Presentations — Silicon Valley Clean Energy Board of Directors, October 12, 2022 (part 2 of 2)

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Transaction Type Sub-Total 922,118.35 922,118.35 0.00 922,118.35 (3,926.96) 0.00 SELL
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DTD 12/06/2019 2.040% 12/02/2022
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DTD 06/30/2016 1.375% 06/30/2023
06/08/22 912828S35 25,000.00 24,740.23 151.93 24,892.16 (867.19) (454.18) FIFO 06/14/22 US TREASURY NOTES
DTD 06/30/2016 1.375% 06/30/2023
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DTD 09/30/2021 0.250% 09/30/2023
06/14/22 91282CDA6 500,000.00 482,128.91 256.15 482,385.06 (17,617.18) (17,705.21) FIFO

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Item 5

PRESENTATION
pfm) asset
manage1ment
IPF M Asset Management ILJLC
Managed Account Security Transactions & Interest For the Month Ending June 30, 2022 SAMPLE CLIENT - XXXX1000
Transaction Type
Trade Settle Security Description CUSIP Par Proceeds
Principal Accrued
Interest Total Cost
Realized G/L Realized G/L Sale
Amort Cost Method
Transaction Type Sub-Total 4,875,000.00 4,806,625.40 5,508.38 4,812,133.78 (80,452.26) (72,143.59) Managed Account Sub-Total 748,803.21 109,189.23 857,992.44 (84,379.22) (72,143.59) Total Security Transactions $748,803.21 $109,189.23 $857,992.44 ($84,379.22) ($72,143.59)

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Item 5

PRESENTATION
pfm) asset
manage1ment
IPF M Asset Management ILJLC
PFM Asset Management LLC | For Institutional Investor or Investment Professional Use Only – This material is not for inspection by, distribution to, or quotation to the general public.

Fixed Income | September 2022
Monthly Market Review
“It’s a bird! It’s a plane! It’s…interest rates”
Economic Highlights
► Federal Reserve (Fed) officials doubled down on their inflation-fighting mantra, highlighted by Fed Chair Jerome Powell’s comments at the annual economic symposium in
Jackson Hole, WY. Powell said the Fed’s “overarching focus right now is to bring inflation back down,” adding “restoring price stability will take some time and requires using our tools forcefully.”
► Powell also noted, “The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers.” This was confirmed by the recent employment report, which showed that the U.S. economy added 315,000 jobs in August, modestly exceeding expectations. The unemployment rate rose to 3.7% from 3.5%, driven by improvements in the labor force participation. Average hourly earnings, an important measure of wages, grew by a solid

5.2% over the past year but continued to lag surging inflation.

Weekly unemployment claims have also fallen for five straight weeks.
► Inflation remained sticky, with the overall consumer price index (CPI) rising 8.3% over the past year (down from 8.5% last month), while core CPI increased to 6.3% year-over-year (YoY).

The report showed gasoline and energy prices fell sharply, but rents rose the most since 1991 and food has continued to rise at roughly 1% per month.
► First-time home buyers continue to face tough conditions as home prices and borrowing rates remain historically elevated.

Building activity continued to slow while pending home sales plunged by more than 20% from a year ago.
► The final August results from the University of Michigan Survey of Consumers showed consumer sentiment improved
from the prior month, perhaps reflecting the strong jobs market and falling gasoline prices.
► The Bloomberg recession probability index, which measures the chance of a recession in the U.S. over the next year, has risen to 50%. Growth in Europe is an even more serious emerging concern, considering the impact of elevated European natural gas prices headed into winter.

Bond Markets
► The Fed’s consistently hawkish tone pushed U.S. Treasury yields sharply higher in August, setting the stage for another 75 basis point (0.75%) (bps) rate hike at the Fed’s September meeting and pushing back against the possibility of eventual rate cuts next year. By mid-September, expectations for Fed funds pointed to a terminal rate of nearly 4.5% by March 2023. ► The benchmark 6-month, 2-year, and 10-year Treasury yields finished August at 3.33%, 3.49%, and 3.19%, up 49, 61, and 54 bps (0.49%, 0.61%, and 0.54%), respectively.
► Fixed income U.S. Treasury index total returns were mostly negative in August. The ICE BofA 6-month, 2-year, and 10- year Treasury indices returned 0.15%, -0.78%, and -1.90%, respectively, for the month.

