
4.A. Monthly Report of Investments for the Successor Agency to the Brea Redevelopment Agency for Period Ended July 31, 2026
— 1. Receive and file.
4.B. Successor Agency Disbursement Register for July 31, 2026 — 1. Receive and file.
5. PUBLIC HEARING
This portion of the meeting is for matters that legally require an opportunity for public input. Audience participation is encouraged and is limited to 5 minutes per speaker.
5.A. OCTA Enhanced Mobility for Seniors and Individuals with Disabilities Grant Application — 1. Open and conduct a public hearing;
— 2. Adopt Resolution No. 2026-62 to certify that no non-profit organizations are readily available to provide the proposed transportation services in Brea’s service area and authorize the application for funding through the Orange County Transportation Authority (OCTA) Enhanced Mobility for Seniors and Individuals with Disabilities (EMSD) Grant Program;
— 3. Authorize the City Manager to execute any forthcoming agreements and documents required by OCTA in connection with the EMSD Grant Program; and
— 4. If awarded, amend the Fiscal Year 2026-27 operating budget in the amount of the approved grant funds, as well as authorize a 10% local match utilizing the Air Quality Improvement Fees Fund (240) and the Vehicle Replacement Fund (480).
6. ADMINISTRATIVE ITEMS
This agenda category is for City Council consideration of a wide variety of topics related to the City's operations.
Public comments regarding items in this section should be presented during "Public Comment - Agenda Items."
6.A. Ordinance to Establish Increased E-Bike Fine Amount — 1. Introduce by title only and waive further reading of Ordinance No. 1277, “An Ordinance of the City of Brea Revising Electric Mobility Device Regulations, Amending the Brea City Code, and Approving a CEQA Exemption.”
— 2. Adopt Resolution No. 2026-63 to establish increased fine amounts for violations of the Ordinance.
6.B. Annual Report related to Police Department use of Military Equipment as required by Government Code § 7072
— 1. Receive and file the report.
6.C. Legal Services Agreement with Richards, Watson & Gershon (RWG) — 1. Approve the Legal Services Agreement with Richards, Watson & Gershon (RWG) to continue as City Attorney.
7. PUBLIC COMMENT - NON-AGENDA ITEMS
The City Council will address comments on non-agenda items during this section and speakers will be called in the order received.
7.A. Public Comment - Non-Agenda Items
8. ADMINISTRATIVE ANNOUNCEMENTS
8.A. City Manager
8.B. City Attorney
8.C. Council Requests
9. COUNCIL ANNOUNCEMENTS
9.A. Council Announcements
10. ADJOURNMENT
10.A. Meeting Adjournment
Date Posted: August 13, 2026
CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3A.
July 21, 2026 Regular City Council Meeting Minutes
TO PREPARED BY
Honorable Mayor and City Council Members Christina Dizol, Deputy City Clerk
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Kristin Webster, City Manager Kristin Webster, City Manager
RECOMMENDATION
Approve.
Attachments
07-21-2026 - Draft Minutes.pdf
** The following document is a draft of the minutes and the not the official approved minutes **
Minutes for the City Council Regular Meeting
1 Civic Center Circle, Brea, California 92821
July 21, 2026
Roll Call: (The following members were in attendance)
Cecilia Hupp, Mayor
Marty Simonoff, Mayor Pro Tem
Christine Marick, Council Member
Blair Stewart, Council Member
Steven Vargas, Council Member
1. CLOSED SESSION - EXECUTIVE CONFERENCE ROOM 3RD FLOOR - TIME 6:00 P.M.
1.A. Call to Order/Roll Call
Mayor Hupp called the Closed Session to order at 6:00 p.m. All members were present.
1.B. Public Comment
None.
1.C. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(2) - Anticipated Litigation. Significant Exposure to Litigation: 1 potential case. Facts and Circumstances:
Urban Habitat Claim.
1.D. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(4) - Anticipated Litigation. Initiation of Litigation: 1 potential case.
1.E. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(2) - Anticipated Litigation. Significant Exposure to Litigation: 1 potential case. Facts and Circumstances:
Cease and Desist Demand Letter from Brea4All / Shute, Mihaly & Weinberger LLP.
1.F. Conference with Legal Counsel Pursuant to Government Code Section 54956.9(d)(1) - Existing Litigation. Name of Case: City of Brea v. Schwarze Industries (Case No. 30-2024-01437243-CU-BCCJC).
Mayor Hupp adjourned the Closed Session at 6:18 p.m.
2. STUDY SESSION - EXECUTIVE CONFERENCE ROOM 3RD FLOOR - TIME 6:15 P.M.
2.A. Call to Order/Roll Call
Mayor Hupp called the Study Session to order at 6:20 p.m. All members were present.
2.B. Public Comment
None.
2.C. Clarify Regular Meeting Topics
None.
2.D. Designate Voting Delegate and Alternate for the League of California Cities Annual Conference and Expo, September 23-25, 2026
The City Council appointed Mayor Hupp as the Voting Delegate and Mayor Pro Tem Simonoff as the Alternate for the League of California Cities Annual Conference and Expo, September 23-25, 2026.
2.E. City Attorney Contract and Lease Agreement Discussion City Manager Griffith introduced the item, provided background information, outlined the timeline of approval, and introduced Sonia Rubio from Best Best & Krieger (BBK) law firm.
Sonia provided an overview of the previous and proposed agreements, discussed previous letters and memorandums related to compensation, and addressed concerns regarding travel expenses.
Council Member Vargas inquired about RWG's monthly rates, past lease agreement letters, potential violations of redevelopment law, travel charges, janitorial services, and the revised 30- day termination notice term.
Sonia provided background information on the previous amended agreements and recommended that the City Council enter into a separate contract for legal services and a separate contract for the lease agreement for office space.
Council Member Vargas proposed approving the contract as presented and pursuing reimbursement for unauthorized travel expenses.
Sonia advised the City Council against pursing litigation for travel expense reimbursement.
Instead, she suggested that the City Council enter into a new legal services agreement that aligns with best practices and market rates.
The City Council continued discussing redevelopment law and legal advice regarding billing issues.
The City Council concurred to transmit the agreements to RWG for review and bring the agreements for consideration at the August 18 City Council meeting.
Sonia provided information on legal rates and potential cost savings.
2.F. Council Member Reports/Requests
None.
2.G. Study Session Adjournment
Mayor Hupp adjourned the Study Session at 6:43 p.m.
3. GENERAL SESSION - COUNCIL CHAMBERS PLAZA LEVEL - 7:00 P.M.
3.A. Call to Order/Roll Call
Mayor Hupp called the General Session to order at 7:01 p.m. All members were present.
3.B. Pledge of Allegiance
Assistant City Manager/Community Development Director Killebrew led the Pledge of Allegiance.
3.C. Invocation: Pastor Rick Darden, Friends Community Church Pastor Rick Darden, Friends Community Church, led the invocation.
3.D. Proclamation: Parks Make Life Better Month
Mayor Hupp presented Day Camp Senior Leader Chase Kittleson, Lifeguard/Instructor Cohen Senkbile, and Sports Senior Leader Nick Tosta with a Proclamation recognizing July as Parks Make Life Better month in the City of Brea.
3.E. Report - Prior Study Session
City Manager Griffith provided a report on the prior Study Session.
3.F. Community Announcements
Council Member Stewart announced that the 2026 Fall Brea Line Newsletter is now available for viewing on the City's website.
Mayor Pro Tem Simonoff invited the community to attend the Concerts in Park series, which will be held every Wednesday night until August 5th. He announced that Soul3Sixty will be the next featured band, performing at City Hall Park starting at 6:30 p.m. He indicated that there will be food and drink items available for purchase. For additional information, please visit the City website.
Council Member Marick invited the community to attend the annual Brea Fest event on Friday, August 7th, at the Brea Civic & Cultural Center at 6:30 p.m. She indicated that admission is free and taste tickets will be available for purchase on the day of the event. For additional information, please visit the City website.
Mayor Hupp announced the launch of a limited-term, pilot Short-Term Rental Program. She indicated that interested property owners can submit a short-term rental license application until Friday, July 31st. Applicants must complete a home inspection, provide proof of insurance, and hold a valid business license. For additional information, please visit the City website.
3.G. Community Development/Public Works Update
Assistant City Manager/Community Development Director Killebrew provided an update on a new entitlement application received for 915 Imperial Highway. He announced that Benihana will occupy the ground level of the former Buffalo Wild Wings, while a new proposal was received for a STK rooftop restaurant on the upper level of the former Buffalo Wild Wings. He provided a construction update on the Greenbriar residential development and the 424 Berry warehouse development. He also announced that Boot Barn and Din Tai Fung are expected to open later this month.
Public Works Director Ho provided an update on current slurry seal projects and encouraged residents to contact the Public Works department if they have any areas they would like the city to address.
3.H. Public Comment - Agenda Items
None.
3.I. Response to Public Inquiries
None.
4. CONSENT CALENDAR
A motion was made by Mayor Pro Tem Simonoff and seconded by Council Member Stewart to approve Consent Calendar items 4A - 4K. Motion passed 5-0-0-0 (Ayes: Hupp, Simonoff, Marick, Stewart, Vargas).
4.A. July 7, 2026 Regular City Council Meeting Minutes
The City Council approved the July 7, 2026 Regular City Council Meeting Minutes.
4.B. Office Lease between the City of Brea and the Brea-Olinda Unified School District The City Council approved a one-year office lease with the Brea-Olinda Unified School District, with an optional eleven-month extension term; and authorized the City Manager to approve nonsubstantive changes, as well as amend and extend the term of the Office Lease, for up to eleven months.
4.C. City Manager Employment Agreement Amendment
The City Council approved Amendment No. 1 to the Employment Agreement with City Manager Kristin Griffith and authorized the Mayor to execute the amendment.
4.D. Amend Cooperation Agreement with County of Orange for Continued Participation in the Community Development Block Grant Program for Fiscal Years 2027-2028, 2028-2029 and 2029- 2030
The City Council adopted Resolution No. 2026-55 approving Amendment Seven to the County of Orange Cooperation Agreement for the Community Development Block Grant (CDBG) Program for fiscal years 2027-2028, 2028-2029, and 2029-2030; and authorized the City Manager, on behalf of the City Council, to execute all documents and forthcoming amendments to the County of Orange Cooperation Agreement for the Urban County Program.
4.E. Increase of Campaign Contribution Limit
The City Council adopted Resolution No. 2026-56 increasing the campaign contribution limit for elective city offices to $5,900 per person, which is the same amount as the State's current default campaign contribution limit for local jurisdictions.
4.F. SB 1205 State Mandated Inspection Annual Report
The City Council approved the report as presented and adopted Resolution No. 2026-57, accepting the 2025 California State Fire Marshal mandated inspection report.
4.G. Award RFP No. 2026.06.02.01 - Emergency Basic Life Support Ambulance Surge Services The City Council approved an agreement with Emergency Ambulance Services, Inc. to provide backup Emergency Basic Life Support ("BLS") ambulance services; and authorized the City Manager to approve any extension option(s).
4.H. InspectionReportsOnline.net (IROL) Contract for Services The City Council approved the software as a Service Agreement between the City of Brea and InspectionReportsOnline.net (IROL), Inc. for a three-year initial term, with the option to renew for up to five (5) successive one-year terms; and authorized the City Manager, or designee, to execute the Agreement and any related documents necessary to implement it, in a form approved by the City Attorney.
4.I. Approval of Memorandum of Understanding Between the City of Brea and the Brea Fire Association and Approval of Side Letter Agreement Between the City of Brea and the Brea Police Association.
The City Council adopted Resolution No. 2026-58 approving a Memorandum of Understanding (MOU) with the Brea Fire Association (BFA); and adopted Resolution No. 2026-59 approving the MOU Side Letter Agreement between the City of Brea and the Brea Police Association (BPA).
4.J. Monthly Report of Investments for the City of Brea for Period Ended June 30, 2026 The City Council received and filed the Monthly Report of Investments for the City of Brea for Period ended June 30, 2026.
4.K. June Outgoing Payment Log and City Disbursement Registers for June 12, June 19, June 26, July 3, and July 10, 2026
The City Council received and filed the June Outgoing Payment Log and City Disbursement Registers for June 12, June 19, June 26, July 3, and July 10, 2026.
5. CITY/SUCCESSOR AGENCY - CONSENT
A motion was made by Mayor Pro Tem Simonoff and seconded by Council Member Stewart to approve the City/Successor Agency Consent item 5A. Motion passed 5-0-0-0 (Ayes: Hupp, Simonoff, Marick, Stewart, Vargas).
5.A. Monthly Report of Investments for the Successor Agency to the Brea Redevelopment Agency for Period Ended June 30, 2026
The City Council, as the Successor Agency, received and filed the Monthly Report of Investments for the Successor Agency to the Brea Redevelopment Agency for period ended June 30, 2026.
6. PUBLIC COMMENT - NON-AGENDA ITEMS
6.A. Public Comment - Non-Agenda Items
Jean Chung spoke about the Costco development and the lack of community input received.
Andrea Strom spoke about the Costco development and emphasized the need for an open forum meeting with the City Council.
Linda Criner expressed concerns about the quality of life, traffic impacts, and tax sharing agreement associated with the Costco development. She also spoke about unanswered questions and the lack of transparency.
Gail Nitta expressed concerns about the potential traffic impacts of the Costco development. She also invited the community to attend the annual Olli Open House event on August 8th at Cal State Fullerton College.
Michael Burns spoke in support of the Costco development.
Nancy Clifton-Hawkins spoke about the lack of community engagement regarding the Costco Development and lack of transparency.
Craig Farris spoke in support of the Costco Development and encouraged residents to communicate with the City and Developer.
Keith Fullington requested additional special events in the Brea Downtown area, suggested renaming the Brea Mall, and spoke in support of the Costco Development.
Dwight Manley spoke about the Costco development, the tax sharing agreement, community outreach, the importance of change, and Senior Center contributions.
7. ADMINISTRATIVE ANNOUNCEMENTS
7.A. City Manager
None.
7.B. City Attorney
None.
7.C. Council Requests
The City Council discussed the placement of stanchions inside the Council Chamber.
Council Member Vargas spoke about the Richards, Watson & Gershon (RWG) contract, lease agreement, and travel expenses.
8. COUNCIL ANNOUNCEMENTS
8.A. Council Announcements
None.
9. ADJOURNMENT
9.A. Meeting Adjournment
Mayor Hupp adjourned the General Session at 8:00 p.m.
CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3B.
August 11, 2026 Special City Council Meeting Minutes
TO PREPARED BY
Honorable Mayor and City Council Members Christina Dizol, Deputy City Clerk
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Kristin Webster, City Manager Kristin Webster, City Manager
RECOMMENDATION
Approve.
Attachments
08-11-2026 - Draft Minutes.pdf
** The following document is a draft of the minutes and the not the official approved minutes **
Minutes for the City Council Special Meeting
1 Civic Center Circle, Brea, California 92821
Roll Call: (The following members were in attendance)
Marty Simonoff, Mayor Pro Tem
Christine Marick, Council Member
Blair Stewart, Council Member
Steven Vargas, Council Member
Absent:
Cecilia Hupp, Mayor
1. GENERAL SESSION - EXECUTIVE CONFERENCE ROOM 3RD FLOOR - 8:15 A.M.
1.A. Call to Order/Roll Call
Mayor Pro Tem Simonoff called the Special General Session to order at 8:15 a.m. All members were present, with Mayor Hupp absent.
1.B. Pledge of Allegiance
Council Member Vargas led the Pledge of Allegiance.
1.C. Public Comment - Agenda Items
Mark Strom spoke about ethics and compliance assessment, potential Brown Act violations, lack of transparency, independent financial assessments, public hearing notices, and Environmental Impact Reports.
1.D. Response to Public Inquiries
None.
2. ADMINISTRATIVE ITEM
2.A. Unconditional Commitment Response to Brea4All / Shute, Mihaly & Weinberger Cease and Desist Demand Letter
City Attorney Boga provided background information on the item and reviewed the proposed edits and next steps. He also provided clarification on the Brown Act regarding one-on-one meetings with staff and council members.
Council Member Marick left the meeting at 8:23 a.m.
The City Council discussed the alleged violations of the Brown Act.
A motion was made by Council Member Stewart and seconded by Mayor Pro Tem Simonoff to approve an unconditional commitment response to the cease and desist demand letter received from Brea4All through its law firm Shute, Mihaly & Weinberger; and authorized the Mayor to send the response letter on behalf of the City. Motion passed 3-0-2-0 (Ayes:
Simonoff, Stewart, Vargas. Absent: Hupp, Marick).
3. PUBLIC COMMENT - NON-AGENDA ITEMS
3.A. Public Comment - Non-Agenda Items
None.
4. ADJOURNMENT
4.A. Meeting Adjournment
Council Member Vargas inquired about City Attorney performance evaluations.
Mayor Pro Tem Simonoff stated that the City Attorney Agreement will be added to a future council meeting agenda for discussion.
Mayor Pro Tem Simonoff adjourned the meeting at 8:26 a.m.
CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3C.
ILJAOC Facial Recognition Participating Agency Agreement
TO PREPARED BY
Honorable Mayor and City Council Members Tony Barbosa, Police Lieutenant
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Adam Hawley, Police Chief Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following action:
1. Approve an agreement with the Integrated Law & Justice Agency for Orange County (ILJAOC) to allow the Brea Police Department to become a participating agency with access to the ILJAOC Facial Recognition System (FRS).
BACKGROUND/DISCUSSION
The Integrated Law & Justice Agency for Orange County (ILJAOC) maintains a Facial Recognition System (FRS) that assists participating law enforcement agencies by comparing facial images to identify or verify individuals during criminal investigations. The system is intended to serve as an investigative tool and does not, by itself, establish a person's identity or provide probable cause for enforcement action.
The Brea Police Department is requesting authorization to enter into an agreement with ILJAOC to become a participating agency with access to the FRS. Participation will enable authorized personnel to use the system for legitimate law enforcement purposes, including assisting with criminal investigations, identifying suspects, locating missing persons, and supporting public safety efforts, consistent with applicable federal, state, and local laws.
The proposed agreement establishes the terms and conditions governing the Department's access to and use of the system, including requirements for authorized use, data security, confidentiality, auditing, and compliance with ILJAOC policies and applicable legal requirements. The agreement also outlines each party's responsibilities regarding the use and sharing of facial recognition data.
Approval of this agreement will provide the Brea Police Department with access to an additional investigative resource while ensuring the technology is used responsibly, securely, and in accordance with established legal and policy safeguards.
As a member agency of the ILJAOC, the City of Brea Police Department is one of 23 law enforcement agencies in the County of Orange. To date, 12 of the 23 law enforcement agencies have entered into this agreement, with approval of the remaining agencies in progress.
FISCAL IMPACT/SUMMARY
There is no fiscal impact associated with approval of the proposed agreement. The Brea Police Department is already a participating member of the Integrated Law & Justice Agency for Orange County (ILJAOC), and access to the Facial Recognition System (FRS) is included as part of the Department's existing membership.
Attachments
Participating AgencyAgreement-Brea Police Department.pdf ILJAOC FR Recognition System Policy.pdf
1 PARTICIPATING AGENCY AGREEMENT
REGARDING
THE USE OF ILJAOC FACIAL RECOGNITION SYSTEM
FOR VALID LAW ENFORCEMENT PURPOSES
This Participating Agency Agreement (“Agreement”) is entered into this ______ day of ____________________, 202, which date is stated for purposes of reference only, and is by and between the Integrated Law & Justice Agency for Orange County, a Joint Powers Authority formed and operating pursuant to California Government Code section 6500 (“ILJAOC”), and City of Brea, a political subdivision of the State of California acting through the Brea Police Department (“Agency”), individually referred to as “Party” and collectively referred to as the “Parties.”
ILJAOC maintains a Facial Recognition (“FR”) System (“FRS”) that identifies and confirms a person’s identity through automated software that compares facial images; The Parties recognize the value of accessing, using, and sharing the FRS and FR data in support of valid law enforcement purposes;
Agency seeks access to the FRS by becoming a participating agency (“Participating Agency”); and
The Parties seek to establish a formal agreement to govern the access, use, and sharing of the FRS and FR data between the Parties.
Accordingly, the Parties agree as follows:
I. OVERVIEW
A. Background
FR technology involves the ability to examine and compare distinguishing characteristics of a human face through the use of biometric algorithms contained within a software application.
California Penal Code § 13150 requires a subject's fingerprints and associated arrest data to be collected, stored, and reported to the California Department of Justice (DOJ) at the time of booking. This biometric information is maintained in a repository in the FRS and may be accessed, used, and shared by authorized law enforcement personnel for valid law enforcement purposes.
The FRS uses an automated process whereby the FR software compares an image of an individual or distinctive mark, scar, or tattoo against the biometric images contained in the repository, resulting in a list of potential candidates ranked by computer-evaluated similarity score. These are then reviewed by trained personnel to identify possible matches. FR technology can be a valuable investigative tool to detect criminal activity, reduce an imminent threat to health or safety, and help identify persons unable to identify themselves or deceased persons. The ILJAOC has established access to and use of FRS to support these law enforcement efforts. 2 B. Purpose
The purpose of this Agreement is to outline the terms, conditions and responsibilities under which the Parties shall access, use, and share the FRS and FR data for valid law enforcement purposes.
C. Definitions
Participating Agency – A law enforcement agency that is authorized to contribute images and/or biometric information and/or is authorized to access, receive, request, or use information from the FRS for a valid law enforcement purpose through its authorized individual users.
Participating Agencies must sign this Agreement, agree to be bound by the ILJAOC Facial Recognition Policy, and adopt their own internal FR policies consistent with the ILJAOC Facial Recognition Policy.
Valid Law Enforcement Purpose – FRS and FR data are to be used for information/ intelligence gathering, development, collection, use, retention, or sharing that furthers the authorized functions and activities of a law enforcement agency. These functions and activities may include preventing crime, criminal investigation, criminal intelligence, mitigating imminent threats, ensuring public safety, protecting public or private structures and property, identifying deceased persons or persons unable to identify themselves, and furthering officer safety while adhering to law and agency policy designed to protect the public. Prohibited uses are located in the ILJAOC Facial Recognition Policy.
II. SCOPE
The scope includes all information, records, and/or media contained within, used for, and associated with the FRS and/or comprising the FR data, including but not limited to booking photos, fingerprints, and other images and biometric data, whether originating, stored, or transmitted to or from local, state or federal sources, including databases, software, or systems; logs of searches and other activity; user identification information; personal information as defined by Civil Code Section 1798.3; metadata; and information considered to be privileged or confidential in nature and not subject to public availability.
A. Responsibilities of the Parties
1. The Parties shall designate a point of contact who will be responsible for coordinating the FR-related activities under this Agreement.
2. Parties are responsible for abiding by the ILJAOC Facial Recognition Policy as exists at any time during the term of this Agreement. ILJAOC is responsible for maintaining and updating the ILJAOC Facial Recognition Policy and providing notice of any updates to Participating Agencies. Agency is responsible for developing its own internal policy regarding the access and sharing of FR data that is consistent with the ILJAOC Facial Recognition Policy.
3. ILJAOC has designated the Orange County Sheriff’s Department Crime Laboratory (“OCCL”) Biometric Program Administrator to have primary responsibility for the oversight and operation of the FRS, including receiving, seeking, retention, evaluation, 3 data quality, use, sharing, disclosure, or dissemination of information; ensuring compliance with applicable laws, regulations, standards, and policy; quality assurance and audits; granting/restricting access to Agency personnel; and any other requirements as may be set forth in this Agreement and the ILJAOC Facial Recognition Policy.
4. Agency is responsible for identifying Agency personnel to become authorized users; ensuring its authorized users have completed the required training; reviewing access privileges to disable inactive user accounts; accessing, using, and sharing FR data for valid law enforcement purposes only; complying with audits; and any other requirements as may be set forth in this Agreement and the ILJAOC Facial Recognition Policy.
5. The Parties shall comply with all applicable federal, state, and local laws and regulations governing the use and sharing of FR data, including but not limited to data security, privacy, and retention requirements.
6. The Parties shall establish appropriate technical and administrative safeguards to ensure the integrity, confidentiality, and security of FR data shared under this Agreement, including but not limited to those set forth in Attachment A, Security Safeguards.
B. Data Access, Use and Sharing Procedures
1. FR data accessed, used, or shared under this Agreement shall be provided for official use only, is law enforcement sensitive, and requires a valid law enforcement purpose.
2. FR data must be treated like any other investigative lead and shall not be used as a sole guarantee of identification, reasonable suspicion to detain, or probable cause to search or arrest.
3. Only trained personnel currently employed by, in good standing with, and authorized by their respective Agency shall access, use, and share FR data.
4. The Parties shall access, use and share FR data electronically via a secure network connection.
5. FR data accessed, used, or shared under this Agreement shall not be disclosed to third parties, except as authorized or required by law and pursuant to the ILJAOC Facial Recognition Policy. FR data shall not be sold, shared, transferred, or otherwise disclosed for commercial purposes or to persons or entities that are not authorized to access, use, or share FR data.
6. Any Party receiving a public records request, subpoena, or court order (“Legal Request”) for information in the FRS system for its own FR data and records shall respond to the Legal Request; however, if the Legal Request pertains to FR data or records authored by or originated by another Party, the Party receiving the Legal Request shall immediately provide a copy of the Legal Request to the originating Party to coordinate a response.
Legal Requests for administrative or statistical information regarding the FRS should be forwarded to ILJAOC and OCCL.
4 7. FR data accessed, used, or shared under this Agreement shall be retained by each Party in accordance with that Party’s retention policy and applicable laws and regulations governing the retention of law enforcement records.
C. Authorization
1. The Parties are authorized to access, use, and share FR data in accordance with the law and established policies and procedures regarding facial recognition and Criminal Offender Record Information (“CORI”) that exist now or at any time during the term of this Agreement, including but not limited to, Penal Code §§ 11105, 11140-11144; California Department of Justice’s (“DOJ”) most updated CORI policies and directives, which can be found on the DOJ website; and the Federal Bureau of Investigation’s (“FBI”) most updated Criminal Justice Information Services (CJIS) policies and directives, which can be found on the FBI website.
2. Parties shall treat the disclosed material as confidential pursuant to all laws, the terms of this Agreement, and the ILJAOC Facial Recognition Policy.
3. The Parties shall take all reasonable measures to protect the confidentiality of FR data and avoid unauthorized disclosure, publication, or dissemination, provided, however, that such measures shall be no less stringent than measures taken to protect the Parties’ own confidential and proprietary information, whether or not in electronic or written form.
4. The Parties are not required by the Agreement to access, use, or share any FR data with each other.
D. Audits and Quality Assurance
1. The Parties shall periodically review, inspect, and audit their respective FR systems, networks, authorized users, and tracking logs, including access, use, and sharing of FR data, in accordance with the ILJAOC Facial Recognition Policy and Agency’s policy.
2. If Agency identifies malfunctions or deficiencies in the FRS, including FR data that may be inaccurate or incomplete, incorrectly merged, out of date, or cannot be verified, Agency shall notify the OCCL Biometric Program Administrator.
III. ADDITIONAL PROVISIONS
A. Term
The term of this Agreement will commence on the date of the last signature to this Agreement and will remain in effect, unless terminated earlier by written agreement or as provided herein.
Either Party may terminate this Agreement without cause immediately by providing the other Party with written notification. In the event this agreement is terminated, Agency shall immediately cease to be a Participating Agency pursuant to this Agreement and shall no longer have the ability to access, use, or share the FRS or FR data. 5 B. Governing Law and Venue
This Agreement has been negotiated and executed in the state of California and shall be governed by and construed under the laws of the state of California. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the Parties hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394.
Furthermore, the Parties specifically waive any and all rights to request that an action be transferred for adjudication to another county. In any action or proceeding to enforce or interpret any provision of this Agreement, or where any provision hereof is validly asserted as a defense, each Party shall bear its own attorney’s fees, costs and expenses.
C. Indemnification
1. The Party accessing, using, or sharing the FR data bears all responsibility to ensure that access, use, and sharing of FR data and images complies with the law, the ILJAOC Facial Recognition Policy, and the Agency’s policy (if applicable).
2. Each Party shall indemnify, defend, protect, hold harmless, and release the other, its officers, agents, and employees, from and against any and all claims, loss, proceedings, damages, causes of action, liability, costs, or expense (including attorneys’ fees and witness costs) arising from or in connection with, or caused by any act, omission, or negligence of such indemnifying party or its agents, employees, contractors, subcontractors, or invitees. This indemnification obligation shall not be limited in any way by any limitation on the amount or type of damages or compensation payable to or for the indemnifying party under workers’ compensation acts, disability benefit acts, or other employee benefit acts. This indemnity provision survives the Agreement.
D. Notices
1. Any and all notices, requests, demands and other communications contemplated, called for, permitted, or required to be given in this Agreement shall be in writing with a copy provided to the assigned point of contact, except through the course of the Parties’ routine exchange of information and cooperation during the terms of the work and services.
2. Any written communications shall be deemed to have been duly given upon actual inperson delivery, if delivery is by direct hand; upon receipt if by email, which is deemed to have occurred at the time shown in the delivery confirmation generated by the sender’s email system; or upon delivery on the actual day of receipt or no greater than four calendar days after being mailed by U.S. certified or registered mail, return receipt requested, postage prepaid, whichever occurs first, with the date of mailing counting as the first day. All communications shall be addressed to the appropriate Party at the address stated herein or such other address as the Parties may designate by written notice.
6 Integrated Law & Justice Agency for
Orange County
____________________________
____________________________
Attn:________________________
Ph: _________________________
Email: ______________________
%UHD3ROLFH'HSDUWPHQW
&LYLF&HQWHU&LUFOH
%UHD&$
Attn:&KLHI$GDP+DZOH\
Ph:_
__________
Email: $KDZOH\#EUHDSROLFHJRY
E. Entire Contract
This Agreement, including any Attachments or Exhibits, contains the entire agreement between the Parties with respect to the matters herein, and there are no restrictions, promises, warranties, or undertakings other than those set forth herein or referred to herein. No exceptions, alternatives, substitutes or revisions are valid or binding on the Parties unless authorized by the Parties in writing.
F. Amendments
The Parties acknowledge that federal and state laws regarding information security and privacy rapidly evolve, and that amendment of this Agreement may be required to provide for procedures to ensure compliance with such laws. No alteration or variation of the terms of this Agreement, including any oral understandings or agreements, shall be valid unless made in writing and signed by the Parties. Notwithstanding the foregoing, the Parties specifically agree to take such action as is necessary to implement new standards and requirements imposed by regulations and other applicable laws relating to the security or privacy of FR data.
G. Severability
If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.
H. Interpretation
1. This Agreement has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters dealt with in this Agreement. In addition, each Party had been represented by experienced and knowledgeable independent legal counsel of its own choosing or has knowingly declined to seek such counsel despite being encouraged and given the opportunity to do so. Each Party further acknowledges that it has not been influenced to any extent whatsoever in executing this Agreement by the other Party hereto or by any person representing it. Accordingly, any rule or law (including California Civil Code Section 1654) or legal decision that would require 7 interpretation of any ambiguities in this Agreement against the Party that has drafted it is not applicable and is waived.
2. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose of the Parties and this Agreement and as necessary to implement and comply with applicable federal and state laws and regulations. The Parties agree that any ambiguity in the terms and conditions of this Agreement shall be resolved in favor of a meaning that complies and is consistent with federal and state laws and regulations.
I. Assignment
Agency shall not assign any rights or obligations under this Agreement without the written consent of ILJAOC.
IV. SIGNATURES
This Agreement may be executed in counterparts and may be signed electronically. By signing below, the Parties agree to be bound by the terms and conditions of this Agreement. Each Party represents that the person signing this Agreement has sufficient authority to execute the Agreement on behalf of that Party.
INTEGRATED LAW & JUSTICE AGENCY FOR ORANGE COUNTY
Signature: ___________________________________ Date: ____________________ Print Name: ____________________________ Print Title: _________________________ [NAME OF AGENCY]
Signature: ___________________________________ Date: ____________________ Print Name: __$GDP+DZOH\_______ Print Title: BBBB&KLHIRI3ROLFHBBBBBBBBBBBBBBBB 8 ATTACHMENT A
Security Safeguards
A. Definitions
1. Breach
a. The unauthorized acquisition, access, use, or disclosure of FR data in a manner which compromises the security, confidentiality or integrity of the information; or
b. The same as the definition of "breach of the security of the system" set forth in California Civil Code section 1798.29(f).
2. Security Incident
a. An attempted Breach;
b. The attempted or successful unauthorized access or disclosure, modification or destruction of FR data, in violation of any state or federal law or in a manner not permitted under the Agreement between the Agency and IJLAOC or the ILJAOC Facial Recognition Policy; or
c. The attempted or successful modification or destruction of, or interference with, Agency operations in an information technology system, that negatively impacts the confidentiality, availability or integrity of FR data.
B. Confidentiality and Security Safeguards
Agency shall implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the FR data that it creates, receives, maintains, uses, or transmits. Including the following safeguards at a minimum:
1. Computing Devices/Media Encryption. All Agency-owned or managed laptops, tablets, smart phones, storage media (e.g., USB Flash drives, tapes, CDs, DVDs, disks, SD cards, portable hard drives) and similar devices that process and/or store FR data must be encrypted if physical and personnel safeguards cannot be implemented. All cryptography including encryption algorithms and validated modules shall be implemented in accordance with NIST and FIPS standards and Guidelines (FIPS 140-2, FIPS 197 NIST SP 800-43, NIST SP 800-52. It is also recommended to encrypt other computing devices such as workstations or desktops. In rare instances where encryption cannot be implemented, compensating control(s) or alternatives to encryption must be in place. Compensating controls and alternatives to encryption must be reviewed on a case-by-case basis and approved in writing by the ILJAOC or the Biometric Program Administrator, after a thorough risk analysis.
9 2. Data Transmission Encryption. All data transmissions of FR data outside the secure internal network must be encrypted using a FIPS 140-2 certified algorithm, such as Advanced Encryption Standard (AES), with a 128-bit key or higher. For Transport Layer Security-TLS standards, follow NIST SP 800-52. This requirement pertains to any type of DOJ CSP in motion such as, but not limited to website access, file transfer, and E-Mail.
3. Server Security. Servers containing unencrypted FR data must have sufficient administrative, physical, and technical controls in place to protect that data, based upon a risk assessment/system security review.
4. Removable Media Devices. All electronic files that contain the FR data must be encrypted if physical and personnel safeguards cannot be implemented. All cryptography including encryption algorithms and validated modules shall be implemented in accordance with NIST and FIPS standards and Guidelines (FIPS 140- 2, FIPS 197 NIST SP 800-43, NIST SP 800-52).
5. Minimum Necessary. Only the minimum necessary amount of the FR data required to perform necessary business functions may be copied, downloaded, or exported.
6. Antivirus Software. All Agency-owned or managed workstations, laptops, tablets, and similar devices that process and/or store FR data must install and actively use comprehensive anti-virus software solution.
7. Patch Management. To correct known security vulnerabilities, Agency shall install security patches and updates in a timely manner on all Agency-owned or managed workstations, laptops, tablets, smart phones, and similar devices that process and/or store DOJ CSP as appropriate based on Agency’s risk assessment of such patches and updates, the technical requirements of Agency’s systems, and the vendor’s or OCCL’s written recommendations. If patches and updates cannot be applied in a timely manner due to hardware or software constraints, mitigating controls must be implemented based upon the results of a risk assessment.
8. User IDs and Password Controls. If not enforced by the FR system, the agency must ensure that all users be issued a unique username for accessing FR data. The username must be promptly disabled or deleted, or the password changed, upon the transfer or termination of an employee with knowledge of the password.
9. Passwords must be at least eight characters long and composed of characters from at least three of the following four groups from the standard keyboard:
x Upper case letters (A-Z)
x Lower case letters (a-z)
x Arabic numerals (0-9)
x Non-alphanumeric characters (punctuation, symbols).
10 Passwords may not be a dictionary word or proper name, the same as the username, identical to the previous ten (10) passwords, or displayed when entered. Passwords shall expire within a maximum of 90 calendar days. They must not be stored in a readable format on the computer.
Usernames and passwords to the FRS are not transferable, must not be shared, and must be kept confidential.
9. System Timeout. If not enforced by the FR System, after a maximum of 30 minutes of inactivity, the system must provide an automatic timeout, requiring re-authentication of the user session.
10. Access Controls. The system must use role-based access controls for all user authentications, enforcing the principle of least privilege.
11. Intrusion Detection. All systems involved in accessing, holding, transporting, and protecting FR data that are accessible via the Internet must be protected by a comprehensive intrusion detection and prevention solutions.
12. Paper Document Controls. Agency shall safeguard FR data from unauthorized access, use, modification or disposal, inside or outside of the entity’s control areas whether in storage or transport.
13. Data Sanitization. FR data must be sanitized using NIST Special Publication 800-88 standard methods for data sanitization when the FR data is no longer needed.
14. Confidential Destruction. FR data must be disposed of through confidential means, such as crosscut shredding and/or pulverizing.
C. Security Incidents and/or Breaches
1. Security Incidents and/or Breach Response Responsibility. Agency shall be responsible for facilitating the Security Incident and/or Breach response process as described in California Civil Code 1798.29(e), California Civil Code 1798.82(f).
2. Discovery and Notification of Security Incidents and/or Breach. Agency shall notify the OCCL Biometric Program Administrator immediately by telephone call and email upon the discovery of the Security Incident and/or Breach affecting the security of FR data if the FR data was, or is reasonably believed to have been, acquired by an unauthorized person, or there is an intrusion, potential loss, actual loss, or unauthorized use or disclosure of the FR data in violation of this Agreement, this provision, or applicable law. Agency shall take:
a. Prompt corrective action to mitigate the risks or damages involved with the Security Incident and/or Breach and to protect the operating environment; and b. Any action pertaining to such unauthorized disclosure required by applicable Federal and State laws and regulations.
11 3. Investigation of Security Incidents and/or Breaches. Agency shall promptly investigate such Security Incidents and/or Breaches. ILJAOC and OCCL shall have the right to participate in Agency’s investigation or conduct their own independent investigation, and Agency shall cooperate fully in such investigations.
4. Written Report. Agency shall provide a written report of the investigation to the OCCL Biometric Program Administrator within 72 hours of the discovery of the Security Incident and/or Breach. To the extent Agency has such information, the report shall include but not be limited to the following:
a. Agency point of contact information;
b. Description of what happened, including the date of the Security Incident and/or Breach and the date of the discovery of the Security Incident and/or Breach, if known;
c. Description of the types of FR data that was involved and the extent of the information involved in the Security Incident and/or Breach; d. A description of the unauthorized persons known or reasonably believed to have improperly used or disclosed FR data;
e. A description of where the FR data is believed to have been improperly transmitted, sent, or utilized;
f. A description of the probable causes of the improper use or disclosure; g. Whether Civil Code sections 1798.29 or 1798.82 or any other federal or state laws requiring individual notifications of breach are triggered; and h. Full, detailed corrective action plan, including information on measures that were taken to halt and/or contain the Incident and/or Breach.
