Agenda packet, regular meeting — Orinda City Council, June 17, 2025

MEMBERS OF THE PUBLIC MAY PARTICIPATE IN THIS MEETING

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In Person:

Orinda Library Auditorium
26 Orinda Way
Orinda, CA 94563
(925) 351-6676

CITY COUNCIL
AGENDA
Tuesday, June 17, 2025
7:00 PM - REGULAR MEETING
City Council
Agenda Page 1 06.17.25
How to follow and/or participate in the meeting:

IN PERSON SPEAKER CARDS: If you would like to speak during the public forum or on an item listed on the agenda, you are invited to submit a speaker card to the City Clerk. You will be permitted to speak even if you elect not to submit a speaker card or decline to provide information requested on the card. After the City Council has heard from everyone who submitted speaker cards, anyone electing not to submit a speaker card may form a line at the lectern. Public comment is generally limited to 3 minutes per speaker per agenda item.

WRITTEN COMMENTS: You may also submit a public comment in advance of the meeting by following instructions below:

Deliver to City Hall at 22 Orinda Way or send an e-mail to [email protected] by 3pm on the day of the meeting. Those comments will be forwarded to the City Council. They will also be made a part of the public record and be available to view in the public review binder at Orinda City Hall, 22 Orinda Way. In addition, they will be available electronically by 5pm on the day of the meeting by selecting the date of the meeting in this Box account link:
https://tinyurl.com/Orinda-Public-Comment
REMOTE COMMENTS: Remote Public Comments have been discontinued for the foreseeable future.
7:00 PM - REGULAR SESSION
A. CALL TO ORDER / ROLL CALL
Councilmembers: Darlene Gee, Cara Hoxie, Janet Riley
Vice Mayor Brandyn Iverson, Mayor Latika Malkani
B. PLEDGE OF ALLEGIANCE
City Council
Agenda Page 2 06.17.25
C. ADOPTION OF AGENDA
The City Council may take action on any item listed on the agenda.

D. ITEMS FOR THE GOOD OF THE CITY
D.1. Historical Society Annual Report
E. PUBLIC FORUM
The public forum provides an opportunity for members of the public to speak on any item within the jurisdiction of the City Council that is not on the agenda.

Additionally, a speaker has the option of addressing the Council on an item listed on the agenda, if the speaker will not be present when that agenda item is taken up. When an item is not listed on the agenda, State law prohibits Council discussion or action. Councilmembers may only “briefly respond” to statements made and questions posed. For example, State law allows Councilmembers to ask questions for clarification and provide a reference to staff or other resources for factual information. Additionally, consistent with the “Matters Initiated” rule contained in its Policies and Procedures Manual, the Council may also direct staff to report back and/or place a matter on a future agenda for discussion.

F. CONSENT CALENDAR
F.1. Minutes Approval
Recommendation:

Approve City Council Minutes:

1. May 30, 2025 Special Closed Session

2. June 3, 2025 Regular Meeting
F.2. Annual Investment Policy Review and Delegation of Investment Authority
Recommendation:

Adopt Resolution 36-25 Approving an Investment Policy for Fiscal Year 2025-26 and Delegation of Authority to Make Investments.

F.3. Acceptance of the Library Parcel Tax Independent Review Annual Report for the Period Ending (June 30, 2024)
Recommendation:

Accept the Report for the period ending June 30, 2024.

F.4. Approval of a Memorandum of Understanding (MOU) between the City of Orinda and Teamsters Local No. 856 and Approval of a Revision to the City's Personnel Rules Introductory Period Recommendation:

City Council
Agenda Page 3 06.17.25
Adopt Resolution No. 33-25, Approving the Memorandum of Understanding between the City of Orinda and Teamsters Local No. 856 for the Period of July 1, 2025 - June 30, 2029, and adopt Resolution No. 34-25 Approving an Amendment of the Personnel Rules Introductory Period.

F.5. Revisions to the Unrepresented Employee Manual, Creation of New Job Classification, and Approval of Consolidated Salary Schedule Recommendation:

Take the following actions:
1) Adopt Resolution No. 35-25 Approving Revisions the Unrepresented Employee Manual;
2) Adopt Resolution No. 37-25 Approving the Assistant to the City Manager Classification and Salary Schedule;
3) Adopt Resolution No. 38-25, Approving an Updated Consolidated Salary Schedule; and
4) Approve Budget Change Form #002-26
F.6. Amendments to Annual Contracts with Tripepi Smith, California Consulting and Townsend Public Affairs
Recommendation:

Approve amendments to contracts for Tripepi Smith, California Consulting and Townsend Public Affairs for Fiscal Year 2025-2026.

G. PUBLIC HEARING
G.1. Approval of the Master Fee Schedule
Recommendation:

Adopt Resolution 22-25 Approving the Master Fee Schedule.

H. POLICY MATTERS
I. COUNCILMEMBERS' REPORTS
J. CITY MANAGER'S REPORT
K. MATTERS INITIATED
L. CLOSED SESSION

1. OPEN SESSION IDENTIFICATION of Closed Session Matters

2. PUBLIC COMMENTS of Closed Session Matters

3. CLOSED SESSION

4. REPORT OUT OF CLOSED SESSION
a. CITY ATTORNEY PERFORMANCE EVALUATION
Pursuant to Government Code Section 54957, performance evaluation of City City Council
Agenda Page 4 06.17.25
Attorney Osa Wolff.
b. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6, conference with the City’s designated labor negotiators (two City Councilmembers), City Attorney. c. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(d)(1), conference with Legal Counsel regarding existing litigation: ORINDANS FOR SAFE EMERGENCY EVACUATION v. City of Orinda, Contra Costa County Superior Court Case No.

N23-0579.

M. ADJOURNMENT
The next meeting of the Orinda City Council will be held on Tuesday, July 01, 2025 at 6:00 PM.

Please visit the City’s website at www.cityoforinda.org to view the City Council Calendar.

I, Sheri Marie Smith, City Clerk, declare under penalty of perjury under the laws of the State of California that this special meeting agenda has been posted at least 24 hours in advance at the Orinda City Hall, 22 Orinda Way and the Orinda Library, 26 Orinda Way.

Additional copies are available at the Orinda Library, 26 Orinda Way, and at the City’s website at www.cityoforinda.org. At least 24 hours in advance of the meeting, this agenda was also delivered to and received by each member of the City Council as well as each local newspaper, radio station and television station requesting written notice of special meetings.

I, Sheri Marie Smith, City Clerk, declare under penalty of perjury under the laws of the State of California that this regular meeting agenda has been posted at least 72 hours in advance at the Orinda City Hall, 22 Orinda Way and the Orinda Library, 26 Orinda Way. Additional copies are available at the Orinda Library, 26 Orinda Way, and at the City’s website at www.cityoforinda.org
~ Notices ~
There is a 90-day limit for the filing of a challenge in Court to certain City decisions that require a hearing by law, the receipt of evidence, and the exercise of discretion. The 90-day limit begins on the date the decision is final (Code of Civil Procedure §1094.6). Further, if you file a challenge in Court, you may be limited by California law, including but not limited to Government Code §65009, to those issues raised in connection with the public hearing. The City Council may be requested to reconsider a decision if the request is made prior to the next City Council meeting. For information on the next City Council meeting, please call 925.253.4221 or visit the website at www.cityoforinda.org. Unless otherwise noted, City Council actions include a determination that the California Environmental Quality Act (CEQA) does not apply. ~ Accessible Public Meetings ~
The City of Orinda will provide special assistance for disabled citizens to participate in public meetings upon advance notice. If you need auxiliary hearing aid or sign language assistance at least two (2) working days advanced notice is necessary. Please contact the City Clerk’s Office, 22 Orinda Way, Orinda, Ca 94563 or 925.253.4221 or [email protected] with the following information: name, mailing address, phone number and type of assistance requested.

