Agenda — Finance Committee, December 11, 2023

AGENDA

FINANCE/AUDIT COMMITTEE

SPECIAL MEETING NOTICE
DECEMBER 11, 2023
PUBLIC MEETING 3:00 P.M.

M
embers
Victor M. Gordo, Mayor
Tyron Hampton, District 1
Felicia Williams, District 2
S
TAFF
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.

Lang
uage translation 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.

Meet
ings are broadcast live on cable Channel 3 and on the Internet at http://pasadena.granicus.com/mediaplayer.php?came ra_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/ Mat
erials 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”

PUBLIC COMMENT AT THE FINANCE/AUDIT COMMITTEE MEETING FOR DECEMBER 11, 2023, AT 3:00 P.M. WILL BE ACCEPTED IN-PERSON AND BY VIDEOCONFERENCE/TELECONFERENCE.

Li
nk to City Meeting Policy:
cityofpasadena.net/CityCouncilMeetingPolicy
In order to facilitate public participation at meetings the City will accept public comment in the following manner:

1. Whether participating in-person or virtually at the meeting, members of the public may provide 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/
If a public comment speaker wishes to speak on more than one agenda item, please indicate which items on the online form (multiple item speakers will be handled according to the process posted on the agenda and as specified in the City meeting policy). Public comments are limited to 3 minutes each, and the Chair and Committee may limit this time if reasonable under the circumstances.

2. In-person Meeting Participation: Complete an online speaker card at the following website: www.cityofpasadena.net/commissions/public-comment/ After submitting a public speaker card, members of the public may attend the meeting in-person by coming to the Pasadena City Council Chamber, Room S249 at City Hall at the date and start-time of the posted meeting.

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To participate in public comment for an item and to be recognized to speak, it is required that the speaker login to the meeting using the same name or telephone number used on the Speaker Card form. This will allow City staff to locate and promote the speaker into the meeting when it is time for their public comment.

Participants’ phone calls to the Committee meeting will be recorded as part of the Committee meeting. By staying on the line and making public comment during the Committee meeting by phone, you are agreeing to have your phone call recorded. Following is the connectivity information for virtual participation:

Computer or electronic devices, join the meeting at: cityofpasadena.net/cczoom Telephone only dial-in: 1-669-900-6833, Meeting ID: 161 482 446

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Help line will open 30 minutes prior to the posted start time of the meeting.

4. Members of the public may submit correspondence of any length prior to the start of the meeting, at the following email address:
gac
[email protected]
C
orrespondence will be forwarded to the Committee prior to the start of the meeting, posted online, and made part of the legislative record for the item.

LIVESTREAM WITH CAPTIONING IS AVAILABLE AT WWW.PASADENAMEDIA.ORG, AND ALSO AT WWW.CITYOFPASADENA.NET/COMMISSIONS/AGENDAS, I

F YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT

TO THE AMERICANS WITH DISABILITIES ACT

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

SPECIAL MEETING
AGENDA

FINANCE/AUDIT COMMITTEE
DEC
EMBER 11, 2023
Public Meeting: 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
Oc
tober 23, 2023 Special Meeting
November 13, 2023 Special Meeting
November 27, 2023 Cancellation Notice

NEW BUSINESS

1. AME
ND THE POLICE DEPARTMENT’S FISCAL YEAR 2024 OPERATING
BUDGET BY APPROPRIATING $148,456 FROM THE GENERAL FUND’S

UNAPPROPRIATED FUND BALANCE AND ADDING THREE PARK SAFETY

SPECIALIST POSITIONS AND ONE POLICE SUPPORT ASSISTANT

POSITION

2. APPROVAL OF BUDGET AMENDMENT TRANSFERRING $120,000 FROM THE HOUSING DEPARTMENT’S FISCAL YEAR 2024 OPERATING BUDGET TO THE PUBLIC HEALTH DEPARTMENT’S FISCAL YEAR 2024 OPERATING

BUDGET TO PROVIDE WEATHER-ACTIVATED MOTEL VOUCHER

SERVICES

3. AUTHO
RIZE CITY MANAGER TO AMEND CONTRACT NO. 9706-3 WITH

NORTON SIMON MUSEUM TO INCREASE ANNUAL LANDSCAPE
MAINTENANCE CONTRACT BUDGET FROM $159,756 TO $328,226

ANNUALLY SUBJECT TO ANNUAL CONSUMER PRICE INDEX INCREASE

4. AME
NDMENTS TO THE FISCAL YEAR 2024 GENERAL FEE SCHEDULE TO

REVISE AND ADD AQUATICS FEES

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2 5. AMENDMENT TO FISCAL YEAR 2024 CAPITAL IMPROVEMENT PROGRAM TO APPROPRIATE $1,000,000 IN GENERAL FUND FOR WORK AT THE

YWCA BUILDING

6. AUTHO

RIZE THE CITY MANAGER TO ENTER INTO A CONTRACT WITH
HORIZONS CONSTRUCTION COMPANY INTERNATIONAL INC., FOR VIÑA VIEJA PICKLEBALL COURTS – PHASE 1 PROJECT FOR AN AMOUNT NOT- TO-EXCEED $544,848 AND AMENDMENT TO THE FISCAL YEAR 2024

CAPITAL IMPROVEMENT PROGRAM

7. ANNUAL ADJ
USTMENTS TO THE FISCAL YEAR 2024 SCHEDULE OF
TAXES, FEES, AND CHARGES RELATED TO NEW YEAR’S DAY AND THE

ROSE BOWL

8. QUART
ERLY INVESTMENT REPORT - QUARTER ENDING SEPTEMBER 30,
2023

INFORMATION ONLY

9. APPROVAL OF INTERNAL AUDIT PLAN FOR FY 2024/2025

10. FI

NAL REPORT FOR THE AUDIT OF THE CITY OF PASADENA AS PROGRAM

ADMINISTRATOR OF THE FOOTHILL WORKFORCE DEVELOPMENT BOARD

11. INT

RODUCTION TO ENTERPRISE RISK MANAGEMENT

12. SWAP ANALYSIS

ADJOURN

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APPROVA

L OF MINUTES
 October 23, 2023 Special Meeting
 November 13, 2023 Special Meeting
 November 27, 2023 Cancellation Notice

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01 10/23/2023 Finance/Audit Committee

CITY OF PASADENA

FINANCE/AUDIT COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER S249
OCTOBER 23, 2023

SPECIAL MEETING
OP
ENING The Chair called the special meeting of the Finance/Audit Committee to order at 3: 26 p.m.

ROLL CALL: Mayor Victor M. Gordo
Councilmember Tyron Hampton (Arrived 3:28 p.m.)
Vice Mayor Felicia Williams
Sta
ff: Miguel Márquez, City Manager
Brenda Harvey-Williams, Assistant City Manager
Theresa Fuentes, Assistant City Attorney
Matthew Hawkesworth, Director of Finance
Joaquin Siques, Acting Director of Transportation
Tony Olmos, Director of Public Works
Kris Markarian, Deputy Director of Public Works/City Engineer Phyllis Hallowell, Management Analyst
Ruthe Holden, Internal Auditor
Jeremy Marquette, Utility Operations Technology Manager Gary Takara, Engineering Manager
Varoojan Avedian, Power Engineering Manager
Art Silva, Power Plant Manager
Caroline Monroy, Deputy City Attorney
Sam De Sylva, Lieutenant
Tim Bundy, Lieutenant
Caroline Lockwood Nelson, Program Coordinator
Jim Wong, Project Manager
Armine Trashian, Controller
Antonio Watson, Acting Procurement Administrator
Gloria Acevedo, Recording Secretary
APP
ROVAL OF MINUTES: It was moved by Vice Mayor Williams seconded by Chair Gordo, to approve the minutes of the September 11, 2023 (special meeting) and the cancellation notices for September 25, 2023 and October 9, 2023, as submitted. (Motion unanimously carried) (Absent: Councilmember Hampton)

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02 10/23/2023 Finance/Audit Committee

NEW BUSINESS AUTHORIZE THE CITY MANAGER TO ENTER INTO A MEMORANDUM

OF UNDERSTANDING WITH THE TASK FORCE FOR REGIONAL

AUTO THEFT PREVENTION AND AMEND THE POLICE
DEPARTMENT’S FY 2024 OPERATING BUDGET BY RECOGNIZING
REVENUE AND APPROPRIATING $247,595
Chair Gordo introduced the item and Miguel Márquez , City Manager , introduced Tim Bundy, Lieutenant.

It was moved by Vice Mayor Williams seconded by Chair Gordo, to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion u nanimously carried) (Absent: Councilmember Hampton)

AUTHORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT
WITH TACTICAL SUPPORT EQUIPMENT, INC. NOT -TO-EXCEED
$1,281,614 FOR THE PURCHASE OF A CELLULAR SITE
SIMULATORAND AMEND THE POLICE DEPARTMENT’S FISCAL
YEAR 2024 OPERATING BUDGET BY APPROPRIATING $1,281,614
Chair Gordo introduced the item and Miguel Márquez, City Manager, provided an overview of the agenda report.

It was moved by Vice Mayor Williams seconded by Councilmember Hampton, to approve staff’s recommendation and forward the item to the City Council for consideration. ( Motion unanimously carried) (Absent:

None)

AUTHORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT

WITH THE DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL
(ABC) FOR A GRANT AND AMEND THE POLICE DEPARTMENT’S FY
2024 OPERATING BUDGET BY RECOGNIZING REVENUE AND
APPROPRIATING $40,000
Chair Gordo introduced the item and Miguel Márquez, City Manager, introduced Sam De S ylva, Lieutenant , who provided a PowerPoint presentation and responded to questions.

Councilmember Hampton requested for staff to provide the number of operators who are in violation of their liquor license and to reach out to the California Department of Alcoholic Beverage Control (ABC) to set up a meeting to ensure the department is enforcing all applicable laws.

Councilmember Hampton also asked for the reason that operators do not lose their license on the first citation. Chair Gordo shared that the State controls the licensing agreements and that the revocation process takes place after a third violation. The City’s jurisdiction is limited to operators who pull a Conditional Use Permit (CUP) and are issued a citation for CUP violations, grandfathered operators are exempt from this process.

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03 10/23/2023 Finance/Audit Committee

Vice Mayor Williams supports the enforcement especially for grandfathered operators that have restrictions on their license.

It was moved by Councilmember Hampton seconded by Vice Mayor Williams, to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent:

None)
ACCEPTANCE OF “SAFE STREETS AND ROADS FOR ALL ACTION
PLAN” GRANT FUNDS AND AMEND THE CITY’S BUDGET TO

RECEIVE AND EXPEND FUNDS
Chair Gordo introduced the item and Miguel Márquez , City Manager, provided an overview of the agenda report.

Vice Mayor Williams inquired if the plan is to evaluate the National Association of City Transportation Officials standards to see which are appropriate for the City. Joaquin Siques, Acting Director of Transportation, explained that the local road safety plan can potentially look at the standards; however, at this time the action in the agenda report is focused on identifying high collision locations.

Councilmember Hampton mentioned Governor Gavin Newson recently signed California Assembly Bill 645, which allow s the installation of cameras to cite speeding violators and asked if Pasadena could be part of the pilot program. Mr. Siques stated that at the moment only larger, selected Cities were invited to participate; however, staff plans to join the program once it is offered to smaller cities.

None)
AMENDMENT OF THE HOUSING DEPARTMENT’S FISCAL YEAR
2024 OPERATING BUDGET IN THE AMOUNT OF $379,900;

APPROVAL OF KEY TERMS OF HOUSING ACQUISITION LOAN

AGREEMENT WITH HERITAGE HOUSING PARTNERS TO PROVIDE
PURCHASE FINANCING IN AN AMOUNT NOT TO EXCEED $379,900

TO IMPLEMENT PURCHASE OPTIONS ON AFFORDABLE
HOMEOWNERSHIP UNIT AT 588 N. FAIR OAKS AVENUE, #103
Chair Gordo introduced the item and Miguel Márquez , City Manager, provided an overview of the agenda report.

None)

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04 10/23/2023 Finance/Audit Committee

AUTHORIZE THE CITY MANAGER TO ENTER INTO AN

AGREEMENT WITH THE SUBSTANCE ABUSE AND MENTAL

HEALTH SERVICES ADMINISTRATION TO RECOGNIZE AND
APPROPIRATE $675,000 TO THE FISCAL YEAR 2024 PUBLIC

HEALTH DEPARTMENT OPERATING BUDGET TO SUPPORT THE
PASADENA OUTREACH AND RESPONSE TEAM (“PORT”)
PROGRAM AND AMEND CONTRACT NO. 32463 WITH UNION

STATION HOMELESS SERVICES
Chair Gordo introduced the item and Miguel Márquez, City Manager, provided an overview of the agenda report.

Vice Mayor Williams asked if staff is pursuing longer funding sources/terms and if it’s feasible for the Pasadena Outreach and Response Team (PORT) to have a 24-hour presence by integrating with the
Homeless Outreach-Psychiatric Evaluation (HOPE) team. Matthew Hawkesworth, Director of Finance, stated that staff is constantly seeking for future funding opportunities. To date, staff has received earmarks for funding the existing two teams with grants and will continue to search for funds to initiate a third team. The hope is that as the state addresses mental health, additional grants may become available.

Mr. Má rquez, added that due to the success of the PORT team, departments involved with the team are in talks about how to extend the service hours to include nights and weekends.

None)
AMENDMENTS TO FISCAL YEAR 2024 CAPITAL IMPROVEMENT

PROGRAM AND AUTHORIZE THE CITY MANAGER TO EXECUTE ALL

AGREEMENTS FOR THE RECEIPT OF ACTIVE TRANSPORTATION

PROGRAM AND HIGHWAY SAFETY IMPROVEMENT PROGRAM
GRANT FUNDS IN THE AMOUNT OF $10,942,040
Chair Gordo introduced the item and Miguel Márquez, City Manager, introduced Tony Olmos, Director of Public Works, who provided an overview of the agenda report.

Chair Gordo requested clarification about improvements on the intersections of Lake Avenue and Maple Street and Lake Avenue and Villa Street, as safety concerns have been raised . Joaquin Siques, Acting Director of Transportation, stated that the current funding does not include the Lake Avenue and Maple Street intersection as this area is under the jurisdiction of the California Department of Transportation; however, the City has incorporated some safety measures at that location. This funding

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05 10/23/2023 Finance/Audit Committee

will include improvements at the intersection of Lake Avenue and Villa Street. Mr. Siques confirmed the installation of a left turn pocket at th e intersection of Villa Street and Lake Avenue and he will look into replacing the missing bench in front of the Villa Gardens senior living complex.

Councilmember Hampton asked about the timeline to install the hydrogen fueling station. Mr. Siques responded that final funding is included in this action and the project is in the design phase, with a target completion date of 2026. In the meantime, the department plans to install a temporary hydrogen fueling station and acquire the fleet.

Councilmember Hampton inquired about the criteria for installing Light Emitting Diode (LED) lighting on light posts and if the department continues to install shields. Mr. Olmos stated that the department replaces LED lights in most replacement projects, shields are used in retrofit projects where there is a need to control glare.

None)
DIRECTION REGARDING AMENDMENTS TO THE CITY’S CHARTER

RELATED TO THE GENERAL FUND TRANSFER FROM THE

ELECTRIC UTILITY
Chair Gordo introduced the item and Miguel Márquez, City Manager, provided background information, items eight t o ten reflect proposed technical changes to the City Charter . Mr. Márquez introduced Matthew Hawkesworth, Director of Finance, who provided a PowerPoint presentation and responded to questions.

Chair Gordo requested clarification on which recommendation is preferred by staff and who delegates authority to the City Council, as it is important for the public to understand that there is still a threshold in place, such as the 12% transfer limit. Mr. Hawkesworth responded that staff recommends item three (remove net income reference entirely), this is preferred or four (remove net income and delegate authority to establish criteria). Mr.

Hawkesworth stated that the City Council authority could mirror other sections of the C harter that allow s co uncil to establish something by resolution or ordinance, like existing language regarding procurement authority. Theresa Fuentes, Assistant City Attorney , confirmed that the City Council can delegate the authority . Mr. Má rquez clarified that this would not be a delegation to the City Council rather the City Council reserving authority by resolution.

Vice Mayor Williams, agreed with the process and asked about the next steps, Ms. Fuentes stated that the next step is to take the item to the full

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06 10/23/2023 Finance/Audit Committee

City Council. Mr. Márquez added that the goal is to add the amendments to the March ballot. Mr. Hawkesworth added that staff can take the item to next Monday’s City Council meeting to get formal direction to then work with the City Attorney and the City Clerk’s Office to draft a formal proposal in time for the March ballot.

It was moved by Vice Mayor Williams, seconded by Councilmember Hampton, to forward recommendation number four to the City Council for consideration. (Motion Unanimously carried) (Absent: None) Chair Gordo clarified that the action gives staff the direction to establish criteria and asked staff to share at the City Council presentation the strengths and weaknesses of the City Council adopting the action by resolution versus the implementation of a staff model.

DIRECTION REGARDING AM ENDMENTS TO THE CITY’S CHARTER

AND MUNICIPAL CODE RELATED TO PROCUREMENT
Chair Gordo introduced the item and Miguel Márquez, City Manager, provided background information, Matthew Hawkesworth, Director of Finance, provided a PowerPoint presentation and responded to questions.

It was moved by Councilmember Hampton seconded by Vice Mayor Williams to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent:

None)
Chair Gordo clarified the motion is to increase the City manager authority to $250,000 and to revise as needed based on the Consumer Price Index.

Vice Mayor Williams asked that other parts of the procurement noncompetitive bidding process should be reviewed at a future meeting.

DIRECTION REGARDING AMENDMENTS TO THE CITY’S CHARTER

AND MUNICIPAL CODE RELATED TO PROCUREMENT

ALTERNATE PROJECT DELIVERY METHODS
Chair Gordo introduced the item and Miguel Márquez, City Manager, introduced, Tony Olmos, Director of Public Works , who provided a PowerPoint presentation and responded to questions.

Vice Mayor Williams asked for confirmation on what section of the Charter is being proposed to be amended. Mr. Olmos responded that the example relating to language adopted by the city of Lawrence, Kansas will be used as a baseline in drafting the City’s ordinance.

Chair Gordo commented on the item stating the City Council will keep existing procurement language, the action will give authority to the City Council to use alternate methods. Mr. Olmos added that alternate methods would be used on larger projects.

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07 10/23/2023 Finance/Audit Committee

Councilmember Hampton is supportive of the item as it will allow City staff to create an ordinance for City Council approval with language that supports local hiring.

It was moved by Vice Mayor Williams, seconded by Councilmember Hampton, to forward recommendation number four to the City Council for consideration. (Motion Unanimously carried) (Absent: None)

INFORMATION ONLY INTERNAL AUDIT STATUS UPDATE Chair Gordo introduced the item and Ruthe Holden, Internal Auditor, gave a brief outline and responded to questions.

Chair Gordo was glad to hear that the high-risk audit had been completed.

Councilmember Hampton asked for clarification on the types of complaints that come in through the fraud hotline and if the information is shared with the City Council. Ms. Holden responded that most of the complaints are related to the Human Resources Department and due to the sensitivity, they are not shared with the City Council.

Following a brief discussion, on the order of the Chair and consensus of the Finance/Audit Committee, the item was received and filed.

THE AUDITOR’S COMMUNICATION WITH THOSE CHARGED WITH

GOVERNANCE PURSUANT TO STATEMENTS ON AUDITING
STANDARDS NO. 114
Chair Gordo introduced the item and Matthew Hawkesworth, Director of Finance, gave a brief outline on the item.

On the order of the Chair and consensus of the Finance/Audit Committee, the item was received and filed.

FY 2024 CAPITAL IMPROVEMENT PROGRAM-FIRST QUARTER

MONITORING REPORT
On the order of the Chair and consensus of the Finance/Audit Committee, the item was received and filed.

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08 10/23/2023 Finance/Audit Committee

ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee was adjourned at 4:39 p.m.

ATTEST: ______________________
Mayor Victor M. Gordo, Chair
Finance/Audit Committee

____________________
Gloria Acevedo
Recording Secretary

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01 11/13/2023 Finance Committee

CITY OF PASADENA

FINANCE COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER S249
NOVEMBER 13, 2023

SPECIAL MEETING

OPENING Chair Gordo called the special meeting of the Finance Committee to order at 3:11 p.m.

ROLL CALL: Mayor Victor M. Gordo (Chair)
Councilmember Tyron Hampton ( Arrived at 3:15 p.m.)
Vice Mayor Felicia Williams

Staff: Miguel Márquez, City Manager
Brenda Harvey-Williams, Assistant City Manager
Theresa Fuentes, Assistant City Attorney
Matthew Hawkesworth, Director of Finance
Sam De Sylva, Lieutenant
Gloria Acevedo, Recording Secretary

NEW BUSINESS AMEND THE POLICE DEPARTMENT'S FISCAL YEAR 2024 OPERATING BUDGET BY RECOGNIZING REVENUE AND APPROPRIATING $43,334

IN GRANT FUNDS FROM THE EDWARAD BYRNE MEMORIAL JUSTICE

ASSISTANCE GRANT PROGRAM
Chair Gordo introduced Miguel Márquez, City Manager, who gave a brief overview and introduced Sam De Sylva, Lieutenant, who provided a PowerPoint presentation and responded to questions.

Councilmember Hampton requested clarification on the components of the panels, the configuration of the site, the safety of the live rounds, and future modifications to the layout. In addition, Councilmember Hampton inquired about the feasibility of allowing outside agencies use of the facility and if a rental fee would apply. Mr. De Sylva, confirmed the safety of the live rounds, stated that staff would make modifications to the layout as needed, and that the facility can be made available to outside agencies, City staff will review any applicable rental fees.

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02 11/13/2023 Finance Committee

ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A STANDARD AGREEMENT (96228) WITH THE STATE OF

CALIFORNIA FRANCHISE TAX BOARD (FTB) FOR THE PURPOSE OF THE CITY’S PARTICIPATION IN THE FTB’S CITY BUSINESS TAX DATA

PROGRAM
Chair Gordo introduced the item and Matthew Hawkesworth, Director of Finance, provided a PowerPoint presentation and responded to questions.

Councilmember Hampton requested clarification that no additional information will be required by business custo mers. Mr. Hawkesworth confirmed that the State will work with the existing data.

Chair Gordo asked for clarification that the action would ensure business owners are applying for a business license. Mr. Hawkesworth confirmed that the intent of the agreement is to ensure businesses are applying for a business license, the City will provide the state a data file of active business license holders.

It was moved by Vice Mayor Williams seconded by Councilmember Hampton, to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None) ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee was adjourned at 3:27 p.m.

ATTEST: ______________________
Mayor Victor Gordo, Chair
Finance Committee

____________________
Gloria Acevedo
Recording Secretary

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NEW BUSINESS
ITEM 1

1. AMEND THE POLICE DEPARTMENT’S FISCAL YEAR
2024 OPERATING BUDGET BY APPROPRIATING
$148,456 FROM THE GENERAL FUND’S

UNAPPROPRIATED FUND BALANCE AND ADDING

THREE PARK SAFETY SPECIALIST POSITIONS AND

ONE POLICE SUPPORT ASSISTANT POSITION

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Page 16 ends

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NEW BUSINESS
ITEM 2

2. APPROVAL OF BUDGET AMENDMENT
TRANSFERRING $120,000 FROM THE HOUSING
DEPARTMENT’S FISCAL YEAR 2024 OPERATING

BUDGET TO THE PUBLIC HEALTH
DEPARTMENT’S FISCAL YEAR 2024 OPERATING

BUDGET TO PROVIDE WEATHER-ACTIVATED

MOTEL VOUCHER SERVICES

Page 19 ends

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Agenda Report
December 11, 2023
TO: Honorable Mayor and City Council
THROUGH: Finance Committee
FROM: Housing Department
SUBJECT: APPROVAL OF BUDGET AMENDMENT TRANSFERRING $120,000 FROM THE HOUSING DEPARTMENT'S FISCAL YEAR 2024

OPERATING BUDGET TO THE PUBLIC HEALTH DEPARTMENT'S
FISCAL YEAR 2024 OPERATING BUDGET TO PROVIDE WEATHER-

ACTIVATED MOTEL VOUCHER SERVICES
RECOMMENDATION:

It is recommended that the City Council take the following actions:
1) Find that the recommended actions are exempt from the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines per Section 15061 (b)(3), the "common sense" exemption that CEQA only applies to projects that may have an effect on the environment; and 2) Amend the Fiscal Year (FY) 2024 Operating Budget by transferring $120,000 from the Housing Department to the Public hlealth Department to provide weather-activated motel voucher services to people experiencing homelessness.

BACKGROUND:

During the COVID-19 pandemic between 2021 and 2023 when the City did not have a congregate winter shelter, the Housing Department was able to collaborate with the Public Health Department and allocate over $450,000 in federal Emergency Solutions Grant funding authorized by the CARES Act (ESG-CV) to support the provision of emergency shelter with motel stays ("motel vouchers") through existing Public Health programs, including the Pasadena Outreach Response Team (PORT), Geriatric Empowerment Model (GEM) Link, and Transitional Age Youth (TAY) Link.

In order to further expand the number of weather-activated motel vouchers available to people who are unsheltered during the 2023-2024 winter season, the Department recommends transferring $120,000 of previously approved City General Funds to the Public hlealth Department to support the provision of emergency shelter through motel MEETING OFAGENDA ITEM NO.

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Budget Transfer to Public Health for Emergency Shelter Services December 11, 2023

Page 2 of 3 ends

stays, including weather-activated motel stays, during the upcoming winter season to existing clients experiencing homelessness. This transfer will increase the City's capacity to ensure timely access to available resources to a larger subset of clients in addition to the people served through Friends In Deed. This funding is expected to serve up to 100 people across a maximum of 1,200 bed nights.

ENVIRONMENTAL ANALYSIS:

The actions proposed herein are exempt from the California Environmental Quality Act (CEQA), pursuant to State CEQA Guidelines Section 15061 (b)(3), the "common sense" exemption of CEQA which applies to projects which may have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. The approval of a transfer of funds from the Department of Housing to the Public Health Department for weather-activated motel vouchers will not have a significant effect on the environment and, hence, is not subject to CEQA.

COUNCIL POLICY CONSIDERATION:

Approval of the recommended actions will provide access to emergency shelter services to people experiencing unsheltered homelessness in Pasadena during the months of the year with the highest incidences of inclement weather. These actions are consistent with the City Council's goal to support and promote the quality of life and local economy. The proposed actions are in accordance with the Pasadena Continuum of Care system, General Plan Housing Element, Five-Year Consolidated Plan, and Five-Year Public Housing Authority Plan.

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Budget Transfer to Public Health for Emergency Shelter Services December 11, 2023

Page 3 of 3 ends

FISCAL IMPACT:

Approval of the recommended action will transfer $120,000 from the Housing Department's FY 2024 Operating Budget within the General Fund (101) to the Public hlealth Department's FY 2024 Operating Budget (Fund 203) to provide emergency shelter services for people experiencing homelessness.

