CC 05-16-2023 Searchable Packet.pdf — Cupertino City Council, May 16, 2023 (part 1 of 6)

CITY OF CUPERTINO

CITY COUNCIL
AGENDA
10350 Torre Avenue, Council Chamber and via Teleconference Tuesday, May 16, 2023
6:45 PM
Televised Regular City Council Meeting (6:45)

IN-PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION Members of the public wishing to observe the meeting may do so in one of the following ways:
1) Attend in person at Cupertino Community Hall, 10350 Torre Avenue. 2) Tune to Comcast Channel 26 and AT&T U-Verse Channel 99 on your TV. 3) The meeting will also be streamed live on and online at www.Cupertino.org/youtube and www.Cupertino.org/webcast
Members of the public wishing to comment on an item on the agenda may do so in the following ways:
1) Appear in person at Cupertino Community Hall. Members of the audience who address the City Council must come to the lectern/microphone, and are requested to complete a Speaker Card and identify themselves. Completion of Speaker Cards and identifying yourself is voluntary and not required to attend the meeting or provide comments.

Members of the public may provide oral public comments during the Regular Meeting as follows:

Oral public comments will be accepted during the meeting. Comments may be made during “oral communications” for matters not on the agenda, and during the public comment period for each agenda item.

Members of the audience who address the City Council must come to the lectern/microphone, and are requested to complete a Speaker Card and identify themselves.

Completion of Speaker Cards and identifying yourself is voluntary and not required to attend the meeting or provide comments.
2) E-mail comments for the Regular Meeting by 4:00 p.m. on Tuesday, May 16 to the

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Council at [email protected]. These e-mail comments will also be posted to the City’s website before and after the meeting.

Regular Meeting Teleconferencing Instructions
To address the City Council, click on the link below to register in advance and access the meeting:

Online
Register in advance for this webinar:
https://cityofcupertino.zoom.us/webinar/register/WN_UjgSqdT9SoyT3ZJ0g-pmlA Phone
Dial: 669-900-6833 and enter Webinar ID: 925 5118 4369 (Type *9 to raise hand to speak, *6 to unmute yourself). Unregistered participants will be called on by the last four digits of their phone number.

Or an H.323/SIP room system:

H.323:
162.255.37.11 (US West)
162.255.36.11 (US East)
Meeting ID: 925 5118 4369
SIP: [email protected]
After registering, you will receive a confirmation email containing information about joining the webinar.

Please read the following instructions carefully:

1. You can directly download the teleconference software or connect to the meeting in your internet browser. If you are using your browser, make sure you are using a current and up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers, including Internet Explorer.

2. You will be asked to enter an email address and a name, followed by an email with instructions on how to connect to the meeting. Your email address will not be disclosed to the public. If you wish to make an oral public comment but do not wish to provide your name, you may enter “Cupertino Resident” or similar designation.

3. When the Mayor calls for the item on which you wish to speak, click on “raise hand,” or, if you are calling in, press *9. Speakers will be notified shortly before they are called to

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speak.

4. When called, please limit your remarks to the time allotted and the specific agenda topic.

5. Members of the public that wish to share a document must email [email protected] prior to speaking. These documents will posted to the City’s website after the meeting.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

ROLL CALL

CLOSED SESSION REPORT

CEREMONIAL ITEMS

1. Subject: Presentation from West Valley Community Services on the Annual Impact Report
Recommended Action: Receive the presentation from West Valley Community Services on the Annual Impact Report
A - Presentation

POSTPONEMENTS AND ORDERS OF THE DAY

ORAL COMMUNICATIONS
This portion of the meeting is reserved for persons wishing to address the Council on any matter within the jurisdiction of the Council and not on the agenda for discussion, including informational items. The total time for Oral Communications will ordinarily be limited to one hour. Individual speakers are limited to three (3) minutes. As necessary, the Chair may further limit the time allowed to individual speakers, or reschedule remaining comments to the end of the meeting on a first come first heard basis, with priority given to students. In most cases, State law will prohibit the Council from discussing or making any decisions with respect to a matter not listed on the agenda. A councilmember may, however, briefly respond to statements made or questions posed by speakers. A councilmember may also ask a question for clarification, provide a reference for factual information, request staff to report back concerning a matter, or request that an item be added to a future City Council agenda in response to public comment.

CONSENT CALENDAR (Items 2-12)
Items appearing on the Consent Calendar are considered routine City business and may be approved by one motion. Typical items may include meeting minutes, awards of contracts, the ratification of accounts payable, and second readings of ordinances. Any member of the Council may request to have

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an item removed from the Consent Calendar based on the rules set forth in the City Council Procedures Manual. Members of the public may provide input on one or more consent calendar items when the Mayor asks for public comments on the Consent Calendar.

2. Subject: Consider approval of the May 2 City Council minutes Recommended Action: Approve the May 2 City Council minutes A - Draft Minutes

3. Subject: Consider setting a hearing date to declare brush with potential fire hazard a public nuisance and for objections to proposed removal through the Cupertino Brush Abatement Program WUI (Wildland-Urban Interface Fire Area); adopting a resolution declaring properties as having potential fire hazards from brush and authorizing removal
Recommended Action: Adopt Resolution No. 23-053 declaring properties as having potential fire hazards from brush; and set a hearing date of July 6, 2023 to declare brush with potential fire hazard a public nuisance and to hear objections to proposed removal Staff Report
A - Draft Resolution
B – Pre Season Program Letter
C – Property owner 30’ WUI Letter
D - Property owner 100’ WUI Letter
E – Wildfire Preparation Brochure
F - Chipping Program Brochure
G – Notice of Inspection
H – Notice of Violation

4. Subject: Consider accepting the City's Investment Policy Recommended Action: Adopt Resolution No. 23-054 accepting the City's Investment Policy
Staff Report
A - Draft Resolution
B - Cupertino Investment Policy (Redline)
C - Cupertino Investment Policy (Clean)
D - Cupertino Investment Policy Statement Review Memo 20230420

5. Subject: Consider ratifying Accounts Payable for the periods ending March 10, 2023; March 17, 2023; March 24, 2023; March 31, 2023; April 7, 2023; April 14, 2023; April 21, 2023; and April 28, 2023

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Recommended Action: A. Adopt Resolution No. 23-055 ratifying Accounts Payable for the Period ending March 10, 2023;
B. Adopt Resolution No. 23-056 ratifying Accounts Payable for the Period ending March 17, 2023;
C. Adopt Resolution No. 23-057 ratifying Accounts Payable for the Period ending March 24, 2023;
D. Adopt Resolution No. 23-058 ratifying Accounts Payable for the Period ending March 31, 2023;
E. Adopt Resolution No. 23-059 ratifying Accounts Payable for the Period ending April 7, 2023;
F. Adopt Resolution No. 23-060 ratifying Accounts Payable for the Period ending April 14, 2023;
G. Adopt Resolution No. 23-061 ratifying Accounts Payable for the Period ending April 21, 2023; and
H. Adopt Resolution No. 23-062 ratifying Accounts Payable for the Period ending April 28, 2023
Staff report
A – Draft Resolution 3.10.23
B – Weekly AP Payment Register for the Period Ending 3.10.23 C – Draft Resolution 3.17.23
D – Weekly AP Payment Register for the Period Ending 3.17.23 E – Draft Resolution 3.24.23
F – Weekly AP Payment Register for the Period Ending 3.24.23 G – Draft Resolution 3.31.23
H – Weekly AP Payment Register for the Period Ending 3.31.23 I – Draft Resolution 4.7.23
J – Weekly AP Payment Register for the Period Ending 4.7.23 K – Draft Resolution 4.14.23
L – Weekly AP Payment Register for the Period Ending 4.14.23 M – Draft Resolution 4.21.23
N – Weekly AP Payment Register for the Period Ending 4.21.23 O – Draft Resolution 4.28.23
P – Weekly AP Payment Register for the Period Ending 4.28.23

6. Subject: Consider the City Manager's Third Quarter Financial Report for Fiscal Year 2022-23
Recommended Action: 1. Receive the City Manager's Third Quarter Financial Report for FY 2022-23;

2. Adopt Resolution No. 23-063 approving Budget Modification 23-277 decreasing appropriations by $2,758,528 and increasing revenues by $4,902,598

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Staff Report
A - FY 2022-23 Third Quarter Financial Report
B - Draft Resolution
C - Description of Carryovers and Adjustments through March 31, 2023 D - Description of Budget Transfers through March 31, 2023 E - FY 2022-23 Third Quarter Recommended Adjustments
F - FY 2022-23 Third Quarter Special Projects Update
G - Competitive and Non-Competitive Grants Tracking
H - CIP Projects Status May 2023
I - CIP Projects Ranking May 2023

7. Subject: Consider authorizing the City Manager to execute a services agreement with Arctic Wolf Networks, Inc., for Managed Detection and Response (MDR) security services, for a total cost of $219,552.46 over three years.

Recommended Action: 1.Authorize the City Manager to execute a services agreement with Arctic Wolf Networks, Inc., for Managed Detection and Response (MDR) Security Services, for a total cost of $219,552.46 over three years.

2. Find under Municipal Code section 3.22.060(B). that the formal competitive bidding procedures are impractical for procurement.

Staff Report
A - Draft Agreement
B - Scope of Services
C - Quote
D - Proof of Insurance

8. Subject: Consider authorizing the City Manager to execute a Third Amendment to Professional Services agreement with Avocette Technologies, Inc., for Accela Configuration and Support Services, for $220,000, over the next three years for a total cost of $392,000 across five years
Recommended Action: Authorize the City Manager to execute a Third Amendment to Professional Services agreement with Avocette Technologies, Inc., for Accela Configuration and Support Services for $220,000, over the next three years for a total cost of $392,000 across five years.

Staff Report
A - Draft Agreement
B - Exhibits A2, B2, & C2
C - Insurance for Consultants Contracts, Jan. 2022
D - Proof of Insurance
E - Base Agreement No. 21-072
F - First Amendment to Agreement 21-072 dated 6-30-22
G - Second Amendment to Agreement 21-072 dated 07-18-22

9. Subject: Consider an amendment to the recreation agreement between the City of Cupertino and Lisa Molaro, a sole proprietor/individual for ceramics and art instruction.

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Recommended Action: Authorize the City Manager to execute a Third Amendment to the recreation agreement between the City of Cupertino and Lisa Molaro, a sole proprietor/individual increasing the amount by $336,941 for a total amount not to exceed $505,941 and extending the term of the agreement to end on August 30, 2025.

Staff Report
A - Draft Amendment

10. Subject: Consider rejection of all bids received for the De Anza Boulevard and McClellan Road/Pacifica Drive Intersection Modifications Capital Improvement Programs (CIP) Project.

Recommended Action: Authorize the Director of Public Works to reject all bids received for the De Anza Boulevard and McClellan Road/Pacifica Drive Intersection Modifications CIP Project.

Staff Report

11. Subject: Consider award of a construction contract for the Pumpkin-Fiesta Storm Drain Improvement Project to Con-Quest Contractors, Inc. for replacement of existing storm drain line and associated improvements.

