Agenda — Finance Committee, June 20, 2022

AGENDA

FINANCE COMMITTEE

SPECIAL MEETING NOTICE
JUNE 20, 2022
PUBLIC MEETING 3:00 P.M.

M
embers
Victor M. Gordo, Mayor
Felicia Williams, District 2
John J. Kennedy, District 3
Andy Wilson, District 7
STAF
F
Matthew Hawkesworth, Director of Finance
Theresa Fuentes, Assistant City Attorney
Gloria Acevedo, Recording Secretary
M

ISSION STATEMENT
The City of Pasadena is dedicated to delivering exemplary municipal services, responsive to our entire community and consistent
with our history, culture and unique character.

I
n compliance with the Americans with Disabilities Act of 1990, Assistive Listening Devices are available from the City Clerk’s Office with a 24-hour advance notice.

Please call (626) 744-4124 to request use of a listening device.

Language t
ranslation services are available for this meeting by calling (626)744-4124 at least 24 hours in advance.

Habrá servicio de interpretación disponible para éstas juntas llamando al (626)744-4124 por lo menos con 24 horas de anticipación.

M
eetings are broadcast live on cable Channel 3 and on the Internet at http://pasadena.granicus.com/mediaplayer.php?camera_id=2&publish_id=9 and https://www.pasadenamedia.org/watch/ (Click on Video Streamlining on the right side of the screen).

I
tems on the agenda may not be called in order listed. Agendas and supporting documents are available on the Internet at
https://www.cityofpasadena.net/commissions/city-council-finance-committee/ M
aterials related to an item on this Agenda submitted to the Finance/Audit Committee after distribution of the agenda packet will be posted online and listed as: “Supplemental Agenda Material Received after the Posting of the agenda”

THE SPECIAL FINANCE COMMITTEE MEETING ON JUNE 20, 2022 AT 3:00 P.M.

WILL TAKE PLACE SOLELY BY VIDEOCONFERENCE/TELECONFERENCE.

T
O ACCESS THE MEETING:
ht
tp://pasadena.granicus.com/MediaPlayer.php?publish_id=9 AND
W
WW.PASADENAMEDIA.ORG
I
n order to facilitate public participation at meetings held solely by electronic means, the City will accept public comment in the following manner:

1. During the meeting, members of the public may provide live public comment by submitting a speaker card prior to the start of public comment on that item, at the following webpage:
www.cityofpasadena.net/commissions/public-comment
After submitting a public speaker card, join the virtual meeting at the published start time with a computer, other electronic device, or by telephone. The same name or telephone number on the Speaker Card must be used for the virtual meeting in order to locate and unmute the speaker.

Computer or electronic devices, join the meeting at:
https://us02web.zoom.us/j/161482446
Telephone only dial-in: 1-669-900-6833, Meeting ID: 161 482 446

2. Members of the public may submit correspondence of any length prior to the start of the meeting, at the following email address:
g
[email protected]
C
orrespondence will be forwarded to the legislative body prior to the start of the meeting.

3. If assistance is needed by phone, please call the City Clerk's Office at:
(626) 744-4124.

YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION

PURSUANT TO THE AMERICANS WITH DISABILITIES ACT

BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET F
ORTH ABOVE, CONTACT THE CITY CLERK’S OFFICE
AS SOON AS POSSIBLE AT (626) 744-4124 OR
[email protected].

SPECIAL MEETING
AGENDA

FINANCE COMMITTEE
JUNE 20, 2022
Public M
eeting: 3:00 P.M.

Council Chamber, Pasadena City Hall
100 North Garfield Avenue, Room S249
PUBLIC MEETING - 3:00 P.M.

ROLL CALL
PUBLIC COMMENT – LIMITED TO ITEMS ON THIS SPECIAL MEETING

AGENDA AND WILL BE HEARD AT THE TIME THE ITEM IS

CONSIDERED

APPROVAL OF MINUTES
April 11, 2022 Special Meeting
Apri
l 25, 2022 Special Meeting
April 25, 2022 Special Joint Meeting of the Finance Committee and/or City Council
May 2, 2022 Special Joint Meeting of the Finance Committee and/or City Council

NEW BUSINESS

1. PROPOSITION A LOCAL RETURN FUND EXCHANGE WITH THE CITY OF CUDAHY

2. AMENDMENTS TO FISCAL YEAR 2022 CAPITAL IMPROVEMENT

PROGRAM BUDGET AND ADOPT ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017 (SB1) PROJECT LIST FOR FISCAL YEAR 2023

3. AMENDMENTS TO FISCAL YEAR 2022 ADOPTED OPERATING
BUDGET

4. JOINT ACTION: FISCAL YEAR 2022-2023 INVESTMENT POLICY AND

INVESTMENT STRATEGY

INFORMATION ONLY

ADJOURN

PAGE 1

APPROVAL OF MINUT
ES
• April 11, 2022 SPECIAL MEETING
• April 25, 2022 SPECIAL MEETING
• April 25, 2022 SPECIAL MEETING OF THE FINANCE

COMMITTEE AND/OR C

ITY COUNCIL
• May 2, 2022 SPECIAL MEETING OF THE FINANCE

COMMITTEE AN

D/OR CITY COUNCIL

PAGE 2
01 04/11/2022

CITY OF PASADENA

FINANCE COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER – S249
APRIL 11, 2022

SPECIAL MEETING
The meeting was convened and held virtually by videoconference/teleconference.

OPENING The Chair called the regular meeting of the Finance Committee to order at 3:50 p.m.

ROLL CALL:

Staff:

Guests:

Mayor Victor M. Gordo (Chair)
Vice Mayor Andy Wilson
Councilmember John Kennedy (Absent)
Councilmember Felicia Williams
Theresa Fuentes, Assi
stant City Attorney
Matthew Hawkesworth, Director of Finance
William Huang, Director of Housing
James Wong, Senior Project Manager
Gloria Acevedo, Recording Secretary
Alexander Boekelheide,
Pasadena City College
Charles Loveman, Heritage Square Partners
MINUTES It was moved by Vice Mayor Wilson, seconded by Councilmember Williams, to approve the minutes of March 14, 2022 (special meeting), and March 28, 2022 (canceled meeting) as submitted:

AYES: Councilmember , Williams, Vice Mayor Wilson, Chair Gordo
NOES: None
ABSENT: Councilmember Kennedy
ABSTAIN: None

NEW BUSINESS APPROVAL OF AN AFFORDABLE HOUSING LOAN AGREEMEENT

WITH HERITAGE HOUSING PARTNERS FOR A CITY LOAN IN AN
AMOUNT NOT TO EXCEED $2,000,000 TO ACQUIRE AND
REHABILITATE PROPERTY AT 2322 E. FOOTHILL BOULEVARD FOR

OPERATION AS A SIX -UNIT AFFORDABLE RENTAL HOUSING

PROJECT FOR HOMELESS AND HOUSING INSECURE TRANSITION

AGE YOUTH

PAGE 3
02 04/11/2022
Chair Gordo, provided introductory comments, and James Wong , Senior Project Manager, reviewed the agenda report as par t of a PowerPoint presentation and responded to questions.

Chair Gordo applauded the work being done to support this sector of Pasadena and suggested the formation of a task force or work group to seek all financial opportunities to promote additional projects of this nature.

Councilmember Williams voiced concerns over the drawdown of the unappropriated fund balance of the inclusionary housing trust fund after the $1.6 million to fund this project and suggested staff look into the availability of state funding.

Vice Mayor Wilson spoke on leveraging this type of projects where the City is the seed funder and staff locates additional fund ing resources from grants and partnerships.

William Huang, Director of Housing, responded to questions regarding the feasibility of additional funding sources for this project.

One public comment was provided in support of the matter:

Alexander Boekelheide,
Representing Pasadena City College
Following discussion, it was moved by Councilmember Williams, seconded by Vice Mayor Wilson , to approve staff’s recommendation, and forward the item to the City Council for consideration:

AYES: Councilmember Williams, Vice Mayor Wilson, Chair Gordo NOES: None
ABSENT: Councilmember Kennedy
ABSTAIN: None
ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee was adjourned at 4:14 p.m.

ATTEST:

Gloria Acevedo
Recording Secretary
Mayor Victor Gordo, Chair
Finance Committee

PAGE 4
01 04/25/2022

CITY OF PASADENA

FINANCE COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER – S249
APRIL 25, 2022

SPECIAL MEETING
The meeting was convened and held virtually by videoconference/teleconference.

OPENING Vice Mayor Wilson called the special meeting of the Finance Committee to order at 2:04 p.m.

ROLL CALL:

Staff:

Mayor Victor M. Gordo (Chair)(Absent)
Vice Mayor Andy Wilson
Councilmember John Kennedy
Councilmember Felicia Williams
Theresa Fuentes, Assi
stant City Attorney
Matthew Hawkesworth, Director of Finance
Laura Rubio-Cornejo, Director of Transportation
Sebastian Hernandez, Principal Planner
Tony Olmos, Director of Public Works
Gloria Acevedo, Recording Secretary

NEW BUSINESS ADOPT RESOLUTION TO ACCEPT LOW CARBON TRANSIT

OPERATIONS PROGRAM (LCTOP) FUNDS FROM THE CITY OF

NORWALK AND AUTHORIZE THE EXCHANGE OF LCTOP FUNDS

WITH THE LOS ANGELES COUNTY METROPOLITAN

TRANSPORTATION AUTHORITY (METRO)
Vice Mayor Wilson provided introductory comments, and Laura Rubio- Cornejo provided a short presentation.

Following discuss
ion, it was moved by Councilmember Kennedy,
seconded by Councilmember Williams, to approve staff’s
recommendation, and forward the item to the City Council for consideration:

AYES: Councilmember Williams, Vice Mayor Wilson,
Councilmember Kenney
NOES: None
ABSENT: Chair Gordo
ABSTAIN: None

PAGE 5
02 04/25/2022
INFORMTION ONLY FY 2022 CAPITAL IMPROVEMENT PROGRAM - THIRD QUARTER

MONITORING REPORT
Vice Mayor Wil
son provided introductory comments.

On the order of the Chair, and by
consensus of the Committee, the
information was received and filed.

ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee was adjourned at 2:08 p.m.

ATTEST:

Gloria Acevedo
Recording Secretary
Mayor Victor Gordo, Chair
Finance Committee

PAGE 6
01 04/25/2022

CITY OF PASADENA

JOINT MEETING OF THE FINANCE COMMITTEE

AND/OR CITY COUNCIL MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER – S249
APRIL 25, 2022

SPECIAL MEETING
The meeting was convened and held virtually by videoconference/teleconference.

OPENING Vice Mayor Wilson called the special meeting of the Finance Committee and/or City Council to order at 2:16 p.m.