Respectfully submitted,
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Prepared by:
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Housing Director
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Jennifer O'Reilly-Jones
Program Coordinator III
Approved by:

J^K^A-
^TARQUEZ
City Manager

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NEW BUSINESS
ITEM 3

3. AUTHORIZE CITY MANAGER TO AMEND CONTRACT
NO. 9706-3 WITH NORTON SIMON MUSEUM TO

INCREASE ANNUAL LANDSCAPE MAINTENANCE
CONTRACT BUDGET FROM $159,756 TO $328,226

ANNUALLY SUBJECT TO ANNUAL CONSUMER PRICE

INDEX INCREASE

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Agenda Report
December 11,2023
TO: hlonorable Mayor and City Council
THROUGH: Finance Committee
FROM: Parks, Recreation, and Community Services Department SUBJECT: AUTHORIZE CITY MANAGER TO AMEND CONTRACT NO. 9706-3

WITH NORTON SIMON MUSEUM TO INCREASE ANNUAL
LANDSCAPE MAINTENANCE CONTRACT BUDGET FROM $159,756
TO $328,226 ANNUALLY SUBJECT TO ANNUAL CONSUMER PRICE

INDEX INCREASE
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed action is exempt from the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines Section 15061 (b)(3) (Common Sense Exemption [formerly the General Rule]);

2. Authorize the City Manager to amend contract No.9706-3 with Norton Simon Museum to increase the annual contract landscape maintenance budget from $159,756 to $328,226, subject to annual Consumer Price Index; and

3. Appropriate $98,274 from the General Fund to the FY 2024 Parks, Recreation and Community Services Department Operating Budget (10118070-811400)to cover increased expenses related to landscape maintenance at Norton Simon Museum.

BACKGROUND:

In 1975, the City of Pasadena entered into a 75-year ground lease agreement with Norton Simon Museum (NSM). As part of the agreement, NSM was responsible for all building improvements and structural maintenance, while the City was responsible for the upkeep of trees, shrubs, ground covers, planters, walkways, and the service, replacement and repair of irrigation systems. In 1978, the agreement was amended to allow NSM to undertake the contractual responsibility for landscape maintenance and required the City to reimburse NSM for payments made to the landscape contractor of their choice. In 1990, a second amendment was executed extending the term from 75 to 99 years and incorporating an annual Consumer Price Index escalator for landscape maintenance expenses. Finally, in 2003, the City Council approved an amendment tomain1 MEETING OF.AGENDA ITEM NO.

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Norton Simon Museum Contract Amendment
December 11, 2023

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the contract to increase the annual landscape maintenance costs due to significant improvements and renovations on the museum grounds. The lease agreement is set to expire in 2075.

The landscape needs at NSM have increased over time due to maturing trees, landscape improvements, and deferred pond maintenance. Through an evaluation of existing landscaping needs, NSM identified that the current vendor contract was insufficient to meet the landscape needs of the museum. Therefore, the current budget is no longer sufficient to maintain the grounds at a "reasonably satisfactory condition" as outlined in the lease agreement.

In April 2022, NSM issued a request for proposals for a new landscape contractor and received three bids. City staff assisted NSM with the preparation of the bid specifications to ensure the scope of work was consistent with the lease agreement provision and met NSM landscape needs. NSM selected Meier Brothers Landscape to provide landscaping, pest control, and pond maintenance services; and Brightview Tree Care Services to provide tree trimming service.

The $168,470 increase in the annual maintenance cost is attributed to:
i) Increase in staffing levels- from 80 hours a week to 128 hours; 2) Increase in frequency - from five days a week service to seven days a week; and 3) Added a dedicated account manager to host bi-weekly meetings with the NSM facility director.

These service elements are crucial to adequately meet NSM's growing maintenance needs and align with the lease agreement provisions. As the selected bidders, Meier Brothers Landscape and Brightview Tree Care Services have entered into an agreement with NSM.

The following table represents the cost summary.

Service
Maintenance activities (landscaping, pest
control and pond maintenance)
Annual Amount
$295,814
Tree trimming$32,412
Total Annual Cost$328,226
In addition to the annual landscape maintenance reimbursement, the City provides in- kind support for trash disposal, water for landscape maintenance, irrigation support, and capital projects such as the recently completed parking lot improvement.

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Norton Simon Museum Contract Amendment
December 11, 2023

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Public Benefits
Since its inception, NSM has offered various public benefits to Pasadena and non- Pasadena residents and children through education programs. Public benefits from July 1,2022 - June 30, 2023 included:
72 free school tours reaching approximately 2,350 students in fifth through twelfth grade (50% from Pasadena schools);
Approximately 2,200 students (K-cotlege) participated in the free, self-guided tour program (14% from Pasadena schools);
Four virtual tours reaching 145 students for schools unable to visit the site in- person; and
Three virtual lectures related to special exhibitions reached 495 attendees (35% Pasadena residents)
*Please note in-person school tours were re-introduced beginning November 2022 In addition, NSM provides free admission to children under age 18, active military personnel, students with valid school identification cards, and holders of EBT cards.

Approximately 17,000 children, active military personnel and EBT card holders received free admission in fiscal year 2023, and 26,000 students above 18 years of age received free admission during the same period. Please see Attachment A for additional information on public benefits provided by NSM.

COUNCIL POLICY CONSIDERATION:

This action is consistent with the City Council's goals to improve, maintain, and enhance public facilities and infrastructure, and to support and promote the quality of life and the local economy.

ENVIRONMENTAL ANALYSIS:

This action is exempt from the CEQA pursuant to State CEQA Guidelines Section 15061(b)(3), the Common Sense Exemption (formerly the general rule) that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The proposed amendment is an administrative action that does not involve any direct or indirect changes to the physical environment.

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Norton Simon Museum Contract Amendment
December 11,2023

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FISCAL IMPACT:

Approval of the recommended actions will amend the Parks, Recreation, and Community Services (PRCS) Department's FY 2024 Operating Budget (10118070 - 811400) by appropriating $98,274 from the unappropriated fund balance of the General Fund (101).

This represents seven months service payments in FY 2024, with an effective date of December 1, 2023. The full year allotment will be included in the PROS FY 2025 Operating Budget.

Respectfully submitted,
Q i 51 ^-^ ^ n\ A
Prepared by:

KOKO'PANOSSIAtT
Director of Parks, Recreation and
Community Services
<>^^yi\. _<)v''.L^y.x*-
Tsega Selassie
Management Analyst IV
Approved by:
f^^MIGUEL MARQUEZ
^ City Manager
NICHOLAS G. RODRIGUEZ
Assistant City Manager
Attachment A - Digital Impact of the Norton Simon Museum (July 2022- June 2023)

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Attachment A
Norton
Simon
Museum
Impact of the Norton Simon Museum
2022-2023
The Norton Simon Museum is committed to offering an array of free educational programs that are designed to foster the imagination; build a deep understanding of human creativity and expression; and serve children and their families, students and teachers, lifelong learners and people with different abilities.

Throughout the pandemic and the first year of our reopening, the Museum offered a robust series of virtual public and school programs, in addition to education videos and web-based offerings. In May 2022 we reintroduced in-person programs, followed by in-person school tours in November 2022. Some highlights for the period of July 1, 2022 - June 30, 2023 include:

PUSD School Tours & My Masterpieces Tours
The Museum conducted 72 free school tours reaching approximately 2,350 students in fifth through twelfth grade in the region, 50% of whom were from Pasadena schools.

Led by paid Museum educators with backgrounds in art history, these tours offer students and teachers the opportunity for lively discussion and engagement around important works of art, artistic styles and processes, and historical periods Of these tours, the Museum served approximately 1,070 PUSD fifth graders through the My Masterpieces program, with a total of 38 tours for 14 schools, led by Museum educators with a curriculum designed by Museum staff in consultation with PUSD Self-Guided School Tours
The Museum welcomed approximately 2,200+ students (K-coltege) through our free, self-guided tour program (tours led by a school's teacher that are scheduled through the Museum's Education Department), 14% of whom were from Pasadena schools On-site Programs for Children and Adults
The Museum offered more than 85 programs for audiences of all ages reaching approximately 4,000 visitors. These events included lectures with curators and scholars invited to speak on a particular topic, performances, educator-led talks and tours, -more-

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educator- and teaching-artist-led art classes and workshops for elementary, middle school, high school students and adults, as well as engagement nights for the community to celebrate a special exhibition or the collection, featuring spotlight talks, art-making activities for all ages and live music. In June 2023, we brought back our Garden Party after a four-year hiatus which served more than 900 guests Virtual School Tours for Children and Programs for Adults The Museum has hosted 4 virtual tours reaching 145 students (we are committed to keeping a virtual school tour option for schools unable to visit our site) The Museum presented 3 virtual lectures related to special exhibitions at the Museum, reaching 495 attendees, 35% of whom were Pasadena residents Looking Ahead:

Collaboration with California Institute of Technology (Caltech) The Norton Simon Museum is collaborating with Caltech on a program that would enable faculty and students of their Visual Culture minor to work closely with the collections and staff of the Norton Simon Museum as part of their standard curriculum and for specialized research.

We hope to host seminar-style courses in the galleries, with the potential to build towards jointly organized programming, such as digital exhibitions, lectures or film series. Our conservator is also in conversation with Katherine Faber about more technical collaborations, that might involve conducting analysis on Simon objects.

Participation in ArtNight Pasadena
The Norton Simon Museum was one of the founding organizations of ArtNight Pasadena. After the pandemic, with limited hours and staffing challenges, we had to pause our participation.

We are pleased to note that the Museum will open its doors and welcome guests for the upcoming ArtNight on March 8, 2024.

Other Metrics of Engagement:

Social Media
2023 (through June 30):

X (formally known as Twitter): 15,614 audience / 18 posts / 12,375 impressions / 291 engagements
Facebook: 41,787 audience / 81 posts / 906,052 impressions / 44,064 engagements

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• Instagram: 48,901 audience / 243 posts / 877,632 impressions / 32,375 engagements Collections-Based Educational Videos
From July 1, 2022-June 30, 2023 the Museum created a total of 15 videos centered on the Museum's collection and special exhibitions (total views c. 78,500)

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NEW BUSINESS
ITEM 4

4. AMENDMENTS TO THE FISCAL YEAR 2024 GENERAL

FEE SCHEDULE TO REVISE AND ADD AQUATICS FEES

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Amendments lo the Fiscal Year 2024 General Fee Schedule December 11, 2023

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New Fees
• Lap Swim Membership (Proposed Fee #1388)
The Lap Swim Membership is a new fee consistent with a renewed interest in the City's year-round aquatics program at the Honorable John J. Kennedy Pool. This 30- minute per day activity reservation is available Tuesday through Saturday excluding holidays. A monthly membership will allow for unlimited lap swim visits per month depending on program enrollment availability.

Proposed Fee: $30/month (Resident) and $60/month (Non-Resident) • Adult Water Aerobics Membership (Proposed Fee #1386)
The Adult Water Aerobics Membership is a new fee consistent with a renewed interest in the City's year-round aquatics program. Currently, water aerobics is offered Wednesdays and Fridays, three sessions per day. In spring 2024, new evening water aerobics classes will be offered to complement the existing water aerobics classes. A monthly membership allows for unlimited class participation during the month depending on program enrollment availability.

Proposed Fee: $30/month (Resident) and $60/month (Non-Resident) COUNCIL POLICY CONSIDERATION:

This proposed action supports the City Council's strategic planning goal of maintaining fiscal responsibility and stability through the periodic review and update of the General Fee Schedule and by ensuring that, where
appropriate, the City is reimbursed for the cost
of providing selected services. This recommended action also supports and promotes the quality of life and local economy.

ENVIRONMENTAL ANALYSIS:

This action is exempt from the CEQA pursuant to State CEQA Guidelines Section 15061(b)(3), the Common Sense Exemption (formerly the general rule) that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The proposed action is the modification of a tax or fee, and will not result in any new development or physical changes.

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NEW BUSINESS
ITEM 5

5. AMENDMENT TO FISCAL YEAR 2024 CAPITAL

IMPROVEMENT PROGRAM TO APPROPRIATE
$1,000,000 IN GENERAL FUND FOR WORK AT THE

YWCA BUILDING

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NEW BUSINESS
ITEM 6

6. AUTHORIZE THE CITY MANAGER TO ENTER INTO A

CONTRACT WITH HORIZONS CONSTRUCTION
COMPANY INTERNATIONAL INC., FOR VIÑA VIEJA
PICKLEBALL COURTS – PHASE 1 PROJECT FOR AN
AMOUNT NOT-TO-EXCEED $544,848 AND AMENDMENT
TO THE FISCAL YEAR 2024 CAPITAL IMPROVEMENT

PROGRAM

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NEW BUSINESS
ITEM 7

7. ANNUAL ADJUSTMENTS TO THE FISCAL YEAR 2024 SCHEDULE OF TAXES, FEES, AND CHARGES RELATED TO NEW YEAR’S DAY AND

THE ROSE BOWL

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NEW BUSINESS
ITEM 8

8. QUARTERLY INVESTMENT REPORT - QUARTER ENDING
SEPTEMBER 30, 2023

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PASb^^6 ^^^
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Agenda Report
December 11, 2023
s
TO: Honorable Mayor and City Council
THROUGH: Finance Committee
FROM: Department of Finance
SUBJECT: QUARTERLY INVESTMENT REPORT - QUARTER ENDING
September 30, 2023
RECOMMENDATION:

This report is for information only.

BACKGROUND:

Government Code Section 53646 (2)(b)(1) states that in the case of a local agency, the Treasurer or Chief Fiscal Officer (CFO) may render a quarterly report to the legislative body of the local agency containing detailed information on: 1) all securities, investments, and moneys of the local agency; 2) a statement of compliance of the portfolio with the statement of investment policy; and 3) a statement of the local agency's ability to meet its pool's expenditure requirements for the next six-months. By making these reports optional, this bill does not impose a state-mandated local program, however, encourages local agencies to continue to report. The bill also states that the Treasurer or CFO may report whatever additional information or data may be required by the legislative body of the local agency.

The quarterly report shall include the following:

1. The type of investment, name of the issuer, date of maturity, par, and dollaramount invested in each security, investment, and money within the treasury;

2. The weighted average maturity of the investments within the treasury;

3. Any funds, investments, or programs, including loans, that are under themanagement of contracted parties;

4. The market value as of the date of the report and the source of this valuation forany security within the treasury; and

5. A description of the compliance with the Statement of Investment Policy.

I
MEETING OF.AGENDA ITEM NO.

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Quarterly Investment Report - Quarter Ending September 30, 2023 December 11, 2023

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Economic Summary
Real GDP: Percent change from preceding quarter
8 6
4 2
0 -2
a? Q3
2022
U.S. Bureau of Kcononiic Analysis
Qda.1Q;' Q3
2023
Seasonally adjusted acinu-aii rates
The U.S. economy experienced a strong rebound and grew at the fastest pace in nearly two years despite the Fed's aggressive campaign to tame inflation, the unstable political and fiscal outlook, the financial problems experienced in the regional banking system and the geopolitical conflicts. According to the "advance" Gross Domestic Product (GDP) estimate released by the Bureau of Economic Analysis, the real U.S. GDP increased at an annual 4.9% rate in the third quarter of 2023 exceeding economists'

4.5% consensus rate. This strong performance was contributed to increases in consumer spending in both services and goods, increases in both federal and state and local government spending, and upturns in exports and residential fixed investment. usiensr
Job Openings vs Total unemployed Workers
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CwyriiW
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The labor market remained solid with unemployment rate measuring at 3.8% at the end of September 2023 and the number of unemployed persons was unchanged at 6.4 million. The economy added 799,000 non-farm jobs during the quarter with the majority in the leisure and hospitality and government sectors. The unemployment rate in California was 4.7%, the fourth highest unemployment rate in the nation after DC, Nevada, and Puerto Rico. The unemployment rate in Los Angeles County was 5.8% and the unemployment rate in Pasadena was 5.6%.

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Quarterly Investment Report - Quarter Ending September 30,2023 December 11, 2023

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Headline CPI ' " " '" ^ • • • " 3.^996^0
Core CPI (excludes Food and Energy) 4.146S30
Personal Consumption ExpendHure Core 3.6772&0
PPI Final.Demiind I 2.168270
^ 12.000000
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Inflation I Indicatornl
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2013 2014 2015 2016
Ir.^uh C'-lF CP; us-bar OD(-sa-T»afE 'r'QY NtSA) ^•'hif:;=' 2017 2018
s .c.ars 'fs =CE wsr.tMy ;
2019 2020 2021
!20^S-300CT2^23 <Opji'ns^ES SOZ3.
2022 2023
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The Consumer Price Index (CPI) rose 3.7% for the last 12 months ending September.

CPI remained elevated in September as gas and rents kept prices high. Food prices however were at their lowest rate and grew at 2.4% annual rate compared to headline inflation of 3.7%. The Core CPI, which excludes food and energy, has been declining.

After reaching 6.1% a year ago, the year-over-year Core CPI measured at 4.1% rate at the end of September 2023. The Core Personal Consumption Expenditures (PCE) rate, the Federal Reserve's preferred inflation gauge dropped to 2.4% compared to 3.7% last quarter, a sign that inflation is gradually subsiding and the Fed might be reaching the end of its tightening cycle. The Fed's target for the Core PCE is 2%.

Yield Curve 09/30/23 vs 06/30/23
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Treasury yields continued to increase during the quarter. The one-month treasury yield closed at 5.345%, an increase of 23.8 basis points or 0.238% from the previous quarter end. The two-year yield ended at 5.044% compared to 5.39% the prior quarter. The ten-year treasury yield was 4.897% on September 30, compared to 4.072% end of June, an increase of 82.5 basis points or 0.825% and the long bond closed at 4.699% compared to 3.86% end of June 2023. The treasury yield remained inverted where short term rates remained higher than longer term treasury rates and mortgage rates continued to climb exceeding 7.5% rate.

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Quarterly Investment Report - Quarter Ending September 30, 2023 December 11, 2023

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-42W.CS
Stock Market {indexes
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U.S. equity markets lost momentum after a strong performance in the first half of the year. The S&P index dropped 3.65% during the third quarter, the Dow Industrial Average Index declined 2.62% and NASDAQ dropped 4.12% during the period; however, all three indexes rebounded in the fourth quarter and had a strong year to date returns. As of November 27,2023, the year to date return of the S&P was 18.55%,the DOW had a year to date return of 6.54% and NASDAQ had an impressive return of36.23%.

Total Funds Under Management
The table below represents total City funds under management based on values as of September 30, 2023.
9/30/2023 6/30/2023
Pooled Investment Portfolio
Capital Endowment
Stranded Investment Reserve Portfolio
Special Funds
Investments Held with Fiscal Agents
PARS Section 115 Trust
Total Funds Under nflanagement
their market
Change
$677,018,590
1,898,329
39,528,732
17,863,556
33,626,835
14,085,603
$666,999,570
1,874,968
40,490,191
22,783,139
34,615,748
14,505,964
$10,019,020
23,361
(961,459)
(4,919,583)
(988,913)
(420,361)
$784,021,645 $781,269,580 $2,752,065

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Quarterly Investment Report- Quarter Ending September 30,2023 December 11, 2023

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The Pooled Investment Portfolio value increased by a net $10,019,020 due to the following cash transactions during the quari:er:

Net Investment Earnings (Fair Market Value Change plus Interest Income) | $ 6,272,530 Deposits and Credit Card Receipts152,021,441
Property Tax Revenues4,420,561
Sales Tax and Other State Apportionments19,401,969
MUD Receipts Net of Payments and Loans4,769,188
Payroll and Payroll-related Expenses(85,901,567)
Vendor Payments and Accounts Payable Checks(65,314,595) Debt Sen/ice Payments Net of Reimbursements and Subsidies(8,562,362) Water and Power Payments Net of Receipts(28,492,048)
Net Transfer from Other Funds6,290,138
Drawdown from 2021 A Water Revenue Project Fund LAIF Acct5,113,765 Total$ 10,019,020
The Capital Endowment Fund increased by $23,361, representing $5,950 investment earnings for the period and an increase in market value of investment by $17,411.

The Stranded Investment Reserve portfolio decreased by $961,459 representing the net change in market value of investments.

Special Funds decreased by $4,919,583. This was due to a drawdown of $5,113,765 from the Water Revenue Bonds 2021A Series Project Fund, $29,300 redemption of principal for the Annadale Investment and a net market value gain of $223,482.

Investments held with fiscal agents decreased by a net $988,913 due to 1) $427,573 transferred to the trustee related to the 2008 Paseo Bonds and the 2016A Rose Bowl Bonds and 2) a decrease of $1,755,471 representing net change in market value of investments adjusted by investment earnings.

The PARS Section 115 Trust account decreased by $420,361. The change was comprised of $402,384 decrease in market value of investments and $17,977 of investment expenses.

The City pools all internal funds to gain economies of scale and to simplify the investment function. There are over 100 funds in the Pooled Investment Portfolio. As of September 30, 2023, the General Fund's investment balance in the pool was estimated at $59.9 million representing 8.85% of the September 30, 2023, Pooled Portfolio value.

The General Fund's cash balance fluctuates daily based on the timing of revenues receipts and payment of expenditures. Investments in the Capital Endowment Fund, the Stranded Investment Reserve Fund, the Special Funds, the PARS Section 115 Trust account, and funds held with fiscal agents are restricted funds or bond proceeds reserved in accordance with the City Charter, City ordinances, bond indentures, and Trust Agreements. The City targets an average duration oftwo-years in managing the

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Quarterly Investment Report - Quarter Ending September 30, 2023 December 11, 2023

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pooled portfolio with an effective duration range of 1.5 to 2.5 years based on market conditions and portfolio's risk and return evaluation, the Treasury yield curve, and industry best practices as it pertains to public funds management. As of September 30, 2023, the portfolio's effective duration was 1.28 years.

Per government code requirements, attached are reports by each fund indicating the type of investments, date of maturity, par and dollar amount invested in each security, and investment and moneys within the Treasury with market values as of June 30, 2023. On a monthly basis, the City Treasurer prices the pooled portfolio and all other funds and investments under management. The market values are obtained from Interactive Data Corporation (I DC) and from Bloomberg Financial System. I DC is an independent third-party whose sole service is to provide market prices for all types of securities.

The types of securities held in the portfolio and their percentage allocation to the total are in compliance with the City's Fiscal Year (FY) 2024 Investment Policy, which was adopted by the City Council on June 12, 2023, and Section 53600 of the State Government Code. The City Treasurer targets to maintain in excess of $60 million short-term, liquid investments (1 to 90 day maturities), which represents approximately 1/12th of the City's total aggregate annual Operating Budget. As of September 30, 2023, the portfolio had $98.0 million in overnight short-term investments. This balance, along with anticipated cash flows into the City's account, represents a strong liquidity position to meet budgeted expenditures for the next three-months.

The yield to maturity on the pooled portfolio began gradually increasing beginning April 2023 as a result of the Fed tightening the monetary policy by raising the Fed Funds rate. Interest rates across the treasury yield curve increased with the most increases occurring on the six-month to two-year maturities. The yield on the pooled portfolio more than doubled in the last twelve months and is expected to continue to increase over the next twelve-month period. The earnings rate on the pooled portfolio as September 30, 2023, was 2.223%.

The graph below represents the historic yield of the Pooled Portfolio over the twelve- month period ending September 30, 2023:

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%
Sept Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sept Oct 22 22 22 22 23 23 23 23 23 23 23 23 23 23

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Quarterly Investment Report- Quarter Ending September 30,2023 December 11, 2023

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COUNCIL POLICY CONSIDERATION:

This quarterly report supports the City Council's strategic planning goal to maintain fiscal responsibility and stability.

FISCAL IMPACT:

There is no fiscal impact as a result of this action report, nor will it have any indirect or support cost requirements. There is no anticipated impact to other operational programs or capital projects.

Respectfully submitted,
^
MATTHEW ^. 'HAWKESWORTH
Director of Finance
Preparedb
^2 i
/
Vie Er^&nian
City T^f-easurer/Deputy Director of Finance
Approved by:
/^s=—
?QUEZ
City Manager
Attachment: (1)
Attachment A - Quarterly Investment Report - Quarter Ending September 30,2023

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City of Pasadena
Quarterly Investment Report
Quarter Ending 9/30/202
3 Prepared by the Department of Finance
Treasury Division
Attachment A

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Quarterly Investment Report
I. Pooled Investment Portfolio
II. Capital Endowment Portfolio
III. Power Reserve Portfolio
IV. Miscellaneous Portfolios
V. Investments Held by Trustees
VI. PARS Section 115 Trust

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I. Pooled Investment Portfolio

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CITY OF PASADENA
Treasurer's Pooled Investment Portfolio
Vicken Erganian
City Treasurer
September 2023

PORTFOLIO COMPLIANCE
The Treasurer's investment portfolio is in compliance with the California Government Code Section 53601 and the City's Investment Policy approved by the City Council on June 12, 2023. The holdings in the investment pool are in compliance with the current investment policy statement. Further information on compliance issues can be obtained by calling the City of Pasadena Treasurer's Office. A complete copy of the monthly investment report on the investment portfolio including a detailed listing of each investment, is available by calling the Treasurer's office at (626)744-4422.

