CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
Fiduciary. A person or organization that acts on behalf of another person(s) or organization that puts their clients’ interest ahead of their own as they are bound both legally and ethically to act in the best interests of their clients.
Haircut: The margin or difference between the actual market value of a security and the value assessed by the lending side of a transaction (i.e. a repo).
Investment Advisor: A registered SEC or state-registered advisor, w ho provides fiduciary advice on portfolios risk management, and investment policy compliance.” Joint Powers Authority (JPA). An entity created by two or more public agencies that share a common goal in order to jointly exercis e powers common to all members through a joint powers agreement or contract.
Leverage. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.
Liquidity: The speed and ease with which an asset can be converted to cash.
Local Agency Investment Fund (LAIF). A voluntary investment fund managed by the California State Treasurer’s Office open to government entities and certain non -profit organizations in California.
Local Government I nvestment Pool. Investment pools including the Local Agency Investment Fund (LAIF), county pools, joint powers authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.
Make Whole Call. A type of call pr ovision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or “made whole.”
Margin: The difference between the market value of a security and the loan a broker makes using that security as collateral.
Market risk. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.
Market value. The price at which a security can be traded.
Marking to market. The process of posting current market values for securities in a portfolio.
Maturity. The final date upon which the principal of a security becomes due and payable .
The investment’s term or remaining maturity is measured from the settlement date to final maturity.
Medium term notes . Unsecured, investment -grade senior debt securities of major corporations which are sold in relatively small amounts either on a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.
Modified duration. The percent change in price for a 100 basis point change in yields.
Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.
Money market. The market in which short term debt instruments (T -bills, discount notes,
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
commercial paper and banker’s acceptances) are issued and traded.
Mortgage pass-through securities. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.
Municipal Securities. Securities issued by state and local agencies to finance capital and operating expenses.
Mutual fund. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most larg e, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.
Nationally Recognized Statistical Rating Organization (NRSRO). A credit rating agency the Uni ted States Securities and Exchange Commission uses for regulatory purposes.
Credit rating agencies provide assessments of an investment’s risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody’s.
Placement Service Deposits. A private service that allows local agencies to invest in FDIC- insured deposits with one or more banks, savings and loans, and credit unions located in the United Sta tes. IntraFi (formerly known as CDARS) is an example of an entity that provides this service.
Premium. The difference between the par value of a bond and the cost of the bond, when the cost is above par.
Prepayment speed. A measure of how quickly principal is repaid to investors in mortgage securities.
Prepayment window. The time period over which principal repayments will be received on mortgage securities at a specified prepayment speed.
Primary dealer. A financial institution (1) that is a trading counte rparty with the Federal Reserve in its execution of market operations to carry out US monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the US Government securities market.
Prudent person (man) r ule. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.” Realized yield. The change in value of the portfolio due to interest received and interest earned and realized gains and losses. It does not give effect to changes in market value on securities, which have not been sold from the portfolio.
Regional dealer. A financial intermediary that buys and sells securities for the benefit of its customers without maintaining substantial inventories of securities, and that is not a primary dealer.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
Repurchase agreement (RP, Repo). Short term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.
Safekeeping. A service to bank customers whereby securities are held by the bank in the customer’s name.
Short Term. Less than one (1) years’ time.
Structured note. Notes issued by Government Sponsored Enterprises (FHLB, FNMA, etc.) and Corporations, which 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.
Supranational. A Supranational is a multi -national organization whereby member sta tes transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.
Third Party Custodian. An independent, third-party custodial safekeeping provider that has a fiduciary responsibility fo r safekeeping their client’s assets to minimize the risk of a fraudulent transaction.
Total rate of return. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.
US Treasury obligations. Securities issued by the US Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk, and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.
Treasury bills. All securities issued with initial maturities of one year or less are issued as discounted instruments, and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.
Treasury notes. All securities issued with initial maturities of two to ten years are called Treasury notes, and pay interest semi-annually.
Treasury bonds. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.
Value. Principal plus accrued interest.
Volatility. The rate at which security prices change with changes in general economic conditions or the general level of interest rates.
Yield to Maturity. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
I. INTRODUCTION
The City of National City’s investment program will conform to federal, state, and other legal requirements, including California Government Code Sections 16429.1-16429.4, 53600- 53609, and 53630-53686. The following investment policy addresses the methods, procedures, and practices which must be exercised to ensure effective and judicious fiscal and investment management of the City’s funds. It is the policy of the City to invest public funds in a manner that will provide a market rate of return, given its requirements for preserving principal and meeting the daily cash flow demands of the City. All investments will comply with this Investment Policy and governing laws.
This Investment Policy replaces any previous Investment Policy or Investment Procedures of the City.
II. SCOPE
This Investment Policy applies to all the City’s financial assets and investment activities
Funds:
General Fund
Special Revenue Funds
Capital Project Funds
Enterprise Funds
Trust and Agency Funds
Any new fund created by the legislative body, unless specifically exempted
However, proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; Such proceeds are invested in accordance with permitted investment provisions of their specific bond indentures.
CalPERS, OPEB trusts, and the investment of employees’ deferred compensation funds invested pursuant to Government Code Section 53609.
Pooling of Funds: Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration.
Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
III. GENERAL OBJECTIVES
The o verriding objectives of the investment program are to preserve principal, provide sufficient liquidity, and manage investment risks.
1. Safety: Safety of principal is the foremost objective of the investment program.
Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk.
2. Liquidity: The investment portfolio will remain sufficiently liquid to meet all operating requirements
3. Return: The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.
IV. PRUDENCE, INDEMNIFICATION, AND ETHICS
A. Prudent Investor Standard: Management of the City’s investments is governed by the Prudent Investor Standard as set forth in California Government Code Section 53600.3:
“…all governing bodies of local agencies or persons autho rized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a pru dent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City. Within the limitations of this secti on and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
B. Indemnification: The Director of Finance or City Manager designee hereinafter designated as Financial Services Officer and other authorized persons responsible for managing City funds, acting in accordance with written procedures and the Investment Policy and exercising due diligence, will be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported within 30 days and appropriate action is taken to control adverse developments.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
C. Ethics and Conflicts of Interest: Officers and employees involved in the investment process will refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
Ethics and Conflicts of Interest: In addition to state and local statutes relating to conflicts of interest, all persons involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impart ial investment decisions. Employees and investment officers, including investment advisors, are required to file annual disclosure statements as required for “public officials who manage public investments” [as defined and required by the Political Reform Act and related regulations, including Government Code Sections 81000, et seq., and the rules, regulations and guidelines promulgated by California’s Fair Political Practices Commission (FPPC)].
V. DELEGATION OF AUTHORITY
A. Authority to manage the City’s investment program is derived from California Government Code Section 53600 et seq. The City Council is responsible for the City’s cash management, including the administration of this Investment Policy. Management responsibility for the cash management of City funds is hereby delegated to the Director of Finance and/or Financial Services Officer.
The Director of Finance or designee will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate employee.
B. The City may engage the services of one or more external investment managers to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. Such external managers may be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. Such managers must be registered under the Investment Advisers Act of 1940.
VI. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS
A list will be maintained of financial institutions and depositories authorized to provide investment services. In addition, a list will be maintained of approved security broker/dealers selected by conducting a process of due diligence described in the investment procedures manual. These may include “primary” dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1 (uniform net capital rule).
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
A. The City’s Director of Finance or designee will determine which financial institutions are authorized to provide investment services to the City. Institutions eligible to transact investment business with the City include:
1. Institutions licensed by the state as a broker-dealer, as defined in Section 25004 of the Corporations Code, with proof of FINRA certification.
2. Primary government dealers as designated by the Federal Reserve Bank;
3. Nationally or state-chartered banks;
4. The Federal Reserve Bank;
5. Savings association or federal association (as defined in Section 5102 of the Financial Code); and
6. Direct issuers of securities eligible for purchase.
B. Selection of financial institutions and broker/dealers authorized to engage in transactions with the City acting by and through the City Council or its authorized designee will be at the sole discretion of the City.
C. All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) must supply the Director of Finance or designee with a statement certifying that the institution has reviewed California Government Code Section 53600 et seq. and the City’s Investment Policy.
D. Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the investment adviser.
E. Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.
VII. DELIVERY, SAFEKEEPING AND CUSTODY, AND COMPETITIVE TRANSACTIONS
A. Delivery-versus-payment: Settlement of all investment transactions will be completed using standard delivery-vs.-payment procedures.
B. Third-party safekeeping: To protect against potential losses by collapse of individual securities dealers, and to enhance access to securities, interest payments and maturity
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
proceeds, all securities owned by the City will be held in safekeeping by a third party bank custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City.
C. Competitive transactions: All investment transactions will be conducted on a competitive basis which can be executed through a bidding process involving at least three separate brokers/financial institutions or through the use of a nationally recognized trading platform.
VIII. AUTHORIZED AND SUITABLE INVESTMENTS
All investments will be made in accordance with California Government Code Section 53600 et seq. and as described within this Investment Policy. Permitted investments under this policy will include:
1. Municipal Bonds. These include bonds of the City, the State of California, any other municipality, within the state of California. Bonds of the other 49 states that are payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states. The bonds will be registered in the name of the City or held under a custodial agreement at a bank.
a. Are rated in the category of “A” or better by at least two nationally recognized statistical rating organizations; and
b. No more than 5% per issuer.
c. No more than 30% of the total portfolio may be invested in municipal bonds.
2. US Treasury and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City may invest in US Treasuries.
3. Federal Agency or Uni ted States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. No more than 30% of the total portfolio may be invested in any single Agency/GSE issuer.
4. Banker’s acceptances, provided that:
a. They are issued by institutions with short term debt obligations rated “A1” or higher, or the equivalent, by at least two nationally recognized statistical-rating organizations (NRSRO); and have long-term debt obligations which are rated in
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
rating category “A” or higher by at least two nationally recognized statistical rating organizations;
b. The maturity does not exceed 180 days; and
c. No more than 40% of the total portfolio may be invested in banker’s acceptances and no more than 5% per issuer.
5. Federally insured time deposits Per G.C. 53630 et seq. (Non-negotiable certificates of deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
a. The amount per institution is limited to the maximum covered under federal insurance;
b. No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits; and
c. The maturity of such deposits does not exceed 5 years.
