Emeryville City Council
June 7, 2022

population growth and the change in the California per capita personal income factor is higher than the change in Alameda County’s Consumer Price Index. Based on this calculation, the City’s appropriations limit for FY2022-23 is $132,398,346.

DISCUSSION
Establishing an appropriations limit is a state law requirement that all cities must adopt at the beginning of each fiscal year at a regularly scheduled city council meeting.

PREPARED BY: Brad Farmer, Finance Director

APPROVED AND FORWARDED TO THE
CITY COUNCIL OF THE CITY OF EMERYVILLE:

Christine Daniel, City Manager
Attachments:

1. Draft Resolution
Appendix A – Gann Appropriations Limit Calculation FY 2022-23 218
RESOLUTION NO. _____
Resolution Of The City Council Of The City Of Emeryville Adopting An Appropriations Limit For The 2022-23 Fiscal Year Of $132,398,346 WHEREAS, pursuant to Article XIIIB of the California Constitution, the City of Emeryville is required to annually adopt an Appropriations Limit for the following fiscal year identifying the limit for appropriation of revenues from tax proceeds; and WHEREAS, the City Council must annually identify the population and inflation adjustment factors utilized to calculate the Appropriations Limit; and WHEREAS, the calculation of the Appropriations Limit is shown in Appendix A; now, therefore, be it

RESOLVED, that the City Council of the City of Emeryville hereby determines the adjustment factors used for calculation of the 2022-23 Fiscal Year Appropriations Limit is as follows:

1. Population: City population growth from January 1, 2021 to January 1, 2022 of

1.1%.

2. Inflation: California Per Capita Personal Income growth of 7.55%; and, be it, further RESOLVED, that the City Council of the City of Emeryville hereby establishes an Appropriations Limit for the 2022-23 fiscal year of $132,398,346.

ADOPTED, by the City Council of the City of Emeryville at a regular meeting held Tuesday, June 07, 2022, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

MAYOR

ATTEST: APPROVED AS TO FORM:

CITY CLERK CITY ATTORNEY
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City of Emeryville Fiscal Year 2021-22
Gann Appropriations Limit Calculations
City Population County Population
Change Change
Population Change as of January 1, 2021 1.10% A -0.40% A Per Capita Consumer
Change Price Index
Cost of Living FY 2021-22 7.55% B 3.20% C
FY 20-21 Gann Limit Growth Factor
1 + Larger of County and City Population 101.10%
1 + Larger of Per Capita Change and
12-Month Change in CPI for County x 107.55%
INCREASE in City's Appropriations Limit for FY 2021-22 1.087331 FY 2020-21 Appropriations Limit 121,764,528 $ D
Growth Factor x 1.087331
FY 2021-22 APPROPRIATIONS LIMIT 132,398,346 $
Notes:

C - Bureau of Labor Statistics CPI, 2021 Avg Change - SF Area (includes Alameda County) D - FY2020-21 General Fund Appropriations Limit as adopted by City Council A - California Department of Finance Population Estimate for Cities, Counties, and State, Dated May, 2021
B - California Department of Finance Letter - Price Factor and Population Information, Dated May, 2021
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CITY OF EMERYVILLE

COMMERCIAL PROPERTY TRANSFER TAX POLICY
Purpose
The purpose of this policy is to provide guidance for the allocation of commercial property transfer tax revenue to ensure proper funding for capital projects, pension obligations, and other important city projects.

Background
The City received a portion of the County real estate transfer tax ($0.55 per $1,000 of sale) prior to January 1, 2015. The passage of Measure V in November 2014 enabled the City to collect $12 per $1,000 of property value per transaction. Revenue from this source is dependent on the level of real estate activity in the City.

Allocation to Capital Improvement Program
On June 21, 2016, as part of the 2016-18 budget adoption the City Council approved a policy committing revenues from “commercial” real estate transfer tax to support the City’s capital program. Commercial property transfer tax is unpredictable and specific projects can be phased to match the timing when this revenue is realized. In some years, commercial property transfer tax may exceed budgeted revenue resulting in excess funds.

Allocations to Pension Reserve/Trust and Other Discretionary Projects Pension costs are expected to increase significantly in the future due to CalPERS discount rate reductions and shorten amortization periods. Key actuarial assumptions such as retirement formula, annual payroll growth, projected investment returns, retirement age, and retiree life expectancy may also impact the City’s unfunded pension liabilities.

The City is committed to funding its pension obligations and have established a Pension Reserve/Trust to prefund its pension liabilities. The City desires to contribute excess commercial property transfer tax to the Pension Reserve/Trust.

In a two-year budget cycle, if the commercial property transfer tax revenue exceeds the budget, including budget adjustments made during that budget cycle, 50% of the excess funds shall be allocated either 221
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toward the annual contribution payments of the City’s pension costs or to the Pension Reserve/Trust, and the remaining 50% shall be allocated to any one-time expenditures based on City Council direction.

The Finance Department shall calculate the excess funds after the City’s annual audit and Comprehensive Annual Financial Report have been published. Before funding pension costs and other one-time expenditures, the Finance Department shall review the fund balance in the Capital Project Fund to ensure resources are available to fund capital projects. In some budget cycles, actual revenues may be lower than budgeted revenues resulting in a funding deficiency. Allocations shall be adjusted accordingly before submitting budget adjustments/projects to City Council for consideration.

For example, if the amount of excess funds is $1,000,000 from a budget cycle and the funding deficiency is $200,000 from a prior budget cycle, the amount that is available for allocation is $800,000, including $400,000 for pension costs and $400,000 for other one-time expenditures.

Conclusion
The Commercial Property Transfer Tax Policy ensures adequate funding for the City’s Capital Improvement Program, pension liabilities, and other important city projects.
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CALIFORNIA
TITLE: Debt Management Policy
REFERENCE: Government Code Section 8855
Senate Bill 1029 (SB 1029)
DATE: September 2017
I. INTRODUCTION
Background:

On September 12, 2016, the Governor signed Senate Bill (“SB 1029”) which requires California public agencies to adopt comprehensive written debt management policies. Therefore, the policies set forth in this Debt Management Policy (the “Policy”) have been developed to provide clear and comprehensive guidelines for the issuance and financial management of the debt portfolio of the City of Emeryville, the Emeryville Public Financing Authority, and the Successor Agency to the Emeryville Redevelopment Agency. The term “City” shall refer to each of such entities. This Policy addresses the basic areas and provides guidance concerning best practices as recommended by the Government Finance Officer Associates (GFOA). This Policy is intended to comply with Government Code Section 8855(i), which became effective January 1, 2017.

Section 8855(i) was added via SB 1029. This policy should also reflect local, state, and federal laws and regulations. The Policy should not be so restrictive that it limits or interferes with the City’s day to day operations and ability to provide services to its public. Decisions made are done with the proper authorization and sound financial management practices that benefit the City with minimal risk.

Purpose and Goals:

The purpose of the Policy is to provide a functional tool for debt management and capital planning, as well as to enhance the City’s ability to manage its debt obligations and lease financings (collectively referred to as “debt” in this Policy) in a conservative and prudent manner.

The Policy is also designed to:
 Establish parameters for issuing and managing debt;
 Provide guidance to decision makers related to debt affordability standards;  Direct the pre- and post-issuance objectives to be achieved by staff;  Promote objectivity in the debt approval decision making process; and  Facilitate the actual financing process by establishing important policy decisions in advance.

The City shall pursue the following goals:
 Minimize debt service and issuance costs;
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September 2017

 Maintain access to cost-effective borrowing;
 Achieve the highest possible credit rating;
 The City shall take all practical precautions and proactive measures to avoid any financial decision that will negatively impact current credit ratings on existing or future debt issues.
 The City shall match the term of the issue to the useful lives of assets whenever practicable and economical, while considering repair and replacement costs of those assets to be incurred in the future.
 The City shall, when planning for the sizing and timing of debt issuance, consider its ability to expend the funds obtained in a timely, efficient and economical manner.

II. SCOPE
The guidelines established by this Policy will govern the issuance and management of all debt funded for short and long term capital financing needs and cash flow needs. The Finance Department recognizes that changes in the capital markets and other unforeseen circumstances may require exception to this Policy, for which approval from the City Council will be necessary for implementation. The Policy may be amended by the City Council as it deems appropriate from time to time in the prudent management of the debt of the City. Any approval of debt by the City Council that is not consistent with this Policy shall constitute a waiver of this Policy.

III. DELEGATION OF AUTHORITY
The Finance Director shall be responsible for all of the financial affairs of the City. This Policy grants the Finance Director the authority to select the financing team, which may include, but not limited to, municipal advisor, bond counsel, disclosure counsel, underwriter, financial advisor, and trustee/fiscal agent. The Finance Director will also coordinate the administration and issuance of debt, communicate with the rating agencies, as well as to fulfill all the pre-issuance and postissuance disclosure information.

Former Redevelopment Agency – As of February 1, 2012, the Emeryville Redevelopment Agency was dissolved and the City assumed the responsibility of winding the operations as the Successor Agency. The passage of AB X1 26 outlined terms that required the Successor Agency to administer the outstanding debt obligations, including debt service, reserves, and other obligations under the bond indentures. This Policy extends to the outstanding bonds and future issuance of debt administered by the Successor Agency.

IV. DEBT TERMS
The City Council recognizes that new debt obligations may impact the long-term affordability of all outstanding debt and any future planned debt, as well as budgetary impacts associated with the maintenance and operating costs of debt-financed facilities.

Term of Debt – Debt will be structured for the shortest period possible, consistent with a fair allocation of costs to current and future beneficiaries or users. Debt shall not be issued for a term that exceeds the useful life of the debt-financed asset.

Debt Repayment – The City should determine the source of revenue for debt service payments and the purposes that it may be pledged. Typically, the City desires level debt service payments over the term of the debt. However, the cost of capital, financial risk, current economic conditions, 224
Debt Management Policy
September 2017

future financial flexibility, credit rating and available cash flow will be evaluated to determine the most appropriate method of debt amortization for each debt issue.

Bond Maturity – No bonds shall be issued with a maturity date greater than the expected useful life of the facilities or improvements being financed.

Interest Rate Structure – The City will issue securities on fixed or variable interest rates, whichever will be most beneficial to the City.

Debt Service Reserve Fund – Debt service reserve funds are held by the Trustee to make principal and interest payments to bondholders in the event the pledged revenues are insufficient to do so. The City will fund debt service reserve funds when it is in the City’s overall best financial interest.

Call Options / Redemption Provisions – A call option or optional redemption provision gives the City the right to prepay or retire debt prior to its stated maturity date. This option may permit the City to achieve interest savings in the future through the refunding of the bonds. The Finance Director shall evaluate and recommend the use of a call option on a case by case basis.