ROLL CALL:

Staff:

Mayor Gordo (Arrived 2:28 p.m.)
Councilmember Tyron Hampton (Absent)
Councilmember John Kennedy
Councilmember Steve Madison (Absent)
Councilmember Gene Masuda
Councilmember Jess Rivas
Councilmember Felicia Williams
Vice Mayor Andy Wilson
Theresa Fuentes, Assis
tant City Attorney
Matthew Hawkesworth, Director of Finance
Cynthia Kurtz, Interim City Manager
Phillip Leclair, Acting Assistant City Manager
Tony Olmos, Director of Public Works
Phyllis, Hallowell, Management Analyst
Denise Garcia, Management Analyst
Kris Markarian, Engineer
Laura Rubio-Cornejo, Director of Transportation
Nader Asmar, Principal Engineer
Asim Mohammed, Acting Chief Information Officer
Jonathan Lang, Assistant Chief Information Officer
Gloria Acevedo, Recording Secretary
NEW BUSINESS City Manager's Recommended Fiscal Year 2023-2027 Capital Improvement Program Budget

MUNICIPAL BUILDINGS & FACILITIES, STREETS & STREETSCAPES,

STREET LIGHTING, SEWERS & STORM DRAINS, PARKS &
LANDSCAPING and ARROYO PROJECTS
Matthew Hawkesw
orth, Director of Finance, provided introductory
comments and Tony Olmos, Director of Public Works, provided a PowerPoint presentation and responded to questions.

Councilmember William
s inquired about the status of the Library and if
staff is comfortable with the $114 million allocation. Vice Mayor Wilson asked about the $4 million design cost.

PAGE 7
02 04/25/2022
Councilmember Rivas asked for an explanation of the Police Department’s building renovation project.

Councilmember Kennedy as
ked about the resurfacing of the basketball
courts at Brenner Park and discouraged closure of the courts unless it’s for the resurfacing.

Councilmember Williams as
ked staff to find creative ways to add
pedestrian friendly street lights to existing cobra lighting light poles and to seek additional funding sources.

The Committee and City Counci
l members discussed the installation of
pickle ball courts at McDonald Park and McKinley School and the gopher problem and artificial turf installation at Hamilton Park. Chair Gordo suggested staff conduct outreach and work with Councilmember Masuda and the Mayor’s office when considering options for the turf installation.

Discussion was held regarding the status of the Sierra Madre Blvd. median improvement project. Councilmember Masuda suggested one department take the lead on the project and Mayor Gordo asked staff to prioritize this project after the budget process and to report back on the status.

Gloria Acevedo, Recor
ding Secretary, reported receiving one letter
providing comments on the item, distributed to the Committee and City Council, and posted online.

TRANSPORTATION AND PARKING
Laura Rubio-Cornejo, Director of Transportation, provided introductory comments and Nader Asmar, Principal Engineer, provided a PowerPoint presentation and responded to questions.

Councilmember Williams requested an explanation on the gas tax being only 1% of the Capital Improvement Budget and suggested gathering input from the business community on public works projects, to properly notify business owners of scheduling timelines, and to consider input from this group.

Mayor Gordo asked abo
ut the North Fair Oaks reconfiguration traffic
pedestrian improvements and asked staff to prioritize the El Molino corridor as portions of the road are uneven, there is high traffic and speeding, and it has high pedestrian traffic.

One public comment was
provided in support of the enhancement
project at the Pasadena Playhouse Village.

Brian Wallace repres
enting the Pasadena Playhouse Village

PAGE 8
03 04/25/2022

TECHNOLOGY
Asim Mohammed, Ac
ting Chief Information Officer provided a
PowerPoint presentation.

On the order of the chair and by
consensus of the Finance Committee
and/or City Council the item was received and filed.

ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee and/or City Council was adjourned at 4:01 p.m.

ATTEST:

Gloria Acevedo
Recording Secretary
Mayor Victor Gordo, Chair
Finance Committee

PAGE 9
01 05/02/2022

CITY OF PASADENA

JOINT MEETING OF THE FINANCE COMMITTEE

AND/OR CITY COUNCIL MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER – S249
MAY 2, 2022

SPECIAL MEETING
The meeting was convened and held virtually by videoconference/teleconference.

OPENING Chair Gordo called the special meeting of the Finance Committee and/or City Council to order at 2:08 p.m.

ROLL CALL:

Staff:

Guests:

Mayor Gordo (Chair)
Councilmember Tyron Hampton (Absent)
Councilmember John Kennedy
Councilmember Steve Madison
Councilmember Gene Masuda
Councilmember Jess Rivas (Absent)
Councilmember Felicia Williams
Vice Mayor Andy Wilson (Arrived 2:35 p.m.)
Theresa Fuentes, Assi
stant City Attorney
Matthew Hawkesworth, Director of Finance
Cynthia Kurtz, Interim City Manager
Phillip Leclair, Acting Assistant City Manager
Tony Olmos, Director of Public Works
Phyllis, Hallowell, Management Analyst
Kris Markarian, City Engineer
Shari Thomas, Assistant General Manager
Jeffrey Kightlinger, Interim General Manager
Stacie Takeguchi, Assistant General Manger
Gary Takara, Engineering Manager
Elena Chamorro, Management Analyst
Michael Go, Management Analyst
Kelly Nugyn, Assistant General Manager
Art Silva, Power Plant Manager
Marvin Moon, Assistant General Manager
Stacey Stevenson, Management Analyst
Varoojan Avedian, Power Engineering Manger
Gloria Acevedo, Recording Secretary
George Cunningham, Chief Operating Officer, Rose
Bowl Operating Company
NEW BUSINESS Continued: City Manager's Recommended Fiscal Year 2023-2027 Capital Improvement Program Budget

PAGE 10
02 05/02/2022
Rose Bowl
Matthew Hawkesworth, Director of Finance, introduced the item and George Cunningham, Chief Operating Officer, Rose Bowl Operating Company (RBOC), presented a PowerPoint Presentation and responded to questions.

Chair Gordo reminded the C
ity Council that it is important to invest in
the upkeep of the Rose Bowl as it is a very important asset.

Councilmember William
s inquired about the $1.1 million donation from
the Legacy Foundation and how its use is determined and asked when the City Council will see a strategic plan for the Rose Bowl.

Councilmember Madison added that the RBOC has debt service and capital needs in order to keep the stadium functional, which will make it competitive.

Pasadena Center
Matthew Hawkesworth, Director of Finance, introduced Mike Ross, Chief Executive Officer, Pasadena Center Operating Company (PCOC), who provided a PowerPoint presentation and responded to questions.

Councilmember William
s asked about future upgrades at the PCOC
when the bonds are retired, in particular the planning for the ice skating rink. The request was made to provide a plan at a future Economic Development & Technology Committee meeting.

Councilmember Masuda
congratulated Mike Ross for the attendance at
the ice skating rink and asked about the restoration plans for the ice skating rink and the site itself.

Street Lightning & Electronic Undergrounding, Water System, and Electric System
Matthew Hawkesw
orth, Director of Finance, introduced Jeffrey
Kightlinger, Interim General Manager, who provided a PowerPoint presentation and responded to questions.

Councilmember Kennedy asked if consideration had been given to the distance of the tanks to the sidewalk and if more distance is feasible and at what cost.

Vice Mayor Wilson asked if there were large underground projects in the queue and if the City had suspended the collection for this fund. Vice Mayor Wilson asked that staff be mindful and ensure there is a balance between the number of programs to the amount of dollars being collected.

PAGE 11
03 05/02/2022
Councilmember Williams echoed Vice Mayor Wilson’s suggestion and also requested staff provide a status update on future projects, their selection criteria, and management of this fund at a future Municipal Services Committee.

Chair Gordo asked for cl
arification on the bottlenecks in the distribution
system on the southwest and east side of the City and the timeline for addressing the constraints.

Chair Gordo mentioned corr
espondence from Sonja Berndt was
received and distributed to the City Council and posted online.

On the order of the Chair and by consensus of the Finance Committee and/or City Council the item was received and filed.

ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee and/or City Council was adjourned at 2:49 p.m.

ATTEST:

Gloria Acevedo
Recording Secretary
Mayor Victor Gordo, Chair
Finance Committee

PAGE 12

NEW BUSINESS

1. PROPOSITION A LOCAL RETURN FUND EXCHANGE

WITH THE CITY OF CUDAHY

PAGE 13

PAGE 14

PAGE 15

PAGE 16
Department of Transportation
Prop A Fund Exchange with the
City of Cudahy
Finance Committee and City Council
June 20, 2022
Item 1

PAGE 17
Department of Transportation
2 Recommendation

1. Find this action is exempt from the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15061(b) (3);

2. Authorize the City Manager to execute a one-time agreement with the City of Cudahy to exchange $252,563 of Pasadena’s General Fund dollars currently dedicated for transit services for $336,750 of Cudahy’s Proposition A Local Return dollars; and neither Competitive Bidding nor Competitive Selection are required pursuant to City Charter Section 1002(H) and Pasadena Municipal Code Section 4.08.049(A)(3), contracts with other governmental entities

PAGE 18
Department of Transportation
Recommendations

4. Appropriate $252,563 from the General Fund portion of the available fund balance in Fund 209 for the City’s portion of the fund exchange;

5. Increase revenue by $336,750 in Fund 208 for the City of Cudahy’s portion of the fund exchange; and

6. Transfer $252,563 from Fund 208 into Fund 209 for the City’s receiving fund to reimburse the donating fund.
3 PAGE 19
Department of Transportation
Transit Funding – Proposition A
• Metro allows for exchange of uncommitted Prop A funds for unrestricted revenues from another city
• The receiving city must use the exchanged Prop A funds for eligible transit operations, programs, and projects
• The premium is negotiated between the respective entities 4 PAGE 20
Department of Transportation
Fund Exchange – City of Cudahy
• May 2022- City of Cudahy contacted Pasadena to express interest in a Proposition A Local Return fund exchange
• Recommend exchanging $252,563 of Pasadena’s General Fund for $336,750 of Cudahy’s Proposition A funds
> The exchange rate is 75 cents on the dollar for a one-time agreement • This fund exchange provides Pasadena with a net increase of $84,187 in Proposition A funding for eligible transit operations, programs, and projects
5 PAGE 21

NEW BUSINESS

2. AMENDMENTS TO FISCAL YEAR 2022 CAPITAL

IMPROVEMENT PROGRAM BUDGET AND

ADOPT ROAD REPAIR AND
ACCOUNTABILITY ACT OF 2017 (SB1)
PROJECT LIST FOR FISCAL YEAR 2023

PAGE 22
PA^0^0
^^^
07 * *
(0 z
co 0<D 0^
^^ x>^ 0^ ?-irED
Agenda Report
June 20, 2022
TO: Honorable Mayor and City Council
THROUGH: Finance Committee
FROM: Department of Public Works
SUBJECT: AMENDMENTS TO FISCAL YEAR 2022 CAPITAL IMPROVEMENT

PROGRAM BUDGET AND ADOPT ROAD REPAIR AND
ACCOUNTABILITY ACT OF 2017 (SB1) PROJECT LIST FOR FISCAL YEAR 2023
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed actions are not "projects" as defined in the California Environmental Quality Act (CEQA), Public Resources Code Section 21065 and Section 15378(b)(4) and (5) of the State CEQA Guidelines and, as such,are not subject to environmental review;

2. Amend the Fiscal Year (FY) 2022 Capital Improvement Program (CIP) Budget as detailed in Attachment A of this report; and

3. Adopt by resolution the Road Repair and Accountability Act (SB1) project list.

BACKGROUND:

Throughout the Fiscal Year, the Department of Public Works in conjunction with other departments review active CIP projects to determine if budgetary changes are needed.