Recommended Action: 1. Award a construction contract for the Pumpkin-Fiesta Storm Drain Improvement Project (Project No. 2022-01) in the amount of the $1,545,708 to Con-Quest Contractors, Inc.;

2. Authorize the City Manager to execute the construction contract with Con-Quest Contractors, Inc. when all conditions have been met; and

3. Authorize the Director of Public Works to execute any necessary construction change orders up to a contingency amount of $154,572 (10%) for a total authorized contract amount of $1,700,280.

Staff Report
A - Draft Contract
B - Project Manual
C - Project Plans

12. Subject: Consider rejecting all bids received for the 2023 Pavement Maintenance Phase 1 Project.

Recommended Action: Authorize the Director of Public Works to reject all bids received for the 2023 Pavement Maintenance Phase 1 Project.

Staff Report
A - 2023 Pavement Report
PUBLIC HEARINGS - None
Effective January 1, 2023, Government Code Section 65103.5 (SB 1214) limits the distribution of copyrighted material associated with the review of development projects. Members of the public wishing to view plans that cannot otherwise be distributed under SB 1214 may make an appointment with the

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Planning Division to view them at City Hall by sending an email to [email protected]. Plans will also be made available digitally during the hearing to consider the proposal.

ACTION CALENDAR

13. Subject: Consider a first reading of Ordinance No. 23-2248: "An Ordinance of the City Council of the City of Cupertino amending Chapter 9.18 of the Cupertino Municipal Code (CMC) regarding Stormwater Pollution Prevention and Watershed Protection." Recommended Action: Conduct the first reading of Ordinance No. 23-2248: "An Ordinance of the City Council of the City of Cupertino amending Chapter 9.18 of the Cupertino Municipal Code regarding Stormwater Pollution Prevention and Watershed Protection."
Presenter: Ursula Syrova, Environmental Programs Manager Staff Report
A - Draft Ordinance (Clean)
B - Draft Ordinance (Blackline)

COUNCIL REPORTS AND COMMENTS

14. Subject: Councilmember Reports
Council Report, Fruen
Council Reports, Mohan
Council Reports, Moore
Council Reports, Wei

CITY MANAGER REPORT

ORAL COMMUNICATIONS - CONTINUED

INFORMATIONAL ITEMS
Information items are intended to provide background information and routine reports to Councilmembers and the public, without discussion by Council. Members of the public wishing to comment on informational items should do so during oral communications.

15. Subject: FY 2022-2023 City Work Program Third Quarter Update Recommended Action: Receive FY 2022-2023 City Work Program Third Quarter Update
Informational Memorandum
A - FY 22-23 City Work Program Q3 Dashboard Printout

16. Subject: Receive the Library Construction Audit Report Recommended Action: Receive the Library Construction Audit Report Staff Report
A - Library Construction Audit Final Report

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17. Subject: Receive the Monthly Treasurer's Investment Report for March and April 2023 Recommended Action: Receive the Monthly Treasurer's Investment Report for March and April 2023
A - Chandler Investment Report March 2023
B - Chandler Investment Report April 2023

18. Subject: Receive the Monthly Treasurer's Report for March 2023 Recommended Action: Receive the Monthly Treasurer's Report for March 2023 Staff Report
A – Report of City-wide Receipts, Disbursements, and Cash Balances March 2023 B – Report of City-wide Fund BalancesNet Position March 2023

19. Subject: Receive the Monthly Treasurer's Report for April 2023 Recommended Action: Receive the Monthly Treasurer's Report for April 2023 Staff Report
A – Report of City-wide Receipts, Disbursements, and Cash Balances April 2023 B – Report of City-wide Fund BalancesNet Position April 2023

20. Subject: Receive the Treasurer's Investment Report for the Quarter Ending March 31, 2023
Recommended Action: Receive the Treasurer's Investment Report for the Quarter Ending March 31, 2023
Staff Report
A - Chandler Investment Report March 31 2023
B - Chandler Custodial Report March 2023
C - PARS Pension and OPEB Account Statement March 2023
D - LAIF Account Statement March 2023

21. Subject: Receive the FY 2021-22 Annual Comprehensive Financial Report (ACFR) and related supplemental reports.

Recommended Action: Receive the FY 2021-22 Annual Comprehensive Financial Report (ACFR) and related supplemental reports.

Staff Report
A – FY 2021-22 ACFR
B – FY 2021-22 Management Letter
C – FY 2021-22 SAS 114
D – FY 2021-22 Single Audit
E – FY 2021-22 GANN AUP Report
F – FY 2021-22 Investment AUP Report
G – FY 2021-22 Storm Drain AUP Report

22. Subject: Receive the report regarding the 2023 Cupertino-Hsinchu Sister City Association Student Exchange Program and Adult Delegation Visit

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Recommended Action: Receive the report regarding the 2023 Cupertino-Hsinchu Sister City Association Student Exchange Program and Adult Delegation Visit A - Report

COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS

ADJOURNMENT
Lobbyist Registration and Reporting Requirements: Individuals who influence or attempt to influence legislative or administrative action may be required by the City of Cupertino’s lobbying ordinance (Cupertino Municipal Code Chapter 2.100) to register and report lobbying activity. Persons whose communications regarding any legislative or administrative are solely limited to appearing at or submitting testimony for any public meeting held by the City are not required to register as lobbyists.

For more information about the lobbying ordinance, please contact the City Clerk’s Office at 10300 Torre Avenue, Cupertino, CA 94107; telephone (408) 777-3223; email [email protected]; and website: www.cupertino.org/lobbyist.

The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a final decision of the City Council must be brought within 90 days after a decision is announced unless a shorter time is required by State or Federal law.

Prior to seeking judicial review of any adjudicatory (quasi-judicial) decision, interested persons must file a petition for reconsideration within ten calendar days of the date the City Clerk mails notice of the City’s decision. Reconsideration petitions must comply with the requirements of Cupertino Municipal Code §2.08.096. Contact the City Clerk’s office for more information or go to http://www.cupertino.org/cityclerk for a reconsideration petition form.

In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this meeting who is visually or hearing impaired or has any disability that needs special assistance should call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for assistance. In addition, upon request, in advance, by a person with a disability, meeting agendas and writings distributed for the meeting that are public records will be made available in the appropriate alternative format.

Any writings or documents provided to a majority of the Cupertino City Council after publication of the packet will be made available for public inspection in the City Clerk’s Office located at City Hall, 10300 Torre Avenue, Cupertino, California 95014, during normal business hours; and in Council packet archives linked from the agenda/minutes page on the Cupertino web site.

IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section

2.08.100 written communications sent to the Cupertino City Council, Commissioners or City staff

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concerning a matter on the agenda are included as supplemental material to the agendized item. These written communications are accessible to the public through the City’s website and kept in packet archives. Do not include any personal or private information in written communications to the City that you do not wish to make public, as written communications are considered public records and will be made publicly available on the City website.

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CITY OF CUPERTINO
Agenda Item
23-12209 Agenda Date: 5/16/2023
Agenda #: 1.

Subject: Presentation from West Valley Community Services on the Annual Impact Report Receive the presentation from West Valley Community Services on the Annual Impact Report CITY OF CUPERTINO Page 1 of 1 Printed on 5/10/2023
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West Valley Community Services
Presentation to Cupertino City Council
May 15th, 2023
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Our mission is to unite the community to fight hunger and homelessness.

Our vision is a community where every person has food on the table and a roof over their head.

About WVCS
“When I first came into WVCS for help, I had a three-day notice for evictions. I had to move out if I did not have any help. WVCS prevented me and my child from
becoming homeless.” - Millisa (Client)
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Our Clients
● West valley residents
● Multicultural
● Multilingual
● Single adults
● Couples
● Families
● Seniors
● At-risk youth
● Domestic abuse survivors
● Disabled
● Homeless and/or unstably housed
Income eligibility 250% FPL
● $33,975 individual
income
● $6,375 family income
(four person
household)
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Our Programs
We provide a variety of critical safety-net services:
● Food - shopping
● Food - delivery
● Rental assistance
● Housing referrals &
support
● Affordable housing
● Family support
● Homeless services
● Financial coaching
● Case management &
system navigation
● Information and
referrals
● Education and
advocacy
● Employment
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Our Approach
● Prevent imminent evictions and/or utility shut-off
● Reduce food costs, preserving household assets for other essential expenses (rent, childcare, utilities, transportation) ● Provide assistance in navigating benefits available through the social services system in the County
● Help clients remain housed/house un-housed clients
● Develop a plan to reduce long-term debt and save money ● Explore new income and employment opportunities
● Support long-term stability and health for children and other household members
● Work with clients to develop and implement a plan that supports long term stability
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End Hunger and Homelessness

ULTIMATE
IMPACT

PROGRAM COMPONENTS
Food Market and Park-it Market
Basic Needs Supports and Eviction Prevention
Homelessness Supportive Services
Community Access to Resource &
Education (CARE) Program
Homeless with
significant financial and
food needs
In Crisis
Vulnerable
Self-Sufficient
Unstably housed and
financially vulnerable with
significant food needs
Stable housing and
finances with regular
food needs
Self-sufficient in housing
and finances with
occasional food needs
Programming
not needed
Outcome Areas:

Program Components:

Service Populations:

Self-Sufficiency
Matrix
Depending on prescribed program intervention, and depending on where each service population group sits in the self-sufficiency scale, WVCS has expectations for how individuals or families should experience movement on that scale with the amount of intervention provided. As an individual receives services from programming, they can move into a new service population category and continue through additional programming to support their evolving needs. The matrices below convey how service populations are expected to move from one self-sufficiency level to the next with program intervention.

Expected Outcomes Based on Life Circumstance and Program Participation WVCS has four program components that
individuals in each service population category
will interact with depending on their needs:

SERVICE POPULATIONS
WVCS thinks about its clients in four categories
based on their life circumstances to make
determinations for what services to offer clients:

1. Homeless with significant financial and food
needs

2. Unstably housed and financially vulnerable
with significant food needs

3. Stable housing and finances with regular food
needs

4. Self-sufficient in housing and finances with
occasional food needs

OUTCOMES
Food Security
Financial security
Housing security
WVCS expects clients to improve in one or more
of those critical areas corresponding to the
program components they receive and their
ability to engage in WVCS supports.

WVCS uses a self-sufficiency matrix that identifies
four progressive levels of development (in crisis,
vulnerable, stable, and self-sufficient) for three
critical areas of a person or family’s life:

VALUES
Compassion: We respond to the needs of others with sensitivity and kindness.

Dignity: We treat everyone with honor and respect.

Integrity: We operate with honesty and strong moral principles.

Service: We bring the community together to help others.

Diversity: We value each individual’s uniqueness.

Ingenuity: We approach our work with creativity and resourcefulness.

