CITY OF HEALDSBURG
CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY
REGULAR MEETING AGENDA
City Hall Council Chamber Meeting Date: June 17, 2024
401 Grove Street Time: 6:00 PM
Healdsburg, CA 95448 Date Posted: June 12, 2024
(707) 431-3317
To join by computer, tablet, or mobile device:
Go to https://zoom.us/join and type in the Webinar ID: 815 8894 3494 or follow this link:
healdsburg.gov/zoom (Pre-registration for the meeting is not required.) .
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 June 19, 2024 as Juneteenth in the City of Healdsburg B. Badge Pinning of Fire Inspector Robert Morris
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 City Council/RSA Regular Meeting Agenda
June 17, 2024
remove the item. In the event an item is removed, the matter will be considered immediately following the adoption of the Consent Calendar.
A. 2024 Utility Wildfire Mitigation Plan for Adoption and Subsequent Filing with the State Wildfire Safety Advisory Board
Adopt a Resolution approving the 204 Utility Wildfire Mitigation Plan (WMP) and verifying the WMP's compliance with state codes.
B. Fiscal Year 2024-2025 Investment Policy
Adopt a Resolution approving the City Investment Policy for Fiscal Year 2024-25.
C. After School Education and Safety Program Memorandum of Understanding Renewal
Adopt a Resolution approving a Memorandum of Understanding between the City of Healdsburg and the Healdsburg Unified School District to operate the After-School Education and Safety Program from July 2024 through June 2027 and authorizing the City Manager to execute the Memo of Understanding on the City's behalf.
D. Extension of a Professional Services Agreement with MMO Partners of Washington DC for Federal Advocacy Services, with Costs Shared by Healdsburg and Four Other Cities
Adopt a Resolution authorizing the City Manager to approve a 12-month extension to a Professional Services Agreement for federal advocacy services with MMO Partners, increasing the not-to-exceed amount by $80,852 to $445,184, offset by an additional $73,794 in reimbursement revenue from four (4) other participating Sonoma County cities.
E. Professional Services Agreement with Reach for Home for Street Outreach and Prevention Services
Adopt a Resolution approving a Professional Services Agreement with Reach for Home for services to the homeless and those at risk of becoming homeless and authorizing the City Manager to execute said agreement.
F. Agreement with Development Group, Inc. for Cisco Security Software Enterprise Agreement
Adopt a Resolution authorizing the City Manager to execute a purchase agreement with Development Group, Inc. in the amount of $424,815.04 for a Cisco Enterprise Agreement bundling Security Software for a 5-year term.
G. Fire Protection Services Agreement with Northern Sonoma County Fire Protection District
City Council/RSA Regular Meeting Agenda
June 17, 2024
Adopt a Resolution approving an agreement with Northern Sonoma County Fire Protection District relating to fire protection services and authorizing the City Manager to execute the agreement.
H. Dispatch Services from the Redwood Empire Dispatch Communications Authority FY 2024-25
Adopt a Resolution authorizing the City Manager to approve payment for dispatch services to the Redwood Empire Dispatch Communications Authority (REDCOM) for the first two quarters of Fiscal Year 2024-25.
I. Amendment of Professional Service Agreement with InfoSend, Inc.
Adopt a Resolution approving an amendment to the agreement between the City and InfoSend, Inc. for utility bill print, mail, and online bill payment services, increasing the not-to-exceed amount by $48,000 to $96,000, extending the term for one-year, and authorizing the City Manager to execute said agreement amendment.
J. Resolution Consolidating the General Municipal Election with the Statewide General Election
Adopt a Resolution (1) calling and giving notice of a general municipal election to be held on November 5, 2024 for the election of three City Council Members; (2) requesting the Board of Supervisors of the County of Sonoma to consolidate a general municipal election to be held on November 5, 2024, with the Statewide General Election pursuant to Section 10403 of the Elections Code; (3) authorizing the City Manager to reimburse the County of Sonoma for the costs to conduct the election; and (4) approving guidelines for conducting said election.
K. Temporary Lease Agreement for the Healdsburg Regional Library Adopt a Resolution approving a Lease Agreement between the City of Healdsburg and Sonoma County Library for temporary use of the Healdsburg Community Center, and authorizing the City Manager to execute the Lease Agreement on behalf of the City.
L. State and Federal Legislative Platform
By motion, adopt the State and Federal Legislative Platform.
M. Professional Services Agreement with Corazón Healdsburg Adopt a Resolution authorizing the City Manager to execute a Professional Services Agreement with Corazón Healdsburg in an amount not to exceed $50,000 for the provision of community outreach and support services to the Latino/a/e community.
City Council/RSA Regular Meeting Agenda
June 17, 2024
N. Compensation and Benefits Package between City of Healdsburg and Executive Management Group
Adopt a Resolution rescinding Resolution No. 35-2021 and approving the Compensation and Benefits Package between the City of Healdsburg and the Executive Management Group for the four-year period ending June 30, 2028.
7. PUBLIC HEARINGS
A. Resolution Ordering the Abatement of Weeds
1. Hold the public hearing; and
2. Adopt a resolution ordering the abatement of weeds.
B. Landscaping and Lighting Assessment District
1. Hold a public hearing and receive public comments or protests on the Annual Engineer’s Report, the proposed budget, and proposed annual assessments for the Healdsburg Landscaping and Lighting Assessment District (Assessment District); and
2. Adopt by Resolution the Annual Engineer’s Report, confirming the assessment diagram and annual assessment amounts, and the levying and collection of assessments for FY 2024-25 for the Assessment District.
8. OLD BUSINESS
A. Growth Management Ordinance Amendment
1. By motion adopt language to be placed on the November 5, 2024 ballot:
"To encourage creation of workforce housing on underutilized parcels, should the City of Healdsburg exempt multi-family housing along portions of the Healdsburg Avenue corridor from the Growth Management Ordinance?"
2. Adopt a Resolution ordering the submission of a third amendment to the Growth Management Ordinance to the voters at the General Municipal Election to be held on November 5, 2024.
B. Appointment of Planning Commissioner
By motion, appoint two applicants to the Planning Commission for a term of four years due to expire June 30, 2028 and appoint one applicant to the Planning Commission for a term of two years due to expire June 30, 2026.
City Council/RSA Regular Meeting Agenda
June 17, 2024
9. NEW BUSINESS
A. Updated Public Electric Vehicle Charging User Fees for City-Owned Electric Vehicle Charging Stations
Provide staff with direction for developing updated public electric vehicle (EV) charging user fees for city-owned EV chargers.
10. COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE
PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS
11. WRITTEN COMMUNICATIONS
12. ADJOURN CITY COUNCIL / RSA MEETING
13. FUTURE AGENDA ITEMS
A. Future Agenda Items for 2024
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 DE DESARROLLO SUCESORA
ORDEN DEL DÍA DE LA REUNIÓN ORDINARIA
Cámaras del Consejo Municipal Fecha de reunión: 17 de junio de 2024 401 Grove Street Hora: 6:00 PM
Healdsburg, CA 95448 Fecha de publicación: 12 de junio de 2024 (707) 431-3317
Para participar por computadora, tableta o dispositivo móvil:
Vaya a https://zoom.us/join y teclee el número de identificación (ID) del seminario web: 815 8894 3494 o siga este enlace: healdsburg.gov/zoom (No es necesario inscribirse previamente a la reunión).
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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 que se declara el 19 de junio de 2024 como Día de Junio en la ciudad de Healdsburg
B. Colocación de insignias del inspector de incendios Robert Morris
4. INFORMES DEL GERENTE 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 se reserva 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 período de comentario. Los comentarios del público sobre los puntos no incluidos en el orden del día están limitados a treinta (30) minutos en total para todos los oradores, concediéndose a cada orador un máximo de tres (3) minutos. Si hay más de diez (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, el periodo de comentarios del público podrá prolongarse más de 30 minutos. Los miembros del público que deseen hablar sobre un asunto en el orden del día acordado deben notificárselo al alcalde durante los comentarios públicos.
Orden del día de la Reunión Ordinaria del Consejo Municipal /RSA 17 de junio de 2024
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6. CALENDARIO ACORDADO
Los siguientes puntos enumerados en el orden del día acordado se consideran rutinarios o han sido revisados 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 se pueden 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 orden del día acordado.
A. Plan de Mitigación de Incendios Forestales de Servicios Eléctricos de 2024 para su adopción y posterior presentación ante la Junta Asesora de Seguridad contra Incendios Forestales del Estado.
Adoptar una Resolución que apruebe el Plan de Mitigación de Incendios Forestales de Servicios Eléctricos 2024 (WMP) y verifique la conformidad del WMP con los códigos estatales.
B. Política de inversiones del año fiscal 2024-2025
Adoptar una Resolución que apruebe la Política de Inversión de la Ciudad para el año fiscal 2024-2025.
C. Renovación del memorándum de acuerdo del Programa de Educación y Seguridad Extraescolar
Adoptar una Resolución que apruebe un Memorándum de Acuerdo entre la ciudad de Healdsburg y el Distrito Escolar Unificado de Healdsburg para operar un Programa de Educación y Seguridad Extraescolar de julio de 2024 a junio de 2027 y que autorice al gerente de la Ciudad a ejecutar el Memorando de Acuerdo en nombre de la Ciudad.
D. Prórroga de un Acuerdo de Servicios Profesionales con MMO Partners de Washington DC para servicios de defensa federal, con costos compartidos por Healdsburg y otras cuatro ciudades.
Adoptar una Resolución que autorice al Gerente de la Ciudad a aprobar una prórroga de 12 meses de un Acuerdo de Servicios Profesionales para servicios de promoción federal con MMO Partners, aumentando el importe no superable en $80,852 a $445,184, compensado por $73,794 adicionales en ingresos por reembolso de otras cuatro (4) ciudades participantes del condado de Sonoma.
E. Acuerdo de servicios profesionales con Reach for Home Adoptar una Resolución que apruebe un Acuerdo de Servicios Profesionales con Reach for Home para brindar servicios a las personas sin vivienda y aquellos a riesgo de perder su vivienda y autorizando al gerente de la Ciudad a ejecutar tal acuerdo.
Orden del día de la Reunión Ordinaria del Consejo Municipal /RSA 17 de junio de 2024
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F. Acuerdo con Development Group, Inc. para el Acuerdo Empresarial de Software de Seguridad de Cisco
Adoptar una Resolución que autorice al Gerente de la Ciudad a ejecutar un acuerdo de compra con Development Group, Inc. por un importe de $424,815.04 para un Acuerdo Cisco Enterprise que incluya software de seguridad por un plazo de 5 años.
G. Acuerdo de Servicios de Protección contra Incendios con el Distrito de Protección contra Incendios del Norte del Condado de Sonoma
Adoptar una Resolución que apruebe un acuerdo con el Distrito de Protección contra Incendios del Norte del condado de Sonoma relativo a los servicios de protección contra incendios y se autoriza al Gerente de la Ciudad a ejecutar el acuerdo.
H. Servicios de Despacho de la Autoridad de Comunicaciones de Despacho de Redwood Empire, para el año fiscal 2024-25
Adoptar una Resolución que autorice al Gerente de la Ciudad a aprobar el pago de los servicios de despacho a la Redwood Empire Dispatch Communications Authority (REDCOM) para el año fiscal 2024-25.
I. Enmienda al Acuerdo de Servicios Profesionales con InfoSend, Inc.
Adoptar una Resolución por que apruebe una modificación del acuerdo entre la Ciudad e InfoSend, Inc. para los servicios de impresión de facturas de servicios públicos, correo y pago de facturas en línea, aumentando el importe no superable en $48,000 a $96,000, ampliando el plazo por un año, y autorizando al Gerente de la Ciudad a ejecutar dicha modificación del acuerdo.
J. Resolución que consolida las elecciones municipales generales con las elecciones generales de todo el estado
Adoptar una Resolución (1) convocando y dando aviso de una elección municipal general a celebrarse el 5 de noviembre de 2024 para la elección de tres miembros del Concejo Municipal; (2) solicitando a la Junta de Supervisores del Condado de Sonoma que consolide una elección municipal general a celebrarse el 5 de noviembre de 2024, con la Elección General Estatal de conformidad con la Sección 10403 del Código Electoral; (3) autorizando al Gerente de la Ciudad a reembolsar al Condado de Sonoma los costos para llevar a cabo la elección; y (4) aprobando las directrices para llevar a cabo dicha elección.
K. Acuerdo de Arrendamiento temporal de la Biblioteca Regional de Healdsburg Orden del día de la Reunión Ordinaria del Consejo Municipal /RSA 17 de junio de 2024
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Adoptar una Resolución que apruebe el Acuerdo de Arrendamiento entre la ciudad de Healdsburg y la Biblioteca del condado de Sonoma para la Biblioteca Regional de Healdsburg y autorice al Gerente de la Ciudad a ejecutar el Acuerdo de Arrendamiento en nombre de la Ciudad.
L. Plataforma legislativa estatal y federal
Por moción, adoptar la plataforma legislativa estatal y federal.
M. acuerdo de servicios profesionales con Corazón Healdsburg Adoptar una Resolución por la que se autorice al gerente de la Ciudad a ejecutar un Acuerdo de Servicios Profesionales con Corazón Healdsburg por un importe que no supere $50,000 para la prestación de servicios de alcance y apoyo comunitario a la comunidad latino/a/e.
N. Paquete de compensación y beneficios entre la ciudad de Healdsburg y Executive Management Group
Adoptar una Resolución que anule la Resolución nº 35-2021 y apruebe el Paquete de Compensación y Beneficios entre la Ciudad de Healdsburg y Executive Management Group para el periodo de cuatro años que finaliza el 30 de junio de 2028.
7. AUDIENCIAS PÚBLICAS
A. Resolución que ordena la eliminación de malas hierbas
1. Celebrar la audiencia pública; y
2. Adoptar una resolución que ordena la eliminación de malas hierbas.
A. Distrito de Evaluación de Paisajismo y Alumbrado
1. Celebrar una audiencia pública y recibir comentarios o protestas del público sobre el Informe Anual del Ingeniero, el presupuesto propuesto, y las cuotas anuales propuestas para el Distrito de Evaluación de Paisajismo y Alumbrado de Healdsburg (Distrito de Evaluación); y
2. Adoptar una Resolución el Informe Anual del Ingeniero, confirmando el diagrama de evaluación y los importes anuales de evaluación y la imposición y recaudación de las evaluaciones para el año fiscal 2024-25 para el Distrito de Evaluación.
8. ASUNTOS PENDIENTES
A. Enmienda a la Ordenanza de la Gestión de Crecimiento Orden del día de la Reunión Ordinaria del Consejo Municipal /RSA 17 de junio de 2024
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1. Por moción, adoptar lenguaje electoral para incluirse en la boleta electoral del 5 de noviembre de 2024:
“Para fomentar la creación de viviendas para la fuerza laboral en parcelas infrautilizadas, ¿debería la ciudad de Healdsburg eximir de la Ordenanza de Gestión del Crecimiento a las viviendas multifamiliares a lo largo de partes del corredor de la avenida Healdsburg?”
2. Adoptar una Resolución que ordene la presentación de una tercera enmienda a la Ordenanza de Gestión del Crecimiento en las Elecciones Municipales Generales que se celebrarán el 5 de noviembre de 2024.
B Nombramiento de Comisionado de Planificación
Por moción, nombrar dos solicitantes a la Comisión de Planificación para un plazo de cuatro años que vencerá el 30 de junio de 2028 y nombrar a un candidato para la Comisión de Planificación por un mandato de dos años que vencerá el 30 de junio de 2026.
9. ASUNTOS NUEVOS
A. Actualización de las tarifas de uso público de las estaciones de recarga de vehículos eléctricos propiedad de la Ciudad
Darle instrucciones al personal para desarrollar tarifas actualizadas de las estaciones de recarga de vehículos eléctricos (EV) para los cargadores de EV propiedad de la ciudad.
10. INFORMES DEL CONSEJO SOBRE ASUNTOS DE INTERÉS QUE HAN OCURRIDO DESDE LA REUNIÓN ORDINARIA ANTERIOR/INFORMES DE
REEMBOLSO DE GASTOS
11. COMUNICACIONES ESCRITAS
12. LEVANTAR LA REUNIÓN DEL CONSEJO MUNICIPAL/RSA
13. PUNTOS FUTUROS PARA EL ORDEN DEL DÍA
A. Futuros puntos del orden del día para 2024
SB 343 - DOCUMENTOS RELACIONADOS CON EL ÓRDEN DEL DÍA DE LAS SESIONES ABIERTAS: Cualquier escrito o documento provisto a una mayoría de la Junta Orden del día de la Reunión Ordinaria del Consejo Municipal /RSA 17 de junio de 2024
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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 hábiles. Si el material complementario se pone a disposición de los miembros de la Junta del Consejo Municipal/Agencia de Desarrollo Sucesora, una copia estará 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 realizará 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.
