Roseville City Council
April 2, 2025

AGENDA
April 2, 2025

CITY COUNCIL

HOUSING AUTHORITY
6:00 p.m.

Council Chambers
311 Vernon Street
Roseville, CA
www.roseville.ca.us

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.

Levine Act Provisions
-

The Levine Act requires a Party (or its agent (s)) to a Proceeding before the City of Roseville that involves any action or consideration to their contract, license, permit, or other entitlement for use, to disclose any campaign contribution made to City elected or appointed officers (including Councilmembers, Planning Commissioners, and members of other City boards and commissions) totaling more than $250 within the 12 months before the City decision.

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. PRESENTATIONS

5.1. Proclamation - Fair Housing Month April 2025
Proclaim the month of April 2025 as Fair Housing Month and encourage all residents and community organizations to celebrate the value of harmonious, inclusive, and diverse communities of neighbors and to support the goal of equal housing opportunity for all people.

CONTACT:

Blair Hutchison 916-774-5266 [email protected]

6. PUBLIC COMMENTS

7. CONSENT CALENDAR

BEGINNING OF CONSENT CALENDAR
Minutes

7.1. Minutes of Prior Meeting
Memo from City Clerk Technician Melissa Lipp and City Clerk Carmen Avalos recommending the City Council approve the minutes of the March 5, 2025 City Council and Housing Authority Meeting and the March 19, 2025 City Council Meeting.

CC #:
3825
File #:
0102-03
CONTACT:

Melissa Lipp [email protected] 916-774-5268
Bids / Purchases / Services

7.2. Cooling Tower Fan Motor (RFQ 10-3409) – Purchase Order Memo from Senior Buyer Joanna Oukrop and Finance Director Scott Pettingell recommending the City Council approve a purchase order with Mechanical Analysis Repair, Inc., which submitted the lowest responsive and responsible bid for a cooling tower fan motor in response to Request for Quotations No. 10- 3409. This fan motor will serve as a spare to replace the existing motor in case of equipment failure at the Roseville Energy Plant. The low bid amount for the spare cooling fan motor is $83,890.00. With a six percent tariff for products shipped after April 2, 2025, of $5,033.40, the grand total will be $95,814.96 including $6,891.56 of sales tax
.

There is adequate funding in the FY2024-25
Electric Fund budget for this purchase.

CC #:
3809
File #:
0203-04
CONTACT:

Joanna Oukrop 916-746-1102 [email protected]

7.3. Fuel and Lubricants (SACOG RFP 2023-24-10) - Contract Purchase Agreement
Memo from Purchasing Supervisor Becky Philipp and Finance Director Scott Pettingell recommending the City Council adopt RESOLUTION NO. 25-072

APPROVING A CONTRACT PURCHASE AGREEMENT, BY AND

BETWEEN THE CITY OF ROSEVILLE AND HUNT OIL OF CALIFORNIA, INC., AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE (3004242).

Staff requests Council
approval of a contract purchase agreement with Hunt Oil of California, Inc. as the selected bidder of the Sacramento Area Council of Governments Request for Proposals No. 2023-24-10 to supply and deliver propane and various lubricants for multiple City departments. The initial contract through August 31, 2027, is for $526,000, and funding is included in multiple City department budgets. The bid allowed for two optional renewal years at one-year intervals.

Staff requests authorization to continue utilizing the remaining optional renewal years of the bid without further Council approvals until the contract expires or until City staff determines that continuing with the same vendor is not in the City's best interest.

CC #:
3810
File #:
0203-04
CONTACT:

Becky Philipp 916-746-1110 [email protected]

7.4. Riego Creek Park Turf Installation Project - Award of Bid and Budget Adjustment
Memo from Park Development Project Manager Kelly Appier and Parks, Recreation & Libraries Director Jill Geller recommending the City Council adopt RESOLUTION No. 25-080 APPROVING AN AGREEMENT, BY AND

BETWEEN THE CITY OF ROSEVILLE AND BRIGHTVIEW
LANDSCAPE DEVELOPMENT, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF
ROSEVILLE; and adopt ORDINANCE 6925 OF THE COUNCIL OF THE

CITY OF ROSEVILLE AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25 BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY EFFECTIVE AS AN APPROPRIATION MEASURE.

Staff requests Council award an agreement to the apparent low bidder, Brightview Landscape Development, Inc. for the Riego Creek Park turf installation, and adopt a resolution to authorize the City Manager to execute the agreement with Brightview Landscape Development, Inc. in the amount of $282,356, as well as authority to approve change order requests in an amount not to exceed 10% of the contracted amount; and adopt an ordinance to approve a budget adjustment in the amount of $175,000 from the Neighborhood Park - West Roseville Specific Plan (SP) Fund, to the Riego Creek Park (formerly, F-51) Project.

Riego Creek Park is located on the 12.15-acre site off
North Hayden and Holt Parkways, adjacent to Riego Creek Elementary School in the Fiddyment Farm area of West Roseville.

The Riego Creek Park turf installation
project includes converting two landscaped areas along North Hayden Parkway to turf grass. Staff recommends award of the base bid plus alternates 1, 2, and 3 for a total contract award amount of $282,356 to Brightview Landscape Development, Inc.

Staff requests authorization to approve change order requests in an amount not to exceed 10% of the contracted amount.

Funding for the construction project was
approved in
the FY2021-22 CIP budget using the Neighborhood Park - West Roseville SP Fund.

A budget adjustment is requested to fully fund the turf installation. Ongoing m
aintenance costs are funded through the Fiddyment Ranch Community Facilities District #2 (Public Services) Fund. There will be no General Fund impact.

CC #:
3820
File #:
0203-10 & 0201-01
CONTACT:

Kelly Appier 916-774-5927 [email protected]

7.5. Dry Creek Wastewater Treatment Plant Gearbox Replacement - Sole Source Purchase Order
Memo from Administrative Technician Audrey Ficker and Environmental Utilities Director Sean Bigley recommending the City Council adopt RESOLUTION NO. 25-081 APPROVING A SOLE SOURCE PURCHASE ORDER FOR
REPLACEMENT MIXING GEARBOXES. Staff requests
Council approval of a
sole source purchase order with Philadelphia Mixing Solutions, LLC for the purchase of eight (8) replacement mixing gearboxes for the aeration process at the Dry Creek Wastewater Treatment Plant. Philadelphia Mixing Solutions, LLC is the only supplier of its named equipment. The cost of this purchase is $206,355 including tax and estimated shipping cost with a ten percent contingency of $20,635, for a total not-to-exceed cost of $226,990. Funding will be provided from the Environmental Utilities Department’s annual approved budgets for the Wastewater Operations Fund.

CC #:
3821
File #:
0203-09
CONTACT:

Audrey Ficker 916-746-1865 [email protected]

Resolutions

7.6. Civic Center Heating, Ventilation and Air Conditioning Boxcar Replacement Project - Notice of Completion
Memo from Project Coordinator Rebecca McCoy and Public Works Director Jason Shykowski recommending the City Council adopt RESOLUTION NO. 25-074 ACCEPTING THE PUBLIC WORK KNOWN AS THE CIVIC

CENTER HVAC BOXCAR REPLACEMENT PROJECT, APPROVING
THE “NOTICE OF COMPLETION”, AND AUTHORIZING THE PUBLIC

WORKS DIRECTOR TO EXECUTE SAID NOTICE ON BEHALF OF THE
CITY OF ROSEVILLE.

Staff requests Council accept the
Civic Center HVAC
Boxcar Replacement
project as complete. The Civic Center Heating, Ventilation and Air Conditioning (HVAC) Replacement units AC-2, AC-3, and AC-4 are fully operational, and the occupied spaces served by these units are maintaining both temperature and airflow setpoints. The total cost of this project was $1,059,780. The Civic Center HVAC Boxcar Replacement Project
was budgeted in the Public Works
FY2021-22 Civic Center – Renovation and Rehabilitation Project and the FY2022- 23 Civic Center – HVAC Boxcar Replacement Project budgets in the Facility Rehabilitation Fund.

CC #:
3814
File #:
0900-01
CONTACT:

Rebecca McCoy 916-774-5706 [email protected]

7.7. Fire Station No. 8 Project - Notice of Completion
Memo from Project Supervisor Andre Baranov and Public Works Director Jason Shykowski recommending the City Council adopt RESOLUTION NO. 25-077 ACCEPTING THE PUBLIC WORK KNOWN AS THE FIRE
STATION NO. 8 PROJECT, APPROVING THE “NOTICE OF
COMPLETION”, AND AUTHORIZING THE PUBLIC WORKS DIRECTOR

TO EXECUTE SAID NOTICE ON BEHALF OF THE CITY OF
ROSEVILLE. Staff request Council
accept the work performed by Carter-Kelly,
Inc. as complete, and authorize the Public Works Director to execute the Notice of Completion, releasing the 5% Retention Funds and beginning the warranty period for the Fire Station No. 8 construction project located at 7951 Painted Desert Dr., Roseville, CA 95747. The project was funded by the Fire Facilities Fund and no additional funding is being requested.

CC #:
3817
File #:
0900-01
CONTACT:

Andre Baranov 916-774-5342 [email protected]

7.8. Low Carbon Fuel Standard Customer Program - Low-Income Definition Policy Approval
Memorandum from Energy Services Account Representative Sarah Kaufman and Electric Utility Director Dan Beans recommending the City Council adopt RESOLUTION NO. 25-078 ADOPTING A LOW-INCOME DEFINITION
POLICY FOR ROSEVILLE ELECTRIC’S LOW CARBON FUEL
STANDARD CUSTOMER PROGRAMS. Staff requests Council adopt a resolution to authorize the City Manager, or his designee, to execute a Low- Income Definition Policy for Roseville Electric Utility’s Low Carbon Fuel Standard Customer Programs. This recommendation has no financial impact to the Electric Fund or the General Fund.

CC #:
3818
File #:
0800-03
CONTACT:

Sarah Kaufman 916-774-5656 [email protected]

7.9. Pleasant Grove Wastewater Treatment Plant Ultraviolet Disinfection Addition Project – Notice of Completion
Memo from Preventative Maintenance Supervisor Jeremy Snyder and Environmental Utilities Director Sean Bigley recommending the City Council adopt RESOLUTION NO. 25-079 ACCEPTING THE PUBLIC WORK

KNOWN AS THE PLEASANT GROVE WASTEWATER TREATMENT

PLANT ULTRAVIOLET DISINFECTION ADDITION PROJECT,
APPROVING THE “NOTICE OF COMPLETION”, AND AUTHORIZING

THE ENVIRONMENTAL UTILITIES DIRECTOR TO EXECUTE SAID
NOTICE ON BEHALF OF THE CITY OF ROSEVILLE. Staff
requests
Council approval of the Notice of Completion for the Pleasant Grove Wastewater Treatment Plant Ultraviolet Disinfection Addition Project. The total cost of the construction contract with Auburn Constructors LLC is $2,255,365.22. Funding for this project was provided by the South Placer Wastewater Authority.

CC #:
3819
File #:
0900-01
CONTACT:

Jeremy Snyder 916-413-9236 [email protected]

7.10. Financial Policies for Fiscal Year 2025-26
Memo from Finance Director Scott Pettingell and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council adopt RESOLUTION NO. 25-076 ADOPTING THE CITY OF ROSEVILLE
FINANCIAL POLICIES, EFFECTIVE JULY 1, 2025. Staff recommends Council approve the annual update of its financial policies. The recommended
updates to the Investment Policy incorporate provisions of Assembly Bill 2618, Surplus Funds: Investment, and make nonsubstantive edits to the policy to improve clarity. The recommended updates to the Budget Development Policy improve clarity regarding the City's indirect cost allocation plan. The recommended Federal Stimulus Reserve Fund Policy change clarifies the deadline for obligating federal stimulus funding. Approval of the financial policies has no fiscal impact. However, implementing the policies is expected to improve the City's fiscal position and financial health. The Fiscal Year 2025-26 Proposed Budget is being developed based on these recommended financial policies.

CC #:
3816
File #:
0200
CONTACT:

Scott Pettingell 916-746-1306 [email protected]

7.11. Downtown Roseville Property and Business Improvement District - 2024 Annual Report and 2025 Budget
Memo from Economic Development Analyst Gina McColl and Economic Development Director Melissa Anguiano recommending the City Council adopt RESOLUTION NO. 25-075
APPROVING THE 2024 DOWNTOWN

ROSEVILLE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT AND 2025 BUDGET.

Staff requests Council receive an
update regarding the 2024 Downtown Roseville Property and Business Improvement District Annual Report including current activities and future operations and approve the annual report and the 2025 Budget for the Downtown Roseville Partnership. The City contributes to the Property and Business Improvement District each year in the form of parcel assessments for City-owned property in Downtown Roseville.

The 2024 City assessment was
approximately $70,690 and the total assessment collected for the district was $215,513. Receiving the annual report has no impact on the General Fund and a maximum of 2% of the property assessment will be retained by the City to cover the costs of administration of the management agreement.