Stable
WVCS Theory of Change
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WVCS Client Data (2021-2022)
By the Numbers
People came to
WVCS for the first
time
Men, women, and
children assisted
Meals made
possible by our
food pantries
Emergency rental
assistance
provided
1,530 4,450 1,027,05 $2,376,726
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Cupertino- 2021-2022
● 114 new Cupertino clients
● 26% of all WVCS clients are Cupertino
residents
● 262 Cupertino residents participated in
special programs (Back to School & Gift of
Hope)
● 63 households received emergency
rental/utility assistance
● 74 Homeless clients accessing services
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Cupertino- 2021-2022
Client demographic information is self-reported at the time of registration for services. 21 CC 05-16-2023
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Cupertino- 2021-2022
Client demographic information is self-reported at the time of registration for services. 22 CC 05-16-2023
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Cupertino- 2022-2023
● 169 new household
● 214 households accessing the WVCS Market
● 300 clients participated in special programs
● 92 households received rental assistance in
the amount of $159,790
● 86 homeless households accessing services at
Cupertino location
● Post-COVID impact: rental assistance in high
demand, requests for support from small
business owners
Current fiscal year to date
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Cupertino Rental Assistance
Rental
Assistance
2018-2023
Rental assistance
numbers for
2022-2023 are
fiscal year to
date.
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Questions
Park-It Market & WVCS Market
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CITY OF CUPERTINO
Agenda Item
22-11704 Agenda Date: 5/16/2023
Agenda #: 2.

Subject: Consider approval of the May 2 City Council minutes Approve the May 2 City Council minutes
CITY OF CUPERTINO Page 1 of 1 Printed on 5/10/2023
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DRAFT MINUTES

CUPERTINO CITY COUNCIL
Tuesday, May 2, 2023
At 6:02 p.m., Mayor Hung Wei called the Regular City Council Meeting to order in the City Hall Conference Room C, 10300 Torre Avenue.

ROLL CALL

Present: Mayor Hung Wei, Vice Mayor Sheila Mohan, and Councilmembers Liang Chao, J.R.

Fruen and Kitty Moore. Absent: none.

In open session before Council convened in closed session, the Mayor called for any members of the public who were present to provide comment regarding any item on the agenda. No members of the public requested to speak. Mayor Wei then closed the session.

CLOSED SESSION

1. Subject: Conference with legal counsel - existing litigation pursuant to Government Code § 54956.9(a): Harshit Shrama & Poonam Salekar v. City of Cupertino et al., Santa Clara County Superior Court Case No. 22CV392971
Council met with legal counsel on the existing litigation.

2. Subject: Conference with legal counsel - initiation of litigation pursuant to Government Code § 54956.9(c) (one case)
Council met with legal counsel on the initiation of litigation.

Council recessed from 6:14 p.m. to 6:45 p.m.

OPEN SESSION
At 6:45 p.m. Mayor Wei reconvened the Regular City Council Meeting in open session and led the Pledge of Allegiance in the Cupertino Community Hall Council Chamber, 10350 Torre Avenue and via teleconference.
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ROLL CALL

Present: Mayor Hung Wei, Vice Mayor Sheila Mohan, and Councilmembers Liang Chao, J.R.

Fruen and Kitty Moore. Absent: none.

CLOSED SESSION REPORT
City Attorney Chris Jensen conducted the open session report regarding the Closed Session held at 6:02 p.m. City Attorney Jensen reported that Council heard two items in closed session and took action to authorize the City Attorney to file a cross complaint in the action Shrama v.

City of Cupertino.

CEREMONIAL ITEMS

3. Subject: Proclamation declaring May as Affordable Housing Month Recommended Action: Present proclamation declaring May as Affordable Housing Month
Emily Ann Ramos, Preservation and Protection Associate with Silicon Valley at Home (SV@Home) received the proclamation.

Mayor Wei presented the proclamation declaring May as Affordable Housing Month.

As part of Ceremonial Items, Mayor Wei acknowledged two proclamations that were issued but were not being presented. Mayor Wei recognized the month of May as Asian American and Pacific Islander (AAPI) Heritage Month and National Public Works Week from May 21 to 27.

POSTPONEMENTS AND ORDERS OF THE DAY
Wei moved and Fruen seconded to postpone Item 11 to consider approval of a Semi-Rural Designation for Carmen Road to a date uncertain. Council did not vote on this motion.

Moore moved and Chao seconded a substitute motion to pull Item 11 to consider approval of a Semi-Rural Designation for Carmen Road from the Consent Calendar and to hear the item.

The substitute motion carried with Fruen voting no.

ORAL COMMUNICATIONS
Sandy James acknowledged the service of the Public Works Department and praised the work of staff, including the Veteran’s Memorial project.
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Brook Ezzat was concerned about Council behavior, working towards solutions for housing, transit, and the unhoused, accepting money from developers, and new Council procedures.

Jennifer Griffin was concerned about the Housing Element certification process and loss of local control and opposed SB 423 to extend SB 35.

Rhoda Fry was concerned about per capita income for sales tax and supported long-term savings and transparency and opposed selling water rights and Blackberry Farm (shared written comments).

San R supported the Sister Cities program, reviving the program to include other sister cities, and ensuring funding for expanded trips.

Peggy Griffin opposed posting the budget survey results after the City presentation on May 17 and supported closing the survey beforehand and was concerned about the survey questions.

Call-in-User-1 opposed the civil assessments charged for a litigation matter involving their property and the City Building Department.

CONSENT CALENDAR (Items 4-11)
Mayor Wei opened the public comment period and the following people spoke.

Peggy Griffin was concerned about the award amount for the 2023 Concrete Reconstruction Project and supported spending reductions (Item 10).

Jennifer Griffin supported the City of Santa Clara paying a greater portion of the cost-sharing agreement for the Via on-demand shuttle expansion (Item 7).

San R opposed the approval of the Countywide Household Hazardous Waste Collection Program agreement if the costs were being passed-on to residents (Item 6).

Mayor Wei closed the public comment period.

Mohan moved and Fruen seconded to approve the items on the Consent Calendar, except for Items 8 and 11 which were pulled for discussion. Ayes: Wei, Mohan, Chao, Fruen, and Moore.

Noes: None. Abstain: None. Absent: None.

Items 8 and 11 were placed after the Action Calendar for consideration. 29 CC 05-16-2023
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4. Subject: Consider approval of the April 13 City Council minutes Recommended Action: Approve the April 13 City Council minutes Written communications for this item included an Amended Attachment A – Draft minutes.

5. Subject: Fiscal Year (FY) 2023-24 recommended funding allocations for the Community Development Block Grant (CDBG) Program, the Below Market Rate (BMR) Affordable Housing Fund (AHF), and the General Fund Human Services Grant (HSG) Recommended Action: Authorize the City Manager to execute FY 2023-24 CDBG, BMR AHF, and General Fund HSG funding agreements
Written communications for this item included a supplemental report with staff responses to councilmember questions, Attachment D - Updated Staff ReportRedlined, Attachment E - Staff Report Consolidation Plan 2020.

6. Subject: Consider approval of the second amendment to the Countywide Household Hazardous Waste (HHW) Collection Program agreement between the City of Cupertino and the County of Santa Clara (County) to augment funding up to an additional $90,705 to the Countywide HHW Program during Fiscal Year (FY) 2023/24 using earmarked funds within the Resource Recovery Fund 520.

Recommended Action: Authorize the City Manager to execute the second amendment to the Countywide HHW Collection Program agreement between the City of Cupertino and the County of Santa Clara to augment funding up to an additional $90,705 to the Countywide HHW Program during FY 2023/24 for the purpose of attaining or increasing household participation, raising the not to exceed amount of the three-year 2022-2024 agreement to $198,885.

7. Subject: Consider a cost-sharing agreement between the City of Santa Clara and the City of Cupertino for the Via on-demand shuttle expansion.

Recommended Action: Authorize the City Manager to enter into a cost-sharing agreement between City of Santa Clara and the City of Cupertino for the Via on-demand shuttle expansion.

9. Subject: Consider award of a construction contract for the Service Center Security Gate Project (Project No. 2023-103) for the construction of a new motorized security gate, including associated improvements.

Recommended Action: 1. Award a construction contract for the Service Center Security Gate Project and authorize the City Manager to execute a contract in the amount of $365,750 with VNH Builders;
a. Authorize the Director of Public Works to execute any necessary change orders up to 30 CC 05-16-2023
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a construction contingency amount of $36,575 (10%) for a total authorized contract amount of $402,325; and
b. Adopt Resolution No. 23-051 approving budget modification #2223-266 increasing appropriations in the General Fund Service Center Facilities Maintenance Fund (budget unit 100-87-829) by $249,001.

10. Subject: Consider award of a construction contract for the 2023 Concrete Reconstruction Project (Project No. 2023-104) for the reconstruction of curbs, gutters, sidewalks and Americans with Disabilities Act (ADA) ramps at various locations throughout the City of Cupertino.

Recommended Action: 1. Award a construction contract for the 2023 Concrete Reconstruction Project and authorize the City Manager to execute a contract amount of $1,378,793.40 with R&S Construction Management, Inc.; and a. Authorize the Director of Public Works to execute any necessary change orders up to a construction contingency amount of $137,879 (10%) for a total authorized contract amount of $1,516,672.40.

PUBLIC HEARINGS – None

ACTION CALENDAR

12. Subject: Consider a Request for Proposals (RFP) for garbage and construction and demolition (C&D) debris disposition services, including solicitation of options to process garbage for recovery of organic and other recyclables.

Recommended Action: Approve the staff recommendation regarding the forthcoming Request for Proposals for garbage and construction and demolition debris disposition services, by incorporating the solicitation of options to process garbage for recovery of organic and other recyclable materials.

Presenter: Ursula Syrova, Environmental Programs Manager Written communications for this item included a staff presentation.

Environmental Programs Manager Ursula Syrova gave a presentation.

Councilmembers asked questions and made comments.

Mayor Wei opened the public comment period and the following people spoke.

Jennifer Griffin asked about the billing structure to customers.

Rhoda Fry supported adding a quality of service element. 31 CC 05-16-2023
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Darcy Paul supported awareness of plastic contaminants.

Peggy Griffin opposed the increase and supported outreach and education.

San R was concerned about risings costs, layoffs, lower income residents, and housing.

Mayor Wei closed the public comment period.

Moore moved and Fruen seconded to approve the staff recommendation regarding the forthcoming Request for Proposals for garbage and construction and demolition debris disposition services, by incorporating the solicitation of options to process garbage for recovery of organic and other recyclable materials. The motion carried unanimously.

Council recessed from 8:15 p.m. to 8:21 p.m.

13. Subject: Consider a report regarding the review of potential violations of the City of Cupertino Municipal Code and City policies regarding Council- and commissioner-staff relations.

Staff and Commissioner-Staff Relations (“Report”).

Recommended Action: Receive confidential Report; consider waiving attorney-client privilege to allow for the public release of the Report; and consider further responses to Report.

Presenter: Christopher Jensen, City Attorney
Written communications for this item included an email to Council.

Councilmember Moore read a statement and recused herself from this item and left the dais.

City Attorney Christopher Jensen reviewed the staff report.

Councilmembers asked questions and made comments.