Debt Limits – The City is subject to debt capacity limit for its general obligation bonds: 3.75% of assessed value. California Government Code Section 43605 states the City shall not incur bonded indebtedness payable from the proceeds of property tax which exceeds 15 percent of the assessed value of all real and personal property of the City. When taking into account the provisions of Article XIIIA, Section 1(a) of the California Constitution, the Emeryville debt limit should be read as 3.75% of assessed value.

V. TYPES OF DEBT
Long-term debt – Long-term debt may be used to finance the acquisition or improvement of land, infrastructure, facilities or equipment for which it is appropriate to spread the costs of such over more than one budget year. Long-term debt may be used to fund capitalized interest, cost of issuance, required reserves and any other financing related costs that may be legally capitalized.

Long-term debt should not be used to fund City operating costs.

Short-term debt – Short-term debt will be considered as an interim source of funding in anticipation of long-term debt. Short-term debt may be issued for any purpose for which long-term debt may be issued, including capitalized interest and financing-related costs. Short-term debt is also appropriate to address legitimate short-term cash flow requirements during a given fiscal year to fund the operating costs of the City to provide necessary public services. The City will not engage in short-term borrowing solely for the purpose of generating investment income.

Refunding – Refunding opportunities will be identified by periodic review of outstanding debt obligations. Refunding will be considered when there is a net economic benefit from the refunding.

Non-economic refunding may be undertaken to achieve City objectives relating to changes in covenants, call provisions, operational flexibility, tax status, issuer or other non-economic factors related to the debt.

The following are types of debt the City could issue, but not limited to:
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1. General Obligation (GO) Bonds - In California, GO Bonds require a supermajority voter approval. Most GO bonds are backed by the issuer’s ability to level ad valorem tax in amounts sufficient to meet debt service. Examples of projects include housing, libraries, parks, and public safety facilities.

2. Refunding Debt - Refunding debt is debt issued to refinance (refund) previously issued outstanding debt. The City may issue refunding debt to refinance the principal and interest on outstanding bonds or other debt to achieve debt service savings, restructure schedule debt service or convert from variable to fixed interest rate, change or modify the source(s) of payment and security for the funded debt, or modify covenants otherwise binding upon the City.

3. Revenue Debt - Revenue debt is generally issued for enterprise funds that are financially self-sustaining without the use of general fund revenue sources and therefore rely on the revenues collected by the enterprise fund to repay the debt.

4. Land-Secured Debt - Examples of land-secured debt include special tax revenue bonds issued under the Mello-Roos Community Facilities Act of 1982, as amended, and limited obligation bonds issued under applicable assessment statutes. Land-secured debt is payable from special taxes or assessments that the City will levy on the secured property tax roll.

5. Lease Financings - Lease revenue bonds, certificates of participation (also known as “COPs”) and lease-purchase transactions are examples of lease financings.

6. Tax and Revenue Anticipation Notes (TRAN) - A TRAN is issued when the City’s anticipated operating revenues are not available when the City’s operating expenses need to be paid, which is a common operational challenge for California cities given the irregular distribution of sales tax and property tax revenues.

7. Tax Increment Financings - Tax increment financing may be used to the extent available under California law.

8. Conduit Financings - The City may agree to provide conduit financing for specific public purposes, such as financings for affordable rental housing and qualified 501c3 organizations. In a conduit financing, the debt is typically repaid with non-City revenues.

9. Other Debt Obligations - Other revenue bonds, bond anticipation notes, grant anticipation notes, loans, lines of credit, and equipment lease financings.

The City may from time to time find that other forms of debt would be beneficial to further its public purposes and may approve such debt without an amendment of this Debt Policy.

VI. DEBT ISSUANCE
The City has the capacity to issue long and short-term debt and to refund any outstanding debt.

The following section details the purposes for debt issuance, the method of sale for such debt and the practices for obtaining professional assistance in the debt issuance process.

Purposes for which debt may be issued:
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 Capital Improvement Program (CIP) Projects: The Finance Department will work with other City departments to assess the City’s borrowing and capital needs, determining, if the availability of funds can be raised through debt for improvements to buildings, infrastructure and other systems, such as storm drains, sidewalks, etc. i. Debt shall only be issued for working capital for operations after cash flow analysis has determined that there is a mismatch between available cash and cash outflows.
ii. Working capital debt shall be repaid by the end of the fiscal year in which the debt was incurred.
 Vehicle and Equipment Needs: The City also maintains the vehicle and equipment needs for various departments such as public safety and information technology.

These assets have a minimum useful life of three years. Loans and capital leases can be executed to meet the needs of replacing such assets.

VII. ON-GOING DEBT ADMINISTRATION - MANAGEMENT AND MONITORING Once debt has been issued, management and monitoring debt activities is the responsibility of the Finance Director and the department. Adequate internal control procedures must be in place to ensure compliance with accounting/deb policies. Such activities include but are not limited to:
 Investment of Bond Proceeds: When governments issue bonds they deposit the bond proceeds in various funds, which may include a construction fund, debt service fund, capitalized interest fund, debt service reserve, or in the case of a refunding, an escrow fund. In some cases, these funds may be held by a third party trustee and are invested until used. Investments of these proceeds should be in compliance with the City’s investment policy, which should be disclosed and summarized in the Official Statement.
 Use of Debt Proceeds: The City shall be vigilant in using bond proceeds in accordance with the stated purpose at the time that such debt was issued. Whenever reasonably possible, proceeds of debt will be held by a third-party trustee and the City will submit written requisitions for such proceeds. The City will submit a requisition only after obtaining the signature of the City Manager/designee or the Finance Director/designee. Appropriate documentation and approval must be obtained before funds can be disbursed.
 Continuing Disclosure Compliance: The Finance Director or designee will ensure the City’s annual financial statements and associated reports comply with the Securities and Exchange Commission Rule 15c2-12 by filing the required disclosures and notices of enumerated events for the benefit of its bondholders on the Electronic Municipal Market Access (EMMA) website of the Municipal Securities Rulemaking Board (MSRB).
 Arbitrage Compliance for Tax-Exempt Debt: The use and investment of bond proceeds must be monitored to ensure compliance with arbitrage restrictions. Existing regulations require that issuers calculate rebate liabilities related to any bond issues, with rebates paid to the Federal Government every five years and as otherwise required by applicable provisions of the Internal Revenue Code and regulations. The Finance Director shall contract with a specialist to ensure that proceeds and 227
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investments are tracked in a manner that facilitates accurate complete calculations, and if necessary timely rebate payments.
 Compliance with Bond Covenants: In addition to financial disclosure and arbitrage, the City is also responsible for verifying compliance with all undertakings, covenants, and agreements of each bond issuance on an ongoing basis.
 Annual Reporting Requirement: The City shall submit an annual report to the California Debt and Investment Advisory Commission (CDIAC) for any issue of debt for which it has submitted a report of final sale on or after January 21, 2017. The annual report shall comply with the requirements of Government Code Section 8855 and related regulations.

VIII. DEBT MANAGEMENT POLICY REVIEW
The Finance Director shall review this Debt Management Policy at a minimum of every five (5) years or as required by law and recommend any changes to the City Manager and City Council. 228

CITY OF EMERYVILLE

RESERVE POLICIES
Updated July 1, 2016
Economic Uncertainty Fund
The purpose of the Economic Uncertainty fund is to provide the fiscal capacity to absorb one-time problems without disrupting day-to-day operations and services and for more systemic and ongoing problems, to take time needed to fully identify the impacts and develop and implement a thoughtful longer-term strategy.

The City shall maintain a target reserve of 50% of the General Fund annual operating budget. Appropriations are to be reserved for emergency situations and limited to one-time or short-term (one or two fiscal years) use. Examples of such emergencies include, but are not limited to:
 Unplanned, major event such as a catastrophic disaster requiring expenditures over 5% of the General Fund adopted budget  Economic uncertainties, local disasters and other hardships or downturns in the local economy.
 Budgeted revenue taken by another government entity
 Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget
Should the Economic Uncertainty fund be used and its level falls below the target amount of 50%, the goal is to replenish the fund within three fiscal years.

Undesignated General Fund
This reserve is considered primarily a working capital requirement, bridging the gap between the time expenses are paid and the time revenues are collected. Undesignated reserve balances will fluctuate from time to time and reflect annual operating results. This fund has no minimum threshold although sufficient balances are maintained to provide contingencies for unseen operating or capital needs and cash flow requirements. 229
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City of Emeryville CALIFORNIA

INVESTMENT POLICY
FISCAL YEAR 2020-2021
A view through “Solar Rose”, ©2001 Artist Roger Berry, Distronic Mirror on Stainless Steel, on display at the Emeryville Civic Center in the Glass Link, 1333 Park Avenue, Emeryville 253
Table of Contents
POLICY .............................................................................................................................. 1 SCOPE............................................................................................................................... 1 PRUDENCE ...................................................................................................................... 1 INVESTMENT OBJECTIVES ........................................................................................ 2 DELEGATION OF AUTHORITY ................................................................................... 2 ETHICS AND CONFLICTS OF INTEREST ................................................................. 3 AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS ................................. 3 AUTHORIZED AND SUITABLE INVESTMENTS ...................................................... 3 PROHIBITED INVESTMENTS ...................................................................................... 4 SUSTAINABLE AND RESPONSIBLE INVESTING .................................................. 5 COLLATERALIZATION ................................................................................................. 5 SAFEKEEPING AND CUSTODY ................................................................................. 5 FAIR VALUE MEASUREMENT AND APPLICATION .............................................. 6 DIVERSIFICATION AND OTHER GUIDELINES ....................................................... 6 PERFORMANCE STANDARDS ................................................................................... 7 REPORTING ..................................................................................................................... 7 ADOPTION ....................................................................................................................... 7 GLOSSARY ...................................................................................................................... 7 254
1 CITY OF EMERYVILLE

STATEMENT OF INVESTMENT POLICY
June 2020
POLICY
It is the policy of the City to invest public funds in a manner which will safely preserve portfolio principal, provide adequate liquidity to meet the City’s cash flow needs and optimize returns while conforming to all federal, state, and local statues governing the investment of public funds.

SCOPE
This investment policy applies to all cash and financial investments of the various funds of the City of Emeryville as reported in the City’s Comprehensive Annual Financial Report, with the exception of those financial assets explicitly excluded from coverage for legal or operational reasons. The provisions of the related bond indentures or resolutions shall govern investments of bond proceeds. City funds to which this policy applies are as follows:
 General Fund
 Special Revenue Funds
 Capital Projects Funds
 Debt Service Funds
 Internal Service Funds
 Enterprise Funds
 Fiduciary Funds
 Any new fund created by the City Council unless specifically exempted.