Staff has completed this report detailing needed budget adjustments. The budgetary changes to the projects are listed on the following pages.

1. Building Maintenance FY 2021 - 2025 (71903) - The Department of Public Works recommends appropriating $12,680 in Private Capital received from Crown Castle to this project and increasing the budget by a like amount. Crown Castle leases space for a cell tower in the upper parking lot at the City Yard. These funds will be used to fund ongoing security and safety-related upgrades and enhancements at City Facilities.

MEETING OF.AGENDA ITEM NO.

PAGE 23
Amendments to FY 2022 CIP Budget
June 20, 2022

Page 2 of 5 ends

2. Fire Station 31 Seismic Upgrade (71914) - The Department of Public Works recommends appropriating $537,178 in FEMA Hazard Mitigation Grant Program funding to this project and increasing the budget by a like amount. These funds are needed to fully fund the scope of work for this project, including soft costs, site preparation for a temporary fire station, and relocation costs for fire and emergency service crews during the construction period. These funds were previously tentatively approved by Cal OES and were taken into account during the design and bid process.

Formal appropriation of funds is needed in order to expend the funds.

3. Annual ADA Sidewalk Improvement Program (73913) - The Department of Public Works recommends appropriating $72,837 in Community Development Block Grant funding to this project and increasing the budget by a like amount. This funding will allow crews to improve additional sidewalk locations in Northwest Pasadena.

4. Miscellaneous Sidewalk Repair Program (73940) - The Department of Public Works recommends appropriating $611 ,542 in Private Capital to this project and increasing it by a like amount. These funds have been collected from property owners and developers as conditions of development or sales of the property.

5. Guardrail Improvement Program (73930) - The Department of Public Works recommends appropriating $36,000 in Street Occupancy Funds to this project and increasing the budget by a like amount. This funding will be used as a local match to the hlighway Safety Improvement Program grant funds that have already been appropriated to this project. Construction on this project is beginning in July.

6. Citywide Facilities Improvements and Installations (78044) - The Department of Public Works recommends appropriating $130,000 in Residential Impact Fees to this project and increasing the budget by a like amount. This funding will be used to tear down an existing picnic structure and build two pickleball courts at Jefferson Park. This work will be completed in FY 2023.

7. Installation of Automated License Plate Readers (ALPR) (75119) -The Police Department recommends appropriating $400,000 in Asset Forfeiture Fund to this project and increasing the budget by a like amount. The scope of this project will be expanded to include the installation of additional ALPRs throughout the City. An ALPR system allows the Police Department personnel to be more efficient and effective at deterring and fighting crime by providing real investigative leads. This appropriation will allow staff to complete the initial request for information to assess the different ALPR options, and to determine the best locations throughout the City that will benefit from fixed ALPR solutions.

8. Emergency Transmission and Distribution System Replacements (3222) - The Water and Power Department recommends transferring $650,000 in Power Fund from 4kVto 17kV Distribution System Conversions (3227) to this project and increasing the budget by a like amount. The additional funds are necessary for replacements due to unanticipated equipment failures in the distribution system, such as the Burleigh pole replacement project failure caused by inclement weather in December. The 4kVto

PAGE 24
Amendments to FY 2022 CIP Budget
June 20, 2022

Page 3 of 5 ends

17kV Distribution System Conversions (3227) project costs are under budget and the remaining appropriations are sufficient for FY 2022.

9. 4kV Substation Modernization (3235) - The Water and Power Department recommends transferring $400,000 in Power Fund from 4kVto 17kV Distribution System Conversions (3227) to this project, and increasing the budget by a like amount. The additional funds will provide for additional scope of work related to an unanticipated service failure of a transformer Load Tap Changer at the Eastern Substation and additional scope of work to modernize and interface the Santa Anita Substation Units 1 and 2 with the Supervisory Control and Data Acquisition System (SCADA). The 4kV to 17kV Distribution System Conversions (3227) project costs are under budget and the remaining appropriations are sufficient for FY 2022.

10. Chester to Santa Anita 34kV Cable Replacement (3268) - The Water and Power Department recommends transferring $700,000 in Power Fund from Transmission System Enhancements (3195) and $400,000 in Power Fund from Primary Dispatch Facility Remodel (3253) and increasing the budget by a like amount. The transfer provides funding for the unanticipated increase in the cost of materials and labor that will be required for this project based on updated estimates. CIPs 3195 and 3253 are under budget and the remaining appropriations are sufficient to complete the remaining work plans for FY 2022.

Aperoyal of Road Repair and Accountability Act (SB1) Project List for FY 2023 On April 28, 2017 Governor Jerry Brown signed Senate Bill (SB) 1 - The Road Repair and Accountability Act of 2017 which allocates revenues to cities and counties to fund basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system.

Prior to receiving an appori;ionment of Road Maintenance and Rehabilitation Account (RMRA) - SB1 funds each year, cities and counties must submit to the California Transportation Commission (CTC) a list of proposed projects. The FY 2023 list is due to the CTC by July 1, 2022 and all proposed and ongoing projects must be adopted by resolution by the City Council at a regular public meeting and not as part of cities' or counties' operating or Capital Improvement Program (CIP) budgets. The FY 2023 allotment of RMRA funds was appropriated as part of the Adoption of the FY 2023 - 2027 CIP Budget on May 2, 2022.

The FY 2023 Road Repair and Accountability Act Project List

1. Annual Citywide Street Resurfacing and ADA Improvement Program FY 2023 :

This project provides for the systematic annual rehabilitation of streets throughout the City as prioritized by the City's pavement management program established in FY 2019. The annual projects include reconstruction, resurfacing, and microsurfacing of asphalt pavement using rubberized asphalt. Replacement of curb and gutter, and installation of ADA compliant ramps will also be made along resurfaced streets. The estimated project useful life is 15-20 years.

The project will improve the pavement condition and will result in lower maintenance to the resurfaced streets. Rubberized pavement resurfacing reduces vehicular noise, is

PAGE 25
Amendments to FY 2022 CIP Budget
June 20, 2022

Page 4 of 5 ends

more resistant to asphalt pavement cracking, provides better skid resistance, and will retain a darker color longer that provides contrast to new pavement markings.

Schedule: Resurfacing will begin in FY 2023.

Total Estimated Project Cost: $4,800,000
Total RMRA (SB1) Funds FY 2023 Appropriation: $2,800,000

2. Traffic Signal at Orange Grove Blvd and Craig Ave (75097): This project provides for the installation of a traffic signal at the intersection of Orange Grove Blvd and Craig Ave. LED signal heads will be utilized, which use 50% less energy and last much longer than their incandescent counterparts, which will also result in cost savings for operating and maintaining fixtures. Design and use of Caltrans traffic signal poles that are designed to meet seismic and wind loads to withstand damage similar to Pasadena's previous windstorm event. The new traffic signals have useful life of 50 years with ongoing maintenance after 10 years.

Schedule: Design will continue in FY 2023.

Total Estimated Project Cost: $1,060,000
Total RMRA (SB1) Funds FY 2023 Appropriation: $70,000

3. Traffic Signal at Orange Grove Blvd and Sunnyslope Ave (75099): This project provides for the installation of a new traffic signal at the intersection of Orange Grove Blvd and Sunnyslope Ave. LED signal heads will be utilized, which use 50% less energy and last much longer than their incandescent counterparts, which will also result in cost savings for operating and maintaining fixtures. Design and use of Caltrans traffic signal poles that are designed to meet seismic and wind loads to withstand damage similar to Pasadena's previous windstorm event. The new traffic signals have useful life of 50 years with ongoing maintenance after 10 years.

Schedule: Construction will begin in FY 2023.

Total Estimated Project Cost: $531 ,000
Total RMRA (SB1) Funds FY 2023 Appropriation: $50,000
COUNCIL POLICY CONSIDERATION:

All of the above projects and actions address City Council's goals to maintain fiscal responsibility and stability and improve, maintain, and enhance public facilities and infrastructure.

ENVIRONMENTAL ANALYSIS:

CEQA excludes from environmental analysis those actions that are not "projects" as defined by State CEQA Guidelines Section 15378. That section excludes from the definition of "project" the creation of government funding mechanisms and fiscal activities which do not yet commit the lead agency to any specific project, and also excludes organizational or administrative governmental activities that do not result in physical changes to the environment. The actions proposed herein are budgetary and part of the City's normal administrative process as it takes early steps to prepare for the possibility of undertaking a

PAGE 26
Amendments to FY 2022 CIP Budget
June 20, 2022

Page 5 of 5 ends

project, and therefore they are not yet "projects" as defined by CEQA. As the City becomes more certain it will undertake one of the projects, and before it commits itself to the project, the appropriate environmental analysis will be conducted and brought to the appropriate City body for approval.

FISCAL IMPACT:

The cumulative result of these recommendations will increase the FY 2022 CIP budget by $1,800,237. The specific funding sources for the budget amendments are listed on Attachment A.

There is no direct fiscal impact as a result of adopting by resolution the Road Repair and Accountability Act project list. However, approval of this project list ensures the City will receive the full allotment of Road Maintenance and Rehabilitation Account funds in FY 2023.