Mayor Wei opened the public comment period and the following people spoke.

Jennifer Griffin opposed the Report.

A majority of Council consented to suspend the Council Procedure’s rules for public comment to allow additional time for Darcy Paul (Fruen, Wei, Mohan).

Darcy Paul opposed the investigation process and the Report. 32 CC 05-16-2023
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Brooke Ezzat ceded their time to Darcy Paul.

Lisa Warren requested definitions of “undue influence” and “due diligence” and supported working together and serving the community.

Rhoda Fry supported Councilmembers working together and opposed divisiveness.

Parks and Recreation Commissioner Jennifer Shearin (representing self) supported public release of the Report.

San R opposed public release of the Report.

Peggy Griffin opposed public release of the Report.

Louise Saadati supported public release of the Report.

Housing Commissioner Tessa Parish (representing self) was concerned about staff bias in the Report.

Mayor Wei closed the public comment period.

Wei moved and Fruen seconded to waive attorney-client privilege and to authorize the public release of the confidential investigation Report prepared by Linda Daube, dated May 1, 2023, provided that such Waiver would not extend to the subject matter of the Report, or to underlying materials considered in the course of the investigation; and to continue this item to a special meeting to allow opportunities for the public to review the Report before any further discussions by the City Council. The motion carried with Chao voting no and Moore absent (recused).

Councilmember Moore returned to the dais.

ITEMS REMOVED FROM THE CONSENT CALENDAR
The following items were pulled from the Consent Calendar and placed after the Action Calendar for discussion.

8. Subject: Consider approving the use of funds from the Art In-Lieu Fees for the Jollyman All-Inclusive Playground (AIPG) Capital Improvement Programs (CIP) project.

Recommended Action: 1. Approve the use of appropriations of $338,146.86 from the 33 CC 05-16-2023
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Art In-Lieu Fee in the General Fund, for artwork within the Jollyman AIPG CIP project;

2. Adopt Resolution No. 23-050 (Attachment A) approving budget modification no. 2223-274 increasing appropriations and revenue by $338,146.86 in the Capital Improvement Program Capital Projects Fund and increasing appropriations in the General Fund to transfer out restricted funds for the Jollyman All-Inclusive Playground Project (420-99-051, PVAR 007); and

3. Authorize the City Manager to execute any necessary contract amendments for a contingency of $100,489 for a total contract amount of $490,000 on the professional design services agreement between the City of Cupertino and MIG, Inc. for the Jollyman AIPG Project (Project 2019-15).

This item was pulled from the Consent Calendar for discussion.

Written communications for this item included a desk item Attachment C - Redlined Staff Report which included a modification to the recommended action, a supplemental report and desk item with staff responses to councilmember questions, and emails to Council.

Acting Director of Public Works Chad Mosley and CIP Manager Susan Michael reviewed the staff report.

Mayor Wei opened the public comment period and the following people spoke.

Jennifer Griffin was concerned about the funds being used on a single project.

Lisa Warren supported implementing a procedure, evaluating other sites, and requesting a recommendation from the Arts and Culture Commission.

Rhoda Fry opposed approving additional funds and was concerned about artwork definitions. (Submitted written comments).

Peggy Griffin opposed approving additional funds and was concerned about artwork definitions.

Parks and Recreation Commissioner Jennifer Shearin (representing self) supported approving the use of funds.

Liana Crabtree supported referral to the Arts and Culture Commission for a recommendation and opposed approving the additional use of funds at this location.

Louis Saadati supported approving the use of funds.
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Mayor Wei closed the public comment period.

Councilmembers asked questions and made comments.

Wei moved and Chao seconded to:

1. Approve the use of appropriations of $338,146.86 from the Art In-Lieu Fee in the General Fund, for artwork within the Jollyman AIPG CIP project; and

The motion carried unanimously.

11. Subject: Consider approval of a Semi-Rural Designation, eliminating the requirement for sidewalks on the east side of Carmen Road, between Scenic Boulevard and Stevens Creek Boulevard, pursuant to Ordinance No. 1925.

Recommended Action: Adopt Resolution No. 23-052 designating the east side of Carmen Road, between Scenic Boulevard and Stevens Creek Boulevard, as semi-rural.

As noted under Postponements and Orders of the Day, this item was pulled from the Consent Calendar for discussion.

Councilmembers asked questions and made comments.

Acting Director of Public Works Chad Mosley answered questions.

Mayor Wei opened the public comment period and the following people spoke.

Patrick Kwok (Petitioner) supported the proposed Semi-Rural Designation.

Rhoda Fry supported the petition and proposed Semi-Rural Designation.

Jennifer Griffin supported having continuity in the area.

Parks and Recreation Commissioner Jennifer Shearin (representing self) supported postponement until Council consideration of the Carmen Road Bridge project.

San R supported postponement and assessing the site visibility and was concerned about future costs to the City.
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Peggy Griffin supported the petition for Semi-Rural Designation.

Mayor Wei closed the public comment period.

Chao moved and Moore seconded to adopt Resolution No. 23-052 designating the east side of Carmen Road, between Scenic Boulevard and Stevens Creek Boulevard, as semirural. The motion carried unanimously.

ADJOURNMENT
At 10:53 p.m., Mayor Wei adjourned the Regular City Council Meeting per Council rule.

COUNCIL REPORTS AND COMMENTS

14. Subject: Councilmember Reports
Written communications for this item included a Council Report from Councilmember Moore.

Councilmembers reported on their various committees and activities as provided in the published agenda and written communications.

CITY MANAGER REPORT
Council did not hear this item.

ORAL COMMUNICATIONS - CONTINUED – None
INFORMATIONAL ITEMS - None

COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS
Council did not hear this item.

Minutes prepared by:
_________________________
Kirsten Squarcia, City Clerk
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CITY OF CUPERTINO
Agenda Item
23-12224 Agenda Date: 5/16/2023
Agenda #: 3.

Subject: Consider setting a hearing date to declare brush with potential fire hazard a public nuisance and for objections to proposed removal through the Cupertino Brush Abatement Program WUI (Wildland-Urban Interface Fire Area); adopting a resolution declaring properties as having potential fire hazards from brush and authorizing removal
Adopt Resolution No. 23-053 declaring properties as having potential fire hazards from brush; and set a hearing date of July 6, 2023 to declare brush with potential fire hazard a public nuisance and to hear objections to proposed removal
CITY OF CUPERTINO Page 1 of 1 Printed on 5/10/2023
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1 CITY COUNCIL STAFF REPORT
Meeting: May 16, 2023
Subject
Consider setting a hearing date of July 6, 2023 to declare brush with potential fire hazard a public nuisance and for objections to proposed removal through the Cupertino Brush Abatement Program (Wildland-Urban Interface Fire Area); and consider adopting a resolution declaring properties as having potential fire hazards from brush and authorizing removal.

Recommended Action
Adopt Resolution No 23-___ declaring properties as having potential fire hazards from brush; and set a hearing date of July 6, 2023 to declare brush with potential fire hazard a public nuisance and to hear objections to proposed removal.

Reasons for Recommendation
The Cupertino Brush Abatement Program is a separate program from the County Weed Abatement Program that works to protect the City from wildfire risk by reducing potential fuel, such as brush, for hillside areas. This program is managed by the Santa Clara County Fire Department. Cupertino Municipal Code Section 16.40.200 requires property owners in the locally adopted Wildland-Urban Interface Fire Area (WUI) to maintain effective defensible space by removing brush, flammable vegetation and combustible growth when required by the fire code official due to steepness of terrain or other conditions. All properties in the WUI area are subject to the requirements of the Brush Abatement Program. The Program authorizes the County to remove the brush if the property owner does not and to recover the cost of abatement.

Each year, homeowners are reminded that they must remove brush and vegetation from around their home to comply with the minimum fire safe regulations. On January 13, 2023, County Fire mailed an introductory pre-season letter notifying property owners in designated fire hazard severity zones (Attachment B). On February 27, 2023, County Fire mailed a community wildfire preparedness packet to residents, including the enforced safety regulations (Attachments C-F).
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2 Fire crews begin conducting property inspections in early April of each year. A notice of inspection is delivered to homes in advance (Attachment G). Properties that are found to be out of compliance with the enforced safety regulations are issued a notice of violation requesting corrections (Attachment H). All properties must comply before June 1. After June 1, non-compliant properties are referred for mandatory abatement by an assigned County contractor. The costs associated with the abatement work for that parcel are placed on the homeowner’s property tax bill.

To proceed with the annual brush abatement process, staff recommends adopting the draft resolution declaring properties as having potential fire hazards from brush; and setting a hearing date of July 6, 2023 to declare brush with potential fire hazard a public nuisance and to hear objections to proposed removal (Attachment A). If the resolution is not adopted, the County Fire will be unable to authorize abatement work performed by a contractor on properties that are not in compliance with the vegetation clearance requirements.

Sustainability Impact
There are no sustainability impacts.

Fiscal Impact
There are no fiscal impacts at this step in the process. Any costs associated with the program are charged to property owners, as determined at the lien assessment hearing on July 18. The City Council holds the hearing, considers any disputes, and adopts a resolution placing a lien assessment on the properties to allow the County to recover the cost of weed and/or brush abatement.

California Environmental Quality Act
Weed abatement activities are exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15304 (minor alteration to land). _____________________________________
Prepared by: Kirsten Squarcia, City Clerk
Reviewed by: Pamela Wu, City Manager
Attachments:

A - Draft Resolution
B – Pre Season Program Letter
C – Property owner 30’ WUI Letter
D - Property owner 100’ WUI Letter
E – Wildfire Preparation Brochure
F - Chipping Program Brochure
G – Notice of Inspection
H – Notice of Violation
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RESOLUTION NO. 23-

A RESOLUTION OF THE CUPERTINO CITY COUNCIL

DECLARING PROPERTIES AS HAVING POTENTIAL FIRE HAZARDS

FROM BRUSH AND SETTING A PUBLIC HEARING TO DECLARE A

PUBLIC NUISANCE AND FOR OBJECTIONS TO PROPOSED REMOVAL
WHEREAS, brush is growing in the City of Cupertino upon certain streets, sidewalks, highways, roads and private property; and
WHEREAS, said brush may attain such growth as to become a fire menace or which are otherwise noxious or dangerous; and
WHEREAS, said brush appears to be a public nuisance;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino does hereby declare:

1. That said brush does now appear to be a public nuisance and potential fire hazard;

2. That said condition and potential fire hazard exists upon all of the streets, sidewalks, highways, roads, and private property more particularly described by common names or by reference to the tract, block, lot, code area, and parcel number on the report to be provided by the Santa Clara County Fire Department;

3. That the 6th day of July, 2023, at the hour of 6:45 p.m., or as soon thereafter as the matter can be heard, in the Council Chamber in the Community Hall, City of Cupertino and via teleconference, with details on how to attend the meeting appearing on the City Council agenda for that date, are hereby set as the time and place to determine whether the condition is a public nuisance and where all property owners having any objections to the proposed removal of such brush may be heard;

4. That the Santa Clara County Fire Marshal is hereby designated and ordered as the person to give notice of the adoption of this resolution in the manner and form provided in Section 16.40.200 of the Cupertino Municipal Code. 40 CC 05-16-2023
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Resolution No. 23-

Page 2 ends

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 16th day of May, 2023 by the following vote:

Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________
Kirsten Squarcia, City Clerk
________________________
Date
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Serving Santa Clara County and the communities of Campbell, Cupertino, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, and Saratoga.