A Report From Ohs President Alison Burns Regarding The June 2024/ June 2025 Activities Of The Orinda Historical Society (Ohs), Which Operates In A Room (“The Museum”) Leased To Ohs As Part Of The Orinda Library

ORINDA HISTORICAL SOCIETY

MAJOR ACCOMPLISHMENTS
JUNE 2024 - JUNE 2025

OUTREACH & EDUCATION
SCHOOL PROGRAMS: Successfully completed Glorietta School 3rd grade walks/education for three groups of students (completed May 2025)
SCHOOL REUNION GROUPS: Miramonte Class of 1969 (55-year reunion) - September 7, 2024, with special Mirador newspapers prepared; received $50 donation Miramonte Class of 1964 (60-year reunion) - September 28, 2024 COMMUNITY EVENTS: Participated in Wagner Ranch Nature Area open house (October 2024), Glorietta FunFest (October 2024), and Trunk or Treat (October 2024) ORINDA INCORPORATION 40TH ANNIVERSARY: Working on July Incorporation celebration display and educational materials in coordination with the City (in progress) CALIFORNIA GENEALOGICAL SOCIETY EVENT: Successfully assisted with the joint teaching event with Moraga/Orinda/Lafayette Historical Societies (May 2025) OHS NEWSLETTER: Completed and sent to printer (spring 2025) MUSEUM HOURS: Changed open hours to Saturday mornings (11:00-1:00) for better visitor traffic (implemented by August 2024)
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Communication: Historical Society Annual Report (ITEMS FOR THE GOOD OF THE CITY)

DIGITIZATION & PRESERVATION
ORINDA SUN NEWSPAPERS: Second batch of digitized newspapers (1960-1963) approved and available online
EQUIPMENT SETUP: Completed acquisition of oral history recording equipment (iPad, microphones, tripod) by November 2024
HISTORICAL NEEDLEPOINT: Discovered (in our archives), researched, and archivally framed 1700s needlepoint sampler with Wagner family genealogy (completed by April 2025)

TECHNOLOGY & SYSTEMS
NEW COMPUTER SYSTEM: Purchased and installed new office computer with Windows 11, complete with training materials and desktop resources (approved November 2024, completed by January 2025) NEW SCANNER: Purchased and installed CZUR book scanner for digitizing large newspaper sheets (completed by February 2025)
SOFTWARE UPGRADES: Added Acrobat Pro (completed by April 2025) EMAIL CONTACT SYSTEM: Implemented MailerLite for member updates and other communications (completed by August 2024)

FINANCIAL MANAGEMENT
GRANT SUCCESS: Received $1,000 Orinda Community Foundation grant for website updates (approved November 2024) and $700 from Orinda Woman's Club (received by February 2025) Stock Donation: Received and processed significant Disney stock donation (December 2024), sold by April 2025

INFRASTRUCTURE & OPERATIONS
INVENTORY MANAGEMENT: Completed extensive newspaper cataloging and indexing by Nancy Royster (completed by November 2024)

PARTNERSHIPS & RECOGNITION
PARTNERSHIP DEVELOPMENT: Established relationship with Orinda Prints & Archiving for photo printing services (November 2024)
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Communication: Historical Society Annual Report (ITEMS FOR THE GOOD OF THE CITY) ORINDA CLASSIC MOVIES: Negotiated member discount program with Orinda Theatre (implemented by February 2025)

SIGNIFICANT TASKS STILL IN PROGRESS
IN ORDER OF PRIORITY:3
PHOTO SALE POLICY: Developing policies and paperwork for photo use by authors and educators (two recent inquiries)
WEBSITE REFRESH: Working with CVK Design on comprehensive website updates ORAL HISTORY PROGRAM: Developing standard questions and transcription software; planning interviews with Reg Barrett and Bobbie Landers
CATALOGIT REFINEMENT: Continuing to refine accession processes and provide training STORAGE ORGANIZATION: Ongoing inventory of storage space, museum, and file room DIGITIZATION PROJECTS: Scanning Orinda News issues and continuing photo digitization efforts ORINDA INCORPORATION 40TH ANNIVERSARY: Planning July celebration activities in coordination with the City
MUSEUM REFRESH: Long-term photo display redesign and artifact rotation project

RE-VAMP DE LAVEGA TRAIN STATION

ALISON BURNS
President, Orinda Historical Society
[email protected]
6/12/2025
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Communication: Historical Society Annual Report (ITEMS FOR THE GOOD OF THE CITY) City Council
Staff Report
Agenda Item: F.1
Date: June 17, 2025
Department: City Clerk
AGENDA TITLE: Minutes Approval
RECOMMENDATION:

Approve City Council Minutes:

1. May 30, 2025 Special Closed Session

2. June 3, 2025 Regular Meeting
BACKGROUND:

The following City Council Minutes are attached for review and adoption.

1. May 30, 2025 Special Closed Session

2. June 3, 2025 Regular Meeting
ATTACHMENTS:

A. City Council Closed Session Meeting Minutes of May 30, 2025 B. City Council Regular Meeting Minutes of June 3, 2025 Respectfully Submitted by:

Sheri Smith
City Clerk
Prepared By: Sheri Smith, City Clerk
Approved by:

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May 30, 2025

CITY OF ORINDA

CITY COUNCIL CLOSED SESSION MINUTES
9:00 AM - SPECIAL MEETING
A. CALL TO ORDER/ ROLL CALL
Mayor Malkani called the meeting to order and noted that all Councilmembers were present except Councilmember Gee who had an excused absence.

B. OPEN SESSION IDENTIFICATION OF CLOSED SESSION MATTERS The Closed Session Matters were identified.

C. PUBLIC COMMENTS REGARDING CLOSED SESSION MATTERS
There were no public comments.

D. CLOSED SESSION
a. CONFERENCE WITH LEGAL COUNSEL -- EXISTING LITIGATION.

Pursuant to Government Code Section 54956.9(d)(1), conference with Legal Counsel regarding existing litigation: ORINDANS FOR SAFE EMERGENCY EVACUATION v. City of Orinda, Contra Costa County Superior Court Case No. N23-0579.

E. OPEN SESSION REPORT REGARDING CLOSED SESSION
There was no reportable action.

F. ADJOURNMENT
The meeting adjourned at approximately 10:45 AM
_______________________
Sheri Marie Smith, City Clerk
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Attachment: City Council Closed Session Meeting Minutes of May 30, 2025 (3640 : Minutes Approval) Orinda City Council Minutes Page 1 of 6 06.03.25
JUNE 3, 2025

CITY OF ORINDA

CITY COUNCIL MINUTES
Note: Written communications received from the public prior to the start of this meeting can be viewed on the City’s website meeting calendar. They are also kept in the City Clerk’s Office as part of the public record and available upon request ([email protected]). d
7:00 P.M. – REGULAR MEETING– ORINDA LIBRARY AUDITORIUM
A. CALL TO ORDER / ROLL CALL:

Mayor Malkani called the Regular Meeting to order at approximately 7:00 p.m.

COUNCILMEMBERS PRESENT: Cara Hoxie, Janet Riley
Mayor Latika Malkani, Vice Mayor Brandyn Iverson
COUNCILMEMBERS ABSENT: Darlene Gee
B. PLEDGE OF ALLEGIANCE – Led by Mayor Malkani
C. ADOPTION OF AGENDA
City Manager Smith recommended taking Item H.1 and H.2 at the same time.

MOTION by Councilmember Hoxie, and seconded by Vice Mayor Iverson, to adopt the agenda, as amended. Said motion carried by unanimous (4-0) vote.