Respectfully submitted,
^c--
T^NV OLMQfe, P.E.
fr-^
DFrector of Public Works
Prepared by:
(A
Phyllis fflallowell
Management Analyst V
Approved by:
<^
CYNTHIA KLMTZ"
Interim City Manager
Attachment A - Amendments to the FY 2021 - 2025 CIP Budget

PAGE 27
Amendments to the FY 2022-2026 CIP BudgetAttachment A
Project/Fund Source
Appropriations
Through FY 2022Changes
Revised
Appropriation
1Building Maintenance FY 2021-2025 (71903]
Building Preventive Maintenance Fund
Private Capita]
General Fund
Charter Capital Fund
Total
4,590,027
55,875
100,000
275,000
5,020,902
0 12,680
0 0
12,680
4,590,027
68,555
100,000
275,000
5,033,582
Fire Station 31 Seismic Retrofit (71914)
FEMA Hazard Mitigation Grant Program
Genera] Fund
General Fund (memo)
Charter Capital Fund
Total
649,511
400,000
21,550
300,000
1,371,061
537,178
0 0
0 537,178
1,186,689
400,000
21,550
300,000
1,908,239
Annual ADA Sidewalk Improvement Program (73913)
American Rescue Plan Act
Community Development Block Grant
General Fund
Street Occupancy Rental Fees
Total
1,500,000
3,487,271
5,500,000
175,000
10,662,271
0 72,837
0 0
72,837
1,500,000
3,560,108
5,500,000
175,000
10,735,108
4Miscellaneous Sidewalk Repair Program (73940)
Private Capital
Total
954,429
954,429
611,542
611,542
1,565,971
1,565,971
Guardrail Improvement Program (73930)
Highway Safety Improvement Program
Street Occupancy Rental Fees
Sewer Fund
Gas Tax
Total
289,000
0 90,615
190,304
569,919
0 36,000
0 0
36,000
289,000
36,000
90,615
190,304
605,919
6Citywide Facilities Improvements and Installations
(78044)
Pasadena Community Foundation Grant
Proposition 68
Residential Impact Fee
Tournament of Roses
Total
18,925
267,375
3,097,166
45,000
3,428,466
0 0
130,000
0 130,000
18,925
267,375
3,227,166
45,000
3,558,466
7 nstallation of Automated License Plate Readers (75119) Supplemental Law Enforcement Fund
UASI Grant
Asset Forfeiture Fund
Total
55,000
165,000
0 220,000
0 0
400,000
400,000
55,000
165,000
400,000
620,000
8Emergency Transmission and Distribution System
Replacements (3222)
Power Fund
Total
4kVto 17kV Distribution System Conversion Program
(3227)
Power Fund
Total
4,132,000
4,132,000
4,987,571
4,987,571
650,000
650,000
(650,000)
(650,000)i
4,782,000
4,782,000
4,337,571
4,337,571
9[4kV Substation Modernization (3235)
Power Fund
Total
|4kV to 17RV Distribution System Conversion Program
(3227)
Power Fund
Total
2,080,000
2,080,000
4,987,571
4,987,571
400,000
400,000
(400,000)1
(400,000)1
2,480,000
2,480,000
4,587,571
4,587,571
10|Chester to Santa Anita 34kV Cable Replacement (3268) Transmission System Enhancements (3195)
Power Fund
Total
Primary Dispatch Facility Remodel (3Z53)
Power Fund
Total
Power Fund
Total
2,240,000
2,240,000
4,642,000
4,642,000
1,140,000
1,140,000
1,100,000
1,100,000
(700,000)
(700,000)
(400,000)
(400,000)
3,340,000
3,340,000
3,942,000
3,942,000
740,000
740,000
Net Change1,800,237

PAGE 28
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PASADENA APPROVING THE PROJECT LIST FOR FISCAL YEAR 2023 FUNDED BY SB1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017
WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapters, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of our City are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and WHEREAS, the City must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project's completion, and the estimated useful life of the improvement; and
WHEREAS, the City of Pasadena, will receive an estimated $3,312,201 in RMRA funding in Fiscal Year 2022-23 from SB 1;and
WHEREAS, this is the sixth year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1 ; and WHEREAS, the City used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost- effective projects that also meet the communities priorities for transportation investment; and
WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate eight streets, and add active transportation infrastructure throughout the City this year; and
1 SNI1HXZMOD2MCW

PAGE 29
WHEREAS, the 2018 California Statewide Local Streets and Roads Needs Assessment found that the City streets and roads are in an at-risk to poor condition and this revenue will help us increase the overall quality of our road system and over the next decade will bring our streets and roads into a good condition; and WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASADENA RESOLVES AS FOLLOWS:

Section 1. The foregoing recitals are true and correct; and Section 2. Exhibit A is a true and correct copy of the Proposed Project List approved by the City Council for the utilization of Fiscal Year 2022-2023 Road Maintenance and Rehabilitation Account revenues.

Adopted at the
.)2022, by the following vote:
_meeting of the City Council on the _day of
AYES:

NOES:

ABSENT:

ABSTAIN:

Approved as to forny
Deborah A. Wordham
Deputy City Attorney
SNI1HXZMOD2MCW
Mark Jomsky
City Clerk
-<£
2 PAGE 30
Department of Public Works
AMENDMENTS TO FISCAL YEAR 2022 CAPITAL

IMPROVEMENT PROGRAM BUDGET AND ADOPT
ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017
(SB1) PROJECT LIST FOR FISCAL YEAR 2023
Finance Committee
June 20, 2022
Item 2

PAGE 31
Department of Public Works
Recommendations

1. Find the proposed actions are not “projects” as
defined in the California E
nvironmental Quality Act
(CEQA);

2. Amend the Fiscal Year 2022 Capital Improvement
Program (CIP) Budget; and

3. Adopt
resolution for Road Repair and Account ability
Act (SB1) project list.
2 PAGE 32
Department of Public Works
Public Works Projects
3 Project Funding Source Change ($)
1 Building Maintenance FY 2021-2025 (71903) Private Capital $12,680 2 Fire Station 31 Seismic Retrofit (71914) Hazard Mitigation Grant Program
$537,178
3 Annual ADA Sidewalk Improvement Program
(73913)
CDBG $72,837
4 Miscellaneous Sidewalk Repair Program
(73940)
Private Capital $611,542
5 Guardrail Improvement Program (73930) Street Occupancy Funds
$36,000
6 Citywide Facilities Improvements and
Installations (78044)
RIF $130,000

PAGE 33
Department of Public Works
Police Projects
4 Project Funding Source Change ($)
7 Installation of Automated License Plate
Readers (ALPR) (75119)
Asset Forfeiture $400,000

PAGE 34
Department of Public Works
Water & Power Projects
5 Project Funding Source Change ($)
8 Emergency Transmission and Distribution
System Replacements (3222)
4kV to 17kV Distribution System Conversions
(3227)
Power Fund
Power Fund
$650,000
($650,000)
9 4kV Substation Modernization (3235)
4kV to 17kV Distribution System Conversions
(3227)
Power Fund
Power Fund
$400,000
($400,000)
10 Chester to Santa Anita 34kV Cable
Replacement (3268)
Transmission System Enhancements (3195)
Primary Dispatch Facility Remodel (3253)
Power Fund
Power Fund
Power Fund
$1,100,000
($700,000)
($400,000)

PAGE 35
Department of Public Works
Adopt Road Repair & Accountability
Act (RMRA) -SB1
6 FY 2023 RMRA – SB1 Project List

1. Annual Citywide Street Resurfacing & ADA
Improvement Program FY 2023
> RMRA Appropriation: $2,800,000

2. Traffic Signal at Orange Grove Blvd & Craig Ave
> RMRA Appropriation: $70,000

3. Traffic Signal at Orange Grove Blvd & Sunnyslope
Ave
> RMRA Appropriation: $50,000

PAGE 36
Department of Public Works
Fiscal Impact
• Net increase to the FY 2022 CIP Budget by
$1,800,237
• Adopting resolution of
Road Repair &
Accountability Act ensures Ci
ty will receive full
allotment of funds in FY 2023
7 PAGE 37

NEW BUSINESS

3. AMENDMENTS TO FISCAL YEAR 2022

ADOPTED OPERATING BUDGET

PAGE 38
PA^b^0
^^^ «»
0-7
* *
<1^(D z
(D 0
<D 0^
'^!^ -0^ 0^ ?-4re5
Agenda Report
June 20, 2022
TO: Honorable Mayor and City Council
THROUGH: Finance Committee
FROM: Department of Finance
SUBJECT: AMENDMENTS TO FISCAL YEAR 2022 ADOPTED OPERATING BUDGET
I
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed action is exempt from the California Environmental Quality Act ("CEQA") in accordance with Section 15061(b)(3), the General Rule that CEQA only applies to projects that may have an effect on the environment; and

2. Amend the Fiscal Year (FY) 2022 Adopted Operating Budget as detailed in the following report by a net revenue of $7,965,997.

BACKGROUND:

Throughout the fiscal year, budgetary adjustments are necessary to account for unanticipated changes to the adopted budget. These revenue and appropriation amendments are presented to the City Council for consideration. This agenda report includes proposed amendments to the FY 2022 Operating Budget as adopted by the City Council on June 21, 2021.

Proposed Budget Amendments

1. Tax Revenue Adjustments and Related Appropriations - The Finance Department recommends recognizing tax revenue of $8,163,361 and appropriating $1,195,120 in the General Fund (101). The details are as follows:
a. The Department recommends recognizing regular Sales Tax revenue of $3,774,000 and Measure I Sales Tax revenue of $2,234,961 to reflect the significant growth in sales tax receipts as compared to the original forecast for FY 2022. Led by strong sales in general consumer goods (i.e electronics, MEETING OF.AGENDA ITEM NO..

PAGE 39
Amendments to Fiscal Year 2022 Adopted Operating Budget June 20, 2022

Page 2 of 6 ends

family apparel) at brick and mortar locations, autos-transportation, online purchases, and restaurants-hotels, the local economy continues to recover from the pandemic impacts of a year ago.

As part of the ongoing partnership between the City and the Pasadena Unified School District (PUSD), the Department also recommends appropriating $656,527 for additional allocations to PUSD in conjunction with the increase in Measure I Sales Tax revenue.
b. The Department recommends recognizing Utility Users Tax (UUT) revenue of $2,154,400 for a one-time increase in Video UUT revenue. The City's tax revenue consultant audited Spectrum and other cellular providers to ensure accurate tax collection, which resulted in a recovery of prior UUT revenue that rightfully belonged to the City.

Based on a 25% rate for recoveries received by the City, the Department recommends appropriating $538,593 to compensate the tax consultant for its audit services.

2. Purchased Power, Gas and Fuel - The Pasadena Water and Power Department (PWP) recommends recognizing revenue of $6,600,000 and appropriating $4,400,000 in the Power Fund (401) in connection with purchased power, gas, and fuel burned for wholesale activities. The result is net additional revenue of $2,200,000. The worldwide coal shortage has disrupted coal supplies, causing an unexpected shortage of power in Pasadena's portfolio due to curtailed deliveries of power from the Intermountain Power Project to meet its electric load. In addition, geopolitical disruptions and challenges to local storage have created upward pressure on gas and power prices. The disruptions in fuel supply have forced unplanned energy procurement from the market to cover power shortages. However, cap and trade market prices were higher than anticipated, resulting in an increase of revenues from Pasadena's activities in those markets to offset the higher expenses.