6. Collateralized Time Deposits (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
a. No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits.
b. The maximum maturity does not exceed five (5) years.
7. Placement Service Deposits, provided that:
a. No more than 30% of the total portfolio may be invested i n a combination of qualifying placement service deposits. Under a provision sunsetting on January 1, 2031, no more than 50% of the portfolio may be invested in deposits through a placement service, including Certificates of Deposit, if the Agency is a city, district or local agency that does not pool money with other local agencies. b. The full amount of each deposit along with accrued interest must at all times be insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).
c. The maturity of CDARS deposits does not exceed 5 years.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
8. Negotiable certificates of deposit (NCDs), provided that:
a. They are issued by institutions which have long -term obligations w hich are rated “A” or higher by at least two nationally recognized statistical rating organizations; and/or have short term debt obligations rated “A1” or higher, or the equivalent, by at least two nationally recognized statistical rating organizations;
b. The maturity does not exceed 5 years; and
c. No more than 30% of the total portfolio may be invested in NCDs and no more than 5% per issuer.
9. Collateralized Bank Deposits. The City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.
There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.
10. Commercial paper, provided that
a. The maturity does not exceed 397days from the date of purchase;
b. The issuer is a corporation organized and operating in the United States with assets in excess of $500 million;
c. They are issued by institutions whose short-term obligations are in a rating category of “A-1” or higher, or the equivalent, by at least one nationally recognized statistical rating organizations; and if the issuer has other debt obligation, they must be in a rating category “A” or higher by at least one nationally recognized statistical rating organizations; and
d. No more than 25% of the total portfolio is invested in commercial paper and no more than 5% per issuer. Under a provision sunsetting on January 1, 2031, no more than 40% of the portfolio may be invested in Commercial Paper if the Agency’s investment assets under management are greater than $100,000,000.
11. Local Government Investment Pools (LGIP)
a. State of California Local Agency Investment Fund (LAIF), provided that:
i. The City may invest up to the maximum permitted amount in LAIF; and
ii. LAIF’s investments in instruments prohibited by or not specified in the
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
City’s policy do not exclude it from the City’s list of allowable investments, provided that the fund’s reports allow the Director of Finance or Financial Services Officer or designee to adequately judge the risk inherent in LAIF’s portfolio.
b. Shares of Beneficial Interest Issued by a Joint Powers Authority (JPA) , provided that
i. The JPA is organized pursuant to California Government Code Section 6509.7 and invests in the securities and obligations authorized in subdivisions (a) to (r), inclusive.
ii. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the JPA.
iii. The JPA has retained an investment advisor who is registered with the SEC (or exe mpt from registration), has assets under management in excess of $500 million, and has at least five years’ experience investing in instruments authorized by Section 53601, subdivisions (a) to (q).
c. Other Local Government Investment Pools (LGIP)
i. Other LGIPs permitted by the agency (such as San Diego County Investment Pool as defined by California Government Code Section 27000.3).
ii. No more than 20% of the total portfolio may be invested in LGIPs other than LAIF and JPAs.
SAN DIEGO COUNTY TREASURER’S POOLED MONEY FUND. Also known as the San Diego County Investment Pool, the pool is a local government money fund created to invest the assets of the County of San Diego and other public agencies located within the County. The three primary objectives of th e County Pool are to safeguard principal; to meet liquidity needs of Pool participants; and to achieve an investment return on the funds within the guidelines of prudent risk management. Investment in the County Pool is highly liquid and the City may invest with no portfolio percentage limit. See Government Code Section 27133.
12. Corporate medium-term notes (MTNs), provided that:
a. Such notes have a maximum maturity of 5 years;
b. Are 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;
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
c. Are rated “A” category or better by at least one nationally recognized statistical rating organization; and
d. Holdings of medium-term notes may not exceed 30% of the total portfolio and no more than 5% per issuer.
13. Mortgage pass -through securities , asset-backed securities , and collateralized mortgage obligations from issuers not defined in sections 2 and 3 of the Authorized and Suitable Investments section of this policy, provided that such securities:
a. Have a maximum stated final maturity of 5 years.
b. Be rated in a rating category of “AA” or its equivalent or better by a nationally recognized statistical rating organization.
c. Purchase of securities authorized by this subdivision may not exceed 20% of the total portfolio.
14. Money market mutual funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940:
a. Provided that such funds meet either of the following criteria:
1. Attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations; or,
2. Have 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 securi ties and obligations authorized by California Government Code Section 53601 (a through j) and with assets under management in excess of $500 million.
b. Purchase of securities authorized by this subdivision may not exceed 20% of the total portfolio.
14. Supranationals, provided that:
a. Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter -American Development Bank.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
b. The securities are rated in a category of “AA” or higher by a NRSRO.
c. No more than 30% of the total portfolio may be invested in these securities.
d. No more than 10% of the total portfolio may be invested in any single issuer.
e. The maximum maturity does not exceed five (5) years.
IX. PORTFOLIO RISK MANAGEMENT
A. The following are prohibited investment vehicles and practices:
1. State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options.
2. In accordance with California Government Code Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited.
3. Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2031, securities backed by the U.S. Government that could result in a zero - or negative-interest accrual if held to maturity are permitted.
4. Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
5. Purchasing or selling securities on margin is prohibited.
6. The use of reverse repurchases agreements, securities lending or any other form of borrowing or leverage is prohibited.
7. The purchase of foreign currency denominated securities is prohibited.
8. The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.
B. Mitigating credit risk in the portfolio
Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
1. The diversification requirements included in Section IX are designed to mitigate credit risk in the portfolio;
2. No more than 5% of the total portfolio may be invested in securities of any single issuer, except as noted in Section VIII of this Investment Policy;
3. The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to improve the quality, liquidity, or yield of the portfolio in response to market conditions or the City’s risk preferences; and
4. If securities owned by the City are downgraded by either Moody’s or S&P to a level below the quality required by this Investment Policy, it will be the City’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio.
a. If a security is downgraded, the Director of Finance or designee will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors.
b. If a decision is made to retain a downgraded security in the portfolio, its presence in the portfolio will be monitored and reported monthly to the City Council.
C. Mitigating Market Risk in the Portfolio
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer -term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short- term cash needs, and by making longer -term investments only with funds that are not needed for current cash flow purposes. The City further recognizes that certain types of securities, including variable rate securities, securities with principal pay -downs prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
1. The City will maintain a minimum of three months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements;
2. The maximum percent of callable securities (does not include “make whole call” securities as defined in the Glossary) in the portfolio will be 20%;
3. The maximum stated final maturity of individual securities in the portfolio will be
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
five years, except as otherwise stated in this policy; and
4. The duration of the portfolio will at all times be approximately equal to the duration (typically plus or minus 20%) of a Market Benchmark Index selected by the City based on the City’s investment objectives, constraints and risk tolerances. The City’s current Benchmark will be documented in the investment procedures manual.
X. INVESTMENT OBJECTIVES (PERFORMANCE STANDARDS AND EVALUATION)
A. Overall objective: The investment portfolio will be designed with the overall objective of obtaining a total rate of return throughout economic cycles, commensurate with investment risk constraints and cash flow needs.
B. Specific objective: The investment performance objective for the portfolio will be to earn a total rate of return over a market cycle which is approximately equal to the return on the Market Benchmark Index as described in the City’s investment procedures manual.
XI. PROCEDURES AND INTERNAL CONTROLS
A. Procedures: The Director of Finance or designee will establish written investment policy procedures in a separate investment procedures manual to assist investment staff with day-to-day operations of the investment program consistent with this policy. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Director of Finance or designee.
B. Internal Controls: The Director of Finance or designee is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse. The internal control structure will be designed to provide reasonable assurance that these objectives are met. Internal controls will be in the City’s investment procedures manual.
C. Safekeeping and Custody: All City investments shall identify the City of National City as the registered owner, and all interest and principal payments and withdrawals shall indicate the City of National City as the payee. All securities shall be safe kept with the City itself or with a qualified financial institution, contracted by the City as a third party.
All agreements and statements will be subject to review annually by external auditors in conjunction with their audit. In the event that the City has a financial institution hold the securities, a separate custodial agreement shall be required. consistent with the Government Code
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
XII. REPORTING AND REVIEW
A. Monthly reports: The Director of Finance and/or Financial Services Officer must submit a monthly report to the legislative body accounting for transactions made during the reporting period.
B. Quarterly reports: Quarterly investment reports will be submitted by the Director of Finance or designee to the City Council, at an agendized meeting within 45 days of the end of the quarter. Consistent with the requirements contained in California Government Code Section 53646, information in the quarterly investment reports shall include, but not be limited to, the following:
1. Type of investment
2. Name of issuer and/or financial institution
3. Date of purchase
4. Date of maturity
5. Current market value for all securities
6. Rate of interest
7. Purchase price of investment
8. Other data as required by the City
The Director of Finance/Treasurer shall submit a quarterly investment report to the City Council and City Manager following the end of each quarter. This report will include the following elements:
• Type of investment
• Institutional issuer
• Purchase date
• Date of maturity
• Amount of deposit or cost of the investment
• Face value of the investment
• Current market value of securities and source of valuation • Rate of interest
• Interest earnings
• Statement relating the report to its compliance with the Statement of Investment Policy or the manner in which the portfolio is not in compliance • Statement on availability of funds to meet the next six month’s obligations • Monthly and year-to-date budget amounts for interest income • Percentage of portfolio by investment type
• Days to maturity for all investments
• Comparative report on interest yields
• Monthly transactions
• Compare portfolio total return to market benchmark total return
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
In addition, a commentary on capital markets and economic conditions may be included with the report.
C. Annual Policy review: The Investment Policy will be reviewed at least annually within 120 days of the end of the fiscal year and, as necessary, adopted, 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.
This Investment Policy shall be reviewed at least a nnually by the Director of Finance/Designee to ensure its consistency with the overall objective of preservation of principal, liquidity, and return, and its relevance to current law and financial and economic trends.
Each fiscal year, the Finance Director shall provide a copy of the City’s current Investment Policy and Guidelines to the City Council.
By virtue of a resolution of the City Council of the City of National City, the Council shall acknowledge the receipt of the Policy for the respective fiscal year.
