Agenda — Roseville City Council, March 2, 2022

AGENDA
March 2, 2022

CITY COUNCIL
6:00 p.m.

Council Chambers
311 Vernon Street
Roseville, California
www.roseville.ca.us
The meeting may be viewed on Comcast channel 14, Consolidated Communications channel 73, and AT&T U-Verse. City Council meetings are also video streamed live on the City’s website at roseville.ca.us/watch and roseville.ca.us/agenda, and the City’s YouTube channel at youtube.com/CityofRosevilleCa.

If you need a disability-related modification or accommodation to participate in this meeting, please contact Voice: 916-774-5200, TDD: 916-774-5220. Requests must be made as early as possible.

THE CITY OF ROSEVILLE WELCOMES YOUR PARTICIPATION
If an agenda item is open to public comment, such public comment shall be addressed to the chair of the meeting.

Public Comment
- Speakers have three minutes under Public Comment to speak on issues that
are not listed on the agenda and are within the City's jurisdiction. The Brown Act does not permit any action or discussion on items not listed on the agenda.

Consent Calendar
- If applicable, the Consent Calendar consists of routine items that may be approved by one motion. Any person can remove an item from the Consent Calendar to be discussed separately.

Agenda Items
- Speakers have five minutes to address items that are listed on the agenda.

Americans with Disabilities Act
- Notify the City Clerk or Secretary at least 72 hours in advance if special assistance is required to participate in a meeting including the need of auxiliary aids or services.

Audio/Visual Presentations
- If making a presentation regarding an agenda item, audio/visual materials must be submitted to the City Clerk or Secretary at least 72 hours in advance.

Security procedures are in place to attend Roseville City Council meetings.

All attendees must
successfully pass through a security metal detector.

Any person with a prohibited item will not be
allowed entry.

Prohibited items include, but are not limited to: firearms (even with valid CCW), knives, pepper spray/mace, explosives of any kind/ any weapons and/or dangerous devices of any kind, illegal drugs and alcohol.

Roseville City Clerk 311 Vernon Street, Roseville, CA 916-774-5200 TDD 916-774-5220

1. CALL TO ORDER

2. ROLL CALL

3. PLEDGE OF ALLEGIANCE

4. MEETING PROCEDURES

5. PUBLIC COMMENTS

6. CONSENT CALENDAR

BEGINNING OF CONSENT CALENDAR
Bids / Purchases / Services

6.1. Centrifuge Controls Upgrade - Sole Source Contract Purchase Agreement Memo from Preventative Maintenance Coordinator Blaine Wiegel and Environmental Utilities Director Richard Plecker recommending the City Council adopt RESOLUTION NO. 22-061 APPROVING A SOLE SOURCE

CONTRACT PURCHASE AGREEMENT, BY AND BETWEEN THE CITY
OF ROSEVILLE AND GEA WESTFALIA SEPARATOR INC., AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF
OF THE CITY OF ROSEVILLE. Staff requests approval of a sole source contract purchase agreement with GEA Westfalia Separator Inc., in the amount of $181,256 to provide control upgrades to the three centrifuges in the Pleasant Grove Wastewater Treatment Plant. F
unding is available from the Environmental
Utilities Department's FY2021-22 operating budget in the Wastewater Operations Fund.

CC #:
1951
File #:
0203-09
CONTACT:

Blaine Wiegel 916-746-1833 [email protected]

Resolutions

6.2. Affordable Housing - Rental Agreements
Memo from Housing Manager Trisha Isom and Economic Development Director Melissa Anguiano recommending the City Council adopt RESOLUTION NO. 22-053 APPROVING AN AFFORDABLE RENTAL

HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE; and adopt RESOLUTION NO. 22-054 APPROVING AN AFFORDABLE RENTAL

HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE. Staff requests Council approve six (6) Affordable Rental Housing Agreements with DF Properties, Inc. The developer will allocate 18 units on 6 different parcels in the Infill Specific Plan to be rented by very low and low-income households. The General Plan Housing Element requires a 10% affordable housing obligation for residential development and recommends that developers provide a distribution of the required affordable housing as follows: 40% very low; 40% low and 20% middle income. Since the 1980's, the City's Housing Division has implemented the General Plan’s recommended distribution for compliance with the 10% affordable housing obligation and created over 3,500 affordable units. The subsidies for the program are borne by the developer. No General Fund resources will be used.

CC #:
1946
File #:
0709-03-02
CONTACT:

Trisha Isom 916-746-1239 [email protected]

6.3. Financial Advisory Services - Professional Services Agreement Memo from Management Analyst Jeannine Thrash and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council adopt RESOLUTION NO. 22-052 APPROVING A

PROFESSIONAL SERVICES AGREEMENT, BY AND BETWEEN THE
CITY OF ROSEVILLE AND HILLTOP SECURITIES, INC., AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE. Staff requests Council award a contract to Hilltop Securities, Inc for Financial Advisory Services with a total not-to-exceed amount of $675,000 through February 28, 2025. The professional services agreement has two components. The first component is an annual retainer of $75,000 for providing general financial advisory services. The budget for the retainer is included in the Finance Department's approved FY2021-22 General Fund budget. The second component is for providing specific financial advisory services rendered in the process of issuing a series of bonds. The agreement is for a flat fee of $25,000 per bond issuance. These expenses are a component of typical "bond issuance costs". Payment of bond issuance costs are typically contingent upon issuance of bonds and are routinely paid from bond proceeds, thus they are not an expense to the General Fund.

CC #:
1945
File #:
0200
CONTACT:

Jeannine Thrash 916-774-5473 [email protected]
Dennis Kauffman 916-774-5313 [email protected]

6.4. Energy Risk Management Policies Update
Memo from Electric Risk and Compliance Supervisor Petra Wallace and Electric Utility Director Daniel Beans recommending the City Council adopt RESOLUTION NO. 22-060

REAFFIRMING THE ENERGY UTILITY RISK

MANAGEMENT POLICY AND THE ENERGY CREDIT RISK POLICY AND

ADOPTING THE ENERGY HEDGE POLICY AND THE ENERGY
TRADING AUTHORITY POLICY. Staff requests
approval of two updated
Energy Risk Management Policies and reaffirmation of two existing Energy Risk Management Policies for Roseville Electric Utility. The Energy Trading Authority Policy and the Energy Hedge Policy are recommended to be updated. The Energy Credit Risk Policy and the Electric Utility Risk Management Policy require City Council reaffirmation every two years by Roseville’s internal risk policy. There is no fiscal impact associated with these policy changes.

CC #:
1948
File #:
0800-03
CONTACT:

Petra Wallace 916-774-5510
[email protected]

6.5. Fiddyment Ranch - Phase 3 Holt Parkway 3A-1 - Notice of Completion Memo from Senior Construction Inspector Darin Crockett and Development Services Director Mike Isom recommending the City Council adopt RESOLUTION NO. 22-051 ACCEPTING THE PUBLIC WORK KNOWN
AS Fiddyment Ranch Phase 3 Holt Parkway 3A-1, APPROVING THE "NOTICE OF COMPLETION", AND AUTHORIZING AND DIRECTING

THE CITY ENGINEER TO EXECUTE SAID NOTICE ON BEHALF OF

THE CITY OF ROSEVILLE, THEREFORE, AND ACCEPTING A

PORTION OF THE DEDICATIONS OFFERED ON THE RECORDED
MAP OF THE SUBDIVISION.

The Engineering Division has made final
inspection of the project and has found the civil improvement work complete in accordance with the improvement plans and City specifications. This action has no impact to the City's General Fund. Construction costs were paid by the developer.