5. Updates on Investigation. Agency shall provide regular (at least once a week) email updates on the progress of the Security Incident and/or Breach investigation to the OCCL Biometric Program Administrator until they are no longer needed, as mutually agreed upon between the Agency and the OCCL Biometric Program Administrator.
6. Notification. Following the assessment of a suspected or confirmed Security Incident and/or Breach, and as soon as possible, OCCL, in consultation with Agency, will determine whether it requires notification to an affected agency or individual, in accordance with applicable laws, regulations, policies, and procedures.
7. Cost of Investigation and Remediation. Per SAM Section 5305.8, Agency shall be responsible for all costs incurred by ILJAOC or OCCL due to Security Incidents and/or Breaches resulting from Agency’s failure to perform or from negligent acts of its personnel, and resulting in the unauthorized disclosure, release, access, review, or destruction, or loss, theft or misuse of an information asset. These costs include, but are not limited to, notice and credit monitoring for impacted individuals, ILJAOC 12 and/or OCCL staff time, material costs, postage, media announcements, and other identifiable costs associated with the Security Incident, Breach and/or loss of data.
D. Plan of Action and Milestones (POAM)
The parties acknowledge that Agency may have identified information security weaknesses or deficiencies where Agency is not currently in full compliance with the controls in this Agreement and/or other applicable standards and/or requirements and, correspondingly, related provisions within this Agreement. To the extent that those weaknesses or deficiencies have been identified and addressed by Agency through the development of a POAM, the development of the POAM and the progress towards remediation of weaknesses or deficiencies on the POAM shall be deemed to be compliance with the terms of this Agreement.
E. Conflict
Any conflict between this Attachment A and the ILJAOC Facial Recognition Policy, or any ambiguity in the terms and conditions of this Attachment A, shall be resolved in favor of the more stringent meaning that complies and is consistent with federal and state laws and regulations.
1 ILJAOC Facial Recognition System Policy
I. PURPOSE AND SCOPE:
This policy establishes procedures for the acceptable use of the Integrated Law and Justice Agency of Orange County (ILJAOC) Facial Recognition System (FRS), its images, information, and tools. The FRS shall only be used when there is reasonable suspicion that such use will provide information relevant to an active investigation, reduce an imminent threat to health or safety (“at-risk”), or to help identify deceased persons or persons unable to identify themselves. The FRS will be used in accordance with federal and state law, including the California Values Act (Government Code Section 7282 et. seq.).
The provisions of this policy are provided to support the authorized uses of the FRS and information identified below. This policy applies to all law enforcement agencies and agency personnel with access to the FRS, and access to the Investigative Leads produced therefrom. Each law enforcement agency requesting access to the FRS is required to maintain an internal policy regarding the use of the technology that is consistent with this policy and is expected to include agency specific operational procedures, as appropriate. Agencies that do not adopt internal policies and procedures consistent with this policy will not be granted access to the FRS. Any ambiguity or inconsistencies in the required policies shall be resolved in favor of a meaning that complies and is consistent with federal and state laws, regulations, and standards.
The ILJAOC considers the results, if any, of a Facial Recognition search to be an Investigative Lead only.
Facial Recognition search results are not regarded as positive identification of a subject and do not, on their own, establish either reasonable suspicion to detain or probable cause to support a search warrant or an arrest. Connection or involvement of the subject(s) to the investigation must be determined through further lawful investigative methods and investigative resources (e.g., witness interviews, forensic analysis of crime scene evidence, witness or victim identification, etc.).
II. DEFINITIONS AND TERMS:
Breach – The unauthorized acquisition, access, use, or disclosure of Facial Recognition data in a manner that compromises the security, confidentiality or integrity of the information; or the same as the definition of "breach of the security of the system" set forth in California Civil Code Section 1798.29(f).
Candidate Images – The results of a Facial Recognition search. When Facial Recognition software compares a Probe Image against the images in a Repository, the result is a list of Candidate Images that the software determines to be sufficiently similar to or most likely resemble the Probe Image to warrant further analysis. A Candidate Image is an Investigative Lead only and does not establish reasonable suspicion or probable cause without further investigation or evidence.
Facial Recognition – The automated process whereby a Probe Image is used by Facial Recognition software for comparison with the Known Images (or features within images) contained in the image Repository, resulting in a list of Candidate Images ranked by computer-evaluated similarity score. This is commonly referred to as a one-to-many comparison.
2 Facial Reviewer – The human reviewer of Candidate Images produced by the automated FRS to identify possible matches. The Facial Reviewer must have successfully completed training in facial comparison and use of the Facial Recognition software.
Investigative Lead – Any information that could potentially aid in the successful resolution of an investigation. An Investigative Lead does not imply positive identification of a subject, nor that the subject is responsible for or otherwise involved in a criminal act.
Known Image – The image of an individual associated with a known or claimed identity and recorded electronically by a law enforcement agency through the Orange County Automated Biometric Identification System during the individual’s booking process at an Orange County or City Jail.
Log(s) – A necessary part of an adequate security system which ensures that information is properly tracked and that only authorized individuals have access to the data within the FRS and the resulting Candidate Images.
Participating Agency – A law enforcement agency that is authorized to contribute images and/or biometric information and/or is authorized to access, receive, request, or use information from ILJAOC’s FRS for a Valid Law Enforcement Purpose through its authorized individual users. Participating Agencies must sign the Participating Agency Agreement (Agreement) with ILJAOC regarding the use of the FRS and adopt internal policies and procedures for use of the FRS that are consistent with this policy.
Personally Identifiable Information (PII) – Information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other information, that is linked or linkable to a specific individual.
Probe Image – The facial or distinctive image of a scar, mark or tattoo, used by Facial Recognition software for comparison against a Known Image contained within the FRS. The Probe Image must be an image of an individual lawfully obtained pursuant to a criminal investigation. Examples of Probe Images include:
x Images captured from closed circuit TV cameras or security cameras. x Images captured from an ATM camera.
x Images provided by a victim or witness of a crime.
x Images gained from a criminal investigation determined to be evidence of identity (fraudulent bank card or photograph ID).
Repository – A location where a group of images of known individuals and biometric templates obtained and verified from the Orange County Automated Biometric Identification System through a law enforcement process are stored and managed. A Repository is utilized during a Facial Recognition search. A Repository may be referred to as a Digital Mugshot System (DMS) by other law enforcement agencies or groups.
Security Incident – An attempted breach; the attempted or successful unauthorized access or disclosure, modification, or destruction of Facial Recognition data in violation of any law or in a manner not permitted under this policy or the Agreement; or the attempted or successful modification or destruction of, or interference with, law enforcement operations in an information technology system that negatively impacts the confidentiality, availability, or integrity of Facial Recognition data.
3 Surveillance – Observation and collection of data to gather evidence.
Unsolved Image File – A lawfully obtained Probe Image of an unknown subject may be added by authorized law enforcement users to an unsolved image file pursuant to an authorized criminal investigation and if a search has produced no candidates and the subject remains unknown. Images in an unsolved image file are periodically compared with the Known Images in an image Repository.
Valid Law Enforcement Purpose – Facial Recognition is to be used for information/intelligence gathering, development, collection, use, retention, or sharing that furthers the authorized functions and activities of a law enforcement agency. These functions and activities may include preventing crime, criminal investigation, criminal intelligence, mitigating imminent threats, ensuring public safety, protecting public or private structures and property, identifying deceased persons or persons unable to identify themselves, and furthering officer safety while adhering to law and agency policy designed to protect the public.
III. POLICY
The policy of the ILJAOC is to utilize Facial Recognition technology as an investigative tool during investigations, reducing imminent threats to health or safety, or helping identify deceased persons or persons unable to identify themselves, while recognizing the established privacy rights of the public.
Facial Recognition technology involves the ability to examine and compare distinguishing characteristics of a human face through the use of biometric algorithms contained within a software application.
California Penal Code § 13150 requires a subject's fingerprints and associated arrest data to be collected, stored, and reported to the California Department of Justice (DOJ) at the time of booking. This information is maintained in the Repository and used by authorized law enforcement personnel for Valid Law Enforcement Purposes. Facial Recognition technology can be a valuable investigative tool to detect criminal activity, reduce an imminent threat to health or safety, and identify deceased persons or persons unable to identify themselves. The ILJAOC has established access to and use of a Facial Recognition software to support investigative efforts to solve crimes. The software will be treated like any other Investigative Lead and shall not be used as a sole guarantee of identification, reasonable suspicion to detain, or probable cause to search or arrest.
This policy provides the ILJAOC and law enforcement personnel with guidelines and principles for collecting, accessing, using, disseminating, retaining, and purging images and related information applicable to FRS. This policy will ensure that all Facial Recognition searches are conducted for a Valid Law Enforcement Purpose while not violating individuals' privacy, civil rights, and civil liberties. This Facial Recognition policy assists the Participating Agency and its personnel in:
(a) Increasing public safety and improving security.
(b) Minimizing the threat and risk of injury to the public. (c) Minimizing the threat and risk of physical injury or financial liability to law enforcement and others responsible for public protection, safety, or health.
(d) Minimizing the potential risks to individual privacy, civil rights, civil liberties, and other legally protected interests.
4 (e) Protecting the integrity of criminal investigatory and justice system processes. (f) Minimizing the threat and risk of damage to real or personal property. (g) Fostering trust by strengthening transparency, oversight, and accountability. (h) Making the most effective use of public resources.
IV. AUTHORIZED USE OF FACIAL RECOGNITION
Access to FRS will be provided only to those individuals from Participating Agencies who are authorized to have access for Valid Law Enforcement Purposes only.
All deployments of the FRS are for official use only and are law enforcement sensitive. All uses of the FRS will be performed on a need-to-know and right-to-know basis per Criminal Offender Record Information (CORI) regulations. Penal Code § 11105, defines who has access to CORI, and Penal Code §§ 11140 through 11144, establish the penalties for the improper use of CORI. Law enforcement agencies are required to abide by the most updated DOJ CORI rules, which can be found on the DOJ’s website, as well as the Federal Bureau of Investigation’s (FBI) most updated Criminal Justice Information Services (CJIS) Security Policy, which can be found on the FBI website. To the extent these laws, rules and policies may change, Participating Agencies shall take any action necessary to abide by such new laws, rules, policies, standards, or requirements relating to security or privacy of CORI or data within the FRS.
The provisions of this policy support the following authorized uses of Facial Recognition information:
(a) A reasonable suspicion that an identifiable individual has committed a criminal offense or is involved in or planning criminal conduct or activity that threatens any individual or the community. (b) An active or ongoing criminal investigation.
(c) To mitigate an imminent threat to the health or safety of the community. (d) To investigate or corroborate tips and leads related to criminal investigations. (e) For a person whom an officer reasonably believes is concealing their true identity and has a reasonable suspicion the individual has committed a misdemeanor or felony crime. (f) To assist in the identification of a person who lacks the capacity or is otherwise unable to identify themselves, such as a person who is incapacitated, deceased, a danger to themselves or others, or otherwise at-risk, and only as a last resort after other traditional methods of identification have been unsuccessful.
V. PROHIBITED USES OF FACIAL RECOGNITION
Facial Recognition shall not be used in the following ways:
(a) To actively surveil members of the public through any camera or video device unless the person(s) are under an active criminal investigation or the Surveillance is in response to an imminent threat of life;
5 (b) On live stream video unless there is an imminent threat to life or at-risk individuals are involved; (c) For any purpose that violates the U.S. Constitution or laws of the United States, including the protections of the First, Fourth, and Fourteenth Amendments; (d) To prohibit or deter lawful individual exercise of other rights, such as freedom of association, implied by and secured by the U.S. Constitution or any other constitutionally protected right or attribute, or as a Probe Image(s) obtained from First Amendment Protected activity; (e) For non-criminal purpose, except as defined in subsections IV(c) and (f) above, or purely administrative investigations;
(f) For harassing and/or intimidating any individual or group; (g) For predictive analysis;
(h) For personal or non-law enforcement purposes. This includes the sharing or utilizing of any PII obtained from the FRS for any purpose beyond the underlying Valid Law Enforcement Purpose; (i) To assess immigration status;
(j) To identify persons pursuing or exercising reproductive rights; or (k) Any other access, use, disclosure, or retention that would violate applicable law, regulation, or policy.
VI. CONSTITUTIONALLY PROTECTED EVENTS, ACTIVITY AND AFFILIATIONS Facial Recognition must be used in accordance with all federal and state laws, this ILJAOC Policy, and all internal Participating Agency policies. The ILJAOC and all personnel with access to the FRS will not perform or request Facial Recognition searches about individuals or organizations that will violate any provision of the US Constitution, including the First, Fourth, and Fourteenth Amendments, and based solely on any of the following:
(a) Their religious, political, or social views or activities. (b) Their participation in a particular non-criminal organization. (c) Their race, ethnicity, citizenship, place of origin, age, disability, gender, gender identification, sexual orientation, or other protected classification.
VII. DATABASE AND DATA LIMITATIONS
(a) The Participating Agency will not maintain, utilize, or keep any database to conduct Facial Recognition searches and shall only use the ILJAOC Repository to conduct Facial Recognition searches.
(b) The Participating Agency will only utilize the ILJAOC countywide FRS to conduct Facial Recognition searches.
6 (c) No databases outside Orange County Automated Biometric Identification System, such as the California driver's license or open-source photo databases, or Automated License Plate Reader images, will be uploaded, accessible, or searchable in the FRS Repository. (d) ILJAOC does not connect the FRS to any interface that performs live video Surveillance, including Surveillance cameras, drone footage, and body-worn cameras. The FRS will not be configured to conduct Facial Recognition analysis on live or recorded video.
VIII. DOCUMENTATION
Any authorized user from a Participating Agency must Log each access of the FRS. Each agency is required to maintain the Logs for their authorized employees and make them available to the Orange County Sheriff’s Department Crime Laboratory (OCCL) for quality control and random auditing purposes.
The Logs shall be retained per the Participating Agency’s retention schedule.
The Logs must include the following information:
x The name, agency, and contact information of the law enforcement user x The date and time of access
x Case number
x Probe Images
x The specific information accessed
x The Valid Law Enforcement Purpose
x Number of potential Candidate Images provided by the FRS x Whether filters or enhancements were utilized, and if so, on which Probe Images.
With any possible match where an Investigative Lead is generated from the Facial Recognition software, the Facial Reviewer or investigator shall write a detailed report on the information they have obtained.
The report by the Facial Reviewer must be attached to the criminal investigation report. This must be done even if possible matches are not deemed likely candidate matches or used in the criminal investigation, since the prosecuting agency must be provided with all investigatory actions taken, whether or not they generate an investigative lead (see Section X below).
It is strongly recommended that Probe and Candidate Images are peer reviewed when feasible for verification by other trained and authorized personnel. Participating Agencies are encouraged to review the quality of the information received from the FRS.
IX. INVESTIGATIVE SEARCHES AND CANDIDATE IMAGES
(a) Probe Images will only be used from legally obtained sources. (b) Before conducting a Facial Recognition search, Facial Reviewers will review, analyze and evaluate the quality and suitability of a Probe Image, including factors such as the angle of the face image, level of detail, illumination, size of the face image, and other factors affecting a Probe Image. It is recommended that the results of this process also be documented in the Logs.
7 (c) Upon determining the Probe Image(s) are suitable, the Facial Reviewer may process the Probe Image(s) to conduct a Facial Recognition search.
(d) Investigative searches shall only be conducted by trained Facial Reviewers. (e) Only the minimum necessary amount of the Facial Recognition data required for Valid Law Enforcement Purposes may be accessed, copied, downloaded, or shared. (f) Candidate Images which result from an investigative search are strictly defined as Investigative Leads. The ILJAOC considers the results, if any, of a Facial Recognition search to be advisory as an Investigative Lead only. Facial Recognition search results are not regarded as identification of a subject and do not, on their own, establish reasonable suspicion or probable cause without further investigation. Any possible connection or involvement of the subject(s) to the investigation must be determined through further investigative methods.
(g) The following statement shall accompany the most likely Candidate Image(s) and any related records:
“ILJAOC is providing this information as a result of a Facial Recognition search, utilizing a Repository from criminal livescan records maintained by the Orange County Crime Lab and/or otherwise linked through a Participating Agency with the FRS. This information is provided only as an Investigative Lead and IS NOT TO BE CONSIDERED A POSITIVE IDENTIFICATION OF ANY SUBJECT. Any possible connection or involvement of any subject to the investigation must be determined through further investigation and lawful investigative resources.”
X. SHARING FACIAL RECOGNITION INFORMATION
Information obtained from the FRS shall only be shared in accordance with the laws and policies governing CORI and as set forth in section IV above.
Participating Agencies and their members may only disseminate information obtained through the FRS to:
x Other law enforcement agencies as permitted by this policy. x A prosecutorial entity for use in a criminal matter to support a prosecution or disclose exculpatory information, in accordance with California statutory law and the California and Federal Constitutions. Any use of the FRS, regardless of the results and whether it results in an investigative lead, shall be disclosed to the prosecuting agency since failure to do may constitute a Brady violation.
x Personnel designated by a California or Federal Court in response to a court order. x To authorized government or law enforcement agency for the purpose of quality control and auditing.
Facial Recognition Search information shall not be disclosed to unauthorized individuals or for unauthorized purposes. It may not be reproduced for secondary dissemination, transferred to, or shared with any other employing, licensing, or regulatory entity, or in response to a Public Records Act request.
8 The existence or nonexistence of Facial Recognition information should not be confirmed to any individual or agency that would not be authorized to receive the information unless otherwise required by law.
XI. TRAINING
Participating Agencies’ members who will be users of the Facial Recognition software and serve as Facial Reviewers must attend training prior to accessing the FRS. Investigative searches shall only be conducted by trained Facial Reviewers who are qualified to assess image quality and suitability for Facial Recognition searches and to perform one-to-many and one-to-one face image comparisons. x Participating Agency personnel accessing the FRS shall have completed training provided by the FBI or ILJAOC, which shall meet the CJIS minimum training criteria for using an FRS. x Facial Reviewers must attend the Facial Recognition Searches and Advanced Morphological Training through the Facial Recognition software vendor prior to utilizing the FRS. x All users must also satisfy any additional training requirements for their respective Participating Agency.
All authorized users must also acknowledge the implementation of and their adherence to this Facial Recognition policy. A Participating Agency will provide its authorized users with a printed or electronic copy of this Facial Recognition policy in addition to the Participating Agency’s own internal policy and require a written acknowledgment of receipt. All written acknowledgements should be retained by the Participating Agency for reporting purposes as required by law or requested by ILJAOC or OCCL.
XII. DATA QUALITY ASSURANCE
Original Probe Images will not be altered, changed, or modified in order to protect the integrity of the images. Any enhancements made to a Probe Image will be made on a copy, saved as a separate image, and should be documented in the Logs to indicate what enhancements were made, including the date and time of change.
The integrity of information depends on quality control and correction of recognized errors, which is key to mitigating the potential risk of poor-quality leads or inclusion of individuals as candidates.
Images in an Unsolved Image File should be validated periodically by the contributor to ensure that the criminal investigation remains active and that the image remains relevant to the investigation. If, in accordance with this policy, the contributor has not validated the need to retain the image in the Unsolved Image File, the image shall be immediately purged.
If a Participating Agency identifies malfunctions or deficiencies, including data that may be inaccurate or incomplete, incorrectly merged, out of date, or cannot be verified, it will notify the OCCL Biometric Program Administrator through electronic notification at [email protected]. The OCCL will investigate in a timely manner alleged errors, malfunctions or deficiencies, including reviewing the Repository for the data identified by the Participating Agency and edit or remove the data, as appropriate. A record will be kept of all requests for correction and the results of the investigation.
9 The OCCL will similarly use written or electronic notification to inform all Participating Agencies when information within the Repository is deleted or changed by the OCCL because the information is determined to be inaccurate or incomplete, incorrectly merged, out of date, or cannot be verified.
XIII.GOVERNANCE
The Biometric Program Administrator of the OCCL has primary responsibility for the operation of the ILJAOC’s FRS. The OCCL’s Director will designate a Biometric Program Administrator who will be responsible for the following:
x Overseeing and administering the FRS to ensure compliance with applicable laws, regulations, standards, and policy.
x Acting as the authorizing official for individual access to Facial Recognition information. x Ensuring that user accounts and access to use the FRS granted to Participating Agencies are maintained in a current and secure “need-to-know” status. x Reviewing supporting documentation of FRS requests and results for quality assurance purposes to ensure reliability and accuracy.
x Ensuring that random evaluations of user compliance with system requirements and the Participating Agencies’ Facial Recognition policies and applicable law are conducted and documented.
x Confirming, through random audits, that Facial Recognition information is removed in accordance with this policy (see, e.g., Sections XII and XV) and to ensure compliance with applicable laws, regulations, standards, and policy.
x Identifying any potential gaps in the FRS and working with the vendor to make improvements and mitigate potential risks of the FRS process.
x Regularly auditing the documentation reflecting those personnel (including any authorized members from Participating Agencies who may make Facial Recognition search requests) meet all prerequisites stated in this policy prior to being authorized to use the FRS.
OCCL reserves the right to establish the qualifications and number of personnel having access to the FRS and to suspend or withhold service and deny access to any Participating Agency or Participating Agency personnel violating this policy.
XIV. AUDITS
All uses of the FRS and search requests are subject to audit by the DOJ, ILJAOC, and OCCL.
Audits by the OCCL will occur on a monthly basis to ensure lawful access and accuracy of data, and to prevent misuse. The OCCL Biometric Program Administrator will obtain necessary data from Facial Recognition software vendor’s support desk to conduct a full and complete audit.
In the event of an audit, the Participating Agency is required to provide the necessary data to the OCCL Biometric Program Administrator, including all Logs and documentation required by this policy and documents that provide appropriate justification for using or requesting a Facial Recognition search.
Appropriate justification shall include a situation description and purpose for the search, including a
10 detailed account of circumstances amounting to reasonable suspicion, a case/complaint number, and a file class/crime type, if available.
In addition, Participating Agencies are encouraged conduct quarterly audits of their personnel access privileges to ensure inactive user accounts are disabled.
Participating Agencies’ access to the FRS may be terminated by the OCCL if their authorized users violate the terms of this policy. Additionally, authorized users may be subject to additional discipline from their respective agencies for violation of their agency-specific policies. Moreover, other law enforcement agencies, including but not limited to State or Federal agencies, may independently pursue violations of the law.
XV. SECURITY AND MAINTENANCE
(a) Security Safeguards
Participating Agencies shall implement the security safeguards specified in Attachment A to the Agreement. Any conflict between this policy and the Agreement, or any ambiguity in the terms and conditions of this policy, shall be resolved in favor of the more stringent meaning that complies and is consistent with federal and state laws and regulations. Security safeguards cover any type of medium (printed or electronic) or technology (e.g., physical servers, virtual machines, and mobile devices) used associated or used with the FRS.
The FRS utilizes secure internal and external security and privacy safeguards against network intrusions, such as strong multifactor authentication; encrypted communications; firewalls; and other reasonable physical technological, administrative, procedural, and personnel security measures to minimize the risks of unauthorized access to the system. Access to Facial Recognition information will be allowed only over secure networks. All results produced by Participating Agencies as a result of a Facial Recognition search should be disseminated by secured electronic means.
All Facial Recognition equipment, software, and components will be properly maintained in accordance with the manufacturer’s recommendations, including routine updates as appropriate. (b) Breach or Security Incident
All individuals with access to the FRS will report a suspected or confirmed Breach or Security Incident to the OCCL Biometric Program Administrator as soon as possible and without unreasonable delay, consistent with applicable laws, regulations, policies, and procedures. This includes a Breach or Security Incident in any medium or form, including paper, oral, and electronic.
Pursuant to the requirements and procedures set forth in Attachment A to the Agreement, Participating Agency shall promptly investigate such Breach or Security Incident. ILJAOC and OCCL shall have the right to participate in the investigation or conduct their own independent investigation, and Participating Agency shall cooperate fully in any such investigation. Following the assessment of a suspected or confirmed Breach or Security Incident and as soon as possible, OCCL, in consultation with Participating Agency, will determine whether it requires notification to an affected agency or individual, in accordance with applicable laws, regulations, policies, and procedures.
11 (c) Usernames and Passwords
Access to the FRS will be granted only to authorized users whose positions and job duties require such access and who have successfully complied with the requirements set forth by their Participating Agency. Usernames and passwords to the FRS are not transferable, must not be shared, and must be kept confidential.
If not enforced by the FR system, the Participating Agency must ensure that all users be issued a unique username for accessing Facial Recognition data. The username must be promptly disabled or deleted, or the password changed, upon the transfer or termination of an employee with knowledge of the password.
Passwords must be at least eight characters long and composed of characters from at least three of the following four groups from the standard keyboard:
x Upper case letters (A-Z)
x Lower case letters (a-z)
x Arabic numerals (0-9)
x Non-alphanumeric characters (punctuation, symbols)
Passwords may not be a dictionary word or proper name, the same as the username, identical to the previous ten (10) passwords, or displayed when entered. Passwords shall expire within a maximum of 90 calendar days. They must not be stored in a readable format on the computer. (d) Image Removal
Occasionally, images are sealed with a court order or removed for a variety of legitimate reasons (e.g., duplicate, test, inappropriate). Such images will be removed by OCCL during audits or when directed to do so by a valid court order issued by a competent court of law. The OCCL’s Biometric Program Administrator will obtain the necessary information from Facial Recognition software vendor’s support desk. and notify all Participating Agencies and users of any removed image pursuant to this section that was previously returned as a Candidate Image in an FRS as soon as practical to protect the integrity of any investigations. All court orders regarding images to be sealed or removed should be forwarded to OCCL’s Biometric Program Administrator.
12 Acknowledgement of Receipt
I have received a copy of the ILJAOC Facial Recognition System Policy. I agree that I have read, understand, and will comply with the Policy and any revisions.
Signature: ___________________________________________ Date: __________________________ Print Name: _________________________________ Print Title: _______________________________ Agency: _____________________________________________________________________________ CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3D.
Acceptance of Integrated Crime Center (ICC) Citywide Camera Network, CIP 7719
TO PREPARED BY
Honorable Mayor and City Council Members Bryan Hong, Assistant City Engineer
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Michael Ho, Public Works Director Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following actions:
1. Accept the Project as complete and authorize City Clerk to file and record Notice of Completion; and
2. Authorize the City Clerk to release the Performance Bond upon acceptance of the Warranty Bond, and release the Payment Bond upon further notification from the Public Works Department; and
3. Accept the Warranty Bond.
BACKGROUND/DISCUSSION
On August 19, 2025, the City Council awarded a Construction Contract (“Contract”) to International Line Builders, Inc., dba ILB Electric for $1,223,382.00, with a 10% construction contingency, for a total approved construction budget of $1,345,720.20 for the Police Department’s Integrated Crime Center (ICC) Citywide Camera Network, CIP 7719 (“Project”). On March 3, 2026, the City Council authorized a $200,000 increase to the construction contingency, resulting in a total approved construction budget of $1,545,720.20.
Work included installation of segments of new conduit, new fiber optic cable, new pull boxes, removal of existing copper signal interconnect cable, installation of new ethernet switches and fiber distribution units, installation of closed-circuit television (CCTV) cameras, integration, and all associated work along nine (9) primary corridors:
Associated Road, Berry Street, Birch Street, Brea Boulevard, Central Avenue, Kraemer Boulevard, Lambert Road, Rose Drive, and State College. See Attachment A for the Project Location Map for reference.
A Notice-to-Proceed was issued for a construction start date on October 6, 2025. On July 15, 2026, the Project was considered substantially complete. On July 20, 2026, ILB Electric signed the Notice of Acceptance for final payment and submitted all required Contract close-out documents. During the construction, there were two Contract Change Orders issued, which included the following items:
Procurement and configuration of three (3) new Layer 3 switches for the fiber network system Procurement of twenty-nine (29) new small form-factor pluggable (SFPs) to complete the fiber network system
Repair and replacement of damaged conduit in multiple locations discovered during construction, including site restoration
Bid quantity adjustments
The final Contract amount totaled $1,481,407.88 or approximately 4.2% under the total construction budget. The improvements have been completed, and staff recommends that the City Council approve the acceptance of work performed by ILB Electric and authorize the City Clerk to file the Notice of Completion with the County of Orange for recordation. See Attachment B for the Notice of Completion for reference.
COMMISSION/COMMITTEE RECOMMENDATION
The Finance Committee reviewed this item at their August 11, 2026 meeting and recommended for City Council approval. A question was asked to City staff requesting the number of cameras within the City and that were installed. Prior to this project, an inventory identified that there were 11 CCTV cameras. This Project installed 63 CCTV cameras, including 45 multi-sensor cameras and 18 pan-tilt-zoom (PTZ) cameras. Upon completion of this Project, there are now 74 CCTV cameras within the City.
FISCAL IMPACT/SUMMARY
The following is a summary of the final Construction Contract cost:
Original Construction Contract Amount $1,223,382.00
Approved Change Orders including Bid Quantity Adjustments $258,025.88 Final Construction Contract Amount $1,481,407.88
Approved Construction Budget with Contingency $1,545,720.20 Remaining Construction Budget +$64,312.32
As shown in the table, the final Contract amount for the Project is $1,481,407.88, which is less than the approved Construction Contract budget by $64,312.32. The source of funds for this Project is an exclusive grant from the Board of State and Community Corrections (BSCC). Therefore, there is no impact on the General Fund.
The Project completed the fiber optic network and camera improvements necessary to establish a citywide camera network for the Police Department’s ICC. ILB Electric completed the Project and fulfilled its contractual obligations to the City under the subject Contract. Furthermore, ILB Electric provided a Warranty Bond of 100% of the final Contract amount to guarantee the work for one year following the date the Notice of Completion is recorded by the County of Orange. Attachment C contains a copy of the Warranty Bond for reference.
Therefore, City staff recommends that City Council consider accepting the Project as complete, authorizing the City Clerk to file the Notice of Completion for recordation by the County of Orange (Attachment B), and accepting the Warranty Bond (Attachment C). Additionally, City staff recommends that City Council authorize the City Clerk to release the Performance Bond upon acceptance of the Warranty Bond and to release the Payment Bond upon further notification from the Public Works Department.
Attachments
Attachment A - Location Map.pdf
Attachment B - Notice of Completion.pdf
Attachment C - Warranty Bond.pdf
PROJECT 7719
FACILITY IMPROVEMENTS - BREA PD INTEGRATED
NOT TO SCALE
VICINITY MAP
CITYWIDE PROJECT
CRIME CENTER (ICC) CITYWIDE CAMERA NETWORK
CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3E.
Curtis Theatre Lighting Equipment Purchase
TO PREPARED BY
Honorable Mayor and City Council Members Anthony Godoy, Senior Management Analyst
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Sean L. Matlock, Interim Community Services Director Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following actions:
1. Approve the recommended vendor, Sound Productions, to provide lighting equipment to the Curtis Theatre, and;
2. Approve the purchase of lighting equipment for a total cost not-to-exceed $150,000.
BACKGROUND/DISCUSSION
The Curtis Theatre serves as a venue for the City of Brea's performing arts, which includes live theater, musical performances, youth programs, community rentals, self-produced productions, and internal meetings and events.
Given the Curtis Theatre's high level of year-round use, many technical systems are reaching the end of their service life, resulting in decreased reliability and higher maintenance demands.
To properly care for this facility, a three-year maintenance plan was established, ensuring timely replacement of necessary systems, equipment and stage elements. An approved decision package for the current fiscal year (FY 2026-27) identifies theater lighting as the next element to be replaced, with an appropriated budget of $175,000.
The bulk of this upgrade includes the replacement of ellipsoidal instruments, which are specific stage lighting fixtures that have not been replaced since 2004. Over the past two decades, technology has advanced considerably, making modernization both more cost-effective and increasingly important to meet the expectations of facility rental clients. Upgrading to modern LED-based lighting and control technologies will improve energy efficiency, reduce operational costs, and enhance performance capabilities. This improvement will ultimately strengthen customer service by providing patrons, program participants, and rental client with a safer, more dependable, and higher-quality experience.
In June 2026, City staff prepared a Request for Proposals (RFP) for qualified vendors to provide equipment and pricing information to replace the Curtis Theatre stage lighting. This RFP was posted to the City website and Public Purchase platform in accordance with standard procurement practice. Two equipment options were proposed with two different lighting console control options. The lower cost option, Ion XE20, was ultimately identified by staff as the optimal choice given the technical needs of the facility. Seven (7) proposals were received by June 30, 2026, and are listed below:
VENDOR NAME PROPOSAL
TOTAL
Sound Productions $140,743
AMP'D ENTERTAINMENT, INC. $152,252
EIDIM Group, Inc. Dba EIDIM AV
Technology $161,001
AKJOHNSTON $161,575
B & H Foto & Electronics Corp. $175,039
Adorama, Inc. $180,527
PCE *Disqualified $132,409
Staff reviewed the proposed equipment, pricing and references, ultimately identifying Sound Productions as the most cost-effective vendor, with all items as requested, full manufacturer warranty support, and a proposed delivery that aligns with timeline requirements. Although PCE provided the lowest cost proposal, Staff determined that the alternative equipment included in the vendor's proposal was not equivalent to the specified requirements, and the manufacturer's projected life expectancy on the equipment being proposed was significantly shorter. As a result, the vendor was disqualified from further consideration.
COMMISSION/COMMITTEE RECOMMENDATION
The vendor selection and equipment purchase were reviewed by the Finance Committee at the August 11, 2026, meeting and were recommended for approval by the City Council.
FISCAL IMPACT/SUMMARY
There is no additional fiscal impact from selecting Sound Productions as the approved vendor and proceeding with the purchase of lighting equipment as these funds have already been appropriated in the Fiscal Year 2026-67 General Fund (110) operating budget. The authorized purchase amount not-to-exceed $150,000 allows for contingency should any unforeseen costs arise above the vendor's proposal amount of $140,743.
Attachments
SoundPro Proposal.pdf
RESPONSE TO REQUEST FOR QUOTES
Theatre Stage Lighting Equipment
RFQ No. 2026.06.23.01
SUBMITTED TO
City of Brea
Brea, California
SUBMITTED BY
Sound Productions, LLC (SoundPro)
6631 N Belt Line Rd #100 | Irving, TX 75063
979-472-4184 | [email protected] | www.soundpro.com Date Submitted: June 30, 2026
Quote Deadline: June 30, 2026 by 5:00 PM PST
TABLE OF CONTENTS
RFQ No. 2026.06.23.01 | Theatre Stage Lighting Equipment SECTION 1 Introduction
Title Page
Table of Contents
Letter of Transmittal
SECTION 2 Qualifications
C.i. Background
C.ii. Experience
C.iii. Qualifications
C.iv. Understanding
SECTION 3 Technical
D.i. Approach
D.ii. Proposed Schedule
SECTION 4 Cost
E.i. Pricing (Standard Form I)
SECTION 5 Forms
Standard Form A: Non-Collusion Affidavit Form
Standard Form B: References Form
Standard Form C: Subcontractors List
Standard Form D: Statement of Compliance or Exceptions Form Standard Form E: Status of Past and Present Contracts Form Standard Form F: Insurance Commitment Form
Standard Form G: Proposer Qualifications Response Form
Standard Form H: Firm Quote Form
Standard Form I: Price Form
June 30, 2026
City of Brea
1 Civic Center Circle
Brea, CA 92821
RE: Response to RFQ No. 2026.06.23.01 | Theatre Stage Lighting Equipment Dear City of Brea Procurement Team,
On behalf of Sound Productions, LLC (SoundPro), I am pleased to submit this quote in response to RFQ No. 2026.06.23.01 for Theatre Stage Lighting Equipment. We understand that the City of Brea is seeking a qualified supplier to furnish professional-grade theatrical lighting equipment for its theatre facility, and we are confident that SoundPro is exceptionally well positioned to meet those needs.
Founded in 1972 and headquartered in Irving, Texas, SoundPro has spent more than 50 years building a reputation as one of the most trusted Pro Audio, Video, and Lighting distributors in the country. We are authorized to sell over 500 professional brands, including ETC Lighting and Chauvet, and we hold national distributor relationships with the manufacturers specified in this RFQ. This year alone, Sound Productions has facilitated over $1 million in direct AV equipment sales to K-12 schools, universities, and local city governments. We know how to work within public procurement requirements and how to see a project through from purchase order to final delivery without disruption.
Our team brings deep product knowledge to every engagement. Austin Bell, our designated project manager for this bid, is an AV-certified sales professional with over 10 years of experience supporting government and education procurement projects. Beyond our internal expertise, we regularly coordinate with manufacturer representatives to ensure our clients have access to the deepest possible technical resources at every stage of a project. When questions arise that go beyond standard support, we bring the right people to the table.
We have prepared this quote in full compliance with the requirements of RFQ No. 2026.06.23.01, including all specified documentation. All pricing submitted is all-inclusive and firm. We commit to meeting the delivery timeline of six weeks from purchase order issuance, and we stand behind every product we supply with the full manufacturer warranty as required. SoundPro has no pending litigation, no contract terminations for cause, and no governmental enforcement actions in the past five years.
This quote represents a firm and irrevocable offer, binding for 120 days from the quote deadline of June 30, 2026. I am authorized to submit this quote and to bind Sound Productions, LLC to its terms. We welcome the opportunity to discuss our qualifications further and look forward to the possibility of serving the City of Brea.
Sincerely,
Austin Bell
Business Development Manager
Sound Productions, LLC (SoundPro)
6631 N Belt Line Rd #100, Irving, TX 75063
972-550-0001 | [email protected]
SECTION 2: QUALIFICATIONS
C.i. Background
Company Legal Name: Sound Productions, LLC
Brand Name: SoundPro
Address: 6631 N Belt Line Rd #100, Irving, TX 75063
Phone: 972-550-0001
Email: [email protected]
Website: www.soundpro.com
Prior Company Names / Years in Business
Sound Productions, LLC has operated under the SoundPro brand since its founding in 1972. The company was formally established in 1973 as Sound Productions, LLC and has operated continuously under that legal name without merger or acquisition. We have remained independently owned and operated for over 50 years.
Organizational Structure
Sound Productions, LLC is organized as a Limited Liability Company (LLC) with S-Corporation tax election, headquartered in Irving, Texas.
Principal Owner(s)
CEO / Principal Owner: Joshua Curlett
Person(s) Authorized to Make Commitments
Authorized Representative: Austin Bell, Business Development Manager Pending Litigation / Contracts Terminated for Cause / Governmental Enforcement Actions Sound Productions, LLC has no pending litigation, no contracts terminated for cause, and no governmental enforcement actions within the past five (5) years.
Special Recognition / Awards
2026 Stellar Service Award. 2018 Chauvet Dealer of the Year.
SECTION 2: QUALIFICATIONS
C.ii. Experience
Summary of Experience with Similar Work
Since 1973, Sound Productions, LLC has maintained a consistent history of supplying professional Audio, Video, and Lighting equipment to public agencies, educational institutions, and commercial venues. This year alone, SoundPro has completed over $1 million in direct AV equipment sales to K-12 schools, universities, and local city governments, spanning equipment procurement, fulfillment, and post-sale support.
