Healdsburg City Council
October 17, 2022

CITY OF HEALDSBURG

CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY

REGULAR MEETING AGENDA
City Hall Council Chamber Meeting Date: October 17, 2022 401 Grove Street Time: 6:00 PM
Healdsburg, CA 95448 Date Posted: October 12, 2022
(707) 431-3317
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CORONAVIRUS (COVID-19) ADVISORY NOTICE
Consistent with Government Code section 54953(e), City Council Members will be participating in this meeting either via Zoom Webinar or in person, socially distanced, in the Council Chamber at 401 Grove Street.

How to Observe the Meetings
To maximize public safety while maintaining transparency and public access, the Healdsburg City Council will be using Zoom Webinar service to allow remote participation. Members of the public who only wish to watch the meeting live or recorded can do so by using the link http://healdsburgca.iqm2.com/Citizens/default.aspx or watching it on the City’s Facebook Page www.facebook.com/cityofhealdsburg.

To Watch the Meeting and Submit Public Comment as Part of the Zoom Webinar:

To join by computer, tablet, or mobile device:

1. Go to https://zoom.us/join and type in the Webinar ID: 819 1094 0770 or follow this link:
https://cityofhealdsburg-org.zoom.us/s/81910940770 (Pre-registration for the meeting is not required.)

2. Fill in your full name, verify you are not a robot (if required), and click “Join”.

3. If the meeting host has started the Webinar, you should join automatically. If the meeting host has not started the Webinar, remain in the Webinar and it will start shortly.

To join by phone:

1. Dial 669-900-9128 or 253-215-8782 or 346-248-7799.

2. Enter the meeting ID: 819 1094 0770 and press # #.

3. If the meeting host has started the meeting, you should join automatically. If the meeting host has not started the meeting, remain in the meeting and it will start shortly.

To Submit Public Comment
By computer, tablet, or mobile device:

1. In the bottom center of the screen is a hand icon, click on “Raise Hand”. The hand icon will place you in line to speak.

2. When it is your turn to comment, the meeting moderator will call upon you to comment.

State your first name, last name, address, and comment. Each speaker will be given no more than three (3) minutes to make your comment.

City Council/RSA Regular Meeting Agenda
October 17, 2022

3. When you are done commenting, please remember to lower hand.

By phone:

1. Press *9 to raise your hand.

2. When it is your turn to comment, the meeting moderator will call the last four digits of your phone number. Press *6 to speak at that time. State your first name, last name, address, and comment. Each speaker will be given no more than three (3) minutes to make your comment.

3. At the conclusion of your comments or when three minutes has passed, the meeting host will remove your ability to talk.

Americans with Disabilities Act Accommodations
Any member of the public who needs accommodations should email the City Clerk at [email protected] or by calling 707-431-3317. The City Clerk will use their best efforts to provide reasonable accommodations to provide as much accessibility as possible while also maintaining public safety in accordance with the city procedure for resolving reasonable accommodation requests. All reasonable accommodations offered will be listed on the city website at https://www.ci.healdsburg.ca.us/406/ada---public-accessibility.

City Council/RSA Regular Meeting Agenda
October 17, 2022

1. CALL TO ORDER/ROLL CALL
A. Pledge of Allegiance
B. Approval of Agenda

2. REPORT ON CLOSED SESSION(S)

3. ANNOUNCEMENTS/PRESENTATIONS
A. Proclamation declaring October 2022 as Domestic Violence Awareness Month B. Proclamation recognizing Shawn Sumpter on the occasion of her retirement

4. CITY MANAGER REPORTS

5. PUBLIC COMMENTS ON ITEMS ON THE CONSENT CALENDAR AND NON

AGENDA ITEMS
This time is set aside to receive comments from the public regarding matters of general interest not on the agenda, but related to City Council/RSA business. Pursuant to the Brown Act, however, the City Council cannot consider any issues or take action on any requests during this comment period. Public comment on non-agenda items is limited to thirty (30) minutes total for all speakers, with each speaker given no more than three (3) minutes. If there are more than ten (10) audience/public comment speakers, the Mayor may reduce each speaker’s time from three (3) minutes so that all speakers have an equal time to speak. At the Mayor’s discretion, the public comment period may be extended past 30 minutes. Members from the public wishing to speak on a Consent Agenda item should notify the Mayor during Public Comments.

6. CONSENT CALENDAR
The following items listed on the Consent Calendar are considered routine in nature or have been previously reviewed by the Council and require little or no further discussion by the Council, public, or applicant and action will be taken by the City Council by a single motion. A Councilmember may request that an item be removed from the Consent Calendar and action taken separately. Consent by a majority of the Councilmembers present will be required in order to remove the item. In the event an item is removed, the matter will be considered immediately following the adoption of the Consent Calendar.

A. Fiscal Year 2022-2023 Investment Policy Update
Adopt a Resolution rescinding Resolution No. 80-2022 and adopting the Fiscal Year 2022-2023 Investment Policy.

B. Election Services Agreement with the County of Sonoma City Council/RSA Regular Meeting Agenda
October 17, 2022

Adopt a Resolution approving an agreement with the County of Sonoma to provide election services for all municipal elections of the City of Healdsburg for the period of January 1, 2023 through December 31, 2027 and authorizing the City Manager to execute the agreement on behalf of the City.

C. Acceptance of the FY21/22 Annual Concrete Maintenance Project Adopt a Resolution accepting the FY21/22 Annual Concrete Maintenance Project as complete and authorizing staff to file a Notice of Completion with the County Recorder's Office.

D. Community Development Block Grant Curb Ramp Improvements Project Bid Award
Adopt a Resolution conditionally awarding the Community Development Block Grant Curb Ramp Improvements Project construction contract to Yukon Construction Inc., of Santa Rosa, California, in the amount of $685,111.00; authorizing the City Manager to execute the contract; authorizing the City Manager to negotiate and approve contract change orders up to 10% of the original contract amount and approving an increase in appropriations by $351,389.

E. Accept the Water Reclamation facility Flood Mitigation Project, Project SE003, as Complete
Adopt a Resolution accepting the Water Reclamation Facility Flood Mitigation Project as complete and authorizing staff to file the Notice of Completion.

F. Renewal of the Healdsburg Tourism Improvement District Pass an ordinance of the City Council of the City of Healdsburg adding Chapter 3.32 to Title 3 of the Healdsburg Municipal Code renewing the Healdsburg Tourism Improvement District (HTID) and declaring results of the Majority Protest Proceedings.

G. Healdsburg Tourism Improvement District Management Contract Adopt a Resolution approving the Owners’ Association Agreement between the City of Healdsburg and the Healdsburg Chamber of Commerce for administration and implementation of the Healdsburg Tourism Improvement District (HTID) Management Plan and authorizing the City Manager to execute the contract.

H. Resolution to Approve a Loan with Eden Mill District, LP for the Randall Apartments
Adopt a Resolution approving a $250,000 loan to Eden Mill District, LP, from the City of Healdsburg affordable housing fund for a term of twenty (20) years and authorizing the City Manager to execute the agreement and take any related actions necessary to complete the transaction.

City Council/RSA Regular Meeting Agenda
October 17, 2022

I. 2022 Community Development Block Grant Application Authorization Adopt a Resolution authorizing the City Manager to submit an application for the FY 2022-23 Community Development Block Grant funding in the amount of $200,000 for the L&M Village and authorizing the City Manager to execute the agreement and any other documents necessary to complete the transaction.

J. Adoption of Resolution Authorizing Remote Meetings
Adopt a Resolution authorizing remote meetings of the City Council and other legislative bodies.

7. PUBLIC HEARINGS
A. Various Healdsburg Municipal Code, Title 20 Land Use Code Amendments Conduct a public hearing and, by motion, introduce for first reading, by title only, an ordinance to amend Healdsburg Municipal Code Sections 20.16.150 (Number of required vehicular spaces); Section 20.08.145 (Permitted and conditionally permitted uses: PR, CD and CS Districts), Table 10; Section 20.20.075 (Alcoholic Beverage Establishments); Section 20.28.310 (Definitions); and related CEQA Exemption.

8. OLD BUSINESS
None.

9. NEW BUSINESS
A. 2020 Greenhouse Gas (GHG) Inventory Summary for Healdsburg Receive a presentation summarizing the results and discussion of the 2020 greenhouse gas (GHG) inventory for Healdsburg.

B. Kickoff for Climate Mobilization Strategy Development Receive a presentation on the project plan for developing a Climate Mobilization Strategy and provide feedback to staff.

10. COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE

PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS

11. WRITTEN COMMUNICATIONS
A. Written Communication from Community Development Director Scott Duiven regarding Planning Commission actions taken on September 27, 2022 No action required.

City Council/RSA Regular Meeting Agenda
October 17, 2022

12. ADJOURN CITY COUNCIL / RSA MEETING

13. FUTURE AGENDA ITEMS
A. Future Agenda Items
Some of the items planned for the November 7, 2022 Council Meeting include, but are not limited to:
• 2022-23 Healdsburg Chamber of Commerce Agreement
• Fire and Building Code Ordinance Introduction
• Staff presentation on options for use of bollards on trails Some of the items planned for the November 21, 2022 Council Meeting include, but are not limited to:
• Housing Element Work Group Plan
• Quarter One Financial Update
These agenda items may be delayed or removed before the meeting. Please review the agenda for that meeting when it is published to ensure that you can voice your opinion about issues you are concerned about.

SB 343 - DOCUMENTS RELATED TO OPEN SESSION AGENDAS: Any writings or documents provided to a majority of the City Council/Redevelopment Successor Agency Board regarding any item on this agenda after the posting of this agenda and not otherwise exempt from disclosure, will be made available for public review in the City Clerk's Office located at City Hall, 401 Grove Street, Healdsburg, during normal business hours. If supplemental materials are made available to the members of the City Council/Redevelopment Successor Agency Board at the meeting, a copy will be available for public review at the City Hall Council Chambers, 401 Grove Street, Healdsburg, CA 95448.

These writings will be made available in appropriate alternative formats upon request by a person with a disability, as required by the Americans with Disabilities Act.

DISABLED ACCOMMODATIONS: The City of Healdsburg will make reasonable accommodations for persons having special needs due to disabilities. Please contact Raina Allan, City Clerk, at Healdsburg City Hall, 401 Grove Street, Healdsburg, California, 431-3317, at least 72 hours prior to the meeting, to ensure the necessary accommodations are made.

CIUDAD DE HEALDSBURG
CONSEJO MUNICIPAL/AGENCIA SUCESORA DE REURBANIZACIÓN
ORDEN DEL DÍA DE LA REUNIÓN HABITUAL
City Hall Council Chamber
(Salón del Consejo Municipal) Fecha de la reunión: 17 de octubre de 2022 401 Grove Street Hora: 6:00 pm
Healdsburg, CA 95448 Fecha de publicación: 12 de octubre de 2022 (707) 431-3317
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AVISO SOBRE EL CORONAVIRUS (COVID-19)
En consonancia con la Sección 54953(e) del Código de Gobierno, los miembros del Consejo Municipal participarán en esta reunión por seminario o en persona, con distanciamiento físico, en las cámaras del Consejo en 401 Grove Street.

Cómo observar las reuniones
Para maximizar la seguridad del público y a la vez mantener la transparencia y el acceso público, el Consejo Municipal de Healdsburg usará el servicio de seminario de Zoom para permitir la participación remota. Los miembros del público que sólo deseen ver la reunión en vivo o grabada, pueden hacerlo utilizando el siguiente enlace:
http://healdsburgca.iqm2.com/Citizens/default.aspx o en la página de Facebook de la Ciudad:
www.facebook.com/cityofhealdsburg.

Para observar la reunión y presentar un comentario público como parte del seminario Zoom:

Para participar por computadora, tableta o teléfono móvil:

1. Vaya a https://zoom.us/join y escriba el identificador (ID) del seminario: 819 1094 0770 o siga este enlace: https://cityofhealdsburg-org.zoom.us/s/81910940770 (No se requiere preinscripción para la reunión).

2. Escriba su nombre completo y, si se requiere, verifique que no es un robot y haga clic en “Join”.

3. Si la persona que anfitriona la reunión ya ha iniciado el seminario, usted ingresará automáticamente a la reunión. Si esa persona no ha iniciado el seminario, permanezca en él y se iniciará en breve.

Para participar por teléfono:

1. Marque 669-900-9128 o 253-215-8782 o 346-248-7799.

2. Escriba el identificador (ID) de la reunión: 819 1094 0770 y oprima # #.

3. Si el anfitrión de la reunión ya ha iniciado el seminario, usted ingresará automáticamente a la reunión. Si tal persona no ha iniciado el seminario, permanezca en él y se iniciará en breve.

Consejo Municipal/Orden del día de la reunión habitual
17 de octubre de 2022
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Para presentar un comentario público
Por computadora, tableta o teléfono móvil:

1. En medio del pie de la página de la pantalla hay un símbolo de una mano, haga clic en “Raise Hand” (Levante la mano). Presionar el símbolo de la mano le colocará en la fila para hablar.

2. Cuando sea su turno para hacer un comentario, el moderador de la reunión le llamará para que lo haga. Diga su primer nombre, su apellido, su dirección y haga su comentario. Cada persona tendrá no más de tres (3) minutos para hacer su comentario.

3. Por favor, recuerde bajar la mano cuando termine su comentario.

Por teléfono:

1. Oprima *9 para levantar la mano.

4. Cuando sea tu turno para hacer un comentario, el moderador de la reunión llamará los últimos cuatro dígitos de su número de teléfono. Oprima *6 para hablar en ese momento.

Diga su primer nombre, apellido, dirección y haga su comentario. Cada persona tendrá no más de tres (3) minutos para hacer su comentario.

2. Al concluir sus comentarios, o cuando hayan pasado tres minutos, el anfitrión de la reunión le quitará su posibilidad de hablar.

Adaptaciones de la Ley de Estadounidenses con Discapacidades Cualquier miembro del público que necesite adaptaciones, debe enviar un correo electrónico a la secretaria municipal a [email protected] o llamar al 707-431-3317. La secretaria municipal hará todo lo posible por proporcionar adaptaciones razonables y ofrecer la mayor accesibilidad posible, así como al mismo tiempo mantener la seguridad pública de acuerdo con el procedimiento de la Ciudad para resolver las solicitudes de adaptaciones razonables. Todas las adaptaciones razonables ofrecidas se enumeran en la página web de la ciudad en:
https://www.ci.healdsburg.ca.us/406/ada---public-accessibility.

Consejo Municipal/Orden del día de la reunión habitual
17 de octubre de 2022
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1. LLAMADA AL ORDEN/PASAR LISTA
A. Juramento a la bandera
B. Aprobación del Orden del Día

2. INFORME SOBRE LA SESIÓN/LAS SESIONES A PUERTA CERRADA

3. ANUNCIOS/PRESENTACIONES
A. Proclamación por la cual se declara octubre de 2022 como el Mes de la Concientización sobre la Violencia Doméstica
B. Proclamación de reconocimiento a Shawn Sumpter con motivo de su jubilación.

4. INFORMES DEL ADMINISTRADOR DE LA CIUDAD

5. COMENTARIOS PÚBLICOS SOBRE LOS PUNTOS EN EL CALENDARIO ACORDADO Y LOS PUNTOS NO INCLUIDOS EN EL ORDEN DEL DÍA
Este tiempo está dedicado para recibir comentarios del público sobre asuntos de interés general no incluidos en el orden del día, pero relacionados con los asuntos del Consejo Municipal/RSA. Sin embargo, conforme la Ley Brown, el Consejo Municipal no puede considerar temas o tomar medidas sobre cualquier solicitud hecha durante este periodo de comentario. Los comentarios del público sobre los asuntos no incluidos en el orden del día están limitados a un total de 30 minutos para todos los participantes, y cada persona tendrá no más de tres (3) minutos. Si hay más de 10 comentarios públicos, el alcalde puede reducir el tiempo de tres (3) minutos de cada orador para que así todos los oradores tengan el mismo tiempo para hablar. A discreción del alcalde, se puede extender el periodo de comentarios públicos a más de 30 minutos. Los miembros del público que deseen hablar sobre un asunto en el Calendario Acordado deben notificarle al alcalde durante los comentarios públicos.

6. CALENDARIO ACORDADO
Los siguientes puntos enumerados en el Calendario Acordado se consideran rutinarios o han sido discutidos previamente por el Consejo y requieren poca o ninguna discusión por parte del Consejo, el público o solicitante y el Consejo Municipal tomará medidas en una sola moción. Un miembro del Consejo puede solicitar que se excluya un punto del Calendario Acordado y tomar medidas por separado. Para excluir un punto, se requiere el consentimiento de una mayoría de los miembros del Consejo presentes. En caso de que se excluya un punto, el asunto se considerará de inmediato después de la adopción del Calendario Acordado.

A. Actualización de la Política de Inversiones del año fiscal 2022-2023 Adoptar una Resolución por la cual se rescinde la Resolución 80-2022 y se adopta la Política de Inversiones para el año fiscal 2022-2023.

Consejo Municipal/Orden del día de la reunión habitual
17 de octubre de 2022
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B. Acuerdo de Servicios Electorales con el Condado de Sonoma Adoptar una Resolución por la cual se aprueba un acuerdo con el Condado de Sonoma para proporcionar servicios electorales para todas las elecciones municipales de la Ciudad de Healdsburg por el periodo del 1.º de enero de 2023 al 31 de diciembre de 2027 y autoriza al Administrador de la Ciudad a ejecutar el acuerdo en nombre de la Ciudad.

C. Aceptación del proyecto anual de mantenimiento de concreto del año fiscal 21/22 Adoptar una Resolución que acepte el proyecto anual de mantenimiento de concreto del año fiscal 21/22 como completo y que autorice al personal a presentar un Aviso de Finalización en la Oficina de Registro del Condado.

D. Adjudicación del proyecto de mejoras a rampas de aceras financiado por la Subvención en Bloque para el desarrollo comunitario
Adoptar una Resolución por la cual se adjudica de manera condicional el contrato de construcción del proyecto de mejoras de rampas de aceras financiadas por una subvención en bloque para el desarrollo comunitario a Yukon Construction Inc. de Santa Rosa, California, por un importe de $685,111.00; autoriza al Administrador de la Ciudad para que ejecute el contrato; autoriza al Administrador de la Ciudad para que negocie y apruebe órdenes de cambio del contrato hasta un 10% del importe original del mismo y aprueba aumentar las apropiaciones por $351,389.

E. Aceptar el Proyecto de Mitigación de Inundaciones de la Instalación de Recuperación de Aguas, Proyecto SE003, como completo
Adoptar una Resolución por la cual se acepta que el Proyecto de Mitigación de Inundaciones de la Instalación de Reclamación de Aguas como completo y se autoriza a presentar el Aviso de Finalización.

F. Renovación del Distrito de Mejora del Turismo de Healdsburg Aprobar una Ordenanza del Consejo Municipal de la Ciudad de Healdsburg por la cual se añade el Capítulo 3.32 al Título 3 del Código Municipal de Healdsburg por el cual se renueva el Distrito de Mejora Turística de Healdsburg (HTID, por sus siglas en inglés) y se declaran los resultados del Procedimiento de Protesta por Mayoría.

G. Contrato de administración del Distrito de Mejora Turística de Healdsburg Consejo Municipal/Orden del día de la reunión habitual
17 de octubre de 2022
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Adoptar una Resolución que apruebe el Acuerdo de la Asociación de Propietarios entre la Ciudad de Healdsburg y la Cámara de Comercio de Healdsburg para la administración e implementación del Plan de Administración del Distrito de Mejora Turística de Healdsburg (HTID) y que autorice al Administrador de la Ciudad a ejecutar el contracto.

H. Resolución para aprobar un préstamo con Eden Mill District, LP para los Apartamentos Randall
Adoptar una Resolución que apruebe un préstamo por la cantidad de $250,000 con Eden Mill District, LP, para los Apartamentos Randall por un término de 20 años y autoriza al Administrador de la Ciudad a ejecutar el acuerdo y tomar cualquier acción relacionada necesaria para completar la transacción.

I. Autorización de la Solicitud de Subvención en Bloque para el Desarrollo de la Comunidad 2022
Adoptar una Resolución que autorice al Administrador de la Ciudad a presentar una solicitud para el financiamiento de la Subvención en Bloque para el Desarrollo Comunitario del año fiscal 2022-23 por la cantidad de $200,000 para la Villa L&M y autorizar al Administrador de la Ciudad a ejecutar el acuerdo y cualquier otro documento necesario para completar la transacción.

J. Adopción de la Resolución que autoriza las reuniones remotas Adoptar una Resolución que autorice las reuniones remotas del Concejo Municipal y otras entidades legislativas.

7. AUDIENCIAS PÚBLICAS
A. Varias Enmiendas al Código Municipal de Healdsburg, Título 20 del Código de Uso de Terrenos
Llevar a cabo una audiencia pública y, por moción, presentar para primera lectura, solo por el título, una ordenanza para modificar la Sección 20.16.150 del Código Municipal de Healdsburg (Número de espacios vehiculares requeridos); Sección 20.08.145 (Usos permitidos y condicionalmente permitidos: Distritos PR, CD y CS), Tabla 10; Sección

20.20.075 (Establecimientos que sirven bebidas alcohólicas); Sección 20.28.310 (Definiciones); y la Exención relacionada de la Ley de Calidad Ambiental de California (CEQA, por sus siglas en inglés).

8. ASUNTOS PENDIENTES
Ninguno.

Consejo Municipal/Orden del día de la reunión habitual
17 de octubre de 2022
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9. ASUNTOS NUEVOS
A. Resumen del inventario de gases de efecto invernadero (GHG, por sus siglas en inglés) de Healdsburg en 2020
Recibir una presentación resumiendo los resultados y discusión acerca del inventario de gases de efecto invernadero (GHG) en Healdsburg de 2020.

B. Inicio del desarrollo de la Estrategia de Movilización Climática Recibir una presentación del personal del plan del proyecto para desarrollar una Estrategia de Movilización Climática y dar su opinión al personal.

10. INFORMES DEL CONSEJO SOBRE ASUNTOS DE INTERÉS QUE HAN OCURRIDO DESDE LA REUNIÓN HABITUAL ANTERIOR/INFORMES DE

REEMBOLSO DE GASTOS

11. COMUNICACIONES ESCRITAS
A. Comunicación escrita del Director de Desarrollo Comunitario Scott Duiven con respecto a las acciones de la Comisión de Planificación tomadas el 27 de agosto de 2022.

No se requiere ninguna acción.

12. TERMINAR LA REUNIÓN DEL CONSEJO MUNICIPAL/RSA

13. PUNTOS FUTUROS PARA EL ORDEN DEL DÍA
A. Puntos futuros para el orden del día
Algunos de los puntos planeados para la reunión del Consejo del 7 de noviembre de 2022 incluyen, pero no se limitan a:
• Acuerdo con la Cámara de Comercio de Healdsburg para 2022-23 • Introducción a la Ordenanza del Código de Incendios y Construcción • Presentación del personal acerca de opciones para el uso de bolardos en senderos Consejo Municipal/Orden del día de la reunión habitual
17 de octubre de 2022
Página 7
Algunos de los puntos planeados para la reunión del Consejo del 21 de noviembre de 2022 incluyen, pero no se limitan a:

• Plan del Grupo de Trabajo del Elemento de Viviendas
• Actualización financiera del primer trimestre
Estos puntos del orden del día se pueden retrasar o eliminar antes de la reunión. Por favor, revise el orden del día de la reunión indicado cuando se publique para garantizar que pueda expresar su opinión acerca de los temas que le interesan.

SB 343 - DOCUMENTOS RELACIONADOS CON EL ÓRDEN DEL DÍA DE LAS SESIONES ABIERTAS: Cualquier escrito o documento provisto a una mayoría de la Junta del Consejo Municipal/Agencia de Desarrollo Sucesora con respecto a cualquier punto en este orden del día después de la publicación de la misma y que no esté exento de divulgación, se pondrá a disposición del público en la Oficina de la Secretaría Municipal ubicada en City Hall, 401 Grove Street, Healdsburg, durante horas de oficina normales. Si el material complementario se pone a disposición a los miembros de la Junta del Consejo Municipal/Agencia de Desarrollo Sucesora durante la reunión, una copia hará disponible para la revisión pública en las Cámaras del Consejo Municipal, 401 Grove Street, Healdsburg, CA 95448.