Equity Markets
► What began as a strong month for the three major averages ended on a decidedly weaker note, cementing the weakest August performance in seven years as worries about aggressive interest rate hikes from the Fed hurt valuations. The S&P 500 finished August down 4.1%, while the Dow and Nasdaq posted monthly losses of 3.7% and 4.5%, respectively.
► The U.S. dollar continued its trend higher as the U.S. Dollar Index (DXY) advanced 3.0% in August to a new 20-year high.

PFMAM Strategy Recap
► Given persistently elevated inflation and expectations for more Fed rate hikes, we plan to maintain our modest defensive duration bias relative to benchmarks. But, we recognize that 2-5 year Treasury yields at 14-15 year highs offer solid income potential and are beginning to shift the risk/reward dynamic.

Historically, yields tend to peak before the last rate hike of a cycle.
► While federal agency non-callable securities continue to offer limited value relative to U.S. Treasuries, callable agencies have become attractive, offering wider than normal yield spreads. ► Investment-grade (IG) corporate yield spreads vs. Treasuries narrowed in August and generated outperformance. While value in the sector remains, certain industries and maturities offer much better value than others, making issue selection more important.

We continue to seek issuers that can benefit from higher rates, can weather a modest economic downturn, and are better
insulated from input cost pressures.
► Asset-backed security (ABS) spreads also narrowed in
August, but remained wide relative to similarly-rated corporate notes. Higher energy costs, increasing rents, and negative real wage growth are potential headwinds for the consumer sector, but collateral performance remains solid and within rating parameters.
► Mortgage-backed securities (MBS) remained under pressure and were one of the few investment grade fixed income sectors to post negative excess returns for the month. Given increased Fed balance sheet reductions beginning in September, we remain defensive in the sector.
► Rates on short-term commercial paper, bank CDs and agency discount notes surged in lock-step with the Fed’s expected rate hikes. Short-term investments now offer excellent income opportunities.

Item 5

PRESENTATION
pfm) asset
management
PFM Asset Management LLC | For Institutional Investor or Investment Professional Use Only – This material is not for inspection by, distribution to, or quotation to the general public.

Spot Prices and Benchmark Rates
Index Aug 31,
2021 Jul 31, 2022 Aug 31, 2022
Monthly
Change
1-Month LIBOR 0.08% 2.36% 2.55% 0.19%
3-Month LIBOR 0.12% 2.79% 3.10% 0.31%
Effective Fed Funds Rate 0.06% 2.32% 2.33% 0.01%
Fed Funds Target Rate 0.25% 2.50% 2.50% 0.00%
Gold ($/oz) $1,816 $1,763 $1,717 -$46
Crude Oil ($/Barrel) $68.50 $98.62 $89.55 -$9.07
U.S. Dollars per Euro $1.18 $1.02 $1.01 -$0.01

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%
U.S. Treasury Yield Curve
8/31/2021
7/31/2022
8/31/2022
3-mo 2-yr 5-yr 10-yr 30-yr
Source: Bloomberg. Data as of August 31, 2022, unless otherwise noted.

The views expressed constitute the perspective of PFM Asset Management LLC at the time of distribution and are subject to change. The content is based on sources generally believed to be reliable and available to the public; however, PFMAM cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation.

PFM Asset Management LLC (“PFMAM”) is an investment adviser registered with the U.S. Securities and Exchange Commission and a subsidiary of U.S. Bancorp Asset Management, Inc. (“USBAM”). USBAM is a subsidiary of U.S. Bank National Association (“U.S. Bank”). U.S. Bank is a separate entity and subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not guarantee the products, services or performance of PFMAM.

NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
U.S. Treasury Yields
Duration Aug 31,
2021 Jul 31, 2022 Aug 31, 2022
Monthly
Change
3-Month 0.04% 2.36% 2.93% 0.57%
6-Month 0.05% 2.86% 3.35% 0.49%
2-Year 0.21% 2.89% 3.50% 0.61%
5-Year 0.78% 2.68% 3.35% 0.67%
10-Year 1.31% 2.65% 3.20% 0.55%
30-Year 1.93% 3.01% 3.29% 0.28%
Yields by Sector and Maturity
Maturity U.S.