Related Policy References
California Government Code Sections: 16429.1 – 16429.4, and 53600 – 53609 and 53630-53686 Investment Company Act of 1940
Investment Advisers Act of 1940
Securities and Exchange Commission Rule #15C3-1
Appendix I attached: “Authorized Personnel”
Appendix II attached: “Glossary of Investment Terms”
Prior Policy Amendments
October 23, 1990 – Established Policy
May 9, 1995 (Resolution No. 95-62) Updated Policy and Inclusion in the Policy Manual and Amend policy adopted October 23, 1990
August 6, 1996 (Resolution No. 96 -130)
August 26, 1997 (Resolution No. 97 -110)
October 6, 1998 (Resolution No. 98 -136)
September 7, 1999 (Resolution No. 99 -130)
October 2, 2001 (Resolution No. 2001-151)
October 1, 2002 (Resolution No. 2002-149)
October 7, 2003 (Resolution No. 2003-139)
June 7, 2005 (Resolution No. 2005-118)
October 4, 2005 (Resolution No. 2005 -215)
August 21, 2007 (Resolution No. 2007-202)
February 19, 2008 (Resolution No. 2008 -37)
February 19, 2008 (Resolution No. 2008-38) CDC
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
January 10, 2012 (Resolution No. 2012 -09)
December 10, 2013 (Resolution No. 2013 -189)
December 16, 2014 (Resolution No. 2014-172)
December 15, 2015 (Resolution No. 2015 -186)
December 6, 2016 (Resolution No. 2016 -189)
October 17, 2017 (Resoluti on No. 2017-203)
November 20, 2018 (Resolution No. 2018 -189)
August 18, 2020 (Resolution No. 2020 -151)
June 21, 2022 (Resolution No. 2022 -107)
August 15, 2023 (Resolution No. 2023 -116)
November 19, 2024 (Resolution No. 2024-135)
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
Appendix I
Authorized Personnel
The following positions are authorized to transact investment business and wire funds for investment purposes on behalf of the City of National City:
City Manager
Assistant City Manager
Financial Services Officer
Director of Finance or designee
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
Appendix II
GLOSSARY OF INVESTMENT TERMS
Agencies. Shorthand market terminology for any obligation issued by a government - sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:
FDIC. The Federal Deposit Insurance Corporation provides insurance backed by the full faith and credit of the US government to certain bank deposits and debt obligations.
FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.
FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.
FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “Freddie Mac” issues discount notes, bonds and mortgage pass-through securities.
FNMA. Like FHLB and Freddie Mac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “Fannie Mae,” issues discount notes, bonds and mortgage pass-through securities.
GNMA. The Government National Mortgage Association, known as “Ginnie Mae,” issues mortgage pass-through securities, which are guaran teed by the full faith and credit of the US Government.
PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.
TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio and Mississippi River valleys. TVA currently issues discount notes and bonds.
Asset-Backed Securities. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.
Banker’s acceptance. A money market instrument created to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.
Benchmark. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.
Broker. A broker brings buyers and sellers to gether for a transaction for which the broker receives a commission. A broker does not sell securities from his own position.
Broker-dealer: Any person engaged in the business of effecting transactions in securities in California for the account of others of for their own account. It includes those regularly issuing or guaranteeing options on securities not of their own issue, while excluding certain agents, issuers, and banks.
Callable. A callable security gives the issuer the option to call it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline since an issuer issues securities, it will likely call its current securities and reissue them at a lower
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
rate of interest. Callable securitie s have reinvestment risk as the investor may receive its principal back when rates are lower than when the investment was initially made.
Certificate of Deposit (CD). A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs may be marketable.
Collateral. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.
Collateralized Mortgage Obligations (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.
Commercial paper. The short-term unsecured debt of corporations.
Cost yield. The annual income from an investment divided by the purchase cost. Because it does not give effect to premiums and discounts which may have been included in the purchase cost, it is an incomplete measure of return.
Coupon. The rate of return at which interest is paid on a bond.
Credit risk. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.
Current yield. The annual income from an investment divided by the current market value.
Since the mathematical calculation relies on the current market value rather than the investor’s cost, current yield is unrelated to the actual return the investor will earn if the security is held to maturity.
Dealer. A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position.
Debenture: A bond secured only be the general credit of the issuer.
Delivery vs. payment (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.
Discount. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par, and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.
Diversification. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.
Duration. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a bond to changes in interest rates. (See modified duration).
Federal funds rate. The rate of in terest charged by banks for short -term loans to other banks. The Federal Reserve Bank through open-market operations establishes it.
Federal Open Market Committee: A committee of the Federal Reserve Board that establishes monetary policy and executes it through temporary and permanent changes to the supply of bank reserves.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
Fiduciary. A person or organization that acts on behalf of another person(s) or organization that puts their clients’ interest ahead of their own as they are bound both legally and ethically to act in the best interests of their clients.
Haircut: The margin or difference between the actual market value of a security and the value assessed by the lending side of a transaction (i.e. a repo).
Investment Advisor: A registered SEC or stat e-registered advisor, who provides fiduciary advice on portfolios risk management, and investment policy compliance.” Joint Powers Authority (JPA). An entity created by two or more public agencies that share a common goal in order to jointly exercise powers common to all members through a joint powers agreement or contract.
Leverage. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.
Liquidity: The speed and ease with which an asset can be converted to cash.