PORTFOLIO STRUCTURE AS OF 9/30/2023

TYPE MARKET VALUE PERCENT
Money Market - Collateralized 1,166 0.00%
Certificates of Deposit 1,250,000 0.19%
Municipal Bonds 23,929,051 3.55%
Corporate Bonds 73,577,222 10.91%
Federal Agencies 391,205,904 58.01%
US Treasury Securities 47,749,805 7.08%
Supernationals 28,607,452 4.24%
Commercial Paper 4,989,725 0.74%
Money Market-CAMP 96,006,536 14.24%
US Treasury Securities Disc 4,951,302 0.73%
LAIF 1,273,940 0.19%
Cash in Bank 808,135 0.12%
TOTALS: 674,350,237 100.00%
Accrued Interest Receivable 2,668,353
GRAND TOTAL: 677,018,590
PORTFOLIO LIQUIDITY AS OF 9/30/2023
Percent of
Aging Interval Par Value Portfolio
0-30 Days 108,089,776 15.27%
31 days - 1 Year 170,325,000 24.05%
1 - 2 Years 194,167,778 27.42%
2 - 3 Years 195,498,000 27.61%
3 - 4 Years 25,000,000 3.53%
4 - 5 Years 15,000,000 2.12%
Over 5 Years - 0.00%
TOTAL: 708,080,554 100.00%
Sep-23 Aug-23 Jul-23 Jun-23 May-23 Apr-23
Month-End Market Value 677,018,590 665,039,870 657,051,757 666,999,570 672,272,990 663,426,916 Modified Duration 1.28 1.38 1.47 1.46 1.44 1.54
Weighted Average Maturity 1.38 1.48 1.57 1.56 1.55 1.64 Current Book Yield to Maturity 2.223% 2.143% 2.083% 2.107% 2.054% 1.922% Effective Yield - Year to Date 2.120% 2.090% 2.090% 1.600% 1.550% 1.510% Interest Earned 1,202,291 1,111,375 1,115,809 1,065,968 990,842 919,839 Fiscal Year To Date Interest Earned 3,429,475 2,227,184 1,115,809 9,574,303 8,508,335 7,517,493 Fair Value Change Gain/(Loss) (16,094) 1,573,542 1,285,606 (446,116) (1,950,287) 553,847 Fiscal Year To Date change in fair value 2,843,054 2,859,147 1,285,606 (4,491,943) (4,045,827) (2,095,540) Total Fiscal YTD Earnings 6,272,529 5,086,331 2,401,414 5,082,360 4,462,508 5,421,953

PORTFOLIO STATISTICS
MMF-Collateral

0.00%
Certificates of
Deposit

0.19%
Muni

3.55%
Corp Bond

10.91%
Fed Agency

58.01%
US Treasury

7.08%
Supranationals

4.24%
Commercial
Paper

0.74%
Money Market-
CAMP

14.24%
US Treasury
Securities Disc

0.73%
LAIF

0.19%
Cash
in
Bank

0.12%
1

Page 74 ends

YTM
365Par Value Book Value
Maturity
Date
Stated
RateMarket Value
September 30, 2023
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management
Monthly for Pool
Days to
MaturityMoody'sCUSIP Investment #
Purchase
Date
LAIF

3.480Local Agency Investment Fund864 1,029,652.97 1,029,652.97 3.4801,029,652.97SYS864 1

3.480LAIF-COVID Relief Funds Acct14053 244,286.65 244,286.65 3.480244,286.65SYS14053 1 1,273,939.621,273,939.621,273,939.621,273,939.62Subtotal and Average 3.480 1 Money Market Fund-CAMP

5.627California Asset Management Pr13824 96,006,535.78 96,006,535.78 5.55096,006,535.78SYS13824 1 96,006,535.7896,006,535.7896,006,535.7885,816,284.75Subtotal and Average 5.627 1 Collateralized Money Market

4.800EAST WEST BANK13067 1,165.86 1,165.86 4.8001,165.86SYS13067 1 1,165.861,165.861,165.861,165.86Subtotal and Average 4.800 1 Municipal Bonds

0.475Califfornia State Univ Revenur13830 2,000,000.00 2,000,000.00 11/01/20230.47509/17/2020 1,992,080.00 Aa213077DMJ8 31

2.125Beverly Hills PFA13710 1,000,000.00 1,000,000.00 06/01/20242.12508/08/2019 977,220.00 AA+088006JM4 244

0.730Beverly Hills PFA13869 750,000.00 750,000.00 06/01/20240.73010/15/2020 726,232.50 AA+088006JY8 244

0.587City of Orange Taxable Pension13916 1,500,000.00 1,500,000.00 06/01/20240.58703/15/2021 1,451,100.00 AA684100AC4 244

2.070South Pasadena Unified School13748 325,000.00 332,527.77 08/01/20245.00012/12/2019 323,469.25 Aa2839278JX7 305

0.580SAN RAMON VLY CA UNIF SCH DIST13871 1,500,000.00 1,500,000.00 08/01/20240.58010/20/2020 1,440,705.00 Aa1799408Z77 305

0.575West Coast Contra Unified Scho13941 1,000,000.00 1,000,000.00 08/01/20240.57506/17/2021 958,890.00 AA9523474U3 305

0.685Califfornia State Univ Revenur13829 2,000,000.00 2,000,000.00 11/01/20240.68509/17/2020 1,899,320.00 Aa213077DMK5 397

0.982City of Arcadia13882 675,000.00 675,000.00 12/01/20240.98211/12/2020 639,744.75 Aaa039063AD4 427

0.650SANTA BARBARA CNTY CA SOLID WA13894 300,000.00 310,418.24 12/01/20243.67012/18/2020 293,583.00 A180136PDB6 427

0.943Huntington Beach CA Public Fin13861 300,000.00 300,000.00 05/01/20250.94308/12/2020 279,162.00 AA446216HJ5 578

0.883UNIVERSITY OF CA REVENUE BONDS13827 1,000,000.00 1,000,000.00 05/15/20250.88307/16/2020 932,480.00 Aa291412HGE7 592

0.610UNIVERSITY OF CA REVENUE BONDS13893 5,000,000.00 5,021,794.34 05/15/20250.88312/16/2020 4,662,400.00 Aa291412HGE7 592

0.952California St Health Facs Fing13883 1,500,000.00 1,500,000.00 06/01/20250.95211/04/2020 1,393,395.00 Aa313032UXM5 609

0.824Redondo Beach Unified School13840 500,000.00 500,000.00 08/01/20250.82408/06/2020 460,265.00 Aa2757710TZ1 670

2.311South Pasadena Unified School13747 675,000.00 706,024.72 08/01/20255.00012/12/2019 670,302.00 Aa2839278JY5 670

0.740SAN RAMON VLY CA UNIF SCH DIST13872 1,500,000.00 1,500,000.00 08/01/20250.74010/20/2020 1,381,080.00 Aa1799408Z85 670

0.938West Coast Contra Unified Scho13940 3,000,000.00 3,000,000.00 08/01/20250.93806/17/2021 2,762,550.00 AA9523474V1 670

1.181City of Arcadia13881 750,000.00 750,000.00 12/01/20251.18211/12/2020 685,072.50 Aaa039063AE2 792 25,345,765.0723,929,051.0025,275,000.0025,347,711.32Subtotal and Average 0.844 474 Certificates of Deposit - Bank

0.650BMW BANK NORTH AMERICA13949 250,000.00 250,000.00 09/17/20240.65009/17/2021 250,000.0005580AD68 352

0.650SYNCHRONY BANK13952 250,000.00 250,000.00 09/17/20240.65009/17/2021 250,000.0087164YB60 352

0.650GOLDMAN SACHS BANK USA CD13951 250,000.00 250,000.00 09/23/20240.65009/22/2021 250,000.0038149MZY2 358 Portfolio PASD
APData Updated: SET_POOL: 10/19/2023 15:46
Run Date: 10/19/2023 - 15:46 PM (PRF_PM2) 7.3.0
2

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0.700SALLIE MAE BANK/SALT LKE CD13956 250,000.00 250,000.00 09/23/20240.70009/22/2021 250,000.00795451AW3 358

0.650UBS BANK USA13950 250,000.00 250,000.00 09/23/20240.65009/22/2021 250,000.0090348JT42 358 1,250,000.001,250,000.001,250,000.001,250,000.00Subtotal and Average 0.660 356 Federal Agency Issues - Coupon

4.625Federal Home Loan Bank14000 5,000,000.00 5,000,000.00 10/27/20234.62510/27/2022 4,996,350.35 Aaa3130ATNK9 26

0.320FED HOME LOAN MORTAGE CORP13879 10,000,000.00 10,000,000.00 11/02/20230.32011/02/2020 9,957,156.60 Aaa3134GW6E1 32

0.320FED HOME LOAN MORTAGE CORP13880 5,000,000.00 5,000,000.00 11/02/20230.32011/02/2020 4,978,578.30 Aaa3134GW6E1 32

0.320FED HOME LOAN MORTAGE CORP13887 10,000,000.00 10,000,000.00 11/24/20230.32011/24/2020 9,925,231.30 Aaa3134GXCA0 54

0.250Federal Home Loan Bank13896 5,000,000.00 5,000,000.00 12/28/20230.25012/28/2020 4,938,533.90 Aaa3130AKL79 88

0.250Federal Home Loan Bank13897 5,000,000.00 5,000,000.00 12/28/20230.25012/28/2020 4,938,533.90 Aaa3130AKL79 88

0.800Federal Home Loan Bank13972 7,500,000.00 7,500,000.00 12/28/20230.80012/28/2021 7,415,378.48 Aaa3130AQ6F5 88

5.126FED NATIONAL MORTGAGE ASSN14011 5,000,000.00 5,000,000.00 02/09/20245.12502/13/2023 4,990,051.90 Aaa3135GAEU1 131

5.250Federal Home Loan Bank14012 4,000,000.00 4,000,000.00 03/01/20245.25003/01/2023 3,995,002.92 Aaa3130AUZ23 152

5.200FED NATIONAL MORTGAGE ASSN14015 5,000,000.00 5,000,000.00 03/28/20245.20003/30/2023 4,989,735.00 Aaa3135GAFP1 179

5.504Federal Home Loan Bank14014 5,000,000.00 5,000,000.00 04/01/20245.50003/08/2023 4,997,495.05 Aaa3130AVA36 183

0.500Federal Home Loan Bank13927 10,000,000.00 10,000,000.00 04/29/20240.50004/29/2021 9,711,630.90 Aaa3130ALXQ2 211

5.414Federal Home Loan Bank14017 5,000,000.00 5,000,000.00 06/07/20245.41005/10/2023 4,985,603.00 Aaa3130AVYY2 250

5.500Federal Home Loan Bank14020 5,000,000.00 5,000,000.00 06/28/20245.50006/28/2023 4,985,933.50 Aaa3130AWEX4 271

3.100FED HOME LOAN MORTAGE CORP13994 5,000,000.00 5,000,000.00 06/28/20243.10006/28/2022 4,909,641.20 Aaa3134GXYE8 271

0.625Federal Home Loan Bank13944 5,000,000.00 5,000,000.00 10/15/20240.62507/15/2021 4,752,412.75 Aaa3130AN4L1 380

0.500Federal Home Loan Bank13948 5,000,000.00 5,000,000.00 10/30/20240.50009/30/2021 4,737,457.15 Aaa3130ANYT1 395

0.900Federal Home Loan Bank13966 5,000,000.00 5,000,000.00 11/08/20240.90011/08/2021 4,752,441.65 Aaa3130APPQ2 404

1.100Federal Home Loan Bank13968 5,000,000.00 5,000,000.00 11/15/20241.10011/15/2021 4,759,673.75 Aaa3130APRA5 411

0.550Federal Home Loan Bank13937 10,000,000.00 10,000,000.00 11/26/20240.55005/26/2021 9,447,794.20 Aaa3130AMK92 422

0.650Federal Home Loan Bank13932 5,000,000.00 5,000,000.00 12/09/20240.65006/09/2021 4,721,435.60 Aaa3130AMJX1 435

1.150Federal Home Loan Bank13971 5,000,000.00 5,000,000.00 12/10/20241.15012/10/2021 4,749,440.85 Aaa3130AQ3F8 436

1.125Federal Home Loan Bank13973 5,000,000.00 5,000,000.00 01/21/20251.12501/21/2022 4,721,875.65 Aaa3130AQFG3 478

1.250Federal Home Loan Bank13975 5,000,000.00 5,000,000.00 01/28/20251.25001/28/2022 4,726,147.75 Aaa3130AQJ79 485

1.500Federal Home Loan Bank13977 5,000,000.00 5,000,000.00 02/18/20251.50002/18/2022 4,733,102.60 Aaa3130AQPF4 506

0.625Federal Home Loan Bank13933 5,000,000.00 5,000,000.00 02/27/20250.62505/27/2021 4,670,745.65 Aaa3130AMMG4 515

1.810Federal Home Loan Bank13979 4,700,000.00 4,700,000.00 02/27/20251.81002/28/2022 4,464,951.73 Aaa3130AQX99 515

0.650Federal Home Loan Bank13959 5,000,000.00 5,000,000.00 03/28/20250.65009/28/2021 4,657,775.10 Aaa3130AP5S0 544

3.000Federal Home Loan Bank13982 5,000,000.00 5,000,000.00 04/22/20253.00004/22/2022 4,817,755.35 Aaa3130ARJW2 569

0.750Federal Home Loan Bank13811 5,000,000.00 5,000,000.00 05/19/20250.75005/19/2020 4,639,966.10 Aaa3130AJLA5 596

3.400Federal Home Loan Bank13985 5,000,000.00 5,000,000.00 05/23/20253.40005/23/2022 4,840,774.80 Aaa3130ARZD6 600

0.750FED HOME LOAN MORTAGE CORP13814 5,000,000.00 5,000,000.00 05/28/20250.75005/28/2020 4,635,545.45 Aaa3134GVVX3 605

0.750FED HOME LOAN MORTAGE CORP13816 5,000,000.00 5,000,000.00 05/28/20250.75005/29/2020 4,635,545.45 Aaa3134GVB31 605 Portfolio PASD
APData Updated: SET_POOL: 10/19/2023 15:46
Run Date: 10/19/2023 - 15:46 PM (PRF_PM2) 7.3.0
3

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0.750FED HOME LOAN MORTAGE CORP13817 5,000,000.00 5,000,000.00 05/28/20250.75006/01/2020 4,635,545.45 Aaa3134GVB31 605

0.780Federal Farm Credit Bank13820 5,000,000.00 5,000,000.00 06/16/20250.78006/16/2020 4,627,855.50 Aaa3133ELK37 624

0.764Federal Home Loan Bank13822 3,017,777.77 3,017,571.21 06/16/20250.76006/19/2020 2,792,194.99 Aaa3130AJPT0 624

5.600FED HOME LOAN MORTAGE CORP14022 5,000,000.00 5,000,000.00 06/26/20255.60006/30/2023 4,968,919.65 Aaa3134GYUQ3 634

4.100Federal Home Loan Bank13996 5,000,000.00 5,000,000.00 08/08/20254.10008/08/2022 4,881,031.65 Aaa3130ASRJ0 677

0.650FED NATIONAL MORTGAGE ASSN13828 5,000,000.00 5,000,000.00 08/14/20250.65008/14/2020 4,590,421.45 Aaa3136G4C43 683

0.614Federal Farm Credit Bank13863 5,000,000.00 4,999,616.81 08/25/20250.61009/10/2020 4,581,485.85 Aaa3133EL4W1 694

0.530Federal Farm Credit Bank13864 20,000,000.00 20,000,000.00 09/29/20250.53009/29/2020 18,232,634.40 Aaa3133EMBH4 729

4.300Federal Home Loan Bank13997 5,000,000.00 5,000,000.00 09/30/20254.30009/30/2022 4,891,264.85 Aaa3130ATBN6 730

0.600FED HOME LOAN MORTAGE CORP13870 10,000,000.00 10,000,000.00 09/30/20250.60009/30/2020 9,128,501.30 Aaa3134GWVN3 730

0.600FED HOME LOAN MORTAGE CORP13873 10,000,000.00 10,000,000.00 10/15/20250.60010/15/2020 9,109,544.10 Aaa3134GWYS9 745

0.625FED HOME LOAN MORTAGE CORP13877 10,000,000.00 10,000,000.00 10/27/20250.62510/27/2020 9,102,169.10 Aaa3134GW3X2 757

0.600FED HOME LOAN MORTAGE CORP13878 5,000,000.00 5,000,000.00 10/27/20250.60010/27/2020 4,548,661.30 Aaa3134GW5P7 757

0.600FED HOME LOAN MORTAGE CORP13874 10,000,000.00 10,000,000.00 10/28/20250.60010/28/2020 9,096,275.70 Aaa3134GW3F1 758

0.600FED HOME LOAN MORTAGE CORP13876 5,000,000.00 5,000,000.00 10/28/20250.60010/28/2020 4,548,137.85 Aaa3134GW3Z7 758

0.600Federal Farm Credit Bank13888 10,000,000.00 10,000,000.00 11/24/20250.60011/24/2020 9,057,400.70 Aaa3133EMHF2 785

0.690FED HOME LOAN MORTAGE CORP13886 5,000,000.00 5,000,000.00 11/25/20250.62511/25/2020 4,530,683.45 Aaa3134GXCS1 786

0.719FED HOME LOAN MORTAGE CORP13891 5,000,000.00 5,000,000.00 11/26/20250.65011/30/2020 4,532,672.70 Aaa3134GXFA7 787

5.000Federal Home Loan Bank14007 5,000,000.00 5,000,000.00 12/29/20255.00012/29/2022 4,926,184.35 Aaa3130AUBX1 820

5.350FED HOME LOAN MORTAGE CORP14002 5,000,000.00 5,000,000.00 12/29/20255.35012/29/2022 4,947,029.10 Aaa3134GY7A4 820

0.550Federal Home Loan Bank13900 5,000,000.00 5,000,000.00 02/12/20260.55002/12/2021 4,482,882.95 Aaa3130AKVR4 865

0.625Federal Home Loan Bank13905 5,000,000.00 5,000,000.00 02/17/20260.62502/17/2021 4,488,762.65 Aaa3130AL3S1 870

0.750Federal Home Loan Bank13907 5,000,000.00 5,000,000.00 02/24/20260.75002/24/2021 4,498,961.50 Aaa3130ALCV4 877

0.630Federal Home Loan Bank13906 5,000,000.00 5,000,000.00 02/26/20260.63002/26/2021 4,484,627.25 Aaa3130ALB94 879

0.844Federal Farm Credit Bank13911 10,000,000.00 9,999,032.22 03/02/20260.84003/02/2021 9,011,728.60 Aaa3133EMSK9 883

0.800Federal Home Loan Bank13908 5,000,000.00 5,000,000.00 03/04/20260.80003/04/2021 4,500,425.25 Aaa3130ALEY6 885

0.800Federal Home Loan Bank13909 5,000,000.00 5,000,000.00 03/10/20260.80003/10/2021 4,497,554.30 Aaa3130ALFS8 891

5.750FED HOME LOAN MORTAGE CORP14013 5,000,000.00 5,000,000.00 03/20/20265.75003/20/2023 4,964,301.80 Aaa3134GYLK6 901

1.000Federal Home Loan Bank13910 4,875,000.00 4,875,000.00 03/23/20261.00003/23/2021 4,401,614.54 Aaa3130ALGJ7 904

6.000Federal Home Loan Bank14023 5,000,000.00 5,000,000.00 07/27/20266.00007/27/2023 4,974,178.55 Aaa3130AWML1 1,030

5.000Federal Farm Credit Bank13999 5,000,000.00 5,000,000.00 09/23/20265.00009/23/2022 4,910,273.00 Aaa3133ENN97 1,088

0.940Federal Farm Credit Bank13960 5,000,000.00 5,000,000.00 09/28/20260.94009/28/2021 4,427,712.55 Aaa3133EM6E7 1,093

1.000Federal Home Loan Bank13953 5,000,000.00 5,000,000.00 09/30/20261.00009/30/2021 4,435,075.05 Aaa3130ANYN4 1,095

1.250Federal Home Loan Bank13964 5,000,000.00 5,000,000.00 10/28/20261.25010/28/2021 4,457,504.00 Aaa3130APDQ5 1,123

5.000Federal Home Loan Bank13998 5,000,000.00 5,000,000.00 09/14/20275.00009/28/2022 4,877,046.45 Aaa3130AT3P0 1,444

5.184FED HOME LOAN MORTAGE CORP14021 5,000,000.00 5,000,000.00 06/28/20286.00006/30/2023 4,942,965.30 Aaa3134GYUE0 1,732

6.000FED HOME LOAN MORTAGE CORP14024 5,000,000.00 5,000,000.00 07/27/20286.00007/28/2023 4,941,979.05 Aaa3134GYXS6 1,761 414,091,220.24391,205,904.11414,092,777.77414,091,191.13Subtotal and Average 1.761 617 Portfolio PASD
APData Updated: SET_POOL: 10/19/2023 15:46
Run Date: 10/19/2023 - 15:46 PM (PRF_PM2) 7.3.0
4

Page 77 ends

0.761US TREASURY13974 10,000,000.00 9,999,728.35 12/31/20230.75012/31/2021 9,885,937.50 Aaa91282CDR9 91

1.081US TREASURY13978 5,000,000.00 4,996,605.31 01/31/20240.87501/31/2022 4,925,585.95 Aaa91282CDV0 122

0.470US TREASURY13943 10,000,000.00 9,984,595.13 06/15/20240.25006/25/2021 9,640,234.40 Aaa91282CCG4 258

0.515US TREASURY13962 5,000,000.00 4,993,333.86 09/15/20240.37509/24/2021 4,764,843.75 Aaa91282CCX7 350

0.747US TREASURY13965 5,000,000.00 4,993,729.91 10/15/20240.62510/22/2021 4,759,179.70 Aaa91282CDB4 380

0.554US TREASURY13954 10,000,000.00 9,992,061.73 03/31/20250.50009/16/2021 9,321,093.80 Aaa912828ZF0 547

0.924US TREASURY13963 5,000,000.00 4,975,297.63 08/31/20260.75009/24/2021 4,452,929.70 Aaa91282CCW9 1,065 49,935,351.9247,749,804.8050,000,000.0049,932,977.21Subtotal and Average 0.684 371 Corporate Bonds - Coupon

5.001JPMORGAN CHASE FINANCIAL14009 5,000,000.00 5,000,000.00 12/26/20235.00012/22/2022 4,972,205.20 A148133PDD2 86

0.654ROYAL BANK OF CANADA13918 5,000,000.00 4,996,600.81 01/19/20240.42503/11/2021 4,920,977.15 A178015K7L2 110

2.250GOLDMAN SACHS13980 2,500,000.00 2,500,000.00 03/15/20242.25003/15/2022 2,442,617.55 A238150AL86 166

3.125JPMORGAN CHASE FINANCIAL13983 2,000,000.00 2,000,000.00 04/29/20243.12504/29/2022 1,963,751.54 A148133DE55 211

0.800Goldman Sach Corporate Bond13935 5,000,000.00 5,000,000.00 06/03/20240.80006/03/2021 4,810,900.55 A238150AG41 246

0.672ROYAL BANK OF CANADA13947 5,000,000.00 4,999,103.24 07/29/20240.65007/29/2021 4,789,326.50 A178016EZU4 302

0.900NEW YORK LIFE GL13967 5,000,000.00 5,000,000.00 10/29/20240.90010/29/2021 4,737,671.85 Aaa64952WEJ8 394

4.050CITIGROUP GLOBAL MARKETS13990 2,500,000.00 2,500,000.00 05/27/20254.05005/27/2022 2,402,961.97 A217330FVU2 604

4.050CITIGROUP GLOBAL MARKETS13991 2,500,000.00 2,500,000.00 05/27/20254.05005/27/2022 2,402,961.97 A217330FVU2 604

0.825JP MORGAN13898 5,000,000.00 5,000,000.00 12/22/20250.82512/22/2020 4,417,978.70 A148128GY53 813

1.357BANK OF AMERICA CORP13923 5,000,000.00 4,912,471.28 01/26/20260.60003/25/2021 4,388,184.85 A106048WK82 848

0.752BANK OF NEW YORK MELLON13901 5,000,000.00 4,999,766.98 01/28/20260.75002/02/2021 4,490,149.50 A106406RAQ0 850

0.718APPLE INC13902 5,000,000.00 4,997,976.61 02/08/20260.70002/08/2021 4,508,824.95 Aaa037833EB2 861

1.250BANK OF AMERICA CORP13934 5,000,000.00 5,000,000.00 05/28/20261.25005/28/2021 4,399,111.75 A106048WM31 970

1.263BANK OF AMERICA CORP13945 3,623,000.00 3,616,971.20 06/25/20261.20007/21/2021 3,176,032.92 A106048WM64 998

1.155ROYAL BANK OF CANADA13958 6,250,000.00 6,249,095.16 07/14/20261.15009/22/2021 5,525,547.56 A178016EZT7 1,017

1.365Credit Suisse New York13961 5,000,000.00 4,984,168.11 08/07/20261.25009/24/2021 4,370,137.60 A322550L2G5 1,041

5.650CITIGROUP14004 5,000,000.00 5,000,000.00 12/16/20275.65012/16/2022 4,857,880.10 Aa117330YDB3 1,537 79,256,153.3973,577,222.2179,373,000.0079,253,769.08Subtotal and Average 1.810 682 Commercial Paper Disc. -Amortizing

5.218CREDIT AGRICOLE CIB NY (CP)14010 5,000,000.00 4,991,676.40 10/13/20234.93501/20/2023 4,989,725.00 P-122533UXD0 12 4,991,676.404,989,725.005,000,000.008,479,001.13Subtotal and Average 5.218 12 Treasury Discounts -Amortizing

5.449US TREASURY14019 5,000,000.00 4,951,696.03 12/07/20235.16506/12/2023 4,951,302.10 Aaa912797FT9 67 4,951,696.034,951,302.105,000,000.004,941,307.66Subtotal and Average 5.449 67 Portfolio PASD
APData Updated: SET_POOL: 10/19/2023 15:46
Run Date: 10/19/2023 - 15:46 PM (PRF_PM2) 7.3.0
5

Page 78 ends

1.070Inter-American Devel Bank13976 5,000,000.00 5,022,377.92 01/16/20242.62501/21/2022 4,957,558.80 Aaa4581X0DF2 107

0.500Inter-American Devel Bank13955 10,000,000.00 10,000,000.00 09/23/20240.50009/23/2021 9,513,603.70 Aaa4581X0DZ8 358

0.610INTL FINANCE CORP13957 5,000,000.00 4,999,299.27 02/28/20250.60009/28/2021 4,658,152.25 Aaa45950VQJ8 516

0.647INTL BK RECON & DEVELOP13903 5,000,000.00 5,000,000.00 02/10/20260.65002/10/2021 4,501,103.00 Aaa459058JS3 863

5.750INTL BK RECON & DEVELOP14018 5,000,000.00 5,000,000.00 06/15/20265.75006/15/2023 4,977,034.15 Aaa45906M4C2 988 30,021,677.1928,607,451.9030,000,000.0030,024,747.44Subtotal and Average 1.513 531 700,412,095.19 707,272,419.03 2.223 504673,542,102.38 707,125,181.50Total and Average Portfolio PASD
APData Updated: SET_POOL: 10/19/2023 15:46
Run Date: 10/19/2023 - 15:46 PM (PRF_PM2) 7.3.0
6

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COMPLIANCE REPORT
Pooled Investment Portfolio
As of 9/30/23
Diversification Credit Quality Maturity
Portfolio State Gov't Portfolio Portfolio Credit Quality Portfolio % of total Code limits compliance Credit Quality per Gov Code compliance Maturity Collateralized Money Market 0.00% 100% In compliance 102% Collateral 102% Collateral In compliance In compliance Certificates of Deposit 0.19% 30% In compliance n/a n/a In compliance In compliance Municipal Bonds 3.55% 100% In compliance Aaa/Aa3/Aa2/Aa1/A2/AA+/AA-/AAA/AA A or better In compliance In compliance US Treasury Securities 7.08% 100% In compliance Aaa AA+/Aaa In compliance In compliance Corporate Bonds 10.91% 30% In compliance* Aa1/A1/A2/A3 A or better In compliance In compliance Federal Agency Issues 58.01% 100% In compliance Aaa AA+/Aaa In compliance In compliance Supranationals 4.24% 30% In compliance Aaa AA or better In compliance In compliance Commercial Paper 0.74% 100% In compliance P-1 (Short-term) P-1 (Short-term) In compliance In compliance Money Market-CAMP 14.24% 100% In compliance n/a n/a In compliance In compliance US Treasury Securities Disc 0.73% 100% In compliance Aaa AA+/Aaa In compliance In compliance LAIF 0.19% 100% In compliance n/a n/a In compliance In compliance Cash 0.12% 100% In compliance Collateralized Collateralized In compliance In compliance 100.00%
Portfolio Value 677,018,590
7

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INVESTMENTS IN ISSUERS REPRESENTING OVER 5%

OF THE POOL PORTFOLIO
September 30, 2023
Market Value % of Total
FHLB 198,747,521 29.36%
FHLMC 123,039,084 18.17%
FFCB 54,849,091 8.10%
Total Fed Agencies 376,635,697 55.63%
OTHER PORTFOLIO INVESTMENTS 300,382,893 44.37%
Total Investments 677,018,590 * 100.00%
note: * Includes Cash in Bank and Accrued Interest Receivable 8

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Pooled Portfolio - Total Return Performance
ICE BofA Pooled
1-3 Index Portfolio
2003 Annual 2.717 2.931
2004 Annual 1.226 2.090
2005 Annual 1.746 2.073
2006 Annual 4.195 4.474
2007 Annual 6.706 5.736
2008 Annual 4.649 3.474
2009 Annual 3.784 3.398
2010 Annual 2.322 1.806
2011 Annual 1.540 1.490
2012 Annual 1.467 1.788
2013 Annual 0.696 0.417
2014 Annual 0.777 1.321
2015 1st quarter 0.594 0.628
2nd quarter 0.143 0.141
3rd quarter 0.284 0.431
4th quarter -0.350 -0.113