Treasury
Federal
Agency
Corporates-A IndustrialsAAA
Municipals
3-Month 2.93% 2.92% 3.28% --
6-Month 3.35% 3.27% 3.37% --
2-Year 3.50% 3.54% 3.76% 2.22%
5-Year 3.35% 3.45% 3.98% 2.32%
10-Year 3.20% 3.52% 4.26% 2.80%
30-Year 3.29% 3.91% 4.69% 3.40%
Key Economic Indicators
Indicator Release
Date Period Actual Survey (Median)
Retail Sales Advance MoM 17-Aug Jul 0.0% 0.1%
GDP Annualized QoQ 25-Aug 2Q S -0.6% -0.7%
PCE Core Deflator YoY 26-Aug Jul 4.6% 4.7%
U. of Mich. Consumer Sentiment 26-Aug Aug 58.2 55.5
ISM Manufacturing 1-Sep Aug 52.8 51.9
Change in Non-farm Payrolls 2-Sep Aug 315k 298k
Unemployment Rate 2-Sep Aug 3.7% 3.5%
-1.25% -1.19% -1.17% -1.35%
-2.09%
-5.44% -5.50% -6.06%
-3.89%
-7.11%
1-5 Year Treasury 1-5 Year Agency 1-5 Year AAA-A
Corp
1-5 Year
Municipals
0-5 Year MBS
ICE BofAML Fixed Income Index Returns
August Prior 12 Months
-2.6%
-4.1%
-2.0%
-4.7%
-10.9% -11.2%
-17.9% -19.8%
ICE BofAML U.S.

Treasury Master Index
S&P 500 Russell 2000
(Small Cap)

MSCI EAFE
(Developed
Europe/Asia)
Total Return of Major Indices
August Prior 12 Months
-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%
Aug '21 Nov '21 Feb '22 May '22 Aug '22
30-Day Money Market Yields
Commercial Paper (A1/P1) Federal Agency U.S. T-Bill
Item 5

PRESENTATION
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• • ------ ---------- -------- ----
Glossary of Terms
For Institutional Investor or Investment Professional
Use Only – This material is not for inspection by,
distribution to, or quotation to the general public
Item 5

PRESENTATION
Glossary
1 ACCRUED INTEREST: Coupon interest accumulated on a bond or note since the last interest payment or, for a new issue, from the dated date to the date of delivery.

ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR): The official annual report of the (entity). It includes five combined statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section.

ASSET-BACKED SECURITIES: Securities that are supported by pools of assets, such as installment loans or leases, or by pools of revolving lines of credits. Asset-backed securities are structured as trusts in order to perfect a security interest in the underlying assets.

ASKED: The price at which securities are offered.

BANKERS’ ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.

BASIS POINTS: Refers to the yield on bonds. Each percentage point of yield in bonds equals 100 basis points (1/100% or 0.01%). If a bond yield changes from 2.25% to 2.39%, that is a rate of 14 basis points.

BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments.

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

BOOK RETURN: Book return includes interest, amortization/accretion of premiums/discounts, realized gains and losses, over a given period of time.

BOOK VALUE: The value at which an asset is carried on a balance sheet.

BROKER: A broker brings buyers and sellers together for a commission.

CALIFORNIA ASSET MANAGEMENT PROGRAM ("CAMP" or the "Program"): A California Joint Powers Authority ("JPA") established in 1989 to provide California public agencies with professional investment services. CAMP is directed by a Board of Trustees and offers a range of services to assist Program investors/participants with their investment and arbitrage compliance needs.

Item 5

PRESENTATION
Glossary
2 CALLABLE SECURITIES: An investment security that contains an option allowing the issuer to retire the security prior to its final maturity date.

CERTIFICATE OF DEPOSIT: A short-term, secured deposit in a financial institution that usually returns principal and interest to the lender at the end of the loan period. Certificates of Deposit (CDs) differ in terms of collateralization and marketability. Those appropriate to public agency investing include:

Negotiable Certificates of Deposit
Generally, short-term debt instrument that usually 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. The majority of negotiable CDs mature within six months while the average maturity is two weeks. Negotiable CDs are traded in a secondary market and are payable upon order to the bearer or initial depositor (investor). Negotiable CDs are insured by FDIC up to $250,000, but they are not collateralized beyond that amount.

