City Council Chambers
29844 Haun Road
Menifee, CA 92586
Lesa Sobek, District 3
Dean Deines, District 4
AGENDA
Finance Committee
Regular Meeting Agenda
Tuesday, November 7, 2023
2:00 PM Regular Meeting
Travis Hickey, Cheif Financial Officer
Sarah Manwaring, City Clerk
REGULAR MEETING (2:00 PM)
1. CALL TO ORDER
2. ROLL CALL
3. PRESENTATIONS NONE
4. PUBLIC COMMENTS (NONAGENDA ITEMS)
This is the time for members of the public to address the Committee Members about items which are NOT listed on the agenda. The Ralph M. Brown Act limits the Committee’s ability to respon d to comments on nonagendized matters at the time such comments are made. Each speaker will be limited to three minutes on any single item.
5. APPROVAL OF MINUTES
5.1 September 26, 2023
6. DISCUSSION ITEMS
6.1 Annual Financial Audit Process for Fiscal Year 202223 RECOMMENDED ACTION
1. Receive and file presentation of City of Menifee Annual Financial Audit Process Overview Presentation.
6.2 Proposed First Amendment to the CFD 20201 Acquisition, Construction and Funding Agreement
RECOMMENDED ACTION
1. Review the proposed First Amendment to the Acquisition, Construction and Funding Agreement for CFD 20201, which adds park site land acquisition costs to the list of city improvements constructed by or on behalf of the developer that are eligible for reimbursement with bond proceeds; and
2. Recommend the finance team present the First Amendment to the Acquisition, Construction and Funding Agreementto the City Council for consideration.
6.3 Participation in CAMP Program
RECOMMENDED ACTION
Recommend City Council Adopt Resolution Authorizing the City of Menifee to participate in the California Asset Management Program (CAMP).
6.4 Proposed Finance Committee Meeting Dates for 2023
RECOMMENDED ACTION
1. Set the following bimonthly Finance Committee meeting dates for 2023 (2nd Tuesday of the month) at 2:00 p.m.
Tuesday, January 9, 2024 2:00 p.m.
Tuesday, March 12, 2024 2:00 p.m.
Tuesday, May 7, 2024 2:00 p.m.
Tuesday, July 9, 2024 2:00 p.m.
Tuesday, September 10, 2024 2:00 p.m.
Tuesday, November 12, 2024 2:00 p.m.
7. STAFF COMMENTS
8. COMMITTEE MEMBER UPDATES AND COMMENTS
9. FUTURE AGENDA ITEMS
10. ADJOURNMENT
Decorum Policy Notes
The Committee anticipates and encourages public participation at its meetings, both on agenda items and during the public comments period. Please turn your cell phones off, refrain from talking in the audience or outbursts that may be disruptive. We encourage participation and ask for a mutual respect for the proceedings.
Staff Reports
Materials related to an item on this agenda, including those submitted to the Committee after distribution of the agenda packet, are available for public inspection by contacting the City Clerk Department, at (951) 6726777, or by coming into City Hall located at 29844 Haun Road, Menifee, CA, 92586 during normal business hours.
Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact the City Clerk Department at (951) 6726777, or by coming into City Hall located at 29844 Haun Road, Menifee, CA, 92586 during normal business hours. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.
Menifee Finance Committee
November 7, 2023
City Council Chambers
29844 Haun Road
Menifee, CA 92586
Lesa Sobek, District 3
Dean Deines, District 4
AGENDA
Finance Committee
Regular Meeting Agenda
Tuesday, November 7, 2023
2:00 PM Regular Meeting
Travis Hickey, Cheif Financial Officer
Sarah Manwaring, City Clerk
REGULAR MEETING (2:00 PM)
1. CALL TO ORDER
2. ROLL CALL
3. PRESENTATIONS NONE
4. PUBLIC COMMENTS (NONAGENDA ITEMS)
This is the time for members of the public to address the Committee Members about items which are NOT listed on the agenda. The Ralph M. Brown Act limits the Committee’s ability to respon d to comments on nonagendized matters at the time such comments are made. Each speaker will be limited to three minutes on any single item.
5. APPROVAL OF MINUTES
5.1 September 26, 2023
6. DISCUSSION ITEMS
6.1 Annual Financial Audit Process for Fiscal Year 202223 RECOMMENDED ACTION
1. Receive and file presentation of City of Menifee Annual Financial Audit Process Overview Presentation.
6.2 Proposed First Amendment to the CFD 20201 Acquisition, Construction and Funding Agreement
RECOMMENDED ACTION
1. Review the proposed First Amendment to the Acquisition, Construction and Funding Agreement for CFD 20201, which adds park site land acquisition costs to the list of city improvements constructed by or on behalf of the developer that are eligible for reimbursement with bond proceeds; and
2. Recommend the finance team present the First Amendment to the Acquisition, Construction and Funding Agreementto the City Council for consideration.
