Rocklin City Council
May 9, 2023

Reso. No. 2023-
and will continue to conduct its activities in accordance with applicable statutes and regulations governing the CDBG Program, as identified in the accompanying Certifications (Exhibit C).

Section 2. The City Council of the City of Rocklin hereby approves and authorizes the City Manager, or her designee, to execute and file the Application (SF 424 and SF 424D – Exhibit B), the Action Plan and Certifications, including all documents that are required to receive CDBG funding for and on behalf of the City of Rocklin.

PASSED AND ADOPTED this 9th day of May, 2023 by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:
____________________________________
Ken Broadway, Mayor
ATTEST:
___________________________
Hope Ithurburn, City Clerk
243

to Reso. No. 2023-
EXHIBITS A, B and C
A. 2023/2024 Final Annual Action Plan
B. SF 424 and SF 424 D
C. Certifications
244
FINAL
Fiscal Year (FY) 2023/2024 Annual Action Plan
HUD Entitlement: Community Development Block Grant
May 9, 2023
Public Review Period: January 27, 2023 – March 1, 2023
Draft Public Hearing: April 11, 2023 City Council Meeting Final Public Hearing: May 9, 2023 City Council Meeting

EXHIBIT A
245
Annual Action Plan
2023/2024
1 Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)

1. Introduction
The FY 2023/2024 Action Plan is a one-year plan to address the community development and low- and moderate-income housing needs in the City of Rocklin. The plan covers the period of July 1, 2023 through June 30, 2024. It is the fourth Action Plan in the implementation of the five-year 2020 – 2024 Consolidated Plan. Both the Consolidated Plan and the Action Plan are implemented by City staff. The City will receive $300,177 from the federal Community Development Block Grant (CDBG) program in FY 2023/2024.

The City also plans to meet its community development and housing needs using a variety of other funding sources, including the Low and Moderate Income Housing Asset Fund and the General Fund.

City staff encourages citizen participation throughout the Action Plan process. This includes consulting local organizations and encouraging public comment during the public review period and at the City Council public hearing to discuss the draft Annual Action Plan. Using research and input from the public, City staff formulated the objectives and outcomes that are briefly described below.

2. Summarize the objectives and outcomes identified in the Plan This could be a restatement of items or a table listed elsewhere in the plan or a reference to another location. It may also contain any essential items from the housing and homeless needs assessment, the housing market analysis or the strategic plan.

The City’s key objectives for the FY 2023/2024 program year are the following:
* Improve the quality of housing in Rocklin.
* Sustain a livable community by identifying issues and working with surrounding jurisdictions and local service providers to solve them.
* Encourage a range of services to help prevent homelessness and to help people move from homelessness to permanent housing, including emergency shelters as well as transitional and supportive housing.
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2 * Support infrastructure improvements in target areas and for the disabled population using Rocklin services.
* Encourage the provision of services to target-income individuals and families, including those with special needs such as youth, seniors, and persons with disabilities. *Encourage the provision of services to target-income individuals and families, including survivors of domestic violence, sexual violence, human trafficking and their non-offending family members.

3. Evaluation of past performance
This is an evaluation of past performance that helped lead the grantee to choose its goals or projects.

In FY 2022/2023, in recognition of the need to improve progress towards meeting the goal of serving target-income individuals and families, including survivors of domestic violence, sexual violence, human trafficking and their non-offending family members, the City funded public services that target these survivors. In recognition of the need to improve progress towards meeting the goal of serving seniors, the City funded public services that target seniors. In recognition of the need to improve progress toward meeting the goal of serving target-income children, adults and families with services to support recovery and healing from trauma, abuse and neglect, the City funded public serves that target these survivors.

4. Summary of Citizen Participation Process and consultation process Summary from citizen participation section of plan.

City staff encouraged citizen participation throughout the Action Plan process. The Notice of Funding Availability and anticipated schedule of events was published consistent with the City’s standard noticing practice, which included publication in The Placer Herald newspaper, on the City's website and distribution to the Placer Collaborative Network (PCN) and Placer Consortium on Homelessness (PCOH) e-mail lists on October 7, 2022.

A notice of the Draft Annual Action Plan availability, 30-day public review period (January 27, 2023 through March 1, 2023) and anticipated public hearing dates of April 11, 2023 for the draft plan and May 9, 2023 for the final Annual Action Plan was published on January 27, 2023. The Plan was available at the City of Rocklin Administration Building and on the City of Rocklin's website throughout the public review period and hearing process. To date, the City has not received any comments.

5. Summary of public comments
This could be a brief narrative summary or reference an attached document from the Citizen Participation section of the Con Plan.
247
Annual Action Plan
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3 This section will be completed after the May 9, 2023 public hearing has been conducted.

6. Summary of comments or views not accepted and the reasons for not accepting them This section will be completed after the May 9, 2023 public hearing has been conducted.

7. Summary
See above information.
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4 PR-05 Lead & Responsible Agencies – 91.200(b)

1. Agency/entity responsible for preparing/administering the Consolidated Plan Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source.

Agency Role Name Department/Agency
Lead Agency ROCKLIN
CDBG Administrator ROCKLIN City of Rocklin
HOPWA Administrator
HOME Administrator
HOPWA-C Administrator
Table 1 – Responsible Agencies
Narrative (optional)
The City of Rocklin is responsible for administering the Consolidated Plan and the Annual Action Plans.

Consolidated Plan Public Contact Information
Laura Webster
Director of Long Range Planning and Housing
Community Development Department
City of Rocklin
3970 Rocklin Road
Rocklin, CA 95677
[email protected]
(916) 625-5161
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5 AP-10 Consultation – 91.100, 91.200(b), 91.215(l)

1. Introduction
The preparation of the FY 2023/2024 Annual Action Plan included consultation with and coordination among government agencies, private groups (for-profit and non-profit) and individuals. The Rocklin Fire Department was one of the organizations who participated in the outreach/consultation process for the Con Plan. The City will continue to include consultation with the Fire Department during preparation of the AAP, to discuss improved coordination related to disaster resiliency, annually moving forward. Opportunities for public participation were offered throughout the Action Plan process.

Residents, service providers and other interested parties were invited to provide comments on the Annual Action Plan by submitting written comments, email, calling City staff or attending the public hearings.

Notice of the planning process was posted in public places, announced on the City's website, distributed to PCN and PCOH e-mail lists and officially noticed in The Placer Herald newspaper.

Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(l))
The City of Rocklin will continue to coordinate with the Roseville Housing Authority, which provides Section 8 vouchers to Rocklin residents. In addition, the City will maintain its relationship with the various governmental health, mental health and service organizations within Placer County. Placer County's Adult System of Care partners with agencies in Placer County to assist adults and older adults achieve their optimal level of self-sufficiency and independence by providing mental health services, substance abuse treatment and in-home support services. City staff created and keeps updated a list of services available to Rocklin residents that need physical and mental health services, foster care, food and other assistance in order to better pair the services to those who need them. City staff also serves as a Board Member for the Homeless Resource Council of the Sierras (HRCS) Placer County.

Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness.

City staff have participated in regular committee meetings organized by the HRCS (Continuum of Care - COC) and Placer County Health and Human Services (HHS) Department from August 2015 to the present to consider homeless shelter needs and options in South Placer County as well as strategies to create permanent housing solutions. Participants in these meetings have included local agency staff or elected officials from Rocklin, Roseville, Lincoln, and Placer County. Attendees have also included numerous non- profits.
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6 In 2021 and 2022 Rocklin staff and two City Council Members participated regularly in a new Regional Working Group and Ad Hoc Committee led by a consultant retained by the Placer County’s Department of Health and Human Services to facilitate even more in-depth multi-agency discussion of strategies to address homeless shelter needs in South and Mid-Placer County. This process has involved a series of monthly meetings and work efforts for these groups are expected to continue into 2023. The City of Rocklin will continue to coordinate with the Placer Consortium on Homelessness whenever possible on providing homeless needs assistance. The City will also coordinate with surrounding jurisdictions in the provision of housing assistance and related services to homeless persons.

Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS The City does not receive ESG funds, develop performance standards, evaluate outcomes or develop funding, policies and procedures for the administration of HMIS, as it does not administer HMIS. However, the City does consult with the Placer County's Continuum of Care related to funding allocations, and encourages all agencies providing services and care for homeless individuals to utilize the HMIS system.

2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdiction’s consultations with housing, social service agencies and other entities
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7 Table 2 – Agencies, groups, organizations who participated 1 Agency/Group/Organization ROCKLIN
Agency/Group/Organization Type Housing
Services-Elderly Persons
Services-Persons with Disabilities
Services-Persons with HIV/AIDS
Services-Victims of Domestic Violence
Services-Homeless
Service-Fair Housing
Other government-Local
What section of the Plan was addressed by
Consultation?
Housing Need Assessment
Public Housing Needs
Homeless Needs-Chronically homeless
Homeless Needs-Families with children
Homelessness Needs-Veterans
Homelessness Needs-Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Market Analysis
Economic Development
Anti-poverty Strategy
Lead-based Paint Strategy
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
Various departments within the City of Rocklin were consulted including the City of Rocklin Community Development, Fire, Police, Public Services and Finance Departments.
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8 2 Agency/Group/Organization PLACER COUNTY
Agency/Group/Organization Type Services-homeless
Other government - Local
What section of the Plan was addressed by
Consultation?
Housing Need Assessment
Homeless Needs - Chronically homeless
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
Various departments within Placer County provide information such as Placer County Department of Health and Human Services, Placer County Housing Authority and Placer County Health and Human Services Adult System of Care.

The anticipated outcome is improved communication, collaboration, and coordination among the agencies.
3 Agency/Group/Organization ROSEVILLE
Agency/Group/Organization Type Housing
PHA
Other government - Local
What section of the Plan was addressed by
Consultation?
Housing Need Assessment
Public Housing Needs
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The City of Roseville's Housing Authority was consulted regarding its continued administration of the City of Rocklin's Section 8 Housing Choice Voucher program.
4 Agency/Group/Organization THE GATHERING INN
Agency/Group/Organization Type Services-homeless
253
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9 What section of the Plan was addressed by
Consultation?
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The Agency was contacted either through phone call, email notification and/or public forum flyer for consultation and coordination. The anticipated outcome is improved communication and collaboration.
5 Agency/Group/Organization Placer Collaborative Network Agency/Group/Organization Type Services-Housing
Services-Children
Services-Elderly Persons
Services-Persons with Disabilities
Services-Persons with HIV/AIDS
Services-Victims of Domestic Violence
Services-Homeless
Services-Health
Services-Employment
Service-Fair Housing
Services-Victims
What section of the Plan was addressed by
Consultation?
Homeless Needs-Chronically homeless
Homeless Needs-Families with children
Homelessness Needs-Veterans
Homelessness Needs-Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
254
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10 Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The City published information related to CDBG document preparation and review opportunities through Placer Collaborative Network's (PCN's) e-mail list.

City staff has also attended and been a presenter at the PCN/PCOH Housing Forum events.
6 Agency/Group/Organization Placer Consortium on Homelessness Agency/Group/Organization Type Housing
Services-Housing
Services-Homeless
Service-Fair Housing
What section of the Plan was addressed by
Consultation?
Homeless Needs-Chronically homeless
Homeless Needs-Families with children
Homelessness Needs-Veterans
Homelessness Needs-Unaccompanied youth
Homelessness Strategy
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The City published information related to CDBG document preparation and review opportunities through Placer Consortium on Homelessness's (PCOH's) e- mail list. City staff has also attended and been a presenter at the PCN/PCOH Housing Forum events.

Identify any Agency Types not consulted and provide rationale for not consulting The City did not deliberately omit any agencies from the process. 255
Annual Action Plan
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11 Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan?
Continuum of Care Homeless Resource Council of the Sierras (HRCS) Point-in-Time count provided homeless data.

Table 3 – Other local / regional / federal planning efforts Narrative (optional)
256
Annual Action Plan
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12 AP-12 Participation – 91.105, 91.200(c)

1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting The Notice of Funding Availability and anticipated schedule of events was published in The Placer Herald newspaper, on the City's website and distributed to the PCN and PCOH e-mail lists on October 7, 2022. The Annual Action Plan's review period and public hearing was noticed and published in The Placer Herald newspaper, on the City's website and distributed to the PCN and PCOH e-mail lists on Friday, January 27, 2023. The Annual Action Plan was available for a 30-day public review period from Friday, January 27, 2023 to Wednesday, March 1, 2023. The City Council conducted a public hearing to discuss the draft Annual Action Plan on Tuesday, April 11, 2023. During the meeting, City Council members had questions about noticing methods and a desire for more frequent communication to the public regarding the various non-profit programs and accomplishments resulting from Rocklin’s CDBG Funding. City Council members also expressed concern that federal regulations applicable to CDBG overly restrict the amount of funding that can be allocated to Services. There were no comments from the public during the April 11, 2023 hearing. Following the close of the public hearing, the City Council did not request any changes to the draft AAP document or funding recommendations. The City Council is scheduled to conduct a public hearing to discuss the final Annual Action Plan on Tuesday, May 9, 2023. 257
Annual Action Plan
2023/2024
13 Citizen Participation Outreach
Sort
Order
Mode of
Outreach
Target of
Outreach
Summary of
response/attendance
Summary of
comments received
Summary of comments
not accepted
and reasons
URL (If applicable)
1 Public
Hearing
Non-
targeted/broad
community
This will be completed
after the public review
period and public
hearings have
concluded.

This will be
completed after the
public review period
and public hearings
have concluded.

This will be completed
after the public review
period and public
hearings have
concluded.

This will be
completed after the
public review period
and public hearings
have concluded.
2 Newspaper
Ad
Non-
targeted/broad
community
This will be completed
after the public review
period and public
hearings have
concluded.

This will be
completed after the
public review period
and public hearings
have concluded.

This will be completed
after the public review
period and public
hearings have
concluded.

This will be
completed after the
public review period
and public hearings
have concluded.
3 Internet
Outreach
Non-
targeted/broad
community
PCN/PCOH e-
mail groups
This will be completed
after the public review
period and public
hearings have
concluded.

This will be
completed after the
public review period
and public hearings
have concluded.

This will be completed
after the public review
period and public
hearings have
concluded.
https://www.rocklin.
ca.us/community-
development-block-
grant
Table 4 – Citizen Participation Outreach
258
Annual Action Plan
2023/2024
14 Expected Resources
AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
Below is information regarding expected resources, based on prior allocations, resources, and the current Consolidated Plan.

On February 27, 2023, HUD published CDBG allocations for the current federal fiscal year and the City will receive $300,177 for the 2023/2024 Program Year.

Anticipated Resources
Program Source
of Funds
Uses of Funds Expected Amount Available Year 1 Expected Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
CDBG public -
federal
Acquisition
Admin and
Planning
Economic
Development
Housing
Public
Improvements
Public Services 300,177 0 0 300,177 267,918
As identified in the five-year
Consolidated Plan, the City anticipates
receiving a total of $1,413,435 over the
five-year Consolidated Plan period.

Other public -
federal
Public Services
0 0 0 0 0

Table 5 - Expected Resources – Priority Table
259
Annual Action Plan
2023/2024
15 Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied
The City of Rocklin receives no federal funding in addition to CDBG for housing and non-housing community development and there are no matching requirements for the City's CDBG program.
260
Annual Action Plan
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16 If appropriate, describe publicly owned land or property located within the jurisdiction that may be used to address the needs identified in the plan The City is in the process of partnering with Community Housing Works to develop an affordable housing project on City owned property located on Pacific Street in Downtown Rocklin between Oak and Pine Streets.

Discussion
261
Annual Action Plan
2023/2024
17 Annual Goals and Objectives
AP-20 Annual Goals and Objectives
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 CD2.3: Meet
senior nutrition
and social needs
2023 2024 Non-Housing
Community
Development
City of
Rocklin
CD2: Public
services
CDBG: $11,256.63 Public service activities
other than Low/Moderate
Income Housing Benefit: 42
Persons Assisted
2 CD2.4: Provide
mental health
services
2023 2024 Non-Housing
Community
Development
City of
Rocklin
CD2: Public
services
CDBG: $11,256.64 Public service activities
other than Low/Moderate
Income Housing Benefit: 50
Persons Assisted
3 CD2.4: Provide
mental health
services
2023 2024 Non-Housing
Community
Development
City of
Rocklin
CD2: Public
services
CDBG: $11,256.64 Public service activities
other than Low/Moderate
Income Housing Benefit: 7
Persons Assisted
4 CD2.3: Meet
senior nutrition
and social needs
2023 2024 Non-Housing
Community
Development
City of
Rocklin
CD2: Public
services
CDBG: $11,256.64 Public service activities
other than Low/Moderate
Income Housing Benefit: 60
Persons Assisted
262
Annual Action Plan
2023/2024
18 Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
5 CD1.1: Improve
safety and
accessibility in
public
2023 2024 Non-Housing
Community
Development
City of
Rocklin
CD1: Public
improvements
and infrastructure
CDBG: $195,115.05 Public Facility or
Infrastructure Activities
other than Low/Moderate
Income Housing Benefit:
100 Persons Assisted
6 Planning and
Administration
2023 2024 Planning and
Administration
City of
Rocklin
Planning and
Administration
CDBG: $60,035.40 Other: 0 Other
Table 6 – Goals Summary
Goal Descriptions
1 Goal Name CD2.3: Meet senior nutrition and social needs Goal
Description
Provide home delivery of hot meals to home-bound seniors in Rocklin. (Seniors First) 2 Goal Name CD2.4: Provide mental health services
Goal
Description
The Victim Services Program will provide therapy services to domestic and sexual violence survivors and crisis intervention and advocacy services to Rocklin domestic and sexual violence survivors. (Stand Up Placer) 3 Goal Name CD2.4: Provide mental health services
Goal
Description
Provide therapy and case management services to support recovery and healing from trauma, abuse and neglect for children (0-18), adults and families. (Kids First)
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19 4 Goal Name CD2.3: Meet senior nutrition and social needs Goal
Description
Provide groceries and basic essentials to low-income, homebound elderly and disabled adults. (St Vincent De Paul) 5 Goal Name CD1.1: Improve safety and accessibility in public Goal
Description
Sidewalk repairs and accessibility improvements to remove architectural barriers in the public right-of-way and improve safety for disabled persons at various locations in Rocklin in block groups with 51% or more of households with incomes less than 80% AMI throughout the City. Potential activities over the plan period may include installation of auditory pedestrian crossing signals, curb cuts, sidewalks leading up to those curbs, wheelchair ramps, and improved accessible path of travel. (City of Rocklin)
6 Goal Name Planning and Administration
Goal
Description
Provide general administration of the CDBG program including planning and reporting activities. (City of Rocklin) 264
Annual Action Plan
2023/2024
20 Projects
AP-35 Projects – 91.220(d)
Introduction
City staff evaluated all submitted applications and have recommended the below projects to be funded for the FY 2023/2024 Annual Action Plan.