SoundPro is a national authorized distributor for over 500 professional AVL brands. For this specific RFQ, we hold authorized distributor relationships with ETC Lighting and Chauvet, two of the primary manufacturers specified in the equipment list. Our team has extensive hands-on experience specifying, quoting, and delivering theatrical and architectural lighting systems of similar scope and complexity.
Familiarity with State and Federal Procedures
SoundPro is thoroughly familiar with public procurement procedures at the state and federal level. Our team regularly navigates the full procurement lifecycle on behalf of government and institutional clients, from initial quote through purchase order issuance, delivery coordination, and final project closeout. We understand the documentation requirements, compliance expectations, and timelines that public agencies require, and we have built our internal processes to align with those standards.
Experience Working with Public Agencies
Public agencies represent a significant and growing portion of SoundPro's business. We have supplied equipment to city governments, school districts, and public universities across Texas and surrounding states. Our team understands the unique considerations that come with public procurement, including the need for competitive, all-inclusive pricing, transparent documentation, and reliable delivery commitments.
Working Relationships with Current Business References
SoundPro maintains open, ongoing communication with all of our government and education clients.
Our customer service does not end at order placement. We stay engaged throughout the full lifecycle of every project, available to support questions around delivery, installation coordination, or manufacturer warranty claims. Our goal with every public agency relationship is to become a trusted, go-to resource for all of their AVL equipment needs.
Current business references are provided in Standard Form B.
SECTION 2: QUALIFICATIONS
C.iii. Qualifications
Financial Responsibility
Sound Productions, LLC is a financially stable company with over 50 years of continuous operation. We maintain the financial capacity to procure, stock, and deliver the equipment specified in this RFQ within the required timeframe without reliance on advance payment.
Demonstrated Technical Ability
SoundPro holds authorized distributor status for the lighting manufacturers specified in this RFQ. Our sales team includes AV-certified professionals with deep product knowledge across theatrical and live production lighting systems. Where technical questions exceed our internal expertise, we actively coordinate with manufacturer representatives to ensure our clients receive accurate, manufacturerbacked guidance.
Capability of Developing Innovative or Advanced Techniques When appropriate, SoundPro proactively identifies opportunities to optimize equipment specifications for our clients, working with manufacturer reps to evaluate alternative configurations, upgraded features, or cost-saving approaches without sacrificing performance requirements.
Special Qualifications, Training, and Credentials
SoundPro is a National ETC Authorized Distributor and a National Chauvet Authorized Distributor.
These authorizations reflect direct manufacturer relationships and the technical training required to properly support these product lines.
Additionally, SoundPro offers an optional but highly recommended on-site commissioning service through a certified ETC lighting technician, who can calibrate the lighting console and provide hands-on guidance to the venue's technical directors upon delivery.
Staff Assigned to This Project
Name Title / Role Qualifications / Experience
Austin Bell Business Development
Manager / Project
Manager
AV-Certified Sales Professional; 10+
years of experience in government and
education procurement. Designated
project manager for this engagement.
Designated Project Manager
Project Manager: Austin Bell, Business Development Manager
SECTION 2: QUALIFICATIONS
C.iv. Understanding
Understanding of the Work to Be Done
SoundPro understands that the City of Brea is seeking a qualified vendor to supply professional theatrical stage lighting equipment for its theatre facility, as specified in Exhibit B of this RFQ. Our role is to furnish all equipment in accordance with the product specifications outlined in Part III, deliver within six weeks of purchase order issuance, and ensure all items arrive new, unused, in original manufacturer packaging, and in undamaged condition.
We further understand that all pricing must be all-inclusive (covering equipment, transportation, and any applicable fees or taxes), that proposed equipment must meet or exceed minimum specifications, and that any 'or equal' substitutions must be accompanied by full technical documentation demonstrating equivalency. We have no proposed substitutions for the specified items in this response.
Issues Requiring Special Consideration
One area that merits attention is system commissioning. The specified lighting console and control equipment require calibration and setup after delivery to function at full capacity. SoundPro offers an optional but highly recommended on-site commissioning service provided by a certified ETC lighting technician. This technician would calibrate the light board on-site and provide guidance to the venue's technical directors on system operation. We have included separate optional pricing for this service in our price form. While the City is not required to add this service, we strongly recommend considering it to maximize the value of this equipment investment.
Unique Approaches and Strengths
What sets SoundPro apart in situations like this is our manufacturer relationships. We are not simply a reseller. As a national authorized distributor for ETC and Chauvet, we have direct lines to manufacturer support, technical teams, and warranty services that independent resellers do not. If a technical question arises before, during, or after delivery, we can get the right person on the phone fast.
We also bring a hands-on, relationship-first approach to public agency accounts. Our team stays engaged beyond order placement, and we welcome ongoing communication throughout the project lifecycle. The City of Brea will have a dedicated point of contact in Austin Bell from first contact through final delivery and beyond.
SECTION 3: TECHNICAL
D.i. Approach
Approach to Successful Performance
SoundPro's approach to fulfilling this RFQ is straightforward and built around three priorities: accuracy, speed, and communication.
Upon receiving a purchase order from the City of Brea, Austin Bell will immediately confirm the order with our procurement team and initiate the fulfillment process with the relevant manufacturer(s). Given our authorized distributor status with the specified brands, we have established priority fulfillment channels that support our commitment to delivery within six weeks of PO issuance.
Every item will be verified against the RFQ specifications before shipment is confirmed. We will source only new, current-production equipment in original manufacturer packaging. If any item presents a lead time concern, the City will be notified immediately with a clear timeline and, where applicable, an approved equal alternative for consideration.
Methodology for Key Tasks
Order Confirmation and Processing
Upon receipt of PO, Austin Bell reviews the complete order against the price form and specification sheet to confirm accuracy. Any discrepancies are resolved within 24 hours of PO receipt.
Procurement and Fulfillment
Orders are placed with manufacturers or drawn from in-stock inventory. SoundPro's Irving, TX warehouse allows for same-day shipping on in-stock items. Items requiring manufacturer lead time will be tracked and communicated to the City on a weekly basis.
Delivery Coordination
SoundPro coordinates freight and delivery logistics directly. All equipment is shipped in original manufacturer packaging. Partial shipments, if required, will be clearly identified with a packing list and advance notice to the City.
Post-Delivery Support
After delivery, Austin Bell remains the City's primary point of contact for any warranty claims, damaged item resolution, or technical support coordination with the manufacturer. If the City elects to add the optional on-site commissioning service, a certified ETC technician will be scheduled in coordination with the City's technical staff.
Team Member Responsibilities
Austin Bell, Business Development Manager: Primary point of contact, order management, delivery coordination, client communication
Sound Productions Business Development Department: Internal procurement support and logistics coordination
ETC Certified Technician (if commissioning selected): On-site calibration and system orientation SECTION 4: COST
E.i. Pricing
Pricing for all specified equipment is provided in Standard Form I (Price Form), submitted as a separate attachment to this quote in accordance with RFQ No. 2026.06.23.01 instructions.
All pricing is all-inclusive as required, covering equipment, transportation, and any applicable costs necessary to comply with the requirements of this RFQ. No additional fees, charges, or taxes have been excluded from the submitted pricing.
Console Options
Per the RFQ instructions, Item No. 9 (Option 1) and Item No. 10 (Option 2) represent alternative lighting console options. Separate pricing for each option has been provided on separate tabs within Standard Form I, as directed.
Optional Commissioning Service
SoundPro has included optional separate pricing for an on-site commissioning service performed by a certified ETC lighting technician. This service includes calibration of the lighting console and hands-on system orientation for the venue's technical directors. This item is optional and has been clearly identified as such on the price form.
Pricing Validity
All pricing is firm and irrevocable for 120 days from the quote deadline of June 30, 2026, per the terms of this RFQ.
STANDARD FORM I - PRICE FORM
Item Quantity Unit Cost Total Cost Notes
4 Port DMX Optical Splitter 3 140.00 $ $ As Specified 420.00 2 Port ETC Response Mk2 Gateway 1 843.00 $ $ As Specified 843.00 ETC Dual 20a Relay Mod - R20AF 8 474.00 $ $ As Specified 3,792.00 DMX/Tru1 Combo Cables (10') 3 75.00 $ $ As Specified 225.00 DMX/Tru1 Combo Cables (6') 12 80.00 $ $ As Specified 960.00 Chauvet Ovation Rêve E-3 48 1,450.00 $ $ As Specified 69,600.00 Chauvet Maverick Force X Profile 9 4,270.00 $ $ As Specified 38,430.00 Mega-Claw/Clamp 18 50.00 $ $ As Specified 900.00
10. ETC Ion Xe 20 12k 1 15,450.00 $ $ As Specified 15,450.00 $ 130,620.00
Taxes (7.75%) $ 10,123.05
Shipping $ -
Total $ 140,743.05
"Or Equal" Justifications
Additional Warranty Information
Use the format here to propose all budgeted items. If your organization utilizes alternative budgeting methods, you may attach those here as supporting documentation. Your cost proposal should account for equipment, delivery, taxes, and any other associated costs that would be incurred should you be awarded this contract. You may add additional rows and/or columns as needed.
Subtoal
Provide a detailed description and justification of each of the proposed line-items that an "Or Equal" item is proposed. Explain how the quote meets the objectives and fulfills deliverables outlined throughout this RFQ. Supporting documentation should be included as needed.
Provide warranty information for any "Or Equal" proposed items.
CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3F.
Approval of the City of Brea Master Employee Pay Schedule to Comply with CalPERS Regulations
TO PREPARED BY
Honorable Mayor and City Council Members Candice Fisher, Senior Human Resources Analyst
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Kristin Webster, City Manager Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following action:
1. Adopt Resolution No. 2026-60 establishing the updated City of Brea Master Employee Pay Schedule, confirming the pay rates/ranges as of January 3, 2026, July 18, 2026, and January 2, 2027, for all City of Brea established positions in order to comply with CalPERS regulations.
BACKGROUND/DISCUSSION
The City Council approves all salary schedules, which include classification titles and pay rates/ranges, at the time a Memorandum of Understanding (MOU) for each bargaining unit is approved; when updates to the Employment and Benefit Policy for Unrepresented Employees are approved; or when specific wage and classification title adjustments are needed. The City has a long-standing practice of posting these approved salary schedules on the City website, www.cityofbrea.gov and the City’s internal website (intranet), as well as having copies available in the Human Resources Division.
In addition, the City Council approves the employment agreements for the City Manager and the Executive Compensation Plan for department directors, which include salaries. The City Manager and Executives’ salaries are also listed on the City’s website. The amount of monthly compensation the City Council receives is addressed in the Brea Municipal Code, Section 2.00.130, City Council Salaries, and is set in accordance with California Government Code Section 36516b.
The California Public Employees’ Retirement System (CalPERS) requires that the City Council regularly adopt a master pay schedule listing all pay rates/ranges for all City of Brea established positions, including the City Council and City Manager. The City has updated and added classifications in addition to approving a new MOU, which has and will result in changes to the wages of certain positions.
CalPERS requires that only compensation earned as defined under Government Code Section 20636 and corresponding regulations can be reported to CalPERS and considered in calculating retirement benefits. In order to determine the amount of compensation earnable, a member’s pay rate is limited to the amount identified on a publicly available pay schedule. Per CCR Section 570.5, a pay schedule, among other things, must:
Be duly approved and adopted by the employer's governing body in accordance with the requirements of applicable public meetings laws;
Identify the position title for every employee position; Show the pay rate as a single amount or multiple amounts within a range for each identified position; Indicate the time base, such as hourly, daily, bi-weekly, monthly, bi-monthly, or annually; Be posted at the office of the employer or immediately accessible and available for public review from the employer during normal business hours or posted on the employer's Internet website; Indicate an effective date and date of any revisions;
Be retained by the employer and available for public inspection for not less than five years; and Does not reference another document in lieu of disclosing the pay rate.
When new MOU contracts are negotiated or when wage rate/range adjustments or classification title changes are approved, a staff report amending this master pay schedule is prepared for City Council consideration. The most recent MOU negotiated was with the Brea Firefighters' Association, which became effective on July 1, 2026.
In an effort to comply with CalPERS regulations, staff recommends that the City adopt the attached resolution establishing a City of Brea Master Employee Pay Schedule confirming the pay rates/ranges for all City of Brea established positions as of January 3, 2026, July 18, 2026, and January 2, 2027.
FISCAL IMPACT/SUMMARY
There is no fiscal impact associated with the adoption of the City of Brea Master Employee Pay Schedule.
Attachments
Resolution No. 2026-XXX - Establishing CalPERS Master Employee Salary Schedule as of January 3, 2026, July 18, 2026 and January 2, 2027.pdf RESO NO. 2026- ___
August 18, 2026
RESOLUTION NO. 2026 -_______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BREA ESTABLISHING AND APPROVING A CITY OF BREA
MASTER EMPLOYEE PAY SCHEDULE CONFIRMING THE
PAY RATES/RANGES FOR ALL CITY OF BREA
ESTABLISHED POSITIONS.
A. RECITALS:
(i) Pursuant to the Brea City Code the City Council shall approve the salary pay rates and ranges for each classified position and may update from time to time as deemed necessary.;
(ii) The California Public Employees’ Retirement Law, Section 570.5 of the California Code of Regulations Title 2, requires the City of Brea to publish Pay Rates and Ranges on the City’s Internet site and the City Council to approve the Pay Rates and Ranges in its entirety each time a modification is made.; (iii) City staff recommends that the City of Brea update the City of Brea Master Employee Pay Schedule confirming the pay rates/ranges for all City of Brea established positions..
(iv) The City Council deems it to be in the best interest of the City to adopt such Recommendation.
B. RESOLUTION
NOW, THEREFORE, be it found, determined and resolved by the City Council of the City of Brea, as follows:
1. The City of Brea Master Employee Pay Schedule confirming the pay RESO NO. 2026- ___
August 18, 2026
rates/ranges for all City of Brea established positions as of January 3, 2026, July 18, 2026, and January 2, 2027, (Exhibit A), is approved.
APPROVED and ADOPTED THIS 18th DAY OF AUGUST 2026.
______________________________
Cecilia Hupp, Mayor
ATTEST: __________________________
Victoria Popescu, City Clerk
I, Victoria Popescu, City Clerk of the City of Brea, do hereby certify that the foregoing resolution was adopted at a regular meeting of the City Council of the City of Brea, held on the 18th day of August, 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAINED: COUNCILMEMBERS:
DATED: ______________________________
_____________________________________
Victoria Popescu, City Clerk
RESO NO. 2026- ___
August 18, 2026
EXHIBIT A
CITY OF BREA SALARY SCHEDULE
Section 1: Regular Full-Time ClassificationsSection 2: Part-Time/Temporary ClassificationsSection 3: Council Members and Elected OfficialsCurrent Revision: As of 01/03/2026, effective 07/18/2026 and 01/02/2027 SECTION 1
Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
B49 ACCOUNTANT I BCEA 07/05/2025 $6,603.81 $6,768.90 $6,938.13 $7,111.58 $7,289.37 $7,471.60 $7,658.39 $7,849.85 $8,046.10 $8,247.26 $8,453.44A31 ACCOUNTANT II APEA 07/05/2025 $6,886.65 $7,058.82 $7,235.29 $7,416.17 $7,601.57 $7,791.61 $7,986.40 $8,186.06 $8,390.71 $8,600.48 $8,815.50B03 ACCOUNTING TECH I BCEA 07/05/2025 $4,420.83 $4,531.36 $4,644.64 $4,760.76 $4,879.78 $5,001.77 $5,126.82 $5,254.99 $5,386.36 $5,521.02 $5,659.04B02 ACCOUNTING TECH II BCEA 07/05/2025 $4,863.13 $4,984.71 $5,109.33 $5,237.06 $5,367.98 $5,502.19 $5,639.74 $5,780.74 $5,925.25 $6,073.39 $6,225.22B07 ADMIN CLERK I BCEA 07/05/2025 $3,788.28 $3,882.99 $3,980.06 $4,079.56 $4,181.55 $4,286.09 $4,393.24 $4,503.08 $4,615.65 $4,731.04 $4,849.32B06 ADMIN CLERK II BCEA 07/05/2025 $4,165.52 $4,269.66 $4,376.39 $4,485.80 $4,597.95 $4,712.90 $4,830.72 $4,951.50 $5,075.28 $5,202.17 $5,332.22E05 ADMIN SVCS DIR N/A 07/20/2024 $17,372.00 $20,846.46B05 ADMINISTRATIVE ASSISTANT BCEA 07/05/2025 $4,605.75 $4,720.89 $4,838.91 $4,959.89 $5,083.89 $5,210.98 $5,341.26 $5,474.80 $5,611.66 $5,751.96 $5,895.75 UR2 AMBULANCE OPERATOR (NS) N/A 05/21/2024 $3,293.33 $4,215.75 A38 ASSISTANT CITY ENG APEA 07/05/2025 $11,233.70 $11,514.54 $11,802.41 $12,097.46 $12,399.91 $12,709.90 $13,027.65 $13,353.35 $13,687.18 $14,029.36 $14,380.10E01 ASSISTANT CITY MGR / DIR N/A 07/20/2024 $20,412.68 $24,495.29B46 ASSISTANT ENGINEER BCEA 07/05/2025 $7,348.47 $7,532.19 $7,720.50 $7,913.51 $8,111.34 $8,314.13 $8,521.98 $8,735.03 $8,953.40 $9,177.24 $9,406.67B10 ASSISTANT PLANNER BCEA 07/05/2025 $6,540.62 $6,704.13 $6,871.74 $7,043.53 $7,219.62 $7,400.11 $7,585.11 $7,774.73 $7,969.10 $8,168.33 $8,372.54A02 ASSOCIATE ENGINEER APEA 07/05/2025 $8,684.10 $8,901.21 $9,123.74 $9,351.83 $9,585.64 $9,825.27 $10,070.90 $10,322.67 $10,580.74 $10,845.25 $11,116.39A04 ASSOCIATE PLANNER APEA 07/05/2025 $7,510.28 $7,698.04 $7,890.49 $8,087.75 $8,289.95 $8,497.19 $8,709.63 $8,927.37 $9,150.55 $9,379.31 $9,613.79B28 ASST TO THE CITY CLERK BCEA 07/05/2025 $4,766.88 $4,886.05 $5,008.20 $5,133.41 $5,261.75 $5,393.29 $5,528.12 $5,666.32 $5,807.98 $5,953.18 $6,102.01A25 ASST TO THE CITY MGR APEA 07/05/2025 $9,253.31 $9,484.64 $9,721.75 $9,964.79 $10,213.91 $10,469.26 $10,730.99 $10,999.26 $11,274.25 $11,556.11 $11,845.01A58 BLDG & FAC ADMIN APEA 07/05/2025 $8,093.47 $8,295.80 $8,503.20 $8,715.78 $8,933.68 $9,157.02 $9,385.94 $9,620.59 $9,861.11 $10,107.64 $10,360.34 M01 BLDG & SAFETY MGR MGMT NS 07/05/2025 $12,299.00 $12,606.47 $12,921.64 $13,244.68 $13,575.80 $13,915.19 $14,263.07 $14,619.65 $14,985.14 $15,359.76 $15,743.76 B04 BUILDING MAINT TECH BCEA 07/05/2025 $5,412.92 $5,548.25 $5,686.95 $5,829.13 $5,974.85 $6,124.23 $6,277.34 $6,434.26 $6,595.12 $6,759.99 $6,928.99 M23 BUILDING OFFICIAL MGMT NS 07/05/2025 $10,105.19 $10,357.82 $10,616.77 $10,882.18 $11,154.24 $11,433.10 $11,718.92 $12,011.90 $12,312.20 $12,620.01 $12,935.51 B37 BUSINESS OUTREACH SP BCEA 07/05/2025 $5,251.90 $5,383.20 $5,517.77 $5,655.72 $5,797.12 $5,942.05 $6,090.60 $6,242.86 $6,398.93 $6,558.90 $6,722.87B69 BUYER BCEA 07/05/2025 $5,543.88 $5,682.48 $5,824.54 $5,970.15 $6,119.41 $6,272.39 $6,429.20 $6,589.93 $6,754.68 $6,923.54 $7,096.63 M16 CITY CLERK MGMT NS 07/05/2025 $11,661.84 $11,953.38 $12,252.22 $12,558.52 $12,872.48 $13,194.30 $13,524.15 $13,862.26 $14,208.81 $14,564.04 $14,928.14 B66 CITY CLERK SPECIALIST BCEA 07/05/2025 $4,165.52 $4,269.66 $4,376.39 $4,485.80 $4,597.95 $4,712.90 $4,830.72 $4,951.50 $5,075.28 $5,202.17 $5,332.22 M02 CITY ENGINEER MGMT NS 07/05/2025 $12,802.08 $13,122.13 $13,450.19 $13,786.44 $14,131.10 $14,484.38 $14,846.49 $15,217.66 $15,598.09 $15,988.05 $16,387.75 3 CITY MANAGER N/A 03/29/2025 $28,424.25
M03 CITY PLANNER MGMT NS 07/05/2025 $12,263.79 $12,570.39 $12,884.65 $13,206.77 $13,536.95 $13,875.37 $14,222.26 $14,577.82 $14,942.26 $15,315.81 $15,698.71 N10 CIVILIAN INVESTIGATOR POLICE 01/03/2026 $6,352.55 $6,511.14 $6,674.62 $6,842.15 $7,012.94 $7,187.79 $7,367.53 $7,552.15 $7,740.83 $7,934.39 $8,132.83 B24 CODE ENFORCE OFFICER BCEA 07/05/2025 $6,556.39 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72B13 COMBO INSPECTOR I BCEA 07/05/2025 $5,564.83 $5,703.95 $5,846.55 $5,992.71 $6,142.53 $6,296.09 $6,453.50 $6,614.84 $6,780.21 $6,949.72 $7,123.47B12 COMBO INSPECTOR II BCEA 07/05/2025 $6,556.39 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 M04 COMM & MKTG MANAGER MGMT NS 07/05/2025 $10,526.60 $10,789.77 $11,059.51 $11,336.00 $11,619.40 $11,909.89 $12,207.64 $12,512.83 $12,825.64 $13,146.29 $13,474.95 A18 COMM & MKTNG ANALYST APEA 07/05/2025 $8,046.76 $8,247.93 $8,454.12 $8,665.47 $8,882.11 $9,104.17 $9,331.77 $9,565.06 $9,804.19 $10,049.29 $10,300.52 M10 COMM DEV MANAGER MGMT NS 07/05/2025 $10,899.92 $11,172.42 $11,451.74 $11,738.03 $12,031.49 $12,332.27 $12,640.58 $12,956.59 $13,280.51 $13,612.51 $13,952.83 A08 COMM SV SPECIALIST I APEA 07/05/2025 $5,219.35 $5,349.83 $5,483.58 $5,620.67 $5,761.19 $5,905.21 $6,052.85 $6,204.17 $6,359.27 $6,518.25 $6,681.21
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 3, 2026 - REGULAR FULL-TIME CLASSIFICATIONS Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 3, 2026 - REGULAR FULL-TIME CLASSIFICATIONS A07 COMM SV SPECIALST II APEA 07/05/2025 $5,893.16 $6,040.49 $6,191.50 $6,346.28 $6,504.94 $6,667.57 $6,834.25 $7,005.11 $7,180.24 $7,359.74 $7,543.73 M05 COMM SVC MANAGER MGMT NS 07/05/2025 $10,227.28 $10,482.96 $10,745.03 $11,013.66 $11,289.01 $11,571.23 $11,860.50 $12,157.01 $12,460.94 $12,772.46 $13,091.77 A06 COMM SVS SUPERVISOR APEA 07/05/2025 $7,829.65 $8,025.40 $8,226.04 $8,431.69 $8,642.48 $8,858.55 $9,080.01 $9,307.01 $9,539.69 $9,778.18 $10,022.63B60 COMM. DEV SPEC. BCEA 07/05/2025 $4,836.83 $4,957.76 $5,081.70 $5,208.74 $5,338.96 $5,472.43 $5,609.24 $5,749.47 $5,893.21 $6,040.54 $6,191.55 N01 COMM. SUPERVISOR POLICE 01/03/2026 $7,942.77 $8,141.06 $8,345.45 $8,554.93 $8,768.47 $8,987.10 $9,211.83 $9,442.65 $9,678.57 $9,920.58 $10,168.70 E07 COMMUNITY DEV DIR N/A 07/20/2024 $16,252.19 $19,502.68E03 COMMUNITY SVCS DIR N/A 07/20/2024 $15,408.52 $18,490.28 N14 CRIME ANALYST POLICE 01/03/2026 $7,076.15 $7,252.80 $7,434.89 $7,621.51 $7,811.76 $8,006.53 $8,206.74 $8,412.38 $8,622.56 $8,838.17 $9,059.21N11 CRIME SCENE INVSTGTR POLICE 01/03/2026 $6,837.58 $7,008.27 $7,184.22 $7,364.55 $7,548.38 $7,736.59 $7,930.05 $8,128.76 $8,331.84 $8,540.18 $8,753.78 A11 DEPUTY CITY CLERK/REC SUP APEA 07/05/2025 $7,211.45 $7,391.74 $7,576.53 $7,765.95 $7,960.09 $8,159.10 $8,363.08 $8,572.16 $8,786.46 $9,006.12 $9,231.27E09 DEPUTY CITY MANAGER / DIR N/A 07/20/2024 $19,457.00 $23,348.00 M21 DEPUTY DIR OF ADMIN SVS MGMT NS 07/05/2025 $14,257.51 $14,613.95 $14,979.30 $15,353.78 $15,737.63 $16,131.07 $16,534.34 $16,947.70 $17,371.40 $17,805.68 $18,250.82M24 DEPUTY DIR OF COMM DEV MGMT NS 07/05/2025 $13,339.50 $13,672.98 $14,014.81 $14,365.18 $14,724.31 $15,092.42 $15,469.73 $15,856.47 $16,252.88 $16,659.20 $17,075.68M22 DEPUTY DIR OF COMM SVS MGMT NS 07/05/2025 $12,646.24 $12,962.40 $13,286.46 $13,618.62 $13,959.09 $14,308.06 $14,665.77 $15,032.41 $15,408.22 $15,793.42 $16,188.26M25 DEPUTY DIR OF PUBLIC WORKS MGMT NS 07/05/2025 $13,492.30 $13,829.61 $14,175.35 $14,529.73 $14,892.97 $15,265.30 $15,646.93 $16,037.25 $16,439.06 $16,850.03 $17,271.28 A63 DEPUTY FIRE MARSHAL APEA 07/05/2025 $7,907.48 $8,105.17 $8,307.80 $8,515.49 $8,728.39 $8,946.59 $9,170.26 $9,399.52 $9,634.51 $9,875.38 $10,122.26B27 DUPLICATING TECH I BCEA 07/05/2025 $4,011.41 $4,111.70 $4,214.49 $4,319.85 $4,427.85 $4,538.54 $4,652.00 $4,768.30 $4,887.50 $5,009.69 $5,134.93B26 DUPLICATING TECH II BCEA 07/05/2025 $5,011.92 $5,137.22 $5,265.65 $5,397.29 $5,532.22 $5,670.53 $5,812.30 $5,957.61 $6,106.55 $6,259.22 $6,415.70B56 ECON DEV ANALYST I BCEA 07/05/2025 $6,470.89 $6,632.66 $6,798.48 $6,968.45 $7,142.66 $7,321.23 $7,504.26 $7,691.87 $7,884.16 $8,081.27 $8,283.30A21 ECON DEV ANALYST II APEA 07/05/2025 $7,175.80 $7,355.20 $7,539.07 $7,727.55 $7,920.74 $8,118.76 $8,321.73 $8,529.77 $8,743.02 $8,961.59 $9,185.63A19 EMERGENCY PREP COORD APEA 07/05/2025 $8,045.74 $8,246.89 $8,453.06 $8,664.39 $8,881.01 $9,103.03 $9,330.61 $9,563.87 $9,802.96 $10,048.04 $10,299.24 M18 EMS MANAGER MGMT NS 07/05/2025 $8,921.69 $9,144.74 $9,373.35 $9,607.68 $9,847.87 $10,094.06 $10,346.42 $10,605.08 $10,870.20 $11,141.96 $11,420.51 B31 ENGINEERING TECH I BCEA 07/05/2025 $5,000.00 $5,125.00 $5,253.12 $5,384.45 $5,519.06 $5,657.04 $5,798.47 $5,943.43 $6,092.02 $6,244.32 $6,400.43B30 ENGINEERING TECH II BCEA 07/05/2025 $6,001.85 $6,151.89 $6,305.69 $6,463.33 $6,624.92 $6,790.55 $6,960.31 $7,134.32 $7,312.68 $7,495.49 $7,682.88B09 ENVIR SERVS INSPECT BCEA 07/05/2025 $6,607.02 $6,772.19 $6,941.50 $7,115.04 $7,292.92 $7,475.25 $7,662.13 $7,853.68 $8,050.02 $8,251.28 $8,457.56A20 ENVIRON SERVS COOR APEA 07/05/2025 $8,691.81 $8,909.10 $9,131.82 $9,360.12 $9,594.12 $9,833.97 $10,079.82 $10,331.82 $10,590.12 $10,854.87 $11,126.24A12 EXECUTIVE ASSISTANT APEA 07/05/2025 $5,698.32 $5,840.78 $5,986.80 $6,136.47 $6,289.89 $6,447.13 $6,608.31 $6,773.52 $6,942.86 $7,116.43 $7,294.35 M06 FINANCIAL SVC MGR MGMT NS 07/05/2025 $11,264.29 $11,545.89 $11,834.54 $12,130.41 $12,433.66 $12,744.51 $13,063.12 $13,389.69 $13,724.44 $14,067.56 $14,419.24 FM1 FIRE BATTALION CHIEF FIRE MGMT 01/03/2026 $13,057.98 $13,383.97 $13,719.99 $14,064.37 $14,415.44 $14,774.86 $15,144.32 $15,523.80 $15,911.65 $16,309.52 $16,717.42 F20 FIRE CAPTAIN FIRE 07/05/2025 $10,134.63 $10,387.64 $10,648.43 $10,915.71 $11,188.18 $11,467.14 $11,753.88 $12,048.41 $12,349.43 $12,658.23 $12,974.81 ES1 FIRE CHIEF N/A 07/20/2024 $18,849.39 $22,619.33
FM_3 FIRE DEPUTY CHIEF FIRE MGMT 01/03/2026 $15,800.16 $16,195.16 $16,600.04 $17,015.04 $17,440.42 $17,876.43 $18,323.34 $18,781.42 $19,250.96 $19,732.23 $20,228.06 FM2 FIRE DIVISION CHIEF FIRE MGMT 01/03/2026 $14,363.78 $14,722.87 $15,090.95 $15,468.22 $15,854.92 $16,251.30 $16,657.58 $17,076.18 $17,502.81 $17,940.47 $18,389.16 F05 FIRE ENGINEER FIRE 07/05/2025 $8,631.95 $8,847.44 $9,069.57 $9,297.22 $9,529.29 $9,766.89 $10,011.12 $10,261.97 $10,518.36 $10,781.37 $11,051.02 M20 FIRE MARSHAL - NON SWORN MGMT NS 07/05/2025 $9,283.29 $9,515.37 $9,753.26 $9,997.08 $10,247.01 $10,503.19 $10,765.77 $11,034.91 $11,310.79 $11,593.56 $11,883.40 B34 FIRE PREV SPEC I BCEA 07/05/2025 $6,170.53 $6,324.80 $6,482.92 $6,644.99 $6,811.12 $6,981.39 $7,155.93 $7,334.83 $7,518.20 $7,706.15 $7,898.80B33 FIRE PREV SPEC II BCEA 07/05/2025 $7,015.35 $7,190.74 $7,370.51 $7,554.78 $7,743.65 $7,937.24 $8,135.67 $8,339.07 $8,547.54 $8,761.23 $8,980.26 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 3, 2026 - REGULAR FULL-TIME CLASSIFICATIONS A50 FIRE PROTECT ANALYST APEA 07/05/2025 $7,188.63 $7,368.34 $7,552.55 $7,741.37 $7,934.90 $8,133.27 $8,336.61 $8,545.02 $8,758.64 $8,977.61 $9,202.06 F01 FIREFIGHTER FIRE 07/05/2025 $7,682.55 $7,874.34 $8,072.04 $8,274.65 $8,481.20 $8,692.66 $8,910.02 $9,133.29 $9,361.48 $9,595.56 $9,835.55 UR1 FIREFIGHTER TRAINEE (NS) N/A 07/05/2025 $6,353.75
A46 FISCAL SPECIALIST APEA 07/05/2025 $6,312.76 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88 A14 FLEET SUPERVISOR APEA 07/05/2025 $7,677.27 $7,869.19 $8,065.93 $8,267.57 $8,474.26 $8,686.12 $8,903.27 $9,125.85 $9,354.00 $9,587.85 $9,827.55A44 GIS ANALYST APEA 07/05/2025 $7,833.50 $8,029.34 $8,230.07 $8,435.82 $8,646.72 $8,862.89 $9,084.46 $9,311.56 $9,544.36 $9,782.96 $10,027.53B36 HEAVY EQUIP MECH I BCEA 07/05/2025 $5,038.17 $5,164.12 $5,293.22 $5,425.55 $5,561.19 $5,700.22 $5,842.73 $5,988.79 $6,138.52 $6,291.98 $6,449.28B35 HEAVY EQUIP MECH II BCEA 07/05/2025 $5,542.88 $5,681.46 $5,823.49 $5,969.08 $6,118.31 $6,271.27 $6,428.05 $6,588.75 $6,753.47 $6,922.30 $7,095.35B59 HELP DESK TECH BCEA 07/05/2025 $5,407.12 $5,542.30 $5,680.85 $5,822.88 $5,968.45 $6,117.67 $6,270.61 $6,427.38 $6,588.06 $6,752.77 $6,921.59A54 HR ANALYST I APEA 07/05/2025 $7,666.20 $7,857.85 $8,054.30 $8,255.66 $8,462.05 $8,673.60 $8,890.44 $9,112.70 $9,340.51 $9,574.03 $9,813.38A27 HR ANALYST II APEA 07/05/2025 $8,428.76 $8,639.47 $8,855.46 $9,076.85 $9,303.77 $9,536.37 $9,774.77 $10,019.14 $10,269.62 $10,526.36 $10,789.51A28 HR TECHNICIAN APEA 07/05/2025 $6,135.93 $6,289.32 $6,446.56 $6,607.72 $6,772.91 $6,942.23 $7,115.79 $7,293.68 $7,476.01 $7,662.91 $7,854.49B08 HSG REHAB SPECIALIST BCEA 07/05/2025 $6,395.92 $6,555.82 $6,719.72 $6,887.71 $7,059.91 $7,236.41 $7,417.32 $7,602.76 $7,792.83 $7,987.65 $8,187.35 M15 HUMAN RESOURES MGR MGMT NS 07/05/2025 $12,094.58 $12,396.95 $12,706.87 $13,024.54 $13,350.15 $13,683.91 $14,026.01 $14,376.66 $14,736.07 $15,104.47 $15,482.09 A24 INFO TECH SUPERVISOR APEA 07/05/2025 $9,438.03 $9,673.98 $9,915.83 $10,163.73 $10,417.82 $10,678.27 $10,945.22 $11,218.85 $11,499.33 $11,786.81 $12,081.48 M08 INFO TECHNO MANAGER MGMT NS 07/05/2025 $12,102.77 $12,405.34 $12,715.47 $13,033.36 $13,359.19 $13,693.17 $14,035.51 $14,386.40 $14,746.05 $15,114.71 $15,492.58 A35 IT ENTRPRS ACT ADMIN APEA 07/05/2025 $9,322.61 $9,555.68 $9,794.57 $10,039.44 $10,290.42 $10,547.68 $10,811.38 $11,081.66 $11,358.71 $11,642.68 $11,933.75A40 IT SPECIALIST I APEA 07/05/2025 $7,081.19 $7,258.22 $7,439.68 $7,625.67 $7,816.32 $8,011.73 $8,212.02 $8,417.33 $8,627.76 $8,843.45 $9,064.54A41 IT SPECIALIST II APEA 07/05/2025 $7,722.09 $7,915.14 $8,113.02 $8,315.84 $8,523.74 $8,736.83 $8,955.25 $9,179.13 $9,408.61 $9,643.83 $9,884.93 N07 JAILER POLICE 01/03/2026 $5,379.97 $5,514.28 $5,652.72 $5,794.61 $5,939.25 $6,087.33 $6,239.55 $6,395.90 $6,555.70 $6,719.63 $6,887.68 B11 JR PLANS CHECKER BCEA 07/05/2025 $6,556.39 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72B15 LS MAINT CTRCT ADMIN BCEA 07/05/2025 $5,968.48 $6,117.69 $6,270.63 $6,427.40 $6,588.08 $6,752.79 $6,921.61 $7,094.65 $7,272.01 $7,453.81 $7,640.16 M11 MAINT SRVS SUPERINT MGMT NS 07/05/2025 $9,568.67 $9,807.88 $10,053.08 $10,304.41 $10,562.01 $10,826.06 $11,096.72 $11,374.13 $11,658.49 $11,949.95 $12,248.70 B23 MAINT WORKER I BCEA 07/05/2025 $4,556.59 $4,670.51 $4,787.27 $4,906.95 $5,029.62 $5,155.36 $5,284.25 $5,416.35 $5,551.76 $5,690.56 $5,832.83B22 MAINT WORKER II BCEA 07/05/2025 $4,784.63 $4,904.24 $5,026.85 $5,152.53 $5,281.34 $5,413.37 $5,548.71 $5,687.42 $5,829.60 $5,975.34 $6,124.72A34 MANAGEMENT ANALYST I APEA 07/05/2025 $6,498.59 $6,661.05 $6,827.58 $6,998.27 $7,173.22 $7,352.56 $7,536.37 $7,724.77 $7,917.89 $8,115.83 $8,318.73A17 MANAGEMENT ANALYST II APEA 07/05/2025 $7,312.65 $7,495.46 $7,682.85 $7,874.92 $8,071.79 $8,273.59 $8,480.43 $8,692.44 $8,909.76 $9,132.50 $9,360.82B70 MANAGEMENT ASSISTANT BCEA 07/05/2025 $5,697.05 $5,839.48 $5,985.47 $6,135.11 $6,288.48 $6,445.69 $6,606.84 $6,772.01 $6,941.31 $7,114.84 $7,292.71B43 MEDIA SVC SPEC I BCEA 07/05/2025 $5,465.09 $5,601.71 $5,741.75 $5,885.29 $6,032.43 $6,183.23 $6,337.82 $6,496.26 $6,658.66 $6,825.13 $6,995.76A26 MEDIA SVS SPEC II APEA 07/05/2025 $5,996.14 $6,146.05 $6,299.70 $6,457.19 $6,618.62 $6,784.08 $6,953.69 $7,127.53 $7,305.72 $7,488.36 $7,675.57 N08 PARKING CTRL OFFICER POLICE 01/03/2026 $4,873.10 $4,994.76 $5,120.16 $5,248.68 $5,379.69 $5,513.83 $5,651.70 $5,793.32 $5,938.06 $6,086.54 $6,238.77 A65 PAYROLL SUPERVISOR APEA 07/05/2025 $6,312.76 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88B71 PAYROLL TECHNICIAN BCEA 07/05/2025 $5,252.19 $5,383.49 $5,518.08 $5,656.03 $5,797.43 $5,942.36 $6,090.92 $6,243.20 $6,399.28 $6,559.26 $6,723.24 B62 PERMIT TECHNICIAN BCEA 07/05/2025 $4,770.69 $4,889.95 $5,012.20 $5,137.50 $5,265.94 $5,397.58 $5,532.52 $5,670.83 $5,812.60 $5,957.91 $6,106.86 A29 PLAN CHECKER APEA 07/05/2025 $8,040.22 $8,241.23 $8,447.26 $8,658.44 $8,874.91 $9,096.78 $9,324.20 $9,557.30 $9,796.23 $10,041.14 $10,292.17B64 PLANNING TECHNICIAN BCEA 07/05/2025 $5,049.79 $5,176.04 $5,305.43 $5,438.07 $5,574.02 $5,713.37 $5,856.21 $6,002.61 $6,152.68 $6,306.50 $6,464.16 PM1 POLICE CAPTAIN POLICE MGMT 01/03/2026 $15,316.14 $15,698.51 $16,092.63 $16,496.57 $16,908.35 $17,329.93 $17,763.27 $18,208.39 $18,663.30 $19,129.98 $19,608.43 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 3, 2026 - REGULAR FULL-TIME CLASSIFICATIONS ES2 POLICE CHIEF N/A 07/20/2024 $20,412.68 $24,495.29
