Paramount City Council
April 28, 2026

H. Proposition FF, adopted by Paramount voters on November 8, 1988, codified Chapter 17.20 of the Municipal Code and established a citywide maximum density of 22 units per acre for all residential developments and 70 dwelling units per acre for qualifying senior citizen housing developments; and
I. Proposition FF would conflict with the Housing Element’s default density of 30 units per acre and, therefore, is unenforceable under state housing law; and
J. The City desires to ensure that development occurs in a prudently effective manner, consistent with the goals, programs, and objectives of the General Plan, including the 2022 Housing Element, state housing law, and reasonable land use planning principles; and
K. The Planning Commission held a duly noticed public hearing on April 1, 2026 at which time it considered all evidence presented, both written and oral, and at the end of the hearing voted to adopt Resolution No. PC 26:012, recommending that the City Council adopt this Ordinance; and L. The City Council held a duly noticed public hearing on this Ordinance on April 28, 2026, at which time it considered all evidence presented, both written and oral.

SECTION 2. The Recitals set forth hereinabove are true and correct and incorporated herein by reference as if fully set forth herein.

SECTION 3. A new section 17.20.030 entitled “Implementation of Housing Element Mandate” is hereby added to Chapter 17.20 (“Initiative Regulating Density”) of Title 17 (“Zoning”) of the Paramount Municipal Code to read as follows:
Ҥ 17.20.030 Implementation of Housing Element Mandate.

In accordance with state housing law, this chapter shall not apply to a housing development project meeting or exceeding the default density for lower income households, as defined under Government Code section 65583.2 (or a similar provision of state law) located on a site listed in the sites inventory of the City’s adopted housing element. As of the codification of this subsection, the default density is 30 units per acre. This subsection shall be of no further force or effect as of October 1, 2029, unless the adopted housing element continues to mandate such a limitation on the enforcement of this chapter. In addition, this chapter does not apply to the extent it is preempted by other state housing law.” SECTION 4. California Environmental Quality Act (CEQA). This Ordinance is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) which is the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment and CEQA does not apply where it can be seen with ORDINANCE NO. 1217

certainty that there is no possibility that the activity may have a significant effect on the environment. In addition, this Ordinance is exempt from CEQA pursuant to Public Resources Code Section 21080.085 as it constitutes an action to implement the schedule of actions contained in an approved housing element.

SECTION 5. Severability. If any section, subsection, sentence, clause, or phrase in this ordinance or the application thereof to any person or circumstance is for any reason held invalid, the validity of the remainder of the ordinance or the application of such provision to other persons or circumstances shall be adopted thereby. The City Council hereby declares it would have passed this ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.

SECTION 6. Effective Date. This Ordinance shall take effect thirty days after its adoption, shall be certified as to its adoption by the City Clerk, and shall be published as required by law, together with the names and members of the City Council voting for and against the Ordinance.

PASSED, APPROVED and ADOPTED by the City Council of the City of Paramount this __ day of ____ 2026.

Brenda Olmos, Mayor
ATTEST
Heidi Luce, City Clerk
To: Honorable City Council
From: John Moreno, City Manager
By: John King, AICP, Planning and Building
Director
Ivan Reyes, Building and Housing
Manager
Date: April 28, 2026
SUBJECT: CONSIDERATION OF A RESOLUTION APPROVING A REQUEST BY CLIFFORD G. FRANZEN/HUNT MANAGEMENT COMPANY FOR

CAPITAL BUSINESS PROPERTIES, LLC FOR A MASTER
CONDITIONAL USE PERMIT FOR THE 22-SUITE CAPITAL BUSINESS

PARK AND ASSOCIATED OPERATING COVENANT AGREEMENT FOR
CERTAIN WAREHOUSE USES AT 15930-15962 DOWNEY AVENUE IN
THE M-1 (LIGHT MANUFACTURING) ZONE AND MAKING A FINDING

OF EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

BACKGROUND
On April 1, 2026, the Planning Commission approved a recommendation to the City Council to approve a request by Clifford G. Franzen/Hunt Management Company for Capital Business Properties, LLC for a Master Conditional Use Permit for the 22-suite Capital Business Park and associated Operating Covenant Agreement for certain warehouse uses at 15930-15962 Downey Avenue in the M-1 (Light Manufacturing) zone.

The 8.98-acre Capital Business Park (formerly the Koretoff Industrial Complex) is an industrial business park developed with five multitenant buildings with a total of 22 suites and 191,900 square feet of building area. Units range in size from 3,520 to 21,192 square feet, and the average suite size is 8,143 square feet. The property, constructed in 1976, is located on the east side of Downey Avenue between Alondra Boulevard and Monroe Street. In recent years, the property owner has upgraded the landscaping, installed decorative gates near the front of the property, and painted the buildings.

In the wake of major air quality concerns that came to the City’s attention in 2016, the City Council adopted Ordinance No. 1106/Zoning Ordinance Text Amendment No. 8 in 2018.

Along with a number of other actions, the ordinance updated the Paramount Municipal Code to require a conditional use permit (CUP) for warehouse and distribution uses in the M-1 (Light Manufacturing) and M-2 (Heavy Manufacturing) zones. The Planning Commission considers CUP applications through a public hearing process.

Agenda Report April 28, 2026
RESOLUTION NO. 26:014 Page 2
The Planning and Building Department reviewed the operations of the existing warehouse businesses located on the subject property. These businesses were previously established in their respective suites without the requirement for a Conditional Use Permit (CUP). However, pursuant to the City’s zoning regulations since 2018, the CUP requirement is applied on a per-suite basis.

In addition to the applicability of the CUP process to new warehouse uses in the industrial park, when an existing business relocates to a different suite within the same property, the relocation also triggers the need for a new CUP. This is the case even when the operational characteristics of the business remain unchanged.

Master CUP
With the review of warehouse uses becoming commonplace, the primary ownership of the Capital Business Park approached the City about a “Master Conditional Use Permit” for the subject properties. Upon review and discussion, it became apparent that such a Master CUP would be beneficial for all interests with the proper agreement. The proposal makes sense for the subject properties given the relatively recent history of existing warehouse uses, the ongoing high-quality property management and maintenance of each, and the amount of discretion and deliberation behind the owners’ tenant selection process.

The Master CUP would include a condition of approval requiring an Operating Covenant Agreement to be formally recorded with the Los Angeles County RegistrarRecorder/County Clerk.

The proposed Operating Covenant Agreement includes the following provisions and would be applicable to incoming warehouse tenants:
• Business license. Each tenant must obtain and maintain a Paramount business license.
• Planning review. The Planning and Building Department would review a proposed tenant and determine if a separate CUP would be required for business uses outside the scope of warehouse/distribution.
• Appeal. The property owner and/or a business can appeal a staff decision to the Planning Commission.
• Prohibited uses. Used automobile parts, tobacco, firearms, and hazardous materials are not permitted products for storage or distribution from the properties. • Uses that warrant a CUP. The storage and/or distribution of alcoholic beverages would require a CUP.
• Truck parking. Trucks must park in truck wells or other City-approved truck parking areas onsite.
• Electric vehicle (EV) charging stations. Two EV chargers for common use must be provided at the subject site before the agreement takes effect.

Agenda Report April 28, 2026
RESOLUTION NO. 26:014 Page 3
• Anti-idling sign. A sign shall be installed and maintained at each site stating that truck drivers shall limit idling of diesel-powered vehicles to less than five minutes in accordance with Title 13 – Section 2485 of the California Code of Regulations. • Workforce development. All new tenants shall make all reasonable efforts to hire Paramount residents. Such new tenants shall maintain contact with the workforce development board (SELACO).
• Indoor work and storage. All work must be indoors. Outdoor storage is prohibited. • Loading. All loading and unloading must be within private property. • Truck engines. Following City review and approval of an informational brochure, the property owner shall provide a brochure to each new tenant to assist in promoting transition to nondiesel truck engines. The owner shall update the brochure at minimum every two years with City review and approval of the changes. • Indemnity. The agreement includes indemnification and hold harmless provisions for the City.

DISCUSSION
The proposed Master CUP provides a strong opportunity to partner with a longstanding property owner to better serve the Paramount community. Through a series of negotiations with the property ownership, City staff, and the City Attorney, the proposed Master CUP offers a means to minimize City resources while still ensuring the expected high quality of life for the surrounding neighborhoods. The Master CUP promotes positive neighborliness, environmental sustainability, and an efficient use of staff time with an improved result in comparison to the existing CUP review process. The ownership follows a management philosophy that screens out potentially disruptive tenants and eliminates concerns with existing tenants. The proposed provisions of the Master CUP will further ensure a quality mix of tenants with minimal trucking impact.

FISCAL IMPACT
None.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity, and guidelines; and provide the framework for policy decisionmaking. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No. 1: Safe Community - Provide a safe place to live, work, and visit; No. 3: Economic Health - Support a healthy, sustainable economy reflecting community values; and No. 6: Efficient, Effective, and Fiscally Responsible - Deliver an efficient and effective City government in a fiscally responsible, transparent and collaborative manner.