Projects
# Project Name
1 2023 Senior Services – Seniors First
2 2023 Mental Health Services – Stand Up Placer
3 2023 Mental Health Services – Kids First
4 2023 Senior Services – St Vincent De Paul
5 2023 Accessibility and Safety Projects – City of Rocklin 6 2023 Planning and Administration – City of Rocklin
Table 7 - Project Information
Describe the reasons for allocation priorities and any obstacles to addressing underserved needs
It is difficult to address all the community needs with the limited amount of funding received. However, it is believed that assisting domestic violence victims, seniors, and the disabled; providing basic essentials such as food and mental health care, including families with trauma, are the best ways to allocate funds based on the needs of the community.
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Annual Action Plan
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21 AP-38 Project Summary
Project Summary Information
1 Project Name 2023 Senior Services – Seniors First
Target Area City of Rocklin
Goals Supported CD2.3: Meet senior nutrition and social needs Needs Addressed CD2: Public services
Funding CDBG: $11,256.63
Description Provide home delivery of hot meals to home-bound seniors in Rocklin.

Target Date 6/30/2024
Estimate the number and type
of families that will benefit
from the proposed activities
42 senior individuals
Location Description Various homes in Rocklin, CA
Planned Activities Provide meals to seniors at home (Meals on Wheels). 2 Project Name 2023 Mental Health Services – Stand Up Placer Target Area City of Rocklin
Goals Supported CD2.4: Provide mental health services
Needs Addressed CD2: Public services
Funding CDBG: $11,256.64
Description The Victim Services Program will provide therapy services to domestic and sexual violence survivors and crisis intervention and advocacy services to Rocklin domestic and sexual violence survivors. 266
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2023/2024
22 Target Date 6/30/2024
Estimate the number and type
of families that will benefit
from the proposed activities
50 domestic and sexual violence survivors
Location Description Services will be provided at a confidential location in Roseville.

Planned Activities Direct labor includes advocacy specialists, the advocacy coordinator, marriage and family therapists, interns, and the clinical manager. These individuals will provide direct services to clients. 3 Project Name 2023 Mental Health Services – Kids First Target Area City of Rocklin
Goals Supported CD2.4: Provide mental health services
Needs Addressed CD2: Public services
Funding CDBG: $11,256.64
Description The Family Mental Wellness Program will provide therapy and case management services to support recovery and healing from trauma, abuse and neglect for children (0-18), adults and families.

Target Date 6/30/2024
Estimate the number and type
of families that will benefit
from the proposed activities
7 very low and/or low income individuals
Location Description Citywide
Planned Activities Direct labor includes a therapist and case manager. These individuals will provide direct services to clients.
4 Project Name 2023 Senior Services – St Vincent De Paul Target Area City of Rocklin
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23 Goals Supported CD2.3: Meet senior nutrition and social needs Needs Addressed CD2: Public services
Funding CDBG: $11,256.64
Description St Vincent De Paul’s Food BAGS Home Delivery program will provide groceries and basic essentials to low- income, homebound elderly and disabled adults.

Target Date 6/30/2024
Estimate the number and type
of families that will benefit
from the proposed activities
60 Location Description City of Rocklin.

Planned Activities Groceries and basic essentials delivered of eligible Rocklin residents who are low-income, homebound elderly and disabled adults.
5 Project Name 2023 Accessibility and Safety Projects – City of Rocklin Target Area City of Rocklin
Goals Supported CD1.1: Improve safety and accessibility in public Needs Addressed CD1: Public improvements and infrastructure Funding CDBG: $195,115.05
Description Improvements within the public right of way and pedestrian paths of travel to benefit disabled individuals in the City of Rocklin by improving their accessibility in block groups with 51% or more of households with incomes less than 80% AMI throughout the City.

Target Date 6/30/2024
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24 Estimate the number and type
of families that will benefit
from the proposed activities
100 disabled individuals
Location Description Various locations in Rocklin in block groups with 51% or more of households with incomes less than 80% AMI throughout the City. Emphasis for ADA projects will be within Pacific Street and Grove Street areas.

Planned Activities Sidewalk repairs and accessibility improvements to remove architectural barriers in the public right-of- way and improve safety for disabled persons citywide. Potential activities over the plan period may include installation of auditory pedestrian crossing signals, curb cuts, sidewalks leading up to those curbs, wheelchair ramps, and improved accessible path of travel. 6 Project Name 2023 Planning and Administration – City of Rocklin Target Area City of Rocklin
Goals Supported Planning and Administration
Needs Addressed Planning and Administration
Funding CDBG: $60,035.40
Description Provide general administration of the CDBG program including planning and reporting activities Target Date 6/30/2024
Estimate the number and type
of families that will benefit
from the proposed activities
N/A
Location Description City offices
Planned Activities Provide general administration of the CDBG program including planning and reporting activities. 269
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25 AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low-income and minority concentration) where assistance will be directed The City of Rocklin does not have significant, dense areas of low-income residents, nor are there areas of significant racial or minority concentration.

Geographic Distribution
Target Area Percentage of Funds
City of Rocklin 100
Table 8 - Geographic Distribution
Rationale for the priorities for allocating investments geographically The City's planning is focused more toward the number of persons who can be helped and identifying projects that will produce the best benefit for Rocklin residents.

Discussion
See above information.
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26 Affordable Housing
AP-55 Affordable Housing – 91.220(g)
Introduction
The City of Rocklin does not currently fund any affordable housing projects.

One Year Goals for the Number of Households to be Supported Homeless 0
Non-Homeless 0
Special-Needs 0
Total 0
Table 9 - One Year Goals for Affordable Housing by Support Requirement One Year Goals for the Number of Households Supported Through Rental Assistance 0
The Production of New Units 0
Rehab of Existing Units 0
Acquisition of Existing Units 0
Total 0
Table 10 - One Year Goals for Affordable Housing by Support Type Discussion
Due to the relatively small grant amount available, Rocklin does not utilize CDBG funds for the items in the tables above. However, 110 to 120 Section 8 Housing Choice Vouchers are administered within Rocklin each year through the City’s contract with the Roseville Housing Authority. As of the writing of this document, there are currently 120 vouchers from the Roseville Housing Authority leased in the City of Rocklin. The Placer County Housing Authority has provided another 71 vouchers that are currently leased in Rocklin.
271
Annual Action Plan
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27 AP-60 Public Housing – 91.220(h)
Introduction
The City of Rocklin does not oversee a public housing authority and there is no public housing agency in Rocklin.

Actions planned during the next year to address the needs to public housing The City recognizes that the Roseville Housing Authority has been acting as the public housing authority for many years and contracts with the City of Roseville to administer Rocklin's Section 8 program. The City will continue to support those services that meet the needs of Rocklin residents.

Actions to encourage public housing residents to become more involved in management and participate in homeownership
While the City of Rocklin is not a public housing authority, the City administers affordability covenants and existing down payment assistance loans on various properties within the City. City staff continue to market these opportunities and work with prospective buyers to determine income eligibility.

If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance
Not applicable; there are no public housing agencies in the City of Rocklin.

Discussion
Please see above information.
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28 AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction
This section discusses the City's one year activities to address the needs of persons who are homeless.

Describe the jurisdictions one-year goals and actions for reducing and ending homelessness including
Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
The City of Rocklin has provided CDBG funding to The Gathering Inn (TGI) in the past several years (funding range has been between $12,000 to $18,000 annually). However, as a result of additional CDBG subrecipient applicants in recent years and the 15% public services funding limit, the City has decided to fund TGI from its Low and Moderate Income Housing Asset (LMIHA) Fund for Homelessness Prevention and Rapid Rehousing (HPRR). TGI has requested $65,000 in funding. We anticipate their funding request would be provided through the Citywide budget. In addition to HPRR, TGI's primary goal is to meet the very basic needs of guests on a daily basis year round: hygiene, food and safe overnight shelter. TGI provides access to showers, toiletries, clean dry socks and clothes, plus transportation to a host church where guests are provided a warm and safe place for sleeping along with a hot nutritious meal. Each morning guests are transported back to the intake sites where they can access social services.

The Homeless Resource Council of the Sierras (HRCS) and Placer County’s Continuum of Care (CoC) conducts a Housing Inventory Count (HIC) and Point-in-Time (PIT) count of sheltered and unsheltered homeless persons during the last ten days in January in odd numbered years. The Housing Inventory Count (HIC) is a report that informs the homeless assistance community on the capacity to house persons who are homeless at local and national levels. The PIT provides the homeless assistance community with the data needed to understand the number and characteristics of persons who are homeless at one point-in- time. In 2022, the count for Rocklin was 55 individuals. Of those individuals, 7 were sheltered and 48 were unsheltered.

Addressing the emergency shelter and transitional housing needs of homeless persons Although no transitional housing facility or emergency shelter is located within Rocklin, the Placer County Department of Health and Human Services Adult System of Care operates a transitional housing facility for homeless persons with mental health disabilities just outside the city limits. HomeStart offers a transitional housing program for Placer County homeless children and their families. The Gathering Inn (TGI) is an emergency housing program serving homeless individuals in Rocklin that offers overnight housing at various churches within South Placer County as well as supportive services at their main office in Roseville. The City of Rocklin has supported TGI’s activities for several years through the use of CDBG funds, but increased the amount of its support to $50,000 per year in 2018 and 2019 and $60,000 in the 273
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29 years 2020, 2021 and 2022 for HPRR utilizing the City’s LMIHA Fund rather than CDBG in order to provide a broader opportunity for other service organizations to be funded through the City’s CDBG program and to be able to provide a higher level of funding to TGI. TGI has requested $65,000 in funding. We anticipate their funding request would be provided from the LMIHA Fund and is subject to City Council approval as part of the City’s FY 2023/2024 overall budget process. The Lazarus Project provides food, housing, clothing, guidance, counseling, education, job training, budgeting classes, parenting classes, and access to health care for persons recovering from homelessness, unemployment, abuse, addiction, and physical and/or mental impairment.

There are several organizations that provide emergency food in the Placer County area, including First United Methodist Church of Loomis, St. Mark's Anglican Episcopal, and United Methodist of Newcastle. Placer Food Bank conducts a free farmers market one day each month in Rocklin at Johnson Springview Park. The Salvation Army and St. Vincent de Paul also provide assistance to the homeless.

The City will continue to coordinate with these organizations to develop a strong system to meet the needs of homeless persons.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again
The loss of a job, a raise in rent, an eviction, or domestic violence can easily lead to homelessness for many low- and moderate-income individuals and families. The City also assists the homeless county-wide through its participation in the Homeless Resource Council of the Sierras (HRCS)/Placer County Continuum of Care. The Continuum of Care (CoC) programs are created to address the problems of homelessness in a comprehensive manner.

In 2019, the CoC prepared The Placer County Homeless Strategy which contains a series of approaches to tackle a variety of homeless issues and concerns. Specifically:

STRATEGY 1: Develop Affordable Housing with Services (i.e., Permanent Supportive Housing).

STRATEGY 2: Continue Support at Placer County Community Development Resource Agency 274
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30 (CDRA)Housing Development Stakeholder Meetings.

STRATEGY 3: Communicate Consistently With General Public About Homelessness.

STRATEGY 4: Increase Investment in Treatment—Alcohol, Drug, and Mental Health.

STRATEGY 5: Increase Emergency Housing Beds.

STRATEGY 6: Continue Participation in the Built for Zero Campaign.

In 2021 and 2022 Rocklin staff and two City Council Members participated regularly in a new Regional Working Group and Ad Hoc Committee led by a consultant retained by the Placer County’s Department of Health and Human Services to facilitate even more in-depth multi-agency discussion of strategies to address homeless shelter needs in South and Mid-Placer County. This process has involved a series of monthly meetings and work efforts for these groups are expected to continue into 2023.

Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs.

The City will continue to coordinate with our partners to develop a strong and effective system to meet the needs of homeless persons.
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31 Rental Assistance to those impacted by COVID-19 will continue to be provided by the Salvation Army who received an allocation of $39,000 in CDBG-CV-1 and $20,000 in CDBG-CV-3 funding from the City. In 2022, the City also allocated $45,000 in CV- 1 funds to KidsFirst for a Rental/Mortgage/Utility Assistance program. St Vincent De Paul also received an allocation of $92,713.02 in CV-3 funds to provide Rental and Utility Assistance to Rocklin residents. The Gathering Inn was also allocated $142,274.98 in CV- 3 Funds to provide Direct Services to Rocklin Homeless due to COVID (Housing, Case Management, Drivers, Transportation, Food, Shelter, Day Services) / Rental Assistance). TGI has requested $65,000 in funding. We anticipate their funding request would be provided from the LMIHA Fund with an emphasis for use on Homeless Prevention and Rapid Rehousing. Due to the limit on services that can be funded from CDBG, recommended funding in 2023 for the Salvation Army’s Rental Assistance Program is also anticipated to be from LMIHA funds in the amount of $25,000. In addition, St Vincent De Paul’s Rental Assistance Program is anticipated to be from LMIHA funds in the amount of $15,000. Approval of LMIHA funding for TGI, Salvation Army and St Vincent De Paul is subject to City Council approval as part of the City’s FY 2023/2024 overall budget process.

Discussion
See information above.
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32 AP-75 Barriers to affordable housing – 91.220(j)
Introduction:

The City's 2021-2029 Housing Element evaluated potential barriers or constraints to the development of affordable housing. These include the following:

Market Constraints
 Development costs; and
 Mortgage and rehabilitation financing.

Governmental Constraints
 Land use controls;
 Flexibility in residential development standards;
 Provisions for a variety of housing;
 Development permit procedures;
 Site improvements, development fees, and exactions;
 Building codes and enforcement;
 Reasonable accommodation procedures; and
 Housing for persons with disabilities.

Environmental Constraints
 Water supply;
 Sewer capacity;
 Oak tree preservation;
 Seismic safety;
 Flooding;
 Fire protection;
 ISO Rating; and
 Other hazards.

Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment
The City of Rocklin recognizes there are certain public policies, particularly zoning and land-use 277
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33 regulations, that pose challenges in increasing affordable housing opportunities and residential investment. This is revealed in higher housing costs, a shortage of affordable housing in relation to demand, and higher land costs. Inflexible or outdated regulations contribute to this problem.

As identified in the 2021-2029 Housing Element, land costs, construction costs, and market financing can potentially hinder the timely production of new residential projects. Although many factors limiting housing production are market-driven, the City has some control in instituting policies and programs to address the constraints or limiting factors.

Costs associated with financing and construction costs for residential projects are going to impact developers that are seeking to serve the affordable housing market segment. Although land costs help keep the cost of some new housing affordable, rising construction costs and market financing will have a substantial impact on developers, resulting in substantially higher prices for their products once they are on the market.

The City is committed to removing or reducing barriers to affordable housing whenever possible. A variety of actions are contained in the 2021-2029 Housing Element to address these issues and will be completed during the 8-year implementation cycle. The City of Rocklin has also designed a number of implementing programs and goals that will focus City resources on meeting its projected housing needs. The City recognizes that there are a number of factors impacting the provision of affordable housing.

Overall, development standards in Rocklin are comparable to similar communities. However, parking requirements for apartments, condominiums, and townhomes may be higher than typically required. To facilitate affordable housing development, the City offers a variety of incentives, including reduction or waiver of garage parking requirements. Specifically, for apartment and triplex units that are affordable to lower-income households, the requirement for one covered space per unit and visitor parking is waived at the request of the applicant. Pursuant to State Density Bonus law, projects meeting the requirements of the Density Incentive Program are eligible to receive density increases, use of state parking standards, and may also receive additional regulatory concessions. The City also created a BARRO (Business Attraction Retention and Revitalization Overlay) zone primarily focused in the downtown/central Rocklin area which allows deviations to parking standards for both new residential and non-residential uses subject to evaluation of off-site parking availability and approval by the Community Development Director on a case-by-case basis.

The City’s 2021-2029 Housing Element was certified by HCD on November 29, 2021 and includes a detailed Assessment Furthering Fair Housing (AFFH) and programs to implement the latest housing legislation.

Discussion:

Please see above information.
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34 AP-85 Other Actions – 91.220(k)
Introduction:

This section discusses the actions the City of Rocklin will undertake during the FY 2023/2024 Annual Action Plan. This includes actions to 1) foster and maintain affordable housing; 2) evaluate and reduce lead-based paint hazards; 3) reduce the number of poverty-level families; 4) develop institutional structure; and 5) enhance coordination.

Actions planned to address obstacles to meeting underserved needs While there are several constraints to meeting the needs of target-income residents, the primary obstacles identified through citizen participation were determined at the public hearings. The City of Rocklin’s Housing Element includes recommendations and programs to alleviate obstacles to meeting underserved needs. The City will continue to use CDBG dollars to address underserved needs and to provide education about services and service providers to the extent feasible. The City will encourage area service providers to offer services in the community. Compared with 94 percent in California, 97 percent of Rocklin residents can connect to high-speed internet. Residents of Rocklin depend on their internet services to connect with the community and pursue professional goals. Cable internet from Wave Broadband reaches 96 percent of Rocklin residents. Commercial offerings in the area are similar to those given to residents. For those households that do struggle for broadband access, the Rocklin Library offers 13 internet workstations free of charge. In addition, several community parks in Rocklin have public Wi-Fi provided by the City.

Actions planned to foster and maintain affordable housing The Community Development Department staff regularly reviews Housing Element programs, objectives, and progress towards accommodating the City’s share of the regional housing need. An annual implementation report will be prepared and provided to the California Office of Planning and Research and California Department of Housing and Community Development. Depending on funding availability, the City will consider modifications to Housing Element programs as necessary and appropriate to implement General Plan goals and policies.

Actions planned to reduce lead-based paint hazards
The City will continue to coordinate with Placer County’s Department of Health and Human Services Environmental Services Division when possible to help reduce lead-based paint hazards and will educate City residents about where to go if there is a problem.

Actions planned to reduce the number of poverty-level families The City’s anti-poverty strategy includes improving the quality of housing in Rocklin, assuring safe housing 279
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35 choices for residents, and supporting social service agencies.