CITY OF HEALDSBURG
PROCLAMATION
A PROCLAMATION OF THE CITY COUNCIL OF THE CITY
OF HEALDSBURG DECLARING JUNE 19, 2024, AS
JUNETEENTH DAY IN THE CITY OF HEALDSBURG
WHEREAS, Juneteenth, also known as "Juneteenth Independence Day," "Emancipation Day," "Emancipation Celebration," and "Freedom Day," is the oldest known celebration commemorating the ending of slavery in the United States; and has been celebrated by the Black Community for over 150 years; and
WHEREAS, President Abraham Lincoln issued the Emancipation Proclamation on January 1, 1863, and declared that all persons held as slaves" within the rebellious states" are, and henceforward shall be free," paving the way for the passing of the thirteenth amendment which formally abolished slavery in the United States of America; and WHEREAS, Juneteenth, or June 19, 1865, is considered the date when the last slaves in America were freed when General Gordon Granger rode into Galveston, Texas, and issued General Order No. 3, almost two and one-half years after President Lincoln issued the Emancipation Proclamation; and
WHEREAS, Juneteenth symbolizes freedom, celebrates the abolishment of slavery, reminds all Americans of the significant contributions of African Americans to our society, and is a time for reflection and rejoicing, assessment, self-improvement, and planning; and WHEREAS, Juneteenth celebrations are a tribute to those African Americans, then and now, who fought so long and worked so hard to make the dream of equality a reality; and WHEREAS, the City of Healdsburg, both its Council and Citizens, stand with their fellow Black Americans to honor the reality of their vital importance and contributions to the evolution and success of our country by formally acknowledging Juneteenth, aka Black Freedom Day.
NOW, THEREFORE, BE IT PROCLAIMED, that the City Council of the City of Healdsburg hereby declares June 19, 2024, as “Juneteenth Day” in the City of Healdsburg, and invites everyone to recognize this month to celebrate the contributions of African Americans.
DATED: JUNE 17, 2024
SO ORDERED:
___________________________________
David Hagele, Mayor
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Attachment: Proclamation (4532 : Proclamation for Juneteenth)
CITY OF HEALDSBURG
CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: 2024 Utility Wildfire Mitigation Plan for Adoption and Subsequent Filing with the State Wildfire Safety Advisory Board
PREPARED BY: Terry Crowley, Utilities Director
STRATEGIC INITIATIVE(S):
Maintain and Improve Infrastructure and Facilities
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):
Adopt a Resolution approving the 204 Utility Wildfire Mitigation Plan (WMP) and verifying the WMP's compliance with state codes.
COMMUNITY ENGAGEMENT/OUTREACH:
The City’s currently adopted and approved Utility Wildfire Mitigation Plan (WMP) is posted on the City’s website along with other information regarding wildfire preparedness. This plan includes an outline for community engagement ahead of, during and following weather events that may require the City, for public safety reasons, to turn off power.
BACKGROUND:
The City owns and operates an electric distribution system for the benefit of the community. In doing so, the primary goals of the City’s Electric department are safety and reliability. Given California’s history of catastrophic wildfires, California’s State Public Utility Code requires utilities to prepare wildfire mitigation plans if “the utility’s overhead electrical lines and equipment are in an area that has a significant risk of wildfire resulting from those electrical lines and equipment.” A portion of Healdsburg’s overhead electrical lines and equipment are within California Public Utilities Commission (“CPUC”) Tier 2 wildfire threat areas.
In 2019 City staff prepared Healdsburg’s first Utility Wildfire Mitigation Plan (WMP), which was adopted by the City Council and reviewed by a qualified independent evaluator. Per the State’s Public Utilities Code, annually the City must update the Utility Wildfire Mitigation Plan (“WMP”) and present the WMP to the City Council. The 2024 WMP has been prepared and now needs reviewed and adopted by Healdsburg’s City Council.
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DISCUSSION/ANALYSIS:
In compliance with state code, City staff reviewed and updated the 2023 WMP and created the 2024 WMP. As required by law, the WMP considers a range of topics to mitigate the potential threat of wildfires ignited by utility equipment. The areas of consideration are intended to help guide the development of various utility programs, standards, policies, and procedures that when implemented have a measurable effect at lowering the risk of utility caused wildfires. The Plan is iterative by design and the annual updates allow for the incorporation of new and evolving utility best practices.
There are several specific sections required to be considered and/or addressed to mitigate utility caused wildfires. These items include the following:
A. Wildfire Mitigation Plan Areas of Responsibility
B. Objective of the Wildfire Mitigation Plan
C. Overview of Preventative Strategies and Programs
D. Key Performance Metrics
E. Previous metrics related to wildfire
F. Disabling Reclosers & De-Energization
G. Customer Notification Procedures
H. Vegetation Management Program
I. Wildfire Inspection Program
J. Wildfire Risks
K. Identification of Areas of Higher Risk
L. Methodology for Identifying Enterprise-Wide Safety and Wildfire Risks M. Process for restoring power after de-energization
N. Wildfire Process & Procedure
Included with the first WMP, the City developed five metrics to track to measure and evaluated the effectiveness of the WMP. These measures included ignition caused by utility equipment, inspection records and maintenance, vegetation maintenance, overhead equipment failures, and outage response time. The 2024 WMP discusses each metric and actionable measures to reduce the risk of catastrophic wildfires. The table below summarizes the discussion within the WMP.
METRIC OUTCOME
1: Ignition Caused by Utility Equip. No utility-caused ignitions of vegetation were caused by City utility equipment during calendar
year 2023.
2: Inspection Records & Maintenance All inspections were completed prior to July 2023 with priority maintenance being completed within
three months of the inspections.
3: Vegetation Maintenance The City’s tree contractor completed, and City staff confirmed clearance of, the annual trimming before
June 30, 2023 with a new 12-month contract started
on July 1, 2023.
4: Overhead Equipment Failures No overhead equipment failures, effecting the primary system occurred during calendar year 2023.
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5: Outage Response Time Outage response time (time to first switching operation) ranged from a low of 20-minutes to high
of 184-minutes with an average response time of 94-
minutes. The wider range and higher average time
are the result of one primary level outage occurring
after hours. To lower this average pre-staging of
qualified electrical workers may be needed.
6: System Reliability Indices Systemwide reliability indices track the reliability of the City’s electric system and over time can indicate
trends in either improving or worsening reliability.
As unplanned outages indicate a potential for arcing
and therefore the starting of a utility caused wildfire.
Reliability indices for past calendar years are
included within the WMP.
The 2024 WMP is attached to this staff report as Exhibit A. It includes policies and procedures the City has had in place for many years as well as some new suggestions to be implemented over the coming season. The WMP includes procedures such as blocking of reclosing devices during red-flag warnings, installation and use of fire safe equipment (CAL-FIRE approved), plans to de-energize certain areas of the City’s electric system should the need arise during periods of low humidity and abnormally high winds, and the need to increase the amount of undergrounding within the fire-threat areas.
Completion of the 2024 WMP and adoption during a regularly scheduled public meeting complies with the requirements of the State’s code. On an annual basis the WMP will continue to be reviewed and revised as necessary to improve upon the City’s ability to mitigate the risk of utility caused wildfires. Additionally, if staff determines the need to implement new procedures or methods to reduce the risk of utility caused wildfires those procedures and methods will be implemented prior to the next annual review.
ENVIRONMENTAL STEWARDSHIP:
By their nature, uncontrolled wildfires release an immense amount of greenhouse gases (“GHG”) into the atmosphere. The WMP is intended to reduce the risk of wildfires and therefore will have a positive impact upon the environment by lessening the potential of wildfire and associated GHG emissions.
ALTERNATIVES:
The City Council could choose not to approve the WMP and provide further direction to staff.
FISCAL IMPACT:
No additional budget appropriations are necessary for the recommended actions. Programs and staffing identified within the WMP are already contemplated by the Electric Fund’s approved budget. If new capital improvement project or policies are required, staff will bring those projects and policies back to the City Council at a later date.
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ENVIRONMENTAL ANALYSIS:
Pursuant to California Environmental Quality Act (“CEQA”) and Title 14, the California Code of Regulations, Section 15378(b) (2), continued administrative actions do not qualify as a “Project”. Therefore, no further CEQA or environmental review is required.
ATTACHMENT(S):
Resolution
2024 Wildfire Mitigation Plan Final Draft
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CITY OF HEALDSBURG
RESOLUTION NO. ___ - 2024
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG APPROVING THE 2024 UTILITY WILDFIRE
MITIGATION PLAN (WMP) AND VERIFYING THE WMP’S
COMPLIANCE WITH STATE CODES
WHEREAS, the City of Healdsburg owns and operates a local publicly owned electric utility; and
WHEREAS, California has a history of significant and damaging wildfires; and WHEREAS, in response to these wildfires Public Utility Code (PUC) 8387 requires publicly owned electric utilities, on an annual basis, to develop utility wildfire mitigation plans with the intent of reducing the risk of utility caused wildfires; and WHEREAS, staff completed the City’s 2024 Utility Wildfire Mitigation Plan (“WMP”) and Council considered the WPM on June 17, 2024 during a regularly scheduled public meeting; and
WHEREAS, continued administrative actions do not constitute a project under California Environmental Quality Act (“CEQA”) guidelines and are therefore exempt from further environmental review.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Healdsburg does hereby:
1. Find that continued administrative actions are exempt from CEQA and no further environmental review is required.
2. Approve the 2024 Utility Wildfire Mitigation Plan (WMP) attached as Exhibit A and verify the plan complies with all applicable rules, regulations, and standards.
PASSED, APPROVED AND ADOPTED, by the City Council of the City of Healdsburg, this 17th day of June 2024, by the following vote:
AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
________________________________ ____________________________________ David L Hagele, Mayor Raina Allan, the City Clerk
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Attachment: Resolution (4313 : 2024 Utility Wildfire Mitigation Plan)
UTILITY WILDFIRE
MITIGATION PLAN
(REVISED FOR CALENDAR YEAR 2024)
Healdsburg Electric Department
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Table of Contents
Executive Summary.......................................................................................................................................3 Wildfire Policy Statement.............................................................................................................................4 Purpose of Wildfire Mitigation Plan .............................................................................................................4 Wildfire Mitigation Plan Components (PUC Section 8387) ..........................................................................5 Wildfire Mitigation Plan Areas of responsibility [PUC-8387 (b)(2)(A)].....................................................5 Objective of the Wildfire Mitigation Plan [PUC-8387 (b)(2)(B)] ...............................................................5 Overview of Preventative Strategies and Programs [PUC-8387 (b)(2)(C)] ...............................................6 Key Performance Metrics [PUC-8387 (b)(2)(D)] .......................................................................................9 Previous metrics related to wildfire [PUC-8387 (b)(2)(E)]......................................................................10 Disabling Reclosers & De-Energization [PUC-8387 (b)(2)(F)]..................................................................13 Customer Notification Procedures [PUC-8387 (b)(2)(G)] .......................................................................13 Vegetation Management Program [PUC-8387 (b)(2)(H)].......................................................................14 Wildfire Inspection Program [PUC-8387 (b)(2)(I)] ..................................................................................15 Wildfire Risks [PUC-8387 (b)(2)(J)]..........................................................................................................15 Identification of Areas of Higher Risk [PUC-8387 (b)(2)(K)]....................................................................17 Methodology for Identifying Enterprise-Wide Safety and Wildfire Risks [PUC-8387 (b)(2)(L)] .............18 Process for restoring power after de-energization [PUC-8387 (b)(2)(M)] .............................................18 Wildfire Process & Procedure [PUC-8387 (b)(2)(N)]...............................................................................18 APPENDIX A – HEALDSBURG’S HIGHER FIRE THREAT DISTRICT (CPUC APPROVED 8/19/2021)................20 APPENDIX B – LOCAL WILDFIRE HISTORY ...................................................................................................21 APPENDIX C – DISTRIBUTION LINES WITHIN FIRE THREAT AREAS .............................................................22 APPENDIX D – AREAS LIKELY TO BE IMPACTED BY PSPS.............................................................................23
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Executive Summary
Established in 1899, Healdsburg’s electric department has and continues a historical trend of providing safe, reliable, and affordable electric service to Healdsburg’s residents and businesses.
Healdsburg’s Electric Department is owned by the community and governed by Healdsburg’s City Council. This arrangement provides direct local control in the operation and management of the City’s electric utility, resulting in utility services that are responsive to community needs and priorities.
The risk of wildfire continues to be a top concern for the community of Healdsburg. The increased risk of devastating wildfires coupled with increased housing in and adjacent to wildland urban interfaces (WUI) requires the City’s electric utility to continually rethink past operational procedures, construction standards, and develop new ways to improve upon our record of safe and reliable electric service.
In response to an increasing number of devastating wildfires, Public Utility Code (PUC) 8387 requires publicly owned utilities, such as Healdsburg, to annually prepare and present a wildfire mitigation plan (WMP). Through the WMP, publicly owned utilities can track and monitor construction, maintenance, and operational practices can reduce the risk of utility caused wildfires.
As required by PUC 8387 each WMP includes several key components that are foundational to reducing the risk of utility caused wildfiresincluding developing plansto contact critical customers such as police, fire, hospitals, and communication service providers. The WMP also measures past performance through key indicators to identify and correct deficiencies of the WMP or construction and operating procedures.
This document is the City of Healdsburg’s wildfire mitigation plan and provides City staff with a guideline to implement and track efforts to reduce utility caused wildfires. The WMP is not a comprehensive study of the mitigation of wildfires in general, study of climate change, nor is this plan intended to provide a guide to mitigate impacts of wildfires upon electric infrastructures.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Wildfire Policy Statement
It shall be the policy of the City of Healdsburg’s Electric Department to construct, maintain, and operate electrical lines and equipment within high fire threat areas in a manner that reduces the risk of utility caused wildfires while maintaining a high level of system reliability and availability.
Purpose of Wildfire Mitigation Plan
The City of Healdsburg’s electric service area includes areas considered to be of a high fire threat.
In general, these areas include the City’s Wildland Urban Interface (WUI) and are generally described as the areas on and around Fitch Mountain, the Healdsburg Ridge, and the northern most portions of the City’s service territory. These areas were identified by staff and later confirmed by the City Council in 2017. The area of high fire risk was later narrowed by the California Department of Fire and approved by the California Public Utilities Commission decision making process that established the High Fire Threat Districts (HFTD).
The CPUC defined HFTD covers roughly one-third of the City’s entire service territory. Within this area, the City owns and operates roughly 19 miles of underground primary conductor and 7 miles of overhead primary conductor. Line protection devices that protect overhead and underground primary lines in this area include two feeder breakers, three line-reclosers, and numerous fused cutouts.
The City’s Electric Department takes appropriate actions to help city electric customers prevent and respond to the increasing risk of wildfires. In its role as a public agency, Healdsburg closely coordinates with other local safety and emergency officials to help protect against fires and respond to emergencies. In its role as a utility, Healdsburg follows applicable design, construction, operation, and maintenance requirements to reduce risks associated with its electric system. This Wildfire Mitigation Plan describes the safety-related measures Healdsburg follows to reduce the risk of utility caused wildfires. The WMP is not intended to be a final set of directions for the City’s Utility Department staff. The intent of this document is to create an ever-improving framework for policies, procedures, and metrics that mitigate the risk of utility caused wildfires.
Over time and as warranted, the WMP’s policies and procedures will be reviewed, updated, and incorporated into this document with the goal of implementing effective and responsible wildfire mitigation measures.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Wildfire Mitigation Plan Components (PUC Section 8387)
The City’s WMP is organized consistent with the listed consideration of the PUC 8387. Areas of consideration are listed below and are used to develop key elements that frame the City’s wildfire mitigation plan.
Wildfire Mitigation Plan Areas of responsibility [PUC-8387 (b)(2)(A)] The City’s Electric Department is governed by Healdsburg’s City Council, managed by the City Manager and Utility Director with day-to-day operations handled by the City’s Electric Operations Superintendent.