D. ITEMS FOR THE GOOD OF THE CITY
D.1. Orinda Association Annual Report
Parks and Recreation Director Todd Trimble said the City works closely with the Orinda Association (OA) on many activities and tonight Vice President Alex Drexel will provide the report and presentation.

Alex Drexel, Vice President, Orinda Association, gave a background on the OA which originally was a means for people to organize and help influence decision-making by the Board of Supervisors. After incorporation, they turned more into a public service organization. He gave the report on OA’s accomplishments, their new Executive Editor who is doing a great job on the paper, OA programs, volunteer drivers, Seniors Around Town service, and annual events.

Councilmembers posed questions and comments on high school student involvement, SAT volunteers, metrics of rides through the Seniors Around Town, and future planning for a community forum in the fall.

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Attachment: City Council Regular Meeting Minutes of June 3, 2025 (3640 : Minutes Approval) Orinda City Council Minutes Page 2 of 6 06.03.25
Mayor Malkani opened the Public Forum, and there were no speakers.

E. PUBLIC FORUM
There were no speakers.

F. CONSENT CALENDAR
Mayor Malkani asked and confirmed there were no requests for removal of items and no public comments.

F.1. Minutes Approval
Recommendation:

Approve City Council Minutes:

1. May 7, 2025 Special Tri City Meeting

2. May 20, 2025 Regular Meeting
F.2. Adoption of Appropriation Limit For Fiscal Year 2025-26 Recommendation:

Adopt Resolution 31-25 Establishing the Annual Appropriations Limit for Fiscal Year 2025-26
MOTION by Vice Mayor Iverson and seconded by Councilmember Hoxie to approve Consent Calendar Items F.1.1, F.1.2, and F.2. Said motion carried by unanimous (4-0) vote.

G. PUBLIC HEARING
G.1. Public Hearing to Confirm the Diagram and Assessment for the Orinda Street Lighting and Landscape Assessment District No. 1986-1 Zones L-42, M-9 and M-11 for Fiscal Year Ending June 30, 2026 Recommendation:

Adopt Resolution 29-25 Confirming the Diagram and Assessment for the Orinda Street Lighting and Landscape Assessment District No. 1986-1, Zones L-42, M-9, and M-11, for Fiscal Year Ending 2026.

Public Works Director Scott Christie gave the staff report, background, and overview of the Orinda Street Lighting and Landscape Assessment District No. 1986-1 Zones L-42, M-9, and M-11 for FY ending June 30, 2026.

Councilmember Hoxie asked and confirmed that the M-11 District is more downtown commercial than rental properties.

Vice Mayor Iverson referred to expenditures and said it is $90,000 special benefit and only $16,000 general benefit. She asked if there is any logic between re-categorizing as between special benefit and general benefit and if not, why.

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Attachment: City Council Regular Meeting Minutes of June 3, 2025 (3640 : Minutes Approval) Orinda City Council Minutes Page 3 of 6 06.03.25
Mr. Christie said they use a set criterion that is consistent between the three districts, so staff could discuss this with the consultant to see if there are other ways to do it. Since the Council supports the concept of increasing the livelihood of downtown, whether they charge it to this district, the City would still want to do this because there is a benefit for the public as a whole. They could apportion less, said staff could review this more closely and charge an amount to some other portion but he thinks in the end, it benefits all to get the work done. He said they are closely monitoring MCE’s work now to understand more about how they are charging, and the new Facilities and Maintenance Superintendent can concentrate more on this in the coming year.

City Manager Smith added that the other benefit of having it displayed in this way is in the future as property and business owners want to know what the City’s investment is looking like in the downtown, instead of hiding it in different funds and budgets within the operating budget, they can demonstrate and show the kinds of investments being made in the downtown from an on-going maintenance standpoint.

Councilmember Riley asked if this is the sole source of funding for landscaping and water, and she asked if more could be done with other funds in different areas that may need more.

Mr. Christie said they have a tight budget but there is always room to adjust and prioritize.

They could consider less road repairs and more landscaping, but part of it is road-related on the medians.

City Manager Smith said the Council has complete discretion on how much money is spent on landscaping or maintenance improvements in the downtown area, and she confirmed this includes sidewalks, as well. Typically, the responsibility of a sidewalk adjacent to a property is the property owner’s responsibility, and any sidewalks needing repair should be reported to the Public Works Department.

Councilmember Riley said it is the block by the antique store. Mr. Christy said they are aware of this, and the exception to the rule is where there is a City street tree, which is usually the culprit to repair the sidewalk.

Mayor Malkani opened the public hearing. She asked if there was any public comment, and there was none.

MOTION by Vice Mayor Iverson, and seconded by Councilmember Riley, to adopt Resolution 29-25 Confirming the Diagram and Assessment for the Orinda Street Lighting and Landscape Assessment District No. 1986-1, Zones L-42, M-9, and M11, for Fiscal Year Ending 2026. Said motion carried by unanimous (4-0) vote.

H. POLICY MATTERS
H.1. Adoption of Fiscal Years 2025-26 and 2026-2027 Biennial Budget Recommendation:

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Attachment: City Council Regular Meeting Minutes of June 3, 2025 (3640 : Minutes Approval) Orinda City Council Minutes Page 4 of 6 06.03.25
Receive the Staff presentation and input from the public, incorporate any changes to the appropriations, and approve Resolution No. 32-25, which appropriates spending for two Fiscal Years (2025-26 and 2026-27).

H.2. Adoption of Capital Improvement Plan (CIP) for Fiscal Years 2026-2030 Recommendation:

Adopt Resolution 30-25 Adopting the Capital Improvement Plan Update, Fiscal Years 2026-2030
Assistant City Manager Doug Alessio gave the staff report and overview of the FY 2025- 26 and 2026-27 Biennial Budget. He said the Council reviewed the draft budget in March and May this year where input was received from the Council which did not indicate changes. Since that time, the budget has been shared with committees and commissions who found it in conformance with the General Plan, and staff recommends adoption of Resolution No. 32-25.

The budget also contains one-time transfers from the General Fund from accumulated resources, miscellaneous operating budget edits, and appropriations, which he described.

Public Works Director Scott Christie then gave a PowerPoint presentation on the CIP over two years with 34 projects at $22 million, including continued projects from the current fiscal year. Over the 5-year period, there are 40 projects at $37 million. He then described miscellaneous reconciliation changes from the May meeting, increased funding for the Library Elevator Modernization/Rehabilitation project, changes to the annual paving projects, and the addition of 3 new roadway repair projects.

Mr. Alessio stated the budget is balanced using current resources, with exception to the transfers which use the accumulated resources.

Vice Mayor Iverson wondered if there is a way they can limit the spending on the library elevator, noting estimates went from $100,000 to $225,000 to go up one floor. She recommended adding a control that it return to the Council if it goes to more than $150,000.

Mr. Christie said the elevator is in decent condition and there is an on-going preventative maintenance contract for the machine. He then described the necessity of the elevator for ADA purposes, and staff’s intent to return to the Council for contract award. Mr. Alessio added that the original $125,000 has been that number for four years.

Councilmembers posed questions and comments ensued regarding comparisons to highrise elevators with this proposal and cost, the need to modernize the existing elevator, disagreement in the amount of expenditure for adding one floor, concerns of the future of state and county funding, expenditure of Measure R funds, Parks and Recreation revenue levels in past and current years, and recognition of the Council’s conservative budget planning and spending.

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Attachment: City Council Regular Meeting Minutes of June 3, 2025 (3640 : Minutes Approval) Orinda City Council Minutes Page 5 of 6 06.03.25
Mayor Malkani opened the Public Forum, and there were no speakers.

Mayor Malkani and Councilmembers complimented staff on their preparation of both budget documents and how the City is managing its funds. City Manager Smith also thanked staff for the work putting the budget documents together.