January 13, 2023
<<Owner Name>>
<<Owner Address>>
<<Owner City>>, <<Owner State>> <<Owner ZIP Code>>
RE: <<APN>>
<<Property Address>>
Dear Property Owner,
Each year, the Santa Clara County Fire Department partners with your city/town to conduct Wildland Fire Safety Inspections. As a property owner in a designated Fire Hazard Severity Zone of the Wildland Urban Interface (WUI), you will receive a packet in the mail with important information about your property and guidelines for protecting your home, family, and community from the threat of wildfires. The packet includes a property self-inspection card that can be completed and returned by mail or online with the provided QR code.

Our records indicate that we did not receive a completed self-inspection card for your property last year. California wildfires have become a year-round reality, and self-inspections are a key component in our efforts to effectively mitigate wildfire risk in the community.

In the coming weeks, you will receive this year’s community wildfire preparedness packet, including a property self-inspection card. Please take the time to complete and return the selfinspection card when you receive it.

If you have questions, please contact the Fire Prevention Division of the Santa Clara County Fire Department at (408) 341-4420 or [email protected]. Thank you for your cooperation as we continue to work together to build fire-resilient communities.

Sincerely,
Hector R. Estrada, Deputy Chief
Fire Prevention Division
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Dear Property Owner,
Each year, the Santa Clara County Fire Department (SCCFD) partners with the City of Cupertino to conduct Wildland Fire Safety Inspections. As a property owner in a designated Fire Hazard Severity Zone of the Wildland Urban Interface, you must comply with the minimum fire safe regulations. SCCFD continues to be committed to achieving fire resilience for our residents and our community. The enclosed packet provides information about your property and how to protect your home, family, and community from the threat of wildfires.

This packet also includes a property self-inspection card that can be completed and returned by mail or online with the provided QR code. Self-inspections are a key component in our efforts to mitigate wildfire risk in the community and are essential for maintaining defensible space. When combustible vegetation is removed or reduced around structures, the defensible space buffer can slow or stop the spread of wildfire.

Your property is in a High/Moderate Fire Hazard Severity Zone of the Wildland Urban Interface Area and requires 30 feet of defensible space from all structures. The enforced safety regulations for your property include:

Enforced Safety Regulations (Items A - F)
A. Create 30 feet of defensible space around your home. To accomplish this, you must clear all flammable vegetation a minimum of 30 feet around structures.

B. Remove pine needles, leaves, and other dead vegetation from roofs, eaves and rain gutters.

C. Trim tree limbs 10 feet from chimneys and stove pipes; remove dead limbs that hang over rooftops.

D. Remove all non-fire-resistive vegetation a minimum of 10 feet on each side of a fire apparatus access road or driveway.

E. Cover chimney outlets or flues with a 1/2” mesh spark arrester.

F. Post a clearly visible house address, using at least 4” high numbers, for easy identification. For homes located more than 50 feet from the street, post address numbers at the driveway entrance.

Additional Safety Recommendations
• Create and maintain a 5-foot noncombustible zone around all structures, including decks. • Clear 10 feet around and 15 feet above fuels (e.g., woodpiles, lumber, and scrap). Move woodpiles as far away as possible from all structures.
• Clear vegetation and other combustible material from underneath decks. Enclose elevated decks with fire-resistive materials.
• Trees 18 feet or taller should be limbed up 6 feet from the ground. Provide additional vertical clearance when trees have vegetation beneath them.

February 27, 2023

SANTA CLARA COUNTY FIRE DEPARTMENT
ATTN: FIRE PREVENTION DIVISION
14700 WINCHESTER BOULEVARD
LOS GATOS, CA 95032-1818
PLACE
STAMP
HERE
<<Owner Name>>
<<Owner Address>>
<<Owner City>>, <<Owner State>> <<Owner ZIP Code>>
<<Endorsement Line>>
<<Owner Name>>
<<Owner Address>>
<<Owner City>>, <<Owner State>> <<Owner ZIP Code>>

FFFFFFFFFFFFFFFFFFFF
RE: <<Property Address>> / APN: <<APN>>
City of Cupertino 30'
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Owner Responsibilities:

1. Please ensure that your property satisfies the requirements above. You have the option to complete the required work yourself or hire your own contractor. For information about vegetation abatement services, visit WeedAbatement.SCCgov.org or call 408.282.3145.

2. Please either complete and return the attached property self-inspection card OR scan the QR Code below to report the current status of your property before April 1, 2023.

Inspection Schedule:

On April 1, 2023, SCCFD will begin conducting property inspections. Property owners not in compliance will be notified of what work needs to be completed to comply with the Enforced Safety Regulations. Please contact us if you are unable to complete the required work due to late season rains or other special circumstance.

On June 1, 2023, we will begin conducting re-inspections of the properties that were out of compliance at the time of the first property inspection. If your property fails to comply with Items A, B, C, or D of the Enforced Safety Regulations specified above, the compliance work will be completed by the City of Cupertino’s authorized contractor, and the charges for this service will appear on your next property tax bill.

SCCFD will be hosting several community wildfire preparedness webinars; please see the enclosed flyer for details. If you have concerns regarding the safety compliance of your property, a limited number of courtesy property inspections will be available during the month of April. For questions or to request a courtesy property inspection, please contact the Fire Prevention Division at 408.341.4420.

Sincerely,
Hector R. Estrada, Deputy Chief
Fire Prevention Division
Choose ONE:

1. Scan the QR code below with a smartphone camera to submit your response online OR

2. Complete and mail the attached information card below.

Evacuation Zone ID:

Private Access Key: Or Online: qrs.ly/syej73x
<<ZoneID>>
<<AccessKey>>
Option 1 - Respond Online
I have received the annual Wildland Urban Interface (WUI) Enforced Safety Regulations letter related to flammable vegetation abatement. The current status of my property is as follows (choose one):
□ I have inspected my property for flammable vegetation clearance and believe it complies with the Enforced Safety Regulations. I understand that an inspection of my property may be conducted to verify compliance. □ I will remove flammable vegetation around all structures on my property in accordance with the Enforced Safety Regulations no later than June 1, 2023. I understand that if the required work is not completed, the authorized contractor may complete the work and the charges will appear on my next property tax bill. □ I am no longer the owner of this property.
□ There are no structures on this property.

Name (print clearly): ____________________________________________________ Date: _________________ Phone: (______)____________________ Email: __________________________________________________ Property Address: <<Property Address>>
Option 2 - Respond by Mail
Resources and Information
Santa Clara County Fire Department: www.SCCFD.org/rsg • 408.378.4010 Offers community education and risk reduction programs, including fire safety, injury prevention, disaster and wildfire resilience Santa Clara County FireSafe Council: www.SCCFireSafe.org • 408.975.9591 Protects and educates communities at risk from wildfire through fuel reduction programs, outreach and community planning efforts Santa Clara County Office of Emergency Management: EmergencyManagement.SCCgov.org • 408.808.7800 Coordinates county-wide all hazards preparedness, including managing the AlertSCC Emergency Alert System (www.alertscc.org) Santa Clara County Weed Abatement Program: WeedAbatement.SCCgov.org • 408.282.3145 Provides community education and hazard abatement services to protect communities from fire hazards 44 CC 05-16-2023
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Dear Property Owner,
Each year, the Santa Clara County Fire Department (SCCFD) partners with the City of Cupertino to conduct Wildland Fire Safety Inspections. As a property owner in a designated Fire Hazard Severity Zone of the Wildland Urban Interface, you must comply with the minimum fire safe regulations. SCCFD continues to be committed to achieving fire resilience for our residents and our community. The enclosed packet provides information about your property and how to protect your home, family, and community from the threat of wildfires.

Your property is in a Very High Fire Hazard Severity Zone of the Wildland Urban Interface Area and requires 100 feet of defensible space from all structures. The enforced safety regulations for your property include:

Enforced Safety Regulations (Items A - F)
A. Create 100 feet of defensible space around your home. To accomplish this, you must clear all flammable vegetation a minimum of 30 feet around structures. Additionally, create a reduced fuel zone for the remaining 70 feet (or to the property line).

B. Remove pine needles, leaves, and other dead vegetation from roofs, eaves, and rain gutters.

C. Trim tree limbs 10 feet from chimneys and stove pipes; remove dead limbs that hang over rooftops.

D. Remove all non-fire-resistive vegetation a minimum of 10 feet on each side of a fire apparatus access road or driveway.

E. Cover chimney outlets or flues with a 1/2” mesh spark arrester.

F. Post a clearly visible house address, using at least 4” high numbers, for easy identification. For homes located more than 50 feet from the street, post address numbers at the driveway entrance.

February 27, 2023

FFFFFFFFFFFFFFFFFFFF
RE: <<Property Address>> / APN: <<APN>>
City of Cupertino 100'
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Owner Responsibilities:

2. Please either complete and return the attached property self-inspection card OR scan the QR Code below to report the current status of your property before April 1, 2023.

Inspection Schedule:

SCCFD will be hosting informative community wildfire preparedness webinars; please see the enclosed flyer for details. If you have concerns regarding the safety compliance of your property, a limited number of courtesy property inspections will be available during the month of April. For questions or to request a courtesy property inspection, please contact the Fire Prevention Division at 408.341.4420.

Sincerely,
Hector R. Estrada, Deputy Chief
Fire Prevention Division
Choose ONE:

1. Scan the QR code below with a smartphone camera to submit your response online OR

2. Complete and mail the attached information card below.

Evacuation Zone ID:

Name (print clearly): ____________________________________________________ Date: _________________ Phone: (______)____________________ Email: __________________________________________________ Property Address: <<Property Address>>
Option 2 - Respond by Mail
Resources and Information
Santa Clara County Fire Department: www.SCCFD.org/rsg • 408.378.4010 Offers community education and risk reduction programs, including fire safety, injury prevention, disaster and wildfire resilience Santa Clara County FireSafe Council: www.SCCFireSafe.org • 408.975.9591 Protects and educates communities at risk from wildfire through fuel reduction programs, outreach and community planning efforts Santa Clara County Office of Emergency Management: EmergencyManagement.SCCgov.org • 408.808.7800 Coordinates county-wide all hazards preparedness, including managing the AlertSCC Emergency Alert System (www.alertscc.org) Santa Clara County Weed Abatement Program: WeedAbatement.SCCgov.org • 408.282.3145 Provides community education and hazard abatement services to protect communities from fire hazards 46 CC 05-16-2023
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Proudly serving Campbell, Cupertino, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Saratoga and the surrounding unincorporated communities.