Estos escritos se pondrán a disposición en formatos alternativos apropiados a petición de una persona con discapacidad, tal y como exige la Ley de Estadounidenses con Discapacidades.

ADAPTACIONES POR DISCAPACIDAD: La ciudad de Healdsburg hará adaptaciones razonables para las personas con necesidades especiales debidas a discapacidades. Por favor, contacte a Raina Allan, secretaria municipal, en Healdsburg City Hall, 401 Grove Street, Healdsburg, California, 431-3317, por lo menos 72 horas antes de la reunión para garantizar que se realicen las adaptaciones necesarias.

3.A.a
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Attachment: Proclamation (3794 : Proclamation - Domestic Violence Awareness Month)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Fiscal Year 2022-2023 Investment Policy Update PREPARED BY: Katie Edgar, Finance Director
STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Adopt a Resolution rescinding Resolution No. 80-2022 and adopting the Fiscal Year 2022-2023 Investment Policy.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

In accordance with California Government Code Section 53646(a)(2) and the City Municipal Code, the Finance Director as Treasurer must submit an Investment Policy for City Council review annually. City Council reviewed and adopted the Fiscal Year 2022-2023 Investment Policy on June 21st, 2022. The City subsequently completed a Request for Proposals for investment management services and awarded a contract to PFM Asset Management (PFMAM) marking a transition from former City advisor Robinson Capital Management (RCM).

RCM is a one-person firm that provided passive investment management services, focusing on U.S. Treasuries, Federal Agency Issues, and State Local Agency Investment Fund. PFMAM is a large firm that provides active investment management and uses all investment types authorized under state law to secure a diversified portfolio that achieves the City safety, liquidity, and yield goals. PFMAM employs a team of 261 employees and implements an internal committee structure that ensures transparency and accountability while relying on research and analysis.

DISCUSSION/ANALYSIS:

Since executing the contract, the City and PFMAM have conducted a cash analysis to determine the optimal amount of liquidity and developed a strategy for the investment portfolio that benchmarks against the Intercontinental Exchange Bank of America Merrill Lynch 0-5 Year U.S Treasury Index. After completing a thorough review of the current Investment Policy with

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PFMAM, staff propose several changes to provide clarity, add limitations to ensure safety of principle, and expand investment types to improve diversification and provide higher yields.

Staff also propose several administrative changes to algin the Policy with the recent reorganization of the Finance Department and the onboarding of PFMAM as a discretionary portfolio manager. The significant policy changes are listed below. • The various investment types were analyzed and assigned a maximum portfolio allocation as outlined in the Table below.

Investment Type Maximum Percentage of Portfolio
Local Agency Bonds 30%
State of California Obligations 30%
CA Local Agency Obligations 30%
Obligations of other 49 States 30%
Money Market Funds 20%
Commercial Paper 25%
Negotiable Certificates of Deposit 30%
Repurchase Agreements 20%
Medium-term Corporate Bonds 30%
Mortgage Pass-Though Securities and
Collateralized Mortgage Obligations 10%
Supranationals 30%
Sonoma County Pooled Fund 10%
• The amount of City funds that may be invested in any one institution would be limited to no more than five percent (5%) across all sectors except for U.S. Treasuries, Federal Agency Issues, money markets and investment pools.
• The following investment types are proposed to be added as authorized investments o Local Government Investment Pools
o Registered treasury notes or bonds of any of the other 49 states in addition to California
o Mortgage Pass-Though Securities and Collateralized Mortgage Obligations • Socially Responsible Investing was defined with the parameters of excluding any corporate investments in the sectors of Fossil Fuels, Tobacco, and Firearms, which is consistent with the approach that has been taken in a large number of California municipalities.
• All investment types except for Medium-term corporate bonds will now require “A” ratings by one nationally recognized rating service as opposed to two to expand options for purchasing bond issuances that are often only rated by a single agency.

As a result of the transition to a larger and more experienced investment management firm, the City portfolio is expected to increase in diversity and size. The proposed policy changes provide portfolio constraints that align with City risk tolerance and social responsibility to guide the diversification process. PFMAM has a robust internal infrastructure to review and approve

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issuers before any investments are made, including multiple review committees guided by a consistent set of review practices and policies. PFMAM’s Credit Research Group monitors the City’s corporate issuers and presents formal credit reviews to an internal Taxable Credit Committee and Public Finance Credit Committee to determine corporate eligibility on the approved list of investments. These committees follow policies and risk guidelines established by the Credit Risk Management Committee when completing their review and recommendations.

ENVIRONMENTAL STEWARDSHIP:

The policy includes Socially Responsible Investing parameters that disallow investments in the fossil fuels industries to promote environmental stewardship.

ALTERNATIVES:

The City Council could choose not to update the Investment Policy and PFMAM will continue to provide Investment Management Services in accordance with the current Fiscal Year 2022-2023 Investment Policy. Council could also provide feedback on specific items and direct staff to return to Council with changes.

FISCAL IMPACT:

There is no direct fiscal impact from the proposed action.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(4)(5) of the California Environmental Quality Act (“CEQA”) guidelines, approval of this resolution is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Resolution
Investment Policy
Redline Investment Policy

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CITY OF HEALDSBURG
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG RESCINDING RESOLUTION NO. 80-2022

AND ADOPTING AN UPDATED INVESTMENT POLICY FOR
FISCAL YEAR 2022-2023
WHEREAS, on June 21
st
, 2022, City Council approved Resolution 80-2022 adopting the Fiscal Year 2022-2023 Investment Policy in accordance with California Government Code Sections 53600 et seq; and
WHEREAS, on September 6
th, 2022, City Council approved Resolution 132-2022 awarding a contract to PFM Asset Management (PFMAM) for Investment Management Services; and WHEREAS, PFMAM has completed a thorough review of the current Investment Policy and has collaborated with City staff on several changes; and WHEREAS, Section III of the City’s policy clearly specifies the three primary objectives of the City’s investment activities in order of priority as safety, liquidity and yield; and WHEREAS, the proposed changes align with the City’s primary objectives by adding single issuer limitations and portfolio allocation limitations to ensure safety, expanding short term investment types to maintain liquidity, and providing diversification options that increase yield; and
WHEREAS, the proposed policy includes Socially Responsible Investment parameters that exclude corporate investments in sectors that do not align with the Cities social and environmental standards.

NOW, THEREFORE, BE IT RESOLVED, the City Council finds that the City’s investment policy complies with California Government Code Sections 53600 et seq., which governs investment practices of local governments; and
BE IT FURTHER RESOLVED, the City Council of the City of Healdsburg rescinds Resolution No. 80-22 and adopts the updated City of Healdsburg Investment Policy for Fiscal Year 2022-23 attached as Exhibit A.

PASSED, APPROVED AND ADOPTED, this 17th day of October 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
___________________________________ ____________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Attachment: Resolution (3785 : FY 22-23 Investment Policy Update) City of Healdsburg Investment Policy 2 Year 2022/23
Investment Policy
Fiscal Year 2022-2023

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Attachment: Investment Policy (3785 : FY 22-23 Investment Policy Update) City of Healdsburg Investment Policy 3 Year 2022/23

TABLE OF CONTENTS
I. MISSION STATEMENT..................................................................................................3 II. SCOPE
A. Pooling of Funds .........................................................................................................3 B. Funds Included in this Policy......................................................................................3 C. Funds Excluded from this Policy................................................................................3 III. GENERAL OBJECTIVES
A. Safety ..........................................................................................................................3 B. Liquidity......................................................................................................................4 C. Yield (Return on Investment) .....................................................................................4 IV. STANDARDS OF CARE
A. Prudence ......................................................................................................................4 B. Ethics and Conflicts of Interest...................................................................................4 C. Delegation of Authority ..............................................................................................5 D. Investment Management Committee ..........................................................................5 E. Internal Controls .........................................................................................................5 V. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS ...............................5 VI. SAFEKEEPING AND CUSTODY...................................................................................5 VII. SUITABLE AND AUTHORIZED INVESTMENTS
A. Investment Types ........................................................................................................6 B. Investment Summary Table ......................................................................................10 C. Collateralization ........................................................................................................11 D. Investments Not Approved .......................................................................................11 E. Investment Pools/Money Market Funds ...................................................................11 VIII. INVESTING PARAMETERS
A. Diversification...........................................................................................................12 B. Maximum Maturities ................................................................................................12 IX. REPORTING
A. Quarterly Reporting to City Council .........................................................................13 B. Reporting to California Debt and Investment Advisory Commission (CDIAC) ......13 X. PERFORMANCE STANDARDS...................................................................................13 A. Market Yield (Benchmark).......................................................................................13 B. Marking to Market ....................................................................................................13 C. Review of Investment Portfolio................................................................................14 XI. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes ..............................................................................14 B. Annual Statement of Investment Policy ...................................................................14 C. Exceptions .................................................................................................................14 APPENDIX: GLOSSARY OF INVESTMENT TERMS ............................................................. 15

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Attachment: Investment Policy (3785 : FY 22-23 Investment Policy Update) City of Healdsburg Investment Policy 3 Year 2022/23
I. MISSION STATEMENT
It is the policy of the City of Healdsburg (“City”) to invest public funds in a manner that will provide maximum security, adequate liquidity and sufficient yield, while meeting the daily cash flow demands of the City and conforming to all statutes and regulations governing the investment of public funds.

II. SCOPE
This investment policy applies to all the financial assets of City of Healdsburg. These funds are accounted for in the City’s audited Annual Financial Report. If the City invests funds on behalf of another agency and, if that agency does not have its own policy, the City's investment policy shall govern the agency's investments.

A. Pooling of Funds
Except for cash in certain restricted and special funds, the City shall consolidate cash balances from all funds to maximize investment earnings. Investment income shall be allocated to various funds in accordance with generally accepted accounting principles.

B. Funds Included in this Policy
General Fund
Special Revenue Funds
Capital Project Funds
Enterprise Funds
Fiduciary Funds
Utility Funds
Any new fund created by City Council unless specifically exempted C. Funds Excluded from this Policy
This investment policy does not apply to bond proceeds, deferred compensation funds, retirement or other post-employment benefits trust funds as these are governed under separate California Government Code sections or other documentation.

III.GENERAL OBJECTIVES
The primary objectives, in priority order, of the City’s investment activities are safety, liquidity and yield.

A. Safety
Preservation 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. The objective shall be to mitigate credit risk and interest rate risk. To attain this objective, the City shall diversify its investments by investing funds among several financial institutions and a variety of securities offering independent returns.

1. Credit Risk
The City shall minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by:
 Limiting investments to securities allowed by this policy  Pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisers with which the City will do business
 Diversifying the investment portfolio so as to minimize the impact any one industry/investment class can have on the portfolio

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2. Interest Rate Risk
To minimize the negative impact of material changes in the market value of securities in the portfolio, the City shall:
 Structure the investment portfolio so that securities mature concurrent with cash needs to meet anticipated demands, thereby avoiding the need to sell securities on the open market prior to maturity
 Diversify the City’s investments among maturities
 Invest a portion of the operating funds primarily in shorter-term securities, and overnight investment vehicles, including but not limited to, money market mutual funds, the State of California’s Local Agency Investment Fund (“LAIF”), and local government investment pools (“LGIP”).

B. Liquidity
The City’s investment portfolio shall remain sufficiently liquid to enable the City to meet all operating requirements that might be reasonably anticipated without requiring a sale of securities. Since all possible cash demands cannot be anticipated, the portfolio shall consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds, LAIF, or LGIPs, which offer same-day liquidity for short-term funds.

C. Yield (Return on Investment)
The City’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and the liquidity characteristics of the portfolio. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.

IV. STANDARDS OF CARE
A. Prudence
The standard of prudence to be used by City investment officials shall be the “prudent investor standard” in that a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of an enterprise of a like character and with like aims. This standard shall be applied in the context of managing the overall portfolio. City investment officers acting in accordance with written procedures and 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.

B. Ethics and Conflicts of Interest
Officers and employees involved in the City investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or that could impair their ability to make impartial investment decisions.

City employees and investment officials shall disclose any material financial interests in financial institutions that conduct business within their jurisdiction, and they shall further disclose any personal financial/investment positions that could be related to the performance of the City immediately to the City of Healdsburg City Manager and

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annually to the Fair Political Practices Commission. City employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City.

C. Delegation of Authority
In accordance with the City of Healdsburg's Municipal Code, herewith established, the Finance Director, who serves as City Treasurer is authorized to invest the City's funds in accordance with California Government Code 53600 et seq. In the absence of the City Finance Director, the investment of funds will be delegated to the Finance Manager.

The Finance Director may also delegate investment decision making and execution authority to an investment advisor. The advisor shall follow this policy and such other written instructions as are provided.

D. Investment Management Committee
An investment committee may be appointed by the City Manager for the purpose of determining investment strategies and to monitor performance. This committee would include the City Manager, the Assistant City Manager, the Finance Director and the Electric Utility Director. The committee may make recommendations regarding portfolio diversification, economic outlook and overall risk management.

E. Internal Controls
The City Finance Director is responsible for establishing and maintaining a system of written internal controls. The internal controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent action by City employees and officers. The internal structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management.

The internal controls shall address the following points:

1. Control of collusion

2. Separation of transaction authority from accounting and recordkeeping

3. Custodial safekeeping

4. Delivery versus payment (DVP)

5. Clear delegation of authority to subordinate staff members

6. Written confirmation of transactions for investments and wire transfers

7. Wire transfer agreements
V. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Finance Director shall establish selection criteria for pre-approval of financial institutions and security broker/dealers to do business with the City. The City Finance Director shall maintain a list of City approved financial institutions, registered investment advisors and security broker/dealers who are authorized to provide investment services to the City. These may include primary dealers, or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). To qualify for consideration, a financial institution or a security broker/dealer must also have an office in California, and that office must perform the transactions with the City.

If the City has an investment advisor, the investment advisor may use its own list of

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authorized broker/dealers to conduct transactions on behalf of the City.

VI. SAFEKEEPING AND CUSTODY
All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery-versus-payment (DVP) basis which will ensure that securities are deposited in an eligible financial institution prior to the release of funds. Securities shall be held by a third-party custodian designated by the City Finance Director and evidenced by safekeeping receipts with a written custodial agreement. The only exception to the foregoing shall be depository accounts and securities purchases made with: LAIF, time certificates of deposit, LGIPs, and money market mutual funds, since the purchased securities are not deliverable. Settlement instructions sent to the safekeeping agent shall require authorization. The City Finance Director shall be bonded to protect the public against possible embezzlement and malfeasance. Safekeeping procedures shall be reviewed annually by an independent external auditor and any irregularities noted shall be reported promptly to the City Council.

VII. SUITABLE AND AUTHORIZED INVESTMENTS
The City shall be governed by the California Government Code, Sections 53600 et seq. If the Code is amended to allow additional investments or is changed regarding the limits on certain categories of investments, the City is authorized to conform to the changes in the revised Code, provided that the changes are not specifically prohibited by the City's policy. The City shall be required to present those changes in the annual review of the policy and to incorporate the new legislation within the policy. Surplus funds are defined as funds not required for the immediate necessities of the City and include investments in individually managed portfolio(s), money market fund(s) and/or State LAIF, and all portfolio limitations and restrictions shall apply to this aggregate amount.

For purposes of compliance with the California Government Code and the City’s Investment Policy, minimum credit rating requirements included in this section shall be based on the credit ratings at the time of purchase. If the credit rating of the issuer is downgraded, subsequent to purchase, below the minimum rating requirement, it shall be reported to the Finance Director with a recommendation, and ongoing information shall be provided if the bond is not sold. The Finance Director shall include a status report on any such downgraded bonds to the City Council in the monthly report to City Council. Percentage limitations of surplus funds invested are noted for the various investment instruments. Where there is a specified percentage limitation for a particular category of investments, that percentage is applicable only at the date of purchase. A later increase or decrease in a percentage resulting from a change in values or assets shall not constitute a violation of that restriction.

Except as provided below, no more than five (5) percent of the City’s surplus funds may be invested in any one institution, regardless of sector. The types of investments which are excluded from this limitation are: United States Treasury and federal agency/government sponsored enterprise (GSE) obligations, obligations of the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and the Inter-American Development Bank (IADB), money market funds and other investment pools.

A security purchased in accordance with this section shall not have a forward settlement date exceeding 45 days from the time of investment.

The City is empowered by statute to invest in the following types of securities and are those that the City Finance Director is trained and competent to handle.

A. Investment Types

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1. Bonds issued by the City, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the local agency.

2. United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

3. Federal Agency or United States government-sponsored enterprise obligations (GSE), participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

4. State of California and Local Agency Obligations. Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state; and bonds, notes, warrants, or other evidence of indebtedness of any local agency within this state including bonds payable solely out of the revenues from revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. Notes eligible for investment shall be rated in a category of "A" or its equivalent or better by a Nationally Recognized Statistical-Rating Organization.

5. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenueproducing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. .

Notes eligible for investment shall be rated in a category of “A” or its equivalent or better a Nationally Recognized Statistical Rating Organization.

6. Medium-Term Notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of five (5) years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Purchases of medium-term notes may not exceed thirty (30) percent of the City's surplus funds. Notes eligible for investment shall be rated in a category of "A" or its equivalent or better by at least two Nationally Recognized Statistical-Rating Organizations.

7. Commercial Paper of “prime” quality of the highest ranking or the highest letter and number rating as provided for by a Nationally Recognized Statistical-Rating Organization. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (a) or paragraph (b):
a. The entity is organized and operating in the United States as a general corporation and has total assets in excess of five hundred million dollars ($500,000,000). In addition, its debt other than commercial paper, if any, must be rated “A” or higher by a Nationally Recognized Statistical-Rating Organization.
b. The entity is organized within the United States as a special purpose corporation, trust, or limited liability company and has a program-wide credit enhancement including, but not limited to, over-collateralization, letters of credit, or a surety bond. In addition, the entity has commercial paper that is rated “A-1” or higher, or the equivalent, by a Nationally Recognized Statistical-Rating Organization.

Eligible commercial paper shall have a maximum maturity of two hundred and seventy (270) days or less. The City may not invest more than twenty-five (25)

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percent of its surplus funds in commercial paper.

8. Negotiable Certificates of Deposit issued by a nationally or state-chartered bank, savings association, federal association, a state or federal credit union or by a statelicensed branch of a foreign bank. Purchases of negotiable certificates of deposit shall not exceed thirty (30) percent of the City's surplus money invested. Deposit notes and bank notes purchased through a broker or dealer shall be included with negotiable certificates of deposit in calculating allowable maximum percentages.

Negotiable certificates of deposit shall be rated in a long-term rating category of "A" or its equivalent or better or a short-term rating category of A-1 or its equivalent or better by a Nationally Recognized Statistical-Rating Organization.

No rating is required if the purchase amount is within the FDIC insurance coverage amount, currently $250,000 maximum per FDIC member.

9. Time Deposits. The City may invest in time deposits, also known as nonnegotiable Certificates of Deposit at commercial banks and savings and loan associations that are collateralized in accordance with the California Government Code. To be eligible to receive City funds, the depository institution shall have received an overall rating of not less than “satisfactory” in its most recent evaluation of its record of meeting the credit needs of California’s communities, including low and moderate-income neighborhoods. In selecting depositories, the credit worthiness of institutions shall be considered. Banks and savings and loan associations seeking to establish an investment relationship with the City shall submit an audited financial report that shall be reviewed for compliance with the City's investment standards. Any institution not providing an audited annual financial report shall be removed from the approved list and all funds maturing will be withdrawn. A list of eligible institutions shall be maintained. Qualification shall be determined by the following criteria:
a. Tangible capital must equal or exceed one and a half (1½) percent; core capital must equal or exceed three (3) percent; and, risk-based capital must equal eight (8) percent of assets adjusted for assigned risk-weightings. b. Return on assets of a minimum of a half of one (½) percent; a return on equity of a minimum of eight (8) percent; an equity to assets ratio of a minimum of five (5) percent; and, City investments shall be no greater than a half of one (½) percent of the total assets of the depository. c. Independent auditor's statement must have a clean opinion.

10. Savings accounts. Savings accounts when used in conjunction with the City's checking accounts at a qualified bank where funds are collateralized in accordance with the California Government Code.

11. U. S. Government money market funds registered with the Securities and Exchange Commission and which comply with rule 2a7 of the Investment Company Act of 1940. The dollar weighted average maturity of the portfolio shall be less than ninety (90) days and the portfolio is managed to maintain a one dollar ($1.00) share price. Also, the fund shall meet either of the following criteria: (a) Attained the highest ranking or the highest letter and numerical rating provided by not less than two Nationally Recognized Statistical-Rating Organizations; (b) retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations authorized by Code section 53601 subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, and with assets under management in excess of five hundred million dollars ($500,000,000).

The purchase price of shares of beneficial interest purchased pursuant to this subdivision shall not include commission that the companies may charge and shall

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not exceed twenty (20) percent of the City’s moneys that may be invested pursuant to this section. However, no more than ten (10) percent of the City’s funds may be invested in shares of beneficial interest of any one mutual fund.

12. Repurchase Agreements. Investments in repurchase agreements or reverse repurchase agreements or securities lending agreements of any securities authorized by the Code, so long as the proceeds of the repurchase agreement are invested solely to supplement the income normally received from these securities.

The City shall adopt as a standard the Bond Market Association Master Repurchase Agreement and shall maintain a list of approved counterparts and limit counter parties to primary dealers rated "A" or better by two Nationally Recognized Statistical-Rating Organizations. Reverse repurchase agreements and securities lending agreements shall require City Council authorization separate from City Council approval of this policy. Securities lending agreements shall include the following safeguard measures: terms of lending agreements, indemnification provisions, reinvestment guidelines, liquidity provisions, credit risks and monitoring requirements. Additionally any securities lending agreement shall be reviewed by the City Attorney to ensure the City’s interests are properly protected.
a. Investments in repurchase agreements may be made, on any authorized investment, when the term of the agreement does not exceed one year. b. Reverse repurchase agreements or securities lending agreements may be utilized when the security to be sold on the reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of thirty (30) days prior to sale; the total of all reverse repurchase agreements on investments owned by the City does not exceed twenty (20) percent of the base value of the portfolio; and the agreement does not exceed a term of ninety-two (92) days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between sale of a security using a reverse repurchase agreement and the final maturity date of the same security.

13. A mortgage passthrough security, collateralized mortgage obligation, mortgagebacked or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond. Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by a Nationally Recognized Statistical Rating Organization and have a maximum remaining maturity of five years or less.

Purchase of securities authorized by this subdivision shall not exceed ten (10) percent of the City’s surplus moneys that may be invested pursuant to this section.

14. Local Agency Investment Fund (LAIF). The City may invest in LAIF, established by the California State Treasurer, up to the maximum allowed by LAIF. The City's investment in LAIF is based on, among other criteria, the following information provided by LAIF: A written statement of portfolio management goals, objectives and polices, including a description of eligible investment securities; a disclosure of LAIF's safekeeping practices; eligible LAIF participants, the monthly transaction limit, and minimum and maximum deposit and withdrawal amounts permitted; calculation of quarterly earnings and apportionment, including gains and losses; disclosure of administrative costs and the assessment process; monthly statements of the City's transaction activity and balances; monthly summaries of LAIF investment data, including market valuation and accrued interest; and a description of the audit process.

The California Government Code states that moneys placed for deposit in LAIF

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are in trust in the custody of the State Treasurer and cannot be borrowed or be withheld from the City. Further, the right of the City to withdraw its deposited money from the LAIF upon demand may not be altered, impaired, or denied in any way by any state official or agency based upon the State’s failure to adopt a budget by July 1 of each new fiscal year.

15. Supranational Obligations – Supranational obligations are defined as United States dollar denominated senior unsecured, unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter-American Development Bank (IADB), with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated “AA” or better by at a Nationally Recognized Statistical Rating Organization. There is a thirty (30) percent limit on the percentage of the portfolio that can be invested in this category.