MOTION by Vice Mayor Iverson, and seconded by Councilmember Hoxie to adopt Resolution No. 32-25, which appropriates spending for two Fiscal Years (2025-26 and 2026-27). Said motion carried by unanimous (4-0) vote.

MOTION by Mayor Malkani, and seconded by Councilmember Hoxie to adopt Resolution No. 30-25, adopting the Capital Improvement Plan Update, Fiscal Years 2026-2030. Said motion carried by unanimous (4-0) vote.

I. COUNCILMEMBER REPORTS – Mayor Malkani reported on her, the Vice Mayor, the City Manager and City staff’s attendance to a well-attended meeting with Senator Tim Grayson, his District staff, and dozens of agencies around emergency preparedness and evacuation event. They broke into brainstorming sessions, and the end result is a working group formed to focus on development of an East Bay Wildfire Master Plan.

City Manager Smith said she will contact Senator Grayson’s office regarding media attention surrounding the plan.

Mayor Malkani reported on today’s 11:00 a.m. gathering for the Pride Flag raising event where P-Flag Lamorinda and community members in attendance.

J. CITY MANAGER'S REPORT – City Manager Smith reported the Lamorinda Fee and Finance Authority is working on their fee update, the review and selection of a new consultant, which should be made by the end of summer, with adoption expected in early 2027.

K. MATTERS INITIATED – None.

L. CLOSED SESSION

1. OPEN SESSION IDENTIFICATION of Closed Session Matters

2. PUBLIC COMMENTS of Closed Session Matters - None

3. CLOSED SESSION

4. REPORT OUT OF CLOSED SESSION
a. CONFERENCE WITH LEGAL COUNSEL -- EXISTING LITIGATION.

N23-0579.

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Attachment: City Council Regular Meeting Minutes of June 3, 2025 (3640 : Minutes Approval) Orinda City Council Minutes Page 6 of 6 06.03.25
M. ADJOURNMENT
The Regular Meeting was adjourned at approximately 9:30 p.m. to the City Council Meeting on Tuesday, June 10, 2025 at 4:00 p.m.
______________________________________
Sheri Marie Smith, City Clerk
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Attachment: City Council Regular Meeting Minutes of June 3, 2025 (3640 : Minutes Approval) City Council
Staff Report
Agenda Item: F.2
Date: June 17, 2025
Department: Finance
AGENDA TITLE: Annual Investment Policy Review and Delegation of Investment Authority
RECOMMENDATION:

Adopt Resolution 36-25 Approving an Investment Policy for Fiscal Year 2025-26 and Delegation of Authority to Make Investments.

BACKGROUND:

On October 1, 2024, the City Council adopted Resolution 45-24 which established the Investment Policy that is currently being used to guide the City Investment portfolio. The policy follows recommended guidelines for the prudent management of public funds. A portion of the City portfolio is managed by Chandler Asset Management (Chandler), which also assists in reviewing and proposing changes to the adopted policy. The current policy states that it is to be reviewed annually by the Finance Advisory Committee (FAC) and that any recommended changes are to be presented to the City Council no later than June 30th. The review of the policy by the FAC occurred on May 29, 2025.

As required under State law, the proposed resolution also includes the City Council delegation of authority to make investments.

DISCUSSION:

The City’s current portfolio includes a “General Reserve” portion managed by Chandler in coordination with City Staff and in conformance with the City Investment policy. In addition to the funds Chandler manages, the City maintains a pooled investment account in the Local Agency Investment Fund (LAIF), which is managed by the State Treasurer. In May 2024 the City opened money market collateralized bank deposit account with Mechanics Bank which is managed by staff.

Focus of a Public Agency Portfolio
It is important to keep in mind that a public agency portfolio has distinct differences from private investments in terms of goals and risks. The annual publication prepared by the California Debt Investment Advisory Commission (CDIAC) and titled “Local Agency Investment Guidelines”, described this difference as follows:
“The vast majority of local agency portfolios are managed with a buy and hold investment strategy. Investments are purchased with the intent and capacity to hold them until maturity. At times, market forces or operations may dictate exchanging one security for another or selling a security before maturity.

Continuous analysis and fine tuning of the investment portfolio are considered F.2
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part of prudent investment management. This passive investment strategy is different from one in which securities are purchased with the intent to sell them before maturity at a profit or the use of leverage to enhance yield.” Given the focus of public funds, the investment objectives are to always seek safety and liquidity, which take precedence and may impact the market rate of return compared to private or personal portfolios.

Investment Manager Review
The Administrative Services Director met with staff from Chandler and reviewed the current policy to ensure its conformance with changes in applicable state law and any changes to industry best practices. That review resulted in Chandler recommending minor changes to the current policy to conform with recent changes in State law. A redlined version of Orinda’s current Investment Policy is included as Attachment B, which highlights all changes. The main changes are listed below:

1. X. Certificates of Deposit: To reflect change in state law requiring collateralization of deposit, moving away from limits of insured value by Federal Deposit Insurance Company (FDIC).

2. XII 8. Placement Service Deposits: To reflect change in state law regarding the full amount of deposits being insured by FDIC or National Credit Union Administration (NCUA).

3. XII 14. Share of Beneficial Interest Issued by a Joint Powers Authority (JPA):

Pursuant to change in state law, allowing for such investment and establishing certain criteria.

4. Glossary of Investment Terms: Terms have been added and removed as it has been recommended by CMTA investment policy reviewers that the glossary shall only include terms used throughout the investment policy.

The results of the review were shared and discussed by the FAC at their May 29, 2025, meeting. During that review the FAC unanimously recommended presenting the redlined investment policy to the City Council for approval.

Government Code Section 53607 only provides two options for authorizing the investment of public funds. It can be completed by either: 1) The City Council; or 2) Delegated for a one-year period to the City Treasurer. From a practical and logistical perspective, it makes sense to delegate this function. Adoption of the proposed resolution will continue the current practice of delegating authority to the City Treasurer.

Proposed Investment Policy
Attachment A contains the Resolution adopting the Investment Policy, which completes the annual review process, incorporating the minor proposed changes to the existing policy. The resolution also formally delegates the authorization to make investment decisions to the City Treasurer for a one-year period in accordance with Government Code Section 53607.

FISCAL IMPACT:

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There are no immediate fiscal impacts as a result of reviewing the Investment Policy. It is anticipated that the policy will continue to provide investment options consistent with State law and appropriate for a public agency portfolio.

ATTACHMENTS:

A. Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make Investments
B. Investment Policy (redlined)
Respectfully Submitted by:

Douglas Alessio
Assistant City Manager
Prepared By: Douglas Alessio, Assistant City Manager
Approved by:

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RESOLUTION NO. 36-25

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORINDA
APPROVING AN INVESTMENT POLICY FOR FISCAL YEAR 2025-26 AND

DELEGATION OF AUTHORITY TO MAKE INVESTMENTS
WHEREAS, the City Council on October 1, 2024, adopted Resolution 45-24 approving an Investment Policy which, in accordance with State law, provides for an annual review by the City Council; and
WHEREAS, the City Council has requested that the Finance Advisory Committee review and make recommendations on the policy annually; and WHEREAS, the City has engaged Chandler Asset Management to provide professional investment services which include reviewing the policy for conformance with State laws and best practices; and
WHEREAS, at a meeting on May 29, 2025, the Finance Advisory Committee reviewed the Investment Policy and recommended that minor edits be made at this time; and WHEREAS, Government Code section 53607 allows the City Council to annually delegate the authority to make investments to the City Treasurer as described in section IV of the policy.

NOW, THEREFORE, BE IT RESOLVED, that the City of Orinda City Council hereby approves the Investment Policy attached hereto and by reference made a part hereof.