B65 POLICE COMM. OUTRCH COOR. BCEA 07/05/2025 $5,601.72 $5,741.76 $5,885.30 $6,032.44 $6,183.24 $6,337.83 $6,496.27 $6,658.68 $6,825.14 $6,995.77 $7,170.66 PM2 POLICE LT. POLICE MGMT 01/03/2026 $13,121.91 $13,449.50 $13,787.16 $14,133.23 $14,486.01 $14,847.20 $15,218.46 $15,599.81 $15,989.55 $16,389.37 $16,799.27 N16 POLICE OFCR RECRUIT POLICE 01/03/2026 $7,626.13
P02 POLICE OFFICER POLICE 01/03/2026 $8,129.21 $8,332.16 $8,541.35 $8,755.74 $8,974.29 $9,198.05 $9,428.06 $9,664.30 $9,905.76 $10,153.45 $10,407.39 A30 POLICE REC & P&E SPVR APEA 07/05/2025 $8,411.30 $8,621.59 $8,837.12 $9,058.05 $9,284.50 $9,516.62 $9,754.53 $9,998.40 $10,248.36 $10,504.56 $10,767.18B19 POLICE RECORDS CLERK BCEA 07/05/2025 $4,539.17 $4,652.65 $4,768.97 $4,888.19 $5,010.40 $5,135.66 $5,264.05 $5,395.65 $5,530.55 $5,668.81 $5,810.54B18 POLICE RECORDS TECH BCEA 07/05/2025 $4,766.88 $4,886.05 $5,008.20 $5,133.41 $5,261.75 $5,393.29 $5,528.12 $5,666.32 $5,807.98 $5,953.18 $6,102.01P20 POLICE SGT POLICE 01/03/2026 $10,506.32 $10,768.61 $11,038.97 $11,316.05 $11,598.51 $11,887.70 $12,184.96 $12,490.29 $12,802.35 $13,122.47 $13,450.67 N05 POLICE SVS. OFFICER POLICE 01/03/2026 $5,360.76 $5,494.59 $5,632.54 $5,773.92 $5,918.04 $6,065.60 $6,217.27 $6,373.06 $6,532.29 $6,695.63 $6,863.09 A49 POLICE TRAIN COORDIN APEA 07/05/2025 $5,697.05 $5,839.48 $5,985.47 $6,135.11 $6,288.49 $6,445.70 $6,606.84 $6,772.01 $6,941.31 $7,114.84 $7,292.71A66 PRINCIPAL ACCOUNTANT APEA 07/05/2025 $9,067.75 $9,294.44 $9,526.81 $9,764.98 $10,009.10 $10,259.33 $10,515.81 $10,778.71 $11,048.17 $11,324.38 $11,607.49A39 PRINCIPAL CIVIL ENG APEA 07/05/2025 $10,449.94 $10,711.19 $10,978.97 $11,253.44 $11,534.78 $11,823.16 $12,118.74 $12,421.71 $12,732.25 $13,050.56 $13,376.83A67 PRINCIPAL HR ANALYST APEA 07/05/2025 $10,427.91 $10,688.61 $10,955.83 $11,229.72 $11,510.47 $11,798.23 $12,093.18 $12,395.51 $12,705.40 $13,023.03 $13,348.61A68 PRINCIPAL MGMT ANALYST APEA 07/05/2025 $9,067.75 $9,294.44 $9,526.81 $9,764.98 $10,009.10 $10,259.33 $10,515.81 $10,778.71 $11,048.17 $11,324.38 $11,607.49A69 PRINCIPAL PLANNER APEA 07/05/2025 $10,098.86 $10,351.33 $10,610.11 $10,875.37 $11,147.25 $11,425.93 $11,711.58 $12,004.37 $12,304.48 $12,612.09 $12,927.39A61 PROCURE & CONTR ADMIN APEA 07/05/2025 $7,329.04 $7,512.27 $7,700.08 $7,892.58 $8,089.89 $8,292.14 $8,499.44 $8,711.93 $8,929.73 $9,152.98 $9,381.80 N06 PROP & EVIDENCE TECH POLICE 01/03/2026 $5,377.04 $5,511.28 $5,649.64 $5,791.45 $5,936.01 $6,084.02 $6,236.16 $6,392.42 $6,552.13 $6,715.97 $6,883.93N04 PUBLIC SAFETY DISPATCHER I POLICE 01/03/2026 $5,458.61 $5,594.89 $5,735.35 $5,879.31 $6,026.07 $6,176.32 $6,330.76 $6,489.40 $6,651.53 $6,817.85 $6,988.37N03 PUBLIC SAFETY DISPATCHER II POLICE 01/03/2026 $6,005.69 $6,155.62 $6,310.16 $6,468.55 $6,630.02 $6,795.33 $6,965.25 $7,139.78 $7,318.16 $7,501.15 $7,688.76 B20 PUBLIC WORKS CREW LDR BCEA 07/05/2025 $5,683.22 $5,825.30 $5,970.93 $6,120.19 $6,273.20 $6,430.03 $6,590.78 $6,755.55 $6,924.43 $7,097.54 $7,274.97E04 PUBLIC WORKS DIR N/A 07/20/2024 $16,438.99 $19,726.84 M26 PUBLIC WORKS MANAGER MGMT NS 07/05/2025 $10,525.54 $10,788.68 $11,058.39 $11,334.85 $11,618.22 $11,908.68 $12,206.40 $12,511.56 $12,824.35 $13,144.95 $13,473.58 A15 PUBLIC WORKS SPRVSR APEA 07/05/2025 $7,293.42 $7,475.76 $7,662.66 $7,854.23 $8,050.58 $8,251.84 $8,458.13 $8,669.59 $8,886.33 $9,108.50 $9,336.21 M27 PUBLIC WORKS UTILIT SUPERINT MGMT NS 07/05/2025 $11,578.09 $11,867.54 $12,164.23 $12,468.34 $12,780.05 $13,099.55 $13,427.04 $13,762.71 $14,106.78 $14,459.45 $14,820.94 A70 PUBLIC WORKS UTLTY SPRVSR APEA 07/05/2025 $8,389.79 $8,599.53 $8,814.52 $9,034.88 $9,260.76 $9,492.28 $9,729.58 $9,972.82 $10,222.14 $10,477.70 $10,739.64 M09 PURCHASING AGENT MGMT NS 07/05/2025 $10,227.28 $10,482.96 $10,745.03 $11,013.66 $11,289.01 $11,571.23 $11,860.50 $12,157.01 $12,460.94 $12,772.46 $13,091.77 A52 RADIO FREQUENCY SP APEA 07/05/2025 $8,491.79 $8,704.09 $8,921.69 $9,144.74 $9,373.35 $9,607.68 $9,847.87 $10,094.06 $10,346.42 $10,605.08 $10,870.20A47 REDEV PROJECT MGR APEA 07/05/2025 $8,080.36 $8,282.36 $8,489.42 $8,701.65 $8,919.19 $9,142.17 $9,370.72 $9,604.99 $9,845.11 $10,091.24 $10,343.52B58 REPROGRAPHICS SPEC. BCEA 07/05/2025 $6,001.85 $6,151.89 $6,305.69 $6,463.33 $6,624.92 $6,790.55 $6,960.31 $7,134.32 $7,312.68 $7,495.49 $7,682.88 M13 REVENUE & BUDGET MGR MGMT NS 07/05/2025 $10,552.31 $10,816.11 $11,086.51 $11,363.67 $11,647.76 $11,938.96 $12,237.43 $12,543.36 $12,856.94 $13,178.36 $13,507.82 A48 SOFTWARE DEVELOPER I APEA 07/05/2025 $7,020.59 $7,196.11 $7,376.01 $7,560.42 $7,749.43 $7,943.16 $8,141.74 $8,345.28 $8,553.92 $8,767.77 $8,986.96A42 SOFTWAREDEVELOPER II APEA 07/05/2025 $7,722.09 $7,915.14 $8,113.02 $8,315.84 $8,523.74 $8,736.83 $8,955.25 $9,179.13 $9,408.61 $9,643.83 $9,884.93A23 SR BUYER APEA 07/05/2025 $6,107.35 $6,260.03 $6,416.54 $6,576.95 $6,741.38 $6,909.92 $7,082.66 $7,259.73 $7,441.22 $7,627.25 $7,817.93A53 SR. ACCOUNTANT APEA 07/05/2025 $7,608.01 $7,798.21 $7,993.16 $8,192.99 $8,397.82 $8,607.76 $8,822.95 $9,043.53 $9,269.61 $9,501.36 $9,738.89A59 SR. BLDG INSPECTOR APEA 07/05/2025 $7,485.33 $7,672.46 $7,864.27 $8,060.88 $8,262.40 $8,468.95 $8,680.68 $8,897.69 $9,120.13 $9,348.14 $9,581.85A05 SR. COMM SVS SPRVSR APEA 07/05/2025 $9,002.14 $9,227.19 $9,457.87 $9,694.31 $9,936.68 $10,185.10 $10,439.72 $10,700.72 $10,968.23 $11,242.44 $11,523.51 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 3, 2026 - REGULAR FULL-TIME CLASSIFICATIONS A09 SR. EX ASST/CITY MGR APEA 07/05/2025 $7,394.39 $7,579.25 $7,768.73 $7,962.95 $8,162.02 $8,366.08 $8,575.23 $8,789.61 $9,009.35 $9,234.58 $9,465.45B41 SR. FIRE PREV SPEC BCEA 07/05/2025 $7,716.89 $7,909.82 $8,107.56 $8,310.24 $8,518.00 $8,730.95 $8,949.22 $9,172.96 $9,402.28 $9,637.33 $9,878.26A62 SR. FISCAL ANALYST APEA 07/05/2025 $8,850.30 $9,071.57 $9,298.35 $9,530.81 $9,769.07 $10,013.31 $10,263.64 $10,520.22 $10,783.23 $11,052.82 $11,329.14A45 SR. GIS ANALYST APEA 07/05/2025 $8,617.43 $8,832.86 $9,053.69 $9,280.03 $9,512.03 $9,749.83 $9,993.57 $10,243.41 $10,499.50 $10,761.99 $11,031.05A43 SR. HR ANALYST APEA 07/05/2025 $9,271.98 $9,503.78 $9,741.37 $9,984.90 $10,234.52 $10,490.39 $10,752.66 $11,021.48 $11,297.02 $11,579.44 $11,868.93A51 SR. IT SPECIALIST APEA 07/05/2025 $8,108.93 $8,311.65 $8,519.44 $8,732.43 $8,950.74 $9,174.50 $9,403.87 $9,638.97 $9,879.94 $10,126.94 $10,380.11A37 SR. MEDIA SVS SPEC-AV APEA 07/05/2025 $7,481.86 $7,668.91 $7,860.63 $8,057.15 $8,258.59 $8,465.05 $8,676.68 $8,893.60 $9,115.94 $9,343.85 $9,577.45A16 SR. MGMNT ANALYST APEA 07/05/2025 $8,045.74 $8,246.89 $8,453.06 $8,664.39 $8,881.01 $9,103.03 $9,330.61 $9,563.87 $9,802.96 $10,048.04 $10,299.24A03 SR. PLANNER APEA 07/05/2025 $8,976.76 $9,201.19 $9,431.22 $9,667.01 $9,908.68 $10,156.40 $10,410.30 $10,670.56 $10,937.33 $11,210.76 $11,491.03B17 SR. POL REC'DS TECH BCEA 07/05/2025 $5,241.84 $5,372.89 $5,507.21 $5,644.89 $5,786.01 $5,930.66 $6,078.94 $6,230.91 $6,386.68 $6,546.35 $6,710.00 N02 SR. PS DISPATCHER POLICE 01/03/2026 $6,606.23 $6,771.15 $6,941.15 $7,115.37 $7,292.98 $7,474.82 $7,661.73 $7,853.72 $8,049.94 $8,251.23 $8,457.59 B45 ST SWEEPER OPERATOR BCEA 07/05/2025 $5,132.15 $5,260.45 $5,391.96 $5,526.76 $5,664.93 $5,806.55 $5,951.71 $6,100.50 $6,253.02 $6,409.34 $6,569.58A71 UTILITY BILLING SPRVSR APEA 07/05/2025 $6,312.76 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88B52 WATER DIST CREW LDR BCEA 07/05/2025 $6,618.50 $6,783.96 $6,953.55 $7,127.39 $7,305.58 $7,488.22 $7,675.43 $7,867.32 $8,064.00 $8,265.60 $8,472.24B54 WATER DIST OPER I BCEA 07/05/2025 $5,003.62 $5,128.71 $5,256.93 $5,388.35 $5,523.07 $5,661.14 $5,802.67 $5,947.73 $6,096.43 $6,248.84 $6,405.06B53 WATER DIST OPER II BCEA 07/05/2025 $5,337.48 $5,470.92 $5,607.69 $5,747.88 $5,891.58 $6,038.87 $6,189.84 $6,344.59 $6,503.20 $6,665.78 $6,832.43 M12 WATER DIST SUPERINT MGMT NS 07/05/2025 $10,524.68 $10,787.79 $11,057.49 $11,333.92 $11,617.27 $11,907.70 $12,205.39 $12,510.53 $12,823.29 $13,143.87 $13,472.46 A36 WATER DIST SUPERVISOR APEA 07/05/2025 $7,990.28 $8,190.03 $8,394.79 $8,604.65 $8,819.77 $9,040.27 $9,266.27 $9,497.93 $9,735.38 $9,978.76 $10,228.23 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
B49 ACCOUNTANT I BCEA 07/04/2026 $6,768.90 $6,938.13 $7,111.58 $7,289.37 $7,471.60 $7,658.39 $7,849.85 $8,046.10 $8,247.25 $8,453.44 $8,664.78A31 ACCOUNTANT II APEA 07/04/2026 $7,058.82 $7,235.29 $7,416.17 $7,601.57 $7,791.61 $7,986.40 $8,186.06 $8,390.72 $8,600.48 $8,815.49 $9,035.88B03 ACCOUNTING TECH I BCEA 07/04/2026 $4,531.36 $4,644.64 $4,760.76 $4,879.78 $5,001.77 $5,126.82 $5,254.99 $5,386.36 $5,521.02 $5,659.05 $5,800.52B02 ACCOUNTING TECH II BCEA 07/04/2026 $4,984.71 $5,109.33 $5,237.06 $5,367.99 $5,502.18 $5,639.74 $5,780.74 $5,925.26 $6,073.39 $6,225.22 $6,380.85B07 ADMIN CLERK I BCEA 07/04/2026 $3,882.99 $3,980.06 $4,079.56 $4,181.55 $4,286.09 $4,393.24 $4,503.07 $4,615.65 $4,731.04 $4,849.32 $4,970.55B06 ADMIN CLERK II BCEA 07/04/2026 $4,269.66 $4,376.40 $4,485.80 $4,597.95 $4,712.90 $4,830.72 $4,951.49 $5,075.28 $5,202.16 $5,332.22 $5,465.53E05 ADMIN SVCS DIR N/A 07/04/2026 $17,806.00 $21,367.00B05 ADMINISTRATIVE ASSISTANT BCEA 07/04/2026 $4,720.89 $4,838.91 $4,959.89 $5,083.89 $5,210.98 $5,341.26 $5,474.79 $5,611.67 $5,751.95 $5,895.76 $6,043.14 UR2 AMBULANCE OPERATOR (NS) N/A 07/04/2026 $3,375.67 $3,460.06 $3,546.56 $3,635.22 $3,726.11 $3,819.26 $3,914.74 $4,012.61 $4,112.92 $4,215.75 $4,321.14 A38 ASSISTANT CITY ENG APEA 07/04/2026 $11,514.54 $11,802.41 $12,097.47 $12,399.90 $12,709.90 $13,027.65 $13,353.34 $13,687.18 $14,029.36 $14,380.10 $14,739.60E01 ASSISTANT CITY MGR / DIR N/A 07/04/2026 $20,923.00 $25,107.00B46 ASSISTANT ENGINEER BCEA 07/04/2026 $7,532.18 $7,720.49 $7,913.51 $8,111.35 $8,314.13 $8,521.98 $8,735.03 $8,953.40 $9,177.24 $9,406.67 $9,641.84B10 ASSISTANT PLANNER BCEA 07/04/2026 $6,704.13 $6,871.74 $7,043.53 $7,219.62 $7,400.11 $7,585.11 $7,774.73 $7,969.10 $8,168.33 $8,372.53 $8,581.85A02 ASSOCIATE ENGINEER APEA 07/04/2026 $8,901.21 $9,123.74 $9,351.83 $9,585.63 $9,825.28 $10,070.90 $10,322.67 $10,580.74 $10,845.26 $11,116.38 $11,394.30A04 ASSOCIATE PLANNER APEA 07/04/2026 $7,698.04 $7,890.49 $8,087.75 $8,289.94 $8,497.20 $8,709.62 $8,927.37 $9,150.55 $9,379.31 $9,613.79 $9,854.14B28 ASST TO THE CITY CLERK BCEA 07/04/2026 $4,886.05 $5,008.20 $5,133.41 $5,261.74 $5,393.29 $5,528.12 $5,666.32 $5,807.98 $5,953.18 $6,102.01 $6,254.56A25 ASST TO THE CITY MGR APEA 07/04/2026 $9,484.64 $9,721.75 $9,964.79 $10,213.91 $10,469.26 $10,730.99 $10,999.27 $11,274.24 $11,556.10 $11,845.01 $12,141.14A58 BLDG & FAC ADMIN APEA 07/04/2026 $8,295.80 $8,503.20 $8,715.78 $8,933.68 $9,157.02 $9,385.95 $9,620.59 $9,861.11 $10,107.64 $10,360.33 $10,619.34 M01 BLDG & SAFETY MGR MGMT NS 07/04/2026 $12,606.48 $12,921.64 $13,244.68 $13,575.80 $13,915.19 $14,263.07 $14,619.65 $14,985.14 $15,359.77 $15,743.76 $16,137.35 B72 BUILDING MAINT CREW LDR BCEA 07/04/2026 $6,116.57 $6,269.48 $6,426.22 $6,586.87 $6,751.54 $6,920.33 $7,093.34 $7,270.67 $7,452.44 $7,638.75 $7,829.72B04 BUILDING MAINT TECH BCEA 07/04/2026 $5,548.25 $5,686.96 $5,829.13 $5,974.85 $6,124.22 $6,277.33 $6,434.27 $6,595.12 $6,760.00 $6,928.99 $7,102.22 M23 BUILDING OFFICIAL MGMT NS 07/04/2026 $10,357.82 $10,616.77 $10,882.19 $11,154.24 $11,433.10 $11,718.92 $12,011.90 $12,312.20 $12,620.01 $12,935.51 $13,258.90 B37 BUSINESS OUTREACH SP BCEA 07/04/2026 $5,383.20 $5,517.78 $5,655.72 $5,797.12 $5,942.05 $6,090.60 $6,242.86 $6,398.93 $6,558.90 $6,722.87 $6,890.94B69 BUYER BCEA 07/04/2026 $5,682.48 $5,824.54 $5,970.16 $6,119.41 $6,272.39 $6,429.20 $6,589.93 $6,754.68 $6,923.54 $7,096.63 $7,274.04 M16 CITY CLERK MGMT NS 07/04/2026 $11,953.38 $12,252.22 $12,558.52 $12,872.48 $13,194.30 $13,524.15 $13,862.26 $14,208.82 $14,564.03 $14,928.14 $15,301.34 B66 CITY CLERK SPECIALIST BCEA 07/04/2026 $4,269.66 $4,376.40 $4,485.80 $4,597.95 $4,712.90 $4,830.72 $4,951.49 $5,075.28 $5,202.16 $5,332.22 $5,465.53 M02 CITY ENGINEER MGMT NS 07/04/2026 $13,122.13 $13,450.19 $13,786.44 $14,131.10 $14,484.38 $14,846.49 $15,217.65 $15,598.10 $15,988.05 $16,387.75 $16,797.45 3 CITY MANAGER N/A 07/04/2026 $29,135.00
M03 CITY PLANNER MGMT NS 07/04/2026 $12,570.39 $12,884.65 $13,206.77 $13,536.94 $13,875.37 $14,222.26 $14,577.81 $14,942.26 $15,315.81 $15,698.71 $16,091.18 N10 CIVILIAN INVESTIGATOR POLICE 01/03/2026 $6,479.60 $6,641.37 $6,808.11 $6,978.99 $7,153.20 $7,331.55 $7,514.88 $7,703.19 $7,895.64 $8,093.07 $8,295.49 B24 CODE ENFORCE OFFICER BCEA 07/04/2026 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 $8,602.54B13 COMBO INSPECTOR I BCEA 07/04/2026 $5,703.96 $5,846.55 $5,992.71 $6,142.52 $6,296.09 $6,453.49 $6,614.83 $6,780.21 $6,949.72 $7,123.47 $7,301.55B12 COMBO INSPECTOR II BCEA 07/04/2026 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 $8,602.54 M04 COMM & MKTG MANAGER MGMT NS 07/04/2026 $10,789.77 $11,059.51 $11,336.00 $11,619.40 $11,909.89 $12,207.63 $12,512.83 $12,825.65 $13,146.29 $13,474.95 $13,811.82 A18 COMM & MKTNG ANALYST APEA 07/04/2026 $8,247.93 $8,454.12 $8,665.48 $8,882.11 $9,104.16 $9,331.77 $9,565.07 $9,804.19 $10,049.30 $10,300.52 $10,558.04 M10 COMM DEV MANAGER MGMT NS 07/04/2026 $11,172.42 $11,451.73 $11,738.03 $12,031.48 $12,332.27 $12,640.58 $12,956.60 $13,280.51 $13,612.52 $13,952.83 $14,301.65 A08 COMM SV SPECIALIST I APEA 07/04/2026 $5,349.84 $5,483.58 $5,620.67 $5,761.19 $5,905.22 $6,052.84 $6,204.17 $6,359.27 $6,518.25 $6,681.21 $6,848.24
CITY OF BREA
SALARY SCHEDULE AS OF JULY 18, 2026 - REGULAR FULL-TIME CLASSIFICATIONS Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JULY 18, 2026 - REGULAR FULL-TIME CLASSIFICATIONS A07 COMM SV SPECIALST II APEA 07/04/2026 $6,040.49 $6,191.50 $6,346.29 $6,504.94 $6,667.56 $6,834.26 $7,005.11 $7,180.24 $7,359.74 $7,543.73 $7,732.32 M05 COMM SVC MANAGER MGMT NS 07/04/2026 $10,482.96 $10,745.03 $11,013.65 $11,289.00 $11,571.23 $11,860.51 $12,157.01 $12,460.94 $12,772.46 $13,091.77 $13,419.07 A06 COMM SVS SUPERVISOR APEA 07/04/2026 $8,025.40 $8,226.04 $8,431.69 $8,642.49 $8,858.55 $9,080.01 $9,307.01 $9,539.69 $9,778.18 $10,022.63 $10,273.20B60 COMM. DEV SPEC. BCEA 07/04/2026 $4,957.75 $5,081.70 $5,208.74 $5,338.96 $5,472.43 $5,609.24 $5,749.47 $5,893.21 $6,040.54 $6,191.56 $6,346.34 N01 COMM. SUPERVISOR POLICE 01/03/2026 $8,101.63 $8,303.88 $8,512.36 $8,726.03 $8,943.84 $9,166.84 $9,396.06 $9,631.51 $9,872.14 $10,119.00 $10,372.07 E07 COMMUNITY DEV DIR N/A 07/04/2026 $16,658.00 $19,991.00E03 COMMUNITY SVCS DIR N/A 07/04/2026 $15,794.00 $18,952.00 N14 CRIME ANALYST POLICE 01/03/2026 $7,217.67 $7,397.86 $7,583.59 $7,773.94 $7,967.99 $8,166.66 $8,370.87 $8,580.63 $8,795.01 $9,014.93 $9,240.39N11 CRIME SCENE INVSTGTR POLICE 01/03/2026 $6,974.33 $7,148.44 $7,327.91 $7,511.84 $7,699.35 $7,891.32 $8,088.65 $8,291.33 $8,498.48 $8,710.99 $8,928.85 A11 DEPUTY CITY CLERK/REC SUP APEA 07/04/2026 $7,391.73 $7,576.53 $7,765.95 $7,960.10 $8,159.09 $8,363.07 $8,572.15 $8,786.46 $9,006.12 $9,231.27 $9,462.05E09 DEPUTY CITY MANAGER / DIR N/A 07/04/2026 $19,943.00 $23,932.00 M21 DEPUTY DIR OF ADMIN SVS MGMT NS 07/04/2026 $14,613.95 $14,979.30 $15,353.78 $15,737.63 $16,131.07 $16,534.34 $16,947.70 $17,371.40 $17,805.68 $18,250.82 $18,707.09M24 DEPUTY DIR OF COMM DEV MGMT NS 07/04/2026 $13,672.98 $14,014.81 $14,365.18 $14,724.31 $15,092.42 $15,469.73 $15,856.47 $16,252.88 $16,659.20 $17,075.68 $17,502.57M22 DEPUTY DIR OF COMM SVS MGMT NS 07/04/2026 $12,962.40 $13,286.46 $13,618.62 $13,959.09 $14,308.06 $14,665.77 $15,032.41 $15,408.22 $15,793.43 $16,188.26 $16,592.97M25 DEPUTY DIR OF PUBLIC WORKS MGMT NS 07/04/2026 $13,829.61 $14,175.35 $14,529.73 $14,892.97 $15,265.30 $15,646.93 $16,038.10 $16,438.18 $16,850.03 $17,271.28 $17,703.07 A63 DEPUTY FIRE MARSHAL APEA 07/04/2026 $8,105.17 $8,307.80 $8,515.50 $8,728.38 $8,946.60 $9,170.26 $9,399.52 $9,634.51 $9,875.37 $10,122.26 $10,375.32B27 DUPLICATING TECH I BCEA 07/04/2026 $4,111.70 $4,214.49 $4,319.85 $4,427.84 $4,538.54 $4,652.00 $4,768.30 $4,887.51 $5,009.69 $5,134.93 $5,263.30B26 DUPLICATING TECH II BCEA 07/04/2026 $5,137.21 $5,265.65 $5,397.29 $5,532.22 $5,670.53 $5,812.30 $5,957.61 $6,106.55 $6,259.22 $6,415.70 $6,576.09B56 ECON DEV ANALYST I BCEA 07/04/2026 $6,632.66 $6,798.48 $6,968.44 $7,142.66 $7,321.22 $7,504.26 $7,691.86 $7,884.16 $8,081.27 $8,283.30 $8,490.38A21 ECON DEV ANALYST II APEA 07/04/2026 $7,355.20 $7,539.08 $7,727.55 $7,920.74 $8,118.76 $8,321.73 $8,529.78 $8,743.02 $8,961.59 $9,185.63 $9,415.27A19 EMERGENCY PREP COORD APEA 07/04/2026 $8,246.88 $8,453.06 $8,664.39 $8,881.00 $9,103.03 $9,330.61 $9,563.87 $9,802.96 $10,048.03 $10,299.24 $10,556.72 M18 EMS MANAGER MGMT NS 07/04/2026 $9,144.73 $9,373.35 $9,607.68 $9,847.87 $10,094.06 $10,346.41 $10,605.08 $10,870.20 $11,141.96 $11,420.51 $11,706.03 B31 ENGINEERING TECH I BCEA 07/04/2026 $5,125.00 $5,253.12 $5,384.45 $5,519.06 $5,657.03 $5,798.46 $5,943.43 $6,092.01 $6,244.32 $6,400.43 $6,560.44B30 ENGINEERING TECH II BCEA 07/04/2026 $6,151.90 $6,305.69 $6,463.34 $6,624.92 $6,790.54 $6,960.31 $7,134.32 $7,312.68 $7,495.49 $7,682.88 $7,874.95B09 ENVIR SERVS INSPECT BCEA 07/04/2026 $6,772.20 $6,941.50 $7,115.04 $7,292.92 $7,475.25 $7,662.13 $7,853.68 $8,050.03 $8,251.28 $8,457.56 $8,669.00A20 ENVIRON SERVS COOR APEA 07/04/2026 $8,909.10 $9,131.83 $9,360.12 $9,594.12 $9,833.98 $10,079.82 $10,331.82 $10,590.11 $10,854.87 $11,126.25 $11,404.40A12 EXECUTIVE ASSISTANT APEA 07/04/2026 $5,840.78 $5,986.79 $6,136.47 $6,289.88 $6,447.13 $6,608.31 $6,773.52 $6,942.86 $7,116.43 $7,294.34 $7,476.70 M06 FINANCIAL SVC MGR MGMT NS 07/04/2026 $11,545.89 $11,834.54 $12,130.40 $12,433.67 $12,744.51 $13,063.12 $13,389.70 $13,724.44 $14,067.55 $14,419.25 $14,779.73 FM1 FIRE BATTALION CHIEF FIRE MGMT 07/04/2026 $13,585.20 $13,924.35 $14,273.94 $14,632.22 $14,997.46 $15,371.39 $15,755.77 $16,150.57 $16,554.08 $16,968.02 $17,392.39 F20 FIRE CAPTAIN FIRE 07/18/2026 $10,387.99 $10,647.33 $10,914.64 $11,188.60 $11,467.88 $11,753.82 $12,047.73 $12,349.62 $12,658.16 $12,974.68 $13,299.18 ES1 FIRE CHIEF N/A 07/04/2026 $19,320.00 $23,184.00
FM_3 FIRE DEPUTY CHIEF FIRE MGMT 07/04/2026 $16,438.09 $16,849.04 $17,270.27 $17,702.02 $18,144.57 $18,598.19 $19,063.14 $19,539.72 $20,028.21 $20,528.92 $21,044.77 FM2 FIRE DIVISION CHIEF FIRE MGMT 07/04/2026 $14,943.72 $15,317.31 $15,700.24 $16,092.75 $16,495.07 $16,907.44 $17,330.13 $17,765.63 $18,209.49 $18,664.82 $19,131.62 F05 FIRE ENGINEER FIRE 07/18/2026 $8,847.75 $9,068.63 $9,296.31 $9,529.65 $9,767.52 $10,011.06 $10,261.40 $10,518.52 $10,781.32 $11,050.91 $11,327.29 M20 FIRE MARSHAL - NON SWORN MGMT NS 07/04/2026 $9,515.37 $9,753.26 $9,997.09 $10,247.01 $10,503.19 $10,765.77 $11,034.91 $11,310.78 $11,593.56 $11,883.40 $12,180.48 B34 FIRE PREV SPEC I BCEA 07/04/2026 $6,324.80 $6,482.92 $6,644.99 $6,811.11 $6,981.39 $7,155.93 $7,334.83 $7,518.20 $7,706.15 $7,898.81 $8,096.27B33 FIRE PREV SPEC II BCEA 07/04/2026 $7,190.73 $7,370.51 $7,554.77 $7,743.64 $7,937.24 $8,135.67 $8,339.06 $8,547.54 $8,761.23 $8,980.26 $9,204.77 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JULY 18, 2026 - REGULAR FULL-TIME CLASSIFICATIONS A50 FIRE PROTECT ANALYST APEA 07/04/2026 $7,368.34 $7,552.55 $7,741.36 $7,934.90 $8,133.27 $8,336.61 $8,545.02 $8,758.65 $8,977.61 $9,202.05 $9,432.11 F01 FIREFIGHTER FIRE 07/18/2026 $7,874.61 $8,071.20 $8,273.84 $8,481.52 $8,693.23 $8,909.98 $9,132.78 $9,361.63 $9,595.51 $9,835.45 $10,081.44 UR1 FIREFIGHTER TRAINEE (NS) N/A 07/04/2026 $6,512.60
A46 FISCAL SPECIALIST APEA 07/04/2026 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88 $8,282.90 A14 FLEET SUPERVISOR APEA 07/04/2026 $7,869.20 $8,065.92 $8,267.58 $8,474.26 $8,686.11 $8,903.27 $9,125.86 $9,354.00 $9,587.85 $9,827.55 $10,073.24A44 GIS ANALYST APEA 07/04/2026 $8,029.33 $8,230.07 $8,435.82 $8,646.72 $8,862.89 $9,084.46 $9,311.57 $9,544.35 $9,782.96 $10,027.54 $10,278.22B36 HEAVY EQUIP MECH I BCEA 07/04/2026 $5,164.13 $5,293.23 $5,425.55 $5,561.19 $5,700.22 $5,842.72 $5,988.80 $6,138.51 $6,291.98 $6,449.27 $6,610.51B35 HEAVY EQUIP MECH II BCEA 07/04/2026 $5,681.46 $5,823.50 $5,969.08 $6,118.31 $6,271.26 $6,428.05 $6,588.75 $6,753.47 $6,922.30 $7,095.36 $7,272.74B59 HELP DESK TECH BCEA 07/04/2026 $5,542.30 $5,680.86 $5,822.88 $5,968.45 $6,117.67 $6,270.61 $6,427.37 $6,588.06 $6,752.76 $6,921.59 $7,094.63A54 HR ANALYST I APEA 07/04/2026 $7,857.86 $8,054.30 $8,255.66 $8,462.05 $8,673.60 $8,890.44 $9,112.70 $9,340.51 $9,574.03 $9,813.38 $10,058.71A27 HR ANALYST II APEA 07/04/2026 $8,639.47 $8,855.46 $9,076.85 $9,303.77 $9,536.37 $9,774.78 $10,019.14 $10,269.62 $10,526.36 $10,789.52 $11,059.25A28 HR TECHNICIAN APEA 07/04/2026 $6,289.33 $6,446.56 $6,607.72 $6,772.91 $6,942.24 $7,115.79 $7,293.68 $7,476.02 $7,662.91 $7,854.49 $8,050.85B08 HSG REHAB SPECIALIST BCEA 07/04/2026 $6,555.82 $6,719.72 $6,887.71 $7,059.91 $7,236.41 $7,417.32 $7,602.76 $7,792.83 $7,987.65 $8,187.35 $8,392.03 M15 HUMAN RESOURES MGR MGMT NS 07/04/2026 $12,396.94 $12,706.87 $13,024.54 $13,350.16 $13,683.91 $14,026.01 $14,376.66 $14,736.08 $15,104.47 $15,482.08 $15,869.14 A24 INFO TECH SUPERVISOR APEA 07/04/2026 $9,673.98 $9,915.83 $10,163.73 $10,417.82 $10,678.27 $10,945.23 $11,218.86 $11,499.33 $11,786.81 $12,081.48 $12,383.52 M08 INFO TECHNO MANAGER MGMT NS 07/04/2026 $12,405.34 $12,715.47 $13,033.36 $13,359.19 $13,693.17 $14,035.50 $14,386.39 $14,746.06 $15,114.71 $15,492.57 $15,879.89 A35 IT ENTRPRS ACT ADMIN APEA 07/04/2026 $9,555.67 $9,794.57 $10,039.43 $10,290.42 $10,547.68 $10,811.37 $11,081.66 $11,358.70 $11,642.67 $11,933.74 $12,232.09A40 IT SPECIALIST I APEA 07/04/2026 $7,258.22 $7,439.68 $7,625.67 $7,816.32 $8,011.73 $8,212.02 $8,417.32 $8,627.76 $8,843.45 $9,064.54 $9,291.16A41 IT SPECIALIST II APEA 07/04/2026 $7,915.14 $8,113.02 $8,315.85 $8,523.74 $8,736.83 $8,955.25 $9,179.13 $9,408.61 $9,643.83 $9,884.92 $10,132.05 N07 JAILER POLICE 01/03/2026 $5,487.57 $5,624.57 $5,765.78 $5,910.50 $6,058.03 $6,209.08 $6,364.34 $6,523.82 $6,686.81 $6,854.02 $7,025.44 B11 JR PLANS CHECKER BCEA 07/04/2026 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 $8,602.54B15 LS MAINT CTRCT ADMIN BCEA 07/04/2026 $6,117.69 $6,270.63 $6,427.40 $6,588.08 $6,752.78 $6,921.61 $7,094.65 $7,272.02 $7,453.81 $7,640.15 $7,831.16 M11 MAINT SRVS SUPERINT MGMT NS 07/04/2026 $9,807.89 $10,053.08 $10,304.41 $10,562.02 $10,826.06 $11,096.71 $11,374.14 $11,658.49 $11,949.95 $12,248.69 $12,554.91 B23 MAINT WORKER I BCEA 07/04/2026 $4,670.50 $4,787.27 $4,906.95 $5,029.62 $5,155.36 $5,284.24 $5,416.35 $5,551.76 $5,690.56 $5,832.83 $5,978.65B22 MAINT WORKER II BCEA 07/04/2026 $4,904.24 $5,026.85 $5,152.52 $5,281.34 $5,413.37 $5,548.70 $5,687.43 $5,829.61 $5,975.34 $6,124.72 $6,277.84A34 MANAGEMENT ANALYST I APEA 07/04/2026 $6,661.05 $6,827.58 $6,998.27 $7,173.23 $7,352.55 $7,536.37 $7,724.78 $7,917.89 $8,115.84 $8,318.73 $8,526.70A17 MANAGEMENT ANALYST II APEA 07/04/2026 $7,495.46 $7,682.85 $7,874.92 $8,071.80 $8,273.59 $8,480.43 $8,692.44 $8,909.75 $9,132.50 $9,360.82 $9,594.84B70 MANAGEMENT ASSISTANT BCEA 07/04/2026 $5,839.48 $5,985.47 $6,135.11 $6,288.48 $6,445.69 $6,606.84 $6,772.01 $6,941.31 $7,114.84 $7,292.71 $7,475.03B43 MEDIA SVC SPEC I BCEA 07/04/2026 $5,601.72 $5,741.75 $5,885.29 $6,032.42 $6,183.24 $6,337.81 $6,496.26 $6,658.67 $6,825.13 $6,995.76 $7,170.65A26 MEDIA SVS SPEC II APEA 07/04/2026 $6,146.05 $6,299.70 $6,457.19 $6,618.62 $6,784.08 $6,953.69 $7,127.53 $7,305.72 $7,488.36 $7,675.57 $7,867.46 N08 PARKING CTRL OFFICER POLICE 01/03/2026 $4,970.57 $5,094.65 $5,222.56 $5,353.65 $5,487.29 $5,624.10 $5,764.74 $5,909.19 $6,056.82 $6,208.28 $6,363.55 A65 PAYROLL SUPERVISOR APEA 07/04/2026 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88 $8,282.90B71 PAYROLL TECHNICIAN BCEA 07/04/2026 $5,383.49 $5,518.08 $5,656.03 $5,797.43 $5,942.37 $6,090.92 $6,243.20 $6,399.28 $6,559.26 $6,723.24 $6,891.32 B62 PERMIT TECHNICIAN BCEA 07/04/2026 $4,889.95 $5,012.20 $5,137.51 $5,265.94 $5,397.58 $5,532.52 $5,670.83 $5,812.60 $5,957.91 $6,106.86 $6,259.53A29 PLAN CHECKER APEA 07/04/2026 $8,241.23 $8,447.26 $8,658.44 $8,874.90 $9,096.78 $9,324.20 $9,557.30 $9,796.23 $10,041.14 $10,292.17 $10,549.48B64 PLANNING TECHNICIAN BCEA 07/04/2026 $5,176.03 $5,305.44 $5,438.07 $5,574.02 $5,713.37 $5,856.21 $6,002.62 $6,152.68 $6,306.50 $6,464.16 $6,625.76 PM1 POLICE CAPTAIN POLICE MGMT 07/04/2026 $17,100.47 $17,527.38 $17,967.43 $18,418.42 $18,878.17 $19,348.86 $19,832.70 $20,329.66 $20,837.58 $21,358.62 $21,892.81 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JULY 18, 2026 - REGULAR FULL-TIME CLASSIFICATIONS ES2 POLICE CHIEF N/A 07/04/2026 $20,923.00 $25,107.00
B65 POLICE COMM. OUTRCH COOR. BCEA 07/04/2026 $5,741.77 $5,885.31 $6,032.43 $6,183.25 $6,337.82 $6,496.27 $6,658.68 $6,825.14 $6,995.77 $7,170.66 $7,349.92 PM2 POLICE LT. POLICE MGMT 07/04/2026 $14,650.61 $15,016.37 $15,393.37 $15,779.75 $16,173.63 $16,576.90 $16,991.41 $17,417.18 $17,852.33 $18,298.73 $18,756.39 N16 POLICE OFCR RECRUIT POLICE 01/03/2026 $7,778.65
P02 POLICE OFFICER POLICE 01/03/2026 $8,291.80 $8,498.80 $8,712.17 $8,930.85 $9,153.78 $9,382.01 $9,616.62 $9,857.59 $10,103.87 $10,356.52 $10,615.54 A30 POLICE REC & P&E SPVR APEA 07/04/2026 $8,621.59 $8,837.13 $9,058.05 $9,284.50 $9,516.62 $9,754.53 $9,998.40 $10,248.36 $10,504.56 $10,767.18 $11,036.36B19 POLICE RECORDS CLERK BCEA 07/04/2026 $4,652.65 $4,768.97 $4,888.19 $5,010.40 $5,135.66 $5,264.05 $5,395.65 $5,530.54 $5,668.81 $5,810.53 $5,955.80B18 POLICE RECORDS TECH BCEA 07/04/2026 $4,886.05 $5,008.20 $5,133.41 $5,261.74 $5,393.29 $5,528.12 $5,666.32 $5,807.98 $5,953.18 $6,102.01 $6,254.56P20 POLICE SGT POLICE 01/03/2026 $10,716.44 $10,983.98 $11,259.74 $11,542.37 $11,830.48 $12,125.46 $12,428.66 $12,740.10 $13,058.39 $13,384.92 $13,719.68 N05 POLICE SVS. OFFICER POLICE 01/03/2026 $5,467.97 $5,604.48 $5,745.19 $5,889.40 $6,036.40 $6,186.91 $6,341.62 $6,500.52 $6,662.93 $6,829.54 $7,000.35 A49 POLICE TRAIN COORDIN APEA 07/04/2026 $5,839.48 $5,985.47 $6,135.11 $6,288.49 $6,445.70 $6,606.84 $6,772.01 $6,941.31 $7,114.84 $7,292.71 $7,475.03A66 PRINCIPAL ACCOUNTANT APEA 07/04/2026 $9,294.44 $9,526.80 $9,764.98 $10,009.10 $10,259.33 $10,515.81 $10,778.71 $11,048.17 $11,324.38 $11,607.49 $11,897.68A39 PRINCIPAL CIVIL ENG APEA 07/04/2026 $10,711.19 $10,978.97 $11,253.44 $11,534.78 $11,823.15 $12,118.74 $12,421.70 $12,732.25 $13,050.56 $13,376.82 $13,711.25A67 PRINCIPAL HR ANALYST APEA 07/04/2026 $10,688.61 $10,955.83 $11,229.72 $11,510.47 $11,798.23 $12,093.18 $12,395.51 $12,705.40 $13,023.03 $13,348.61 $13,682.33A68 PRINCIPAL MGMT ANALYST APEA 07/04/2026 $9,294.44 $9,526.80 $9,764.98 $10,009.10 $10,259.33 $10,515.81 $10,778.71 $11,048.17 $11,324.38 $11,607.49 $11,897.68A69 PRINCIPAL PLANNER APEA 07/04/2026 $10,351.33 $10,610.11 $10,875.37 $11,147.25 $11,425.93 $11,711.58 $12,004.37 $12,304.48 $12,612.09 $12,927.39 $13,250.58A61 PROCURE & CONTR ADMIN APEA 07/04/2026 $7,329.04 $7,512.27 $7,700.08 $7,892.58 $8,089.89 $8,292.14 $8,499.44 $8,711.93 $8,929.73 $9,152.98 $9,381.80 N06 PROP & EVIDENCE TECH POLICE 01/03/2026 $5,484.58 $5,621.50 $5,762.64 $5,907.28 $6,054.73 $6,205.70 $6,360.88 $6,520.27 $6,683.17 $6,850.29 $7,021.61N04 PUBLIC SAFETY DISPATCHER I POLICE 01/03/2026 $5,567.79 $5,706.78 $5,850.06 $5,996.90 $6,146.59 $6,299.85 $6,457.38 $6,619.19 $6,784.56 $6,954.21 $7,128.13N03 PUBLIC SAFETY DISPATCHER II POLICE 01/03/2026 $6,125.80 $6,278.73 $6,436.37 $6,597.92 $6,762.62 $6,931.23 $7,104.55 $7,282.58 $7,464.52 $7,651.17 $7,842.53 B20 PUBLIC WORKS CREW LDR BCEA 07/04/2026 $5,825.30 $5,970.93 $6,120.20 $6,273.20 $6,430.03 $6,590.78 $6,755.55 $6,924.43 $7,097.54 $7,274.98 $7,456.85E04 PUBLIC WORKS DIR N/A 07/04/2026 $16,850.00 $20,220.00 M26 PUBLIC WORKS MANAGER MGMT NS 07/04/2026 $10,788.68 $11,058.39 $11,334.85 $11,618.23 $11,908.68 $12,206.40 $12,511.56 $12,824.35 $13,144.95 $13,473.58 $13,810.42 A15 PUBLIC WORKS SPRVSR APEA 07/04/2026 $7,475.76 $7,662.65 $7,854.22 $8,050.58 $8,251.84 $8,458.14 $8,669.59 $8,886.33 $9,108.49 $9,336.21 $9,569.61 M27 PUBLIC WORKS UTILIT MGR MGMT NS 07/04/2026 $11,867.54 $12,164.23 $12,468.34 $12,780.05 $13,099.55 $13,427.04 $13,762.71 $14,106.78 $14,459.45 $14,820.94 $15,191.46 A70 PUBLIC WORKS UTLTY SPRVSR APEA 07/04/2026 $8,599.53 $8,814.52 $9,034.89 $9,260.76 $9,492.28 $9,729.58 $9,972.82 $10,222.14 $10,477.70 $10,739.64 $11,008.13 M09 PURCHASING AGENT MGMT NS 07/04/2026 $10,482.96 $10,745.03 $11,013.65 $11,289.00 $11,571.23 $11,860.51 $12,157.01 $12,460.94 $12,772.46 $13,091.77 $13,419.07 A52 RADIO FREQUENCY SP APEA 07/04/2026 $8,704.09 $8,921.69 $9,144.73 $9,373.35 $9,607.68 $9,847.87 $10,094.06 $10,346.41 $10,605.08 $10,870.20 $11,141.96A47 REDEV PROJECT MGR APEA 07/04/2026 $8,282.36 $8,489.42 $8,701.65 $8,919.19 $9,142.17 $9,370.72 $9,604.99 $9,845.11 $10,091.24 $10,343.52 $10,602.11B58 REPROGRAPHICS SPEC. BCEA 07/04/2026 $6,151.90 $6,305.69 $6,463.34 $6,624.92 $6,790.54 $6,960.31 $7,134.32 $7,312.68 $7,495.49 $7,682.88 $7,874.95 M13 REVENUE & BUDGET MGR MGMT NS 07/04/2026 $10,816.11 $11,086.51 $11,363.67 $11,647.76 $11,938.95 $12,237.43 $12,543.36 $12,856.95 $13,178.36 $13,507.82 $13,845.52 A48 SOFTWARE DEVELOPER I APEA 07/04/2026 $9,271.98 $9,503.78 $9,741.37 $9,984.90 $10,234.52 $10,490.39 $10,752.66 $11,021.48 $11,297.02 $11,579.44 $11,868.93A42 SOFTWAREDEVELOPER II APEA 07/04/2026 $8,108.93 $8,311.65 $8,519.44 $8,732.43 $8,950.74 $9,174.50 $9,403.87 $9,638.97 $9,879.94 $10,126.94 $10,380.11A53 SR. ACCOUNTANT APEA 07/04/2026 $7,798.21 $7,993.16 $8,192.99 $8,397.82 $8,607.77 $8,822.96 $9,043.53 $9,269.61 $9,501.35 $9,738.89 $9,982.36A59 SR. BLDG INSPECTOR APEA 07/04/2026 $7,672.46 $7,864.27 $8,060.88 $8,262.40 $8,468.96 $8,680.68 $8,897.69 $9,120.14 $9,348.14 $9,581.85 $9,821.39A23 SR. BUYER APEA 07/04/2026 $6,260.03 $6,416.53 $6,576.95 $6,741.38 $6,909.92 $7,082.67 $7,259.73 $7,441.22 $7,627.25 $7,817.93 $8,013.38A05 SR. COMM SVS SPRVSR APEA 07/04/2026 $9,227.19 $9,457.87 $9,694.32 $9,936.67 $10,185.09 $10,439.72 $10,700.72 $10,968.23 $11,242.44 $11,523.50 $11,811.59 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JULY 18, 2026 - REGULAR FULL-TIME CLASSIFICATIONS A09 SR. EX ASST/CITY MGR APEA 07/04/2026 $7,579.25 $7,768.73 $7,962.95 $8,162.02 $8,366.08 $8,575.23 $8,789.61 $9,009.35 $9,234.59 $9,465.45 $9,702.08B41 SR. FIRE PREV SPEC BCEA 07/04/2026 $7,909.81 $8,107.56 $8,310.25 $8,518.00 $8,730.95 $8,949.23 $9,172.95 $9,402.28 $9,637.34 $9,878.27 $10,125.22A62 SR. FISCAL ANALYST APEA 07/04/2026 $9,071.56 $9,298.35 $9,530.81 $9,769.08 $10,013.30 $10,263.64 $10,520.23 $10,783.23 $11,052.81 $11,329.14 $11,612.37A45 SR. GIS ANALYST APEA 07/04/2026 $8,832.86 $9,053.68 $9,280.03 $9,512.03 $9,749.83 $9,993.58 $10,243.41 $10,499.50 $10,761.99 $11,031.04 $11,306.82A43 SR. HR ANALYST APEA 07/04/2026 $9,503.78 $9,741.37 $9,984.91 $10,234.53 $10,490.39 $10,752.65 $11,021.47 $11,297.02 $11,579.44 $11,868.92 $12,165.65A51 SR. IT SPECIALIST APEA 07/04/2026 $8,311.65 $8,519.44 $8,732.43 $8,950.74 $9,174.51 $9,403.87 $9,638.97 $9,879.94 $10,126.94 $10,380.11 $10,639.61A37 SR. MEDIA SVS SPEC-AV APEA 07/04/2026 $7,668.91 $7,860.63 $8,057.15 $8,258.58 $8,465.05 $8,676.67 $8,893.59 $9,115.94 $9,343.84 $9,577.44 $9,816.88A16 SR. MGMNT ANALYST APEA 07/04/2026 $8,246.88 $8,453.06 $8,664.39 $8,881.00 $9,103.03 $9,330.61 $9,563.87 $9,802.96 $10,048.03 $10,299.24 $10,556.72A03 SR. PLANNER APEA 07/04/2026 $9,201.18 $9,431.22 $9,667.00 $9,908.68 $10,156.40 $10,410.31 $10,670.56 $10,937.33 $11,210.76 $11,491.03 $11,778.31B17 SR. POL REC'DS TECH BCEA 07/04/2026 $5,372.89 $5,507.21 $5,644.89 $5,786.01 $5,930.66 $6,078.93 $6,230.91 $6,386.68 $6,546.35 $6,710.01 $6,877.75 N02 SR. PS DISPATCHER POLICE 01/03/2026 $6,738.35 $6,906.57 $7,079.97 $7,257.68 $7,438.84 $7,624.32 $7,814.97 $8,010.80 $8,210.94 $8,416.25 $8,626.75 B45 ST SWEEPER OPERATOR BCEA 07/04/2026 $5,260.45 $5,391.96 $5,526.76 $5,664.93 $5,806.55 $5,951.71 $6,100.51 $6,253.02 $6,409.35 $6,569.58 $6,733.82A71 UTILITY BILLING SPRVSR APEA 07/04/2026 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88 $8,282.90B52 WATER DIST CREW LDR BCEA 07/04/2026 $6,783.96 $6,953.56 $7,127.39 $7,305.58 $7,488.22 $7,675.43 $7,867.32 $8,064.00 $8,265.60 $8,472.24 $8,684.05B54 WATER DIST OPER I BCEA 07/04/2026 $5,128.71 $5,256.93 $5,388.35 $5,523.06 $5,661.14 $5,802.67 $5,947.73 $6,096.43 $6,248.84 $6,405.06 $6,565.18B53 WATER DIST OPER II BCEA 07/04/2026 $5,470.92 $5,607.70 $5,747.89 $5,891.58 $6,038.87 $6,189.84 $6,344.59 $6,503.20 $6,665.78 $6,832.43 $7,003.24 M12 WATER DIST SUPERINT MGMT NS 07/04/2026 $10,787.80 $11,057.49 $11,333.92 $11,617.27 $11,907.70 $12,205.39 $12,510.52 $12,823.29 $13,143.87 $13,472.47 $13,809.28 A36 WATER DIST SUPERVISOR APEA 07/04/2026 $8,190.03 $8,394.78 $8,604.66 $8,819.77 $9,040.27 $9,266.28 $9,497.93 $9,735.38 $9,978.77 $10,228.23 $10,483.94B73 WATER QUALITY SPECIALIST BCEA 07/04/2026 $6,172.55 $6,326.86 $6,485.04 $6,647.16 $6,813.34 $6,983.67 $7,158.27 $7,337.22 $7,520.65 $7,708.67 $7,901.39 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