6.3 Participation in CAMP Program
RECOMMENDED ACTION
Recommend City Council Adopt Resolution Authorizing the City of Menifee to participate in the California Asset Management Program (CAMP).
6.4 Proposed Finance Committee Meeting Dates for 2023
RECOMMENDED ACTION
1. Set the following bimonthly Finance Committee meeting dates for 2023 (2nd Tuesday of the month) at 2:00 p.m.
Tuesday, January 9, 2024 2:00 p.m.
Tuesday, March 12, 2024 2:00 p.m.
Tuesday, May 7, 2024 2:00 p.m.
Tuesday, July 9, 2024 2:00 p.m.
Tuesday, September 10, 2024 2:00 p.m.
Tuesday, November 12, 2024 2:00 p.m.
7. STAFF COMMENTS
8. COMMITTEE MEMBER UPDATES AND COMMENTS
9. FUTURE AGENDA ITEMS
10. ADJOURNMENT
Decorum Policy Notes
The Committee anticipates and encourages public participation at its meetings, both on agenda items and during the public comments period. Please turn your cell phones off, refrain from talking in the audience or outbursts that may be disruptive. We encourage participation and ask for a mutual respect for the proceedings.
Staff Reports
Materials related to an item on this agenda, including those submitted to the Committee after distribution of the agenda packet, are available for public inspection by contacting the City Clerk Department, at (951) 6726777, or by coming into City Hall located at 29844 Haun Road, Menifee, CA, 92586 during normal business hours.
Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact the City Clerk Department at (951) 6726777, or by coming into City Hall located at 29844 Haun Road, Menifee, CA, 92586 during normal business hours. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.
Menifee Finance Committee
November 7, 2023
Menifee Finance Committee
September 26, 2023
City Council Chambers
29844 Haun Road
Menifee, CA 92586
Lesa Sobek, District 3
Dean Deines, District 4 AGENDA
Finance Committee
Regular Meeting Agenda
Tuesday, September 26, 2023
1:30 PM Regular Meeting
Rochelle Clayton, Asst. City Manager
Sarah Manwaring, City Clerk
REGULAR MEETING (1:30 PM)
1. CALL TO ORDER
Chair Deines called the meeting to order at 1:31pm.
2. ROLL CALL
Present were Councilmembers Deines and Sobek
3. PRESENTATIONS NONE
4. PUBLIC COMMENTS (NONAGENDA ITEMS)
There were no public comments.
5. APPROVAL OF MINUTES
5.1 May 11, 2023 Finance Committee Minutes
The minutes were approved unanimously (2-0).
6. DISCUSSION ITEMS
6.1 City of Menifee Investment Portfolio Overview
ACTION
1. Received and filed presentations on City of Menifee’s Investment Portfolio.
Item: 5.1
Item Page Number: 1
Menifee Finance Committee November 7, 2023 Page 3 of 54
Menifee Finance Committee
September 26, 2023
6.2 Annual Investment Policy for Fiscal Year 2023/2024
ACTION
1. Reviewed and provided comments on the Draft Fiscal Year 2023/2024 Investment Policy and recommended submittal to the City Council for approval at a future City Council meeting.
6.3 Proposed Formation of Community Facilities District No. 2023-3, Banner Park II, by Pulte Homes
RECOMMENDED ACTION
1. Reviewed the proposed Community Facilities District No. 2023-3, Banner Park II, by Pulte Homes to finance certain costs of public improvements within the 182- home single-family residential development.
6.4 Proposed Change to Community Facilities District No. 2023-2 Improvement Area 2, Cimarron Ridge by Pulte Homes
RECOMMENDED ACTION
1. Reviewed the changes proposed for Community Facilities District No. 2023-2 Improvement Area 2, Cimarron Ridge by Pulte Homes to amend the financing plan for certain public improvements within the proposed 756-unit residential development and recommended submittal to the City Council for consideration.
7. STAFF COMMENTS
None.
8. COMMITTEE MEMBER UPDATES AND COMMENTS
9. ADJOURNMENT
Chair Deines adjourned the meeting at 2:35pm.