CC #:
1942
File #:
0400-04-09-1
CONTACT:

Darin Crockett 916-751-9196 [email protected]

6.6. Litigation, Labor, and Employment Services - Legal Services Agreement Memo from Paralegal Gretchen Hakala and City Attorney Michelle Sheidenberger recommending the City Council adopt RESOLUTION NO. 22- 048 APPROVING AN AGREEMENT FOR LEGAL SERVICES, BY AND

BETWEEN THE CITY OF ROSEVILLE AND BURKE, WILLIAMS &

SORENSEN, LLP, AND AUTHORIZING THE CITY MANAGER TO
EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE. Staff requests Council approval of a legal services agreement with Burke, Williams & Sorensen, LLP for outside legal services to advise, assist, and represent the City as co-counsel with the City Attorney from time to time with respect to litigation, and to assist the City with respect to transaction matters. Staff is updating the current agreement from 2012 to match the current contractual terms. The firm will continue to assist the Human Resources Department with Labor and Employment matters. Legal services provided by this contract will be dependent upon needs as they occur during the year and thus cannot be forecast. All expenses will be paid from the Human Resources Department operating budget in the General Fund, as needed.

CC #:
1937
File #:
0500
CONTACT:

Gretchen Hakala 916-774-5325
[email protected]

Ordinances (for introduction and adoption - appropriation/urgency measures)

6.7. Park Rehabilitation Projects - Budget Adjustment
Memo from the Park Planning & Development Superintendent, Tara Gee and Parks, Recreation & Libraries Director, Jill Geller, recommending the City Council adopt ORDINANCE NO. 6459 AUTHORIZING CERTAIN
AMENDMENTS TO THE FISCAL YEAR 2021-22 BUDGET AND

DECLARING THIS ORDINANCE TO BE IMMEDIATELY EFFECTIVE AS AN APPROPRIATION MEASURE. Staff recommends City Council approval of a budget adjustment to redirect existing funds in the Parks, Recreation & Libraries Capital Projects Fund for approved park rehabilitation projects.

Staff
requests Council approval of a budget adjustment for the Mahany Patio Shade project in an amount of $4,000 to fill the existing empty tree wells in the patio area with concrete as the new shade canopy will be erected over this area.

Funding is available in the Paving Repair project fund for this request. Staff also requests a budget adjustment for the Shade Structure at the Mahany All- Weather Field in an amount of $16,800, as the cost to add shade over the second set of bleachers at the All-Weather Field came in higher than anticipated. Funding is available in the Maidu Museum Trail Repair project fund for this request. No additional funding is requested.

CC #:
1944
File #:
0704-01 & 0201-01
CONTACT:

Tara Gee 916-774-5253
[email protected]

Reports / Requests

6.8. HOUSING AUTHORITY/CITY COUNCIL - Quarterly Status Update Memo from Housing Supervisor Suzi Cook-Turner and Economic Development Director Melissa Anguiano recommending the City Council receive a quarterly report on the Housing Authority’s Housing Choice Voucher Program. This report is for informational purposes only and has no impact on the City's General Fund.

CC #:
1943
File #:
0709-02-01
CONTACT:

Suzi Cook-Turner
916-774-5414 [email protected]
Trisha Isom 916-746-1239
[email protected]

6.9. Roseville Junction Final Map
Memo from Assistant Engineer Kerry Andrews and Development Services Director Mike Isom recommending the City Council approve the Roseville Junction final map. Engineering has completed its review of the final map and found that it is in compliance with the approved tentative map. This map will be creating 6 commercial lots. The actions requested have no fiscal impact to the City's General Fund.

CC #:
1950
File #:
0400-06-03 & 0400-07
CONTACT:

Kerry Andrews 916-774-5346 [email protected]

6.10. Out-of-State Travel Request - Police Department
Memo from Management Analyst Mark Peinado and Police Chief Troy Bergstrom recommending the City Council approve out-of-state travel to Hoover, Alabama, for one Police Officer to attend a Credit Card Skimmers course from March 8, 2022 to March 10, 2022. The travel and training cost for this four-day course is fully sponsored by the National Computer Forensics Institute. This course is fully funded by the NCFI. The NCFI will pay for training and travel expenses, including hotel and per diem for meals. There is no cost to the City or fiscal impact to the General Fund.

CC #:
1938
File #:
0600-02
CONTACT:

Mark Peinado 916-774-5021 [email protected]

6.11. Out-of-State Travel Request - Police Department
Memo from Management Analyst Mark Peinado and Police Chief Troy Bergstrom recommending the City Council approve out-of-state travel from March 13th to March 17th, 2022, to Winston-Salem, North Carolina, for two professional staff members to research and evaluate specific integration software at an agency with a Real Time Crime Center deployment that aligns with the City's future vision. The total cost to send two professional staff members will be approximately $3,400. This amount includes travel, lodging, meals and incidental expenses. There are sufficient funds in the FY2021-22 Police Department budget in the General Fund to cover the expense; no additional funds are being requested.

CC #:
1939
File #:
0600-02
CONTACT:

Josh Simon 916-774-5059 [email protected]
Mark Peinado 916-774-5021 [email protected]

END OF CONSENT CALENDAR

7. RESOLUTIONS

7.1. Community Facilities District No. 3 (Municipal Services) - Annexation No. 27 (Torrente at Sierra Vista) - Annexation of Territory
Memo from Management Analyst Jeannine Thrash and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council adopt RESOLUTION NO. 22-049 A RESOLUTION OF

ANNEXATION OF TERRITORY TO COMMUNITY FACILITIES

DISTRICT, AUTHORIZING THE LEVY OF A SPECIAL TAX AND
SUBMITTING LEVY OF TAX TO QUALIFIED ELECTORS; and adopt RESOLUTION NO. 22-050 A RESOLUTION DECLARING RESULTS OF

SPECIAL ANNEXATION ELECTION, DETERMINING VALIDITY OF

PRIOR PROCEEDINGS, AND DIRECTING RECORDING OF AMENDED
NOTICE OF SPECIAL TAX LIEN. The recommended annexation into Community Facilities District (CFD) No. 3 will incorporate the developer-owned territory and be named Community Facilities District No. 3 (Municipal Services), Annexation 27 (Torrente at Sierra Vista), under the Mello-Roos Community Facilities Act of 1982, as amended. The landowner submitted the required property owner ballots to the City Clerk, agreeing to be annexed into CFD No. 3.

The landowner agrees to pay the approved special tax sufficient to pay the costs of the CFD, levied annually among the parcels within the CFD, at the maximum special tax rates identified in the Amended Notice of Special Tax for CFD No.

3. On February 2, 2022, the City Council adopted Resolution of Intention No. 22- 029, to Annex Territory to the Community Facilities District and to Authorize the Levy of Special Taxes Therein, City of Roseville, Community Facilities District No. 3 (Municipal Services), Annexation No. 27 (Torrente at Sierra Vista), and set March 2, 2022, at 6:00 p.m. at the City of Roseville Civic Center Council Chambers at 311 Vernon Street, Roseville, California as the time and place to conduct a public hearing.

The CFD will generate special taxes levied on the landowner's annual property tax bill. Annexation into Community Facilities District No. 3 (Municipal Services) helps offset the property's impact on City General Fund resources available to pay for municipal services and therefore will not negatively impact the General Fund.

CC #:
1941
File #:
0400-09-01
CONTACT:

Jeannine Thrash 916-774-5473 [email protected]
Dennis Kauffman 916-774-5313 [email protected]

8. ORDINANCES

8.1. Military Equipment Policy
Memo from Police Captain Doug Blake and Chief of Police Troy Bergstrom recommending the City Council adopt findings pursuant to California Assembly Bill 481 and introduce for first reading an ordinance adopting a Military Equipment Policy authorizing the Roseville Police Department’s continued use of “military equipment”, as defined by Assembly Bill 481, obtained prior to January 1, 2022 and going forward. There is no fiscal impact associated with the proposed policy.