3. General Fund Transfers - The Finance Department recommends authorizing two transfers from the General Fund totaling $3,650,000 for the purposes detailed below. Both one-time transfers are possible in part due to the aforementioned growth in sales tax revenue and projected savings in the General Fund.
a. The Department recommends transferring $3,500,000 from the General Fund (101) to the General Liability Fund (507) so that enough cash is on hand to make self-insured retention payments (SIR) as needed. The City's SIR is currently $5.0 million. Although the City makes an annual appropriation to Fund 507 based on an actuarial estimate of projected claim and expense payments, it does not account for SIR. As claim settlements have increased dramatically in recent years, the practice of planning ahead and systematically saving for SIR is prudent management and ensures sufficient resources are available when necessary.

PAGE 40
Amendments to Fiscal Year 2022 Adopted Operating Budget June 20,2022

Page 3 of 6 ends

b. The Department also recommends transferring $150,000 from the General Fund (101) to the Building Maintenance Fund (502) to support one-time emergency repair work at various City buildings.

4. Outside Legal Services - The City Attorney/City Prosecutor Department recommends appropriating $900,000 from the unappropriated fund balance in the General Fund (101) for outside legal services. The Department currently has $2.0 million budgeted for outside legal services; however, this will not be sufficient given the number and range of legal matters required to be processed, the resumption of civil jury trials in the state and federal courts (and attendant preparation for such trials), and one current vacant in-house attorney position.

These additional costs are partly offset by the receipt of approximately $400,000 in an attorney's fee award in litigation during FY 2022.

5. Re-appropriate for The Salvation Army Hlope Center Project - The Housing Department recommends appropriating $600,000 from the unappropriated fund balance in the Housing Successor Low Income Housing Asset Fund (237) for The Salvation Army Hope Center project. On November 25, 2019, City Council approved and appropriated $1,000,000 for the project in the form of an affordable housing loan agreement to pay for predevelopment and construction costs. Due to pandemic related delays, only $400,000 had been disbursed prior to FY 2022.

The remaining balance of $600,000 was disbursed on October 21, 2021, resulting in the need to re-appropriate said amount in FY 2022.

6. Cross Connection Program - PWP recommends transferring $250,000 from the unappropriated fund balance in the Water Fund (402) to the Public Health Fund (203). This one-time transfer will fund the Pasadena Public Health Department's (PPHD) portion of the Cross Connection Control Program, which is a joint effort between PWP and PPHD to help protect the provision of safe and reliable water. PWP is responsible for system protection, while PPHD is responsible for internal protection.

This one-time funding will be used exclusively by PPHD to identify 400 to 700 new backflow prevention devices located and installed inside of Pasadena commercial properties to protect the quality of water within a customer's plumbing system. PPHD will also complete a cost of service study to develop fees that will fully and sustainably support its share of the Cross Connection Program going forward.

PWP will continue to manage the external (outside of commercial buildings) assembly of backflow prevention devices that prevents any on-site contamination from getting back into the water distribution system.

7. Grant Funding for Homeless Services - The Housing Department recommends recognizing and appropriating $162,242 in the Other Housing Fund (238) for a grant from the California Homeless Coordinating & Finance Council (HCFC). As the administrative entity for the Pasadena Continuum of Care, and on behalf of the City, the Department executed a "Standard Agreement" with the

PAGE 41
Amendments to Fiscal Year 2022 Adopted Operating Budget June 20, 2022

Page 4 of 6 ends

state on March 8, 2022 to receive the initial disbursement of Homeless Housing, Assistance and Prevention Program-Round 3 funding (HHAP-3) from HCFC. Of this funding, $150,885 will support homeless services programming and $11,357 will cover administrative activities related to the grant. Any unspent balance will carry forward to FY 2023. The Department anticipates receiving the remaining disbursement of HHAP-3 funds in the amount $648,966 during FY 2023, at which time the Department's operating budget will be amended appropriately.

8. Parking Enforcement - The Transportation Department recommends appropriating $130,000 from the unappropriated fund balance in the General Fund (101) to support additional contract costs related to parking enforcement.

During the FY 2022 budget cycle, the Parking Division reduced its budget for contractual parking enforcement sen/ices to more closely align with the lower volume of parking activity stemming from the pandemic. As the demand for parking has gradually increased across the City there is a demonstrated need to partially restore the budget for contract parking enforcement officers and the increased use of parking permit/citation software - both of which will help earn back lost revenue. These costs will be offset by increased enforcement revenue that has been forecasted to continue into FY 2023.

9. Consultant Services for Transitional Roadway Projects - The Transportation Department recommends appropriating $120,000 from the unappropriated fund balance in the General Fund (101) for design plans related to transitional roadway projects near the SR-710 stub. In order to have a list of projects for City Council consideration by July 2022 and in time to meet Metro's deadline for submitting a list of potential transitional projects for funding consideration, the Department needed prompt consultant services to develop conceptual design plans for transitional projects for the roadway network adjacent to the SR-710 stub.
lO.Cannabis Equity Grant - The Planning and Community Development Department recommends recognizing grant revenue of $75,000 in the General Fund (101) to conduct a cannabis social equity assessment and program development. On February 7, 2022, the City was announced as one of five recipient jurisdictions to be awarded a $75,000 grant via the Governor's Office of Business and Economic Development (GO-Biz). On March 14, 2022, City Council authorized the Director of the Department to execute, on behalf of the City, an agreement with GO-Biz for the grant award. The current request will amend the Department's revenue budget by $75,000; meanwhile, there are sufficient appropriations within the Department's existing budget to cover expenses associated with the assessment and staff time in developing the program.

11. Risk Management Information System - The City Attorney/City Prosecutor Department recommends appropriating $40,444 from the unappropriated fund balance in the General Liability Fund (507) to cover the remaining costs related to system implementation. On November 16, 2020, City Council approved a multi-year contract with Origami Risk LLC for a new Risk Management

PAGE 42
Amendments to Fiscal Year 2022 Adopted Operating Budget June 20, 2022

Page 5 of 6 ends

Information System (RMIS). At the time the FY 2021 Operating Budget was amended by appropriating $132,442 for base implementation costs. The implementation was not completed in FY 2021, but continued into FY 2022 - the new RMIS went live in March 2022. In order to pay for the remaining implementation costs that carried over into the current fiscal year, the Department is requesting $40,444, which is the amount that was not expended in FY 2021.

12. California State Library Act (LSTA) Grants - The Libraries and Information Sen/ices Department recommends recognizing revenue of $13,200 in the Library Services Fund (212) for two grants:
a. The Department was awarded the LSTA's "Lunch at the Library" grant of $7,200 to support giveaway books and craft kits for children and youth in the community.
b. The Department was also awarded the LSTA's "Book to Action" grant of $6,000 for giveaway books and programs in support of Asian American and Pacific Islanders Heritage month.

There are sufficient appropriations within the Department's existing budget to cover the grant expenses that will be completed by FY 2022.

COUNCIL POLICY CONSIDERATION:

The City Council's strategic planning goal of maintaining fiscal responsibility and stability will be advanced by monitoring the FY 2022 Adopted Operating Budget and by implementing necessary budget amendments.

PAGE 43
Amendments to Fiscal Year 2022 Adopted Operating Budget June 20, 2022

Page 6 of 6 ends

FISCAL IMPACT:

As detailed in the attached "Summary of Proposed 4th Quarter FY 2022 Budget Amendments," approval of the proposed budget amendments will increase FY 2022 total authorized operating appropriations across multiple funds by $10,947,806.

These additional costs will be offset through increased revenue of $18,913,803.

The General Fund's unappropriated fund balance will increase by $2,743,241.

The budget amendments included in this agenda report are not anticipated to impact existing FY 2022 budgeted indirect and support costs such as maintenance and DolT support.

Prepared by:
^~ ^^ "7^^^
Tifn^ffTy Park
Budget Administrator
Respectfully submitted,
MATTHEW y. blAWKESWORTH
Director of Finance
Approved by:
^>^
IIA j^yaOiKj-) z
Interim City^Vlanager
Attachment:

A) Summary of Proposed 4th Quarter FY 2022 Budget Amendments

PAGE 45
Amendments to
Fiscal Year 2022
Adopted Operating Budget
Timothy Park
Budget Administrator
June 20, 2022
Finance Committee/City Council
Item 3 (Finance Committee); Item XX (City Council)

PAGE 46
2 Recommendations
A. Amend the Fiscal Year (FY) 2022 Operating Budget
by a net revenue of $7,965,997 acr
oss multiple funds.

Department of Finance

PAGE 47
FY 2022 Budget Amendments

1. Tax Revenue Adjustments & Related Appropriations –
General Fund (101)
a) Recognize regular Sales Tax revenue of $3,774,000 and Measure I Sales Tax rev
enue of $2,234,961 to reflect
significant growth in sales tax receipts.

Appropriate $656,527 for additional allocation of Measure I Sales Tax revenue to Pasadena Unified School District.
b) Recognize UUT revenue of $2,154,400 for one-time increase in Video UUT resulti
ng fr
om tax revenue audit.

Appropriate $538,593 for tax consultant’s audit services  Based on 25% rate for recoveries received by the City. 3 Finance Department

PAGE 48
FY 2022 Budget Amendments

2. Purchased Power, Gas, and Fuel
• Recognize revenue of $6,600,000 and appropriate $4,400,000 in Power Fund (
401) in connection with purchased power, gas,
and fuel burned for wholesale activities.
 Global coal shortage resulting in curtailed deliveries of power from Intermountain Power
Project.
 Geopolitical disruptions/challenges to local storage creating upward pressure on gas and
power prices.
 Disruptions in fuel supply forcing unplanned energy procurement from market to c
over power shortages.
 Cap and trade market prices higher than anticipated resulting in increased revenue in suc
h markets.
4 Pasadena Water and Power Department

PAGE 49
FY 2022 Budget Amendments

3. General Fund Transfers
Growth in sales tax revenue beyond original forecast and projected savings in General Fund allow both one-time transfers. a) Transfer $3,500,000 from General Fund (101) to General Liability Fund (507)
to ensur
e sufficient resources are
available for making self-insured retention payments when necessary.
b) Transfer $150,000 from General Fund (101) to Building Maintenance Fund (502) to support one-tim
e emergency
work at various City buildings.
5 Finance Department

PAGE 50
FY 2022 Budget Amendments

4. Outside Legal Services
• Appropriate $900,000 in General Fund (101) for additional outside legal services.
• P
artly offset by an attorney’s fee award of approx. $400,000 in litigation during FY 2022.
• Curr
ent budget of $2.0 million is not sufficient due to:
 Number and range of legal matt ers required to be processed  Resumption of civil trials in state and federal courts  Vacant in-house attorney position
6 City Attorney/City Prosecutor Department