16. Local Government Investment Pools - Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in Code Section 53601 subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:
a. The adviser is registered or exempt from registration with the Securities and Exchange Commission.
b. The adviser has not less than five years of experience investing in the securities and obligations authorized in Code Section 53601 subdivisions (a) to (q), inclusive.
c. The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

17. Sonoma County Pooled Fund – The City may invest in the Sonoma County Pooled Fund managed by the Sonoma County Treasurer up to the maximum permitted by State Law. However, at no time shall deposits in the County Pool exceed 10% of the total portfolio.

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B. Summary Table of Suitable and Authorized Investments Investment Type Maximum
Percentage
of Portfolio
Maximum par
value per
name
Credit/Minimum Quality Requirements
US Treasury Bills, Bonds and Notes 100% None Full faith and credit of the United States Government.

Federal Agency Securities 100% None Implied guarantee of the US Government.

Local Agency Bonds 30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service,
such as Moody’s or S&P.

State of California
Obligations
30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

CA Local Agency
Obligations
30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service
such as Moody’s or S&P.

Obligations of other 49
States
30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

Money Market Funds 20% 10% per single
issuer
Multiple requirements including highest ranking by two
nationally recognized rating agencies, must have fund advisor registered with the SEC, have more than $500 million under management, etc.

Commercial Paper 25% 5% per single
issuer
Multiple requirements including highest ranking A-1, P-1, by a nationally recognized rating agency, and must have total assets exceeding $500 million.

Negotiable Certificates of Deposit 30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

Repurchase Agreements 20% 5% per single
issuer
Signed Security Loan Agreement in file. Underlying securities must be valued at 102% or greater of the funds borrowed against. Reverse Repurchase Agreements are specifically not authorized under this investment policy.

Medium-term Corporate Bonds 30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by two nationally recognized rating services, such as Moody’s or S&P.

Mortgage Pass-Though Securities
and Collateralized Mortgage
Obligations
10% 5% per single
issuer
Shall be rated in a rating category of “AA” or its equivalent or better by a nationally recognized rating service such as Moody’s or S&P.

Supranationals 30% 10% per single
issuer
Shall be rated in a rating category of “AA” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

Joint Powers Authority (Local
Government Investment Pools)
100% None Multiple requirements including registration with SEC, at least 5 years of experience with securities included here, and total assets in excess of $500 million.

Local Agency Investment Fund 100% State maximum Investment of funds in the California LAIF which allows the State Treasurer to invest through the Pooled Money
Investment Account
Sonoma County Pooled Fund 10% 10% of total
portfolio
Pooled money investment fund obligation of Sonoma
County

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C. Collateralization
Collateralization shall be required on two types of investments: Certificates of deposit and repurchase (and reverse repurchase) agreements. A collateral agreement must be current and on file before any funds can be transferred for collateralized certificates of deposit. Collateral shall be held by an independent third party with whom the City has a current written custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and retained. The right of collateral substitution is granted in accordance with the following requirements:

1. Certificates of Deposit
a. Government securities used as collateral require one hundred and two (102) percent of market value to the face amount of the deposit b. Promissory notes secured by first trust deeds used as collateral require one hundred and fifty (150) percent of market value to the face amount of the deposit
c. Irrevocable letters of Credit issued by the Federal Home Loan Bank of San Francisco require one hundred and five (105) percent of market value to the face amount of the deposit
d. No collateral is required for Certificates of Deposit covered by FDIC insurance

2. Repurchase and Reverse Repurchase Agreements
a. Only U.S. Treasury securities or federal agency securities are acceptable collateral. All securities underlying repurchase agreements must be delivered to the City’s custodian bank versus payment or be handled under a properly executed tri-party repurchase agreement.

The total market value of all collateral for each repurchase agreement must equal or exceed one hundred and two (102) percent of the total dollar value of the money invested by the City for the term of the investment. For any repurchase agreement with a term of more than one (1) day, the value of the underlying securities must be reviewed on an ongoing basis according to market conditions. Market value must be calculated each time there is a substitution of collateral. b. The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to a repurchase agreement.

D. Socially Responsible Investing
It is the City’s objective to disallow investment in the industries identified in the table below. To achieve this objective, the City will apply the Socially Responsible Investment (“SRI”) Parameters detailed herein to investments authorized and governed by this Investment Policy. The SRI Investment Parameters will be implemented by utilizing industry and subindustry classifications as defined by Sustainalytics1
, and Sustainalytics Product Involvement evaluations, as applicable. 1 Sustainalytics is a subsidiary of Morningstar Inc. that rates the sustainability of over 16,000 companies based on their environmental, social, and corporate governance performance.

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SRI Investment Parameters
Exclusion #1: Fossil
Fuels
Industry/Subindustry Exclusions:
(1) Energy Services
(2) Oil & Gas Producers
(3) Refiners & Pipelines
Exclusion #2: Tobacco Industry/Subindustry Exclusions:
(1) Tobacco
Exclusion #3: Firearms
Product Involvement:
(1) Small Arms –
Revenue/Ownership > 50%
If a previously purchased investment no longer satisfies the SRI Investment Parameters set forth herein, the City will continue to hold that investment unless the City sells or directs its investment advisor to sell that investment.

E. Investments Not Approved
Any security type or structure not specifically approved by this policy is hereby prohibited. Security types, which are hereby prohibited include, but are not limited to: reverse repurchase agreements used as a leveraging vehicle, "exotic" derivatives structures such as range notes, dual index notes, inverse floating-rate notes, leveraged or de-leveraged floating-rate notes, interest-only strips that are derived from a pool of mortgages and any security that could result in zero interest accrual if held to maturity, or any other complex variable or structured note with an unusually high degree of volatility or risk.

F. Investment Pools/Money Market Funds
A review of the pool/fund is required prior to investing, and on a continual basis. The investigation will, at a minimum, obtain the following:
 A description of eligible investment securities, and a written statement of investment policy and objectives.
 A description of interest calculations and how it is distributed, and how gains and losses are treated.
 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.  A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
 A schedule for receiving statements and portfolio listings  A description of how the pool/fund maintain reserves, retained earnings, etc. or is all income after expenses distributed to participants  A fee schedule that discloses when and how fees are assessed.  The eligibility of the pool/fund to invest in bond proceeds and a description of its practices.

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Money market funds must be registered with the Securities and Exchange Commission and which comply with rule 2a7 of the Investment Company Act of 1940. The dollar weighted average maturity of the portfolio shall be less than ninety (90) days and the portfolio is managed to maintain a one dollar ($1.00) share price.

Also, the fund shall meet either of the following criteria: (a) Attained the highest ranking or the highest letter and numerical rating provided by not less than two Nationally Recognized Statistical-Rating Organizations; (b) retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations authorized by Code section 53601 subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, , and with assets under management in excess of five hundred million dollars ($500,000,000).

VIII. INVESTING PARAMETERS
A. Diversification
The City shall diversify its investments by security type, issuer, maturity, and financial institutions. No percentage limitations are established for United States government, United States government agencies and United States government sponsored enterprises; however percentage limitations are established for other permitted investments, as noted in Section VII of this policy. The investments shall be diversified by limiting investments to avoid over-concentration in securities from a specific issuer or business sector (excluding U.S. Treasury and Federal Agency securities), limiting investment in securities that have higher credit risks, and investing in securities with varying maturities.

B. Maximum Maturities
To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Where there is no specified maturity limitation on an investment, no investment shall be made in any security, which, at the time of the investment, has a term remaining to maturity in excess of five (5) years, unless the City Council has granted express authority to make that investment no less than three months prior to the investment. For purposes of compliance with this section, an investment’s term or remaining maturity shall be measured from the settlement date to final maturity.

In addition to the five (5) year limitation on investments specified in this policy, the average maturity of the City's combined portfolio shall not exceed two and a half (2½) years without prior approval of the City Council.

IX. REPORTING
The Finance Director shall submit investment reports to the City Council that provide a clear picture of the status of the current investment portfolio and shall contain sufficient information to permit an independent organization to evaluate the performance of the investment program.

A. Reporting to City Council
Monthly. In accordance with California Government Code Section 53607, the City shall make a monthly report of transactions to the City Council.

Quarterly. In accordance with California Government Code Section 53646, the City Finance Director shall submit to City Council an investment report that summarizes

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all securities in the portfolio. The report shall include:

1. Investment type

2. Issuer

3. Maturity date

4. Book value

5. Market value

6. Source of valuation

7. Statement of compliance with the investment policy

8. Statement of the ability to meet expenditures for the next six months In addition, a narrative shall accompany the portfolio addressing noteworthy items or the current investment climate. Annually, the City Finance Director shall provide a review of the City's Investment Policy.

B. Reporting to California Debt and Investment Advisory Commission (CDIAC) The City shall forward copies of investment portfolio reports and copies of the annual City of Healdsburg’s Statement of Investment Policy to CDIAC on an as-required basis.

X. PERFORMANCE STANDARDS
The investment portfolio shall be managed in accordance with the parameters specified within this policy and always within consistently safe and prudent treasury management procedures.

A. Market Yield (Benchmark)
The City’s overall investment strategy is active : Investments are purchased with the intent to hold to maturity, however, may be sold prior to maturity to adjust the portfolio duration or improve the risk structure, liquidity, yield, or return potential of the portfolio in response to market condition or City needs. If an investment advisory firm is retained by the City, the City portfolio shall be compared to a market benchmark in order to determine whether market returns are being achieved. In addition, the quarter-to-date LAIF apportionment rate, the three-month U.S. Treasury Bill and the two-year U.S. Treasury Note shall also be considered useful benchmarks of the City’s portfolio performance.

B. Marking to Market
The market value of the portfolio shall be calculated at least quarterly. This will ensure that review of the investment portfolio, in terms of value and price volatility, has been performed. In defining market value, consideration shall been given to pronouncements from the Government Accounting Standards Board (GASB) that address the reporting of investment assets and investment income for all investment portfolios held by governmental entities. The fair value of all securities reported in the City’s portfolio is based on currently quoted market prices.

C. Review of Investment Portfolio
The securities held by the City must be in compliance with Authorized and Suitable Investments at the time of purchase. The City Finance Director shall establish procedures to report to the City Council, major and critical incidences of noncompliance identified through the review of the portfolio.

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XI. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes
Any deviation from the policy shall be reported to City Council at the next scheduled meeting. The City Finance Director shall promptly notify the City Council of any material change in the policy, and any modifications to the policy must be approved by the City Council.

B. Annual Statement of Investment Policy
The City Finance Director shall render a written Investment Policy that shall be reviewed at least annually by the City Council to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. The City Council shall consider the annual Investment Policy and any changes therein at a public meeting. The Investment Policy shall be adopted by resolution of the City Council.

C. Exceptions
An exception to the policy may exist with respect to the Cultural Trust Fund, Senior Center Trust Fund and other similar trust funds where the Finance Director is the Trustee and only the income from such funds may be used. The investment policy authorizes the deviation of extending beyond the five-year maturity limitation outlined. Additionally, these funds may be invested with a responsible institution or nonprofit agency to maximize return on investment and/or manage community giving.

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APPENDIX
City of Healdsburg Investment Policy 15 Year 2022/23

GLOSSARY OF INVESTMENT TERMS
ASKED: The price at which securities are offered for sale; also known as offering price.

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

BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.)
BOND PROCEEDS: The money paid to the issuer by the purchaser or underwriter of a new issue of municipal securities. These moneys are used to finance the project or purpose for which the securities were issued and to pay certain costs of issuance as may be provided in the bond contract.

BOOK VALUE: The value at which a debt security is shown on the holder's balance sheet.

Book value is often acquisition cost plus/minus amortization and accretion, which may differ significantly from the security’s current value in the market.

BROKER: Someone who brings buyers and sellers together and is compensated for his/her service.

CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs are typically negotiable.

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

CREDIT QUALITY: The measurement of the financial strength of a bond issuer. This measurement helps an investor to understand an issuer's ability to make timely interest payments and repay the loan principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest rate paid by the issuer because the risk of default is lower. Credit quality ratings are provided by a Nationally Recognized Statistical-Rating Organization.

CREDIT RISK: The risk to an investor that an issuer will default in the payment of interest and/or principal on a security.

CUSTODIAN: A bank or other financial institution that keeps custody of stock certificates and other assets.

CURRENT YIELD (CURRENT RETURN): A yield calculation determined by dividing the annual interest received on a security by the current market price of that security.

DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, by buying and selling for his/her own account.

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

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

DIVERSIFICATION: Dividing investment funds among a variety of security types by sector, maturity and quality ratings offering independent returns.

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Attachment: Investment Policy (3785 : FY 22-23 Investment Policy Update) DURATION: A measure of the timing of the cash flows, such as the interest payments and the City of Healdsburg Investment Policy 16 Year 2022/23
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.

FAIR VALUE: The amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

FEDERAL CREDIT AGENCIES: Agencies of the Federal Government set up to supply credit to various classes of institutions and individuals, e.g., S&L’s, small-business firms, students, farmers, farm co-operatives, and exporters.

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) that lend funds and provide correspondent banks services to member commercial banks, thrift institutions, credit unions and insurance companies.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). 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 addition to fixed-rate mortgages.

FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.

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., twelve Regional Banks and about 5,700 commercial banks that are members of the system.

FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA): A self-regulatory organization (SRO) of brokers and dealers in the over-the-counter securities business. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities.

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

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae):

Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHA mortgages. The term “pass-throughs” is often used to describe Ginnie Maes.

GOVERNMENT SECURITIES: An obligation of the U.S. government, backed by the full faith and credit of the government. These securities are regarded as the highest quality of investment securities available in the U.S. securities market. See "Treasury Bills, Notes, and Bonds."
INTEREST RATE RISK: The risk associated with declines or rises in interest rates which cause an investment in a fixed-income security to increase or decrease in value.

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Attachment: Investment Policy (3785 : FY 22-23 Investment Policy Update) INTERNAL CONTROLS: An internal control structure designed to ensure that the assets of City of Healdsburg Investment Policy 17 Year 2022/23
the entity are protected from loss, theft, or misuse. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be derived and 2) the valuation of costs and benefits requires estimates and judgments by management. Internal controls should address the following points:
 Control of collusion - Collusion is a situation where two or more employees are working in conjunction to defraud their employer.
 Separation of transaction authority from accounting and record keeping - By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved.  Custodial safekeeping - Securities purchased from any bank or dealer including appropriate collateral (as defined by state law) shall be placed with an independent third party for custodial safekeeping.
 Avoidance of physical delivery securities - Book-entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.  Clear delegation of authority to subordinate staff members - Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities.
 Written confirmation of transactions for investments and wire transfers - Due to the potential for error and improprieties arising from telephone and electronic transactions, all transactions should be supported by written communications and approved by the appropriate person. Written communications may be via fax if on letterhead and if the safekeeping institution has a list of authorized signatures.  Development of a wire transfer agreement with the lead bank and third-party custodian - The designated official should ensure that an agreement will be entered into and will address the following points: controls, security provisions, and responsibilities of each party making and receiving wire transfers.

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

LOCAL AGENCY INVESTMENT FUND (LAIF): Chapter 730, Statutes of 1976 of the State of California, established the Local Agency Investment Fund. This fund enables local governmental agencies to remit money not required for immediate needs to the State Finance Director for the purpose of investment. In order to derive the maximum rate of return possible, the State Finance Director has elected to invest these monies with State monies as a part of the Pooled Money Investment Account. Each local governmental unit has the exclusive determination of the length of time its money will be on deposit with the State Finance Director.

At the end of each calendar quarter, all earnings derived from investments are distributed by the State Controller to the participating government agencies in proportion to each agency's respective amounts deposited in the Fund and the length of time such amounts remained therein.

Prior to the distribution, the State's costs of administering the program are deducted from the earnings.

MARK-TO-MARKET: The process whereby the book value or collateral value of a security is adjusted to reflect its current market value.

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in market conditions.

MARKET VALUE: The current price at which a security is trading and could presumably be purchased or sold at that particular point in time.

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

MATURITY: The date upon which the principal or stated value of a financial obligation is due and payable.

MONEY MARKET MUTUAL FUND: Mutual funds that invest solely in money market instruments (short-term debt instruments, such as Treasury bills, commercial paper, bankers' acceptances, repos and federal funds).

MUTUAL FUND: An investment company that pools money and can invest in a variety of securities, including fixed-income securities and money market instruments. Mutual funds are regulated by the Investment Company Act of 1940 and must abide by Securities and Exchange Commission (SEC) disclosure guidelines.

NATIONALLY RECOGNIZED STATISTICAL-RATING ORGANIZATION (NRSRO):

Standard and Poor’s, Moody’s, and Fitch Financial Services are examples of such organizations.

OFFER: An indicated price at which market participants are willing to sell a security or commodity. Also referred to as the "Ask price."
PAR VALUE: The amount of principal that must be paid at maturity. Also referred to as the face amount of a bond, normally quoted in $1,000 increments per bond.

PRINCIPAL: The face value or par value of a debt instrument, or the amount of capital invested in a given security.

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.

REINVESTMENT RISK: The risk that a fixed-income investor will be unable to reinvest income proceeds from a security holding at the same rate of return currently generated by that holding.

REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate the buyer for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves.

REVERSE REPURCHASE AGREEMENT: An agreement of one party (for example, a financial institution) to purchase securities at a specified price from a second party (such as a public agency) and a simultaneous agreement by the first party to resell the securities at a specified price to the second party on demand or at a specific date.

RISK: Degree of uncertainty of return on an asset.

RULE 2A-7 OF THE INVESTMENT COMPANY ACT: Applies to all money market mutual funds and mandates such funds to maintain certain standards, including a 13-month maturity limit and a 90-day average maturity on investments, to help maintain a constant net asset value of one dollar ($1.00).

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Attachment: Investment Policy (3785 : FY 22-23 Investment Policy Update) SAFEKEEPING SERVICE: A service to customers rendered by banks for a fee whereby City of Healdsburg Investment Policy 19 Year 2022/23
securities and valuables of all types and descriptions are held in the bank's vault for protection and security.

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

SECURITIES LENDING: An agreement under which a local agency agrees to transfer securities to a borrower who, in turn, agrees to provide collateral to the local agency. During the term of the agreement, both the securities and the collateral are held by a third party. At the conclusion of the agreement, the securities are transferred back to the local agency in return for the collateral.

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

SWAP: Trading one asset for another.

TOTAL RETURN: The sum of all investment income plus changes in the capital value of the portfolio.

TREASURY BILLS: Short-term U.S. government non-interest bearing discounted debt securities with maturities of no longer than one year and issued in minimum denominations of $10,000. Auctions of three- and six-month bills are weekly, while auctions of one-year bills are monthly. The yields on these bills are monitored closely in the money markets for signs of interest rate trends.

TREASURY BOND: A long-term coupon-bearing U.S. Treasury security issued as a direct obligation of the U.S. Government and having an initial maturity of more than 10 years and issued in minimum denominations of $1,000.

TREASURY NOTE: A medium-term coupon-bearing U.S. Treasury security issued as a direct obligation of the U.S. Government and having an initial maturity of from one to ten years and issued in denominations ranging from $1,000 to $1 million or more.

UNIFORM NET CAPITAL RULE: Securities and Exchange Commission (SEC) Rule 15C3- 1 outlining requirements that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

VOLATILITY: A degree of fluctuation in the price and valuation of securities.

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

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Investment Policy
Fiscal Year 2022-2023

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TABLE OF CONTENTS
I. MISSION STATEMENT ..................................................................................................3 II. SCOPE
A. Pooling of Funds .........................................................................................................3 B. Funds Included in this Policy ......................................................................................3 C. Funds Excluded from this Policy ................................................................................3 III. GENERAL OBJECTIVES
A. Safety ..........................................................................................................................3 B. Liquidity ......................................................................................................................4 C. Yield (Return on Investment) .....................................................................................4 IV. STANDARDS OF CARE
A. Prudence ......................................................................................................................4 B. Ethics and Conflicts of Interest ...................................................................................4 C. Delegation of Authority ..............................................................................................5 D. Investment Management Committee ..........................................................................5 E. Internal Controls .........................................................................................................5 V. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS ...............................5 VI. SAFEKEEPING AND CUSTODY ...................................................................................5 VII. SUITABLE AND AUTHORIZED INVESTMENTS
A. Investment Types ........................................................................................................6 B. Investment Summary Table ......................................................................................10 C. Collateralization ........................................................................................................11 D. Investments Not Approved .......................................................................................11 E. Investment Pools/Money Market Funds ...................................................................11 VIII. INVESTING PARAMETERS
A. Diversification...........................................................................................................12 B. Maximum Maturities ................................................................................................12 IX. REPORTING
A. Quarterly Reporting to City Council .........................................................................13 B. Reporting to California Debt and Investment Advisory Commission (CDIAC) ......13 X. PERFORMANCE STANDARDS ...................................................................................13 A. Market Yield (Benchmark) .......................................................................................13 B. Marking to Market ....................................................................................................13 C. Review of Investment Portfolio ................................................................................14 XI. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes ..............................................................................14 B. Annual Statement of Investment Policy ...................................................................14 C. Exceptions .................................................................................................................14 APPENDIX: GLOSSARY OF INVESTMENT TERMS ............................................................. 15

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I. MISSION STATEMENT
It is the policy of the City of Healdsburg (“City”) to invest public funds in a manner that will provide maximum security, adequate liquidity and sufficient yield, while meeting the daily cash flow demands of the City and conforming to all statutes and regulations governing the investment of public funds.

II. SCOPE
This investment policy applies to all the financial assets of City of Healdsburg. These funds are accounted for in the City’s audited Annual Financial Report. If the City invests funds on behalf of another agency and, if that agency does not have its own policy, the City's investment policy shall govern the agency's investments.

A. Pooling of Funds
Except for cash in certain restricted and special funds, the City shall consolidate cash balances from all funds to maximize investment earnings. Investment income shall be allocated to various funds in accordance with generally accepted accounting principles.

B. Funds Included in this Policy
General Fund
Special Revenue Funds
Capital Project Funds
Enterprise Funds
Fiduciary Funds
Utility Funds
Any new fund created by City Council unless specifically exempted C. Funds Excluded from this Policy
This investment policy does not apply to bond proceeds, deferred compensation funds, retirement or other post-employment benefits trust funds as these are governed under separate California Government Code sections or other documentation.

III.GENERAL OBJECTIVES
The primary objectives, in priority order, of the City’s investment activities are safety, liquidity and yield.

A. Safety
Preservation 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. The objective shall be to mitigate credit risk and interest rate risk. To attain this objective, the City shall diversify its investments by investing funds among several financial institutions and a variety of securities offering independent returns.

1. Credit Risk
The City shall minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by:
 Limiting investments to the safest types of securitiessecurities allowed by this policy  Pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisers with which the City will do business
 Diversifying the investment portfolio so as to minimize the impact any one industry/investment class can have on the portfolio

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2. Interest Rate Risk
To minimize the negative impact of material changes in the market value of securities in the portfolio, the City shall:
 Structure the investment portfolio so that securities mature concurrent with cash needs to meet anticipated demands, thereby avoiding the need to sell securities on the open market prior to maturity
 Diversify the City’s investments among maturities
 Invest a portion of the operating funds primarily in shorter-term securities, and overnight investment vehicles, including but not limited to, money market mutual funds, and the State of California’s Local Agency Investment Fund (“LAIF”), and local government investment pools (“LGIP”).

B. Liquidity
The City’s investment portfolio shall remain sufficiently liquid to enable the City to meet all operating requirements that might be reasonably anticipated without requiring a sale of securities. Since all possible cash demands cannot be anticipated, the portfolio shall consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds, or LAIF, or LGIPs, which offer same-day liquidity for short-term funds.

C. Yield (Return on Investment)
The City’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and the liquidity characteristics of the portfolio. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.

IV. STANDARDS OF CARE
A. Prudence
The standard of prudence to be used by City investment officials shall be the “prudent investor standard” in that a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of an enterprise of a like character and with like aims. This standard shall be applied in the context of managing the overall portfolio. City investment officers acting in accordance with written procedures and 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.

B. Ethics and Conflicts of Interest
Officers and employees involved in the City investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or that could impair their ability to make impartial investment decisions.

City employees and investment officials shall disclose any material financial interests in financial institutions that conduct business within their jurisdiction, and they shall further disclose any personal financial/investment positions that could be related to

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the performance of the City immediately to the City of Healdsburg City Manager and annually to the Fair Political Practices Commission. City employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City.