CC #:
1949
File #:
0323
CONTACT:

Troy Bergstrom 916-774-5058 [email protected]
Doug Blake 916-746 1043 [email protected]

9. REPORTS / PUBLIC COMMENTS

10. ADJOURNMENT

COUNCIL COMMUNICATION
CC #:
1951
File #:
0203-09
Title:

Centrifuge Controls Upgrade - Sole Source Contract Purchase Agreement Contact:

Blaine Wiegel 916-746-1833 [email protected]

Meeting Date: 3/2/2022
Item #: 6.1.

RECOMMENDATION TO COUNCIL
Staff recommends City Council adopt a resolution authorizing the City Manager to execute a sole source, contract purchase agreement with GEA Westfalia Separator, Inc. to provide control upgrades to the three centrifuges in the Pleasant Grove Wastewater Treatment Plant.

BACKGROUND
The Pleasant Grove Wastewater Treatment facility uses three GEA centrifuges for the dewatering of processed sludge before transporting it to the landfill. Centrifugal thickening and dewatering of sewage sludge is a high-speed process that uses the force from rapid rotation of a cylindrical bowl to separate wastewater solids from liquid to produce a non-liquid material referred to as “cake.” Dewatering wastewater solids reduces the volume of residuals, improves operation, and reduces costs for subsequent storage, processing, transfer, end use, or disposal, among other benefits.

These centrifuges are twenty years old and are in need of a controls upgrade to ensure the operation of this critical process in wastewater treatment. Upgrades to these centrifuges can only be purchased from, and performed by, GEA Westfalia factory-trained technicians. There are no other certified technicians or repair facilities that can perform maintenance with GEA’s authorization.

FISCAL IMPACT
The cost of the control upgrades is $181,256 with funding from the Environmental Utilities Department’s FY2021-22 operating budget in the Wastewater Operations Fund.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Approval of a contract purchase order for centrifuge controls meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal C - Maintain a safe and healthy community
Goal E - Deliver exceptional city services
Goal F - Invest in well-planned infrastructure and growth

Respectfully Submitted,
Blaine Wiegel, Preventative Maintenance Coordinator
Richard Plecker, Environmental Utilities Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 22-061
Signed GEA Contract
RESOLUTION NO. 22-061

APPROVING A SOLE SOURCE CONTRACT PURCHASE AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND GEA WESTFALIA SEPARATOR INC., AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF

THE CITY OF ROSEVILLE

WHEREAS, a sole source contract purchase agreement (3001768) for a controls upgrade to existing panels of the Pleasant Grove Wastewater Treatment Plant’s centrifuges, between the City of Roseville and GEA Westfalia Separator Inc., has been reviewed by the Council; and

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said sole source contract purchase agreement is approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 20 , by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR

ATTEST:

City Clerk

COUNCIL COMMUNICATION
CC #:
1946
File #:
0709-03-02
Title:

Affordable Housing - Rental Agreements
Contact:

Trisha Isom 916-746-1239 [email protected]

Meeting Date: 3/2/2022
Item #: 6.2.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt resolutions to approve six (6) Affordable Rental Housing Agreements with DF Properties, Inc., and authorize the City Manager to execute them.

BACKGROUND
The City of Roseville's General Plan Housing Element requires a 10% affordable housing obligation for residential development and recommends that developers provide a distribution of the required affordable housing as follows: 40% very low; 40% low and 20% middle income.

Since the 1980's, the City's Housing Division has implemented the General Plan’s recommended distribution for compliance with the 10% affordable housing obligation and created over 3,500 affordable units.

On November 2, 2020, City Council approved a Small Lot Subdivision Map for the Sierra Vista Specific Plan Parcel DF-20. The conditions of approval required four (4) units to be developed as affordable purchase and sold to middle income purchasers as well as eighteen (18) units to be developed and rented at rates affordable to very low and low income households.

The very-low
income affordable rent does not exceed the price at which a household earning 50% of the area median income (AMI) can afford and the low-income affordable rent shall not exceed the price at which a household earning 80% of the AMI can afford.

On July 7, 2021, Council approved the DF Properties – Sierra Vista Specific Plan Parcel DF-20 Affordable Purchase Agreement which requires the developer to build 4 of the subdivision's 103 homes as affordable to middle income households.

The conditions of approval also allowed the
transfer of 18 affordable rental units from parcel DF-20 to infill parcels owned by the developer and required them to enter into an Affordable Rental Housing Agreement with the City to implement the affordable obligations.

Due to the locations of the rental properties, there are six (6) separate agreements that comprise the 18 units.

The unit mix will consist of 6 studios, 1 one-bedroom, 10 two-bedrooms and 1 three- bedroom unit.

The proposed agreements establish the methods and terms by which the affordable units will be rented to income-qualified renters. The agreements will also support the City's General Plan in meeting the affordable housing goals and Regional Housing Needs Allocation.

FISCAL IMPACT
No General Fund resources will be used for the implementation of the Affordable Renting Housing Agreements. The rental subsidies for the project that are necessary to comply with the affordability requirements will be borne by the project’s developer.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. The Affordable Renting Housing Agreements meet the above criteria and are not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal D - Enhance economic vitality

Respectfully Submitted,
Trisha Isom, Housing Manager
Melissa Anguiano, Economic Development Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 22-053
113 Atkinson ARHA
Resolution 22-054
115 Atkinson ARHA
Resolution 22-055
205 Hickory ARHA
Resolution 22-056
207 Hickory ARHA
Resolution 22-057
1124 Circuit ARHA
Resolution 22-058
Duranta ARHA
RESOLUTION NO. 22-053

APPROVING AN AFFORDABLE RENTAL HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Affordable Rental Housing Agreement regarding the real property located at 113 Atkinson Street, Roseville, CA, by and between the City of Roseville and DF Properties, Inc., has been reviewed by the City Council; and

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said Affordable Rental Housing Agreement is hereby approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

________________________
City Clerk

RESOLUTION NO. 22-054

APPROVING AN AFFORDABLE RENTAL HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Affordable Rental Housing Agreement regarding the real property located at 115 Atkinson Street, Roseville, CA, by and between the City of Roseville and DF Properties, Inc., has been reviewed by the City Council; and

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

________________________
City Clerk

RESOLUTION NO. 22-055

APPROVING AN AFFORDABLE RENTAL HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Affordable Rental Housing Agreement regarding the real property located at 205 Hickory Street, Roseville, CA, by and between the City of Roseville and DF Properties, Inc., has been reviewed by the City Council; and

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

________________________
City Clerk

RESOLUTION NO. 22-056

APPROVING AN AFFORDABLE RENTAL HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Affordable Rental Housing Agreement regarding the real property located at 207 Hickory Street, Roseville, CA, by and between the City of Roseville and DF Properties, Inc., has been reviewed by the City Council; and

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR

ATTEST:

City Clerk

RESOLUTION NO. 22-057

APPROVING AN AFFORDABLE RENTAL HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Affordable Rental Housing Agreement regarding the real property located at 1124 Circuit Drive, Roseville, CA, by and between the City of Roseville and DF Properties, Inc., has been reviewed by the City Council; and

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR

ATTEST:

City Clerk

RESOLUTION NO. 22-058

APPROVING AN AFFORDABLE RENTAL HOUSING AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND DF PROPERTIES, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Affordable Rental Housing Agreement regarding the real property located at 141-145 Duranta Street, Roseville, CA, by and between the City of Roseville and DF Properties, Inc., has been reviewed by the City Council; and

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR

ATTEST:

City Clerk

COUNCIL COMMUNICATION
CC #:
1945
File #:
0200
Title:

Financial Advisory Services - Professional Services Agreement Contact:

Jeannine Thrash 916-774-5473 [email protected]
Dennis Kauffman 916-774-5313 [email protected]

Meeting Date: 3/2/2022
Item #: 6.3.