PRUDENCE
Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in management of their own affairs, not for speculation, but for investment considering the probable safety of their capital as well as the probably income to be derived.

The standard of prudence to be used by investment officials shall be the “prudent person” and/or “prudent investor” standard in accordance with CA Government Code Section 53600.3, and shall be applied in the context of managing an overall portfolio. 53600.3. [. . .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 255
2 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.] Investment officers acting in accordance with the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

INVESTMENT OBJECTIVES
The criteria for investing and managing public funds and the order of priority are as follows:

Safety of Principal: Safety of principal is the foremost objective of the investment program. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a number of financial institutions offering a variety of securities with independent returns.

Liquidity:

Liquidity is the ability to change an investment into its cash equivalent on short notice at its prevailing market value. The City’s investment portfolio shall remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrently with anticipated cash needs. Since all possible cash demands cannot be anticipated, the portfolio will maintain a liquidity “buffer” equivalent to six months of expenses and invest in short-term, highly liquid vehicles such as LAIF and/or money market funds.

Rate of Return (Yield): The portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, taking into account safety and liquidity requirements. The benchmark may vary from time to time depending on the economic and budgetary conditions present.

DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from the California Government Code Section 53607. Management’s responsibility is hereby delegated by the City Council to the Treasurer, who shall establish procedures for the operation of the investment program consistent with this investment policy. The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinates. The Treasurer can designate a staff person(s) to be responsible for investment transactions. Any and all independent investment managers used by the City must be approved by the City Council. No persons may engage in an investment transaction for the City except as provided under the terms of this policy.
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3 ETHICS AND CONFLICTS OF INTEREST
The Treasurer and all investment personnel shall refrain from personal business activities that could conflict with proper execution of the investment program and/or which could impair their ability to make impartial investment decisions. The Treasurer and all investment personnel shall disclose to the City Manager and the City Council any material financial interests in financial institutions that conduct business within this jurisdiction and shall disclose any material investment positions which could be related in a conflicting manner to the performance of the City’s investment portfolio.

The State of California Fair Political Practices Commission Statement of Economic Interests shall be completed on an annual basis by the Treasurer.

AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS
The Treasurer will maintain a list of financial institutions, selected on the basis of credit worthiness, financial strength, experience, references and minimal capitalization that are authorized to provide investment capacity. No public deposit shall be made except in a qualified public depository as established by state laws.

As part of a due diligence program, the Treasurer should review the annual financial reports of key counterparty banks as well as summary reports retrieved from each bank’s regulator. These summary reports are known as Call Reports and can be viewed on the Federal Financial Institutions Examination Council’s (FFIEC) website at https://cdr.ffiec.gov/public/.

Annually and before engaging in investment transactions with a broker/dealer, the firm shall sign a certification form, attesting that the individual responsible for the City’s account with that firm has reviewed the investment policy and that the firm understands the policy and intends to present only those investment transactions appropriate under the policy. The Treasurer shall request for the he broker/dealer to provide the latest/most available financial statement to the City.

AUTHORIZED AND SUITABLE INVESTMENTS
The City is empowered by California Government Code Section 53601 to invest in the following types of securities:
 United States Treasury bills, notes, bonds, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest with a maximum remaining maturity of five (5) years.
 Obligations issued by agencies or instrumentalities of the U.S. Government with a maximum remaining maturity of five (5) years.
 Bonds, notes, warrants or other evidence of debt issued by a City of Emeryville entity with a maximum remaining maturity of five (5) years. 257
4  The Local Agency Investment Fund (LAIF) maintained by the State of California.

Current policies of LAIF set minimum and maximum amounts of monies that may be invested as well as maximum number of transactions that are allowed per month.
 Negotiable certificates of deposit issued by federally or state chartered banks or associations or by a state licensed branch of a foreign bank with a maximum remaining maturity of five (5) years. Purchases may not exceed 30% of surplus funds.
 Medium term notes with a maximum remaining maturity of five years or less, by corporations organized and operating in the United States and rated “AA” or better by a recognized rating service. No more than 15% of surplus funds can be invested in this type of security.
 Money Market Mutual Funds. Shares of beneficial interest issued by diversified management companies investing in the securities and obligations authorized by this section. Such funds must carry the highest rating of at least two of the largest national rating agencies. No more than 20% of surplus funds can be invested in such funds. The companies shall retain an investment adviser registered with the Securities and Exchange Commission with not less than five (5) years’ experience investing in the securities and obligations as authorized by this section, and with assets under management in excess of $500,000,000. The purchase price of shares of beneficial interest purchased pursuant to this subdivision shall not include any commission that these companies may charge.  Insured or collateralized time deposits or savings accounts secured in accordance with the provisions of Sections 53651 and 53652 of the California Government Code. If the collateral is government securities, 110% of market value to the face amount and accrued interest of the deposit is required. If secured by first mortgages and first deeds of trust, the market value must be 150% of the face amount and accrued interest of the deposit. The collateral must be held by a third party.

Required ratings will be deemed to be the rating on the date of purchase.

A five (5) year maximum remaining maturity is allowed unless an extension of maturity is granted by the City Council.

PROHIBITED INVESTMENTS
Certain investments allowed by California Government Code will continue to be excluded from the policy. These include: repurchase agreements, reverse repurchase agreements, commercial paper, interest only strips, collateralized mortgage obligations, County investment pools, other investment pools, notes and bonds issued by the State of California and local agencies within California.
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5 SUSTAINABLE AND RESPONSIBLE INVESTING
City funds should be guided by the following provisions when investing in securities of non-governmental entities:
 Priority shall be given to investments in entities that support community wellbeing through safe and environmentally sound practices and fair labor practices.  Priority shall be given to investments in entities that promote equality of rights regardless of race, religion, color, ancestry, age, national origin, gender, marital status, sexual orientation, disability or place of birth.  Priority shall be given to investments in entities that promote community economic development
In addition, the direct investment of City funds is restricted as follows. These are investments made by City staff directly and funds are not part of a pool or other similar investment accounts (e.g., LAIF and investments for bond funds and trust).  No investments are to be made in tobacco or tobacco-related products.  No investments are to be made to support the production of weapons or military systems.
 No investments are to be made to support the production or distribution of fossil fuels.

The City Treasurer shall periodically verify compliance with the guidelines either through direct contact with company or through the use of a third-party resource.

COLLATERALIZATION
California Government Code Section 53652, et seq. requires depositories to post certain types of collateral for public funds above the Federal Deposit Insurance Corporation (FDIC) insurance amounts. The collateral requirements apply to bank deposits, both active (checking and savings accounts) and inactive (non-negotiable certificates of deposit).

SAFEKEEPING AND CUSTODY
In accordance with California Government Code Section 53601, all securities owned by the City shall be held in safekeeping by the City’s custodial bank or a third-party bank trust department, acting as an agent for the city under terms of the custody agreement.

All securities will be received and delivered using a delivery vs. payment (DVP) basis, which ensures that securities are deposited with the third-party custodian prior to the release of funds. Securities held by the third-party custodian will be evidenced by safekeeping receipts and/or bank statements. Investments in the State Local Agency Investment Fund (LAIF) or money market mutual funds are undeliverable and are not subject to delivery or third-party safekeeping.
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6 Investment trades shall be verified against bank transactions and broker confirmation tickets. On a monthly basis, the custodial asset statement shall be reconciled with the month-end portfolio holdings.

The City shall consider divesting in custodial banks or third-party banks that do not align with the sustainable and responsible investing requirements of this policy. Such decisions should be made in the best interest to the City.

FAIR VALUE MEASUREMENT AND APPLICATION
Governmental Accounting Standards Board (GASB) passed GASB statement 72 effective fiscal year 2016 which addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. This Statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements. Determination can be obtained by the fiscal agent statements in which the City’s cash and investments are held.

DIVERSIFICATION AND OTHER GUIDELINES
Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. Credit risk will be mitigated by limiting investments to the types of securities authorized by this policy, using pre-qualified financial institutions, and diversifying the investment portfolio.

The City will diversify its investments by security type, except for securities issued by the U.S. Government and its agencies, and by institution to reduce or eliminate risk of loss.

The following guidelines shall apply:
 Maturities shall be matched against projected liabilities to avoid an overconcentration in a specific series of maturities.  Maturities selected shall provide for stability and liquidity.  Every transaction will be reviewed by the Treasurer and City Manager.  Expenditures and revenues will be carefully monitored and forecast to allow as much money to be invested as possible.
 In general, securities will be bought and kept to maturity.  The City’s cash should be pooled.
 The Local Agency Investment Fund should be used to provide daily liquidity to the portfolio. The portfolio will be diversified to balance yield with other objectives.
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7 PERFORMANCE STANDARDS
The investment portfolio will be managed in accordance with the standards established within this investment policy and should obtain a market rate of return throughout budgetary and economic cycles, taking into account the City’s investment risk constraints, cash flow needs and maturities of its investments. The basis to determine whether market yields are being achieved shall be the total return of the portfolio. The U.S. Treasury and U.S. Government agency securities yield curves shall be considered useful benchmarks of the City’s portfolio performance.

REPORTING
The Treasurer shall submit to each member of the City Council a monthly report. The report shall contain a complete description of the portfolio, including the types of investments, issuers, maturity dates, par values and current market values. The report will also include a certification of the following:
 All investments meet the requirements of the City’s investment policy.  Sufficient investment liquidity and anticipated revenues are available to meet the City’s budgeted expenditure requirements for the next six months.

ADOPTION
The investment policy shall be adopted annually by resolution of the City Council.

GLOSSARY
The attached Glossary is incorporated as part of the policy. 261
8 GLOSSARY
The following technical words are included in the policy because they are common treasury and investment terminology.

Agencies: Debt instruments issued by the U.S. government agencies, departments, government-sponsored corporations and related instrumentalities to finance their own programs. Some examples of these agencies are Federal Farm Credit, Federal Home Loan and Student Loan Marketing Association.

Ask: The price at which securities are offered. The offer price is the cost of the security to the buyer.

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

Basis Point: A basis point equals one one-hundredths of 1% (.01%).

Bid: The price offered by a buyer of securities. This is payment that the seller gets when a security is sold.

Broker: A broker brings a buyer and seller together for a commission.

Callable: Securities subject to payment of the principal amount and accrued interest prior to the stated maturity date, with or without premium.

Certificate of Deposit (CD): A time deposit with a specific maturity evidences by a certificate issued by commercial banks and savings institutions. The first $250,000 is insured by the FDIC. For governmental agency, deposits in excess of $250,000 are required to be collateralized by the financial institutions.