The City’s anti-poverty strategy will focus on:
 Working with project proponents to increase the supply and availability of decent, safe, and affordable housing necessary for low-income families to live healthy, productive lives;  Working with local utility providers to ensure existing and planned infrastructure will continue to support a viable community and benefit low- and moderate-income persons;  Looking for opportunities to increase the effectiveness of existing programs through better collaboration and efficient implementation; and
 Providing funding to a larger variety of programs to better assist individual situations, such as the victims and families of domestic violence, sexual violence and human trafficking, and individuals or families that recently faced an unexpected expense.

Actions planned to develop institutional structure
The City relies on a network of public sector and non-profit organizations to implement the Consolidated Plan. These organizations play a large role in directly providing housing and services to low-income, homeless, and special needs populations throughout Rocklin. The system's strengths include the collaborative manner in which these diverse groups work together to maximize available resources.

Rocklin is a large enough city to have many institutional resources, yet small enough to be able to effectively communicate and collaborate.

The City does not plan to duplicate services of other established and successful programs. The City’s system of institutional structure is strong and well-coordinated, with little duplication of services.

Actions planned to enhance coordination between public and private housing and social service agencies
The City of Roseville’s Housing Authority administers the Section 8 program for the City of Rocklin via contract. The City has historically budgeted for these services from its General Fund and anticipates providing continued funding in a similar manner in FY 2023/2024.

Discussion:

See above information.
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36 Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction:

The following table identifies program income that is available for use that is included in projects to be carried out.

The City does not currently have a balance of program income. The City does not plan to receive program income in FY 2023/2024.

Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out.

1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 0

2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0

3. The amount of surplus funds from urban renewal settlements 0

4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0

5. The amount of income from float-funded activities 0
Total Program Income: 0
Other CDBG Requirements

1. The amount of urgent need activities 0

2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan. 100.00% See above information.
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Application for Federal Assistance SF-424
* 1. Type of Submission: * 2. Type of Application: * If Revision, select appropriate letter(s):

D Preapplication �New I
� Application D Continuation * Other (Specify):

D Changed/Corrected Application D Revision I
* 3. Date Received: 4. Applicant Identifier:

I jRocklin, CA I
5a. Federal Entity Identifier: 5b. Federal Award Identifier:

IB-23-MC-06-0064 I I
State Use Only:

6. Date Received by State: I I I 7. State Application Identifier: I

8. APPLICANT INFORMATION:
* a. Legal Name: lei ty of Rocklin
* b. Employer/Taxpayer Identification Number (EIN/TIN): * c. UEI:
194-6000408 I jF9JTDAHKSBX5 I
d.Address:
* Street1: 13970 Rocklin Road
Street2: I
* City: !Rocklin I
County/Parish: I I
* State: ]CA: California
Province: I I
* Country: lusA: UNITED STATES
* Zip / Postal Code: 195677-2720 I
e. Organizational Unit:

Department Name: Division Name:
!community Development I ILong Range Planning/Housing
f. Name and contact information of person to be contacted on matters involving this application:

Prefix: IMs. I * First Name: !Laura
Middle Name: I I
* Last Name: lwebster
Suffix: I I
Title: !Director I
Organizational Affiliation:

I
* Telephone Number: I (916) 625-5592 I Fax Number: 1(916) 625-5195 * Email: [email protected]
I
I
0MB Number: 4040-0004
Expiration Date: 11/30/2025
I
I
I
I I
I
I
I
I
I
I
I
I

EXHIBIT B
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283
284
285
286

CERTIFICATIONS
In accordance with the applicable statutes and the regulations governing the consolidated plan regulations, the jurisdiction certifies that:

Affirmatively Further Fair Housing --The jurisdiction will affirmatively further fair housing.

Uniform Relocation Act and Anti-displacement and Relocation Plan -- It will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, (42 U.S.C. 4601-4655) and implementing regulations at 49 CFR Part 24. It has in effect and is following a residential anti-displacement and relocation assistance plan required under 24 CFR Part 42 in connection with any activity assisted with funding under the Community Development Block Grant or HOME programs.

Anti-Lobbying --To the best of the jurisdiction's knowledge and belief:

1. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and

3. It will require that the language of paragraph 1 and 2 of this anti-lobbying certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

Authority of Jurisdiction --The consolidated plan is authorized under State and local law (as applicable) and the jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations.

Consistency with plan --The housing activities to be undertaken with Community Development Block Grant, HOME, Emergency Solutions Grant, and Housing Opportunities for Persons With AIDS funds are consistent with the strategic plan in the jurisdiction’s consolidated plan.

Section 3 -- It will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and implementing regulations at 24 CFR Part 135. ____________________________ _________
Signature of Authorized Official Date
__City Manager___________
Title

EXHIBIT C
287
Specific Community Development Block Grant Certifications The Entitlement Community certifies that:

Citizen Participation -- It is in full compliance and following a detailed citizen participation plan that satisfies the requirements of 24 CFR 91.105.

Community Development Plan -- Its consolidated plan identifies community development and housing needs and specifies both short-term and long-term community development objectives that that have been developed in accordance with the primary objective of the CDBG program (i.e., the development of viable urban communities, by providing decent housing and expanding economic opportunities, primarily for persons of low and moderate income) and requirements of 24 CFR Parts 91 and 570.

Following a Plan -- It is following a current consolidated plan that has been approved by HUD.

Use of Funds -- It has complied with the following criteria:

1. Maximum Feasible Priority. With respect to activities expected to be assisted with CDBG funds, it has developed its Action Plan so as to give maximum feasible priority to activities which benefit low- and moderate-income families or aid in the prevention or elimination of slums or blight. The Action Plan may also include CDBG-assisted activities which the grantee certifies are designed to meet other community development needs having particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community, and other financial resources are not available (see Optional CDBG Certification).

2. Overall Benefit. The aggregate use of CDBG funds, including Section 108 guaranteed loans, during program year(s) __2023___________________ [a period specified by the grantee of one, two, or three specific consecutive program years], shall principally benefit persons of low and moderate income in a manner that ensures that at least 70 percent of the amount is expended for activities that benefit such persons during the designated period.

3. Special Assessments. It will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108 loan guaranteed funds, by assessing any amount against properties owned and occupied by persons of low and moderate income, including any fee charged or assessment made as a condition of obtaining access to such public improvements.

However, if CDBG funds are used to pay the proportion of a fee or assessment that relates to the capital costs of public improvements (assisted in part with CDBG funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds.

In addition, in the case of properties owned and occupied by moderate-income (not low-income) families, an assessment or charge may be made against the property for public improvements financed by a source other than CDBG funds if the jurisdiction certifies that it lacks CDBG funds to cover the assessment.

Excessive Force -- It has adopted and is enforcing:

1. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and

2. A policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within its jurisdiction.
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Compliance with Anti-discrimination laws -- The grant will be conducted and administered in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and the Fair Housing Act (42 U.S.C. 3601-3619) and implementing regulations.

Lead-Based Paint -- Its activities concerning lead-based paint will comply with the requirements of 24 CFR Part 35, Subparts A, B, J, K and R.

Compliance with Laws -- It will comply with applicable laws. _____________________________ _____________
Signature of Authorized Official Date
_City Manager___________
Title
289

APPENDIX TO CERTIFICATIONS
INSTRUCTIONS CONCERNING LOBBYING CERTIFICATION:

Lobbying Certification
This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
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City Council
Staff Report

Subject:

COVID-19 Business Retention Grant Program
Date:

May
9, 2023
Submitted By:

Elizabeth Sorg, Management Analyst
Department:

City Manager's Office
Recommendation:

Adopt a Resolution of the City Council of the City of Rocklin Approving Amendment No. 2 to the Contract for Services with the Sierra Business Council for the Administration of the COVID-19 Business Retention Grant Program and Direct Staff on the Appropriate Method of Determining Funding Amounts.

Background:

At the April 11, 2023 City Council meeting, the City Council provided direction to staff regarding a potential COVID-19 business retention grant program and directed staff to return at the next available meeting with an update and the formal documents needed to initiate the program.

The proposed COVID-19 Business Retention Grant Program would be funded as part of the City’s ARPA Revenue loss allocation, and therefore is less restrictive than ARPA funding.

According to the ARPA Final Rule, Revenue loss funds may be used for the provision of government services. The proposed COVID-19 Business Retention Program is in alignment with the City’s Economic Development Strategy and aims to support those businesses that were open before COVID-19 but who may otherwise not be eligible for ARPA-funded programs because they opened in 2019 or early 2020.

The COVID-19 Business Retention Grant Program would provide grants of up to $15,000 for those businesses that opened immediately before COVID-19 and remain in business. To be eligible for funding, businesses must:

Have opened a Rocklin location from January 1, 2019 to March 15, 2020 and must still be in operation;
Be a brick-and-mortar retail or commercial business;
Have been ordered to close operations due to state COVID-19 mandates; Be able to provide documents that demonstrate eligibility based on the selected program model (examples include, but are not limited to, tax returns, City of Rocklin business license, building lease or mortgage documents).

Item Number 7.A

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Additionally, examples of ineligible businesses would include:

Nonprofit organizations
Professional services (i.e. consultants, accountants, architects, etc.) Businesses that operated remotely during COVID or were not ordered to close by state mandates
Retail businesses with online-only offerings
Independent vacation home businesses, such as Airbnb or Vrbo Financial businesses primarily engaged in lending, such as banks and finance companies

Should the program be oversubscribed, eligible applicants will be ranked based on the number of days they were forced to close due to state mandates during COVID-19. Those that were closed the longest based on their business type will be given top priority for funding.

The Sierra Business Council is currently under contract with the City of Rocklin to administer the Restore Rocklin program. Staff from the Sierra Business Council have indicated they would be interested in a contract amendment to administer this supplemental program. City staff have reviewed the existing contract and determined that the COVID-19 Business Retention Grant Program would fall within the scope of services for the existing contract and would still be in alignment with the initial Request for Proposals that was issued on April 27, 2022. The attached resolution (Attachment 1) would authorize the City Manager to enter into a contract amendment with the Sierra Business Council to administer this additional program.

Staff is also seeking direction for the grant program model. Staff are proposing two options:
1 .
5% of gross revenue for 2021 up to $15,000; or
2 .

Rent reimbursement for 3 consecutive months between January 1, 2019 to March 15, 2020 not to exceed $15,000.

If City Council approves the resolution to administer the funding, staff will execute a contract amendment and will work with the Sierra Business Council to launch the COVID-19 Business Retention Grant Program.

Fiscal Impact:

There is no direct impact to the general fund. Funding would be available through the Revenue Loss allocation of ARPA funds, which are budgeted in Fund 266.

ATTACHMENTS:

1. Resolution

2. Resolution Exhibit A - Contract Amendment No. 2
292
RESOLUTION NO. 2023-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROCKLIN

APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE A

CONTRACT AMENDMENT WITH THE SIERRA BUSINESS COUNCIL TO

ADMINISTER ARPA GRANT PROGRAMS
WHEREAS, the Federal Government allocated $350 billion from the American Rescue Plan Act for the Coronavirus State and Local Fiscal Recovery Funds which allocated funding to state, local, and Tribal governments to support the response to and recovery from COVID-19; and WHEREAS, the City of Rocklin has received $7,039,025 in funding from the Coronavirus State and Local Fiscal Recovery Funds; and
WHEREAS, American Rescue Plan Act funding is intended to mitigate the negative impact of COVID-19 on local communities; and
WHEREAS, at the February 22, 2022 Rocklin City Council meeting the City Council approved spending American Rescue Plan Act Funding for Community Support programs, including grants for small businesses, hotels, restaurants, and non-profits; and, WHEREAS, at the June 28, 2022 Rocklin City Council meeting, City Council approved and authorized the City Manager to execute a Contract for Services with the Sierra Business Council to provide administration of ARPA grants in an amount not to exceed $1,862,500; and, WHEREAS, at the March 28, 2023 Rocklin City Council meeting, the City Council approved the expenditure of up to $509,982.40 in additional funding to provide grants for the oversubscribed ARPA grant program; and,
WHEREAS, at the April 11, 2023 Rocklin City Council meeting, the City Council of the City of Rocklin approved Contract Amendment No. 1 with the Sierra Business Council to administer the additional funds directed at the March 28, 2023 City Council meeting.

NOW, THEREFORE, the City Council of the City of Rocklin does resolve as follows:

Section 1. The City Council of the City of Rocklin approves and authorizes the City Manager to execute an amendment to the Contract for Services with the Sierra Business Council to provide administration of ARPA grants in an amount not to exceed $550,000 in the form attached hereto as Exhibit “A.”
Section 2. The City Manager, or the City Manager’s designee, is hereby authorized to approve all financial transactions, budgets, and appropriations needed to carry out the ARPA grant program in connection with the Contract in accordance with the law and City policy. 293
PASSED AND ADOPTED this 9 of May, 2023 by the followingvote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

Ken Broadway, Mayor
ATTEST:

Hope Ithurburn, City Clerk

Reso. No. 2023-
294
AMENDMENT NO. 2

TO CONTRACT FOR SERVICES BETWEEN THE CITY OF ROCKLIN AND THE SIERRA BUSINESS COUNCIL This Amendment is entered into on ______________________________, by and between the City of Rocklin, a municipal corporation (“City”) and the Sierra Business Council (“Contractor”) who agree as follows:

RECITALS
WHEREAS, City and Contractor entered into a Contract for Services dated November 10, 2022, for administration for the ARPA small business and nonprofit grant program; and WHEREAS, the City and Contractor agreed to amend the Contract for Services to increase the amount of funding provided to approved grant applicants in the program with Amendment No. 1; and WHEREAS, the City and Contractor agree to enter into a further contract amendment to administer a second grant program for ARPA funding.

AGREEMENT
NOW, therefore, the City and Contractor hereby agree to amend the Contract for Services/Agreement as follows:

1. Section 2. Compensation shall be amended to say:

The City shall pay Contractor for the services rendered pursuant to this Contract at the times and in the manner set forth in the Scope of Services, Exhibit A, the Schedule for Performance, Exhibit B, and in accordance with the Schedule of Fees in Exhibit C, but in no event shall the total compensation exceed the total sum of $2,734,412 for the grant program, and $188,071 for Contractor’s services related to the administration of the grant program. The payments specified in Exhibit C shall be the only payments to be made to Contractor for the services rendered pursuant to this Contract unless pursuant to Section 1, above, City approves additional compensation for additional services.

2. EXHIBIT C, Schedule of Fees shall be amended to say:

The total cost of the program shall be as follows:

Direct ARPA funding to be passed through to grant recipients $2,734,412 Contractor’s Administrative Service Fee $188,071
Total Program $2,922,483
Except as set forth in this Amendment, the Contract for Services is unaffected and shall continue in full force and effect in accordance with its terms. If there is a conflict between this Amendment and the Contract for Services, the terms of this Amendment will prevail.

Executed as of the date first written above.
“CITY”
By: ___________________________
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Aly Zimmermann, City Manager
“CONTRACTOR”
By: __________________________
Steve Frisch, President
By: __________________________
Kristin York, Vice President
APPROVED AS TO FORM:

By: ___________________________
City Attorney
ATTEST:

By: ___________________________
Hope Ithurburn, City Clerk
296
City Council
Staff Report

Subject:

Delegation of Investment Decision Authority and Investment Policy Update
Date:

May
9, 2023
Submitted By:

Daniel Choe, Deputy Director of Administrative Services Megan Bressem, Management Analyst
Department:

Administrative Services - Finance
Recommendation:

A
.

Receive a Presentation on Legislative Policy No. 1 - Investment Policy Updates by Chandler Asset Management, Inc.

B
.

Adopt a Resolution of the City Council of the City of Rocklin Delegating Authority to Make Investment Decisions to the City Treasurer and Adopting Legislative Policy No. 1 - Investment Policy.

Background:

City of Rocklin Legislative Policy No. 1 (Investment Policy) establishes standards and guidelines for the direction, management, and oversight for the majority of the City’s investable cash and funds and identifies the investment objectives, tolerance for risk, constraints on the investment portfolio, and the manner in which the investments will be managed and monitored.

Investment Policy Section XII requires annual review of the City’s Investment Policy to ensure its consistency with the overall objectives of preservation of principal, liquidity and return. The policy is also reviewed for relevance to current law, financial and economic trends, and the needs of the City. Adoption of the Investment Policy is required each year by resolution.

On June 28, 2022, the City Council adopted Resolution No. 2022-130 approving the Investment Policy for Fiscal Year (FY) 2022/23, and delegated authority to make all investment decisions to the City Treasurer for FY 2022/23 consistent with California Government Code 53607 and the Investment Policy.

On September 27, 2022, the City Council adopted Resolution No. 2022-189 awarding the Investment Management and Advisory Services contract to Chandler Asset Management, Inc. and, subsequently, an agreement was executed with Chandler Asset Management, Inc. for investment management and advisory services. The scope included the contractor to review and recommend updates to the City’s Investment Policy.

Item Number 7.B

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City staff worked with the Investment Team at Chandler Asset Management, Inc. to update the City’s Investment Policy and identified opportunities for the improvement of and to better align the policy with the City’s investment objectives, California Government Code, and the industry best practices.

Revisions to the policy this year include updating the authorized investment asset classes allowed by California Government Code and expanding descriptive language of those currently listed, updating and designating maximum maturities, expanding description of prohibited investments, adding investment portfolio concentration limits, creating a section to address and expand on mitigating factors for credit and market risk, expanding language addressing Delivery-Versus-Payment and protections provided by a third-party custodian, and removing policy attachments that are no longer applicable. Additionally, descriptions and references were updated to align with current California Government Code.

On February 23, 2023, the proposed investment policy changes were presented to the City's Investment Advisory Committee for review and advisement. The Committee did not recommend any additional changes to the policy and a redline copy of the policy is included as Attachment 1 to the Report.

Staff recommends the City Council adopt a resolution delegating authority to make investment decisions to the City Treasurer for the fiscal year commencing July 1, 2023 and ending June 30, 2024, and approving Legislative Policy No. 1 – Investment Policy, which is included as Exhibit A to the Resolution.

Fiscal Impact:

There is no direct fiscal impact to the General Fund from the staff recommendation.

ATTACHMENTS:

1. Investment Policy - Redline

2. Resolution - Investment Policy
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ATTACHMENT 1 - REDLINE

CITY OF ROCKLIN

STATEMENT OF INVESTMENT POLICY

INTRODUCTION

This statement is intended to outline the policies for the prudent investment of the City’s Funds and to provide guidelines for suitable investments.

The ultimate goal is to enhance the economic status of the City while safeguarding its assets.

The City’s Cash Management System is designed to accurately monitor and forecast expenditures and revenues, thus e nabling the City to invest funds to the fullest extent possible. The City’s investment portfolio shall be structured with the objective of attaining a market rate of return throughout budgetary and economic cycles , provided that all investments meet the criteria established for safety and liquidity.