The City Council is the governing body for Healdsburg’s Electric Department and approves utility policies and utility expenditures such as wildfire mitigation efforts. The wildfire mitigation plan is implemented by the City’s Electric Operations Superintendent with oversight provided by the Utility Director and City Manager. Due to the small size of Healdsburg’s electric department, the Electric Operations Superintendent is responsible for the implementation of many aspects of the plan (inspections, tree trimming, SOPs, etc.). To implement the WMP the superintendent relies on his experience and knowledge of the system and the qualified electrical workers that report directly to him.
Objective of the Wildfire Mitigation Plan [PUC-8387 (b)(2)(B)] The main objective of the Plan is to reduce the risk of utility caused wildfires. To achieve this objective, various industry best practices, policies, procedures, and system improvements will be studied and implemented should they be applicable to the Healdsburg community and Healdsburg’s electric distribution system. Additionally, the WMP is intended to track the progress and effectiveness of past practices implemented by previous versions of the WMP. This selfassessment is critical to ensuring that the actions of the WMP effect the intended goal of reducing Healdsburg City Council
(five member body)
City Manager
Utility Director
Electric Superintendent
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) utility caused wildfires. Healdsburg’s Electric Department staff will assess the merits of the WMP and modifications based upon new information and applicable utility best practices. A key objective of the WMP is to annually identify cost-effective measures that produce the same or improved results in reducing wildfire risk.
Overview of Preventative Strategies and Programs [PUC-8387 (b)(2)(C)] New and existing strategies and programs will be used to mitigate the risk and impact of utility caused wildfires. Primarily these programs rely on adequate staffing levels to perform prudent and timely maintenance or the pro-active replacement of high-risk utility equipment. Strategies and programs are listed below and are discussed further throughout this document.
Vegetation Management – The City’s existing vegetation management program (tree trimming) follows the CPUC’s General Order (GO95) requirements for vegetation clearance from electric powerlines. Through the WMP, the existing vegetation management program will be continually reassessed and enhanced where needed to further mitigate utility wildfire risk. Specifics of the City’s vegetation management program is discussed further within this document.
Public Education and Notification – Public education and notification are key components of the Plan. The Plan identifies how the City informs and notifies the public on the wildfire plan and prepare the public for potential de-energizations of portions of or the entirety of the City’s electric system.
Situational Awareness – Situational awareness allows City staff to be informed of the status of the City’s electric infrastructure and weather conditions conducive to wildfires. City Staff rely heavily on internet weather services and technology but do not forego the value of field observations from the Electric Operations Superintendent, Qualified Electrical Workers (QEW), and other City staff. Starting in 2022, City staff enhanced recloser controls with remote indication and control to monitor system status. The City continues to further the use of technology to improve situational awareness through improved data collection and presentation to City staff.
Routine Inspections – To ensure the City’s electric system remains in good condition the City follows CPUC General Order 165. These routine inspections help ensure that necessary repairs or replacements are identified and corrected in a timely manner. Needed repairs within the fire area will be prioritized and moved up in the Electric Department’s work schedule. The Electric Department’s Preventative Maintenance and Inspection Program guides in the assessment of City electric facilities and will be continually reviewed and revised to incorporate utility best practices.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) System Hardening - At the time of reconstruction, the City constructs overhead facilities to meet or exceed CPUC General Order No. 95 (GO 95). Following or exceeding current GO 95 standards helps to ensure that the City’s facilities are safe and reliable. Specifically, the City increases pole strength requirements beyond those required by CPUC’s GO 95 safety factors (safety factor of 3.0 for existing poles and 4.4 for new/replacement poles). In addition to the increased pole strength, the City has proactively replaced weaker copper conductors to lessen the risk of overhead conductors falling during wind events.
Increased Overhead Conductor Spacing - Overhead conductors can increase the risk of utility caused wildfire. To mitigate that risk, in 2018 Healdsburg staff spoke with a provider supplying covered overhead conductor to assess the value of installing covered conductor in areas of higher fire risk. In that review, the City found that covered conductors are heavier requiring stronger and larger diameter wood utility poles, are subject to the same preventative tree trimming/removal requirements, and that if tree wire falls to the ground line-protection devices may not trip (de-energize) the line in an expedient manner. As such, the City will continue its policy of increasing conductor spacing and increased tree trimming requirements.
Increased tree clearance and increasing the spacing between overhead wires is a best practice to reduce tree caused power outages. To further prevent wildfire and power outages the City uses covered jumpers, wildlife guards, and other protective coverings at equipment locations.
These coverings minimize wildlife and tree caused outages at equipment locations where conductors and equipment lead-wires have less spacing.
Use of Non-Expulsion Fuses – The use of non-expulsion fuses can reduce the risk of utility caused wildfire by significantly reducing sparks created when a fuse operates (blows). City staff have replaced legacy expulsion fuses within the HFTD with non-expulsion fuses. New construction within the HFTD will use non-expulsion fuses.
Elimination of Split Bolt Connectors – The use of split bolt connectors creates system reliability issues and can be an ignition source for wildfires. To mitigate this risk, the City has prohibited the use of split bolt connectors throughout the City’s electric system and actively removed split bolt connectors found within high fire threat areas.
CAL FIRE Approved Lightning Arrestors – Lightning arrestors are used to limit the damage caused by lightning strikes to or near utility equipment. While a lightning arrestor can protect conductors and equipment many times over, in some cases a lightning arrestor will catastrophically fail emitting sparks. To limit the risk of these sparks igniting a wildfire, in 2021 the City replaced existing lightning arresters with CAL FIRE approved lightning arrestors within high fire treat areas. Future installations and replacements will be CAL FIRE approved lightning arrestors.
Operational Procedures - The safe operation of the City’s electric system helps lessen the risk of utility caused wildfires. As a standard practice, the City adjusts system protection settings during red-flag warnings (periods of forecasted high winds and low humidity) and is
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) researching additional field practices (vegetation management, patrols, increased afterhours staffing) to lessen the risk of wildfire. During red-flag warnings the City will revise existing work practices and work locations to further reduce the risk of wildfire. These practices center on limitations of work during weather conditions conducive to wildfire but include other preventive measures such as increased inspections.
Capital Improvements – As identified by the Utility Director and department staff, Capital improvements will be recommended through the City’s 5-year Capital Improvement Program (CIP) and other budgeting processes. This budgeting process occurs at least once every two years, but new projects can be presented to the City Council sooner if required.
Recommendations for system wildfire mitigation measures will be based upon their ability to reduce wildfire risk in a cost-effective manner. Past projects have included reconductoring to remove weak #6 copper overheads wires, pole replacements, replacement of expulsion fuses, replacement of self-protected transformers, lightning arrestor replacements, replacement of field recloser controls to provide SCADA improving wildfire protection, and the replacement of feeder breakers to improve wildfire protection and provide SCADA.
Staff will continue to identify projects, such as undergrounding power lines in key areas, to be constructed when funding is available (Healdsburg is actively seeking grant funding).
Additionally, electric department staff will continue to develop construction standards and City policies that reduce the risk of utility caused wildfire through the acceleration of undergrounding. Future standards could require the undergrounding of services when significant remodeling or development occurs and the prohibition of any new overhead power lines within the HFTD.
Staffing & Staff Training – The City will not be able to reduce the risk of wildfire without qualified and experienced staff. Further, electric department staffing must be maintained at appropriate levels with adequate training to maintain staff knowledge and preparedness. This may include cross training to build redundancies within the department and from time-to-time succession planning for known and pending retirements. Additionally, short briefings (tailboards) will be had with staff ahead of weather events forecasted to contain a combination of conditions that favor the rapid spread of wildfire. With a recent rate increase, staff included funding to allow for succession planning for staff nearing retirement. In most cases this succession planning will require the early and successful recruitment and placement of new staff to allow a reasonable transition period. Additionally, the City will need to consider funding additional positions within the Department to improve wildfire preparedness and remain ahead of regulatory requirements.
Wildfire Preparedness, Response, and Recovery – To minimize the chaotic nature typical of any emergency, this plan outlines necessary steps to prepare, respond, and recover from weather events conducive to wildfire. Throughout the year these procedures will be reviewed and revised as needed to improve the City’s ability to reduce the risk of utility caused wildfires.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Key Performance Metrics [PUC-8387 (b)(2)(D)]
The purpose of the Plan is to reduce wildfire caused by utility equipment and the incident rate of utility caused wildfires as a primary metric. However other metrics exist to determine if the risk of wildfire mitigation is being reduced. Five primary metrics are identified below and will be used to measure the effectiveness of the City’s wildfire mitigation efforts.
Metric 1: Ignitions caused by Utility Equipment
This metric will be tracked by City staff and reported annually. For the purposes of this plan and the annual reporting, an ignition caused by City owned utility equipment is a sustained ground fire of combustible vegetation. To be tracked by the City, staff must have knowledge of the ignition and will track (at a minimum) the date, time, location, and equipment involved for each ignition.
Metric 2: Inspection Records & Maintenance
System inspections and timely maintenance are leading methods to improve safety and system reliability. Inspections of overhead lines in the fire threat areas will begin in the spring of each year. Needed maintenance or repairs identified during these inspections will be tracked and given priority in the work schedule with higher priority repairs moved up in the Electric Department’s work schedule. Each identified maintenance task or repair will be reported annually.
Metric 3: Vegetation Maintenance
Throughout the year, the City maintains proper vegetation clearance from utility lines by contracting with qualified high-voltage tree trimmers and at times augments this work with City staff. Under the terms of the contract, the contractor is required to report their work plan to the City and ensure that proper vegetation clearance from powerlines is met at all times.
Vegetation management performed within the high fire threat areas will be tracked throughout the year and reported annually.
Metric 4: Overhead Equipment Failures
Failure of overhead electric utility equipment can be a source of wildfire ignitions. Therefore, the rate of failures of overhead electric equipment, within the high fire threat areas, will be tracked and reported on an annual basis. Any patterns that emerge will be used to proactively replace utility owned equipment.
Metric 5: Outage Response Time
Utility response time to power-outages and other service-calls is a measurable metric that indicates the City’s response time to mitigating unsafe conditions related to electric utility equipment. To track and gauge response time, staff’s after-hours response time to poweroutages or City owned equipment failures will be recorded throughout the year. Staff response time, from the time of the first call for service to the time they arrive on site, will be tracked
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) for every confirmed power outage and reported annually. This metric will be used to determine the need for afterhours staffing during extreme weather events.
Metric 6: System Reliability
The inclusion of systemwide reliability indices will track the total number of unplanned primary outages per year, the System Average Interruption Duration Index (SAIDI), and the System Average Interruption Frequency Index (SAIFI). With each outage, there is a chance for arcing that may result in ignition of vegetation. Tracking these reliability indices will help to understand trends in the occurrence of outages. A higher occurrence of outages may indicate a higher risk for utility caused wildfires.
Previous metrics related to wildfire [PUC-8387 (b)(2)(E)] PUC 8387 requires consideration of how previous versions of the WMP’s metric have informed the current WMP. Metrics are compared below.
Metric 1 Ignition Caused by Utility Equipment: During the 2023 calendar year there were no known vegetation ignition.
WMP Year Date Equipment &
Location
Description of Cause
2020 no utility related wildfires
2021 no utility related wildfires
2022 9/26/2022 R-03
S. Fitch Mtn Rd
Bird stored acorns within wildlife
bushing covers. This caused tracking
across the bushings and eventually
melted the covers. Melted covers
caused a pole fire which started a
small vegetation fire.
2023 no utility related wildfires
Metric 2 Inspection Records & Maintenance: To prepare for the wildfire season Electric Department staff completed several different inspections in 2023. These inspections include visual and intrusive inspections of existing facilities as well as inspections of vegetation clearance from overhead powerlines. The number of inspections are tracked through the assignment of mapping grids. Each grid covers roughly 34 acres and depending upon the existing construction within, a grid may have more or less overhead facilities requiring inspections. To balance workloads from year to year, the number of grids are assigned based upon the equipment within and inspection timelines for that equipment type. The table below provides a summary of the inspections completed since 2020.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Type of
Inspection
(Fire Area)
2020
Grids
Due
2020
Grids
Compl
ete
2021
Grids
Due
2021
Grids
Complet
e
2022
Grids
Due
2022
Grids
Compl
ete
2023
Grids
Due
2023
Grids
Compl
ete
Overhead Visual
Inspections
56 56 54 54 54 54 54 54
Overhead
Detailed
Inspections
8 8 3 3 38 38 5 5
Vegetation
Clearance
56 56 54 54 54 54 54 54
Wood Pole
Intrusive
Inspections
3 3 0 0 30 30 7 7
From the inspections, maintenance tags were created for any issues found. Tags are prioritized based upon asset condition and whether the asset is located within the HFTD.
Metric 3: Vegetation Maintenance: The City’s standard is to maintain vegetation clearance throughout the year, trimming within the fire area happens continuously. Therefore, inspections are also performed on a frequent basis throughout the year. This year’s contract period ended June 30, 2023 with a new 12-month contract beginning July 1, 2023. At the end of the initial contract vegetation was confirmed to have the required clearance. Five vegetation related primary outages occurred within calendar year 2023, versus one vegetation outage in the previous year. The increase is largely attributed to strong winter storms of 2023 blowing over trees into pole lines or branches breaking out of adjacent trees. All vegetation clearance was compliant with the City’s and GO95 standards.
Calendar
Year
Date Equipment &
Location
Cause Detail
2020 no vegetation related outages
2021* 12/15/2021 Fuse 144 – Hasset
Lane
Tree fell through line during December
wind event
2022* 4/16/2022 Fuse 54 – S. Fitch
Mtn
tree limb broke-off and blew into the line
2023 1/7/2023 Fuse 145 Reed Ct Winter storm, tree limb fell and broke pole
2023* 1/14/2023 Fuse 76 N Fitch
Mtn
Winter storm, live oak fell into phone line
2023 2/21/2023 Fuse 131 Grant Ave Wind blew branch into line 2023* 2/21/2023 Fuse 44 University Wind blew branch into line 2023 6/21/2023 Fuse 61 W. Grant St Branch broke out of redwood • Indicates vegetation related primary outages that occurred within the HFTD.
Metric 4: Overhead Equipment Failures: No equipment failures resulting in primarily level outages occurred during calendar year 2023. It is note worth that several failures of Fault Tamer
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) fuse links occurred during 2023 but they only impacted individual transformers and not the primary system. These failures appear to be a result of manufacturing defects and City staff continue to monitor for additional failures.
Calendar Year Equipment
Failures Systemwide
Failures within
Fire Area
2020 3 0
2021 5 0
2022 3 0
2023 0 0
Metric 5: Outage Response Time: Response time (time to first switching operation) for outages ranged from 20 to 184-minutes with an average response time of 94-minutes. The range of response time is due to a mix of outages occurring during the daytime when electric crews are within the City and outages that occur afterhours when electric crews must respond from home. 2023 average response time is slower than previous years due to one afterhours outage.
Consideration of pre-staging qualified electrical workers ahead of significant fire-weather is warranted.
Calendar Year Response Time
Range (min)
Average
Response Time
(min)
2020 17-60 41
2021 30-75 52
2022 6-98 46
2023 20-184 94
Metric 6: System Reliability: The inclusion of systemwide reliability indices allows the tracking the total number of unplanned primary outages per year, the System Average Interruption Duration Index (SAIDI), and the System Average Interruption Frequency Index (SAIFI). The data below is for unplanned primary level outages throughout the City’s distribution system including major events. Transmission and secondary outages are excluded from this data. Calendar year 2023’s number of outages decreased but included five tree related outages. While the number of outages is lower during calendar year 2023, the number of winter wind events that resulted in tree related outages was significantly greater.
Year Total
Customers
No. of
Outages SAIDI SAIFI
2019 5959 5 8.37 0.05
2020 5971 5 13.76 0.05
2021 6020 7 42.67 0.36
2022 6047 8 8.46 0.10
2023 6062 5 11.34 0.08
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Disabling Reclosers & De-Energization [PUC-8387 (b)(2)(F)] As a key component of the WMP, the use of automatic reclosing on circuit breakers and line reclosers serving HFTD will be disabled when the National Weather Service issues red-flag warnings affecting any portion of the City electric service territory. Additionally, during Red-Flag warnings the City will implement recloser settings that shorten the time a fault will exist (faster tripping). In general, these settings include lowering instantaneous trip settings and improving the detection of ground faults. Additional protection settings to speed fault detection during weather conditions conducive to wildfires have also been implemented. Staff will continue to monitor these settings and look for additional utility best practices to implement.