RECOMMENDATION TO COUNCIL
Staff recommends City Council adopt a resolution authorizing the City Manager to execute a professional services agreement with Hilltop Securities, Inc. for financial advisory services.

BACKGROUND
From time to time, the City has a need for financial advisory services related to issuing bonds that are highly technical and require the services of a financial advisor with specialized expertise. Each bond transaction can be complex and requires a specialized skillset to help the City mitigate risk, make informed decisions and achieve the lowest overall cost of capital. In addition the City also has the need for a wide variety of financial advisor expertise and advice in the many financial functions the City is involved with on a daily basis. The City issued a Request for Proposals (RFP) for Municipal Advisory Services in October 2021 and received several proposals in response. After City staff reviewed the proposals and interviewed the highest ranking proposers, staff recommends contracting with Hilltop Securities, Inc. for municipal advisor services. Hilltop Securities is the City's current municipal advisor and, after going through the RFP process, City staff agree that they remain the best fit for the City based on the RFP criteria.

FISCAL IMPACT
The total not-to-exceed amount of the agreement is $675,000 through February 28, 2025. The professional services agreement has two components. The first component is an annual retainer of $75,000 for providing general financial advisory services. The budget for the retainer is included in the Finance Department's approved FY2021-22 General Fund budget, and will be included in future fiscal year proposed budgets. The second component is for providing specific financial advisory services rendered in the process of issuing a series of bonds. The agreement is for a flat fee of $25,000 per bond issuance. These expenses are a component of typical "bond issuance costs". Payment of bond issuance costs are typically contingent upon issuance of bonds and are routinely paid from bond proceeds, thus they are not an expense to the General Fund.

The total dollar value of this component of the agreement will be dependent upon the number of bond issuances during each fiscal year.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) only applies to projects which have the potential to cause a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. (CEQA Guidelines §15061(b)(3)).

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Goal F - Invest in well-planned infrastructure and growth

Respectfully Submitted,
Jeannine Thrash, Management Analyst
Dennis Kauffman, Assistant City Manager/Chief Financial Officer

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 22-052
Professional Services Agreement-Financial Advisory Services RESOLUTION NO. 22-052

APPROVING A PROFESSIONAL SERVICES AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND HILLTOP SECURITIES, INC., AND AUTHORIZING THE

CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, a professional services agreement for financial advisory services, by and between the City of Roseville and Hilltop Securities, Inc., has been reviewed by the City Council; and

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said professional services agreement is hereby approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2022, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR

ATTEST:

City Clerk

COUNCIL COMMUNICATION
CC #:
1948
File #:
0800-03
Title:

Energy Risk Management Policies Update
Contact:

Petra Wallace 916-774-5510
[email protected]

Meeting Date: 3/2/2022
Item #: 6.4.

RECOMMENDATION TO COUNCIL
Staff recommends that City Council adopt a resolution to approve two updated Energy Risk Management Policies and reaffirm two existing Energy Risk Management Policies for Roseville Electric Utility. There is no fiscal impact associated with these policy changes.

BACKGROUND
Energy markets can be highly volatile and if unmanaged can result in significant monetary risk to the City of Roseville. In 2005, the City adopted a comprehensive set of Energy Risk Management Policies to manage the inherent risks associated with operating an electric utility. The policies are:
•

Electric Utility Risk Management Policy: This is the overarching risk management governance document. It specifies the goals and objectives of the policies and the roles and responsibilities in the risk governance structure.
•

Energy Credit Risk Policy: This policy defines how credit limits are set and managed. •

Energy Trading Authority Policy: This policy sets the types of energy transactions that can be entered into and the levels of authorization the City Manager has for long term hedging and the Power Management Services Agent (“Agent”) has for within-the-month operational trading. •

Energy Hedge Policy: This policy defines the Roseville Electric’s hedging goals and risk tolerance.

The policies are reviewed and updated on a regular basis to incorporate changes in the operating environment and periodic independent audits. Staff, the Risk Management Committee, and the Risk Oversight Committee have reviewed the following policy changes and recommend Council approval:

•

Electric Utility Risk Management Policy – No changes to the policy.

•

Energy Credit Risk Policy – No changes to the policy.

•
Energy
Trading Authority Policy – The policy update includes:

Updated the Authority Matrix (section 7.2) to allow Roseville Electric’s Power Management

Services Provider to transact financial gas, similar to their existing electricity, physical gas, and

financial gas authority.

•

Energy Hedge Policy – The policy update includes:

Removed the Power Supply Cost Risk Policy (section 2.2) portion of the Hedge Policy as

recommended by the 2014 Risk Audit. This portion of the policy is difficult to make actionable,

will therefore shift to use it as an indicator metric and decision guide internally.

FISCAL IMPACT
There is no fiscal impact associated with the policy changes.

Updates to the Energy Risk Policies meet the above criteria and are not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A: Remain fiscally responsible in a changing world.

Respectfully Submitted,
Petra Wallace, Electric Risk and Compliance Supervisor
Daniel Beans, Electric Utility Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 22-060
Energy Hedge Policy.Redline.01.05.2022
Energy Hedge Policy.Clean.2022
Energy Trading Authority Policy.Redline.01.11.2022
Energy Trading Authority Policy.Clean.2022
Energy Utility Risk Management Policy
Electric Credit Risk Policy
RESOLUTION NO. 22-060

REAFFIRMING THE ENERGY UTILITY RISK MANAGEMENT POLICYAND THE

ENERGY CREDIT RISK POLICY AND ADOPTING THE ENERGY HEDGE POLICY

AND THE ENERGY TRADING AUTHORITY POLICY

WHEREAS, in 2005, the City adopted comprehensive risk management policies, which addressed a wide range of risks, such as credit risk, and incorporated considerations, such as fuel, required for the Roseville Energy Park; and

WHEREAS, these policies need to be reaffirmed every two years; and

WHEREAS, no changes have been made to the Energy Utility Risk Management Policy or the Energy Credit Risk Policy; and

WHEREAS, City Council has reviewed the proposed updates to the Energy Hedge Policy and the Energy Trading Authority Policy.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Roseville that the Energy Utility Risk Management Policy and the Energy Credit Risk Policy are hereby reaffirmed.

BE IT FURTHER RESOLVED by the Council of the City of Roseville that the Energy Hedge Policy and the Energy Trading Authority Policy are hereby adopted.

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 20 , by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR

ATTEST:

City Clerk

ENERGY HEDGE POLICY

Energy Hedge Policy

03/03/2021 2/16/2022

ENERGY HEDGE POLICY

Table of Contents

1. Summary ........................................................................................................................................... 1

2. Hedging Policy Criteria ...................................................................................................................... 1 3 Natural Gas Hedging ....................................................................................................................... 54 4 Risk Measurement and Compliance Reporting ............................................................................... 54 5 Responsibility .................................................................................................................................. 54 6 Related Policies ............................................................................................................................... 64

ENERGY HEDGE POLICY

Page 1 of 54 ends

1. Summary
The City of Roseville (“City”) Hedge Policy outlines the energy hedging policy (natural gas and electricity) that will guide disciplined hedging of forward energy resources. The hedge policy is designed to reduce energy rate volatility and to maintain rates within reasonable tolerances.

The primary purpose of this policy is to identify specific guidelines and criteria for procuring projected energy needs. These procurement criteria are defined for quarters, fiscal years, and calendar years as appropriate in the different parts of the policy.