RECOMMENDED ACTION
Conduct a public hearing and adopt Resolution No. 26:014.

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
RESOLUTION NO. 26:014

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT APPROVING A REQUEST BY CLIFFORD G. FRANZEN/HUNT

MANAGEMENT COMPANY FOR CAPITAL BUSINESS PROPERTIES,
LLC FOR A MASTER CONDITIONAL USE PERMIT FOR THE 22-SUITE

CAPITAL BUSINESS PARK AND ASSOCIATED OPERATING

COVENANT AGREEMENT FOR CERTAIN WAREHOUSE USES AT
15930-15962 DOWNEY AVENUE IN THE M-1 (LIGHT

MANUFACTURING) ZONE AND MAKING A FINDING OF EXEMPTION

UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS, the City of Paramount has received an application from Clifford G.

Franzen/Hunt Management Company for Capital Business Properties, LLC for a Master Conditional Use Permit (“Master CUP”) for the 22-suite Capital Business Park and associated Operating Covenant Agreement for certain warehouse uses at 15930-15962 Downey Avenue in the M-1 (Light Manufacturing) zone; and WHEREAS, Paramount Municipal Code Section 17.48.030 et seq., a portion of the Zoning Ordinance of the City of Paramount, requires the Planning Commission to duly notice a public hearing, receive a report from staff, conduct the hearing and consider all evidence before it, and thereafter announce its findings and decisions in zoning matters; and
WHEREAS, as warehouse uses become more common at the Capital Business Park, the property owner approached the City about a Master CUP for the entire Capital Business Park which will result in a more effective process for approval of warehouse uses on the Capital Business Park, yet maintain consistent high-quality operations and property maintenance for the benefit of the Paramount community; and WHEREAS, a Master CUP would be beneficial for all interests through the approval and implementation of a signed and recorded Operating Covenant Agreement; WHEREAS, the Planning Commission held a duly noticed public hearing on April 1, 2026 at which time it considered all evidence presented, both written and oral, and at the end of the hearing voted to adopt Planning Commission Resolution No. PC 26:010, recommending that the City Council adopt this resolution; and WHEREAS, the City Council opened the duly noticed public hearing for the proposed Master CUP on April 28, 2026, when the City Council conducted the duly noticed public hearing and heard comments for and against the associated resolution; and
WHEREAS, the City Council of the City of Paramount finds that this project is a Class 1 (existing facilities) Categorical Exemption pursuant to Article 19, Section 15301 of California Environmental Quality Act (CEQA) Guidelines.

RESOLUTION NO. 26:014

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARAMOUNT AS FOLLOWS:

SECTION 1. The above recitations are true and correct.

SECTION 2. The City Council finds that it has conducted all the public hearings necessary and in compliance with State Law and the Municipal Code of the City of Paramount.

SECTION 3. The City Council finds that all requirements of notice have been complied with pursuant to State Law and the Municipal Code.

SECTION 4. The City Council finds that the evidence presented does justify the granting of this application for the following reasons:

1. The requested use at the location proposed will not:
a. Adversely affect the health, peace, safety, or welfare of persons residing or working in the surrounding area;
b. Be materially detrimental to the use, enjoyment, or valuation of property of other persons located in the vicinity of the site; nor c. Jeopardize, endanger or otherwise constitute a menace to the public health, safety, or general welfare; and

2. The proposed site is adequate in size and shape to accommodate the yards, walls, fences, parking and loading facilities, landscaping and other development features prescribed in this chapter, or as is otherwise required in order to integrate such use with the uses in the surrounding area; and

3. That the proposed site is adequately served:
a. By highways or streets of sufficient width and improved as necessary to carry the kind and quantity of traffic such use would generate, and b. By other public or private service facilities as are required.

SECTION 5. That pursuant to Resolution No. 82:043 of the City Council the time limit to seek judicial review pursuant to California Code of Civil Procedure is ninety (90) days from the date hereof.

SECTION 6. The City Council hereby approves the applied for Conditional Use Permit as to use in the above entitled matter, subject to the following conditions:

RESOLUTION NO. 26:014

General

1. Affidavit. This Conditional Use Permit application shall not be effective for any purposes until the applicant has first filed at the office of the Conditional Use Permit a sworn affidavit both acknowledging and accepting all conditions of approval of this Conditional Use Permit application. The affidavit shall be submitted by Friday, May 8, 2026. Failure to provide the City with the requisite affidavit within the time stated hereinabove shall render the Conditional Use Permit void.

2. Revocation. It is hereby declared to be the intent, that if any provision of this permit is violated or held to be invalid, or if any law, statute, or ordinance is violated, this Permit shall be subject to the revocation process at which time, the Permit may become terminated and the privileges granted hereunder shall lapse.

3. Violations. It is further declared and made a condition of this Conditional Use Permit that if any condition hereof is violated or if any law, statute, or ordinance is violated, the exception shall be suspended and the privileges granted hereunder shall lapse, provided that the applicant has been given written notice to cease such violation and has failed to do so within thirty (30) days of receipt of said notification.

4. Grounds for Modification, Suspension, Revocation. The applicant understands that an Unclassified Use Permit, Conditional Use Permit, and/or Variance granted under the Zoning Ordinance, or any section thereof, is granted and accepted by all parties with the express understanding that the Planning Commission may hold a public hearing, notice of time and place of which shall be given to the applicant, if one or more of the following conditions exists:
a. That the approval was obtained by fraud;
b. That the need for which such approval was granted has ceased to exist or has been suspended for one year or more;
c. That the Unclassified Use Permit, Conditional Use Permit, and/or Variance is being, or recently has been, exercised contrary to the terms or conditions of such approval or in violation of any statute, provision of the Code, ordinance, law, or regulation;
d. That the need for which the approval was granted was so exercised as to be detrimental to the public health or safety or so as to constitute a nuisance (Section 17.48.070, Paramount Municipal Code).

RESOLUTION NO. 26:014

If after such hearing, the Planning Commission finds that any grounds for modification, suspension, or revocation exist, the Planning Commission may modify, suspend, or revoke such Unclassified Use Permit, Conditional Use Permit, and/or Variance.

Permitting

5. License. All tenants and contractors shall obtain a business license to work and/or conduct business in the City of Paramount.

6. Fees. All applicable development fees are due prior to the issuance of building permits for any construction associated with a business operation.

7. Alterations. No exterior structural alteration or building color change, other than the colors or building treatments originally approved, shall be permitted without the prior approval of the Planning and Building Department.

8. Window Security Bars. The installation of exterior window security bars is prohibited in accordance with Section 17.32.090(J) of the Paramount Municipal Code.

9. Paint. The applicant shall maintain sufficient quantities of matching exterior paint to remove graffiti, blemishes, and peeling paint.

10. Tarps. Tarps are prohibited from use as carports, patio covers, shade covers, and covers for outdoor storage in all front and side setback areas, rear yard areas, over driveways, and in parking and circulation areas.

11. Lighting. The parking lot and other common areas shall be illuminated to a demonstrated degree equal to or exceeding one point five candles per foot.

12. Labor Regulations. The applicant shall comply with all relevant labor laws and regulations of the Division of Labor Standards Enforcement of the California Department of Industrial Relations and the Division of Occupational Safety and Health (Cal/OSHA).

13. Agency Regulations. In the ongoing business operations of businesses approved to operate under the conditions of the Master Conditional Use Permit shall comply with all relevant federal, state, and local laws and regulations of all relevant government agencies, including but not limited to (1) the Los Angeles County Fire Department, (2) the Industrial Waste Unit of the Los Angeles County Department of Public Works (3) the South Coast Air Quality Management District, and (4) the California Department of Resources Recycling and Recovery (CalRecycle).

RESOLUTION NO. 26:014

14. Parking. All parking areas shall comply with applicable development requirements as specified in Article 3 (Loading Areas and Off-Street Parking) of Chapter 17.44 of the Paramount Municipal Code. The parking lot shall be restriped and maintained in a clear condition in compliance with Americans with Disabilities Act (ADA) requirements. The parking spaces and drive aisles shall meet all Municipal Code and Americans with Disabilities Act (ADA) requirements.

15. Urban Stormwater Management. The applicant shall comply with Chapter

8.20 (Urban Stormwater Management) of the Paramount Municipal Code.

The outside premises shall be maintained in a clean manner at all times, and trash and debris shall be promptly removed from the yard areas, landscaped areas, the parking lot, and the surrounding property perimeter.

The parking lot shall be completely swept and maintained free of debris and litter at least weekly. Areas adjacent to a parking lot, including, but not limited to, planters, loading and unloading areas, and surrounding public rights-of-way shall be maintained free of debris and litter by sweeping and other equally effective measures. Such debris and litter shall be collected and properly disposed of in compliance with all applicable local, State, and Federal regulations.

Business Operations

16. Business Hours. Business hours shall be limited to between 7:00 a.m. to 9:00 p.m., Monday through Saturday. Any request for extended hour operations shall require the submittal and approval of a separate Conditional Use Permit (CUP) prior to extending business hours beyond those authorized herein.