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

Comprehensive Annual Financial Report (CAFR): The official annual report for the City of Emeryville. It includes basic financial statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section.

Commercial Paper: An unsecured promissory note with a fixed maturity no longer than 270 days. Usually sold in discount form.

Coupon: The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. A certificate attached to a bond evidencing interest due on a payment date.
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9 CUSIP Number: An identifying number developed by the Committee on Uniform Security Identification Procedures, under the auspices of the American Bankers Association to provide a uniform method of identifying municipal, U.S. government, and corporate securities.

Dealer: A dealer, as opposed to a broker, acts as a principally in all transactions, buying and selling for his own account.

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

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

Direct Investment: Investment transactions explicitly managed by the delegated authority for the City.

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

Discount securities: Non-interest bearing money market instruments that are issued below the face amount and redeemed at maturity at full face value, such as Treasury Bills.

Diversification: Dividing investments of funds among a variety of securities offered independent returns, maturity and market risks.

Duration: A measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.

Federal Deposit Insurance Corporation (FDIC): A federal agency that insures bank deposits currently up to $250,000 per deposit.

Federal Home Loan Banks (FHLB): Government sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of members who must purchase stock in their district bank.

Federal National Mortgage Association (FNMA): FNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing & Urban Development, H.U.D.

It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans in additional to fixed-rate mortgages. FNMA’s securities are also highly liquid and are 263
10 widely accepted, FNMA assumes and guarantees that are security holders will receive timely payment of principal and interest.

Federal Home Loan Mortgage Corporation (Freddie Mac): A Government Sponsored Enterprise that provides liquidity to the mortgage markets, much like FNMA and FHLB.

Federal Reserve System: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.

Liquidity: Liquidity is the ability to change an investment into its cash equivalent on short notice at its prevailing market value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.

Local Agency Investment Fund (LAIF): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment.

Market Value: The price at which a security if trading and could presumably be purchased or sold.

Master Repurchase Agreement: A secured contractual obligation between an investor and an issuing financial institution establishing each party’s rights in the transactions. It specifies the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower. The investor exchanges cash for temporary ownership of the collateral securities with an understanding the seller-borrower (financial institution) will repurchase the securities. Interest income earned during the term belongs to the investor.

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

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

Offer: The price asked by a seller of securities. When buying securities the investor asks for an offer.

Portfolio: Collection of securities held by an investor.

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

Prudent Person Rule: A standard followed by a person of discretion and intelligence seeking a reasonable income and preservation of capital. 264
11 Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

Safekeeping: A service to customers rendered by financial institutions for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vault for protection. Other services which are normally provided are marking the portfolio to market value, reporting investments held and investment activities.

Securities & Exchange: Agency created by Congress to protect investors in securities transactions by administering securities legislation.

Treasury Bills: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months or one year.

Treasury Bond: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years.

Treasury Notes: Intermediate term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of one to ten years.

Variable rate note: Securities which pay interest at rates that can fluctuate during the life of the security.

When issued: A conditional transaction that takes place between the time a new issue is offered and the time of physical delivery of the bonds. It is understood between the buyer and the seller that transactions will occur when and if the bonds are issued.

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

Yield to Maturity: The rate of return yielded by a debt security held to maturity when both interest payments and the investor’s capital gain or loss on the security are taken into account.
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CALIFORNIA

ADMINISTRATIVE INSTRUCTION
A.I. NUMBER: 605
SUBJECT: Purchasing and Accounts Payable Procedures
REFERENCE: Municipal Code 3.6.04(e); Governmental Accounting, Auditing and Financial Reporting; California Uniform Public Construction Cost Accounting Commission; Federal Uniform Guidance
SUPERSEDES: AI 106 (dated January 12, 1988); AI 402 (dated June 26, 1989); AI 104 (dated January 22, 1990); AI 605 (dated November 1, 1991); AI 605 (dated October 25, 2016)
DATE: September 19, 2019

TABLE OF CONTENTS

1. Purpose .................................................................................................................... 2

2. Ethics ........................................................................................................................ 2

3. Policy ........................................................................................................................ 3

3.1 Purchasing Authority ....................................................................................... 3

3.2 Approval Authority ........................................................................................... 3

3.3 Monitoring Expenditures / Change Order Requests ........................................ 4

3.4 Categories Requiring Purchase Orders .......................................................... 4

3.5 Contracts and Professional Services Contracts .............................................. 5

3.6 Change Orders ............................................................................................... 5

3.7 Purchases NOT Requiring Purchase Orders .................................................. 5

3.8 Grant Funded Expenditures ............................................................................ 6

4. The Bid Process ....................................................................................................... 6

4.1 When Formal Bidding Is Required .................................................................. 6

4.1.1 Public Works and Maintenance Projects ......................................................... 6

4.1.2 Consultant / Professional Services (excluding legal) and Other General Purchases ....................................................................................................... 7

4.2 Procedures for Formally Advertising Bids ....................................................... 8

4.3 Sole Source Justification ............................................................................... 10

5. Purchase Order Procedures ................................................................................... 11

5.1 Responsibility ................................................................................................ 11

5.2 Submission Guidelines ................................................................................. 11

5.3 Emergency Purchase Orders ........................................................................ 12

5.4 Finance Department Purchase Order Process ............................................. 13 266
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6. Claim Voucher Processing ..................................................................................... 13

6.1 Preparation of Claim Vouchers ..................................................................... 13

6.2 Timetable for Submitting and Processing Claim Vouchers ........................... 14

7. Petty Cash Processing ........................................................................................... 14

7.1 Reimbursements ........................................................................................... 15

7.2 Reconciliation and Replenishment ................................................................ 15

8. Cal-Card Purchases ............................................................................................... 15

9. Attachments: ........................................................................................................... 16

1. PURPOSE
The purpose of this Administrative Instruction is to provide the City of Emeryville a means of assuring continuity and uniformity in its purchasing operation, to establish policy guidelines for the cost effective and efficient purchase of services, supplies, materials, and equipment, to define the responsibilities for such purchases, and to implement the City’s Purchasing Ordinance, Chapter 6 of Title 3 of the Emeryville Municipal Code.

These guidelines are designed to provide financial oversight of the acquisition of goods and services, and monitoring vendors with whom the City conducts business. They are not intended to address every issue, exception, or contingency that may arise in the course of purchasing activities. The basic standard that should always prevail is to exercise good judgment in the use and stewardship of City resources, including keeping within the budget authorized by the City Council. This Administrative Instruction also establishes purchasing guidelines for competitive bidding of goods and services.

2. ETHICS
The purpose of this section is to provide a general code of conduct for all personnel who may be engaged in the City’s purchasing function. It is essential that all personnel involved in the procurement process conduct themselves in a manner that maintains impartiality and complete objectivity, to meet the continuing scrutiny of suppliers and the public. In dealings with the business community, it is necessary to exercise a strict rule of personal conduct to ensure that business relations are not compromised or even have the appearance of being compromised. The City’s reputation for fairness and integrity in dealing with suppliers and others must always be maintained.

The following are the City’s standards in ethics for purchasing:

A. To buy on the basis of value, recognizing that value represents a combination of quality, service and price which assures the greatest economy to the City.

B. To recognize that permanent business relationships should be established on the basis of honesty and fair dealings.
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C. To be courteous and considerate in all City dealings.

D. To avoid statements that might injure or discredit legitimate suppliers and to avoid disclosure of confidential information that might give an unfair advantage in a competitive business transaction.

E. To adjust claims and settle disputes on the basis of facts and fairness.

No City employee shall participate in a purchase if the purchase involves purchasing goods, services or equipment from the City employee or the City employee’s spouse, partner, or family member.

3. POLICY
These policies primarily cover items that require a Purchase Order (P.O.) and involve the use of Claim Vouchers. Purchase orders provide a mechanism for encumbering budgeted funds and ensure that the purchase of goods is approved by the appropriate department manager or his/her designee.

3.1 Purchasing Authority
The City Manager is the official Purchasing Officer for the City of Emeryville and for the City of Emeryville as Successor Agency for the Emeryville Redevelopment Agency (RDA), the Emeryville Public Financing Authority, the Management of Emeryville Services Authority, and the Emeryville Community Development Commission (collectively, “the City”). The City Manager may delegate purchasing authority to a Department Head.

Department Heads are responsible for reviewing, planning, and authorizing department needs, subject to the City Manager’s review and approval.

Officers or employees of the City are prohibited from contracting for goods and/or services, supplies, materials, equipment contrary to the provisions of Chapter 3-6.09 of the City of Emeryville’s Municipal Code. Such purchase orders or contracts shall be void.

3.2 Approval Authority
A. Purchase Order Requisitions (Exhibit B) must be signed by the Department Head or designee regardless of the purchase level. Following are authority levels and dollar thresholds:

Department Head or Designee per vendor per fiscal year $0 - $5,000 268
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City Manager per vendor per fiscal year
(approves all Purchase Orders over $5,000) $5,000 - $45,000 City Council / Agency Body Resolution Over $45,000
B. The practice of stringing or splitting of P.O.’s to circumvent the approval levels and dollar thresholds is prohibited.

C. Designees are recognized once an Authorized Designee memo is received by the Finance Department (Exhibit C). This memo is completed by the Department Head to authorize the designee, provide a sample signature of designee and a list of what the designee may approve.

D. P.O.’s that are split between departments, or if the ordering department and the department being charged are different, the P.O. shall be signed and approved by both Department Heads.

E. Capital outlay items which have a capitalization dollar threshold of $5,000 will by default require City Manager approval.

F. Computer-related and telecommunication equipment and license purchases shall also be approved by the Information Technology Manager or their designee.

G. All cost recovery account, retention and deposit refunds must be approved by a finance manager/designee.

3.3 Monitoring Expenditures / Change Order Requests
Departments are responsible for tracking charges against a purchase order. If the funding is exhausted, or the scope of the service changes, the department must prepare and submit a Change Order request (Exhibit D). Please note that change in the scope of services may necessitate an amendment to the PSC or other original contract, and such amendment is separate and distinct from a Change Order.

The Change Order request shall be prepared as soon as the department is aware that the funds are exhausted or the scope of the service has changed. The department should act in an expeditious manner so that payment to the vendor is not delayed. Refer to the City’s Purchasing Procedures below for detailed instructions on the preparation of Change Orders.