B49 ACCOUNTANT I BCEA 07/04/2026 $6,768.90 $6,938.13 $7,111.58 $7,289.37 $7,471.60 $7,658.39 $7,849.85 $8,046.10 $8,247.25 $8,453.44 $8,664.78A31 ACCOUNTANT II APEA 07/04/2026 $7,058.82 $7,235.29 $7,416.17 $7,601.57 $7,791.61 $7,986.40 $8,186.06 $8,390.72 $8,600.48 $8,815.49 $9,035.88B03 ACCOUNTING TECH I BCEA 07/04/2026 $4,531.36 $4,644.64 $4,760.76 $4,879.78 $5,001.77 $5,126.82 $5,254.99 $5,386.36 $5,521.02 $5,659.05 $5,800.52B02 ACCOUNTING TECH II BCEA 07/04/2026 $4,984.71 $5,109.33 $5,237.06 $5,367.99 $5,502.18 $5,639.74 $5,780.74 $5,925.26 $6,073.39 $6,225.22 $6,380.85B07 ADMIN CLERK I BCEA 07/04/2026 $3,882.99 $3,980.06 $4,079.56 $4,181.55 $4,286.09 $4,393.24 $4,503.07 $4,615.65 $4,731.04 $4,849.32 $4,970.55B06 ADMIN CLERK II BCEA 07/04/2026 $4,269.66 $4,376.40 $4,485.80 $4,597.95 $4,712.90 $4,830.72 $4,951.49 $5,075.28 $5,202.16 $5,332.22 $5,465.53E05 ADMIN SVCS DIR N/A 07/04/2026 $17,806.00 $21,367.00B05 ADMINISTRATIVE ASSISTANT BCEA 07/04/2026 $4,720.89 $4,838.91 $4,959.89 $5,083.89 $5,210.98 $5,341.26 $5,474.79 $5,611.67 $5,751.95 $5,895.76 $6,043.14 UR2 AMBULANCE OPERATOR (NS) N/A 07/04/2026 $3,375.67 $3,460.06 $3,546.56 $3,635.22 $3,726.11 $3,819.26 $3,914.74 $4,012.61 $4,112.92 $4,215.75 $4,321.14 A38 ASSISTANT CITY ENG APEA 07/04/2026 $11,514.54 $11,802.41 $12,097.47 $12,399.90 $12,709.90 $13,027.65 $13,353.34 $13,687.18 $14,029.36 $14,380.10 $14,739.60E01 ASSISTANT CITY MGR / DIR N/A 07/04/2026 $20,923.00 $25,107.00B46 ASSISTANT ENGINEER BCEA 07/04/2026 $7,532.18 $7,720.49 $7,913.51 $8,111.35 $8,314.13 $8,521.98 $8,735.03 $8,953.40 $9,177.24 $9,406.67 $9,641.84B10 ASSISTANT PLANNER BCEA 07/04/2026 $6,704.13 $6,871.74 $7,043.53 $7,219.62 $7,400.11 $7,585.11 $7,774.73 $7,969.10 $8,168.33 $8,372.53 $8,581.85A02 ASSOCIATE ENGINEER APEA 07/04/2026 $8,901.21 $9,123.74 $9,351.83 $9,585.63 $9,825.28 $10,070.90 $10,322.67 $10,580.74 $10,845.26 $11,116.38 $11,394.30A04 ASSOCIATE PLANNER APEA 07/04/2026 $7,698.04 $7,890.49 $8,087.75 $8,289.94 $8,497.20 $8,709.62 $8,927.37 $9,150.55 $9,379.31 $9,613.79 $9,854.14B28 ASST TO THE CITY CLERK BCEA 07/04/2026 $4,886.05 $5,008.20 $5,133.41 $5,261.74 $5,393.29 $5,528.12 $5,666.32 $5,807.98 $5,953.18 $6,102.01 $6,254.56A25 ASST TO THE CITY MGR APEA 07/04/2026 $9,484.64 $9,721.75 $9,964.79 $10,213.91 $10,469.26 $10,730.99 $10,999.27 $11,274.24 $11,556.10 $11,845.01 $12,141.14A58 BLDG & FAC ADMIN APEA 07/04/2026 $8,295.80 $8,503.20 $8,715.78 $8,933.68 $9,157.02 $9,385.95 $9,620.59 $9,861.11 $10,107.64 $10,360.33 $10,619.34 M01 BLDG & SAFETY MGR MGMT NS 07/04/2026 $12,606.48 $12,921.64 $13,244.68 $13,575.80 $13,915.19 $14,263.07 $14,619.65 $14,985.14 $15,359.77 $15,743.76 $16,137.35 B72 BUILDING MAINT CREW LDR BCEA 07/04/2026 $6,116.57 $6,269.48 $6,426.22 $6,586.87 $6,751.54 $6,920.33 $7,093.34 $7,270.67 $7,452.44 $7,638.75 $7,829.72B04 BUILDING MAINT TECH BCEA 07/04/2026 $5,548.25 $5,686.96 $5,829.13 $5,974.85 $6,124.22 $6,277.33 $6,434.27 $6,595.12 $6,760.00 $6,928.99 $7,102.22 M23 BUILDING OFFICIAL MGMT NS 07/04/2026 $10,357.82 $10,616.77 $10,882.19 $11,154.24 $11,433.10 $11,718.92 $12,011.90 $12,312.20 $12,620.01 $12,935.51 $13,258.90 B37 BUSINESS OUTREACH SP BCEA 07/04/2026 $5,383.20 $5,517.78 $5,655.72 $5,797.12 $5,942.05 $6,090.60 $6,242.86 $6,398.93 $6,558.90 $6,722.87 $6,890.94B69 BUYER BCEA 07/04/2026 $5,682.48 $5,824.54 $5,970.16 $6,119.41 $6,272.39 $6,429.20 $6,589.93 $6,754.68 $6,923.54 $7,096.63 $7,274.04 M16 CITY CLERK MGMT NS 07/04/2026 $11,953.38 $12,252.22 $12,558.52 $12,872.48 $13,194.30 $13,524.15 $13,862.26 $14,208.82 $14,564.03 $14,928.14 $15,301.34 B66 CITY CLERK SPECIALIST BCEA 07/04/2026 $4,269.66 $4,376.40 $4,485.80 $4,597.95 $4,712.90 $4,830.72 $4,951.49 $5,075.28 $5,202.16 $5,332.22 $5,465.53 M02 CITY ENGINEER MGMT NS 07/04/2026 $13,122.13 $13,450.19 $13,786.44 $14,131.10 $14,484.38 $14,846.49 $15,217.65 $15,598.10 $15,988.05 $16,387.75 $16,797.45 3 CITY MANAGER N/A 07/04/2026 $29,135.00
M03 CITY PLANNER MGMT NS 07/04/2026 $12,570.39 $12,884.65 $13,206.77 $13,536.94 $13,875.37 $14,222.26 $14,577.81 $14,942.26 $15,315.81 $15,698.71 $16,091.18 N10 CIVILIAN INVESTIGATOR POLICE 01/02/2027 $6,544.40 $6,707.78 $6,876.19 $7,048.78 $7,224.73 $7,404.87 $7,590.03 $7,780.22 $7,974.60 $8,174.01 $8,378.44 B24 CODE ENFORCE OFFICER BCEA 07/04/2026 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 $8,602.54B13 COMBO INSPECTOR I BCEA 07/04/2026 $5,703.96 $5,846.55 $5,992.71 $6,142.52 $6,296.09 $6,453.49 $6,614.83 $6,780.21 $6,949.72 $7,123.47 $7,301.55B12 COMBO INSPECTOR II BCEA 07/04/2026 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 $8,602.54 M04 COMM & MKTG MANAGER MGMT NS 07/04/2026 $10,789.77 $11,059.51 $11,336.00 $11,619.40 $11,909.89 $12,207.63 $12,512.83 $12,825.65 $13,146.29 $13,474.95 $13,811.82 A18 COMM & MKTNG ANALYST APEA 07/04/2026 $8,247.93 $8,454.12 $8,665.48 $8,882.11 $9,104.16 $9,331.77 $9,565.07 $9,804.19 $10,049.30 $10,300.52 $10,558.04 M10 COMM DEV MANAGER MGMT NS 07/04/2026 $11,172.42 $11,451.73 $11,738.03 $12,031.48 $12,332.27 $12,640.58 $12,956.60 $13,280.51 $13,612.52 $13,952.83 $14,301.65 A08 COMM SV SPECIALIST I APEA 07/04/2026 $5,349.84 $5,483.58 $5,620.67 $5,761.19 $5,905.22 $6,052.84 $6,204.17 $6,359.27 $6,518.25 $6,681.21 $6,848.24
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 2, 2027 - REGULAR FULL-TIME CLASSIFICATIONS Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 2, 2027 - REGULAR FULL-TIME CLASSIFICATIONS A07 COMM SV SPECIALST II APEA 07/04/2026 $6,040.49 $6,191.50 $6,346.29 $6,504.94 $6,667.56 $6,834.26 $7,005.11 $7,180.24 $7,359.74 $7,543.73 $7,732.32 M05 COMM SVC MANAGER MGMT NS 07/04/2026 $10,482.96 $10,745.03 $11,013.65 $11,289.00 $11,571.23 $11,860.51 $12,157.01 $12,460.94 $12,772.46 $13,091.77 $13,419.07 A06 COMM SVS SUPERVISOR APEA 07/04/2026 $8,025.40 $8,226.04 $8,431.69 $8,642.49 $8,858.55 $9,080.01 $9,307.01 $9,539.69 $9,778.18 $10,022.63 $10,273.20B60 COMM. DEV SPEC. BCEA 07/04/2026 $4,957.75 $5,081.70 $5,208.74 $5,338.96 $5,472.43 $5,609.24 $5,749.47 $5,893.21 $6,040.54 $6,191.56 $6,346.34 N01 COMM. SUPERVISOR POLICE 01/02/2027 $8,182.64 $8,386.92 $8,597.49 $8,813.29 $9,033.28 $9,258.51 $9,490.02 $9,727.82 $9,970.86 $10,220.18 $10,475.79 E07 COMMUNITY DEV DIR N/A 07/04/2026 $16,658.00 $19,991.00E03 COMMUNITY SVCS DIR N/A 07/04/2026 $15,794.00 $18,952.00 N14 CRIME ANALYST POLICE 01/02/2027 $7,289.85 $7,471.84 $7,659.43 $7,851.68 $8,047.67 $8,248.33 $8,454.58 $8,666.44 $8,882.96 $9,105.08 $9,332.80N11 CRIME SCENE INVSTGTR POLICE 01/02/2027 $7,044.07 $7,219.92 $7,401.19 $7,586.96 $7,776.34 $7,970.23 $8,169.53 $8,374.24 $8,583.47 $8,798.10 $9,018.14 A11 DEPUTY CITY CLERK/REC SUP APEA 07/04/2026 $7,391.73 $7,576.53 $7,765.95 $7,960.10 $8,159.09 $8,363.07 $8,572.15 $8,786.46 $9,006.12 $9,231.27 $9,462.05E09 DEPUTY CITY MANAGER / DIR N/A 07/04/2026 $19,943.00 $23,932.00 M21 DEPUTY DIR OF ADMIN SVS MGMT NS 07/04/2026 $14,613.95 $14,979.30 $15,353.78 $15,737.63 $16,131.07 $16,534.34 $16,947.70 $17,371.40 $17,805.68 $18,250.82 $18,707.09M24 DEPUTY DIR OF COMM DEV MGMT NS 07/04/2026 $13,672.98 $14,014.81 $14,365.18 $14,724.31 $15,092.42 $15,469.73 $15,856.47 $16,252.88 $16,659.20 $17,075.68 $17,502.57M22 DEPUTY DIR OF COMM SVS MGMT NS 07/04/2026 $12,962.40 $13,286.46 $13,618.62 $13,959.09 $14,308.06 $14,665.77 $15,032.41 $15,408.22 $15,793.43 $16,188.26 $16,592.97M25 DEPUTY DIR OF PUBLIC WORKS MGMT NS 07/04/2026 $13,829.61 $14,175.35 $14,529.73 $14,892.97 $15,265.30 $15,646.93 $16,038.10 $16,438.18 $16,850.03 $17,271.28 $17,703.07 A63 DEPUTY FIRE MARSHAL APEA 07/04/2026 $8,105.17 $8,307.80 $8,515.50 $8,728.38 $8,946.60 $9,170.26 $9,399.52 $9,634.51 $9,875.37 $10,122.26 $10,375.32B27 DUPLICATING TECH I BCEA 07/04/2026 $4,111.70 $4,214.49 $4,319.85 $4,427.84 $4,538.54 $4,652.00 $4,768.30 $4,887.51 $5,009.69 $5,134.93 $5,263.30B26 DUPLICATING TECH II BCEA 07/04/2026 $5,137.21 $5,265.65 $5,397.29 $5,532.22 $5,670.53 $5,812.30 $5,957.61 $6,106.55 $6,259.22 $6,415.70 $6,576.09B56 ECON DEV ANALYST I BCEA 07/04/2026 $6,632.66 $6,798.48 $6,968.44 $7,142.66 $7,321.22 $7,504.26 $7,691.86 $7,884.16 $8,081.27 $8,283.30 $8,490.38A21 ECON DEV ANALYST II APEA 07/04/2026 $7,355.20 $7,539.08 $7,727.55 $7,920.74 $8,118.76 $8,321.73 $8,529.78 $8,743.02 $8,961.59 $9,185.63 $9,415.27A19 EMERGENCY PREP COORD APEA 07/04/2026 $8,246.88 $8,453.06 $8,664.39 $8,881.00 $9,103.03 $9,330.61 $9,563.87 $9,802.96 $10,048.03 $10,299.24 $10,556.72 M18 EMS MANAGER MGMT NS 07/04/2026 $9,144.73 $9,373.35 $9,607.68 $9,847.87 $10,094.06 $10,346.41 $10,605.08 $10,870.20 $11,141.96 $11,420.51 $11,706.03 B31 ENGINEERING TECH I BCEA 07/04/2026 $5,125.00 $5,253.12 $5,384.45 $5,519.06 $5,657.03 $5,798.46 $5,943.43 $6,092.01 $6,244.32 $6,400.43 $6,560.44B30 ENGINEERING TECH II BCEA 07/04/2026 $6,151.90 $6,305.69 $6,463.34 $6,624.92 $6,790.54 $6,960.31 $7,134.32 $7,312.68 $7,495.49 $7,682.88 $7,874.95B09 ENVIR SERVS INSPECT BCEA 07/04/2026 $6,772.20 $6,941.50 $7,115.04 $7,292.92 $7,475.25 $7,662.13 $7,853.68 $8,050.03 $8,251.28 $8,457.56 $8,669.00A20 ENVIRON SERVS COOR APEA 07/04/2026 $8,909.10 $9,131.83 $9,360.12 $9,594.12 $9,833.98 $10,079.82 $10,331.82 $10,590.11 $10,854.87 $11,126.25 $11,404.40A12 EXECUTIVE ASSISTANT APEA 07/04/2026 $5,840.78 $5,986.79 $6,136.47 $6,289.88 $6,447.13 $6,608.31 $6,773.52 $6,942.86 $7,116.43 $7,294.34 $7,476.70 M06 FINANCIAL SVC MGR MGMT NS 07/04/2026 $11,545.89 $11,834.54 $12,130.40 $12,433.67 $12,744.51 $13,063.12 $13,389.70 $13,724.44 $14,067.55 $14,419.25 $14,779.73 FM1 FIRE BATTALION CHIEF FIRE MGMT 07/04/2026 $13,585.20 $13,924.35 $14,273.94 $14,632.22 $14,997.46 $15,371.39 $15,755.77 $16,150.57 $16,554.08 $16,968.02 $17,392.39 F20 FIRE CAPTAIN FIRE 07/18/2026 $10,387.99 $10,647.33 $10,914.64 $11,188.60 $11,467.88 $11,753.82 $12,047.73 $12,349.62 $12,658.16 $12,974.68 $13,299.18 ES1 FIRE CHIEF N/A 07/04/2026 $19,320.00 $23,184.00
FM_3 FIRE DEPUTY CHIEF FIRE MGMT 07/04/2026 $16,438.09 $16,849.04 $17,270.27 $17,702.02 $18,144.57 $18,598.19 $19,063.14 $19,539.72 $20,028.21 $20,528.92 $21,044.77 FM2 FIRE DIVISION CHIEF FIRE MGMT 07/04/2026 $14,943.72 $15,317.31 $15,700.24 $16,092.75 $16,495.07 $16,907.44 $17,330.13 $17,765.63 $18,209.49 $18,664.82 $19,131.62 F05 FIRE ENGINEER FIRE 07/18/2026 $8,847.75 $9,068.63 $9,296.31 $9,529.65 $9,767.52 $10,011.06 $10,261.40 $10,518.52 $10,781.32 $11,050.91 $11,327.29 M20 FIRE MARSHAL - NON SWORN MGMT NS 07/04/2026 $9,515.37 $9,753.26 $9,997.09 $10,247.01 $10,503.19 $10,765.77 $11,034.91 $11,310.78 $11,593.56 $11,883.40 $12,180.48 B34 FIRE PREV SPEC I BCEA 07/04/2026 $6,324.80 $6,482.92 $6,644.99 $6,811.11 $6,981.39 $7,155.93 $7,334.83 $7,518.20 $7,706.15 $7,898.81 $8,096.27B33 FIRE PREV SPEC II BCEA 07/04/2026 $7,190.73 $7,370.51 $7,554.77 $7,743.64 $7,937.24 $8,135.67 $8,339.06 $8,547.54 $8,761.23 $8,980.26 $9,204.77 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 2, 2027 - REGULAR FULL-TIME CLASSIFICATIONS A50 FIRE PROTECT ANALYST APEA 07/04/2026 $7,368.34 $7,552.55 $7,741.36 $7,934.90 $8,133.27 $8,336.61 $8,545.02 $8,758.65 $8,977.61 $9,202.05 $9,432.11 F01 FIREFIGHTER FIRE 07/18/2026 $7,874.61 $8,071.20 $8,273.84 $8,481.52 $8,693.23 $8,909.98 $9,132.78 $9,361.63 $9,595.51 $9,835.45 $10,081.44 UR1 FIREFIGHTER TRAINEE (NS) N/A 07/04/2026 $6,512.60
A46 FISCAL SPECIALIST APEA 07/04/2026 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88 $8,282.90 A14 FLEET SUPERVISOR APEA 07/04/2026 $7,869.20 $8,065.92 $8,267.58 $8,474.26 $8,686.11 $8,903.27 $9,125.86 $9,354.00 $9,587.85 $9,827.55 $10,073.24A44 GIS ANALYST APEA 07/04/2026 $8,029.33 $8,230.07 $8,435.82 $8,646.72 $8,862.89 $9,084.46 $9,311.57 $9,544.35 $9,782.96 $10,027.54 $10,278.22B36 HEAVY EQUIP MECH I BCEA 07/04/2026 $5,164.13 $5,293.23 $5,425.55 $5,561.19 $5,700.22 $5,842.72 $5,988.80 $6,138.51 $6,291.98 $6,449.27 $6,610.51B35 HEAVY EQUIP MECH II BCEA 07/04/2026 $5,681.46 $5,823.50 $5,969.08 $6,118.31 $6,271.26 $6,428.05 $6,588.75 $6,753.47 $6,922.30 $7,095.36 $7,272.74B59 HELP DESK TECH BCEA 07/04/2026 $5,542.30 $5,680.86 $5,822.88 $5,968.45 $6,117.67 $6,270.61 $6,427.37 $6,588.06 $6,752.76 $6,921.59 $7,094.63A54 HR ANALYST I APEA 07/04/2026 $7,857.86 $8,054.30 $8,255.66 $8,462.05 $8,673.60 $8,890.44 $9,112.70 $9,340.51 $9,574.03 $9,813.38 $10,058.71A27 HR ANALYST II APEA 07/04/2026 $8,639.47 $8,855.46 $9,076.85 $9,303.77 $9,536.37 $9,774.78 $10,019.14 $10,269.62 $10,526.36 $10,789.52 $11,059.25A28 HR TECHNICIAN APEA 07/04/2026 $6,289.33 $6,446.56 $6,607.72 $6,772.91 $6,942.24 $7,115.79 $7,293.68 $7,476.02 $7,662.91 $7,854.49 $8,050.85B08 HSG REHAB SPECIALIST BCEA 07/04/2026 $6,555.82 $6,719.72 $6,887.71 $7,059.91 $7,236.41 $7,417.32 $7,602.76 $7,792.83 $7,987.65 $8,187.35 $8,392.03 M15 HUMAN RESOURES MGR MGMT NS 07/04/2026 $12,396.94 $12,706.87 $13,024.54 $13,350.16 $13,683.91 $14,026.01 $14,376.66 $14,736.08 $15,104.47 $15,482.08 $15,869.14 A24 INFO TECH SUPERVISOR APEA 07/04/2026 $9,673.98 $9,915.83 $10,163.73 $10,417.82 $10,678.27 $10,945.23 $11,218.86 $11,499.33 $11,786.81 $12,081.48 $12,383.52 M08 INFO TECHNO MANAGER MGMT NS 07/04/2026 $12,405.34 $12,715.47 $13,033.36 $13,359.19 $13,693.17 $14,035.50 $14,386.39 $14,746.06 $15,114.71 $15,492.57 $15,879.89 A35 IT ENTRPRS ACT ADMIN APEA 07/04/2026 $9,555.67 $9,794.57 $10,039.43 $10,290.42 $10,547.68 $10,811.37 $11,081.66 $11,358.70 $11,642.67 $11,933.74 $12,232.09A40 IT SPECIALIST I APEA 07/04/2026 $7,258.22 $7,439.68 $7,625.67 $7,816.32 $8,011.73 $8,212.02 $8,417.32 $8,627.76 $8,843.45 $9,064.54 $9,291.16A41 IT SPECIALIST II APEA 07/04/2026 $7,915.14 $8,113.02 $8,315.85 $8,523.74 $8,736.83 $8,955.25 $9,179.13 $9,408.61 $9,643.83 $9,884.92 $10,132.05 N07 JAILER POLICE 01/02/2027 $5,542.45 $5,680.81 $5,823.43 $5,969.61 $6,118.61 $6,271.17 $6,427.99 $6,589.06 $6,753.68 $6,922.56 $7,095.69 B11 JR PLANS CHECKER BCEA 07/04/2026 $6,720.30 $6,888.31 $7,060.51 $7,237.03 $7,417.95 $7,603.40 $7,793.48 $7,988.31 $8,188.02 $8,392.72 $8,602.54B15 LS MAINT CTRCT ADMIN BCEA 07/04/2026 $6,117.69 $6,270.63 $6,427.40 $6,588.08 $6,752.78 $6,921.61 $7,094.65 $7,272.02 $7,453.81 $7,640.15 $7,831.16 M11 MAINT SRVS SUPERINT MGMT NS 07/04/2026 $9,807.89 $10,053.08 $10,304.41 $10,562.02 $10,826.06 $11,096.71 $11,374.14 $11,658.49 $11,949.95 $12,248.69 $12,554.91 B23 MAINT WORKER I BCEA 07/04/2026 $4,670.50 $4,787.27 $4,906.95 $5,029.62 $5,155.36 $5,284.24 $5,416.35 $5,551.76 $5,690.56 $5,832.83 $5,978.65B22 MAINT WORKER II BCEA 07/04/2026 $4,904.24 $5,026.85 $5,152.52 $5,281.34 $5,413.37 $5,548.70 $5,687.43 $5,829.61 $5,975.34 $6,124.72 $6,277.84A34 MANAGEMENT ANALYST I APEA 07/04/2026 $6,661.05 $6,827.58 $6,998.27 $7,173.23 $7,352.55 $7,536.37 $7,724.78 $7,917.89 $8,115.84 $8,318.73 $8,526.70A17 MANAGEMENT ANALYST II APEA 07/04/2026 $7,495.46 $7,682.85 $7,874.92 $8,071.80 $8,273.59 $8,480.43 $8,692.44 $8,909.75 $9,132.50 $9,360.82 $9,594.84B70 MANAGEMENT ASSISTANT BCEA 07/04/2026 $5,839.48 $5,985.47 $6,135.11 $6,288.48 $6,445.69 $6,606.84 $6,772.01 $6,941.31 $7,114.84 $7,292.71 $7,475.03B43 MEDIA SVC SPEC I BCEA 07/04/2026 $5,601.72 $5,741.75 $5,885.29 $6,032.42 $6,183.24 $6,337.81 $6,496.26 $6,658.67 $6,825.13 $6,995.76 $7,170.65A26 MEDIA SVS SPEC II APEA 07/04/2026 $6,146.05 $6,299.70 $6,457.19 $6,618.62 $6,784.08 $6,953.69 $7,127.53 $7,305.72 $7,488.36 $7,675.57 $7,867.46 N08 PARKING CTRL OFFICER POLICE 01/02/2027 $5,020.27 $5,145.60 $5,274.79 $5,407.19 $5,542.16 $5,680.34 $5,822.38 $5,968.28 $6,117.39 $6,270.36 $6,427.18 A65 PAYROLL SUPERVISOR APEA 07/04/2026 $6,470.58 $6,632.34 $6,798.15 $6,968.11 $7,142.31 $7,320.87 $7,503.89 $7,691.49 $7,883.78 $8,080.88 $8,282.90B71 PAYROLL TECHNICIAN BCEA 07/04/2026 $5,383.49 $5,518.08 $5,656.03 $5,797.43 $5,942.37 $6,090.92 $6,243.20 $6,399.28 $6,559.26 $6,723.24 $6,891.32 B62 PERMIT TECHNICIAN BCEA 07/04/2026 $4,889.95 $5,012.20 $5,137.51 $5,265.94 $5,397.58 $5,532.52 $5,670.83 $5,812.60 $5,957.91 $6,106.86 $6,259.53A29 PLAN CHECKER APEA 07/04/2026 $8,241.23 $8,447.26 $8,658.44 $8,874.90 $9,096.78 $9,324.20 $9,557.30 $9,796.23 $10,041.14 $10,292.17 $10,549.48B64 PLANNING TECHNICIAN BCEA 07/04/2026 $5,176.03 $5,305.44 $5,438.07 $5,574.02 $5,713.37 $5,856.21 $6,002.62 $6,152.68 $6,306.50 $6,464.16 $6,625.76 PM1 POLICE CAPTAIN POLICE MGMT 07/04/2026 $17,100.47 $17,527.38 $17,967.43 $18,418.42 $18,878.17 $19,348.86 $19,832.70 $20,329.66 $20,837.58 $21,358.62 $21,892.81 Job
Code Job Title Unit
Effective
Date
Approx
Monthly
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Approx
Monthly
Max. /
Step 11
CITY OF BREA
SALARY SCHEDULE AS OF JANUARY 2, 2027 - REGULAR FULL-TIME CLASSIFICATIONS ES2 POLICE CHIEF N/A 07/04/2026 $20,923.00 $25,107.00
B65 POLICE COMM. OUTRCH COOR. BCEA 07/04/2026 $5,741.77 $5,885.31 $6,032.43 $6,183.25 $6,337.82 $6,496.27 $6,658.68 $6,825.14 $6,995.77 $7,170.66 $7,349.92 PM2 POLICE LT. POLICE MGMT 07/04/2026 $14,650.61 $15,016.37 $15,393.37 $15,779.75 $16,173.63 $16,576.90 $16,991.41 $17,417.18 $17,852.33 $18,298.73 $18,756.39 N16 POLICE OFCR RECRUIT POLICE 01/02/2027 $7,856.44
P02 POLICE OFFICER POLICE 01/02/2027 $8,374.72 $8,583.79 $8,799.29 $9,020.16 $9,245.32 $9,475.83 $9,712.78 $9,956.17 $10,204.91 $10,460.09 $10,721.70 A30 POLICE REC & P&E SPVR APEA 07/04/2026 $8,621.59 $8,837.13 $9,058.05 $9,284.50 $9,516.62 $9,754.53 $9,998.40 $10,248.36 $10,504.56 $10,767.18 $11,036.36B19 POLICE RECORDS CLERK BCEA 07/04/2026 $4,652.65 $4,768.97 $4,888.19 $5,010.40 $5,135.66 $5,264.05 $5,395.65 $5,530.54 $5,668.81 $5,810.53 $5,955.80B18 POLICE RECORDS TECH BCEA 07/04/2026 $4,886.05 $5,008.20 $5,133.41 $5,261.74 $5,393.29 $5,528.12 $5,666.32 $5,807.98 $5,953.18 $6,102.01 $6,254.56P20 POLICE SGT POLICE 01/02/2027 $10,823.61 $11,093.82 $11,372.34 $11,657.79 $11,948.79 $12,246.71 $12,552.95 $12,867.50 $13,188.98 $13,518.77 $13,856.88 N05 POLICE SVS. OFFICER POLICE 01/02/2027 $5,522.65 $5,660.52 $5,802.64 $5,948.29 $6,096.77 $6,248.78 $6,405.03 $6,565.53 $6,729.56 $6,897.84 $7,070.35 A49 POLICE TRAIN COORDIN APEA 07/04/2026 $5,839.48 $5,985.47 $6,135.11 $6,288.49 $6,445.70 $6,606.84 $6,772.01 $6,941.31 $7,114.84 $7,292.71 $7,475.03A66 PRINCIPAL ACCOUNTANT APEA 07/04/2026 $9,294.44 $9,526.80 $9,764.98 $10,009.10 $10,259.33 $10,515.81 $10,778.71 $11,048.17 $11,324.38 $11,607.49 $11,897.68A39 PRINCIPAL CIVIL ENG APEA 07/04/2026 $10,711.19 $10,978.97 $11,253.44 $11,534.78 $11,823.15 $12,118.74 $12,421.70 $12,732.25 $13,050.56 $13,376.82 $13,711.25A67 PRINCIPAL HR ANALYST APEA 07/04/2026 $10,688.61 $10,955.83 $11,229.72 $11,510.47 $11,798.23 $12,093.18 $12,395.51 $12,705.40 $13,023.03 $13,348.61 $13,682.33A68 PRINCIPAL MGMT ANALYST APEA 07/04/2026 $9,294.44 $9,526.80 $9,764.98 $10,009.10 $10,259.33 $10,515.81 $10,778.71 $11,048.17 $11,324.38 $11,607.49 $11,897.68A69 PRINCIPAL PLANNER APEA 07/04/2026 $10,351.33 $10,610.11 $10,875.37 $11,147.25 $11,425.93 $11,711.58 $12,004.37 $12,304.48 $12,612.09 $12,927.39 $13,250.58A61 PROCURE & CONTR ADMIN APEA 07/04/2026 $7,329.04 $7,512.27 $7,700.08 $7,892.58 $8,089.89 $8,292.14 $8,499.44 $8,711.93 $8,929.73 $9,152.98 $9,381.80 N06 PROP & EVIDENCE TECH POLICE 01/02/2027 $5,539.43 $5,677.72 $5,820.26 $5,966.35 $6,115.28 $6,267.76 $6,424.49 $6,585.47 $6,750.00 $6,918.79 $7,091.83N04 PUBLIC SAFETY DISPATCHER I POLICE 01/02/2027 $5,623.46 $5,763.85 $5,908.56 $6,056.87 $6,208.06 $6,362.84 $6,521.95 $6,685.38 $6,852.40 $7,023.75 $7,199.42N03 PUBLIC SAFETY DISPATCHER II POLICE 01/02/2027 $6,187.06 $6,341.52 $6,500.73 $6,663.90 $6,830.24 $7,000.54 $7,175.60 $7,355.40 $7,539.17 $7,727.69 $7,920.96 B20 PUBLIC WORKS CREW LDR BCEA 07/04/2026 $5,825.30 $5,970.93 $6,120.20 $6,273.20 $6,430.03 $6,590.78 $6,755.55 $6,924.43 $7,097.54 $7,274.98 $7,456.85E04 PUBLIC WORKS DIR N/A 07/04/2026 $16,850.00 $20,220.00 M26 PUBLIC WORKS MANAGER MGMT NS 07/04/2026 $10,788.68 $11,058.39 $11,334.85 $11,618.23 $11,908.68 $12,206.40 $12,511.56 $12,824.35 $13,144.95 $13,473.58 $13,810.42 A15 PUBLIC WORKS SPRVSR APEA 07/04/2026 $7,475.76 $7,662.65 $7,854.22 $8,050.58 $8,251.84 $8,458.14 $8,669.59 $8,886.33 $9,108.49 $9,336.21 $9,569.61 M27 PUBLIC WORKS UTILIT MGR MGMT NS 07/04/2026 $11,867.54 $12,164.23 $12,468.34 $12,780.05 $13,099.55 $13,427.04 $13,762.71 $14,106.78 $14,459.45 $14,820.94 $15,191.46 A70 PUBLIC WORKS UTLTY SPRVSR APEA 07/04/2026 $8,599.53 $8,814.52 $9,034.89 $9,260.76 $9,492.28 $9,729.58 $9,972.82 $10,222.14 $10,477.70 $10,739.64 $11,008.13 M09 PURCHASING AGENT MGMT NS 07/04/2026 $10,482.96 $10,745.03 $11,013.65 $11,289.00 $11,571.23 $11,860.51 $12,157.01 $12,460.94 $12,772.46 $13,091.77 $13,419.07 A52 RADIO FREQUENCY SP APEA 07/04/2026 $8,704.09 $8,921.69 $9,144.73 $9,373.35 $9,607.68 $9,847.87 $10,094.06 $10,346.41 $10,605.08 $10,870.20 $11,141.96A47 REDEV PROJECT MGR APEA 07/04/2026 $8,282.36 $8,489.42 $8,701.65 $8,919.19 $9,142.17 $9,370.72 $9,604.99 $9,845.11 $10,091.24 $10,343.52 $10,602.11B58 REPROGRAPHICS SPEC. BCEA 07/04/2026 $6,151.90 $6,305.69 $6,463.34 $6,624.92 $6,790.54 $6,960.31 $7,134.32 $7,312.68 $7,495.49 $7,682.88 $7,874.95 M13 REVENUE & BUDGET MGR MGMT NS 07/04/2026 $10,816.11 $11,086.51 $11,363.67 $11,647.76 $11,938.95 $12,237.43 $12,543.36 $12,856.95 $13,178.36 $13,507.82 $13,845.52 A48 SOFTWARE DEVELOPER I APEA 07/04/2026 $9,271.98 $9,503.78 $9,741.37 $9,984.90 $10,234.52 $10,490.39 $10,752.66 $11,021.48 $11,297.02 $11,579.44 $11,868.93A42 SOFTWAREDEVELOPER II APEA 07/04/2026 $8,108.93 $8,311.65 $8,519.44 $8,732.43 $8,950.74 $9,174.50 $9,403.87 $9,638.97 $9,879.94 $10,126.94 $10,380.11A53 SR. ACCOUNTANT APEA 07/04/2026 $7,798.21 $7,993.16 $8,192.99 $8,397.82 $8,607.77 $8,822.96 $9,043.53 $9,269.61 $9,501.35 $9,738.89 $9,982.36A59 SR. BLDG INSPECTOR APEA 07/04/2026 $7,672.46 $7,864.27 $8,060.88 $8,262.40 $8,468.96 $8,680.68 $8,897.69 $9,120.14 $9,348.14 $9,581.85 $9,821.39A23 SR. BUYER APEA 07/04/2026 $6,260.03 $6,416.53 $6,576.95 $6,741.38 $6,909.92 $7,082.67 $7,259.73 $7,441.22 $7,627.25 $7,817.93 $8,013.38A05 SR. COMM SVS SPRVSR APEA 07/04/2026 $9,227.19 $9,457.87 $9,694.32 $9,936.67 $10,185.09 $10,439.72 $10,700.72 $10,968.23 $11,242.44 $11,523.50 $11,811.59 SECTION 2
Job Code Job Title Unit
Effective
Date
Min. /
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6
Max. /
Step 7
MIN
ADMINISTRATIVE INTERNCOMMUNITY SERVICES WORKERLIFEGUARDMAIL ROOM STORES CLERKRESERVE POLICE TRAINEETECHNICAL INTERN Non-Represented - Part-Time 01/01/2026 $16.90 $17.32 $17.76 $18.20 $18.65 $19.12 $19.60 919 COMM SVS SHUTTLE DRIVER Non-Represented - Part-Time 07/04/2026 $24.40 $25.00 $25.63 $26.27 $26.93 $27.60 $28.29903 COMMUNITY SERVICES COORDINATOR Non-Represented - Part-Time 01/01/2026 $22.49 $23.05 $23.63 $24.22 $24.82 $25.45 $26.08 905 909 COMMUNITY SERVICES LEADER SWN INSTRUCTOR Non-Represented - Part-Time 01/01/2026 $18.59 $19.05 $19.53 $20.02 $20.52 $21.03 $21.56 907 904 908
FACILITIES WORKER SR. COMMUNITY SERVICES LEADERSR. LIFEGUARD Non-Represented - Part-Time 01/01/2026 $20.45 $20.96 $21.49 $22.02 $22.57 $23.14 $23.72 912 POLICE CADET Non-Represented - Part-Time 07/04/2026 $17.98 $18.43 $18.89 $19.36 $19.84 $20.34 $20.85915 SPECIALIST Non-Represented - Part-Time 07/04/2026 $16.90 $100.00 927 928 GOLF COURSE SPECIALIST RECYCLING COORDINATOR Non-Represented - Part-Time 07/04/2026 $32.72 $33.54 $34.37 $35.23 $36.11 $37.02 $37.94 SECTION 3
Job Code Job Title Unit Effective
Date
Min. /
Step 1
Step 2 Step 3 Step 4 Step 5 Step 6 Max. /
Step 7
2 CITY TREASURER N/A 12/01/20041 CITY COUNCIL N/A 01/01/2025 $824.00/monthly
SALARY SCHEDULE - CITY COUNCIL AND ELECTED CLASSIFICATIONS
CITY OF BREA
SALARY SCHEDULE - REGULAR PART-TIME AND PART-TIME INTERMITTENT CLASSIFICATIONS
CITY OF BREA
$50.00/month stipend
CITYofBREA
Communication
August 18, 2026
Item No. 3G.
Statement of Investment Policy for the City/Brea Successor Agency to the Brea Redevelopment Agency
TO PREPARED BY
Honorable Mayor and City Council Members Faith Madrazo, Financial Services Manager, Revenue
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Monica Lo, Administrative Services Director Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following action.
1. Review and approve the City of Brea/Successor Agency to the Brea Redevelopment Agency Statement of Investment Policy.
BACKGROUND/DISCUSSION
In accordance with City policy, the City Council is required to annually review and adopt the Investment Policy for both the City and the Successor Agency to the Brea Redevelopment Agency, as recommended by the Investment Advisory Committee.
In 2024, the Investment Policy underwent significant updates and was submitted to the California Municipal Treasurers Association (CMTA) for certification, where it was successfully certified.
For the 2026 Investment Policy, Chandler Asset Management, the City's investment portfolio manager, has recommended several minor updates to ensure the policy reflects recent changes to the California Government Code, incorporates CMTA best practices, improves organization and readability, and strengthens internal controls.
A summary of the recommended revisions is provided below with page references corresponding to the red-lined version of the proposed policy:
by the applicable bond documents, while remaining consistent with the City's overall investment philosophy.
Committee from the Investment Policy. The committee's responsibilities are established separately by City policy, and removing this section aligns the City's policy with Chandler Asset Management's California Model Investment Policy.
"Members of the Committee" with "Investment Officials" to ensure that all applicable investment officials are required to file a Statement of Economic Interests (Form 700) annually. In addition, the term "Investment Official" has been added to the Investment Policy's glossary.
allowable maturity from 270 days to 397 days to conform with Senate Bill 595, which became effective January 1, 2026.
of Deposit Account Registry Service (CDARS)" to "Placement Service Deposits" and add term to the Investment Policy's glossary to align with the terminology used in the California Government Code.
Replace the existing Local Agency Investment Fund (LAIF) section with updated language that separately addresses:
The State of California Local Agency Investment Fund (LAIF); Joint Powers Authority (JPA) investment pools; and
Other Local Government Investment Pools (LGIPs).
The revised language more closely reflects the California Government Code, clarifies the investment requirements applicable to each type of pool, and establishes a 20 percent portfolio limitation for LGIPs other than LAIF and qualifying JPAs.
securities pledged as collateral for repurchase agreements be delivered to an acceptable third-party custodian. This update reflects a recommendation made during the CMTA certification review and further strengthens the City's collateralization requirements.
For additional reference, the adopted 2025 Investment Policy and a clean version of the Proposed Investment Policy are included.
The recommended revisions are administrative and clarifying in nature and do not alter the City's investment objectives, risk tolerance, or overall investment strategy. Accordingly, Chandler Asset Management has advised that these changes do not require resubmission of the Investment Policy to be resubmitted for CMTA certification.
COMMISSION/COMMITTEE RECOMMENDATION
At the Investment Advisory Committee meeting held on July 27, 2026, the Committee reviewed the City of Brea/Successor Agency to the Brea Redevelopment Agency Statement of Investment Policy. The Committee recommended minor grammatical revisions and additional clarifying references and subsequently recommended the policy for City Council consideration.
FISCAL IMPACT/SUMMARY
There is no fiscal impact from the adoption of the Statement of Investment Policy.
Attachments
Brea CA Model Investment Policy - 2025 FINAL.pdf
Brea CA Model Investment Policy - FY 2026-27 CAM Redline_20260730_v2.pdf Brea CA Model Investment Policy - FY 2026-27 Clean Version 2026080326.pdf Investment
Policy
SEPTEMBER 2025
ADOPTED
CITY OF BREA / SUCCESSOR AGENCY TO THE BREA REDEVELOPMENT AGENCY
INVESTMENT POLICY
ADOPTED
SEPTEMBER 16, 2025
CONTENTS
I. INTRODUCTION ..................................................................................................... 1 II. SCOPE.................................................................................................................. 1 III. PRUDENCE............................................................................................................ 1 IV. OBJECTIVES.......................................................................................................... 2 V. DELEGATION OF AUTHORITY .................................................................................. 2 VI. ETHICS AND CONFLICTS OF INTEREST....................................................................... 3 VII. INTERNAL CONTROLS ............................................................................................ 3 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS ........... 4 IX. AUTHORIZED INVESTMENTS.................................................................................... 6 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES............................................... 11 XI. INVESTMENT POOLS/MUTUAL FUNDS .................................................................... 11 XII. COLLATERALIZATION .......................................................................................... 11 XIII. DELIVERY, SAFEKEEPING AND CUSTODY ................................................................ 12 XIV. MAXIMUM MATURITY ......................................................................................... 13 XV. RISK MANAGEMENT AND DIVERSIFICATION............................................................ 13 XVI. REVIEW OF INVESTMENT PORTFOLIO ..................................................................... 14 XVII. PERFORMANCE EVALUATION ................................................................................ 14 XVIII. REPORTING......................................................................................................... 15 XIX. REVIEW OF INVESTMENT POLICY........................................................................... 16 GLOSSARY OF INVESTMENT TERMS..................................................................................... 19 1 I. INTRODUCTION
The purpose of this investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Brea/Successor Agency to the Brea Redevelopment Agency’s (“City”) objectives of safety, liquidity and return on investment through a diversified investment portfolio. The ultimate goal is to enhance the economic status of the City while protecting its pooled funds. This policy also serves to organize and formalize the City’s investment-related activities, while complying with all applicable statutes governing the investment of public funds. This policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal City Treasurer and/or Administrative Services Directors Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public City Treasurer and/or Administrative Services Directors (APT).