17. Planning Review. The Planning and Building Department would review a proposed tenant and determine if a separate CUP would be required for business uses outside the scope of warehouse/distribution.

18. Appeal. The property owner and/or a business can appeal a staff decision to the Planning Commission.

19. Prohibited Uses. Used automobile parts, tobacco, firearms, and hazardous materials are not permitted products for storage or distribution from the properties.

20. Uses that Warrant a CUP. The storage and/or distribution of alcoholic beverages would require a CUP.

21. Electric Vehicle (EV) Charging Stations. Two EV chargers for common use must be provided at the subject site before the agreement takes effect.

22. Truck Parking. Trucks must park in truck wells or other City-approved truck parking areas onsite.

RESOLUTION NO. 26:014

23. Truck Deliveries. Trucks delivering merchandise to the site shall unload within the property. Stopping, loading, and unloading of delivery trucks associated with inbound and outbound shipments is prohibited on public streets and alleys.

24. Truck Operations. Trucks shall operate in a manner appropriate to the intent of the design of the property. Truck queuing shall be prohibited anywhere on the property. Truck operations shall be to a frequency that is harmonious with the surrounding community.

25. Anti-idling Sign. A sign shall be installed and maintained at each site stating that truck drivers shall limit idling of diesel-powered vehicles to less than five minutes in accordance with Title 13 – Section 2485 of the California Code of Regulations.

26. Workforce Development. All new tenants shall make all reasonable efforts to hire Paramount residents. Such new tenants shall maintain contact with the workforce development board (SELACO).

27. Business License. The applicant and all successor tenants shall obtain and maintain a current City of Paramount business license.

28. Signs. Signs, banners, and feather flags require separate review and approval by the Planning and Building Department prior to fabrication and installation. Signs shall not conceal architectural features on the exterior of the building. Damage to the building exterior from wall signs that have been removed shall be repainted and repaired as needed.

29. Window Signs. Window sign area shall be limited to 40 percent of each grouping of adjacent panes of glass.

30. Existing Signs. Any sign on the building and parking lot area of the subject suite in disrepair shall be repaired or replaced with an equivalent sign and maintained in good condition.

31. Special Events. Special events shall be reviewed in accordance with Special Event Permit regulations for possible approval by the Planning and Building Department.

32. Clean Premises. The outside premises shall be maintained in a clean manner at all times, and trash and debris shall be promptly removed from the yard areas, landscaped areas, and the surrounding property perimeter.

33. Landscaping. Landscaping shall be maintained to the satisfaction of the Planning and Building Department in perpetuity. Landscape changes are subject to Planning and Building Department review and approval. Mature trees shall not be removed without prior written approval by the Planning RESOLUTION NO. 26:014

and Building Department. Plant material shall be maintained in thriving condition in perpetuity in compliance with Chapter 17.96 (Water-Efficient Landscape Provisions) of the Paramount Municipal Code.

34. Floor Plan Revisions. The approved floor plan shall not be changed without prior approval by the Planning and Building Department.

35. Security Cameras. Security cameras shall be installed following City review and approval of a security camera plan. The approved cameras or more technologically advanced versions of the approved cameras shall be maintained in perpetuity. Security camera recordings shall be maintained for at least 30 days and provided for law enforcement review upon request.

36. Noise. Outdoor speakers or other exterior audible devices are prohibited.

37. Bicycle Rack. At least one bicycle rack shall be provided and maintained in good condition in perpetuity. The rack shall be an inverted “U” or another rack type that allows for a bicycle frame and one wheel to be attached. The type, color, and precise location of the rack shall be reviewed and approved by the Planning and Building Department prior to purchase or installation of the racks. The precise location shall be within the clear range of a security camera.

38. Building Maintenance. The existing exterior shall be touched up, repaired as needed, and maintained in good condition. The aluminum window screens shall be removed.

39. Screening. Screening materials shall be reviewed and approved by the Planning and Building Department prior to installation. Chain link may not be used as a component of screening material.

40. Organic Waste. The business shall comply with organic waste disposal requirements of Chapter 13.09 of the Paramount Municipal Code.

41. Trash and Other Waste. Businesses shall comply with all relevant requirements for trash and other waste streams referenced in Chapter

17.118 of the Paramount Municipal Code

42. Tenant Improvement. Future tenant improvements and other construction shall meet all requirements of the Building and Safety Division.

43. Exterior. No exterior structural alteration or building color change, other than the colors or building treatments originally approved, shall be permitted without the prior approval of the Planning and Building Department.

44. Graffiti Removal. Any graffiti, including graffiti in the form of window etching, shall be promptly removed.

RESOLUTION NO. 26:014

45. Barbed Wire. Barbed/razor wire is prohibited.

46. Noise Ordinance. In the ongoing business operations, the applicant shall comply with the Noise Ordinance (Chapter 9.12 of the Paramount Municipal Code).

47. Objectionable Operations. All operations conducted on the premises shall not be objectionable by reason of noise, steam, vibration, odor, or hazard.

Final Approval

48. The Operating Covenant Agreement (Exhibit A) associated with this project shall be fully executed and recorded with the Los Angeles County Registrar-Recorder/County Clerk prior to the commencement of operations under the Master CUP. No rights granted by the Master CUP may be exercised until proof of recordation is submitted to the Planning and Building Department.

SECTION 7. Severability. If any section, subsection, sentence, clause, phrase, or portion of this resolution is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this resolution shall nonetheless remain in full force and effect. The City Council hereby declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this resolution, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this resolution be declared invalid or unenforceable.

SECTION 8. This resolution shall take effect immediately.

PASSED, APPROVED and ADOPTED by the City Council of the City of Paramount this 28th day of April 2026.

Brenda Olmos, Mayor
ATTEST:

Heidi Luce, City Clerk
1 EXHIBIT “A”

OPERATING COVENANT AGREEMENT
By and Between the

CITY OF PARAMOUNT
and

CAPITAL BUSINESS PROPERTIES, LLC
April___, 2026
2 COVENANT AGREEMENT
THIS OPERATING COVENANT AGREEMENT (“Agreement”) dated as of April ___, 2026, is entered into by and between the CITY OF PARAMOUNT, a general municipal corporation of the State of California ("City") and CAPITAL BUSINESS PROPERTIES, LLC ("Operator"). The City and Operator agree as follows:

ARTICLE 1. PURPOSE OF THIS AGREEMENT
A. The Operator is the owner of an improved industrial park located at 15930- 15962 Downey Avenue (“the Property”) within the City at which Operator currently leases multiple-tenant industrial uses. The improvements on the Property were designed to accommodate warehouse/distribution (“warehouse”) businesses with features such as a wide driveway entrance and wide drive aisles to accommodate box trucks and tractortrailer trucks. In addition, each tenant premises includes at least one covered truck-well with dock high loading and one ground level loading door. There is sufficient onsite parking to accommodate a wide variety of industrial uses, including warehouse businesses.

B. The Operator wishes to coordinate with the City to establish a Master Conditional Use Permit (“Master CUP”) which would apply to the Property without the Operator having to apply to City for separate conditional use permits for each new warehouse tenant in the Property.

C. In order to establish a Master CUP on the Property for the benefit of the Operator for warehouse uses, the City has determined that requiring the Operator to meet certain operating covenants for the Master CUP as set out in this Agreement is necessary for the public health and safety of the City and Operator is willing to enter into and be bound by such Covenants.

D. The purpose of this Agreement is to set forth the terms upon which City believes, and hereby finds, that based upon the location of the Property within the Industrial Land Use Designation as defined in the City’s General Plan, the design of the existing improvements on the Property, and the covenants and conditions contained herein, the policies of the General Plan for the Industrial Land Use Designation will be achieved, there will be no adverse impacts upon the neighbors or the community, and there will be uniform conditions of approval for each new warehouse tenant on the Property.

ARTICLE 2. DEFINITIONS
“Agreement” means this Operating Covenant by and between City and Operator. “City” means the City of Paramount, a general municipal corporation, exercising governmental functions and powers and organized and existing under the laws of the 3 State of California, and any assignee of or successor to its rights, powers and responsibilities.
“County” means the County of Los Angeles, California.
“Date of Agreement” means the date first written above. “Operator” means CAPITAL BUSINESS PROPERTIES LLC.
“Parties” means the City and Operator, collectively.
“Planning and Building Director” means the Planning and Building Director of the City or his or her designee.
“Site” means the industrial park Property commonly known as the Capital Business Park; containing tenant spaces referred to as 15930-15962 Downey Ave., Paramount, California; and which Property is commonly identified as 15930 Downey Avenue, Paramount, California.

ARTICLE 3. OPERATOR OBLIGATIONS AND OPERATING COVENANTS The Operator shall comply, or cause to comply with each of the following covenants and conditions for the Site under this Agreement:

1. Business License. Each individual warehouse business shall obtain and maintain, at all times, an active City of Paramount business license.