Local Agency Investment Fund (LAIF). A voluntary investment fund managed by the California State Treasurer’s Office open to government entities and certain non -profit organizations in California.
Local Government Inv estment Pool. Investment pools including the Local Agency Investment Fund (LAIF), county pools, joint powers authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.
Make Whole Call. A type of call prov ision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or “made whole.”
Margin: The difference between the market value of a security and the loan a broker makes using that security as collateral.
Market risk. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.
Market value. The price at which a security can be traded.
Marking to market. The process of posting current market values for securities in a portfolio.
Maturity. The final date upon which the principal of a security becomes due and payable .
The investment’s term or remaining maturity is measured from the settlement date to final maturity.
Medium term notes . Unsecured, investment -grade senior debt securities of major corporations which are sold in relatively small amounts either on a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.
Modified duration. The percent change in price for a 100 basis point change in yields.
Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.
Money market. The market in which short term debt instruments (T -bills, discount notes,
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
commercial paper and banker’s acceptances) are issued and traded.
Mortgage pass-through securities. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.
Municipal Securities. Securities issued by state and local agencies to finance capital and operating expenses.
Mutual fund. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.
Nationally Recognized Statistical Rating Organization (NRSRO). A credit rating agency the Unite d States Securities and Exchange Commission uses for regulatory purposes.
Credit rating agencies provide assessments of an investment’s risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody’s.
Placement Service Deposits. A private service that allows local agencies to invest in FDIC- insured deposits with one or more banks, savings and loans, and credit unions located in the United States. IntraFi (formerly known as CDARS) is an example of an entity that provides this service.
Premium. The difference between the par value of a bond and the cost of the bond, when the cost is above par.
Prepayment speed. A measure of how quickly principal is repaid to investors in mortgage securities.
Prepayment window. The time period over which principal repayments will be received on mortgage securities at a specified prepayment speed.
Primary dealer. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out US monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the US Government securities market.
Prudent person (man) rule. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.” Realized yield. The change in value of the portfolio due to interest received and interest earned and realized gains and losses. It does not give effect to changes in market value on securities, which have not been sold from the portfolio.
Regional dealer. A financial intermediary that buys and sells securities for the benefit of its customers without maintaining substantial inventories of securities, and that is not a primary dealer.
CITY COUNCIL POLICY
CITY OF NATIONAL CITY
AMENDED: January 20, 2026
ADOPTED: October 23, 1990
POLICY #203
TITLE: Investments
Repurchase agreement (RP, Repo). Short term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.
Safekeeping. A service to bank customers whereby securities are held by the bank in the customer’s name.
Short Term. Less than one (1) years’ time.
Structured note. Notes issued by Government Sponsored Enterprises (FHLB, FNMA, etc.) and Corporations, which 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.
Supranational. A Supranational is a multi -national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.
Third Party Custodian. An independent, third-party custodial safekeeping provider that has a fiduciary responsibility for safekeeping their client’s assets to minimize the risk of a fraudulent transaction.
Total rate of return. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.
US Treasury obligations. Securities issued by the US Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk, and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.
Treasury bills. All securities issued with initial maturities of one year or less are issued as discounted instruments, and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.
Treasury notes. All securities issued with initial maturities of two to ten years are called Treasury notes, and pay interest semi-annually.
Treasury bonds. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.
Value. Principal plus accrued interest.
Volatility. The rate at which security prices change with changes in genera l economic conditions or the general level of interest rates.
Yield to Maturity. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.
RESOLUTION NO. 2026 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA AMENDING CITY COUNCIL POLICY NO. 203, AND CODIFYING THE ADOPTION OF CITY COUNCIL POLICY NOS. 101, 107, 109, 204, 206, 402, 502, 703, 707, AND 904 THAT WERE APPROVED BY THE CITY COUNCIL ON JANUARY 20, 2026.
WHEREAS, The City of National City (“City”) City Council Policy No. 101 requires an annual review for legal and operational consistency, and that changes to the City Council Policy Manual be updated as required or necessary; ; and
WHEREAS, On January 20, 2026, after having completed the annual review of the City’s City Council Policy Manual, City staff recommended updates to Policy Nos. 101, 107, 109, 121, 203, 204, 206, 402, 502, 703, 707, and 904; and
WHEREAS, On January 20, 2026, the City Council authorized updates to Policy Nos. 101, 107, 109, 204, 206, 402, 502, 703, 707, and 904, but did not adopt an associated resolution; and WHEREAS, On January 20, 2026, the City Council deferred action on Policy Nos. 121 and 203 until such time as City Council ad hoc committees could review them; and WHEREAS, Councilmembers Bush and Yamane have completed a review of City Council Policy No. 203 and are recommending updates as displayed in Exhibits A (redline) and B (clean) of the agenda report . Staff also reviewed and updated City Council Policy No. 203 for legal and operational consistency.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NATI ONAL CITY, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
Section 1: That the City Council hereby authorizes the updates to the following City Council Policies:
101: City Council Policy Manual, Amended January 20, 2026 107: Appointments to Boards, Commissions and Committees, Amended January 20, 2026 109: Reimbursement Expenses Incurred Official Duties, Amended January 20, 2026 203: Investment Policy
204: Donation Acceptance Policy, Amended January 20, 2026 206: Debt Management, Amended January 20, 2026
402: Procedures and Requirements for Development Agmts, Amended January 20, 2026 502: Public Improvements or Professional Service Contract Change Orders, Amended January 20, 2026
703: CFCs – Eliminated, January 20, 2026
707: Alcohol Beverage License Application and Review Process, Amended January 20, 2026 904: Housing Loan Subordination Policy, Amended January 20, 2026
Section 2: That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.