C. Delegation of Authority
In accordance with the City of Healdsburg's Municipal Code, herewith established, the Administrative Services DirectorFinance Director, who serves as City Treasurer is authorized to invest the City's funds in accordance with California Government Code 53600 et seq. In the absence of the City Administrative Services DirectorFinance Director, the investment of funds will be delegated to the Finance Manager. Investments made by the Finance Manager will be restricted to LAIF, or securities maturing within six months.

The Administrative Services DirectorFinance Director may also delegate investment decision making and execution authority to an investment advisor. The advisor shall follow this policy and such other written instructions as are provided.

D. Investment Management Committee
An investment committee may be appointed by the City Manager for the purpose of determining investment strategies and to monitor performance. This committee would include the City Manager, the Assistant City Manager, the Administrative Services DirectorFinance Director and the Electric Utility Director. The committee may make recommendations regarding portfolio diversification, economic outlook and overall risk management.

E. Internal Controls
The City Administrative Services DirectorFinance Director is responsible for establishing and maintaining a system of written internal controls. The internal controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent action by City employees and officers. The internal structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management.

The internal controls shall address the following points:

1. Control of collusion

2. Separation of transaction authority from accounting and recordkeeping

3. Custodial safekeeping

4. Delivery versus payment (DVP)

5. Clear delegation of authority to subordinate staff members

6. Written confirmation of transactions for investments and wire transfers

7. Wire transfer agreements
V. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Administrative Services DirectorFinance Director shall establish selection criteria for pre-approval of financial institutions and security broker/dealers to do business with the City. The City Administrative Services DirectorFinance Director shall maintain a list of City approved financial institutions, registered investment advisors and security broker/dealers who are authorized to provide investment services to the City. These may include primary Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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dealers, or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). To qualify for consideration, a financial institution or a security broker/dealer must also have an office in California, and that office must perform the transactions with the City.

If the City has an investment advisor, the investment advisor may use its own list of authorized broker/dealers to conduct transactions on behalf of the City.

VI. SAFEKEEPING AND CUSTODY
All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery-versus-payment (DVP) basis which will ensure that securities are deposited in an eligible financial institution prior to the release of funds. Securities shall be held by a third-party custodian designated by the City Administrative Services DirectorFinance Director and evidenced by safekeeping receipts with a written custodial agreement. The only exception to the foregoing shall be depository accounts and securities purchases made with:

LAIF, time certificates of deposit, LGIPs, and money market mutual funds, since the purchased securities are not deliverable. Settlement instructions sent to the safekeeping agent shall require authorization. The City Administrative Services DirectorFinance Director shall be bonded to protect the public against possible embezzlement and malfeasance. Safekeeping procedures shall be reviewed annually by an independent external auditor and any irregularities noted shall be reported promptly to the City Council.

VII. SUITABLE AND AUTHORIZED INVESTMENTS
The City shall be governed by the California Government Code, Sections 53600 et seq. If the Code is amended to allow additional investments or is changed regarding the limits on certain categories of investments, the City is authorized to conform to the changes in the revised Code, provided that the changes are not specifically prohibited by the City's policy. The City shall be required to present those changes in the annual review of the policy and to incorporate the new legislation within the policy. Surplus funds are defined as funds not required for the immediate necessities of the City and include investments in individually managed portfolio(s), money market fund(s) and/or State LAIF, and all portfolio limitations and restrictions shall apply to this aggregate amount.

For purposes of compliance with the California Government Code and the City’s Investment Policy, the minimum credit rating requirements included in this section for medium-term notes, deposit notes, bank notes and commercial paper shall be based on the quality credit ratings at the time of purchase.

If the quality credit rating of the issuer is downgraded, subsequent to purchase, by any of the Nationally Recognized Statistical-Rating Organizations below the minimum rating requirement, "A", or its equivalent, it shall be reported to the Finance Director City Council with a recommendation, and ongoing information shall be provided if the bond is not sold. The Finance Director shall include a status report on any such downgraded bonds to the City Council in the monthly report to City Council. Percentage limitations of surplus funds invested are noted for the various investment instruments. Where there is a specified percentage limitation for a particular category of investments, that percentage is applicable only at the date of purchase. A later increase or decrease in a percentage resulting from a change in values or assets shall not constitute a violation of that restriction.

Except as provided below, no more than five (5) percent of the City’s surplus funds may be invested in any one institution, regardless of sector. The types of investments which are excluded from this limitation are: United States Treasury and federal agency/government Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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sponsored enterprise (GSE) obligations, obligations of the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and the Inter-American Development Bank (IADB), money market funds and other investment pools.

A security purchased in accordance with this section shall not have a forward settlement date exceeding 45 days from the time of investment.

The City is empowered by statute to invest in the following types of securities and are those that the City Administrative Services DirectorFinance Director is trained and competent to handle.

A. Investment Types

1. Bonds issued by the City, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the local agency.

2. United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

3. Federal Agency or United States government-sponsored enterprise obligations (GSE), participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

4. State of California and Local Agency Obligations. Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state; and bonds, notes, warrants, or other evidence of indebtedness of any local agency within this state including bonds payable solely out of the revenues from revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. Notes eligible for investment shall be rated in a category of "A" or its equivalent or better by two a Nationally Recognized Statistical-Rating Organizations.

5. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenueproducing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. .

Notes eligible for investment shall be rated in a category of “A” or its equivalent or better a Nationally Recognized Statistical Rating Organization.

5.6.Medium-Term Notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of five (5) years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Purchases of medium-term notes may not exceed thirty (30) percent of the City's surplus funds. Investments in medium-term notes for any one nongovernment issuer shall be limited to no more than five (5) percent of surplus funds. Notes eligible for investment shall be rated in a category of "A" or its equivalent or better by at least two a Nationally Recognized Statistical-Rating Organizations.

6.7.Commercial Paper of “prime” quality of the highest ranking or the highest letter and number rating as provided for by a Nationally Recognized Statistical-Rating Organization. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (a) or paragraph (b):
a. The entity is organized and operating in the United States as a general Investment Policy)

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corporation and has total assets in excess of five hundred million dollars ($500,000,000). In addition, its debt other than commercial paper, if any, must be rated “A” or higher by a Nationally Recognized Statistical-Rating Organization.
b. The entity is organized within the United States as a special purpose corporation, trust, or limited liability company and has a program-wide credit enhancement including, but not limited to, over-collateralization, letters of credit, or a surety bond. In addition, the entity has commercial paper that is rated “A-1” or higher, or the equivalent, by a Nationally Recognized Statistical-Rating Organization.

Eligible commercial paper shall have a maximum maturity of two hundred and seventy (270) days or less. The City may not invest more than twenty- five (25) percent of its surplus funds in commercial paper. no more than ten (10) percent of the outstanding eligible commercial paper of any single issuer.

7.8.Negotiable Certificates of Deposit issued by a nationally or state-chartered bank, savings association, federal association, a state or federal credit union or by a statelicensed branch of a foreign bank. Purchases of negotiable certificates of deposit shall not exceed thirty (30) percent of the City's surplus money invested. and shall be limited to no more than three (3) percent of any one issuer. Deposit notes and bank notes purchased through a broker or dealer shall be included with negotiable certificates of deposit in calculating allowable maximum percentages. Negotiable certificates of deposit, deposit notes and bank notes shall be rated in a long-term rating category of "A" or its equivalent or better or a short-term rating category of A-1 or its equivalent or better by two a Nationally Recognized Statistical-Rating Organizations. No rating is required if the purchase amount is within the FDIC insurance coverage amount, currently $250,000 maximum per FDIC member.

8.9. Time Deposits. The City may invest in time deposits, also known as nonnegotiable Certificates of Deposit at commercial banks and savings and loan associations that are collateralized in accordance with the California Government Code. To be eligible to receive City funds, the depository institution shall have received an overall rating of not less than “satisfactory” in its most recent evaluation of its record of meeting the credit needs of California’s communities, including low and moderate-income neighborhoods. In selecting depositories, the credit worthiness of institutions shall be considered. Banks and savings and loan associations seeking to establish an investment relationship with the City shall submit an audited financial report that shall be reviewed for compliance with the City's investment standards. Any institution not providing an audited annual financial report shall be removed from the approved list and all funds maturing will be withdrawn. A list of eligible institutions shall be maintained. Qualification shall be determined by the following criteria:
a. Tangible capital must equal or exceed one and a half (1½) percent; core capital must equal or exceed three (3) percent; and, risk-based capital must equal eight (8) percent of assets adjusted for assigned risk-weightings. b. Return on assets of a minimum of a half of one (½) percent; a return on equity of a minimum of eight (8) percent; an equity to assets ratio of a minimum of five (5) percent; and, City investments shall be no greater than a half of one (½) percent of the total assets of the depository. c. Independent auditor's statement must have a clean opinion.

9.10. Savings accounts. Savings accounts when used in conjunction with the City's checking accounts at a qualified bank where funds are collateralized in accordance with the California Government Code.

Investment Policy)

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11. U. S. Government money market funds registered with the Securities and Exchange Commission and which comply with rule 2a7 of the Investment Company Act of 1940. The dollar weighted average maturity of the portfolio shall be less than ninety (90) days and the portfolio is managed to maintain a one dollar ($1.00) share price. Also, the fund shall meet either of the following criteria: (a) Attained the highest ranking or the highest letter and numerical rating provided by not less than two Nationally Recognized Statistical-Rating Organizations; (b) retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations authorized by Code section 53601 subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, andmanaging money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000).

The purchase price of shares of beneficial interest purchased pursuant to this subdivision shall not include commission that the companies may charge and shall not exceed twenty (20) percent of the City’s moneys that may be invested pursuant to this section. However, no more than ten (10) percent of the City’s funds may be invested in shares of beneficial interest of any one mutual fund.

10.12. Repurchase Agreements. Investments in repurchase agreements or reverse repurchase agreements or securities lending agreements of any securities authorized by the Code, so long as the proceeds of the repurchase agreement are invested solely to supplement the income normally received from these securities.

The City shall adopt as a standard the Bond Market Association Master Repurchase Agreement and shall maintain a list of approved counterparts and limit counter parties to primary dealers rated "A" or better by two Nationally Recognized Statistical-Rating Organizations. Reverse repurchase agreements and securities lending agreements shall require City Council authorization separate from City Council approval of this policy. Securities lending agreements shall include the following safeguard measures: terms of lending agreements, indemnification provisions, reinvestment guidelines, liquidity provisions, credit risks and monitoring requirements. Additionally any securities lending agreement shall be reviewed by the City Attorney to ensure the City’s interests are properly protected.
a. Investments in repurchase agreements may be made, on any authorized investment, when the term of the agreement does not exceed one year. b. Reverse repurchase agreements or securities lending agreements may be utilized when the security to be sold on the reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of thirty (30) days prior to sale; the total of all reverse repurchase agreements on investments owned by the City does not exceed twenty (20) percent of the base value of the portfolio; and the agreement does not exceed a term of ninety-two (92) days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between sale of a security using a reverse repurchase agreement and the final maturity date of the same security.

13. A mortgage passthrough security, collateralized mortgage obligation, mortgagebacked or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond. Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by a Nationally Recognized Statistical Rating Organization and have a maximum remaining maturity of five years or less.

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Purchase of securities authorized by this subdivision shall not exceed twentyten (120) percent of the City’s surplus moneys that may be invested pursuant to this section.

11.14. Local Agency Investment Fund (LAIF). The City may invest in LAIF, established by the California State Treasurer, up to the maximum allowed by LAIF. seventy-five million dollars ($75,000,000) maximum permitted by State law, effective January 1, 2020; per account. The City's investment in LAIF is based on, among other criteria, the following information provided by LAIF: A written statement of portfolio management goals, objectives and polices, including a description of eligible investment securities; a disclosure of LAIF's safekeeping practices; eligible LAIF participants, the monthly transaction limit, and minimum and maximum deposit and withdrawal amounts permitted; calculation of quarterly earnings and apportionment, including gains and losses; disclosure of administrative costs and the assessment process; monthly statements of the City's transaction activity and balances; monthly summaries of LAIF investment data, including market valuation and accrued interest; and a description of the audit process.

The California Government Code states that moneys placed for deposit in LAIF are in trust in the custody of the State Treasurer and cannot be borrowed or be withheld from the City. Further, the right of the City to withdraw its deposited money from the LAIF upon demand may not be altered, impaired, or denied in any way by any state official or agency based upon the State’s failure to adopt a budget by July 1 of each new fiscal year.

12.15. Supranational Obligations – Supranational obligations are defined as United States dollar denominated senior unsecured, unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter- American Development Bank (IADB), with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated “AA” or better by at least two a Nationally Recognized Statistical Rating Organizations. There is a thirty (1530)% percent limit on the percentage of the portfolio that can be invested in this category.

16. Local Government Investment Pools - Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in Code Section 53601 subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:
a. The adviser is registered or exempt from registration with the Securities and Exchange Commission.
b. The adviser has not less than five years of experience investing in the securities and obligations authorized in Code Section 53601 subdivisions (a) to (q), inclusive.
c. The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

13.17.Sonoma County Pooled Fund – The City may invest in the Sonoma County Pooled Fund managed by the Sonoma County Treasurer up to the maximum permitted by State Law. However, at no time shall deposits in the County Pool exceed 10% of the total portfolio.

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B. Summary Table of Suitable and Authorized Investments Investment Type Maximum
Percentage
of Portfolio
Maximum par
value per
name
Credit/Minimum Quality Requirements
US Treasury Bills, Bonds and
Notes
100% None Full faith and credit of the United States Government and have a Aaa/AA+ rating by Moody’s and S&P.

Federal Agency Securities 100% None Implied guarantee of the US Government. Federal Agency Securities have a Aaa/AA+ rating by
Moody’s and S&P.

Local Agency Bonds 0-30% $2,000,0005% per
single issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service,
such as Moody’s or S&P.

State of California
Obligations
0-30% $5,000,0005% per
single issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

CA Local Agency
Obligations
0-30% $5,000,0005% per
single issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service
such as Moody’s or S&P.

Obligations of other 49
States
30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

Money Market Funds 0-20% 10% per single
issuer
Multiple requirements including highest ranking by two nationally recognized rating agencies, must have fund advisor registered with the SEC, have more than $500 million under
management, etc.

Commercial Paper 0-25% 105% per single
issuer
Multiple requirements including highest ranking A-1, P-1, by two a nationally recognized rating agencyies, and must have total assets exceeding
$500 million.

Negotiable Certificates of Deposit 0-30% 35% per single issuer to $250k
Shall be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service, such as Moody’s or S&P.

FDIC insurance coverage amount, currently $250,000 maximum per FDIC member.

Repurchase Agreements 0-20% $2,000,0005% per
single issuer
Signed Security Loan Agreement in file. Underlying securities must be valued at 102% or greater of the funds borrowed against. Reverse Repurchase Agreements are specifically not authorized under this investment policy.

Local Agency Investment Fund 0-100% $75,000,000State
Limit
Investment of funds in the California LAIF which allows the State Treasurer to invest through the Pooled Money Investment Account Medium-term Corporate Bonds 0-30% 5% per single
issuer
Shall be rated in a rating category of “A” or its equivalent or better by atwo nationally recognized rating services, such as Moody’s or S&P.

Mortgage Pass-Though
Securities and Collateralized
Mortgage Obligations
120% 5% per single
issuer
Shall be rated in a rating category of “AA” or its
equivalent or better by a nationally recognized rating
service such as Moody’s or S&P.

Supranationals 0-1530% 10% per single
issuer
Shall be rated in a rating category of “AA” or its equivalent or better by a nationally recognized rating service,
such as Moody’s or S&P.

Joint Powers Authority (Local
Government Investment Pools)
100% None Multiple requirements including registration with SEC, at least 5 years of experience with securities included here, and total assets in excess of $500 million.

Local Agency Investment Fund 0-100% $75,000,000State
maximum
Investment of funds in the California LAIF which allows the State Treasurer to invest through the Pooled Money Investment Account
Sonoma County Pooled Fund 0-10% 10% of total
portfolio
Pooled money investment fund obligation of Sonoma County Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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C. Collateralization
Collateralization shall be required on two types of investments: Certificates of deposit and repurchase (and reverse repurchase) agreements. A collateral agreement must be current and on file before any funds can be transferred for collateralized certificates of deposit. Collateral shall be held by an independent third party with whom the City has a current written custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and retained. The right of collateral substitution is granted in accordance with the following requirements:

1. Certificates of Deposit
a. Government securities used as collateral require one hundred and two (102) percent of market value to the face amount of the deposit b. Promissory notes secured by first trust deeds used as collateral require one hundred and fifty (150) percent of market value to the face amount of the deposit
c. Irrevocable letters of Credit issued by the Federal Home Loan Bank of San Francisco require one hundred and five (105) percent of market value to the face amount of the deposit
d. No collateral is required for Certificates of Deposit covered by FDIC insurance

2. Repurchase and Reverse Repurchase Agreements
a. Only U.S. Treasury securities or federal agency securities are acceptable collateral. All securities underlying repurchase agreements must be delivered to the City’s custodian bank versus payment or be handled under a properly executed tri-party repurchase agreement.

The total market value of all collateral for each repurchase agreement must equal or exceed one hundred and two (102) percent of the total dollar value of the money invested by the City for the term of the investment. For any repurchase agreement with a term of more than one (1) day, the value of the underlying securities must be reviewed on an ongoing basis according to market conditions. Market value must be calculated each time there is a substitution of collateral. b. The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to a repurchase agreement.

D. Socially Responsible Investing
It is the City’s objective to disallow investment in the industries identified in the table below. To achieve this objective, the City will apply the Socially Responsible Investment (“SRI”) Parameters detailed herein to investments authorized and governed by this Investment Policy. The SRI Investment Parameters will be implemented by utilizing industry and subindustry classifications as defined by Sustainalytics1, and Sustainalytics Product Involvement evaluations, as applicable. 1 Sustainalytics is a subsidiary of Morningstar Inc. that rates the sustainability of over 16,000 companies based on their environmental, social, and corporate governance performance.

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SRI Investment Parameters
Exclusion #1: Fossil
Fuels
Industry/Subindustry Exclusions:
(1) Energy Services
(2) Oil & Gas Producers
(3) Refiners & Pipelines
Exclusion #2: Tobacco Industry/Subindustry Exclusions:
(1) Tobacco
Exclusion #3: Firearms
Product Involvement:
(1) Small Arms –
Revenue/Ownership > 50%
If a previously purchased investment no longer satisfies the SRI Investment Parameters set forth herein, the City will continue to hold that investment unless the City sells or directs its investment advisor to sell that investment.

D.E.Investments Not Approved
Any security type or structure not specifically approved by this policy is hereby prohibited. Security types, which are hereby prohibited include, but are not limited to: Collateralized mortgage obligations (CMO's), mortgage pass-through securities, reverse repurchase agreements used as a leveraging vehicle, "exotic" derivatives structures such as range notes, dual index notes, inverse floating-rate notes, leveraged or de-leveraged floating-rate notes, interest-only strips that are derived from a pool of mortgages and any security that could result in zero interest accrual if held to maturity, or any other complex variable or structured note with an unusually high degree of volatility or risk.

E.F.Investment Pools/Money Market Funds
A review of the pool/fund is required prior to investing, and on a continual basis. The investigation will, at a minimum, obtain the following:
 A description of eligible investment securities, and a written statement of investment policy and objectives.
 A description of interest calculations and how it is distributed, and how gains and losses are treated.
 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.  A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
 A schedule for receiving statements and portfolio listings  A description of how the pool/fund maintain reserves, retained earnings, etc. or is all income after expenses distributed to participants  A fee schedule that discloses when and how fees are assessed.  The eligibility of the pool/fund to invest in bond proceeds and a description of

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its practices.

Money market funds must be registered with the Securities and Exchange Commission and which comply with rule 2a7 of the Investment Company Act of 1940. The dollar weighted average maturity of the portfolio shall be less than ninety (90) days and the portfolio is managed to maintain a one dollar ($1.00) share price.

Also, the fund shall meet either of the following criteria: (a) Attained the highest ranking or the highest letter and numerical rating provided by not less than two Nationally Recognized Statistical-Rating Organizations; (b) retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations authorized by Code section 53601 subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, managing money market mutual funds , and with assets under management in excess of five hundred million dollars ($500,000,000).

VIII. INVESTING PARAMETERS
A. Diversification
The City shall diversify its investments by security type, issuer, maturity, and financial institutions. No percentage limitations are established for United States government, United States government agencies and United States government sponsored enterprises; however percentage limitations are established for other permitted investments, as noted in Section VII of this policy. The investments shall be diversified by limiting investments to avoid over-concentration in securities from a specific issuer or business sector (excluding U.S. Treasury and Federal Agency securities), limiting investment in securities that have higher credit risks, and investing in securities with varying maturities.

B. Maximum Maturities
To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Where there is no specified maturity limitation on an investment, no investment shall be made in any security, which, at the time of the investment, has a term remaining to maturity in excess of five (5) years, unless the City Council has granted express authority to make that investment no less than three months prior to the investment. For purposes of compliance with this section, an investment’s term or remaining maturity shall be measured from the settlement date to final maturity.

In addition to the five (5) year limitation on investments specified in this policy, the average maturity of the City's combined portfolio shall not exceed two and a half (2½) years without prior approval of the City Council.

IX. REPORTING
The Administrative Services DirectorFinance Director shall submit investment reports to the City Council that provide a clear picture of the status of the current investment portfolio and shall contain sufficient information to permit an independent organization to evaluate the performance of the investment program.

A. Reporting to City Council
Monthly. In accordance with California Government Code Section 53607, the City shall make a monthly report of transactions to the City Council.

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

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Quarterly. In accordance with California Government Code Section 53646, the City Administrative Services DirectorFinance Director shall submit to City Council, within thirty (30) days following the end of the quarter, an investment report that summarizes all securities in the portfolio. The report shall include:

1. Investment type

2. Issuer

3. Maturity date

4. Book value

5. Market value

6. Source of valuation

7. Statement of compliance with the investment policy

8. Statement of the ability to meet expenditures for the next six months In addition, a narrative shall accompany the portfolio addressing noteworthy items or the current investment climate. Annually, the City Administrative Services DirectorFinance Director shall provide a review of the City's Investment Policy.

B. Reporting to California Debt and Investment Advisory Commission (CDIAC) The City shall forward copies of investment portfolio reports and copies of the annual City of Healdsburg’s Statement of Investment Policy to CDIAC on an as-required basis.

X. PERFORMANCE STANDARDS
The investment portfolio shall be managed in accordance with the parameters specified within this policy and always within consistently safe and prudent treasury management procedures.

A. Market Yield (Benchmark)
The City’s overall investment strategy is passiveactive : Investments are purchased with the intent to hold to maturity, however, may be sold prior to maturity to adjust the portfolio duration or improve the risk structure, liquidity, yield, or return potential of the portfolio in response to market condition or City needs. generally held to maturity. If an investment advisory firm is retained by the City, the City portfolio shall be compared to a customized market benchmark in order to determine whether market yields returns are being achieved. In addition, the quarter-to-date LAIF apportionment rate, the three-month U.S. Treasury Bill and the two-year U.S.

Treasury Note shall also be considered useful benchmarks of the City’s portfolio performance.

B. Marking to Market
The market value of the portfolio shall be calculated at least quarterly. This will ensure that review of the investment portfolio, in terms of value and price volatility, has been performed. In defining market value, consideration shall been given to pronouncements from the Government Accounting Standards Board (GASB) that address the reporting of investment assets and investment income for all investment portfolios held by governmental entities. The fair value of all securities reported in the City’s portfolio is based on currently quoted market prices.

C. Review of Investment Portfolio
The securities held by the City must be in compliance with Authorized and Suitable Investments at the time of purchase. The City Administrative Services Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

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DirectorFinance Director shall establish procedures to report to the City Council, major and critical incidences of noncompliance identified through the review of the portfolio.

XI. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes
Any deviation from the policy shall be reported to City Council at the next scheduled meeting. The City Administrative Services DirectorFinance Director shall promptly notify the City Council of any material change in the policy, and any modifications to the policy must be approved by the City Council.

B. Annual Statement of Investment Policy
The City Administrative Services DirectorFinance Director shall render a written Investment Policy that shall be reviewed at least annually by the City Council to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. The City Council shall consider the annual Investment Policy and any changes therein at a public meeting. The Investment Policy shall be adopted by resolution of the City Council.