The policy largely employs a price averaging strategy of declining percentage of energy supply positions held over forward time periods. This strategy protects the City from potential adverse impacts that could result from either significant energy price increases or decreases. The strategy also maintains some elements of procurement to remain flexible. For example, during times of extremely attractive market conditions, this policy allows for increasing the amount of forward energy hedged above the stated ranges with the concurrence of the City’s Risk Oversight Committee (“ROC”). A key component of the policy is a monthly report for the Risk Management Committee and a quarterly report to the City Council and ROC, which is outlined herein.

2. Hedging Policy Criteria

2.1.1 2.1 Fixed Price Energy Policy - Volumetric and Lead Time Criteria for Energy Hedging

2.1 Rolling Monthly Hedge Ranges
One criterion of this policy is to have energy procured within defined volumetric ranges during the following rolling monthly and quarterly timeframes. These ranges identify the percentage of City’s projected total energy needs that will be procured with fixed price energy over a given time period. For use within this policy, energy needs are considered hedged or procured to the extent that the projected need is met by:
i. Authorized Transactions, as defined in the Roseville Trading Authority Policy or
Other transactions as Authorized by the City Council, using the process outlined in the Roseville Trading Authority Policy. Options with out of the money strike prices may be used to hedge forward volumes, provided that they do not account for more than 15% of the projected energy needs in any given month, and they are not more than 50% out of the money at the time of the transaction.

ENERGY HEDGE POLICY

Page 2 of 54 ends

2.2 2.1.2 The City will hedge projected energy needs based on the following criteria:

Lead
Time
Months
1 to 12
Quarters
5 to 8
Quarters
9 to 12
Hedging
Frequency Monthly Quarterly Quarterly
Range (%) 90-110 70-100 45-80

i. Lead Time: This is the amount of time from the current period (including the current period). It may be defined in months or quarters.

ii. Hedging Frequency: This is the frequency that the hedging period changes. This is to prevent a situation where Month 36 (the last month of Quarter 12) would have to be hedged at a time when monthly purchases are very illiquid. It also defines the purchases of hedges, indicating that a one-month hedge could be purchased for each month between Month 1 and Month 12, whereas a whole quarter hedge would be purchased for a period starting Quarter 5. In case of a conflict, monthly frequency has precedence over quarterly.

iii.Range: This is the lower and upper bounds of overall energy needs that will be required to be covered with fixed price energy, and/or up to 15% with call options. If the percentage of overall energy compared to the expected load for the total lead time is within the bounds, then Roseville is in compliance.

iv.Remediation Period on Violation is 45 Days, meaning the City has 45 days from the date of the violation notice to get back in compliance with the hedging policy.

Deviations that exceed the range will require approval of the ROC and/or City Council, and will be part of the regular reporting to the City Council.

Because the models being used to determine official compliance with this policy are being run by an external entity, the City’s first warning of being out of compliance with this policy may occur when a report is delivered showing it out of compliance. As such, the City will have 45 days to remedy the out of compliance situation before it is deemed a violation.

ENERGY HEDGE POLICY

Page 3 of 54 ends

2.12.3 Hedge Timing and Volumetric Minimums
In meeting the overall volumetric criteria, the City will have the following minimum percentages of energy hedged no later than the lead time as identified below:

Time Frame Months Quarters
Lead time 1-12 5-8 9-12
Minimum (%) 70 50 30
For example, on January 1, 20212022, the City will have a minimum of 70% of its projected energy needs for each of the following 12 months, January 2021 2022 through December 2021 2022 procured. For Quarter 5, including January, February, and March 20222023, a minimum of 50% of the total projected energy shall be procured, whereas minimum thresholds for individual months are not required. This minimum amount can be hedged well before that date based on the ranges in the prior section. As with the Volumetric Lead Time Criteria, a time frame in months takes precedence over a time in quarters.

The City will maintain hedges at the minimum volumetric level for the specified lead times. Any deviation from the monthly minimum volume for the specified lead time will require ROC and/or City Council approval and will be reported to the City Council. It would still be considered compliant if one month in Month 1 through Month 12 was between 70% and 90%, on condition that the average of Month 1 through Month 12 was between 90% and 110%.

The following chart illustrates the volumetric and lead time criteria for energy hedging.

ENERGY HEDGE POLICY

Page 4 of 54 ends

2 2.2 Power Supply Cost Risk Policy
3 The Power Supply Cost Risk Policy will measure the effect of several variables on the cost to supply power to the City. These variables are:
4 Hydro variability (more or less than expected water to run hydroelectric power plants).
5 Market price variability in the electric, natural gas, and the derived marginal heat rate market.
6 Generating unit outages.
7 Appropriate correlations between all of the above variables. 8 This policy sets a goal to develop a portfolio to limit the effects of the above variables on portfolio costs. These goals are expressed as a percent of total power supply cost. The goals for this 36 Month rolling policy are outlined in the table below:

Time Horizon 0 to 12 Months 13 to 24 Months 25 to 36 Months Maximum % Cost
Exposure (% above
Baseline Cost)

7.5% 15% 30%
9 Remediation Period on Violation: 45 Days
10 In the table above, there are several terms that need further explanation. 1 Time Horizon: This is the aggregate time period over which compliance with the policy is to be measured. For example, in the first rolling 12 month time period, the total Maximum Cost over that 12 months cannot exceed the total Baseline Cost over that 12 months by more than the prescribed amount (in this case 7.5%). This policy limit does not apply to individual months within the time horizon.
2 Baseline Cost: A cost exposure policy needs to have a baseline from which

ENERGY HEDGE POLICY

Page 5 of 54 ends

to be measured. For this policy, the baseline will be t the next three rolling years’ estimated power supply costs based on current market conditions and other assumptions made at the time.
3 Maximum Cost: The Maximum Cost upon which the policy limits are binding will be the 97th percentile of the total cost distribution (for the given Time Horizon) of a Monte Carlo risk model using uncertain variables as defined above.
11 Because of the complex nature of the risk models used to calculate compliance with this policy, and because those models are being run by an external entity, the City’s first warning of being out of compliance with this policy may occur when a report is delivered showing it out of compliance. As such, the City will have 45 days to remedy the out of compliance situation before it is deemed a violation.
3 Natural Gas Hedging
Natural gas and power hedging will be a complementary hedging activity for the City’s natural gas fired generation (owned or contracted) or if it enters a transaction that uses a natural gas index price to derive its electricity cost, such as a heat rate product. Such gas related generation or purchase transactions would not be considered energy hedges until the projected gas volumes are procured. The monthly hedge criteria are measured based on total energy exposure for native load (total projected electricity needed for native load minus energy already hedged). This is the criteria required to be considered fixed price energy. There are three mechanisms for hedging gas price risk:
i. The use of NYMEX contracts.
ii. Bilateral financial hedging using ISDA Master Agreements iii. Fixed price physical gas procurement.

In order to allow flexibility in overall energy hedging decisions (e.g. economically hedging additional needs via gas contracts versus power purchases), specific sub-targets for natural gas hedging are not set within this policy.
4 Risk Measurement and Compliance Reporting
Risk measurement and policy compliance within the volumetric and lead time criteria will be demonstrated on a regular basis in the Power Management Services Agent’s (“Agent’s”) monthly portfolio model risk report. This report will also report on the Power Supply Cost Risk Policy. This report will generally cover three years of projections with seven-year runs performed at least once per year or when market conditions indicate the potential to cost-effectively hedge beyond three years out.
5 Responsibility
It shall be the responsibility of the City Council, Risk Oversight Committee, City Manager, and Risk Management Committee to assure compliance with this policy. Implementation of this policy shall be in accordance with the Related Polices, as referenced below.