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Item: 5.1
Item Page Number: 2
Menifee Finance Committee November 7, 2023 Page 4 of 54
Menifee Finance Committee
September 26, 2023
y Notes
______________________________________
Sarah Manwaring, MMC
City Clerk
Item: 5.1
Item Page Number: 3
Menifee Finance Committee November 7, 2023 Page 5 of 54
CITY OF MENIFEE
SUBJECT: Annual Financial Audit Process for Fiscal Year 2022-23 MEETING DATE: November 7, 2023
TO: Finance Committee
PREPARED BY: Margarita Cornejo, Deputy Finance Director REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Rebekah Kramer, Acting City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
Receive and file presentation of City of Menifee Annual Financial Audit Process Overview Presentation.
DISCUSSION
The City of Menifee organizes its annual operations into individual fiscal years, defined as the 12- month period from July 1 st to June 30 th of the following year. In preparation for each new year, and as part of its financial planning, the City strategically organizes its upcoming revenue and expenditure plan through the annual budget process and beginning in fiscal year (FY) 2023-24 as a biennial or 2-year budget process. Once the fiscal year begins, the City’s financial management continues under the governance of all applicable local, state, and federal regulations. Further, financial transactions are recorded in conformance with generally accepted accounting principles (GAAP) as set forth by the Governmental Accounting Standards Board (GASB).
Following the close of each fiscal year, the City’s external auditors, currently Rogers, Anderson, Malody & Scott, LLP (RAMS), conduct an audit of the City’s financial records and assist in the compilation of the Annual Comprehensive Financial Report (ACFR). The purpose and value of external financial reporting is standardized financial reporting and accountability. The goal of a financial statement audit is to provide users and the public in general with reasonable assurance from an independent source that the information presented in the agency’s statements is reliable.
Additionally, any entity spending $750,000 or more in any fiscal year of direct or pass-thru federal funds, is subject to the Single Audit. A Single Audit includes an audit of the organization’s financial statements and compliance with Federal award requirements for those programs identified as "major programs". During completion of the main financial audit and/or Single Audit, the external Item: 6.1
Item Page Number: 1
Menifee Finance Committee November 7, 2023 Page 6 of 54
City of Menifee Staff Report
Annual Financial Audit
November 7, 2023
1 8
9 4
auditors, may identify any significant deficiencies (a deficiency or combination of deficiencies in internal controls), material weaknesses (failings in internal controls) and/or findings (significant concern about the agency control over public resources or other issues). The engagement culminates with the auditors issuing an opinion on the overall financial statements. The highest level of opinion an auditor can issue is known as an “unmodified” opinion, indicating their conclusion that the financial statements are presented fairly in all material respects. Additionally, from time-to-time new GASB Statements of Governmental Accounting Standards are issued to reflect new financial reporting standards. The City is responsible for adhering to any existing and new applicable GASB statements as part of its overall financial reporting and management.
The following table provides a summary of the key components, purpose, and timeline of the annual financial audit process.
Table 1: Annual Financial Audit Process Overview
Annual Audit Step
Description
Purpose Tentative Timeline
Interim Audit Process Initiates financial audit process, with onsite/hybrid review of FY22-
23 financial transactions and
processes. Established tentative
audit completion timeline for the
fall.
May/June of ending
fiscal year.
Year End/Financial Audit Following internal close-out
processes, final comprehensive
onsite/hybrid review including trial
balance(s).
October
Single Audit Reviews how well the City managed
federal grants and ensures
applicable rules for dollars
associated with the grant or award
were followed.
October/November
Financial Statements/ACFR
& Single Audit Report
Preparation and review of Financial
Statements.
November/December
Council Receive & File Receive presentation by Finance
Department and external audit team
on Financial Statements of the fiscal
year ended, and financial position
based on completed fiscal year.
January
FY2022-23 Audit Summary:
Audit efforts for FY2022-23 began in the spring of 2023. The external audit team from RAMS met with Finance Department management during the Interim Audit process and provided feedback on the various processes reviewed, as well as set a tentative audit completion timeline for the fall.
GASB 96, Subscription Based Information Technology Arrangements (effective with the FY2022- 23 audit cycle) provides specific guidance on the accounting and financial reporting requirements for subscription-based information technology arrangements (SBITAs) for government end users Item: 6.1
Item Page Number: 2
Menifee Finance Committee November 7, 2023 Page 7 of 54
City of Menifee Staff Report
Annual Financial Audit
November 7, 2023
1 8
9 4
(governments). With a fast-growing community, the City leverages technology, including various technology software to provide municipal services. Accordingly, part of the FY2022-23 reflects the City’s various SBITAs in compliance with the new GASB 96 reporting requirements.