Non-Negotiable Certificates of Deposit
CDs that carry a penalty if redeemed prior to maturity. A secondary market does exist for non-negotiable CDs, but redemption includes a transaction cost that reduces returns to the investor. Non-negotiable CDs issued by banks and savings and loans are insured by the Federal Deposit Insurance Corporation up to the amount of $250,000, including principal and interest. Amounts deposited above this amount may be secured with other forms of collateral through an agreement between the investor and the issuer. Collateral may include other securities including Treasuries or agency securities such as those issued by the Federal National Mortgage Association.

COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.

COMMERCIAL PAPER: An unsecured short-term promissory note issued by corporations or municipalities, with maturities ranging from 2 to 270 days.

COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date.

CREDIT RISK: The chance that an issuer will be unable to make scheduled payments of interest and principal on an outstanding obligation. Another concern for investors is that the market’s perception of an issuer/borrower’s credit will cause the market value of a security to fall, even if default is not expected.

Item 5

PRESENTATION
Glossary
3 DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.

DEBENTURE: A bond secured only by the general credit of the issuer.

DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.

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

DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount.

DISCOUNT SECURITIES: Noninterest-bearing money market instruments that are issued a discount and redeemed at maturity for full face value (e.g., U.S. Treasury Bills.)
DIVERSIFICATION: The allocation of different types of assets in a portfolio to mitigate risks and improve overall portfolio performance.

DURATION: A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices.

EFFECTIVE DURATION: Duration measures the weighted average of the present value of the cash flows of a fixed-income investment. Effective duration measures the price sensitivity of fixed-income investments, especially for those with embedded option features such as call options. As yields rise, the effective duration of a callable investment rises to reflect the fact that it has become less likely to be called. The more rates rise, the longer the effective duration will become, approaching the duration to maturity. The converse is true in a declining interest rate environment (that is, the more rates fall, the shorter the effective duration will become, approaching the duration to call). For securities without an embedded option, the duration to call, maturity, and effective duration are all the same. The calculation for effective duration is complicated and involves averaging the duration under a simulation of many possible interest rate scenarios in the future.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $250,000 per entity.

Item 5

PRESENTATION
Glossary
4 FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations.

GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB): A standard-setting body, associated with the Financial Accounting Foundation, which prescribes standard accounting practices for governmental units.

GOVERNMENT SPONSORED ENTERPRISES (GSE): Privately held corporations with public purposes created by the U.S. Congress to reduce the cost of capital for certain borrowing sectors of the economy. Securities issued by GSEs carry the implicit backing of the U.S. Government, but they are not direct obligations of the U.S. Government. For this reason, these securities will offer a yield premium over Treasuries.

INTEREST: The amount a borrower pays to a lender for the use of his or her money.

INTEREST RATE RISK: Interest rate risk is the risk that an investment's value will change due to a change in the absolute level of interest rates, spread between two rates, shape of the yield curve, or any other interest rate relationship.

LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.

LOCAL AGENCY INVESTMENT FUND: A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment.

MARKET RISK: The chance that the value of a security will decline as interest rates rise. In general, as interest rates fall, prices of fixed income securities rise. Similarly, as interest rates rise, prices fall. Market risk also is referred to as systematic risk or risk that affects all securities within an asset class similarly.

MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.

Item 5

PRESENTATION
Glossary
5 MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase—reverse repurchase agreements that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower.

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

MEDIUM TERM NOTES: Corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.

MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.

MONEY MARKET MUTUAL FUNDS: MMF’s are mutual funds that invest exclusively in short-term money market instruments. MMF’s seek the preservation of capital as a primary goal while maintaining a high degree of liquidity and providing income representative of the market for short-term investments.

MORTGAGE BACKED SECURITIES: Mortgage-backed securities (MBS) are created when a mortgagee or a purchaser of residential real estate mortgages creates a pool of mortgages and markets undivided interests or participations in the pool. MBS owners receive a pro rata share of the interest and principal cash flows (net of fees) that are “passed through” from the pool of mortgages. MBS are complex securities whose cash flow is determined by the characteristics of the mortgages that are pooled together. Investors in MBS face prepayment risk associated with the option of the underlying mortgagors to pre-pay or payoff their mortgage. Most MBS are issued and/or guaranteed by federal agencies and instrumentalities (e.g., Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA), and Federal Home Loan Mortgage Corporation (FHLMC)).