0.671 1.087
2016 1st quarter 0.982 0.713
2nd quarter 0.660 0.350
3rd quarter 0.027 0.170
4th quarter -0.385 -0.520

1.284 0.713
2017 1st quarter 0.393 0.440
2nd quarter 0.303 0.419
3rd quarter 0.342 0.380
4th quarter -0.182 -0.059

0.856 1.180
2018 1st quarter -0.185 -0.097
2nd quarter 0.291 0.269
3rd quarter 0.354 0.431
4th quarter 1.166 1.038

1.626 1.641
2019 1st quarter 1.219 0.963
2nd quarter 1.480 1.054
3rd quarter 0.700 0.593
4th quarter 0.606 0.590

4.005 3.200
2020 1st quarter 1.590 0.495
2nd quarter 1.215 0.962
3rd quarter 0.274 0.287
4th quarter 0.227 0.236

3.306 1.980
2021 1st quarter -0.028 -0.467
2nd quarter 0.063 0.437
3rd quarter 0.088 0.085
4th quarter -0.533 -0.638
-0.410 -0. 583
2022 1st quarter -2.580 -2.910
2nd quarter -0.625 -0.842
3rd quarter -1.503 -1.713
4th quarter 0.890 0.821
2023 1st quarter 1.480 1.599
2nd quarter -0.341 0.995
3rd quarter 0.781 1.000
Yield Fiscal Y TD
Pooled Portfolio YTM 2.22%
State Treasurer's LAIF yield 3.48%
2 Year Average US Treasury yield 4.94%
9

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CITY POOLED PORTFOLIO
Portfolio Management
Distribution of Investments By Type - Historic
(By Market Values)
In %
Fiscal Year Total
June June June June June June June June June June 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Investment Type 2013 2014 2015 2016 2017 2019 2020 2021 2022 2023 2024 2024 2024 2024 Money Market 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Money Market Collateralized 12.91 16.74 9.14 7.25 3.97 1.59 11.73 6.76 0.00 0.00 0.00 Municipal Bonds 12.62 13.00 4.97 4.01 5.80 4.33 4.72 7.70 5.96 4.25 3.55 Corporate Bonds - Coupon 25.94 22.67 21.65 16.36 17.12 20.78 22.50 16.62 13.97 11.02 10.91 Agency CMOs/Mortgage Backed 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Federal Agency Issues - Coupon 36.55 43.39 43.45 49.70 55.86 54.14 34.00 47.35 48.79 57.84 58.01 Repurchase Agreements 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 L.A.I.F. 9.04 1.47 13.09 14.38 9.07 7.29 11.66 16.47 4.00 0.19 0.19 Cash 2.72 2.50 3.76 0.68 0.44 0.45 0.34 0.53 0.31 0.06 0.12 Treasury Securities 0.00 0.00 3.93 3.37 2.99 3.71 2.37 3.66 7.46 7.11 7.08 Treasury Securities Disc 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.54 1.48 0.73 Supranationals 0.00 0.00 0.00 4.25 3.76 5.89 8.24 0.80 3.73 4.27 4.24 Bank Notes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Federal Agency Discount 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Commerical Paper - Disc (Amortizing) 0.00 0.00 0.00 0.00 0.99 0.82 0.00 0.00 1.55 2.97 0.74 Asset Backed Securities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Amortized Zero Cpn Bonds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.77 0.00 0.00 Certificates of Deposit 0.22 0.23 0.00 0.00 0.00 1.00 0.00 0.00 0.20 0.19 0.19 Money Market-CAMP 0.00 0.00 0.00 0.00 0.00 0.00 3.89 0.12 11.72 10.61 14.24 Muni Variable Rate 0.00 0.00 0.00 0.00 0.00 0.00 0.54 0.00 0.00 0.00 0.00 Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 0.00 10

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II. Capital Endowment Portfolio

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CITY OF PASADENA
Capital Endowment Portfolio
Vicken Erganian
City Treasurer
September 2023

PORTFOLIO STRUCTURE AS OF 9/30/2023

TYPE MARKET VALUE PERCENT
Money Market - CAMP 86,619 4.58%
Federal Agencies 1,804,652 95.42%
TOTALS: 1,891,271 100.00%
Accrued Interest Receivable 7,058
GRAND TOTAL: 1,898,329
PORTFOLIO LIQUIDITY AS OF 9/30/2023
Percent of
Aging Interval Par Value Portfolio
0-30 Days 86,215 4.34%
31 days - 1 Year - 0.00%
1 - 2 Years - 0.00%
2 - 3 Years 1,900,000 95.66%
3 - 4 Years - 0.00%
4 - 5 Years - 0.00%
Over 5 Years - 0.00%
TOTAL: 1,986,215 100.00% -

PORTFOLIO STATISTICS
Sep-23 Aug-23 Jul-23 Jun-23 May-23 Apr-23
Month-End Mkt Value 1,898,329 1,891,579 1,879,795 1,874,968 1,871,287 1,877,557 Modified Duration 1.06 1.14 1.21 1.29 1.37 1.45
Weighted Average Maturity 1.10 1.18 1.26 1.35 1.42 1.51 Current Book Yield to Maturity 1.202% 1.200% 1.195% 1.187% 1.183% 1.155% Effective Yield - Year to Date 1.190% 1.170% 1.170% 1.110% 1.100% 1.100% Interest Earned 1,992 1,987 1,971 1,964 1,924 1,891 Fiscal Year To Date Interest Earned 5,950 3,959 1,971 21,938 19,974 18,049 Fair Value Change Gain/(Loss) 4,759 9,796 2,856 1,717 (8,195) (3,952) Fiscal Year To Date change in fair value 17,411 12,652 2,856 (32,574) (34,292) (26,097) Total Fiscal YTD earnings 23,361 16,611 4,828 (10,637) (14,318) (8,048) MMF -
CAMP,

4.58%
Federal
Agencies,

95.42%
11

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YTM
365Par Value Book Value
Maturity
Date
Stated
RateMarket Value
September 30, 2023
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management

CAPITAL ENDOWMENT
Days to
MaturityMoody'sCUSIP Investment #
Purchase
Date
Money Market Fund-CAMP

5.627California Asset Management Pr14111 86,618.79 86,618.79 5.55086,618.79SYS14111 1 86,618.7986,618.7986,618.7986,618.79Subtotal and Average 5.627 1 Collateralized Money Market

4.800EAST WEST BANK13057 0.00 0.00 4.8000.00SYS13057 1

0.000.000.000.00Subtotal and Average 0.000 0
Federal Agency Issues - Coupon

1.000Federal Home Loan Bank13970 1,900,000.00 1,900,000.00 11/25/20241.00011/30/2021 1,804,651.86 Aaa3130APVG7 421 1,900,000.001,804,651.861,900,000.001,900,000.00Subtotal and Average 1.000 421 1,986,618.79 1,986,618.79 1.202 4031,891,270.65 1,986,618.79Total and Average Portfolio PASD
APData Updated: FUNDSNAP: 10/19/2023 15:56
Run Date: 10/19/2023 - 15:56 PM (PRF_PM2) 7.3.0
12

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COMPLIANCE REPORT
Capital Endowment Portfolio
As of 9/30/23
Diversification Credit Quality Maturity
Portfolio State Gov't Portfolio Portfolio Credit Quality Portfolio % of total Code limits compliance Credit Quality per Gov Code compliance Maturity Money Market-CAMP 4.58% 100% In compliance n/a n/a In compliance In compliance Federal Agency Issues 95.42% 100% In compliance** Aaa AA+/Aaa In compliance In compliance 100.00%
Portfolio Value 1,898,329
**Compliance is measured based on the City's total investments which include the Pooled portfolio as well as the Power Reserve Fund. 13

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INVESTMENTS IN ISSUERS REPRESENTING OVER 5%

OF THE CAPITAL ENDOWMENT PORTFOLIO
September 30, 2023
Market Value % of Total
FHLB 1,804,652 95.07%
Total 1,804,652 95.07%
OTHER PORTFOLIO INVESTMENTS 93,677 4.93% Total Investments 1,898,329 * 100.00% note: * Includes Accrued Interest Receivable
14

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CAPITAL ENDOWMENT
Portfolio Management
Distribution of Investments By Type - Historic
(By Market Values)
In % Fiscal Year Total
June June June June June June June June 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Investment Type 2016 2017 2018 2019 2020 2021 2022 2023 2024 2024 2024 2024 Money Market - Collateralized 100.00 1.80 0.75 0.03 1.10 3.10 3.38 0.00 0.00 Federal Agency Issues - Coupon 0.00 0.00 0.00 0.00 0.00 0.00 96.62 95.44 95.42 Corporate Bonds - Coupon 0.00 0.00 99.25 99.97 98.90 96.90 0.00 0.00 0.00 Municipal Bonds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 L.A.I.F. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Certificate of Deposit 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Federal Agency Discount 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Treasury Securities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Agency CMOs/Mortgage Backed 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Commerical Paper - Disc (Amortizing) 0.00 98.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Asset Backed Securities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Mutual Funds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Money Market - CAMP 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.56 4.58 Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 0.00 15

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III. Power Reserve Portfolio

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CITY OF PASADENA
Power Reserve Portfolio
Vicken Erganian
City Treasurer
September 2023

PORTFOLIO STRUCTURE AS OF 9/30/2023

TYPE MARKET VALUE PERCENT
Municipal Bonds 1,831,700 4.66%
Federal Agencies 27,787,355 70.71%
L.A.I.F. 43,489 0.11%
Money Market-CAMP 9,633,830 24.52%
TOTALS: 39,296,375 100.00%
Accrued Interest Receivable 232,357
GRAND TOTAL: 39,528,732
PORTFOLIO LIQUIDITY AS OF 9/30/2023
Percent of
Aging Interval Par Value Portfolio
0 - 30 days 9,677,319 19.61%
31 days - 1 Year - 0.00%
1 - 2 Years - 0.00%
2 - 3 Years 5,000,000 10.13%
3 - 4 Years 2,000,000 4.05%
4 - 5 Years 6,000,000 12.16%
Over 5 Years 26,666,667 54.04%
TOTAL: 49,343,986 100.00%

PORTFOLIO STATISTICS
Sep-23 Aug-23 Jul-23 Jun-23 May-23 Apr-23
Month-End Market Value 39,528,732 40,442,878 40,281,402 40,490,191 40,504,198 40,736,424 Modified Duration 5.55 5.79 5.85 5.98 6.05 6.16
Weighted Average Maturity 7.81 7.89 7.98 8.06 8.13 8.22 Current Book Yield to Maturity 2.454% 2.447% 2.415% 2.381% 2.365% 2.321% Effective Yield - Year to Date 2.410% 2.380% 2.350% 2.090% 2.060% 2.030% Interest Earned 100,829 99,880 97,846 97,037 96,022 92,835 Fiscal Year To Date Interest Earned 298,555 197,726 97,846 1,010,612 913,574 817,552 Fair Value Change Gain/(Loss) (1,015,007) 61,596 (306,636) (111,065) (328,248) 67,460 Fiscal Year To Date change in fair value (1,260,047) (245,040) (306,636) (2,382,127) (2,271,061) (1,942,813) Total Fiscal YTD Earnings (961,491) (47,313) (208,790) (1,371,515) (1,357,487) (1,125,261) Money Market-
CAMP

1.03%
Fed Agency

70.71%
LAIF

0.11%
Municipal
Bonds

4.54%
16

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YTM
365Par Value Book Value
Maturity
Date
Stated
RateMarket Value
September 30, 2023
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management

POWER RESERVE FUND
Days to
MaturityMoody'sCUSIP Investment #
Purchase
Date
LAIF

3.480Local Agency Investment Fund6184 43,488.97 43,488.97 3.48043,488.97SYS6184 1 43,488.9743,488.9743,488.9743,488.97Subtotal and Average 3.480 1 Money Market Fund-CAMP

5.627California Asset Management Pr14063 9,633,830.35 9,633,830.35 5.5509,633,830.35SYS14063 1 9,633,830.359,633,830.359,633,830.359,633,830.35Subtotal and Average 5.627 1 Collateralized Money Market

4.800EAST WEST BANK13066 0.00 0.00 4.8000.00SYS13066 1

0.000.000.000.00Subtotal and Average 0.000 0
Municipal Bonds

2.560LA County Redevelopment TABs13553 2,000,000.00 1,990,530.78 09/01/20262.37508/25/2016 1,831,700.00 Aa254465AGS5 1,066 1,990,530.781,831,700.002,000,000.001,990,400.02Subtotal and Average 2.560 1,066 Federal Agency Issues - Coupon

1.000Federal Home Loan Bank13969 5,000,000.00 5,000,000.00 11/25/20241.00011/30/2021 4,749,083.85 Aaa3130APV69 421

1.230Federal Farm Credit Bank13946 6,000,000.00 6,000,000.00 08/02/20281.23008/02/2021 5,017,796.16 Aaa3133EMX80 1,767

1.230Federal Farm Credit Bank13890 5,000,000.00 5,000,000.00 11/25/20301.23011/25/2020 3,807,693.80 Aaa3133EMHN5 2,612

1.850Federal Home Loan Bank13788 1,666,667.00 1,666,667.00 04/08/20321.85004/08/2020 1,274,770.44 Aaa3130AJEA3 3,112

2.000Federal Home Loan Bank13904 10,000,000.00 10,000,000.00 02/25/20362.00002/25/2021 6,900,299.90 Aaa3130AL3X0 4,530

2.000Federal Farm Credit Bank13875 10,000,000.00 10,000,000.00 10/15/20402.00010/15/2020 6,037,711.30 Aaa3133EMCV2 6,224 37,666,667.0027,787,355.4537,666,667.0037,666,667.00Subtotal and Average 1.636 3,677 49,334,386.34 49,343,986.32 2.454 2,85039,296,374.77 49,334,517.10Total and Average Portfolio PASD
APData Updated: FUNDSNAP: 10/19/2023 16:04
Run Date: 10/19/2023 - 16:04 PM (PRF_PM2) 7.3.0
17

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COMPLIANCE REPORT
Power Reserve Portfolio
As of 9/30/23
Diversification Credit Quality Maturity
Portfolio State Gov't Portfolio Portfolio Credit Quality Portfolio % of total Code limits compliance Credit Quality per Gov Code compliance Maturity Municipal Bonds 4.66% 100% In compliance Aa2 A or better In compliance In compliance Federal Agency Issues 70.71% 100% In compliance Aaa/AA AA+/Aaa In compliance In compliance Money Market-CAMP 24.52% 100% In compliance n/a n/a In compliance In compliance LAIF 0.11% 100% In compliance n/a n/a In compliance In compliance 100.00%
Portfolio Value 39,528,732
18

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INVESTMENTS IN ISSUERS REPRESENTING OVER 5%

OF THE POWER RESERVE PORTFOLIO
September 30, 2023
Market Value % of Total
FHLB 12,924,154 32.70%
FFCB 14,863,201 37.60%
Total Fed Agencies 27,787,355 70.30%
OTHER PORTFOLIO INVESTMENTS 11,741,377 29.70%

Total Investments 39,528,732 * 100.00% note: * Includes Accrued Interest Receivable
19

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Power Reserve Portfolio - Total Return Performance
ICE BofA Power
3-5 Index Reserve
2003 Annual 4.214 3.940
2004 Annual 2.740 3.430
2005 Annual 0.980 2.615
2006 Annual 4.184 4.540
2007 Annual 7.656 6.960
2008 Annual 4.610 3.683
2009 Annual 3.784 3.714
2010 Annual 1.113 1.206
2011 Annual 1.555 2.547
2012 Annual 1.467 3.027
2013 Annual -0.143 -0.184
2014 Annual 2.446 2.688
2015 1st quarter 1.550 0.910
2nd quarter -0.178 0.039
3rd quarter 0.995 0.884
4th quarter -0.793 -0.469

1.574 1.364
2016 1st quarter 2.420 1.197
2nd quarter 1.390 0.560
3rd quarter 0.080 0.190
4th quarter -1.840 -2.340

2.050 -0.393
2017 1st quarter 0.773 0.830
2nd quarter 0.873 0.803
3rd quarter 0.567 0.515
4th quarter -0.398 0.071

1.815 2.219
2018 1st quarter -0.890 -0.702
2nd quarter 0.013 0.284
3rd quarter 0.188 0.048
4th quarter 1.812 1.987

1.123 1.617
2019 1st quarter 2.245 1.538
2nd quarter 2.530 1.704
3rd quarter 1.196 0.877
4th quarter 0.430 0.460

6.401 4.579
**2020 1st quarter 1.594 0.950
2nd quarter 1.215 0.625
3rd quarter 0.274 0.249
4th quarter 0.227 0.249

3.31 2.073
2021 1st quarter -1.178 -2.549
2nd quarter 0.634 3.715
3rd quarter -0.037 -0.554
4th quarter -0.896 -0.015
-1.477 0.597
2022 1st quarter -5.627 -6.886
2nd quarter -2.810 -4.182
3rd quarter -4.590 -5.972
4th quarter 1.680 0.454
2023 1st quarter 2.210 2.517
2nd quarter -0.918 -0.212
3rd quarter -1.916 -2.378

Yeld Fiscal YTD
Power Reserve YTM 2.46%
State Treasurer's LAIF yield 3.48%
2 Year Average Treasury yield 4.94%
20

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POWER RESERVE FUND
Portfolio Management
Distribution of Investments By Type - Historic
(By Market Values)
In % Fiscal Year Total
June June June June June June June June 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Investment Type 2016 2017 2018 2019 2020 2021 2022 2023 2024 2024 2024 2024 Money Market - Collateralized 7.43 0.02 4.34 2.58 32.06 0.08 0.00 0.00 0.00 Municipal Bonds 7.24 7.00 6.92 6.02 3.43 3.93 4.50 4.56 4.66 Federal Agency Issues - Coupon 77.86 79.82 82.96 85.12 51.22 57.67 75.33 72.13 70.71 L.A.I.F. 0.24 0.24 0.24 0.26 0.00 32.77 18.69 0.11 0.11 Corporate Bonds - Coupon 7.23 12.92 5.54 6.02 13.29 5.56 0.00 0.00 0.00 Certificate of Deposit 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Federal Agency Discount 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Treasury Securities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Agency CMOs/Mortgage Backed 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Commerical Paper - Disc (Amortizing) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Asset Backed Securities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Mutual Funds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Money Market - CAMP 0.00 0.00 0.00 0.00 0.00 0.00 1.48 23.21 24.52 Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 0.00 21

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IV. Miscellaneous Portfolios

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Fund Coupon Yield Maturity Face Value Cost Per Book Market Value City of Pasadena-Housing Succesor Agency
Money Mkt CAMP 5.550% 5.550% 10/1/2023 $2,379,935.72 $2,379,935.72 $2,379,935.72 LAIF 3.480% 3.480% 10/1/2023 $1.49 $1.49 $1.49
Weighted Average Maturity = 1 day $2,379,937.21 $2,379,937.21 $2,379,937.21 2002 Electric Revenue Reserve Fund
Money Mkt CAMP 5.550% 5.550% 10/1/2023 $104,890.71 $104,890.71 $104,890.71 FFCB 3133EMBH4 0.530% 0.530% 9/29/2025 $4,000,000.00 $4,000,000.00 $3,646,526.88 Weighted Average Maturity = 1.97 $4,104,890.71 $4,104,890.71 $3,751,417.59 Annandale Assessment District
Municipal Bonds-Annandale Assessment 6.000% 6.000% 9/2/2040 $887,735.00 $887,735.00 $887,735.00 Weighted Average Maturity = 17.17
Miscellaneous Funds
September 30, 2023
22

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Fund Coupon Yield Maturity Face Value Cost Per Book Market Value Miscellaneous Funds
September 30, 2023
2012A Electric Parity Reserve Fund
Money Mkt CAMP 5.550% 5.550% 10/1/2023 $15,873.38 $15,873.38 $15,873.38 FFCB 3133EMBH4 0.530% 0.530% 9/29/2025 $690,000.00 $690,000.00 $629,025.89 Weighted Average Maturity = 1.98 $705,873.38 $705,873.38 $644,899.27 2013A Electric Parity Reserve Fund
Money Mkt CAMP 5.550% 5.550% 10/1/2023 $281,455.84 $281,455.84 $281,455.84 FFCB 3133ELC28 0.730% 0.730% 5/27/2025 $8,000,000.00 $8,000,000.00 $7,415,154.16 Weighted Average Maturity = 1.62 $8,281,455.84 $8,281,455.84 $7,696,610.00 23

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Fund Coupon Yield Maturity Face Value Cost Per Book Market Value Miscellaneous Funds
September 30, 2023
2016A Electric Revenue Refunding Reserve
Money Mkt CAMP 5.550% 5.550% 10/1/2023 $53,942.34 $53,942.34 $53,942.34 FFCB 3133EMBH4 0.530% 0.530% 9/29/2025 $2,680,000.00 $2,680,000.00 $2,443,173.01 Weighted Average Maturity = 1.99 $2,733,942.34 $2,733,942.34 $2,497,115.35 2020A Water Refund Revenue Bonds Project
LAIF 3.480% 3.480% 10/1/2023 $4,624.28 $4,624.28 $4,624.28 Weighted Average Maturity = 1 day $4,624.28 $4,624.28 $4,624.28 2021A Water Refund Revenue Bonds Project
Money Mkt CAMP 5.550% 5.550% 10/1/2023 $1,217.65 $1,217.65 $1,217.65 Weighted Average Maturity = 1 day $1,217.65 $1,217.65 $1,217.65 GRAND TOTAL: $19,099,676.41 $19,099,676.41 $17,863,556.35 24

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V. Investments Held by Trustees

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Schedule of Funds Held by Trustees

CITY OF PASADENA
For Period Ending 9/30/2023 Market Yield 5.24%
Maturity 10/01/23
$ Amount
Trustee/Officer Issue Name Shares/Par Cost Market Maturity % Maturity Date Investment Value Value Da te Yld
BNY 2021A Water Revenue Refunding Bonds
Amy Green COI-2021A Account #209092
(213)630-6204 Cash - - - 10/01/23 0.00%
Lena Chan Debt Service-2021A Account #209093
(213) 630-6253 Cash - - - 10/01/23 0.00%
Reserve-2021A Account #209094
DREFUS GOVT CM INST 289 Cusip: X9USDDGCM 831,614.69 831,614.69 831,614.69 10/01/23 5. 22% Cash - - - 10/01/23 0.00%
Total 831,614.69 831,614.69 831,614.69
BNY 2020A Water Revenue Refunding Bonds
Amy Green COI-2020 Account #746583
(213)630-6204 Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS - - - 10/01/23 5.24% Lena Chan DEBT SERVICE-2020 Account #746585
(213) 630-6253 Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS - - - 10/01/23 5.24% Total - - -
2020AB POB Bonds
BNY POB COI-2020B Account #220413
Amy Green BlackRock Treasury Turst Dollars 63 Cusip: X9USDBTRD - - - 10/01/23 0.02% (213)630-6204 POB Bond Fund-2020B Account #220414
Lena Chan Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 1,020.24 1,020.24 1,020.24 10/01/ 23 5.24% (213) 630-6253 POB COI-2020A Account #765976
Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS - - - 10/01/23 5.24% POB Bond Fund-2020A Account #765990
Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 1,668.91 1,668.91 1,668.91 10/01/23 5.24% Total 2,689.15 2,689.15 2,689.15
2019A Electric Revenue Bonds
BNY Electric COI-2019A Account #106207
Amy Green Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 38,066.81 38,066.81 38,066.81 10/01/ 23 5.24% (213)630-6204 Electric Bond Fund-2019A Account #113813 - Lena Chan Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 1,292.83 1,292.83 1,292.83 10/01/ 23 5.24% (213) 630-6253 - - - 10/01/23 5.24%
Total 39,359.64 39,359.64 39,359.64
25

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Schedule of Funds Held by Trustees

CITY OF PASADENA
For Period Ending 9/30/2023 Market Yield 5.24%
Maturity 10/01/23
$ Amount
Trustee/Officer Issue Name Shares/Par Cost Market Maturity % Maturity Date Investment Value Value Da te Yld
US Bank 2018AB Rose Bowl Pasadena PFA Lease Revenue Bonds Ilse Vlach Interest Fund- Series 2018A Account #248882000 (213) 615-6051 Fidelity Govt Protfolio CI Cusp:316175108 212.65 212.65 212.65 10/01/23 5.23% Adriana Marshall Costs of Issuance- Series 2018A Account #248882002 (213) 615-6033 Fidelity Govt Protfolio CI Cusp:316175108 - - - 10/01/23 5.23% Interest Fund- Series 2018B Account #248882100
Fidelity Govt Protfolio CI Cusp:316175108 26.30 26.30 26.30 10/01/23 5.23% Principal Fund- Series 2018B Account #248882101
Fidelity Govt Protfolio CI Cusp:316175108 436.01 436.01 436.01 10/01/23 5.23% Costs of Issuance- Series 2018B Account #248882102
Fidelity Govt Obl Fd Cl D 316175108 - - - 10/01/23 5.23% Total 674.96 674.96 674.96
2017A Water Revenue Bonds
BNY Debt Service-2017A Account #948165
Amy Green Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS - - - 10/01/23 5.24% (213)630-6204 Reserve Fund-2017A Account #948269
Lena Chan Federal Home Loan Banks Cusip: 3130AL3S1 1,050,000.00 1,050,000.00 942,637.50 02/17/26 0. 63% (213) 630-6253 DREYFUS CUSIP:X9USSGCM 37,931.40 37,931.40 37,931.40 10/01/ 23 5.22% Total 1,087,931.40 1,087,931.40 980,568.90
US Bank 2016A Rose Bowl Pasadena PFA Lease Revenue Bonds Ilse Vlach Interest Fund- Series 2016A Account #264433000 (213) 615-6051 Fidelity Govt Protfolio CI Cusp:316175108 440,751.45 440,751.45 440,751.45 10/ 01/23 5. 23% Principal Fund- Series 2016A Account #264433001
Fidelity Govt Protfolio CI Cusp:316175108 1,488.20 1,488.20 1,488.20 10/01/23 5.23% Adriana Marshall
Insurance & Condemnation Fund- Series 2016A Account
#264433002
(213) 615-6033 Fidelity Govt Obl Fd Cl D 316175108 0.19 0.19 0.19 10/01/23 5.23% Cost of Issuance- Series 2016A Account #264433003
First American Govt Obl Fd Cl D 31846V401 - - - 10/01/23 5.20% Total 442,239.84 442,239.84 442,239.84
BNY Pasadena 2015A COPS Bond
Amy Green COPS Base Rental-2015A Account #336964
(213)630-6204 Cash Balance - - - 10/01/23 0.00%
Lena Chan Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 6.10 6.10 6.10 10/01/23 5.24% (213) 630-6253 Total 6.10 6.10 6.10
26

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Schedule of Funds Held by Trustees