ENERGY HEDGE POLICY

Page 6 of 54 ends

6 Related Policies
Supporting policies and procedures are required as outlined below:
i. City of Roseville Electric Utility Risk Management Policy ii. City of Roseville Energy Trading Authority Policy
iii. City of Roseville Energy Credit Risk Policy
iv.Resolution 17-368 retaining ACES for power management services v. Resolution 16-161 declaring ACES as agent for the purposes of risk policies

ENERGY HEDGE POLICY

Energy Hedge Policy

2/16/2022

ENERGY HEDGE POLICY

Table of Contents

1. Summary ........................................................................................................................................... 1

2. Hedging Policy Criteria ...................................................................................................................... 1 3 Natural Gas Hedging ......................................................................................................................... 4 4 Risk Measurement and Compliance Reporting ................................................................................. 4 5 Responsibility .................................................................................................................................... 4 6 Related Policies ................................................................................................................................. 4

ENERGY HEDGE POLICY

Page 1 of 4 ends

2. Hedging Policy Criteria

ENERGY HEDGE POLICY

Page 2 of 4 ends

2.2 The City will hedge projected energy needs based on the following criteria:

Lead
Time
Months
1 to 12
Quarters
5 to 8
Quarters
9 to 12
Hedging
Frequency Monthly Quarterly Quarterly
Range (%) 90-110 70-100 45-80

i. Lead Time: This is the amount of time from the current period (including the current period). It may be defined in months or quarters.

iv.Remediation Period on Violation is 45 Days, meaning the City has 45 days from the date of the violation notice to get back in compliance with the hedging policy.

Deviations that exceed the range will require approval of the ROC and/or City Council, and will be part of the regular reporting to the City Council.

ENERGY HEDGE POLICY

Page 3 of 4 ends

2.3 Hedge Timing and Volumetric Minimums
In meeting the overall volumetric criteria, the City will have the following minimum percentages of energy hedged no later than the lead time as identified below:

Time Frame Months Quarters
Lead time 1-12 5-8 9-12
Minimum (%) 70 50 30
For example, on January 1, 2022, the City will have a minimum of 70% of its projected energy needs for each of the following 12 months, January 2022 through December 2022 procured. For Quarter 5, including January, February, and March 2023, a minimum of 50% of the total projected energy shall be procured, whereas minimum thresholds for individual months are not required. This minimum amount can be hedged well before that date based on the ranges in the prior section. As with the Volumetric Lead Time Criteria, a time frame in months takes precedence over a time in quarters.

The following chart illustrates the volumetric and lead time criteria for energy hedging.

ENERGY HEDGE POLICY

Page 4 of 4 ends

3 Natural Gas Hedging
Natural gas and power hedging will be a complementary hedging activity for the City’s natural gas fired generation (owned or contracted) or if it enters a transaction that uses a natural gas index price to derive its electricity cost, such as a heat rate product. Such gas related generation or purchase transactions would not be considered energy hedges until the projected gas volumes are procured. The monthly hedge criteria are measured based on total energy exposure for native load (total projected electricity needed for native load minus energy already hedged). This is the criteria required to be considered fixed price energy. There are three mechanisms for hedging gas price risk:
i. The use of NYMEX contracts.
ii. Bilateral financial hedging using ISDA Master Agreements iii. Fixed price physical gas procurement.

In order to allow flexibility in overall energy hedging decisions (e.g. economically hedging additional needs via gas contracts versus power purchases), specific sub-targets for natural gas hedging are not set within this policy.
4 Risk Measurement and Compliance Reporting
Risk measurement and policy compliance within the volumetric and lead time criteria will be demonstrated on a regular basis in the Power Management Services Agent’s (“Agent’s”) monthly portfolio model risk report. This report will generally cover three years of projections with seven-year runs performed at least once per year or when market conditions indicate the potential to cost-effectively hedge beyond three years out. 5 Responsibility
It shall be the responsibility of the City Council, Risk Oversight Committee, City Manager, and Risk Management Committee to assure compliance with this policy. Implementation of this policy shall be in accordance with the Related Polices, as referenced below. 6 Related Policies
Supporting policies and procedures are required as outlined below:
i. City of Roseville Electric Utility Risk Management Policy ii. City of Roseville Energy Trading Authority Policy
iii. City of Roseville Energy Credit Risk Policy
iv.Resolution 17-368 retaining ACES for power management services v. Resolution 16-161 declaring ACES as agent for the purposes of risk policies

ENERGY TRADING AUTHORITY POLICY

Energy Trading Authority Policy

2/26/202203/03/2021

ENERGY TRADING AUTHORITY POLICY

Table of Contents

1. Purpose ................................ ................................ ................................ ........................ 1

2. Execution Authority ................................ ................................ ................................ ..... 1

3. Requirements ................................ ................................ ................................ ............... 1

3.1 Credit Requirements ................................ ................................ ............................... 1

3.2 Contract Requirements ................................ ................................ ........................... 2

4. Non Permissible Transactions ................................ ................................ .................... 2

4.1 Sleeving ................................ ................................ ................................ ................... 2

4.2 Speculative ................................ ................................ ................................ .............. 2

5. Standard Transactions ................................ ................................ ................................ 2

5.1 Enabling and Master Agreements ................................ ................................ ............. 2

5.2 Purchase and Sale of Energy Products ................................ ................................ .... 2

6. Non-standard Transactions................................ ................................ ......................... 5

6.1 Approval Process for Non-Standard Transactions ................................ .................... 5

7. Aggregated Dollar Authority Limits ................................ ................................ ............ 5

7.1 Authority Matrix ................................ ................................ ................................ ........ 6 i. Matrix Explanations ................................ ................................ ................................ 6

7.2 Authority Matrix for Agent’s Short-Term Traders ................................ ....................... 7 i. Matrix Explanations ................................ ................................ ................................ 8

7.3 CAISO Trading Authority Matrix for Agent’s Short-Term Traders .............................. 9 i. Matrix Explanations ................................ ................................ .............................. 9

8. Acknowledgements ................................ ................................ ................................ ... 10

8.1 Violations and Sanctions ................................ ................................ ........................ 10

8.2 Policy Effective ................................ ................................ ................................ ....... 10

9. Responsibility ................................ ................................ ................................ ............ 10

10. Related Responsibilities ................................ ................................ .......................... 10

ENERGY TRADING AUTHORITY POLICY PAGE 1 OF 10

ENERGY TRADING AUTHORITY POLICY
3/03/2021

1. Purpose
The Trading Authority Policy (“Policy”) is the framework containing the governing rules and requirements associated with the City’s energy related transactions. The Policy also specifies the list of authorities or powers granted by the City Council of the City of Roseville (“City”) to the City Manager and key personnel that can execute energy related transactions.

1.1 The Trading Authority Policy includes directives that address the following:

i. The City’s intention regarding hedging and speculating; ii. Who has authority to execute transactions;
iii. The commodities and products that can be transacted; iv. The authorized lead-time and term for each transaction; v. Counterparty contract and credit requirements;
vi. Other relevant factors associated with due diligence in authorizing transactions to be executed.

2. Execution Authority
The City Council granted the City Manager the ability to delegate his/her authority to the Electric Utility Director and Power Management Services Agent (“Agent”) at his/her discretion. The City Manager may also choose to amend the extent of authority granted to Utility Director and Agent at his/hers discretion as long as it does not surpass the limit of his/her own authority.

The Transaction Authority Matrix outlines the Execution Authority Limits and defines the trading limits applicable to purchases and sales for each authority level.

All transactions must be executed via a recorded communication method. Recorded communications must be maintained and controlled by personnel who are independent of the trading function. Any request by the City for the Agents to execute on its behalf a transaction beyond the Agent’s authority must by documented in accordance with this Policy.