This investment policy was endorsed and adopted by the City Council and is effective as of the 16 day of September, 2025, and replaces any previous versions.
II. SCOPE
This policy covers all funds and investment activities under the direct authority of the City, as set forth in the State Government Code, Sections 53600 et seq., including: General Fund, Special Revenue Funds, Assessment Funds, Enterprise Funds, Internal Service Funds, Capital Projects Funds, Debt Service Funds, Reserve Funds, Fiduciary Funds, Trust and Agency Funds, and any other funds that may be created from time to time.
This policy does not apply to retiree health care savings/trust/plan(s) or deferred compensation plans.
POOLING OF FUNDS
Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.
III. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and 2 diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
The Administrative Services Director (may also be referred to as the Director of Administrative Services) and/or designee and other authorized persons responsible for managing City funds acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes provided that the Administrative Services Director and/or designee or other authorized persons acted in good faith. Deviations from expectations of a security’s credit or market risk should be reported to the City Council in a timely fashion and appropriate action should be taken to control adverse developments.
IV. OBJECTIVES
The City’s overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives of the program are to preserve principal, provide sufficient liquidity, and manage investment risks, while seeking a market-rate of return.
• SAFETY. Safety of principal is the foremost objective of the investment program.
Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns. • LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. • RETURN ON INVESTMENTS. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.
V. DELEGATION OF AUTHORITY
Authority to manage the City’sinvestment program is derived from California Government Code, Sections 41006 and 53600 et seq.
The City Council is responsible for the management of the City’s funds, including the administration of this investment policy. Management responsibility for the cash management of the City’s funds is hereby delegated to the Administrative Services Director and/or designee.
3 The Administrative Services Director and/or designee will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Administrative Services Director and/or designee.
The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.
The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.
VI. ETHICS AND CONFLICTS OF INTEREST
All participants in the investment process shall act as custodians of the public trust.
Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Thus employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
Employees and investment officials shall disclose to any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.
VII. INTERNAL CONTROLS
The Administrative Services Director and/or designee is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
Periodically, as deemed appropriate by the City and/or the City Council, an independent analysis by an external auditor shall be conducted to review internal controls, account activity and compliance with policies and procedures.
4 Investment Advisory Committee: An Investment Advisory Committee (“Committee”) is established to review and make recommendations on the Investment Policy and investment strategy of the City of Brea/Successor Agency to the Brea Redevelopment Agency and to strengthen the internal control of the management of the City's funds. The following are the duties and responsibilities of the Committee:
A. Purpose
1. To review and make recommendations on investment policy and investment strategy of the City of Brea/Successor Agency to the Brea Redevelopment Agency.
2. To review the City's investments on a periodic basis and to recommend any exceptions and/or changes to the policy, to the City Council for review and approval.
B. Composition of Committee
1. City Treasurer
2. City Council Member, who serves as the Chair (selected by the City Council)
3. Administrative Services Director
4. Four (4) Brea Citizens (selected by the City Council) C. Functions
1. Annually (or as needed):
a. To review and approve Statement of Investment Policy. b. To review the financial condition and registrations of qualified broker/dealers. (Only required when investments are managed by the City.)
2. Monthly or Quarterly:
a. To review the City's investments.
b. To recommend any modifications to the Investment Policy. c. To develop and carry out the ongoing investment strategy in accordance with the Investment Policy.
d. To provide a status report at a study session of the City Council as requested.
The function of the Committee is not to inhibit the daily operation of the Administrative Services Department, but to provide policy guidelines within which to work on a day-today basis. By this, it is meant that each individual trade need not be approved by the Committee at the time it is transacted provided that it falls within the scope of the Statement of Investment Policy.
Disclosure: Members of the Committee shall be required to comply with the Fair Political Practices Act reporting requirements (Form 700) on an annual basis and submit filings to the City Clerk’s Office.
VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS To the extent practicable, the Administrative Services Director and/or designee shall endeavor to complete investment transactions using a competitive bid process whenever possible. The Administrative Services Director and/or designee will determine which 5 financial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and firms.
The Administrative Services Director and/or designee shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City. Due inquiry shall determine whether such authorized broker/dealers, and the individuals covering the City are reputable and trustworthy, knowledgeable and experienced in Public City investing and able to meet all of their financial obligations. These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).
In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
• Institutions licensed by the state as a broker-dealer. • Institutions that are members of a federally regulated securities exchange. • Primary government dealers as designated by the Federal Reserve Bank and nonprimary government dealers. • Nationally or state-chartered banks.
• The Federal Reserve Bank.
• Direct issuers of securities eligible for purchase.
Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the City may rely on the adviser for selection.
All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) must supply the Administrative Services Director and/or designee with audited financials and a statement certifying that the institution has reviewed the California Government Code, Section 53600 et seq. and the City’s investment policy. The Investment Advisory Committee will conduct an annual review of the financial condition and registrations of such qualified bidders.
Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.
Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded.
If there is no other readily available competitive offering, best efforts will be made to document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price. 6 IX. AUTHORIZED INVESTMENTS
The City’s investments are governed by California Government Code, Sections 53600 et seq. Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits listed in this section apply at the time the security is purchased.
Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.
An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.
1. MUNICIPAL SECURITIES include obligations of the City, the State of California and any local City within the State of California, provided that:
• The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). • No more than 5% of the portfolio may be invested in any single issuer. • No more than 30% of the portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.
2. MUNICIPAL SECURITIES (REGISTERED TREASURY NOTES OR BONDS) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, City, or authority of any of the other 49 states, in addition to California.
• The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). • No more than 5% of the portfolio may be invested in any single issuer. • No more than 30% of the portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.
3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:
• The maximum maturity does not exceed five (5) years.
4. FEDERAL AGENCIES or United States Government-Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to 7 principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal City or Government-Sponsored Enterprises (GSEs), provided that:
• No more than 25% of the portfolio may be invested in any single City/GSE issuer. • The maximum maturity does not exceed five (5) years.
• The maximum percentage of callable Agency securities in the portfolio will be 5%.
5. BANKER’S ACCEPTANCES, provided that:
• They are issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 40% of the portfolio may be invested in Banker’s Acceptances. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 180 days.
6. COMMERCIAL PAPER, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
a. SECURITIES issued by corporations:
(i) A corporation organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
(iii) If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO. b. SECURITIES issued by other entities:
(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.
(ii) The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond. (iii)The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
• No more than 10% of the outstanding commercial paper of any single issuer. • No more than 25% of the City’s investment assets under management may be invested in Commercial Paper.
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 270 days.
7. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or statechartered bank, a savings association or a federal association, a state or federal credit 8 union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
• The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
• Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.
8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
• The amount per institution is limited to the maximum covered under federal insurance.
• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.
9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.
10. CERTIFICATE OF DEPOSIT PLACEMENT SERVICE (CDARS), provided that:
• No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARS.
• The maximum maturity does not exceed five (5) years.
11. COLLATERALIZED BANK DEPOSITS. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.
There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.
12. REPURCHASE AGREEMENTS collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:
9 • Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
• Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).
• The maximum maturity does not exceed one (1) year.
13. STATE OF CALIFORNIA LOCAL CITY INVESTMENT FUND (LAIF), provided that:
• The City may invest up to the maximum amount permitted by LAIF. • LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the Administrative Services Director and/or designee to adequately judge the risk inherent in LAIF’s portfolio.
14. LOCAL GOVERNMENT INVESTMENT POOLS
• Approved State and County Investment Pools, including the County of Orange Investment Fund, together cannot exceed 60% of the maturity value of the portfolio at time of purchase, and no more than 40% of the maturity value at the time of purchase can be deposited in any one particular pool.
15. CORPORATE MEDIUM TERM NOTES (MTNS), provided that:
• The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
• The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.
16. ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES,
AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that:
• The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
• No more than 15% of the total portfolio may be invested in these securities. • No more than 5% of the portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer.
• The maximum legal final maturity does not exceed five (5) years. 10 17. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
• No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.
• No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities.
18. SUPRANATIONALS, provided that:
• Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
• The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
• No more than 15% of the total portfolio may be invested in these securities. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.
11 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
• State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. • In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. • Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2026, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. Notification to the City Council, the Investment Advisory Committee, the City Treasurer, and the Administrative Services Director and/or designee will be given within two (2) business days when securities of this type are being added to the portfolio, this allows for full disclosure and understanding of the strategy given the market conditions.
• Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
• Purchasing or selling securities on margin is prohibited. • The purchase of foreign currency denominated securities is prohibited. • The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.
XI. INVESTMENT POOLS/MUTUAL FUNDS
The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. Administrative Services Director and/or designee shall develop a questionnaire which will answer the following general questions:
• A description of eligible investment securities, and a written statement of investment policy and objectives.
• A description of interest calculations and how it is distributed, and how gains and losses are treated.
• A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. • A description of who may invest in the program, how often, and what size deposit and withdrawal are allowed.
• A schedule for receiving statements and portfolio listings. • Are reserves, retained earnings, etc. utilized by the pool/fund? • A fee schedule, and when and how is it assessed.
• Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? XII. COLLATERALIZATION
CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable 12 Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.
COLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.
REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
• The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities. • Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
• The City shall receive monthly statements of collateral.
XIII. DELIVERY, SAFEKEEPING AND CUSTODY
DELIVERY-VERSUS-PAYMENT (DVP). All investment transactions shall be conducted on a delivery-versus-payment basis.
SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third-party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.
Monthly trust statements are reconciled to the Investment Reports by the City’s Accountant. The City’s Accountant performs reconciliation of the monthly bank statements. The periodic review of the investment portfolio, including investment types, purchase price, market values, maturity dates, and investment yields as well as conformance to the stated investment policy will be performed by the Investment Advisory Committee.
The only exceptions to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools; (ii) time certificates of deposit, and, (iii) mutual funds and money market mutual funds, since these securities are not deliverable. 13 XIV. MAXIMUM MATURITY
To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities.
The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment.
XV. RISK MANAGEMENT AND DIVERSIFICATION
MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
• The diversification requirements included in the “Authorized Investments” section of this policy is designed to mitigate credit risk in the portfolio. • No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy. • The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
• If a security owned by the City is downgraded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:
• Any actions taken related to the downgrade by the investment manager will be communicated to the City Council, the Investment Advisory Committee, Administrative Services Director and/or designee within two (2) business days. • If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.
MITIGATING MARKET RISK IN THE PORTFOLIO
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash flow purposes.
The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different 14 interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
• The City will maintain a minimum of six months of budgeted operating expenditures in short-term investments to provide sufficient liquidity for expected disbursements. • The maximum stated final maturity of individual securities in the portfolio will be five (5) years, unless the investment is for the Senior Low Cost Housing Subsidy Program, bond proceeds for the Reserve Fund, funded/capitalized interest fund; or the City Council has granted express authority to make that investment, either specifically or as part of an investment program approved by the City Council no more than three months prior to the investment.
• The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances. • When possible, a minimum of 25% of the portfolio should be in maturities of one year or less.
XVI. REVIEW OF INVESTMENT PORTFOLIO
The Administrative Services Director and/or designee shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council.
XVII. PERFORMANCE EVALUATION
The investment portfolio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account the City’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.
The Administrative Services Director and/or designee shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the Monthly/Quarterly Report of Investments or a similar type of report. With the advisement of the City’s outside Investment Manager (if applicable), the Administrative Services Director and/or designee shall select an appropriate, readily available index to use as a market benchmark.
15 XVIII.REPORTING
MONTHLY REPORTS
Monthly transaction reports will be submitted by the Administrative Services Director and/or designee to the City Council within 30 days of the end of the reporting period in accordance with California Government Code Section 53607.
These reports will disclose, at a minimum, the following information about the City’s portfolio:
1. An asset listing showing par value, cost and independent third-party fair market value of each security as of the date of the report, the source of the valuation, type of investment, issuer, maturity date and interest rate.
2. Transactions for the period.
3. A description of the funds, investments and programs (including lending programs) managed by contracted parties (i.e. LAIF; investment pools, outside money managers and securities lending agents)
4. A one-page summary report that shows:
a. Average maturity of the portfolio and modified duration of the portfolio; b. Maturity distribution of the portfolio;
c. Percentage of the portfolio represented by each investment category; d. Average portfolio credit quality; and,
e. Time-weighted total rate of return for the portfolio for the prior one month, three months, twelve months and since inception compared to the City’s market benchmark returns for the same periods;
5. A statement of compliance with investment policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio and a timetable for resolution.
6. A statement that the City has adequate funds to meet its cash flow requirements for the next six months.
Reports are to be submitted to the City Council and City Manager by the 3rd City Council meeting following the end of the reporting month.
The Investment Advisory Committee will review the status of investments on a quarterly basis. These reports shall include the type of investment, institution, face amount, market value, book value, interest rate, date of maturity, compliance to the investment policy.
If the City has an outside Investment Manager, the Investment Manager shall periodically report on the activity and results of the funds being managed by the Investment Manager.
Additionally, the Investment Manager shall notify the Investment Advisory Committee when investment portfolios demonstrate low performance, if any, which occurs between each periodic report.
16 QUARTERLY REPORTS
The Administrative Services Director and/or designee will submit a quarterly investment report to the City Council which provides full disclosure of the City’s investment activities within 45 days after the end of the quarter.
ANNUAL REPORTS
A comprehensive annual report will be presented to the City Council. This report will include comparisons of the City’s return to the market benchmark return, suggest policies and improvements that might enhance the investment program, and will include an investment plan for the coming year.
XIX. REVIEW OF INVESTMENT POLICY
The investment policy will be reviewed and adopted at least annually within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.
Any recommended modifications or amendments shall be presented by Staff to the City Council for their consideration and adoption.
17 SEGREGATION OF RESPONSIBILITIES
(when an Outside Investment Manager is utilized)
FUNCTION RESPONSIBILITY
Develop formal Statement of Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Recommend modifications to Investment
Policy
City Treasurer
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Review formal Statement of Investment
Policy and recommend a Council action
Investment Advisory Committee
Adopt formal Statement of Investment Policy City Council Select investments Outside Investment Manager
Execute investment transactions and fax or
email completed trade information to City
Outside Investment Manager
Review transactions for compliance with
investment policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Outside Investment Manager
Investment verification (match broker
confirmation to trade information provided by
outside Investment Manager to City
investment records)
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Record investment transactions into City's
accounting records
City Accountant
Reconcile investment records to accounting
records and bank statements and report any
variances to Administrative Services Director
and City Treasurer
City Accountant
Security All investment securities will be held in
safekeeping in the trust department of the
City's Depository Bank, or other third-party
custodian as designated by the Administrative
Services Director.
18 SEGREGATION OF RESPONSIBILITIES
(when Investment transactions are performed by City Staff)
FUNCTION RESPONSIBILITY
Develop formal Statement of Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Recommend modifications to Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Investment Advisory Committee
Review formal Statement of Investment
Policy and recommend a Council action
Investment Advisory Committee
Annually review and adopt a formal
Statement of Investment Policy
City Council
Select investments Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Approve transactions Administrative Services Director
Deputy Director of Administrative Services
Execute investment transactions Administrative Services Director Deputy Director of Administrative Services
Investment verification (match broker
confirmation to City investment records)
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Record investment transactions into City's
accounting records
City Accountant
Reconcile investment records to accounting
records and bank statements and report any
variances to Administrative Services Director
City Accountant
Security All investment securities will be held in
safekeeping in the trust department of the
City's Depository Bank, or other third-party
custodian as designated by the Administrative
Services Director.
19 GLOSSARY OF INVESTMENT TERMS
AGENCIES. Shorthand market terminology for any obligation issued by a government-sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:
FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.
FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.
FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.
FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.
GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.
PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.
TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.
ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.
AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.
BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions.
It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.
BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.
BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.
CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity.
The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.
CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.
CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS). A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage.
CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.
COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.
COLLATERALIZED BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
20 COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.
COLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER. The short-term unsecured debt of corporations.
COUPON. The rate of return at which interest is paid on a bond.
CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.
DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position.
DEBENTURE. A bond secured only by the general credit of the issuer.
DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.
DERIVATIVE. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.
DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.
DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.
DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal City insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.
FEDERALLY INSURED TIME DEPOSIT. A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.
LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.
LIQUIDITY. The speed and ease with which an asset can be converted to cash.
LOCAL CITY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State City Treasurer and/or Administrative Services Director’s Office.
LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State City Treasurer and/or Administrative Services Director’s Office Local City Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.
MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole." MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.
21 MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.
MARKET VALUE. The price at which a security can be traded.
MATURITY. The final date upon which the principal of a security becomes due and payable. The investment’s term or remaining maturity is measured from the settlement date to final maturity.
MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.
MODIFIED DURATION. The percent change in price for a 100-basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.
MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.
MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short-term securities.
Examples of investments in money market funds are certificates of deposit and U.S. Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.
MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.
MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.
MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO).
A credit rating City that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.
NEGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market.
PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market.
PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries.
In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.
SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.
SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government City responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full 22 public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.
SECURITIES AND EXCHANGE COMMISSION SEC) RULE 15C3-1. An SEC rule setting capital requirement for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.
STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate.
Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.
SUPRANATIONAL. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.
TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.
U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.
TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month Tbills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.
TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.
TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.
CITY OF BREA / SUCCESSOR AGENCY TO THE BREA REDEVELOPMENT AGENCY
INVESTMENT POLICY
ADOPTED
SEPTEMBER 16, 2025AUGUST 18, 2026
CONTENTS
I. INTRODUCTION ..................................................................................................... 1 II. SCOPE .................................................................................................................. 1 III. PRUDENCE ............................................................................................................ 1 IV. OBJECTIVES ........................................................................................................ 22 V. DELEGATION OF AUTHORITY ................................................................................ 22 VI. ETHICS AND CONFLICTS OF INTEREST..................................................................... 33 VII. INTERNAL CONTROLS .......................................................................................... 33 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS ......... 54 IX. AUTHORIZED INVESTMENTS .................................................................................. 66 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES ........................................... 1111 XI. INVESTMENT POOLS/MUTUAL FUNDS ................................................................ 1211 XII. COLLATERALIZATION ...................................................................................... 1211 XIII. DELIVERY, SAFEKEEPING AND CUSTODY ............................................................ 1312 XIV. MAXIMUM MATURITY ..................................................................................... 1313 XV. RISK MANAGEMENT AND DIVERSIFICATION ........................................................ 1413 XVI. REVIEW OF INVESTMENT PORTFOLIO.................................................................. 1514 XVII. PERFORMANCE EVALUATION ............................................................................ 1514 XVIII. REPORTING ..................................................................................................... 1615 XIX. REVIEW OF INVESTMENT POLICY ....................................................................... 1716 GLOSSARY OF INVESTMENT TERMS ................................................................................. 2019 1 I. INTRODUCTION
The purpose of this investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Brea/Successor Agency to the Brea Redevelopment Agency’s (“City”) objectives of safety, liquidity and return on investment through a diversified investment portfolio. The ultimate goal is to enhance the economic status of the City while protecting its pooled funds. This policy also serves to organize and formalize the City’s investment-related activities, while complying with all applicable statutes governing the investment of public funds. This policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal City Treasurer and/or Administrative Services Directors Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public City Treasurer and/or Administrative Services Directors (APT).