3.4 Categories Requiring Purchase Orders
A. Supplies and services over $5,000
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B. All contracts and Professional Service Contracts (PSC’s) C. All capital outlay purchases (equipment costing $5,000 or more)

3.5 Contracts and Professional Services Contracts
After the contract has been approved and signed by both the City Attorney and the vendor, the P.O. Requisition should be prepared and presented to the City Manager along with the contract for final approval. A copy of the signed contract or agreement (along with the P.O. requisition, insurance certificate plus endorsement, W-9, business license, and resolution if applicable) must be submitted to Finance for P.O. processing.

3.6 Change Orders
P.O. Change Orders require the same documentation as P.O. Requisitions, except Change Orders are prepared using a manual form (per Exhibit D). The P.O. number shall remain the same and should be noted on the manual form. This is submitted to Finance for processing.

3.7 Purchases NOT Requiring Purchase Orders

1. Office supplies under $5,000

2. Professional membership dues and subscriptions

3. Conferences and meetings

4. Training expenditures

5. Travel costs, reimbursements, refunds

6. Utility bills (electricity, gas, water, garbage, fuel, telephone, etc.)

7. Rental payments (building rents, equipment rentals, etc.)

8. Real estate transactions and escrow transactions – approved by the City Council and/or Successor Agency. This includes First Time Homebuyers or other similar programs.

9. General administrative expenses such as taxes, insurance, fees, and legal bills.

10. Contracts for Community Services Classes with recreational class instructors who are paid based on a percentage of class revenue, or a fixed compensation based upon the rate per class.
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11. Professional Services Contracts (PSC’s) that contain one-time purchases under $5,000 can be submitted with a Claim Voucher in lieu of a Purchase Order.

3.8 Grant Funded Expenditures
Any purchases made with federal, state or other grantor funds must be made in compliance with the funding agency’s procurement policies as documented in the Grant Management Policy & Procedures A.I. 115 dated November 29, 2011 (or the revised A.I.).

Federal procurement is controlled both by the funding agency procurement policy as well as federal policy as expressed in 2 CFR Part 200 regarding Cost Principles. Please refer to Exhibit A regarding Uniform Guidance Procurement Standards. Any requirements in an executed grant agreement supersede any preferences or policies listed within this A.I.

4. THE BID PROCESS
Departments are encouraged to solicit bids for all purchases to ensure the City is obtaining competitive rates for its supplies, services, and equipment.

4.1 When Formal Bidding Is Required

4.1.1 Public Works and Maintenance Projects
Public Contract Code section (PCC) 20162 requires bidding of a “public project” if the public project exceeds $5,000. “Public project” is defined as: “a project for the erection, improvement, painting, or repair of public buildings and works; (b) work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow; (c) street or sewer work except maintenance or repair; (d) furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.” (PCC 20161.) However, the State adopted the “Uniform Public Construction Cost Accounting Act” (PCC 22000, et seq.) (“UPCCAA”) to provide an alternate bidding procedure. (PCC 22001.) A public agency may elect to become subject to the UPCCAA when contracting for maintenance work or other work not falling within the definition of public project by adopting a resolution (PCC 22003). The UPCCAA defines public project, for the purposes of the UPCCAA, to include any of the following: “(1) construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any public owned, leased, or operated facility; (2) painting or repainting of any publicly owned, leased, or operated facility; (3) [omitted].” (PCC 22002(c)). Public project as defined by the UPCCAA does not include maintenance work, which includes all of the following: “(1) routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes; (2) minor painting; (3) resurfacing of streets and highways at less than one inch; (4) landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems; (5) [omitted].” (PCC 22002(d).) As of January 1, 2019, UPCCAA provides that public projects (as defined in UPCCAA 22002(c)) of $65,000 or less may be performed by the public agency’s employees, 271
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negotiated contract or by purchase order, and that public projects (as defined in UPCCAA 22002(c)) of $200,000 may be let by informal procedures. The City elected to become subject to UPCCAA by adopting Resolution No. 03-46. When a public agency elects to become subject to the UPCCAA, the public agency must adopt a local ordinance regulating informal bidding procedures, and satisfying the requirements set forth in PCC 22034. The City Council adopted Ordinance No. 03-005, which is codified as Chapter 9 of Title 7 of the Emeryville Municipal Code.

Accordingly, public projects (as defined in PCC section 20161) of up to $5,000 may be procured with the following options:

1. The City may choose to use internal resources for the construction of the project; or

2. The City may follow purchasing procedures applicable for non-Public Works procurements.

Under PCC Section 22032(a), public projects (as defined in PCC section 22002(c)) less than $60,000 may be procured with the following options:

1. The City may be performed by employees by force account; or

2. The City may follow informal bidding procedures as outlined in Chapter 9 of Title 7 of the Emeryville Municipal Code.

3. The City may follow purchasing procedures applicable for non-Public Works procurements to purchase via a negotiated contract.

Under PCC Section 22032(b), public projects (as defined in PCC section 22002(c)) less than $200,000 may be procured by following the informal bidding procedures as outlined Chapter 9 of Title 7 of the Emeryville Municipal Code.

Maintenance projects (as defined in PCC section 22002(d)) are exempt from bidding requirements.

4.1.2 Consultant / Professional Services (excluding legal) and Other General Purchases
Consultant/Professional Services (excluding legal) and general purchases such as supplies, equipment and leases:
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1. For purchases up to $5,000 (cumulative amount of contract), there are no specific bidding requirements, but competitive bidding should be used when practical.

Departments may award the contract for purchase. For purchases greater than $5,000, and up to $45,000 (cumulative amount of contract), the Department must solicit three written quotations (“Informal Bidding Procedures”) and submit an Addendum for Purchasing Supplies, Services and Equipment Form to the City Manager, with a recommendation for the award of the contract to the City Manager.

2. For purchases above $45,000, the Department formally advertises for sealed bids (Request for Qualifications or Proposals1). The Department submits the results of the proposals to the City Manager for assessment. The City Manager makes the recommendation for the award of the contract and submits to the City Council for approval. If it is anticipated that the same vendor will be providing the same services for several years, the project manager should consider entering into a multi-year contract. If the multi-year contract would exceed the City Manager’s $45,000 threshold in authority to contract, then the Council must approve the multiyear contract. Contracts should not be limited to one year terms for the sole purpose of satisfying the City Manager’s contracting authority.

4.2 Procedures for Formally Advertising Bids
When purchases and contracts for non-public works projects are required to be formally bid as set forth in this policy, the advertising of the bid shall adhere to the procedures set forth in this administrative policy in addition to the requirements imposed by State law.

1. The City Clerk shall publish the legal notice inviting bids twice, the first publication at least ten (10) days before the date of bid submittal. Prior City Council authorization is not required. Notice shall be published in newspaper of general circulation.
a. The notice inviting bids shall include a general description of the articles or services to be purchased, place where bid blanks and specifications may be secured, and the time and place for opening bids.
b. The Department Head shall approve all formal bid notices and bid forms prior to distribution.

2. The department making the purchase shall solicit bids from all responsible prospective suppliers whose names are on the bidder’s list when such a list is available.
1 The City Clerk’s Office maintains a template that may be used for a Request for Qualifications or Proposals.
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3. The solicitation of bids shall be posted on the City’s website at least ten (10) days before the date of bid submittal.

4. All bids must be submitted to the City Clerk’s office by the time established for submittal. Bids must be sealed and enclosed in an envelope marked “Bid Enclosed”.

5. The report to Council on bid awards should include the tabulation of bids with a recommendation for the award of bid. If the project bid award is under $45,000 in value, the City Manager may award the bid at his or her discretion based on the tabulation of bids.

6. The awarding authority shall award the bid within sixty (60) days from bid submittal or as specified in the bid documents.

7. The awarding authority may, at its discretion, reject all bids presented and readvertise for bids or have the work performed in accordance with the general laws of the State.

8. If two (2) or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay of readvertising for bids, the Council may accept the one it chooses or choose a bidder by lot.

9. Bidder’s security may be required if considered necessary:
a. Bidders shall be entitled to the return of bid security after award of contract.

The City Clerk’s office shall be responsible for retaining the bid security and returning it to the appropriate bidders after the bid opening. b. A successful bidder shall forfeit his bid security, however, upon refusal or failure to execute the contract within ten (10) days after notice of the award of the contract has been mailed.
c. The Council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. d. If the Council awards the contract to the next lowest responsible bidder, the amount of the lowest responsible bidder’s security shall be applied by the City to the difference between the low bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder. 274
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10. The City Manager shall have the authority to require a performance bond and/or labor and materials bond before entering a contract in such amount as determined necessary for the best interests of the City. The form and amount of required bonds shall be determined by the City Manager.

11. A file of formal bids shall be maintained in the City Clerk’s office for a period of two years and be open for public inspection.

12. The department shall notify the successful bidder by forwarding a purchase order or other official notice.

13. In its discretion, the awarding authority may waive any informalities or minor irregularities in the bids.

14. If it is necessary to make changes in the notice to bidders or changes in specifications, an amendment, or addendum to the bid specifications shall be issued by the Department Head to all prospective bidders setting forth the changes.

15. Contracts with an on-going nature, or which provide services on an as-needed basis should be bid at least every five years.

4.3 Sole Source Justification
Exceptions to the bidding requirements as outlined above include:

1. The purchase is made through the Department of General Services of the State.

2. The purchase is combined with that of another public agency, provided such public agency followed the competitive bidding practices which comply with the legal requirements applicable to such agency.

3. The supplies, materials and equipment are only available from a single source.

4. For services, as waived by the awarding authority2 for good cause.

5. An emergency.

6. A maintenance project as defined in Public Contract Code section 22002(d). 2 In applying this policy to a specific contract, as used herein, awarding authority refers to either the City Council or the City Manager, depending upon who awards the contract at issue. 275
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Compliance with this AI would defeat the purpose of this AI and Emeryville Municipal Code section 3-6.01 and result in procurement of services, supplies, materials, or equipment at a higher cost that was not commensurate with the quality needed.

If a sole source contract is being recommended, complete an Addendum for Purchasing Supplies, Services and Equipment Form explaining why the City requires the goods and/or services from the selected vendor. The Purchase Order Requisition shall be attached to the memo. Approval authority for purchases is as outlined in Section 4.2.

5. PURCHASE ORDER PROCEDURES

5.1 Responsibility
Purchase Order Requisitions are prepared by the department initiating the purchase. The department must ensure that all of the proper approvals and signatures relating to the purchase, required forms, and supporting documentation have been secured. As noted in Section 4.2, the practice of stringing or splitting of purchase requisitions to circumvent this Administrative Instruction is prohibited. The requisitioning department is responsible for submitting the necessary forms and supporting documentation to Finance in a timely manner to avoid delays in vendor payments. Following are submission guidelines, and the required forms.