CITY OF PASADENA
For Period Ending 9/30/2023 Market Yield 5.24%
Maturity 10/01/23
$ Amount
Trustee/Officer Issue Name Shares/Par Cost Market Maturity % Maturity Date Investment Value Value Da te Yld
BNY Pasadena Tax Pension 2015AB Bond
Amy Green Bond Fund-2015A POB Account #479226
(213)630-6204 Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 597.02 597.02 597.02 10/01/23 5.24% Lena Chan Cash Balance - - - 10/01/23 0.00%
(213) 630-6253 Bond Fund-2015A POB Account #479231
Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 1,321.42 1,321.42 1,321.42 10/01/23 5.24% Cash Balance - - - 10/01/23 0.00%
Total 1,918.44 1,918.44 1,918.44
BNY Pasadena Water Revenue 2010AB
Amy Green 2010 A Parity Reserve Account #286245
(213)630-6204 DREYFUS CUSIP:X9USSGCM 25,014.56 25,014.56 25,014.56 10/01/ 23 5.22% Lena Chan Federal Home Loan Bank CUSIP:3130AL3S1 1,350,000.00 1,350,000.00 1,211,962. 50 02/17/ 26 0.63% (213) 630-6253 Cash - - - 10/01/23 0.00%
2010 B Debt Service Account #286247
Cash - - - 10/01/23 4.19%
2010 B Parity Reserve Account #286248
DREYFUS CUSIP:X9USSGCM 7,887.93 7,887.93 7,887.93 10/01/23 5.22% Federal Home Loan Bank CUSIP:3130AL3S1 300,000.00 300,000.00 269,325.00 02/17/26 0. 63% Cash - - - 10/01/23 0.00%
2010 A Debt Service Fund Account #286295
Cash - - - 10/01/23 0.00%
Total 1,682,902.49 1,682,902.49 1,514,189.99
US Bank 2010 Rose Bowl Pasadena PFA Lease Revenue Bonds Ilse Vlach Interest Fund (S631591)
(213) 615-6051 Fidelity Instl Mm Fds Government I CUSIP:316175108 344,641.89 344,641.89 344,641.89 10/ 01/23 5. 23% Adriana Marshall Cash - - - 10/01/23 0.00%
(213) 615-6071 Principal Fund (S631592)
Fidelity Instl Mm Fds Government I CUSIP:316175108 3.31 3.31 3.31 10/01/23 5.23% Bond Reserve Fund (S631593)
Federal Home Loan Bank Funds CUSIP: 3130ALBD5 15,500,000.00 15,500,000.00 9,458,720.00 02/25/ 41 2.15% Fidelity Instl Mm Fds Government I CUSIP:316175108 72,028.32 72,028.32 72,028.32 10/01/23 5.23% Cash - - - 10/01/23 0.00%
Total 15,916,673.52 15,916,673.52 9,875,393.52
27

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Schedule of Funds Held by Trustees

CITY OF PASADENA
For Period Ending 9/30/2023 Market Yield 5.24%
Maturity 10/01/23
$ Amount
Trustee/Officer Issue Name Shares/Par Cost Market Maturity % Maturity Date Investment Value Value Da te Yld
Computershare Corporate Trust PPFA (Paseo Colorado Parking Facilities) 2008 Tracy Mason Bond Fund Account #23200100
(213) 253-7536 Allspring Government Money Market Service 90,923.50 90,923.50 90,923.50 10/01/23 5. 26% Cash - - - 10/01/23 0.00%
Reserve Fund Account #23200101
teresalynn.mason1@computershFHLB Cusip: 3130APVC6 2,000,000.00 2,000,000.00 1,784,080.00 12/01/26 1. 38% Well Fargo Advantage Government Money Market Service - - - 10/01/23 0.01% Cost of Issuance Fund Account #23200103
Well Fargo Advantage Government Money Market Service - - - 10/01/23 0.00% Total 2,090,923.50 2,090,923.50 1,875,003.50
BNY Pasadena 2006,2008,2015 COP Reserves
Amy Green Reserve Account #281635
(213)630-6204 Federal Home Loan Banks CUSIP:3130AKKQ8 4,950,000.00 4,950,000.00 3,763,782.00 12/23/30 1. 25% Lena Chan Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 95,575.90 95,575.90 95,575.90 10/01/23 5. 24% (213) 630-6253 Cash - - - 10/01/23 0.00%
Total 5,045,575.90 5,045,575.90 3,859,357.90
Pasadena 2008AB COPS, 15A Parity Reserve
BNY Reserve Fund #281207
Amy Green Federal Home Loan Banks CUSIP:3130AKKQ8 1,325,000.00 1,325,000.00 1,007,477.00 12/23/30 1. 25% (213)630-6204 Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 25,583.37 25,583.37 25,583.37 10/01/23 5. 24% Lena Chan Cash Balance - - -
(213) 630-6253 Total 1,350,583.37 1,350,583.37 1,033,060.37 BNY Pasadena 2008A COPS
Amy Green Base Rental Fund #281732
(213)630-6204 Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 261,848.41 261,848.41 261,848.41 10/01/ 23 5.24% Lena Chan Cash Balance - - - 0.00%
(213) 630-6253 Interest Fund #281733
Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 5,795.80 5,795.80 5,795.80 10/01/23 5.24% Letter of Credit #281734
Bank of America CUS: S86494570 1.00 1.00 1.00 03/31/25 0.00% Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 0.36 0.36 0.36 10/01/23 5.24% Total 267,645.57 267,645.57 267,645.57
BNY Pasadena Conf Ctr 2006AB
28

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Schedule of Funds Held by Trustees

CITY OF PASADENA
For Period Ending 9/30/2023 Market Yield 5.24%
Maturity 10/01/23
$ Amount
Trustee/Officer Issue Name Shares/Par Cost Market Maturity % Maturity Date Investment Value Value Da te Yld
Amy Green Reserve Fund #281722
(213)630-6204 Federal Home Loan Banks CUSIP:3130AJRH4 10,800,000.00 10,800,000.00 6,630,768. 00 06/29/ 40 2.07% Lena Chan Federal Home Loan Banks CUSIP:3130AKKQ8 270,000.00 270,000.00 205,297.20 12/ 23/30 1. 25% (213) 630-6253 Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 350,414.66 350,414.66 350,414.66 10/ 01/23 5. 24% Total 11,420,414.66 11,420,414.66 7,186,479.86
BNY Pasadena Water Revenue 2003
Amy Green Parity Reserve Account #281651
(213)630-6204 Federal Home Loan Banks CUSIP: 3130AL3S1 1,000,000.00 1,000,000.00 897,750.00 02/17/26 0. 63% Lena Chan DREYFUS GOVT CM INST 289 CUSIP: X9USDDGCM 24,201.19 24,201.19 24,201.19 10/01/ 23 5.22% (213) 630-6253 Cash - - - 10/01/23 0.00%
Total 1,024,201.19 1,024,201.19 921,951.19
BNY COPS Parity Reserve Fund(2006A, and 2008ABC COP)
Amy Green Certificate Reserve #281143
(213)630-6204 Federal Home Loan Banks CUSIP: 3130AKKQ8 2,025,000.00 2,025,000.00 1,539,729. 00 12/23/ 30 1.25% Lena Chan Goldman Fincl Sq Govt Instl 465 CUSIP:X9USDGLDS 39,100.70 39,100.70 39,100.70 10/01/ 23 5.24% (213) 630-6253 Cash - - - 10/01/23 0.00%
(In aggegrate with 2006A, Total Funds 2,064,100.70 2,064,100.70 1,578,829. 70 and 2008ABC COP reserve)
SCPPA SCPPA Investments
Atif Haji Datoo SCPPA Project Stabilization Fund
(213) 367-4668 Fidelity Inst MMKT GOVT 57CUSIP:X9USDFIN 33,592.89 33,592.89 33,592.89 10/01/ 23 5.24% Fidelity Inst MMKT GOVT 57CUSIP:X9USDFIN 229,928.40 229,928.40 229,928.40 10/01/23 5. 24% US Treasury Bill CUSIP: 912797HB6 2,000,000.00 1,992,402.22 1,995,600.00 10/17/ 23 5.26% Federal Home Loan Bank CUSIP: 3130ANZG8 1,000,000.00 999,800.00 956,730.00 09/16/24 0. 75% FHLB Discount Notes CUSIP:313384LD9 - - - 09/01/23 4.92% - - - 0.00%
Total 3,263,521.29 3,255,723.51 3,215,851.29
TOTAL FUND BALANCE 46,532,976.41$ 46,525,178.63$ 33,626,834.61$ 29

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VI. PARS Section 115 Trust

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City of Pasadena
PARS Section 115 Trust
For the Month Ended September 30, 2023
Pension Account 6746056200
Mayket Value Book Value
Beginning Balance 12,202,535.15 12,644,205.85 Activity
Contributions - -
Disbursements - -
Total - -
Net Investment Income
Dividends 47,762.91 47,762.91
Interest 2,489.88 2,489.88
Other Income 1.43 1.43
Change in Accrued Income 6,277.65 6,277.65 Total Investment Income 56,531.87 56,531.87 Net Change in Unrealized Gain/Loss (401,790.35) - Realized Gain/Loss (10,172.80) (10,172.80) Total Mayket Value Adjustment (411,963.15) (10,172.80) Trust Fees (2,641.78) (2,641.78)
PARS Fee (Net of Depository Earnings) (2,384.06) (2,384.06) Unreconciled Difference - - Total (5,025.84) (5,025.84)
Ending Balance 11,842,078.03 12,685,539.08
1 Year Inception To Date
Investment Return (Inception-To-Date as of 9/30/2023) 6.36% 2.66% BenchMayk Return (PARS Moderately Conservative) 6.59% 2.94% Asset Allocation
Market Value Percentage
Cash and Equivalents 499,377.84 4.22% Equity 3,442,191.98 29.07% Fixed Income 7,891,740.68 66.64% Accrued Income 8,767.53 0.07% Total 11,842,078.03 100.00% Account Manager:

Kyra Clarke
3121 Michelson Dr 3rd Fl
Irvine, CA 92612
949-224-7214, [email protected]
Cash and Equivalents

4.22%
Equity

29.07%
Fixed Income

66.64%
Accrued Income

0.07%
30

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City of Pasadena
PARS Section 115 Trust
For the Month Ended September 30, 2023
Post Employments Benefits Trust 6746056201
Mayket Value Book Value
Beginning Balance 2,311,880.41 2,396,899.83 Activity
Contributions - -
Disbursements - -
Total - -
Net Investment Income
Dividends 9,044.38 9,044.38
Interest 464.76 464.76
Other Income - -
Change in Accrued Income 1,181.00 1,181.00 Total Investment Income 10,690.14 10,690.14 Net Change in Unrealized Gain/Loss, Fee Receipts & Deliveries Net (75,492.04) - Realized Gain/Loss (2,601.59) (2,601.59) Total Mayket Value Adjustment (78,093.63) (2,601.59) Trust Fees (500.13) (500.13)
PARS Fee (Net of Depository Earnings) (451.68) (451.68) Unreconciled Difference - - Total (951.81) (951.81)
Ending Balance 2,243,525.11 2,404,036.57
1 Year Inception To Date
Investment Return (Inception-To-Date as of 9/30/2023) 6.36% 2.68% BenchMayk Return (PARS Moderately Conservative) 6.59% 2.91% Asset Allocation
Marrket Value Percentage
Cash and Equivalents 92,660.82 4.13% Equity 651,770.46 29.05% Fixed Income 1,497,447.07 66.75% Accrued Income 1,646.76 0.07% Total 2,243,525.11 100.00% Account Manager:

Kyra Clarke
3121 Michelson Dr 3rd Fl
Irvine, CA 92612
949-224-7214, [email protected]
Cash and Equivalents

4.13%
Equity

29.05%
Fixed Income

66.75%
Accrued Income

0.07%
31

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INFORMATION ONLY
ITEM 9

9. APPROVAL OF INTERNAL AUDIT PLAN FOR
FY 2024/2025

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Office of the City Manager
Decemb
er 11, 2023
TO: Finance/A
udit Committee
FROM: Ruthe
Holden, Internal Audit Manager
SUBJECT: A
pproval of Internal Audit Plan for FY2024/2025
Recommend
ation:

This repor
t is for information only.

Backgroun
d:

In Novembe
r 2015, the Internal Audit Manager began to build the framework for a comprehensive internal audit function. One of the first steps was to draft an Internal Audit Framework, which was approved by City Council on February 2, 2016. The Internal Audit Framework states that the City of Pasadena (City) will adopt the Institute of Internal Auditors’ (IIA) International Professional Practices Framework (Standards) to comply with California Government Code Section 1236.

Standard 2010 st
ates that the Internal Auditor must establish a risk-based audit plan to determine the priorities of the internal audit activity, consistent with the City’s goals. The internal audit activity’s audit plan must be based on a documented risk assessment, undertaken at least annually. The input of senior management and the City Council must be considered in this process.

The Cityw
ide Risk Assessment is a process to identify and assess potential events or situations that may prevent the City from achievement of its strategic goals and objectives. The Citywide Risk Assessment evaluates risk in four areas:
• Strategic
• Operational
• Compliance, and
• Financial.

The atta
ched Citywide Risk Assessment is required by the Standards and will be reviewed and updated each year. There are many activities performed by management and staff that are designed to control risk and reduce the likelihood that a negative event will occur. The risk remaining despite those controls is called residual risk. The risk assessment process does not attempt to measure residual risk. Instead, the goal of this process is to assess the inherent risk in each of the City’s auditable areas.

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Approval of Internal Audit Plan
December 11, 2023

Page 2 ends

It is important to note that a high-risk score does not mean that: a department is ineffectively managed; that sufficient controls are not already in place; or that the function is not performing properly. A high-risk score merely indicates that a negative event in that area would be particularly damaging or more likely to occur in the absence of effective controls. The purpose of a heat map is to highlight areas that have significant risk to the City in order to identify and develop a risk based audit plan to evaluate the effectiveness and efficiencies of the internal controls and business processes that management has put in place to mitigate these risks. The goal is not to move auditable areas from one quadrant to another, ie. from Quadrant IV to Quadrant I.

Standard 2020 s
tates that the Internal Audit Manager must communicate the internal audit activity’s plans and resource requirements, including significant interim changes, to senior management and the City Council for review and approval. The Internal Audit Manager must also communicate the impact of resource limitations.

The atta
ched Internal Audit Plan includes proposed work for fiscal year 2024/2025. The proposed Internal Audit Plan includes eight engagements to be completed or started during this period. Engagements included on the proposed audit plan were selected using the following criteria:
• Any areas specified by KPMG LLP, the Task Force on Financial Administration and Internal Controls, and Management Partners reports related to the alleged embezzlement that have not yet been audited were included in this year’s plan; • Audits and reviews that commenced but not yet completed from the prior fiscal year;
• Projects were included for the department’s whose risk scores increased this fiscal year to evaluate compliance to regulatory requirements and internal controls; and • Departments included in Quadrant IV were also reviewed based on the City’s risk appetite and overall impact on City operations, audits were included to address areas of potential concerns and/or high inherent risks
The Citywide Risk Assessment and Internal Audit Plan included all departments that report to the City Manager. The areas not included were City Council appointees and the City of Pasadena’s affiliated agencies that have their own oversight Boards.

Attachments: (1)
Attachment A – Annual Citywide Risk Assessment and Internal Audit Plan

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October 2023

Annual Citywide Risk Assessment and
Internal Audit Plan

Fiscal Year 2024/2025

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1 December 2023
Executive Summary
Professional auditing standards and the City of Pasadena (City) Internal Audit Framework requires Internal Audit to assess risks challenging the City and to communicate its risk assessment activities, audit plans and resource requirements to the City of Pasadena Finance/Audit Committee.

This report describes how Internal Audit analyzed the City’s risk environment, prioritized audit areas, and prepared the annual Audit Plan. The contents of this report are based on these premises:
□ Risk, control and governance largely determine the City’s ability to achieve its objectives.
□ City management is responsible for managing risk by implementing internal controls and providing reasonable assur ance that they are operating as intended. □ Internal Audit is responsible for assessing risk by analyzing conditions that can impair the City’s ability to achieve its objectives.
□ Internal Audit is responsible for developing audit plans to review controls that City management has implemen ted to address risks.

In collaboration with City management, Internal Audit established an audit universe of auditable areas for the City and performed a high-level risk assessment of each. There are many activities performed by management and staff that are designed to control risk and reduce the likelihood that a negative event will occur. The risk remaining despite those controls is called residual risk.

It is important to note that the risk assessment process does not attempt to measure residual risk.

Instead, the goal of this process is to assess the inherent risk in each of the City’s auditable areas.

The strategy for de veloping the proposed Audit Plan is based on the assumption that a large part of the overall risk of an auditable area is attributable to the risks of the business processes it utilizes. As part of this year’s risk assessment, the Internal Audit division again reviewed the 10 key citywide business processes (listed in Appendix B) and reassessed each City department for the level of risk it introduces to that business process in the operating environment.

During the audits scheduled as a result of this risk assessment process, the Internal Audit division will determine how existing controls within the City’s auditable areas mitigate risk.

The audit scope will be updated during the planning phase of each audit, based on the assessment of the risk remaining within the area, after considering the effects of existing controls.

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2 December 2023
Approach
The following diagram illustrates the citywide risk assessment process, the results of the risk assessment provide information that helps to create the annual Internal Audit Plan. There are six interrelated steps used to collect data for the annual citywide risk assessment.

1. Understand City’s Strategic Goals
The first step to completing a Risk Assessment is to understand the City Council’s strategic goals. Since risk is def ined as any issue (positive or negative) that may impact the City’s ability to achieve its strateg ic goals, identifying the City’s key goals is a prerequisite to identifying risk.

The City Council adopted goals are t o:
□ Ensure public safety
□ Support and promote the quality of life and local economy □ Maintain fiscal responsibility and stability
□ Improve, maintain and enhance public facilities and infrastructure □ Increase conservation and sustainability
□ Improve mobility and accessibility throughout the city

2. Understand Citywide Control Environment
The control environment is the foundation of an effective system of internal control. The control environment provides discipline an d structure to achieve a system of internal controls. The control environment usually includes the following elements, 1) integrity and ethical values, 2) management philosophy and operat ing style, 3) organizational structure, 4) assignment of Understand Utilize Knowledge of Identify, Assess and
City Council Goals Industry & Business Rank Auditable
Ongoing
Change
Develop
Internal
Audit Plan
Ongoing
Change
Understand City-
wide Control
Environment
Evaluate impact of
key City-wide
Business Processes
Update Audit
Universe

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3 December 2023

authority and responsibility, 5) City policies and practices and 6) competence of personnel.1 This step incorporates reviewing current City policies and practices, prior audit results, MGO Fraud Risk Assessment results, and Audit Committee survey results.

Because implementing the KPMG LLP, the Task Force on Financial Administration and Internal Controls, and Management Partners’ reports related to the alleged embezzlement findings and recommendations are considered a high priority in the City, these reports were reviewed again.

Audits were included in this year’s proposed audit plan to address recommendations from these reports.

In addition, it includes interviewing executive management, senior management, reviewing prior City Council reports and actions, and analyzing fraud hotline complaints. The purpose of this step is to assess among other things, the City’s Control Environment, and the risk appetite. The Control Environment, often referred to as “Tone at the Top”, is considered the foundation for all other components of internal control. The Committee of Sponsoring Organizations (COSO) defines risk appetite as the amount of risk, on a broad level, an organization is willing to accept in pursuit of its strategic goals. Both concepts are important to assess to help identify areas to include in the audit plan.

3. Utilize Knowledge of Industry and Business
The purpose of this step is to gain an understanding of emerging risks and issues related to the City’s strategic goals and operations. This step involves identifying issues affecting local city governments, analyzing recent fraud occurrences, discussions with other government auditors and reviewing white papers on emerging issues.
4: Identify Key Citywide Business Processes and their Impact on Auditable Areas
A key citywide business process, in the context of the Risk Assessment, is a set of activities designed to provide critical support to auditable areas. Many business processes involve actions performed by multiple areas in order to achieve a common goal. In the key Citywide process of contract management, for example, the auditable area seeking a contract service would draft the scope of work, City Attorney’s Office would prepare/approve the contract language and terms, and the Purchasing division would provide oversight ensuring compliance with all procurement related policies, procedures, and laws. The primary objectives of these activities are to ensure that contracted services are efficiently and effectively utilized and related risks are properly managed.

These business processes, their objectives, and their inherent risks were determined through discussions with City personnel, management input, other information gathered, and the Internal Auditor’s own experience working with local government entities. The risks associated with

1 International Professional Practices Framework “Auditing the Control Environment” April 2011

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4 December 2023

each business process were used to evaluate the departments that are primarily involved in those business processes. The departments’ final risk scores include the risks from these business processes
A complete list of these key business processes is included in Appendix B. The key business processes included in Appendix B are listed in alphabetic order rather than priority order or by level of associated risk. The risks listed with each business process do not represent actual events but are a listing of potential risks normally associated with those key processes. Management is responsible for putting in place processes and internal controls to mitigate these risks to an appropriate level.
5: Identify, Assess, and Rank Auditable Areas - Complete Citywide Risk Assessment
Institute of Internal Auditors (IIA) International Professional Practices Framework (Standards) requires that “The internal audit activity’s plan of engagements must be based on a documented risk assessment, undertaken at least annually. The input of senior management and the board must be considered in this process.”
The Citywide Risk Assessment is process to identify and assess potential events or situations that may prevent the City from achievement of its strategic goals and objectives. The Citywide risk assessment evaluates risk in four areas:
□ Strategic;
□ Operational;
□ Compliance; and
□ Financial.

The Citywide Risk Assessment started by identifying the audit universe, or list of auditable areas, to guide and define the parameters for the Risk Assessment. For purposes of this year’s Risk Assessment, the auditable areas included were all departments reporting to the Office of the City Manager. The areas not included in this assessment and proposed audit plan are the following, except when these departments or entities use the City’s financial system or any other processes that fall under the purview of the City Manager’s Office, such as use of purchasing cards:
□ City Council;
□ City Clerk;
□ City Attorney; (except in the areas of procurement and contracts, grants and employment management)
□ Rose Bowl Operating Company;
□ Pasadena Center Operating Company;
□ Pasadena Community Access Corporation, and
□ Successor Agency to the PCDC

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5 December 2023

Risk is typically assessed and scored along two dimensions: the likelihood, or probability, that a given adverse event will occur; and the impact of the event on strategic objectives, operations, compliance requirements, and financial reporting if the event does occur. Using department metrics, surveys to management and the Audit Committee, issues identified in audit reports, and financial data and reports, an impact and probability score were multiplied to map the risk for each auditable area.

Impact is calculated using several factors including:
□ financial materiality;
□ degree of regulatory compliance;
□ operational and strategic impact to City’s objectives; □ number of key IT systems; and
□ fraud risk.

Probability is calculated using several factors including:
□ complexity of process;
□ volume of transactions;
□ known issues;
□ changes in personnel or processes; and
□ degree of monitoring/oversight.

Risk scores are summarized by department and mapped on a Heat Map, which is divided into 4 quadrants:
□ I - Low Probability, Low Impact;
□ II - Low Probability, High Impact;
□ III - High Probability, Low Impact; and
□ IV - High Probability, High Impact.

It is important to note that a high risk score does not mean that a department is ineffectively managed, that sufficient controls are not already in place, or that the function is not performing properly. A high risk score indicates that a negative event in that area would be particularly damaging or more likely to occur in the absence of effective controls. Therefore, for example, departments mapped in Quadrant IV on the Heat Map are considered mission critical; provide substantial support for many City functional areas; reflect a high public need; or consume significant financial resources.

The goal is not to move auditable areas from one quadrant to another, ie. from Quadrant IV to Quadrant I. Auditable areas do shift sometimes as new issues emerge, new systems are brought online, or when significant processes or management changes occur. Therefore, an auditable area whose risks have a high probability of occurring and has high impact on City operations usually does not shift to an area of low probability or low impact. The purpose of a heat map is

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6 December 2023

to highlight areas that have significant risk to the City in order to identify and develop a risk- based audit plan to evaluate the effectiveness and efficiencies of the internal controls and business processes that management has put in place to mitigate these risks. The FY 2024/2025 Citywide Risk Assessment Heat Map is included in Appendix A.

For FY 2024/2025, there were 2 departments whose total risk scores increased this fiscal year.

These departments include:

1. Transportation Department

2. Department of Information Technology

Both departments’ scores were increased to reflect recent changes in key personnel positions. 6: Develop the Audit Plan
Institute of Internal Auditors (IIA) International Professional Practices Framework (Standards) requires that “The Chief Audit Executive must establish a risk-based plan to determine the priorities of the internal audit activity, consistent with the organization’s goals.” The proposed audit plan covers FY 2024/2025. The methodology used to identify audits for the audit plan is as follows:

1. Audits and reviews that are in process from the prior fiscal year;

2. The embezzlement was discovered in May 2014 and many IT systems have been updated or replaced and internal processes have changed or evolved. The recommendations from the Internal Controls Task Force and the KPMG report will be audited to verify the risks have been effectively mitigated;

3. Departments in Quadrant IV of the heat map were also reviewed based on the City’s risk appetite and overall impact on City operations, audits were included to address areas of potential concerns and/or high inherent risks; and

4. Audits that represent emerging risks or in departments/areas of risk in the City that have never been formally reviewed.

In developing the audit plan, the hours included for each audit are an estimate. Quarterly, the plan will be reassessed and adjusted to account for unanticipated requests and progress on current audits. Occasionally, the City Manager will direct Internal Audit division to review an emerging issue, these projects will be added to the proposed Audit Plan and the Audit Committee will be briefed quarterly on the status of work completed to the Audit Plan and any adjustments that need to be made to hours and anticipated completion dates. The proposed audit plan is included in Appendix C.

Because the Risk Assessment is an iterative process, the audit universe is re-assessed and updated as part of the risk assessment process and as audits are being completed.

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Appendix A: Risk Ranking of City Departments

LEGEND

City Manager

Finance

Fire

Housing

Human Resources

IT Information Technology
LI Library & Information Services

PR
Parks, Recreation &
Community Services

PL
Planning & Community
Development

PD Police

PH Public Health

Public Works

Transportation

Water & Power

8 December 2023
CM
FN
FD
H
HR
PR
IT
LI
PL
PDPH
LITR
WP
PW

0.0 1.0

2.0 3.0

4.0 5.0

0.0 1.0 2.0 3.0 4.0 5.0
Probability
Impact
Citywide Risk Heat Map
III
I
II
IV

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Appendix B: FY 2024/2025 Key Citywide Business Processes 9 October 2023

1. BENEFITS ADMINISTRATION

Objective: To ensure that employee benefit programs are managed in accordance with laws, regulations, and contract terms.

Potential Risks:
□ Under/over payroll withholding and/or City incorrect contribution for benefits programs are not discovered in a timely manner
□ Self-insured plans are over/under funded
□ Compliance and financial reports are not prepared accurately □ Benefits payments are made for services not received
□ Plan provisions are not consistent with legal requirements □ Benefits paid to ineligible employees or dependents
□ Outdated technology increasing risk and inefficiency
□ Untimely managing and processing life event changes
□ Non-compliant initial Consolidated Omnibus Budget Reconciliation Act (COBRA) participant notification
□ Payments to benefits’ providers may not be made in a timely manner, causing promised benefits to be interrupted or cancelled
□ Errors in qualified COBRA beneficiary tracking
Primary Auditable Area:
□ Human Resources - Employee Benefits/Health Insurance

2. BU DGET

Objective: To ensure that a budget system is managed and maintained that facilitates allocation and use of resources in line with the City Council’s priorities Potential Risks:
□ Unapproved expenditures
□ Unmet critical needs
□ Budget assumptions and methodologies are not scrutinized □ Appropriate budget monitoring is not performed (variance analysis etc.) □ Baseline budget assumptions are not revisited periodically □ Over/under budgeted expenditure/revenue
□ Adequate reserves may not be available or budget cushion may not be adequate in the case that budget assumptions are significantly incorrect or unexpected events occur that requires deviation from the budget plan
□ Complexity of the budget process, the budget itself and/or various areas of the budget may overwhelm the controls and processes of City departments and finance function

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Appendix B: FY 2024/2025 Key Citywide Business Processes 10 □ Budget may not consider all potential sources of revenue available to the City in any given year
Primary Auditable Area:
□ Finance (Operating Budget)
□ Public Works (Capital Budget)

3. CASH MANAGEMENT/INVESTMENTS

Objective: To ensure that investments are identified, accounted for, invested, and reported in accordance with the City needs and all applicable laws, regulations, and policies.