BE IT FURTHER RESOLVED, that the City Council hereby delegates the authority to make investments to the City Treasurer (Administrative Services Director) and Deputy Treasurer (City Manager).

PASSED AND ADOPTED by the City Council of the City of Orinda on June 17, 2025, by the following vote:

AYES:

NAYS:

ABSTAIN:

ABSENT:

Latika Malkani, Mayor
ATTEST:

Sheri Marie Smith, City Clerk
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make

CITY OF ORINDA, CALIFORNIA

INVESTMENT POLICY
ADOPTED – June 17, 2025

CONTENTS
I. INTRODUCTION.....................................................................................................................................................1 II. SCOPE...........................................................................................................................................................1 III. OBJECTIVES..............................................................................................................................................2 IV. DELEGATION OF AUTHORITY.......................................................................................................................2 V. PRUDENCE.....................................................................................................................................................3 VI. ETHICS AND CONFLICTS OF INTEREST .........................................................................................................4 VII. INTERNAL CONTROLS.................................................................................................................................4 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS EXTERNAL INVESTMENT ADVISERS ...............................................................................................................................................................4 IX. INVESTMENT POOLS/MUTUAL FUNDS ..........................................................................................................5 X. COLLATERALIZATION ......................................................................................................................................6 XI. DELIVERY, SAFEKEEPING AND CUSTODY.....................................................................................................6 XII. AUTHORIZED INVESTMENTS ........................................................................................................................7 XIII. MAXIMUM MATURITY................................................................................................................................12 XIV. PROHIBITED INVESTMENT VEHICLES AND PRACTICES .................................................................................12 XV. RISK MANAGEMENT AND DIVERSIFICATION ................................................................................................13 XVI. REVIEW OF INVESTMENT PORTFOLIO.........................................................................................................14 XVII. PERFORMANCE EVALUATION................................................................................................................14 XVIII. REPORTING.........................................................................................................................................14 XIX. REVIEW OF INVESTMENT POLICY...............................................................................................................15 GLOSSARY OF INVESTMENT TERMS...................................................................................................................16 F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 1 I. INTRODUCTION
The City of Orinda was incorporated on July 1, 1985, and is located in the East Bay area within 20 minutes of downtown San Francisco. The City operates under a CouncilManager form of government and provides municipal services that include public safety, public works, parks and recreation, and community development. The City Council consists of five members with the position of Mayor and Vice Mayor chosen by the Council. The Council serves as the policy board for the City.

The City of Orinda has a fiduciary responsibility to maximize the productive use of assets entrusted to its care and to invest and manage those public funds wisely and prudently with the overriding objectives to preserve principal and provide sufficient liquidity while seeking a market-rate of return. The purpose of this investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Orinda's objectives of safety, liquidity and yield through a diversified investment portfolio. This policy also serves to organize and formalize the City's investment-related activities, while complying with all applicable statutes governing the investment of public funds.

II. SCOPE
This policy covers all funds and investment activities under the direct authority of the City, as set forth in the State Government Code, Sections 53600 et seq., with the following exceptions:
• Retirement Plans offered to City Employees including the 457 Deferred Compensation Plan, and 401(a) Defined Contribution Plan are excluded because the Plans are administered by a third-party administrator and held in trust for the exclusive benefit of participants and are not assets of the City. Individual plan participants select the investments from those offered under the Plans.
• Proceeds of debt issuance shall be invested in accordance with the City's general investment philosophy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their specific bond indentures.
• Any other funds specifically exempted by the City Council.

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 shall accrue solely to the General Fund except where required by law, or other binding agreement, in which case interest shall accrue to other funds based upon the fund's proportionate ratio of balances to total pooled cash. Investment income shall not be credited to individual reserve accounts, except where required by law. Investment income shall be credited no less than annually.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 2 III. OBJECTIVES
The City's overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives in order of priority shall be:
• 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.
• LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
• YIELD. Yield should become a consideration only after the basic requirements of safety and liquidity have been met. 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. DELEGATION OF AUTHORITY
Authority to manage the City's investment program is derived from California Government Code, Sections 41006 for City Treasurers and 53600 et seq. The City Council is responsible for the policy level management of City funds, including the adoption and review of this investment policy. The day-to-day management of idle cash and investment transactions is the responsibility of the Administrative Services Director/City Treasurer. The Administrative Services Director is designated as the City Treasurer, in accordance with a Resolution specifying the job description adopted by the City Council.

As authorized in Government Code Section 53607, the City Council delegates the authority to invest funds of the City to the Administrative Services Director/City Treasurer and/or any duly appointed Deputy Treasurer. The City Treasurer and any duly appointed Deputy City Treasurer shall make all investment decisions and transactions in accordance with State law and this investment policy. The Administrative Services Director/City Treasurer has designated the City Manager as Deputy City Treasurer for the purpose of carrying out investment transactions, at such times as the Administrative Services Director/City Treasurer is unavailable.

The City shall strive to maintain the level of investment of all idle funds as near 100 percent as possible through daily and projected cash flow determinations. The City's cash management system should monitor and forecast revenues and expenditures, thus insuring the investment of monies to the fullest extent possible. The Administrative Services Director will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate employees.

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 procedures determined by the Administrative F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 3 Services Director to be consistent with this policy.

The City Council may authorize engaging the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City's investment portfolio in a manner consistent with the City's objectives. The selection process will follow standard City and industry practices for selecting a qualified firm to provide investment advisory services. The contract for such services must be reviewed and approved by the City Attorney. Under the review by the Administrative Services Director external investment advisers are granted discretion to purchase and sell investment securities in accordance with this investment policy. On February 15, 2015 the City Council authorized an agreement with Chandler Asset Management which serves as the external investment manager pursuant to this policy.

The contract was fully executed in May 2015 and the initial investment services focused on GO Bond proceeds. The Orinda Reserve portfolio management services began in February 2016.

The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City intends to hold its investments to maturity in order to maximize its return on its investments and minimize its exposure to potential losses resulting from temporary declines in the market values of its investments.

However, if a decline in the market value of a security is deemed by the Administrative Services Director in consultation with the external Investment Manager, to be permanent, the security may be sold early to minimize the loss of principal. Although there may be opportunities to resell securities, this type of regular trading is not recommended.

V. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
"... all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law."
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 4 VI. ETHICS AND CONFLICTS OF INTEREST
Employees and officials involved in the investment process shall at all times comply with each of the following:
- Recognize that the process is subject to public review - Act as a custodian of the public trust
- Recognize that their professional duties, loyalties, and responsibility are solely to the City
- Submit to the City statements of economic interest under the Political Reform Act (Government Code section 81000 et seq.)
- Not engage in any activity or have any interest that would result in a conflict of interest or the appearance of a conflict interest under the Political Reform Act, the common law, or Government Code section 1090 et seq.
- Not engage in any activity or have any interest that could interfere with unbiased involvement in the investment process (e.g., by impairing their ability to make impartial investment decisions).

VII. INTERNAL CONTROLS
The Administrative Services Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

Periodically, as deemed appropriate by the City and/or the City Council, an independent analysis by an external auditor may be conducted to review internal controls, account activity and compliance with policies and procedures.

VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS EXTERNAL

INVESTMENT ADVISERS
Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded and presented as part of the information on the Trade Ticket. If there is no other readily available competitive offering, the investment adviser shall make their best efforts to document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities as the same original issue price.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 5 PROCESS IF CITY DOES NOT ENGAGE PROFESSIONAL EXTERNAL INVESTMENT ADVISOR If the City Administrative Services Director is directly completing investment transactions without an external investment adviser, to the extent practical, the Administrative Services Director shall endeavor to complete investment transactions using a competitive bid process whenever possible. The City's Administrative Services Director will determine which financial institutions are authorized to provide investment services to the City. It shall be the City's policy to purchase securities only from authorized institutions and firms.