5.2 Submission Guidelines
The requisitioning department must complete the Purchase Order Requisition form manually or by utilizing the City’s financial software (preferred method). The following information is required to ensure the prompt and efficient processing of the purchase:

1. Vendor name and address (include vendor number if available)

2. Completed W-9 (for new vendors)

3. Item description and quantity

4. Cost for each item, and estimated shipping and taxes

5. Project number (if applicable)

6. Department/division(s) and account(s) to be charged

7. Specify if the purchase is standard or urgent (emergency purchase)

8. Urgent purchase requisitions must have a memo detailing the nature of the emergency
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9. Sole source or single source purchases require an Addendum for Purchasing Supplies, Services and Equipment Form signed by the City Manager to justify the sole/single source

10. Copy of signed contract, if required

11. Copy of Council approved resolution, if required

12. Appropriate approvals

13. Bid memo (Addendum for Purchasing Supplies, Services and Equipment Form signed by the City Manager), if required

5.3 Emergency Purchase Orders
Sometimes an emergency occurs which makes it necessary to purchase items without the benefit of competitive bidding. The guidelines outlined herein are intended to define emergency criteria for the purpose of purchasing equipment, goods, and services:

A. To avoid and/or mitigate the immediate danger to life, health, safety, or property, B. In the event of a natural disaster,
C. Facilitate the continued performance of critical City operations or services, D. Immediate action is required to avoid great financial loss.

Unforeseen emergency occurrences that do not provide the City an opportunity to obtain competitive quotes or provide for the encumbrance of the committed funds, shall rely on sound judgment to keep these orders to a minimum.

In the event of an emergency, as defined above, the procedures are as follows:

1. The department shall make every effort to solicit bids from qualified vendors, if time allows and it is feasible to do so.

2. Purchase Order Requisitions must have all the proper approvals and supporting documentation as outlined in this AI. In addition, approval by the City Manager or designee is required for all emergency purchases exceeding $5,000.

3. It is understood that emergencies may occur during non-business hours and/or designated Finance staff may be unavailable. However, it is the responsibility of the requesting department to make every effort to obtain an Emergency Purchase Order Number in advance of the purchase.
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4. If the department is making a purchase which may be eligible for reimbursement for funds distributed by the Federal Emergency Management Agency or any other federal funds, emergency purchases may need to comply with 2 CFR Part 200.

Consult with the City Attorney.

5.4 Finance Department Purchase Order Process

1. Completed Purchase Order Requisitions received in Finance by 5:00 p.m. on Tuesday will be assigned a Purchase Order number and processed by the following Wednesday.

2. Incomplete Requisitions will be returned to the department with reason(s) of return.

Common reasons include lack of funds in the account and/or project to be charged, incomplete documentation and/or authorization, and/or missing Council Resolution.

3. Urgent Purchase Order requests follow the procedures outlined in the Emergency Purchase Order section of this AI.

4. Finance staff responsible for Accounts Payable will process the Purchase Order and email an electronic copy (PDF) to the requesting department. The department is responsible for providing a copy to the vendor as appropriate.

5. Funds are encumbered once the Purchase Order has been processed and posted to the general ledger of the City’s financial system.

6. CLAIM VOUCHER PROCESSING

6.1 Preparation of Claim Vouchers
A. Departments are responsible for preparation of claim vouchers (Exhibit E) for payment of invoices. Assuming there are no errors or discrepancies, vouchers should be prepared within five (5) business days of receipt of invoice.

B. Merchandise received by department must be thoroughly checked. Item(s) must be verified against packing slips and Purchase Order to ensure item received is exactly as specified. Invoice and Claim Voucher should NOT be signed off until all merchandise/services have been satisfactorily received.

C. The department is responsible for tracking the charges against a Purchase Order.

If a Purchase Order runs out of money or the scope of service changes, the department must submit a (manual) Change Order request before the vendor can be paid. The Change Order Request should be done as soon as you become aware of a change so as not to delay payments to the vendor. If the service is under contract, the contract will also require amendment and City Manager and/or Council approval.
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D. Claim Vouchers should include the following information:

1. Purchase Order Number, if applicable. This number is vital to ensure the invoice is charged against the encumbrance, rather than the budget.

2. Construction vouchers must include a Purchase Order number and an invoice signed by the contractor. The gross amount due less retention, if applicable, should be detailed on the voucher.

3. Vendor number. Please verify this number in the City’s financial software and include it on the claim voucher.

4. Completed W-9 (for new vendors).

5. Fund, department/division and budget account(s) to be charged. Project and account, if applicable. Use correct account coding for purchases whether or not your division has a budget for that line item. For instance, you may code a purchase of books to Books, Maps, & Periodicals to Account #73100 even if your department did not budget for that line item.

The department must be cognizant of the department’s bottom line. If no account number is listed, the voucher will be returned to the Department. If the voucher includes multiple items and account coding is not listed for each item, Accounts Payable will charge the last account listed.

6. Appropriate approvals as described in Section 4.2 (Approval Authority).

6.2 Timetable for Submitting and Processing Claim Vouchers

1. Department must submit completed and approved Claim Vouchers with supporting documents to Finance Department by 5:00 p.m. on Tuesday, to be processed for payment by the following Wednesday.

2. Departments are encouraged to submit Claim Vouchers and invoices any time prior to the cut-off date in order to minimize the volume to be processed.

3. Finance processes the Claim Vouchers and payments weekly and produces the warrants for inclusion on the Council and Successor Agency agendas.

7. PETTY CASH PROCESSING
Petty cash is used for small, incidental expenditures that would be impractical to process through the regular accounts payable process. City-authorized expenditures that are $50 or less may be reimbursed through petty cash. The petty cash fund shall be maintained 279
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September 19, 2019

and safeguarded in a safe with limited access. Three petty cash funds are currently authorized by the Finance Director.

The departments, amounts and administrators (positions, in italics) of the City’s petty cash funds are listed below:

Finance Department
(Cashier / Business License Technician) $450.00
Community Services Department
(Supervisor)
Childcare Center
Senior Center
Emeryville Center of Community Life
$300.00
$300.00
$600.00
Police Department
(Police Services Manager) $350.00

7.1 Reimbursements
To receive a reimbursement, employees should complete an Expense Reimbursement Form (Exhibit F) noting their name, the date, amount requested, a description of the expense, and the division/department and account(s) to be charged. The original receipts should be attached before forwarding it to the appropriate Department Head (depending on department/division being charged) for signature. The approved request should then be presented to the petty cash administrator to receive the funds. Reimbursement for City expenses using personal funds is discouraged, and employees should make every reasonable effort to avoid having to use personal funds to cover City expenses.

7.2 Reconciliation and Replenishment
The petty cash administrator is responsible for reconciling and replenishing the fund as needed. Petty cash vouchers will be summarized and entered onto a Claim Voucher form made payable to the person responsible for the funds. All original petty cash vouchers and receipts should be attached to the claim voucher before submitting to the Department Head for approval. Upon approval, the voucher will be forwarded to Accounts Payable for processing and payment. Periodic audits will be performed by a Finance manager or delegate to ensure compliance with these procedures.

8. CAL-CARD PURCHASES
The State of California’s Department of General Services (DGS) developed a Master Service Agreement with U.S. Bank to provide VISA bank cards to State and local government employees as a payment method for small purchases of goods and services. 280
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September 19, 2019

This unique government credit card has the employee’s name embossed on it and is identified as a State of California VISA card which is also known as the “CAL-Card”.

The CAL-Card, when used to purchase goods or services, promotes increased supplier/ contractor acceptance, improves the timely delivery of products and services, and reduces certain business-related costs. For example, using this card will centralize invoice processing and provide opportunities for greater efficiencies. This program allows for a 45-day payment cycle, along with rebates for early payments. The CAL-Card program is not intended to and will not be used to circumvent any existing statues or laws, or City purchasing procedures and policies. The use of CAL-Card will be closely managed to ensure the cards are being used efficiently and appropriately. The CAL-Card will only be issued to regular City employees. Cardholders are prohibited from using the CAL-CARD for personal expenses, even if the cardholder intends to reimburse the City for the personal expense.

For additional information on the guidelines, responsibilities and use of the CAL-Card, please refer to the “Cardholder Acceptance Letter and Cardholder Guide” which is required to be signed by all cardholders prior to being issued a card.

Approved:

Christine Daniel, City Manager

9. ATTACHMENTS:

1. Exhibit A: Uniform Guidance Procurement Standards

2. Exhibit B: Purchase Order Requisition Form

3. Exhibit C: Department/Division Authorized Designee(s) Form

4. Exhibit D: Purchase Order Change Order Form

5. Exhibit E: Claim Voucher Form

6. Exhibit F: Expense Reimbursement Form
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CITY OF EMERYVILLE

RESERVE POLICIES

USE OF RESIDUAL PROPERTY TAX REVENUE
The City believes that maintaining adequate reserves reflects an ability to manage risk as well as provide working capital to meet operational and capital needs. The City has established certain reserve policies, such as an Economic Uncertainty Fund to provide a reserve for State budget impacts and other fiscal emergencies.

In FY2011-12, due to the dissolution of the Emeryville Redevelopment Agency and the requirements of AB 26 and AB 1484, the City began receiving residual property tax revenue. The City adopted, and has amended, this residual property tax reserve policy to maintain a reserve committed to the use of residual property tax revenue for capital improvements, affordable housing, economic development, public art and general purposes, as follows:

On June 21, 2016, the Policy was revised to reflect a 25% allocation to the General Fund effective FY2017-18. The 75% allocation to the General Capital Improvement Fund was reduced to 50%.

As part of the FY2019-2021 Budget, the Policy is revised to reflect a 2.5% allocation to support Public Art programs starting in FY2019-20 and an additional 25% allocation to the General Fund effective FY2020-21. The allocation to the General Capital Improvement Fund will be reduced to 47.5% in FY2019-20 and to

22.5% effective FY2020-21.

The Economic Development Reserve is held and programmed in Fund 202 which is a sub-fund of the General Fund. The definition of Economic Development for Residual Property Tax Reserve and Use Policy
Current
FY 19-20
Proposed
Effective July
1, 2020
Allocation Allocation New Allocation
of Receipts of Receipts of Receipts
General Fund 101 25.0% 25.0% 50.0%
General Capital Improvement Fund 475 50.0% 47.5% 22.5%
Affordable Housing Fund 299 20.0% 20.0% 20.0%
Public Art Fund 243 0.0% 2.5% 2.5%
Economic Development Fund 202 5.0% 5.0% 5.0%
100% 100% 100%
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the purpose of this policy is anything that the City Council deems to assist in the Economic Development of the City of Emeryville.