Potential Risks:
□ Optimum liquidity may not be maintained resulting in unmet cash need □ Excessive risk of losing principle
□ Violation of state investment law
□ Risk not appropriately compensated for
□ Excessive investment expense
□ Execution of unauthorized transactions
□ Missed investment opportunities
□ Outdated investment policies resulting in loss of reasonable returns □ Certain investments may be too complex to properly evaluate and may be subject to fraud risks by investment managers or investment vehicles
Primary Auditable Area:
□ Finance - Treasury
□ Water & Power

4. EMPLOYEE MANAGEMENT

Objective: To facilitate employee recruitment, training, retention, compensation and ensure compliance with employment related laws and regulations.

Potential Risks:
□ Best qualified employees with required skillsets are not hired □ Vacant positions or promotions are not timely filled
□ Safe working environment is not maintained resulting in potential liability to the City □ Employees are over or under compensated resulting in increased cost or recruitment difficulty
□ Labor and employment laws are not complied with
□ Employees are not provided adequate training resulting in reduced productivity □ Grievances are not properly handled

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Appendix B: FY 2024/2025 Key Citywide Business Processes 11 October 2023

□ Employee data is not maintained confidentially
□ Job responsibilities may be overly complex, ill-defined, or may unnecessarily overlap responsibilities in other positions
Primary Auditable Area:
□ Human Resources - Recruitment & Classification, Safety and Training □ Police – Live Scan

5. GENERAL ACCOUNTING

Objective: To ensure that internal and external financial reporting requirements are timely met and financial transactions are executed and recorded as authorized.

Potential Risks:
□ All reportable transactions are not captured and reported timely □ Reporting standards are incorrectly interpreted and applied □ The system does not produce management reports that meet user needs □ Unauthorized transactions
□ Fraud or embezzlement
□ Erroneous reporting
□ Comprehensive Annual Financial Report (CAFR) is not accurately and/or timely compiled to meet reporting requirements
□ Significant deficiencies and/or material weaknesses have an adverse impact on accuracy and/or completeness of CAFR
□ Tyler Munis (or parts of it) could be too complex and/or poorly designed, increasing the probability of inaccurate and/or non-complete financial information Primary Auditable Area:
□ Finance
□ Information Technology

6. GRANTS

Objective: To ensure that the City identifies, applies for and manages grants that help meet its objectives. The grant life cycle, including cost/benefit analysis of grants being applied for and life cycle costs including maintenance and replacement are considered prior to applying for grants.

The management review, approval, and oversight processes are effective.

Potential Risks:
□ Grants that the City qualifies for and has a need for are not identified and applied for □ Unallowable or questioned costs
□ Increased federal or state oversight

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Appendix B: FY 2024/2025 Key Citywide Business Processes 12 October 2023

□ Unable to demonstrate compliance with grant terms due to lack of policies, procedures and/or systems
□ Grants accepted do not align with the City goals resulting in unanticipated results □ Grants are accepted without assessing the recipient entity's ability to cost effectively fulfill grant terms
□ Co-mingling of grant funds in financial accounts
□ Incorrect labor coding on grant funded projects
□ Inability to produce timely grant compliance reports
□ Grants are applied for that have unanticipated long-term life cycle costs □ Lost revenue from failure to identify all eligible costs □ Absence of performance reports on grant funded projects □ Overhead rate proposed on grant applications are not supported □ Inability to timely report accurate grant expenses to Grantee □ Indirect costs may not accurately or fairly allocate between various grants and non-grant departments
□ Grants reimbursements could potentially be withheld or required to be returned because of poor management of grant billings and/or advance draws of grant funds □ Inadequate understanding of federal grant compliance requirements (OMB A-133) could negatively impact the City’s ability to obtain new grants and/or require return or withholding of existing grant funding
□ Inadequate management of sub recipients compliance to grant requirements could negatively impact the City’s ability to obtain new grants and/or require return or withholding of existing grant funding
Primary Auditable Area:
□ City Manager (Career Services)
□ Finance
□ Fire
□ Housing
□ Parks, Recreation, and Community Services
□ Planning
□ Police
□ Public Health
□ Public Works
□ Transportation

7. INFORMATION TECHNOLOGY

Objective: To ensure that information technology (hardware and software) is acquired, implemented and used to best meet the needs of the City; and information produced is guarded against unauthorized access or use.

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Appendix B: FY 2024/2025 Key Citywide Business Processes 13 October 2023

Potential Risks:
□ Non-compliance with Information Technology (IT) related Federal, State, and local laws □ Business goals are not met due to lack of communication between process owners and IT service providers
□ Outdated systems affecting productivity and increasing risk to business goals □ Privacy violations due to lack of or adherence to policies and procedures □ Risk to service continuity due to inadequate disaster recovery policies and procedures □ Waste and inefficiency due to lack of coordination between leveraging of existing and acquisition of new and emerging technologies
□ System and software change management controls are absent or work ineffectively □ System conversions are not managed effectively possibly increasing project budget, increasing project schedule, and/or impacting user department’s ability to meet City strategic objectives
□ Timely changes of employee/vendor access to system does not occur □ Cybersecurity controls are not adequate to prevent unauthorized access or use of data □ Inadequate consideration or planning for estimated IT product or service life cycles, could result in poor or nonexistent capital replacement plans □ Inadequate understanding of critical business processes dependency on IT systems could negatively impact the City’s ability to complete its strategic objectives Primary Auditable Area:
□ Information Technology
□ Water and Power

8. PAYROLL

Objective: To ensure that payroll transactions are processed accurately and timely in compliance with relevant legal and regulatory requirements and timely and accurate information is provided to support management decision making and grant reporting requirements.

Potential Risks:
□ Fictitious employees in the system
□ Recurring errors due to heavy reliance on computer systems □ Incorrect changes in employee status, pay rates, withholding etc. □ Employee contract terms not entered correctly in the system □ Payments made for time not worked
□ Inaccurate labor reports that are used for grant reimbursement claims □ Errors in interpreting State and Federal withholding requirements □ All compensations subject to withholding and reporting are not captured □ Time and labor data is not reviewed and approved by supervisors □ Overtime payments are incorrectly calculated

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Appendix B: FY 2024/2025 Key Citywide Business Processes 14 October 2023

□ Taxpayer identification is not correct
□ Tyler Munis conversion impacts timely payment of payroll, inadequate controls and/or incorrect calculation of payroll
□ Tax withholdings, voluntary employee withholdings and other payroll deductions are not timely remitted to appropriate entities
□ Required tax compliance reporting is not timely and/or accurately prepared and issued Primary Auditable Area:
□ City departments’ timekeeping systems
□ Finance
□ Human Resources
□ Information Technology

9. PROCURE TO PAY

Objective: To ensure that all necessary goods and services are used strategically to best meet the City’s goals and objectives and associated risks are properly managed.

Potential Risks:
□ Higher costs and substandard services due to ineffective competitive bidding process □ Service delivery is not in accordance with contract terms due to lack of oversight □ City is not adequately protected from non-performance or other contractor activities □ Key aspects of the contract are not in place – contract drafting, negotiations, and approval, compliance monitoring and renewal process
□ Increased exposure to liability due to inadequate vendor insurance □ Contested bid awards
□ Overpayment or duplicate payment of vendor invoices
□ Poorly managed knowledge transfer leading to loss of intellectual property □ Failure of the contract to meet needs resulting in scope creep, cost over-runs, and quality failures, or failure to properly close out contracts
□ Vendors are not paid in a timely manner resulting in increased cost and/or lost discount opportunities
□ City’s scope of work may not be accurate or complete
□ Approved Change Order work duplicates work in original contract scope □ PCards and Petty Cash payments are used to circumvent Purchasing controls □ Vendor file may not be accurate and/or complete or may contain invalid (fictitious) vendors
□ Poor performance on contracted work because of inadequate screening of contractors and vendors qualifications and abilities
□ Large projects may not be monitored or inadequately monitored to verify quality work in compliance with approved contract scope

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Appendix B: FY 2024/2025 Key Citywide Business Processes 15 October 2023

□ Failure to verify vendors and contractors are eligible to work on federal or state grant funded work or are not in compliance of other laws and grant requirements could negatively impact the City’s ability to obtain new grants and/or require return or withholding of existing grant funding
Primary Auditable Area:
□ Finance - Accounts Payable
□ City Project Managers
□ Finance - Purchasing
□ Purchasing Card Holders
□ Petty Cash Funds

10. REVENUE

Objective: To ensure that all charges and fees allowed by law are assessed and collected in a timely manner.

Potential Risks:
□ Missed opportunities for additional fees and charges
□ All chargeable costs are not identified
□ Unauthorized charges and fees are collected
□ Collections are not recorded and reported correctly and timely □ Lower collection performance
□ Adequate systems are not in place to facilitate the billing and collection function □ Adequate controls are not in place to reduce the risk of diverting collections □ Cash handling controls are ineffective to reduce potential theft □ Revenue may not be properly recorded and reported in accordance with government accounting standards
□ Restricted revenues may not be accounted for in the appropriate fund □ Lack of monitoring of receivables can result in “lapping” and other fraudulent schemes Primary Auditable Area:
□ Finance
□ Parks, Recreation, and Community Services
□ Planning
□ Transportation
□ Water & Power

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Appendix C: FY 2024/2025 Proposed Internal Audit Plan
16 FY 2024/2025 Proposed Projects

Title Audit Objective Area Proposed Resources

1. Audit of Fleet
Management Practices
Reviewing City internal controls
and performance related to fuel
management, and vehicle repair
and maintenance.

Public Works

1,500

2. IT Risk Assessment To assess the information technology (IT) related to Cybersecurity risks.

DoIT
Water & Power
To be Outsourced

3. Payroll/VTI & Telestaff Audit Review the internal controls and processes for the payroll and
timekeeping systems.

Human Resources
Finance Department

1,200

4. Follow up on
Recommendations from
Embezzlement Internal
Controls Task Force &
KPMG Report
Selectively follow up on departments’
implementation of recommendations
issued by KPMG and the Internal
Control Task Force subsequent to the
embezzlement to ensure the

underlying risk/issue has been
successfully mitigated.

City Manager
DoIT
Finance
Human Resources
Public Works
Water & Power
800

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Appendix C: FY 2024/2025 Proposed Internal Audit Plan
17 5. Building & Safety Inspections of
City Facilities
Review policies and processes in
place to ensure existing facilities
owned or fully controlled by the
City are regularly inspected in
accordance with state and local
requirements.

Planning
Fire
Other Departments - tbd
1,500

6. Citywide Safety program Review effectiveness of Safety programs to minimize employee
injuries.

All City Departments Outsourced

7. Street Pavement
Maintenance program
Evaluate the department’s processes
to manage and repair the City’s
streets.

Public Work 1,000

8. Water & Power's Customer
Refunds, Rebates & Other
Assistance Programs
Review operational controls for the
refunds, rebates and assistance
programs.

Water & Power 1,200

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Appendix C: FY 2024/2025 Proposed Internal Audit Plan
18 Consulting Activities

1. Fraud Hotline Monitoring,
Maintenance, and Marketing
Continuous monitoring,
response/referral, and maintenance of
fraud allegations reported to the City’s
telephone hotline and online reporting
database. Additionally, distribute
materials to promote fraud hotline and
awareness.

Citywide Ongoing

2. System Implementation
Advisory Reviews
Providing ad hoc internal control
reviews/discussions of ongoing system
implementation plans including Land
Management System/EnerGov, - Water
and Power Customer Information
System (CIS), and other department
systems that collect revenue or process
financial transactions. Anticipate
additional implementation projects
during the year.

Citywide Ongoing

3. Other Ongoing Consultation
Activities
Providing ad hoc advisory services for
management including internal control
reviews, process reviews, formal
training, and other value-added services.

Citywide As needed/based on
availability

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INFORMATION ONLY
ITEM 10

10. FINAL REPORT FOR THE AUDIT OF THE CITY OF

PASADENA AS PROGRAM ADMINISTRATOR OF THE

FOOTHILL WORKFORCE DEVELOPMENT BOARD

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Office of the City Manager
December 11, 2023
TO: Finance/A
udit Committee
FROM: Ruthe
Holden, Internal Audit Manager
SUBJECT: F
inal Report for the Audit of the City of Pasadena as Program Administrator of the Foothill Workforce Development Board Recommend
ation:

This repor
t is for information only.

Backgroun
d:

This audit
was part of our FY 22-23 audit plan, based on a request by the prior interim City Manager. The Internal Audit Division hired TAP International, Inc. a woman owned firm with an office in Pasadena to evaluate the following:
1) Are Foothill Workforce Development Board’s (FWDB) internal controls designed to promote compliance with the key financial provisions of the Joint Powers Agreement (JPA), City of Pasadena policies and procedures and grant accounting requirements;
2) Are FWDB’s internal controls designed to promote compliance with the requirements outlined in the JPA and other relevant documents; and 3) Is FWDB’s Career Services Division implementing its programs and services consistent with the vision and intentions outlined in the Local Plan for program years 2021-2024.

The Workforce Investment Opportunity Act of 2014 (WIOA) grants authority and monies to states to establish workforce development programs, which provide access to jobs, skill development, and business services to those eligible for services. The State of California workforce development system is comprised of 45 Local Workforce Development Areas (Local Areas). Each Local Area has a Local Workforce Development Board (Local Board), such as the FWDB. The City of Pasadena is the designated administrator of FWDB. Under WIOA, the State of California expects FWDB, to:
• Bring toget
her business, labor, education, and economic development to focus on community workforce issues.

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Final Report for Audit of FWDB
December 11, 2023

Page 2 ends

2 • Develop, disseminate, and understand current labor market trends and economic information.
• Bring together systems to solve common problems, or broker new relationships with businesses and workers.
• Advocate for the importance of workforce policy, providing perspective about the need for skilled workers.
• Enhance the region's ability to meet the workforce needs of local employers. • Monitor and provide regular oversight and monitoring of its WIOA funded programs to verify compliance with the stated requirements of WIOA.

To accompl
ish these objectives, FWDB implements many local, state, and federally funded workforce programs. In this role, FWDB is responsible for ensuring that public funds are properly safeguarded and for ensuring progress is made towards the defined goals and objectives.

TAP Interna
tional applied multiple methods of analysis to conduct the program audit.

These methods included financial analysis, review of selected financial transactions, a comparative review of overall program performance with 44 other local workforce development boards, and interviews with 14 staff members from FWDB, Economic Development, and the City Finance Department.

Audit Find
ings and Recommendations:

TAP International identified nine audit findings and 22 recommendations which when implemented will strengthen the internal controls over this program. Management agreed with all the recommendations. The management response and corrective actions are included in the audit report as Attachment A.

The Stat
e of California has recognized FWDB for its high performance. The audit findings demonstrate that the FWDB can build on its past success by implementing stronger controls designed to address FWDB’s varied and inconsistent performance in its operations, especially over financial management, program administration, and program goal completion.

These findings recommend improving controls that include development of a comprehensive set of policies and procedures to govern all aspects of operations, including enhancing review and approval activities, segregation of duties, and incorporating routine monitoring and oversight of operations. The program performance results also show that FWDB can benefit from having priorities set among the nine performance measures required by the State of California.

Attachments
(1):

Attachment A- Program Audit of the City of Pasadena as Program Administrator of the Foothill Workforce Development Board

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Program Audit of the City of Pasadena as
Program Administrator of the Foothill
Workforce Development Board
Final Report: Management Action is
Needed Across Key Financial,
Operational, and Performance Areas
November 27, 2023

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Areas 1 November 27, 2023
Ruthe Holden, Internal Audit Manager
City of Pasadena
Dear Ms. Holden,
TAP International, Inc. is pleased to present our final report describing the results of a program audit of the City of Pasadena as program administrator of the Foothill Workforce Development Board (FWDB), herein referred to as FWDB. This report describes nine audit findings and 22 recommendations for improvement of FWDB’s financial management, operational, and program performance areas. This report also describes a suggested framework to enhance internal operations in Appendix B.

Sincerely,
TAP International
TAP International
TRAINING | ANALYTICS | PERFORMANCE
117 E. Colorado Blvd, Suite 600
Pasadena, CA
626.314.5973
www.tapinternational.org

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Areas 2 Contents
RESULTS IN BRIEF .......................................................................................................................................... 4 Why this Audit is Important ..................................................................................................................... 4 How the Audit Was Conducted ................................................................................................................ 4 What this Audit Found ............................................................................................................................. 5 PERFORMANCE AUDIT FINDINGS ................................................................................................................. 8 Finding 1: FWDB does not comply with eligibility verification requirements. ........................................ 8 Finding 2: FWDB does not effectively implement its support payment policies that limit maximum payment amounts. ................................................................................................................................... 9 Finding 3: There is a need for additional segregation of duty over program administration. .............. 11 Finding 4: Controls for contract and grant management were not implemented effectively. . ........... 12 Effect ...................................................................................................................................................... 13 Finding 5: FWDB did not perform effective financial management of its operations. .......................... 13 Finding 6: FWDB does not monitor whether the services it delivers are in the best interest of the local communities participating in the Joint Powers Agreement. ................................................................. 14 Finding 7: FWDB partially complied with the requirement to timely disseminate meeting minutes. .. 16 Finding 8: FWDB has made limited progress at accomplishing four strategic goals in its work plan. ... 16 Finding 9: FWDB had mixed success at accomplishing agreed upon performance goals with the State of California. ........................................................................................................................................... 19 APPENDICES ................................................................................................................................................ 26 Appendix A: Total Persons Served by WIOA Title I Funded Programs ................................................... 26 Appendix B: Internal Control Framework with Recommended Action ................................................. 29 Appendix C: FWDB Contracts ................................................................................................................ 33 Appendix D: Background ........................................................................................................................ 34 ATTACHMENT A: AGENCY COMMENTS………………………………………………………………………………………………….37

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 3 | Page
Results in Brief
• Why this Audit is Important
• How the Audit Was Conducted
• What the Audit Found
• What the Audit Concludes

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 4 RESULTS IN BRIEF
Why this Audit is Important
The Workforce Investment Opportunity Act of 2014 (WIOA) empowers states to establish workforce development programs, offering job access, skill development, and business services to eligible individuals. In California, the workforce development system comprises 45 Local Workforce Development Areas (Local Areas), each governed by a Local Workforce Development Board (Local Board). One such board is the Foothill Workforce Development Board (FWDB), administered by the City of Pasadena herein referred to as FWDB. 1 Under WIOA, the State of California tasks FWDB with:
• Facilitating collaboration among business, labor, education, and economic development to address community workforce issues.
• Analyzing and disseminating up-to-date labor market trends and economic information. • Coordinating efforts to solve shared problems and fostering new relationships with businesses and workers.
• Advocating for workforce policy importance and offering perspective on the need for skilled workers.
• Strengthening the region's capacity to meet the workforce needs of local employers. • Conducting regular oversight and monitoring of WIOA funded programs to ensure compliance with stated requirements.

To achieve these objectives, FWDB implements various locally, state, and federally funded workforce programs. In this capacity, FWDB assumes responsibility for safeguarding public funds and ensuring progress towards defined goals and objectives.

How the Audit Was Conducted
As program administrator of FWDB, the City of Pasadena contracted with TAP International to address the following audit questions:
(1) Are FWDB’s internal controls designed to promote compliance with the key financial provisions of the Joint Powers Agreement (JPA), City of Pasadena policies and procedures, and grant accounting requirements?
(2) Are FWDB’s internal controls designed to promote compliance with the requirements outlined in the JPA (including administrator and provider of services) and other relevant governance documents?
(3) Is FWDB’s Career Services Division implementing its programs and services consistent with the vision and intentions outlined in the Local Plan for program years 2021–2024?
1 A Joint Powers Agreement (JPA) between the City of Pasadena and other local communities established a program to provide workforce development services.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 5 TAP International adopted a mixed-methods approach for the program audit, employing various analytical techniques:
• Financial Analysis: Assessing financial structures to determine alignment with established guidelines.
• Transaction Review: Scrutinizing selected financial transactions to verify compliance. • Comparative Program Performance Review: Evaluating FWDB's overall program performance in relation to 44 other local workforce development boards. • Interviews: Engaging in interviews with 14 personnel members from FWDB, Economic Development, and the City Finance Department to gain insights.

Refer to Appendix D for additional details regarding the audit methodology.

What this Audit Found
The controls established to promote compliance with the key financial provisions of the Joint Powers Agreement (JPA), City of Pasadena policies and procedures, and grant accounting requirements need to be implemented effectively. This report describes the following:
• Although FWDB has delegated responsibility for case managers to review and approve applicant eligibility for program participation, this control is not uniformly or consistently implemented across FWDB;
• FWDB has established a policy to set reimbursement limits on support payments issued to program participants at $1,000, but FWDB has issued payments that exceed these limits; and
• FWDB does not always effectively comply with
procedures to submit sufficient supporting
documentation to facilitate timely payment on
contracts or reimbursement on grants.

When controls are not consistently and uniformly
implemented, it diminishes the ability for FWDB to
effectively manage its financial resources. Between fiscal years 2019-2020 and 2020-2021, FWDB has left unspent
funds totaling $500,528.

This report further describes that FWDB does not have
documented internal controls designed for complying with JPA requirements. For instance, FWDB provides services to program participants residing in JPA communities, but FWDB has not established controls designed to monitor and verify the number of JPA members served.

Finally, this report explains that FWDB Career Services Division could make added progress implementing its
programs and services consistent with the vision and
intentions outlined in the Local Work Plan for program years 2021–2024 and in Program Year FWDB 2021–2024 Work
Plan Goals
• Address the lack of
digital equity in
FWDB communities.
• Prioritize local
business and job
services.
• Adopt a holistic
approach to
supporting
communities in
recovery.
• Plan workforce
strategies to improve
equity.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 6 2021, FWDB had mixed success, as evidenced by the performance rankings among 44 other local boards, ranging from high to low. Factors contributing to the varying levels of success stem from non-uniform case management and absence of priorities established for FWDB other than the goals established in the Local Work Plan. As a result, the long-term viability of continuing operations for at least one of the programs may be at risk because of the very low levels of program participation (less than five reported participants to the State of California) at the time of our review.

What this Audit Concludes
While the State of California had recognized FWDB for its high performance, the audit findings demonstrate that FWDB can build on its past success by implementing stronger internal controls designed to address FWDB’s varied and inconsistent performance in operations, especially over financial management, program administration, and program goal completion.

These controls would include development of a comprehensive set of policies and procedures to govern all aspects of operations, including enhancing review and approval activities, segregation of duty, and incorporating routine monitoring and oversight of operations. The program performance results also show FWDB can benefit from having priorities set among the nine performance measures required by the State of California. This audit report describes 22 recommendations to enhance the efficiency and effectiveness of FWDB operations, including describing suggested elements of an enhanced internal control framework in Appendix B.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 7 Performance Audit Findings

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 8 PERFORMANCE AUDIT FINDINGS
Finding 1: FWDB needs to ensure compliance with eligibility verification requirements.

Criteria
WIOA requires verification that individuals meet the eligibility requirements as a condition of program participation. To be eligible for the 12 FWDB administered programs and services, individuals must meet multiple requirements. These requirements include, but are not limited to: low-income status, veteran status, selective service registration status, spouse of a veteran, birth date, social security number, employment status, citizenship, and identification. To determine an individual’s eligibility with any number of the requirements, the individual must provide proof.2 Examples of the documentation that can be used to verify eligibility, include a birth certificate, driver’s license, social security card, and other documentation, such as a layoff notice, letter from a Human Resources Department, or media announcement of layoffs by the employer.

Condition
FWDB did not have proper controls established or did not implement established controls effectively to assess eligibility of applicants prior to program enrollment. Case managers, responsible for determining participant eligibility, are not required to sign off on applications to confirm the verification of the applicant's eligibility. In addition, the FWDB staff person responsible for collecting eligibility documentation is not required to sign off attesting that the application submitted meets the required documentation rules.

Cause
FWDB has not prepared policy and procedures that define and show a clear delegation of roles and responsibilities for determining eligibility.

Effect
Without documenting clear expectations for the review and approval of program eligibility, FWDB becomes vulnerable to admitting individuals into a program for which they are not eligible. In our sample of 399 transactions, three people could not be located on enrollment/participation lists provided by FWDB, yet these individuals received support payments for which they may not have been eligible.

Recommendations

1. The FWDB Executive Director should assign responsibility to one individual staff person for the assessment and approval of the eligibility of program applicants.

2. The FWDB Executive Director should (a) develop enrollment applications that require the signature of the person that reviewed and approved the prospective participant for program participation, and (b) establish procedures for periodic review by the Executive 2 FWDB must use the income guidelines identified in the U.S. Department of Labor’s (DOL) Lower Living Standard Income Level (LLSIL) guidelines and the U.S. Department of Health and Human Services’ (HHS) Poverty Guidelines.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 9 Director of the completed enrollment forms to verify compliance with program enrollment requirements.

Finding 2: FWDB should always follow its support payment policies that limit maximum payment amounts.

Criteria
FWDB’s 2017 Standard Operating Procedure (SOP) and 2022 DRC (Policy/Procedures Statement) require reimbursement of expenses which are reasonable, necessary, cannot duplicate services, or pay for services available through other sources for which a participant may qualify. Both the 2017 SOP and 2022 DRC capped total reimbursements at a total amount of $1,000 per person.

The 2017 SOP and 2022 DRC also have maximum support payment amounts by expense category including, but not limited to, Tools, Licenses, Certifications, Employment Related Clothing.

These provisions in the SOP and DRC create a framework that balances participant support with fiscal responsibility, helping to ensure that resources are allocated efficiently and in accordance with program goals. Adherence to these guidelines helps maintain consistency in the reimbursement process and prevents excessive or inappropriate use of program funds. Regular monitoring and compliance checks are essential to uphold the integrity of the reimbursement system and verify that participants receive support within the established parameters.

Condition
Using the policy in effect at the time of the reimbursement, FWDB’s support payments issued to many program participants exceeded the limits defined in FWDB policy. Eighteen percent (72) of 399 support services payments to individuals exceeded the maximum payment amount of $1,000. Another five of 20 selected transactions exceeded the maximum allowable for a specific type of expense reimbursed by FWDB or contained some other type of error creating an overpayment. See Figure 1 below for a list of the transactions. Other gaps and deficiencies in internal controls are described in Appendix B, Figure B1.

Figure 1:

Transactions Randomly Selected That Exceed the Maximum Allowable Amount for a Specific Expense, FY 2019-2021
Sample
#
Total
Payments
that
Participants
Received
Overpayment
Amount Issue
21-24 $754.70 $704.70 Support services overpayment of car payments for two months. Per SOP 2017-1, the maximum allowable is $50.
21-28 $651.99 $451.99 The maximum amount per SOP 2017-1 is $200 for tools or employment-related supplies.
21-31 $928.00 $428.00 The maximum amount per SOP 2017-1 is $500 for credentials/licenses, certifications, and testing.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 10 21-32 $850.00 $800.00 The maximum amount per SOP 2017-1 is $50 for auto repairs.
21-34 $459.29 $259.29 The maximum amount per SOP 2017-1 is $200 for course- related books. A reimbursement for clothing does not
appear to be fire-fighter related and no documentation is provided of course enrollment or for the request for
clothing reimbursement.