CC #:
3815
File #:
0206-10-01
CONTACT:

Gina McColl 916-774-5452 [email protected]

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

7.12. Accela Cloud Migration - Budget Adjustment
Memo from Management Analyst Stacie Marchetti and Development Services Director Mike Isom recommending the City Council adopt ORDINANCE NO. 6924 AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR
2024-25 BUDGET AND DECLARING THIS ORDINANCE TO BE
IMMEDIATELY EFFECTIVE AS AN APPROPRIATION MEASURE.

Staff
requests Council approve a budget adjustment appropriating $100,000 in the Development Services Department's Technology Replacement Fund to the Accela Cloud Migration Capital Improvement Project, increasing the total project budget to $995,000. The City's on-premise enterprise permitting software, Accela Automation, will no longer be supported by the vendor after June 30, 2025, and all users must
migrate to its new cloud-hosted system in order to continue receiving product support, updates, and maintenance. The Council authorized the upgrade project in the FY2024-25 budget. Unexpected staff vacancies have increased the need for consultant support to complete the project on time.

The proposed budget adjustment
would appropriate an additional $100,000 needed to complete the project. The Technology Replacement Fund receives funding from a fee associated with building permit issuance and was specifically established to pay for technology platforms that benefit development. There is no impact to the General Fund.

CC #:
3811
File #:
0203-06 & 0201-01
CONTACT:

Stacie Marchetti 916-774-5278 [email protected]

Ordinances (for second reading and adoption)

7.13. Second Reading - Roseville Municipal Code Amendment – Regulations for Fireworks
ORDINANCE NO. 6926 AMENDING SECTION 16.16.140 OF CHAPTER

16.16 OF TITLE 16 OF THE ROSEVILLE MUNICIPAL CODE
REGARDING REGULATIONS FOR FIREWORKS, for second reading and adoption.

CC #:
3824
File #:
0102
CONTACT:

Travis Cochran 916-774-5325 [email protected]

Reports / Requests

7.14. Annual Comprehensive Financial Report and Other Audit Reports for the Fiscal Year ended June 30, 2024
Memo from Accounting Manager Teri Quinlan and Finance Director Scott Pettingell recommending the City Council receive three informational financial reports for the fiscal year ended June 30, 2024, along with two required auditor communication letters. There is no impact to the City's General Fund.

CC #:
3813
File #:
0202
CONTACT:

Teri Quinlan 916-774-5316 [email protected]

END OF CONSENT CALENDAR

8. SPECIAL REQUESTS/REPORTS/PRESENTATION

8.1. Roseville Power Plant #2 Repower Project - New Capital Improvement Project Approval, Third Amended and Restated Site Use and Installation Agreement, Second Amended and Restated Operations and Maintenance Agreement, Design-Build Construction Agreement, and Budget Adjustment Memo from Electric Utility Chief Operating Officer Shawn Matchim and Electric Utility Director Dan Beans recommending the City Council adopt RESOLUTION NO. 25-082

APPROVING A THIRD AMENDED AND

RESTATED SITE USE AND INSTALLATION AGREEMENT, BETWEEN

THE CITY OF ROSEVILLE AND THE CALIFORNIA DEPARTMENT OF

WATER RESOURCES, AND AUTHORIZING THE CITY MANAGER TO
EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE; and adopt RESOLUTION NO. 25-083 APPROVING A SECOND AMENDED AND

RESTATED OPERATIONS AND MAINTENANCE AGREEMENT, BY AND

BETWEEN THE CITY OF ROSEVILLE AND THE CALIFORNIA

DEPARTMENT OF WATER RESOURCES, AND AUTHORIZING THE

CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF
ROSEVILLE; and adopt RESOLUTION NO. 25-084 APPROVING A

DESIGN-BUILD CONSTRUCTION AGREEMENT, BY AND BETWEEN

INTEGRATED ENGINEERS AND CONTRACTORS CORPORATION

DBA IEC CORPORATION AND THE CITY OF ROSEVILLE, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE; and adopt RESOLUTION NO 25-085 OF THE

CITY COUNCIL OF THE CITY OF ROSEVILLE DECLARING

INTENTION TO REIMBURSE EXPENDITURES FROM PROCEEDS OF
TAX-EXEMPT OBLIGATIONS FOR THE ELECTRIC SYSTEM; and adopt ORDINANCE NO. 6927 ORDINANCE OF THE COUNCIL OF THE CITY

OF ROSEVILLE AUTHORIZING CERTAIN AMENDMENTS TO THE
FISCAL YEAR 2024-25 BUDGET AND DECLARING THIS ORDINANCE

TO BE IMMEDIATELY EFFECTIVE AS AN APPROPRIATION
MEASURE.

Staff requests Council approval of the Third Amended and Restated Site Use and Installation Agreement and the Second Amended and Restated Operations and Maintenance Agreement between the City of Roseville and the California Department of Water Resources. Staff also requests approval of the creation of a new Capital Improvement Project – Roseville Power Plant #2 Repower, and approval and award of a Design-Build Construction Agreement with Integrated Engineers and Contractors Corporation dba IEC Corporation in the amount of $38,835,925. Staff also requests authorization for the City Manager or his designee to approve and pay for contract change orders for this project that could increase the contract amount by no more than 5 percent ($1,941,796) or a not-to-exceed total contract amount of $40,777,721. Staff also requests approval of a budget adjustment appropriating $17,000,000 from the FY2024-25 Electric Fund to the Project and adding $4,000,000 in expected revenue from CDWR to the FY2024-25 budget, with the total estimated cost of these agreements to be approximately $46,000,000, with funding in future fiscal years dependent on City Council approval. Staff further requests that the City Council adopt a resolution declaring its intention to reimburse expenditures related to the Roseville Power Plant #2 Repower Project activities from bond proceeds in the event that bonds are issued in the future to fund project costs. There is no financial impact to the General Fund.

CC #:
3826
File #:
0900-03 & 0201-01
CONTACT:

Shawn Matchim 916-746-1620 [email protected]

8.2. Long-Term Liabilities Update - Pension and Other Postemployment Benefits Memo from Finance Director Scott Pettingell and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council receive a presentation on the City's long-term liabilities for pension and other postemployment benefits. There is no fiscal impact. This is for informational purposes only.

CC #:
3813
File #:
0600-04
CONTACT:

Scott Pettingell
916-746-1306 [email protected]

9. APPOINTMENTS

9.1. Personnel Board & Senior Commission - Unscheduled Vacancy Appointments Memo from City Clerk Technician Katrina Six and City Clerk Carmen Avalos recommending the City Council appoint one (1) individual to the Personnel Board to a term expiring December 31, 2026 from the applications received from: Richard Plecker and Cheri Polan; and appoint Linda Richardson Soto to the Senior Commission to a term expiring December 31, 2026 as the sole application received.

CC #:
3823
File #:
0103-06-03 & 0103-12-03
CONTACT:

Katrina Six 916-774-5267 [email protected]

10. PUBLIC HEARING

NOTICE TO THE PUBLIC
City Council, when considering the matter scheduled for hearing, will take the following actions:

1. 2.

3. 4.

Open the Public Hearing
Presentation by Staff
Presentation by applicant or Appellant
Accept Public Testimony

5. 6.

7. 8.

Appellant or Applicant Rebuttal Period
Close the Public Hearing
City Council Comments and Questions
City Council Action

In the future, if you wish to challenge in court any of the matters on this agenda for which a public hearing is to be conducted, you may be limited to raising only those issues, which you, or someone else raised orally at the Public Hearing or in written correspondence received by the City on or before the hearing.

Public Hearings listed for continuance will be continued as noted and posting of this agenda serves as notice of continuation.

10.1. HOUSING AUTHORITY - Five Year Plan and Fiscal Year 2025-26 Annual Plan Memo from Housing Supervisor Suzi Cook-Turner and Economic Development Director Melissa Anguiano recommending the City Council acting as the Board of Directors for the Roseville Housing Authority, adopt RESOLUTION NO. 1- 25 O

F THE HOUSING AUTHORITY OF THE CITY OF ROSEVILLE

AUTHORIZING THE EXECUTIVE DIRECTOR TO SUBMIT THE

ROSEVILLE HOUSING AUTHORITY FIVE YEAR PLAN AND ANNUAL
PLAN FOR FISCAL YEAR 2025-26 TO THE U.S. DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT ALONG WITH ALL THE

REQUIRED CERTIFICATIONS, DISCLOSURES, AND RELATED
DOCUMENTS. Staff requests Council
receive the Housing Authority’s Five
Year and Annual Plans for submission to the U.S. Department of Housing & Urban Development. These plans have no impact on the City's General Fund.

CC #:
3812
File #:
0103-03-02
CONTACT:

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

11. COUNCIL REPORTS / PUBLIC COMMENTS

12. ADJOURNMENT

COUNCIL COMMUNICATION
CC #:

File #:

Title:

Meeting Heading
Contact:

Meeting Date: 4/2/2025
Item #: 0.1.

COUNCIL COMMUNICATION
CC #:
3822
File #:
0102-06
Title:

Proclamation - Fair Housing Month April 2025
Contact:

Blair Hutchison 916-774-5266 [email protected]

Meeting Date: 4/2/2025
Item #: 5.1.

RECOMMENDATION TO COUNCIL
Proclaim the month of April 2025 as Fair Housing Month and encourage all residents and community organizations to celebrate the value of harmonious, inclusive, and diverse communities of neighbors and to support the goal of equal housing opportunity for all people.

BACKGROUND
Not applicable.

FISCAL IMPACT
Not applicable.

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. Ceremonial documents meet the above criteria and are not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal B - Support community engagement and advocacy

Respectfully Submitted,
Blair Hutchison, City Clerk Technician
Carmen Avalos, City Clerk

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Fair Housing Month April 2025

COUNCIL COMMUNICATION
CC #:

File #:

Title:

Consent Calendar
Contact:

Meeting Date: 4/2/2025
Item #:

COUNCIL COMMUNICATION
CC #:
3825
File #:
0102-03
Title:

Minutes of Prior Meeting
Contact:

Melissa Lipp [email protected] 916-774-5268
Meeting Date: 4/2/2025
Item #: 7.1.

RECOMMENDATION TO COUNCIL
Approve the minutes of the
March 5, 2025 City Council and Housing Authority Meeting and the March 19, 2025 City Council Meeting.

BACKGROUND
Not applicable.

FISCAL IMPACT
There is no fiscal impact associated with this request.

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 City Council minutes are not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

Respectfully Submitted,
Melissa Lipp, City Clerk Technician
Carmen Avalos, City Clerk

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
March 5, 2025
March 19, 2025

MINUTES
March 5, 2025

CITY COUNCIL

HOUSING AUTHORITY
6:00 p.m.

Council Chambers
311 Vernon Street
Roseville, CA
www.roseville.ca.us

1. CALL TO ORDER
Mayor Krista Bernasconi called the meeting to order at 6:01 p.m.

2. ROLL CALL

Present: Vice Mayor Karen Alvord, Councilmember Bruce Houdesheldt, Councilmember Tracy Mendonsa, Councilmember Pauline Roccucci, Mayor Krista Bernasconi.

3. PLEDGE OF ALLEGIANCE
Claire Sheidenberger led the Pledge of Allegiance.

4. MEETING PROCEDURES
City Clerk Carmen Avalos announced the procedures for addressing the City Council.

5. PUBLIC COMMENTS
Diya Sandeep spoke on Sewa Diwali food drive.

Venkata Manish Maramreddy spoke on Health for Humanity Yogathon.

Ishaha Datusalia spoke on the Maha Kumbh Mela festival in India.

6. CONSENT CALENDAR

BEGINNING OF CONSENT CALENDAR
Motion by Bruce Houdesheldt, seconded by Tracy Mendonsa, to approve the Consent Calendar as recommended. The Motion Passed.

Roll call vote:

Ayes: Alvord, Bernasconi, Houdesheldt, Mendonsa, Roccucci Minutes

6.1. Minutes of Prior Meeting
Memo from City Clerk Technician Melissa Lipp and City Clerk Carmen Avalos recommending the City Council approve the minutes of the February 19, 2025 City Council Meeting.

CC #:
3785
File #:
0102-03
CONTACT:

Melissa Lipp 916-774-5268 [email protected]

Bids / Purchases / Services

6.2. Fertilizer Plus Dimension (RFQ 10-3410) - Purchase Order Memo from Buyer Sue Jessup and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council adopt RESOLUTION NO. 25- 052

APPROVING A PURCHASE ORDER FOR FERTILIZER PLUS
DIMENSION.

Staff requests Council authorize open purchase orders with SiteOne Landscape Supply as the lowest responsive and responsible bidder for the purchase of Fertilizer plus Dimension in response to Request for Quotations No. 10-3410. The initial contract period will be from the date of award through December 31, 2025. Funding is included in the Park Maintenance Division’s FY2024-25 budget and will be included in the proposed FY2025-26 budget.

Funding is provided by the General Fund and the City's community facilities districts. The estimated total annual spend is $75,000 with an estimated increase of up to 8% per year due to potential increases caused by inflation. The bid allowed for four optional renewal calendar years at one-year intervals. Staff requests authorization to continue utilizing the remaining optional renewal calendar years without further Council approval, provided that the applicable budget is approved by the City Council each year, until the contract expires or until City staff determines that continuing with the same vendor is not in the City's best interest.