For public safety, City staff may pro-actively de-energize all or portions of the City’s electric distribution system. De-energization of City facilities may occur due to one or more of the following conditions.
1) Upon the request of Healdsburg’s Fire Department, Healdsburg’s Police Department, CAL-FIRE or other State or local public safety agencies. 2) When energized powerlines subject to high winds or other weather or atmospheric conditions may create a substantial public safety risk. 3) When real-time information from qualified City field staff indicates that wind driven vegetation or other combustible debris are threatening City owned electric utility equipment.
4) When PG&E de-energizes the City’s transmission source. The City has no control over PG&E’s decision to de-energize the Healdsburg’s transmission source.
As time permits, de-energization of City owned high-voltage powerlines will be coordinated between the City Manager’s Office, Electric Department, and City Public Safety Departments. The decision to de-energize City owned powerlines will be communicated to the City Manager’s office as soon as practical.
Customer Notification Procedures [PUC-8387 (b)(2)(G)]
Customer notification is an important component and consideration of the Wildfire Mitigation Plan. The City’s customer notification procedures starts with customer education and continues with relevant updates when weather conditions are conducive to wildfires. Customer education will be predominantly through printed material, social media, and the City’s webpage. Real-time communications leading up to and during a potential de-energization event will be predominantly through social media and other technology resources immediately available to City staff.
Leading up to and during an event, City staff will coordinate customer notifications through the City Manager’s office, City Emergency Operations Center (EOC), or other means available to City staff at the time of the event. The City Manager, as EOC Director, or the EOC Coordinator (Fire or Police Chief) may activate the City’s Emergency Operations Plan. To provide the fastest means of notifying electric customers the City will rely on automated phone calls and social media. Social media and automated alerts may include reverse phone calls, Facebook, and/or Nextdoor.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) The City will make efforts to communicate with critical facility operators, such as hospitals, emergency centers, fire departments, public utilities/agencies, schools, and telecommunications providers before, during, and after any PSPS effecting their City supplied electric service.
Communication with critical facilities will be primarily through automated phone call but operators of these critical facilities will also be encouraged to monitor the City’s Facebook page and signup for automated emergency alerts from the City.
City staff will continue to reach out to the community on an ongoing basis regarding the risks of wildfire. This will include the encouragement of City electric customers, first responders, and operators of critical facilities to update their contact information such that the City can reach them should a de-energization event need to occur.
Appendix D indicates areas of Healdsburg that have the potential for PSPS events. The graphic indicates areas affected by either transmission level PSPS events or distribution level PSPS events.
This information is based upon both the City of Healdsburg’s distribution system and information provided by PG&E regarding their distribution and transmission systems. Wildfire and PSPS customer outreach will be emphasized within areas shaded in blue.
Vegetation Management Program [PUC-8387 (b)(2)(H)]
To reduce power outages, promote safety and comply with required vegetation clearance, the City contracts with a qualified vegetation management contractor. This contractor is responsible for maintaining vegetation clearance from energized overhead conductors. The City’s clearance requirements, which exceed the requirements of GO-95, apply throughout the City, not just within the HFTD. Contractors are, in general, required to meet the City’s tree clearance requirements as summarized below.
- Primary (12,000 volts) - trim to 7-feet and maintain no less than 4-feet of clearance during the contract period.
- Secondary (480 volts and below) - trim to 3-feet and maintain no less than 1 foot of clearance during the contract period. (pole to pole configuration). - Service drop - maintain 6-inches during contract period (pole to customer weather head). - Poles and Streetlights - trim a 3-foot radius around entire length of poles and streetlights during contract period (excluding customer poles).
- Guy Wires - trim to 3 feet and maintain no less than 1 foot of clearance during the contract period. (pole to pole configuration).
- Substation – 3-feet clearance from outside of wall from ground level to top of tree. - When trimming, contractors must assume at least two-feet of line sag and at least onefoot of horizontal movement in both directions in addition to the clearances listed above.
Through the contract period, the City’s contractor is to prune and remove vegetation hazards. This includes removal of dead branches overhanging primary conductors. Portions of dead, old decadent, rotten trees, or portions of trees weakened by decay or disease that may contact the line from the side or fall on the line, must be trimmed to eliminate the hazard.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) With this version of the WMP, City staff plan to review the current contract and easements for the ability to increase clearance at the time of trimming. Additional clearance at the time of trimming may help reduce outages and the frequency of trimming within the HFTD.
Wildfire Inspection Program [PUC-8387 (b)(2)(I)]
Starting each year in the month of May, a City qualified employee shall perform a visual patrol of all overhead supply wires within the high-fire threat areas (Tier 2 or 3). This patrol shall review specific items related to wildfire mitigation such as;
- Proper vegetation clearance from primary and secondary wires - Condition of wood poles, cross-arms, and other support structures - Review and prioritize pending maintenance tags within the high-fire threat areas.
Before and after a Red-Flag Warning covering a portion of the City’s service territory, the City may perform a visual patrol of overhead primary and secondary conductors within the HFTD. This patrol is intended to identify vegetation clearance and/or equipment issues that can be quickly corrected. A patrol following the Red-Flag event will document, by photo, any fallen vegetation, damaged facilities, or other potential causes of power outages.
The findings of these patrols will be recorded and reviewed by the Utility Director and Electric Superintendent. The Utility Director and Superintendent will review the patrol results to determine the system’s performance during an event (outages, vegetation, damaged facilities). The intent of these patrols and data collection is to better predict system performance under future weather events.
Wildfire Risks [PUC-8387 (b)(2)(J)]
This section of the plan identifies, describes, and prioritizes wildfire risks and drivers found within the City’s service territory. The identified risks are separated into two categories; i) risks associated with design, construction, operation, and maintenance of the City’s electrical equipment and facilities and ii) risks associated with topographic and climatological factors within the City’s service territory.
i. Risk associated with the design, construction, operation, and maintenance of the City’s electric system include the following (listed in order of priority). 1) Vegetation near or adjacent to City electric lines presents the highest risk for utility caused wildfires. Mitigation of this risk is done through the routine and thorough performance of tree trimming to provide adequate clearance from power lines. The City will continue to evaluate the need to limit trimming (performance of work) within the fire area during the fire season or at times of elevated fire risk.
2) Overhead Utility Equipment presents a risk of utility wildfire that can be mitigated through design standards, alternate equipment, and adjusted work
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) practices. To mitigate the risk of utility caused wildfire, the City will enact the strategies discussed within the WMP. These strategies will be reviewed annually for their effectiveness in reducing the risk of wildfire. 3) Reclosing or the automatic testing of faulted powerlines can increase the risk of utility caused wildfires. To lessen this risk, the City disables reclosing during red-flag warnings affecting the City’s service territory. Additionally the City has implemented faster tripping of line-reclosers and feeder breakers during weather events conducive to the rapid spread of wildfire. 4) Certain work practices or operations can increase the risk of utility caused wildfire. To reduce the risk of wildfire, Staff incorporates operational procedures to limit work activities during weather conducive to wildfire, to clarify inspection practices within the fire-threat areas and revise other work procedures, as necessary.
5) An additional risk for the City is the limited amount of field and office staff able to support utility wildfire mitigation efforts. The City currently employees four journey level line-workers and one apprentice line-worker. Staff available for program oversight and program direction are limited to the City’s Utility Director and Electric Superintendent. The summer and fall months are periods of typical vacation but also are times most conducive to wildfire. Staffing levels can be reduced due to vacation and present increased risk in preparing for and responding to wildfire conditions.
6) Recently the City experienced a large fiber optic communication deployment, attaching new communication lines to over 80% of the City’s utility poles.
During this process the communication provider’s contractor created hundreds of GO95 infractions, some so significant they required multiple stop work orders. Third party attachers on joint use poles can increase the risk of wildfires as the quality of work and speed of corrections is far below any acceptable utility standard. This is further compounded as the true regulatory oversight for these attachers is the CPUC and not the City.
ii. Topographic and climatological risks include the following (listed in order of priority). a) Volume of vegetation (fuels) in high-fire threat areas increases the risk and speed of which wildfire can spread. Increasing vegetation clearance from overhead lines lowers the risk of wildfire. Additionally, the City’s active and ongoing weed abatement program reduces the amount of fuels within the fire area and Urban Wildland Interface (WUI) further reducing the risk of wildfire. b) Periods of significantly low humidity can dry vegetative fuels and create an increased risk of ignition. The City will monitor the National Weather Service alerts related to forecasted fire weather watch and/or red-flag days affecting the City’s service territory to remain aware of the elevated risks. c) High sustained winds and strong wind gusts can down trees, break branches, or damage utility equipment. The City will monitor the National Weather Service for high-wind warnings, watches, and/or advisory affecting the City’s service
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) territory to remain aware of these events. Increasing vegetation clearance, weed abatement programs, and exceeding GO 95 design standards reduces the risk of wildfire caused by these events.
d) Extended droughts or continued periods of below average rainfall can increase dry vegetative fuel loads, leading to an increase in wildfire risk. Prolonged droughts can also weaken or kill trees. The City’s vegetation management program requires the identification and removal of diseased, dying, or hazard trees adjacent to the City’s electrical lines. Routine visual inspections allow the City to remain aware of this risk factor. Steep terrain and areas difficult to access are present within the HFTD of the City’s service territory. Steep terrain can increase the speed and spread of wildfire and limit access delaying response times of local firefighting agencies. While the terrain and access cannot be changed by the Electric Department, prudent utility operations within the fire area can reduce the likelihood of utility caused wildfires. e) Housing and community activities within wildland urban interfaces (WUI) can increase the risk of wildfire. The City has zoning and land use policies that help mitigate the risk of wildfire associated with activities in the WUI. Additionally, the City manages an aggressive weed abatement program to reduce wildfire risks.
f) Wildfire history within and adjacent to the City’s electric service area, shown in Appendix B, are indicators of the risk of wildfire. In review of historical wildfires, the City can confirm that the HFTD covering the City’s service area are in fact at higher risk for wildfire.
Identification of Areas of Higher Risk [PUC-8387 (b)(2)(K)] In 2017, Healdsburg’s City Council directed City staff to submit to the CPUC updates to the City service territory that defined high-fire threat areas (Tier 2). The area defined by the City Council closely aligned with the City’s Wildland Urban Interface (WUI) and contain areas of improved property and structures adjacent to wildland vegetation (fuels) with potentially delayed or restricted fire response due to narrow and windy roads and steep terrain. These areas were defined as Tier 2 and provided to the CPUC’s fire mapping process.
In working with the CPUC mapping team, the area was further refined and is shown in Appendix A. In accordance with this map, the City operates and maintains electric facilities within this area in a manner that reduces the risk of utility caused wildfires.
In 2021, the CPUC finalized and approved the Tier 2 area covering Healdsburg’s service territory.
The finalization and approval of this area aligns closely with City’s WUI but does exclude some areas of developed lands. The City is monitoring updates to fire-threat maps by various state agencies. Should these maps be finalized and effect changes within the City’s service territory, the City will consider any needed updates to our utility maps and replacement of utility equipment.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) Methodology for Identifying Enterprise-Wide Safety and Wildfire Risks [PUC-8387 (b)(2)(L)]
To determine the level of risk to the City’s electric system and service territory, City staff review historic outages within the wildland urban interface and their associated causes to assess wildfire risk. Outages that have the potential for causing wildfires are noted and reviewed for potential corrective actions. On a rolling five-year window, the number of sustained outages is tracked to establish trends. The City must use a five-year window due to the low number of outages on an annual basis.
To assess the risk of wildfire throughout the City’s service territory and adjacent areas, City staff reviewed historical fires as well as vegetation and terrain surrounding the City. This annual review helps to confirm the need for wildfire mitigation as well as identify areas of potential threat to the City’s infrastructure.
Process for restoring power after de-energization [PUC-8387 (b)(2)(M)] Due to either the City proactively de-energize powerlines, a loss of the City’s transmission source, or following the operation of a protective device, power lines will be re-energized in the following manner.
1) Overhead facilities in high fire threat areas must be patrolled and visually found to be clear of trouble, damage, or vegetation before re-energizing facilities by a qualified electrical worker.
2) If damaged facilities are found, those facilities will be isolated such that sections of overhead lines that have been inspected and are not damaged can be re-energized restoring power to customers. To the extent additional resources are needed to repair the damage, the City will leverage mutual aid agencies and contractors to obtain needed material and qualified personnel.
3) Any damaged facilities or vegetation issues will be documented and photographed before being repaired or cleared.
4) Repairs to damaged facilities will be performed consistent with City and utility construction standards and then re-energized.
Wildfire Process & Procedure [PUC-8387 (b)(2)(N)]
i) The Plan’s oversight, monitoring, and auditing will occur at least annually with any lessons learned being prioritized for incorporation into the plan, related standards, and procedures. The City’s Utility Director will collect the results of oversight and monitoring of the program. This may include the use of qualified external stakeholders and consultants. If required for implementation, City staff will present this plan to the City Council for their consideration and action.
ii) The identification of deficiencies and areas of improvement will be noted through the annual auditing process or as issues are identified. City Staff may implement deficiency
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) mitigation, remediation, and/or improvements at any time in a continued effort to mitigate wildfires.
iii) Quality control of inspections (line, equipment, & tree), construction standards, and operating procedures will be the responsibility of the City’s Electric Superintendent.
Through the scheduling of inspections, review of inspections performed, and the completion of any maintenance work found, the Electric Superintendent shall track and record the effectiveness of operations and maintenance staff. iv) City staff will continue to review and consider new utility equipment meant to reduce the risk of wildfire. Equipment will be reviewed for the effectiveness and applicability to the City’s electric system including the evaluation of non-expulsion fuses, tree-wire, the use of lightning arrestors, and other equipment.
v) As needed, but at least every five years, City staff will review system protection settings to ensure proper coordination and possible improvements to reduce the risk of wildfire mitigation. A review of protection device settings is necessary to ensure system faults are cleared in a proper and expedient manner and that current and appropriate best utility practices are being implemented.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) APPENDIX A – HEALDSBURG’S HIGHER FIRE THREAT DISTRICT
(CPUC APPROVED 8/19/2021)
The above graphic shows the CPUC fire threat areas that affect the City of Healdsburg’s Service territory.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) APPENDIX B – LOCAL WILDFIRE HISTORY
The above graphic shows historical wildfires in and around the City of Healdsburg. These historical fires help inform the City of the risk of wildfire.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) APPENDIX C – DISTRIBUTION LINES WITHIN FIRE THREAT AREAS The above image approximates the footage of over-head and underground high-voltage distribution line within the HFTD. Of the City’s roughly 60 miles of distribution line, 30 are overhead. Of the 30 miles of overhead only 7 miles or one-quarter are within the HFTD.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan) APPENDIX D – AREAS LIKELY TO BE IMPACTED BY PSPS
The above image indicates areas more likely to be impacted by public safety power shutoffs (PSPS). The areas shaded in orange (entire service area) are likely to be impacted by transmission level PSPS events. Areas shaded in blue indicate areas likely to be impacted by distribution level (more localized) PSPS events.
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Attachment: 2024 Wildfire Mitigation Plan Final Draft (4313 : 2024 Utility Wildfire Mitigation Plan)
CITY OF HEALDSBURG
CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: Fiscal Year 2024-2025 Investment Policy
PREPARED BY: Katie Edgar, Finance Director
STRATEGIC INITIATIVE(S):
Provide Effective Governance
RECOMMENDED ACTION(S):
Adopt a Resolution approving the City Investment Policy for Fiscal Year 2024-25.
COMMUNITY ENGAGEMENT/OUTREACH:
Not Applicable.
BACKGROUND:
The California Government Code Section 53646(a)(2) requires the City Treasurer to submit a “Statement of Investment Policy” to the legislative body each fiscal year. This policy has been designed and developed according to the specific needs of the City of Healdsburg and complies with the California Government Code, guidelines recommended by the California Municipal Treasurer’s Association, and guidelines recommended by the Association of Public Treasurers of the United States and Canada.
The City’s Municipal Code designates the City’s Finance Director as the City Treasurer. The core statutory duty of the Treasurer as set forth in California Code Section 41001 is “the City Treasurer shall receive and safely keep all money the treasurer receives.” Considering the statutory responsibilities, the California Municipal Treasurer’s Association has established the following guidelines to prudent investment strategy for local treasurers to follow:
• Legal Investment Authority: Temporary idle monies are to be invested in accordance with state and local statutes and in compliance with California Government Code Section 53600 et seq.