2. Initial Review. Each new individual warehouse business shall be subject to an initial administrative review by the City Planning and Building Department which initial review shall be completed within two business days. The purpose of the initial administrative review shall be limited to determine if additional conditions of approval outside of this Master CUP are warranted because the proposed business is not a warehouse/distribution business, for example, because it contains a manufacturing component or plans to ship products on such a frequent basis by tractor-trailer trucks or large box trucks such that the business may be better characterized as a logistics use rather than warehouse/distribution. The City agrees that, as of the date of this Agreement, none of the existing businesses at the Property is considered to be a logistics use. The City shall have the right to review non-warehouse use components of new tenants through a separate conditional use permit review.

3. Business Description. To facilitate the initial review, each new tenant shall use best efforts to describe in writing all proposed machinery to be used in the business, including but not limited to forklifts, pallet jacks, hand trucks, industrial scales, stretch wrap machines, packing tables, etc.
4 4. Appeal. The Operator and any new warehouse business may appeal the requirement of additional conditions of approval to the Paramount Planning Commission.

The decision of the Planning Commission may be appealed to the Paramount City Council.

5. Uses Not Covered. Warehouse uses not covered by this Master CUP are those warehousing and/or wholesaling of alcohol, automobile parts, tobacco, hazardous materials, or firearms, all of which uses are expressly outside the scope of this Agreement. Other than providing for the conditional approval of certain warehouse uses on the Site, nothing contained herein shall limit or expand the ability of the Operator or a new tenant to apply for and obtain a business license in accordance with the Paramount Municipal Code.

6. Landscaping. The Operator shall preserve and maintain the existing trees and other landscaping and maintain a water-efficient irrigation system in compliance with Chapter 17.96 of the Paramount Municipal Code.

7. Travel Demand Measures. The Operator shall comply with the travel demand measures contained in Sec. 17.32.140(A), (B), and (C) of the Paramount Municipal Code, which were incorporated into the Municipal Code after the construction of the Site. Examples include installing a bulletin board with transit/rideshare/carpool information and marking preferential parking stalls for carpools. With respect to Sec.

17.32.140(c)(4), in lieu of a bicycle facilities, the Operator may opt to provide a $3,000.00 payment to the City to be specifically directed toward active transportation planning and/or active transportation projects.

8. Fences, etc. The Operator shall comply with Section 17.32.090 regarding perimeter fencing. No barbed wire, concertina wire, razor wire, or cut glass shall be used as a fence or part of a fence, wall, or hedge along any property line or within any required side, rear, or front yard where visible from the public right-of way. Any existing chain-link fencing shall be removed and replaced with an alternative approved fencing. Compliance with this condition shall be completed no later than April 28, 2027.

9. Electric Vehicle Charging. The Operator shall provide an EV charging station (with two chargers) at the Site for common use.

10. Certificate of Occupancy. If applicable, all proposed uses that require a new certificate of occupancy shall comply with all Building and Safety Division requirements prior to occupancy.

11. New Construction. All feasible building resiliency and environmental sustainability provisions shall be incorporated into any new construction and significant building rehabilitation.

12. Sign to Limit Idling. A sign shall be installed and maintained at the Site stating that truck drivers shall limit idling of diesel-powered vehicles to less than five (5) minutes in accordance with Title 13 – Section 2485 of the California Code of Regulations. 5 13. Additional Requirements for New Tenants. Through leases with its new tenants, the Operator shall require that all new tenants shall comply with all of the following requirements:
(A) All new tenants shall make all reasonable efforts to hire Paramount residents. Such new tenants shall maintain contact with the workforce development board (SELACO).
(B) All applicable responsible parties shall comply with and maintain required permits from all other applicable regulatory agencies, including but not limited to the United States Environmental Protection Agency, the Los Angeles County Fire Department, the South Coast Air Quality Management District, the State Water Resources Control Board, the Department of Transportation, and the Los Angeles Regional Water Quality Control Board, and the City of Paramount. The use of Best Available Control Technology is required at minimum.
(C) Each business shall comply with all relevant labor laws and regulations of the Division of Labor Standards Enforcement of the California Department of Industrial Relations and the Division of Occupational Safety and Health (Cal/OSHA). (D) Each business shall comply with all relevant regulations for the disposal of waste, including but not limited to the California Department of Resources Recycling and Recovery (CalRecycle) and California Department of Toxic Substances Control (DTSC).
(E) Trucks or other vehicles delivering products shall park exclusively within the Property.
(F) The overnight storage of oversize vehicles shall be limited to only truck wells or other City-approved truck parking areas. (G) All work shall only be conducted indoors.
(H) Outdoor storage is expressly prohibited anywhere on the Site. (I) All truck drivers shall limit idling of diesel-powered vehicles to less than five (5) minutes in accordance with Title 13 – Section 2485 of the California Code of Regulations.
(J) The tenants are responsible for all trucks to adhere to designated truck routes established by the City.
(K) All loading and unloading shall be conducted onsite. Truck parking, idling, standing, loading, unloading, or any combination thereof within City of Paramount public streets is prohibited.
6 (L) Following City review and approval of an informational brochure, the Operator shall provide a brochure to each new tenant to assist in promoting transition to nondiesel truck engines. The Operator shall update and recirculate the brochure to each tenant at minimum every two years with City review and approval of the changes. The Operator shall provide the City a digital and hard copy of each finalized brochure. (M) Waste Facilities/Trash Enclosures. The business shall comply with Chapter 17.118 of the Paramount Municipal Code regarding receptacles, facilities, and storage for garbage waste, refuse, trash, organic waste, and nonorganic recyclables.

ARTICLE 4. DEFAULTS, REMEDIES AND TERMINATION

14. Defaults – General. Failure by the Operator to perform or cause to perform any condition or obligation of this Agreement under Article 3 constitutes a default under this Agreement. The party who so fails must immediately commence to cure, correct or remedy such failure and shall complete such cure, correction or remedy with reasonable diligence and during any period of curing shall not be in default.

15. Legal Actions.
(i) In the event any default under this Agreement is not cured within Forty-five (45) days after written notice by the City, the City may cause the Master CUP to be subject to revocation by the City Council and causing this Agreement to be terminated.
(ii) Institution of Legal Actions. In addition to any other rights or remedies, the City may institute legal action to cure, correct or remedy any default, or recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement.
(iii) Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement.

16. Termination. In order to enable redevelopment or the substantial renovation of the Property, the Operator shall have the right to terminate this Agreement upon not less than 120 days written notice. If any new tenants subject to this Agreement are to remain after the expiration of such 120 days period, such tenant shall apply for and obtain a conditional use permit.

ARTICLE 5. GENERAL PROVISIONS

17. Notices, Demands, and Communications between the Parties. Formal notices, demands and communications between City and Operator shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, or by commercial overnight delivery to the principal offices of City and Operator as set forth below. Such written notices, demands and communications may be 7 sent in the same manner to such other addresses as either party may from time-to-time designate by mail.

To the City: City of Paramount
16400 Colorado Avenue
Paramount, CA 90723
Attn: Planning and Building Director
To the Operator: Capital Business Properties, LLC
28105 San Lucas
Mission Viejo, CA 92693
Attn:_____________

18. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe, or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections of this Agreement, unless expressly stated otherwise.

19. Severability. If any term, provision, condition, or covenant of this Agreement or its application to any party or circumstances shall he held, to any extent, invalid or unenforceable, the remainder of this Agreement, or of the application of the term, provision, condition, or covenant to persons or circumstances other than those as to whom or which is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law.

20. Legal Advice. Each party represents and warrants to the other the following:
they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; each has received independent legal advice from its respective legal counsel as to the matters set forth in this Agreement, or has knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, each has freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or its respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. Nothing contained in this Agreement shall be construed to render the City in any way or for any purpose a partner, joint venture, or associated in any relationship with Operator, nor shall this Agreement be construed to authorize any party to act as agent for the other.

21. Indemnity. Operator will indemnify, defend with legal counsel approved by City and hold the City, its officers, employees and agents harmless against all liability, loss, damage, expenses and costs (including but not limited to attorney’s fees and all costs and fees of litigation) (i) arising or alleged to arise out of Operator’s performance for failure to perform hereunder; (i) any act, omission or negligence of the Operator or Operator’s tenants. Nothing herein shall prevent Operator from itself seeking indemnification from other parties.
8 22. Hazardous Materials Indemnification. Operator further shall indemnify, defend, reimburse and hold harmless the City, its elected officials, officers, employees, agents, consultants, and attorneys (the “City Indemnitees”), harmless from and against any and all claims, actions, proceedings, lawsuits, orders, costs, liabilities, judgments, damages, fines, encumbrances, liens, penalties, punitive damages, losses and expenses (including without limitation all costs and expenses reasonably incurred to investigate and defend claims, whether or not such claim is ultimately defeated, and costs and expenses reasonably incurred for consultants, court fees, administrative fees, expert witness fees, and attorneys’ fees) of whatever kind or nature, contingent or otherwise, matured or not matured, foreseeable or unforeseeable, any of which are suffered or incurred by said indemnified parties, or assessed, levied or asserted by any person or entity (whether governmental or private) against said indemnified parties, after the date hereof and relating to environmental Claims, environmental Cleanup Liability arising from the release or threatened release of hazardous materials in or into the soil or groundwater in, on, under or from the Project as a result of the use, generation, discharge, storage, handling or disposal of hazardous materials by Operator or Operator’s agents, employees, contractors or invitees. Nothing in this indemnification shall prevent Operator from seeking indemnification from other parties.

23. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors, transferees and assigns of each of the Parties hereto, whether by merger, consolidation, sale, transfer, liquidation or otherwise, and shall run with the land.

24. Counterpart Originals. This Agreement may be executed in multiple counterparts, and when signed and delivered by all Parties, shall constitute one and the same instrument. A signed counterpart delivered by electronic mail shall be deemed to be an original.

25. No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit for the Parties, their successors and assigns, and the new tenants. No other person shall have any right of action based upon any provision of this Agreement.

26. Attorney’s Fees. In the event that suit is brought for the enforcement of this Agreement or, as of the result of any alleged breach hereof, the prevailing party or parties in such suit shall be entitled to recover their reasonable attorneys’ fees from the losing party or parties, and any judgment or decree rendered in such proceeding shall include an award thereof.

27. Integration, Waiver, and Amendments. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto and supersedes all negotiations or previous agreements between the Parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City and Operator. Operator and City agree to mutually consider reasonable requests for written amendments to this 9 Agreement. All amendments hereto must be in writing and signed by the appropriate authorities of City and Operator.

IN WITNESS WHEREOF, the City and the Operator have signed this Agreement effective as of the Date of Agreement.

CITY:

CITY OF PARAMOUNT
By ___________________________
John Moreno, City Manager
Attest:

By__________________________
Heidi Luce, City Clerk
OPERATOR:

CAPITAL BUSINESS PROPERTIES LLC
By: CAPITAL BUSINESS PROPERTIES LLC
By: ______________________________
_______________________
C:\PGCOMPILERSERVICERELEASE\TEMP\PARAMOUNTCITY\6402\1174\1.DOCX;4/24/2026 12:32 AM To: Honorable City Council
From: John Moreno, City Manager
By: Lana Dich, Finance Director
Karemy Quintero, Finance Assistant
Date: April 28, 2026
Subject: ADOPTING THE STATEMENT OF INVESTMENT POLICY FOR THE CITY OF PARAMOUNT FOR FISCAL YEAR 2026-2027

BACKGROUND
California Government Code Section 53646 recommends that local agencies review and approve their investment policy once a year at a public meeting. While it is not required by statute, it is in the best interest of the City to discuss the policy with the City Council and have the policy approved and adopted. A public vote signifies that the City Council shares fiduciary responsibility with the City’s treasurer and increases the authority and legitimacy of the investment policy, providing for transparency and disclosure. We believe that the annual review and adoption is a financially sound organizational practice that should be maintained even if there are no changes to the policy.

The City’s current Investment Policy was adopted with a limited range of allowable investment instruments. These limitations were primarily influenced by the investment option available through the City’s prior broker/dealer relationships at the time. While the existing policy has supported the City’s objectives of safety, liquidity, and yield, it restricts the City’s ability to fully diversify its investment portfolio and optimize returns within prudent risk parameters.

Below are summaries of the main changes to the policy added:

8. Authorized and Suitable Investments -

2. “…There is no limitation as to the percentage of the City’s portfolio that may be invested in this category. The maximum maturity for this investment is five years from the time of settlement. The mature of Agency mortgage-backed or assetbacked securities shall be measured by Weighted-Average-Life (WAL), which is not to exceed 5 years.”

3. “… A maximum of Seventy-Five Million may be invested in LAIF, while there is no limit to investment in the Los Angeles County Investment Pool.” Agenda Report April 28, 2026
RESOLUTION NO. 26:013 Page 2

7. “…Investments in mutual funds shall not exceed twenty percent (20%) of the City’s surplus money.”

8. “Medium-term corporate notes shall mean all corporate and depository institution debt securities issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States, that are rated in the category of “A” or better by one NRSRO. A maximum of 30% of the City’s portfolio may be invested in this category. The maximum maturity for this investment is five years from the time of settlement.”

9. “Supranational Debt Obligations. United States dollar-denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development of the World Bank (IBRD), International Finance Corporation (IFC), and Inter-American Development Bank (IABD), with maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments must have a minimum rating of AA or better by at least one NRSRO, and shall not exceed 30% of the City’s surplus funds, and not more than 10% of the market value of the portfolio may be invested in notes issued by any one supranational. The maximum maturity period may not exceed 5 years from the time of settlement.”

10. “A mortgage passthrough security, collateralized mortgage obligation, mortgage- backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond with a maximum remaining maturity of five years or less as measured by Weighted-Average Life (WAL). Securities shall be rated in the category of "AA" or better by one NRSRO. No more than 20 percent of the market value of the City's investment portfolio shall be invested in this category.”

11. “Bonds, notes, warrants, or other evidences of indebtedness of a local agency within the State of California, or registered treasury notes or bonds of any of the other 49 states, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency or state. A maturity limitation of five years from time of settlement is applicable.”

12. “Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recognized statistical rating organization (NRSRO) and issued by a domestic corporation having assets in excess of $500,000,000 and has a long-term debt rating in the category of “A” or better by one NRSRO. The purchase of eligible commercial paper may not exceed 397 days maturity nor represent more than 5% of the outstanding paper of an issuing corporation.”
Agenda Report April 28, 2026
RESOLUTION NO. 26:013 Page 3

13. “Repurchase Agreements are purchases of securities by the City under an agreement with a term of one (1) year or less whereby the seller will “repurchase” the same securities on or before a specified date or on demand of either party and for a specified amount. The underlying securities must be delivered to the City’s custodial account by book entry, physical delivery or a third-party custodial agreement.”

14. Maximum Maturities – “…Both Agency and Non-Agency Mortgage-Backed Securities and Asset-Backed Securities may be measured by their WeightedAverage-Life when determining allowable maturity limits.

17. Reporting – “The Investment Advisor shall report to the City, on a monthly basis, the weighted-average-life for each structured security to ensure compliance with the individual 5-year weighted-average-life limitation. All data shall be maintained by the Investment Advisor for record-keeping purposes. If a structured security is reported to have a weighted-average-life greater than 5 years, it shall be flagged for immediate discussion with both the City and Investment Advisor to determine if the security shall be held or liquidated, depending on underlying risk and broader market conditions. Notwithstanding the aforementioned process, any security with a weighted-average-life greater than 4 years shall be monitored on a monthly basis to note any reporting trends.”

19. Glossary of Terms in this Policy – “Weighted-Average-Life (WAL): Measures the average length of time for anticipated principal repayments to measure a bond's risk and liquidity. In order to calculate a bond's WAL, assumptions must be made regarding prepayment event probabilities, prepayment amounts, prepayment speed, underlying asset leverage, and other collateral features as well as macroeconomic drivers such as, but not limited to, interest rate expectations, home prices, and mortgage rates. Institutionally, proprietary models use these various assumed inputs to estimate the amount and timing of principal repayments in order to produce a WAL output that functions as a useful metric to understand interest rate risk, prepayment risk, and extension risk.”

DISCUSSION
The proposed update to the Investment Policy expands the list of allowable investments to align more closely with the provisions of the California Government Code. These enhancements provide the City with greater flexibility to:
 Diversify the investment portfolio across a broader range of permitted instruments;  Improve overall portfolio performance while maintaining safety and liquidity as top priorities;
 Adapt to changing market conditions and take advantage of competitive investment opportunities.

Agenda Report April 28, 2026
RESOLUTION NO. 26:013 Page 4
Collectively, these updates modernize the City’s investment framework and position the City to achieve improved long-term financial performance while maintaining compliance with State law and prudent public fund management practices. The Investment Policy (Exhibit A) continues to prioritize the core principles of safety of principal, liquidity, and yield, in that order.

This Investment Policy has been prepared in conformance with the existing laws of the State of California for General Law cities and adheres to the standards set forth by the Government Finance Officers Association (GFOA), the Municipal Treasurers' Association of the United States and Canada (MTA US&C), and the California Municipal Treasurer’s Association (CMTA).

FISCAL IMPACT
There is no fiscal impact associated with the recommended action. However, increased diversification is expected to enhance long-term investment earnings and reduce portfolio risk over time.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization; establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No. 6 Efficient, Effective, and Fiscally Responsible.

RECOMMENDED ACTION
Adopt Resolution No. 26:013.

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
RESOLUTION NO. 26:013

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT

ADOPTING THE STATEMENT OF INVESTMENT POLICY FOR THE CITY OF PARAMOUNT FOR FISCAL YEAR 2026-2027
WHEREAS, the California Government Code Section 53646 recommends the City Treasurer to submit a Statement of Investment Policy to the City Council each fiscal year; and
WHEREAS, the City of Paramount considers the annual submittal of the Statement of Investment Policy to the City Council for their review to be a sound organizational practice; and
WHEREAS, the Investment Policy is necessary in order to assure the City Council that the City's investment goals of safety, liquidity, yield, and safekeeping are met; and WHEREAS, the Investment Policy attached hereto as “Exhibit A” was designed according to the specific needs of the City of Paramount in compliance with Government Code regulations.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARAMOUNT AS FOLLOWS:

SECTION 1. The above recitations are true and correct.