Source: TAP International analysis of FWDB expenditures.

Cause
FWDB has not established effective internal
control policies and procedures designed to
comply with the 2017 SOP or the policy 2022
DRC. The deficiencies in internal control
include the absence of a centralized method
for tracking the total payments made to each
program participant across all programs and
the absence of documented review and
approval by FWDB’s finance staff to verify
compliance with established policy.

In other areas, the 2017 SOP and 2022 DRC
policies lack specificity on the types of
expenses not allowed when processing
reimbursements for program participants.

Although FWDB now requires program
participants to attest to the accuracy of their
submitted expense reports, this control does
not address the absence of review and
approval of the expenses by FWDB staff.

Effect
The overpayments and other errors that occurred place FWDB at greater risk of non-compliance with funding requirements and reduces the amount of funds available for other program participants.

Recommendations

3. The FWDB Executive Director should add controls to require the FWDB Finance Manager to check participant program eligibility prior to approving support services payments.

4. The FWDB Executive Director should segregate check request preparation and review/approval responsibilities at FWDB. Case managers can submit requests, but the FWDB Finance Staff should review and approve check requests.

5. The FWDB Executive Director should add criteria to existing policy on the types of support service expenses unallowed for reimbursement and issue the updated policy to all FWDB staff, with each attesting to the receipt and understanding.

What is Internal Control?
Internal control is a process effected by
an entity’s oversight body, management,
and other personnel that provides
reasonable assurance that the objectives
of an entity will be achieved. These
objectives and related risks can be
broadly classified into one or more of the
following three categories: (1)
Operations - Effectiveness and efficiency
of operations; (2) Reporting - Reliability
of reporting for internal and external use;
and (3) Compliance - Compliance with
applicable laws and regulations.

Source: GAO-14-704G, STANDARDS FOR

INTERNAL CONTROL IN THE FEDERAL

GOVERNMENT

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 11 6. The FWDB Executive Director should maintain a master spreadsheet of program participants to track support payments issued to prevent exceeding the $1,000 limit.

7. The FWDB Executive Director should implement the controls recommended in Appendix B, Figure B1.

Finding 3: There is a need for additional segregation of duty over program administration.

Criteria
FWDB does not have documentation that clearly
describes and delineates the roles and
responsibilities of the FWDB staff for processing
reimbursements. In the absence of documentation,
the Auditor relied on day-to-day practices to assess
the extent to which FWDB had segregated program
administration duties. For example, a case manager
should prepare the individual plan and a program
manager should be responsible for its review and
approval.

Condition
The following are examples of where FWDB had not segregated duties:
• A FWDB program manager administers and implements all aspects of the Transitional and Subsidized Employment Program funded by the Los Angeles Department of Social Services, including case management, financial management, and enrollment, rather than dividing these responsibilities among other FWDB staff. • A FWDB program manager also administers and implements all aspects of the WIOA Youth Program although other FWDB staff have assisted with case management when needed.
• FWDB improperly consolidates the roles and responsibilities of case managers to include both the review and approval of the eligibility of program participants as well as support payment reimbursements.

Cause
FWDB management had not considered the potential risks that occur without properly segregating duties, as evidenced by the frequency of overpayments and issuing support payments to program participants who may not be eligible for them.

Effect
The Youth Program currently poses a significant level of operational and financial risk due to the limited segregation of duty for various critical responsibilities under the authority of the Program Manager. This consolidation includes the authority to review program eligibility, administer case management, and both review and approve support payments for program participants.

Similarly, the Transitional and Subsidized Employment Program is also exposed to a high level of risk. This risk arises from the absence of controls and necessary procedures for monitoring and verifying program operations. Without these essential safeguards in place, there is an increased What is Segregation of Duty?
Segregation of duty is an established
internal control that separate
responsibilities of a task or process
among at least two individuals, each not
having full control of a specific task.

Having proper segregation of duties
allows for the prevention and detection
of potential fraud, waste, and abuse.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 12 vulnerability to potential issues related to program integrity, financial mismanagement, and compliance.

Recommendations

8. The FWDB Executive Director should establish stronger segregation of duty by clearly dividing program administration responsibilities to program managers and program implementation activities to case managers.

9. The FWDB Executive Director should reassign review and approval of check requests for support payments to an individual(s) other than case managers, such as the FWDB Finance Manager.

10. The FWDB Executive Director should assign full responsibility to one individual for reviewing and approving the eligibility of applicants for FWDB programs. The FWDB Executive Director should formally assign responsibility for case managers to prepare check requests for support payments and assign different individuals, such as the FWDB Finance Manager to review and approve the allowability of the requested payment including verifying program eligibility of the program participant.

Finding 4: Controls for contract and grant management need better implementation. effectively.

Criteria
Effective contract and grant management depend on fully implementing procedures that require review and approval of checks and grant drawdowns prior to their processing. The City’s Finance Department ultimately issues checks to vendors or implements reimbursement procedures from other government agencies after receiving the appropriate documentation that has been already reviewed and approved from FWDB.

Condition
A
s shown in Appendix C, FWDB had six contracts valued at about $231,452. Four of these six contracts had expired and one with the South Bay Workforce Development Board was renewed in December 2022. Depending on the type of contract, these contracts can have invoicing activity and/or payment activity. For payment activity, the City’s Finance Department staff reported delays in processing payments attributed to insufficient supporting documentation provided by FWDB, or the lack of payments requests submitted to the Finance Department. For instance, under one contract, invoices for a one-month period – about $56,000 – went unpaid for several months because FWDB did not submit payment requests. Similarly, FWDB has not submitted sufficient documentation to support the timely drawdowns of grant reimbursements from federal agencies.

Cause
FWDB has assigned responsibility to a management analyst to submit payment and drawdown related transactions to the City’s Finance Department. However, the City’s Finance Department staff reported having to work with four management analysts serving in the position which has led the FWDB staff to implement procedures inconsistently. Although FWDB or the City’s

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 13 Finance Department does not track the number of these occurrences, the City’s Finance Department staff reported frequent occurrences.

Effect
Inconsistent implementation of procedures for contract and grant management has led to: (1) FWDB vendors raising concern about timely payment of invoices; (2) improper issuance of checks through the accounts payable process rather than the grants management process that was subsequently caught and corrected by the City Finance Department staff, and (3) direct intervention by FWDB program administrators to expedite check processing without FWDB Finance staff involved.

Recommenda
tion

11. The FWDB Executive Director should establish a checklist and timetable for subsequent management analyst use that describe step-by-step procedures to follow when processing payments for contracts and/or grants.

Finding 5: FWDB should have better financial management of its operations.

Criteria
Title 20 CFR Subpart D, section 683.410 (a) requires that each recipient and subrecipient of Title I WIOA funds – including FWDB – conduct regular oversight and monitoring of its WIOA funded programs, recognizing that serving program participants relies in part on effective management of funding.

Condition
In FY 2020-21, FWDB did not receive all the revenue for which it had budgeted, resulting in about $2.84 million less than anticipated. Similar outcomes occurred in FY 2019-20, suggesting that FWDB’s budget process is not effectively implemented. For example, budget estimates were not based on historical activity, and likely did not include effective budget activities that confirmed the awarding of the anticipated revenues with the respective agency. See Figure 2 showing the levels of revenue anticipated that were not received.

Figure 2: Budget Comparison Schedule – General Fund ISON SCHEDULE - GENERAL FUND FY 2019-20 FY 2020-21

BUDGET ACTUAL VARIANCE BUDGET ACTUAL VARIANCE
Budgetary fund
balance, July 1 (921,047) (921,047) 0 (749,493) (749,493) 0 Resources (Inflows)
Intergovernmental 6,601,252 3,122,120 (3,479,132) 7,380,363 4,548,237 (2,832,126) Other revenue 10,000 0 (10,000) 10,000 0 (10,000)
TOTAL 6,611,252 3,122,120 (3,489,132) 7,390,363 4,548,237 (2,842,126) Changes to
appropriations
(Outflows)
Workforce
development 7,353,730 2,950,566 4,403,164 7,887,258 3,675,439 4,211,819

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 14 TOTAL 7,353,730 2,950,566 4,403,164 7,887,258 3,675,439 4,211,819 Budgetary Fund
Balance, June 30 (1,663,525) (749,493) 914,032 (1,246,388) 123,305 1,369,693 Cause
FWDB had one senior finance manager position and another lower-level finance position intermittently vacant throughout fiscal years 2019-20 and 2020-21. With these positions vacant, account staff at the City’s Finance Department assumed some day-to-day responsibilities to provide continuity in billing and support payments, but other managerial responsibilities had not been performed, especially the monitoring of available funds. Although the Economic Development Director in place during this time period gave complete autonomy to the FWDB Executive Director to manage and oversee operations, the activities that occurred were not enough to compensate for the gap in financial management.

Effect
Without the filling of FWDB positions to conduct budget monitoring and financial management, FWDB ultimately did not spend all the funds that it had received in FY 2019-20 and FY 2020-21 totaling $254,548 and $245,980, respectively. In 2022, the City of Pasadena’s Economic Development Director, the division responsible for overseeing FWDB, took action to establish routine meetings with FWDB executive management and finance staff to monitor fund availability, but challenges occurred early on with FWDB meeting attendance.

Recommendation

12. For the next budget year, the FWDB Executive Director should work with the Economic Development Director to develop a budget that adjusts expected revenues accordingly by applying a three-year historical analysis of programmatic funding and verifying the award of expected funding sources, such as contracts and grants for more accurate revenue projections.

Finding 6
: FWDB needs to monitor whether the services it delivers are in the best interest of the local communities participating in the Joint Powers Agreement.

Criteria
The JPA requires that FWDB provide the services that are in the best interest of the communities served by the JPA. The JPA does not define what are its best interests.

Condition
FWDB has program participants that reside within, as well as outside of, the JPA communities.

The proportion of FWDB’s program participants residing within the JPA communities is unknown. Reports are not prepared showing the geographic origin of its program participants even though FWDB has the capability to do so.

Cause
FWDB enrolls both residents within and outside of the JPA communities because WIOA does not prohibit Local Boards – like FWDB – from serving persons residing outside of their

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 15 workforce development area. However, the WIOA does not contain requirements preventing FWDB from establishing preferential goals for providing services to JPA residents.

Effect
FWDB is not complying with the intent of the JPA when it does not monitor the number of residents served originating from the JPA communities.

Recommendation

13. The FWDB Executive Director should work with the Board to establish goals that set the proportion of residents from JPA communities to be served by FWDB.

14. The FWDB Executive Director should prepare reports and report to the Board on the number
of program participants residing within and outside the geographic boundaries of the JPA communities.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 16 Finding 7: FWDB needs full compliance with the requirement to timely disseminate meeting minutes.

Criteria
The JPA requires FWDB to keep minutes of its meetings (regular, adjourned regular, and special) and, as soon as possible after each meeting, disseminate meeting minutes.

Government transparency is the duty governments have to be clear, accountable, and truthful with citizens about operations as a whole.

Condition
FWDB did not consistently comply with the Brown Act requiring the timely dissemination of meeting minutes for CY 2022. In this year, FWDB did not prepare and post the meeting minutes until November 2022, for a regular Board meeting that was conducted in May 2022.

Cause
The FWDB staff responsible for preparing and posting meeting minutes had separated employment from the City and the next staff person tasked with the responsibility did not have sufficient training to complete the task.

Effect
FWDB experienced inadequate transparency for about six months due to the late posting of the meeting minutes. According to Pasadena City officials, the statute of limitations for legal accountability over the matter has lapsed.

Recommendation

15. The FWDB Executive Director should cross-train staff to prepare Board agendas and minute meetings to avoid untimely posting of meeting minutes if employee availability challenges occur.

Finding 8
: FWDB has made some progress at accomplishing four strategic goals in its work plan.

Criteria
Each Local Board is required to develop and implement a multi-year Work Plan that establishes strategic goals and priorities.

Condition
FWDB has complied with the requirement to establish a multi-year work plan for 2021-2024.

The goals and priorities established are:
• Address the lack of digital equity in FWDB communities.3 3 The FWDB Work Plan states that economic disparity directly affects access to the web and the information, services, and resources it affords. Communities and individuals who lack internet/broadband access, hardware, and digital technology skills experience a huge opportunity gap that impacts their ability to learn, work, and achieve economic self-sufficiency.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 17 • Prioritize local business and job services.4
• Adopt a h
olistic approach to supporting communities in recovery.5 • Plan work
force strategies to improve equity.6
For each of
the goals established, the Work Plan describes general concepts of work to be performed but does not offer a detailed strategy on how each goal will be accomplished. Of these four goals, FWDB had made limited progress at the time of our review to accomplish each of them.

Goal 1 – Address the lack of digital equity in FWDB communities.

Activities implemented to date include the purchase of a vehicle to use as a mobile hotspot when visiting local communities, but it has not yet been equipped for use. The FWDB has plans to utilize a second vehicle that was purchased in the past, but it has not yet been equipped to hold pop-ups and other materials for job fairs. In a December 2021 Local Board meeting, the Executive Director reported that only one vehicle would be used. Other than the recent purchase of the one vehicle, no other activities, planned or implemented, were identified to address digital access outside of FWDB’s current partners, such as the California Employment Development Department.

Goal 2 – Prioritize local business and job services.

FWDB had a gap in the services provided to the business sector in 2021 through mid-2022 because the FWDB Business Services Manager left the agency, without anyone assuming these program responsibilities. As a result, FWDB had not expanded the number of businesses willing to support FWDB with employment opportunities to program participants. At the time of review, FWDB had 20 agencies across 46 locations supporting the Adult Career Services Program, which had not grown for several years according to FWDB program staff.

FWDB contracted with a vendor in June 2022 to administer Rapid Response, Lay Off Aversion, and Business Services Assistance to support the State’s vision for a high road economic strategy that emphasizes high quality jobs, environmental sustainability, and broad access to opportunities for a diverse set of businesses and workers. Also, FWDB re-engaged in efforts to conduct outreach to businesses in four of the five JPA communities, visiting local Chambers of Commerce, hiring agencies, and community libraries to assess their needs and to coordinate services. FWDB also had begun focusing on job services, participating in six job fairs sponsored by other local communities and organizations that included 227 contacts with potential program participants as well as sponsoring one job fair of its own in 2022 with 33 persons 4 Under WIOA, local workforce development boards must consider the input and feedback of businesses. These businesses, or potential employing organizations, inform and guide the workforce system to help align the services of the Local Board to the workforce needs of the community. 5 FWDB’s Work Plan states that its local boards and the workforce system partners should devise a local recovery strategy to address the full range of needs being experienced in local communities, including employment, housing, medical services, mental health, food, transportation, childcare, and more. 6 FWDB’s Work Plan states that to improve workforce-related equity, diversity, inclusion, and access, the workforce system partners need to be intentional in their efforts and develop a plan to guide their action.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 18 attending. In total, 260 people were in contact with FWDB personnel at these seven events.

FWDB does not know or track the number of these participants that enrolled in a FWDB program and found employment, or received training through these events, because FWDB does not have internal systems in place to track this information.

Goal 3 – Holistic approach to supporting communities in recovery.

Limited progress has also been made at the time of our review in implementing a holistic approach to supporting communities in recovery. Virtually all of the FWDB staff reported their lack of knowledge of, or involvement in, implementing a holistic approach to supporting communities in recovery or in the planning of workforce strategies to improve equity. Only the new FWDB Marketing Coordinator explained that she is working to build the program by determining community needs to develop a plan. The FWDB Executive Director explained FWDB is working with the business services subcommittee and chair of the subcommittee as well as the contractor responsible for Business Support Services to set plans to expand business services outreach and work with the incumbent worker program. The 2023 Modification to the 2021-2024 Work Plan states that the FWDB and its partners need to develop a local strategy to address the full range of needs in the community.

Comparatively, other Local Boards structure operations differently to meet Work Plan goals. Of the three other Local Boards that we assessed – San Luis Obispo County, Monterey County, and the City of Long Beach – two had notably addressed their goal to support communities in a holistic way by integrating their workforce development program with county wide priorities.

For instance, one Local Board is in the process of hiring a regional coordinator and the other established a job training program to attract people to work in the County’s public health department.

Goal 4 – Plan for workforce strategies to improve equity FWDB made limited progress in the creation of a plan for workforce strategies to improve equity. With plans to conduct four to five meetings with community stakeholders, FWDB had held one to-date at the time of this review, on December 6, 2022, with the meeting purpose to discuss unconscious bias. FWDB also had plans in progress to conduct similar training with FWDB and local staff of the California Employment Development Department. The FWDB stated in its draft biennial modification to the 2021-2024 plan that training needs to take place internally and with its partners to increase knowledge and effectiveness of diversity, equity, and inclusion prior to accomplishing equity throughout the workforce system. The updated plan, however, does not establish measurable goals for assessing how well the FWDB has improved equity or details how equity will be accomplished throughout the workforce system. More work will need to be done by the FWDB on defining how it plans to accomplish this goal.

Cause
FWDB had made limited progress at completing the goals established in its Work Plan. This is evident because FWDB had not developed detailed plans, such as a detailed project management plan, to better guide their completion. A project management plan provides specific information on how goals and other objectives will be accomplished, by detailing the tasks to be completed. Project management plans also allow for the easier completion of goals

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 19 and objectives, through the creation of a timeline for task completion and the assignment of staff member responsibility for each task.

Effect
Without having clear documentation and direction on the activities needed to complete established goals and objectives, goal completion is at risk of further delay and/or failure.

Although a marketing and outreach plan is under development, no date has been set for its completion, according to the new coordinator.

Recommendations

16. The FWDB Executive Director should establish performance measures that assess the effectiveness of the goals established in the 2021-2024 Work Plan.

17. The FWDB Executive Director should prepare a detailed project management plan that describes the tasks and activities required to accomplish each goal within the 2021-2024 Work Plan, the person(s) assigned to complete each task, the estimated timeframe for completion, and track the percentage completion of the project management plan.

18. The FWDB Executive Director should report on the progress of completion of the project management plan to the FWDB Board and Economic Development Director.

Finding 9: FW
DB has had mixed success at accomplishing agreed upon performance goals with the State of California.

Criteria
Section 116 of WIOA establishes performance accountability indicators and performance reporting requirements to assess the effectiveness of the State and Local Boards in achieving positive outcomes for individuals served by the workforce development system's core programs. Core programs administered by Local Boards, including FWDB, are:
• Adult,
• Dislocated Worker,
• Youth programs, and
• Employment Service program.

Under WIOA, California requires all Local Boards to collect and report information on all the participants and report on key measures. These measures include:

1. Employment rate after 2nd quarter exits: The percentage of participants who are in unsubsidized employment during the second quarter after exit from the program; the percentage of program participants who are in education or training activities, or in unsubsidized employment, during the second quarter after exit from the program.

2. Employment rate after 4th quarter exits: The percentage of participants who are in unsubsidized employment during the fourth quarter after exit from the program; the percentage of program participants who are in education or training activities, or in unsubsidized employment, during the fourth quarter after exit from the program.

3. Median earnings: The median earnings of participants who are in unsubsidized employment during the second quarter after exit from the program.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 20 4. Credential attainment: The percentage of those participants enrolled in an education or training program excluding those in on-the-job training (OJT) and customized training who attain a recognized postsecondary credential or a secondary school diploma, or its recognized equivalent, during participation in or within one year after exit from the program.

5. Enrollment in more than one program: The percentages of program participants enrolled in more than one program.

6. Measurable skill gain: The percentage of program participants who, during a program year, are in an education or training program that leads to a recognized postsecondary credential or employment and who are achieving measurable skill gains, defined as documented academic, technical, occupational, or other forms of progress, towards such a credential or employment.

7. Participants served: Number of persons served under the Workforce Opportunity and Innovation Act (WIOA) funded programs.

8. Participants exiting the programs: Number of persons exiting from programs.

9. Effectiveness in service employers: Retention, repeat business of employers and penetration rate of employers supporting Local Boards. This measure has not been formally established and reporting by Local Boards is voluntary. The 2021 California WIOA Annual Report did not include FWDB information for this measure.

For five of the nine measures, each Local Board negotiates with the State of California the performance targets to accomplish for each of its funded programs.

Condition
Three WIOA Title I funded program had varying levels of performance For FY 2021, FWDB exceeded the negotiated targets established for four of the five performance measures established under the WIOA Title I Adult Program. These four measures include:
• the percentage of people who retained employment after one year (Employment Rate Q4),
• accomplishing median earnings of over $7,900 for program participants, (Median Earnings)
• having over half of program participants receive some type of credential or certification (Credential Rate), and,
• having about 81 percent of program participants attain some type of measurable skill gain (Measurable Skill Gain).

FWDB did not perform as effectively for some of these measures under the Title I Youth Program and Title I Dislocated Worker Program. For these two programs, FWDB met fewer of the goals established in comparison to the WIOA Title I Adult Program. See Figures 3-5 below.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 21 Figure 3: FWDB
Performance Data, Program Year 2021 TITLE I ADULT PROGRAM ONLY Figure 4: FWDB
Performance Data, Program Year 2021 TITLE I YOUTH PROGRAM Figure 5: FWDB
Performance Data, Program Year 2021 TITLE I DISLOCATED WORKER PROGRAM Source of data: TAP Interna�onal and htps://cwdb.ca.gov/wp-content/uploads/sites/43/2022/11/2021-WIOA- Annual-Report_Final_ACCESSIBLE.pdf?emrc=39b597
FWDB Ranked High to Low Compared to Other Local Boards
When comparing FWDB’s overall performance to 44 other Local Boards located in California,7 FWDB, designated previously by the State of California as a high performing board, ranked among the top 10 for two of the nine performance measures: “Enrolled in More than One Core Program:” and “More than Half of Program Participants Exceeding the Median Income Goal of $7,000. See Figure 6. The measure “Enrolled in More than One Core Program” provides the ability of Local Boards to help an individual through different programs. FWDB had one participant enrolled in six different programs for Fiscal Year 2020-21 and six different programs 7 The Auditor compared and ranked FWDB performance with 44 other Local Boards operating in California across all nine performance measures for the Title I Adult Program only. Comparing FWDB with other larger programs is appropriate in this case, because each Local Board tracks and reports on the same metrics – many of them on a percentage basis, which allows for comparison.

Performance Employment
Rate Q2
Employment
Rate (Q4)
Median
Earnings
Credential Rate Measurable
Skill Gain
Negotiated
Performance
Goal

76.9 % 66.0% $7,900 60.0% 30.0%
FWDB – Program
Year 2021
69% 70% $9,483 73.9% 80.6%
Performance Employment
Rate Q2
Employment
Rate (Q4)
Median
Earnings
Credential Rate Measurable
Skill Gain
Negotiated
Performance
Goal
76% 71% $3,500 70.0% 60.0%
FWDB – Program
Year 2021
60% 83.3% $310 100% 83.3%
Performance Employment
Rate Q2
Employment
Rate (Q4)
Median
Earnings
Credential Rate Measurable
Skill Gain
Negotiated
Performance
Goal
75 % 72.5% $9,100 60.0% 50.0%
FWDB – Program
Year 2021

64.7% 55.0% $12,433 89.6% 37.1%

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 22 in FY 2021-22, which made the participant eligible to receive over $4,000 in rent payments under three different grant funded programs, exceeding the threshold limit of $1,000.

Figure 6: FWDB Top Ranked Measures, 2021
Performance Measure Reported Performance 2021 Ranking in comparison to 44 other Local Boards
Enrolled in More than One Core
Program

87.6% 5
Median earnings $9,124 10
Source of data: TAP Interna�onal analysis and htps://cwdb.ca.gov/wp-content/uploads/sites/43/2022/11/2021- WIOA-Annual-Report_Final_ACCESSIBLE.pdf?emrc=39b597
FWDB ranked in the bottom 10 for another two measures. See Figure 7.

Figure 7: FWDB Bottom Ranked Measures,2021
Performance Measure Reported
Performance
2021 Ranking in comparison
to 44 other Local Boards
Participants Served 97 persons 38
Participants Exited 31 persons 43
Source of Data: TAP International and htps://cwdb.ca.gov/wp-content/uploads/sites/43/2022/11/2021-WIOA- Annual-Report_Final_ACCESSIBLE.pdf?emrc=39b597
For the measure, “Number of Participants Served,” FWDB ranked 38 among 44 other local boards. In 2018, FWDB served 204 participants in the WIOA Title I Adult Program and in 2021, FWDB had served 96 participants. See Figure 7.

The sam
e downward trend had occurred with the Title I Youth Program and the Title 1 Dislocated Worker Program, as shown in Figures A1 to A5 in Appendix A. 204
121 82
96 84
79 28
31 0
50 100
150
200
250
2018 2019 2020 2021
Figure 7: WIOA Title 1 Adult Program, Career Services
ADULT Total Persons Served ADULT Total Persons Exited

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 23 The measure, “Number of Program Participants Exiting the Adult Program” inherently conflicts with the measure, “Enrolled in More than One Core Program.” To be successful in these two goals would require lower performance of the other measure. California State Employment Development Department officials said that while multiple enrollment offers Local Boards flexibility to help program participants, it is not intended to serve as a means to provide continuous support, explaining that enrolling program participants in multiple programs should serve as short-term assistance until the program participant becomes employed.

For the remaining five performance measures, FWDB ranked in the middle tier of Local Boards, ranging from 13th to 33rd. See Figure 8. FWDB fell below its 2021 negotiated goal of 76.9 percent of participants who are in unsubsidized employment during the second quarter after exit from the program and more FWDB program participants were less likely to retain employment up to one year after exiting the program in comparison to other Local Boards.

Figure 8: FWDB Middle Ranked Performance Measures, 2021 Performance Measure Reported Performance 2021 Ranking in comparison to 44 other
Local Boards
Percent receiving training related
employment

14.3% 30
Employment rate (Q2) 64% 20
Employment rate (Q4) 70% 13
Credential rate 74.7% 19
Measurable Skill Gain 80.6% 12
Source of Data: TAP International and htps://cwdb.ca.gov/wp-content/uploads/sites/43/2022/11/2021-WIOA- Annual-Report_Final_ACCESSIBLE.pdf?emrc=39b597
Cause
Three key factors contributed to FWDB’s varied program performance. First, the agency’s Board has not established policies and subsequent priorities to guide the day-to-day activities of management and staff. Having such guidance will facilitate the efforts of FWDB to focus on those metrics important to the JPA communities. For instance, providing guidance on whether to enroll program participants in more than one program as a priority over recruiting and assisting as many new applicants as possible.

Secondly, FWDB does not administer a uniform and consistent approach to case management.

Key steps in case management include: (1) obtaining the client’s history; (2) developing a plan that describes the goals for the participant to accomplish; (3) obtaining agreement that the program participants understand the outcomes that are to be achieved; and (4) tracking the program toward accomplishing the participants’ goals. Each case manager described a different approach to implementing case management, explaining their many years of experience guide the advice offered to program participants. For example, one case manager reported encouraging program participants to take truck driving lessons and discourages them from

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 24 seeking professions, such as phlebotomy (blood drawer), while another case manager reported encouraging phlebotomy as a career. In addition, FWDB does not routinely share program performance reports with case or program managers. Case or program managers also do not request the information.

Sharing information routinely to all case managers allows case managers to identify the successes and weaknesses of their activities, which could influence how case managers prepare their individual plans for program participants.