MORTGAGE PASS-THROUGH OBLIGATIONS: Securities that are created when residential mortgages (or other mortgages) are pooled together and undivided interests or participations in the stream of revenues associated with the mortgages are sold.

MUNICIPAL NOTES, BONDS, AND OTHER OBLIGATIONS: Obligations issued by state and local governments to finance capital and operating expenses.

Item 5

PRESENTATION
Glossary
6 NET ASSET VALUE: Net asset value (NAV) is a term used in the mutual fund industry to determine the average price per share of a pool or mutual fund. How this measure varies over time provides information on whether the pool is stable or variable. NAV is the market value of all securities in a mutual fund, less the value of the fund’s liabilities, divided by the number of shares in the fund outstanding. Shares of mutual funds are purchased at the fund’s offered NAV.

OFFER: The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Asked and Bid.

PAR AMOUNT OR PAR VALUE: The principal amount of a note or bond which must be paid at maturity. Par, also referred to as the “face amount” of a security, is the principal value stated on the face of the security. A par bond is one sold at a price of 100 percent of its principal amount.

PORTFOLIO: Combined holding of more than one stock, bond, commodity, real estate investment, cash equivalent, or other asset. The purpose of a portfolio is to reduce risk by diversification.

PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms.

PRUDENT INVESTOR STANDARD: A standard of conduct where a person acts with care, skill, prudence, and diligence when investing, re-investing, purchasing, acquiring, exchanging, selling, and managing funds. The test of whether the standard is being met is if a prudent person acting in such a situation would engage in similar conduct to ensure that investments safeguard principal and maintain liquidity.

PUBLIC BANK: A corporation, organized as either a nonprofit mutual benefit corporation or a nonprofit public benefit corporation for the purpose of engaging in the commercial banking business or industrial banking business, that is wholly owned by a local agency, as specified, local agencies, or a joint powers authority.

QUALIFIED INSTITUTIONAL BUYER: Federal regulations define qualified institutional buyer (QIB) as any of the following entities, acting for its own account or the accounts of other QIBs, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the entity: insurance company, investment company, small business investment company, a Rural Business Investment Company, a plan (established and maintained by a public agency) for the benefit of its employees, employee benefit plan, trust fund (bank or trust company), business development company, 501(c)(3), investment adviser, and dealer, an institution that qualifies as an accredited investor. 17 CFR § 230.144A and 230.145 Item 5

PRESENTATION
Glossary
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return.

REINVESTMENT RISK: The risk that interest rates may be lower than the yield on a fixed income security when the investor seeks to reinvest interest income or repaid principal from the security.

REPURCHASE AGREEMENT (REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate them for this.

REVERSE REPURCHASE AGREEMENT (REVERSE REPO): A reverse-repurchase agreement (reverse repo) involves an investor borrowing cash from a financial institution in exchange for securities. The investor agrees to repurchase the securities at a specified date for the same cash value plus an agreed upon interest rate. Although the transaction is similar to a repo, the purpose of entering into a reverse repo is quite different. While a repo is a straightforward investment of public funds, the reverse repo is a borrowing.

SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection.

SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution.

SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation.

SEC RULE 15C3-1: See Uniform Net Capital Rule.

STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, FHLMC, etc.) and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.

SUPRANATIONAL INSTITUTIONS: International institutions formed by two or more governments that transcend boundaries to pursue mutually beneficial economic or social goals. There are three supranational institutions that issue obligations that are eligible investments for California local agencies: the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Inter-American Development Bank (IADB).
7 Item 5

PRESENTATION
Glossary
TOTAL RETURN: Total return includes interest, realized gains and losses, and unrealized gains and losses over a given period of time.

U.S. TREASURY OBLIGATIONS: Debt obligations of the U.S. Government sold by the Treasury Department in the forms of bills, notes, and bonds. Bills are short-term obligations that mature in one year or less and are sold at a discount. Notes are obligations that mature between one year and ten years.

Bonds are long-term obligations that generally mature in ten years or more.

WEIGHTED AVERAGE MATURITY (WAM): The average maturity of all the securities that comprise a portfolio, typically expressed in days or years.

YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

ZERO-COUPON BOND: A bond on which interest is not payable until maturity (or earlier redemption), but compounds periodically to accumulate to a stated maturity amount. Zero-interest bonds are typically issued at a discount and repaid at par upon maturity. 8 Item 5

PRESENTATION
Disclaimer
Analysis provided at your request and does not constitute a recommendation. Analysis is as of the date herein unless otherwise noted, and is subject to change. Our analysis is based on assumptions, some but not all of which are noted herein. We have not reviewed our assumptions with any outside parties, and any changes in assumptions will have a material effect on our analysis. Assumptions may or may not be proven correct as actual events occur, and actual results will vary depending on events outside of your or our control. Our analysis is based on current market conditions and other information provided to us by or obtained from sources generally believed to be reliable; however, PFMAM cannot guarantee its accuracy, completeness or suitability. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained is not an offer to purchase or sell any securities. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation.

Investment advisory services are provided by PFM Asset Management LLC (“PFMAM”), an investment adviser registered with the U.S. Securities and Exchange Commission and a subsidiary of U.S. Bancorp Asset Management, Inc. (“USBAM”). USBAM is a subsidiary of U.S. Bank National Association (“U.S.

Bank”). U.S. Bank is a separate entity and subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not guarantee the products, services or performance of PFMAM. The information contained is not an offer to purchase or sell any securities. Additional applicable regulatory information is available upon request.

For more information regarding PFMAM’s services please visit www.pfmam.com.

Disclaimer
For Institutional Investor or Investment Professional
Use Only – This material is not for inspection by,
distribution to, or quotation to the general public
Item 5

PRESENTATION
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 6

PRESENTATION
Item 6

PRESENTATION

1. Summarize potential reach code impacts - your actions matter!

2. Provide a quick status update

3. Highlight upcoming actions
rA, s1L1coN VALLEY ~ CLEAN ENERGY 2
Item 6

PRESENTATION
r A, slLICON
~CLEAN E
N25k homes with gas water
heating
N$12M locked-in replacement cost
from gas to electric
$0 savings at the
time of construction
N25,000 annual MT carbon
pollution
from new water heaters
N10,000 families without
access to home EV charging
N25k homes with heat pump
water heating
$0 replacement cost
N$40M savings at the
time of construction
0 MT carbon pollution
from new water heaters
N10,000 more families with
reliable home EV charging
*Illustrative
example showing
the impact of
building N60% of
RHNA required
housing.
3 •
•
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•
x
10/20 x
11/1
x
11/1 x
11/15
11/2
10/25
Item 6
©

PRESENTATION
New Activities and Upcoming Priorities
New Activities:

Initial Upcoming 1:1 Technical
Campbell, Gilroy, Los Altos Jurisdiction Boardmember and Signed LOI Council VCE Supported Consultation Hills, Los Altos, Los Gatos, Staff Meetings Sessions Outreach w/ Consultants
Monte Sereno, Saratoga have
held information sessions. Recommended Optional
All jurisdictions moving Campbell X X 11/1
Cupertino X X 10/18
tow a rd first vote.

Gilroy X X 10/17 X
CARB passed rule to end sale Los Altos X X 11/15 X X
of gas heaters by 2030. Los Altos Hills X X X
Los Gatos X X
Milpitas X X 10/18
Upcoming Priorities: Monte Sereno X X 11/1 X
Morgan Hill X X 11/2
Hold council information Mountain View X X X
sessions and vote Santa Clara Co. X X
Saratoga X X
Sunnyvale X X X
4 Item 6

PRESENTATION
Jurisdiction
Campbell
Cupertino
Gilroy
Los Altos
Los Altos Hills
Los Gatos
Milpitas
Monte Sereno
Morgan Hill
Mountain View
Saratoga
Sunnyvale
Santa Clara County
Council
Information
Session
10/4
N/A
8/1
9/6
9/15
6/7
N/A
9/20
N/A
N/A
9/21
N/A
N/A
First
Reading
11/1
10/18
10/17
11/15
10/20
11/1
10/18
11/1
11/2
11/1
11/2
10/25
11/15
Second
Reading
TBD
TBD
TBD
11/29
11/17
11/15
12/6
11/15
11/16
12/13
11/16
11/8
TBD
Link to Staff Report
Link to Council Agenda Packet - Items starts on
page148
Link to Council Info Session
Link to Council Info Session
Link to Council Aqenda Packet - Item starts on
page 407
Link to Council Info Session
Link to Council Info Session
Link to Council Info Session
•
•
Item 6

SVCE can provide
technical assistance and
outreach support
throughout the process.