SANTA CLARA COUNTY FIRE DEPARTMENT | (408) 378-4010 | WWW.SCCFD.ORG Rev1.13.23h
2023

COMMUNITY

WILDFIRE

PREPAREDNESS
REGISTER at SCCFD.EVENTBRITE.COM or CALL (408) 378-4010

DATE WEBINAR TIME
APRIL 5
WEDNESDAY Home Ignition Zone (HIZ) 6:30 – 8:30pm
APRIL 13

THURSDAY
Zonehaven:

Know Your Zone 6:30 – 7:30pm
APRIL 17
MONDAY Home Ignition Zone (HIZ) 6:30 – 8:30pm
APRIL 26

WEDNESDAY
Zonehaven:

Know Your Zone 6:30 – 7:30pm
MAY 4

THURSDAY
Home Insurance:

Roadmap to Preparedness 6:30 – 8:00pm
MAY 10

WEDNESDAY
Home Insurance:

Roadmap to Preparedness 6:30 – 8:00pm

HOME IGNITION ZONE (HIZ)
Most homes
destroyed by wildfire
are first ignited by
embers and small
flames. Take steps
to harden your home
in the Home Ignition
Zone (HIZ) to better
protect it from the
threat of wildfire.

This webinar will focus on cost-effective measures to
improve your home’s survivability and fire resistance in the Immediate Zone (0’ to 5’), the area most vulnerable to embers and radiant heat.

During a
wildfire, do you
know when
to evacuate?
Zonehaven is a
powerful tool to
manage evacuations and assigns each area
to a designated zone. Residents have instant
access to real time evacuation updates.

In this webinar, learn about:
f Zonehaven web-based platform
f Alerting and notifications
f How to evacuate safely
f Standardized evacuation terminology
Learn about
resources and
useful tools to build
a safety net for
disaster resilience. A consumer focused non-profit
HOME INSURANCE: Roadmap to Preparedness
In this webinar, learn about:
f What consumers should know before and
after a disaster
f Home insurance coverage and policy limits
f Understanding the fine print
f What to do if you are “dropped” by your insurer
f How to save money in these
unprecedented times
ZONEHAVEN: Know Your Zone
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2023
Santa Clara County
FireSafe Council
Stay Connected
Residents submit an
application for chipping to be
performed at home
At Home Chipping
Residents drop off piles of
brush at a specific location on
a specific date
Community Chipping Piles
Residents drive the brush to a
designated location and is
chipped on the spot
Drive Up Chipping Event
The Santa Clara County FireSafe Council
Chipping Program is a FREE program that
assists residents and communities in their
efforts to create and maintain adequate and
safe defensible space by processing or
disposing vegetation such as brush and tree
branches. Required defensible space clearing is
0-100 feet from permanent structures. Due to
the varying natures of hillside neighborhoods,
different types of chipping services may be
necessary.

About Chipping Program Our Chipping Services
For more information, visit:
14380 Saratoga Avenue, Saratoga, CA 95070
408.975.9591 • www.sccfiresafe.org
Online Applications Open March 13, 2023
Applications will be accepted in the order received.

Space is limited, apply early.

Rev.1.18.23
www.sccfiresafe.org
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SCCFD Officer Name & Title (print)
Santa Clara County Fire Department
408.378.4010 • [email protected]
Proudly serving Campbell, Cupertino,
Los Altos, Los Altos Hills, Los Gatos,
Monte Sereno, Saratoga, & unincorporated
communities within Santa Clara County
FIRE PREVENTION–WHITE OWNER/RESIDENT–MANILA CARDSTOCK

ALL PROPERTIES WITHIN THE DESIGNATED FIRE HAZARD SEVERITY ZONES

OF THE WUI MUST COMPLY WITH THE ENFORCED SAFETY REGULATIONS PRIOR TO JUNE 1st EVERY YEAR. A RE-INSPECTION WILL OCCUR ON OR AFTER 15 DAYS OF THIS INSPECTION NOTICE. IF, AT THAT TIME, THE REQUIRED

CLEARANCE OF FLAMMABLE VEGETATION HAS NOT BEEN COMPLETED,

A NOTICE OF VIOLATION WILL BE ISSUED TO THE PROPERTY OWNER AND REFERRED TO THE LOCAL JURISDICTION FOR CODE ENFORCEMENT.

DATE:_______________________________________________
ADDRESS:___________________________________________
___________________________________________________
APN#_______________________________________________
Property Owner and/or Community Resident:

The Santa Clara County Fire Department (SCCFD) is
conducting property inspections in your neighborhood. Your property is not in compliance with the enforced Wildland Urban Interface (WUI) safety regulations checked below:

A. 

B. 
C. 
D. 
E. 
F. q
WWW.SCCFD.ORG
Comments: _______________________________________
___________________________________________________
__________________________________________________
___________________________________________________
Create 30 feet of defensible space around your home.

To accomplish this, clear all flammable vegetation a
minimum of 30 feet (or to the property line) around
structures.

Create 100 feet of defensible space around your home.

To accomplish this, create a green zone by clearing all flammable vegetation 30 feet around structures and
create a reduced fuel zone for the remaining 70 feet or to your property line.

Remove pine needles, leaves, and other dead vegetation
from roofs, eaves and rain gutters.

Trim tree limbs 10 feet from chimneys and stove pipes;
remove dead limbs that hang over rooftops.

Remove all non-fire resistive vegetation a minimum of
10 feet on each side of a fire apparatus access road
or driveway.

Cover chimney outlets or flues with a 1/2” mesh spark
arrester.

Post a clearly visible house address, using at least 4” high numbers, for easy identification.
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Your Efforts Help to Build Wildfire Resilient Communities!

ADDITIONAL SAFETY RECOMMENDATIONS
• Create and maintain a 0 to 5 feet noncombustible zone (Zone 1) around all structures, including decks.
• Clear 10 feet around and 15 feet above fuels (e.g., woodpiles, lumber, scrap, etc.) Move woodpiles as far away as possible from all structures.
• Clear vegetation and other combustible materials from underneath decks. Enclose elevated decks with fire-resistive materials.
• Trees 18 feet or taller should be limbed up 6 feet from the ground. Provide additional vertical clearance when trees have vegetation beneath them.

RESOURCES AND INFORMATION
Santa Clara County Fire Department
www.SCCFD.org/rsg • 408.378.4010
Offers community education and risk reduction programs, including fire safety, injury prevention, disaster and wildfire preparedness
Santa Clara County FireSafe Council
www.SCCFireSafe.org • 408.975.9591
Protects and educates communities at risk from wildfire through fuel reduction programs, outreach and community planning efforts
Santa Clara County Weed Abatement Program
WeedAbatement.SCCgov.org • 408.282.3145
Provides community education and hazard abatement
services to protect communities from fire hazards
www.nfpa.org/wildfire
FM #1409 / Revised 2022 50
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Dear Property Owner,
Collaborative efforts are key to building fire resilient communities. As a property owner in a designated Fire Hazard Severity Zone of the Wildland Urban Interface (WUI), you play a vital role in keeping both your property and neighborhood safe by complying with the minimum fire safe regulations.

Your property was recently inspected by the Santa Clara County Fire Department on <<Inspection date>>. At that time, the following items were identified to bring your property into compliance with the enforced Wildland Fire Safety Regulations. The noted corrections are listed below:
<<Violations>>
<<Inspector comments>>
Please ensure that your property satisfies the requirements above, then contact the Fire Prevention Division of the Santa Clara County Fire Department at 408.341.4420 or email [email protected] to schedule a re-inspection. If your property re-inspection is not scheduled before May 15, 2023, the Santa Clara County Fire Department will conduct an independent re-inspection of your property to determine compliance status.

You have the option to complete the required work yourself or hire your own contractor.

For information about brush and weed abatement services, call 408.282.3145 or visit WeedAbatement.SCCgov.org.

All properties must comply with the enforced Wildland Fire Safety Regulations before June 1, 2023. After June 1st, properties identified by the Fire Department as being non-compliant with the Wildland Fire Safety Regulations will be referred to your city/town for mandatory abatement.

The local authority will make a declaration identifying properties with hazardous conditions and may hold a public hearing. At that time, if your property has been identified as non-compliant, you will be notified.
<<Date>>
RE: APN: <<APN>> / <<Property Address>>
<<Owner Name>>
<<Owner Address>>
<<Owner City>>, <<Owner State>> <<Owner ZIP Code>>
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If you have questions about this notice, please contact the Fire Prevention Division of the Santa Clara County Fire Department at 408.341.4420 or email [email protected].

Thank you for your cooperation in helping to establish a fire resilient community. 52 CC 05-16-2023
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CITY OF CUPERTINO
Agenda Item
23-12271 Agenda Date: 5/16/2023
Agenda #: 4.

Subject: Consider accepting the City's Investment Policy Adopt Resolution No. 23-054 accepting the City's Investment Policy CITY OF CUPERTINO Page 1 of 1 Printed on 5/10/2023
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CITY COUNCIL STAFF REPORT
Meeting: May 16, 2023
Subject
Consider accepting the City's Investment Policy
Recommended Action
Adopt Resolution No. 23-XXX accepting the City's Investment Policy Reasons for Recommendation
Background
To ensure the City's investment policy is up-to-date and aligned with its investment objectives, the Audit Committee conducts an annual review before presenting it to the City Council. City Council approved the current City Investment Policy on May 19, 2022. The Audit Committee reviewed and accepted a revised Investment Policy on April 24, 2023, which will be considered for City Council adoption on May 16, 2023.

The investment policy is the foundation of the City's investment goals and priorities. It can help protect the City's assets if it is carefully researched, effectively drafted, and regularly reviewed to assure that it continues to meet the City's investment objectives.

The existence of an approved investment policy demonstrates that the City is performing its fiduciary responsibilities, thereby inspiring trust and confidence among the public that it serves.

The policy also provides guidance on the proper management of the City's temporary idle cash, outlining protocols to maximize cash efficiency.

California Government Code (Code) section 53646(a)(2) states:
[T]he treasurer or chief fiscal officer of the local agency may annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting. Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting.
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Assembly Bill 2853 (Chapter 889, Statutes of 2004) amended section 53646(a)(2) to make presentation of the investment policy to the City Council optional. While no longer required by Code, the City annually presents the investment policy to the Audit Committee before submitting it to City Council for approval.

Chandler Asset Management
In FY 2018-19, the City conducted a Request for Proposal (RFP) for investment management services and selected Chandler Asset Management. Under the City's Treasurer's direction, Chandler Asset Management manages the City's investment portfolio in accordance with the City's investment objectives. The City's investment objectives, in order of priority, are to provide:
 Safety to ensure the preservation of capital in the overall portfolio  Sufficient liquidity for cash needs
 A market rate of return consistent with the investment program The performance objective is to earn a total rate of return through a market cycle equal to or above the return on the benchmark index. To achieve the objective, Chandler Asset Management invests in high-quality fixed-income securities consistent with the City's investment policy and Code.

Investment Policy Review
Chandler Asset Management reviewed the City's investment policy. The review of the policy focused on compliance with the statutes of Code that govern the investment of public funds, as well as on the inclusion of current best practices.