CC #:
3769
File #:
0203-04
CONTACT:

Sue Jessup 916-746-1107 [email protected]

6.3. Glycerin-Based Carbon – Contract Purchase Agreement Amendment Memo from Wastewater Operations Superintendent Jason Fick and Environmental Utilities Director Sean Bigley recommending the City Council adopt RESOLUTION NO. 25-053 APPROVING AMENDMENT #1 TO CONTRACT

PURCHASE AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE

AND MOMAR, INC., AND AUTHORIZING THE CITY MANAGER TO
EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE (3003703). Staff requests Council approval of Amendment No. 1 to the contract purchase agreement with Momar, Inc., to increase the agreement total not-to-exceed amount from $113,000 to $148,000 to cover the purchase of glycerin-based carbon at the Dry Creek Wastewater Treatment Plant.

Funding for this purchase will be provided
from the Environmental Utilities Department’s budget in the Wastewater Operations Fund.

CC #:
3770
File #:
0203-09
CONTACT:

Jason Fick 916-746-1940 [email protected]

6.4. Sodium Hypochlorite and Sodium Hydroxide Tank Replacements - Sole Source Purchase Order
Memo from Preventative Maintenance Coordinator Blaine Wiegel and Environmental Utilities Director Sean Bigley recommending the City Council approval of a sole source purchase order with TW Associates, LLC dba MISCOwater, for the purchase of two (2) replacement chemical tanks used in the process of disinfecting water at the Barton Road Water Treatment Plant. The cost of this purchase is $104,225.94 and will be funded from the Environmental Utilities Department annual budget for the Water Treatment Plant in the Water Operations Fund.

CC #:
3772
File #:
0203-09
CONTACT:

Blaine Wiegel 916-746-1833
[email protected]

6.5. Electric Vehicle Chargers - Contract Purchase Agreement Memo from Park Planning and Development Manager Tara Gee and Parks, Recreation & Libraries Director Jill Geller recommending the City Council adopt RESOLUTION NO. 25-055 APPROVING A CONTRACT PURCHASE

AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND

RENEWAGE ENERGY SOLUTIONS, AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF
ROSEVILLE (3004392). Staff requests Council approve a contract purchase agreement (CPA) with RenewAge Energy Solutions in the amount of $293,836.93 to supply, install and activate Electric Vehicle (EV) chargers at Riego Creek Park, Byouk Park and the Placer Valley Soccer Complex. Funding for the EV chargers will include a $120,000 contribution from Roseville Electric, with the balance funded through the Capital Improvement Project budgets for the three parks included in this CPA. Maintenance of the chargers will be managed by Loop, the selected charging network. Loop recovers maintenance and customer service costs by adding a small percentage to each customer transaction.

CC #:
3774
File #:
0704
CONTACT:

Tara Gee 916-774-5253 [email protected]

Resolutions

6.6. Barton Road Water Treatment Plant Communication Facility - Mast Installation Lease Agreement Amendment
Memo from Business Systems Analyst Christian Barajas and Chief Information Officer Hong Sae recommending the City Council adopt RESOLUTION NO. 25- 051

APPROVING A REINSTATEMENT AND SECOND AMENDMENT TO

MAST INSTALLATION LEASE AGREEMENT, BY AND BETWEEN THE

CITY OF ROSEVILLE AND SPRINT SPECTRUM REALTY COMPANY, LLC,

AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE.

Staff requests Council approve the
Reinstatement and Second Amendment to Mast Installation Agreement for the Barton Road Water Treatment Plant Communications Facility, and authorize the City Manager to execute it.

West Coast PCS/T-Mobile is currently leasing space
on a cell tower at the City's water treatment plant, at 9595 Barton Road. This amendment is to reinstate the expired lease and update the conditions.

The City
will receive $2,000 per month from T-Mobile to lease space, and that revenue will be deposited into the General Fund.

CC #:
3767
File #:
0708
CONTACT:

Christian Barajas 916-774-5431 [email protected]

6.7. Placer Valley Soccer Complex – Spending Authority Increase Approval Memo from Park Planning and Development Manager Tara Gee and Parks, Recreation & Libraries Director Jill Geller recommending the City Council adopt RESOLUTION NO. 25-059 APPROVING AN INCREASE IN SPENDING AUTHORITY. Staff requests Council approve an increase to contract spending authority by an additional $600,000 under the current design-assist contract with Bothman Construction, Inc. for the Placer Valley Soccer Complex Project. To maximize cost efficiencies and avoid duplication of efforts, additional changes, which include completion of the Traffic Signalization Project and sidewalk construction along Westbrook Boulevard, have been requested to be included in the design-assist contract with Bothman Construction, Inc. Based on this, it is projected that additional improvements combined with approved and pending change orders will exceed the approved authorization amount. As such, staff is seeking Council approval to increase the contract spending authority by $600,000.

Offsets for the traffic signal related items remain allocated through the Traffic Signalization capital improvement project, and funding for the additional sidewalk connection is provided by the Electric Department, who owns the property immediately north of the Complex. The remaining added improvements will be absorbed within the Complex Project budget. No additional funding is being requested.

CC #:
3781
File #:
0900-07
CONTACT:

Tara Gee 916-774-5253 [email protected]

6.8. Weber Park Renovation Project - Notice of Completion Memo from Park Development Project Manager Joel De Jong and Parks, Recreation & Libraries Director Jill Geller recommending the City Council adopt RESOLUTION NO. 25-061ACCEPTING THE PUBLIC WORK KNOWN AS WEBER PARK RENOVATION PROJECT, APPROVING THE “NOTICE OF COMPLETION”, AND AUTHORIZING THE PARKS, RECREATION AND

LIBRARIES DIRECTOR TO EXECUTE SAID NOTICE ON BEHALF OF
THE CITY OF ROSEVILLE.

Staff requests Council approval to accept the Weber
Park Renovation Project as complete. The Parks, Recreation & Libraries Department has made a final inspection of the Weber Park Renovation Project and has found that all contract work has been completed in accordance with the approved plans and specifications. The project is now ready for acceptance. Funding was allocated and approved in the FY2022-23 and FY2023-24 budgets from the American Rescue Plan Act. Maintenance costs are provided through the General Fund and are anticipated to be unchanged.

CC #:
3783
File #:
0704-01
CONTACT:

Joel De Jong 916-774-5924 [email protected]

6.9. Designation of the Law and Regulation Committee Meeting Day and Time Memo from Government & Community Relations Manager Rob Baquera and Deputy City Manager Megan Scheid recommending the City Council adopt RESOLUTION NO. 25-058

ADOPTING A RESOLUTION REPEALING
RESOLUTION NO. 23-048 AND ADOPTING A 2025 MEETING SCHEDULE FOR THE LAW AND REGULATION COMMITTEE.

Staff requests Council
repeal resolution 23-048 and adopt a new resolution to establish the 2025 Law and Regulation Committee meeting schedule. Meetings will be held on the third Thursday of March, May, and August at 9:00 a.m., and on Wednesday, November 19, from 4:30 to 5:30 p.m. before the City Council meeting. These changes align meetings with key legislative milestones. Meetings will be held in the City Council Chambers and broadcast on Comcast channel 14.

There is no financial impact
associated with this action.

CC #:
3780
File #:
0103-32
CONTACT:

Rob Baquera 916-746-1170 [email protected]

6.10. Sierra Vista Specific Plan Mitigation Fee Program Administration - Sole Source Professional Services Agreement
Memo from Management Analyst Stacie Marchetti and Development Services Director Mike Isom recommending the City Council adopt RESOLUTION NO. 25- 056 APPROVING A PROFESSIONAL SERVICES AGREEMENT, BY AND

BETWEEN THE CITY OF ROSEVILLE AND ECONOMIC AND PLANNING SYSTEMS, INC., AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE.

Staff requests Council approval
of a sole source professional services agreement with Economic and Planning Systems, Inc. (EPS) for Sierra Vista Specific Plan Mitigation Fee Program

administration. EPS has been the designated third party administrator of the SVSP Fee Program since adoption. Based on the experience and knowledge EPS has with the program and the nature of the fee program, staff recommends continuing to contract with EPS to manage the SVSP Fee Program. The total cost of the service is $300,000 which is funded through the developer-paid Sierra Vista Infrastructure Fee program.

There is no impact to the General Fund.

CC #:
3776
File #:
0400-04-12 & 0800-06
CONTACT:

Stacie Marchetti 916-774-5278 [email protected]

6.11. Resolution Declaring Public Weeds and Rubbish a Public Nuisance - Setting a Public Hearing Date
Memo from Fire Division Chief Michael Bradley and Fire Chief Ryan Harrigan recommending the City Council adopt RESOLUTION NO. 25-054 DECLARING

ALL WEEDS, DIRT, RUBBISH, AND/OR RANK GROWTHS WITHIN THE CITY OF ROSEVILLE TO BE A NUISANCE; ORDERING THE FIRE CHIEF TO GIVE NOTICE OF THE PASSAGE OF THIS RESOLUTION; AND

SETTING A TIME AND PLACE FOR HEARING ANY OBJECTIONS TO THE

PROPOSED DESTRUCTION OR REMOVAL OF SUCH WEEDS, DIRT,
RUBBISH, OR RANK GROWTHS. Staff requests Council approval of a resolution declaring weeds, rubbish, dirt, and/or rank growth within the City to be a public nuisance, as well as ordering the Fire Chief to give notice of the passage and setting a time and place for the required public hearing. The public hearing will be scheduled for the City Council meeting on Wednesday, April 16, 2025. Owners of private parcels that are abated by the City are responsible for the costs associated with providing abatement services. This item has no fiscal impact on the General Fund.

CC #:
3773
File #:
0324-01
CONTACT:

Michael Bradley 916-774-5806 [email protected]

6.12. CalHome Homeownership Program - Grant Application Memo from Housing Analyst Kristine Faelz and Economic Development Director Melissa Anguiano recommending the City Council adopt RESOLUTION NO. 25- 057 APPROVING THE SUBMITTAL OF AN APPLICATION TO THE

CALIFORNIA STATE DEPARTMENT OF HOUSING AND COMMUNITY
DEVELOPMENT FOR FUNDING UNDER THE CALHOME PROGRAM;

AUTHORIZING THE CITY MANAGER TO EXECUTE A STANDARD

AGREEMENT IF SELECTED FOR SUCH FUNDING AND ANY
AMENDMENTS THERETO; AND ANY RELATED DOCUMENTS
NECESSARY TO PARTICIPATE IN THE CALHOME PROGRAM. Staff
requests Council approve an application to the State of California Department of Housing and Community Development for the CalHome Program in the amount of $1,261,500 to assist with homeownership programs and to execute the necessary application, standard agreement and relevant documents for the CalHome grant program. The recommended action does not impact the City's General Fund.

CC #:
3777
File #:
0709-04
CONTACT:

Kristine Faelz 916-774-5451 [email protected]

6.13. Northern California Power Agency Combustion Turbine Project - Intent to Reimburse
Memo from Acting Assistant Electric Utility Director Joanna Cucchi and Electric Utility Director Daniel Beans recommending the City Council adopt RESOLUTION NO. 25-062 OF THE CITY OF ROSEVILLE REGARDING

REIMBURSEMENT WITH PROCEEDS OF TAX-EXEMPT
OBLIGATIONS. Staff requests Council declare its intention to reimburse expenditures related to Phase 2 activities of the Combustion Turbine No. 2 Repower Project from the proceeds of bonds issued by the Northern California Power Agency. There is no fiscal impact related to this recommendation.

CC #:
3784
File #:
0800-03
CONTACT:

Joanna Cucchi 916-746-1609 [email protected]

Ordinances (for introduction and first reading)

6.14. Roseville Municipal Code Ordinance - Military Equipment Policy Memo from Police Lieutenant Scott Blynn and Lieutenant Darren Kato recommending the City Council adopt findings pursuant to California Government Code Sections 7071 and 7072, and introduce for first reading an ORDINANCE
RENEWING CITY OF ROSEVILLE ORDINANCE 6463 AND READOPTING AND CONTINUING ROSEVILLE POLICE DEPARTMENT POLICY NO. 706, TITLED “MILITARY EQUIPMENT”, thereby authorizing the Roseville Police Department’s continued use of “military equipment”, as defined by Government Code Section 7070. Assembly Bill 481 required the City Council to adopt an ordinance and policy allowing the Police Department to use and acquire “military equipment”. To continue to use “military equipment” each year, the City Council is required to review and renew the ordinance and military equipment policy. There is no fiscal impact associated with this action.

CC #:
3779
File #:
0323
CONTACT:

Scott Blynn 916-774-5040 [email protected]
Darren Kato 916-774-5040 [email protected]

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

6.15. Community Facilities Districts - Budget Adjustments Memo from Management Analyst Jeannine Thrash and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council adopt ORDINANCE NO. 6913 AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25 BUDGET AND DECLARING THIS

ORDINANCE TO BE IMMEDIATELY EFFECTIVE AS AN APPROPRIATION MEASURE.

Staff requests Council approve budget adjustments for the City's community facilities districts (CFDs) to true up the district budgets to the FY2024- 25 tax levies that were submitted to Placer County for the property tax roll and to budget for CFD bond issuances and draws since the beginning of the fiscal year.