• Safety: It is the primary duty and responsibility of the Treasurer to protect, preserve, and maintain intact cash and investments placed in trust with the Treasurer on behalf of the citizens of the City of Healdsburg.
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• Liquidity: An adequate percentage of the portfolio should be maintained in liquid shortterm securities, which can be converted to cash, if necessary, to meet disbursement requirements.
• Yield: The Treasurer shall obtain the highest possible yield within the parameters of the City’s authorized investments, provided the criteria for safety and liquidity have been met.
DISCUSSION/ANALYSIS:
For the City Council’s consideration, the attached proposed investment policy for Fiscal Year 2024-25 is presented in accordance with California Government Code Section 53600 et seq, which governs investment practices of local government agencies.
Section III of the City’s policy clearly specifies the three primary objectives of the City’s investment activities in order of priority are safety, liquidity, and yield.
In January 2024, Senate Bill 882 made several changes to Code, including one change to Code Section 53601(o). The bill clarified that mortgage-backed securities issued by federal agencies are exempt from the Code’s requirements described in Section 53601(o) for privately issued asset- and mortgage- backed securities. The Code update codifies the common understanding of how agency mortgage-backed securities are treated and the proposed investment policy incorporates additional clarifying language.
ENVIRONMENTAL STEWARDSHIP:
The policy includes Socially Responsible Investing parameters that disallow investments in the fossil fuels industries to promote environmental stewardship.
ALTERNATIVES:
The California Government Code Section 53646(a)(2) requires the City Treasurer to submit a “Statement of Investment Policy” to the legislative body each fiscal year. If the Council chooses not to adopt the resolution, additional direction from the Council will be required.
FISCAL IMPACT:
There is no financial impact resulting 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
Investment Policy FY 2024-25
Investment Policy FY2024-25 REDLINE
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CITY OF HEALDSBURG
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG ADOPTING AN INVESTMENT POLICY FOR
FISCAL YEAR 2024-2025
WHEREAS, Section 53600.5 of the California Government Code Section states when investing and managing public funds, the primary objective of a trustee shall be to safeguard the principal of the funds under its control; and
WHEREAS, the secondary objective of Section 53600.5 is the requirement to meet the liquidity needs of the depositor; and
WHEREAS, the third objective of Section 53600.5 is to achieve a return on the funds under its control; and
WHEREAS, Section III of the City’s policy clearly specifies the three primary objectives of the City’s investment activities as safety, liquidity and yield, in that order of priority; and WHEREAS, in accordance with California Government Code Section 53646, the City Treasurer shall annually review and render to the City Council an investment policy; and WHEREAS, in January 2024 Senate Bill 882 made several changes to Code, including one change to Code Section 53601(o); and
WHEREAS, the proposed City Investment Policy for Fiscal Year 2024-2025 incorporates additional language to address these changes.
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 adopts the attached City of Healdsburg Investment Policy for Fiscal Year 2024-25.
PASSED, APPROVED AND ADOPTED, this 17th day of June 2024, by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ABSTAINING: Councilmembers:
SO ORDERED: ATTEST:
__________________________________ ____________________________________ David Hagele, Mayor Raina Allan, City Clerk
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Attachment: Resolution - Investment Policy (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 1 Year 2023/24
Investment Policy
Fiscal Year 2023-2024
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Attachment: Investment Policy FY 2024-25 (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 2 Year 2023/24
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...................................................................................... 11 C. Collateralization ....................................................................................................... 12 D. Socially Responsible Investing ................................................................................ 12 E. Investments Not Approved....................................................................................... 13 F. Investment Pools/Money Market Funds................................................................... 13 VIII. INVESTING PARAMETERS
A. Diversification .......................................................................................................... 14 B. Maximum Maturities................................................................................................ 14 IX. REPORTING
A. Quarterly Reporting to City Council........................................................................ 14 B. Reporting to California Debt and Investment Advisory Commission (CDIAC)...... 15 X. PERFORMANCE STANDARDS .................................................................................. 15 A. Market Yield (Benchmark)....................................................................................... 15 B. Marking to Market ................................................................................................... 15 C. Review of Investment Portfolio................................................................................ 15 XI. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes.............................................................................. 16 B. Annual Statement of Investment Policy................................................................... 16 C. Exceptions................................................................................................................ 16 APPENDIX: GLOSSARY OF INVESTMENT TERMS .............................................................17
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Attachment: Investment Policy FY 2024-25 (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 3 Year 2023/24
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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Attachment: Investment Policy FY 2024-25 (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 4 Year 2023/24
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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Attachment: Investment Policy FY 2024-25 (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 5 Year 2023/24
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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Attachment: Investment Policy FY 2024-25 (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 6 Year 2023/24
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 that are not issued or guaranteed by federal agencies and GSE’s, the security 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
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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.
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 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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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
Investment Type Maximum
Percentage
of Portfolio
Maximum par
value per
name
Credit/Minimum Quality Requirements
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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
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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DURATION: A measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.
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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INTERNAL CONTROLS: An internal control structure designed to ensure that the assets of 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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MARKET RISK: The risk that the value of a security will raise or decline as a result of changes 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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SAFEKEEPING SERVICE: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's 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 2023-2024
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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...................................................................................... 11 C. Collateralization ....................................................................................................... 12 D. Socially Responsible Investing ................................................................................ 12 E. Investments Not Approved....................................................................................... 13 F. Investment Pools/Money Market Funds................................................................... 13 VIII. INVESTING PARAMETERS
A. Diversification .......................................................................................................... 14 B. Maximum Maturities................................................................................................ 14 IX. REPORTING
A. Quarterly Reporting to City Council........................................................................ 14 B. Reporting to California Debt and Investment Advisory Commission (CDIAC)...... 15 X. PERFORMANCE STANDARDS .................................................................................. 15 A. Market Yield (Benchmark)....................................................................................... 15 B. Marking to Market ................................................................................................... 15 C. Review of Investment Portfolio................................................................................ 15 XI. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes.............................................................................. 16 B. Annual Statement of Investment Policy................................................................... 16 C. Exceptions................................................................................................................ 16 APPENDIX: GLOSSARY OF INVESTMENT TERMS .............................................................17
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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 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 that are not issued or guaranteed by federal agencies and GSE’s, the security 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.
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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.
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 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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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% persingle
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
Investment Type Maximum
Percentage
of Portfolio
Maximum par
value per
name
Credit/Minimum Quality Requirements
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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
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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DURATION: A measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.
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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INTERNAL CONTROLS: An internal control structure designed to ensure that the assets of 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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MARKET RISK: The risk that the value of a security will raise or decline as a result of changes 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 FY2024-25 REDLINE (4395 : FY 24-25 Investment Policy) City of Healdsburg Investment Policy 21 Year 2023/24
SAFEKEEPING SERVICE: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's 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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Attachment: Investment Policy FY2024-25 REDLINE (4395 : FY 24-25 Investment Policy)
CITY OF HEALDSBURG
RSA AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: After School Education and Safety Program Memorandum of Understanding Renewal
PREPARED BY: Richard Schwarz, Recreation Supervisor
STRATEGIC INITIATIVE(S):
Effective & Efficient Government
RECOMMENDED ACTION(S):
Adopt a Resolution approving a Memorandum of Understanding between the City of Healdsburg and the Healdsburg Unified School District to operate the After-School Education and Safety Program from July 2024 through June 2027 and authorizing the City Manager to execute the Memo of Understanding on the City's behalf.
COMMUNITY ENGAGEMENT/OUTREACH:
Community Services and School District staff host program open houses for current and prospective families to see the program in action and learn more about the ASES program.
Throughout the course of each year, program staff and participants complete a Continuous Quality Improvement process which provides an evaluation and modification opportunity throughout the span of the program. ASES staff partners with local organizations to deliver enrichment programs such as Farm to Pantry for sustainable gardening and gleaning, and the Sonoma County Bookmobile, which provides on-site access for families to borrow literature material free of charge.
BACKGROUND:
Beginning with the 2007-08 school year, the City of Healdsburg entered into a memorandum of understanding (“MOU”) with the Healdsburg Unified School District (“HUSD”) to run and operate the After-School Education & Safety (“ASES”) program. The program and partnership have been subsequently renewed and continued through the most recent grant period of 2021- 2024. The ASES program, funded primarily through a state grant, provides after school care for 150+ children in our community. The current MOU expires on June 30, 2024, and HUSD has requested that the City continue to be the operational partner of the program through June 2027.
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DISCUSSION/ANALYSIS:
The ASES program is an after-school program that serves children from Healdsburg elementary and junior high schools that are in kindergarten through eighth grade. Those who attend the program are placed into grade-specific rooms where throughout the course of the program Community Services recreation staff provide homework assistance, a nutritional snack, and various enrichment activities such as athletics, gardening, and STEAM based programs. The ASES program fills a significant need in the community by providing a supervised and enriching environment for students during the critical hours following school and prior to parents being available after work.
During the 2015-18 ASES grant period the program was housed at the Healdsburg Community Center. After significant discussions between HUSD and City staff, the program moved to school sites at the beginning of the 2018-19 school year to minimize transportation of students and provide parents the ability to drop-off and pick-up their child from the same location each day. The relocation of the program also helped foster a stronger relationship between ASES staff and HUSD faculty. The move back to the school sites also led to an increase in program enrollment, specifically with our youngest participants.
For the 2021-22 school year, the junior high program relocated to the Community Center, providing junior high participants the opportunity to create their own dedicated space, enhancing the City’s role in serving the teen population, and ensuring that this age group is being provided the traditional support of the after-school program. After additional discussions with program participants, their families, program staff and HUSD staff, elementary students will remain on their respective campuses, and the Jr. High students will continue to meet at the Community Center.
The City and HUSD have partnered on childcare programs for over a decade and in doing so, have worked in conjunction to achieve common goals of providing a safe, supervised, and enriching environment for students and their families. This was most recently demonstrated through the implementation of new enrichment programs:
• Contracted Instructor Classes
• Alexander Valley Film Enrichment
• Farm to Pantry
• Junior Giants
• Poetry Slam with HES Librarian Greta Mesics
The terms of this MOU run from July 1, 2024, to June 30, 2027, subject to annual evaluations, and may be extended by written agreement of both parties. Within the MOU the City is charged with providing staffing, developing curriculum, facility space for junior high participants, and overall program delivery. Healdsburg Unified School District provides ongoing support, facility space for elementary participants, and is the lead agency for securing and facilitating grant requirements.
ENVIRONMENTAL STEWARDSHIP:
As part of the program curriculum staff lead participants in activities that promote composting,
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recycling, water conservation, and sustainable gardening through our garden program partnership with Farm to Pantry.
ALTERNATIVES:
Should the Council decide to not approve the MOU, Healdsburg Unified School District would need to find another organization to operate the After-School Education and Safety program.
FISCAL IMPACT:
HUSD receives $9.16 per student per day in grant funding to fund the operational expenses of the program. In addition, HUSD also has a grant match that is paid to the City based on annual enrollment. The total cost of the program exceeds the available grant and matching funding resulting in City contributions from the Community Services fund each year. The operation of the ASES program has been included in our fiscal year 24-25 and 25-26 budgets and is estimated to require approximately $80,000 of Community Services funding each year.
ENVIRONMENTAL ANALYSIS:
Review and approval of the Afterschool Education and Safety Program is not subject to the provisions of the California Environmental Quality Act (CEQA) because approval of the memorandum of understanding (MOU) is not a project, since it will not have a direct or reasonably foreseeable indirect impact on the environment.
ATTACHMENT(S):
Resolution
Final_ASES MOU_2024-2027
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CITY OF HEALDSBURG
RESOLUTION NO. ___-2024
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG APPROVING A MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF HEALDSBURG
AND THE HEALDSBURG UNIFIED SCHOOL DISTRICT TO
OPERATE THE AFTER-SCHOOL EDUCATION AND SAFETY
PROGRAM FROM JULY 2024 THROUGH JUNE 2027 AND
AUTHORIZING THE CITY MANAGER TO EXECUTE THE
MEMO OF UNDERSTANDING ON THE CITY’S BEHALF
WHEREAS, the City of Healdsburg (“City”) entered into a Memorandum of Understanding with the Healdsburg Unified School District (“District”) at the start of the 2007-08 school year to operate the After School Education and Safety (“ASES”) program; and WHEREAS, the City and the District have subsequently continued to operate the ASES program in partnership and renewed a series of Memorandums of Understanding with the current agreement scheduled to expire on June 30, 2024; and
WHEREAS, the ASES program serves approximately 150 students annually from Healdsburg elementary and junior high schools by providing a supervised and enriching afterschool program that is free of charge to participants’ families; and WHEREAS, the California Department of Education approved funding for the ASES program to continue and be administered through the District until June 30, 2027; and WHEREAS, the District and City have worked collaboratively for over a decade to deliver successful childcare programs and wish to continue to provide the ASES program in partnership for the Healdsburg community; and
WHEREAS, the District agrees to provide transportation of students, a daily snack, ongoing administrative support, facility space for the elementary school program, and to be the lead agency for securing and meeting fiscal requirements; and WHEREAS, the City agrees to provide staffing, development of curriculum; facility space for junior high participants, and be the lead agency for overall day-to-day delivery of the program.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:
1. Review and approval of the Afterschool Education and Safety Program is not subject to the provisions of the California Environmental Quality Act (CEQA) because approval of the memorandum of understanding (MOU) is not a project, since it will not have a direct or reasonably foreseeable indirect impact on the environment.
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Attachment: Resolution (4476 : After School Education and Safety Program MOU Renewal) Resolution No. _____-2024
2. Approves a Memorandum of Understanding with the Healdsburg Unified School District to operate the After School Education and Safety program until June 30, 2027.
3. Authorizes the City Manager to execute the Memorandum of Understanding.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Healdsburg this 17th day of June 2024, by the following vote:
AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
__________________________________ _________________________________ David Hagele, Mayor Raina Allan, City Clerk
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Attachment: Resolution (4476 : After School Education and Safety Program MOU Renewal) 1 MEMORANDUM OF UNDERSTANDING
BETWEEN
Healdsburg Unified School District
and the
City of Healdsburg
For the After School Education and Safety (ASES) Program for 2024-27 THIS MEMORANDUM OF UNDERSTANDING (MOU) is made and entered into this 15 day of May 2024 by and between HEALDSBURG UNIFIED SCHOOL DISTRICT of Sonoma County, California, a public school district (School District) and the CITY OF HEALDSBURG, a municipal corporation of the State of California (City). Collectively, School District and City are referred to as “Parties” herein.
Section 1. Purpose and Background
The Healdsburg Unified School District and the City of Healdsburg enter into this Memorandum of Understanding for the purpose of implementing the After School Education and Safety (ASES) Program to serve at least 85% (historically 88 students) of the California Department of Education (CDE) determined attendance goal for the school year, from Healdsburg Elementary School (K-5), at least 25 middle school students (grades 6-8) from Healdsburg Junior High School. The partnership described herein is designed to best utilize the After School Education and Safety grant received by the School District.
The planning process for this program has included representation from participating schools, the Healdsburg Board of Education representing parents and students, and the City of Healdsburg Community Services Department staff. Together the group engaged in a needs assessment process to ensure that the after-school program will meet the needs of the Healdsburg Unified School District K-8 students and build on the strengths of a diverse range of stakeholders. The goals of the Program are directly aligned with the After School Education and Safety Program. These include:
⮚ Providing an educational element that includes tutoring and/or homework assistance designed to help students meet State standards in one or more of the following academic subjects: reading/language arts, mathematics, history/social science, or science.
⮚ Providing an educational enrichment element that offers an array of additional services, programs, and activities that reinforce and complement the schools’ academic program, including but not limited to positive youth development strategies, recreational opportunities and juvenile delinquency prevention activities.
The City is committed to realizing the goals of the ASES Program. In furtherance of this effort, this MOU establishes the framework for a formal working relationship between the Parties and specifies the services and resources that each commits to the program.
The School District, acting as a lead agent, will work with the City to coordinate and ensure the overall success of the after-school program activities. This will include recruiting students to participate, implementing systems and procedures to comply with State grant requirements, and in general, working to establish quality after school activities that are integrally linked to each school’s regular school program and the academic and social goals being promulgated by participating School District schools.
Section 2. Term
The terms of this MOU shall be from July 1, 2024 to June 30, 2027, subject to annual evaluations, and may be extended by written agreement of both Parties. Either Party, upon 30 days’ written notice to the other Party, may terminate this MOU. The entire MOU will be terminated immediately if the grant is not received.