SECTION 2. The City Council hereby approves the adoption of the Investment Policy attached hereto as “Exhibit A” and authorizes the City Treasurer to invest the City's idle funds in accordance with its provisions.

SECTION 3. This Resolution shall take effect immediately upon its adoption.

PASSED, APPROVED and ADOPTED by the Paramount City Council this 28th day of April 2026.
________________________________
Brenda Olmos, Mayor
Attest:
______________________________
Heidi Luce, City Clerk
City of Paramount – Investment Policy 1

EXHIBIT A

CITY OF PARAMOUNT INVESTMENT POLICY
(Last Revised 3/16/2026)
Table of Contents

1. Policy........................................................................................................................................2

2. Scope........................................................................................................................................2

3. Prudence ..................................................................................................................................2

4. Objectives ................................................................................................................................2

5. Delegation of Authority...........................................................................................................3

6. Ethics and Conflicts of Interest .............................................................................................3

7. Authorized Dealers and Institutions......................................................................................4

8. Authorized and Suitable Investments ...................................................................................4

9. Review of Investment Portfolio..............................................................................................8

10. Investment Pools / Money Market Funds............................................................................8

11. Collateralization.....................................................................................................................8

12. Safekeeping and Custody ....................................................................................................9

13. Diversification........................................................................................................................9

14. Maximum Maturities..............................................................................................................9

15. Internal Controls....................................................................................................................9

16. Performance Standards......................................................................................................10

17. Reporting .............................................................................................................................10

18. Investment Policy Adoption ...............................................................................................11

19. Glossary of Terms in this Policy........................................................................................11

20. Glossary of General Investment Terms ............................................................................13 City of Paramount – Investment Policy 2

1. Policy
The City of Paramount shall invest public funds in such a manner as to comply with state and local laws; ensure prudent money management; provide for daily cash flow requirements; and meet the objectives of the Policy, in priority order of Safety, Liquidity and Return on investment. In accordance with the Municipal Code of the City of Paramount and under authority granted by the City Council, the City Finance Director is responsible for investing the unexpended cash in the City Treasury.

2. Scope
The investment policy applies to all investment activities and financial assets of the City of Paramount as accounted for in the Annual Comprehensive Financial Report (ACFR).

This policy is applicable, but not limited to, all funds listed below:
• General Fund
• Capital Funds
• Other Special Revenue Funds, Debt Service Funds, Internal Service Funds • Trust and Agency Funds
• Any new fund created by the City Council unless specifically exempted.

3. Prudence
The standard of prudence to be used by the designated representative shall be the “prudent investor” standard and shall be applied in the context of managing the overall portfolio. Persons authorized to make investment decisions on behalf of local agencies investing public funds are trustees and therefore fiduciaries subject to the prudent investor standard which states, “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”.

The City Finance Director and other individuals assigned to manage the investment portfolio, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, shall be relieved of personal responsibility and liability for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments.

4. Objectives
The City’s primary investment objectives, in order of priority, shall be:

1. Safety: Safety of principal is the foremost objective of the investment program.

Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The City shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk.

City of Paramount – Investment Policy 3
a. Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be mitigated by investing in issuers that carry the direct or implied backing of the U.S. Government (including, but not limited to, the U.S.

Treasury, U.S. Government Agencies, and federally insured banks). The portfolio will be diversified so that the failure of any one issuer does not unduly harm the City's capital base and cash flow.
b. Market risk, (aka “interest rate risk”) defined as market value fluctuations due to overall changes in the general level of interest rates shall be mitigated by targeting the maximum maturity of any one security to five years (measured by Weighted-Average-Life when allowed), structuring the portfolio based on historic and current cash flow analysis eliminating the need to sell securities prior to maturity and avoiding the purchase of longterm securities for the sole purpose of short term speculation. Moreover, it is the City's full intent, at the time of purchase, to hold all investments until maturity to ensure the return of all invested principal dollars. Limited exceptions will be granted for security swaps that would improve the portfolio’s yield and/or credit quality.

2. Liquidity: The City’s investment portfolio will remain sufficiently liquid to enable the City of Paramount to meet all operating requirements which might be reasonably anticipated.

3. Return on Investments: The City’s investment portfolio shall have the objective of attaining a comparative performance measurement or an acceptable rate of return throughout budgetary and economic cycles. These measurements should be commensurate with the City’s investment risk constraints identified in this Investment Policy and the cash flow characteristics of the portfolio.

5. Delegation of Authority
The Municipal Code of the City of Paramount and the authority granted by City Council assign the responsibility of investing unexpended cash to the City’s Finance Director.

Daily management responsibility of the investment program may be delegated to the Assistant Finance Director, who shall establish procedures for the operation consistent with this investment policy.

6. Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program or impairs their ability to make impartial investment decisions. Additionally, the Finance Director and the Assistant Finance Director are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC). Furthermore, Investment officials must refrain from undertaking personal investment transactions with the same individual(s) employed by the financial institution with whom business is conducted on behalf of the City.

City of Paramount – Investment Policy 4

7. Authorized Dealers and Institutions
The Finance Director will maintain a list of approved financial institutions authorized to provide investment services to the public agency in the State of California. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). Best practices include the following:
1) A determination that all approved broker/dealer firms, and individuals covering the public agency, are reputable and trustworthy; 2) the broker/dealer firms should have the ability to meet all their financial obligations in dealing with the Public Agency; 3) the firms, and individuals covering the agency, should be knowledgeable and experienced in Public Agency investing and the investment products involved; 4) no public deposit shall be made except in a qualified public depository as established by the established state laws; 4) all financial institutions and broker/dealers who desire to conduct investment transactions with the public agency may supply the Finance Director with audited financial statements, proof of FINRA certification, trading resolution, proof of State of California registration, a completed broker/dealer questionnaire, certification of having read the Public Agency’s investment policy and depository contracts.

The Finance Director may conduct an annual review of the financial condition and registrations of qualified dealers & institutions.

8. Authorized and Suitable Investments
Investment of City funds is governed by the California Government Code Sections 53600 et seq. Within the context of the limitations, the following investments are authorized, as further limited herein:

1. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio that can be invested in this category, although a five-year maturity limitation from the time of settlement is applicable.

2. Federal agency 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 governmentsponsored enterprises. There is no limitation as to the percentage of the City’s portfolio that may be invested in this category. The maximum maturity for this investment is five years from the time of settlement. The maturity of Agency mortgage-backed or asset-backed securities shall be measured by WeightedAverage-Life (WAL), which is not to exceed 5 years.

3. Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, and Los Angeles County Investment pool, may be used up to the maximum permitted by California State Law. A review of the pool/fund is required when part of the list of authorized investments, with the knowledge that the pool/fund may include some investments allowed by statute but not explicitly City of Paramount – Investment Policy 5
identified in this investment policy. A maximum of Seventy-Five Million may be invested in LAIF, while there is no limit to investment in the Los Angeles County Investment Pool.

4. Joint Powers Authority (JPA) Investment Pools (e.g Cal Trust, CAMP, CLASS) - shares of beneficial interest issued by a JPA organized pursuant to CA Code (Section 6509.7) that invests in the securities and obligations in compliance with CA Code 53601 (subsection ‘a’ to ‘r’, inclusive) are also authorized. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the JPA. There is no limitation as to the percentage of the City’s portfolio that may be invested in this category. To be eligible under this section, the JPA issuing the shares shall have retained an investment adviser that meets all of the following criteria:
• The adviser is registered or exempt from registration with the Securities and Exchange Commission.
• The adviser has not less than five years of experience investing in the securities and obligations authorized in CA Code (subsection ‘a’ to ‘q’, inclusive).
• The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

5. Negotiable Certificates of Deposit issued by a nationally or state-chartered bank, a savings association or a federal association (as defined by Section 5102 of the Financial Code), or by a state or federal credit union. Purchases of negotiable certificates of deposit may not exceed 30% of total portfolio. Principal and accrued interest on these investments must not exceed the $250,000 FDIC/NCUA insurance limit. A maturity limitation of five years from the time of settlement is applicable.

6. Time deposits or placement service deposits, non-negotiable and collateralized in accordance with the California Government Code, may be purchased through banks or savings and loan associations. Since time deposits are not liquid, no more than 30% of the investment portfolio may be invested in this investment type. A maturity limitation of five years from the time of settlement is applicable.

7. Various daily money market funds administered for or by trustees, paying agents and custodian banks contracted by the City of Paramount may be purchased as allowed under the State of California Government Code. Only funds holding U.S.

Treasury or Government agency obligations can be used. Investments in mutual funds shall not exceed twenty percent (20%) of the City’s surplus money.

City of Paramount – Investment Policy 6

8. Medium-term corporate notes shall mean all corporate and depository institution debt securities issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States, that are rated in the category of “A” or better by one NRSRO. A maximum of 30% of the City’s portfolio may be invested in this category. The maximum maturity for this investment is five years from the time of settlement.