During FY2022-23, including the American Rescue Plan (ARP) expenditures, the City did expend more than $750,000 in federal funds. However, excluding the ARP funds, the total federal funds expenditures were just over $400k. In discussion and confirmation with the external audit group, the City will therefore undergo an ARP specific program review, instead of the full Single Audit process. In the most recent audit year, FY2021-22, the City did complete a Single Audit with no findings.
During the months of November and December, staff will work on the development of the ACFR, including the Financial Statements and accompanying Management Discussion and Analysis (MD&A), Single Audit report, and staff report for the City Council to receive and file in January 2024. As an agency, the City of Menifee continues to prioritize strong financial management and reporting practices, understanding the importance of accountability and transparency to the public. Staff will continue to work on strengthening and streamlining processes, striving to obtain an unmodified opinion on its annual financial audit.
As part of strengthening the financial reporting process, staff asked the auditors to come to the Finance Committee meeting to engage with the Finance Committee members about the audit process. The goal is to open lines of communication directly between the auditors and governing board in a less formal and more interactive way prior to the typical receive and file report presented at the conclusion of the audit.
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
ATTACHMENTS
1. Presentation from Rogers, Anderson, Malody & Scott, LLP Item: 6.1
Item Page Number: 3
Menifee Finance Committee November 7, 2023 Page 8 of 54
City of Menifee
FY22- 23 AUDIT PROCESS PRESENTATION
FOR THE YEAR ENDED JUNE 30, 2023
PRESENTED BY: ROGERS, ANDERSON, MALODY & SCOTT , LLP
NOVEMBER 7, 2023
Item: 6.1
Item Page Number: 4
Menifee Finance Committee November 7, 2023 Page 9 of 54
City of Menifee
Audit objective
◦ Express an opinions on management’s financial
statements
◦ After gathering and evaluating sufficient, appropriate audit evidence, provide:
◦ Reasonable assurance, not absolute, the financial statements are free of material misstatement
◦ Opinions as to whether the financial statements are fairly presented, in all material respects, in accordance with Generally Accepted Accounting Principles
-1-
Item: 6.1
Item Page Number: 5
Menifee Finance Committee November 7, 2023 Page 10 of 54
City of Menifee
Audit standards followed:
◦ Generally Accepted Auditing Standards (GAAS)
◦ Generally Accepted Government Auditing Standards (GAGAS) ◦ Uniform Guidance – Single Audit
-2-
Item: 6.1
Item Page Number: 6
Menifee Finance Committee November 7, 2023 Page 11 of 54
City of Menifee
Responsibilities
◦ Management:
◦ Financial statements
◦ Complete accurate financial records
◦ Comprehensive framework of internal control, including controls to prevent and detect fraud
◦ Governing body:
◦ Fiduciary
◦ Ensure management fulfills obligations for internal control and financial reporting
-3-
Item: 6.1
Item Page Number: 7
Menifee Finance Committee November 7, 2023 Page 12 of 54
City of Menifee
◦ Auditor responsibilities:
◦ Obtain reasonable assurance that the financial statements are free of material misstatement
◦ Examine, on a test basis, evidence supporting amounts and disclosures
◦ Assess accounting principles used, estimates made and evaluate the overall financial statement presentation.
◦ Express opinions on the City’s financial statements
-4-
Item: 6.1
Item Page Number: 8
Menifee Finance Committee November 7, 2023 Page 13 of 54
City of Menifee
◦ Audit process:
◦ Update understanding of the City and review controls over various transaction cycles (inquiries, inspect documents, perform walkthroughs, etc.)
◦ Conduct detailed audit of financial records
◦ Inspect relevant documentation (bank statements, invoices, cash receipts, etc.)
◦ Inquire about various or unusual transactions and events, if any ◦ Confirm cash and investment balances
◦ Perform analytical procedures (looking for significant variances or unusual transaction; comparing to budgeted amounts, etc.) ◦ Use Data Analytics on cash disbursements
◦ Read minutes of board meetings
-5-
Item: 6.1
Item Page Number: 9
Menifee Finance Committee November 7, 2023 Page 14 of 54
City of Menifee
Final opinion over financial statements:
◦ Unmodified (highest level of assurance)
◦ Financial statements are fairly presented in all material respects ◦ Significant accounting policies have been consistently applied ◦ Estimates are reasonable
◦ Disclosures are properly reflected
◦ Other required reporting
◦ GAGAS report on internal control (Yellow Book)
◦ SAS 114 – Communications with those charged with governance ◦ Uniform Guidance (Single Audit)
◦ GANN Limit – Appropriations AUP report
◦ Report on material weaknesses and/or significant deficiencies -6-
Item: 6.1
Item Page Number: 10
Menifee Finance Committee November 7, 2023 Page 15 of 54
City of Menifee
Questions?