PASSED and ADOPTED this 19th day of May, 2026.
Ron Morrison, Mayor
ATTEST:
Shelley Chapel, MMC, City Clerk
APPROVED AS TO FORM:
Heidi Skinner, Interim City Attorney
AGENDA REPORT
Department: Fire Department
Prepared by: Jeremy Day, Battalion Chief
Meeting Date: Tuesday, May 19, 2026
Approved by: Stephen Manganiello, Acting City Manager
SUBJECT:
Presentation - Public Provider Ground Emergency Medical Transport Program Update
RECOMMENDATION:
Receive and File this Report Regarding an Update on Phase I (Startup Financing & Foundational Agreements) and Phase II (Staffing and Classification Development) of the City’s In -House Emergency Ambulance Transport Program, and Provide Direction as Appropriate.
BOARD/COMMISSION/COMMITTEE PRIOR ACTION:
Not Applicable.
EXPLANATION:
In March 2026, the City Council received an update on the development of a Public Provider Ground Emergency Medical Transport (GEMT) Program and authorized staff to proceed using a phased implementation approach. This approach is intended to ensure continuity of service, manage financial and operational risk, and provide Council oversight at key milestones. Phase I and Phase II represent foundational planning and organizational steps required prior to any vehicle procurement or service activation.
The Fire Department continues Phase I and Phase II planning efforts related to the implementation of an in-house emergency ambulance transport program. Phase I work focuses on foundational planning, including refinement of preliminary startup cost estimates and evaluation of financing approaches such as external funding for eligible hard assets, internal funding options for personnel and operational costs, and available grant opportunities. Phase II planning builds upon this financial framework and includes organizational structure, staffing concepts, and classification development. All activities remain limited to planning and analysis only. No operational activation, hiring actions, or capital procurements are being requested or authorized at this time, and any future implementation steps would return to the City Council for separate consideration.
FINANCIAL STATEMENT:
Not Applicable
RELATED CITY COUNCIL 2020-2025 STRATEGIC PLAN GOAL:
Public Safety
ENVIRONMENTAL REVIEW:
This is not a project under CEQA , and is therefore , not subject to environmental review.
CCR15378; PRC 21065.
PUBLIC NOTIFICATION:
The Agenda Report was posted at least 72 hours before the Regular Meeting date and time, and 24 hours before a Special Meeting in accordance with the Ralph M. Brown Act.
ORDINANCE:
Not Applicable
EXHIBIT:
Exhibit A - Presentation
Public Provider Ground
Emergency Medical Transport
May 19, 2026
1 Page 163 of 174
Phased Implementation
• PHASE 1: STARTUP FINANCING & FOUNDATIONALAGREEMENTS
• PHASE 2: STAFFING AND CLASSIFICATION DEVELOPMENT
• PHASE 3: FLEET AND EQUIPMENT PROCUREMENT
• PHASE 4: BUDGET FINALIZATION AND BILLING DEVELOPMENT
• PHASE 5: TRAINING, SYSTEM TESTING, AND OPERATIONALACTIVATION 2 Page 164 of 174
Phase 1: Startup Financing & Foundational
Agreements
• Identify financing options for startup costs
• Develop repayment strategy tied to revenue
• Initiate agreements for:
• Billing
• Supplies and pharmaceuticals
• Continuity of service
Phase 2: Staffing and Classification Development
• EMS classifications in development with Human Resources • EMT, Paramedic, and Assistant EMS Coordinator classifications being finalized • Scheduled for Civil Service Commission – July 14th
• Will return to City Council for approval and adoption • Meet-and-confer to begin following Council approval
• Recruitment targeted to begin January 2027
Financing Options For Startup Costs
FINANCING OPTIONS
Total startup funding needs are currently estimated in the range of $6.0–$6.5 million. Startup costs are planned to be phased across two fiscal years as follows:
FY27:
• Personnel and operational costs: approximately $850,000 • Hard asset acquisition: approximately $3.0–$3.5 million FY28:
• Personnel and operational costs: approximately $2.5 million 5 Page 167 of 174
External Financing
BANK LOANS:
Staff has engaged with two financial institutions to evaluate borrowing options and repayment structures. Both institutions confirmed that personnel and operational costs are not eligible for external financing, limiting borrowing to hard asset acquisition.
BANK #1:
• Term: Fixed 5 years (prepayment penalty prior to 3 years) • Interest: Prime rate (6.75%) plus up to 2.5%
• Estimated total interest: $1.0M–$1.4M
BANK #2:
• Term: 5 to 20 years
• Interest: 5.3%–6.28%
• Estimated total interest: $500,000–$2.3M
GRANTS:
Staff continues to actively pursue grant opportunities to offset startup costs. 6 Page 168 of 174
Internal Financing
INTERNAL LOAN:
An internal City funding source may be used to support both personnel/operational costs and, if directed, capital costs associated with program startup.