The Administrative Services Director shall maintain procedures for the establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence determined by the City.

These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).

In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
• Institutions licensed by the state and proof FINRA certification as broker-dealer, as defined in Section 25004 of the Corporations Code.
• Primary government dealers as designated by the Federal Reserve Bank of New York and non-primary government dealers.
• Nationally or state-chartered banks.
• Savings association or federal association (as defined in Section 5102 of the Financial Code).
• The Federal Reserve Bank of New York.
• Direct issuers of securities eligible for purchase.

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 Administrative Services Director with a statement certifying that the institution has reviewed the California Government Code, Section 53600 et seq. and the City's investment policy.

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.

IX. INVESTMENT POOLS/MUTUAL FUNDS
Participation in the Local Agency Investment Fund (LAIF) managed by the State Treasurer shall be an authorized investment under this policy. Participation in any other pool or mutual fund shall require approval of the City Council upon investigation of the investment pool/mutual fund legal structure, objectives, and suitability as a component of the City portfolio.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 6 The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. Annually, the Administrative Services Director shall seek responses to the following questions from any investment pool or mutual fund in which the City invests:
• A description of eligible investment securities, and a written statement of investment policy and objectives.
• A description of interest calculations and how it is distributed, and how gains and losses are treated.
• A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. • A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
• A schedule for receiving statements and portfolio listings. • Are reserves, retained earnings, etc. utilized by the pool/fund? • A fee schedule, and when and how it is assessed.
• Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? X. COLLATERALIZATION
CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.

COLLATERALIZATION OF DEPOSITS. Process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing the repayment of deposited funds.

The type and value of eligible securities is as defined by California Government Code, Section 53651.

XI. DELIVERY, SAFEKEEPING AND CUSTODY
DELIVERY-VERSUS-PAYMENT (DVP). Settlement of all investment transactions will be completed using standard delivery-versus-payment procedures.

SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City's portfolio shall be held in safekeeping in the City's name by a third party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. The custodian shall provide a monthly report to the City listing all securities held in safekeeping F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 7 with current market data and other information. The Administrative Services Director shall implement procedures to review and reconcile the custodian statements on a regular basis.

The only exceptions to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools; (ii) time certificates of deposit, and, (iii) mutual funds and money market mutual funds, since the purchased securities are not deliverable.

XII. AUTHORIZED INVESTMENTS
The City's investments are governed by California Government Code, Sections 53600 et seq. The City intends for the investments permitted by this policy to be more restrictive than what is authorized in the Government Code. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence.

Percentage holding limits and minimum credit requirements listed in this section apply at the time the security is purchased.

Any investment held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity, provided it is disclosed as an exception at each reporting period. At the time of the investment's maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and issuer to avoid incurring unreasonable and avoidable risks regarding specific security types or individual financial institutions.

1. MUNICIPAL SECURITIES include obligations of the City, the State of California, and any local agency within the State of California, provided that the following criteria is met:
• The securities are rated in a rating category of "A" or its equivalent or better by at least one Nationally Recognized Statistical Rating Organization (“NRSRO”).
• No more than 5% of the total portfolio may be invested in any issuer. • No more than 30% of the total portfolio may be in Municipal Securities. • The maximum maturity does not exceed five years.

2. MUNICIPAL SECURITIES (REGISTERED TREASURY NOTES OR BONDS) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a 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, in addition to California.
• The securities are rated in a rating category of "A" or its equivalent or better F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 8 by at least one NRSRO.
• No more than 5% of the total portfolio may be invested in any single issuer. No more than 30% of the total portfolio may be in Municipal Securities.
• The maximum maturity does not exceed five years.

3. U.S. TREASURIES 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 U.S.

Treasuries, provided that the following criteria is met:
• The maximum maturity does not exceed five years.

4. FEDERAL AGENCIES or United 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. There are no limits on the dollar amount or percentage that the City may invest in Federal Agency or GovernmentSponsored Enterprises (GSEs), provided that the following criteria is met:
• No more than 30% of the total portfolio may be invested in any Agency/GSE issuer. The maximum maturity does not exceed five years. • No more than 20% of the total portfolio may be invested in callable agency securities.

5. BANKERS’ ACCEPTANCES, provided that the following criteria is met:
• They are issued by institutions which have short-term debt obligations rated "A1" or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in the "A" category or its equivalent or better by at least one NRSRO.
• No more than 40% of the total portfolio may be invested in Bankers' Acceptances.
• No more than 5% of the total portfolio may be invested in any issuer. • The maximum maturity does not exceed 180 days.

6. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that the following criteria is met:
• The amount per institution is limited to the maximum covered under Federal Deposit Insurance Corporation or the National Credit Union Administration. • No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five years.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 9 7. 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 the following criteria is met:
• No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five years.

8. PLACEMENT SERVICE DEPOSITS, provided that the following criteria is met and as allowed under California Government Code section 53601.8:
• No more than 30% of the total portfolio may be invested in a combination of qualifying placement service deposits.
• 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).
• 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.
• The maximum maturity does not exceed five years.

9. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), provided that the following criteria is met:
• The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
• For any amount above the FDIC insured limit they must be issued by institutions which have short-term debt obligations are rated "A-1" or its equivalent or better by at least one NRSRO; or long-term obligations are rated in the "A" category or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in NCDs. • No more than 5% of the total portfolio may be invested in any issuer. The maximum maturity does not exceed five years.

10. COLLATERALIZED BANK DEPOSITS. The City's deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651 and a maximum maturity not exceeding five years.

11. COMMERCIAL PAPER, provided that the following criteria is met:
a. If issued by a corporation:

1. The issuer is a corporation organized and operating in the United States F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 10 with assets in excess of $500 million.

2. They are issued by corporations which have long-term obligations rated in the "A" category or its equivalent or better, if the issuer has long-term ratings, by at least one NRSRO.
b. If issued by other entities:

1. The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.

2. The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit or a surety bond. • The securities are rated "A-1" or its equivalent or better by at least one NRSRO. • No more than 25% of the total portfolio may be invested in Commercial Paper. • No more than 10% of the outstanding commercial paper issued by any single issuer.
• No more than 5% of the total portfolio may be invested in any issuer. • The maximum maturity does not exceed 270 days.

12. STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND (LAIF), provided that the following criteria is met:
• The City may invest subject to the maximum permitted balance established by LAIF.

13. LOCAL GOVERNMENT INVESTMENT POOLS (LGIP)
• Other LGIPs are permitted provided that the City Council takes a separate action to authorize the LGIP and it is added to this policy.

14. Shares of Beneficial Interest Issued by a Joint Powers Authority (JPA) • 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.
• Each share shall represent an equal proportional interest in the underlying pool of securities owned by the JPA.
• The JPA has retained an investment advisor who is registered with the SEC (or exempt 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 (o).

15. CORPORATE MEDIUM TERM NOTES (MTNS), provided that the following criteria is met:
• The issuer is a corporation 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.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 11 • The securities are rated "A" or its equivalent or better by at least one NRSRO. • No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the portfolio may be invested in any one issuer. • The maximum maturity does not exceed five years.

16. ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES,

AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that the following criteria is met:
• The securities are rated "AA" or the equivalent or better by a NRSRO. • No more than 20% of the total portfolio may be invested in these securities. • No more than 5% of the total portfolio may be invested in any Asset-Backed or Commercial Mortgage security issuer.
• The maximum maturity does not exceed five years.

17. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that the following criteria is met:
a. No more than 20% of the total portfolio may be invested in these securities. b. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

1. Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; 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 securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.

3. No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
c. MONEY MARKET MUTUAL FUNDS Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) The company shall meet either of the following criteria:

1. Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; 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 managing money market mutual funds with assets under management in excess of $500 million.