-7-
Item: 6.1
Item Page Number: 11
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CITY OF MENIFEE
SUBJECT: Proposed First Amendment to the CFD 2020-1 Acquisition, Construction and Funding Agreement
MEETING DATE: November 7, 2023
TO: Finance Committee
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Margarita Cornejo, Deputy Finance Director APPROVED BY: Travis Hickey, Chief Financial Officer
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Review the proposed First Amendment to the Acquisition, Construction and Funding Agreement for CFD 2020-1, which adds park site land acquisition costs to the list of city improvements constructed by or on behalf of the developer that are eligible for reimbursement with bond proceeds; and
2. Recommend the finance team present the First Amendment to the Acquisition, Construction and Funding Agreement to the City Council for consideration.
DISCUSSION
Lennar Homes of California, Inc. developed a 258-home residential tract southwest of Menifee and Rouse roads. The City Council previously approved the formation of a Community Facilities District (CFD) and authorized the issuance of bonds in an amount not to exceed $18 million.
Two series of bonds were intended to be issued at separate points in the development to pay for city, school and water facilities associated with the project.
The Acquisition, Construction and Funding Agreement signed at the time the CFD was formed envisioned $13 million in bond proceeds, of which nearly $3.8 million would be set aside to finance DIF fees and city facilities including traffic signal improvements, overhead utility undergrounding and dry utilities. Although the developer planned to build a park, at that time it was not believed there would be enough money from bond proceeds to finance the park and, consequently, it was not included as an eligible project in the funding agreement.
The first series of bonds was issued in January 2022, resulting in proceeds of $11.33 million. A second and final bond issuance was targeted for less than a year later. After the second bond issuance, proceeds from both sales totaled roughly $3 million more than originally projected.
Item: 6.2
Item Page Number: 1
Menifee Finance Committee November 7, 2023 Page 17 of 54
City of Menifee Staff Report
Proposed First Amendment to the CFD 2020-1 Acquisition and Construction Funding Agreement
November 7, 2023
1 8
7 7
This was due to strong investor interest in the first bond issuance, which resulted in the receipt of a large premium on the first sale, and favorable market conditions at the time of both sales.
With sufficient money in the city facilities account, bond proceeds could provide enough money to pay the developer for the park site in addition to the other previously approved public facilities.
The park was on the list of city projects eligible for reimbursement on the tax certificate and the bond pro forma the City Council reviewed prior to authorizing the second bond issuance. At that time, there was no request to revise the funding agreement.
In order for the developer to be reimbursed for expenditures on a given project, it must be listed among the eligible projects on the funding agreement. Consequently, at this time, the developer is not entitled to be reimbursed for the project. Lennar has completed all city improvements listed on the funding agreement and is now requesting the agreement be amended to include acquisition of the park site as an eligible project. There is enough money in the city facilities account to handle the request.
Although the city has not previously used CFD bond proceeds to pay a developer for park land, it is an allowable use of the funds. The City’s bond counsel prepared the revised funding agreement and has confirmed that acquisition of park land is an eligible use of the bond proceeds.
Table 1: Timeline of CFD 2020-1
Action Date
Council approves resolutions to establish CFD 2020-1, to incur bonded indebtedness not to exceed $18 million and to certify the election results 8/5/2020 Council adopts ordinance approving CFD 2020-1 8/19/2020 Council authorizes the issuance of Series 2022A bonds 12/15/2021 Council authorizes the issuance of Series 2023A bonds* 9/21/2022 * Attachments for the agenda item mention the park site as an eligible improvement.
FISCAL IMPACT
There is no fiscal impact to the General Fund. Any amount paid to the developer would come from bond proceeds designated to reimburse the developer.