PAGE 51
FY 2022 Budget Amendments

5. The Salvation Army Hope Center Project
• Appropriate $600,000 in Housing Successor Low Income
Housing Asset Fund (237).
• Remai
ning balance of affordable housing loan to finance
predevelopment and construction cos
ts related to project.
 Original loan agreement of $1.0 million was approved and appropriated by City
Council on November 25, 2019.
7 Housing Department

PAGE 52
FY 2022 Budget Amendments

6. Cross Connection Program
• Transfer $250,000 from the Water Fund to the Public Health Fund (203) to provide one-time
funding for the Pasadena Public
Health Department’s (PPHD) portion of program.
• PPHD will identify 400-700 new backflow prevention devices located inside of commerc
ial properties to protect water quality
within plumbing system.
• PPHD will also complete a cost of service study to develop fees that sustainably support its
share of the program.
8 Pasadena Water and Power Department

PAGE 53
FY 2022 Budget Amendments

7. Grant Funding for Homeless Services
• Recognize and appropriate $162,242 in Other Housing Fund (238) for a grant from the Cali
fornia Homeless Coordinating &
Finance Council.
• Homeless Housing, Assistance and Prevention Program – Round 3 funding (HHAP-3):
 $150,885 to support homeless services programming
 $11,357 to cover administrative activities
• Remaining disbursement of HHAP-3 funding for $648,966 expected in FY 2023.
9 Housing Department

PAGE 54
FY 2022 Budget Amendments

8. Parking Enforcement
• Appropriate $130,000 in General Fund (101) to support additional contract costs r
elated to parking enforcement as
demand for parking has increased across the City.
• During the FY 2022 budget cycle, volume of parking activity still remained low and Department res
ponsibly reduced its budget
for contractual parking enforcement officers and use of parking citation software.
• An increase in enforcement revenue will help offset some of these additional costs.
10 Transportation Department

PAGE 55
FY 2022 Budget Amendments

9. Consultant Services for Transitional Roadway Projects • Appropriate $120,000 in General Fund (101) for design plans related to transitional roadway
projects near the SR-710 stub.
• Department needed prompt consultant services for conceptual design plans in order to provi
de a project list for City Council by
July 2022 and in time for Metro’s deadline for funding
consideration.
11 Transportation Department

PAGE 56
FY 2022 Budget Amendments

10. Cannabis Equity Grant
• Recognize $75,000 in General Fund (101) for a grant from the Governor’s Office of Bus
iness and Economic Development.
• City was notified of grant award in February 2022.
 Funding to support a cannabis social equity assessment and staff time involved in dev
eloping the program.
12 Planning and Community Development Department

PAGE 57
FY 2022 Budget Amendments

11. Risk Management Information System
• Appropriate $40,444 in General Liability Fund (507) to cover the remaining costs for sys
tem implementation.
• Implementation of the Risk Management Information System (RMIS) began in FY 2021 and was
completed in FY 2022.
 In FY 2021, City Council appropriated $132,442 for base implementation costs
.
 $40,444 was not expended and is needed to pay for the remaining implementation costs
in FY 2022.
13 City Attorney/City Prosecutor Department

PAGE 58
FY 2022 Budget Amendments

12. California State Library Act (LSTA) Grants
• Recognize revenue of $13,200 in Library Services Fund (212) for two grants.
a) “Lunch at the Library”
grant: $7,200 to support giveaway
books and craft kits for children and youth in the
community.
b) “Book to Action” grant
: $6,000 for giveaway books and
programs in support of Asian American and Pacific
Islanders Heritage month.
14 Libraries and Information Services Department

PAGE 59
Fiscal Impact
A. Approval of the proposed budget amendments will
increase FY 2022 total authori
zed operating
appropriations across multiple funds by $10,947,806.

These additional appropriations will be offset by
increased revenue of $18,913,803.

B. The General Fund’s unappropriated fund balance
will increase by $2,743,241.
15 Finance Department

PAGE 60

NEW BUSINESS

4. JOINT ACTION: FISCAL YEAR 2022-2023

POLICY AND INVESTMENT STRATEGY

PAGE 61
Agenda Report
TO: Honorable Mayor and City Council
June 20, 2022
Successor Agency to the Pasadena Community Development
Commission
THROUGH: Finance Committee
FROM: Department of Finance
SUBJECT: JOINT ACTION: FISCAL YEAR 2022-2023 INVESTMENT POLICY AND

INVESTMENT STRATEGY
RECOMMENDATION:

It is recommended that the City Council and the Successor Agency to the Pasadena Community Development Commission:
1 . Find that the proposed action is not a project subject to the California Environmental Quality Act (CEQA) as defined in Section 21065 of CEQA and Section 15378 of the State CEQA Guidelines and, as such, no environmental document pursuant to CEQA is required for the project; and

2. Adopt the City Treasurer's recommended Investment Policy and Investment Strategy for Fiscal Year 2022-2023 (FY 2022-2023).

BACKGROUND:

In relation to a local government's investment policy, California Government Code Section 53646 states "the Treasurer or Chief Fiscal Officer may annually render to the legislative body of the local agency a statement of investment policy." Attached for review and approval is the City's Investment Policy for FY 2022-2023.

The Investment Policy is intended to outline the policies for maximizing the efficiency of the City's cash management system, the prudent investment of the City's funds, and to provide guidelines for suitable investments. The primary goals of the investment policy are to ensure compliance with the law; provide protection of principal; maintain liquidity; and maximize investment income to enhance the economic status of the City.

MEETING OF _____ _ AGENDA ITEM NO. ____ _

PAGE 62
FY 2022-2023 Investment Policy
June 20, 2022

Page 2 of 3 ends

The City's cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City Treasurer to invest funds to the fullest extent possible. The City Treasurer then attempts to obtain the highest yield, provided that all investments meet the safety and liquidity criteria established in the investment policy.

The investment policies and practices of the City Treasurer for the City of Pasadena are based upon federal, state, and local laws and prudent money management. The primary goals of these policies are to:

1. Assure compliance with all federal, state and local laws governing the investment of monies under the control of the City Treasurer;

2. Preserve the principal amount of monies entrusted to the City Treasurer's office;

3. Within the goal of preserving the principal amount of monies and maintaining necessary liquidity, to generate the maximum amount of investment income within the parameters of the Investment Policy and the guidelines for suitable investments.

The City Treasurer is authorized to invest the City's funds in accordance with the California Government Code Section 53600 et seq. (the "State Code"), and the investment policy adopted by the Pasadena City Council. The City's investment policy may be modified, amended, or otherwise changed at any time, at the sole discretion of the Pasadena City Council. This investment policy applies to all financial assets and investment activities of the City of Pasadena, except for the investment of bond proceeds (which are authorized in the bond indentures), employee retirement funds, Section 115 Trust funds, and Deferred Compensation funds.

The City Treasurer manages all of the City's funds in a pooled investment portfolio. The City Treasurer also holds monies in specific purpose funds, invested separately to meet the specific investment objectives of those funds. These funds include construction funds for the City's bond issues, Pasadena Redevelopment Successor Agency Fund, the Stranded Investment Reserve Fund, the Capital Endowment Fund and Section 115 Trust Funds. The interest for each is also maintained within the separate fund. The City Treasurer and staff will monitor, review, and respond to changing conditions that affect the various portfolios.

The City holds no investments in derivative products such as interest rate swaps, futures, options, or reverse repurchase agreements. The City has no investments in inverse floaters, range notes, interest only strips that are derived from a pool of mortgages, or any security that could result in zero interest accrual if held to maturity.

The City's investment Policy has been amended to include City Council's approved language related to Environmental, Social and Governance (ESG) investing on page five of the Policy as well as explicitly listing California Asset Management Program (CAMP) and Collateralized Money Market Bank Accounts as authorized investments on page seven.

PAGE 63

PAGE 64
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY
| City of Pasadena | Department of Finance | Treasury Division |

Page 1 ends

Attachment A

DEPARTMENT OF FINAN

CE -- TREASURY DIVISION

CITY OF PASADENA INVESTMENT POLICY
Fiscal Year 2022 - 2023
I. PURPOSE
This statement
is intended to provide guidelines for the prudent investment of the City's temporary idle cash and reserves, and to outline the policies for maximizing the efficiency of the City's cash management system. The ultimate goal is to enhance the economic status of the City while protecting its pooled cash.

II. OBJECTIVE
The City'
s cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest possible extent. The City attempts to earn the highest yield obtainable while remaining within the investment criteria established for the safety and liquidity of public funds.

The investment portf
olio will be managed in accordance to the parameters specified within this policy.

The investment portfolio will be designed to obtain a reasonable market -level rate of return, given budgetary and economic cycles, commensurate with the City’s investment risk and cash flow needs.

The City’s portfolio management approach will be active, allowing periodic restructuring of the investment portfolio to take advantage of current and anticipated rate movements.

III. POLICY
As a Charter Cit
y, Pasadena operates its temporary pooled idle cash investments as a trustee and under the prudent person rule (Probate Code Section 16040, et seq., formerly set forth in Civil Code Section 2261, et seq.). The prudent person rule governing the standard of care of trustees, generally states, in essence, that:

PAGE 65
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY
| City of Pasadena | Department of Finance | Treasury Division |

Page 2 ends

a) The trustee shall administer the trust with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument.
b) When investing, reinvest
ing, purchasing, acquiring, exchanging, selling, and
managing trust property, the trustee shall act with the care, skill, prudence, and diligence under the circumstances then prevailing, including b ut not limited to the general economic conditions and the anticipated needs of the trust and its beneficiaries, that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument. In the course of administering the trust pursuant to this standard, individual investments shall be considered as part of an overall investment strategy.

This affords the Cit
y a broad spectrum of investment opportunities as long as the investment is considered prudent and is allowable under current legislation of the State of California (Government Code Section 53600 et seq.). 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. However, it is realized that market prices of securities will vary depending on economic and interest rate conditions at any point in time.

It is further recognized that in a well -diversified investment portfolio, occasional paper losses are inevitable due to economic, bond market or individual security credit analysis and shifts in interest rates.

It is further recogni
zed that even in a wel l-diversified portfolio, at any particular point in time, when security valuations are impacted by changes in interest rates and economic conditions, that securities may at times be worth less than the original purchase price. Market fluctuations and occasional measured losses may occur and must be considered within the context of overall portfolio return rather than based on the performance of any single security or investment transaction. It is also understood that in the event of the need for a forced li quidation of investments to meet unplanned or unanticipated cash flow demands, a potential loss of investment principal might occur.

The prudent and professional management of portfolio risk includes knowingly selling or changing a security to prevent further losses or to incur loss for the intent of improving credit quality or liquidity.