9. Supranational Debt Obligations. United States dollar-denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development of the World Bank (IBRD), International Finance Corporation (IFC), and Inter-American Development Bank (IABD), with maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments must have a minimum rating of AA or better by at least one NRSRO, and shall not exceed 30% of the City’s surplus funds, and not more than 10% of the market value of the portfolio may be invested in notes issued by any one supranational. The maximum maturity period may not exceed 5 years from the time of settlement.

10.A mortgage passthrough security, collateralized mortgage obligation, mortgagebacked or other pay-through bonds, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond with maximum remaining maturity of five years or less as measured by WeightedAverage Life (WAL). Securities shall be rated in the category of “AA” or better by one NRSRO. No more than 20 percent of the market value of the City’s investment portfolio shall be invested in this category.

11.Bonds, notes, warrants, or other evidences of indebtedness of a local agency within the State of California, or registered treasury notes or bonds of any of the other 49 states, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency or state. A maturity limitation of five years from time of settlement is applicable.

12.Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recognized statistical rating organization (NRSRO) and issued by a domestic corporation having assets in excess of $500,000,000 and has a long-term debt rating in the category of “A” or better by one NRSRO. The purchase of eligible commercial paper may not exceed 397 days maturity nor represent more than 5% of the outstanding paper of an issuing corporation.

13.Repurchase Agreements are purchases of securities by the City under an agreement with a term of one (1) year or less whereby the seller will “repurchase” the same securities on or before a specified date or on demand of either party and City of Paramount – Investment Policy 7
for a specified amount. The underlying securities must be delivered to the City’s custodial account by book entry, physical delivery or a third-party custodial agreement.

The following summary of maximum percentage limits, by instrument, are established for the City's investment portfolio:

Authorized Investment
Type
Government
Code
Maximum
Maturity
Minimum
Credit
Quality
Maximum in
Portfolio
Maximum
Investment
in One
Issuer
Treasury
Obligations
(bills, notes, &
bonds)
53601(b) 5 Years N/A 100% N/A
US Government
Agency and Federal
Agency Securities
53601(f) 5 Years N/A 100% N/A
Local Agency
Investment Fund
(LAIF)
16429.1 Upon
Demand N/A
As permitted by
LAIF (currently $75
million per account)
N/A
Los Angeles County
Investment Pool 53684
Upon
Demand N/A
As permitted by
County Treasurer
(currently no limit) N/A
Joint Powers Authority
Pool (e.g., CAMP) 53601(p) N/A N/A None N/A
Negotiable Certificates
of Deposit 53601(i) 5 Years N/A 30% N/A
Placement Service
Deposits – Deposits or
53601.8 and
53635.8 5 Years N/A 30% N/A
Authorized Investment
Type
Government
Code
Maximum
Maturity
Minimum
Credit
Quality
Maximu
m in
Portfolio
Maximum
Investment
in One
Issuer
Medium Term
Corporate Notes
53601(k) 5 Years A rated or
better
30% 10%
Mortgage-Backed /
Asset-Backed
Securities
53601(n) 5 Years
measured in
WeightedAverage Life
(WAL)
AA rated of
better
20% (no portfolio
limit on Agency
MBS)
N/A
Municipal
Securities
53601(d)
and
53601(e)
5 Years N/A N/A N/A
Supranational
Obligations 53601(q)
5 Years AA rated or
better 30% N/A
Commercial Papers 53601(h) 397 days
A-1 rated or
better 40% N/A
Repurchase
Agreements 53601(g) 1 Year N/A N/
A
N/A
City of Paramount – Investment Policy 8

9. Review of Investment Portfolio
The securities held by the City of Paramount must be in compliance with Section 8.0 “Authorized and Suitable Investments” at the time of purchase. The Finance Director should review the portfolio (at least annually) to identify those securities that do not comply.

The Finance Director should establish procedures to report any major and critical incidences of noncompliance identified through the review of the portfolio.

10. Investment Pools / Money Market Funds
A thorough investigation of the investment pool/money market fund is required prior to investing, and on a continual basis. Best efforts will be made to acquire the following information:

1. A description of eligible investment securities, and a written statement of investment policy and objectives.

2. A description of interest calculations and how it is distributed, and how gains and losses are treated.

3. A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.

4. A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.

5. A schedule for receiving statements and portfolio listings.

6. Are reserves, retained earnings, etc. utilized by the pool/fund?

7. A fee schedule, and when and how is it assessed.

8. Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?

11. Collateralization
Collateralization will be required on two types of investments: non-negotiable certificates of deposit and repurchase (and reverse repurchase) agreements. To anticipate market changes and provide a level of security for all funds, the collateralization level will be 110% of market value for non-negotiable certificate of deposit and 102% for reverse repurchase agreements of principal and accrued interest.

Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained.

City of Paramount – Investment Policy 9
The City may waive the collateralization requirements for any portion of the deposit that is covered by Federal Deposit Insurance.

12. Safekeeping and Custody
All security transactions shall be conducted on a delivery-versus-payment (DVP) basis.

Securities will be held by a third-party custodian designated by the Treasurer and evidenced by safekeeping receipts.

13. Diversification
The City shall diversify the investments within the portfolio to avoid incurring unreasonable risks inherent in over-investing in specific instruments, individual financial institutions, or maturities. To promote diversification, no more than 10% - unless a more restrictive limit applies - of the portfolio may be invested in the securities of any one issuer, regardless of security type, excluding U.S. Treasuries, federal agencies, corporates, MBS/ABS, municipals, and pooled investments such as LAIF, money market funds, or local government investment pools.

14. Maximum Maturities
To the extent possible, the City of Paramount will attempt to match its investments with anticipated cash flow requirements. Unless specified above or matched to a specific cash flow, the City will not directly invest in securities maturing more than 5 years from the date of purchase. Any investment longer than 5 years must be done within the bounds of the Investment Policy or with advance permission from City Council. Both Agency and NonAgency Mortgaged-Backed Securities and Asset-Backed Securities may be measured by their Weighted-Average-Life when determining allowable maturity limits.

15. Internal Controls
The Finance Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City of Paramount are protected from loss, theft, fraud or misuse.

Separation of functions between the City’s Finance Director or Assistant Finance Director and/or the City Senior Accountant is designed to provide an ongoing internal review to prevent the potential for converting assets or concealing transactions.

Investment decisions are made by the Finance Director, executed by the Finance Director or Assistant Finance Director, and confirmed by the Senior Accountant. All wire transfers initiated by the Finance Director or Assistant Finance Director must be reconfirmed by the appropriate financial institution to the Senior Accountant. Proper documentation obtained from confirmation and cash disbursement wire transfers is required for each investment transaction. Timely bank reconciliation is conducted to ensure proper handling of all transactions.

The investment portfolio and all related transactions are reviewed and balanced to appropriate general ledger accounts by the Senior Accountant on a monthly basis. An independent analysis by an external auditor shall be conducted annually to review and City of Paramount – Investment Policy 10
perform procedure testing on the City’s cash and investments that have a material impact on the financial statements. The Finance Director shall review and assure compliance with investment process and procedures.

16. Performance Standards
The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs.

The City intends to spread its investments relatively evenly between 0 and 5 years and hold those investments to maturity, unless market conditions or opportunities warrant a security swap to improved quality, liquidity, or yield. The City is targeting its authorized investments to the safest end of the investment spectrum as defined withing California Code 53601. In addition, the City shall regularly review and monitor liquid funds, and when necessary, move them to the appropriate authorized investment pool option to ensure that it continues to meet the City’s investment objectives.

Therefore, an appropriate performance benchmark will be a Constant Treasury Maturity Rate consistent with the weighted average maturity of the portfolio. The City recognizes that benchmarks may change over time based on changes in market conditions or cash flow requirements. The City will monitor the City’s portfolio yield against the US Treasury Constant Maturity and the performance yield presented by LAIF.

17. Reporting
The City Finance Director shall review and render quarterly reports to the City Council that include the following information:
• Investment type (e.g. U.S. Treasury Note, U.S. Government Agency Bond) • Name of the issuer (e.g. Federal Farm Credit Bank, Federal Home Loan Bank) • Maturity date
• Yield to maturity
• Current market value and source of market value
• Par and dollar amount for each security the City has invested in • Par and dollar amount on any money held by the City (e.g. LAIF balance, Cash Balance).

The report shall also include a description of any of the City’s funds, investments, or programs that are under the management of contracted parties, including lending programs.

The quarterly report shall state compliance of the portfolio to the investment policy, or manner in which the portfolio is not in compliance.

The quarterly report shall include a statement denoting the ability of the City to meet its expenditure requirements for the next six months or provide an explanation as to why sufficient money shall (or may not) be available.

City of Paramount – Investment Policy 11
The quarterly reports shall be placed on the City Council’s meeting agenda for its review and approval no later than 45 days after the quarter ends. If there are no Council meetings within the 45-day period, the quarterly report shall be presented to the Council at the soonest possible meeting thereafter.