3. No more than 20% of the total portfolio may be invested in Money Market Mutual Funds.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 12 18. SUPRANATIONALS, provided that the following criteria is met:
• The issue purchased shall be U.S. 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.
• Issues are "eligible for purchase and sale within the United States." • The securities are rated in the "AA" category or its equivalent or better by a NRSRO.
• No more than 30% of the total portfolio may be invested in these securities. • No more than 10% of the total portfolio per issuer
• The maximum maturity does not exceed five years.

XIII. MAXIMUM MATURITY
To the extent possible, the overall portfolio and investments shall take into consideration anticipated cash flow requirements and known future liabilities.

The City will not invest in securities maturing more than five years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment at least three months prior to that investment.

XIV. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
• State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. • In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. • Investment in any security that could result in a zero interest accrual if held to maturity is prohibited.
• Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
• Purchasing or selling securities on margin is prohibited. • The use of repurchase agreements and reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited. • The purchase of foreign currency denominated securities is prohibited. • The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 13 XV. RISK MANAGEMENT AND DIVERSIFICATION

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:
• The diversification requirements included in the "Authorized Investments" section of this policy are designed to mitigate credit risk in the portfolio. • No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy. • 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.
• If securities owned by the City are downgraded by a NRSRO 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.
• If a security is downgraded, the Administrative Services Director/ City Treasurer 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. Downgraded securities will be reported to the City Council in the quarterly investment report.
• 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.

MITIGATING INTEREST RATE RISK IN THE PORTFOLIO
Market risk includes 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:

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 14 • The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements. • The maximum stated final maturity of individual securities in the portfolio will be five years, except as otherwise stated in this policy.
• The duration of the portfolio will strive at all times be approximately equal to the duration (typically, plus or minus 20%) of a market benchmark, an index selected by the City based on the City's investment objectives, constraints and risk tolerances.

XVI. REVIEW OF INVESTMENT PORTFOLIO
The Administrative Services Director shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council. The compliance status shall be reported as part of the quarterly reporting.

XVII. PERFORMANCE EVALUATION
The investment portfolio shall be designed to attain a rate of return consistent with the overriding objectives of the program to preserve principal and provide sufficient liquidity.

The investment portfolio shall take into account the City's risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.

The Administrative Services Director shall monitor and evaluate the portfolio's performance relative to market benchmark, which will be included in the Administrative Services Director's quarterly report. The Administrative Services Director in consultation with the external investment adviser, shall select an appropriate readily available index to use as a market benchmark. Benchmarks may change over time based on changes in market conditions or cash flow requirements.

XVIII. REPORTING

QUARTERLY REPORTS
Quarterly investment reports will be submitted by the Administrative Services Director to the City Council within 45 days after the end of the quarter. These reports will disclose, at a minimum, the following information about the characteristics of the City's portfolio in order to comply with GC 53646 (b):

1. These reports shall include the type of investment, issuer, date of maturity, par and dollar amount invested on all securities, investments and moneys held by the City, and shall additionally include a description of any of the City's funds, investments, or programs, that are under the management of contracted parties, including lending programs. With respect to all securities held by the City, and under management of any outside party that is not also a local public agency or the State of California Local Agency Investment Fund, the report shall also include a current market value F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 15 as of the date of the report, and shall include the source of this same valuation.

2. Monthly transactions for the period in accordance with California Government Code Section 53607.

3. A statement of compliance with investment policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio and a timetable for resolution. Although this policy measures compliance at the time of purchase, any transactions or holdings that were in compliance at the time of purchase, and no longer comply shall also be disclosed and reviewed by the Treasurer.

4. A statement regarding whether the portfolio will allow the City to have adequate funds to meet its cash flow requirements for the next six months.

XIX. REVIEW OF INVESTMENT POLICY
The investment policy will be reviewed at least annually by the Finance Advisory Committee, which shall make a recommendation to the City Council regarding any recommended changes to address consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.

The results of the review including any recommended modifications, amendments, and delegation of authority as described in Section IV, shall be presented by the Administrative Services Director/City Treasurer to the City Council for their consideration and adoption at a public meeting. For consistency it is recommended that the review be timed to occur no later than June 30th at the same time as the Annual Appropriations Limit Adoption.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 16 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:

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 “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.

FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.

GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed 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.

BID. The indicated price at which a buyer is willing to purchase a security or commodity.

BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.

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, the issuer will likely call its current securities and reissue them at a lower rate of interest.

CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.

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 BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

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.

COLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 17 COMMERCIAL PAPER. The short-term unsecured debt of corporations.

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.

DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position.

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 security to changes interest rates.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

FEDERALLY INSURED TIME DEPOSIT. A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.

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 other’s best interests.

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.

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 open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to 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 provision 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 F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 18 conditions or interest rates.

MARKET VALUE. The price at which a security can be traded.

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 on either 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, commercial paper, and banker’s acceptances) are issued and traded.

MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short-term securities.

Examples of investments in money market funds are certificates of deposit and U.S.

Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.

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 that the Securities and Exchange Commission in the United States 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.

NEGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or statelicensed branch of a foreign bank. Negotiable CDs are traded in a secondary market.

OFFER (ASK). An indicated price at which market participants are willing to sell a security. Also referred to as the “ask price”.

PAYDOWN. A reduction in the principal amount owed on a bond, loan or other debt.

PLACEMENT SERVICE DEPOSITS. A private service that allows local agencies to invest in FDICinsured 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.

PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S.

Government securities market.

PRUDENT INVESTOR (PRUDENT PERSON) RULE. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, F.2.a
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 19 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.” 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.

REPURCHASE AGREEMENT. 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.

SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.

SECURITIES AND EXCHANGE COMMISSION SEC) RULE 15C3-1. An SEC rule setting capital requirements for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.

STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

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.

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.

U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. 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.

VOLATILITY. The rate at which security prices change with changes in general economic conditions or the general level of interest rates.

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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make 20 YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its c
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Attachment: Resolution 36-25 Approval of Investment Policy for Fiscal Year 2025-26 and Delegation of Investment Authority to Make

CITY OF ORINDA, CALIFORNIA

INVESTMENT POLICY
ADOPTED – October 1, 2024 (RESOLUTION No.45-24)

CONTENTS
I. INTRODUCTION..................................................................................................................................................... 1 II. SCOPE ........................................................................................................................................................... 1 III. OBJECTIVES .............................................................................................................................................. 2 IV. DELEGATION OF AUTHORITY ....................................................................................................................... 2 V. PRUDENCE ..................................................................................................................................................... 3 VI. ETHICS AND CONFLICTS OF INTEREST ......................................................................................................... 4 VII. INTERNAL CONTROLS ................................................................................................................................. 4 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS EXTERNAL INVESTMENT ADVISERS ............................................................................................................................................................... 4 IX. INVESTMENT POOLS/MUTUAL FUNDS .......................................................................................................... 5 X. COLLATERALIZATION ...................................................................................................................................... 6 XI. DELIVERY, SAFEKEEPING AND CUSTODY ..................................................................................................... 6 XII. AUTHORIZED INVESTMENTS ........................................................................................................................ 7 XIII. MAXIMUM MATURITY ................................................................................................................................ 12 XIV. PROHIBITED INVESTMENT VEHICLES AND PRACTICES ................................................................................. 12 XV. RISK MANAGEMENT AND DIVERSIFICATION ................................................................................................ 13 XVI. REVIEW OF INVESTMENT PORTFOLIO ......................................................................................................... 14 XVII. PERFORMANCE EVALUATION................................................................................................................ 14 XVIII. REPORTING ......................................................................................................................................... 14 XIX. REVIEW OF INVESTMENT POLICY ............................................................................................................... 15 GLOSSARY OF INVESTMENT TERMS................................................................................................................... 16 F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 1 I. INTRODUCTION
The City of Orinda was incorporated on July 1, 1985, and is located in the East Bay area within 20 minutes of downtown San Francisco. The City operates under a CouncilManager form of government and provides municipal services that include public safety, public works, parks and recreation, and community development. The City Council consists of five members with the position of Mayor and Vice Mayor chosen by the Council. The Council serves as the policy board for the City.