Section 3. Roles and Responsibilities of the City
The City is committed to the successful functioning of the ASES Program and to the realization of the outcomes it seeks.
The City’s specific commitments of financial, personnel and/or in-kind resources include the following:
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Attachment: Final_ASES MOU_2024-2027 (4476 : After School Education and Safety Program MOU Renewal) 2 ● Operate the ASES Program every regular school day during the regular school year from the conclusion of the regular school day until 6:00 p.m.
● Verify that ASES Program staff members who directly supervise students meet at least the minimum qualifications for an instructional aide in the School District, which includes either completing two years of college, possessing an AA degree, or passing the local instructional aide assessment test. ● Requiring all ASES Program staff and volunteers to comply with health screening and fingerprint clearance requirements under current law and School District policy for school personnel and volunteers in the School District.
● Requiring all ASES Program staff and volunteers to comply with annual mandated reporter training required under CA Education Code.
● Serve a daily nutritious snack, provided by HUSD, that meets Education Code Section 49430 standards, to students participating in the program.
● Maintain a student-to-staff ratio of no greater than 20:1 at all times for 1st - 8th grade. For Transitional Kindergarten and Kindergarten maintain a student to staff ratio of no greater than 10:1. ● Provide ongoing training to all staff who directly supervise students in the ASES program. ● Serve at least 85% of CDE determined attendance goal for current school year (historically at least 88), elementary school students from Healdsburg Elementary School per day in the after-school program. Each student participating from Healdsburg Elementary School should attend five days per week, from the end of the school day until 6:00 p.m. as is the intent of the grant, or by adhering to the early-release policies and the part-time attendance policies.
● Serve at least 85% of CDE determined attendance goal for current school year (historically 25) middle schools’ students. Each student participating in the middle school portion of the program should attend at least three days per week, three hours per day as is the intent of the grant, or by adhering to the early-release policies and the parttime attendance policies. Regardless of the participation level on any given day, the City shall assure that the program will remain operational five days per week, from the end of the school day until 6:00 p.m. ● No fee shall be charged for a student identified as a homeless or foster youth or who qualifies for free/reduced price lunch. The Parties do not intend to charge. If funding constraints require a charge, it would be on a sliding scale basis.
● Submit quarterly attendance reports to the School District using a daily attendance reporting program. ● Submit attendance reports for each school separately but simultaneously. ● Provide Healdsburg Unified School District with the dollar value for all in-kind services quarterly. ● Participate in the evaluation processes as required by the California Department of Education and the ASES Program by maintaining records of activities and services. ● Lead the annual data-driven continuous quality improvement process. ● Submit quarterly invoices to the School district for student attendance. Reimbursement rate will reflect 85% of the grant, to be used only for direct services. Annual reimbursement will be based on the number of school days as determined by the HUSD board approved school calendar. ● Be solely responsible for all matters of employment and personnel administration, including, but not limited to, hiring, scheduling, wages and salaries, benefits, workers’ compensation costs, unemployment costs, employee discipline and termination.
This work will be completed subject to the award of grant funding and the negotiation of a specific contract for such funding with the granting agency.
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Attachment: Final_ASES MOU_2024-2027 (4476 : After School Education and Safety Program MOU Renewal) 3 Section 4. Roles and Responsibilities of School District The School District will:
● Provide a daily nutritious snack that meets Education Code Section 49430 standards, to students participating in the program.
● Provide daily transportation after school to the Healdsburg Community Center for Healdsburg Junior High School students.
● Convene an advisory committee of School District and City representatives to plan, organize, implement and evaluate the ASES Program.
● Assume lead and fiscal agency responsibilities for the ASES Program. ● Work with the participating schools and the City of Healdsburg Parks and Recreation Department to link ASES Program services to other appropriate community, school, and School District activities. ● Submit all necessary reports to the California Department of Education. ● Work closely with the ASES Program in the development of a sustainability plan to ensure the ongoing viability and development of after school programs.
● Participate in a data-driven continuous quality improvement process led by the City.
Section 5. Indemnification and Hold Harmless
The DISTRICT shall indemnify, defend, protect, hold harmless, and release the CITY, its officers, agents and employees, from and against any and all claims, loss proceedings, damages, causes of action, liability, costs, or expense (including attorneys’ fees and witness costs) arising out of the negligent acts or omissions in the performance by the DISTRICT under this Agreement; except such Liability caused by the sole negligence or willful misconduct of the CITY. This indemnification obligation shall not be limited in any way by any limitation on the amount or type of damages or compensation payable to or for the indemnifying party under workers’ compensation acts, disability benefit acts, or other employee benefits acts.
The CITY shall indemnify, defend, protect, hold harmless, and release the DISTRICT, its officers, agents and employees, from and against any and all claims, loss proceedings, damages, causes of action, liability, costs, or expense (including attorneys’ fees and witness costs) arising out of the negligent acts or omissions in the performance by the CITY under this Agreement; except such Liability caused by the sole negligence or willful misconduct of the DISTRICT. This indemnification obligation shall not be limited in any way by any limitation on the amount or type of damages or compensation payable to or for the indemnifying party under workers’ compensation acts, disability benefit acts, or other employee benefits acts.
Section 6. Fingerprinting
The City acknowledges that Education Code section 45125.1 applies to contracts for the provision of services under this MOU, and any similar services. Section 45125.1 requires that employees of entities providing such services to school district must be fingerprinted by the California Department of Justice for a criminal records check, unless the School District determines, based on the totality of the circumstances, that the fingerprinting of a contractor’s employees is not required. The School District has determined that fingerprinting certification is required and, therefore: (1) all City employees having direct student contact must submit or have submitted fingerprints in a manner authorized by the Department of Justice, together with the requisite fee as set forth in Education Code section 45125.1; (2) The City shall not permit any employee to come in contact with pupils until the Department of Justice has ascertained that the employee has not been convicted of a serious or violent felony; (3) The City shall certify in writing to the governing board of the School District that none of its employees who may come in contact with pupils have been convicted of a serious or violent felony; and (4) The City shall provide to the School District’s governing board a list of the names of its employees who may come in contact with pupils. The City shall fulfill these requirements at its expense.
Section 7. Insurance
a. The DISTRICT shall provide the CITY with a Certificate of Insurance as evidence of all required in force insurance and an endorsement naming the CITY, its officers, employees and agents as an additional insured with regard to liability arising out of the DISTRICT’S activities carried out under the terms of this Agreement.
The CITY shall provide the DISTRICT with a Certificate of Insurance as evidence of all required in force insurance and an endorsement naming the DISTRICT, its officers, employees and agents as an additional insured
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Attachment: Final_ASES MOU_2024-2027 (4476 : After School Education and Safety Program MOU Renewal) 4 with regard to liability arising out of the UNIVERSITY’S activities carried out under the terms of this Agreement.
b. Liability Insurance. Throughout the term of this MOU, School District and City shall maintain in full force and effect, Comprehensive General Liability or Commercial General Liability Insurance covering bodily injury (including death), personal injury, and property damage. 1) Limits shall be in an amount not less than one million dollars ($1,000,000.00) per occurrence, and two million dollars ($2,000,000.00) aggregate if applicable. 2) School District shall name City, its officers, agents, and employees, individually and collectively, as additional insureds. City shall name School District, its officers, agents, and employees, individually and collectively, as additional insureds.
3) The City’s insurance shall be primary as to liability arising from its use of the District facilities, and the School District’s insurance shall be primary as to liability arising from its use of the City facilities.
c. Workers’ Compensation and Employer’s Liability Insurance. Throughout the term of this Agreement, School District, and City shall maintain in full force and effect, Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly. The Workers’ Compensation Insurance and Employer’s Liability Insurance must be provided with limits of not less than one million dollars ($1,000,000.00) per accident. The insurance shall be endorsed to waive all rights of subrogation against the other Party and its officials, officers, employees, and volunteers for loss arising from or related to the uses provided for in this MOU.
d. Property Insurance. School District shall be solely responsible for maintaining adequate property insurance coverage for the School District facilities.
e. Notification of Change. Required insurance coverage may not be suspended, voided, canceled, or reduced in coverage or in limits, unless thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the other Party to this Agreement.
Section 8. Defaults
In the event of either Party’s default of any material obligation under this MOU, the non-defaulting Party must give the defaulting Party written notice of and a reasonable time to cure the default. The Parties agree to meet and confer within fourteen (14) days of receipt of such notice to discuss next steps.
Section 9. Successors and Assigns
Neither Party may transfer or assign its rights or obligations under this MOU, in part or in whole, without the other Party’s prior written consent. The terms and provisions of this MOU shall extend to and be binding upon and inure to the benefit of the successors and permitted assigns of the Parties.
Section 10. Amendments
This Agreement can only be amended by a writing duly authorized and signed by the Parties.
Section 11. Severability
In the event that any provision herein is held to be invalid by any court of competent jurisdiction, the invalidity of any such provision shall not affect the validity of the remaining provisions of this MOU, which shall remain in full force and effect.
Section 12. Time is of the Essence
Time is of the essence for each and all of the terms and provisions of this MOU.
Section 13. Written Agreement
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Attachment: Final_ASES MOU_2024-2027 (4476 : After School Education and Safety Program MOU Renewal) 5 Neither Party has relied on any promise or representation not contained in this MOU. This MOU constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties regarding the subject matter of this MOU and supersedes all prior written or oral understandings or agreements of the Parties. Upon execution of this MOU by the Parties, all prior written agreements between the Parties as to the subject matter of this MOU shall be deemed terminated in their entirety.
Section 14. Headings
The headings of the paragraphs are for convenience only and are not a part of this MOU, nor shall they be considered in construing the intent of this MOU nor affect any of the rights or obligations of the Parties.
Section 15. Governing Law
This MOU shall be governed by the laws of the State of California and any action brought relating to this MOU shall be brought solely in a court of competent jurisdiction in Sonoma County, California.
Section 16. Notices
All notices, including invoices, given hereunder shall be in writing and shall be deemed to have been given if personally delivered or deposited in the United States mail postage prepaid, certified or registered, return receipt requested, and addressed to the other Party as follows or as otherwise designated by written notice hereunder from time to time:
To SCHOOL DISTRICT: Healdsburg Unified School District
Superintendent
1028 Prince Street
Healdsburg, CA 95448
To CITY: City of Healdsburg
Director of Healdsburg Community Services Department
City Hall
401 Grove Street
Healdsburg, CA 95448
Section 17. Authorization
Each person signing below represents that he or she is duly authorized to do so by the party he or she represents.
CITY OF HEALDSBURG HEALDSBURG UNIFIED SCHOOL DISTRICT
By:_____________________________________ By:_______________________________________ Jeff Kay, City Manager Chris Vanden Heuvel, Superintendent
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Attachment: Final_ASES MOU_2024-2027 (4476 : After School Education and Safety Program MOU Renewal)
CITY OF HEALDSBURG
CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: Extension of a Professional Services Agreement with MMO Partners of Washington DC for Federal Advocacy Services, with Costs Shared by Healdsburg and Four Other Cities
PREPARED BY: Tyler Kettmann, Central Services Manager
STRATEGIC INITIATIVE(S):
Provide Effective Governance
RECOMMENDED ACTION(S):
Adopt a Resolution authorizing the City Manager to approve a 12-month extension to a Professional Services Agreement for federal advocacy services with MMO Partners, increasing the not-to-exceed amount by $80,852 to $445,184, offset by an additional $73,794 in reimbursement revenue from four (4) other participating Sonoma County cities.
COMMUNITY ENGAGEMENT/OUTREACH:
Not Applicable.
BACKGROUND:
In May of 2020, the City of Healdsburg, along with the cities of Petaluma, Cotati, Rohnert Park, Sebastopol, Sonoma and Cloverdale (Partnering Cities), retained Murray, Montgomery, and O’Donnell (MMO Partners) to ensure that: cities in Sonoma County with a population below 100,000 were provided direct, flexible federal funding to offset COVID related revenue losses, monitor federal agency program guidance, provide timely Covid grant related funding announcements and analyze House and Senate COVID related legislation to determine potential impact to partnering cities.
MMO supported the City of Healdsburg and other participating cities in advocating for the American Rescue Plan Act (ARPA), which was signed into law on March 11, 2021, as well as it’s ensuing regulatory implementation process. Additionally, MMO has supported partnering Cities in advocating for their priorities in the Infrastructure Investment and Jobs Act (IIJA), which was signed into law on November 15, 2021. MMO has also provided technical assistance to partnering cities on the Federal Appropriations Process and helped support the City of Healdsburg’s recent projects included in the Water Resources Development Act.
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DISCUSSION/ANALYSIS:
Given the success of the partnership with MMO in advocating partnering cities needs at the federal level, five (5) participating cities have expressed interest in continuing the partnership with MMO for another year. MMO has proposed to continue providing federal advocacy services for five (5) of the partnering cities, including:
• Serving as an intergovernmental liaison with federal agencies, Congress, and partnering cities.
• Supporting partnering cities in identifying policy and project priorities, including support in preparing future year federal appropriation requests • Monitoring ARPA and IIJA implementation guidance and funding opportunities • Monitoring and providing federal grant opportunities
• Tracking federal legislation and providing technical assistance • Monitoring and identifying opportunities in the FY 25 and 26 federal budgets. • Support connectivity between partnering cities, federal agency officials, and Capitol Hill staff
MMO has proposed to keep the cost of these services flat, with a total rate of $6,738 per month, or $80,852 for the full year. The City of Healdsburg acts as the contract administrator for the partnering cities and receives reimbursement from the partnering cities to offset their proportional cost share. The cost is split based on population and remains the same as the prior year for the partnering cities.
Costs for FY 23-24:
Proposed Costs for FY 24-25:
City Population Cost/City
Healdsburg 11,610 $ 7,057.28
Petaluma 59,760 $ 36,325.82
Cloverdale 8,760 $ 5,324.87
Sonoma 10,950 $ 6,656.09
Rohnert Park 41,930 $ 25,487.64
TOTAL 133,010 $ 80,851.70
Partnering cities have expressed that MMO Partners continues to have the experience, skills, and knowledge of our local area (as well as detailed knowledge of the congressional appropriations and FEMA reimbursement process) necessary to accomplish this task. The $6,738/month rate is
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reasonable for the work being performed, and with all five (5) participating cities sharing in the cost allocated by population, the net cost to the City is expected to be $7,058 for the twelvemonth Agreement, which would expire at the end of June 2025.
ENVIRONMENTAL STEWARDSHIP:
Not applicable.
ALTERNATIVES:
The Council may choose not to approve the resolution and direct staff to find an alternate means to support federal advocacy efforts.
FISCAL IMPACT:
Appropriations for this Professional Services Agreement are included in the proposed Fiscal Year 2024-25 budget in the City Managers Department. The total proposed contract amendment cost of $80,852 will be offset by reimbursements totaling $73,794 for a net impact to the City of $7,058.
ENVIRONMENTAL ANALYSIS:
The Professional Services Agreement (“Agreement”) is not a “project” pursuant to California Environmental Quality Act (“CEQA”) Guidelines 15378(b)(5) because the Agreement for advocacy services is an organizational and administrative activity; therefore, no environmental review is required.