Term: 10 years with prepayment options included
Interest: Aligned with LAIF rate (currently in the range of 4%) Benefit: Provides greater flexibility, lower overall borrowing cost, and increased City control over repayment and cash flow timing
Based on current analysis, an internal financing approach may provide a more cost-effective and administratively efficient solution compared to external borrowing, particularly given limitations on financing personnel and operational costs through traditional lenders.
GRANTS:
Community Development Block Grant (CDBG): $370,000 awarded and available for program equipment costs 7 Page 169 of 174
Funding Scenarios
OPTION 1 – HYBRID FINANCING APPROACH:
Utilize internal funding for personnel and operational costs and external financing for equipment:
FY27: $850,000 internal (operations/personnel)
FY27: approximately $3.0M external loan (equipment)
FY28: approximately $2.5M internal (operations/personnel) CONSIDERATION:
This option introduces additional complexity, higher potential financing costs, and reliance on external lending conditions.
8 Page 170 of 174
Funding Scenarios
OPTION 2 – FULL INTERNAL FINANCING (RECOMMENDED):
Utilize an internal funding source to establish a loan covering all startup costs:
FY27: approximately $3.85M (personnel, operations, and equipment) FY28: approximately $2.5M (personnel and operations)
RATIONALE:
This approach provides the greatest flexibility, simplifies implementation, avoids higher external borrowing costs, and ensures consistent funding across both fiscal years, while maintaining full City control over repayment terms.
9 Page 171 of 174
Conclusion & Council Direction
COUNCIL DIRECTION REQUESTED: FUNDING APPROACH
OPTION 1 – HYBRID FINANCING APPROACH
FY27: $850K internal (personnel/operations) + $3.0M external (equipment) FY28: $2.5M internal (personnel and operations)
Involves greater complexity, higher potential costs, and external constraints OPTION 2 – FULL INTERNAL FINANCING (RECOMMENDED)
FY27: $3.85M (personnel, operations, equipment)
FY28: $2.5M (personnel and operations)
Provides flexibility, lower cost, simplified implementation, and full City control
CITY COUNCIL AGENDA ITEM
REQUEST FORM
The City Council Agenda Item Request Form is for members of the City Council to submit written requests to the City Manager's Office for inclusion of an item on a future City Council Meeting Agenda. At the meeting where the initial written request is heard, discussion should be limited to whether the item should be added to an agenda and a date , not the merit of the item.
A majority vote of the City Council is required for the item to be added to a future City Council Meeting Agenda for action.
Requestor: _Councilmember Jose Rodriguez Date Submitted: 01/13/202 Co-Sponsor (Mayor or Councilmember): Councilmember Ditas Yamane Section 1. Proposal Title: OUR FUTURE IS HOMEOWNERSHIP. Create a Home Ownership sub-committee
Section 2. Justification Statement
D What is the need/problem to be address?
Our city has had an unbalanced residency when it comes to homeownership. Approximately 65% renters and 35% homeowners. We would like to address this issue and balance this equation and come up with a program that Homeownership Matters.
D Who is proposed to do the work? (City staff/department, consultant, etc.) We would like to proposed a Sub-Committee (Rodriguez/Yamane) that will coordinate with staff on processes and/or guidelines to get this program going.
D Why is the timing appropriate now?
NOW is the time to address this painful issue of housing, especially, the opportunity to develop homeownership program for our city.
Section 3. Impact Statement
D Estimated staff time (by department, if applicable)
We would gather informational documents from staff to be able to follow processes and guidelines, understand “switches and controls” in helping builders (private and/or public) to expedite the processes and to realize building units for sale.
D Expected costs or budget implications (consultant fees, legal review, etc.) Policy No. 105 Request as presented to
City Council February 17, 2026
We will come back with a plan, fees, legalities, etc. once we have gathered and study the process and then seek council approval.
D Related/ongoing projects that may be affected
NONE that we are aware of. We will be exploring private/public partnerships.
Section 4. Urgency
D Not urgent
D Urgent - If urgent, check all that apply and explain:
D Potential financial loss
D Legal implications
D Public safety risks
As housing is a challenge, not just in our city but the nation, we would like to address this issue in our capacity as the local government to help our city in providing for housing but most importantly balance the homeownership equation of our city and continue to promote economic development for our city to thrive.
Section 5. Strategic Alignment
D Explain how this proposal aligns with the City's Strategic Plan or Council priorities.
As we all know, we still need to have our strategic plan moving forward, these efforts are aligned with the seven C’s from the old City’s Strategic Plan, most especially the last two C’s Commitment to our Community to provide for homeownership opportunities.
Section 6. Proposal Type
D Significant project (requires staff analysis, legal opinion, or financial evaluation) We will need staff support for information and processes. Our offices will handle most of the leg work to make this happen. These will all be taken up and a feasibility study will be carefully drafted for council approval. If we are not going to do this now then, when? D Minor amendment/operational adjustment (exempt from full analysis) None, at this time.
Section 7. Certification
I certify that this request complies with the requirements of City Council Policy No. 105.
Signature of Requestor: Councilmember Jose Rodriguez Date: 01/13/2026 _ Signature of Co-Sponsor: Councilmember Ditas Yamane Date: 01/13/2026