The proposed policy incorporates revisions to address an amendment to Government Code section 53601, consistent with the recommendation made by Chandler Asset Management. Pursuant to Senate Bill 1489, effective January 1, 2023, the Code specified that an investment’s term or remaining maturity shall be measured from the settlement date to final maturity rather than from the trade date. The Maximum Maturities and Mitigating Market Risk in the Portfolio sections of the policy have been revised to incorporate those changes.

Sustainability Impact
No sustainability impact.

Fiscal Impact
No fiscal impact.

California Environment Quality Act
Not applicable.
_____________________________________
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Prepared by: Thomas Leung, Budget Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services and City Treasurer Approved for Submission by: Matt Morley, Assistant City Manager Attachments:

A – Draft Resolution
B – Investment Policy - Redline
C – Investment Policy - Clean
D – Chandler Investment Policy Statement Review Memo
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RESOLUTION NO. 23-________

A RESOLUTION OF THE CUPERTINO CITY COUNCIL ACCEPTING THE

CITY INVESTMENT POLICY
WHEREAS, the City has available funds to invest in accordance with principles of sound treasury management; and
WHEREAS, the City invests funds in accordance with provisions of California Government Code Section 53600 et seq.; and
WHEREAS, the California Government Code requires a statement of investment policy to be reviewed and adopted by the City Council on at least an annual basis; and
WHEREAS, the City’s Audit Committee reviewed and accepted the attached City Investment Policy on April 24, 2023.

NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby accept the attached City Investment Policy dated May 16, 2023.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 16th day of May, 2023, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
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Resolution No. __________________

Page 2 ends

________
Kirsten Squarcia, City Clerk
________________________
Date
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City Investment Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:

May 16, 2023May 19, 2022
Responsible Department:

Administrative Services
Related Policies & Notes:

Pension Investment Policy, OPEB Investment Policy
POLICY
Under authority granted by the City Council, the City Treasurer and Deputy Treasurer are responsible for investing the surplus funds of the City.

The investment of the funds of the City of Cupertino is directed to the goals of safety, liquidity and yield. The authority governing investments for municipal governments is set forth in the California Government Code, Sections 53600 et seq.

The primary objective of the investment policy of the City of Cupertino is SAFETY OF PRINCIPAL. Investments shall be placed in those securities as outlined by type and maturity sector in this document. Effective cash flow management and resulting cash investment practices are recognized as essential to good fiscal management and control. The City’s portfolio shall be designed and managed in a manner responsive to the public trust and consistent with state and local law. Portfolio management requires continual analysis and as a result the balance between the various investments and maturities may change in order to give the City of Cupertino the optimum combination of necessary liquidity and optimal yield based on cash flow projections.

SCOPE
The investment policy applies to all financial assets of the City of Cupertino as accounted for in the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this document focus on the City of Cupertino’s pooled, surplus funds, but will also apply to all other funds under the City Treasurer’s span of control unless specifically exempted by statute or ordinance. This policy is applicable, but not limited to all funds listed below:
 General Fund
 Special Revenue Funds
 Capital Project Funds
 Enterprise Funds
 Internal Service Funds
 Trust and Agency Funds
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 Any new fund unless specifically exempted
Investments of bond proceeds shall be governed by the provisions of the related bond indentures and/or cash flow requirements and therefore may extend beyond the maturity limitations as outlined in this document. Other post‐employment benefit (OPEB) and Pension trust investments are governed by California Government Code Sections 53620 through 53622 and trust documents.

The trusts are governed by separate investment policies entitled Investment Policy Statement City of Cupertino Investment Trust that were reviewed by the City of Cupertino Audit Committee on September 27, 2021 and October 245, 20221 and City Council on December 67, 20221.

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 diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
It is the City’s intent, at the time of purchase, to hold all investments until maturity to ensure the return of all invested principal dollars. However, it is realized that market prices of securities will vary depending on economic and interest rate conditions at any point in time. It is further recognized that in a well‐diversified investment portfolio, occasional measured losses are inevitable due to economic, bond market, or individual security valuation fluctuations. These occasional losses must be considered within the context of the overall investment program objectives and the resultant long‐term rate of return. The City Treasurer and Deputy Treasurer, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, shall be relieved of personal responsibility and liability for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments.

OBJECTIVES
The primary objectives, in order of priority, of the City of Cupertino’s investment activities shall be:
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A. Safety of Principal
Safety of principal is the foremost objective of the City of Cupertino. Investments will be undertaken in a mannerthat 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.

B. Liquidity
The City’s investment portfolio will remain sufficiently liquid to meet all operating requirements which might be reasonably anticipated and provide the City with adequate cash flows to pay its obligations overthe next six months. Additionally, the portfolio should consist largely of securities with active secondary resale markets.

C. Return
The City’s investment portfolio shall be designed with the objective of attaining a rate of return throughout budgetary and economic cycles, commensurate with Cupertino’s investment risk constraints and cash flow characteristics of the portfolio.

MAXIMUM MATURITIES
Maturities of investments will be selected based on liquidity requirements to minimize interest rate risk and maximize earnings. Investment of surplus funds shall comply with the maturity limits as set forth in the California Government Code 53600, et seq. Where this section does not specify a limitation on the term or remaining maturity at the time of the investment, no investment shall be made in any security that at the time of the investment has a term remaining to maturity in excess of five years from date of trade settlement, unless the Council has granted express authority to make that investment either specifically or as a part of an investment program approved by the Council no less than three months prior to the investment. Reserve funds may be invested in securities exceeding five years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds.

PERFORMANCE EVALUATION
Investment performance is continually monitored and evaluated by the City Treasurer.

Investment performance statistics and activity reports are generated on a quarterly basis for presentation to the oversight (audit) committee, City Manager and City Council. Yield on the City’s investment portfolio is of secondary importance compared to the safety and liquidity objectives described above. The City’s investment portfolio shall be designed to attain a market average rate of return through economic cycles. The Treasurer shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the Treasurer’s quarterly report. The Treasurer shall select an appropriate, readily available index to use as a market benchmark. Whenever possible, and consistent with risk limitations as defined herein and prudent investment principles, the Treasurer shall seek to augment return above the market average rate of return. The City may select alternative benchmarks for identified pools of City funds that have different objectives.

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DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from California Government Code, Sections 41006 and 53600 et seq. The Treasurer is responsible for investment management decisions and activities per City Council Resolution.

The Treasurer shall designate a staff person as a liaison/deputy in the event circumstances require timely action and the Treasurer is not present.

No officer or designee may engage in an investment transaction except as provided under terms of this policy and the procedures by the Treasurer and approved by the City Manager/Council.

The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.

If an investment adviser is retained by the City, the investment adviser, registered under the Investment Advisers Act of 1940, must have at least five yearsʹ experience investing in the securities and obligations authorized by California Government Code 53601 subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, and with assets under management in excess of five hundred million dollars ($500,000,000). 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.

OVERSIGHT COMMITTEE
An audit committee consisting of appropriate internal and external members, appointed by the City Council, shall be established to provide general oversight and direction concerning the policies related to management of the City’s investment pool, OPEB trust, and Pension Rate Stabilization Program trust. The City Treasurer shall serve in a staff and advisory capacity. The committee shall meet at least quarterly to review policy changes, new legislation and portfolio status.

ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program, or impairs their ability to make impartial investment decisions. Additionally the City Treasurer and the Deputy Treasurer are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC).

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SAFEKEEPING OF SECURITIES
To protect against fraud or embezzlement or losses caused by collapse of an individual securities dealer, all securities owned by the City shall be held in safekeeping by a third party custodian acting as agent for the City under the terms of a custody agreement. All trades executed by a dealer will settle delivery versus payment (DVP) through the City’s safekeeping agent. In order to verify investment holdings, an external auditor, on an annual basis, shall independently verify securities held in custody for the City. Additionally, the City Treasurer shall include a listing of holdings provided by the City’s custodian to the quarterly investment report as verification between annual reviews by the external auditor.

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) money mutual funds, since the purchased securities are not deliverable. All other exceptions to this safekeeping policy must be approved by the City Treasurer in written form and included in the quarterly report to City Council.

INTERNAL CONTROL
Separation of duties between the Treasurer’s function and Finance is designed to provide proper internal controls to prevent the potential for converting assets or concealing transactions. Dual transaction controls, separate and independent notifications, and reports provided by financial institutions shall be used to help implement these controls.

Wire transfers shall be approved prior to being submitted to the financial institution. Wire transfers initiated by Treasury staff must be reconfirmed by the appropriate financial institution to Finance staff. Proper documentation is required for each investment transaction and must include a broker trade confirmation and a cash disbursement wire transfer confirmation. Timely bank reconciliation is conducted to ensure proper handling of all transactions. The investment portfolio and all related transactions are reviewed and balanced to appropriate general ledger accounts by Finance staff on a monthly basis.

An annual agreed‐upon procedures engagement in accordance with the attestation standards established by the American Institute of Certified Public Accountants shall be conducted by an auditor solely to assist management in determining the City’s compliance with this investment policy. At the conclusion of such engagement, the agreed‐upon procedures report detailing all procedures performed and findings noted (if applicable) shall be provided to the Audit Committee of the City.

REPORTING
Monthly transaction reports will be submitted by the Treasurer to the City Council within 30 days of the end of the reporting period in accordance with California Government Code Section 53607. 63 CC 05-16-2023
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The City Treasurer shall also prepare a quarterly investment report, including a succinct management summary that provides a clear picture of the status of the current investment portfolio. The report will be prepared in a manner that will report all information required under this policy and as recommended by California Government Code. The Treasurer will submit the report to Council no later than the second regular council meeting, or approximately 45 days following the end of the quarter covered by the report.

AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND QUALIFIED

BROKER/DEALERS
To the extent practicable, the Treasurer shall endeavor to complete investment transactions using a competitive bid process whenever possible. The City’s Treasurer 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 Treasurer 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 Agency investing and able to meet all of their financial obligations. These institutions may include ʺprimaryʺ 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:
 Primary government dealers as designated by the Federal Reserve Bank and non‐primary 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 Treasurer 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 Treasurer 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. 64 CC 05-16-2023
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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.

COLLATERAL REQUIREMENTS
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.
 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.

AUTHORIZED INVESTMENTS
Investment of City funds is governed by the California Government Code Sections 53600 et seq. Within the context of the limitations, the following investments are authorized, subject to the restrictions 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.
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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. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio that can be invested in this category, although a five‐ year maturity limitation is applicable.

2. Obligations issued by 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 Agency or Government‐Sponsored Enterprises (GSEs), provided that:
 No more than 25% of the portfolio may be invested in any single Agency/GSE issuer.
 The maximum maturity does not exceed five (5) years.
 The maximum percent of agency callable securities in the portfolio will be 20%.

3. Banker’s Acceptances (bills of exchange or time drafts drawn on and accepted by commercial banks) may not exceed 180 days to maturity or 40% of the portfolio.  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 5% of the portfolio may be invested in any single issuer.

4. Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, may be used up to the maximum permitted by California state law.

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 Treasurerto adequately judge the risk inherent in LAIF’s portfolio..

5. Commercial paper issued by corporations organized and operating in the United States having assets in excess of $500,000,000, ranked “A‐1” or its equivalent or better by at least one Nationally Ranked Statistical Rating Organization (NRSRO), issued by corporations which have long‐term obligations rated in a rating category of “A” or its equivalent or better by one NRSRO.

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represent more than 10% of the outstanding paper of the issuing corporation.

Purchases of commercial paper may not exceed 25% of the portfolio. Under a provision sunsetting on January 1, 2026, no more than 40% of the City’s portfolio may be invested in Commercial Paper if the City’s investment assets under management are greater than $100,000,000. No more than 10% of the total investments may be invested the in commercial paper and medium term notes of any single issuer.

6. Negotiable Certificates of Deposits issued by nationally or state‐chartered banks, state or federal savings associations, or state or federal credit unions, or by a federally licensed or state‐licensed branch of a foreign bank. Purchases of Negotiable Certificates of Deposit may not exceed 30% of the portfolio. No more than 5% of the portfolio may be invested in any single issuer. A maturity limitation of five years is applicable. 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.

7. Repurchase agreements that specify terms and conditions may be transacted with banks and broker dealers. The maturity of the repurchase agreements shall not exceed one year.

The market value of the securities used as collateral for the repurchase agreements shall be monitored by the investment staff and shall not be allowed to fall below 102% of the value of the repurchase agreement. A PSA Master Repurchase Agreement is required between the City of Cupertino and the broker/dealer or financial institution for all repurchase agreements transacted.

8. Reverse repurchase agreements are not authorized.

9. Certificates of Deposit (time deposits), non‐negotiable and collateralized in accordance with the California Government Code, may be purchased through banks, savings and loan associations, or credit unions. Within a limit of 30% of the portfolio, these institutions may use a private sector entity to assist in the placement of the time deposits under the conditions specified by the Government Code.

10. Medium Term Corporate Notes issued by corporations organized and operating in the United States or by depository institutions licensed by the United States or any state and operating within the United States, with a maximum maturity of five years may be purchased. Securities eligible for investment shall be rated in the rating category of “A” or better by at least one NRSRO. Purchase of medium term note s may not exceed 30% of the portfolio. No more than 10% of the total investments may be invested in the commercial paper and medium term notes of any single issuer.

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local agency 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 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.

12. 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, agency, 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.

13. Asset‐backed, mortgage‐backed, mortgage pass‐through securities, and collateralized mortgage obligations, provided that:
 The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
 No more than 20% 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. There is no issuer limitation on any Mortgage security where the issuer is the US Treasury or a Federal Agency/GSE.  The maximum legal final maturity does not exceed five (5) years.

14. 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 30% of the total portfolio may be invested in these securities.  No more than 10% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.
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15. Various daily money market funds administered for or by trustees, paying agents and custodian banks contracted by the City of Cupertino may be purchased as allowed under State of California Government Code. Only funds holding U.S. Treasury obligations, Government agency obligations, or repurchase agreements collateralized by U.S.

Treasury or Government agency obligations can be utilized and may not exceed 20% of the cost value of the portfolio.

16. Ineligible investments are those that are not described herein, including but not limited to, common stocks and long‐term (over five years in maturity) notes and bonds are prohibited from use in this portfolio. It is noted that special circumstances arise that necessitate the purchase of securities beyond the five‐year limitation. On such occasions, requests must be approved by City Council prior to purchase. Additionally:
 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 zero‐ or negative‐interest accrual if held to maturity are permitted.  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 use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
 The purchase of foreign currency denominated securities is prohibited.

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 are 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 69 CC 05-16-2023
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response to market conditions or City’s risk preferences.  If the credit ratings of any security owned by the City are downgraded to a level below the quality required by this investment policy, it will be the City’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio.
 If a security is downgraded, the Treasurer will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors.
 If a decision is made to retain a downgraded security in the portfolio, its presence in the portfolio will be monitored and reported monthly 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 as measured from trade settlement date, except as otherwise stated in this policy.
 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.

DEPOSITS
To be eligible to receive local agency money, a bank, savings association, federal association, or federally insured industrial loan company shall have received an overall rating of not less than “satisfactory” in its most recent evaluation by the appropriate federal financial supervisorial agency of its record of meeting the credit needs of California’s communities. 70 CC 05-16-2023
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INTEREST EARNINGS
All moneys earned and collected from investments authorized in this policy shall be allocated monthly to various fund accounts based on the cash balance in each fund as a percentage of the entire pooled portfolio.

REVIEW OF INVESTMENT PORTFOLIO
The Treasurer 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.

POLICY REVIEW
The City of Cupertino’s investment policy shall be adopted by resolution of the City Council on an annual basis. This investment policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of principal, liquidity, and yield, and its relevance to current law and financial and economic trends.

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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 Freddie Mac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “Fannie Mae,” issues discount notes, bonds and mortgage pass‐through securities.

GNMA. The Government National Mortgage Association, known as “Ginnie Mae,” 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.

ASKED. The price at which a seller offers to sell a security.

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.

BID. The price at which a buyer offers to buy a security. 72 CC 05-16-2023
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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 his 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 since an issuer issues securities, it will likely call its current securities and reissue them at a lower rate of interest. Callable securities have reinvestment risk as the investor may receive its principal back when interest rates are lower than when the investment was initially made.

CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs may be marketable.

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 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.

COMMERCIAL PAPER. The short‐term unsecured debt of corporations.

COST YIELD. The annual income from an investment divided by the purchase cost. Because it does not give effect to premiums and discounts which may have been included in the purchase cost, it is an incomplete measure of return.

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.

CURRENT YIELD. The annual income from an investment divided by the current market value.

Since the mathematical calculation relies on the current market value rather than the investor’s cost, current yield is unrelated to the actual return the investor will earn if the security is held to maturity.

DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position.

DEBENTURE. A bond secured only by the general credit of the issuer. 73 CC 05-16-2023
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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 bond to changes in interest rates. (See modified duration).

FEDERAL FUNDS RATE. The rate of interest charged by banks for short‐term loans to other banks. The Federal Reserve Bank through open‐market operations establishes it.

FEDERAL OPEN MARKET COMMITTEE. A committee of the Federal Reserve Board that establishes monetary policy and executes it through temporary and permanent changes to the supply of bank reserves.

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 AGENCY INVESTMENT FUND (LAIF). 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. Investment pools that range from the State Treasurer’s Office Local Agency 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 74 CC 05-16-2023
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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 investoris compensated, or ʺmade whole.ʺ 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.

MARKING TO MARKET. The process of posting current market values for securities in a portfolio.

MATURITY. The final date upon which the principal of a security becomes due and payable.

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.

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 agency that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investmentʹs 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 Moodyʹs. 75 CC 05-16-2023
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NEGOTIABLE 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 and are payable upon order to the bearer or initial depositor (investor).

PREMIUM. The difference between the par value of a bond and the cost of the bond, when the cost is above par.

PREPAYMENT SPEED. A measure of how quickly principal is repaid to investors in mortgage securities.

PREPAYMENT WINDOW. The time period over which principal repayments will be received on mortgage securities at a specified prepayment speed.

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.” REALIZED YIELD. The change in value of the portfolio due to interest received and interest earned and realized gains and losses. It does not give effect to changes in market value on securities, which have not been sold from the portfolio.

REGIONAL DEALER. A financial intermediary that buys and sells securities for the benefit of its customers without maintaining substantial inventories of securities and that is not a primary dealer.

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.

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 ʺdual index floaters,ʺ 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.
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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 T‐bills 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.

VOLATILITY. The rate at which security prices change with changes in general economic conditions or the general level of interest rates.

YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.

Director of Administrative Services’ signature: _______________________________ Date: _______________________________
City Manager’s signature: _______________________________ Date: _______________________________
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Revisions:
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City Investment Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:

May 16, 2023
Responsible Department:

Administrative Services
Related Policies & Notes:

SCOPE
The investment policy applies to all financial assets of the City of Cupertino as accounted for in the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this document focus on the City of Cupertino’s pooled, surplus funds, but will also apply to all other funds under the City Treasurer’s span of control unless specifically exempted by statute or ordinance. This policy is applicable, but not limited to all funds listed below:
 General Fund
 Special Revenue Funds
 Capital Project Funds
 Enterprise Funds
 Internal Service Funds
 Trust and Agency Funds
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 Any new fund unless specifically exempted
Investments of bond proceeds shall be governed by the provisions of the related bond indentures and/or cash flow requirements and therefore may extend beyond the maturity limitations as outlined in this document. Other post‐employment benefit (OPEB) and Pension trust investments are governed by California Government Code Sections 53620 through 53622 and trust documents.

The trusts are governed by separate investment policies entitled Investment Policy Statement City of Cupertino Investment Trust that were reviewed by the City of Cupertino Audit Committee on October 24, 2022 and City Council on December 6, 2022.

OBJECTIVES
The primary objectives, in order of priority, of the City of Cupertino’s investment activities shall be:
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A. Safety of Principal
Safety of principal is the foremost objective of the City of Cupertino. Investments will be undertaken in a mannerthat 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.

PERFORMANCE EVALUATION
Investment performance is continually monitored and evaluated by the City Treasurer.

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The Treasurer shall designate a staff person as a liaison/deputy in the event circumstances require timely action and the Treasurer is not present.

No officer or designee may engage in an investment transaction except as provided under terms of this policy and the procedures by the Treasurer and approved by the City Manager/Council.

The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.

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REPORTING
Monthly transaction reports will be submitted by the Treasurer to the City Council within 30 days of the end of the reporting period in accordance with California Government Code Section 53607. 83 CC 05-16-2023
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The City Treasurer shall also prepare a quarterly investment report, including a succinct management summary that provides a clear picture of the status of the current investment portfolio. The report will be prepared in a manner that will report all information required under this policy and as recommended by California Government Code. The Treasurer will submit the report to Council no later than the second regular council meeting, or approximately 45 days following the end of the quarter covered by the report.

AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND QUALIFIED

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. 84 CC 05-16-2023
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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.

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.
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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.

4. Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, may be used up to the maximum permitted by California state law.

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represent more than 10% of the outstanding paper of the issuing corporation.

7. Repurchase agreements that specify terms and conditions may be transacted with banks and broker dealers. The maturity of the repurchase agreements shall not exceed one year.

8. Reverse repurchase agreements are not authorized.

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local agency 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 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.

Treasury or Government agency obligations can be utilized and may not exceed 20% of the cost value of the portfolio.

The diversification requirements included in the “Authorized Investments” section of this policy are 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 89 CC 05-16-2023
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response to market conditions or City’s risk preferences.  If the credit ratings of any security owned by the City are downgraded to a level below the quality required by this investment policy, it will be the City’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio.
 If a security is downgraded, the Treasurer will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors.
 If a decision is made to retain a downgraded security in the portfolio, its presence in the portfolio will be monitored and reported monthly to the City Council.

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