The City's budget is developed and proposed for adoption before the final tax levy budget for each CFD is determined. The recommended budget adjustment trues up the budgets after the final expenditure estimates, including pay-as-you-go developer reimbursements, are taken into consideration. Also, this budget adjustment will realign the budget for debt service-related fees to improve the accounting and financial reporting. There are sufficient fund balances in all the identified CFDs to accommodate the budget adjustments. There is no impact to the General Fund.

CC #:
3768
File #:
0210 & 0201-01
CONTACT:

Jeannine Thrash 916-774-5473 [email protected]

6.16. Home Investment Partnerships Program - Budget Adjustment Memo from Housing Analyst Kristine Faelz and Economic Development Director Melissa Anguiano recommending the City Council adopt ORDINANCE NO. 6914 AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25

BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY
EFFECTIVE AS AN APPROPRIATION MEASURE.

Staff requests Council
approval of a budget adjustment for the FY2024-25 HOME Investment Partnerships Program (HOME) Fund to increase the expenditure budget in the amount of $250,000 to fund additional owner-occupied housing rehabilitation projects and program administrative costs for FY2024-25 from the HOME Investment Partnerships Program Fund. This budget adjustment uses HOME funds and will not impact the City's General Fund.

CC #:
3771
File #:
0709
CONTACT:

Kristine Faelz 916-774-5451 [email protected]
Claudia Carreno 916-774-5486
[email protected]

6.17. Martha Riley Library Cooling Tower Replacement Project - New Capital Iimprovement Project Approval and Budget Adjustment
Memo from Design & Construction Project Manager Andre Baranov and Public Works Director Jason Shykowski recommending the City Council approve the establishment of a new capital improvement project, the Martha Riley Library Cooling Tower Replacement project; and adopt ORDINANCE NO. 6915 AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25

BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY
EFFECTIVE AS AN APPROPRIATION MEASURE.

Staff requests approval of
the establishment of the new Martha Riley Library Cooling Tower Replacement project and a $150,000 budget adjustment ($131,100 from the Facility Rehabilitation Fund; $3,150 each from the Water, Wastewater, and Waste Services Operations Funds; and $9,450 from the Electric Fund) to fund it. The project will replace the Cooling Tower

serving the main air handler unit at the Martha Riley Library using an existing on-call agreement.

CC #:
3778
File #:
0900-04
CONTACT:

Andre Baranov 916-774-5342 [email protected]

Reports / Requests

6.18. 2025 Legislative and Regulatory Platform for State and Federal Advocacy Memo from Government Relations Manager Rob Baquera and Deputy City Manager Megan Scheid recommending the City Council adopt the 2025 Legislative and Regulatory Platform to guide the City's state and federal advocacy efforts. This platform reflects the City Council’s priorities and provides a framework for legislative, regulatory, and judicial engagement. Annual updates will ensure alignment with evolving legislative environments and Roseville’s interests.

CC #:
3780
File #:
0114
CONTACT:

Rob Baquera 916-774-5179 [email protected]

END OF CONSENT CALENDAR

7. SPECIAL REQUESTS/REPORTS/PRESENTATION

7.1. HOUSING AUTHORITY/CITY COUNCIL – Quarterly Status Update 4th Qtr 2024
Memo from Housing Analyst Danielle O’Connell 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 #:
3775
File #:
0709-01
CONTACT:

Danielle O’Connell 916-774-5277 [email protected] Suzi Cook-Turner 916-774-5414 [email protected] Housing Manager Trisha Isom introduced Housing Supervisor Suzi Cook-Turner, who made the presentation.

No public comment received.

For information only. No action taken.

8. PUBLIC HEARING

8.1. Appeal of Infill Parcels 183, 229, 305 - Sunrise Office Center Design Review Permit, Flood Encroachment Permit, and Tree Permit
Memo from Associate Planner Shelby Maples and Development Services Director Mike Isom recommending the City Council adopt RESOLUTION NO. 25- 060 DENYING THE APPEAL FROM THE JANUARY 9, 2025 APPROVAL BY

THE PLANNING COMMISSION, ADOPTING THE SUNRISE OFFICE

CENTER INITIAL STUDY/MITIGATED NEGATIVE DECLARATION (SCH #2024120281) AND MITIGATION MONITORING AND REPORTING

PROGRAM, ADOPTING THE FOUR FINDINGS OF FACT FOR THE

DESIGN REVIEW PERMIT AND APPROVING THE DESIGN REVIEW

PERMIT, ADOPTING THE TWO FINDINGS OF FACT AND APPROVING

THE FLOOD ENCROACHMENT PERMIT, AND ADOPTING THE TWO
FINDINGS OF FACT AND APPROVING THE TREE PERMIT. This will uphold the Planning Commission's approval of a Design Review Permit, Flood Encroachment Permit, and Tree Permit to allow the construction of a 7,300-square- foot medical office building and associated site improvements including parking, lighting, and landscaping. Staff also recommends that the City Council deny the request to refund the appeal fee.

CC #:
3782
File #:
0400-04-17 & 0400-08
CONTACT:

Shelby Maples 916-746-1347 [email protected]

Mayor Krista Bernasconi declared a conflict of interest as she owns property within 500 feet of the subject property, and left the dais.

Vice Mayor Karen Alvord opened the public hearing at 6:19 p.m.

Development Services Director Mike Isom introduced Planning Manager Greg Bitter, Senior Planner Derek Ogden, Associate Planner Shelby Maples, and Engineering Manager Marc Stout.

Associate Planner Shelby Maples made the presentation to the City Council.

Engineering Manager Marc Stout continued the presentation.

Millennium Planning & Engineering Principal Planner, Robert Wood, spoke in support of the project.

Jennifer Chapman presented her objections to the Planning Commission's decision.

John Prior spoke in opposition to removal of the large oak tree.

Jennifer Chapman continued her presentation.

Robert Wood, Principal Planner, rebutted the appellant's objections.

Vice Mayor Karen Alvord closed the public hearing at 7:20 p.m.

Motion by Bruce Houdesheldt, seconded by Tracy Mendonsa, to adopt RESOLUTION NO. 25-060 DENYING THE APPEAL FROM THE JANUARY 9, 2025 APPROVAL BY THE PLANNING COMMISSION,

ADOPTING THE SUNRISE OFFICE CENTER INITIAL STUDY/MITIGATED NEGATIVE DECLARATION (SCH #2024120281) AND MITIGATION

MONITORING AND REPORTING PROGRAM, ADOPTING THE FOUR

FINDINGS OF FACT AND APPROVING THE DESIGN REVIEW PERMIT

SUBJECT TO SIXTY-FIVE CONDITIONS OF APPROVAL, ADOPTING THE

TWO FINDINGS OF FACT AND APPROVING THE FLOOD

ENCROACHMENT PERMIT SUBJECT TO TWELVE CONDITIONS OF

APPROVAL,

AND ADOPTING THE TWO FINDINGS OF FACT AND

APPROVING THE TREE PERMIT SUBJECT TO

MODIFIED CONDITIONS

OF APPROVAL THAT CORRECT THE NUMBER OF TREES AND INCHES

TO BE REMOVED AS WELL AS ADDING THE APPROPRIATE

CONDITIONS TO IMPLEMENT THE STANDARD POLICIES AND

PROCEDURES FOR WORK WITHIN THE DRIP LINE OF PROTECTED
TREES
AS FOUND IN SECTION 19.66.060 OF THE ROSEVILLE

MUNICIPAL CODE,

AND DENY THE REQUEST TO REFUND THE APPEAL
FEE. The Motion Passed.

Roll call vote:

Ayes: Alvord, Houdesheldt, Mendonsa, Roccucci

Absent: Bernasconi

9. COUNCIL REPORTS / PUBLIC COMMENTS
No public comment received.

Northern California Power Association Meeting
- Councilmember Pauline
Roccucci reported on attendance.

Regional Water Authority Meeting
- Councilmember Pauline Roccucci reported
on attendance.

Council Priorities
Workshop
- Councilmember Pauline Roccucci reported on
attendance.

Councilmember Pauline Roccucci reported on various community events.

Councilmember Tracy Mendonsa thanked staff for their work on the Council Priorities Workshop.

Vice Mayor Karen Alvord reported on various community events.

10. ADJOURNMENT
Vice Mayor Karen Alvord adjourned the meeting at 7:52 p.m.

MINUTES
March 19, 2025

CITY COUNCIL
6:00 p.m.

Council Chambers
311 Vernon Street
Roseville, CA
www.roseville.ca.us

1. CALL TO ORDER
Mayor Krista Bernasconi called the meeting to order at 6:00 p.m.

2. ROLL CALL

Present: Vice Mayor Karen Alvord, Councilmember Bruce Houdesheldt, Councilmember Tracy Mendonsa, Councilmember Pauline Roccucci, Mayor Bruce Houdesheldt

3. PLEDGE OF ALLEGIANCE
City Manager Dominick Casey led the Pledge of Allegiance.

4. MEETING PROCEDURES
City Clerk Carmen Avalos announced the procedures for addressing the City Council.

5. PRESENTATIONS

5.1. Retirement Resolution - Art Vogtlin
Commend Art Vogtlin for his 18 years of outstanding service and dedication to the City of Roseville and the Information Technology Department, congratulate him for his accomplishments and wish him a long, healthy, and enjoyable retirement.

CONTACT:

Blair Hutchison 916-774-5266 [email protected]

City Council made the presentation to Assistant Information Technology Director Art Vogtlin, who responded.

5.2. Sacramento Area Council of Governments - Blueprint Project The 2024 Blueprint will outline recommendations for public land use policy and transportation investment strategies for the Sacramento region for the next 30 years. This plan will lay out a set of strategies for an integrated, multimodal transportation system and a regional land use development pattern that can create a more thriving region that works for all residents. The plan aims to connect housing to jobs, education, goods and services, and recreational opportunities while protecting and enhancing our region’s natural and working landscapes.

CONTACT:

Carmen Avalos 916-774-5269 [email protected]

Sacramento Area Council of Governments Executive Director James Corliss made the presentation to the City Council.

Senior Planner Lauren Hocker continued the presentation.

6. PUBLIC COMMENTS
Laurel Peterson spoke on the need for affordable housing for individuals with intellectual and development disabilities.

Kim Zarin spoke on the need for affordable housing for individuals with intellectual and development disabilities.

Jennifer Chapman read comments made by individuals at most recent Council meeting.

7. CONSENT CALENDAR

BEGINNING OF CONSENT CALENDAR
Motion by Bruce Houdesheldt, seconded by Pauline Roccucci, to drop item 7.9 to be relisted on April 16, 2025 and remove item 7.11 for discussion. The Motion Passed.

Roll call vote:

Ayes: Alvord, Bernasconi, Houdesheldt, Mendonsa, Roccucci Bids / Purchases / Services

7.1. Adventure Club Heating, Ventilation, & Air Conditioning Replacement Project (RFQ 10-3399) – Contract Purchase Agreement
Memo from Buyer Tiffany Valdez and Finance Director Scott Pettingell recommending the City Council adopt RESOLUTION NO. 25-070 APPROVING

A CONTRACT PURCHASE AGREEMENT, BY AND BETWEEN THE CITY

OF ROSEVILLE AND THP MECHANICAL, LLC, AND AUTHORIZING THE

CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF

ROSEVILLE (3004220). Staff requests Council approve a contract purchase agreement with THP Mechanical LLC as the lowest responsive and responsible bidder for Request for Quotations No. 10-3399 Adventure Club Heating Ventilation, Air Conditioning Replacement. The cost of the agreement is $230,469.

Additionally, adopt a resolution authorizing the City Manager to sign the contract purchase agreement and authorizing the Parks, Recreation & Libraries Director or designee to approve change order requests for this project up to 10% ($23,046.90) as a construction contingency, for a grand total of $253,515.90.

Funding is included in the FY2024-25 Youth Development Fund budget.

CC #:
3801
File #:
0203-10
CONTACT:

Tiffany Valdez 916-746-1109 [email protected]

7.2. Rocky Rockholm (FD-51) Park Project - Approval of Plans and Specifications and Authorize Staff to Call for Bids
Memo from Park Development Project Manager Joel De Jong and Parks, Recreation & Libraries Director Jill Geller recommending the City Council approve the plans and specifications for the Rocky Rockholm (formerly FD-51) Park Project and authorize staff to call for bids. This 1.12-acre park site is located off Earl Rush Drive at Market Street in the Sierra Vista Specific Plan area. The architect’s estimate for construction for the base bid is $419,000. Funding for design was included in FY2021-22 budget with construction of the park included in the FY2023-24 Capital Improvement Project budget in the Neighborhood Park - Sierra Vista Fund. Maintenance costs will be funded by the Sierra Vista Community Facilities District No. 2 (Public Services). There will be no General Fund impact.

CC #:
3791
File #:
0704-01
CONTACT:

Joel De Jong 916-774-5924 [email protected]

7.3. Lower Bank (formerly C-63) Park Project - Approval of Plans and Specifications and Authorization to Call for Bids
Memo from Park Development Project Manager Joel De Jong and Parks, Recreation & Libraries Director Jill Geller recommending the City Council approve the plans and specifications for the Lower Bank (formerly C-63) Park Project and authorize staff to call for bids. This 2.5-acre neighborhood park is located off of Lemonade Lane at Lower Bank Drive within the Creekview area of Roseville. The architect’s estimate for construction for the base bid is $880,000. Funding for construction of this park was initially included in the FY2023-24 Capital Improvement Project budget in the
Neighborhood Park -
Creekview Fund.