This investment policy was endorsed and adopted by the City Council and is effective as of the 186 day of August September, 20265, and replaces any previous versions.
II. SCOPE
This policy covers all funds and investment activities under the direct authority of the City, as set forth in the State Government Code, Sections 53600 et seq., including: General Fund, Special Revenue Funds, Assessment Funds, Enterprise Funds, Internal Service Funds, Capital Projects Funds, Debt Service Funds, Reserve Funds, Fiduciary Funds, Trust and Agency Funds, and any other funds that may be created from time to time.
Proceeds of debt issuance shall be invested in accordance with the City’s general investment policy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their specific bond indentures.
This policy does not apply to retiree health care savings/trust/plan(s) or deferred compensation plans.
POOLING OF FUNDS
Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.
III. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
2 “…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
The Administrative Services Director (may also be referred to as the Director of Administrative Services) and/or designee and other authorized persons responsible for managing City funds acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes provided that the Administrative Services Director and/or designee or other authorized persons acted in good faith. Deviations from expectations of a security’s credit or market risk should be reported to the City Council in a timely fashion and appropriate action should be taken to control adverse developments.
IV. OBJECTIVES
The City’s overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives of the program are to preserve principal, provide sufficient liquidity, and manage investment risks, while seeking a market-rate of return.
SAFETY. Safety of principal is the foremost objective of the investment program.
Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns. LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. RETURN ON INVESTMENTS. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.
V. DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from California Government Code, Sections 41006 and 53600 et seq.
3 The City Council is responsible for the management of the City’s funds, including the administration of this investment policy. Management responsibility for the cash management of the City’s funds is hereby delegated to the Administrative Services Director and/or designee.
The Administrative Services Director and/or designee will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Administrative Services Director and/or designee.
The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.
The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.
VI. ETHICS AND CONFLICTS OF INTEREST
All participants in the investment process shall act as custodians of the public trust.
Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Thus employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
Employees and investment officials shall disclose to any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.
VII. INTERNAL CONTROLS
The Administrative Services Director and/or designee is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to 4 be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
Periodically, as deemed appropriate by the City and/or the City Council, an independent analysis by an external auditor shall be conducted to review internal controls, account activity and compliance with policies and procedures.
Investment Advisory Committee: An Investment Advisory Committee (“Committee”) is established to review and make recommendations on the Investment Policy and investment strategy of the City of Brea/Successor Agency to the Brea Redevelopment Agency and to strengthen the internal control of the management of the City's funds. The following are the duties and responsibilities of the Committee:
A. Purpose
1. To review and make recommendations on investment policy and investment strategy of the City of Brea/Successor Agency to the Brea Redevelopment Agency.
2. To review the City's investments on a periodic basis and to recommend any exceptions and/or changes to the policy, to the City Council for review and approval.
B. Composition of Committee
1. City Treasurer
2. City Council Member, who serves as the Chair (selected by the City Council)
3. Administrative Services Director
4. Four (4) Brea Citizens (selected by the City Council) C. Functions
1. Annually (or as needed):
a. To review and approve Statement of Investment Policy. b. To review the financial condition and registrations of qualified broker/dealers. (Only required when investments are managed by the City.)
2. Monthly or Quarterly:
a. To review the City's investments.
b. To recommend any modifications to the Investment Policy. c. To develop and carry out the ongoing investment strategy in accordance with the Investment Policy.
d. To provide a status report at a study session of the City Council as requested.
The function of the Committee is not to inhibit the daily operation of the Administrative Services Department, but to provide policy guidelines within which to work on a day-today basis. By this, it is meant that each individual trade need not be approved by the Committee at the time it is transacted provided that it falls within the scope of the Statement of Investment Policy.
Disclosure: Members of the CommitteeInvestment Officials shall be required to comply with the Fair Political Practices Act reporting requirements (Form 700) on an annual basis and submit filings to the City Clerk’s Office.
5 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS To the extent practicable, the Administrative Services Director and/or designee shall endeavor to complete investment transactions using a competitive bid process whenever possible. The Administrative Services Director and/or designee will determine which financial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and firms.
The Administrative Services Director and/or designee shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City. Due inquiry shall determine whether such authorized broker/dealers, and the individuals covering the City are reputable and trustworthy, knowledgeable and experienced in Public City investing and each is able to meet all of itstheir financial obligations. These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).
In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
Institutions licensed by the state as a broker-dealer. Institutions that are members of a federally regulated securities exchange. Primary government dealers as designated by the Federal Reserve Bank and nonprimary government dealers. Nationally or state-chartered banks.
The Federal Reserve Bank.
Direct issuers of securities eligible for purchase.
Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the City may rely on the adviser for selection.
All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) must supply the Administrative Services Director and/or designee with audited financials and a statement certifying that the institution has reviewed the California Government Code, Section 53600 et seq. and the City’s investment policy. The Investment Advisory Committee will conduct an annual review of the financial condition and registrations of such qualified bidders.
Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.
Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded. 6 If there is no other readily available competitive offering, best efforts will be made to document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price.
IX. AUTHORIZED INVESTMENTS
The City’s investments are governed by California Government Code, Sections 53600 et seq. Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits listed in this section apply at the time the security is purchased.
Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.
An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.
1. MUNICIPAL SECURITIES include obligations of the City, the State of California and any local City within the State of California, provided that:
The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). No more than 5% of the portfolio may be invested in any single issuer. No more than 30% of the portfolio may be in Municipal Securities. The maximum maturity does not exceed five (5) years.
2. MUNICIPAL SECURITIES (REGISTERED TREASURY NOTES OR BONDS) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, City, or authority of any of the other 49 states, in addition to California.
The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). No more than 5% of the portfolio may be invested in any single issuer. No more than 30% of the portfolio may be in Municipal Securities. The maximum maturity does not exceed five (5) years.
3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:
7 The maximum maturity does not exceed five (5) years.
4. FEDERAL AGENCIES or United States Government-Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal City or Government-Sponsored Enterprises (GSEs), provided that:
No more than 25% of the portfolio may be invested in any single City/GSE issuer. The maximum maturity does not exceed five (5) years.
The maximum percentage of callable Agency securities in the portfolio will be 5%.
5. BANKER’S ACCEPTANCES, provided that:
Each is They are issued by an institutions which havinge short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or longterm debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
No more than 40% of the portfolio may be invested in Banker’s Acceptances. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed 180 days.
6. COMMERCIAL PAPER, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
a. SECURITIES issued by corporations:
(i) A corporation organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
(iii) If the issuer has other debt obligations, thesey must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO. b. SECURITIES issued by other entities:
(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.
(ii) The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond. (iii)The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
No more than 10% of the outstanding commercial paper of any single issuer. No more than 25% of the City’s investment assets under management may be invested in Commercial Paper.
8 No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed 270397 days.
7. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or statechartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
No more than 30% of the total portfolio may be invested in NCDs (combined with PSDsSCDARS).
No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed five (5) years.
8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
The amount per institution is limited to the maximum covered under federal insurance.
No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
The maximum maturity does not exceed five (5) years.
9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
The maximum maturity does not exceed five (5) years.
10. CERTIFICATE OF DEPOSIT PLACEMENT SERVICE DEPOSITS(CDARS) (PSDSS), provided that:
No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARSPSDsS.
The maximum maturity does not exceed five (5) years.
11. COLLATERALIZED BANK DEPOSITS. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.
There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.
9 12. REPURCHASE AGREEMENTS collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:
Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).
The maximum maturity does not exceed one (1) year.
13. LOCAL GOVERNMENT INVESTMENT POOLS (LGIP) STATE OF CALIFORNIA LOCAL CITY INVESTMENT FUND (LAIF), provided that:
13. a. State of California Local Agency Investment Fund (LAIF), created by California Government Code Section 16429.1, provided that:
The City may invest up to the maximum amount permitted by LAIF. LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the FinanceAdministrative Services Director to adequately judge the risk inherent in LAIF’s portfolio.
b. Shares of Beneficial Interest Issued by a Joint Powers Authority (JPA), provided that:
The JPA is organized pursuant to California Government Code Section 6509.7 and invests in the securities and obligations authorized in subdivisions (a) to (r), inclusive.
Each share shall represent an equal proportional interest in the underlying pool of securities owned by the JPA.
The JPA has retained an investment advisor who is registered with the SEC (or exempt from registration), has assets under management in excess of $500 million, and has at least five years’ experience investing in instruments authorized by Section 53601, subdivisions (a) to (q).
c. Other Local Government Investment Pools (LGIP)
Other LGIPs permitted by the agency (such as a County Pool as defined by California Government Code Section 27000.3).
No more than 20% of the total portfolio may be invested in LGIPs other than LAIF and JPAs.
The City may invest up to the maximum amount permitted by LAIF. LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable 10 investments, provided LAIF’s reports allow the Administrative Services Director and/or designee to adequately judge the risk inherent in LAIF’s portfolio.
14. LOCAL GOVERNMENT INVESTMENT POOLS
Approved State and County Investment Pools, including the County of Orange Investment Fund, together cannot exceed 60% of the maturity value of the portfolio at time of purchase, and no more than 40% of the maturity value at the time of purchase can be deposited in any one particular pool.
15.14. CORPORATE MEDIUM TERM NOTES (MTNS), provided that:
The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
No more than 30% of the total portfolio may be invested in MTNs. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed five (5) years.
16.15. ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH
SECURITIES, AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that:
The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
No more than 15% of the total portfolio may be invested in these securities. No more than 5% of the portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer.
The maximum legal final maturity does not exceed five (5) years.
17.16. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
11 No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.
No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities.
18.17. SUPRANATIONALS, provided that:
Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
No more than 15% of the total portfolio may be invested in these securities. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed five (5) years.
X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 203126, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. Notification to the City Council, the Investment Advisory Committee, the City Treasurer, and the Administrative Services Director and/or designee will be given within two (2) business days when securities of this type are being added to the portfolio, this allows for full disclosure and understanding of the strategy given the market conditions.
12 Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
Purchasing or selling securities on margin is prohibited. The purchase of foreign currency denominated securities is prohibited. The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.
XI. INVESTMENT POOLS/MUTUAL FUNDS
The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. Administrative Services Director and/or designee shall develop a questionnaire which will answer the following general questions:
A description of eligible investment securities, and a written statement of investment policy and objectives.
A description of interest calculations and how it is distributed, and how gains and losses are treated.
A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. A description of who may invest in the program, how often, and what size deposit and withdrawal are allowed.
A schedule for receiving statements and portfolio listings. Are reserves, retained earnings, etc. utilized by the pool/fund? A fee schedule, and when and how is it assessed.
Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? XII. COLLATERALIZATION
CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.
COLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.
REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
13 The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities. Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
The City shall receive monthly statements of collateral.
XIII. DELIVERY, SAFEKEEPING AND CUSTODY
DELIVERY-VERSUS-PAYMENT (DVP). All investment transactions shall be conducted on a delivery-versus-payment basis.
SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third-party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.
Monthly trust statements are reconciled to the Investment Reports by the City’s Accountant. The City’s Accountant performs reconciliation of the monthly bank statements. The periodic review of the investment portfolio, including investment types, purchase price, market values, maturity dates, and investment yields as well as conformance to the stated investment policy will be performed by the Investment Advisory Committee.
The only exceptions to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools; (ii) time certificates of deposit, and, (iii) mutual funds and money market mutual funds, since these securities are not deliverable.
XIV. MAXIMUM MATURITY
To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities.
The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment.
14 XV. RISK MANAGEMENT AND DIVERSIFICATION
MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
The diversification requirements included in the “Authorized Investments” section of this policy is designed to mitigate credit risk in the portfolio. No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy. The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
If a security owned by the City is downgraded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:
Any actions taken related to the downgrade by the investment manager will be communicated to the City Council, the Investment Advisory Committee, Administrative Services Director and/or designee within two (2) business days. If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.
MITIGATING MARKET RISK IN THE PORTFOLIO
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash flow purposes.
The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
The City will maintain a minimum of six months of budgeted operating expenditures in short-term investments to provide sufficient liquidity for expected disbursements. The maximum stated final maturity of individual securities in the portfolio will be five (5) years, unless the investment is for the Senior Low Cost Housing Subsidy Program, bond proceeds for the Reserve Fund, funded/capitalized interest fund; or the City 15 Council has granted express authority to make that investment, either specifically or as part of an investment program approved by the City Council no more than three months prior to the investment.
The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances. When possible, a minimum of 25% of the portfolio should be in maturities of one year or less.
XVI. REVIEW OF INVESTMENT PORTFOLIO
The Administrative Services Director and/or designee shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council.
XVII. PERFORMANCE EVALUATION
The investment portfolio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account the City’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.
The Administrative Services Director and/or designee shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the Monthly/Quarterly Report of Investments or a similar type of report. With the advisement of the City’s outside Investment Manager (if applicable), the Administrative Services Director and/or designee shall select an appropriate, readily available index to use as a market benchmark.
16 XVIII.REPORTING
MONTHLY REPORTS
Monthly transaction reports will be submitted by the Administrative Services Director and/or designee to the City Council within 30 days of the end of the reporting period in accordance with California Government Code Section 53607.
These reports will disclose, at a minimum, the following information about the City’s portfolio:
1. An asset listing showing par value, cost and independent third-party fair market value of each security as of the date of the report, the source of the valuation, type of investment, issuer, maturity date and interest rate.
2. Transactions for the period.
3. A description of the funds, investments and programs (including lending programs) managed by contracted parties (i.e. LAIF, LGIP,; investment pools, outside money managers and securities lending agents)
4. A one-page summary report that shows:
a. Average maturity of the portfolio and modified duration of the portfolio; b. Maturity distribution of the portfolio;
c. Percentage of the portfolio represented by each investment category; d. Average portfolio credit quality; and,
e. Time-weighted total rate of return for the portfolio for the prior one month, three months, twelve months and since inception compared to the City’s market benchmark returns for the same periods;
5. A statement of compliance with investment policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio and a timetable for resolution.
6. A statement that the City has adequate funds to meet its cash flow requirements for the next six months.
Reports are to be submitted to the City Council and City Manager by the 3rd City Council meeting following the end of the reporting month.
The Investment Advisory Committee will review the status of investments on a quarterly basis. These reports shall include the type of investment, institution, face amount, market value, book value, interest rate, date of maturity, compliance to the investment policy.
If the City has an outside Investment Manager, the Investment Manager shall periodically report on the activity and results of the funds being managed by the Investment Manager.
Additionally, the Investment Manager shall notify the Investment Advisory Committee when investment portfolios demonstrate low performance, if any, which occurs between each periodic report.
17 QUARTERLY REPORTS
The Administrative Services Director and/or designee will submit a quarterly investment report to the City Council which provides full disclosure of the City’s investment activities within 45 days after the end of the quarter.
ANNUAL REPORTS
A comprehensive annual report will be presented to the City Council. This report will include comparisons of the City’s return to the market benchmark return, suggest policies and improvements that might enhance the investment program, and will include an investment plan for the coming year.
XIX. REVIEW OF INVESTMENT POLICY
The investment policy will be reviewed and adopted at least annually within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.
Any recommended modifications or amendments shall be presented by Staff to the City Council for their consideration and adoption.
18 SEGREGATION OF RESPONSIBILITIES
(when an Outside Investment Manager is utilized)
FUNCTION RESPONSIBILITY
Develop formal Statement of Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Recommend modifications to Investment
Policy
City Treasurer
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Review formal Statement of Investment
Policy and recommend a Council action
Investment Advisory Committee
Adopt formal Statement of Investment Policy City Council Select investments Outside Investment Manager
Execute investment transactions and fax or
email completed trade information to City
Outside Investment Manager
Review transactions for compliance with
investment policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Outside Investment Manager
Investment verification (match broker
confirmation to trade information provided by
outside Investment Manager to City
investment records)
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Record investment transactions into City's
accounting records
City Accountant
Reconcile investment records to accounting
records and bank statements and report any
variances to Administrative Services Director
and City Treasurer
City Accountant
Security All investment securities will be held in
safekeeping in the trust department of the
City's Depository Bank, or other third-party
custodian as designated by the Administrative
Services Director.
19 SEGREGATION OF RESPONSIBILITIES
(when Investment transactions are performed by City Staff)
FUNCTION RESPONSIBILITY
Develop formal Statement of Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Recommend modifications to Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Investment Advisory Committee
Review formal Statement of Investment
Policy and recommend a Council action
Investment Advisory Committee
Annually review and adopt a formal
Statement of Investment Policy
City Council
Select investments Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Approve transactions Administrative Services Director
Deputy Director of Administrative Services
Execute investment transactions Administrative Services Director Deputy Director of Administrative Services
Investment verification (match broker
confirmation to City investment records)
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Record investment transactions into City's
accounting records
City Accountant
Reconcile investment records to accounting
records and bank statements and report any
variances to Administrative Services Director
City Accountant
Security All investment securities will be held in
safekeeping in the trust department of the
City's Depository Bank, or other third-party
custodian as designated by the Administrative
Services Director.
20 GLOSSARY OF INVESTMENT TERMS
AGENCIES. Shorthand market terminology for any obligation issued by a government-sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:
FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.
FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.
FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.
FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.
GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.
PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.
TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.
ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.
AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.
BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions.
It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.
BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.
BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.
CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity.
The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.
CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.
CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS). A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage.
CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.
COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.
COLLATERALIZED BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
21 COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.
COLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER. The short-term unsecured debt of corporations.
COUPON. The rate of return at which interest is paid on a bond.
CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.
DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position.
DEBENTURE. A bond secured only by the general credit of the issuer.
DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.
DERIVATIVE. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.
DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.
DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.
DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal City insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.
FEDERALLY INSURED TIME DEPOSIT. A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.
INVESTMENT OFFICIAL. Those officers and employees who are authorized by the governing body to administer, manage, execute, monitor, or report on the city’s investment program in accordance with the Investment Policy and applicable provision of the California code.
LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.
LIQUIDITY. The speed and ease with which an asset can be converted to cash.
LOCAL CITY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State City Treasurer and/or Administrative Services Director’s Office.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP). Investment pools that range from the State City Treasurer and/or Administrative Services Director’s Office Local City Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.
MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum 22 payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole." MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.
MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.
MARKET VALUE. The price at which a security can be traded.
MATURITY. The final date upon which the principal of a security becomes due and payable. The investment’s term or remaining maturity is measured from the settlement date to final maturity.
MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.
MODIFIED DURATION. The percent change in price for a 100-basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.
MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.
MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short-term securities.
Examples of investments in money market funds are certificates of deposit and U.S. Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.
MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.
MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.
MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO).
A credit rating City that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.
NEGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market.
PLACEMENT SERVICE DEPOSITS (PSDS). A private service that allows local agencies to invest in FDICinsured deposits with one or more banks, savings and loans, and credit unions located in the United States. IntraFi (formerly known as CDARS) is an example of an entity that provides this service.
PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market.
PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries.
In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
23 REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.
SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.
SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government City responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.
SECURITIES AND EXCHANGE COMMISSION SEC) RULE 15C3-1. An SEC rule setting capital requirement for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.
STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate.
Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.
SUPRANATIONAL. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.
TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.
U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.
TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month Tbills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.
TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.
TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.
CITY OF BREA / SUCCESSOR AGENCY TO THE BREA REDEVELOPMENT AGENCY
INVESTMENT POLICY
ADOPTED
AUGUST 18, 2026
CONTENTS
I. INTRODUCTION ..................................................................................................... 1 II. SCOPE .................................................................................................................. 1 III. PRUDENCE ............................................................................................................ 1 IV. OBJECTIVES .......................................................................................................... 2 V. DELEGATION OF AUTHORITY .................................................................................. 2 VI. ETHICS AND CONFLICTS OF INTEREST....................................................................... 3 VII. INTERNAL CONTROLS ............................................................................................ 3 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS ........... 4 IX. AUTHORIZED INVESTMENTS .................................................................................... 5 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES ............................................... 10 XI. INVESTMENT POOLS/MUTUAL FUNDS .................................................................... 11 XII. COLLATERALIZATION .......................................................................................... 11 XIII. DELIVERY, SAFEKEEPING AND CUSTODY ................................................................ 12 XIV. MAXIMUM MATURITY ......................................................................................... 12 XV. RISK MANAGEMENT AND DIVERSIFICATION ............................................................ 13 XVI. REVIEW OF INVESTMENT PORTFOLIO...................................................................... 14 XVII. PERFORMANCE EVALUATION ................................................................................ 14 XVIII. REPORTING ......................................................................................................... 14 XIX. REVIEW OF INVESTMENT POLICY ........................................................................... 16 GLOSSARY OF INVESTMENT TERMS ..................................................................................... 19 1 I. INTRODUCTION
The purpose of this investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Brea/Successor Agency to the Brea Redevelopment Agency’s (“City”) objectives of safety, liquidity and return on investment through a diversified investment portfolio. The ultimate goal is to enhance the economic status of the City while protecting its pooled funds. This policy also serves to organize and formalize the City’s investment-related activities, while complying with all applicable statutes governing the investment of public funds. This policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal City Treasurer and/or Administrative Services Directors Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public City Treasurer and/or Administrative Services Directors (APT).
This investment policy was endorsed and adopted by the City Council and is effective as of the 18 day of August, 2026, and replaces any previous versions.
II. SCOPE
This policy covers all funds and investment activities under the direct authority of the City, as set forth in the State Government Code, Sections 53600 et seq., including: General Fund, Special Revenue Funds, Assessment Funds, Enterprise Funds, Internal Service Funds, Capital Projects Funds, Debt Service Funds, Reserve Funds, Fiduciary Funds, Trust and Agency Funds, and any other funds that may be created from time to time.
Proceeds of debt issuance shall be invested in accordance with the City’s general investment policy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their specific bond indentures.
This policy does not apply to retiree health care savings/trust/plan(s) or deferred compensation plans.
POOLING OF FUNDS
Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.
III. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
2 “…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
The Administrative Services Director (may also be referred to as the Director of Administrative Services) and/or designee and other authorized persons responsible for managing City funds acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes provided that the Administrative Services Director and/or designee or other authorized persons acted in good faith. Deviations from expectations of a security’s credit or market risk should be reported to the City Council in a timely fashion and appropriate action should be taken to control adverse developments.
IV. OBJECTIVES
The City’s overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives of the program are to preserve principal, provide sufficient liquidity, and manage investment risks, while seeking a market-rate of return.
SAFETY. Safety of principal is the foremost objective of the investment program.
Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns. LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. RETURN ON INVESTMENTS. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.
V. DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from California Government Code, Sections 41006 and 53600 et seq.
3 The City Council is responsible for the management of the City’s funds, including the administration of this investment policy. Management responsibility for the cash management of the City’s funds is hereby delegated to the Administrative Services Director and/or designee.
The Administrative Services Director and/or designee will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Administrative Services Director and/or designee.
The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.
The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.
VI. ETHICS AND CONFLICTS OF INTEREST
All participants in the investment process shall act as custodians of the public trust.
Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Thus, employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.
VII. INTERNAL CONTROLS
The Administrative Services Director and/or designee is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to 4 be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
Periodically, as deemed appropriate by the City and/or the City Council, an independent analysis by an external auditor shall be conducted to review internal controls, account activity and compliance with policies and procedures.
Disclosure: Investment Officials shall be required to comply with the Fair Political Practices Act reporting requirements (Form 700) on an annual basis and submit filings to the City Clerk’s Office.
VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS To the extent practicable, the Administrative Services Director and/or designee shall endeavor to complete investment transactions using a competitive bid process whenever possible. The Administrative Services Director and/or designee will determine which financial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and firms.
The Administrative Services Director and/or designee shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City. Due inquiry shall determine whether such authorized broker/dealers, and the individuals covering the City are reputable and trustworthy, knowledgeable and experienced in Public City investing and each is able to meet all of its financial obligations. These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).
In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
Institutions licensed by the state as a broker-dealer. Institutions that are members of a federally regulated securities exchange. Primary government dealers as designated by the Federal Reserve Bank and nonprimary government dealers. Nationally or state-chartered banks.
The Federal Reserve Bank.
Direct issuers of securities eligible for purchase.
Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the City may rely on the adviser for selection.
All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) must supply the Administrative Services Director and/or designee with audited financials and a statement 5 certifying that the institution has reviewed the California Government Code, Section 53600 et seq. and the City’s investment policy. The Investment Advisory Committee will conduct an annual review of the financial condition and registrations of such qualified bidders.
Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.
Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded.
If there is no other readily available competitive offering, best efforts will be made to document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price.
IX. AUTHORIZED INVESTMENTS
The City’s investments are governed by California Government Code, Sections 53600 et seq. Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits listed in this section apply at the time the security is purchased.
Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.
An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.
1. MUNICIPAL SECURITIES include obligations of the City, the State of California and any local City within the State of California, provided that:
The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). No more than 5% of the portfolio may be invested in any single issuer. No more than 30% of the portfolio may be in Municipal Securities. The maximum maturity does not exceed five (5) years.
2. MUNICIPAL SECURITIES (REGISTERED TREASURY NOTES OR BONDS) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state 6 or by a department, board, City, or authority of any of the other 49 states, in addition to California.
The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). No more than 5% of the portfolio may be invested in any single issuer. No more than 30% of the portfolio may be in Municipal Securities. The maximum maturity does not exceed five (5) years.
3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:
The maximum maturity does not exceed five (5) years.
4. FEDERAL AGENCIES or United States Government-Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal City or Government-Sponsored Enterprises (GSEs), provided that:
No more than 25% of the portfolio may be invested in any single City/GSE issuer. The maximum maturity does not exceed five (5) years.
The maximum percentage of callable Agency securities in the portfolio will be 5%.
5. BANKER’S ACCEPTANCES, provided that:
Each is issued by an institution having short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
No more than 40% of the portfolio may be invested in Banker’s Acceptances. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed 180 days.
6. COMMERCIAL PAPER, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
a. SECURITIES issued by corporations:
(i) A corporation organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
(iii) If the issuer has other debt obligations, these must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO. 7 b. SECURITIES issued by other entities:
(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.
(ii) The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond. (iii)The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
No more than 10% of the outstanding commercial paper of any single issuer. No more than 25% of the City’s investment assets under management may be invested in Commercial Paper.
No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed 397 days.
7. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or statechartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
No more than 30% of the total portfolio may be invested in NCDs (combined with PSDs).
No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed five (5) years.
8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
The amount per institution is limited to the maximum covered under federal insurance.
No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
The maximum maturity does not exceed five (5) years.
9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
8 The maximum maturity does not exceed five (5) years.
10. PLACEMENT SERVICE DEPOSITS (PSDS), provided that:
No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including PSDs.
The maximum maturity does not exceed five (5) years.
11. COLLATERALIZED BANK DEPOSITS. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.
There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.
12. REPURCHASE AGREEMENTS collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:
Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).
The maximum maturity does not exceed one (1) year.
13. LOCAL GOVERNMENT INVESTMENT POOLS (LGIP)
a. State of California Local Agency Investment Fund (LAIF), created by California Government Code Section 16429.1, provided that:
The City may invest up to the maximum amount permitted by LAIF. LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the Administrative Services Director to adequately judge the risk inherent in LAIF’s portfolio. b. Shares of Beneficial Interest Issued by a Joint Powers Authority (JPA), provided that:
The JPA is organized pursuant to California Government Code Section 6509.7 and invests in the securities and obligations authorized in subdivisions (a) to (r), inclusive.
Each share shall represent an equal proportional interest in the underlying pool of securities owned by the JPA.
The JPA has retained an investment advisor who is registered with the SEC (or exempt from registration), has assets under management in excess of $500 million, and has at least five years’ experience investing in instruments authorized by Section 53601, subdivisions (a) to (q).
9 c. Other Local Government Investment Pools (LGIP)
Other LGIPs permitted by the agency (such as a County Pool as defined by California Government Code Section 27000.3).
No more than 20% of the total portfolio may be invested in LGIPs other than LAIF and JPAs.
14. CORPORATE MEDIUM TERM NOTES (MTNS), provided that:
The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
No more than 30% of the total portfolio may be invested in MTNs. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed five (5) years.
15. ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES,
AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that:
The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
No more than 15% of the total portfolio may be invested in these securities. No more than 5% of the portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer.
The maximum legal final maturity does not exceed five (5) years.
16. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
10 b. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.
No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities.
17. SUPRANATIONALS, provided that:
Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
No more than 15% of the total portfolio may be invested in these securities. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity does not exceed five (5) years.
X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2031, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. Notification to the City Council, the Investment Advisory Committee, the City Treasurer, and the Administrative Services Director and/or designee will be given within two (2) business days when securities of this type are being added to the portfolio, this allows for full disclosure and understanding of the strategy given the market conditions.
Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
Purchasing or selling securities on margin is prohibited. The purchase of foreign currency denominated securities is prohibited. 11 The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.
XI. INVESTMENT POOLS/MUTUAL FUNDS
The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. Administrative Services Director and/or designee shall develop a questionnaire which will answer the following general questions:
A description of eligible investment securities, and a written statement of investment policy and objectives.
A description of interest calculations and how it is distributed, and how gains and losses are treated.
A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. A description of who may invest in the program, how often, and what size deposit and withdrawal are allowed.
A schedule for receiving statements and portfolio listings. Are reserves, retained earnings, etc. utilized by the pool/fund? A fee schedule, and when and how is it assessed.
Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? XII. COLLATERALIZATION
CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.
COLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.
REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities. 12 Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
The City shall receive monthly statements of collateral.
XIII. DELIVERY, SAFEKEEPING AND CUSTODY
DELIVERY-VERSUS-PAYMENT (DVP). All investment transactions shall be conducted on a delivery-versus-payment basis.
SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third-party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.
Monthly trust statements are reconciled to the Investment Reports by the City’s Accountant. The City’s Accountant performs reconciliation of the monthly bank statements. The periodic review of the investment portfolio, including investment types, purchase price, market values, maturity dates, and investment yields as well as conformance to the stated investment policy will be performed by the Investment Advisory Committee.
The only exceptions to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools; (ii) time certificates of deposit, and, (iii) mutual funds and money market mutual funds, since these securities are not deliverable.
XIV. MAXIMUM MATURITY
To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities.
The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment.
13 XV. RISK MANAGEMENT AND DIVERSIFICATION
MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
The diversification requirements included in the “Authorized Investments” section of this policy is designed to mitigate credit risk in the portfolio. No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy. The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
If a security owned by the City is downgraded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:
Any actions taken related to the downgrade by the investment manager will be communicated to the City Council, the Investment Advisory Committee, Administrative Services Director and/or designee within two (2) business days. If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.
MITIGATING MARKET RISK IN THE PORTFOLIO
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash flow purposes.
The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
The City will maintain a minimum of six months of budgeted operating expenditures in short-term investments to provide sufficient liquidity for expected disbursements. The maximum stated final maturity of individual securities in the portfolio will be five (5) years, unless the investment is for the Senior Low Cost Housing Subsidy Program, bond proceeds for the Reserve Fund, funded/capitalized interest fund; or the City 14 Council has granted express authority to make that investment, either specifically or as part of an investment program approved by the City Council no more than three months prior to the investment.
The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances. When possible, a minimum of 25% of the portfolio should be in maturities of one year or less.
XVI. REVIEW OF INVESTMENT PORTFOLIO
The Administrative Services Director and/or designee shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council.
XVII. PERFORMANCE EVALUATION
The investment portfolio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account the City’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.
The Administrative Services Director and/or designee shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the Monthly/Quarterly Report of Investments or a similar type of report. With the advisement of the City’s outside Investment Manager (if applicable), the Administrative Services Director and/or designee shall select an appropriate, readily available index to use as a market benchmark.
XVIII.REPORTING
MONTHLY REPORTS
Monthly transaction reports will be submitted by the Administrative Services Director and/or designee to the City Council within 30 days of the end of the reporting period in accordance with California Government Code Section 53607.
These reports will disclose, at a minimum, the following information about the City’s portfolio:
1. An asset listing showing par value, cost and independent third-party fair market value of each security as of the date of the report, the source of the valuation, type of investment, issuer, maturity date and interest rate.
2. Transactions for the period.
15 3. A description of the funds, investments and programs (including lending programs) managed by contracted parties (i.e. LAIF, LGIP, investment pools, outside money managers and securities lending agents)
4. A one-page summary report that shows:
a. Average maturity of the portfolio and modified duration of the portfolio; b. Maturity distribution of the portfolio;
c. Percentage of the portfolio represented by each investment category; d. Average portfolio credit quality; and,
e. Time-weighted total rate of return for the portfolio for the prior one month, three months, twelve months and since inception compared to the City’s market benchmark returns for the same periods;
5. A statement of compliance with investment policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio and a timetable for resolution.
6. A statement that the City has adequate funds to meet its cash flow requirements for the next six months.
Reports are to be submitted to the City Council and City Manager by the 3rd City Council meeting following the end of the reporting month.
The Investment Advisory Committee will review the status of investments on a quarterly basis. These reports shall include the type of investment, institution, face amount, market value, book value, interest rate, date of maturity, compliance to the investment policy.
If the City has an outside Investment Manager, the Investment Manager shall periodically report on the activity and results of the funds being managed by the Investment Manager.
Additionally, the Investment Manager shall notify the Investment Advisory Committee when investment portfolios demonstrate low performance, if any, which occurs between each periodic report.
QUARTERLY REPORTS
The Administrative Services Director and/or designee will submit a quarterly investment report to the City Council which provides full disclosure of the City’s investment activities within 45 days after the end of the quarter.
ANNUAL REPORTS
A comprehensive annual report will be presented to the City Council. This report will include comparisons of the City’s return to the market benchmark return, suggest policies and improvements that might enhance the investment program, and will include an investment plan for the coming year.
16 XIX. REVIEW OF INVESTMENT POLICY
The investment policy will be reviewed and adopted at least annually within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.
Any recommended modifications or amendments shall be presented by Staff to the City Council for their consideration and adoption.
17 SEGREGATION OF RESPONSIBILITIES
(when an Outside Investment Manager is utilized)
FUNCTION RESPONSIBILITY
Develop formal Statement of Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Recommend modifications to Investment
Policy
City Treasurer
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Review formal Statement of Investment
Policy and recommend a Council action
Investment Advisory Committee
Adopt formal Statement of Investment Policy City Council Select investments Outside Investment Manager
Execute investment transactions and fax or
email completed trade information to City
Outside Investment Manager
Review transactions for compliance with
investment policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Outside Investment Manager
Investment verification (match broker
confirmation to trade information provided by
outside Investment Manager to City
investment records)
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Record investment transactions into City's
accounting records
City Accountant
Reconcile investment records to accounting
records and bank statements and report any
variances to Administrative Services Director
and City Treasurer
City Accountant
Security All investment securities will be held in
safekeeping in the trust department of the
City's Depository Bank, or other third-party
custodian as designated by the Administrative
Services Director.
18 SEGREGATION OF RESPONSIBILITIES
(when Investment transactions are performed by City Staff)
FUNCTION RESPONSIBILITY
Develop formal Statement of Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Recommend modifications to Investment
Policy
Administrative Services Director
Deputy Director of Administrative Services
Investment Advisory Committee
Review formal Statement of Investment
Policy and recommend a Council action
Investment Advisory Committee
Annually review and adopt a formal
Statement of Investment Policy
City Council
Select investments Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Approve transactions Administrative Services Director
Deputy Director of Administrative Services
Execute investment transactions Administrative Services Director Deputy Director of Administrative Services
Investment verification (match broker
confirmation to City investment records)
Administrative Services Director
Deputy Director of Administrative Services
Financial Services Manager, Revenue
Record investment transactions into City's
accounting records
City Accountant
Reconcile investment records to accounting
records and bank statements and report any
variances to Administrative Services Director
City Accountant
Security All investment securities will be held in
safekeeping in the trust department of the
City's Depository Bank, or other third-party
custodian as designated by the Administrative
Services Director.
19 GLOSSARY OF INVESTMENT TERMS
AGENCIES. Shorthand market terminology for any obligation issued by a government-sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:
FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.
FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.
FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.
FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.
GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.
PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.
TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.
ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.
AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.
BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions.
It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.
BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.
BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.
CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity.
The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.
CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.
COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.
COLLATERALIZED BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.
COLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER. The short-term unsecured debt of corporations. 20 COUPON. The rate of return at which interest is paid on a bond.
CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.
DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position.
DEBENTURE. A bond secured only by the general credit of the issuer.
DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.
DERIVATIVE. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.
DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.
DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.
DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal City insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.
FEDERALLY INSURED TIME DEPOSIT. A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.
INVESTMENT OFFICIAL. Those officers and employees who are authorized by the governing body to administer, manage, execute, monitor, or report on the city’s investment program in accordance with the Investment Policy and applicable provision of the California code.
LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.
LIQUIDITY. The speed and ease with which an asset can be converted to cash.
LOCAL CITY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State City Treasurer and/or Administrative Services Director’s Office.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP). Investment pools that range from the State City Treasurer and/or Administrative Services Director’s Office Local City Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.
MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole." MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.
MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.
MARKET VALUE. The price at which a security can be traded.
MATURITY. The final date upon which the principal of a security becomes due and payable. The investment’s term or remaining maturity is measured from the settlement date to final maturity. 21 MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.
MODIFIED DURATION. The percent change in price for a 100-basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.
MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.
MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short-term securities.
Examples of investments in money market funds are certificates of deposit and U.S. Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.
MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.
MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.
MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO).
A credit rating City that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.
NEGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market.
PLACEMENT SERVICE DEPOSITS (PSDS). A private service that allows local agencies to invest in FDICinsured deposits with one or more banks, savings and loans, and credit unions located in the United States. IntraFi (formerly known as CDARS) is an example of an entity that provides this service.
PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market.
PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries.
In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.
SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.
SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government City responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. 22 SECURITIES AND EXCHANGE COMMISSION SEC) RULE 15C3-1. An SEC rule setting capital requirement for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.
STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate.
Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.
SUPRANATIONAL. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.
TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.
U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.
TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month Tbills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.
TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.
TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.
CITYofBREA
Communication
August 18, 2026
Item No. 3H.
Investment Policy Guidelines for the City of Brea's Employee Benefits Fund Pension Plan
TO PREPARED BY
Honorable Mayor and City Council Members Faith Madrazo, Financial Services Manager, Revenue
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Monica Lo, Administrative Services Director Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following action.
1. Review and approve the Investment Policy Guidelines for the City of Brea’s Employee Benefits Fund Pension Plan through Public Agency Retirement Services (PARS).
BACKGROUND/DISCUSSION
On November 17, 2015, the Brea City Council approved participation in the Public Agencies Post-Employment Benefit Trust Program, establishing the City’s Employee Benefits Fund Pension Plan. The Plan is administered by Public Agencies Retirement Services (PARS) through an irrevocable Section 115 Trust, enabling the City to prefund its pension obligations.