C. Exceptions
An exception to the policy may exist with respect to the Cultural Trust Fund, Senior Center Trust Fund and other similar trust funds where the Administrative Services DirectorFinance Director is the Trustee and only the income from such funds may be used. The investment policy authorizes the deviation of extending beyond the fiveyear maturity limitation outlined. Additionally, these funds may be invested with a responsible institution or nonprofit agency to maximize return on investment and/or manage community giving.

Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

6.A.b APPENDIX
City of Healdsburg Investment Policy 15 Year 2022/23
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GLOSSARY OF INVESTMENT TERMS
ASKED: The price at which securities are offered for sale; also known as offering price.

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

BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.)
BOND PROCEEDS: The money paid to the issuer by the purchaser or underwriter of a new issue of municipal securities. These moneys are used to finance the project or purpose for which the securities were issued and to pay certain costs of issuance as may be provided in the bond contract.

BOOK VALUE: The value at which a debt security is shown on the holder's balance sheet.

Book value is often acquisition cost plus/minus amortization and accretion, which may differ significantly from the security’s current value in the market.

BROKER: Someone who brings buyers and sellers together and is compensated for his/her service.

CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs are typically negotiable.

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

CREDIT QUALITY: The measurement of the financial strength of a bond issuer. This measurement helps an investor to understand an issuer's ability to make timely interest payments and repay the loan principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest rate paid by the issuer because the risk of default is lower. Credit quality ratings are provided by a Nationally Recognized Statistical-Rating Organization.

CREDIT RISK: The risk to an investor that an issuer will default in the payment of interest and/or principal on a security.

CUSTODIAN: A bank or other financial institution that keeps custody of stock certificates and other assets.

CURRENT YIELD (CURRENT RETURN): A yield calculation determined by dividing the annual interest received on a security by the current market price of that security.

DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, by buying and selling for his/her own account.

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

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

DIVERSIFICATION: Dividing investment funds among a variety of security types by sector, maturity and quality ratings offering independent returns.

Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

6.A.b DURATION: A measure of the timing of the cash flows, such as the interest payments and the City of Healdsburg Investment Policy 16 Year 2022/23
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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.

FAIR VALUE: The amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

FEDERAL CREDIT AGENCIES: Agencies of the Federal Government set up to supply credit to various classes of institutions and individuals, e.g., S&L’s, small-business firms, students, farmers, farm co-operatives, and exporters.

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) that lend funds and provide correspondent banks services to member commercial banks, thrift institutions, credit unions and insurance companies.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). 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 addition to fixed-rate mortgages.

FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.

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., twelve Regional Banks and about 5,700 commercial banks that are members of the system.

FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA): A self-regulatory organization (SRO) of brokers and dealers in the over-the-counter securities business. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities.

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

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae):

Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHA mortgages. The term “pass-throughs” is often used to describe Ginnie Maes.

GOVERNMENT SECURITIES: An obligation of the U.S. government, backed by the full faith and credit of the government. These securities are regarded as the highest quality of investment securities available in the U.S. securities market. See "Treasury Bills, Notes, and Bonds."
INTEREST RATE RISK: The risk associated with declines or rises in interest rates which cause an investment in a fixed-income security to increase or decrease in value.

Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

6.A.b INTERNAL CONTROLS: An internal control structure designed to ensure that the assets of City of Healdsburg Investment Policy 17 Year 2022/23
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the entity are protected from loss, theft, or misuse. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be derived and 2) the valuation of costs and benefits requires estimates and judgments by management. Internal controls should address the following points:
 Control of collusion - Collusion is a situation where two or more employees are working in conjunction to defraud their employer.
 Separation of transaction authority from accounting and record keeping - By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved.  Custodial safekeeping - Securities purchased from any bank or dealer including appropriate collateral (as defined by state law) shall be placed with an independent third party for custodial safekeeping.
 Avoidance of physical delivery securities - Book-entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.  Clear delegation of authority to subordinate staff members - Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities.
 Written confirmation of transactions for investments and wire transfers - Due to the potential for error and improprieties arising from telephone and electronic transactions, all transactions should be supported by written communications and approved by the appropriate person. Written communications may be via fax if on letterhead and if the safekeeping institution has a list of authorized signatures.  Development of a wire transfer agreement with the lead bank and third-party custodian - The designated official should ensure that an agreement will be entered into and will address the following points: controls, security provisions, and responsibilities of each party making and receiving wire transfers.

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

LOCAL AGENCY INVESTMENT FUND (LAIF): Chapter 730, Statutes of 1976 of the State of California, established the Local Agency Investment Fund. This fund enables local governmental agencies to remit money not required for immediate needs to the State Finance Director for the purpose of investment. In order to derive the maximum rate of return possible, the State Finance Director has elected to invest these monies with State monies as a part of the Pooled Money Investment Account. Each local governmental unit has the exclusive determination of the length of time its money will be on deposit with the State Finance Director.

At the end of each calendar quarter, all earnings derived from investments are distributed by the State Controller to the participating government agencies in proportion to each agency's respective amounts deposited in the Fund and the length of time such amounts remained therein.

Prior to the distribution, the State's costs of administering the program are deducted from the earnings.

MARK-TO-MARKET: The process whereby the book value or collateral value of a security is adjusted to reflect its current market value.

Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

6.A.b MARKET RISK: The risk that the value of a security will raise or decline as a result of changes City of Healdsburg Investment Policy 18 Year 2022/23
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in market conditions.

MARKET VALUE: The current price at which a security is trading and could presumably be purchased or sold at that particular point in time.

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

MATURITY: The date upon which the principal or stated value of a financial obligation is due and payable.

MONEY MARKET MUTUAL FUND: Mutual funds that invest solely in money market instruments (short-term debt instruments, such as Treasury bills, commercial paper, bankers' acceptances, repos and federal funds).

MUTUAL FUND: An investment company that pools money and can invest in a variety of securities, including fixed-income securities and money market instruments. Mutual funds are regulated by the Investment Company Act of 1940 and must abide by Securities and Exchange Commission (SEC) disclosure guidelines.

NATIONALLY RECOGNIZED STATISTICAL-RATING ORGANIZATION (NRSRO):

Standard and Poor’s, Moody’s, and Fitch Financial Services are examples of such organizations.

OFFER: An indicated price at which market participants are willing to sell a security or commodity. Also referred to as the "Ask price."
PAR VALUE: The amount of principal that must be paid at maturity. Also referred to as the face amount of a bond, normally quoted in $1,000 increments per bond.

PRINCIPAL: The face value or par value of a debt instrument, or the amount of capital invested in a given security.

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.

REINVESTMENT RISK: The risk that a fixed-income investor will be unable to reinvest income proceeds from a security holding at the same rate of return currently generated by that holding.

REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate the buyer for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves.

REVERSE REPURCHASE AGREEMENT: An agreement of one party (for example, a financial institution) to purchase securities at a specified price from a second party (such as a public agency) and a simultaneous agreement by the first party to resell the securities at a specified price to the second party on demand or at a specific date.

RISK: Degree of uncertainty of return on an asset.

RULE 2A-7 OF THE INVESTMENT COMPANY ACT: Applies to all money market mutual funds and mandates such funds to maintain certain standards, including a 13-month maturity limit and a 90-day average maturity on investments, to help maintain a constant net asset value of one dollar ($1.00).

Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

6.A.b SAFEKEEPING SERVICE: A service to customers rendered by banks for a fee whereby City of Healdsburg Investment Policy 19 Year 2022/23
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securities and valuables of all types and descriptions are held in the bank's vault for protection and security.

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

SECURITIES LENDING: An agreement under which a local agency agrees to transfer securities to a borrower who, in turn, agrees to provide collateral to the local agency. During the term of the agreement, both the securities and the collateral are held by a third party. At the conclusion of the agreement, the securities are transferred back to the local agency in return for the collateral.

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

SWAP: Trading one asset for another.

TOTAL RETURN: The sum of all investment income plus changes in the capital value of the portfolio.

TREASURY BILLS: Short-term U.S. government non-interest bearing discounted debt securities with maturities of no longer than one year and issued in minimum denominations of $10,000. Auctions of three- and six-month bills are weekly, while auctions of one-year bills are monthly. The yields on these bills are monitored closely in the money markets for signs of interest rate trends.

TREASURY BOND: A long-term coupon-bearing U.S. Treasury security issued as a direct obligation of the U.S. Government and having an initial maturity of more than 10 years and issued in minimum denominations of $1,000.

TREASURY NOTE: A medium-term coupon-bearing U.S. Treasury security issued as a direct obligation of the U.S. Government and having an initial maturity of from one to ten years and issued in denominations ranging from $1,000 to $1 million or more.

UNIFORM NET CAPITAL RULE: Securities and Exchange Commission (SEC) Rule 15C3- 1 outlining requirements that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

VOLATILITY: A degree of fluctuation in the price and valuation of securities.

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

Attachment: Healdsburg Investment Policy 2022-23 (3636 : Investment Policy)

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Attachment: Redline Investment Policy (3785 : FY 22-23 Investment Policy Update)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Election Services Agreement with the County of Sonoma PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Adopt a Resolution approving an agreement with the County of Sonoma to provide election services for all municipal elections of the City of Healdsburg for the period of January 1, 2023 through December 31, 2027 and authorizing the City Manager to execute the agreement on behalf of the City.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

The City of Healdsburg has consolidated its municipal elections with the County of Sonoma since 1980. As part of the agreement, the County, at the City's request, has provided the following services:

1. Conducts, manages, and supervises all municipal elections held within the City pursuant to all applicable state and federal laws governing the conduct of municipal elections;

2. Procures and furnishes all supplies and equipment to be used in said elections, including those supplies required to meet the federal Help America Vote Act (HAVA);

3. Performs all related services and functions necessary, including any additional language requirements that may be imposed as a result of the federal Voting Rights Act during the term of the Agreement
DISCUSSION/ANALYSIS:

The current agreement with the County of Sonoma expires December 31, 2022. A new updated agreement is proposed for a period of five years beginning January 1, 2023 through December 31, 2027. The proposed agreement is essentially the same as the previous agreement with a few minor changes such as: defining how pro-rata share will be determined and adding language on

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the procedure to follow if the qualified nominees do not exceed the number of seats to be filled at that election in resolutions consolidating elections with the County.

The City of Healdsburg will pay the County of Sonoma its pro-rata share of the expenses incurred by the County for staff services and use of County supplies, including: (1) time and effort expended by County officers and employees; (2) equipment and supplies furnished by the County; and (3) any other necessary expenditures made by the County in the accomplishments of this agreement.

ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

ALTERNATIVES:

The Council could opt to not approve the proposed agreement and direct staff to hold stand-alone elections. Under this option the City would have to perform all the tasks that have been outsourced to the Sonoma County Registrar of Voters, including preparing and printing all the election materials, hiring poll workers, and counting the ballots on election night. The cost of a stand-alone election would be higher than consolidating with the County of Sonoma and staff does not have the expertise to conduct elections.

FISCAL IMPACT:

The County will be reimbursed for the cost to conduct the City’s elections, which is based on a time and materials basis. The total cost of an election will vary year to year. Each year the County provides an estimate of the total election costs which is presented to Council with the resolution authorizing the election. The upcoming November 2022 election was estimated to cost $75,000 and was included in the City Manager’s Office operating budget.

ENVIRONMENTAL ANALYSIS:

The subject matter of this resolution involves administrative activities of the City that will not result in direct or indirect changes in the environment. Therefore, the adoption of this resolution is not a "project," as defined in the California Environmental Quality Act ("CEQA") and does not require environmental review, pursuant to Title 14, Chapter 3 of the California Code of Regulations (CEQA Guidelines), sections 15060(c)(3) and 15378(b)(5).

ATTACHMENT(S):

Resolution
Election Agreement

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CITY OF HEALDSBURG
RESOLUTION NO. _____- 2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING AN AGREEMENT WITH THE

COUNTY OF SONOMA TO PROVIDE ELECTION SERVICES

FOR ALL MUNICIPAL ELECTIONS WITHIN THE CITY OF

HEALDSBURG AND AUTHORIZING THE CITY MANAGER

TO EXECUTE SAID AGREEMENT
WHEREAS, the City Council of the City of Healdsburg, at a regular meeting held October 17, 2022 considered the request of the City Clerk that an agreement between the City of Healdsburg and the County of Sonoma be approved whereby the County of Sonoma would provide election services for all City Municipal Elections for a period of five years beginning January 1, 2023 and ending December 31, 2027; and
WHEREAS, the City of Healdsburg has contracted with the County of Sonoma to provide these services since 1980 and their performance has been satisfactory; and WHEREAS, after due consideration, the City Council finds the proposed agreement of benefit to the City; and
WHEREAS, the City Council finds that the subject matter of this resolution involves administrative activities of the City that will not result in direct or indirect changes in the environment; therefore, the adoption of this resolutions is not a “project”, as defined in the California Environmental Quality Act (CEQA) and does not require environmental review, pursuant to Title 14, Chapter 3, of the California Code of Regulations (CEQA Guidelines), sections 15060(c)(3) and 15378(b)(5).

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Healdsburg hereby approves an agreement with the County of Sonoma for the period of January 1, 2023 through December 31, 2027 to provide election services for all municipal elections for the City of Healdsburg and authorizes the City Manager to execute the agreement on behalf of the City.

PASSED, APPROVED AND ADOPTED this 17th day of October 2022, by the following vote:

AYES: Councilmembers: (5) Plass
NOES: Councilmembers: (0) None
ABSENT: Councilmembers: (0) None
ABSTAINING: Councilmembers: (0) None
SO ORDERED: ATTEST:
________________________________ _____________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Attachment: Resolution (3789 : Election Services Agreement) 1 CITY OF HEALDSBURG

AGREEMENT FOR ELECTION SERVICES
This agreement (“Agreement”) is made and entered into on January 1, 2023 (“Effective Date”), by and between the County of Sonoma, a political subdivision of the State of California (hereinafter “County”), and the City of Healdsburg, a municipal corporation (hereinafter “City”).

The parties mutually agree as follows:

1. This Agreement is made and entered into pursuant to Government Code Section 51300 et seq. and is subject to all the provisions thereof.

2. At the City’s request, the County shall render the following services to the City:
a. Conduct, manage, and supervise all municipal elections held within the City during this period pursuant to all applicable state and federal laws governing the conduct of municipal elections;
b. Procure and furnish all supplies and equipment to be used in said elections, including those supplies required to meet the federal Help America Vote Act (HAVA); c. Perform all related services and functions necessary to the accomplishment of this Agreement including any additional language requirements that may be imposed as a result of the federal Voting Rights Act during the term of this Agreement.

3. This Agreement shall be in effect once signed by both parties, beginning January 1, 2023 and shall continue in force and effect until notice of termination is given or December 31, 2027, whichever occurs first.

4. For the purposes of conducting said elections, the Sonoma County Clerk-Recorder-Assessor (“County Elections Official”) shall exercise such powers and duties conferred by law upon the clerk of the City with respect to elections, as agreed to by both parties. Such duties shall include, but not be limited to, those powers and duties set forth in Division 3, commencing with Section 3000; Division 10, Part 2, commencing with Section 10100, excluding the issuance and filing of nomination documents unless specifically agreed upon in writing by the County Elections Official and the City Clerk not less than 180 days prior to the date of the municipal election; Division 13, commencing with Section 13000; and Division 15, commencing with Section 15000, of the California Elections Code.

5. The City shall designate within its resolution or ordinance calling the election and requesting the consolidation with the general election, the procedure to follow if the qualified nominees do not exceed the number of seats to be filled at that election. If the resolution does not specify the City elects to follow the procedure set forth in Elections Code 10229, subdivision (a)(1)-(2), the County shall be entitled to proceed with an election in accordance with subdivision (a)(3) as reasonably necessary to comply with printing deadlines, and in all such cases the City shall pay all applicable costs.

6. The County shall not be obligated to conduct any election, the procedures for the administration of which are not specified in state law; nor any election which employs any

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Attachment: Election Agreement (3789 : Election Services Agreement) 2 method of tabulation of votes other than a “one vote equals one vote” manner, including, but not limited to, those methods referred to as choice voting, cumulative voting, distributive voting, instant run-off voting, ranked choice voting, limited voting, or preferential voting.

Adoption by the City of an alternative method of voting terminates this contract, unless both parties agree in writing to amend the Agreement to provide for administration of the alternative voting method.

7. Upon the completion of the official canvass of the votes cast, and upon proper demand by the County, the City shall forthwith reimburse the County for any and all expenses incurred by the County in connection with said election as follows:
a. EQUIPMENT AND SUPPLIES:
i. The County shall procure all equipment and supplies in the name of, and on behalf of, the City.
ii. The amount, source and nature of said equipment and supplies will be determined in accordance with applicable laws. The County will have complete discretion in making determinations in procurement of equipment and supplies. iii. Expenses incurred by the County in the accomplishment of this Section 6 of the Agreement shall, at the option of the County, either be paid directly by the City upon confirmation by the County, or shall be paid to the County upon proper demand. b. POSTAGE: Postage shall, upon request of the County, either be prepaid by the City by warrant in the requested amount payable to the U.S. Postal Service or be paid to the County upon proper demand.
c. VOTING LOCATIONS AND ELECTION OFFICIALS: The City shall, upon proper demand, pay its pro-rata share of vote center expenses and compensation of election officials attributable to the conduct of such election, including the cost of insurance if necessary.
d. COUNTY STAFF SERVICES AND SUPPLIES: The City shall pay its pro-rata share of expenses incurred by the County for staff services and use of County supplies. “Expenses” as used in this subsection shall include the cost or the reasonable value of the following:
i. Time and effort expended by County officers and employees; ii. Equipment and supplies furnished by the County;
iii. Any other necessary expenditures made by the County in the accomplishment of this Agreement.
e. CORRECTIONS: The City agrees to bear the cost of correcting errors, including reprinting and mailing of information, if determined to be necessary, once the City Clerk has approved the final typeset version of ballot materials. f. The “pro-rata share” in the Agreement shall be determined by dividing the number of registered voters in the City by the total number of aggregate registered voters in all cities/districts going to election.

8. The City shall provide suitable locations for vote centers, ballot drop boxes and/or the

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Attachment: Election Agreement (3789 : Election Services Agreement) 3 consolidation of returns and perform any other necessary functions, including the issuance of Vote by Mail ballots or establishment of additional Vote by Mail drop-off or early voting locations, if requested by the County.

9. County employees assigned to duties in the performance of this Agreement shall remain at all times under supervision or control of the County. The City shall exercise no supervision or control of such employees. If questions arise on the part of the City as to performance, such questions shall be referred directly to the County Elections Official as the supervisor of such employees, and the determination or resolution of questions or problems shall be settled as mutually agreed upon by the parties to this Agreement. For purposes of workers’ compensation insurance, it is intended that all persons performing services under this Agreement shall remain in the general service of the County, and that their services on behalf of the City shall be considered a special employment which shall not subject the City to liability under workers’ compensation laws. However, it is understood that the County, in computing the cost of its services hereunder, may take into account its direct cost of providing workers’ compensation insurance coverage for such employees in proportion to time spent in the performance of this Agreement. The City shall hold harmless, defend and indemnify the County from and against any liability, claims, actions, costs, damages or losses to any person, or damage to any property, arising out of the City’s activities under this Agreement. The County, in computing its costs of services under this Agreement, may take into account the direct cost of providing adequate liability insurance to cover operations under this Agreement. The parties understand that each party maintains insurance programs under workers’ compensation laws and in protection of various other liability risks and exposures; each party shall continue to maintain such programs as a matter of its own discretion. In the event liability is imposed upon the parties to this Agreement under any circumstances in which the above provisions of this paragraph do not control, and if the liability is joint and several, the parties shall contribute equally to the settlement of any claim or judgment. The City shall not be obligated or liable for payment hereunder to any party other than the County.

10. Notwithstanding anything to the contrary in this Agreement, the City of the ultimate responsibility for canvassing the returns of any election held hereunder, County shall not be obligated in any case to defend or prosecute any action at law or equity arising out of any such election or contesting the validity of any such election. The City shall be responsible for defending any court action brought to challenge any election held pursuant to this Agreement.

11. It is expressly recognized that this Agreement transfers ministerial duties only. In the event that policy questions arise, such questions will be referred to the City for decision by the appropriate City officials.

12. For any fiscal year commencing after December 31, 2022, either the City or the County, at the time of its respective annual budget deliberations, may terminate this Agreement by giving the other party a 90-day written notice of termination. In such event, the County will not be responsible for the conduct of elections occurring thereafter. If no such notice is given, this Agreement shall continue year-to-year until expiration of the term.

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Attachment: Election Agreement (3789 : Election Services Agreement) 4 13. All notices, bills, and payments shall be made in writing and shall be given by personal delivery or by U.S. Mail or courier service. Notices, bills, and payments shall be addressed as follows:

To City: Raina Allan
City Clerk
401 Grove St
Healdsburg, CA 95448
To County: Deva Marie Proto
Clerk-Recorder-Assessor
585 Fiscal Drive, Room 104
Santa Rosa, CA 95403
When a notice, bill or payment is given by a generally recognized overnight courier service, the notice, bill or payment shall be deemed received on the next business day. When a copy of a notice, bill or payment is sent by facsimile or email, the notice, bill or payment shall be deemed received upon transmission as long as (1) the original copy of the notice, bill or payment is promptly deposited in the U.S. mail and postmarked on the date of the facsimile or email (for a payment, on or before the due date), (2) the sender has a written confirmation of the facsimile transmission or email, and (3) the facsimile or email is transmitted before 5 p.m. (recipient’s time). In all other instances, notices, bills and payments shall be effective upon receipt by the recipient. Changes may be made in the names and addresses of the person to whom notices are to be given by giving notice pursuant to this paragraph

14. This Agreement constitutes the complete and exclusive statement of the agreement between the County and the City and shall supersede any previous agreements, whether verbal or written, concerning the same subject matter.

15. This Agreement shall be interpreted as though it was a product of a joint drafting effort and no provisions shall be interpreted against a party on the ground that said party was solely or primarily responsible for drafting the language to be interpreted.

16. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder.

17. If any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions hereof, and such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.

18. This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

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Attachment: Election Agreement (3789 : Election Services Agreement) 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

CITY OF HEALDSBURG
By:

Jeffrey Kay, City Manager
Date:

ATTEST:

City Clerk
Date:

COUNTY: COUNTY OF SONOMA

CERTIFICATES OF INSURANCE ON

FILE WITH AND APPROVED AS TO
SUBSTANCE FOR COUNTY:

By:

Department Head
Date:

APPROVED AS TO FORM FOR
COUNTY:

By:

County Counsel
Date:

COUNTY OF SONOMA
By:

Chair
Sonoma County Board of Supervisors
Date:

ATTEST:

Clerk of the Board of Supervisors

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Attachment: Election Agreement (3789 : Election Services Agreement)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Acceptance of the FY21/22 Annual Concrete Maintenance Project PREPARED BY: Clay Thistle, Senior Engineer
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

Adopt a Resolution accepting the FY21/22 Annual Concrete Maintenance Project as complete and authorizing staff to file a Notice of Completion with the County Recorder's Office.

COMMUNITY ENGAGEMENT/OUTREACH:

The FY 21/22 Annual Concrete Maintenance Contract was advertised for public bidding in the Santa Rosa Press Democrat and on the City’s website.

Prior to beginning construction, advance notices were provided to adjacent residents and businesses advising of potential impacts, parking restrictions and the planned work duration. The City project manager’s direct contact information was provided for additional information and for any concerns that arose during the construction process.

BACKGROUND:

The Public Works staff collects and maintains a list of sidewalk, curb and gutter, and other concrete within the public right-of-way needing repair. Repairs are often needed because of surface disturbance associated with sewer and water utility repairs, tree roots, and subsurface soil movement.

City Council awarded the bid for the FY 21/22 Annual Concrete Maintenance Contract Project in March of 2022. Construction on the project began in May of 2022.

The project included repairing sidewalk, curb and gutter, and other concrete at over two hundred locations throughout the City. Repairs were made to approximately 6,000 square feet of sidewalk, 250 linear feet of curb and gutter and 500 square feet of concrete street.