The Affordable Housing Reserve is held and programmed in a separate Affordable Housing Special Revenue Fund 299. The definition of Affordable Housing for the purpose of this policy is anything that the City Council deems to assist in the development or maintenance of affordable housing in the City of Emeryville.

The General Capital Improvements Fund 475 may be programmed and transferred into various capital funds. The definition of Capital Improvements for the purpose of this policy is anything that the City Council deems to be necessary for the capital improvements of the City of Emeryville, such as new public facilities, replacement and rehabilitation of current public facilities, parks, transportation systems, and environmental improvements.
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➢ 2013 Lease Revenue Bonds, Series A
The Emeryville Public Financing Authority (the Authority) issued $4,390,300 in Lease Revenue Bonds, 2013 Series A, with an effective interest rate of 3.02% per annum. The proceeds were used to refund $4,745,000 of outstanding 1998 Series A Lease Revenue Bonds.

The outstanding balance of this private placement bonds contains a provision in which the Purchaser of the bonds may terminate the agreement if any event occurs or becomes known that has a material adverse effect on the financial condition of the City or the ability of the City to perform under the Agreement.

Source of repayment – General Fund Revenues
The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2022, including interest, are as follows:

Fiscal
Year Principal Interest
Annual Debt
Service
Principal
Balance
2021-22 $ 1,993,400
2022-23 306,900 $ 60,201$ $ 367,101 1,686,500
2023-24 319,200 50,932 370,132 1,367,300
2024-25 325,900 41,292 367,192 1,041,400
2025-26 336,900 31,450 368,350 704,500
2026-27 347,400 21,276 368,676 357,100
2027-28 357,100 10,784 367,884 -
284
➢ Successor Agency of the Former Redevelopment Agency
Tax Allocation Refunding Bonds Series 2014A
On July 24, 2014, the Successor Agency to the Emeryville Redevelopment Agency issued $95,450,000 of Tax Allocation Refunding Bonds. Proceeds from the issuance were used to refund the following Public Financing Authority Revenue Bonds: Series 1995, Series 1998B, Series 2001A, Series 2002, and Series 2004. Interest on the Bonds is payable on March 1 and September 1 of each year and the interest rate ranges from 2.0% to 5.0%. The Bonds mature starting September 1, 2015 and end on September 1, 2034. The bonds are secured by a pledge of tax increment funds distributed by the Redevelopment Property Tax Trust Fund (RTTPF). The outstanding balance from this public offering contains a provision stating that if an event of default has occurred and is continuing, the trustee may declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding. In addition, the Trustee shall exercise any other remedies available to the trustee in law or at equity.

Source of repayment – Property Taxes collected.

The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2022, including interest, are as follows:

Fiscal
Year Principal Interest
Annual Debt
Service
Principal
Balance
2021-22 $ 54,075,000
2022-23 7,075,000 $ $ 2,508,875 $ 9,583,875 47,000,000
2023-24 7,435,000 2,146,125 9,581,125 39,565,000
2024-25 7,815,000 1,764,875 9,579,875 31,750,000
2025-26 8,180,000 1,365,000 9,545,000 23,570,000
2026-27 7,770,000 975,250 8,745,250 15,800,000
2027-28 1,855,000 743,625 2,598,625 13,945,000
2028-29 1,940,000 697,250 2,637,250 12,005,000
2029-30 1,595,000 560,375 2,155,375 10,410,000
2030-31 1,680,000 478,500 2,158,500 8,730,000
2031-32 1,770,000 392,250 2,162,250 6,960,000
2032-33 2,210,000 292,750 2,502,750 4,750,000
2033-34 2,315,000 179,625 2,494,625 2,435,000
2034-35 2,435,000 60,875 2,495,875 -
285
➢ Successor Agency of the Former Redevelopment Agency
Tax Allocation Refunding Bonds Series 2014B
On July 24, 2014, the Successor Agency to the Emeryville Redevelopment Agency issued $14,270,000 of Tax Allocation Refunding Bonds. Proceeds from the issuance were used to refund the Public Financing Authority Revenue Bonds, Series 1998C and Series 2001B. Interest on the Bonds is payable on March 1 and September 1 of each year and the interest rate grows from 0.70% to 4.625%. The Bonds mature starting September 1, 2015 and end on September 1, 2031. The bonds are secured by housing set aside funds, also issued by the RTTPF. The outstanding balance from this public offering contains a provision stating that if an event of default has occurred and is continuing, the trustee may declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding. In addition, the Trustee shall exercise any other remedies available to the trustee in law or at equity.

Source of repayment – Property Taxes collected.

The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2022, including interest, are as follows:

Fiscal
Year Principal Interest
Annual Debt
Service
Principal
Balance
2021-22 $ 7,770,000
2022-23 1,030,000 $ 303,361$ $ 1,333,361 6,740,000
2023-24 1,065,000 263,273 1,328,273 5,675,000
2024-25 1,105,000 219,310 1,324,310 4,570,000
2025-26 1,170,000 172,981 1,342,981 3,400,000
2026-27 2,045,000 106,125 2,151,125 1,355,000
2027-28 245,000 57,003 302,003 1,110,000
2028-29 260,000 45,325 305,325 850,000
2029-30 275,000 32,953 307,953 575,000
2030-31 280,000 20,119 300,119 295,000
2031-32 295,000 6,822 301,822 -
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 GLOSSARY
The City’s budget contains specialized and technical terminology that is unique to public finance and budgeting. To help the reader understand the terms, a glossary of budgetary terminology has been included in the document.

ACCOUNT – A subdivision within a fund for the purpose of classifying transactions ACCRUAL BASIS OF ACCOUNTING – The method of accounting under which revenues are recorded when they are earned (regardless of when cash is received) and expenditures are recorded when goods and services are received (regardless of when disbursements are actually made at the time).

ADOPTED BUDGET – Revenues and appropriations approved by the City Council in June for the following fiscal year.

ALLOCATED COSTS – An expense charged by one department/division to another for services performed or expenditures of a general nature that are charged to one main account and allocated to other departments/divisions by a specified formula.

APPROPRIATION – Legal authorization granted by City Council to make expenditures and incur obligations for a specific purpose within a specific time frame.

APPROPRIATION LIMIT – As defined by Section 8 of Article XIIIB of the California Constitution, enacted by the passage of Proposition 4 at the November 6, 1979 general election, the growth in the level of certain appropriations from tax proceeds are generally limited to the level of the prior year’s appropriation limit as adjusted for changes in cost of living and population. Other adjustments may be made for such reasons as the transfer of services from one government entity to another.

ASSESSED VALUATION – A dollar value placed on real estate or other property by the County as a basis for levying property taxes.

ATTRITION – The unpredictable and uncontrollable, but normal, reduction of work force due to resignations and retirements.

AUDIT – A review of the City’s accounts by an independent auditing firm to substantiate fiscal year-end balances and assure compliance with generally accepted standards for financial accounting and reporting.

BALANCED BUDGET – Where budgeted operating revenues cover or exceed budgeted non-capital operating expenditures, avoiding budgetary procedures that balance current expenditures at the expense of meeting future years’ expenses such as postponing expenditures or accruing future years’ revenues. 287
BOND – A municipal bond is a written promise from a local government to repay a sum of money on a specific date at a specified interest rate.

BUDGET – A plan of financial operation, including an estimate of proposed expenditures/expenses for a given period (typically a fiscal year) and the proposed means of financing them (revenue estimates). Upon approval by the City Council, the budget appropriation resolution is the legal basis for expenditures in the fiscal year.

BUDGET AMENDMENT – A legal procedure utilized by the City Manager to revise a budget appropriation during the year. Adjustments to expenditures within or between department budgets may be accomplished administratively. City Council approval is required for additional appropriations from fund balances or new revenue sources.

BUDGET YEAR – The fiscal year for which the budget is being considered; fiscal year following the current year.

CAPITAL BUDGET – Annual appropriations for capital improvement projects such as street improvements, building construction and various kinds of major facility maintenance. Capital projects are supported by a five-year expenditure plan, which details funding sources and expenditure amounts. They often are multi-year projects, which require funding beyond the one-year period of the annual budget.

CAPITAL IMPROVEMENT PROGRAM (CIP) – A financial plan of authorized expenditures for tangible, long-term construction of, or improvements to, public physical facilities.

CAPITAL OUTLAY – A budget appropriation category which budgets all equipment, land or other fixed assets having a unit cost of more than $5,000 and an estimated useful life of over five years.

CAPITAL PROJECT FUND – A governmental fund used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds.

CARRYOVER OR CARRY FORWARD – Process of carrying a budgeted and encumbered item from the current fiscal year to the next fiscal year.

CASH BASIS OR CASH METHOD – An Accounting method that recognizes income and deductions when money is received or paid. The modified accrual method is the preferred method for government organizations.

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) - One of the longest-running programs of the U.S. Department of Housing and Urban Development, funds local community development activities such as affordable housing, anti-poverty programs, and infrastructure development.

CONTINGENCY – An appropriation of funds to cover unforeseen events that occur during the fiscal year
288
COST RECOVERY – The establishment of user fees that is equal to the full cost of providing services including indirect overhead and administrative costs.

DEBT SERVICE – Payment of the principal and interest on an obligation resulting from the issuance of bonds, notes or leasing arrangements.

DEBT SERVICE FUND – A governmental fund used to account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the government is obligated in some manner for the payment.

DEFICIT – An excess of expenditures or expenses over revenues (resources).

DEPARTMENT – An organizational unit comprised of divisions or programs. It is the basic unit of service responsibility that may include a broad mandate of related activities.

ENCUMBRANCE – A contingent liability, contract, purchase order, payroll commitment, tax payable, or legal penalty that is chargeable to an account. It ceases to be an encumbrance when paid-out or when the actual liability amount is determined and recorded as an expense.

EMERGENCY OPERATION CENTER (EOC) – A location from which centralized emergency management can be performed. EOC facilities are established by an agency or jurisdiction to coordinate the overall agency or jurisdictional response and support to an emergency.

EXPENDITURES – Monies spent, including current operating expenses, debt service and capital outlays.

EXPENSE – The actual spending of funds by an enterprise fund set-aside by an appropriation.

FISCAL SUSTAINABILITY - The ability of a government to sustain its current spending, tax and other policies in the long run without threatening government solvency or defaulting on some of its liabilities or promised expenditures.

FISCAL YEAR – The City’s year for accounting and budgeting purposes, which begins on July 1 and ends on June 30.

FORECAST – Estimate of the future impact of current revenue and expenditure policies based on specific assumptions about future conditions such as inflation or population growth. Forecasts are neither predictions about the future nor a statement of policy intentions.