Maintenance costs will be funded by the Creekview Community Facilities District No.2 (Public Services). There will be no General Fund impact.

CC #:
3788
File #:
0704-01
CONTACT:

Joel De Jong 916-774-5624 [email protected]

7.4. Woodbridge Park Tennis & Pickleball Court Renovations Project - Approval of Plans and Specifications and Authorization to Call for Bids Memo from Park Development Project Manager Joshua Cervantes and Parks, Recreation & Libraries Director Jill Geller recommending the City Council approve the plans and specifications for Woodbridge Park Tennis & Pickleball Court Renovations and authorize staff to call for bids. The Woodbridge Park Tennis & Pickleball Court Renovation Project is at Woodbridge Park, a 7.2-acre neighborhood park located at 415 Sierra Blvd. The scope of work for the project includes renovating the court foundation, reestablishing one of the two tennis courts with a pickleball striping overlay on the tennis court, converting the second tennis court into two pickleball-only courts and adding a new shaded seating area for the pickleball courts. Funding for this Project was approved in the Parks, Recreation and Library Capital Project Fund through the FY2024-25 Capital Improvement Project budget process. There are negligible increases to maintenance costs. The funding source for maintenance will continue to be the General Fund.

CC #:
3793
File #:
0704-01
CONTACT:

Joshua Cervantes 916-866-2553 [email protected]

7.5. Fleet Equipment Purchase – Purchase Order
Memo from Management Analyst Lea
Schroeder and Public Works Director Jason
Shykowski recommending the City Council approve a
sole source purchase order
to Volvo Construction Equipment & Service for one (1) Avant 860GT compact loader with attachments in the amount of $185,367. The FY2024-25 Fleet Replacement Fund budget includes funding for this equipment purchase.

CC #:
3786
File #:
0203-02
CONTACT:

Lea Schroeder 916-774-5503 [email protected]

7.6. RPEAK Evaporative Cooling - Sole Source Contract Purchase Agreement Memo from Senior Power Plant Engineer Oscar Plasencia and Electric Utility Director Dan Beans recommending the City Council adopt RESOLUTION NO. 25-069 APPROVING A CONTRACT PURCHASE AGREEMENT, BY AND

BETWEEN THE CITY OF ROSEVILLE AND GE VERNOVA OPERATIONS,

LLC, AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON
BEHALF OF THE CITY OF ROSEVILLE. Staff requests Council approve a sole source contract purchase agreement with GE Vernova Operations, LLC for the control system design and technical advisory services needed for the installation of evaporative cooling systems on each of the GE TM2500 combustion turbines at the RPEAK site for an amount of $286,524.40 and to approve change order authority for unforeseen change orders up to 10% of the cost, or $28,652.44, for a total of $315,176.84. GE Vernova Operations, LLC is the original equipment manufacturer of the evaporative cooling system and, as such, is required to design the necessary control system and be onsite during installation to provide technical advisory services. Funding is included in the Electric Department's FY2024-25 budget in the Electric Fund.

CC #:
3799
File #:
0203-09
CONTACT:

Oscar Plasencia 916-746-1648 [email protected]

Resolutions

7.7. Judicial Foreclosure of Delinquent Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982, as Amended
Memo from Management Analyst Jeannine Thrash and Assistant City Manager/Chief Financial Officer Dennis Kauffman recommending the City Council adopt RESOLUTION NO. 25-063

ACTING AS THE GOVERNING BODY OF

ALL OF ITS COMMUNITY FACILITIES DISTRICTS ORDERING JUDICIAL

FORECLOSURE OF DELINQUENT SPECIAL TAXES PURSUANT TO THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982, AS AMENDED,

AND ORDERING THAT THE PLACER COUNTY TAX COLLECTOR

REMOVE CURRENT AND FUTURE DELINQUENT SPECIAL TAXES FOR

THE COMMUNITY FACILITIES DISTRICTS FROM THE TAX ROLL
. Certain
property owners have become delinquent in payments of the special taxes associated with some of the City's community facilities districts (CFDs). Bonds have been issued in connection with each of these CFDs and payments of these bonds are secured by special taxes levied upon individual property owners within each of these CFD boundaries. To comply with the City's bond covenants, when certain delinquency thresholds have been met, the City is required to commence foreclosure actions against any delinquent parcel(s). The combined special tax delinquencies recommended for judicial foreclosure action is $9,716.07.

There is
no fiscal impact to the City's General Fund. All legal fees are borne by the property owners and all penalties and interest collected will be credited to the subject CFDs.

CC #:
3789
File #:
0206-03-01
CONTACT:

Jeannine Thrash 916-774-5473 [email protected]

7.8. 2024 Housing Element Annual Progress Report and 2024 General Plan Annual Progress Report
Memo from Housing Manager Trisha Isom, Senior Planner Lauren Hocker, and Economic Development Director Melissa Anguiano recommending the City Council adopt RESOLUTION NO. 25-064
APPROVING THE 2024 HOUSING
ELEMENT ANNUAL PROGRESS REPORT AND APPROVING THE 2024
GENERAL PLAN ANNUAL PROGRESS REPORT.

Staff requests Council
approve an annual informational report on the status of the annual progress reports for the Housing Element and the General Plan progress implementation, as required by the State of California. The staff cost to develop the progress reports was included in the FY2024-25 adopted budget. There is no additional fiscal impact to the City's General Fund.

CC #:
3790
File #:
0709
CONTACT:

Trisha Isom 916-746-1239 [email protected]

Lauren Hocker 916-774-5272 [email protected]

7.9. Five Star Intertie Improvement Project – Construction Agreement Memo from Assistant Engineer William Montz and Environmental Utilities Director Sean Bigley recommending the City Council adopt RESOLUTION NO. 25-068

APPROVING AN AGREEMENT, BY AND BETWEEN THE CITY OF
ROSEVILLE AND SIERRA NATIONAL CONSTRUCTION, INC., AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE. Staff requests Council approval and award of a Construction Agreement to Sierra National Construction, Inc. for the Five Star Intertie Improvement Project in the amount of $698,640 and authorization for the City Manager or his designee to approve and pay for contract change orders for the project that could increase the contract amount by no more than 10% ($69,864), for a not-to-exceed total contract amount of $768,504. This project will be funded from available resources in the Water Construction Fund. The Water Construction Fund is funded by water connection fees paid for by developers.

CC #:
3798
File #:
0800-02
CONTACT:

William Montz
916-938-0154 [email protected]

7.10. Utility Legal Services - Legal Services Agreement Memo from Paralegal Gretchen Hakala and City Attorney Michelle Sheidenberger recommending the City Council adopt RESOLUTION 25-066

APPROVING AN

AGREEMENT FOR LEGAL SERVICES, BY AND BETWEEN THE CITY OF

ROSEVILLE AND CLIMATE EDGE LAW GROUP, AND AUTHORIZING THE

CITY MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF

ROSEVILLE
. Staff requests Council approve a Legal Services Agreement with Climate Edge Law Group to
provide legal services related to regulatory and
commercial matters regarding utilities and environmental law. 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 Roseville Electric Department operating budget in the Electric Fund, as needed.

CC #:
3795
File #:
0500-01
CONTACT:

Gretchen Hakala 916-774-5325 [email protected]

7.11. Multi-Hazard Mitigation Plan - 2024 Progress Report Memo from Associate Engineer Joe Anderson and Public Works Director Jason Shykowski recommending the City Council adopt RESOLUTION NO. 25-065 ACCEPTING THE 2023 CITY OF ROSEVILLE MULTI-HAZARD
MITIGATION PLAN 2024 PROGRESS REPORT. The Federal Emergency Management Agency requires that the City evaluate its Multi-Hazard Mitigation Plan (MHMP) action items for progress annually to maintain its Community Rating System Class 1 rating. This is the complete first annual progress report of the adopted 2023 MHMP. Staff time spent preparing the Annual Progress Report is included within the project budget for the MHMP Plan Update Project, funded

annually by the General Fund. Mitigation measures are implemented as various City departments have funding within their regular work programs or operating budgets, and as grant funding is received by various City departments.

CC #:
3794
File #:
0307-02
CONTACT:

Joe Anderson 916-774-5440 [email protected]

Item removed by Jennifer Chapman to speak on vulnerable populations within the plan.

Motion by Pauline Roccucci, seconded by Bruce Houdesheldt, to adopt RESOLUTION NO. 25-065 ACCEPTING THE 2023 CITY OF
ROSEVILLE MULTI-HAZARD MITIGATION PLAN 2024 PROGRESS
REPORT. The Motion Passed.

Roll call vote:

Ayes: Alvord, Bernasconi, Houdesheldt, Mendonsa, Roccucci

7.12. Rubberized Pavement Grant Program - Grant Authorization Memo from Assistant Public Works Director Stefanie Kemen and Public Works Director Jason Shykowski recommending the City Council adopt RESOLUTION NO. 25-071

APPROVING A GRANT APPLICATION TO THE CALIFORNIA

DEPARTMENT OF RESOURCES RECYCLING AND RECOVERY, AND

AUTHORIZING THE ASSISTANT PUBLIC WORKS DIRECTOR TO

EXECUTE ALL FORMS AND AGREEMENTS ON BEHALF OF THE CITY

OF ROSEVILLE
.

Staff requests Council authorization for the City Manager to designate the Assistant Public Works Director to execute all forms pertaining to the Rubberized Pavement Grant Program. No General Fund resources will be used for the project.

CC #:
3802
File #:
0214 & 0800-04
CONTACT:

Stefanie Kemen 916-774-5372 [email protected]

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

7.13. Fleet Services Vehicle Replacement - Budget Adjustment Memo from Fleet Manager Brandy LeBeau and Public Works Director Jason Shykowski recommending the City Council adopt ORDINANCE NO. 6916 AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024- 25 BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY EFFECTIVE AS AN APPROPRIATION MEASURE.

Staff requests Council
approve a $240,000 budget adjustment to cover the additional cost of equipping 36 new Police Interceptor Utility replacements with the EcoBoost engine option (at $5,000 per vehicle) and incorporating updated upfit requirements to align with the Police Department's operational needs.

This investment ensures that the replacement vehicles
meet law enforcement operations' performance, efficiency, and safety demands. The

total cost, including sales tax, will be a one-time request out of the FY2024-25 General Fund contingency budget.

CC #:
3787
File #:
0203-02 & 0201-01
CONTACT:

Brandy LeBeau 916-774-5531 [email protected]

7.14. Old Fiddyment Road Emergency Culvert Repair Project - Capital Improvement Project Approval, Contract Purchase Agreement, and Budget Adjustment Memo from Senior Engineer Jesse Khatkar and Public Works Director Jason Shykowski recommending the City Council approve the establishment of a new capital improvement project; and adopt
RESOLUTION NO. 24-067 ADOPTING A

FINDING THAT AN EMERGENCY JUSTIFYING WAIVER OF THE BIDDING REQUIREMENTS UNDER SECTION 7.21 OF THE CHARTER EXISTED AND

APPROVING AND RATIFYING A CONTRACT PURCHASE AGREEMENT, BY

AND BETWEEN THE CITY OF ROSEVILLE AND DESILVA GATES
CONSTRUCTION, LLC (3004406)
; and adopt ORDINANCE NO. 6917
AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25

BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY

EFFECTIVE AS AN APPROPRIATION MEASURE
. Staff requests Council ratify a
February 7th, 2025 contract purchase agreement with DeSilva Gates Construction LLC for $600,000. Staff also requests approval of a budget adjustment in the amount of $600,000 to fund emergency repairs to the Old Fiddyment Road culvert bridge crossing Pleasant Grove Creek. Funding of $300,000 will come from the General Fund Contingency and $300,000 from the Local Transportation Fund. Repairs are currently ongoing.

CC #:
3796
File #:
0900-04 & 0201-01
CONTACT:

Jesse Khatkar 916-774-5434 [email protected]

7.15. Staffing Changes
Memo from Human Resources Manager Macy Dippert and Human Resources Director Stacey Peterson recommending the City Council adopt ORDINANCE NO. 6919 AMENDING ORDINANCE NO. 6897, THE SALARY ORDINANCE FOR MANAGEMENT EMPLOYEES, AS AMENDED BY APPENDIX “I” TO BE EFFECTIVE MARCH 22, 2025, AS AN URGENCY MEASURE; and adopt ORDINANCE NO. 6920 AMENDING ORDINANCE NO. 6911, THE SALARY

ORDINANCE FOR EMPLOYEES REPRESENTED BY THE

INTERNATIONAL UNION OF OPERATING ENGINEERS, STATIONARY
ENGINEERS, LOCAL 39, AS AMENDED BY APPENDIX “G” TO BE
EFFECTIVE MARCH 22, 2025, AS AN URGENCY MEASURE; and adopt ORDINANCE NO. 6921 AMENDING ORDINANCE NO. 6901, THE SALARY

ORDINANCE FOR SEASONAL/TEMPORARY EMPLOYEES, AS AMENDED
BY APPENDIX “X” TO BE EFFECTIVE MARCH 22, 2025, AS AN URGENCY MEASURE; and adopt ORDINANCE NO. 6922 AMENDING ORDINANCE NO. 6895, THE SALARY ORDINANCE FOR NON-SWORN EMPLOYEES

REPRESENTED BY THE ROSEVILLE POLICE ASSOCIATION, AS
AMENDED BY APPENDIX “D” TO BE EFFECTIVE MARCH 22, 2025 AS AN

URGENCY MEASURE.