ATTACHMENTS
1. First Amendment to Acquisition Agreement for CFD 2020-1.
2. Original Acquisition, Construction and Funding Agreement for CFD 2020-1.
Item: 6.2
Item Page Number: 2
Menifee Finance Committee November 7, 2023 Page 18 of 54
1 4888-3071-3740v2/200299-0014
COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA)
OF THE CITY OF MENIFEE
FIRST AMENDMENT TO
ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT
THIS FIRST AMENDMENT TO ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT (the “First Amendment”) is made and entered into by and between CITY OF MENIFEE (the “City”), acting for and on behalf of itself and COMMUNITY FACILITIES DISTRICT NO. 2020-1 (MCCALL MESA) OF THE CITY OF MENIFEE (the “Community Facilities District” or “CFD”) and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company (the “Developer”) (each individually a “Party” and collectively the “Parties”) and amends that certain Acquisition, Construction and Funding Agreement entered into as of August 11, 2020 (the “Original Agreement” and together with this First Amendment, the “Agreement”), by and among the Parties.
Capitalized terms used and not defined herein have the meanings ascribed thereto in the Original Agreement.
WHEREAS, the Parties entered into the Original Agreement to provide for, among other matters, the financial and other obligations and responsibilities related to the formation of the Community Facilities District and the Improvements to be financed by the Community Facilities District; and
WHEREAS, Section 24(b) of the Original Agreement provides that the Parties may amend the Original Agreement in writing signed by each Party thereto; and WHEREAS, the Parties desire to amend Exhibit “B” of the Original Agreement with respect to the City Improvements as described herein; and
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:
1. Amendment to Section 9. Section 9 of the Original Agreement is hereby amended to add the following after the fifth paragraph thereof:
“The Acquisition Price of real property constituting land to be funded from proceeds of the Bonds shall be the fair market value thereof as determined by an M.A.I. appraiser mutually acceptable to the Parties. The appraisal shall be based upon the highest and best use of the property as determined by the appraiser.”
2. Amendment to Exhibit “B”. The description of the cost estimates of the City Improvements shown in Exhibit B is hereby amended to include the acquisition of park land as detailed in the attached First Amended Exhibit B.
3. General Provisions.
(a) Incorporation into Original Agreement. Except as expressly amended hereby, all provisions of the Original Agreement remain in full force and effect, and this First Amendment is incorporated as a part of the Original Agreement to comprise the Agreement in effect as of the date hereof.
Item: 6.2
Item Page Number: 3
Menifee Finance Committee November 7, 2023 Page 19 of 54
2 4888-3071-3740v2/200299-0014
(b) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument.
Item: 6.2
Item Page Number: 4
Menifee Finance Committee November 7, 2023 Page 20 of 54
3 4888-3071-3740v2/200299-0014
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written below.
DATED: December 6, 2023
CITY OF MENIFEE, a political subdivision of
the State of California
By:
Armando G. Villa, City Manager
ATTEST:
By:
Sarah Manwaring, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY FOR THE CITY OF
MENIFEE
By:
Jeffrey T. Melching, City Attorney
LENNAR HOMES OF CALIFORNIA, LLC,
A California limited liability company
By:
Name:
Title:
Item: 6.2
Item Page Number: 5
Menifee Finance Committee November 7, 2023 Page 21 of 54
4888-3071-3740v2/200299-0014
FIRST AMENDED EXHIBIT B
DESCRIPTION OF COST ESTIMATES OF THE IMPROVEMENTS(1)
I. CITY FEE FACILITY IMPROVEMENTS.
Estimated Cost of the City Fee Facility Improvements
Description Estimated Cost
Law Enforcement $59,598
Fire Facilities 158,412
Circulation 1,204,860
General Government 263,418
Public Use Facilities 39,732
Parks – Land Acquisition 55,470
Parks – Improvements 170,538
City Projects 390,406
Total City Fees Facility Improvements $ 2,342,434
II. CITY IMPROVEMENTS.
Those facilities constructed by or on behalf of the Developer and needed by City in order to provide services to the Developer Property, including the following:
Traffic Signal Improvements related to Menifee Road /
Heritage Lake Drive and Menifee Road / Rouse Road
(including Turtle Point Dr. signal modifications) *
$777,500
Overhead Utility Undergrounding * $1,046,921
Park Site Land Acquisition Costs ** $2,145,000
Dry Utilities $800,000
* City Improvements bid prior to the effective date of this Agreement pursuant to Section 6.3.
** Represents the appraised land value of the 3.2-acre park site. (1) Amounts are estimates and subject to change. The Acquisition Price will be funded with Bond proceeds.