3. Requirements

3.1 Credit Requirements –

i. Roseville Electric shall not intentionally exceed the credit limit associated with each counterparty. Entering into unsecured transactions with a counterparty that has total credit exposure greater than or equal to its open line of credit and the total of any security currently provided, will be managed according

ENERGY TRADING AUTHORITY POLICY PAGE 2 OF 10

to the City of Roseville Energy Credit Policy. (Note: Since credit exposures are a function of not only positions traded, but also a function of market pricing and volatility, credit exposure to a counterparty may unintentionally exceed a credit limit purely due to changes in the forward market).

3.2 Contract Requirements –

i. Transactions with counterparties shall only be permitted if City has an active, valid, and executed agreement enabling such trading activity with that counterparty.
ii. Long form confirmations may be used as a valid agreement in lieu of a permanent agreement, when necessary, if approved by the Roseville City Council.

4. Non-Permissible Transactions

4.1 Sleeving

i. No sleeving transactions for credit or contract purposes shall be executed.

Note: Credit Sleeving is an arrangement where a more financially reputable entity acts as middleman for a smaller, undercapitalized entity in the purchase or sale of power. Contract sleeving is an arrangement where an entity acts as a middleman between two entities to bridge a contract gap that exists between the two entities.

4.2 Speculative

i. The primary purpose of trading activities shall be for hedging and portfolio optimization (including participation in arbitrage opportunities). However, the Energy Hedge Policy does allow the City to take advantage of market opportunities through transactions that could in the strictest sense be labeled speculation if those transactions expose the City to additional risk. The Energy Hedge Policy defines what is permissible in this regard.

5. Standard Transactions
Types of transactions that are executed by Roseville or its Agent must be consistent with City Council resolutions, all applicable laws, and rules and regulations. These may include, but not limited to the following:

5.1 Enabling and Master Agreements

5.2 Purchase and Sales of Energy Products such as:

5.2.1 Electric Power and Transmission (Financial and Physical Contracts)

i. Purchase energy or capacity to serve load above what is expected to be generated or purchased from existing resources, or if energy or capacity purchases are more economical than existing resources.

ENERGY TRADING AUTHORITY POLICY PAGE 3 OF 10

ii. Sell existing capacity or energy that is expected to be in excess of the City’s requirements.
iii. Execute financial transactions, including CAISO virtual transactions, to fix the price of variable commodity purchases or sales.
iv. Purchase from the CAISO markets to meet the City’s load requirements or sell into the CAISO markets energy in excess of the City’s load requirements.
v. Purchase call options to limit price exposure on short power positions. vi. Sell call options or tolling agreements on capacity that is expected to be in excess of the City’s resource requirements.
vii. Purchase a “floor” to limit price exposure on long power positions. viii. Sell a “floor” to offset a portion of the price of the purchase of call ix. Execute physical spread transactions at authorized locations. x. Transmission purchases are to be as firm as possible to reasonably assure the delivery of the commodity at the firmness transacted.

Notes:
 Physical Contracts are contracts that require “sellers” to produce and deliver the commodity to the “buyers”. Financial Contracts do not involve a direct physical delivery of a commodity; instead they use cash settlements, the buyer either gains or lose credit against the seller based on the difference between the agreed “entry” price and the “final” settlement price.

5.2.2 Natural Gas and Transportation (Financial and Physical Contracts)

i. Purchase natural gas and transportation that is expected to be needed to fuel the Roseville facilities. Enter into imbalance and storage agreements if deemed beneficial to fuel Roseville facilities.
ii. Sell surplus gas, or release transportation capacity, if more economic energy is available for purchase.
iii. Purchase call options to limit price exposure on short natural gas positions.
iv. Sell call options or tolling agreements on capacity that is expected to be in excess of the City’s resource requirements.
v. Purchase a “floor” to limit price exposure on long natural positions. vi. Sell a “floor” to offset a portion of the price of the purchase of call options listed in item (5) above.
vii. Transportation purchases are to be as firm as possible to reasonably assure the delivery of the commodity at the firmness transacted.

5.2.3 Environmental Compliance Instruments

i. Purchase environmental compliance instruments, including but not limited to LCFS credits, GHG allowances, GHG offsets and Federal SO2 and NOx emission allowances expected to be necessary to optimize the operation of the City’s resource portfolio.
ii. Sell environmental compliance instruments, including- but not limited to- Carbon Free Attributes, LCFS credits, GHG allowances, GHG offsets,

ENERGY TRADING AUTHORITY POLICY PAGE 4 OF 10

and Federal SO2 and NOx Emission Allowances deemed unnecessary for efficient operation of the City’s resource portfolio.

5.2.4 REC’s and Energy Attributes

i. Purchase or sell renewable energy credits and/or energy attributes as required to meet compliance requirements.

5.2.5 Congestion Revenue Rights

i. Execute congestion revenue rights or physical transmission transactions, including natural gas transportation to manage congestion price risk.

5.2.6 Ancillary Services

i. Purchase bilateral ancillary services to meet the City’s load requirements or sell bilateral ancillary services in excess of the City’s load requirements.
ii. Purchase CAISO Ancillary Services (Spinning Reserves, Non-Spinning Reserves, and Regulation) to meet the City’s load requirements or sell CAISO Ancillary Services in excess of the City's load requirements.

5.2.7 Movement of energy to and from:

i. CAISO (NP15 and SP15), BANC (Balancing Area of Northern California), Mid-Columbia, John Day, Big Eddy and COB

a. Execute physical spread transactions at authorized locations. b. For financial electricity transactions, authorized locations include CAISO NP 15 EZ Gen Hub, CAISO SP 15 EZ Gen Hub, the
Balancing Area of Northern California (BANC), Mid-Columbia, John Day, Big Eddy, and COB. These same locations are authorized for physical electricity transactions to the extent delivery can be reasonably expected.
c. Additional physical and financial locations include owned-generation locations within the CAISO, and CAISO inter-ties for import and export transactions.

5.2.8 Movement of Natural Gas to and from:

i. PG&E CityGate, Malin, Topock, Henry Hub, and SoCal Border

a. Execute physical spread transactions at authorized locations. b. For Natural Gas physical and financial transactions, authorized locations include PG&E CityGate, Malin, Topock and the SoCal Border.
c. Henry Hub is authorized for financial Natural Gas hedging, as well as Henry Hub to PG&E CityGate Basis.

ENERGY TRADING AUTHORITY POLICY PAGE 5 OF 10

5.2.9 Energy Exchange:

Energy exchange transaction is defined as any transaction in which similar quantities of energy are exchanged across locations or commodities to lower cost, or to reduce risk or to increase reliability.

6. Non-Standard Transactions
City staff may enter non-standard Transactions with City Council approval. Non-standard Transactions fall outside the scope of the defined “Standard” Transactions; these may include new opportunities that involve the following:

i. New commodities
ii. Location outside defined trading boundaries
iii. Pilot program

6.1 The approval process for non-standard transactions are defined by the following:

i. Transaction Proposal -

The proposal is the responsibility of the person or business group proposing the transaction. The proposal should address the business need, risks, trading controls, valuation methodology, accounting methodology, operations workflow/methodology, and assessment of legal and regulatory issues.
ii. City Council Review -

The Risk Oversight Committee (“ROC”) will perform a review on behalf of, and make a recommendation to, the City Council on the benefits and risks of the proposed transaction. The City Council will assess the proposed transaction and make a determination whether to add the proposed transaction to the approved list.

7. Aggregated Dollar Authority Limits
The aggregated dollar authority limit specifies the corresponding maximum dollars each authority level is allowed to authorize for forward transactions for Electric Power, Transmission, Natural Gas, Transportation, Environmental Compliance Instruments, RECs and Energy Attributes, Congestive Revenue Rights, Ancillary Services, and Energy Exchanges. See Authority Matrix for details.