Key Benefits of Participation
City Oversight: The City retains full control over the investment strategy and portfolio risk tolerance.
Enhanced Investment Flexibility: Trust assets can be invested in a broader range and higher-yielding potential than those available to General Fund assets.
Pension Rate Stabilization: Funds can be used to offset unexpected increases in CalPERS contribution rates.
Improved Credit Profile: Participation may positively influence the City’s bond rating.
Asset Accessibility: Funds remain accessible at any time, provided they are used to meet pension-related obligations.
Investment Policy Guidelines
Collaborative Development: Guidelines are established by PARS, PFM Asset Management (the Plan’s Investment Advisor), and the City’s Investment Advisory Committee (IAC).
Purpose: To clearly define investment objectives, guide long-term strategy through market fluctuations, and establilsh roles and responsibilities for:
Trustee
Investment Manager
Investment Advisory Committee
Ongoing Oversight
The Investment Advisory Committee, in coordination with PARS and PFM, conducts an annual review of the Investment Policy Guidelines.
The current strategy follows a "Balanced Objective"—aiming for both income growth and principal appreciation.
No changes have been recommended for the upcoming review cycle.
COMMISSION/COMMITTEE RECOMMENDATION
At its meeting on July 27, 2026, the Investment Advisory Committee reviewed the City of Brea's existing Investment Policy Guidelines for the Employee Benefit Fund Pension Plan and recommended the policy to the City Council without any changes. The City's Portfolio Manager for the City's Employee Benefit Fund Pension Plan advised the Committee that revisions to its standardized investment policy are anticipated in the near future. Any future revisions will be presented to the Investment Advisory Committee and City Council for review and consideration.
FISCAL IMPACT/SUMMARY
There is no fiscal impact for approving the Investment Policy Guidelines.
Attachments
2026-07 Investment Policy Statement - 115 Pension Brea - Balanced.pdf
INVESTMENT POLICY STATEMENT
FOR
CITY OF BREA
SECTION 115 TRUST PENSION FUND
2 TABLE OF CONTENTS
SECTION PAGE
Purpose ......................................................................................................................................... 3 Investment Authority .................................................................................................................... 3 Statement of Investment Objectives ............................................................................................. 4 Investment Guidelines .................................................................................................................. 5 Time Horizon
Liquidity and Diversification
Asset Allocation
Rebalancing Philosophy
Risk Tolerance
Performance Expectations
Selection of Investment Managers ................................................................................................ 7 Guidelines for Portfolio Holdings ................................................................................................ 7 Direct Investments by Advisor
Limitations on Managers’ Portfolios
Portfolio Risk Hedging
Prohibited Portfolio Investments
Safekeeping
Control Procedures ....................................................................................................... ………..10 Review of Investment Objectives
Review of Investment Performance
Voting of Proxies
Adoption of Investment Policy Statement………………………………………………………11
3 The City of Brea “City” has established a section 115 Trust known as the City of Brea Section 115 Pension Trust (the “Trust”). This Trust will be used to invest monies to fund the City’s unfunded liability in the California Public Employee Retirement System (“CalPERS”). The City Council of Brea (“Council”) has given authority to the Plan Administrator to establish and adopt the investment Policy Statement (“Policy Statement”) for the following purposes.
Purpose
Funds set aside in the Section 115 Trust are safeguarded from diversion to other budgetary uses and generally may be invested in a broader range of securities than would typically be permitted for public agency operating funds, potentially increasing earnings. Therefore, higher returns can improve the City’s ability to meet future pension obligations. An additional advantage of holding funds in the Trust rather than contributing an equivalent amount directly to CalPERS is that the City retains control over the timing and amount of disbursements from the Trust. Retaining control of the funds in the Trust provides the flexibility to meet current or accrued liabilities based on the financial circumstances at that time. The City also controls the timing of contributions to the Trust.
The main investment objective of the Trust is to achieve long-term growth of Trust assets by maximizing long-term rate of return on investments and minimizing risk of loss.
The purpose of this Policy Statement is to achieve the following:
1. Document investment objectives, performance expectations, and investment guidelines for Fund assets.
2. Establish an appropriate investment strategy for managing all Trust assets, including an investment time horizon, risk tolerance ranges, and asset allocation to provide sufficient diversification and overall return over the long-term time horizon of the Trust.
3. Establish investment guidelines to control overall risk and liquidity.
4. Establish periodic performance reporting requirements to monitor investment results and confirm that the investment policy is being followed.
5. Comply with fiduciary, prudence, due diligence, and legal requirements for Trust assets.
Investment Authority
The Council has appointed the City Manager to be the Plan Administrator, (the “Administrator”) to oversee certain policies and procedures related to the operation and administration of the Trust. The Administrator will have authority to implement the investment policy and guidelines in the best interest of the Trust to best satisfy the purposes of the Trust. In implementing this Policy Statement, the Administrator believes it may delegate certain functions to:
4 1. An investment advisor (“Advisor”) to assist the Administrator in the investment process and to maintain compliance with this Policy Statement. The Advisor may assist the Administrator in establishing investment policy objectives and guidelines. The Advisor will adjust asset allocation for the Trust subject to the guidelines and limitations set forth in this Policy Statement. The Advisor will also select investment managers (“Managers”) and strategies consistent with its role as a fiduciary for the Trust. The investment vehicles allowed may include mutual funds, commingled trusts, separate accounts, limited partnerships and other investment vehicles deemed to be appropriate by the Advisor. The Advisor is also responsible for monitoring and reviewing investment managers; measuring and evaluating performance; and other tasks as deemed appropriate in its role as Advisor for Trust assets. The Advisor may also select investments with discretion to purchase, sell, or hold specific securities, such as Exchange Traded Funds, that will be used to meet the Trust’s investment objectives. The Advisor shall never take possession of securities, cash or other assets of the Trust, all of which shall be held by the custodian. The Advisor must be registered with the Securities and Exchange Commission.
2. A custodian selected by the Trust to maintain possession of physical securities and records of street name securities owned by the Trust, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian may also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Trust.
3. A trustee appointed by the Trust, such as a bank trust department, if the Trust does not have its own Trustees, to assume fiduciary responsibility for the administration of Trust assets; provided, however, that if the Administrator shall have appointed an investment advisor, then any trustee appointed under this paragraph shall have no authority with respect to selection of investments.
4. Specialists such as attorneys, auditors, actuaries and, retirement plan consultants to assist the Administrator in meeting its responsibilities and obligations to administer Trust assets prudently.
Statement of Investment Objectives
The investment objectives of the Trust are as follows:
1. To invest assets of the Trust in a manner consistent with the following fiduciary standards:
(a) all transactions undertaken must be for the sole interest of Trust beneficiaries, and (b) assets are to be diversified in order to minimize the impact of large losses from individual investments.
2. To provide for funding and anticipated withdrawals on a continuing basis for payment of benefits and reasonable expenses of operation of the Trust.
3. To enhance the value of Trust assets in real terms over the long-term through asset appreciation and income generation, while maintaining a reasonable investment risk profile.
4. Subject to performance expectations over the long-term, to minimize principal fluctuations over the Time Horizon (as defined below).
5 5. To achieve a long-term level of return commensurate with contemporary economic conditions and equal to or exceeding the investment objective set forth in this Policy Statement under the section labeled “Performance Expectations”.
Investment Guidelines
Within this section of the Policy Statement, several terms will be used to articulate various investment concepts. The descriptions are meant to be general and may share investments otherwise considered to be in the same asset class. They are:
"Growth Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on capital appreciation. Investments within the Growth Assets category can include income and risk mitigating characteristics, so long as the predominant investment risk and return characteristic is capital appreciation. Examples of such investments or asset classes are:
domestic and international equities or equity funds, private or leveraged equity, and certain real estate investments.
"Income Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on income generation. Investments within the Income Assets category can include capital appreciation and risk mitigating characteristics, so long as the primary investment risk and return characteristic is income generation. Examples of such investments or asset classes are:
fixed income securities, guaranteed investment contracts, and certain real estate investments. "Real Return Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on real returns, net of inflation. Investments within the Real Return category may include, but are not limited to, inflation protected securities, commodities, certain real estate investments, natural resources, and liquid alternatives.
Time Horizon
The Trust’s investment objectives are based on a long-term investment horizon (“Time Horizon”) of five years or longer. Interim fluctuations should be viewed with appropriate perspective. The Administrator has adopted a long-term investment horizon such that the risks and duration of investment losses are carefully weighed against the long-term potential for appreciation of assets. However, this portfolio of assets is viewed by the City as the first pool of assets that would be utilized to support pension expenses.
As such, the time horizon for this portfolio could be less than five years based on budget conditions, or any increase in expenses arising from CalPERS.
6 Liquidity and Diversification
In general, the Trust may hold some cash, cash equivalent, and/or money market funds for near-term Trust benefits and expenses (the “Trust Distributions”). Remaining assets will be invested in longer-term investments and shall be diversified with the intent to minimize the risk of long-term investment losses.
Consequently, the total portfolio will be constructed and maintained to provide diversification with regard to the concentration of holdings in individual issues, issuers, countries, governments or industries.
Asset Allocation: Balanced (Strategic Blend)
The Administrator believes that to achieve the greatest likelihood of meeting the Trust’s investment objectives and the best balance between risk and return for optimal diversification, assets will be invested in accordance with the targets for each asset class as follows to achieve an average total annual rate of return that is equal to or greater than the Trust’s target rate of return over the long-term, as described in the section titled “Performance Expectations”.
Asset Weightings
Asset Classes Range Target
Growth Assets
Domestic Equity 20% - 50% 36%
International Equity 10% - 36% 18%
Other 0% - 20% 6%
Income Assets
Fixed Income
Other
25% - 50%
0% - 20%
38%
0%
Real Return Assets 0% - 20% 0%
Cash Equivalents 0% - 20% 2%
The Advisor and each Manager will be evaluated against their peers on the performance of the total funds under their direct management.
Rebalancing Philosophy
The asset allocation range established by this Policy Statement represents a long-term perspective. As such, rapid unanticipated market shifts or changes in economic conditions may cause the asset mix to fall outside Policy Statement ranges. When allocations breach the specified ranges, the Advisor will rebalance the assets within the specified ranges. The Advisor may also rebalance based on market conditions.
7 Risk Tolerance
Subject to investment objectives and performance expectations, the Trust will be managed in a style that seeks to minimize principal fluctuations over the established Time Horizon.
Performance Expectations
Over the long-term, five years or longer, the performance objective for the Trust will be to achieve an average total annual rate of return that is equal to or greater than the Trust’s blended benchmark target rate. Additionally, it is expected that the annual rate of return on Trust assets will be commensurate with the then prevailing investment environment. Measurement of this return expectation will be judged by reviewing returns in the context of industry standard benchmarks, peer universe comparisons for individual Trust investments and blended benchmark comparisons for the Trust in its entirety.
Selection of Investment Managers
The Advisor shall prudently select appropriate Managers to invest the assets of the Trust. Managers must meet the following criteria:
The Manager must provide historical quarterly performance data compliant with Global Investment Performance Standards (GIPS®), Securities & Exchange Commission (“SEC”), Financial Industry Regulatory Agency (“FINRA”) or industry recognized standards, as appropriate. The Manager must provide detailed information on the history of the firm, key personnel, support personnel, key clients, and fee schedule (including most-favored-nation clauses). This information can be a copy of a recent Request for Proposal (“RFP”) completed by the Manager or regulatory disclosure.
The Manager must clearly articulate the investment strategy that will be followed and document that the strategy has been successfully adhered to over time. The investment professionals making the investment decisions must have a minimum of three (3) years of experience managing similar strategies either at their current firm or at previous firms. Where other than common funds such as mutual funds or commingled trusts are utilized, the Manager must confirm receipt, understanding and adherence to this Policy Statement and any investment specific policies by signing a consent form provided to the Manager prior to investment of Trust assets.
Guidelines for Portfolio Holdings
Direct Investments by Advisor
Every effort shall be made, to the extent practical, prudent and appropriate, to select investments that have investment objectives and policies that are consistent with this Policy Statement (as outlined in the following sub-sections of the “Guidelines for Portfolio Holdings”). However, given the nature of the 8 investments, it is recognized that there may be deviations between this Policy Statement and the objectives of these investments.
Limitations on Portfolio Holdings
EQUITIES
No more than 5% of the total equity portfolio valued at market may be invested in the common equity of any one corporation; ownership of the shares of one company shall not exceed 5% of those outstanding; and not more than 40% of Equity valued at Market may be held in any one sector [excluding Mutual Funds and/or ETFs], as defined by Bloomberg (BB) Sector standards.
Domestic Equities. Other than the above constraints, there are no quantitative guidelines as to issues, industry or individual security diversification. However, prudent diversification standards should be developed and maintained by the Manager.
International Equities. The overall non-U.S. equity allocation should include a diverse global mix that is comprised of the equity of companies from multiple countries, regions and sectors.
FIXED INCOME
Fixed Income
The fixed income portion of the account will use individual bonds for the core bond portfolio.
Investment Manager may allocate assets among various sectors and industries, as well as varying maturities and credit quality that are consistent with the overall goals and objectives of the portfolio.
OTHER ASSETS (ALTERNATIVES)
Diversifying (Liquid Alternatives): Primary objective shall be to enhance the risk-return profile of the overall portfolio. This can be accomplished by using liquid alternative strategies that may enhance returns at a reasonable level of risk or reduce volatility while providing a reasonable level of return.
These asset classes may differ from traditional public market asset classes due to the use of certain strategies including short-selling, leverage, and derivatives. Liquid alternatives may also invest across asset classes. For purposes of asset allocation targets and limitations, liquid alternatives funds will be categorized under the specific asset class of the fund. For example, a long/short U.S. equity fund will be categorized as “Other” in the Growth Assets category while a long/short credit fund will be categorized as “Other” in the Income Assets category. Multi-strategy liquid alternatives funds that cannot be easily categorized under one asset class will be included in “Other” under either the Growth Assets or Income Assets category depending on the risk-return profile of the strategy.
Real Assets: Real assets are typically physical assets that have intrinsic worth due to their substance and properties. Real assets are primarily used for their lower correlation to traditional assets (i.e. stocks and 9 bonds) and their inflation hedging properties. Categories of real asset investments include, but are not limited to, real estate, infrastructure, land, farmland, timberland, precious metals, and commodities.
Public real assets are publicly traded and liquid. The benefit of lower correlation investments is that, when implemented correctly, these investments can potentially improve a portfolio’s expected riskadjusted return over the long-term. The real assets category can be extended to include other forms of assets that offer similar inflation hedging properties such as pooled vehicles holding: commodities contracts, Treasury Inflation Protected Securities (“TIPS”), index-linked derivative contracts, certain forms of intellectual property, and the equity of companies in businesses thought to hedge inflation. For purposes of asset allocation targets and limitations, real assets may be categorized as “Other” under either the Growth Assets or Income Assets category or in the Real Return Assets category, depending on the nature and risk/return profile of the investment.
CASH EQUIVALENTS
Cash equivalents shall be held in funds complying with Rule 2(a)-7 of the Investment Company Act of 1940.
Portfolio Risk Hedging
Portfolio investments designed to hedge various risks including volatility risk, interest rate risk, etc. are allowed to the extent that the investments are not used for the sole purpose of leveraging Trust assets.
One example of a hedge vehicle is an exchange traded fund (“ETF”) which takes short positions.
Prohibited Investments
Except for purchase within authorized investments, securities having the following characteristics are not authorized and shall not be purchased: letter stock and other unregistered securities, direct commodities or commodity contracts, or private placements (with the exception of Rule 144A securities). Further, derivatives, options, or futures for the sole purpose of direct portfolio leveraging are prohibited. Direct/physical ownership of real estate, natural resource properties such as oil, gas or timber and the purchase of collectibles is also prohibited.
Safekeeping
All assets of the Trust shall be held by a custodian approved by the Administrator for safekeeping of Trust assets. The custodian shall produce statements on a monthly basis, listing the name and value of all assets held, and the dates and nature of all transactions in accordance with the terms in the Trust Agreement. Investments of the Trust not held as liquidity or investment reserves shall, at all times, be invested in interest-bearing accounts. Investments and portfolio securities may not be loaned. 10 Control Procedures
Review of Investment Objectives
The Advisor shall review annually and report to the Administrator the appropriateness of this Policy Statement for achieving the Trust’s stated objectives. It is not expected that this Policy Statement will change frequently. In particular, short-term changes in the financial markets should not require an adjustment in this Policy Statement.
Review of Investment Performance
The Advisor shall report on a quarterly basis to the Administrator to review the investment performance of the Trust. In addition, the Advisor will be responsible for keeping the Administrator advised of any material change in investment strategy, Managers, and other pertinent information potentially affecting performance of the Trust.
The Advisor shall compare the investment results on a quarterly basis to appropriate peer universe benchmarks, as well as market indices in both equity and fixed income markets. Examples of benchmarks and indexes that will be used include the Russell 3000 Index for broad U.S. equity strategies; S&P 500 Index for large cap U.S. equities, Russell 2000 Index for small cap U.S. equities, MSCI ACWI ex-U.S. Index for broad based non-U.S. equity strategies, MSCI Europe, Australasia, and Far East (EAFE) Index for developed markets international equities, Bloomberg US Aggregate Bond Index for fixed income securities, and the U.S. 91 Day T-bill for cash equivalents. The Russell 3000 Index will be used to benchmark the U.S. equities portfolio; the MSCI ACWI ex-U.S. Index will be used to benchmark the non-U.S. equities portfolio; the Bloomberg US Aggregate Bond Index will be used to benchmark the fixed income portfolio. The categories “Other” will be benchmarked against appropriate indices depending on the specific characteristics of the strategies and funds used.
Voting of Proxies
The Administrator recognizes that proxies are a significant and valuable tool in corporate governance.
The voting rights of individual stocks held in separate accounts or collective, common, or pooled funds will be exercised by the investment managers in accordance with their own proxy voting policies. The voting rights of funds will be exercised by the Advisor. 11 Adoption of Investment Policy Statement
Any changes and exceptions to this Policy Statement will be made in writing and adopted by the Administrator. Once adopted, changes and exceptions will be delivered to each Manager, as appropriate, by the Advisor.
Approved by the City of Brea Plan Administrator:
Member
____________
Date
CITYofBREA
Communication
August 18, 2026
Item No. 3I.
Investment Policy Guidelines for the City of Brea's Other Post Employment Benefits (OPEB) Trust Fund
TO PREPARED BY
Honorable Mayor and City Council Members Faith Madrazo, Financial Services Manager, Revenue
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Monica Lo, Administrative Services Director Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following action.
1. Review and approve the Investment Guidelines for the City's Other Post Employment Benefits (OPEB) Trust Fund through Public Agency Retirement Services (PARS).
BACKGROUND/DISCUSSION
On May 5, 2020, the City Council approved the Investment Guidelines for the City's OPEB Trust Program ("Plan"), adopting the Moderate Investment Objective recommended by the Investment Advisory Committee (IAC).
Strategic Asset Allocation
Strategic Asset Allocation Ranges
Cash Fixed Income Equity
0-20% 40%-60% 40%-60%
Policy: 5% Policy: 45% Policy: 50%
Investment Goals & Objectives:
Achieve a reasonable level of growth to fund both current and future obligations.
Outperform the policy benchmark over the life of the Plan.
Manage assets on a total return basis, considering both income and capital appreciation.
While capital preservation is important, the Plan embraces measured risk-taking to pursue higher long-term returns.
Purpose of the Investment Guidelines:
Ensure clear communication between the Plan sponsor and fiduciaries.
Confirm investment goals, objectives, and management policies.
Guide the construction of a diversified asset mix aligned with the Plan's needs, risk tolerance, and liquidity requirements.
Identify any investment restrictions or unique considerations.
Encourage a long-term perspective, especially during periods of short-term market volatility.
Contributions & Updates:
Due to the COVID-19 pandemic, the initial contribution was delayed.
The first contribution of $250,000 was made on May 13, 2024, followed by $175,000 on June 24, 2024.
At the April 22, 2024 IAC meeting, it was determined that the original 2020 recommendation for 12 month dollar cost averaging is no longer applicable due to the current low balance. Ongoing contributions will naturally achieve a dollar cost averaging effect over time.
Current Status:
There are no changes to the Investment Policy Guidelines for this year.
COMMISSION/COMMITTEE RECOMMENDATION
At its meeting on July 27, 2026, the Investment Advisory Committee reviewed the City of Brea's existing Investment Policy Guidelines for the Other Post-Employment Benefits (OPEB) Trust Fund and recommended the policy to the City Council without any changes. The City's Portfolio Manager for the OPEB Trust Fund advised the Committee that revisions to its standardized investment policy are anticipated in the near future. Any future revisions will be presented to the Investment Advisory Committee and City Council for review and consideration.
FISCAL IMPACT/SUMMARY
There is no fiscal impact for approving the Investment Policy Guidelines.
Attachments
2026-07 Template IPS City of Brea- OPEB - Moderate SB.pdf
INVESTMENT POLICY STATEMENT
FOR
CITY OF BREA
OTHER POST-EMPLOYMENT BENEFITS TRUST
2 TABLE OF CONTENTS
SECTION PAGE
Purpose ......................................................................................................................................... 3 Investment Authority .................................................................................................................... 3 Statement of Investment Objectives ............................................................................................. 4 Investment Guidelines .................................................................................................................. 5 Time Horizon
Liquidity and Diversification
Asset Allocation
Rebalancing Philosophy
Risk Tolerance
Performance Expectations
Selection of Investment Managers ................................................................................................ 7 Guidelines for Portfolio Holdings ................................................................................................ 7 Direct Investments by Advisor
Limitations on Managers’ Portfolios
Portfolio Risk Hedging
Prohibited Portfolio Investments
Safekeeping
Control Procedures ......................................................................................................... ………..9 Review of Investment Objectives
Review of Investment Performance
Voting of Proxies
Adoption of Investment Policy Statement………………………………………………………11 3 The City of Brea has established the City of Brea Other Post-Employment Benefits Trust (the “Trust”).
This Trust is intended to provide funding of non-pension post-employment benefits (“OPEB”) for those employees who meet the age and service requirements outlined in the plan document. The Trustees of the Trust hereby adopt this Investment Policy Statement (“Policy Statement”) for the following purposes.
Purpose
The main investment objective of the Trust is to achieve long-term growth of Trust assets by maximizing long-term rate of return on investments and minimizing risk of loss to fulfill the City’s current and long-term OPEB obligations.
The purpose of this Policy Statement is to achieve the following:
1. Document investment objectives, performance expectations and investment guidelines for Trust assets.
2. Establish an appropriate investment strategy for managing all Trust assets, including an investment time horizon, risk tolerance ranges and asset allocation to provide sufficient diversification and overall return over the long-term time horizon of the Trust.
3. Establish investment guidelines to control overall risk and liquidity.
4. Establish periodic performance reporting requirements to monitor investment results and confirm that the investment policy is being followed.
5. Comply with fiduciary, prudence, due diligence and legal requirements for Trust assets.
Investment Authority
The City Council has appointed a Plan Administrator (the “Administrator”) to oversee certain policies and procedures related to the operation and administration of the Trust. The Administrator will have authority to implement the investment policy and guidelines in the best interest of the Trust to best satisfy the purposes of the Trust. In implementing this Policy Statement, the Administrator believes it may delegate certain functions to:
1. An investment advisor (“Advisor”) to assist the Administrator in the investment process and to maintain compliance with this Policy Statement. The Advisor may assist the Administrator in establishing investment policy objectives and guidelines. The Advisor will adjust asset allocation for the Trust subject to the guidelines and limitations set forth in this Policy Statement. The Advisor will also select investment managers (“Managers”) and strategies consistent with its role as a fiduciary for the Trust. The investment vehicles allowed may include mutual funds, commingled trusts, separate accounts, limited partnerships and other investment vehicles deemed to be appropriate by the Advisor. The Advisor is also responsible 4 for monitoring and reviewing investment managers; measuring and evaluating performance; and other tasks as deemed appropriate in its role as Advisor for Trust assets. The Advisor may also select investments with discretion to purchase, sell, or hold specific securities, such as Exchange Traded Funds, that will be used to meet the Trust’s investment objectives. The Advisor shall never take possession of securities, cash or other assets of the Trust, all of which shall be held by the custodian. The Advisor must be registered with the Securities and Exchange Commission.
2. A custodian selected by the Trust to maintain possession of physical securities and records of street name securities owned by the Trust, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian may also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Trust.
3. A trustee appointed by the Trust, such as a bank trust department, if the Trust does not have its own Trustees, to assume fiduciary responsibility for the administration of Trust assets; provided, however, that if the Administrator shall have appointed an investment advisor, then any trustee appointed under this paragraph shall have no authority with respect to selection of investments.
4. Specialists such as attorneys, auditors, actuaries and, retirement plan consultants to assist the Administrator in meeting its responsibilities and obligations to administer Trust assets prudently.
Statement of Investment Objectives
The investment objectives of the Trust are as follows:
1. To invest assets of the Trust in a manner consistent with the following fiduciary standards:
(a) all transactions undertaken must be for the sole interest of Trust beneficiaries, and (b) assets are to be diversified in order to minimize the impact of large losses from individual investments.
2. To provide for funding and anticipated withdrawals on a continuing basis for payment of benefits and reasonable expenses of operation of the Trust.
3. To enhance the value of Trust assets in real terms over the long-term through asset appreciation and income generation, while maintaining a reasonable investment risk profile.
4. Subject to performance expectations over the long-term, to minimize principal fluctuations over the Time Horizon (as defined below).
5. To achieve a long-term level of return commensurate with contemporary economic conditions and equal to or exceeding the investment objective set forth in this Policy Statement under the section labeled “Performance Expectations”. 5 Investment Guidelines
Within this section of the Policy Statement, several terms will be used to articulate various investment concepts. The descriptions are meant to be general and may share investments otherwise considered to be in the same asset class. They are:
"Growth Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on capital appreciation. Investments within the Growth Assets category can include income and risk mitigating characteristics, so long as the predominant investment risk and return characteristic is capital appreciation. Examples of such investments or asset classes are:
domestic and international equities or equity funds, private or leveraged equity, and certain real estate investments.
"Income Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on income generation. Investments within the Income Assets category can include capital appreciation and risk mitigating characteristics, so long as the primary investment risk and return characteristic is income generation. Examples of such investments or asset classes are:
fixed income securities, guaranteed investment contracts, and certain real estate investments. "Real Return Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on real returns, net of inflation. Investments within the Real Return category may include, but are not limited to, inflation protected securities, commodities, certain real estate investments, natural resources, and liquid alternatives.
Time Horizon
The Trust’s investment objectives are based on a long-term investment horizon (“Time Horizon”) of five years or longer. Interim fluctuations should be viewed with appropriate perspective. The Administrator has adopted a long-term investment horizon such that the risks and duration of investment losses are carefully weighed against the long-term potential for appreciation of assets.
Liquidity and Diversification
In general, the Trust may hold some cash, cash equivalent, and/or money market funds for near-term Trust benefits and expenses (the “Trust Distributions”). Remaining assets will be invested in longerterm investments and shall be diversified with the intent to minimize the risk of long-term investment losses. Consequently, the total portfolio will be constructed and maintained to provide diversification with regard to the concentration of holdings in individual issues, issuers, countries, governments or industries.
6 Asset Allocation: Moderate (Strategic Blend)
The Administrator believes that to achieve the greatest likelihood of meeting the Trust’s investment objectives and the best balance between risk and return for optimal diversification, assets will be invested in accordance with the targets for each asset class as follows to achieve an average total annual rate of return that is equal to or greater than the Trust’s target rate of return over the long-term, as described in the section titled “Performance Expectations”.
Asset Weightings
Asset Classes Range Target
Growth Assets
Domestic Equity 15% -5% 30%
International Equity 1% - 25% 15%
Other 0%-15% 5%
Income Assets
Fixed Income
Other
33% - 60%
0%- 15%
48%
0%
Real Return Assets 0% - 15% 0%
Cash Equivalents 0% - 20% 2%
The Advisor and each Manager will be evaluated against their peers on the performance of the total funds under their direct management.
Rebalancing Philosophy
The asset allocation range established by this Policy Statement represents a long-term perspective. As such, rapid unanticipated market shifts or changes in economic conditions may cause the asset mix to fall outside Policy Statement ranges. When allocations breach the specified ranges, the Advisor will rebalance the assets within the specified ranges. The Advisor may also rebalance based on market conditions.
Risk Tolerance
Subject to investment objectives and performance expectations, the Trust will be managed in a style that seeks to minimize principal fluctuations over the established Time Horizon. 7 Performance Expectations
Over the long-term, five years or longer, the performance objective for the Trust will be to achieve an average total annual rate of return that is equal to or greater than the Trust’s actuarial discount rate.
Additionally, it is expected that the annual rate of return on Trust assets will be commensurate with the then prevailing investment environment. Measurement of this return expectation will be judged by reviewing returns in the context of industry standard benchmarks, peer universe comparisons for individual Trust investments and blended benchmark comparisons for the Trust in its entirety.
Selection of Investment Managers
The Advisor shall prudently select appropriate Managers to invest the assets of the Trust. Managers must meet the following criteria:
The Manager must provide historical quarterly performance data compliant with Global Investment Performance Standards (GIPS®), Securities & Exchange Commission (“SEC”), Financial Industry Regulatory Agency (“FINRA”) or industry recognized standards, as appropriate. The Manager must provide detailed information on the history of the firm, key personnel, support personnel, key clients, and fee schedule (including most-favored-nation clauses). This information can be a copy of a recent Request for Proposal (“RFP”) completed by the Manager or regulatory disclosure.
The Manager must clearly articulate the investment strategy that will be followed and document that the strategy has been successfully adhered to over time. The investment professionals making the investment decisions must have a minimum of three (3) years of experience managing similar strategies either at their current firm or at previous firms. Where other than common funds such as mutual funds or commingled trusts are utilized, the Manager must confirm receipt, understanding and adherence to this Policy Statement and any investment specific policies by signing a consent form provided to the Manager prior to investment of Trust assets.
Guidelines for Portfolio Holdings
Direct Investments by Advisor
Every effort shall be made, to the extent practical, prudent and appropriate, to select investments that have investment objectives and policies that are consistent with this Policy Statement (as outlined in the following sub-sections of the “Guidelines for Portfolio Holdings”). However, given the nature of the investments, it is recognized that there may be deviations between this Policy Statement and the objectives of these investments.
8 Limitations on Portfolio Holdings
EQUITIES
No more than 5% of the total equity portfolio valued at market may be invested in the common equity of any one corporation; ownership of the shares of one company shall not exceed 5% of those outstanding; and not more than 40% of Equity valued at Market may be held in any one sector [excluding Mutual Funds and/or ETFs], as defined by Bloomberg (BB) Sector standards.
Domestic Equities. Other than the above constraints, there are no quantitative guidelines as to issues, industry or individual security diversification. However, prudent diversification standards should be developed and maintained by the Manager.
International Equities. The overall non-U.S. equity allocation should include a diverse global mix that is comprised of the equity of companies from multiple countries, regions and sectors.
FIXED INCOME
Fixed income securities of any one issuer shall not exceed 5% of the total bond portfolio at time of purchase. The 5% limitation does not apply to issues of the U.S. Treasury or other Federal Agencies.
OTHER ASSETS (ALTERNATIVES)
Diversifying (Liquid Alternatives): Primary objective shall be to enhance the risk-return profile of the overall portfolio. This can be accomplished by using liquid alternative strategies that may enhance returns at a reasonable level of risk or reduce volatility while providing a reasonable level of return.
These asset classes may differ from traditional public market asset classes due to the use of certain strategies including short-selling, leverage, and derivatives. Liquid alternatives may also invest across asset classes. For purposes of asset allocation targets and limitations, liquid alternatives funds will be categorized under the specific asset class of the fund. For example, a long/short U.S. equity fund will be categorized as “Other” in the Growth Assets category while a long/short credit fund will be categorized as “Other” in the Income Assets category. Multi-strategy liquid alternatives funds that cannot be easily categorized under one asset class will be included in “Other” under either the Growth Assets or Income Assets category depending on the risk-return profile of the strategy.
Real Assets: Real assets are typically physical assets that have intrinsic worth due to their substance and properties. Real assets are primarily used for their lower correlation to traditional assets (i.e. stocks and bonds) and their inflation hedging properties. Categories of real asset investments include, but are not limited to, real estate, infrastructure, land, farmland, timberland, precious metals, and commodities.
Public real assets are publicly traded and liquid. The benefit of lower correlation investments is that, when implemented correctly, these investments can potentially improve a portfolio’s expected riskadjusted return over the long-term. The real assets category can be extended to include other forms of assets that offer similar inflation hedging properties such as pooled vehicles holding: commodities 9 contracts, Treasury Inflation Protected Securities (“TIPS”), index-linked derivative contracts, certain forms of intellectual property, and the equity of companies in businesses thought to hedge inflation.
For purposes of asset allocation targets and limitations, real assets may be categorized as “Other” under either the Growth Assets or Income Assets category or in the Real Return Assets category, depending on the nature and risk/return profile of the investment.
CASH EQUIVALENTS
Cash equivalents shall be held in funds complying with Rule 2(a)-7 of the Investment Company Act of 1940.
Portfolio Risk Hedging
Portfolio investments designed to hedge various risks including volatility risk, interest rate risk, etc. are allowed to the extent that the investments are not used for the sole purpose of leveraging Trust assets.
One example of a hedge vehicle is an exchange traded fund (“ETF”) which takes short positions.
Prohibited Investments
Except for purchase within authorized investments, securities having the following characteristics are not authorized and shall not be purchased: letter stock and other unregistered securities, direct commodities or commodity contracts, or private placements (with the exception of Rule 144A securities). Further, derivatives, options, or futures for the sole purpose of direct portfolio leveraging are prohibited. Direct/physical ownership of real estate, natural resource properties such as oil, gas or timber and the purchase of collectibles is also prohibited.
Safekeeping
All assets of the Trust shall be held by a custodian approved by the Administrator for safekeeping of Trust assets. The custodian shall produce statements on a monthly basis, listing the name and value of all assets held, and the dates and nature of all transactions in accordance with the terms in the Trust Agreement. Investments of the Trust not held as liquidity or investment reserves shall, at all times, be invested in interest-bearing accounts. Investments and portfolio securities may not be loaned.
Control Procedures
Review of Investment Objectives
The Advisor shall review annually and report to the Administrator the appropriateness of this Policy Statement for achieving the Trust’s stated objectives. It is not expected that this Policy Statement will change frequently. In particular, short-term changes in the financial markets should not require an adjustment in this Policy Statement.
10 Review of Investment Performance
The Advisor shall report on a quarterly basis to the Administrator to review the investment performance of the Trust. In addition, the Advisor will be responsible for keeping the Administrator advised of any material change in investment strategy, Managers, and other pertinent information potentially affecting performance of the Trust.
The Advisor shall compare the investment results on a quarterly basis to appropriate peer universe benchmarks, as well as market indices in both equity and fixed income markets. Examples of benchmarks and indexes that will be used include the Russell 3000 Index for broad U.S. equity strategies; S&P 500 Index for large cap U.S. equities, Russell 2000 Index for small cap U.S. equities, MSCI ACWI ex-U.S. Index for broad based non-U.S. equity strategies, MSCI Europe, Australasia, and Far East (EAFE) Index for developed markets international equities, Bloomberg U.S. Aggregate Bond Index for fixed income securities, and the U.S. 91 Day T-bill for cash equivalents. The Russell 3000 Index will be used to benchmark the U.S. equities portfolio; the MSCI ACWI ex-U.S. Index will be used to benchmark the non-U.S. equities portfolio; the Bloomberg U.S. Aggregate Bond Index will be used to benchmark the fixed income portfolio. The categories “Other” will be benchmarked against appropriate indices depending on the specific characteristics of the strategies and funds used.
Voting of Proxies
The Administrator recognizes that proxies are a significant and valuable tool in corporate governance.
The voting rights of individual stocks held in separate accounts or collective, common, or pooled funds will be exercised by the investment managers in accordance with their own proxy voting policies. The voting rights of funds will be exercised by the Advisor. 11 Adoption of Investment Policy Statement
Any changes and exceptions to this Policy Statement will be made in writing and adopted by the Administrator. Once adopted, changes and exceptions will be delivered to each Manager, as appropriate, by the Advisor.
Approved by the City of Brea Plan Administrator:
Member
Date
CITYofBREA
City Council Regular Meeting
Communication
August 18, 2026
Item No. 3J.
City of Brea Response to the 2025-2026 Orange County Grand Jury Report, “California Housing Mandates:
The Unintended Reshaping of Orange County Neighborhoods”
TO PREPARED BY
Honorable Mayor and City Council Members Jaquelyn Salgado, Community Development Specialist
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Jason Killebrew, Assistant City Manager/Community
Development Director
Kristin Webster, City Manager
RECOMMENDATION
Staff recommends that the City Council take the following actions:
1. Authorize the Mayor, on behalf of the Brea City Council, to respond to the Orange County Grand Jury Report, “California Housing Mandates: The Unintended Reshaping of Orange County Neighborhoods”; and
2. Authorize the City Manager, or their or designee, to make non-substantive edits to the City's response and submit the response to the Orange County Grand Jury.
BACKGROUND/DISCUSSION
On May 27, 2026, the Orange County Grand Jury (“OCGJ”) released a report titled “California Housing Mandates:
The Unintended Reshaping of Orange County Neighborhoods” (Attachment A). The report examines how wellintended legislation has produced unintended consequences affecting local jurisdictions throughout Orange County. Additionally, the report evaluates the implementation of Housing Mandates and Regional Housing Needs Allocation (“RHNA”) requirements and emphasizes the need for strategic preparation for the upcoming 7th Cycle RHNA process. The report also highlights the importance of regional coordination between local jurisdictions, the Southern California Association of Governments (“SCAG”), and the Orange County Council of Governments (“OCCOG”). Through this regional coordination, OCCOG serves as the County’s representative to SCAG in the RHNA process, ultimately influencing regional planning outcomes.
By August 27, 2026, the City is required to submit a written response to the OCGJ’s findings and recommendations, pursuant to California Penal Code Sections 933 and 933.05. Staff reviewed the findings and recommendations applicable to the City and prepared a response letter (Attachment B).
Subsequently, staff recommends that the City Council authorize the Mayor to respond to the OCGJ report and authorize the City Manager, or their designee, to make non-substantive edits to the City's response and submit it to the OCGJ.
FISCAL IMPACT/SUMMARY
Authorizing the City’s response letter to the 2025-2026 OCGJ Report, “California Housing Mandates: The Unintended Reshaping of Orange County Neighborhoods,” will have no fiscal impact on the General Fund (110).
Attachments
Attachment A - 2025-2026 OCGJ Report: California Housing Mandates The Unintended Reshaping of Orange County Neighborhoods Attachment B - City of Brea Response to 2025-2026 OCGJ Report: California Housing Mandates the Unintended Reshaping of OC Neighborhoods
California State Housing Mandates