Item: 6.2
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Menifee Finance Committee November 7, 2023 Page 47 of 54
Item: 6.2
Item Page Number: 32
Menifee Finance Committee November 7, 2023 Page 48 of 54
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Item: 6.2
Item Page Number: 33
Menifee Finance Committee November 7, 2023 Page 49 of 54
CITY OF MENIFEE
SUBJECT: Participation in CAMP Program
MEETING DATE: November 7, 2023
TO: Finance Committee
PREPARED BY: Margarita Cornejo, Deputy Finance Director REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Rebekah Kramer, Acting City Manager
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RECOMMENDED ACTION
Recommend City Council Adopt Resolution Authorizing the City of Menifee to participate in the California Asset Management Program (CAMP).
DISCUSSION
Pursuant to the City of Menifee’s Investment Policy (CC-11), the City’s investment operations are under the direction of the City Treasurer, currently designated as the Chief Financial Officer (CFO). Regular reporting in the form of a Treasurer’s Report is presented via a staff item included in regular City Council meetings throughout the year. Pursuant to the policy, the City of Menifee will foster a prudent and systematic investment program designed to seek the City of Menifee’s objectives of safety, liquidity, and return through a diversified investment portfolio. At present, the City’s investment composition includes investment in the Local Agency Investment Fund (LAIF), and the engagement of Chandler Asset Management and Piper Sandler & Co. for other investments. In keeping with the City’s investment policy objectives, staff identified an opportunity to further diversify the City’s investment portfolio, by participating in the California Asset Management Program (CAMP) and investing a portion of the City’s savings account balance.
At the present, the City holds a portion of its cash within a savings account with the City’s banking institution, U.S. Bank. As of October 31, 2023, there was a balance of just over $35 million in the savings account with an interest rate of 1.15%. Staff recommends consideration be given to moving some of the savings account balance to other investment opportunities while continuing to ensure that the City’s cashflow needs are met.
CAMP is a Joint Powers Authority (JPA) established in 1989 to provide California public agencies with professional investment services. CAMP is directed by a Board of Trustees, which is made up of experienced local government finance directors and treasurers. CAMP offers a range of Item: 6.3
Item Page Number: 1
Menifee Finance Committee November 7, 2023 Page 50 of 54
City of Menifee Staff Report
Participation in CAMP Program
November 7, 2023
1 8
8 8
services to assist Investors/Participants with their investment and arbitrage compliance needs.
PFM Asset Management LLC (PFM) provides day-to-day portfolio management and program administrative services for CAMP. PFM specializes in providing investment management services to public agencies.
CAMP’s Cash Reserve Portfolio (Pool) is a short-term money market portfolio, which seeks to preserve principal, provide daily liquidity, and earn a high level of income. The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p) and under the City’s Investment Policy, participation in CAMP is permitted under Section 14, under Local Government Investment Pools.
Agencies can participate in CAMP as either an “Investor” or an actual JPA “Participant”. As an Investor, the City would sign an Investor Agreement and be a non-voting shareholder, utilizing the pool strictly as an investment vehicle. Alternately, with approval by resolution of the City Council, the City could act as a Participant with voting authority on programmatic changes such as CAMP’s Investment Policy, other governing documents, and the election of Trustees.
Staff recommends that the City of Menifee open a CAMP Pool account as a JPA Participant and transfer a portion of its operating funds from LAIF to CAMP, while leaving its LAIF account open and available. Staff would monitor interest rates for both CAMP and LAIF to take advantage of the differences in their investment cycles. CAMP also offers participants separately managed individual portfolios and investment services for proceeds of tax-exempt bonds compliant with arbitrage regulations services. A sample Council resolution is attached for reference.
If recommended by the Finance Committee, a staff report and resolution for participation in CAMP as a JPA Participant will be prepared for City Council consideration at an upcoming Council meeting.
FISCAL IMPACT
The City’s current savings account offers an interest rate of 1.15%, LAIF’s current rate is 3.534%, and CAMP’s rate is 5.56%. Participation in CAMP provides an opportunity to increase the City’s return on investments. As with all money market funds, including LAIF and CAMP, there are no out-of-pocket expenses as all participation expenses are deducted from the Pool’s yield. The CAMP Pool is a long-established, safe, short-term investment alternative.