As part of an ongoing assessment of the appropriate staffing levels to provide a high level of service to the community, staff requests Council approve the Management A & B salary schedules reflecting the addition of a Business Systems Supervisor, Information Technology Supervisor, and Database Supervisor; the International Union of Operating Engineers, Stationary Engineers, Local 39 A & B salary schedules reflecting the deletion of the Courier classification ; the Temporary
salary schedule adding a Courier classification; the
Roseville Police Association (RPA)
A & B Salary Schedules
reflecting the addition of Police Community Outreach
Specialist classification; adding two (2) regular full-time positions of a Inventory Control and Supply Worker I/II, and a Police Community Outreach Specialist; deletion of one (1) regular full-time Economic Development Project Manager position; and six (6) reclassifications from three (3) Senior Business Systems Analyst to Business Systems Supervisor, one (1) Senior Database Analyst to Database Supervisor, one (1) Senior Information Technology Analyst to Information Technology Supervisor, and one (1) Data Management Specialist to Electric Business Analyst I/II. For the remainder of FY2024- 25, the financial impact of the recommendations is: (1) General Fund - $14,488, (2) Information Technology Operations Fund - $7,399, (3) Fleet Services Fund - $27,645, and (4) Electric Fund - $15,091. All net budget increases can be covered by existing appropriations in these funds, so no budget adjustments are requested at this time.

CC #:
3800
File #:
0600-01
CONTACT:

Macy Dippert 916-774-5215 [email protected]

7.16. Electric New Services - Budget Adjustment
Memo from Assistant Electric Utility Director Chris Porter and Electric Utility Director Dan Beans recommending the City Council adopt ORDINANCE NO. 6918 AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR
2024-25 BUDGET AND DECLARING THIS ORDINANCE TO BE
IMMEDIATELY EFFECTIVE AS AN APPROPRIATION MEASURE. Staff requests Council approve a budget adjustment to the Electric New Services Project of $2,500,000 to continue to provide infrastructure installation services for development, with an offsetting increase to the Contribution in Aid of Construction revenue budget for the same amount. There is no net impact to the Electric Fund.

CC #:
3797
File #:
0800-03 & 0201-01
CONTACT:

Chris Porter 916-774-5615 [email protected]

Ordinances (for second reading and adoption)

7.17. Second Reading - Roseville Municipal Code Ordinance - Military Equipment Policy ORDINANCE NO. 6923 RENEWING CITY OF ROSEVILLE ORDINANCE 6463 AND READOPTING AND CONTINUING ROSEVILLE POLICE
DEPARTMENT POLICY NO. 706, TITLED “MILITARY EQUIPMENT”, for second reading and adoption.

CC #:
3803
File #:
0323

CONTACT:

Scott Blynn 916-774-5040 [email protected]
Darren Kato 916-774-5040 [email protected]

END OF CONSENT CALENDAR

8. ORDINANCES

8.1. Roseville Municipal Code Amendment – Regulations for Fireworks Memo from Senior Deputy City Attorney Travis Cochran and City Attorney Michelle Sheidenberger recommending the City Council introduce for first reading ORDINANCE AMENDING SECTION 16.16.140 OF CHAPTER 16.16 OF TITLE 16 OF THE ROSEVILLE MUNICIPAL CODE REGARDING
REGULATIONS FOR FIREWORKS. The proposed revisions to Section

16.16.140 build upon the changes adopted by the City Council last year, and will
make the ordinance clearer and allow for better and more efficient enforcement against illegal fireworks. Specifically, the revised ordinance clarifies that the term “possession” of prohibited fireworks includes actual, constructive, or joint possession; expands the concept of “host liability” to include the street and/or sidewalk that is immediately adjacent to the host’s property as well as any other property where a host is exercising apparent control of the property; and clarifies that each individual prohibited firework constitutes a separate violation of the Roseville Municipal Code. There is no direct fiscal impact associated with the proposed ordinance, although the proposed changes may lead to higher numbers of administrative citations being issued for fireworks violations and/or more successful collection of the corresponding fines.

CC #:
3792
File #:
0102
CONTACT:

Travis Cochran 916-774-5325 [email protected]

Senior Deputy City Attorney Travis Cochran introduced Public Affairs & Communications Manager Erin Dunley and made the presentation to City Council.

Public Affairs & Communications Manager Erin Dunley continued the presentation.

Dennis Ravell spoke in support of the item.

Motion by Bruce Houdesheldt, seconded by Tracy Mendonsa, to introduce for first reading ORDINANCE AMENDING SECTION 16.16.140 OF CHAPTER 16.16 OF TITLE 16 OF THE ROSEVILLE MUNICIPAL CODE REGARDING
REGULATIONS FOR FIREWORKS. The Motion Passed.

Roll call vote:

Ayes: Alvord, Bernasconi, Houdesheldt, Mendonsa, Roccucci

9. COUNCIL REPORTS / PUBLIC COMMENTS
No public comment received.

Councilmember Tracy Mendonsa acknowledged City employees who addressed the rainy conditions.

Councilmember Pauline Roccucci reported on various community events.

Northern California Water Association Meeting
- Councilmember Pauline
Roccucci reported on attendance.

10. ADJOURNMENT
Mayor Krista Bernasconi adjourned the meeting at 7:14 p.m.

COUNCIL COMMUNICATION
CC #:
3809
File #:
0203-04
Title:

Cooling Tower Fan Motor (RFQ 10-3409) – Purchase Order
Contact:

Joanna Oukrop 916-746-1102 [email protected]

Meeting Date: 4/2/2025
Item #: 7.2.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council approve a purchase order for a cooling tower fan motor from Mechanical Analysis Repair, Inc.

BACKGROUND
A cooling tower fan motor is needed at the Roseville Energy Plant (REP) to serve as a spare to replace an existing motor in case of equipment failure. The plant always operates with four cooling tower fans in service. If one of the motors fails during the summer, the plant would need to de-rate by approximately five megawatts, which could result in significant costs (thousands of dollars) depending on the market value at that time. The repair turnaround time for a fan motor is about four to six weeks. However, with a spare motor available, staff could remove the faulty fan motor and install the new spare motor in approximately ten hours.

A formal bid was issued with the following responses:

Bidder

Amount

Mechanical Analysis/Repair, Inc.

$83,890.00
Lodi, CA

American Chiller Service, Inc.

$96,200.00
Rancho Cordova, CA

Valve Industries, Inc.

$99,924.00
Woodland Park, NJ

Mechanical Analysis/Repair, Inc.

submitted the lowest responsive and responsible bid in
response to Request for Quotations No. 10-3409.

FISCAL IMPACT
The low bid amount for the spare cooling fan motor is $83,890.00. With a six percent tariff for products shipped after April 2, 2025, of $5,033.40, the grand total will be $95,814.96 including $6,891.56 of sales tax.

There is adequate funding in the FY2024-25 Electric Fund budget for this purchase.

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 purchase of a cooling tower fan motor meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal F - Invest in well-planned infrastructure and growth

Respectfully Submitted,
Joanna Oukrop, Senior Buyer
Scott Pettingell, Finance Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description

COUNCIL COMMUNICATION
CC #:
3810
File #:
0203-04
Title:

Fuel and Lubricants (SACOG RFP 2023-24-10) - Contract Purchase Agreement Contact:

Becky Philipp 916-746-1110 [email protected]

Meeting Date: 4/2/2025
Item #: 7.3.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution to approve a contract purchase agreement (3004242) with Hunt Oil of California, Inc. as the selected bidder for Sacramento Area Council of Governments (SACOG) Request for Proposals No. 2023-24-10 (RFP) for the supply and delivery of propane and various lubricants to multiple City departments and authorize the City Manager to execute it on behalf of the City of Roseville.

The bid allowed for two optional renewal years at one-year intervals. Staff further requests authorization to continue utilizing the remaining optional renewal years of the bid contract without further Council approvals, provided that the applicable budget is approved by the City Council each year, or until the contract expires, or until City staff determines that continuing with the same vendor is not in the City's best interest.

BACKGROUND
Multiple City departments have recurring demands for propane and various lubricants used in ongoing operations to operate equipment.

In May 2024, the City participated in a regional RFP led by SACOG. The RFP was for the purchase of bulk automotive fuels, renewable diesel fuel, commercial cardlock automotive fuels, automotive oil propane and lubrication products and other related products on an as-needed basis. SACOG is an association of local governments representing six counties, twenty-two cities, as well as special districts and school districts in the Sacramento Region. The regional consolidation of fuel and lubricant purchases into a single bid results in significant cost savings for the City.

FISCAL IMPACT
The initial contract through August 31, 2027 is $526,000. Funding is included in department budgets in various City funds. Future spending is contingent upon Council approval of the City budget. The estimated spending for the optional renewal years, by fiscal year, is as follows:

FY2027-28, $175,000; FY2028-29, $175,000; FY2029-30 $60,000.

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 (CEQA Guidelines § 15061 (b )(3)). The hauling and delivery of hazardous substances is regulated by the state.

Hazardous material transport consistent with applicable safety regulations should not result in a significant environmental effect. Therefore, the proposed contract purchase agreement does not include the potential for significant environmental effect and is not subject to CEQA.

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

Respectfully Submitted,
Becky Philipp, Purchasing Supervisor
Scott Pettingell, Finance Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 25-072
Contract Purchase Agreement
RESOLUTION NO. 25-072

APPROVING A CONTRACT PURCHASE AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND HUNT OIL OF CALIFORNIA, INC., AND AUTHORIZING THE

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

WHEREAS, a contract purchase agreement (3004242) to provide fuel and lubricants to various City departments, by and between the City of Roseville and Hunt Oil of California, Inc., has been reviewed by the City Council; and

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

BE IT FURTHER RESOLVED, that the City Manager or his or her designee is authorized to execute two (2) additional one (1) year renewals without further City Council approval, provided that the applicable budget is approved by the City Council, or until staff determines that continuing with this consultant is not in the best interest of the City.

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

Contract Purchase Agreement 3004242
Supplier Details:

Company Hunt Oil of California Inc
Contact Josh Hunt
Address 5750 South Watt Ave
Sacramento, CA 95827
Submit your response to:

Company City of Roseville
Contact "Becky" Rebecca Philipp
Address Purchasing Division
311 Vernon St
Roseville, CA 95678
Phone (916) 746-1110
Fax (916) 746-1115
E-mail [email protected]
This Contract Purchase Agreement is sent for your review and acceptance. Notify the Buyer via email of any needed changes to the company name, address, and contact information. The Buyer will update the agreement prior to you signing the document.

Return signed copies of the agreement to the Buyer noted on the agreement. Alterations or modifications to the agreement are not allowed. Upon receipt of all necessary documents, the City will sign the agreement and return a fully executed copy to you. Receipt of the signed copy will be your notice to proceed with the work in accordance with the terms and conditions of the agreement. Work must not begin until the contract has been fully executed.

The following guidelines must be followed for the signature block on the agreement:

Sole proprietorship - By owner
Partnership - Any general partner
Corporation - Two options:
(1) A signature from the President and the corporate seal; OR (2) One signature from the Chairman of the Board, President, or any Vice President AND one signature from the Secretary, any Assistant Secretary, Chief Financial Officer, or any Treasurer or Assistant Treasurer of the corporation
*General Manager, Office Manager and/or Sales Manager are not corporate officer titles. The agreement will be rejected if not signed in accordance with these guidelines.

Insurance requirements:

The City's insurance requirements are referenced on Attachment A of the agreement. By signing the agreement, you are confirming that your company has the minimum insurance limits required. 1 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242
Agreement 3004242
Agreement Date 13-DEC-2024
Revision 0
Agreement Amount 526,000.00 USD
Invoice To City of Roseville
Accounts Payable
311 Vernon St
ROSEVILLE CA 95678
Supplier Hunt Oil of California Inc
5750 South Watt Ave
Sacramento, CA 95827
Phone:

Fax:

Email:
(916) 774-5488
(916) 784-3796
[email protected]
Phone:

Fax:

Email:
()
()
[email protected]
Description of
Labor,
equipment
and/or materials

THE SERVICES CALLED FOR UNDER SACRAMENTO AREA COUNCIL OF

GOVERNMENTS (SACOG) REQUEST FOR PROPOSAL FOR COOPERATIVE PURCHASING AGREEMENT FOR FUELS AND LUBRICANTS RFP 2023-24-10 AND

CONTRACTOR'S PROPOSAL THERETO TITLED PROPANE AND VARIOUS LUBRICANTS (HEREINAFTER "PROPOSAL") THE TERMS AND SCOPE OF WORK OF SACRAMENTO AREA COUNCIL OF GOVERNMENT (SACOG) FOR RFP 2023-24- 10 AND CONTRACTOR'S PROPOSAL ARE HEREIN MADE PART OF THIS

CONTRACT PURCHASE AGREEMENT AND FULLY INCORPORATED BY
REFERENCE.