The City’s investment policies and practices are based upon Federal, State, and Local laws and prudent money management. The primary goals of these policies are:

1. To assure compliance with all Federal, State and Local laws governing the investment of monies.

2. To protect the principal monies.

3. To ensure the investment portfolio remains sufficiently liquid to enable the City of Rocklin to meet all operating requirements which might be reasonably anticipated.

4. To attain a market rate of return on investment within the parameters of this Statement of Investment Policy and the Investment Portfolio Guidelines.

I. SCOPE

It is intended that this policy cover all funds and investment activities under the direct authority of the City in accordance with California Government Code Section 53600 et seq., the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ( FIRREA) and local laws. Funds included are General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, Permanent Funds and Trust Funds. The Investment Portfolio will be referred to hereafter as the “FUND” throughout the remainder of this document. 299

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This policy will not cover bond proceeds obtained from bond issues which are not direct obligations of the City, and which are not under the direct authority of the City. The bond proceeds will be invested in accordance with the Bond Indentu re Agreement and applicable State and Federal regulations.

II. OBJECTIVES

1. Safety of Principal

Safety of principal is the foremost objective of the City of Rocklin. Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the Agency will diversify its investments by investing funds among a variety of securities with independent retu rns. Each investment transaction shall seek to ensure that capital losses are avoided, whether from institution default, broker-dealer default, or erosion of market value of securities. The City shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk.

A. Credit Risk. Credit risk, defined as the risk of loss due to failure of an issuer of a security, shall be mitigated by investing in only financially sound institutions and by diversifying the Fund so that the failure of any one issuer would not be detrimental to the City’s cash flow.

B. Market Risk. The risk of market value fluctuations due to overall changes in the general level of market interest rates shall be mitigated by limiting the wei ghted average maturity of the City’s Fund to five years. It is explicitly recognized herein that occasional losses in a diversified portfolio are inevitable, and must be considered within the context of the overall investment return.

2. Liquidity

Liquidity is the second most important objective of the City of Rocklin. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands. It is important that an investment contain the feature of being easily sold at any time with a minimal risk of loss of some portion of principal or interest. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.

3. Return onf Investment

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The City’s Fund shall seek to attain a market -average rate of retu rn throughout economic cycles. The market -average rate of return is defined as the average return on two-year U.S. Treasury Notes. Whenever possible, and consistent with risk limitations as defined here, and prudent investment principals, the Investment Committee shall seek to augment returns above the market average rate of return. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.

III. PRUDENCE

Investments shall be made in the context of the “Prudent Investor” rule, which states that:

Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of thei r own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:

“…all governing bodies of local agencies o r persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, ac quiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the A gency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency.

Within the limita tions of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”

City employees involved in the investment process and other authorized persons responsible for managing City funds, acting in accordance with written procedures and the Investment Policy and exercising due diligence, shall not be held personally responsible for a specific security’s credit risk or market price changes, provided that 301

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deviations from expectations are reported in a timely manner and that appropriate action is taken to control adverse developments.

IV. DELEGATION OF AUTHORITY

Authority to manage the City’s investment program is derived from California Government Code, Sections 41006 and 53600 et seq.

The City Council is responsible for the management of the City’s funds, including the administration of this investment policy. Management responsibility for the cash management of the City’s funds may be delegated to the City Treasurer.

The City Treasurer will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the City Treasurer.

The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.

The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.

IV. ETHICS AND CONFLICTS OF INTEREST

All participants in the investment process shall act as custodians of the public trust.

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. City employees and t he City’s Investment Advisory Committee involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the Investment Policy of which could impair their ability to make impartial investment recommendations and/or decisions. The City’s Investment Advisory Committee and City employees involved in the investment process shall disclose any material financial interests in financial institutions with which the City may conduct business, and they shall further disclose any reportable personal financial/investment positions that could be related to the performance of the City’s portfolio. The Investment Advisory Committee and City employees involved in the investment process shall 302

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subordinate their personal investment transactions to those of the City, particularly with regard to the timing of purchases and sales.

VI. INVESTMENTS

1. AUTHORIZED INVESTMENTS

The City is governed by the California Government Code, Sections 53600 et seq.

In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits and minimum credit requirements listed in this section apply at the time the security is purchased. An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.

Within the context of these limitations, the following investments are authorized, as further limited herein:

A. Bonds issued by the City of Rocklin.

A. United States Treasury Bills, Notes, Bonds, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for payment of principal and interest. There is no limitation as to the percentage of the Fund that can be invested in this category as they are both safe and liquid. • The maximum maturity is five (5) years.

B. Municipal Securities including obligations of the City of Rocklin, the State of California and any local agency within the State of California, provided that:
• The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”).
• No more than 5% of the portfolio may be invested in any single issuer. • No more than 30% of the portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.

C. Registered state warrants or treasury notes or bonds issued by the State of California.

D.C. Municipal Securities (Registered Treasury Notes or Bonds) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 4 9 303

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states, in addition to California. Registered treasury notes or bonds of any of the other forty-nine United States, in addition to California. • The securities are rated in a rating category of “A” or its equivalent or better by at le ast one nationally recognized statistical rating organization (“NRSRO”).
• No more than 5% of the portfolio may be invested in any single issuer. • No more than 30% of the portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.

E. Bonds, notes, warrants or other evidence of debt issued by a local agency within the State of California.

F.D. Federal Agencies or United States Government -Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal Agency or Government-Sponsored Enterprises (GSEs), provided that: Obligations issued by the Government National Mortgage Association (GNMA), the Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank Board (FHLB), the Fed eral Home Loan Mortgage Corporation (FHLMC), the Tennessee Valley Authority, and those fully guaranteed as to principal and interest by the Federal National Mortgage Association (FNMA), or in guaranteed portions of Small Business Administration notes, thos e insured by the Federal Housing Administration (FHA) or in obligations, participations, or other instruments of, or issued by, a federal agency or a United States government-sponsored enterprise. No more than 20% of the market value of the Fund may be invested in obligations issued by federal agencies or United States government-sponsored enterprises. No more than 5% of the of the market value of the Fund may be invested in the obligations of a single federal agency. No more than 5% of the of the market value of the Fund may be invested in callable federal agency securities.
• No more than 30% of the portfolio may be invested in any single Agency/GSE issuer.
• The maximum maturity does not exceed five (5) years.
• The maximum percent of agency callable securities in the portfolio will be 20%.

G.E. Banker’s Acceptances, provided that: Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as banker’s acceptances. Prime banker’s acceptances purchased shall be issued by prime money center banks. Banker’s acceptances purchased may not exceed 180 days to maturity or 40% of the market value of the Fund. No more than 5% of the market value of the fund may be invested in banker’s acceptances issued by any one bank.
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• They are issued by institutions which have short -term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 40% of the portfolio may be invested in Banker’s Acceptances.
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 180 days.

H.F. Commercial paper, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below: of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recog nized statistical rating organization (NRSRO), and issued by a domestic corporation having assets in excess of $500,000,000 and having an “A” or better rating on its long term debentures as provided by a NRSRO. Purchases of eligible commercial paper may n ot exceed 270 days maturity nor represent more than 10% of the outstanding paper of the issuing corporation. No more than 5% of the market value of the Fund may be invested in commercial paper issued by any one corporation. No more than 25% of the market value of the Fund may be invested in commercial paper.
a. Securities issued by corporations:

(i) A corporation organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
(iii) If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO.

b. Securities issued by other entities:

(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company. (ii) The securities must have program -wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond.
(iii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.

• No more than 10% of the outstanding commercial paper of any single issuer.
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• No more than 25% of the Agency’s investment assets under management may be invested in Commercial Paper
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 270 days.

I.G. Negotiable Certificates of Deposit (NCD s), issued by a nationally or state - chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that: issued by a Nationally or State-Chartered Bank or a State or Federal Savings and Loan Association or by a State licensed branch of a foreign bank. To be eligible for purchase by the City, the amount invested in NCD’s shall be subject to the limitations of Section 53638 of the California Government Code. Purchases of NCD’s may not exceed 30% of the market value of the Fund. No more than 5% of the market value of the Fund may be invested in NCD’s issued by any one institution.
• The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
• Any amount above the FDIC insured limit must be issued by institutions which have short -term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long -term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO. • No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

J.H. Repurchase Agreements . collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided t hat: The City may invest in Repurchase Agreements, on any investment authorized in this section with banks and dealers with which the City has entered into a master repurchase agreement that specifies terms and conditions of Repurchase Agreements and only when California Government Code Section 53601(j) conditions are met. The maturity of Repurchase Agreements shall not exceed 90 days. In order to conform with provisions of the Federal Bankruptcy Code that provides for the liquidation of securities held a s collateral for Repurchase Agreements, the only securities acceptable as collateral shall be eligible negotiable certificates of deposit, eligible banker’s acceptances, or securities that are direct obligations of, or that are fully guaranteed as to principal and interest by, the United States or any agency of the United States. Collateral for Repurchase Agreements will also comply with t he requirements of the FIRREA , see Section VII on collateralization. No more than 15% of the market value of the Fund may be invested in Repurchase Agreements. 306

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No more than 5% of the market value of the Fund may be invested in Repurchase Agreements issued by any one institution.
• Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third party custodian.
• Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA). • The maximum maturity does not exceed one (1) year.

K.I. Supranationals, provided that: are United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inte r-American Development Bank (IADB), with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated “AA-“, its equivalent, or better by an NRSRO. No mor e than 30% of the market value of the Fund may be invested in these obligations. • Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
• The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
• No more than 30% of the total portfolio may be invested in these securities.
• No more than 10% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

L.J. State of California Local Agency Investment Fund (LAIF)., provided that: The City may invest in the Local Agency Investment Fund (LAIF) establ ished by the State Treasurer for the benefit of local agencies up to the maximum permitted by State law.
• The City may invest up to the maximum amount permitted by LAIF. • LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the City Treasurer to adequately judge the risk inherent in LAIF’s portfolio.

M.K. Corporate Medium-term notes (MTNs), provided that: of a maximum of five years maturity issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investmen t shall 307

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be rated in a rating category of “A” or its equivalent or better by a nationally recognized rating service. No more than 30% of the market value of the Fund may be invested in medium-term notes. No more than 5% of the market value of the Fund may be invested in medium-term notes issued by any one institution. • The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
• The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

N.L. Federally Insured Time Deposits. (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that: The City may invest in non -negotiable time deposits collateralized in accordance with the California Government Code and the FIRREA, in those banks and savings and loan associations that meet the requirements for investment in negotiable certificates of deposit and in accordance with Sections 53637, 53638, 53648 and 53652 of the California Government Code. Since time deposits are not liquid, no more than 10% of the market value of the Fund may be invested in this category. No more than 5% of the market value of the Fund may be invested in time deposits issued by any one institution.
• The amount per institution is limited to the maximum covered under federal insurance.
• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

O.M. Mutual Funds and Money Market Mutual Funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that: Shares of beneficial interest issued by diversified management companies, such as mutual funds and money market funds, investing in the securities and obligations as authorized by subdivisions (A) to (M), inclusive, of this section and that comply with the inv estment restrictions (California Government Code, Section 53600 and Section 53630), Companies shall either:
b. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
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(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.

• No more than 1 0% of the total portfolio may be invested in shares of any one mutual fund.

b. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet e ither of the following criteria:

(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or (ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.

• No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.

c. No more than 20% of the total portfolio may be invested in these securities.

i. Attain the highest ranking or the highest letter and numerical rating provided by not less than two of the nationally recognized statistical rating organizations, or

ii. Have an investment adviser registered with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations as authorized by subdivisions ( A) to ( M), inclusive and with assets under management in excess of five hundred million dollars
($500,000,000). The mutual fund is to be registered with the Federal Securities and Exchange Commission (SEC) and have met the requirements of Rule 2a -7 of the Investment Company Act of 1940. The purchase price of s hares of beneficial interest (mutual funds or money market funds) purchased pursuant to this subdivision shall not include any commission that these companies may charge. No more than 15% of the market value of the Fund 309

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may be invested in mutual funds. No more than 5% of the market value of the Fund ma y be invested in mutual funds of any one institution.

P.N. Collateralized Bank DepositsObligations. The City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651. There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits. The City may invest in notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed in the California Government Code Section 53651 having a market value at least equal to California Government Code Section 53652. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank which is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or Federal regulations applicable to the types of securities in which the security interest is granted. No more than 10% of the market value of the Fund may be invested in Collateralized Negotiable investments. No more than 5% of the market value of the Fund may be invested in Collateralized Negotiable investments of any one institution.

Q.O. Asset-Backed, Mortgage-Backed, Mortgage Pass -Through Securities and Collateralized Mortgage Obligations from issuers not defined in sections A. or D. of the Authorized Investments Section of this Policy, provided that: The City may invest in mortgage pass-through securities, collateralized mortgage obligations or mortgage-backed bonds of a maximum remaining maturity of five years or less.

Securities shall be rated in a rating category of “AA” or its equivalent or better by a nationally recognized rating service. No more than 20% of the market value of the Fund may be invested in these securities. No more than 5% of the market value of the Fund may be invested in mortgage pass -through securities, collateralized mortgage obligations or mortgage-backed bond issued by any one institution.
• The securities are ra ted in a rating category of “AA” or its equivalent or better by a NRSRO.
• No more than 20% of the total portfolio may be invested in these securities.
• No more than 5% of the portfolio may be invested in any single Asset - Backed or Commercial Mortgage security issuer.
• The maximum legal final maturity does not exceed five (5) years.

R.P. Placer County Treasurer ’s Investment Pool. The City may invest in the Placer County Treasurer ’s Investment Pool established by the Placer County Treasurer for the benefit of local agencies. No more than 25% of the market value of the Fund may be invested in the Placer County Treasurer’s Investment Pool. 310

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2. PROHIBITED INVESTMENT VEHICLES AND PRACTICES INELIGIBLE INVESTMENTS

• State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. • In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. • Investment in any security that could result in a zero interest accrual if held to maturity is prohibited. Under a provision sunsetting on Janu ary 1, 2026, securities backed by the U.S. Government that could result in a zero - or negative-interest accrual if held to maturity are permitted. • Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
• Purchasing or selling securities on margin is prohibited. • The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
• The purchase of foreign currency denominated securities is prohibited.

Agencies that are not Qualified Institutional Buyers (QIB) as defined by the Securities and Exchange Commission are prohibited from purchasing Private Placement Securities. The SEC defines a QIB as having at least $100,000,000 in securities owned and invested.

Investments not described herein, including, but not limited to common stocks, inverse floaters, range notes, or mortgage -derived interest -only strips, and any security that could result in zero interest accrual if held to maturity, as specified in Section 53601.6 are prohibited from use in this fund. See Table 1 for summary of above investment percentage limitations.

VII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS

QUALIFIED DEALERS AND INSTITUTIONS

To the extent practicable, the City Treasurer shall endeavor to complete investment transactions using a competitive bid process whenever possible. The City Treasurer will determine which financial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and firms.

The City Treasurer shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City. Due inquiry shall determin e whether such authorized broker/dealers, and the individuals covering the City are reputable and trustworthy, knowledgeable and experienced in Public Agency investing and able to meet all of their financial obligations. These 311

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

In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:

• Institutions licensed by the state as a broker-dealer. • Institutions that are members of a federally regulated securities exchange. • Primary government dealers as designated by the Federal Reserve Bank and non-primary government dealers.
• Nationally or state-chartered banks.
• The Federal Reserve Bank.
• Direct issuers of securities eligible for purchase.

Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the Agency may rely on the adviser for selection.

All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) mu st supply the City Treasurer with audited financials and a statement certifying that the institution has reviewed the California Government Code, Section 53600 et seq . and the City’s investment policy. The City Treasurer will conduct an annual review of the financial condition and registrations of such qualified bidders.

Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insuran ce Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.

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

The City shall tr ansact business only with banks, savings and loans, and registered investment securities dealers. The purchase of any investment by the City other than those purchased directly from the issuer, shall be purchased either from an institution licensed by the State as a broker -dealer, as defined in Section 25004 of the California Corporations Code, or a member of a Federally regulated securities exchange, a National 312

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or State-Chartered Bank, a Federal or State Association or a brokerage firm designated as a Primary Government Dealer by the Federal Reserve Bank. The City Treasurer shall review all institutions that wish to do business with the City, in order to determine if they are adequately capitalized, deal in security markets appropriate to the City’s needs, and agree to abide by the conditions set forth in the City o f Rocklin’s Investment Policy. This will be done periodically as determined by the Investment Commi ttee by having the Financial Institutions complete and return the appropriate questionnaire (See Attachments “A” & “B”), and an audited Financi al Statement must be provided. The Investment Committee shall make the final determination as to which institutio ns are admitted to the “Approved Qualified Institution List.” See Attachment “F” for Institution Selection Policy. A written depository agreement will be obtained and retained for all qualified institutions.

Investment Management Services. The City shall also be open to contracting investment management services f or a portion of the portfolio. The City Treasurer shall investigate all institutions that wish to do business with the City in order to determine that the firm’s performance stati stics are comparable with industry averages or benchmarks, deal in security markets appropriate to the City’s needs, and agree to abide by the conditions set forth in the City of Rocklin’s Investment Policy. This will be done as determined by the Investment Committee by having the Financial Institutions complete and return the “External Money Manager Questionnaire and Certification” (Attachment C). All investments made under contract will be purchased in the City’s name and in accordance with the guidelines established by the City’s Investment Policy.

VIII. COLLATERALIZATION

CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.

COLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall req uire any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.

REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
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• The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities.
• Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
• The City shall receive monthly statements of collateral.

All demand deposits, time deposits, and repurchase agreements be fully collateralized with securities authorized by the California Government Code Section 53652 and pursuant to Sections 53656 and 53658. Collateralization must comply with the requirements of the FIRREA. FIRREA mandates that a valid security collateral agreement 1) is in writing; 2) was executed by the depository institution and the City contemporaneously with the acquisition of the asset; 3) was approved by the board of directors or loan committee of the institution and reflected in the minutes of that group; and 4) has been an official record of the institution continuously from the time of its execution.

A. Eligible Collateral. Eligible collateral for demand and time deposits must be those investments authorized by the California Governmen t Code Section 53651 and 53652. The eligible collateral for repurchase agreements must be those investments noted in Section V. 1. (J.) above. Eligible collateral must be in book entry form.