Action
Attend first meeting w/SVCE staff
Identify your ideal level of reach
(your goal)
Confirm appropriate staff are
engaged and aware of your goals
Confirm council info sessions and
vote sessions are agendized
Confirm City Manager signed LOI
Vote
Suggested
Completion Done?
Date
2/1/2022
3/31/2022
3/31/2022
4/30/2022
4/30/2022
10/31/2022 6
Item 6

PRESENTATION
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•
•
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•
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•
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•
Item 6

New Construction Energy Code (Part 6)
Electric heat pumps are prescribed for:

Residential HVAC
Nonresidential - most include one or both of water heating and HVAC, depending on building type
Residential
Performance credit for all-electric buildings
Required higher ventilation rate for gas stoves
Pre-wiring required for residential dwellings
Energy storage readiness
Nonresidential - Solar PV and Battery Storage required
8 Item 6

PRESENTATION
A gas range is not just a gas range. It is the tailpipe of a complex system.

Source: The Gas Index, 2020
Gas Supply Chain Leaks
PAO~::

PLANT
.. J ~ ■
■
■
•
■
■

GAS TRANSMISSION

PIPELINES

DISTRIBUTION RESIDENTIAL

PIPELINES USERS
9 •
•
Item 6

PRESENTATION
Any natural gas appliances installed today becomes a costly stranded assets •
Illustrative example:

Assume 3500 new housing units are built per year for the next three years with gas cooking and gas water heating. A future incentive program to replace these appliances would cost:
$5.25M for cooktops ($500 incentive)
$21M for water heaters ($2000 incentive)
Plus: Building all-electric today can be less expensive than building mixed fuel. 10 Item 6

PRESENTATION
Type
Building
Electric
Preferred
Mostly-Electric
All-Electric
Gas Ban
No Reach
How it works
Allows mixed-fuel buildings with high energy
performance. Electrification-ready panel and wiring
in mixed-fuel buildings.

Water and space heating must be electric,
exemptions for other appliances. Electrification-ready panel and wiring in mixed-fuel buildings.

All appliances must be electric, with very limited
exemptions.

No gas hookup (via municipal ordinance). Limited
exceptions.

Meet state code minimum requirements.

SVCE Members
2 - Milpitas, Monte Sereno
4 - Campbell (res), Los Altos, Los Altos
Hills (res), Saratoga
5 - County of Santa Clara, Cupertino,
Los Gatos (res), Mountain View,
Sunnyvale
1 - Morgan Hill
1 - Gilroy
11 •
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•
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Item 6

PRESENTATION
© 2022 Model Reach Codes - New Buildings
Code Approach
All-Electric Municipal
Ordinance
CALGreen - All-Electric amendment
Benefits
Avoids CEC review and
approval
Flexible (i.e., time-certain or
existing buildings policies can
be included)
Avoids triennial cycle
Avoids CEC review and
approval
Considerations
Must exceed future code updates to
stay relevant (i.e., most effective for
all-electric with limited exceptions)
Requires triennial update or more if
intervening cycle
Model code language for both approaches can be found at BayAreaReachCodes.org 12 •
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Item 6

PRESENTATION
Our 2022 model code is all-electric to help our communities to prepare for an all-electric future.

Member jurisdictions can tailor the codes with exceptions as they deem appropriate.

The model code includes both an energy code amendment and the municipal ordinance option.

Your efforts matter. We look forward to supporting you. 13 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
LOI
Conduct Outreach
Effective
Vote
Potential CEC Submittals
Define Goals
Agendize
Engage Staff
Define Approach
Write Code Language
Council Info Sessions
Item 6

PRESENTATION
Orange text
indicates a
Boardmember task
Goals and Approach Defined
Reach Codes Agendized
City Manager LOI Signed
Staff Responsibilities Defined
Proposed Code language complete
Outreach conducted
Council informed
Final code language complete
Vote complete, same meeting as
state code adoption
Documentation done 14

Silicon Valley Clean Energy Board of DirectorsOctober 12, 2022

Silicon Valley Clean Energy Board of Directors
October 12, 2022