START DATE: UPON EXECUTED AGREEMENT
END DATE: 8/31/27
PLEASE CONTACT AMY KEEMA IN THE FLEET DIVISION AT (916) 774-1730 OR [email protected] FOR QUESTIONS REGARDING THIS AGREEMENT. *The total agreement amount is an approximation only. The City does not guarantee whatsoever the actual value of this contract.

Customer # Supplier # Payment Terms Freight Terms FOB Shipping Method 10399 Net 30 Freight on Board at the destination Destination Best Method Start Date End Date Confirm To
"Becky" Rebecca Philipp Phone 1-916-746-1110
Attention: Total Cost not to exceed the agreement amount without prior approval of the Purchasing office.

2 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

Contract Terms and Conditions

1. To the fullest extent allowed by law, Contractor shall defend, indemnify, and save and hold harmless City, its officers, agents, employees and volunteers from any claims, suits or actions of every name, kind and description brought forth, or on account of, injuries to or death of any person (including but not limited to workers and the public), or damage to property, resulting from or arising out of Contractor's willful misconduct or negligent act or omission while engaged in the performance of obligations or exercise of rights created by this Agreement, except those matters arising from City's sole negligence or willful misconduct. The parties intend that this provision shall be broadly construed. Contractor's responsibility for such defense and indemnity obligations shall survive the termination or completion of this Agreement for the full period of time allowed by law. The defense and indemnity obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement.

2. Contractor is an independent contractor, and shall not be considered an officer, agent or employee of the City.

3. Without the written consent of the City, this Agreement is not assignable by Contractor either in whole or in part.

4. Time is of the essence of this Agreement.

5. At any time during the term of this Agreement, the City has the right to terminate this Agreement, provided Contractor is given thirty (30) days written notice. City's termination shall be without further liability to City; however, Contractor shall be entitled to all costs reasonably incurred prior to the date of termination. Contractor acknowledges that City may terminate this Agreement should funds not be appropriated by its governing body to continue services under this Agreement.

6. This Agreement may only be amended or modified in writing. It is integrated and contains the complete understanding of the parties.

7. All equipment, supplies and services sold to the City of Roseville shall conform to the general safety orders of the State of California.

8. Unless notified to the contrary, in writing, the City assumes that the Contractor has accepted the work in accordance with the plans and specifications (if any) and agrees to do the work in compliance with this Agreement.

9. All fair employment practices must be adhered to. In addition, if the project referenced on this service agreement is a Public Works project, all prevailing wage laws must be complied with. For prevailing wage contracts over $25,000, copies of certified payroll must be submitted with invoices. Prevailing wage rates may be obtained from the State Department of Industrial Relations and/or the following website address: http://www.dir. ca.gov/dlsr/DPreWageDetermination.htm. In compliance with Labor Code Section 1773.2, as may be amended from time to time, Contractor shall cause a copy of this website to be posted at each jobsite, as applicable.

10. Contractor agrees to the below insurance requirements:
a. Unless otherwise specified, the Contractor shall maintain the policies of insurance outlined in Attachment A, incorporated herein by this reference, in full force and effect during the term of this Agreement. The City of Roseville retains sole discretion in determining the types and proper levels of insurance coverage.
b. Form. Contractor shall submit a certificate evidencing such coverage for the period covered by this Agreement in a form satisfactory to Risk Management and the City Attorney, prior to undertaking any work hereunder. Any insurance written on a claims made basis is subject to the approval of Risk Management 3 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

and the City Attorney.
c. Additional Insureds. Contractor shall also provide a separate endorsement or section of the policy showing City, its officers, agents, employees, and volunteers as additional insureds for each type of coverage, except for Workers' Compensation. Such insurance shall specifically cover the contractual liability of Contractor. The additional insured coverage under the Contractor's policy shall be primary and noncontributory, as evidenced by a separate endorsement or section of the policy, and shall not seek contribution from City's insurance or self-insurance. In addition, the additional insured coverage shall be at least as broad as the Insurance Services Office (ISO) CG 20 01 Endorsement. Any available insurance proceeds in excess of the specified minimum insurance coverage requirements and limits shall be available to the additional insureds.

Furthermore, the requirements for coverage and limits shall be:
(1) the minimum coverage and limits specified in this Agreement; or (2) the full coverage and maximum limits of any insurance proceeds available to the named insureds, whichever is greater.
d. Cancellation/Modification. Contractor shall provide thirty (30) days written notice to City prior to cancellation or modification of any insurance required by this Agreement.
e. Umbrella/Excess Insurance. The limits of insurance required in this Agreement may be satisfied by a combination of primary and excess insurance. Any excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of City (if agreed to in a written contract) before City's own insurance shall be called upon to protect it as a named insured.
f. Subcontractors. Contractor agrees to include in its contracts with all subcontractors the same requirements and provisions of this Agreement, including the indemnity and insurance requirements, to the extent they apply to the scope of the subcontractor's work. Furthermore, Contractor shall require its subcontractors to agree to be bound to Contractor and City in the same manner and to the same extent as Contractor is bound to City under this Agreement.

Additionally, Contractor shall obligate its subcontractors to comply with these same provisions with respect to any tertiary subcontractor, regardless of tier. A copy of City's indemnity and insurance provisions will be furnished to the subcontractor or tertiary subcontractor upon request.
g. Self-Insured Retentions. All self-insured retentions (SIR) must be disclosed to Risk Management for approval and shall not reduce the limits of liability.

Policies containing any SIR provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named insured or City. City reserves the right to obtain a full certified copy of any insurance policy and endorsements. The failure to exercise this right shall not constitute a waiver of such right.
h. Waiver of Subrogation. Contractor hereby agrees to waive subrogation which any insurer of Contractor may acquire from Contractor by virtue of the payment of any loss under a Workers Compensation, Commercial General Liability or Automobile Liability policy. All Workers Compensation, Commercial General Liability and Automobile Liability policies shall be endorsed with a waiver of subrogation in favor of City, its officers, agents, employees and volunteers for all work performed by Contractor, its employees, agents and subcontractors. i. Liability/Remedies. Insurance coverage in the minimum amounts set forth herein shall not be construed to relieve Contractor of liability in excess of such coverage, nor shall it preclude City from taking such other actions as are available to it under any other provisions of this Agreement or law.

11. Contractor shall comply with all federal, state, and local laws and ordinances, including 4 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

but not limited to the City's storm water regulations, as may be applicable to the performance of services under this Agreement. Failure to comply with local ordinances may result in monetary fines and cancellation of this Agreement. Refer to www.roseville. ca.us/stormwater for links to more information on the City's storm water regulations.

12. In the event that the terms of any attachment or exhibit conflict with any terms of this Agreement, the terms of this Agreement shall control.

13. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission or by e- mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original hereof.

14. If either party commences any legal action against the other party arising out of this Agreement or the performance thereof, the prevailing party in such action shall be entitled to recover its reasonable litigation expenses, including but not limited to, court costs, expert witness fees, discovery expenses, and attorneys' fees. Any action arising out of this Agreement shall be brought in Placer County, California, regardless of where else venue may lie. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

15. This Agreement shall be binding upon the heirs, successors, executors, administrators and assigns of the respective parties hereto.

16. If any of the provisions contained in this Agreement are for any reason held invalid or unenforceable, such holding shall not affect the remaining provisions or the validity and enforceability of the Agreement as a whole.

17. For purposes of this Agreement, the terms "Contractor," "Consultant," and "Supplier" are used interchangeably.

18. If the project referenced on this agreement is a Public Works project, then the following shall apply: No contractor or subcontractor may work on a public works project unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5. During the performance of this agreement, Contractor and its subcontractors shall have a continuing legal obligation to maintain current registration with the Department of Industrial Relations. Contractor is hereby notified that this project is subject to compliance monitoring and enforcement by the Department of Industrial Relations.

19. Vehicles with a gross vehicle weight rating (GVWR) greater than 8,500 lbs. and light- duty package delivery vehicles operated in California may be subject to the California Air Resources Board (CARB) Advanced Clean Fleets regulations. Such vehicles may therefore be subject to requirements to reduce emissions and air pollutants. For more information, visit the CARB Advanced Clean Fleet webpage at https://ww2.arb.ca. gov/our-work/programs/advanced-clean-fleets.

20. Contractor/consultant's duties and services under this agreement shall not include preparing or assisting the public entity with any portion of the public entity's preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with the public entity. The public entity entering this agreement shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. Contractor/consultant's participation in the planning, discussions, or drawing of project plans or specifications, if any, shall be limited to conceptual, preliminary, or initial plans or specifications. Contractor/consultant shall cooperate with the public entity to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by contractor pursuant to this agreement.

21. If the project referenced on this agreement is a Public Works project, then the following 5 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

shall apply: Contractor must submit all claims as defined in and in accordance with the claim resolution process set forth in Section 9204 of the Public Contract Code. Each such claim must be sent to the City by registered mail or certified mail with return receipt requested and must contain reasonable documentation to support the claim. All claims must be received prior to acceptance of the work.

22. Contractor certifies that Contractor, its employees, directors, officers, agents, subcontractors, vendors, and volunteers are not presently debarred, excluded, suspended, declared ineligible, voluntarily excluded, or proposed for debarment, exclusion, suspension, or ineligibility by any federal, state, or local department or agency.

23. The Levine Act (Govt. Code, Section 84308) requires a Party (and its agent(s), if any) to a Proceeding before the City of Roseville that involves any action or consideration related to their contract, license, permit, or other entitlement for use, to disclose any campaign contributions made to City elected or appointed officers totaling more than $250 within the twelve (12) months prior to the City decision and while a proceeding is pending, and includes certain prohibitions on contribution activity thereafter. If applicable campaign contributions have been made by Contractor and/or its agent(s), Contractor is responsible for compliance, including for its disclosure obligations, if any, as further described at: https://www.roseville.ca.
us/government/departments/city_clerk/transparency/levine_act.

24. This Agreement may be amended via change order, but only if such change order is made in writing, approved by the City, and signed by both parties.

25. CONTRACTOR agrees to defend and indemnify CITY if, despite the parties intent and practice, any venue, agency, or court with competent jurisdiction determines that CONTRACTOR and/or any of its agents, officers, employees, volunteers, independent contractors, or subcontractors, are characterized as employee(s) of CITY.

CONTRACTOR and CITY agree that: (a) CONTRACTOR is free from the control and direction of CITY in connection with the performance of the work; (b) CONTRACTOR is providing services directly to CITY; (c) CONTRACTOR has and will maintain at all relevant times a business license; (d) CONTRACTOR maintains a business location that is separate from CITY; (e) CONTRACTOR is customarily engaged in an independently established business of the same nature as that involved in the work performed hereunder; (f) CONTRACTOR actually contracts with other businesses to provide the same or similar services and maintains a clientele without restrictions from CITY; (g) CONTRACTOR advertises and holds itself out to the public as available to provide the same or similar services; (h) CONTRACTOR provides its own tools, vehicles, and equipment to perform the services; (i) CONTRACTOR has negotiated its own rates; (j) CONTRACTOR set its own hours and location of work in accomplishing CITY's on-call needs; and (k) CONTRACTOR has the right to control the manner and means of accomplishing the result desired and exercises its own expert independent judgement.

The supplier named hereon by the acceptance of this order agrees to the provisions of this document titled "Contract Purchase Agreement" and all accompanying terms, conditions, and attachments.

Roseville Business License No. ____________________________________ Contractor License No. ____________________________________________ DIR Registration No. _______________________________________________ Check mark the applicable company type below:
___________ Corporation
___________ Limited Liability Company
___________ Partnership
___________ Sole Proprietor
6 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 N/A

N/A

X
EN/A
Contract Purchase Agreement 3004242

City Reserves the right to withhold any payments to contractor in the event of noncompliance with insurance requirements or if required by law.

General T&C
REV 3/21/24 JS

7 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

ATTACHMENT A

HUMAN RESOURCES/RISK MANAGEMENT DIVISION

INSURANCE REQUIREMENTS

AGREEMENT OVER FORMAL BID LIMIT OR INVOLVING HIGH RISK ACTIVITIES General - Required Coverage/Documentation
● General Liability: $1 Million per occurrence /$2 Million aggregate ● Automobile Liability: $1 Million combined single limit ● Workers' Compensation: Statutory *Must provide a Waiver of subrogation ● Additional Insured Endorsement (AIE) - General Liability policy: CG 20 38 04 13 or an equivalent, blanket endorsement or section of the policy. Endorsement shall cover the City of Roseville, its officers, agents, employees and volunteers as additional insured. ● Policies must be primary and non-contributory
● A 30 day notice of cancellation must be provided
● List certificate holder as: The City of Roseville - Insurance Compliance, PO Box 100085-R1, Duluth, GA 30096
Additional Liability/Insurance Requirements if required by Agreement (and marked below):

Construction:____
General Liability:
$2 Million/occurrence
$4 Million aggregate
Design Professional:____
General Liability:
$2 Million/occurrence
$4 Million aggregate
Professional Liability:
$2 Million/occurrence
Professional Consultant:____
Professional Liability:
$1 Million/occurrence
IT Services:____
Professional Liability:
$1 Million/occurrence
No auto required
Cyber Liability:
$1 Million/occurrence
Hazardous Materials:____
Pollution Liability:
$1 Million/occurrence
Special Events/Caterers-Vendors:____
No auto required
No workers' comp required
Professional Counseling/ Psychological:____
Professional Liability:
$1 Million/occurrence
No auto required
8 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

Pyrotechnics:____
General Liability:
$5 Million/occurrence
$10 Million aggregate
Auto - $2 Million/occurrence
Chemical/Environmental:_X__
General Liability:
$3 Million/occurrence
$6 Million aggregate
Pollution – $2 Million/Occurrence
Auto - $2 Million/Occurrence
Insurance Submission Process
The City of Roseville Human Resources/Risk Management Department uses a service called EBIX to manage our insurance certificate tracking.