The City Treasurer, t
he 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 securities 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. Criteria for selecting investments in the order of priority are:

PAGE 66
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 3 ends

1. Safety
The safety and risk associated with an investment refers to the potential for loss of principal, interest or both. Protection of the public funds entrusted to the Treasurer is the paramount criteria used to evaluate the investment instruments available. Safety of principal is the foremost objective of the City of Pasadena. Each investment transaction shall seek to ensure that capital losses are avoided, whether from securities default, broker -dealer default or erosion of market value. The City shall seek to preserve principal by mitigating the two types of risk, credit risk and market risk.

2. Liquidity
This refers to the ability to convert an investment to cash at any moment in time with minimal risk of forfeiting a portion of principal or interest. Liquidity is an essential investment requirement especially in light of the City's need to be able to meet emergency financing demands of the community at any time.

Because the City of Pasadena operates its own electric and water utility and bills monthly for these services, significant cash flow is generated on a daily basis. Historical cash flow trends are compared to current cash flow requirements on an ongoing basis in an effort to ensure that the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all reasonable anticipated operating requirements.

3. Yield
Yield is the potential dollar earnings an investment can provide, and sometimes is described as the rate of return. As a general rule, yields tend to mirror the inherent risk and liquidity characteristics of the particular investment and thus can only be evaluated after those investment criteria are satisfied.

IV. LENGTH OF MATURITIES
The City attempts to obtain the highest yield possible when selecting investments, provided that criteria for safety and liquidity are met. Ordinarily, because investments normally carry a positive yield curve, (i.e., longer term investments have higher rates than shorter maturities), the City attempts to stagger its maturities to meet anticipated cash needs in such a way that new investment money can be placed in maturities that carry a higher rate than is available in the short market of 30 days or under. Furthermore, maturities are selected to position the portfolio to anticipate market risks as well as anticipate cash needs of the City, thereby obviating the need for forced liquidation.

The Government code stipulates that no investment shall be made in securities with maturities in excess of five years without express authority from the City's legislative body. The City Treasurer shall not, at any time, invest in securities with stated maturities exceeding five years with the exception of the Power Reserve portfolio and bond reserve funds as authorized in the bond indentures or with the consent of the bond insurers.

PAGE 67
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 4 ends

Stranded Investment Reserve Fund
The City Council authorizes the City Treasurer to invest monies in the Reserve Fund in securities with maturities exceeding five years. The City Treasurer shall strive to maximize the yield in this fund by extending the maturity of the investments and matching them with future cash flow needs.

V. DELEGATION OF AUTHORITY
The authority granted by the Pasadena City Council assigns the responsibility of investing idle cash to the City Treasurer who will report to the Director of Finance. In the City Treasurer’s absence, the Director of Finance or the Assistant City Treasurer is authorized to initiate investment transactions.

The City Council also delegates to the City Treasurer and the Director of Finance the authority to open new bank accounts, investment and cash management accounts, letters of credit and other credit enhancement products, close bank accounts, investment and cash management accounts, and sign all documents related thereto.

VI. PORTFOLIO EVALUATION AND REPORTING
Investment performance is continually monitored and evaluated by the City Treasurer. Investmen t performance statistics and activity reports are reported monthly to the Director of Finance and the City Manager.

The City Treasurer shall review and render monthly and quarterly reports to the City Manager and the Director of Finance. Government Code Section 53646 (b)(1) states that the Treasurer or Chief Fiscal Officer may render quarterly reports to the legislative body of the local agency containing detailed information on all securities, investments, and moneys of the local agency, a statement of compliance of the portfolio with the statement of investment policy, and a statement of the local agency’s ability to meet its pool’s expenditures for the next six months. By making these reports optional, this Bill does not impose a state- mandated local program but encourages agencies to continue to report. The quarterly report shall incorporate the disclosure requirements of GASB 40 including the portfolio risk disclosure in the following four primary categories:

1. Credit Risk of Investment positions;

2. Concentration Risk;

3. Interest Rate Risk;

4. Foreign Currency Risk.

VII. QUALIFIED BROKERS/DEALERS

The City shall transact business only with national or state chartered banks, and with securities broker/dealers. The broker/dealers should be primary dealers licensed by the state as a broker - dealer or from a member of a federally regulated securities exchange, or from a brokerage firm designated as a primary government dealer by the Federal Reserve Bank. The City can also transact

PAGE 68
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 5 ends

with non-primary broker/dealers upon the City Treasurer’s and the Director of Finance’s approval.

Investment staff shall investigate dealers who wish to do business with the City to determine if they are adequately capitalized, have pending legal action against the firm or the individual broker and make markets in securities appropriate to the City’s needs.

The City Treasurer shall annually send a copy of the current investment policy to all broker/dealers approved to do business with the City of Pasadena. Confirmation of receipt of this policy shall be considered evidence that the dealer understands the City’s investment policies and intends to sell the City only appropriate investments authorized by this investment policy.

VIII. COLLATERAL REQUIREMENTS
Collateral is required for investments in certificate of deposits and repurchase agreements. In order to reduce market risk, the collateral level will be at least 102% of the market value of principal and accrued interest.

In order to conform with the provisions of the Federal Bankruptcy Code which provides for liquidation of securities held as collateral, securities acceptable as collateral shall be certificates of deposit, commercial paper, eligible banker’s acceptances, medium term notes or securities that are the direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency of the United States. Mortgage securities and whole loans can also be used as collateral for the repurchase agreements as long as the collateral level is at least 102% of the market value of the principal and accrued interest.

IX. SAFEKEEPING OF SECURITIES
To protect against fraud or embezzlement or losses caused by collapse of an individual securities dealer, all securities owned by the City shall be held in safekeeping by a third-party trust department, acting as agent for the City under the terms of a custody agreement or PSA agreement (repurchase agreement collateral). All trades executed by a dealer will settle delivery versus payment (DVP) through the City's safekeeping agent.

X. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Investments shall be considered in entities that support environmental, social, and governance (ESG) factors alongside traditional financial measures in the investment decision making process, ensuring that investments are financially prudent, and impact d riven.

Investing in companies that prioritize conservation and sustainable business practices helps protect our environment for future generations and is commensurate with the City of Pasadena’s values. ESG factors may include, but are not limited to:
• Environmental: Carbon Footprint; Energy Consumption; Water/Waste; Ex ternal Conservation Initiatives; and Sector-Specific Adjustments.

PAGE 69
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 6 ends

• Social: Labor Rights; Employee Diversity; Corporate Social Responsibility; and Human Rights/Ethics.
• Governance: Leadership Structure; Executive Compensation; Human Capital Management; Transparency/Disclosure; and Shareholder Rights.

XI. AUTHORIZED INVESTMENTS
The City shall not invest any funds in any security that could result in a zero interest accrual if held to maturity. In addition, the City shall not invest any funds in inverse floaters, range notes or interest only strips that are derived from a pool of mortgages and also common stocks. However, a local agency may hold prohibited instruments until their matu rity date. These limitations will not apply to investments in shares of beneficial interest issued by diversified management companies as referenced in subparagraph 11 of this section.

The City is further governed by the California Government Code, Section 53600 et seq. Within the context of these limitations, the following investments are authorized, and 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 limitation as to the percentage of the portfolio which can be invested in this category, although maturity limitations as stated in Section IV apply.

2. Obligations issued by the Government National Mortgage Association (GNMA), the Federal Farm Credit Bank System (FFCB), the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Association (FHLMC), the Student Loan Marketing Association (SLMA) and the Tennessee Valley Authority (TVA) and the Federal Home Loan Bank. There is no limitation on the dollar amount that can be invested in these issues except for maturity limitations as stated in Section IV.

3. Bills of exchange or time drafts drawn on and accepted by commercial banks, otherwise known as banker’s acceptances. Banker’s acceptances purchased may not exceed 180 days to maturity or 40% of the cost value of the portfolio. No more than 30% shall be invested in any one commercial bank pursuant to Section 53601(f) of the Government Code.

4. Commercial paper of “prime” quality of the highest ranking or highest numerical rating as provided for by Moody’s Investor services or Standard and Poor’s Corporation, and issued by domestic corporations having assets in excess of $500,000,000 and having an “A” or better rating on its long term debentures as provided by Moody’s or Standard & Poor’s. Purchases of eligible commercial paper may not exceed 270 days to maturity nor represent more than 10% of the outstanding paper of the issuing corporation. Purchases of commercial paper may not exceed 15% of the cost value of the portfolio. An additional 15%, or a total of 30% of the agency’s surplus money, may be invested pursuant to this subdivision. The additional 15%

PAGE 70
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 7 ends

may be so invested only if the dollar weighted average maturity of the entire amount does not exceed 31 days.

5. Negotiable Certificates of Deposit issued by nationally or state chartered banks or state or federal savings institutions. Purchases of negotiable certificates of deposit may not exceed 30% of total portfolio.

6. Investments in Repurchase agreements or securities lending agreements may be made when the term of the agreement does not exceed one year. The market value of the securities used as collateral for the repurchase agreements shall be monitored by the investment staff and shall not be allowed to fall below 102% of the value of the repurchase agreement. A PSA Master Repurchase Agreement is required between the City of Pasadena and the broker dealer or financial Institution for all Repurchase Agreements transacted.

7. Reverse Repurchase Agreements or securities lending agreement which specifies terms and conditions may be transacted with broker/dealers and financial institutions but cannot exceed 20% of the portfolio base value on the date entered into with the conditions as specified in Section 53601(i)(3)(B) of the Government Code.

8. Local Agency Investment Fund (LAIF) which is a State of California managed investment pool may be used up to the maximum permitted by California State Law.

9. CAMP: California Asset Management Program. A Joint Powers Authority created to provide statewide local government investment pool. Maximum term of 1 day.

10. Collateralized Money M arket Bank Accounts: Interest -bearing collateralized money market bank accounts in banks or credit unions. Maximum term of 1 day.

11. Time 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 25% of the investment portfolio may be invested in this investment type.

12. Medium Term Corporate Notes, with a maximum remaining maturity of five years or less may be purchased. Securities eligible for investment shall be rated “A” or better by Moody’s or Standard and Poor’s rating services. Purchase of medium term notes may not exceed 30% of the cost value of the portfolio and no more than 5% of the cost value of the portfolio may be invested in notes issued by one corporation. Commercial paper holdings should also be included when calculating the 5% limitation.

13. Shares of beneficial interest issued by diversified management companies investing in the securities and obligations as authorized by subdivisions (a) to (j) inclusive of the Government Section or subdivision (m)or(n) and that comply with the investment restrictions of this article

PAGE 71
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 8 ends

and Article 2 (commencing with Section 53630). To be eligible for investment pursuant to this subdivision, these companies shall either:

a) Attain the highest ranking or the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services.

b) Retain an investment advisor registered with the Securities and Exchange Commission with no less than five years of experience investing in the securities and obligations as authorized by subdivisions (a) to (j), inclusive, and with assets under management in excess of five hundred million dollars ($500,000,000). The purchase price of shares of beneficial interest purchased pursuant to this subdivision shall not include any commission that these companies may charge and shall not exceed 20 percent of the agency’s surplus money that may be invested pursuant to this section. No more than 10% of the portfolio may be invested in any one mutual fund at the date of purchase.