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 2 III. OBJECTIVES
The City's overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives in order of priority shall be:
• SAFETY. Safety of principal is the foremost objective of the investment program.

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 procedures determined by the Administrative F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 3 Services Director to be consistent with this policy.

The contract was fully executed in May 2015 and the initial investment services focused on GO Bond proceeds. The Orinda Reserve portfolio management services began in February 2016.

V. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
"... all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law."
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 4 VI. ETHICS AND CONFLICTS OF INTEREST
Employees and officials involved in the investment process shall at all times comply with each of the following:
- Recognize that the process is subject to public review - Act as a custodian of the public trust
- Recognize that their professional duties, loyalties, and responsibility are solely to the City
- Submit to the City statements of economic interest under the Political Reform Act (Government Code section 81000 et seq.)
- Not engage in any activity or have any interest that would result in a conflict of interest or the appearance of a conflict interest under the Political Reform Act, the common law, or Government Code section 1090 et seq.
- Not engage in any activity or have any interest that could interfere with unbiased involvement in the investment process (e.g., by impairing their ability to make impartial investment decisions).

VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS EXTERNAL

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 5 PROCESS IF CITY DOES NOT ENGAGE PROFESSIONAL EXTERNAL INVESTMENT ADVISOR If the City Administrative Services Director is directly completing investment transactions without an external investment adviser, to the extent practical, the Administrative Services Director shall endeavor to complete investment transactions using a competitive bid process whenever possible. The City's Administrative Services Director will determine which financial institutions are authorized to provide investment services to the City. It shall be the City's policy to purchase securities only from authorized institutions and firms.

These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 6 The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. Annually, the Administrative Services Director shall seek responses to the following questions from any investment pool or mutual fund in which the City invests:
• A description of eligible investment securities, and a written statement of investment policy and objectives.
• A description of interest calculations and how it is distributed, and how gains and losses are treated.
• A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. • A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
• A schedule for receiving statements and portfolio listings. • Are reserves, retained earnings, etc. utilized by the pool/fund? • A fee schedule, and when and how it is assessed.
• Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? X. COLLATERALIZATION
CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.limit the value of investments in CD's held by a single institution to the maximum insured value by the FDIC.

COLLATERALIZATION OF DEPOSITS. Process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing the repayment of deposited funds.

The type and value of eligible securities is as defined by California Government Code, Section 53651.

XI. DELIVERY, SAFEKEEPING AND CUSTODY
DELIVERY-VERSUS-PAYMENT (DVP). Settlement of all investment transactions will be completed using standard delivery-versus-payment procedures.

SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City's portfolio shall be held in safekeeping in the City's name by a third party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. The F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 7 custodian shall provide a monthly report to the City listing all securities held in safekeeping with current market data and other information. The Administrative Services Director shall implement procedures to review and reconcile the custodian statements on a regular basis.

Percentage holding limits and minimum credit requirements listed in this section apply at the time the security is purchased.

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 8 • The securities are rated in a rating category of "A" or its equivalent or better by at least one NRSRO.
• No more than 5% of the total portfolio may be invested in any single issuer. No more than 30% of the total portfolio may be in Municipal Securities.
• The maximum maturity does not exceed five years.

Treasuries, provided that the following criteria is met:
• The maximum maturity does not exceed five years.

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 9 • The maximum maturity does not exceed five years.

7. 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 the following criteria is met:
• No more than 20% of the total portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five years.

8. PLACEMENT SERVICE DEPOSITS, provided that the following criteria is met and as allowed under California Government Code section 53601.8:
• No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including those transactions using a qualifying placement service deposits.
• 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).
• 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.
• The maximum maturity does not exceed five years.

11. COMMERCIAL PAPER, provided that the following criteria is met:

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 10 a. If issued by a corporation:

1. The issuer is a corporation organized and operating in the United States with assets in excess of $500 million.

1. The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.

12. STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND (LAIF), provided that the following criteria is met:
• The City may invest subject to the maximum permitted balance established by LAIF.

13. LOCAL GOVERNMENT INVESTMENT POOLS (LGIP)
• Other LGIPs are permitted provided that the City Council takes a separate action to authorize the LGIP and it is added to this policy.

14.15. CORPORATE MEDIUM TERM NOTES (MTNS), provided that the following criteria is met:

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 11 • The issuer is a corporation 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.
• The securities are rated "A" or its equivalent or better by at least one NRSRO. • No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the portfolio may be invested in any one issuer. • The maximum maturity does not exceed five years.

15.16. ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES,

AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that the following criteria is met:
• The securities are rated "AA" or the equivalent or better by a NRSRO. • No more than 20% of the total portfolio may be invested in these securities. • No more than 5% of the total portfolio may be invested in any Asset-Backed or Commercial Mortgage security issuer. There is no issuer limitation on any Mortgage security where the issuer is the US Treasury or a Federal Agency/GSE. • The maximum maturity does not exceed 5five years.

16.17. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that the following criteria is met:
a. No more than 20% of the total portfolio may be invested in these securities. b. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

1. Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or

1. Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or

2. Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 12 experience managing money market mutual funds with assets under management in excess of $500 million.

3. No more than 20% of the total portfolio may be invested in Money Market Mutual Funds.

17.18. SUPRANATIONALS, provided that the following criteria is met:
• The issue purchased shall be U.S. 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.
• Issues are "eligible for purchase and sale within the United States." • The securities are rated in the "AA" category or its equivalent or better by a NRSRO.
• No more than 30% of the total portfolio may be invested in these securities. • No more than 10% of the total portfolio per issuer
• The maximum maturity does not exceed five years.

XIII. MAXIMUM MATURITY
To the extent possible, the overall portfolio and investments shall take into consideration anticipated cash flow requirements and known future liabilities.

F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 13 • The purchase of foreign currency denominated securities is prohibited. • The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.

XV. RISK MANAGEMENT AND DIVERSIFICATION

The City further recognizes that certain types of securities, including variable rate securities, securities with principal pay downs prior to maturity, and securities with F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 14 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:
• The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements. • The maximum stated final maturity of individual securities in the portfolio will be five years, except as otherwise stated in this policy.
• The duration of the portfolio will strive at all times be approximately equal to the duration (typically, plus or minus 20%) of a market benchmark, an index selected by the City based on the City's investment objectives, constraints and risk tolerances.

XVIII. REPORTING

1. These reports shall include the type of investment, issuer, date of maturity, par and dollar amount invested on all securities, investments and moneys held by the City, and shall additionally include a description of any of the City's funds, investments, F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 15 or programs, that are under the management of contracted parties, including lending programs. With respect to all securities held by the City, and under management of any outside party that is not also a local public agency or the State of California Local Agency Investment Fund, the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation.

2. Monthly transactions for the period in accordance with California Government Code Section 53607.

4. A statement regarding whether the portfolio will allow the City to have adequate funds to meet its cash flow requirements for the next six months.

F.2.b
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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 16 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:

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.

GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed 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.

ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

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.

BID. The indicated price at which a buyer is willing to purchase a security or commodity.

BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.

CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.

CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS). A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage. CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.

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.

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Attachment: Investment Policy (redlined) (3648 : Annual Investment Policy Review And Authorize City Treasurer 2025) 17 COLLATERALIZED BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

COMMERCIAL PAPER. The short-term unsecured debt of corporations.