B. Collateral Levels. Collateral is valued at current market plus accrued interest through the date of valuation.

1. Demand Deposits and Time Deposits. The market value of collateral pledged for demand deposits and time deposits must at all times be equal to or greater than the amount on the deposit, plus accrued interest, in accordance with the margin ratios following:

U.S. Treasury Securities....................................110% U.S. Government Agencies...............................110% U.S. Government Sponsored Corporations……..110%
Mortgages (First Deeds of Trust)…………....………150%
Federal Home Loan Bank of San Francisco
Irrevocable Letter of Credit…………………..105%

2. Repurchase Agreements. The market value of collateral pledged for repurchase agreements must at all time s be equal to or greater than the par amount, plus accrued interest with the margin ratios following:
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U.S. Treasury Securities……………………...…….…….102%
U.S. Government Agencies…………………………..….102%
U.S. Government Sponsored Corporations….…..102%
All other securities permitted by 53601…….…...104%
Cash (in immediately available funds)………….…100%

The market value of the collateral shall be adjusted no less than quarterly.

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

C. Monitoring Collateral. It is the policy of the City to require reports at least on a quarterly basis from institutions with whom the City has pledged security interest. The Investment Committee shall monitor the adequacy of collateralization to ensure that balances are collateralized in accordance with the margin ratios approved herein.

IXVIII. DELIVERY, SAFEKEEPING AND CUSTODY OF SECURITIES

DELIVERY-VERSUS-PAYMENT (DVP). All investment transactions shall be conducted on a delivery-versus-payment basis.

SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.

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

All investment securities owned by the City except securities used as collateral for repurchase agreements, shall be kept in safekeeping with “perfected interest” by a third- 315

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party bank trust department, acting as agent for the City under the terms of a written custody agreement executed by the bank and by the City. All securities will be received and delivered using standard delivery versus payment procedures. All securities are to be registered in the City’s name.

Substitution of collateral is permitted as long as the securities meet the City’s collateralization requirements and approval.

IX. RISK MANAGEMENT AND DIVERSIFICATION

MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:

• The diversification requirements included in the “Authorized Investm ents” section of this policy are designed to mitigate credit risk in the portfolio.

• No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy.

• The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or the City’s risk preferences.

• If a security owned by the City is downg raded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:

• Any actions taken related to the downgrade by the investment manager will be communicated to the City Treasurer in a timely manner.

• If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.

MITIGATING MARKET RISK IN THE PORTFOLIO
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer -term portfolios have the potential to achieve higher returns. On the other hand, longer- term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer- term investments only with funds that are not needed for current cash flow purposes.
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The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the follow ing strategies to control and mitigate its exposure to market risk:

• The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.
• The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy.

The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benc hmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances.

XI. REPORTING

Monthly Reporting
The City Treasurer shall provide to the City Council a monthly investment report detailing transactions in the City’s portfolio as required per California Government Code section 53607.

Quarterly Reporting
The City Treasurer shall render a quarterly report to the City Council showing the type of investment, institution, date of maturity, amount of deposit, current market value for all securities with a maturity of more than twelve months, rate of interest, type and amount of funds under the management of contract investment managers, the City’s compliance with the statement of investment policy, the ability of the City of meet cash flow needs for the next six months, and such data as may be required by the City Council as required per California Government Code section 53646.

Annual Reports
An annual report will be presented to the City Council . This report will include comparisons of the City’s return to the market benchmark return, suggest policies and improvements that might enhance the investment program, and may include an investment plan for the coming year.

XII. INVESTMENT CONTROLS

The City Tr easurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft 317

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or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.The Investment Committee has developed a system of internal investment controls and a segregation of responsibilities of investment functions in order to assure an adequate system of internal control over the investment function. An “Investment Transaction Authorization” form will b e completed for all investment purchases. See Attachment “D”.

XI. DELEGATION OF AUTHORITY

Pursuant to Section 53607 of the California Government Code, the City Council may delegate authority to make all investment decisions for the City’s investment portfolio to the City Treasurer.

XIII. POLICY ADOPTION

The City’s Investment Policy shall be adopted by resolution of the City Council. The Policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of PRINCIPAL, LIQUIDITY, AND RETURN, and its relevance to current law, financial and economic trends, and to meet the needs of the City of Rocklin and any modifications made thereto must be approved by the City Council. The City’s Investment Policy shall be submitted annually to the City Council.

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Attachment “A”

CITY OF ROCKLIN

BANK/SAVINGS AND LOAN QUESTIONNAIRE AND CERTIFICATION

1. Name of Firm________________________________________________________

2. Address_____________________________________________________________

3. Telephone No. (____)_____________ (___)________________________________ Local National Headquarters

4. Primary Representative: Manager:

Name _________________________ Name_____________________________ Title __________________________ Title______________________________ Telephone No. ( ) ______________ Telephone No. (___)_________________

5. What is the Total Assets of the Bank/Savings and Loan? _______________________

6. What is the current Net Worth Ratio? _____________________________________

7. What was the Net Worth Ratio for the Previous Year? ________________________

8. What is your required Capital Ratios?
A. Total Risk-Based Capital Ratio ____________________________________ B. Tier 1 Risk-Based Capital Ratio ____________________________________ C. Tier 1 Leverage Ratio ____________________________________

9. What is the date of your fiscal year-end? ___________________________________ A. Has there been a year during the past three years in which the Bank/ Savings and Loan did not make a profit? ____________________________

10. Have you read the California Government Code Section 53600 et seq. pertaining to all of the State’s requirements governing the deposit of monies by Local Agencies which includes Cities? [ ] YES [ ] NO

11. Where is the collateral for Time Deposits of the Bank/Savings and Loan held? _________________________________________________________________

12. How many years of related experience does the Primary Contact(s) have? ________________________________________________________________

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13. What transaction documents and reports would we receive? ________________________________________________________________

14. What information would you provide to the City?
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________

15. Describe the precautions taken by your Bank/Savings and Loan to protect the interest of the public when dealing with government agencies as depositors of investors.
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________

16. Please provide your Contract of Deposit of Moneys pre -signed and sealed by your institution, as well as, any signature cards that you may require. __________________________________________________________________ __________________________________________________________________ __________________________________________________________________

17. Please provide your Wiring Instructions__________________________________ __________________________________________________________________ __________________________________________________________________

18. Please provide your Banks/Savings and Loan most recent certified financial statements. In addition, audited financial statements must be provided. __________________________________________________________________ __________________________________________________________________ __________________________________________________________________

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--CERTIFICATION --

I hereby certify that I have personally read City of Rocklin’s Investment Policy and the California Government Codes pertaining to the investments of the City of Rocklin, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of Rocklin. All sales personnel will be routinely informed of City of Rocklin’s investment objectives, horizon, outlook, strategies and risk constraints whenever we are so advised. We pledge to exercise due diligence in informing City of Rocklin of all foreseeable risks associated with financial transactions conducted with our firm. I attest to the accuracy of our responses to your questionnaire.

NOTE: Completion of Questionnaire is only part of City of Rocklin’s Certification process and DOES NOT guarantee that the applicant will be approved to do business with the City of Rocklin.

SIGNED: _____________________________ DATE: _______________________

TITLE: _______________________________

COUNTERSIGNED: ______________________ DATE: ________________________

TITLE: _______________________________

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Attachment “B”

CITY OF ROCKLIN

BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION

1. Name of Firm _________________________________________________________

2. Address______________________________________________________________

3. Telephone No. (____)________________ (____)_____________________________ Local National Headquarters

4. Primary Representative Manager/Partner-in-Charge

Name __________________________ Name ____________________________ Title ___________________________ Title______________________________ Telephone No._________________ Telephone No.______________________ No. of Yrs. in Institutional Sales ____ No. of Yrs. in Institutional Sales_________ Number of Years with Firm_______ Number of Years with Firm____________

5. Are you a Primary Dealer in U.S. Government Securities? [ ] YES [ ] NO

6. Are you a Broker instead of a Dealer, i.e. You DO NOT own positions of Securities? [ ] YES [ ] NO

7. What is the debt to equity ratio of your Firm?______________________________

8. What is the date of your Firm’s fiscal year-end? ____________________________

9. Is your Firm owned by a Holding Company? If so, what is its name and debt to equity ratio?_________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

10. Please provide your Wiring and Delivery Instructions________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

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11. Which of the following instruments are offered regularly by your local desk?

[ ] T-Bills [ ] Treasury Notes/Bonds [ ] Discount Notes [ ] NCD’S [ ] Agencies (specify)_________________________________________________ [ ] BAs (Domestic) [ ] BAs (Foreign) [ ] Commercial Paper [ ] Mid-Term Notes

12. Which of the above does your Firm specialize in Marketing?___________________ _____________________________________________________________________ _______________________________________________________________

13. Please identify your most directly comparable City Local Agency clients in our geographical area.

Entity Contact Person Telephone No. Client Since
___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

14. What reports, transactions, confirmations and paper trail would we receive? ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

15. Please include samples of research reports or market information that your firm regularly provides to local agency clients._________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

16. What precautions are taken by your Firm to protect the interest of the public when dealing with government agencies as investors.
___________________________________________________________________ ___________________________________________________________________

17. Have you or your Firm been censored or punished by a Regulatory State or Federal Agency for improper or fraudulent activities, related to the sale of securities? [ ] YES [ ] NO

If Yes, explain _________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 323

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19. Attach certified documentation as to your capital adequacy and financial solvency. In addition, annually audited financial Statements must be provided.

20. Have you read the California Government Code Section 53600 et seq. pertaining to all of the State’s requirements governing the deposit of monies by Local Agencies, which includes Cities?
[ ] YES [ ] NO

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-- CERTIFICATION--

I hereby certify that I have personally read City of Rocklin’s Investment Policy and the California Government Codes pertaining to the investments of the City of Rocklin, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of Rocklin. All sales personnel will be routinely informed of City of Rocklin’s investment objectives, horizon, outlook, strategies and risk constraints whenever we are so advised. We pledge to exercise due diligence in informing City of Rocklin’s Investment Committee of all foreseeable risks associated with financial transactions conducted with our firm. I attest to the accuracy of our responses to your questionnaire.

NOTE: Completion of Questionnaire is only part of City of Rocklin’s Certification process and DOES NOT guarantee that the applicant will be approved to do business with the City of Rocklin.

SIGNED: _______________________________ DATE: _______________

TITLE:__________________________________

COUNTERSIGNED: ________________________ DATE: _______________

TITLE: _________________________________

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ATTACHMENT “C”

CITY OF ROCKLIN

EXTERNAL MONEY MANAGER QUESTIONNAIRE AND CERTIFICATION

1. Name of Firm_________________________________________________________

2. Address______________________________________________________________

3. Telephone No. ( ) ________________ ( ) ______________________________ (Local) (National Headquarters)

4. Primary Representative

Name_____________________________
Title______________________________
Telephone No. ______________________

5. What are your total institutional assets under investment management? ___________________________________________________________________ ___________________________________________________________________

6. What amount of your total assets under investment management are governmental funds? __________________________________________________________ ___________________________________________________________________

7. Please provide relevant performance statistics on operating funds showing comparison with industry averages or benchmarks, if appropriate.

8. Describe your firm’s research capabilities and resources. ____________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

9. Does your firm assign credit research to specialists? [ ] YES [ ] NO

10. Describe your credit review process._____________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 326

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11. Who reviews portfolio lists for credit approval? ____________________________ ___________________________________________________________________ ___________________________________________________________________

12. Identify the number of investment professionals (portfolio managers, analysts and researchers) employed by your firm by classification and specify the average number of accounts handled by portfolio managers. _______________________________ ___________________________________________________________________ ___________________________________________________________________

13. Are there any established limits on accounts or assets under management? [ ] YES [ ] NO

14. Provide biographical information on investment professionals that will be directly involved in the decision-making process for the City’s portfolio. _______________ ___________________________________________________________________ ___________________________________________________________________

15. Describe how your firm organizes its investment-management process. _________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

16. What oversight is provided to portfolio managers? _________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

17. What are the primary strategies for adding value to portfolios; e.g. market timing, credit research, trading. _______________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

18. Provide the fee schedule that would apply to this account.___________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

19. If alternative fee schedules could be developed, such as performance fees, describe how you would propose to develop such fee structures. _____________________ ___________________________________________________________________

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20. What expenses would be covered through the fee structure? _________________ ___________________________________________________________________

21. What additional costs could be required in order to implement your program; e.g., bank custodial fees, travel expenses, etc.? _________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

22. Please provide three references including length of time you have managed their assets, client name, contact personnel, address and phone number. (Governmental entities are preferred.)
___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

23. Have you read the California Government Code Section 53600 et seq. pertaining to all of the state requir ements governing the deposit of monies by local agencies which includes cities?
[ ] YES [ ] NO

24. Please provide your Wiring Instructions. __________________________________ ___________________________________________________________________ ___________________________________________________________________

25. What is the date of your fiscal-year end. __________________________________

26. Please provide your most recent certified financial statement. In addition, audite d financial statement must be provided. ____________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

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-- CERTIFICATION --

I hereby certify that I have personally read City of Rocklin’s Investment Policy and the California Government Codes pertaining to the investments of the City of Rocklin, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our fir m and the City of Rocklin. All sales personnel will be routinely informed of City of Rocklin’s investment objectives, horizon, outlook, strategies and risk constraints whenever we are so advised. We pledge to exercise due diligence in informing City of Roc klin of all foreseeable risks associated with financial transactions conducted with our firm. I attest to the accuracy of our responses to your questionnaire.

NOTE: Completion of Questionnaire is only part of City of Rocklin’s Certification process and DOES NOT guarantee that the applicant will be approved to do business with the City of Rocklin.

SIGNED: ________________________________ DATE: __________________

TITLE: _________________________________

COUNTERSIGNED: _________________________ DATE: _________________

TITLE: __________________________________

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ATTACHMENT “D”

CITY OF ROCKLIN

INVESTMENT TRANSACTION AUTHORIZATIONS

Date: ______________________

Please circle: Purchase Sale

Investment Transaction Placed By: ___________________________________________

Debit/Credit Account Name: ________________________________________________

Debit/Credit Account Number: ______________________________________________

INVESTMENT

Type: ___________________________________________________________________

Cost/Sales Proceeds: ______________________________________________________

Face Value: ______________________________________________________________

Yield: ___________________________________________________________________

Maturity Date: ___________________________________________________________

Bank/Brokerage Firm: _____________________________________________________

Brokerage Account No.: ____________________________________________________

Document No.: ___________________________________________________________

Contact Name: ___________________________________________________________

Authorized By: __________________________ Title: ____________________________

Authorized By: __________________________ Title: ____________________________

Date: ______________________
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ATTACHMENT “E”

CITY OF ROCKLIN

INVESTMENT BID FORM

Quotation requested by: __________________________ Date: ___________________

Surplus funds available to invest: ____________________________________________

Date can be invested to: ___________________________________________________

Quotes obtained:

Firm No. 1 ______________________________________________________________

Contact: ______________________________ Phone: _______________________

Types of Face Maturity
Securities Amount Yield Date Cost1

Firm No. 2 ______________________________________________________________

Contact: _______________________________ Phone: _______________________

Types of Face Maturity
Securities Amount Yield Date Cost1_

Please circle security of applicable firm accepted.

______________________________________
1Total cost including fees, if any.
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ATTACHMENT “F”

CITY OF ROCKLIN

INSTITUTION SELECTION POLICY

I. PURPOSE

The purpose of the Institution Selection Policy is to establish procedures for the selection and evaluation of institutions that have been approved to conduct financial transactions with the City of Rocklin. Institutions selected pursuant to this policy will be admitted to the approved list upon approval by the City Treasurer . Evaluations of those approved institutions will be performed annually. The City will only transact business with institutions who have been previously approved.

II. SELECTION PROCESS

The selection process shall be as follows:

A. Institutions complete and return the appropriate questionnaire (see Attachments “A” -- “C”) to the City of R ocklin’s Administrative Services Department.

B. The Administrative Services Department shall review the questionnaire in order to determine if the institutions are adequately capitalized, deal in security markets appropriate to the City’s needs, and agree to abide by the conditions set forth in the City of Rocklin’s Investment Policy. The Department will then submit the questionnaire and the results of the review to the City Treasurer for future consideration. Institutions submitting incomplete responses will be advised and allowed an opportunity to amend their responses.

C. The City will consider the institution’s responses, the Administrative Services Department’s review and determine if it is necessary to invite the institution to make a presentation prior to its final approval.

D. The City Treasurer’s decision to recommend approval or denial by his or her interpretation of the City’s needs, the insti tution’s response to the questionnaire, and other factors regarding the ability of the institution to provide the most effective and efficient financial services required.

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III. EVALUATION PROCESS

The evaluation process shall be as follows:

A. Upon acceptance to the “Approved Qualified Institut ions” list, the Financial Institution shall complete periodically, as determined by the City Treasurer, the appropriate questionnaire (see Attachments “A” - “C”) and shall submit audited financial statements to the City. City shall review the data as in the selection process and forward results to the Investment Committee. Questions or issues that are raised as a result of the data reported will be put to the appropriate institution either personally or in writing.

B. The City Treasurer shall make the final determination to retain or eliminate any institution from the approved list which is not subject to further review or appeal.

IV. APPROVED QUALIFIED INSTITUTIONS LIST

The City shall maintain an approved list of institutions authorized for transacting business.

The number of institutions included on the approved list shall be determined by the City Treasurer. Inclusion on the approved list is a privilege and does not imply or create a right or any intent on behalf of the City of Rocklin to conduct financial transactions through or with any institution. Institutions may be added or removed from the approved list at the discretion of the City Treasurer . It is recognized that qualified institutions may not be included on the approved list due to the City’s need to manage the number of institutions for investment competition.

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GLOSSARY

ACCRUED INTEREST - Interest on a bond that has accumulated since the last interest payment. The buyer pays the seller the bond price plus accrued interest.

AGENCIES - Federal agency securities.

BANKER’S ACCEPTANCE - A time draft drawn on a bank and accepted by that bank as ultimate liability for payment. Used most often to finance import and export transactions.

Banker’s acceptances are also collateralized b y the underlying merchandise being contracted in the import -export transaction. It is a money market instrument when guaranteed by a bank.

BASIS POINT - Smallest measure used in quoting yields on bonds and notes; one one - hundredth of a percentage point (.01 percent or .0001).

BOND - A debt instrument in which the investor lends money to the bond issuer, who agrees to pay a stated rate of interest over a specified period of time. Very simply a bond is nothing more than a promissory note which is traded in the financial markets. The investor’s position is that of lender.

BOOK VALUE - The value at which the investor holds on their books as their invested amount in a security. This may be more or less’ than the current face value of the security depending if the security was purchased at a price more or less than the face value.