14. Registered state warrants or treasury notes or bonds, including bonds payable solely out of the revenues from a revenue-p roducing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state.

15. Bonds, notes, warrants or other indebtedness of any local agency within this state, including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency including variable rate demand bonds with a daily or weekly put feature and supported by a credit facility.

16. Any mortgage pass-through security, collateralized mortgage obligation mortgage- backed or other pay -through bond, equipment lease- backed certificate, consumer receivable pass - through certificate, or consumer receivable-backed bond of a maximum of five years maturity.

Securities eligible for investment under this subdivision shall be issued by an issuer having an “A” or higher rating for the issuer’s debt as provided by an a nationally recognized rating service and rated in a rating category of “AA” or its equivalent or better by a nationally recognized rating service. Purchase of securities authorized by this subdivision may not exceed 20% of the agency’s surplus money that may be invested pursuant to this section.

17. Contracts issued by insurance companies that provide the policyholder with the right to receive a fixed or variable rate of interest and the full return of principal at the maturity date.

18. Notwithstanding anything to the contrary contained in this section, Section 53635 of the Government Code, or any other provision of law, moneys held by a trustee or fiscal agent and pledged to the payment or security of bonds or other indebtedness, or obligations under a lease, installment sale, or other agreement of a local agency, or certificates of participation in those bonds, indebtedness, or lease installment sale, or other agreements, may be invested in accordance with the statutory \ provisions governing the issuance of those bonds,

PAGE 72
FY 2022/2023 CITY OF PASADENA INVESTMENT POLICY

| City of Pasadena | Department of Finance | Treasury Division |

Page 9 ends

indebtedness, or lease installment sale, or other agreement, or to the extent not inconsistent therewith, or if there are no specific statutory provisions, in accordance with the ordinance, resolution, indenture, or agreement of the local agency providing for the issuance.

19. Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by Section 53651 as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by Section 53652 for the purpose of securing local agency deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank which is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted.

20. United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter -American Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated “AA” or better by an NRSRO and invested pursuant to this section.

21. Municipal Variable Rate Demand Bonds (VRDBs) that have long- term maturities exceeding five years and have a seven day put feature and carry a short-term interest rate which is reset every seven days and are backed by a liquidity facility and/or bank letter of credit (LOC). The underlying issuer rating must be rated at least A or better.

PAGE 73
FY 2022-2023 CITY OF PASADENA INVESTMENT STRATEGY

| City of Pasadena | Department of Finance | Treasury Division |

Page 1 ends

Attachment B

DEPARTMENT OF FINANCE -- TREASURY DIVISION

CITY OF PASADENA INVESTMENT STRATEGY
Fiscal Year 2022-2023

I. PURPOSE
The City's investment strategy is designed to ensure (1) the prudence and efficiency of investments; (2) the accurate monitoring and forecasting of revenues and expenditures; and, (3) the securing of the safety and liquidity of public funds. The City attempts to earn the highest yield obtainable while maintaining compliance to the criteria of the City's Investment Policy. The qualifications are as follow:

1. To secure safety of funds

2. To maintain liquidity of assets

3. Yield or return

4. To monitor deposits from all departments (Float)

5. Compounding of interest

6. To match investment maturities to large expenditures

7. Flexibility to change investments to maximize security and yield

8. To retain full knowledge of investments available to Treasurers

9. To deal only with qualified brokers and banks

10. To insist upon written confirmation of investments and collateral

11. To check with FHLB for sufficiency of collateral if pooled collateral

PAGE 74
FY 2022-2023 CITY OF PASADENA INVESTMENT STRATEGY

| City of Pasadena | Department of Finance | Treasury Division |

Page 2 ends

II. FINANCIAL DATA
Daily economic and financial market data is obtained from the Bloomberg Financial System and financial experts in the field through bankers, brokers, market analysts and periodicals.

III. CASH FORECASTS
Twelve- and eighteen- month cash forecasts are monitored and updated to accurately estimate revenues and expenditures in order to invest funds to the fullest extent possible.

IV. MAINTAINING BANK BALANCES
Active bank balances are kept at adequate levels without jeopardizing good banking relationships.

V. PORTFOLIO TESTING
The City's portfolio is tested on a monthly basis so that legal limits of types of investments are not exceeded.

VI. LIQUIDITY OF FUNDS
Sufficient funds are maintained in overnight liquid investments to meet current and estimated cash flow needs. The City maintains an adequate level of overnight and short term investments to meet any liquidity and cash need at any given day when cash outflow exceeds cash inflow.

VII. PORTFOLIO MANAGEMENT
In managing the City’s portfolio, the City Treasurer considers the overnight investment balance along with securities with maturities of 90 days or less as the operating fund for cash flow purposes. This portion of the portfolio is managed to meet the needs of the regular day to day operating expenses of the public body. Safety of principal and liquidity are the primary investment objectives. Income is a secondary objective. Typically the Treasurer maintains an average investment balance of at least $40 million in this short term liquid portion of the portfolio with a maturity of one week or less.

PAGE 75
FY 2022-2023 CITY OF PASADENA INVESTMENT STRATEGY

| City of Pasadena | Department of Finance | Treasury Division |

Page 3 ends

The balance of the portfolio is invested in securities with longer -term maturities representing the surplus funds. This portion of the portfolio is managed with longer -term securities as liquidity is not the primary objective and may include supplementing the short term liquidity portion of the portfolio if necessary. Safety of principal is still the primary objective, but income, competitive return, and liquidity can be secondary objectives.

VIII. MANAGEMENT ACTIVITY
The investment program shall seek to augment returns consistent with the intent of this policy, identified risk limitations and prudent investment principals. These objectives will be achieved by the potential use when appropriate of the following strategies:

1) Active Portfolio Management:

Through active fund and cash flow management, taking advantage of current economic and interest rate trends, the portfolio yield may be enhanced with limited and measurable increases or decreases in risk by enhanced indexing the portfolio or extending or reducing the weighted maturity of the total portfolio and/or actively trading a portion of the portfolio to try to achieve higher returns. Realized gains and losses are expected in active portfolio management and thus authorized as part of the program.

2) Portfolio Maturity Management:

When structuring the maturity composition of the portfolio, the City shall evaluate current and expected interest rate yields and necessary cash flow requirements. It is recognized that in normal market conditions, longer maturities produce higher yields. However, the securities with longer maturities also experience greater price fluctuations when the level of interest rates change.

PAGE 76
FY 2022-2023 CITY OF PASADENA INVESTMENT STRATEGY

| City of Pasadena | Department of Finance | Treasury Division |

Page 4 ends

3) Security Swaps:

The City may take advantage of security swap opportunities or simply sell an investment to improve the overall portfolio yield and/or credit risk. Such transactions that improve the portfolio yield and/or reduce credit risk may be selected even if the transactions result in an accounting loss.

PAGE 77

FINANCE DEPARTMENT
FISCAL YEAR 2023

INVESTMENT POLICY

VIC ERGANIAN

CITY TREASURER
June 20, 2022
Finance Committee Item 4 City Council Item X

PAGE 78

FINANCE DEPARTMENT

PURPOSE OF THE INVESTMENT POLICY
• To establish procedures and guidelines that will
ensure the prudent management o
f public agency
funds
• To incorporate all of the regulations specified by
California Code secti
ons into the agency’s investment
program
• To specify the investment philosophy of the agency
2 PAGE 79

FINANCE DEPARTMENT

INVESTMENT OBJECTIVES

1. The primary objective is to safeguard the
principal of the funds

2. The second objecti
ve is to meet the l iquidity
needs of the City

3. The third objective is to achieve a reasonable
return on the investments
3 PAGE 80

FINANCE DEPARTMENT

INVESTMENT STANDARDS
“…all governing bodies of local agencies or
persons authorized to make investment decisions
on behalf of those local agencies investing public
funds pursuant to this chapter are trustees and
therefore fiduciaries subject to the prudent
investor standard.”
4 PAGE 81

FINANCE DEPARTMENT

COMPONENTS OF THE POLICY
• Purpose
• Objective
• Policy
• Length of Maturities
• Delegation of
Authority
• Portfolio
Evaluation and Reporting
• Risks
• Qualified Br
okers and Dealers
• Collateral Requirements
• Safekeeping and C
ustody of securities
• Authoriz
ed Investments
• Diversification/Limits
5 PAGE 82

FINANCE DEPARTMENT

INVESTMENT STRATEGY
• Prepare cash forecasts 1-18 months
• Determine adequate l
evel of short-term investments
for
liquidity purposes
• Maintain an extra layer for safety purposes
• Total portfolio
- Liquidity portf
olio
- Reserve portfolio
6 PAGE 83

FINANCE DEPARTMENT

LIQUIDITY PORTFOLIO
• Structured to meet liquidity needs
• Investments in short-term securities
• Bank D
eposits, MMF, LAIF, Repos, T-Bills, Agency
D
iscount Notes, CDs, BAs, CPs, CAMP
• Must have a short average maturity
7 PAGE 84

FINANCE DEPARTMENT

RESERVE PORTFOLIO
• Funds not required for short term liquidity needs
• Determine the highest suitable duration
(up to 3 years modi
fied duration)
• Invest in liquid and easily marketable securities
• US T-Bonds and Notes, Government Agency Bonds,
Corporate Bonds, and Muni
cipal Bonds
8 PAGE 85

FINANCE DEPARTMENT

PORTFOLIO MANAGEMENT STRATEGY
• Duration Management
• Yield Curve Analysis
• E
nhanced Indexing
• Sector
Weighting
• I
ndividual Security S
election
9 PAGE 86

FINANCE DEPARTMENT

AMENDMENT TO THE POLICY
• The City’s Investment Policy is amended to incorporate the following language rel
ated to ESG investing:
• Investments will be considered in entities that support environmental, social, and governance (ESG)
factors
alongside traditional financial measures in the investment decision making process, ensuring that investments are
financially prudent, and impact driven. Investing in
companies that prioritize conservation and sustainable
business practices helps protect our environment for
future generations and is commensurate with the City of Pasadena’s values. ESG factors may include but are not
limited to:
10 PAGE 87

FINANCE DEPARTMENT
• Environmental: Carbon Footprint; Energy
Consumption; Water/Wast
e; External Conservation
Initiatives; and Sector-Specific Adjustments.
• Social: Labor Rights; Employee Diversity; Corporate
Social Responsibility;
and Human Rights/Ethics.
• Governance: Leadership Structure; Executive
Compensation; Human Capit
al Management;
Transparency/Disclosure; and Shareholder Rights.
11 PAGE 88

Finance CommitteeJune 20, 2022

Finance Committee
June 20, 2022