A list of the specific locations and quantities of work is included as an attachment to this report.

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On September 9, 2022, Yukon Construction, Inc. notified the City in writing that they consider the work complete, supported by the fact that all contract documents have been reviewed and the work has been inspected for compliance.

DISCUSSION/ANALYSIS:

Yukon Construction Inc. has completed all work in compliance with approved Project Plans, Specifications, Special Provisions, and Contract Change Orders. City representatives have reviewed all contract documents and performed final inspections of the work and have determined that all work has been performed and completed in accordance with the contract documents, and as directed by the City. There are no liquidated damages to be assessed and there are no existing or potential contractor claims. Therefore, the project is deemed completed by staff and ready for council acceptance.

ENVIRONMENTAL STEWARDSHIP:

Construction waste was diverted from landfill for reuse or recycling where possible.

ALTERNATIVES:

There is no reasonable alternative to the recommended action, as the City has begun beneficial use of the completed facilities.

FISCAL IMPACT:

The total budget for the FY 21/22 Annual Concrete Maintenance Project was $312,291 with funding from multiple sources including Traffic Congestion Relief Funds, Other Special Revenue Funds and Streets Capital Funds. The construction contract was awarded for $283,900.04 and was completed under budget for a total of $274,442.15. The total project costs are estimated to be $288,465, including additional staff time to complete the project closeout.

The remaining approximately $23,826 was funded by Streets Capital Funds and will be available for use on future projects.

ENVIRONMENTAL ANALYSIS:

The recommended action does not constitute a project under CEQA., pursuant to Section 15378(b)(5) of the California Environmental Quality Act (CEQA) Guidelines, approval of this Resolution is an administrative activity of the City that does not constitute a project under CEQA.

ATTACHMENT(S):

Resolution
Certificate of Completion
Notice of Completion
Location List PDF

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CITY OF HEALDSBURG
RESOLUTION NO. __-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG ACCEPTING THE FY21/22 ANNUAL

CONCRETE MAINTENANCE PROJECT AS COMPLETE AND

AUTHORIZING STAFF TO FILE A NOTICE OF COMPLETION

WITH THE COUNTY RECORDER'S OFFICE
WHEREAS, on March 21, 2022, the Healdsburg City Council awarded a construction contract for the FY21/22 Annual Concrete Maintenance Project to Yukon Construction Inc; and WHEREAS, the Healdsburg City Council at a regular meeting held October 17, 2022, received the report from the City Engineer that the Project has been satisfactorily completed in accordance with the contract documents and City Standards; and WHEREAS, the work consisted of repairing sidewalk, curb and gutter and other concrete at over two hundred locations throughout the City; and
WHEREAS, the City Engineer recommended that the City Council accept the Project as complete and take appropriate action to finalize the Project; and WHEREAS, pursuant to Section 15378(b)(5) of the California Environmental Quality Act (CEQA) Guidelines, approval of this Resolution is an administrative activity of the City that does not constitute a “project” under CEQA.; and
WHEREAS, after due consideration, the City Council accepts the recommendation of the City Engineer; and
WHEREAS, there remains approved unspent funding for the project that shall be returned to the original funding sources.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby finds:

1. This action of accepting the Project as complete does not constitute a “project” under CEQA; and

2. Authorizes staff to file a Notice of Completion with the County Recorder's Office; and

3. Authorizes staff to take appropriate action to finalize the Project.

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Attachment: Resolution (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project) Resolution No.

PASSED, APPROVED AND ADOPTED, this 17th day October 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
__________________________________ ____________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Attachment: Resolution (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project)

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Attachment: Certificate of Completion (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project) Recording Requested by:

Healdsburg City Clerk
When Recorded Return to:

Healdsburg City Clerk
401 Grove Street
Healdsburg, CA. 95448

CITY OF HEALDSBURG

NOTICE OF COMPLETION
Project Title: FY 21/22 Annual Concrete Maintenance Project City Project No. 2019-07
Site Address or
Location: Various locations throughout the City of Healdsburg Property Owner: City of Healdsburg
Address: 401 Grove Street, Healdsburg, CA 95448
Nature of Owner’s
Interest Public Facilities
NOTICE IS HEREBY GIVEN THAT I, Larry Zimmer, City Engineer of the City of Healdsburg, California, on September 27, 2022, did file with the City Clerk of the City of Healdsburg, my Certificate of Completion of the following described work the contract for doing, which was heretofore awarded Yukon Construction Inc. on March 21, 2022, in accordance with the City Clerk and approved by the City Council of said City;
That said work and improvements were actually completed on September 9, 2022; That acceptance of the said work and improvements was ordered by City Council Resolution No. ___- 2022 on October 3, 2022.

That said work and improvements consisted of repairing sidewalk, curb and gutter and other concrete at over two hundred locations throughout the City. Repairing approximately 6,000 square feet of sidewalk, 250 linear feet of curb and gutter and 500 square feet of concrete street.

I, Larry Zimmer, City Engineer, of the City of Healdsburg do hereby certify, under penalty of perjury, that the foregoing is true and correct.

DATED: ATTEST:
________________________________ ___________________________________ Larry Zimmer, City Engineer Raina Allan, City Clerk

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Attachment: Notice of Completion (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project) Remove and Replace
Concrete Sidewalk
Remove and Replace
Concrete Sidewalk
with Roots
Remove and
Replace Curb
and Gutter
Remove and Replace
Curb and Gutter w/
Roots
Remove and
Replace Concrete
Street
Number Street SQF SQF LF LF SQF
1 233 Almond 45
2 233 Almond 23
3 301 Almond 45
4 301 Almond 90
5 370 Arabian 42
6 507 Brown 15
7 706 Brown 30 6
8 717 Brown 44 8
9 735 Brown 9
10 819 Center 24
11 819 Center 7
12 1325 Crofton 22
13 90 Dry Creek 63
14 217 East 24
15 217 East 50 8
16 247 East 27
17 301 East 45
18 301 East 90
19 321 East 15
20 321 East 18
21 328 East 18
22 328 East 38 25
23 239 East 6
24 212 First 28
25 212 First 84
26 219 First 75
27 311 First 35
28 311 First 193
29 329 First 13
30 329 First 61
31 222 Fitch 28
32 434 Fitch 65
33 500 Fitch 75
34 500 Fitch 75
35 516 Fitch 25
36 536 Fitch 45
37 725 Fitch 15
38 725 Fitch 50
39 777 Fitch 38
40 777 Fitch 50
41 831 Fitch 13 63
42 532/534 Fitch 40 60
43 532/534 Fitch 38
44 532/534 Fitch 25
45 200 C Foss Circle 3
46 435 Grant 58
47 435 Grant 58
48 423 Haydon 50
49 133 Healdsburg 5
50 139 Healdsburg 4
51 433 Healdsburg 59 7
52 1360 Healdsburg 52 12
53 1395 Healdsburg 48
54 1557 Healdsburg 23
55 16039 Healdsburg 52 9
56 16085 Healdsburg 90
57 15989 Healdsburg 80 15
58 16001 Healdsburg 60
59 16001 Healdsburg 60
Address
FY21/22 Annual Concrete Maintenance Project

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Attachment: Location List PDF (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project) Remove and Replace
Concrete Sidewalk
Remove and Replace
Concrete Sidewalk
with Roots
Remove and
Replace Curb
and Gutter
Remove and Replace
Curb and Gutter w/
Roots
Remove and
Replace Concrete
Street
Number Street SQF SQF LF LF SQF
Address
FY21/22 Annual Concrete Maintenance Project
60 522 Johnson 28
61 522 Johnson 6 12
62 522 Johnson 38
63 522 Johnson 45
64 642 Johnson 85
65 742 Johnson 26
66 742 Johnson 28
67 835 Johnson 43
68 835 Johnson 63
69 245 Lincoln 11
70 245 Lincoln 75
71 245 Lincoln 63
72 245 Lincoln 47
73 245 Lincoln 25
74 213 Matheson 15
75 220 Matheson 14
76 338 Matheson 26 8
77 430 Matheson 25
78 438 Matheson 6
79 438 Matheson 19
80 309-311 Matheson 30
81 Mill 225
82 321 North 11
83 321 North 46
84 331 North 30 6
85 401 North 9
86 401 North 84
87 407 North 8
88 407 North 50
89 407 North 5
90 415 North 34 9
91 433 North 75
92 510 North 7
93 510 North 35
94 206 Piper 88
95 212 Piper 50
96 219 Piper 35
97 219 Piper 150 8 35
98 302 Piper 5
99 401 Piper 11 42
100 442 Piper 35
101 308 Plaza 36 25
102 311 Plaza 25
103 314 Plaza 41
104 321 Plaza 81
105 321 Plaza 6
106 321 Plaza 25
107 124-128 Plaza 10
108 301 Powell 8
109 711 Prince 25
110 819 Prince 18
111 754 Rose 7
112 754 Rose 25
113 755 Rose 6
114 755 Rose 36
115 760 Rose 30 5
116 761 Rose 6 4
117 761 Rose 24
118 809 Rose 189 3

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Attachment: Location List PDF (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project) Remove and Replace
Concrete Sidewalk
Remove and Replace
Concrete Sidewalk
with Roots
Remove and
Replace Curb
and Gutter
Remove and Replace
Curb and Gutter w/
Roots
Remove and
Replace Concrete
Street
Number Street SQF SQF LF LF SQF
Address
FY21/22 Annual Concrete Maintenance Project
119 221 Second 50
120 221 Second 6
121 221 Second 36
122 221 Second 36
123 221 Second 48
124 228 Second 63 63
125 228 Second 63
126 1433 Spruce 180 32
127 330 Sunnyvale 48
128 202 Tucker 63
129 202 Tucker 25
130 202 Tucker 20
131 301 Tucker 38
132 403 Tucker 25
133 415 Tucker 19
134 415 Tucker 11
135 428 Tucker 58
136 431 Tucker 55
137 4 University 25
138 18 University 63
139 18 University 88
140 112 University 21
141 430 University 38
142 430 University 38
143 430 University 38
144 430 University 13
145 436 University 25
Total 4351 1414 246 15 481
5764 261

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Attachment: Location List PDF (3765 : Acceptance of the FY21/22 Annual Concrete Maintenance Project)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Community Development Block Grant Curb Ramp Improvements Project Bid Award
PREPARED BY: Clay Thistle, Senior Engineer
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

Adopt a Resolution conditionally awarding the Community Development Block Grant Curb Ramp Improvements Project construction contract to Yukon Construction Inc., of Santa Rosa, California, in the amount of $685,111.00; authorizing the City Manager to execute the contract; authorizing the City Manager to negotiate and approve contract change orders up to 10% of the original contract amount and approving an increase in appropriations by $351,389.

COMMUNITY ENGAGEMENT/OUTREACH:

The Community Development Block Grant Curb Ramp Improvements Project was advertised for public bidding in the Santa Rosa Press Democrat and on the City’s website.

Prior to beginning construction, advance notices will be provided to adjacent residents and businesses. They will be advised of potential impacts, parking restrictions and the planned work duration. City project manager’s direct contact information will be provided for additional information and for any concerns that arise during the construction process.

BACKGROUND:

The City applied for and received $415,000 in Community Development Block Grant (CDBG) funding. The funding is administered by the Sonoma County Community Development Commission. CDBG funds must be utilized for projects that benefit or reduce barriers to lowand moderate-income persons, disabled persons and/or seniors. State and local CDBG administrators develop yearly funding priorities. The Sonoma County Community Development Commission has identified Americans with Disabilities Act (ADA) retrofit projects for public facilities as a priority for the use of local government sponsored capital project funding.

The Community Development Block Grant Curb Ramp Improvements Project will construct 38

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new ADA compliant curbs ramps at various locations throughout Healdsburg. New curb ramps will be installed at locations where existing curb ramps do not exist or are substandard. New signage and roadway striping in the vicinity of the new curb ramps will be upgraded. Upgrading curb ramps provides for improved pedestrian access and mobility.

DISCUSSION/ANALYSIS:

A notice inviting bids was advertised in accordance with all applicable procedures, and the City received three bids. The lowest apparent and responsive bid was from Yukon Construction, Inc. of Santa Rosa, California in the amount of $685,111. The other bids received ranged from the apparent second low bid of $698,845 to a high bid of $777,557. The low bid was lower than the engineer’s estimate of $701,257 by approximately 2%.

The bid is based on specified bid items, estimated quantities, and fixed unit prices for the total bid amount of $685,111. Staff is requesting a 10% contingency to cover unforeseen conditions for a total project budget of $753,622.

The bid from Yukon Construction, Inc. satisfies the bidding requirements for the project as described in the bid instructions. There are no irregularities with the bid and no protests to the bid have been filed within the allowable time for filing such actions. Staff has verified that Yukon Construction, Inc. possesses the required license(s) and is otherwise qualified to complete the project.

ENVIRONMENTAL STEWARDSHIP:

Reuse and recycling will be used to divert much of the construction waste from landfill. Concrete and asphalt removed will be delivered to local recyclers for reuse in new paving and concrete products.

ALTERNATIVES:

The City Council could choose to reject all bids and direct staff to postpone the project. This alternative would require the City to forfeit the $415,000 grant funding and might impair our ability to seek future funding.

FISCAL IMPACT:

The Curb Ramp Improvement Projects number ST005 is included in the adopted 2022-23 CIP in the Streets Capital Fund with a total budgeted amount of $459,000. Funding sources include $415,000 in CDBG funding and $44,000 in American Rescue Plan Act (ARPA) funding.

The requested contract award amount is $685,111, with a 10% contingency of $68,511.

Environmental review, design and staff time is estimated at $56,767 for a total project budget of $810,389. The scope of the project cannot be reduced because completing the work at all identified locations is required under the grant agreement. An increase in appropriations of $351,389 is needed to cover the difference between the current budget amount and the total project amount.

The Annual Concrete Maintenance Project number ST002 is in the final stages of project closeout with $23,389 in remaining streets funding that has not been utilized and is available for

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use on the Curb Ramp Improvement Project. The Sidewalk Repair and Maintenance Project number ST003 has $64,000 in ARPA funding available for unidentified sidewalk repairs. Staff propose utilizing these funds to complete the Curb Ramp Improvements Project as it provides necessary sidewalk maintenance that is consistent with the goals of both projects. The Pavement Preventative Maintenance Project number ST001 is planned in two phases with a flexible scope and has not been started. Staff propose reducing the project budget by $264,000 of ARPA funding and utilizing these funds for the Curb Ramp Improvements Project.

Exhibit A to the resolution includes the budget amendments required to effectuate the changes described above.

ENVIRONMENTAL ANALYSIS:

Sonoma County Community Development Commission as the National Environmental Policy Act (NEPA) responsible entity determined the proposed Community Development Block Grant Curb Ramp Improvements Project is categorically excluded subject to section 58.5 pursuant to 24CFR 58.35(a).

The proposed Project involves the repair and maintenance of an existing public facility involving negligible or no expansion of use therefore is exempt pursuant to the California Environmental Quality Act (CEQA) Guidelines 15301(c) and no further environmental review is needed. A Notice of Exemption has been filed with the County of Sonoma.

ATTACHMENT(S):

Resolution
Exhibit A
Location Map

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CITY OF HEALDSBURG
RESOLUTION NO. __-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG CONDITIONALLY AWARDING THE

COMMUNITY DEVELOPMENT BLOCK GRANT CURB RAMP

IMPROVEMENTS CONSTRUCTION CONTRACT TO YUKON
CONSTRUCTION, INC., OF SANTA ROSA, CALIFORNIA IN
THE AMOUNT OF $685,111, AUTHORIZING THE CITY

MANAGER TO EXECUTE THE CONTRACT, AUTHORIZING

THE CITY MANAGER TO NEGOTIATE AND APPROVE
CONTRACT CHANGE ORDERS UP TO 10% OF THE

ORIGINAL CONTRACT AMOUNT, AND AMENDING

APPROPRIATIONS IN THE STREETS CAPITAL FUND
WHEREAS, the notice inviting bids for the Community Development Block Grant Curb Ramp Improvements Contract was advertised in accordance with applicable procedures that resulted in the City receiving three bids; and
WHEREAS, the lowest responsive bid was submitted by Yukon Construction, Inc. in the amount of $685,111; and
WHEREAS, staff has verified that Yukon Construction, Inc., possesses the required license(s) and is otherwise qualified to complete the project; and WHEREAS, staff has reviewed the proposal and determined that there are no irregularities and no protests have been filed; and
WHEREAS, staff recommends awarding the contract to Yukon Construction Inc. in the amount of $685,111; and
WHERAS, staff recommend a standard 10% contract contingency of $68,511; and WHERAS, staff estimate environmental review, design, and staff time will cost $56,767 for a total project budget of $810,389; and
WHEREAS, the City applied for and received $415,000 in Community Development Block Grant (CDBG) funding; and
WHEREAS, the Curb Ramp Improvements Project is included in the adopted 2022-23 CIP Streets Capital Fund budget with a total budgeted amount of $459,000; and WHEREAS, an increase in appropriations of $351,389 is needed to cover the difference between the budgeted amount and the total project amount; and

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Attachment: Resolution (3770 : Community Development Block Grant Curb Ramp Improvements Project Bid Award) Resolution No. -2022

WHEREAS, the Annual Concrete Maintenance Project is in the final stages of project closeout with $23,389 in remaining streets funding that has not been utilized; and WHEREAS, the Sidewalk Repair and Maintenance Project has $64,000 in ARPA funding available for unidentified sidewalk repairs; and
WHERAS, the Pavement Preventative Maintenance Project has not been started and the scope can be adjusted for $264,000 in ARPA funding to be available; and WHEREAS, Sonoma County Community Development Commission as the National Environmental Policy Act (NEPA) responsible entity determined the proposed Community Development Block Grant Curb Ramp Improvements Project is categorically excluded subject to section 58.5 pursuant to 24CFR 58.35(a); and
WHEREAS, the proposed Project involves the repair and maintenance of an existing public facility involving negligible or no expansion of use and therefore is exempt, pursuant to the California Environmental Quality Act (CEQA) Guidelines 15301(c); and WHEREAS, a Notice of Exemption has been filed with the County of Sonoma.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Finds the proposed Community Development Block Grant Curb Ramp Improvements Contract involves the repair and maintenance of an existing public facility involving negligible or no expansion of use therefore is exempt pursuant to the California Environmental Quality Act (CEQA) Guidelines 15301(c) and 15302(c).

2. Conditionally awards the Community Development Block Grant Curb Ramp Improvements Contract to Yukon Construction, Inc.

3. Authorizes the City Manager to execute the Community Development Block Grant Curb Ramp Improvements Contract and approve contract change orders up to ten percent (10%) of the bid amount.

4. Authorizes the City Engineer to negotiate contract change orders, issue the notice of award to Yukon Construction, Inc. and to otherwise administer the Project.

5. Approves amending the adopted fiscal year 2022-23 budget as depicted on the attached Exhibit A.

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Attachment: Resolution (3770 : Community Development Block Grant Curb Ramp Improvements Project Bid Award) Resolution No. -2022

PASSED, APPROVED AND ADOPTED, this 17thday of October 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
_________________________________ ____________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Attachment: Resolution (3770 : Community Development Block Grant Curb Ramp Improvements Project Bid Award) Resolution No.

Exhibit A
Account Number Increase Amount Decrease Amount Description 512-6162-45000-ST005 $ 351,389 Increase CDBG Curb Ramps Improvements Project Budget 512-6162-45000-ST002 $ 23,389 Decrease Annual Concrete Maintenance Project Budget 512-6162-45000-ST003 $ 64,000 Decrease FY 22-23 Sidewalk Repair Project Budget 512-6162-45000-ST001 $ 264,000 Decrease Pavement Preventative Maintenance Project Budget FY 22-23 Budget Amendment

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Attachment: Exhibit A (3770 : Community Development Block Grant Curb Ramp Improvements Project PIPER
POWELL

NORTH GRANT MATHESON
TUCKER

TERRACE

SHERMAN
MASON
BADGER
ALLEY 1

DRYCREEK
HAYDON
ALLEY 2
ED Y

LINCOLN

FERRERO
HUDSON

ALEXANDRIA

TWINOAKS

WESTGRANT

EXCHANGE
SUN
ALLEY 4

FIELDCREST
ALLEY 5 FOSS CREEK

FUCHSIA WESTMONT MARCH
SHORT
CDBG Locations

MONTEVISTA
ADA Ramp Project
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Attachment: Location Map (3770 : Community Development Block Grant Curb Ramp Improvements Project Bid Award)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Accept the Water Reclamation facility Flood Mitigation Project, Project SE003, as Complete
PREPARED BY: Patrick Fuss, Water/Wastewater Engineer
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):

Adopt a Resolution accepting the Water Reclamation Facility Flood Mitigation Project as complete and authorizing staff to file the Notice of Completion.

COMMUNITY ENGAGEMENT/OUTREACH:

Not applicable.

BACKGROUND:

In February 2019, heavy rains brought flooding to the City’s Water Reclamation Facility (WRF).

As a result of the flooding, many of the WRF processes were damaged along with damage to buildings and property. Staff worked with a consultant to prepare a mitigation against future flooding consisting of an earthen berm to keep flood waters out of the facility.

In November 2019, Staff applied for a grant through FEMA’s Hazard Mitigation Program to fund the Project. A grant was awarded on December 7, 2021, with additional funds awarded on April 15, 2022, for a total grant of $181,856 for Project costs including design and construction.

The balance of the Project costs, not less than 25% of the FEMA grant funds, will be through local funds.

In April and May 2022, the Water Reclamation Facility Flood Mitigation Project was advertised for bidding. Bids were opened on May 5, 2022. The project was awarded to WestPac Construction in the amount of $160,600. Notice to proceed was issued on July 10, 2022 indicating a contract start date of July 21, 2022. Work was completed on September 29, 2022, within the allowed contract time.

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DISCUSSION/ANALYSIS:

The Project scope of work consists of approximately 650 feet of earthen berm approximately five feet wide at the top with a top elevation of 92.50 feet, two gate structures to prevent flood backflow into the area protected by the berm but allow rain catchment to escape during ordinary periods.

The initial contract amount was $160,600. The final contract amount includes change orders required to modify the connection to existing drainage piping, which was found to be damaged upon excavation. The final contact amount was $173,300, of which $172,327.30 was needed to complete the work of the contract.

ENVIRONMENTAL STEWARDSHIP:

The WRF, when damaged by the 2019 flooding, was able to store the raw-sewage it received.

However, the storage capacity is limited, and if the WRF could not have been restored to functional condition, a raw-sewage discharge may have occurred. The WRF Flood Mitigation Project will protect the environment by allowing the WRF to continue operation in the event of a flood.

As part of the grant process, the Project was found to be categorically exempt under NEPA, but there is a potential for special status species (California tiger salamander and California redlegged frog) to be in the area. the contract documents have provisions to protect these species, consisting of initial site survey for species of concern by a qualified biologist, training of construction and management staff on procedures should species be encountered during the work, erection of wildlife mitigation fencing, daily site review by City Staff to verify the work area is clear of species, weekly site reviews by qualified biologist to verify proper procedures are in place, and reporting to FEMA on wildlife mitigation procedures.

ALTERNATIVES:

The City Council could choose not to accept the Project as complete and provide further direction to staff. Staff does not recommend this alternative as the work is complete and notice of completion should be recorded to close out the contract FISCAL IMPACT:

The authorized contract amount for construction of the Water Reclamation Facility Flood Mitigation Project including base bid plus contingency is $173,300. The costs of construction work completed is $172,327.30, with $159,627.30 in the base contract work and $12,700 in change order work.

The FEMA Hazard Mitigation Grant (DR4434-PJ0043) is anticipated to reimburse the City for 75% of base construction cost not including the change order in the amount of $119,720.48. The City will be responsible for funding the remaining $52,606.82 of construction costs with Wastewater funds.

Staff have requested that FEMA include the $12,700 of change order work costs under the grant.

FEMA has not yet provided a response to this request, and Staff have been advised that a response could take months to receive. If FEMA includes the change order work in the grant, the

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FEMA share of the construction cost would be $129,245.47, and the City share would be $43,081.83
The total FY 22-23 Adopted Budget for the Water Reclamation Facility Flood Mitigation Project SE003 is $224,410. Funding sources include $152,504 of FEMA grant funding and $71,906 of Wastewater funding. Total project expenses to date including staff time, biological monitoring and construction are $189,519.49. Additional staff time and biological monitoring expenses will be incurred as the project is closed out and will be funded at the 75% grant reimbursement rate.