ENERGY TRADING AUTHORITY POLICY PAGE 6 OF 10

7.1 Authority Matrix:

Title

Source of
Authority

Products

Term

Delivery
Lead
Time

Termination
Limits

Aggregate Dollar Authority
Limit
Power &
Transmission
Nat. Gas &
Transpor-
tation
Environmental
Compliance
Instruments
RECs and
Energy
Attributes
Congestions
Revenue
Rights
Ancillary
Services
Energy
Exchan
ges

Net

Gross

City
Council

State Law,
City
Charter

No
Limit

No Limit

City
Manager

City
Council

< 6
Years

$500,000,000

$700,000,000

Utility
Director

City
Council

< 3
Month

<6
Months

< 1
Year

$5,000,000

Agent’s
CEO

City
Council

< 1
Month

< 6
Weeks

< 2
Months

$23,000,000

$31,000,000

i. Matrix Explanations:

 The gross aggregate limits represent the maximum allowable total dollars based on the absolute values of all forward purchases and sales.
 The net aggregate limits represent the maximum allowable total dollars between all forward purchases and sales.  Delivery Lead Time represents the time period from the date a trade is executed to the start of the trade.  Unless otherwise stated, the dollar limits are based upon electric power only and do not include transmission, however, the Term, Lead Time, and Quantity limits do apply to transmission.  Termination Limit refers to the last day of the term from the execution day of the contract.

ENERGY TRADING AUTHORITY POLICY PAGE 7 OF 10

7.2 Authority Matrix for Agent’s Short-Term Traders:

Product

Source of
Authority

Per Transaction
Limits

Per Trading Day Limits
(Up to)

Aggregated Limits
(Up to)

Term

Delivery
Lead Time

Termination
Limits

Volume
Size

Total Cost
($)

Volume
Size

Total Cost
($)

Total
Volume

Net Total
($)

Gross Total
($)

Power and
Transmission

City
Council
(Can be
Modified
by City
Manager)

> 1 Week
< 1 Month

< 6
Weeks

< 2
Months

8,400 MWh
per Week

$1,050,000
per Week

111,600 MWh

$14,000,000

446,400
MWh

$17,000,000

$21,000,000

> 1 Day
< 1 Week

2,400 MWh
per Day

$600,000
per Day

33,600 MWh

$8,400,000

< 1 Day

4,800 MWh
per Day

No Max.
(Keep Lights
On)

Natural Gas
and
Transportation

< 1 Month

< 6
Weeks

< 2
Months

12,000

MMBTU/D

XRE will
authorize
the
purchase of
all financial
natural gas
balancing
transaction
s before
execution
by
APMAgent.

APM Agent

775,000
MMBTU

$6,200,000

775,000
MMBTU

$6,200,000

$9,300,000

ENERGY TRADING AUTHORITY POLICY PAGE 8 OF 10

may
manage
and
execute the
sale of
financial
natural gas
balancing
transaction
s as RE’s
exposure to
natural gas
prices
decreases.

> 1 Day
< 1 Week

40,000

MMBTU/D

280,000
MMBTU

$4,200,000

400,000
MMBTU

$4,000,000

$6,000,000

< 1 Day

< 1
Week

< 2
Weeks

50,000

MMBTU/D

150,000
MMBTU

$3,000,000

150,000
MMBTU

$2,000,000

$4,000,000

ENERGY TRADING AUTHORITY POLICY PAGE 9 OF 10

i. Matrix Explanations:

a. Power and Transmission Transactions:

 Transaction Limits represent the MWh volume per period labeled in the table and total dollars per period (as labeled above) for each transaction executed.  Per Trading Day Limits represent the total MWH volume and dollars for all transactions executed in a trading day.
 The transaction term limit for the Agent of < 1 Day covers individual daily transactions as well as executed transactions for more than one day to accommodate weekends or holidays, which could have terms up to 3 days for a normal weekend and up to 5 days for a holiday weekend.
 The gross aggregate limits represent the maximum allowable total dollars based on the absolute values of all forward purchases and sales.  The net aggregate limits represent the maximum allowable total dollars between all forward purchases and sales.
 Delivery Lead Time represents the time period from the date execution to the first day of the term of the trade.
 Unless otherwise stated, the dollar limits are based upon electric power only and do not include transmission, however, the Term, Lead Time, and Quantity limits do apply to transmission.
 Termination Limit refers to the time period between the date of execution and the last day of the term of the trade.

b. Natural Gas and Transportation Transactions:

 Transaction Limits represent the daily MMBtu volume for each transaction executed.
 Per Trading Day Limits represent the total MMBtu volume and dollars for all transactions executed in a trading day.
 The transaction term limit for the Agent of < 1 Day covers individual daily transactions as well as executed transactions for more than one day to accommodate weekends or holidays, which could have terms up to 3 days for a normal weekend and up to 5 days for a holiday weekend.
 The gross aggregate limits represent the maximum allowable total dollars based on the absolute values of all forward purchases and sales.  The net aggregate limits represent the maximum allowable total dollars between all forward purchases and sales.
 Lead time represents the time period from the date a trade is executed to the start of the trade.
 One monthly NYMEX contract contains 10,000 MMBtu.
 The dollar limits are based upon commodity gas only and do not include transportation, however, the Term, Lead Time, and Quantity limits do apply to transportation.
 Termination limit refers to the last day of the term from the execution day of the contract.

ENERGY TRADING AUTHORITY POLICY PAGE 10 OF 10

7.3 CAISO Trading Authority Matrix for Agent’s Short-Term Traders:

Products

Delivery Lead Time

Term

MW Size

$/MWh

Generation
Awards

As Required by CAISO

1 Operating Day

230

CAISO Price Cap

Demand
Awards

None

Inter SC Transactions
(IST)

As Required by CAISO

1 Operating Day

200

CAISO Price Cap

CAISO
Imports

230

CAISO
Exports

375

Ancillary
Services

200

Congestion Revenue
Rights

None

i. Matrix Explanations:

 Generation Award Limits are per generating unit within the CAISO.  Demand Award Limits are per each load location.
 CAISO Imports and Exports are by location and are each monitored separately.  Inter SC Transactions (IST) are each monitored separately.  Limits for Ancillary Service Awards apply to the Regulation and Operating (Spinning and Non- Spinning) Reserve Market. Limits for ancillary services transacted bilaterally are addressed in the power authority matrix.  Only Congestion Revenue Rights that are bought and sold via the long-term, annual and monthly auctions or in the secondary market are monitored per the limits above. This excludes congestion revenue rights allocated in the Annual Allocation.
 Term applies to either the calendar year or planning year.

ENERGY TRADING AUTHORITY POLICY PAGE 11 OF 10

8. Acknowledgements

8.1 Violations and Sanctions –

i. Violations of this Policy must not occur. Should it be deemed that violations did occur due to the actions of City employees, the Agent will notify the City’s Electric Risk and Compliance Supervisor and the City Attorney of such violations. Those individuals will have the responsibility to bring the violations to the Risk Management Committee for discussion. If warranted, the Risk Management Committee may escalate the issue to the Risk Oversight Committee to develop remediation procedures.

8.2 Policy Effective –

ii. This Policy is in effect upon the City Council’s approval and shall remain in effect until a replacement policy has been approved by the City Council superseding this Policy.

9. Responsibility

It shall be the responsibility of the City Council, through the duly appointed Risk Oversight Committee, Risk Management Committee and the City Manager to assure compliance with this policy.

10. Related Policies

10.1 Supporting policies and procedures are required as outlined below:

i. City of Roseville Energy Credit Risk Policy
ii. City of Roseville Electric Utility Risk Management Policy iii. City of Roseville Energy Risk Identification Policy and Hedge Plan iv. Resolution 17-368 declaring ACES for power management services v. Resolution 16-161 declaring ACES as agent for the purposes of risk policies.

ENERGY TRADING AUTHORITY POLICY

Energy Trading Authority Policy
2/26/2022