The Investment Advisor shall report to the City, on a monthly basis, the weightedaverage-life for each structured security to ensure compliance with the individual 5-year weighted-average-life limitation. All data shall be maintained by the Investment Advisor for record-keeping purposes. If a structured security is reported to have a weightedaverage-life greater than 5 years, it shall be flagged for immediate discussion with both the City and Investment Advisor to determine if the security shall be held or liquidated, depending on underlying risk and broader market conditions. Notwithstanding the aforementioned process, any security with a weighted-average-life greater than 4 years shall be monitored on a monthly basis to note any reporting trends.

18. Investment Policy Adoption
The City of Paramount’s investment policy shall be adopted by resolution of the City Council. The policy shall be reviewed annually by the City Council and any modifications made thereto must be approved by the City Council.

The Finance Director shall establish written investment policy procedures for the operation of the investment program consistent with this policy. The procedures should include reference to: safekeeping, master repurchase agreements, wire transfer agreements, banking service contracts and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the City of Paramount.

19. Glossary of Terms in this Policy
Accrued Interest: Interest earned but not yet received.

Annual Comprehensive Financial Report (ACFR): The official annual financial report for the City. It includes five combined statements and basic financial statements for each individual fund and account group prepared in conformity with Generally Accepted Accounting Principles (GAAP).

Bond: A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.

Bond Swap: Selling one bond issue and buying another at the same time in order to create an advantage for the investor. Some benefits of swapping may include taxdeductible losses, increased yields, and an improved quality portfolio.

City of Paramount – Investment Policy 12
Broker: In securities, the intermediary between a buyer and a seller of securities. The broker, who usually charges a commission, must be registered with the exchange in which he or she is trading, accounting for the name registered representative.

Certificate of Deposit: A deposit insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) at a set rate for a specified period of time.

Collateral: Securities, evidence of deposit or pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposit of public moneys.

Constant Maturity Treasury (CMT): An average yield of a specific Treasury maturity sector for a specific time frame. This is a market index for reference of past direction of interest rates for the given Treasury maturity range.

Custody: A banking service that provides safekeeping for the individual securities in a customer's investment portfolio under a written agreement that also calls for the bank to collect and pay out income, to buy, sell, receive and deliver securities when ordered to do so by the principal.

Delivery vs. Payment (DVP): Delivery of securities with a simultaneous exchange of money for the securities.

Diversification: Dividing investment funds among a variety of securities offering independent returns and risk profiles.

Federal Deposit Insurance Corporation (FDIC): Insurance provided to customers of a subscribing bank that guarantees deposits to a set limit (currently $250,000) per account.

Interest Rate: The annual yield earned on an investment, expressed as a percentage.

Liquidity: Refers to the ability to rapidly convert an investment into cash.

Market Value: The price at which a security is trading and could presumably be purchased or sold.

Maturity: The date upon which the principal or stated value of an investment becomes due and payable.

Portfolio: Collection of securities held by an investor.

Primary Dealer: A group of government securities dealers that submit daily reports of market activity and security positions held to the Federal Reserve Bank of New York and are subject to its informal oversight.

Purchase Date: The date in which a security is purchased for settlement on that or a later date.

Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

City of Paramount – Investment Policy 13
Risk: Degree of uncertainty of return on an asset. Safekeeping: See Custody.

Settlement Date: The date on which a trade is cleared by delivery of securities against funds.

Time Deposit: A deposit in an interest-paying account that requires the money to remain on account for a specific length of time. While withdrawals can generally be made from a passbook account at any time, other time deposits, such as certificates of deposit, are penalized for early withdrawal.

Treasury Obligations: Debt obligations of the U.S. Government that are sold by the Treasury Department in the forms of bills, notes, and bonds. Bills are short-term obligations that mature in one year or less. Notes are obligations that mature between one year and ten years. Bonds are long-term obligations that generally mature in ten years or more.

U.S. Government Agencies: Instruments issued by various US Government Agencies most of which are secured only by the credit worthiness of the particular agency.

Yield: The rate of annual income return on an investment, expressed as a percentage. It is obtained by dividing the current dollar income by the current market price of the security.

Yield to Maturity: The rate of income return on an investment, minus any premium or plus any discount, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond, expressed as a percentage.

Weighted-Average-Life (WAL): Measures the average length of time for anticipated principal repayments to measure a bond’s risk and liquidity. In order to calculate a bond’s WAL, assumptions must be made regarding prepayment event probabilities, prepayment amounts, prepayment speed, underlying asset leverage, and other collateral features as well as macroeconomic drivers such as, but not limited to, interest rate expectations, home prices, and mortgage rates. Institutionally, proprietary models use these various assumed inputs to estimate the amount and timing of principal repayments in order to produce a WAL output that functions as a useful metric to understand interest rate risk, prepayment risk, and extension risk.

20. Glossary of General Investment Terms
Active Deposits: Funds that are immediately required for disbursement.

Amortization: An accounting practice of gradually decreasing (increasing) an asset's book value by spreading its depreciation (accretion) over a period of time.

Asked Price: The price a broker dealer offers to sell securities. Basis Point: One basis point is one hundredth of one percent (.01). Bid Price: The price a broker / dealer offers to purchase securities.

City of Paramount – Investment Policy 14
Book Entry Securities: Securities, such stocks held in “street name,” that are recorded in a customer’s account, but are not accompanied by a certificate. The trend is toward a certificate-free society to cut down on paperwork and to diminish investors’ concerns about the certificates themselves. All the large New York City banks, including those that handle the bulk of the transactions of the major government securities dealers, now clear most of their transactions with each other and with the Federal Reserve through the use of automated telecommunications and the “book-entry” custody system maintained by the Federal Reserve Bank of New York. These banks have deposited with the Federal Reserve Bank a major portion of their government and agency securities holdings, including securities held for the accounts of their customers or in a fiduciary capacity.

Virtually all transfers for the account of the banks, as well as for the government securities dealers who are their clients, are now effected solely by bookkeeping entries. The system reduces the costs and risks of physical handling and speeds the completion of transactions.

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

Book value is acquisition cost less amortization of premium or accretion of discount.

Bullet Bond: See “Non-callable Bond.”
Callable Bond: A debit obligation where the bond issuer (i.e. borrower) has the option to call the bond or pay it off early (before the scheduled maturity date). For instance, a 5- year bond might be “callable quarterly”—meaning that, although the bond has a scheduled end date 5 years from now, it could end in 3 months (and every 3 months after that, until the scheduled maturity date).

Coupon: The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value.

Credit Analysis: A critical review and appraisal of the economic and financial conditions or of the ability to meet debt obligations.

Current Yield: The interest paid on an investment expressed as a percentage of the current price of the security.

Discount: The difference between the cost of a security and its value at maturity when quoted at lower than face value.

Duration: The weighted average maturity of a bond's cash flow stream, where the present value of the cash flows serve as the weights; the future point in time at which on average, an investor has received exactly half of the original investment, in present value terms; a bond's zero-coupon equivalent; the fulcrum of a bond's present value cash flow time line.

Fannie Mae: Trade name for the Federal National Mortgage Association (FNMA), a U.S. sponsored corporation.

City of Paramount – Investment Policy 15
Federal Reserve System: The central bank of the U.S. that consists of a seven member Board of Governors, 12 regional banks and approximately 8,000 commercial banks that are members.

Fed Wire: A wire transmission service established by the Federal Reserve Bank to facilitate the transfer of funds through debits and credits of funds between participants within the Fed system.

Freddie Mac: Trade name for the Federal Home Loan Mortgage Corporation (FHLMC), a U.S. sponsored corporation.

Investment Agreements: An agreement with a financial institution to borrow public funds subject to certain negotiated terms and conditions concerning collateral, liquidity and interest rates.

Nationally Recognized Statistical Rating Organizations (NRSRO): A U.S. Securities & Exchange Commission registered agency that assesses the creditworthiness of an entity or specific security. NRSRO typically refers to Standard and Poor’s Ratings Services, Fitch Ratings, Inc. or Moody’s Investors Services.

New Issue: Term used when a security is originally "brought" to market.

Non-callable Bond: Also known as, “Bullet Bond.” A non-callable bond is a debt obligation where the bond issuer does not have the option to “call the bond” i.e.-end the bond before the scheduled maturity date.

Perfected Delivery: Refers to an investment where the actual security or collateral is held by an independent third party representing the purchasing entity.

Repurchase Agreement (REPO): A transaction where the seller (bank) agrees to buy back from the buyer (City) the securities at an agreed upon price after a stated period of time.

Reverse Repurchase Agreement (REVERSE REPO): A transaction where the seller (City) agrees to buy back from the buyer (bank) the securities at an agreed upon price after a stated period of time.

Secondary Market: A market made for the purchase and sale of outstanding issues following the initial distribution.

Yield Curve: The yield on bonds, notes or bills of the same type and credit risk at a specific date for maturities up to thirty years.

To: Honorable City Council
From: John Moreno, City Manager
By: Heidi Luce, City Clerk
Date: April 28, 2026
SUBJECT: UPDATE ON CITY COUNCIL GOALS
On January 27, 2026, the City Councill held a goal setting workshop at which the City Council established goals and priorities for 2026. Tonight’s presentation will provide an update on the status of the goals set at that meeting.