ENVIRONMENTAL ANALYSIS:

Accepting the Project as complete is and administrative action and therefore not defined as a “project” and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Title 14, the California Code of Regulations, Section 15378(b)(2).

ATTACHMENT(S):

Resolution
Certificate of Acceptance
Notice of Completion
Maint Bond WestPac Constr WRF Flood Mit Proj

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CITY OF HEALDSBURG
RESOLUTION NO. ___-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG ACCEPTING AS COMPLETE THE WATER

RECLAMATION FACILITY FLOOD MITIGATION PROJECT

AND AUTHORIZING STAFF TO FILE THE NOTICE OF

COMPLETION
WHEREAS, the City’s Water Reclamation Facility was damaged by flooding in 2019; and WHEREAS, staff developed a project to construct a berm to prevent flooding at the Water Reclamation Facility; and
WHEREAS, staff applied for a FEMA Hazard Mitigation Grant to assist with funding of the flood mitigation berm project; and
WHEREAS, on December 7, 2021, FEMA approved the flood mitigation project grant for 75% of project costs up to $181,856; and
WHEREAS, on June 6, 2022, the City Council awarded the WRF Flood Mitigation Project (Project) to WestPac Construction. (Contractor) in the amount of $160,600 with a contingency amount of $16,060; and
WHEREAS, the Project consisted of construction of an earthen berm approximately 650 feet long and two gate structures; and
WHEREAS, the work of the Project and related change order for modification of connection to existing drainage infrastructure at one of the gate structures were approved by the City Manager and fell within the approved project budget; and WHEREAS, on September 29, 2022, the Contractor finalized the Project in accordance with the contract documents to the satisfaction of the City; and WHEREAS, the City’s Utility Engineering Manager has reviewed all the completed work and finds the work complete per the prepared plans and agreed upon change orders; and WHEREAS, accepting the Project as complete is an administrative action and therefore not defined as a “project” and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Title 14, the California Code of Regulations, Section 15378(b)(2).

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Attachment: Resolution (3784 : Accept WRF Flood Mitigation as Complete) Resolution No. -2022

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Finds that accepting the Project as complete is an administrative action and therefore not defined as a “project” and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Title 14, the California Code of Regulations, Section 15378(b)(2).

2. Accepts the project as complete and authorizes staff to file a Notice of Completion with the County Recorder’s Office.

3. Authorizes staff to release any retention due and payable to WestPac Construction. thirtyfive (35) days after the recordation of the Notice of Completion subject to any retention requirements permitted by law.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Healdsburg this 17th day of October, 2022, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
________________________________ ____________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Attachment: Resolution (3784 : Accept WRF Flood Mitigation as Complete)

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Attachment: Certificate of Acceptance (3784 : Accept WRF Flood Mitigation as Complete) Recording Requested by:

Healdsburg City Clerk
When Recorded Return to:

Healdsburg City Clerk
401 Grove Street
Healdsburg, Ca. 95448

CITY OF HEALDSBURG

NOTICE OF COMPLETION
Project Title: Water Reclamation Facility Flood Mitigation Project Site Address or
Location: 340 Foreman Lane, Healdsburg, CA
Property Owner: City of Healdsburg
Address: 401 Grove Street, Healdsburg, CA 95448
Nature of Owner’s
Interest Simple fee title
NOTICE IS HEREBY GIVEN THAT I, Patrick Fuss, Utility Engineering Manager, of the City of Healdsburg, California, on September 29, 2022, did file with the City Clerk of the City of Healdsburg, my Certificate of Completion of the following described work the contract for doing which was heretofore awarded to WestPac Construction on June 6, 2022, in accordance with the City Clerk and approved by the City Council of said City;
That said work and improvements were actually completed on September 29, 2022; That acceptance of the said work and improvements was ordered by City Council Resolution No____ on October 17, 2022
That said work and improvements consisted construction of an earthen berm and gate structures as more specifically described in the plans and specifications approved by the City Council of the City of Healdsburg.

I, Patrick Fuss, Utility Engineering Manager, of the City of Healdsburg do hereby certify, under penalty of perjury, that the foregoing is true and correct.

DATED:____________________ ATTEST:
_____________________________
Patrick D. Fuss, P.E. Raina Allan
Utility Engineering Manager City Clerk

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Attachment: Notice of Completion (3784 : Accept WRF Flood Mitigation as Complete)

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Attachment: Maint Bond WestPac Constr WRF Flood Mit Proj (3784 : Accept WRF Flood Mitigation as Complete)

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Attachment: Maint Bond WestPac Constr WRF Flood Mit Proj (3784 : Accept WRF Flood Mitigation as Complete)

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Attachment: Maint Bond WestPac Constr WRF Flood Mit Proj (3784 : Accept WRF Flood Mitigation as Complete)

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Attachment: Maint Bond WestPac Constr WRF Flood Mit Proj (3784 : Accept WRF Flood Mitigation as Complete)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Renewal of the Healdsburg Tourism Improvement District PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Establish Proactive Policies/Programs to Continue to Promote Economic Diversity & Sustainable Growth
RECOMMENDED ACTION(S):

Pass an ordinance of the City Council of the City of Healdsburg adding Chapter 3.32 to Title 3 of the Healdsburg Municipal Code renewing the Healdsburg Tourism Improvement District (HTID) and declaring results of the Majority Protest Proceedings.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

The Property and Business Improvement District Law of 1994 grants cities and counties the authority to establish and renew “property and business improvement districts” for the purpose of levying assessments against businesses in the district to pay for the cost of certain improvements and activities benefiting those businesses paying the assessment. Funds raised are returned to the private non-profit entity governing the district.

Under the 1994 Act, a Business Improvement District (“BID”) can only be established or renewed by the submission of a written petition signed by the business owners in the proposed district who will pay more than 50% of the assessments. Petitioners are required to prepare and submit a Management District Plan along with their petition. The contents of the Management Plan lay out the boundaries of the district, the timing and method of assessments, and the improvements and activities to be financed. In addition, the Management Plan must designate the number of years the assessment will be levied. A BID can only be renewed for no more than 10 years, unless certain other processes are followed.

Activities and improvements allowed under the 1994 Act include:

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Activities

1. Promotion of public events which benefit businesses or real property in the district

2. Furnishing of music in any public place within the district

3. Promotion of tourism within the district

4. Marketing and economic development, including retail retention and recruitment

5. Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality within the district

6. Other services provided for the purpose of conferring special benefit upon assessed businesses and real property located in the district
Improvements

1. Parking facilities

2. Benches, booths, kiosks, display cases, pedestrian shelters and signs

3. Trash receptacles and public restrooms

4. Lighting and heating facilities

5. Decorations

6. Parks

7. Fountains

8. Planting areas

9. Closing, opening, widening or narrowing of existing streets

10. Facilities and/or equipment to enhance security of persons and property within the district

11. Ramps, sidewalks, plazas and pedestrian malls

12. Rehabilitation or removal of existing structures
The City Council initiated proceedings to renew a BID, on August 2, 2022 by adopting a resolution of intention containing a brief description of the proposed activities and improvements, exterior boundaries, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or business owners and whether bonds will be issued.

On September 6, 2022, the Council held the public meeting and provided feedback to the Chamber of Commerce on the proposed 2023-2032 Management Plan.

On October 3, 2022, the Council held the public hearing, received comments and introduced the first reading of the ordinance.

DISCUSSION/ANALYSIS:

In 2013 the Healdsburg Chamber of Commerce, working with the hoteliers in the City, developed and formed the Healdsburg Tourism Improvement District (“HTID”) in compliance with the 1994 Act. The HTID is an assessment district that funds the marketing and sales promotion efforts of Healdsburg lodging businesses. The HTID was initially formed for a five (5) year term.

On November 20, 2017, the City Council renewed the HTID for an additional five (5) year term, which will end on December 31, 2022, unless renewed.

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In early 2022, the City received notice from the HTID that the lodging businesses now wish to renew the HTID for an additional ten (10) years, beginning January 1, 2023 through December 31, 2032. At that time, the HTID also submitted the draft 2023-2032 Healdsburg Improvement District Management Plan (“Management Plan”) which outlined the activities to be financed with the assessment revenue.

At the August 2, 2022, City Council meeting, Council adopted the Resolution of intention, setting dates for future action and on September 6, 2022, Council held the public meeting.

Based on Council feedback received at the September 6, 2022 Council meeting, the HTID is proposing to allocate a minimum of 15% of the HTID annual budget to district development projects including services, improvements and activities which the HTID suggests will improve the quality of life in the community while also supporting the District’s purpose of increasing guest visits. For 2023, approximately $225,000 of HTID revenue would be made available to support services and projects in the community.

The attached Management Plan has been prepared by the District’s consultant and reflects the HTID’s proposed spending plan for the life of the HTID (through 2032). The Management Plan also identifies the location of the District encompassing all existing and future lodging businesses within the boundaries of the City, proposes to continue the annual assessment rate of 2% of gross short-term room rental revenue, and identifies all of the activities to be financed including sales and marketing, district development projects, administration and operations, City administration fee and contingency/reserve. In addition, the Management Plan designates the assessments will be levied for a period of 10 years, beginning January 1, 2023 through December 31, 2032. The draft Management Plan has been accepted by the lodging businesses. The City Council has the right to make changes to the Management Plan before giving its final approval.

The proposed Management Plan includes the following changes from the current Management Plan in place:

Current Proposed
Time Period 5 years 10 years
Assessment 2%
2% and gives the HTID Board
the ability to decrease the
rate annually by no more
than .5%
City Admin. Fee 2.5% 1.2%
Proposed Annual Budget $ 600,209 $ 1,500,000
Budget Allocation Amount % Amount %
Sales and Marketing $360,125 60.0% $1,032,000 68.8%
District Development $135,047 22.5% $225,000 15%
Administration and Ops* $60,021 10.0% $150,000 10%
Contingency/Reserve $30,010 5.0% $75,000 5%
City Collection Fee $15,005 2.5% $18,000 1.20%
*Admin and Ops Budget 65,000 annual cap in costs No annual cap

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Under the Management Plan, the Healdsburg Chamber of Commerce would continue to serve as the HTID’s Owners’ Association and be responsible for managing funds and implementing programs in accordance with the Management Plan, as well as providing annual reports to the City. The total HTID annual budget for the initial year of its ten (10) year operation is anticipated to be approximately $1,500,000. Signed petitions in favor of renewing the HTID have been received from business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, meeting the statutory requirement to initiate this renewal process.

Renewal of the HTID is a four-step process, as follows:

1. Step 1 (Completed) – Council will consider whether or not to initiate the request to renew the HTID. If Council elects to move forward with the renewal, they will adopt the Resolution of Intention to renew the HTID and set the date and time of a public meeting and a public hearing where the request for renewal will be considered further.

2. Step 2 (Completed) – Council will hold a public meeting to allow public testimony and Council feedback on the request to renew the HTID.

3. Step 3 (Completed) – Council will hold a public hearing to allow public testimony on the request to renew the HTID and to allow the Council to consider approval of the renewal. At the conclusion of the public hearing, the City Council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. If the Council elects to renew the HTID, following the public hearing, they will introduce for first reading, an Ordinance of District Formation. and approve the Owners’ Association Agreement with the Chamber of Commerce to administer and implement the improvements and activities of the HTID.

4. Step 4 (Tonight) – Council will consider adoption of the Ordinance. Upon successful passage of the ordinance, the HTID shall be renewed, and the ordinance shall go into effect thirty (30) days after successful passage of the ordinance. Also, at this meeting the Council will approve the Owners’ Association Agreement with the Chamber of Commerce to administer and implement the improvements and activities of the HTID.

ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

ALTERNATIVES:

Staff’s recommendation is to hear public comment and provide feedback on the terms of the proposed renewal.

FISCAL IMPACT:

The proposed assessment may not exceed 2% of the gross rental receipts from all overnight stays in the City. During the ten (10) year term, the assessment rate may be decreased annually by the HTID Owners’ Association by a maximum of one half of one percent (0.5%) of gross room rental revenue per year. The total assessment rate may not be less than half a percent (.5%).

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Consistent with the City’s current TOT ordinance, all types of lodging 30 consecutive calendar days or less are proposed to be included in the assessment. Lodging operators would collect the assessment from their guests and report and pay the assessment when they pay their Transient Occupancy Tax. The assessment estimates the HTID would generate approximately $1,500,000 on an annual basis.

The City would function as the fiscal agent for the HTID, with responsibility for collecting revenue/payment and remitting proceeds to the Owners’ Association. The City would retain

1.2% or approximately $18,000 per year based on the $1,500,000 annual budget to cover its costs of collection and administration. This amount is based on an assessment of the current costs to provide this service.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Ordinance
HTID Final Management Plan

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CITY OF HEALDSBURG
ORDINANCE NO. ________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG ADDING CHAPTER 3.32 TO TITLE 3 OF THE

HEALDSBURG MUNICIPAL CODE RENEWING THE

HEALDSBURG TOURISM IMPROVEMENT DISTRICT AND

DECLARING RESULTS OF THE MAJORITY PROTEST

PROCEEDINGS
WHEREAS, the City Council of the City of Healdsburg created the Healdsburg Tourism Improvement District (HTID) in 2013 by Resolution No. 102-2012; and WHEREAS, the City Council created the HTID for a five (5) year term, then subsequently renewed it for an additional five (5) year term, which ends on December 31, 2022; and WHEREAS, pursuant to California Streets and Highways Code Section 36621(a), lodging business owners who will pay more than fifty percent (50%) of the proposed assessment, as weighted according to the amount of the assessment to be paid by the petitioner, within the boundaries of the HTID, have petitioned the City Council to renew the HTID; and WHEREAS, the petition for renewal included a Management District Plan (“Management Plan”) summary that includes a map showing the boundaries of the district, information specifying where the complete management district plan can be obtained, describes the proposed assessment to be levied on lodging businesses within the HTID to pay for sales and marketing programs, and other improvements and activities set forth in the Management Plan; and WHEREAS, the assessed lodging businesses within the HTID will receive a specific benefit from the improvements, maintenance, and activities funded by the proposed assessments set forth in the Management Plan; and
WHEREAS, on August 1, 2022, at 6:00 PM at City Hall located at 401 Grove Street, Healdsburg, CA 95448, at a properly noticed public meeting, the City Council adopted Resolution No. 110-2022, a Resolution of the City Council of the City of Healdsburg Declaring its Intention to Renew the Healdsburg Tourism Improvement District and Fixing the Time and Place of a Public Meeting and a Public Hearing thereon and Giving Notice Thereof (“Resolution of Intention”). A map of showing the boundaries of the district, and a copy of the Management Plan were attached as exhibits to Resolution No. 110-2022; and
WHEREAS, on September 6, 2022 at 6:00 PM at City Hall located at 401 Grove Street, Healdsburg, CA 95448, the City Council held a properly noticed public meeting regarding the renewal of the HTID and the City Council heard and received objections and protests, if any, to the renewal of the HTID and the levy of the proposed assessment; and WHEREAS, on October 3, 2022 at 6:00 PM at City Hall located at 401 Grove Street, Healdsburg, CA 95448, the City Council held a public hearing to conduct the first reading of this

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Attachment: Ordinance (3790 : HTID - Ordinance Adoption) Ordinance No.

ordinance to renew the HTID and continue the levy of assessments, and the City Council heard and received all objections and protests, if any, to the renewal of the HTID and the levy of the proposed assessment. The public hearing was properly noticed in accordance with Streets and Highways Code § 36623; and
WHEREAS, the City Clerk has determined that there was no majority protest. A majority protest is defined as written protests received from owners of businesses in renewed HTID which would pay fifty percent (50%) or more of the assessments proposed to be levied. Protests are weighted based on the assessment proposed to be levied on each lodging business; and WHEREAS, if the City Council approves the first reading of this ordinance at the October 3, 2022 City Council meeting, passage of the ordinance is anticipated to be scheduled for the October 17, 2022 City Council meeting; and
WHEREAS, the Management Plan states that the Healdsburg Chamber of Commerce will serve as the owners’ association of the HTID. Accordingly, pursuant to Streets and Highways Code § 36651, Staff intends to propose adoption of a contract between the City and the Healdsburg Chamber of Commerce for the administration of the HTID at the meeting at which the ordinance is scheduled for passage.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HEALDSBURG DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. PURPOSE
The purpose of this chapter is to renew the Healdsburg Tourism Improvement District, consistent with the requirements of Property and Business Improvement District Law of 1994, California Streets and Highways Code Section 36620, et seq.

SECTION 2. FINDINGS
The City of Healdsburg incorporates the findings above by reference and adopts the following additional findings:

1. The activities funded by the assessment will provide a specific benefit to assessed businesses within the HTID that is not provided to those not paying the assessment.

2. The assessment is a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.

3. The assessment is a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.

SECTION 3. APPLICABILITY
The provisions of this chapter shall apply to all lodging businesses in the Healdsburg Tourism

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Attachment: Ordinance (3790 : HTID - Ordinance Adoption) Ordinance No.

Improvement District, which comprises all lodging businesses located on the premises of a winery, existing and in the future, available for public occupancy within the boundaries of the City of Healdsburg.

SECTION 4. CODE AMENDMENTS
Chapter 3.32 is hereby added to Title 3 of the Healdsburg Municipal Code to read as follows:

3.32. 010. Healdsburg Tourism Improvement District Renewed.

The City of Healdsburg hereby renews the Healdsburg Tourism Improvement District (HTID), for a ten (10) year term, beginning January 1, 2023, and ending December 31, 2032, pursuant to the provisions of the Property and Business Improvement District Law of 1994, as set forth in California Streets and Highways Code, Section 36600 et seq.

3.32.020. Management District Plan.

The Management District Plan (“Management Plan”) dated September 21, 2022 is hereby adopted and approved. A copy is attached hereto and located in the Office of the City Clerk.

3.32.030. Activities and Improvements.

1. The activities to be provided to benefit businesses in the HTID will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used to fund activities that directly benefit businesses outside the HTID; to fund activities or improvements outside the HTID; or for any purpose other than the purposes specified in this Ordinance, the Resolution of Intention adopted by the City Council on August 2, 2022, and the Management Plan.

Notwithstanding the foregoing, improvements and activities that must be provided outside the HTID boundaries to create a specific benefit to the assessed businesses may be funded, but use of such funds shall be limited to marketing or signage pointing to the HTID.

2. The assessments levied for the HTID shall be applied toward marketing and sales promotions and district development programs to market HTID lodging businesses as tourist, meeting and event destinations, and other improvements and activities as set forth in the Plan.

3. Assessments levied on lodging businesses pursuant to this ordinance shall be levied on the basis of benefit. Because the services provided are intended to increase room rentals, an assessment based on room rentals is the best measure of benefit.

4. Assessments may be used to fund activities, as defined by Streets and Highways Code §36606, and improvements, as defined by Streets and Highways Code § 36610, thtoe benefit the assessed businesses, as described by the Management Plan.

3.32. 040. Budget.

The assessment budget for the entire HTID will total approximately $1,500,000 in year one (1), and is anticipated to grow by 3% annually thereafter, subject to market conditions. A detailed annual

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Attachment: Ordinance (3790 : HTID - Ordinance Adoption) Ordinance No.

assessment budget will be developed and approved by the Chamber. Funds will be allocated as described in the Management Plan.

3.32.050. Bonds
Bonds shall not be issued to fund the HTID.

3.32.060. Boundaries.

The HTID includes all lodging businesses (including all lodging businesses located on the premises of a winery) located within the boundaries of the City of Healdsburg as described in the Management District Plan.

3.32.070. Assessments.

1. The annual assessment rate is two percent (2%) of gross short-term room rental revenue, for each assessed business. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days; stays by any federal or state officer or employee when on official business; stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; and stays by any person who has signed an agreement in writing for occupancy in a lodging business for more than thirty (30) days. During the ten (10) year term, the assessment rate may be decreased annually by the HTID Owners’ Association by a maximum of one half of one percent (0.5%) of gross room rental revenue per year, as described in Section V of the Management Plan. The total assessment rate may not be decreased to less than one percent one half of one percent (0.5%).

2. The assessments shall be used for the purposes set forth herein. Any funds remaining at the end of any year may be used in subsequent years in which the HTID assessment is levied as long as they are used consistent with the requirements set forth herein.

3. Assessments imposed pursuant to this chapter are levied solely upon the assessed business, and the business owner is solely responsible for payment of the assessment when due. If the owner chooses to collect any portion of the assessment from a transient, that portion shall be specifically called out and identified for the transient in any and all communications from the business owner as the “HTID Assessment” as specified in the Management Plan.

3.32.080. Collections.

The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest as set forth in the Management Plan) from each assessed business located in the boundaries of the HTID. The City shall take all reasonable efforts to collect the assessments from each assessed lodging business.

3.32.090. Owners’ Association.

The Management Plan identifies the Healdsburg Chamber of Commerce as the Owners’ Association

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Attachment: Ordinance (3790 : HTID - Ordinance Adoption) Ordinance No.

for the HTID. Pursuant to Streets and Highways Code §36651, the City has contracted with the Chamber of Commerce to administer the HTID.

3.32.100. Annual Report.

The Healdsburg Chamber of Commerce, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvement and activities described in the report, to be presented to the City Council. The first report shall be due after the first year of operation of the HTID.

3.32.110. Amendments to Enabling Legislation.

The HTID renewed pursuant to this ordinance shall be subject to any amendments to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code §36600 et. seq.).

SECTION 5. ENVIRONMENTAL COMPLIANCE
The City Council finds, pursuant to the California Environmental Quality Act (“CEQA”) Guidelines Section 15061(b)(3), that this ordinance is exempt from the requirements of CEQA on the grounds there are no reasonably foreseeable adverse impacts and there is no possibility that the activity in question may have a significant effect on the environment.

SECTION 6. SEVERABILITY
If any part of this Ordinance is held to be invalid or inapplicable to any situation by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or the applicability of this Ordinance to other situations.

SECTION 6: EFFECTIVE DATE
This ordinance shall be effective thirty (30) days after its passage.

SECTION 7: PUBLICATION
Within fifteen (15) days of its adoption, this ordinance or a summary thereof, as provided in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Healdsburg, along with the names of the City Council voting for and against its passage.

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Packet Pg. 99
Attachment: Ordinance (3790 : HTID - Ordinance Adoption) Ordinance No.

This Ordinance was introduced by the City Council of the City of Healdsburg on the 3rd day of October, 2022, and passed and adopted on the 17th day of October, 2022, at a regular meeting by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )

SO ORDERED ATTEST
__________________________________ _____________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk
Dated: ________________________________

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Packet Pg. 100 Attachment: Ordinance (3790 : HTID - Ordinance Adoption) TBD
2023-2032

HEALDSBURG TOURISM

IMPROVEMENT DISTRICT

MANAGEMENT DISTRICT PLAN
September 21, 2022 Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.

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Packet Pg. 101 Attachment: HTID Final Management Plan (3790 : HTID - Ordinance Adoption)

CONTENTS
I. OVERVIEW ........................................................................................................................................2 II. BACKGROUND ................................................................................................................................3 III. ACCOMPLISHMENTS.....................................................................................................................4 IV. BOUNDARY.......................................................................................................................................6 V. ASSESSMENT BUDGET AND SERVICES................................................................................7 A. Annual Service Plan .............................................................................................................................7 B. Annual Budget......................................................................................................................................9 C. California Constitutional Compliance.............................................................................................10 D. Assessment..........................................................................................................................................11 E. Penalties and Interest.........................................................................................................................12 F. Time and Manner for Collecting Assessments..............................................................................12 VI. GOVERNANCE...............................................................................................................................13 A. Owners’ Association..........................................................................................................................13 B. Brown Act and California Public Records Act Compliance........................................................13 C. Annual Report ....................................................................................................................................13 APPENDIX 1 – LAW....................................................................................................................................14 APPENDIX 2 – ASSESSED BUSINESSES .............................................................................................25 Prepared by
Civitas
(800)999-7781
www.civitasadvisors.com

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Packet Pg. 102 Attachment: HTID Final Management Plan (3790 : HTID - Ordinance Adoption) HTID Management District Plan 2
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I. OVERVIEW
Developed by the Healdsburg Chamber of Commerce (the Chamber), the Healdsburg Tourism Improvement District (HTID) is an assessment district proposed to provide specific benefits to payors, by funding marketing and sales promotion efforts and district development programs for assessed businesses. The HTID was formed in 2013 for a five (5) year term; and subsequently renewed in 2018 for another five (5) year term. The Chamber and Healdsburg businesses now wish to renew the HTID for an additional ten (10) years.