ATTACHMENTS
1. Sample Resolution for participation in CAMP Program.
Item: 6.3
Item Page Number: 2
Menifee Finance Committee November 7, 2023 Page 51 of 54
A-1
RESOLUTION NO. ___
RESOLUTION AUTHORIZING CITY OF MENIFEE (THE “PUBLIC AGENCY”)
TO JOIN WITH OTHER PUBLIC AGENCIES
AS A PARTICIPANT OF THE
CALIFORNIA ASSET MANAGEMENT TRUST
AND TO INVEST IN SHARES OF THE TRUST
AND IN INDIVIDUAL PORTFOLIOS
WHEREAS, Section 6509.7 of Title 1, Division 7, Chapter 5 of the Government Code of the State of California (the “Joint Exercise of Powers Act”) provides that, if authorized by their legislative or other governing bodies, two or more public agencies that have the authority to invest funds in their treasuries may, by agreement, jointly exercise that common power;
WHEREAS, under Sections 6500 and 6509.7(b) of the Joint Exercise of Powers Act, a “public agency” includes, but is not limited to, any California county, county board of education, county superintendent of schools, city, public corporation, public district, regional transportation commission, state department or agency, any joint powers authority formed pursuant to the Joint Exercise of Powers Act by public agencies or any nonprofit corporation whose membership is confined to public agencies or public officials; WHEREAS, public agencies that constitute local agencies, as that term is defined in Sections 53600 of Title 5, Division 2, Part 1, Chapter 4, Article 2 of the Government Code of the State of California (the “California Government Code”), are authorized pursuant to Section 53601(p), to invest all money belonging to, or in the custody of, a local agency not required for its immediate need in shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 of the California Government Code that invests in the securities and obligations authorized in subdivisions (a) to (q), inclusive, of Government Code Section 53601;
WHEREAS, the California Asset Management Trust (the “Trust”) was established, pursuant to and in accordance with the Joint Exercise of Powers Act, by a Declaration of Trust, made as of December 15, 1989, as subsequently amended from time to time (the “Declaration of Trust”), as a vehicle for public agencies to jointly exercise their common power to invest the proceeds of debt issues and Public Agency surplus funds; WHEREAS, pursuant to and in accordance with the Joint Exercise of Powers Act, the Public Agency desires to join the other public agencies which are or will be Participants of the Trust by adopting and executing the Declaration of Trust, a form which is on file in the office of the Chief Financial Officer/City Treasurer;
WHEREAS, the Public Agency is a “public agency” as that term is defined in Sections 6500 and 6509.7(b) of the Joint Exercise of Powers Act and a “local agency” as that term is defined in Section 53600 of the California Government Code; Item: 6.3
Item Page Number: 3
Menifee Finance Committee November 7, 2023 Page 52 of 54
A-2
WHEREAS, the Public Agency is otherwise permitted to be a Participant of the Trust and to invest funds in the Trust and in the individual portfolios to be managed by the Investment Adviser to the Trust (“Individual Portfolios”); and WHEREAS, a program guide describing the Trust and the Individual Portfolios (the “Program Guide”) is on file in the office of the Chief Financial Officer/City Treasurer NOW, THEREFORE, BE IT RESOLVED by the City of Menifee of the Public Agency as follows:
Section 1. The Public Agency shall join with other public agencies pursuant to and in accordance with the Joint Exercise of Powers Act by executing the Declaration of Trust and thereby becoming a Participant in the Trust, which Declaration of Trust is hereby approved and adopted. A copy of the Declaration of Trust, which is available in the office of the Chief Financial Officer/City Treasurer shall be filed with the minutes of the meeting at which this Resolution was adopted. The City Council is hereby authorized to execute, and the City Clerk is hereby authorized to attest and deliver, the Declaration of Trust.
Section 2. The Public Agency is hereby authorized to purchase shares in the Trust from time to time with available funds of the Public Agency, and to redeem some or all of those shares from time to time as such funds are needed.
Section 3. The Public Agency is hereby authorized to invest available funds of the Public Agency from time to time in one or more Individual Portfolios managed by the Investment Adviser to the Trust and described in the Program Guide.
Section 4. The appropriate officers, agents and employees of the Public Agency are hereby authorized and directed in the name and on behalf of the Public Agency to take all actions and to make and execute any and all certificates, requisitions, agreements, notices, consents, warrants and other documents, and any changes, amendments, modifications, or waivers thereto which they, or any of them, might deem necessary or appropriate in order to accomplish the purposes of this Resolution.
Section 5. This Resolution shall take effect at the earliest date permitted by law.
By:
Bill Zimmerman
Mayor
ATTEST:
By: _________________________________
Sarah A. Manwaring, City Clerk
Item: 6.3
Item Page Number: 4
Menifee Finance Committee November 7, 2023 Page 53 of 54
A-3
_________________________________
City Clerk
_________________________________
Date
Item: 6.3
Item Page Number: 5
Menifee Finance Committee November 7, 2023 Page 54 of 54