ATTACHMENT(S):
Resolution
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CITY OF HEALDSBURG
RESOLUTION NO. __-2024
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG AUTHORIZING THE CITY MANAGER TO
APPROVE A 12-MONTH EXTENSION TO A PROFESSIONAL
SERVICES AGREEMENT FOR FEDERAL ADVOCACY
SERVICES WITH MMO PARTNERS, INCREASING THE
NOT-TO-EXCEED AMOUNT BY $80,852 TO $445,184,
OFFSET BY AN ADDITIONAL $73,794 IN
REIMBURSEMENT REVENUE FROM FOUR (4) OTHER
PARTICIPATING SONOMA COUNTY CITIES
WHEREAS, the COVID-19 crisis and the related Shelter-in-Place (SIP) Order(s) have significantly impacted the community, its businesses, and city government; and WHEREAS, the City has worked with five other similarly situated cities in Sonoma County (Cloverdale, Petaluma, Rohnert Park, Sebastopol and Sonoma) to align our interests in retaining Federal advocacy services to secure better COVID-related Federal assistance to offset lost revenue due to COVID-19 and the SIP Order(s); and
WHEREAS, in April 2020 the cities entered into a cost-shared contract with MMO (Murray Montgomery O’Donnell) Partners, a Washington DC-based advocacy firm with knowledge of our region, the importance of tourism to our revenues, and our collective interests; and
WHEREAS, that agreement was extended, with City Council approval in December 2020, June 2021, June of 2022, and June of 2023 based on the shared desire of all participating Cities to continue to receive the services being provided by MMO Partners; and WHEREAS, MMO Partners has successful provided federal advocacy services to partnering cities during the term of the current agreement; and WHEREAS, MMO Partners has represented that that it can perform these advocacy services in accordance with the terms and conditions set forth in the City’s Professional Services Agreement; and
WHEREAS, the City and four other similarly situated cities in Sonoma County (Cloverdale, Petaluma, Rohnert Park, and Sonoma) wish to extend the services for an additional year; and
WHEREAS, the expenses relating to these services during the extension period are anticipated to be offset significantly by per capita-based payments from the five partnering cities, including Healdsburg; and
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Attachment: Resolution (4505 : Professional Services Agreement Extension with MMO Partners of Washington DC) Resolution No. xx-2024
WHEREAS, the Professional Services Agreement is not a “project” pursuant to California Environmental Quality Act (“CEQA”) Guidelines 15378(b)(5) because the Professional Services Agreement for federal advocacy services is an organizational and administrative activity that will not result in direct or indirect physical changes in the environment. Therefore, no further environmental review is required.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:
1. Approves an extension of an existing professional services agreement for federal advocacy services relating to the COVID-19 crisis and the Shelter-in-Place Order(s) with MMO Partners and five participating Cities (Healdsburg, Cloverdale, Petaluma, Rohnert Park, and Sonoma).
2. Authorizes the City Manager to execute a one-year extension to the existing agreement with a not-to-exceed amount of $445,184 ($60,000 from the initial agreement, $52,500 for the first extension, $85,490. for the second extension, $85,490 for the third extension, $80,852 for the fourth extension, and $80,852 for this extension).
3. Directs the City Manager to continue the existing administrative billing method to provide for a per capita-based reimbursement of the Agreement’s cost by any participating city.
4. Finds that federal advocacy services are exempt under CEQA section 15378(b)(5).
PASSED, APPROVED AND ADOPTED, by the City Council of the City of Healdsburg, this 17th day of June 2024 by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ABSTAINING: Councilmembers:
SO ORDERED: ATTEST:
_________________________________ ____________________________________ David Hagele, Mayor Raina Allan, City Clerk
6.D.a
Packet Pg. 100 Attachment: Resolution (4505 : Professional Services Agreement Extension with MMO Partners of Washington DC)
CITY OF HEALDSBURG
CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: Professional Services Agreement with Reach for Home for Street Outreach and Prevention Services
PREPARED BY: Griselda Villarreal, Administrative Analyst II STRATEGIC INITIATIVE(S):
Expand Affordable Housing Opportunities
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):
Adopt a Resolution approving a Professional Services Agreement with Reach for Home for services to the homeless and those at risk of becoming homeless and authorizing the City Manager to execute said agreement.
COMMUNITY ENGAGEMENT/OUTREACH:
This item will be considered at a public meeting, providing time for public comment on the proposed Professional Services Agreement (PSA). Additionally, City housing staff and Reach for Home actively engage with the community on programs and services for those experiencing homelessness. This is done through periodic updates and community outreach.
BACKGROUND:
As part of an ongoing effort to address housing challenges within our community, the City has partnered with Reach for Home to provide programs and services aimed at addressing homelessness and delivering essential support to prevent individuals and families from becoming homeless.
Timeline of Agreements with Reach for Home
December 2009: The Redevelopment Agency of the City of Healdsburg entered into a lease agreement with Reach for Home (formerly North Sonoma County Services) to provide affordable transitional housing at 306 and 308 East Street (Victory Apartments and Studios).
This partnership has enabled the City to offer affordable transitional housing to families working towards stability, economic independence, and permanent housing placements.
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October 2018: The City expanded its partnership with Reach for Home by entering into a Professional Services Agreement to include prevention services, housing navigation, and street outreach.
June 2021: The City authorized a one-year agreement with Reach for Home to continue services at the Victory Apartments and Studios, including case management, street outreach, and relocation assistance. This agreement expired on June 30, 2022.
November 2022: The City authorized an agreement with Reach for Home, expanding services to include the newly constructed on-site Navigation Center at the Victory Studios and Apartments.
The services provided under this agreement include case management, temporary emergency shelter, and relocation assistance. This agreement is set to expire on June 30, 2024.
DISCUSSION/ANALYSIS:
The existing Professional Services Agreement (PSA) with Reach for Home expires on June 30, 2024. Staff recommends that the City Council approve a new two-year PSA with Reach for Home to continue these services. The agreement would not exceed $150,000 per year, for a total of $300,000 over the two-year period.
This item specifically concerns the PSA with Reach for Home for street outreach and prevention services. This agreement is separate from the Lease, Funding, and Service Agreement with Reach for Home for the operation of the L&M Village. However, combined, they form a comprehensive and complementary program that addresses homelessness through prevention, shelter, and permanent housing with supportive services and programs. This integrated strategy has been key to the City’s recent success in reducing homelessness by over 60%.
Reach for Home has provided the attached Scope of Work (Exhibit A), outlining a one-year plan with an annual budget not to exceed $150,000. This proposed agreement aims to sustain the existing services offered by Reach for Home. Maintaining prevention efforts becomes even more crucial as the City reduces homelessness and aims to achieve functional zero homelessness, meaning homelessness is rare, brief, and non-recurring.
Accomplishments
Under previous agreements, Reach for Home has made significant strides in reducing homelessness. They have permanently housed a total of 71 individuals experiencing homelessness and partnered with Burbank Housing to reserve five units at the 155 Dry Creek Commons project. Additionally, they have provided HIV testing in collaboration with Face to Face, operated the Victory Apartments and Studios through the Continuum of Care’s Coordinated Entry System, and offered one-on-one case management, counseling services, and addiction recovery group services. These efforts have been pivotal in reducing homelessness in our community.
ENVIRONMENTAL STEWARDSHIP:
There is no direct correlation to environmental stewardship associated with this item.
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ALTERNATIVES:
The City Council may choose to direct staff to modify the terms of the agreement.
FISCAL IMPACT:
The City Council adopted a two-year budget on June 6, 2024, which includes funding for this Professional Services Agreement with Reach for Home in the fiscal year 2024-2025 and 2025- 2026 Affordable Housing - Measure S Fund budget.
ENVIRONMENTAL ANALYSIS:
Pursuant to Title 14, the California Code of Regulations, Section 15302(c) 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
Exhibit A - Scope of Work
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CITY OF HEALDSBURG
RESOLUTION NO.___2024
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG APPROVING A PROFESSIONAL SERVICES
AGREEMENT WITH REACH FOR HOME FOR SERVICES TO
INDIVIDUALS EXPERIENCING HOMELESSNESS AND
THOSE AT RISK OF BECOMING HOMELESS, AND
AUTHORIZING THE CITY MANAGER TO EXECUTE SAID
AGREEMENT
WHEREAS, the City of Healdsburg has expressed an ongoing commitment to providing housing services and assistance to our low-income and homeless residents; and WHEREAS, in December 2009, the Redevelopment Agency of the City of Healdsburg entered into a lease agreement with Reach for Home, formerly North Sonoma County Services to provide affordable transitional housing at 306 and 308 East Street; and WHEREAS, the City is the owner of the dwelling units located at 306 and 308 East Street; and
WHEREAS, affordable transitional housing for families struggling to attain stability, economic independence, and permanent housing placements is deemed critical for Healdsburg; and
WHEREAS, Reach for Home’s housing programs and case-management services offer an effective housing and supportive services solution for families and individuals in our community; and
WHEREAS, the services provided by Reach for Home have provided greater stability for residents in our community at risk and those that are experiencing homelessness, and the City desires to continue these services; and
WHEREAS, funding for the Professional Services Agreement was approved by the City Council in the FY 2024-25 and FY 2025-26 Measure S Affordable Housing Budget; and WHEREAS, pursuant to Title 14, the California Code of Regulations, Section 15302(c) 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.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:
1. Approves a two-year agreement with Reach for Home for services as described in the attached Scope of Work for the not to exceed amount of $150,000 per year; and
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Packet Pg. 104 Attachment: Resolution (4506 : PSA on Street Outreach Services) Resolution No. _ -2024
2. Authorizes the City Manager to execute an Agreement consistent with the Scope of Services, subject to approval by the City Attorney.
PASSED, APPROVED AND ADOPTED, by the City Council of the City of Healdsburg, this 17th day of June 2024, by the following vote:
AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
__________________________________ ____________________________________ David Hagele, Mayor Raina Allan, City Clerk
6.E.a
Packet Pg. 105 Attachment: Resolution (4506 : PSA on Street Outreach Services) Exhibit A
Reach for Home – Scope of Work
Case-Management and Outreach Services
For the not to exceed amount of $150,000 per year of the two-year period ending June 30, 2026, utilizing the Victory Studios, a seven-unit studio apartment complex located at 306 East Street in Healdsburg, the Victory Apartments, a four-unit two-bedroom apartment complex located at 308 East Street in Healdsburg, and the newly constructed Navigation Center located on-site for housing programs including:
1. Case Management Services.
a. Ensure that the programs and clients comply with the rules as specified in Federal, State, and County housing programs and assist them in becoming self-reliant and able to move into independent housing. b. Ensure the establishment of necessary controls to qualify and administer government funding. c. Use the full spectrum of the county’s social services resources to serve the family’s needs, striving for the goal for each family to gain the skills needed to be stable, independent, and productive members of the community following graduation into permanent housing. d. Work in partnership with other agencies, churches, and businesses in the area to reduce duplication of services and use best practices to serve the needs of the clients of Reach for Home at the lowest possible cost to the City.
e. Programs offered may include emergency shelter, permanent supportive housing, or rapid rehousing. f. Oversee the management of the Victory Studios and Apartments located at 306 and 308 East Street as outlined in the terms of the Lease Agreement dated December 2009.
2. Temporary emergency shelter services (“TESS”) for homeless residents in the City in response to extreme weather events.
a. Oversee and manage all aspects including weather forecast monitoring, decision-making, identifying and securing a facility location, event commencement and conclusion, tracking and reporting services provided, monitoring and oversight of all activities including but not limited to management of participating organizations, volunteers, outreach teams, and homeless residents as well as documentation, funding, payment of any costs incurred, and reimbursement. b. Coordinate entry for the Healdsburg homeless residents impacted by extreme weather changes. c. Provide information to Sonoma County Coordinated Intake Services. d. Provide and/or coordinate all staffing, food, bedding, facility, and any other required supplies or resources for the duration of time the TESS remains active. e. Provide 24-hour per day staffing for as long as the TESS remains active. f. Coordinate the transportation of affected homeless residents to the TESS.
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Packet Pg. 106 Attachment: Exhibit A - Scope of Work (4506 : PSA on Street Outreach Services) g. Notify the City Manager and/or his/her designee, as well as the Chief of Police when the TESS is activated and deactivated.
h. If appropriate, notify the media and coordinate with the City on any press release. i. Specific costs that may be reimbursed under this scope of work include staffing costs, operating expenses (e.g. gas, food, facility fees, cleaning expenses, supplies, garbage removal, and utilities) related to the TESS, and other costs as approved by the City Manager and/or his/her designee.
3. Relocation Assistance and Services.
a. Provide relocation assistance and services for Healdsburg families impacted by rent increases and/or construction.
4. Referrals and Coordination of Services.
a. Provide referrals to other services as necessary and coordinate services and delivery of services with a “warm hand-off” to the appropriate level of care.
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Packet Pg. 107 Attachment: Exhibit A - Scope of Work (4506 : PSA on Street Outreach Services)
CITY OF HEALDSBURG
CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: Agreement with Development Group, Inc. for Cisco Security Software Enterprise Agreement
PREPARED BY: Adam McKenna, IT Manager
STRATEGIC INITIATIVE(S):
Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):
Adopt a Resolution authorizing the City Manager to execute a purchase agreement with Development Group, Inc. in the amount of $424,815.04 for a Cisco Enterprise Agreement bundling Security Software for a 5-year term.
COMMUNITY ENGAGEMENT/OUTREACH:
Not applicable.
BACKGROUND:
The City manages, maintains, and safeguards many technology systems which support City operations. An area of increased focus for City staff is cyber security. Over the past 5 years, an increasing number of local government entities have been impacted by network breaches, phishing attacks, and ransomware. Recent Bay Area cities’ cyber-attacks have shut down these entities for as long as 9 months with remediation costs reaching millions of dollars. As these cyber attacks have increased, the City has enhanced its cyber security posture to minimize the potential of breaches and threats. Today, the City uses a best practice “defense-in-depth” cyber security strategy to protect the City and meet continuously increasing cyber liability insurance requirements. This strategy layers over 17 security tools from multiple vendors ranging from network security, endpoint (computer), and user identity protection to cloud security, phishing, and cyber-security staff training tools. Cisco, which manufactures network equipment used throughout the City provides 10 of these 17 security tools and services. As the portfolio of Cisco security products has increased to meet the growing needs of the City, the City has negotiated a bundled enterprise licensing agreement at significant savings.
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DISCUSSION/ANALYSIS:
The proposed agreement will allow the City to purchase and renew licensing for 10 critical security software tools, usually purchased annually, at a total cost of approximately $220,000 per year. After negotiating with Cisco and meeting certain usage thresholds, the total cost for all 10 tools for 5 years is $424,815.04. The 5-year agreement bundle would save the city close to $675,400 and would be effective after July 1, 2024.
The City will receive the following tools across 5 key security areas through this agreement.
Network Security:
• Cisco Firewall Threat Defense
• Defense Orchestrator
• Identity Services Engine (ISE)
• Cisco XDR Extended Managed Threat
Monitoring
Cloud Security:
• Umbrella DNS Security
• CloudLock for Microsoft O365
Device Security:
• Secure Client (VPN and Client Mgr)
• Secure Endpoint (Endpoint Detection
and Response)
User Security:
• Duo Multi-Factor Security
Analytics:
• Secure Malware and Network
Each of these tools, when working together and layered appropriately provides a strong shield around the City and minimizes the risk of a successful cyber-attack. These tools paired with staff training and awareness exercises, security policy, disaster recovery tools, and annual penetration testing and remediation, build the foundation of the City’s security program.
Staff propose to execute an agreement with Development Group, Inc. for Cisco security software through the State of California's Participating Addendum (Participating Addendum No. 3-22-09- 1021) through California Multiple Award Schedules (CMAS) Cooperative Purchasing Program Master Agreement, as permitted by Section 3.24.080.8 of the City of Healdsburg Municipal Code. Purchasing the software through the State's Participating Addendum meets all requirements set forth in the City of Healdsburg's Purchasing Policy and Ordinance and all requirements set forth by the State of California in regards to regional, state, and national cooperative purchasing agreements. CMAS has established an approved vendor list following a competitive bid process. This process confirms the City receives the lowest available pricing and meets the competitive bid process requirements.
ENVIRONMENTAL STEWARDSHIP:
Not applicable.
ALTERNATIVES:
The City Council could choose not to authorize the City Manager to sign agreements with Development Group, Inc.; in this case, the City would purchase these security programs on an annual basis at additional cost to the City.
FISCAL IMPACT:
Staff recommends approving the agreement with Development Group, Inc. for 5-years of licensing of Cisco Security Software in the amount of $424,815.04. The proposed contract would
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be effective after July 1st, 2024 and appropriations were included in the approved Fiscal Year 2024-25 Adopted Budget for the information Services Fund. The entire 5-year contract would be paid up front with the entire one-time cost incurred in Fiscal Year 2024-25.
ENVIRONMENTAL ANALYSIS:
Pursuant to Section 15378(b)(5) of the State 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; and is, therefore, not a project for purposes of CEQA.
ATTACHMENT(S):
Resolution
Attachment A - Development Group Inc Proposal
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CITY OF HEALDSBURG
RESOLUTION XX - 2024
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG AUTHORIZING THE CITY MANAGER TO
EXECUTE A PURCHASE AGREEMENT WITH
DEVELOPMENT GROUP, INC. IN THE AMOUNT OF
$424,815.04 FOR A CISCO ENTERPRISE AGREEMENT
BUNDLING SECURITY SOFTWARE FOR A 5-YEAR TERM.