Location: The renewed HTID includes all lodging businesses (including all lodging businesses located on the premises of a winery) located within the boundaries of the City of Healdsburg, as shown on the map in Section IV.

Services: The HTID is designed to provide specific benefits directly to payors by increasing room night sales. Marketing and sales promotions and district development programs will increase overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing demand for room night sales.

Budget: The total HTID annual assessment budget for the initial year of its ten (10) year operation is anticipated to be approximately $1,500,000. A similar assessment budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, and if the assessment rate is decreased pursuant to this Plan.

Cost: The annual assessment rate is two percent (2%) of gross short-term room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; stays by any federal or state officer or employee when on official business; stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; and stays by any person who has signed an agreement in writing for occupancy in a lodging business for more than thirty (30) days. During the ten (10) year term, the assessment rate may be decreased annually by the HTID Owners’ Association by a maximum of one half of one percent (0.5%) of gross room rental revenue per year, as described in Section V. The total assessment rate may not be less than one half of one percent (0.5%).

Collection: The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the HTID. The City shall take all reasonable efforts to collect the assessments from each assessed lodging business.

Duration: The renewed HTID will have a ten (10) year life, beginning January 1, 2023 through December 31, 2032, or as soon as possible thereafter, and end ten (10) years from its start date. Once per year, beginning on the anniversary of HTID renewal, there is a 30-day period in which owners paying more than fifty percent (50%) of the assessment may protest and initiate a City Council hearing on HTID termination.

Management: The Healdsburg Chamber of Commerce will continue to serve as the HTID’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council.

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II. BACKGROUND
TIDs are an evolution of the traditional Business Improvement District. The first TID was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TID laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TIDs without a state law.

California’s TIDs collectively
raise over $300 million annually
for local destination marketing.

With competitors raising their
budgets, and increasing rivalry
for visitor dollars, it is
important that Healdsburg
lodging businesses continue to
invest in stable, lodging-specific
marketing programs.

TIDs utilize the efficiencies of
private sector operation in the
market-based promotion of tourism districts. TIDs allow lodging business owners to organize their efforts to increase demand for room night sales. Lodging business owners within the TID pay an assessment and those funds are used to provide services that increase demand for room night sales.

In California, most TIDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TIDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.

There are many benefits to TIDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
• Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion. 1 2 4 6 9 12 19 25 29 32 38 46
61 64 70 75
88 95 99101104109110
0 20
40 60
80 100
120
19891995200020012002200320042005200620072008200920102011201220132014201520162017201820192020 Number of Districts Operating in
California

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III. ACCOMPLISHMENTS
HTID Recent Accomplishments
• 8,614,755,116 total earned media impressions
• 264 total online media placements
• 41 total print media placements
• 35 Curated Media Visits
• Press Hit Examples:
o Food & Wine – The article by Ray Isle highlights Healdsburg as a small town that offers a variety of dining and wine tasting options along with newly built modern hotels. 8.6M readers
o Orange Coast Magazine – Allan Gibbons describes the perfect getaway to Healdsburg that includes listening to music on the downtown plaza, savory and sweet gourmet wine and food pairings, picnics, downtown hotels, and dining - all with hometown flavor. 56k readers
o Travel + Leisure - Kathryn Romeyn outlines her post-baby family-friendly trip to Healdsburg that included wine tasting, outdoor adventures, along with hotel and dining recommendations. 5.5M viewers
o Conde Nast Traveler – Carey Jones writes about California weekend getaways that featured Healdsburg as a wine, food and bakery destination with a charming identity.

2.8M viewers
o 7x7 – Amber Turpin describes her 3-day Healdsburg weekend that included a stay at Montage, biking, art, wine tasting, cocktails, lounging, shopping, dining and her plans to come back again. 130k viewers
o Country Living – Lauren Smith McDonough showcases 35 American “European-like” towns, including Healdsburg, that she compares to Tuscany. 12M viewers o Decanter – Jess Lander outlines the perfect 3-day trip to Healdsburg to experience small town charm and luxury - all at the same time. 366k viewers o Forbes - Katie Chang showcases the pleasures of a visit to Healdsburg that included art galleries, dining, day spa’s - all without drinking any wine. 66.5M viewers o Locale Magazine – The article by Taylor Gorski features some of Healdsburg’s newest hotels, classic wineries, art galleries, and culinary suggestions. 100k viewers o Marie Claire – Featured in the Instagram Guide to Sonoma, Healdsburg is highlighted for wine tasting and dining. 13M viewers

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o PaperCity – Georgie Miller documented a charming visit to Healdsburg that included modern hotels, unique retail shops and art galleries, along with fine dining. 204k viewers
o The Zoe Report – Nicole Kliest highlights Healdsburg as an American city that should not be missed during the Fall; offering many hotel options, outdoor activities, and a variety of wine tasting venues. 2.4M viewers
o Thrillist – Daisy Barringer and Margot Seeto describe Healdsburg as a perfect road trip from San Francisco to experience lunch at a winery, food and wine pairings, creative cocktails, farm-fresh dining and stylish hotel rooms. 8.4M viewers o Yahoo! News – This article considered Healdsburg as one of the most wine-friendly towns where you can experience a variety of excellent dining options, modern hotels, along with new and established wineries. 2.1B viewers
o MSN – Daisy Barringer and Margot Seeto suggest Healdsburg as a top fall destination to enjoy wonderful eating and drinking. 69.5M viewers o House Beautiful – Lauren Smith McDonough and Janaya Wecker suggest travelers will enjoy Healdsburg as much as Italy based on the food and wine. 6.7M viewers o Forbes – Laurie Werner highlights Napa and Sonoma County and suggests visiting Healdsburg to sample dishes prepared by many local culinary stars. 66.5M viewers

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IV. BOUNDARY
The HTID will include all lodging businesses (including all lodging businesses located on the premises of a winery), existing and in the future, available for public occupancy within the boundaries of the City of Healdsburg.

Lodging business means: any structure or any portion of any structure that is occupied or intended or designed for occupancy by transients for sleeping purposes, including any inn, home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof that is used for occupancy by transients, even if such use is on a part-time basis.

The term “winery” as used herein means: A business that is commercial growing and/or processing of wine grapes; and/or must have a valid state license and/or federal permit to process or sell wine at retail locations within the boundaries of the HTID.

The boundary, as shown in the map below, currently includes thirty (30) lodging businesses. A complete listing of lodging businesses within the renewed HTID can be found in Appendix 2.

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V. ASSESSMENT BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the HTID funds are sales and marketing programs available only to assessed businesses.

A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by the Chamber.

The table below illustrates the initial annual assessment budget allocations. The total initial assessment budget is $1,500,000.

Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the City and the Chamber shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the HTID, any and all assessment funds may be used for the costs of defending the HTID.

Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The staffing levels necessary to provide the services below will be determined by the Chamber on an as-needed basis.

Sales and Marketing
A sales and marketing program will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Healdsburg as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed businesses, and may include the following activities:
• Internet marketing efforts to increase awareness and optimize internet presence to drive Sales & Marketing,
$1,032,000 , 68.8%
District Development,
$225,000 , 15%
Administration and
Operations,
$150,000 , 10%
Contingency/
Reserve,
$75,000 , 5%
City Collection Fee,
$18,000, 1.2%
Initial Annual Assessment Budget- $1,500,000

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overnight visitation and room sales to assessed businesses; • Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Attendance of trade shows to promote assessed businesses; • Sales blitzes for assessed businesses;
• Familiarization tours of assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
• Attendance of professional industry conferences and affiliation events to promote assessed businesses;
• Lead generation activities designed to attract tourists and group events to assessed businesses; • Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed businesses;
• Development and maintenance of a website designed to promote assessed businesses; and • Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits to assessed businesses; and • Education of lodging businesses management and the Owners’ Association on marketing strategies best suited to meet Healdsburg’s needs designed to increase overnight visitation and room night sales and assessed businesses.

District Development
District Development (DD) projects will be designed to improve the visitor experience in an effort to increase overnight visitation at assessed lodging businesses. As the total number of rooms sold and room prices increase over time, the amount of available funds for DD projects will increase. During the ten (10) year term of the HTID, a minimum of fifteen percent (15%) of the annual assessment budget shall be used for DD projects. Working collaboratively with the City, the Chamber will develop specific DD funding criteria. The City and the Chamber staff shall have equal input to make recommendations to the Chamber for final project approval. The award of any public works contract for an approved DD project must be done in accordance with Municipal Code requirements. Policies and procedures acceptable to both the Chamber and the City will be developed. DD projects may include:
• Services designed to improve the visitor experience, such as but not limited to, transportation and parking solutions;
• Improvements designed to improve the visitor experience, such as but not limited to, benches, restrooms, and lighting improvements; and
• Activities designed to improve the visitor experience, such as but not limited to, Tuesday Music on the Plaza, Healdsburg Farmers Market, Healdsburg Center to the Arts, and/or creation of new Arts, Cultural and Educational activities.

Administration and Operations
The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting fees. Ten percent (10%) of the annual assessment budget shall be used for administration and operations.

City Administration Fee
The City of Healdsburg shall retain 1.2% percent of the amount of assessment collected, to cover its costs of collection and administration. Any amount of the City Administration Fee in excess of the

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actual cost of collecting and administering the assessment shall be forwarded to the Owners’ Association to be used for HTID programs.

Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the Owners’ Association. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the Board of Directors of the Owners’ Association.

Contingency/reserve funds may be spent on HTID programs or administrative and renewal costs in such proportions as determined by the Owners’ Association. The reserve fund may be used for the costs of renewing the HTID. The contingency/reserve portion of the budget may also be utilized for expenditures relating to unforeseen circumstances, including but not limited to those arising out of natural disaster, pandemic, or economic crisis.

B. Annual Budget
The total ten (10) year improvement and service plan budget is projected at approximately $1,500,000 annually, or approximately $17,195,819 through 2032. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, and if the assessment rate is decreased pursuant to this Plan.

The initial annual assessment rate is two percent (2%) of gross room rental revenue. The Owners’ Association may decrease the assessment rate by a maximum of one half of one percent (0.5%) per year. The assessment rate shall never be less than one half of one percent (0.5%).

The table below demonstrates the estimated maximum annual improvement and service plan budget during the HTID’s ten (10) year term. A three percent (3%) annual increase in the total budget is shown to account for estimated increased room night sales as a result of HTID efforts. This three percent (3%) increase is a conservative estimate based on the effects of similarly sized TID budgets, not an increase in the HTID assessment.

Estimated Maximum Annual Assessment Budget
2023-2032
Year
Sales &
Marketing
District
Development
Admin. and
Operations
Contingency
/Reserve
City Collection
Fee Total
2023 $1,032,000 $225,000 $150,000 $75,000 $18,000 $1,500,000 2024 $1,158,750 $231,750 $154,500 $77,250 $18,540 $1,545,000 2025 $1,193,513 $238,703 $159,135 $79,568 $19,096 $1,591,350 2026 $1,229,318 $245,864 $163,909 $81,955 $19,669 $1,639,091 2027 $1,266,197 $253,239 $168,826 $84,413 $20,259 $1,688,263 2028 $1,304,183 $260,837 $173,891 $86,946 $20,867 $1,738,911 2029 $1,343,309 $268,662 $179,108 $89,554 $21,493 $1,791,078 2030 $1,383,608 $276,722 $184,481 $92,241 $22,138 $1,844,811 2031 $1,425,116 $285,023 $190,016 $95,008 $22,802 $1,900,155 2032 $1,467,870 $293,574 $195,716 $97,858 $23,486 $1,957,160 Total $12,803,864 $2,579,373 $1,719,582 $859,791 $206,350 $17,195,819

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C. California Constitutional Compliance
The HTID assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the HTID assessment is a business-based assessment, and is subject to Proposition

26.Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the HTID, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services.

1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2The services in this Plan are designed to provide targeted benefits directly to assessed lodging businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific lodging businesses within the HTID. The activities described in this Plan are specifically targeted to increase room night sales for assessed lodging businesses within the boundaries of the HTID, and are narrowly tailored. HTID funds will be used exclusively to provide the specific benefit of increased room night sales directly to the assessees.

Assessment funds shall not be used to feature non-assessed lodging businesses in HTID programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses.

The assessment imposed by this HTID is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in room night sales. The specific benefit of an increase in room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing and sales programs promoting lodging businesses paying the district assessment. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses.

Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased room night sales to the assessed lodging businesses.

Although the HTID, in providing specific benefits to payors, may produce incidental benefits to nonpaying businesses, the incidental benefit does not preclude the services from being considered a specific benefit.The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3

2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
2 Cal. Const. art XIII C § 1(e)(1)
3 Government Code § 53758(a)

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reasonable costs to the local government of providing the service or product.”4The legislature has recognized that marketing and promotions services like those to be provided by the HTID are government services within the meaning of Proposition 265.Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6

3. Reasonable Cost
HTID services will be implemented carefully to ensure they do not exceed the reasonable cost of such services.The full amount assessed will be used to provide the services described herein. Funds will be managed by the Chamber, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from district-funded activities, be featured in advertising campaigns, and benefit from other district-funded services. Nonassessed lodging businesses will not receive these, nor any other, district-funded services and benefits.

The HTID -funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non- HTID funds. HTID funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed lodging businesses.

D. Assessment
The annual assessment rate is two percent (2%) of gross short-term room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; stays by any federal or state officer or employee when on official business; stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; and stays by any person who has signed an agreement in writing for occupancy in a lodging business for more than thirty (30) days. During the ten (10) year term, the assessment rate may be decreased annually by the HTID Owners’ Association by a maximum of one half of one percent (0.5%) of gross room rental revenue per year. The total assessment rate may not be less than one half of one percent (0.5%).

The term “gross room rental revenue” as used herein means: the actual consideration charged, whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credit and property and services of any kind or nature without any deduction therefrom whatsoever. Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes.

The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. The assessment shall be disclosed as the “HTID Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if 4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)

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it is passed on to transients. The assessment shall not be considered revenue for any purposes, including calculation of transient occupancy taxes.

Bonds shall not be issued.

E. Penalties and Interest
The HTID shall reimburse the City of Healdsburg for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent HTID assessment are sought to be recovered in the same collection action by the City, the HTID shall bear its pro rata share of such collection costs.

Assessed businesses which are delinquent in paying the assessment shall be responsible for paying:

1. Original Delinquency: Any lodging business which fails to remit any assessment imposed within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment owning in addition to the amount of the assessment

2. Continued Delinquency: Any lodging business which fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed.

3. Fraud: If the City determines that the nonpayment of any remittance due was willful, a penalty of fifty percent (50%) of the amount of the assessment shall be added thereto in addition to the penalties stated in subsection (1) and (2) of the section.

4. Interest: In addition to the penalties imposed, any lodging business which fails to remit any assessment imposed shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

5. Penalties Merged with Assessment: Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment herein required to be paid.

F. Time and Manner for Collecting Assessments
The renewed HTID will have a ten (10) year life, beginning January 1, 2023 through December 31, 2032, or as soon as possible thereafter, and end ten (10) years from its start date.The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business .The City shall take all reasonable efforts to collect the assessments from each lodging business. The City shall forward the assessments collected to the Owners’ Association.

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VI. GOVERNANCE
A. Owners’ Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the HTID as defined in Streets and Highways Code §36612.The City Council has determined that the Healdsburg Chamber of Commerce (the Chamber) will continue to serve as the Owners’ Association for the HTID.

B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.).Thus, meetings of the Chamber board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action.

C. Annual Report
The Chamber shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1).The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

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APPENDIX 1 – LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2021 SUPPLEMENT *** (ALL 2020 LEGISLATION)

STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.” 36601. Legislative findings and declarations; Legislative guidance The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts.
(b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed.

Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits. The

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mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits.

Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). 36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.

ARTICLE 2. Definitions
36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district. 36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”
“Business” means all types of businesses and includes financial institutions and professions. 36608. “City”

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“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. 36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. 36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622. 36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), for all records relating to activities of the district.
36614. “Property”
“Property” means real property situated within a district. 36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.

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36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property. 36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment. 36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient. 36615.5. “Special benefit”
“Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.
36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.

ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.

CHAPTER 2. Establishment
36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 36620.5. Requirement of consent of city council
A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district. The

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amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request. (c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries. (b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part.
(d) The improvements, maintenance, and activities proposed for each year of operation of the district and the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision. (f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy

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assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) (1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof.
(2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (l) In a property-based district, the total amount of all special benefits to be conferred upon the properties located within the property-based district.
(m) In a property-based district, the total amount of general benefits, if any. (n) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (o) Any other item or matter required to be incorporated therein by the city council. 36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council.
(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments

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At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district.
(2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district. (4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district. Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit.
(8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part. 36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners

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The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property-based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622. 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district. 36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.

CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625.

An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment. 36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention

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(a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications.

If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.

CHAPTER 3.5. Financing
36640.Bonds authorized; Procedure; Restriction on reduction or termination of assessments (a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part. (b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.

CHAPTER 4. Governance
36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year.

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(3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.

The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 36651. Designation of owners’ association to provide improvements, maintenance, and activities The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.

CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses.
(c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.

CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on

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Packet Pg. 124 Attachment: HTID Final Management Plan (3790 : HTID - Ordinance Adoption) HTID Management District Plan 24
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disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. 36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.

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Packet Pg. 125 Attachment: HTID Final Management Plan (3790 : HTID - Ordinance Adoption) HTID Management District Plan 25
September 21, 2022
APPENDIX 2 – ASSESSED BUSINESSES
Business Name Address
Bella Luna 530 Healdsburg Avenue, Healdsburg, CA 95448
Bella Villa Messina 316 Burgundy Road, Healdsburg, CA 95448 Belle de Jour Inn 16276 Healdsburg Avenue, Healdsburg, CA 95448 Best Western Dry Creek Inn 198 Dry Creek Road, Healdsburg, CA 95448 Calderwood Inn 25 West Grant Street, Healdsburg, CA 95448 Camellia Inn 211 North Street, Healdsburg, CA 95448
Cottages at Healdsburg 425 Foss Street, Healdsburg, CA 95448 Cypress House and Studio 410 Grater Street, Healdsburg, CA 95448 Duchamp Hotel 421 Foss Street, Healdsburg, CA 95448
Fairview Inn and Suites 74 Healdsburg Avenue, Healdsburg, CA 95448 Grandma's Victorian Cottage 607 Johnson Street, Healdsburg, CA 95448 Grape Leaf Inn 539 Johnson Street, Healdsburg, CA 95448 h2hotel 219 Healdsburg Avenue, Healdsburg, CA 95448
Harmon Guest House 414 Healdsburg Avenue, Healdsburg, CA 95448 Healdsburg Contemporary Cottage 225 Piper Street, Healdsburg, CA 95448 Healdsburg Cottage 602 College Street, Healdsburg, CA 95448 Healdsburg Inn on the Plaza 112 Matheson Street, Healdsburg, CA 95448 Honor Mansion 891 Grove Street, Healdsburg, CA 95448
Hotel Healdsburg 25 Matheson Street, Healdsburg, CA 95448 Hotel Les Mars 27 North Street, Healdsburg, CA 95448
Hotel Trio 110 Dry Creek Road, Healdsburg, CA 95448
Hotel Vinea 178 Dry Creek Rd, Healdsburg, CA 95448
Inspirato 223 Center Street, Healdsburg, CA 95448
L & M Motel 70 Healdsburg Ave., Healdsburg, CA 95448
Montage Healdsburg 100 Montage Way, Healdsburg, CA 95448 River Belle 68 Front Street, Healdsburg, CA 95448
Rock House Suites 115 Mill St, Healdsburg, CA 95448
Single Thread Farm Inn 131 B North Street, Healdsburg, CA 95448 The Roost 340 East Street, Healdsburg, CA 95448
Two Thirty Five 235 Healdsburg Avenue, Healdsburg, CA 95448 Bella Luna 530 Healdsburg Avenue, Healdsburg, CA 95448
Bella Villa Messina 316 Burgundy Road, Healdsburg, CA 95448

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Packet Pg. 126 Attachment: HTID Final Management Plan (3790 : HTID - Ordinance Adoption)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 17, 2022
SUBJECT: Healdsburg Tourism Improvement District Management Contract PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Establish Proactive Policies/Programs to Continue to Promote Economic Diversity & Sustainable Growth
RECOMMENDED ACTION(S):

Adopt a Resolution approving the Owners’ Association Agreement between the City of Healdsburg and the Healdsburg Chamber of Commerce for administration and implementation of the Healdsburg Tourism Improvement District (HTID) Management Plan and authorizing the City Manager to execute the contract.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

The City Council has been considering renewal of the Healdsburg Tourism Improvement District (HTID) over the last few months. On October 3, 2022, Council introduced the first reading of an ordinance to renew the HTID for a period of ten years, beginning January 1, 2023 and expiring December 31, 2032.

DISCUSSION/ANALYSIS:

The Property and Business Improvement District Law of 1994 (Streets and Highways Code §36600 et. seq) permits the City to designate a private nonprofit entity, known as the “owners’ association,” to administer or implement the improvements and activities specified in the management district plan. Under the Management Plan, the Healdsburg Chamber of Commerce would continue to serve as the HTID’s Owners’ Association and be responsible for managing funds and implementing programs in accordance with the Management Plan.

ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

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ALTERNATIVES:

Council may choose not to authorize entering into the agreement with the Chamber for management of the HTID. If Council chooses this alternative, staff requests further direction.

FISCAL IMPACT:

The City would function as the fiscal agent for the HTID, with responsibility for collecting revenue/payment and remitting proceeds to the Owners’ Association. The City would retain

1.2% or approximately $18,000 per year based on the $1,500,000 annual budget to cover its cost of collection and administration. This amount is based on an assessment of the current costs to provide this service.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Resolution
Owners Association Agreement
Management Plan

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CITY OF HEALDSBURG
RESOLUTION NO. -2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG APPROVING THE OWNERS’ ASSOCIATION

AGREEMENT BETWEEN THE CITY OF HEALDSBURG AND

THE HEALDSBURG CHAMBER OF COMMERCE FOR

ADMINISTRATION AND IMPLEMENTATION OF THE

HEALDSBURG TOURISM IMPROVEMENT DISTRICT
(HTID) MANAGEMENT PLAN AND AUTHORIZING THE

CITY MANAGER TO EXECUTE THE CONTRACT
WHEREAS, the Property and Business Improvement District Law of 1994 (Streets and Highways Code §36600 et. seq.) authorizes cities and counties to establish property and business improvement districts upon petition by a weighted majority of the lodging business owners located within the boundaries of the district; and
WHEREAS, the City Council of the City of Healdsburg created the Healdsburg Tourism Improvement District (HTID) in 2013 by Resolution No. 102-2012; and WHEREAS, the City Council created the HTID for a five (5) year term, then subsequently renewed it for an additional five (5) year term, which ends on December 31, 2022; and
WHEREAS, the Property and Business Improvement District Law of 1994 (Streets and Highways Code §36600 et. seq) permits the City to designate a private nonprofit entity, known as the “owners’ association,” to administer or implement the improvements and activities specified in the management district plan; and
WHEREAS, if the City elects to have the “owners association” implement the management plan it must enter into a contract with the owners association to administer and carry out the programs and activities; and
WHEREAS, the City Council of the City of Healdsburg wishes to designate the Healdsburg Chamber of Commerce as the Owners’ Association to administer and implement the improvements and activities specified in the management district plan.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Healdsburg that:

1. Approves the Owners’ Association Agreement between the City of Healdsburg and the Healdsburg Chamber of Commerce; and

2. Authorizes the City Manager to execute the Owners’ Association agreement, attached as Exhibit A, between the City of Healdsburg and Healdsburg Chamber of Commerce for

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Packet Pg. 129 Attachment: Resolution (3796 : HTID Management Plan Contract) Resolution No. -2022