Finally, FWDB has a low level of program participants entering and exiting the WIOA Title I Adult Program because of re-enrollment of program participants and ineffective outreach and recruitment activities that occurred between FY 2019-2020 and FY 2020-2021.

Effect
FWDB has operated without consistent and uniform priorities established for Program staff to accomplish, which has led to declining enrollment across the programs. For one program, WIOA Title 1 Youth, the low level of participants reported to the State in 2021 raises questions about its viability for the long term without an influx of program participants.

Recommendations

19. The FWDB Board should choose and prioritize performance measures for FWDB to improve upon.

20. The FWDB Executive Director should restructure and set performance expectations for case managers. For example, the Executive Director should prepare expectation setting forms that document the case manager’s specific roles and responsibilities and align the expected performance goals to participant outputs and outcomes.

21. The FWDB Executive Director should routinely prepare, disseminate, and act upon, if necessary the results of monthly performance reports, by case manager, that assess the current job status of clients, training completion rate, initial job placement rate, job placement rate for persons lasting six months or more, and average number of program contacts with program participants and prepare management plans to improve performance.

22. To address declining enrollment among the WIOA Title I programs, the FWDB Executive Director should submit an outreach plan designed to increase enrollment within one year.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 25 Appendices

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 26 APPENDICES
Appendix A: Total Persons Served by WIOA Title I Funded Programs Source of Data: TAP International analysis of FWDB performance reports.

Source o
f Data: TAP International analysis of FWDB performance reports. 164
94 69
77 64
56 20
18 0
20 40
60 80
100
120
140
160
180
2018 2019 2020 2021
A1: WIOA Adult Title I Training Services
Total Persons Served Total Persons Exited
173
113
60 84
49 80
6 18
0 20
40 60
80 100
120
140
160
180
200
2018 2019 2020 2021
A2: WIOA Title 1 Dislocated Worker, Training Services
Total Persons Served Total Persons Exited

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 27 Source o
f Data: TAP International analysis of FWDB performance reports.

Source o
f Data: TAP International analysis of FWDB performance reports. 193
123
68 95
58 88
11 22
0 50
100
150
200
250
2018 2019 2020 2021
A3: WIOA Title 1 Dislocated Adult Program, Career Services Total Persons Served Total Persons Exited
23 3 1
10 24
3 1
00 5
10 15
20 25
30 2018 2019 2020 2021
A4 WIOA Title 1 Program, Youth Training Services
Total Persons Served Total Persons Exited

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 28 Source o
f Data: TAP International analysis of FWDB performance reports. 46 23
7 19
38 17
9 3
0 5
10 15
20 25
30 35
40 45
50 2018 2019 2020 2021
A5: WIOA Title 1 - Youth Career Services
Total Persons Served Total Persons Exited

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 29 Appendix B: Internal Control Framework with Recommended Action Management is responsible for developing, implementing, and monitoring an internal control system. Internal controls are policies, procedures, processes, and activities that when present and working effectively serve as a critical line of defense against fraud, waste, and abuse.

Figure B1 below shows the key components of the COSO framework for internal control and current gaps and other deficiencies in controls implemented by the FWDB. The COSO Internal Control Framework guides public agencies in relevant aspects of organizational governa nce, business ethics, internal control, business risk management, fraud, and financial reports. 8 Figure B1: Gaps and Deficiencies in FWDB operations.

Program Operations
Program Eligibility
Gaps/deficiencies in Internal
Controls
Recommended Action
• Absence of verification of
eligibility
• Absence of uniform
adherence of program
documentation
requirements.
• Prepare WIOA Adult, Dislocated Worker,
and Youth Eligibility Policy.
• Prepare Required Verification Documents
Eligibility Checklist.
• Assign the Eligibility Worker
responsibility for reviewing and
approving eligibility among the
programs.
• Prepare Selective Service Registration
Policy.
o Address Selective Service
Registration Who Must Register.
o Prepare Selective Service
Registration Knowing and Willful
Determination Form.
• Enhance the priority of service policy,
limiting enrollment into no more than
two programs for participants who have
been in the Program for two or more
years.
8 The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 30 Case Management
Gaps/deficiencies in Internal
Controls
Recommended Action
• Inconsistent implementation
of program implementation
activities.
• Absence of uniform case
management practice.
• Prepare On the Job Training (OJT) Policy.
• Establish Individual Training Accounts
(ITAs).
• Enhance Supportive Services Policy by
describing the types of expenses allowed
and not allowed.
• Develop case management handbook
that includes the following policies and
tools:
o WIOA Youth Program Elements
o Develop Work Experience Policy
o Develop Youth Incentives Policy
o Develop Transitional Jobs Policy
o Develop Incumbent Worker
Training Policy
o Develop Career Services Policy
• Review and approve each case
management plan.

Marketing
• Absence of a marketing
plan.
• The marketing plan under development
should tie to the broad strategic priorities
of the JPA communities.

Program Expenditures
Gaps/deficiencies in Internal
Controls
Recommended Action
• Limited adherence to support
payment policies
• Conduct training of FWDB employees
and finance staff on Supportive Services
Policies and Procedures.
• Prepare monitoring policies and
procedures that assigns responsibility to
the FWDB Finance Manager to review
the allowability of support payments and
verify program eligibility prior to
approval for payment.
• Prepare policies and procedures that
describe how support payments will be

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 31 audited for compliance with FWDB
policies and procedures.
• Absence of policies that
describe a specific allowable
and unallowable expense.
• Prepare support payment
reimbursement policies consistent with
federal cost allocation requirements.
• Insufficient review of travel
and expense reimbursement
request reports.
• Conduct training of employees and
FWDB finance staff of requirements in
the City’s Manual of Personnel
Administrative Rules.
• Absence of controls
reconciling payments with
participation lists.
• Distribute monthly
enrollment/participation lists to Case
Managers for review and approval.

Information and Communication (Program Monitoring)
Gaps/deficiencies in Internal
Controls
Recommended Action
• Absence of internal progress
reporting on participant
outcomes.
• Develop uniform case management
reports for data aggregation and
centralizing reporting at team meetings.
• Absence of routine sharing of
case management outcome
data with case managers .
• Distribute quarterly performance FWDB
performance reports to case managers
that shows results by case manager and
by the program as a whole.
• Absence of formal program
outcome reporting to FWDB
department staff.
• Share performance reports distributed to
the FWDB Board with program staff.

Performance
Gap/Deficiencies in Internal
Control
Recommended Action
• Gaps in establishing
operational priorities that
align with specific
performance measures
required by the state.
• The FWDB Board should set performance
priorities (e.g., reduce number of
persons co enrolled in other programs,
increase number of unique program
participants).
• Absence of effective
segregation of duty.
• Segregate the duties of the Youth
Program Manager and the Los Angeles
County Program to exclude case
management activities other than review
of participant plans, and preparation of
support payment requests.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 32 • Absence of detailed project
management plans for goal
accomplishment.
• Develop detailed project management
plans that outline detailed tasks to be
completed for goal accomplishment,
including assigning specified personnel to
accomplish each task.
• Absence of strategy to
develop alternative streams
for potential program
participants.
• Develop strategy document that outlines
new methods for attracting program
participants.
• Absence of formal tracking of
potential program
participants.
• Develop integrated business process that
identifies and tracks the outcome of
program participants recruited by the
FWDB to determine how far the
participant engaged with FWDB.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 33 Appendix C: FWDB Contracts
Contractor Contract # Contract Dates
Contract
Budget
Purpose
Vendor
Geographic
Location
Verdugo Consortium
/ City of Glendale
32170 4/1/2020 -
5/1/2022
12,999
Participation in
Regional Plan
Implementation 3.0
Glendale, CA
City of Los
Angeles/City of LA
Workforce
Development Board
32240 3/15/2022 -
12/31/2022
$28,055 Services to develop
regional initiatives
Los Angeles, CA
Propath, Inc. 32066

7/1/2020 -
8/30/2023
$74,999
Provide services as
the One-Stop
Operator for the
AJCC One-Stop
Centers located in
the FWDB Area.

Tehachapi, CA
Southeast Los
Angeles Workforce
Development Board
32024

5/1/2020 -
5/31/2022
$28,055
Participate in
Regional Plan
Implementation 3.0 Norwalk, CA
City of Long Beach
(Pacific Gateway
Workforce
Innovation Network)
32105

7/30/21 -
5/1/2022
$28,055 Participate in
Regional Plan
Implementation 3.0
Long Beach, CA
South Bay Workforce
Investment Board
31953

4/1/2020 -
8/31/2022
$59,289 Participate in
Regional Plan
Implementation 3.0 Hawthorne, CA

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 34 Appendix D: Background
What Communities Comprise the Foothill Workforce Development Board (FWDB)? FWDB originally served the City of Pasadena, Arcadia, Duarte, Sierra Madre, Monrovia, and South Pasadena through a Joint Powers Agreement (JPA) approved by these parties in 2000. In mid-2022, the City of Monrovia left FWDB to join the Los Angeles County Workforce Development Board.

The JPA designates the City of Pasadena as the grant recipient, fiscal agent, and Administrator for the consortium of cities participating in the Agreement providing the program administration necessary to implement the WIOA Program under the supervision and direction of the Policy Board of the FWDB. Specifically, FWDB is authorized to do all acts necessary for the exercise of said common powers for the common benefit of the cities participating in the Agreement consistent with federal and state funding provided under the Act, to acquire by lease buildings or sites, to make and enter into contracts, to employees’ agents and employees, to manage, maintain, operate any buildings, facilities, works or improvements, to incur debits, liabilities, or obligations. FWDB shall also establish and maintain funds and accounts as may be required by good accounting practice.

Objectives
The City of Pasadena contracted with TAP International (Auditor) in August 2022 to conduct a program audit of the City’s role as grant recipient, fiscal agent, and administrator for the program. The City asked the following:
(1) Are the internal controls designed to promote compliance with the key financial provisions of the JPA, City of Pasadena policies and procedures, and grant accounting requirements?
(2) Are the internal controls designed to promote compliance with the requirements in its role as administrator and provider of services as outlined in the JPA and other relevant governance documents?
(3) Is the Career Services Division implementing its programs and services consistent with the vision and intentions outlined in the Local Plan for program years 2021–2024? Scope and Methodology
To determine if internal controls are designed to promote compliance with the key financial provisions of the JPA, City of Pasadena policies and procedures, and grant accounting requirements, the Auditor:
• Assessed the presence of internal controls for procurement, travel request/reimbursements, payment requests and P-Card (Purchase Card) purchases, including determining the appropriateness of expenditures and adequacy of documentation, signature authority, and segregation of duties. • Interviewed FWDB management and staff on the implementation of and gaps in internal controls, including signing authority, review and authorization of transactions, and policies and procedures.
• Judgmentally selected 76 applicable payment transactions to evaluate the existence and effectiveness of controls established to facilitate compliance with JPA and other governance requirements. These transactions were selected across FY 2020-21 and FY

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 35 2021-22 and included transactions that represented the Adult Worker, Displaced Worker, and Youth Programs that included high, medium, and low dollar value transactions.

To determine if internal controls are designed to promote compliance with the requirements in its role as administrator and provider of services as outlined in the JPA and other relevant governance documents, the Auditor:
• Conducted a financial analysis of revenues and expenditures to determine how well revenues and expenditures are managed. The sources of information used for this analysis included audited financial statements for FY 2019-20 and FY 2020-21 of the Foothill Workforce Development Board.
• Examined all payable disbursements and revenue receipts incurred in FY 2020-21 and FY 2021-22.
• Examined budget vs actual expenses for Fiscal Year (FY) 2020-21 and FY 2021-22.

To determine if the Career Services Division implements its programs and services consistent with the vision and intentions outlined in the Local Plan for program years 2021–2024, the Auditor:
• Assessed and monitored compliance with the Brown Act for agenda and meeting minute postings by examining board agendas and meeting minutes. • Operationally reviewed FWDB by interviewing staff at levels to discuss the implementation of the JPA requirements, grant management, case management, and efforts to accomplish Local Plan goals.
• Examined program and case management effectiveness by analyzing performance reports for adults, dislocated adults, and youth.
• Examined contract management to determine if JPA cities are adequately served. • Compared FWDB activities to best practices and goals established by federal and state agencies. The analysis also included comparing FWDB to three other Workforce Development Boards: City of Long Beach, County of San Luis Obispo, and County of Monterey. We compared FWDB to these Local Program on program transparency examining the availability of application forms and documents, business resources guides, calendar of events, online free training resources, economic workforce research, communication of efforts to address the digital divide and to accomplish a holistic effort to support communities, content of Three-Year Work Plans, and Priority of Service Policies.
• Assessed the extent of completion for goals and objectives established in the Local Plan for Program Years 2021–2024 by FWDB, including comparing overall program performance for Program Year 2020 and 2021 to the other 44 Local Boards located in California against nine required performance measures.

Finally, this report includes a series of recommendations designed to enhance financial management, program operations, program reporting, marketing, program funding, and performance.

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Final Report: Management Action is Needed Across Key Financial, Operational, and Performance Area 36 We conducted this performance audit in accordance with Institute of Internal Auditor standards. Those standards call for planning and conducting the audit to obtain sufficient and appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

The City, as program administrator of the FWDB, in its review of the draft audit report, agreed with all the audit recommendations. See Attachment A.

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ATTACHMENT A: Agency Comments
37 MEMORANDUM
To: Ruthe Holden and Rebecca Takahashi, Internal Audit Division From David A. Klug, Economic Development Director
Date: November 21, 2023
Re: Program Audit of the City of Pasadena as Program
Administrator of the Foothill Workforce Development Board On April 25, 2023, the Economic Development Division received email correspondence from Ruthe Holden containing a draft Program Audit of the City of Pasadena as Program Administrator of the Foothill Workforce Development Board. The Audit report describes nine audit findings and 22 recommendations for improvement of FWDB’s financial management, operational, and program performance areas. The report also describes a suggested framework to enhance internal operations.

Upon review and discussion with the Executive Director, of the Foothill Workforce Development Board and Career Services Division Administrator, I concur with the recommendations and believe they constitute best practices relative to effective policies designed to enhance accountability and establish internal controls.

Overall, Career Services Division is committed to improving their programs and strengthening their internal controls. The Executive Director requested an internal controls workshop be conducted for her office. On September 26, 2023, the Executive Director and her staff participated in an Internal Controls Training workshop facilitated by the Deputy City Manager and the Manager of Internal Audit.

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ATTACHMENT A: Agency Comments
38 Recommendation
Number
City of Pasadena Audit/ Career Services
Division/Foothill Workforce Development
Board/Description of
Finding/Recommendation
Career Services Division/ Foothill Workforce
Development Board/Proposed Corrective Action
Date Corrective
Action Will be
Implemented
1 The FWDB Executive Director should assign
responsibility to one individual staff person
for the assessment and approval of the
eligibility of program applicants.

Concur – The Career Services Division Case
Manager will be responsible for the assessment
and approval of the eligibility of program
applicants.
1/2024
2 The FWDB Executive Director should (a)
develop enrollment and (b) establish
procedures for periodic Executive Director
review of the completed enrollment forms to
verify compliance with program
enrollment requirements.

Concur – a. The State of California Employment
Development Department CalJOBS system
application already has a required signature line
that requires a Career Services Division staff to sign
that they reviewed and approved the prospective
participant for program participation.
b. Once a month, FWDB MIS Staff will review a 30%
random sample of all program files to verify
compliance with program enrollment
requirements.
11/2023
3 The FWDB Executive Director should add
controls to require the FWDB Finance
Manager to check participant program
eligibility prior to approving support services
payments.

Concur - The FWDB Budget Analyst can check
participant program eligibility prior to approving
support services payments via CalJOBS. The FWDB
Budget Analyst can add a case note in CalJOBS
identifying he has reviewed the file.
11/2023
4 The FWDB Executive Director should
segregate check request preparation and
review/approval responsibilities at FWDB.

Case managers can submit requests, but the
Concur - FWDB Executive Director will work with
FWDB Budget Analyst to develop policy to
facilitate recommendation.
12/2023
November 6, 2023

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ATTACHMENT A: Agency Comments
39 FWDB Finance Staff should review and
approve check requests.
5 The FWDB Executive Director should add
criteria to existing policy on the types of
support service expenses unallowed for
reimbursement and issue the updated policy
to all FWDB staff, with each attesting to the
receipt and understanding.

Concur – The FWDB Budget Analyst will add the
types of support service expenses unallowed for
reimbursement and issue the updated policy to all
FWDB staff, with each attesting to the receipt and
understanding.
11/2023
6 The FWDB Executive Director should
maintain a master spreadsheet of program
participants to track support payments
issued to prevent exceeding the $1,000 limit.

Concur - Through an action item vote by the FWDB
Executive Committee by the FWDB has increased
the limit on support services to $2,000. FWDB
Administrative Support will maintain a master
spreadsheet of program participants to track
support payments issued to prevent exceeding the
$2,000 limit.
11/2023
7 The FWDB Executive Director should
implement the controls recommended in
Appendix B, Figure B1.

Concur - The FWDB Executive Director will discuss
with the FWDB and FETC Policy Board the items
recommended in Appendix B, Figure B1.

The FWDB Executive Director will work with the
FWDB Ad Hoc Operations Committee to assist in
the review, discussion, vote and adaptation of the
recommendations in
Appendix B, Figure B1.

Following their recommendation, operational
policies and procedures will be developed
accordingly.
06/24
8 The FWDB Executive Director should
establish stronger segregation of duty by
Concur – The FWDB Executive Director will work
with the FWDB Ad Hoc Operations Committee to
06/24

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ATTACHMENT A: Agency Comments

40 clearly dividing program administration
responsibilities to program managers and
program implementation activities to case
managers.
establish stronger segregation of duties by clearly
dividing program administration responsibilities to
program managers and program implementation
activities to case managers.
9 The FWDB Executive Director should reassign
review and approval of check requests for
support payments to an individual(s) other
than case managers, such as the FWDB
Finance Manager.

Concur – The FWDB Finance Manager will review
and approve check requests for
support payments.
11/23
10 The FWDB Executive Director should assign
full responsibility to one individual for
reviewing and approving the eligibility of
applicants for FWDB programs. The FWDB
Executive Director should formally assign
responsibility for case managers to prepare
check requests for support payments and
assign different individuals, such as the
FWDB Finance Manager to review and
approve the allowability of the requested
payment including verifying program
eligibility of the program participant.

Concur - The FWDB Executive Director will assign
full responsibility to one individual for
reviewing and approving the eligibility of
applicants for FWDB programs.

The FWDB Executive Director will formally assign
responsibility for case managers to prepare
check requests for support payments.

FWDB Finance Manager will review and approve
the allowability of the requested payment
including verifying program eligibility of the
program participant.
12/23
11 The FWDB Executive Director should
establish a checklist and timetable for
subsequent management analyst use that
describe step -by-step procedures to follow
when processing payments for contracts
and/or grants.

Concur - FWDB Budget Analyst will establish a
checklist and timetable. that describes step -by-
step procedures to follow when processing
payments for contracts and/or grants. FWDB
Budget Analyst will solicit assistance from COP
Finance and Purchasing. FWDB Budget Analyst will
also establish and maintain a tracking sheet to use
between FWDB, Finance and Purchasing
3/24

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ATTACHMENT A: Agency Comments
41 12 The FWDB Executive Director should work
with the Board to establish goals that set the
proportion of residents from JPA
communities to be served by FWDB.

Concur - This matter will be brought to the
attention of the Foothill Workforce Development
Board and Foothill Employment and Training
Consortium Policy Board for their consideration
and action.
6/24
13 The FWDB Executive Director should prepare
reports and report to the Board on the
number of program participants residing
within and outside the geographic
boundaries of the JPA communities.

Concur - The FWDB MIS Manager will prepare
reports and present to the Board on the number of
program participants residing within and outside
the geographic boundaries of the JPA
communities.
12/23
14 The FWDB Executive Director should cross -
train staff to prepare Board agendas and
minute meetings to avoid untimely posting
of meeting minutes if employee availability
challenges occur.

Concur - FWDB Executive Director will assign a
Senior Administrative Specialist (primary staff) and
an Administrative Specialist (secondary staff) to
work together to prepare board meeting agendas,
minutes and other Brown Act required tasks or
items.
12/23
15 The FWDB Executive Director should
establish performance measures that assess
the effectiveness of the goals established in
the 2021-2024 FWDB Local Plan.

Concur - The FWDB Executive Director will discuss
with the FWDB and FETC Policy Board the
establishment of FWDB Local Plan goals that can
determine the effectiveness of the goals
established in the 2023 Biennial Work Plan.
6/24
16 The FWDB Executive Director should prepare
a detailed project management plan that
describes the tasks and activities required to
accomplish each goal within the 2021 - 2024
Work Plan, the person(s) assigned to
complete each task, the estimated
timeframe fo r completion, and track the
percentage completion of the project
management plan.

Concur - The FWDB Executive Director will work
with the FWDB Ad Hoc Operations Committee to
prepare a plan that describes the tasks and
activities required to accomplish goals established
in the 2023 Biennial Work Plan.
3/24

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ATTACHMENT A: Agency Comments
42 17 The FWDB Executive Director should report
on the progress of completion of the
project management plan to the FWDB
Board and Economic Development Director.

Concur - The FWDB Executive Director will report
on the progress of completion of the project
management plan to the FWDB Board and
Economic Development Director.
3/24
18 For the next budget year, the FWDB
Executive Director should work with the
Economic Development Director to develop
a budget that adjusts expected revenues
accordingly by applying a three -year
historical analysis of programmatic funding
and verifying the award of expected funding
sources, such as contracts and grants for
more accurate revenue projections.

Concur - For the next budget year, the FWDB
Executive Director will work with the City of
Pasadena Finance Department and FWDB Ad Hoc
Operations Committee to develop a budget that
adjusts expected revenues accordingly by applying
a three -year historical analysis o
f programmatic
funding and verifying the award of expected
funding sources, such as contracts and grants for
more accurate revenue projections when
applicable.
6/24
19 The FWDB Board should choose and
prioritize performance measures for FWDB
to improve upon.

Concur - This matter will be brought to the
attention of the FWDB Ad Hoc Operations
Committee for discussion and action.
3/24
20 The FWDB Executive Director should
restructure and set performance
expectations for case managers. For
example, the Executive Director should
prepare expectation setting forms that
document the case manager’s specific roles
and responsibilities and align the expected
performance goals to participant outputs
and outcomes.

Concur - The FWDB Executive Director and
appropriate staff will implement with support from
the City of Pasadena Human Resources
Department to facilitate.
3/24
21 The FWDB Executive Director should
routinely prepare, disseminate, and act
upon, if necessary, the results of monthly
performance reports, by case manager, that
assess the current job status of clients,
Concur - The FWDB Executive Director and
appropriate staff will work with the City of
Pasadena Human Resources Department to
facilitate.
6/24

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ATTACHMENT A: Agency Comments
43 training completion rate, initial job
placement rate, job placement rate for
persons lasting six months or more, and
average number of program contacts with
program participants and prepare
management plans to improve performance.
22 To address declining enrollment among the
WIOA Title I programs, the FWDB Executive
Director should submit an outreach plan
designed to increase enrollment within one
year.

Concur - FWDB staff develop and implement an
outreach plan including but not limited to:
 Hosting multiple career and training fairs
 Making use of the Mobile Training Unit and
Mini Outreach Vans by taking them on
vocational training and employment
recruiting tours specifically in underserved
and underrepresented communities.
 Providing business services designed to
help businesses find and hire the talent
needed as well as assisting them with
employee retention.
 Utilizing WIOA support services to assist job
seekers with obtaining and retaining
employment.
6/24

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INFORMATION ONLY
ITEM 11

11. INTRODUCTION TO ENTERPRISE RISK MANAGEMENT

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INFORMATION ONLY
ITEM 12

12. SWAP ANALYSIS

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Swap Analysis
December 11, 2023

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Swap was approximately $14 million and far exceeded any potential interest rate savings of refunding the VRDBs for fixed rate bonds. The City Council approved the staff recommendation to terminate the Swap with DEPFA Bank and enter into a new identical Swap with a financial institution with a qualified credit rating, Royal Bank of Canada (RBC).

Recently, s
taff requested the City’s Swap advisor to provide a current market analysis of the Swap. As of November 15, 2023 the market value of the Swap was $6 million, which represents the difference in future interest payments between the Swap rate of 3.536% and the current market rate for the duration of the life of the bonds. In other words, the termination value of the swap was $6 million.

The indepe
ndent Swap analysis below dated as of September 30, 2023 indicates that the Swap has performed better than expected and generated a synthetic fixed rate lower than the 3.536% fixed rate in the swap agreement. The below analysis presents the actual numbers, on an inception to date basis, since the swap agreement was put in place in 2006. The analysis further indicates that the City has saved a cumulative $958,495.18 in interest cost (basis differential), which resulted in a reduction of the synthetic fixed rate from 3.536% to 3.487%. Therefore, adding to the synthetic fixed rate the average 0.35% letter of credit fee and 0.07% remarketing fee paid on the bonds, the total synthetic fixed rate, or the actual financing rate on the bonds to date equals to 3.9%.

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Swap Analysis
December 11, 2023

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Current status of the swap and financing cost
Over the last 12 months and still continuing, the reset rates on the City’s Variable Rate Demand Bonds (VRDBs) have been much lower than the floating leg swap receipts (64% of LIBOR (now 64% of SOFR+11.44 bps)) resulting in total average interest costs close to

3.00% (rather than 3.9%) for those months. The below graph indicates this economic benefit to the City. The green line represents the variable rates paid by the City on its bonds and the orange line represents the variable rates received by the City from the swap agreement and the blue bars represent the economic benefit to the City in Dollars.

To furth
er illustrate this phenomenon, the below graph represents the spread differential between SIFMA, the average variable rate paid by AA rated tax-exempt issuers and the actual rates paid by the City on its VRDBs. It is evident that the City’s bonds have been remarketed at a much lower rate as compared to SIFMA in the last 18 months and still continue to do so; therefore, confirming the material financial benefits to the City.

RBC_01 / $133,000,000 02/01/34
Swap Receipts Total: 11,125,994.58$
Bond Interest Payments Total: (10,167,499.40)$
Basis Differential ($): 958,495.18$
Average of Difference: 6,389.97$
Average of Swap Floating Leg Reset Rate: 0.65977%
Average of Bond Coupon Rate: 0.61144%
Basis Differential (%): 0.04833%
Swap Fixed Payment Total: (58,929,699.54)$
Net Synthetic Fixed Payment on Bonds Total: (57,971,204.36)$ Swap Fixed Rate: 3.53600%
Net Synthetic Fixed Payment Rate on Bonds: 3.48767%

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Swap Analysis
December 11, 2023

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The graph
represents the difference in rates between SIFMA, which is the average AA rated variable rate bond in the market that resets every week, and the actual reset rates on the City of Pasadena bonds. Historically, these two rates have been almost the same and therefore the difference between the two was close to zero. There was one anomaly for a very short period of time when the pandemic began; however, in the last 18 months, SIFMA rates have been reset much higher than the City of Pasadena bond reset rates by as much as 2%. The larger the blue line, the greater difference between SIFMA and the City’s VRD bonds and therefore the greater the financial benefit to the City.

The total
financing cost of the City’s PCOC bonds inception to date was 3.9%. The current financing cost today is approximately 3% or less. The true interest cost of a refunding in today’s market, assuming the inclusion of the termination cost of the swap in the refunding will be approximately 4.25%.
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Historical SIFMA Spread To Pasadena VRDOs

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Finance CommitteeDecember 11, 2023

Finance Committee
December 11, 2023