BROKER - A broker brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides; he does not hold a position. In the money market, brokers are active in markets in which banks buy and sell money and in interdealer markets.

CAPITALIZATION - A firm’s capital structure, composed of total securities issued by the corporation, including bonds, debentures, preferred and common stock, and all surpluses (retained earnings).

CERTIFICATE OF DEPOSIT (CD) (TIME DEPOSIT) - An interest bearing time deposit issued by banks with a specific maturity evidenced by a certificate. Large denomination CD’s are typically negotiable.

CHURNING – excessive tr ading in a customer ’s account designed solely to increase broker’s commissions.

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COLLATERAL - Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.

COLLATERALIZED OBLIGATIONS - Notes secured by collateral. The collateral is usually comprised of U.S. Government securities which are held by a third-party-trustee who also insures that adequate collateral is posted at all times.

COLLATERALIZED MORTGAGE OBLIGATION (CMO) - Derivative security created by dividing the cash flows of a pool of mortgages into obligations with different maturities.

COMMERCIAL PAPER - Unsecured, bearer obligations (maturity usually 270 days or less) issued by corporations, either at a discount and redeemed at par, or at par and pay interest.

COMMON STOCK - Units (shares) of ownership in a public corporation. Shareholders have control over corporate affairs through voting rights, and dividends are paid to common stockholders after preferred stock shareholders.

CONFIRMATION - A piece of paper detailing the conditions and terms of a transaction.

Delivered to the customer on or before settlement. It serves as a bill for purchases and an advisory notice for sales.

CORPORATE BONDS - A debt instrument issued by a corporation which normally pays interest on specific dates and repays the principal at maturity.

COUPON - (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the b ond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date.

CREDIT RISK - The risk that an obligation will not be met in a timely fashion with the result being a temporary or even permanent loss to the lender.

DEALER - A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.

DEBENTURE - A bond secured only by the general credit of the issuer.

DEBT TO EQUITY RATIO - Solvency ratio of total long -term debt to to tal stockholder’s equity.

DELIVERY VERSUS PAYMENT - There are two methods of delivery of securities: delivery 335

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versus payment and delivery versus receipt (also called free). Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.

DERIVATIVE - A broad term referring to any security which derives its value from another underlying asset or index.

DISCOUNT - The difference between the cost price of a security and its value at maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount.

DISCOUNT RATE - Interest rate that th e Federal Reserve charges for loans to member banks.

DISCOUNT SECURITIES - Non-interest bearing money market instruments that are issued at a discount and redeemed at a maturity for full face value; i.e., U.S. Treasury bills.

DIVERSIFICATION - Spreading a portfolio across a range of security types, industries or geographic areas to limit risk.

FACE VALUE - The same as par value. Face value is the principal amount of a bond.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) - A federal agency that insures bank deposits currently $250,000 per depositor.

FEDERAL FARM CREDIT BANK (FFCB) - Government instrumentality which issues notes and bonds to provide funds for its member banks for the purchase of farm land, equipment and commodities.

FEDERAL HOME LOAN BANKS (FHLB) - Government instrumentality consisting of twelve regional banks owned by savings and homestead associations which issue bonds and notes to finance home building and mortgage loans of their member associates.

FEDERAL HOME LOAN MORTGAGE CORPOR ATION (FHLMC OR FREDDIE MAC) - Debt issued by FHLMC, a government i nstrumentality, to facilitate real estate lending. FHLMC issues short-term debt backed by its own full faith and credit, and it issued long-term debt backed by mortgages with repayment guaranteed by FHLMC.

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FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA OR FANNIE MAE) – A government- sponsored-publicly-owned corporation whose stock trades on the New York Stock Exchange. FNMA issues short -term debt backed by its own full faith and credit. FNMA purchases FHA, VA, and FHDA mortgages through the sale of its corporate debenture notes. These notes are backed by the mortgages with repayment guaranteed by FNMA.

FLOATER - A floating rate security in which the interest note varies with an index such as U.S. Treasury Bills or LIBOR (London Interbank Offered Rate).

GENERAL OBLIGATION BOND (G.O.) - A municipal bond secured by the full faith and credit of the municipality.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA OR GINNIE MAE) - Securities guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by F HA, VA or FMHM mortgages. The term pass-through is often used to describe Ginnie Maes.

GUARANTEED INVESTMENT CONTRACTS (GICs) - An agreement acknowledging receipt of funds for deposit, specifying terms for withdrawal, and guaranteeing a rate of interest to be paid. Uninsured, non -guaranteed obligations of insurance companies, permitted for public investment in a few states. Risk varies according to the credit risk of the issuing company.

HEDGE/HEDGING - Technique designed to counteract the risk of loss fr om price changes in the market.

HOLDING COMPANIES - A corporation with controlling interest in one or more corporations.

INSTRUMENTALITIES - See U.S. government instrumentality obligations.

INTEREST - The sum charged for borrowing money.

INTEREST-ONLY SECURITY (I0) - Security derived from the interest rate portion of a pool of mortgage securities (separated from the principal portion).

INTEREST RATE RISK - The uncertainty of investment return due to changes in the market rates of interest. For investm ents that generate a fixed rate of return, the value of that investment is inversely related to the movement of market rates of interest.

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INVERSE FLOATER - Structured note or derivative designed to rise in yield as interest rates fall. Also called reverse floater. Extremely volatile security not recommended for public funds.

INVESTMENT COMPANY ACT OF 1940 - Regulates investment companies.

LEVERAGE - Money borrowed to reinvest in order to increase the return on invested capital. A municipality may leverage funds through the issuance of taxable notes, reverse repurchase agreements and purchasing securities with embedded leverage. Leverage may be embedded inside a securi ty or it may be applied to an investment portfolio as a whole.

LIQUIDITY - A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.

LIQUIDITY RISK - The risk that a financial institution or other organization will not have sufficient cash on hand to meet its obligations ; or in the case of a specific investment instrument, the risk that it will not be easily convertible to cash.

LOCAL GOVERNMENT INVESTMENT POOL (LGIP) - The aggregate of all funds from a political subdivision that are placed in the custody of the State Treasurer for investment and reinvestment.

LONG TERM - Securities held more than six months or bonds maturing in more than five years.

MARK TO MARKET - Adjustment of an account or portfolio to reflect actual market price rather than book price, purchase price or some other valuation.

MARKET MAKER - A broker/dealer maintaining an inventory in a security.

MARKET RATE OF RETURN - Return that is based on some market index that acts as a proxy for the market, such as the “Standard & Poor ’s 500” stock index, which is used to gauge the returns on individual securities or portfolios. The City uses as a benchmark the average return on two-year U.S. Treasury Notes.

MARKET RISK - The risk of a decline in the price of securities because of a general falling market.

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MARKET VALUE - The price at which a security is trading and could presumably be purchased or sold.

MASTER REPURCHASE AGREEMENT - A written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower.

MATURITY - The date upon which the principal or stated value of an investment become due and payable.

MEDIUM-TERM NOTES - Issuers register with the SEC allowing for notes to be issued at various times, rates and maturities from one to ten years as the issuer’s financing needs dictate.

MONEY MARKET - The market in which short -term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.

MONEY MARKET FUND - An open-end investment company (mutual fund) that invests in money market instruments regulated by the Securities and Exchange Commission. It is a highly liquid investment that pays money market rates of interest.

MONEY MARKET INSTRUMENTS - Highly liquid debt instruments usually with maturities of one year or less. Money market instruments include repurchase agreements, reverse repurchase agreements, negotiable certificates of deposit, banker’s acceptances, commercial paper, Treasury bills and other short -term direct obligations of U.S. government agencies and instrumentalities.

MORTGAGE BACKED SECURITY (MBS) - A pool of individual mortgages which is packaged and sold to investors at a specified coupon rate, maturity date, and face value. Individual mortgage loans are purchased from lenders by GNMA, FNMA, & FHLMC, thus converting the lenders loan assets to dollars, in turn making money available again for borrowing.

GNMA, FNMA, & FHLMC then package the mortgage loans into pools, securitize them and offers them for sale in the securities market. In doing so, GNMA, FNMA, & FHLMC convert mortgages to dollars, enabling them to purchase additional individual mortgages for pooling. This conduit is used to reallocate funds, from the securities markets into the real estate market.

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MUTUAL FUNDS - Investment company that pools funds from investors to buy stocks, bonds, government securities, money market instruments and other assets. Public investments, with the exception of pension funds, usually are restricted to mutual funds known as money market funds.

NATIONAL ASSOCIATION OF SECURITIES DEALERS - A not-for-profit organization of dealers whose aim is protecting over the counter customers through financ ial solvency and integrity.

NEGOTIABLE CERTIFICATE OF DEPOSIT - Time deposits which may be purchased and sold in the financial markets.

NET ASSET VALUE - Net redemption price (bid price) of an open-end investment company.

NO-LOAD MUTUAL FUNDS - Mutual funds offered directly to the public at net asset value with no sales charge.

NOTE - A written promise to pay a specified amount to a certain entity on demand or on a specified date.

OPEN MARKET OPERATIONS - Purchases and sales of government and certai n other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool.

PAR VALUE - The same as face value. Par value is the principal amount of a bond.

PERFECTED INTEREST - The legal right to interest and principal of securities held as collateral by a third party safekeeping arrangement.

PORTFOLIO - Collection of securities held by an investor.

PREFERRED STOCK - Shareholders are entitled to a specified dividend and priority o ver assets in liquidation, but not voting rights.

PREMIUM - Bond purchase price which is greater than that of its face value.

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PRIMARY DEALER - A group of government securities dealers that submit daily reports of market activity and positions and month ly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange commission (SEC), registered securities broker -dealers, banks, and a few unregulated firms.

PRIME BANKER’S ACCEPTANCE - A banker’s acceptance issued by a bank that has received the highest short -term ratings from at least two’ nationally recognized ratings organizations. It has a relatively short maturity (usually six months or less), and is eligible for discounting within the Federal Reserve system. Eligibility depends on a number of criteria including the purpose; timing and amount of the underlying transaction (See also “banker’s acceptance”).

PRIME COMMERCIAL PAPER - Commercial paper that has received the highest short-term ratings from at least two national ratings organizations (See also “commercial paper”).

PRIME RATE - Interest rate charged by a bank on loans to its best customers.

PRINCIPAL - (1) The face amount on a bond. (2) The basic amount invested.

PRINCIPAL-ONLY SECURITY (P0) - Security derived from principal portion of a pool of mortgage securities (separated from the interest payments).

PROSPECTUS - A legal document that must be provided to any prospective purchaser of a new securiti es offering registered with the SEC that typically includes information on the issuer, the issuer’s business, the proposed use of proceeds, the experience of the issuer’s management, and certain certified financial statements (also known as an “official statement”).

PRUDENT INVESTOR RULE - An investment standard. In some states, the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the state—the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.

RATE OF RETURN - The yield obtainable on a security based on its purchase price or i ts current market price. This may be the amortized yield to maturity on a bond or the current income return.

REINVESTMENT RISK - The risk that maturing investments cannot be replaced by investments earning the same interest rate.

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REPURCHASE AGREEMENT (RP or REPO) - A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the ag reement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves.

SAFEKEEPING - A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vault for protection.

SECONDARY MARKET - A market made for the purchase and sale of outstanding issues following the initial distribution.

SECURITIES & EXCHANGE COMMISSION (SEC) - Agency created by Congress to protect investors in securities transactions by administering securities legislation.

SECURITY INVESTOR PROTECTION CORPORATION (SIPC) - A non-profit organization of broker/dealers responsible for orderly liquidation of failed firms. Customers are protected to $500,000 per account.

SHORT TERM - Securities held six months or less. Bonds with maturities of one year or less.

SMALL BUSINESS ADMINISTRATION LOANS (SBA) - Loans made by banks to small business, which are then sold to the SBA who offers them for sale in the financial markets.

Loans are purchased by the SBA to facilitate lending for small business enterprises.

STRIPS – Separate trading of registered interest and principal securities

STRUCTURED NOTE - Complex customized security (also known as structured derivative) on which the returns are pegged to underlying assets or financial indices.

SUPRANATIONALS – International development institutions that provide financing, advisory services, and/or other financial services to their member countries to achieve overall goal of improving living standards through sustainable economic growth.

TAX AND REVENUE ANTICIPATION NOTES (TRANs) - Notes issued in anticipation of receiving tax proceeds or other revenues at a future date.

TOTAL RISK-BASED CAPITAL RATIO, TIER 1 RISK-BASED CAPITAL RATIO & TIER 1 LEVERAGE RATIO - In response to the FDIC Improvement Act of 1991 (FDICIA), the FDIC and the Federal Reserve Board both proposed a five -tier scheme of ca pital requirements and corresponding supervisory actions to implement the prompt corrective actions provisions 342

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of the FDICIA. These ratios serve as benchmarks for the five capital categories: well capitalized, adequately capitalized, undercapitalized, sign ificantly undercapitalized, and critically undercapitalized.

Well capitalized institution would be defined as one that has a total risk -based capital ratio of ten percent, a Tier 1 risk -based capital ratio of six percent and a leverage ratio of five percent. A well-capitalized institution can not be subject to any written capital order or directive.

An adequately capitalized institution would be one with a total risk-based capital ratio of eight percent, a Tier 1 risk-based capital ratio of four percent, or a Tier 1 leverage ratio of four percent.

An undercapitalized institution would be one that does not meet the capital levels needed to be adequately capitalized. A significantly undercapitalized institution, however, would be one that has a total risk -based capital ratio of under six percent, a Tier 1 risk -based capital of under three percent, or a Tier 1 leverage ratio of under three percent.

Finally, the agencies proposed to classify any institution as critically undercapitalized if it has a Tier 1 leverage ratio of two percent or less.

TREASURY BILLS - A short-term U.S. government security, also known as a T-bill, issued in minimum denominations of $10,000 with maturities of 13 weeks, 26 weeks and 52 weeks. T-bills bear no specific interest rate. They are sold at a discount to face value; their yield, therefore, varies with the difference between the purchase price and the value at maturity.

TREASURY BOND - Long-term, coupon-bearing U.S. government security, usually issued in denominations of $1,000 or more and having maturities of 10 or more years. Interest is paid every six months at a rate of one -half the annual coupon; principal is paid at maturity.

TREASURY NOTES - Medium-term, coupon -bearing U.S. government security, usually issued in denomin ations of $1,000 or more and having maturities of one to 10 years.

Interest is paid every six months at a rate of one-half the annual coupon; principal is paid at maturity.

TRUSTEE OR TRUST COMPANY OR TRUST DEPARTMENT OF A BANK – A financial institution w ith trust powers which acts in a fiduciary capacity for the benefit of the bondholders in enforcing the terms of the bond contract.

UNDERWRITER - A dealer which purchases a new issue of municipal securities for resale. 343

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UNIFORM NET CAPITAL RULE - SEC requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including m argin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

U.S. GOVERNMENT AGENCY OBLIGATIONS (AGENCIES) - Securities issued by federal agencies other than the U.S. Treasury including: the Government National Mortgage Association (GNMA or Ginnie Mae), Small Business Administration (SBA), General Services Administration (GSA) and Federal Housing Administration (FHA). Some investors include debt instruments issued by government -sponsored corporations and related instrumentalities in the term “agencies.” However, technical differences make this usage incorrect. In most cases, the U.S. government explicitly guarantees principal and interest of agency debt but not debt of instrumentalities and government sponsored corporations.

U.S. GOVERNMENT INSTRUMENTALITY OBLIGATIONS (INSTRUMENTALITIES) - Securities issued by government -sponsored corporations including: the Student Lo an Marketing Association (Sallie Mae), World Bank, Federal National Mortgage Association (Fannie Mae), Federal Farm Credit Banks (FFCB), Federal Home Loan Mortgage Association (Freddie Mae) and Federal Home Loan Banks (FHLB). Principal and interest are guaranteed only by the corporations, not the U.S. government.

WEIGHTED AVERAGE MATURITY (WAM) - The average maturity of all the securities that comprise a portfolio that is typically expressed in days or years.

YIELD - The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price for the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

YIELD CURVE - A graphic representation that shows the relationship at a given point in time between yields and maturity for bonds that are identical in every way except maturity.

ZERO-COUPON SECURITY (ZEROS) - A security on which all interest is paid in a lump sum at maturity, thus eliminating the reinvestment risk of interest paid out over the life of the security. Prices are extremely interest rate sensitive and volatility increases with maturity (See also “zero-coupon treasury bonds”).
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ZERO-COUPON TREASURY BOND - Security formed by stripping coupons from a treasury bond so that an investor can buy a single coupon or the principal payment at present value. Market risk is high, particularly for longer maturities. Variations include STRIPS (Separate Trading: of Registere d Interest and Principal), CATS (Certificate of Accrual on Treasury Securities), TIGRS (Treasury Income Growth Receipts) and others.

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TABLE 1

INVESTMENT LIMITATIONS SUMMARY

Eligible Investment Percentage of Total Percentage of Total Investment Policy Investment Fund Investment Fund Invested Vehicle SectionMarket Value With a Single Institution

City of Rocklin Bonds V. 1. (A.) No limitation No limitation

U.S. Treasuries V. 1. (B.) No limitation No limitation

State of California Bonds V. 1. (C.) No limitation No limitation

Other U.S. State Bonds V. 1. (D.) No limitation No limitation

Local Agency Bonds V. 1. (E.) No limitation No limitation

U.S. Agencies V. 1. (F.) May not exceed 25% of 5%
the market value of the
fund. No more than 5%
may be in callable
securities.

Banker’s Acceptance V. 1. (H.) May not exceed 180 days to 5% maturity and 40% of the
market value of the fund.

Commercial Paper V. 1. (I.) May not exceed 270 days to 5% maturity nor 10% of the
outstanding paper of the
issuing corporation and 25%
of the market value of the
fund.

Negotiable Certificates V. 1. (J.) 30% 5%
of Deposit

Repurchase Agreements V. 1. (L.) May not exceed 90 days to 5% maturity and 15% of the
market value of the fund.

Supranationals V.1. (K.)
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Eligible Investment Percentage of Total Percentage of Total Investment Policy Investment Fund Investment Fund Invested Vehicle SectionMarket Value With a Single Institution

Local Agency V. 1. (L.) Maximum dollar Maximum dollar amount Investment Fund amount as permitted as permitted by State law. by State law.