FULL-TIME EQUIVALENT (FTE) – The amount of time a regular full or part-time position has been budgeted for in terms of the amount of time an employee works in a year. The City of Emeryville uses 1,000 hours to calculate the number of seasonal and part-time employees.
289
FUND – An independent fiscal and accounting entity used to record all financial transactions related to the specific purpose for which the fund was created.

FUND BALANCE – The amount of financial resources available for use. Generally, this represents the detail of all the annual operating surpluses and deficits since the fund’s inception.

GENERAL FUND – The primary fund used to account for all revenues and expenditures of the City not legally restricted as to use. This fund is used to offset the cost of the City’s general operations. Examples of departments financed by the General Fund include the General Government, Police, Public Works, Recreation, and other Administrative Departments.

GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA) - A professional organization of public officials united to enhance and promote the professional management of governmental financial resources by identifying, developing and advancing fiscal strategies, policies, and practices for the public benefit.

GOVERNANCE – The process of providing community leadership and overall direction for a City. It involves understanding the community’s desires for its future, focusing those desires into an achievable vision and establishing specific objectives and goals in order to realize that future vision. It also involves leadership in explaining City policies to the community and gathering support for City programs.

GRANT – Contributions, gifts of cash or other assets from another governmental entity to be used or expended for a specific purpose, activity or facility.

INFRASTRUCTURE – Facilities on which the continuance and growth of a community depend, such as streets and roads, sewers, public building, parks, etc.

INTERFUND TRANSFER IN/OUT- Monies transferred from one fund to another. Such money is transferred to finance the operations of another fund or to reimburse the fund for certain expenditures/expenses such as administrative support.

INTERNAL SERVICE FUND – A fund used to account for the services provided by one department to other departments on a cost-reimbursement basis.

MUNICIPAL CODE – A book that contains the City Council-approved ordinances currently in effect. The Code defines City policy. The Code contains the “laws” of the City.

OTHER POST EMPLOYMENT BENEFITS (OPEB) - The benefits that an employee will begin to receive at the start of retirement. This does not include pension benefits paid to the retired employee.

OPERATING BUDGET – Annual appropriation of funds for on-going program cost, including salaries and benefits, services and supplies, debt service and capital outlay. 290
ORDINANCE – A formal legislative enactment by the City Council. It has the full force and effect of law within City boundaries unless preempted by a higher form of law. An ordinance has higher legal standing than a resolution.

RECOMMENDED BUDGET – The financial and operating document submitted by the City Manager to the City Council for consideration.

RESERVE – an account used to record a portion of the fund balance as legally segregated for a specific use, usually at a future time.

RESOLUTION – A special order of the City Council, which has a lower legal standing than an ordinance.

REVENUES – Monies received or anticipated by a local government from both tax and non-tax sources during the fiscal year. Revenues include income from user fees, taxes, permits and other sources.

SALARIES AND BENEFITS – A budget category which generally accounts for full-time and part-time employees, overtime expenses and all employee benefits, such as medical, dental and retirement.

SECTION 115 TRUST –Employer assets placed in a trust which is used for the designated purpose of prefunding other post-employment benefits.

SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY – The primary purpose of the Successor Agency is to administer the wind down of the previous Redevelopment Agency’s operations which entails continued payment for financial obligations and fulfillment of contractual obligations entered into the Successor Agency prior to the enactment of Assembly Bill 26, which caused the dissolution of all Redevelopment Agencies in California.

TRANSIENT OCCUPANCY TAX (TOT) – This tax is collected from the operators of hotels and motels located within the City. A percentage of this tax is then remitted to the City.

UNFUNDED ACTUARIAL ACCRUED LIABILITY (UAL) – In regard to Pension, the amortized dollar amount needed to fund past service credit earned (or accrued) for members who are currently receiving retirement benefits, active members, and for members entitled to deferred benefits, as of the valuation date.

USER FEES – Fees charged to users of a particular service provided by the City. 291
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 INDEX
1999 Revenue Bonds Capital Project 444….………………………………………….41 2013 Lease Revenue Bond Debt Service 345……………………………………….131 Accrued Benefits 700……………………………………………………..…………….139
Acknowledgements ………………………………………………………………………...i
Administration……………………………….………………………………………….…19
Affordable Housing 299….…………………………………………………….………...43
Affordable Housing Impact Fees 239………………………………………………..…42 Bay Shellmound Assessment District 790………………………………….………...132 Budget Message………………………………………………………………….………...v
Budget Process and Basis of Budgeting.………….………………………………..…xxv Budget Resolution – (City Resolution No. 22-____)…...……………………….…..xxviii Budget Resolution – (Successor Agency Resolution No. 22-____)……….……….xxx Cal Home 208..…………………………………………………..………………………152
Capital Assets Policy…………………………………………………………….………230
Capital Outlay – Projects………………………………………………..……………..…41 Catellus 215………………………………………………..…………..…………………..44
Community Development Block Grant 205………………………………………...….157 Child Development 230……….………………….….……………….…………….……153
City of Emeryville Mission Statement……….………………………..…..…………….xvii City of Emeryville Organization Chart……………………………..…………………...xxiv Citywide Budget By Fund…………………………………………..……………………....1
Citywide Goals and Objectives……………………………………..…………………….xv Citywide Salary and Benefits by Category …………………………………………..…..3 Citywide Salary and Benefits by Program………………………………………………..4 Citywide Staffing Summary Comparison…………………………………………...…….5 Code Enforcement 271……………………….……………………………………..…..154
Commercial Property Transfer Tax Policy……………………………………………..221 Community Development Technology Fund 268…..……………………………..…..155 Community Development.…………………..…………………………………………….77
Community Programs Reserve 203…….…….…………………………………..……..12 293
 INDEX
Community Services……………………….……………………………………….……107
Debt Management Policy…………………..……………………………………………223
Debt Service Schedules……..……………………………………………………….….284
Dental 610…………………………………………………………………………………140
Developer Reimbursements 473………………………….……………….……….…….45 Disaster Fund 277..…………………………………………………………………….….13
East Bay Bridge District Debt Service 721………………………..……………..…….133 Economic Development Reserve 202..…..…….…………………………..…….……..14 Economic Uncertainty Reserve 275………………………………………….……….…15 Emergency Medical Service 258……..………..………………………….……………156 Emeryville Center Community Life 477……………………..………………...…….…..46 Environmental Programs 204.……………………………………….……………….…..47 EPA Grant 247……………………………………………………………….……….……48
Expenditures Summary by Classification 101….……….………………..…………….11 Expenditures Summary by Department 101….…….………………………..……..….10 Fire………………………………………….……………………………………….…….135
Gann Appropriation Limit Resolution No. 22-_____………………………………….219 Gas Tax 220………………………………………….…………..………..………………49
General Capital 475……………………………………………………………………….50
General Fund - Fund Balance Projection…….…………………………………….…….7 General Fund – Revenue Summary…………………………..………………………….9
General Fund – Total Fund Balance Reserves.………………...……………….….…..8 General Fund Expenditure Summary by Classification…………………...…………..11 General Fund Expenditure Summary by Department…………………………………10 General Plan Maintenance Fee 225……………………………………..…….………..52 Glossary of Budget Terms………………………………………………………………287
Grant Management Policy………………………………………………………………233
Grants 254……………………………………………..……….…………………….……53
Historical Timeline of Emeryville….…..………………………………………….….…xviii Housing Community Development…………………………………………….………157
294
 INDEX
Housing Successor (Restricted) 298….…………………………….……..…………...54 Information Technology 670………………………………………………………….….55
Investment Policy…….……………………………………………………………….....253
Litigation 270……………………………………………………………………….…….141
Location Map……………………………...……………………………………….…….xxiii
Major Maintenance 650..…………………………………………………....………...…56 Marina 495………………………………………………………………….........……….57
Measure B – Bicycles and Pedestrians 262…………………………………………..58 Measure B – Paratransit 261………………………………….……………………….158
Measure B – Streets and Roads 240…………………………………….……………..60 Measure BB – Bicycles and Pedestrians 264………………..…….………….………59 Measure BB – Paratransit 263…..………………………….……………………...….159 Measure BB – Streets and Roads 242………………….…………………….………..61 Measure D 266………………………………………….………………..………….……62
Measure F 267…………………………………………………………………………..160
MESA 295……….……………………………………………………………………….142
Mission Statement……………………………………………………………...………..xvii
Organization Chart……………………………………………………………...……….xxiv
Non-Department………………………………………………………..………...……..147
Park Impact Fees 237……………………………………………………...……….……63
Parking Program 269……………………………………………………………………161
Pedestrian Path Improvement 471.………………………………………...…..……….64 PEG Program 235……………………….…………….………………………….…..…162
Pension Trust 712……………………………………………………………………..….17
PERS Liability Fund Reserve 715…………………………………………………...….16 Police Impound Fund – Federal 211...…….……….………………………….………163 Police Impound Fund – Federal 213...…….……….………………………….………164 Police Impound Fund –State 210………………………………..……………………..165 Police…………….…………………………………………………………………….….171
Post-Employment Health Benefits 710………………………………..………...…….143 295
 INDEX
Property Based Improvement District 805…………………..……………………..166 Public Art 243……………………………………………………………….………..…65
Public Works………………………………………………………….……………….181
Purchasing Policy…………………………………………………………………..…266
Redevelopment 472………………………………….…….……………….….…..….67
Redevelopment Implementation Plan 479…………………..……………...……....66 Reserves Policy……………………………………………………………………….282
Revenues 101………………………..…………………………………………..………9
Road Maintenance and Rehabilitation 221…………………..……………..……….68 Sewer Capital 511………………………………………………………..…………….69
Sewer Connection Fee 513…………….…………………………………..………….70
Sewer Operations 510……………………………………………………...…………167
Small Local Business Support 212…………………..……….……………………..168 Source Reduction & Recycling 265……………………………..…………………….71 Staffing Summary…………………………….……………………………………..……6
Successor Agency………..…………………………..……………………………….211
Successor Agency RDA Retirement…………………..…………………………….213 Successor Agency 2014A Debt Service…………………………………………….214 Successor Agency 2014B Debt Service…………………………………………….215 Supplemental Law Enforcement 252….…………………………..………………..169 Table of Contents………………………………………………………………………..iii
Traffic Impact Fees 250………………………………………………….…..….……..72
Unemployment 620……………………………………………………….…..………144
Urban Forestry Fee 251…………………….………………….…….……….……….73
Vehicle Replacement 660……………………………………………………..………75
VRF – Streets and Roads Funds 238………………………………………………..74 Workers Compensation 600………………….……………………………..……….145
296