WHEREAS, the City manages, maintains, and safeguards many technology systems that assist City staff with their day-to-day duties; and
WHEREAS, an area of increased focus for City staff is cyber security; and WHEREAS, over the past 5 years, an escalating number of local government entities have been impacted by network breaches, phishing attacks, and ransomware; and WHEREAS, recent bay area cities’ cyber-attacks have shut down these entities for as long as 9 months with remediation costs reaching millions of dollars; and WHEREAS, as these cyber attacks have increased, the City has escalated its cyber security posture to minimize the potential of breaches and threats; and WHEREAS, the City uses a best practice “defense-in-depth” cyber security strategy to protect the City and meet continuously increasing cyber liability insurance requirements; and WHEREAS, Cisco, which manufactures network equipment used throughout the City provides 10 of the 17 security tools and services used in the City; and WHEREAS, as the portfolio of Cisco security products has increased to meet the growing needs of the City, the City was able to negotiate a bundled enterprise licensing agreement at significant savings; and
WHEREAS, this agreement will allow the City to purchase and renew licensing for 10 critical security software tools, usually purchased annually, at a total cost of approximately $220,000 per year; and
WHEREAS, after negotiating with Cisco and meeting certain usage thresholds, the total cost for all 10 tools for 5 years is $424,815.04; and
WHEREAS, the 5-year agreement bundle would save the city close to $675,400 and amounts to less than the cost of 2 years of paying for these tools in individual annual agreements; and
WHEREAS, when working together and layered appropriately, each of these 10 tools provides a strong shield around the City and minimizes the risk of a successful cyber-attack; and
6.F.a
Packet Pg. 111 Attachment: Resolution (4507 : Authorize Agreements with Development Group, Inc.) Resolution No. xx-2024
WHEREAS, these tools along with others, paired with staff training and awareness exercises, security policy, disaster recovery tools, and annual penetration testing and remediation, build the foundation of the City’s security program; and WHEREAS, Staff intends to execute an agreement with Development Group, Inc. for Cisco security software through the State of California's Participating Addendum (Participating Addendum No. 3-22-09-1021) through California Multiple Award Schedules (CMAS) Cooperative Purchasing Program Master Agreement, as permitted by Section 3.24.080.8 of the City of Healdsburg Municipal Code; and
WHEREAS, staff recommends approving the agreement with Development Group, Inc. for 5-years of licensing of Cisco Security Software in the amount of $424,815.04 effective after July 1st, 2024: and
WHEREAS, the Fiscal Year 2024-25 Adopted Budget includes sufficient appropriations to support the entire one-time payment; and
WHEREAS, 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; and is, therefore, not a project for purposes of CEQA.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby authorizes the City Manager to execute a purchase agreement with Development Group, Inc. in the amount of $424,815.04 for a Cisco Enterprise Agreement bundling Security Software for a 5-year term.
PASSED, APPROVED, and ADOPTED by the City Council of the City of Healdsburg, this 4th day of March 2024, by the following vote:
AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
___________________________________ ____________________________________ David Hagele, Mayor Raina Allan, City Clerk
6.F.a
Packet Pg. 112 Attachment: Resolution (4507 : Authorize Agreements with Development Group, Inc.) Company:
CITY OF HEALDSBURGRequested By:Adam McKennaInformation Systems ManagerDescription:Cisco Security EA with XDR Premier (updated)- 60-month Proposal #32012
Bill To:CITY OF HEALDSBURG401 GROVE STHEALDSBURG, CA 95448-4723 Ship To:CITY OF HEALDSBURG238 Center StHealdsburg, CA 95448-4402 Sold To:CITY OF HEALDSBURG401 GROVE STHEALDSBURG, CA 95448-4723 Created: 6/4/2024Expires: 7/4/2024Version: 1
Account Manager: joravezSystems Engineer: estoxen
Terms & Conditions:This proposal is offered according to the termsand conditions of one or more CMAS schedules Product & Manufacturer Maintenance
Line No Qty Product Unit Price Ext'd Price Tax
1.0 Cisco EA 3.0 BUNDLE
2 1 EA3-M Cisco EA 3.0 BUNDLE 0.00 0.003 1 E3-SEC-SFW Security EA 3.0 Cisco Secure Firewall 0.00 0.004 2 E3S-SFW-FPR2130T Security EA 3.0 FPR2130 Threat Defense Threat, Malware,URL 23,262.67 46,525.345 1 SVS-E3S-SFW-B Basic Software Support for Cisco Secure Firewall 0.00 0.006 1 E3-SEC-UMBDNSA Security EA 3.0 Umbrella DNS Advantage 0.00 0.007 250 E3S-UMB-DNSA Security EA 3.0 Umbrella DNS Advantage 92.10 23,025.008 1 E3S-UDNSA-INVC Security EA 3.0 Umbrella Additional Console Users 24,709.50 24,709.509 1 E3-UMBDNSA-SVS1 Cisco Services Portfolio: Umbrella DNS Advantage T1 0.00 0.00 10 1 E3-CX-UMBA-T1SSA SVCS Portfolio T1 Umbrella DNS ADV SW Solution Support - CD 11,249.83 11,249.8311 1 E3-CX-EAMSC SVCS Portfolio EA Management Service Cisco 0.00 0.0012 1 E3-SEC-DUO-PRE Cisco EA 3.0 - Duo Premier edition (formerly Beyond) 0.00 0.00 E3S-DUO-PRE
6.F.b
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Attachment: Attachment A - Development Group Inc Proposal (4507 : Authorize Agreements with 13 250 Security EA3.0-Duo Premier edition (formerly Beyond) 376.38 94,095.00 14 1 SVS-E3S-DUO-B Basic Software Support for Duo 0.00 0.0015 1 E3-SEC-ISE Security EA 3.0 Identity Service Engine 0.00 0.0016 600 E3S-ISE-PRM Security EA 3.0 ISE Premier Subscription 23.42 14,052.0017 1 SVS-E3S-ISE-B Basic Software Support for ISE 0.00 0.0018 250 E3S-ISE-ADV Security EA 3.0 ISE Advantage Subscription 15.95 3,987.5019 1 E3-SEC-NWCLDA Security EA 3.0 Cisco Secure Network & Cloud Analytics 0.00 0.00
20 500 E3S-NW-EP Security EA 3.0 Stealthwatch Endpoint 28.80 14,400.0021 1 SVS-E3S-NWCLD-B Basic Software Support for Secure Network & Cloud Analytics 0.00 0.00
22 1 E3-SEC-EP-ADV Security EA 3.0 Cisco Secure Endpoint Advantage 0.00 0.0023 210 E3S-EP-ADV Security EA 3.0 AMP Endpoints Advantage 127.91 26,861.1024 1 SVS-E3S-SECEP-B Basic Software Support for Secure Endpoint 0.00 0.0025 1 E3-SEC-CLDLK Security EA 3.0 Cloudlock 0.00 0.0026 200 E3S-CL-PLT1 Security EA 3.0 Cloudlock Sub for 1 App 91.80 18,360.0027 1 E3-CLDK-SVS2 Cisco Services Portfolio: Cloudlock T2 0.00 0.0028 1 E3-CX-CLDK-T2SWE SVCS Portfolio T2 Cloudlock SWSS Enhanced SW Support - Cloud 11,610.00 11,610.0029 1 E3-CX-EAMSC SVCS Portfolio EA Management Service Cisco 0.00 0.0030 1 E3-SEC-CDO Security EA 3.0 Cisco Defense Orchestrator 0.00 0.0031 1 E3S-CDOFPR1010-P Security EA 3.0 Defense Orchestrator for FPR1010 113.00 113.0032 2 E3S-CDOFPR2130-P Security EA 3.0 Defense Orchestrator for FPR2130 3,597.12 7,194.2433 1 SVS-E3S-CDO-B Basic Software Support for CDO 0.00 0.0034 1 E3-SEC-XDR-P Cisco EA 3.0 XDR Premier 0.00 0.0035 210 E3S-XDR-PRE Security EA 3.0 Cisco XDR Premier 600.59 126,123.9036 1 E3-CX-XDRP-T2SC1 SVCS Portfolio T2 XDR Pre SW Enhanced Service 0.00 0.0037 1 E3-SEC-ADDONS Security EA 3.0 Security Add-On Products 0.00 0.0038 450 E3S-AC-APEX Security EA 3.0 AnyConnect Apex License 5.11 2,299.50 T
6.F.b
Packet Pg. 114
Attachment: Attachment A - Development Group Inc Proposal (4507 : Authorize Agreements with 39 1 SVS-E3S-ADDONS-B Basic Software Support for Security Add-Ons 0.00 0.00 Need more time to get important stuff done? Ask us about Subtotal $424,605.91
Handling $2.00
Estimated Sales Tax (9.%) $207.13
Professional Services $0.00
Shipping $0.00
Total $424,815.04
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Packet Pg. 115
Attachment: Attachment A - Development Group Inc Proposal (4507 : Authorize Agreements with Company:
CITY OF HEALDSBURGRequested By:Adam McKennaInformation Systems ManagerDescription:Cisco Security EA with XDR Premier (updated)- 60-month Proposal #32012
Proposal NotesCMAS Contract No.: 3-22-09-1021CMAS Contract Term: through 6/26/2027Base GSA Schedule No.: GS-35F-0511TCalifornia Multiple Award Schedule (CMAS) Contract Number(s)
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Attachment: Attachment A - Development Group Inc Proposal (4507 : Authorize Agreements with Company:
CITY OF HEALDSBURGRequested By:Adam McKennaInformation Systems ManagerDescription:Cisco Security EA with XDR Premier (updated)- 60-month Proposal #32012
About Sales TaxItems sold by Development Group, Inc. ("DGI") and shipped to destinations in California are subject to sales tax.If an item is subject to sales tax in the state to which the order is shipped, tax is generally calculated on the total selling price of each individual item. In accordance with state tax laws, the total selling price of anorder will generally include shipping and handling charges and item-level discounts. The amount of tax charged on your order will depend upon many factors including, but not limited to, the type of item(s)purchased, and the source and destination of the shipment. Factors can change between the time you place an order and the time and invoice is sent, which could affect the calculation of sales taxes. The amountappearing on your proposal as 'Estimated Sales Tax' may differ from the sales taxes ultimately charged.About Product ReturnsConsistent with the terms and conditions of the California Multiple Award Schedules (CMAS) General Provisions for Information Technology, you are required to provide written notice of rejection of productsdelivered or services performed within a reasonable time after receipt of such products or the performance of such services. Such notice of rejection is required to state the respect in which the products do notsubstantially conform to your specifications. If you do not provide such notice of rejection within FIFTEEN (15) days of delivery for purchases of Commercial Hardware or Commercial Software or THIRTY (30) daysof delivery for all other purchases, such products and services will be deemed to have been accepted. Your acceptance will be final and irreversible, except as it relates to latent defects, fraud, or gross mistakesamounting to fraud.Company & Payment Information Mailing AddressDevelopment Group, Inc.PO Box 991484Redding, CA 96099-1484Phone: (530) 229-0071Fax: (530) 248-3415 Office LocationsDevelopment Group, Inc.6704 Lockheed DrRedding, CA 96002 Payment InformationDevelopment Group, Inc.32880 Collections Center DrChicago, IL 60693Federal Tax ID: 26-3740919 Wire Transfer InformationDomestic Wire Transfer (U.S.)Wire Routing Transit Number (RTN): 026009593Bank Name: Bank of AmericaCity, State: Chicago, ILAccount Number: 8188065595Title of Account: DEVELOPMENT GROUP INC ACH InformationACH Transfer (U.S.)Routing Transit Number (RTN): 071000039Bank Name: Bank of AmericaCity, State: Chicago, ILAccount Number: 8188065595Title of Account: DEVELOPMENT GROUP INC Note: All wire transfers must be made in US Dollars
6.F.b
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Attachment: Attachment A - Development Group Inc Proposal (4507 : Authorize Agreements with
CITY OF HEALDSBURG
CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 17, 2024
SUBJECT: Fire Protection Services Agreement with Northern Sonoma County Fire Protection District
PREPARED BY: Jason Boaz, Fire Chief
STRATEGIC INITIATIVE(S):
Provide Effective Governance
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):
Adopt a Resolution approving an agreement with Northern Sonoma County Fire Protection District relating to fire protection services and authorizing the City Manager to execute the agreement.
COMMUNITY ENGAGEMENT/OUTREACH:
Not Applicable.
BACKGROUND:
The City of Healdsburg has been providing contractual fire protection services to Zone FS-Fitch Mountain for over 30 years and Zone FS-Dry Creek Sotoyome for over 20 years under a contract with the County of Sonoma. Last year, these territories were annexed into Northern Sonoma County Fire Protection District (NSCFPD), a fire protection district organized and operating pursuant to the California Fire Protection District Law of 1987. All contracts moving forward will be with NSCFPD.
DISCUSSION/ANALYSIS:
Northern Sonoma County Fire Protection District wishes to continue to contract with the City of Healdsburg to provide fire protection services to these areas. This entails responding to all fire, rescue and medical emergencies and potentially other non-emergency events requiring fire department services, to the areas located within Fitch Mountain and Dry Creek-Sotoyome.
Fitch Mountain includes all unincorporated areas of Fitch Mountain outside of the City of Healdsburg and generated 47 calls for service in 2023. On average, of these calls for service, 30 percent involve hazardous conditions such as fallen trees and PG&E power lines; 30 percent are
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medical emergencies; 30 percent are public service type events including fire alarms and lift assists, and 10 percent involve fires.
Dry Creek-Sotoyome contains 65 square miles of unincorporated Sonoma County areas adjacent to the City of Healdsburg, including lower Dry Creek Valley extending to the Rio Lindo Academy, Westside Road to Sweetwater Springs and the Mill Creek area. The Dry CreekSotoyome zone generated 218 calls for service in 2023. Of these calls, approximately 50 percent involve medical emergencies; 30 percent are public service type events; 15 percent involve hazardous conditions and 5 percent involve fires.
The attached agreement enables Healdsburg to provide an additional year of contractual fire services beginning on July 1, 2024.
ENVIRONMENTAL STEWARDSHIP:
Not Applicable.
ALTERNATIVES:
The Council may choose not to provide contract fire protection services to this area of NSCFPD.
Declining approval of the agreement will eliminate the General Fund revenue source to the City of Healdsburg and diminish the level of fire protection services provided to Fitch Mountain and Dry Creek-Sotoyome areas of Northern Sonoma County Fire Protection District.
FISCAL IMPACT:
The proposed contract includes the Northern Sonoma County Fire Protection District paying the City of Healdsburg a flat fee of $200,000 for services in Fiscal Year 2024-25. The fee will be paid in two equal installments due by November 30th and April 30th respectively. The revenue from the contract was included in the Fiscal Year 2024-25 budget. There are no changes to the fee or services provided from the prior year agreement. Staff believes that the revenue received from the contract will be sufficient to cover the costs of providing the contracted services.
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; and therefore, is not a project for purposes of CEQA.
ATTACHMENT(S):
Fire Protection Resolution 2024
Fire Protection Agreement 2024
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CITY OF HEALDSBURG
RESOLUTION NO. -2024
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG APPROVING THE AGREEMENT BETWEEN
NORTHERN SONOMA COUNTY FIRE PROTECTION
DISTRICT AND THE CITY OF HEALDSBURG RELATING TO
FIRE PROTECTION SERVICES
WHEREAS, the City of Healdsburg maintains a fire department capable of providing fire protection services; and
WHEREAS, the County of Sonoma has historically contracted with the City of Healdsburg to provide fire protection services to those areas of local responsibility not located within incorporated cities or fire protection districts; and WHEREAS, the City of Healdsburg has been providing fire protection to the Dry Creek/Sotoyome and Fitch Mountain areas for over 30 years; and WHEREAS, both areas are now part of Northern Sonoma County Fire Protection District (NSCFPD) through a recent annexation; and
WHEREAS, Northern Sonoma County Fire Protection District wishes to continue to contract with the City of Healdsburg to provide fire protection services to areas located within Fitch Mountain and Dry Creek-Sotoyome of their service area; and WHEREAS, the City of Healdsburg has the equipment and personnel and is willing to provide such services; and
WHEREAS, the term of this agreement shall be for one (1) year commencing on July 1, 2024, and expiring at midnight on June 30, 2025, unless terminated sooner, as provided in the agreement; and
WHEREAS, Northern Sonoma County Fire Protection District shall pay to the City of Healdsburg an amount equal to $200,000 for fiscal year 2024-25.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby approves an agreement between Northern Sonoma County Fire Protection District and the City of Healdsburg relating to fire protection services.
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Packet Pg. 120 Attachment: Fire Protection Resolution 2024 (4508 : Fire Protection Services Agreement with Northern Sonoma County Fire Protection District) Resolution No. -2024