Medium-term Notes V. 1. (M.) 30% 5%

Time Deposits V. 1. (N.) 10% 5%

Mutual Funds/Money V. 1. (O.) 15% 5%
Market Funds

Collateralized Negotiable V. 1. (P.) 10% 5%
Investments

Mortgage-Backed V. 1. (Q.) 20% 5%
Securities

Placer County Treasurer’s V. 1. (R.) 25% N/A Investment Pool

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RESOLUTION NO. 2023-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROCKLIN

DELEGATING AUTHORITY TO MAKE INVESTMENT DECISIONS TO THE CITY TREASURER AND ADOPTING LEGISLATIVE POLICY NO. 1 – INVESTMENT POLICY WHEREAS, the City of Rocklin’s Investment Policy and California Government Code Section 53607 authorize the City Council to delegate authority to the City Treasurer to make all investment decisions for a one-year period; and WHEREAS, pursuant to the Investment Policy, the City’s Investment Policy shall be reviewed annually to ensure its consistency with the overall objectives of preservation of principal, liquidity, and return, and its relevance to current laws and regulations.

NOW THEREFORE, the City Council of the City of Rocklin does resolve as follows:

Section 1. Pursuant to Section 53607 of the California Government Code, the City Council hereby delegates authority to make all investment decisions for the City’s investment portfolio to the City Treasurer. Such delegation shall be for the period commencing July 1, 2023 and ending June 30, 2024. This authority shall supersede Resolution No. 2022-130.

Section 2. Pursuant to the Rocklin Legislative Policy No. 1 – Investment Policy, City of Rocklin Statement of Investment Policy attached hereto as Exhibit A, is hereby confirmed through the 2023/24 fiscal year.

PASSED AND ADOPTED this 9th day of May, 2023, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:
____________________________________
Ken Broadway, Mayor
ATTEST:
____________________________
Hope Ithurburn, City Clerk
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Exhibit A

CITY OF ROCKLIN

STATEMENT OF INVESTMENT POLICY

INTRODUCTION
This statement is intended to outline the policies for the prudent investment of the City’s Funds and to provide guidelines for suitable investments.

The ultimate goal is to enhance the economic status of the City while safeguarding its assets.

The City’s Cash Management System is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest extent possible. The City’s investment portfolio shall be structured with the objective of attaining a market rate of return throughout budgetary and economic cycles, provided that all investments meet the criteria established for safety and liquidity.

The City’s investment policies and practices are based upon Federal, State, and Local laws and prudent money management. The primary goals of these policies are:

1. To assure compliance with all Federal, State and Local laws governing the investment of monies.

2. To protect the principal monies.

3. To ensure the investment portfolio remains sufficiently liquid to enable the City of Rocklin to meet all operating requirements which might be reasonably anticipated.

4. To attain a market rate of return on investment within the parameters of this Statement of Investment Policy and the Investment Portfolio Guidelines.

I. SCOPE
It is intended that this policy cover all funds and investment activities under the direct authority of the City in accordance with California Government Code Section 53600 et seq., the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) 349

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and local laws. Funds included are General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, Permanent Funds and Trust Funds.

This policy will not cover bond proceeds obtained from bond issues which are not direct obligations of the City, and which are not under the direct authority of the City. The bond proceeds will be invested in accordance with the Bond Indenture Agreement and applicable State and Federal regulations.

II. OBJECTIVES

1. Safety of Principal
Safety of principal is the foremost objective of the City of Rocklin. Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the Agency will diversify its investments by investing funds among a variety of securities with independent returns. The City shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk.

2. Liquidity
Liquidity is the second most important objective of the City of Rocklin. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands. It is important that an investment contain the feature of being easily sold at any time with a minimal risk of loss of some portion of principal or interest. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.

3. Return on Investment
The City’s Fund shall seek to attain a market-average rate of return throughout economic cycles. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs. 350

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III. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
City employees and other authorized persons responsible for managing City funds, acting in accordance with written procedures and the Investment Policy and exercising due diligence, shall not be held personally responsible for a specific security’s credit risk or market price changes, provided that deviations from expectations are reported in a timely manner and that appropriate action is taken to control adverse developments.

IV. DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from California Government Code, Sections 41006 and 53600 et seq.

The City Council is responsible for the management of the City’s funds, including the administration of this investment policy. Management responsibility for the cash management of the City’s funds may be delegated to the City Treasurer.

The City Treasurer will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment 351

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transaction except as provided under the terms of this policy and the procedures established by the City Treasurer.

The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.

The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.

V. ETHICS AND CONFLICTS OF INTEREST
All participants in the investment process shall act as custodians of the public trust.

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. City employees and the City’s Investment Advisory Committee involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the Investment Policy of which could impair their ability to make impartial investment recommendations and/or decisions. The City’s Investment Advisory Committee and City employees involved in the investment process shall disclose any material financial interests in financial institutions with which the City may conduct business, and they shall further disclose any reportable personal financial/investment positions that could be related to the performance of the City’s portfolio. The Investment Advisory Committee and City employees involved in the investment process shall subordinate their personal investment transactions to those of the City, particularly with regard to the timing of purchases and sales.

VI. INVESTMENTS

1. AUTHORIZED INVESTMENTS
The City is governed by the California Government Code, Sections 53600 et seq. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits and minimum credit requirements listed in this section apply at the time the security is purchased.

An appropriate risk level shall be maintained by primarily purchasing securities that 352

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are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.

Within the context of these limitations, the following investments are authorized, as further limited herein:

A. United States Treasury Bills, Notes, Bonds, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for payment of principal and interest. There is no limitation as to the percentage of the Fund that can be invested in this category as they are both safe and liquid.
 The maximum maturity is five (5) years.

B. Municipal Securities including obligations of the City of Rocklin, the State of California and any local agency within the State of California, provided that:
 The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”).
 No more than 5% of the portfolio may be invested in any single issuer.  No more than 30% of the portfolio may be in Municipal Securities.  The maximum maturity does not exceed five (5) years.

C. Municipal Securities (Registered Treasury Notes or Bonds) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California.
 The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”).
 No more than 5% of the portfolio may be invested in any single issuer.  No more than 30% of the portfolio may be in Municipal Securities.  The maximum maturity does not exceed five (5) years.

D. Federal Agencies or United States Government-Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal Agency or Government-Sponsored Enterprises (GSEs), provided that:
 No more than 30% of the portfolio may be invested in any single Agency/GSE issuer.
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 The maximum maturity does not exceed five (5) years.
 The maximum percent of agency callable securities in the portfolio will be 20%.

E. Banker’s Acceptances, provided that:
 They are issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 40% of the portfolio may be invested in Banker’s Acceptances.
 No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed 180 days.

F. Commercial paper, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
a. Securities issued by corporations:
(i) A corporation organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
(iii) If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
b. Securities issued by other entities:
(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company. (ii) The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond.
(iii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO.
 No more than 10% of the outstanding commercial paper of any single issuer.
 No more than 25% of the Agency’s investment assets under management may be invested in Commercial Paper
 No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed 270 days.
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G. Negotiable Certificates of Deposit (NCDs), issued by a nationally or state- chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
 The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
 Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO.  No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
 No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

H. Repurchase Agreements collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:
 Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
 Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).  The maximum maturity does not exceed one (1) year.

I. Supranationals, provided that:
 Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
 The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
 No more than 30% of the total portfolio may be invested in these securities.
 No more than 10% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.
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J. State of California Local Agency Investment Fund (LAIF), provided that:
 The City may invest up to the maximum amount permitted by LAIF.  LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the City Treasurer to adequately judge the risk inherent in LAIF’s portfolio.

K. Corporate Medium-term notes (MTNs), provided that:
 The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
 The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 30% of the total portfolio may be invested in MTNs.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

L. Federally Insured Time Deposits (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
 The amount per institution is limited to the maximum covered under federal insurance.
 No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
 The maximum maturity does not exceed five (5) years.

M. Mutual Funds and Money Market Mutual Funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. M UTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
 No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
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b. M ONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or (ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.  No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities.

N. Collateralized Bank Deposits. The City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651. There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.

O. Asset-Backed, Mortgage-Backed, Mortgage Pass-Through Securities and Collateralized Mortgage Obligations from issuers not defined in sections A. or D. of the Authorized Investments Section of this Policy, provided that:
 The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
 No more than 20% of the total portfolio may be invested in these securities.
 No more than 5% of the portfolio may be invested in any single Asset- Backed or Commercial Mortgage security issuer.
 The maximum legal final maturity does not exceed five (5) years.

P. Placer County Treasurer’s Investment Pool. The City may invest in the Placer County Treasurer’s Investment Pool established by the Placer County Treasurer for the benefit of local agencies. No more than 25% of the market value of the Fund may be invested in the Placer County Treasurer’s Investment Pool.

2. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
A. State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options.

B. In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. 357

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C. Investment in any security that could result in a zero interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2026, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted.

D. Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.

E. Purchasing or selling securities on margin is prohibited.

F. The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.

G. The purchase of foreign currency denominated securities is prohibited.

Agencies that are not Qualified Institutional Buyers (QIB) as defined by the Securities and Exchange Commission are prohibited from purchasing Private Placement Securities. The SEC defines a QIB as having at least $100,000,000 in securities owned and invested.

VII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS To the extent practicable, the City Treasurer shall endeavor to complete investment transactions using a competitive bid process whenever possible. The City Treasurer will determine which financial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and firms.

The City Treasurer shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City. Due inquiry shall determine whether such authorized broker/dealers, and the individuals covering the City are reputable and trustworthy, knowledgeable and experienced in Public Agency investing and able to meet all of their financial obligations. These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).

In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
 Institutions licensed by the state as a broker-dealer.  Institutions that are members of a federally regulated securities exchange.  Primary government dealers as designated by the Federal Reserve Bank and non- primary government dealers.
 Nationally or state-chartered banks.
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 The Federal Reserve Bank.
 Direct issuers of securities eligible for purchase.

Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the Agency may rely on the adviser for selection.

All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) must supply the City Treasurer with audited financials and a statement certifying that the institution has reviewed the California Government Code, Section 53600 et seq . and the City’s investment policy. The City Treasurer will conduct an annual review of the financial condition and registrations of such qualified bidders.

Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.

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

VIII. COLLATERALIZATION
CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security. 359

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COLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.

REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
 The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities.  Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
 The City shall receive monthly statements of collateral.

IX. DELIVERY, SAFEKEEPING AND CUSTODY OF SECURITIES
DELIVERY-VERSUS-PAYMENT (DVP). All investment transactions shall be conducted on a delivery-versus-payment basis.

SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third-party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.

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

MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:

1. The diversification requirements included in the “Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio.

2. No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy.

3. The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or the City’s risk preferences.

4. If a security owned by the City is downgraded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:
 Any actions taken related to the downgrade by the investment manager will be communicated to the City Treasurer in a timely manner.
 If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.

MITIGATING MARKET RISK IN THE PORTFOLIO
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash flow purposes.

The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
 The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.
 The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy. 361

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The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances.

XI. REPORTING
Monthly Reporting
The City Treasurer shall provide to the City Council a monthly investment report detailing transactions in the City’s portfolio as required per California Government Code section 53607.

Quarterly Reporting
The City Treasurer shall render a quarterly report to the City Council showing the type of investment, institution, date of maturity, amount of deposit, current market value for all securities with a maturity of more than twelve months, rate of interest, type and amount of funds under the management of contract investment managers, the City’s compliance with the statement of investment policy, the ability of the City of meet cash flow needs for the next six months, and such data as may be required by the City Council as required per California Government Code section 53646.

Annual Reports
An annual report will be presented to the City Council. This report will include comparisons of the City’s return to the market benchmark return, suggest policies and improvements that might enhance the investment program, and may include an investment plan for the coming year.

XII. INVESTMENT CONTROLS
The City Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. 362

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XIII. POLICY ADOPTION
The City’s Investment Policy shall be adopted by resolution of the City Council. The Policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of PRINCIPAL, LIQUIDITY, AND RETURN, and its relevance to current law, financial and economic trends, and to meet the needs of the City of Rocklin and any modifications made thereto must be approved by the City Council. The City’s Investment Policy shall be submitted annually to the City Council. 363

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Glossary

GLOSSARY
ACCRUED INTEREST - Interest on a bond that has accumulated since the last interest payment.

The buyer pays the seller the bond price plus accrued interest.

AGENCIES - Federal agency securities.

BANKER’S ACCEPTANCE - A time draft drawn on a bank and accepted by that bank as ultimate liability for payment. Used most often to finance import and export transactions. Banker’s acceptances are also collateralized by the underlying merchandise being contracted in the import-export transaction. It is a money market instrument when guaranteed by a bank.

BASIS POINT - Smallest measure used in quoting yields on bonds and notes; one one-hundredth of a percentage point (.01 percent or .0001).

BOND - A debt instrument in which the investor lends money to the bond issuer, who agrees to pay a stated rate of interest over a specified period of time. Very simply a bond is nothing more than a promissory note which is traded in the financial markets. The investor’s position is that of lender.

BOOK VALUE - The value at which the investor holds on their books as their invested amount in a security. This may be more or less’ than the current face value of the security depending if the security was purchased at a price more or less than the face value.

BROKER - A broker brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides; he does not hold a position. In the money market, brokers are active in markets in which banks buy and sell money and in interdealer markets.

CAPITALIZATION - A firm’s capital structure, composed of total securities issued by the corporation, including bonds, debentures, preferred and common stock, and all surpluses (retained earnings).

CERTIFICATE OF DEPOSIT (CD) (TIME DEPOSIT) - An interest bearing time deposit issued by banks with a specific maturity evidenced by a certificate. Large denomination CD’s are typically negotiable.

CHURNING – excessive trading in a customer’s account designed solely to increase broker’s commissions.

COLLATERAL - Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.
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Glossary
COLLATERALIZED OBLIGATIONS - Notes secured by collateral. The collateral is usually comprised of U.S. Government securities which are held by a third-party-trustee who also insures that adequate collateral is posted at all times.

COLLATERALIZED MORTGAGE OBLIGATION (CMO) - Derivative security created by dividing the cash flows of a pool of mortgages into obligations with different maturities.

COMMERCIAL PAPER - Unsecured, bearer obligations (maturity usually 270 days or less) issued by corporations, either at a discount and redeemed at par, or at par and pay interest.

COMMON STOCK - Units (shares) of ownership in a public corporation. Shareholders have control over corporate affairs through voting rights, and dividends are paid to common stockholders after preferred stock shareholders.

CONFIRMATION - A piece of paper detailing the conditions and terms of a transaction. Delivered to the customer on or before settlement. It serves as a bill for purchases and an advisory notice for sales.

CORPORATE BONDS - A debt instrument issued by a corporation which normally pays interest on specific dates and repays the principal at maturity.

COUPON - (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date.

CREDIT RISK - The risk that an obligation will not be met in a timely fashion with the result being a temporary or even permanent loss to the lender.

DEALER - A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.

DEBENTURE - A bond secured only by the general credit of the issuer.

DEBT TO EQUITY RATIO - Solvency ratio of total long-term debt to total stockholder’s equity.

DELIVERY VERSUS PAYMENT - There are two methods of delivery of securities: delivery versus payment and delivery versus receipt (also called free). Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.

DERIVATIVE - A broad term referring to any security which derives its value from another underlying asset or index.
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Glossary
DISCOUNT - The difference between the cost price of a security and its value at maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount.

DISCOUNT RATE - Interest rate that the Federal Reserve charges for loans to member banks.

DISCOUNT SECURITIES - Non-interest bearing money market instruments that are issued at a discount and redeemed at a maturity for full face value; i.e., U.S. Treasury bills.

DIVERSIFICATION - Spreading a portfolio across a range of security types, industries or geographic areas to limit risk.

FACE VALUE - The same as par value. Face value is the principal amount of a bond.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) - A federal agency that insures bank deposits currently $250,000 per depositor.

FEDERAL FARM CREDIT BANK (FFCB) - Government instrumentality which issues notes and bonds to provide funds for its member banks for the purchase of farm land, equipment and commodities.

FEDERAL HOME LOAN BANKS (FHLB) - Government instrumentality consisting of twelve regional banks owned by savings and homestead associations which issue bonds and notes to finance home building and mortgage loans of their member associates.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC OR FREDDIE MAC) - Debt issued by FHLMC, a government instrumentality, to facilitate real estate lending. FHLMC issues short-term debt backed by its own full faith and credit, and it issued long-term debt backed by mortgages with repayment guaranteed by FHLMC.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA OR FANNIE MAE) – A government- sponsored-publicly-owned corporation whose stock trades on the New York Stock Exchange.

FNMA issues short-term debt backed by its own full faith and credit. FNMA purchases FHA, VA, and FHDA mortgages through the sale of its corporate debenture notes. These notes are backed by the mortgages with repayment guaranteed by FNMA.

FLOATER - A floating rate security in which the interest note varies with an index such as U.S.

Treasury Bills or LIBOR (London Interbank Offered Rate).

GENERAL OBLIGATION BOND (G.O.) - A municipal bond secured by the full faith and credit of the municipality.
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Glossary
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA OR GINNIE MAE) - Securities guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations and other institutions. Security holder is protected by full faith and credit of the U.S.

Government. Ginnie Mae securities are backed by FHA, VA or FMHM mortgages. The term pass- through is often used to describe Ginnie Maes.

GUARANTEED INVESTMENT CONTRACTS (GICs) - An agreement acknowledging receipt of funds for deposit, specifying terms for withdrawal, and guaranteeing a rate of interest to be paid.

Uninsured, non-guaranteed obligations of insurance companies, permitted for public investment in a few states. Risk varies according to the credit risk of the issuing company.

HEDGE/HEDGING - Technique designed to counteract the risk of loss from price changes in the market.

HOLDING COMPANIES - A corporation with controlling interest in one or more corporations.

INSTRUMENTALITIES - See U.S. government instrumentality obligations.

INTEREST - The sum charged for borrowing money.

INTEREST-ONLY SECURITY (I0) - Security derived from the interest rate portion of a pool of mortgage securities (separated from the principal portion).

INTEREST RATE RISK - The uncertainty of investment return due to changes in the market rates of interest. For investments that generate a fixed rate of return, the value of that investment is inversely related to the movement of market rates of interest.

INVERSE FLOATER - Structured note or derivative designed to rise in yield as interest rates fall.

Also called reverse floater. Extremely volatile security not recommended for public funds.

INVESTMENT COMPANY ACT OF 1940 - Regulates investment companies.

LEVERAGE - Money borrowed to reinvest in order to increase the return on invested capital. A municipality may leverage funds through the issuance of taxable notes, reverse repurchase agreements and purchasing securities with embedded leverage. Leverage may be embedded inside a security or it may be applied to an investment portfolio as a whole.

LIQUIDITY - A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. 367

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Glossary
LIQUIDITY RISK - The risk that a financial institution or other organization will not have sufficient cash on hand to meet its obligations; or in the case of a specific investment instrument, the risk that it will not be easily convertible to cash.

LOCAL GOVERNMENT INVESTMENT POOL (LGIP) - The aggregate of all funds from a political subdivision that are placed in the custody of the State Treasurer for investment and reinvestment.

LONG TERM - Securities held more than six months or bonds maturing in more than five years.

MARK TO MARKET - Adjustment of an account or portfolio to reflect actual market price rather than book price, purchase price or some other valuation.

MARKET MAKER - A broker/dealer maintaining an inventory in a security.

MARKET RATE OF RETURN - Return that is based on some market index that acts as a proxy for the market, such as the “Standard & Poor’s 500” stock index, which is used to gauge the returns on individual securities or portfolios. The City uses as a benchmark the average return on two- year U.S. Treasury Notes.

MARKET RISK - The risk of a decline in the price of securities because of a general falling market.

MARKET VALUE - The price at which a security is trading and could presumably be purchased or sold.

MASTER REPURCHASE AGREEMENT - A written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower.

MATURITY - The date upon which the principal or stated value of an investment become due and payable.

MEDIUM-TERM NOTES - Issuers register with the SEC allowing for notes to be issued at various times, rates and maturities from one to ten years as the issuer’s financing needs dictate.

MONEY MARKET - The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.

MONEY MARKET FUND - An open-end investment company (mutual fund) that invests in money market instruments regulated by the Securities and Exchange Commission. It is a highly liquid investment that pays money market rates of interest.
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Glossary
MONEY MARKET INSTRUMENTS - Highly liquid debt instruments usually with maturities of one year or less. Money market instruments include repurchase agreements, reverse repurchase agreements, negotiable certificates of deposit, banker’s acceptances, commercial paper, Treasury bills and other short-term direct obligations of U.S. government agencies and instrumentalities.

MORTGAGE BACKED SECURITY (MBS) - A pool of individual mortgages which is packaged and sold to investors at a specified coupon rate, maturity date, and face value. Individual mortgage loans are purchased from lenders by GNMA, FNMA, & FHLMC, thus converting the lenders loan assets to dollars, in turn making money available again for borrowing. GNMA, FNMA, & FHLMC then package the mortgage loans into pools, securitize them and offers them for sale in the securities market. In doing so, GNMA, FNMA, & FHLMC convert mortgages to dollars, enabling them to purchase additional individual mortgages for pooling. This conduit is used to reallocate funds, from the securities markets into the real estate market.

MUTUAL FUNDS - Investment company that pools funds from investors to buy stocks, bonds, government securities, money market instruments and other assets. Public investments, with the exception of pension funds, usually are restricted to mutual funds known as money market funds.

NATIONAL ASSOCIATION OF SECURITIES DEALERS - A not-for-profit organization of dealers whose aim is protecting over the counter customers through financial solvency and integrity.

NEGOTIABLE CERTIFICATE OF DEPOSIT - Time deposits which may be purchased and sold in the financial markets.

NET ASSET VALUE - Net redemption price (bid price) of an open-end investment company.

NO-LOAD MUTUAL FUNDS - Mutual funds offered directly to the public at net asset value with no sales charge.

NOTE - A written promise to pay a specified amount to a certain entity on demand or on a specified date.

OPEN MARKET OPERATIONS - Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool.

PAR VALUE - The same as face value. Par value is the principal amount of a bond. 369

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PERFECTED INTEREST - The legal right to interest and principal of securities held as collateral by a third-party safekeeping arrangement.

PORTFOLIO - Collection of securities held by an investor.

PREFERRED STOCK - Shareholders are entitled to a specified dividend and priority over assets in liquidation, but not voting rights.

PREMIUM - Bond purchase price which is greater than that of its face value.

PRIMARY DEALER - A group of government securities dealers that submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange commission (SEC), registered securities broker-dealers, banks, and a few unregulated firms.

PRIME BANKER’S ACCEPTANCE - A banker’s acceptance issued by a bank that has received the highest short-term ratings from at least two’ nationally recognized ratings organizations. It has a relatively short maturity (usually six months or less), and is eligible for discounting within the Federal Reserve system. Eligibility depends on a number of criteria including the purpose; timing and amount of the underlying transaction (See also “banker’s acceptance”).

PRIME COMMERCIAL PAPER - Commercial paper that has received the highest short-term ratings from at least two national ratings organizations (See also “commercial paper”).

PRIME RATE - Interest rate charged by a bank on loans to its best customers.

PRINCIPAL - (1) The face amount on a bond. (2) The basic amount invested.

PRINCIPAL-ONLY SECURITY (P0) - Security derived from principal portion of a pool of mortgage securities (separated from the interest payments).

PROSPECTUS - A legal document that must be provided to any prospective purchaser of a new securities offering registered with the SEC that typically includes information on the issuer, the issuer’s business, the proposed use of proceeds, the experience of the issuer’s management, and certain certified financial statements (also known as an “official statement”).

PRUDENT INVESTOR RULE - An investment standard. In some states, the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the state— the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.

RATE OF RETURN - The yield obtainable on a security based on its purchase price or its current 370

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market price. This may be the amortized yield to maturity on a bond or the current income return.

REINVESTMENT RISK - The risk that maturing investments cannot be replaced by investments earning the same interest rate.

REPURCHASE AGREEMENT (RP or REPO) - A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves.

SAFEKEEPING - A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vault for protection.

SECONDARY MARKET - A market made for the purchase and sale of outstanding issues following the initial distribution.

SECURITIES & EXCHANGE COMMISSION (SEC) - Agency created by Congress to protect investors in securities transactions by administering securities legislation.

SECURITY INVESTOR PROTECTION CORPORATION (SIPC) - A non-profit organization of broker/dealers responsible for orderly liquidation of failed firms. Customers are protected to $500,000 per account.

SHORT TERM - Securities held six months or less. Bonds with maturities of one year or less.

SMALL BUSINESS ADMINISTRATION LOANS (SBA) - Loans made by banks to small business, which are then sold to the SBA who offers them for sale in the financial markets. Loans are purchased by the SBA to facilitate lending for small business enterprises.

STRIPS – Separate trading of registered interest and principal securities STRUCTURED NOTE - Complex customized security (also known as structured derivative) on which the returns are pegged to underlying assets or financial indices.

SUPRANATIONALS – International development institutions that provide financing, advisory services, and/or other financial services to their member countries to achieve overall goal of improving living standards through sustainable economic growth.

TAX AND REVENUE ANTICIPATION NOTES (TRANs) - Notes issued in anticipation of receiving tax proceeds or other revenues at a future date.
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TOTAL RISK-BASED CAPITAL RATIO, TIER 1 RISK-BASED CAPITAL RATIO & TIER 1 LEVERAGE RATIO - In response to the FDIC Improvement Act of 1991 (FDICIA), the FDIC and the Federal Reserve Board both proposed a five-tier scheme of capital requirements and corresponding supervisory actions to implement the prompt corrective actions provisions of the FDICIA. These ratios serve as benchmarks for the five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.

Well capitalized institution would be defined as one that has a total risk-based capital ratio of ten percent, a Tier 1 risk-based capital ratio of six percent and a leverage ratio of five percent. A well-capitalized institution cannot be subject to any written capital order or directive.

An adequately capitalized institution would be one with a total risk-based capital ratio of eight percent, a Tier 1 risk-based capital ratio of four percent, or a Tier 1 leverage ratio of four percent.

An undercapitalized institution would be one that does not meet the capital levels needed to be adequately capitalized. A significantly undercapitalized institution, however, would be one that has a total risk-based capital ratio of under six percent, a Tier 1 risk-based capital of under three percent, or a Tier 1 leverage ratio of under three percent.

Finally, the agencies proposed to classify any institution as critically undercapitalized if it has a Tier 1 leverage ratio of two percent or less.

TREASURY BILLS - A short-term U.S. government security, also known as a T-bill, issued in minimum denominations of $10,000 with maturities of 13 weeks, 26 weeks and 52 weeks. T-bills bear no specific interest rate. They are sold at a discount to face value; their yield, therefore, varies with the difference between the purchase price and the value at maturity.

TREASURY BOND - Long-term, coupon-bearing U.S. government security, usually issued in denominations of $1,000 or more and having maturities of 10 or more years. Interest is paid every six months at a rate of one-half the annual coupon; principal is paid at maturity.

TREASURY NOTES - Medium-term, coupon-bearing U.S. government security, usually issued in denominations of $1,000 or more and having maturities of one to 10 years. Interest is paid every six months at a rate of one-half the annual coupon; principal is paid at maturity. 372

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TRUSTEE OR TRUST COMPANY OR TRUST DEPARTMENT OF A BANK – A financial institution with trust powers which acts in a fiduciary capacity for the benefit of the bondholders in enforcing the terms of the bond contract.

UNDERWRITER - A dealer which purchases a new issue of municipal securities for resale.

UNIFORM NET CAPITAL RULE - SEC requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

U.S. GOVERNMENT AGENCY OBLIGATIONS (AGENCIES) - Securities issued by federal agencies other than the U.S. Treasury including: the Government National Mortgage Association (GNMA or Ginnie Mae), Small Business Administration (SBA), General Services Administration (GSA) and Federal Housing Administration (FHA). Some investors include debt instruments issued by government-sponsored corporations and related instrumentalities in the term “agencies.” However, technical differences make this usage incorrect. In most cases, the U.S. government explicitly guarantees principal and interest of agency debt but not debt of instrumentalities and government sponsored corporations.

U.S. GOVERNMENT INSTRUMENTALITY OBLIGATIONS (INSTRUMENTALITIES) - Securities issued by government-sponsored corporations including: the Student Loan Marketing Association (Sallie Mae), World Bank, Federal National Mortgage Association (Fannie Mae), Federal Farm Credit Banks (FFCB), Federal Home Loan Mortgage Association (Freddie Mae) and Federal Home Loan Banks (FHLB). Principal and interest are guaranteed only by the corporations, not the U.S. government.

WEIGHTED AVERAGE MATURITY (WAM) - The average maturity of all the securities that comprise a portfolio that is typically expressed in days or years.

YIELD - The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price for the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

YIELD CURVE - A graphic representation that shows the relationship at a given point in time between yields and maturity for bonds that are identical in every way except maturity. 373

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ZERO-COUPON SECURITY (ZEROS) - A security on which all interest is paid in a lump sum at maturity, thus eliminating the reinvestment risk of interest paid out over the life of the security.

Prices are extremely interest rate sensitive and volatility increases with maturity (See also “zero- coupon treasury bonds”).

ZERO-COUPON TREASURY BOND - Security formed by stripping coupons from a treasury bond so that an investor can buy a single coupon or the principal payment at present value. Market risk is high, particularly for longer maturities. Variations include STRIPS (Separate Trading: of Registered Interest and Principal), CATS (Certificate of Accrual on Treasury Securities), TIGRS (Treasury Income Growth Receipts) and others.
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City Council
Staff Report

Subject:

City of Rocklin 2023-2025 Strategic Plan
Date:

May
9, 2023
Submitted By:

Aly Zimmermann, City Manager
Department:

City Manager's Office
Recommendation:

Affirm the Outcomes of the 2023-2025 Strategic Planning Process, and Provide Direction to Staff on the Proposed Two-Year Work Plan Items.

Background:

On March 22, 2023 the City Council participated in a Strategic Planning Session, with staff and members of the community also participating. Consultant Julia Novak led the City Council through exercises to identify expectations, belief statements, and ultimately the development of 5 “
pillars”, or strategic outcomes for the next two fiscal years. Subsequently, the City Council, staff and community members collaborated on the preparation of directional statements to coincide with those strategic outcomes
. The 5 Pillars and directional statements
are included as Attachment 1.

Following the workshop, staff has been developing two-year programs and project goals that align with City Council's direction. Attachment 2 shows the 5 Pillars, directional statements, and staff-identified work plan items that will be the focus of staff and other resource priorities over the next two fiscal years. The work plan items represent big picture, high priority projects and programs that align with the 5 pillars, and were identified based on research and technical analysis by staff.

Staff seeks direction from the City Council regarding the proposed two-year work plan items.

Based on that direction, projects and programs will be incorporated into the City’s draft Operating and Capital Improvement budgets for the next two fiscal years. Updates will be provided as part of the quarterly budget updates received by the City Council.

Fiscal Impact:

There is no direct fiscal impact associated with the 2023-2025 Strategic Plan; however, funding to achieve specific projects will be included in the City’s Operating Budget over the next two fiscal years.

Item Number 7.C

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ATTACHMENTS:

1. Rocklin 2023-2023 Strategic Goals

2. Rocklin 2023-2025 Strategic Goals Workplan
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Safe
Rocklin residents feel comfortable
walking and biking throughout the
community, enjoying parks and public
spaces, and know that the City is
prioritizing the safety, health and well-
being of its community. Rocklin invests
in public safety by providing resources
and technology to consistently reduce
crime and ensure the City remains safe.

The City partners with nonprofits, social
service agencies, and the community to
address the root causes of crime and
social instability.

Livable
Rocklin is responsive to the unique
and emerging needs of the community
and offers a quality of life that supports
health, happiness and prosperity to
all. This results in a community where
residents have access to diverse parks,
unique amenities, inviting gathering
spaces, quality events, and exceptional
educational opportunities.

Our Pillars

CITY OF ROCKLIN
Vibrant
Rocklin stimulates a vibrant and diverse
community through technology and
efficient planning that is flexible and
responsive. Rocklin’s business friendly
environment promotes economic vitality,
welcoming new and supporting existing
businesses through excellent customer
service.

Resilient
Rocklin is resilient and seeks ways to
assist the community, businesses and
citizens to be adaptable in the face
of a changing world. The community
is connected through a network of
roadways, trails, and sidewalks that allow
people and goods to move safely and
efficiently throughout the City. Rocklin’s
infrastructure is designed, built, and
maintained to withstand and quickly
recover from disasters and disruptions.

Sustainable
Rocklin seeks opportunities to diversify
its funding sources to ensure a strong
fiscal foundation. Intentional long-term
financial planning ensures community
success and supports the city’s quality of
life.
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City of Rocklin 2023-25 Strategic Planning Framework
The City Council recently reviewed and established priorities for the next two years at the March 22, 20223 Council Retreat. A Council priority is defined as a topic that will receive significant attention and budget consideration during the year. Typically, priorities have one to three-year time limit, although some may continue beyond that time.

On Wednesday, March 22, 2023, the City Council selected the following “5 Pillars” to include as categories for its highest priorities:

Rocklin is resilient and seeks ways to assist the community, businesses and citizens to be adaptable in the face of a changing world. The community is connected through a network of roadways, trails, and sidewalks that allow people and goods to move safely and efficiently throughout the City. Rocklin’s infrastructure is designed, built, and maintained to withstand and quickly recover from disasters and disruptions.

Two-Year Work Plan Items:
• Construct and staff a 4th Rocklin Fire Station south/east of Interstate 80 • Update the City’s drainage infrastructure master plan and prioritize critical improvements • Explore opportunities to improve utility services to Rocklin residents and business owners and communicate those processes with the community
• Update the City’s ADA Transition Plan
• Establish a 3-year Pavement Management Program
• Create and Implement a Strategic Plan for Information Technology services • Strengthen Interagency Relationships (FEMA, Caltrans, CalOES, Army Corps, CDFW, etc.) • Identify innovative solutions to infrastructure maintenance and enhancements • Implement programs to reduce fire loss and increase community preparedness

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Rocklin stimulates a vibrant and diverse community through technology and efficient planning that is flexible and responsive.

Rocklin’s business friendly environment promotes economic vitality, welcoming new and supporting existing businesses through excellent customer service.

Two-Year Work Plan Items:
• Continue implementation of the adopted Economic Development Strategy and support efforts to recruit, retain and expand local businesses
• Invest in technology that supports economic development efforts • Nurture efforts to establish the Quarry District as a regional destination • Establish a small business outreach program with CDD to assist business owners with planning, permitting, and inspections of new and tenant improvement projects • Create and promote events and activities that will attract outside visitors and overnight stays • Support the newly created Arts Commission’s efforts:
o To review, update, and implement elements of the 2016 Rocklin Public Art Master Plan o To advise the city council on all matters affecting arts and culture of the city o To encourage programs in the arts and to promote the cultural enrichment of the community; o To establish an effective liaison between the city, county, and local cultural and artistic groups

Rocklin is responsive to the unique and emerging needs of the community and offers a quality of life that supports health, happiness and prosperity to all. This results in a community where residents have access to diverse parks, unique amenities, inviting gathering spaces, quality events, and exceptional educational opportunities.

Two-Year Work Plan Items:
• Update the City’s Zoning Code
• Use master planning processes to guide future development of parks that provide the community with amenities that currently are not offered within Rocklin’s park system • Increase recreation programing to ensure programs are offered to all ages and abilities within the community
• Identify critical gaps in City Trails within the public Right Of Way • Complete the Oak & Pine affordable housing project and support efforts to increase the availability of affordable housing
• Continue to work with regional partners to address homelessness in the City

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Rocklin seeks opportunities to diversify its funding sources to ensure a strong fiscal foundation. Intentional long-term financial planning ensures community success and supports the city’s quality of life.

Two-Year Work Plan Items:
• Evaluate opportunities to create new sources of revenue to support critical City services • Implement a new Records Management enterprise system that is user friendly for both City staff and the public
• Implement a Section 115 Trust to better address CalPERS obligations • Implement a two-year operating budget
• Update the City’s Purchasing Code
• Update Infrastructure Reserve Studies
• Implement comprehensive workforce development and succession planning programs • Establish plans for reaching 100% funded for the City’s facility and fleet replacement reserves

Rocklin residents feel comfortable walking and biking throughout the community, enjoying parks and public spaces, and know that the City is prioritizing the safety, health, and wellbeing of its community.

Rocklin invests in public safety by providing resources and technology to consistently reduce crime and ensure the City remains safe. The City partners with nonprofits, social service agencies, and the community to address the Root causes of crime and social instability.

Two-Year Work Plan Items:
• Maintain, improve, and expand City partnerships that aid in crime prevention and creating a safe community
• Continue public education efforts regarding prevention of crimes of opportunity • Evaluate the creation of a Real Time Crime Center
• Improve Interoperability between law enforcement, fire, and EMS agencies • Update antiquated Fire station alerting systems
• Reduce Interagency Response Times through improved technology • Improve Cardiac Arrest Survivability by deploying citizen CPR public education and increasing AED distribution
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