How It Works
● The vendor's contact information is entered into EBIX. EBIX will contact the vendor to request proof of insurance.
● The Vendor can forward the request to their Insurance Agent(s) if necessary. ● Vendor/Insurance Agent submits insurance to EBIX by email to [email protected] or by fax to (770) 325-5727. After faxing or emailing the certificate, please DO NOT send the certificate by mail to EBIX. Please do not mail, email or fax any certificates to the City of Roseville. ● Once submitted, EBIX reviews the insurance documentation. If there are deficiencies, EBIX will send a follow up letter or email requesting additional information.

Questions Regarding Insurance Submission: Contact EBIX at (951) 652-4239 Questions Regarding Insurance Requirements Contact Risk Management at (916) 774-5202

9 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Contract Purchase Agreement 3004242

CALIFORNIA AIR RESOURCES BOARD REGULATION COMPLIANCE
Please indicate whether the Contractor is subject to, and/or in compliance with, the following regulations of the California Air Resources Board.

In-Use Off-Road Diesel-Fueled Fleets Regulation
1) Will vehicles subject to Cal. Code Regs., tit. 13, §§ 2449 et seq. be used for the project? This includes, but is not limited to:
a) Vehicles with a diesel-fueled or alternative diesel fueled off-road compression- ignition engine with maximum power (max hp) of 25 horsepower (hp) or greater provided that the vehicle cannot be registered and driven safely on-road or was not designed to be driven on-road, even if it has been modified so that it can be driven safely on-road
b) Workover rigs
c) Certain two-engine vehicles
Yes ____ No ____
2) If you answered "Yes" to 1), you must submit a valid Certificate of Reported Compliance to the City as provided in Cal. Code Regs., tit. 13, § 2449(n).

Advanced Clean Fleets Regulation
Pursuant to Cal. Code Regs., tit. 13, § 2013(i)(1), the Contractor shall submit to the City a document evidencing that it is listed on the CARB Advanced Clean Fleets webpage as a compliant fleet OR a signed statement stating that it is not subject to the High Priority and Federal Fleets regulation of title 13, CCR section 2015 through 2015.6.

The High Priority Fleets regulation applies to, without limitation, entities with more than $50 million in gross annual revenues and/or which own, operate, or direct the operation of 50 or more vehicles in the total fleet.
1) Is the Contractor subject to the High Priority and Federal Fleets regulation of title 13, CCR section 2015 through 2015.6?
Yes ____ No ____
2) If you answered "Yes" to 1), you must submit a document evidencing that you are listed on the CARB Advanced Clean Fleets webpage as a compliant fleet.

Signature: _____________________________
Title: __________________________________
CARB Compliance
Rev 2/15/24 MC

10 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 CEO

Contract Purchase Agreement 3004242

Supplier
Signature:______________________________________________ Print Name:_____________________________________________ Title:__________________________________________________ Date: __________________________________________________ Supplier
Signature:______________________________________________ Print Name:_____________________________________________ Title:__________________________________________________ Date: __________________________________________________ City of Roseville, A Municipal Corporation
Signature:______________________________________________ Print Name: Dominick Casey
Title: City Manager
Date:__________________________________________________ 11 Docusign Envelope ID: E7F00F57-302E-46E5-AEBD-FB0A79162A45 Secretary
President
Joshua Hunt
1/14/2025
1/14/2025
Joseph Hunt

COUNCIL COMMUNICATION
CC #:
3820
File #:
0203-10 & 0201-01
Title:

Riego Creek Park Turf Installation Project - Award of Bid and Budget Adjustment Contact:

Kelly Appier 916-774-5927 [email protected]

Meeting Date: 4/2/2025
Item #: 7.4.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council:

1)

Award an agreement to the apparent low bidder, Brightview Landscape Development, Inc. for the Riego Creek Park turf installation, and adopt a resolution to authorize the City Manager to execute the agreement with Brightview Landscape Development, Inc. in the amount of $282,356, as well as authority to approve change order requests in an amount not to exceed 10% of the contracted amount; and
2)

Adopt an ordinance to approve a budget adjustment in the amount of $175,000 from the Neighborhood Park - West Roseville Specific Plan (SP) Fund, to the Riego Creek Park (formerly, F-51) Project.

BACKGROUND
Riego Creek Park (formerly, F-51 Park) is located on the 12.15-acre site off North Hayden and Holt Parkways, adjacent to Riego Creek Elementary School in the Fiddyment Farm area of West Roseville. Construction of the park was completed in December of 2024.

As the park project is
complete and all expenses have been accounted for, staff proposes to utilize unspent funds to convert two large landscape areas along North Hayden into turf grass. These areas include the large spaces outside the outfield fences. The addition of this turf is in response to resident feedback seeking more turf areas within the park.

The base bid includes the conversion of one large landscaped area (Area A) into turf. Add alternates include:

1. Convert a second large landscaped area (Area B) into turf.

2. Re-locate the bark mulch removed from Riego Creek Park (Area A) to Gibson Park for The Courts at Gibson Park Frontage Project (500465).

3. Re-locate the bark mulch removed from Riego Creek Park (Area B) to Gibson Park for The Courts at Gibson Park Frontage Project (500465).

City Council approved the plans and specifications and authorized the call for bids at the February 5, 2025 meeting. Bids were opened on February 25, 2025. Staff received three bids for the project. The bid results are as follows:

Bidder
Total Lump Sum Bid and Add Alternates
Brightview Landscape Development, Inc. $282,356 Procida Landscape, Inc. $291,224 Parker Landscape Development, Inc. $343,190

Engineer’s Estimate $374,261

Staff recommends award of the base bid plus add alternates 1, 2, and 3 for a total contract award amount of $282,356 to Brightview Landscape Development, Inc.

FISCAL IMPACT
Funding for the park construction project was approved in the FY2021-22 CIP budget using the
Neighborhood Park - West Roseville SP Fund.

A budget adjustment is requested to supplement
the current project balance in the Riego Creek Park (formerly, F-51) project budget by $175,000.

Ongoing m
aintenance costs are funded through the Fiddyment Ranch Community Facilities District #2 (Public Services) Fund. There will be no General Fund impact.

ENVIRONMENTAL REVIEW
Development of the F-51 Neighborhood Park site was previously evaluated in the West Roseville Specific Plan (WRSP) EIR (certified and SCH No.2002082057), and identified in the associated West Roseville Specific Plan. As proposed, construction of the F-51 Neighborhood Park is within the scope of the project covered by the WRSP Final EIR. As discussed in the Specific Plan EIR, the EIR provides environmental analyses of community infrastructure and facilities, including parks, pedestrian bridges, and bike trails, to the extent applicable. Because the project is consistent with the WRSP Final EIR and Specific Plan, no new effects would be expected to occur and all applicable mitigation measures from the WRSP EIR will be implemented during the design and construction of the F-51 Neighborhood Park. Because the proposed project meets the requirements identified in Section 15183 of the State CEQA Guidelines, no additional CEQA review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A – Remain fiscally responsible in a changing world Goal B – Support community engagement and advocacy
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,
Kelly Appier, Park Development Project Manager
Jill Geller, Director, Parks, Recreation & Libraries

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Vicinity Map
Resolution 25-080
Agreement
Ordinance 6925
Bid Results
Riego Creek Park
Vicinity Map

RESOLUTION NO. 25-080

APPROVING AN AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND BRIGHTVIEW LANDSCAPE DEVELOPMENT, INC., AND AUTHORIZING THE CITY

MANAGER TO EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, an Agreement for the Riego Creek Park Turf Conversion project, by and between the City of Roseville and Brightview Landscape Development, Inc., has been reviewed by the City Council; and

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

BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to approve change orders for the project, consistent with the contract terms, provided that the net cost of all change orders shall not exceed ten percent (10%) of the contract price.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

________________________
City Clerk

ORDINANCE NO. 6925

ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE
AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25

BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY

EFFECTIVE AS AN APPROPRIATION MEASURE

THE CITY OF ROSEVILLE ORDAINS:

SECTION 1. The City of Roseville Annual Budget, Fiscal Year 2024-25, is hereby amended as listed on the attached budget adjustment for the Riego Creek Park Turf Installation project.

SECTION 2. This ordinance is hereby declared to be an appropriation measure, immediately effective pursuant to the provisions of Section 5.03 of the Charter.

SECTION 3. The City Clerk is hereby authorized and directed to post a true copy of the foregoing ordinance in each of three (3) conspicuous locations in the City and she shall immediately after such posting enter in the ordinance book, under the record of the ordinance, a certificate under her hand stating the time and place of such publication by posting.

PASSED AND ADOPTED by the Council of the City of Roseville, this day of , 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR
ATTEST:

City Clerk

REQUEST FOR BUDGET ADJUSTMENT
Updated 11/22/2024

Please complete the cells highlighted in yellow.

REQUESTER NAME & TITLE: FISCAL YEAR:

PREPARER NAME & TITLE: ORDINANCE:

DEPARTMENT/DIVISION:

EXPENDITURES/EXPENSES/TRANSFERS OUT
ACCOUNT STRING BUDGET ($) DESCRIPTION Fund Account Center Project Adjustment 3311 6587 84001 500040 175,000 Increase project budget - Riego Creek Park - F-51

EXPENDITURES/EXPENSES/TRANSFERS OUT TOTAL 175,000

REVENUES/TRANSFERS IN
ACCOUNT STRING BUDGET ($) DESCRIPTION Fund Account Center Project Adjustment

REVENUES/TRANSFERS IN TOTAL -

NET ADJUSTMENT 175,000

FUND BALANCE
ACCOUNT STRING BUDGET ($) DESCRIPTION Fund Account Center Project Adjustment 3311 3601 00000 000000 (175,000) Decrease Neighborhood Park - West Roseville SP Fund Balance
3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
FUND BALANCE TOTAL (175,000)

Justification for Budget Adjustment:

The Parks, Recreation & Libraries Department is requesting a budget adjustment to increase the Riego Creek Park - F-51 project budget (#500040) in the amount of $175,000, increasing the total project budget to $7,275,000. Construction of Riego Creek Park was completed in December 2024. The additional funds are required to convert two large landscape areas along North Hayden into turf grass. These areas include the large spaces outside the outfield fences. The addition of these turf areas is a response to resident feedback seeking more turf areas within the park.

2024-25 Kelly Appier, Park Development Project Manager
Lisa Saunders, Management Analyst
Parks, Recreation & Libraries

COUNCIL COMMUNICATION
CC #:
3821
File #:
0203-09
Title:

Dry Creek Wastewater Treatment Plant Gearbox Replacement - Sole Source Purchase Order
Contact:

Audrey Ficker 916-746-1865 [email protected]

Meeting Date: 4/2/2025
Item #: 7.5.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution approve a sole source purchase order with Philadelphia Mixing Solutions, LLC. gearboxes for the aeration process at the Dry Creek Wastewater Treatment Plant, and authorize the City Manager or his designee to approve change orders for the project, consistent with the contract terms, provided that the net cost of all change orders shall not exceed ten percent (10%) of the contract price.

BACKGROUND
The Dry Creek Wastewater Treatment Plant (DCWWTP) has eight (8) mixing gearboxes on aeration basins 100 & 200. These gearboxes have outlived their life expectancy, replacement and repair parts are obsolete, and predictive and preventative maintenance have slotted these for replacement. Philadelphia Mixing Solutions, LLC manufactures the only direct replacement for these mixing gearboxes.

Philadelphia Mixing Solutions, LLC designs and manufactures equipment for the water and wastewater industries. All the equipment and components are specified according to each application per a set of specifications, tolerances, and standards. Philadelphia Mixing Solutions, LLC is the only supplier of its named equipment.

FISCAL IMPACT
The cost of this purchase is $206,355 including tax and estimated shipping cost with a ten percent contingency of $20,635, for a total not-to-exceed cost of $226,990. Funding will be provided from the Environmental Utilities Department’s annual approved budgets for the Wastewater Operations Fund.

ENVIRONMENTAL REVIEW
The proposed project involves the replacement of existing equipment. This activity is categorically exempt from CEQA as a Class 1 Exemption (State CEQA Guidelines Section 15301). The Exemption has been prepared and no further CEQA action 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,
Audrey Ficker, Administrative Technician
Sean Bigley, Environmental Utilities Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 25-081
CEQA Notice of Exemption - Class 1
RESOLUTION NO. 25-081

APPROVING A SOLE SOURCE PURCHASE ORDER

FOR REPLACEMENT MIXING GEARBOXES

WHEREAS, a sole source purchase order for the purchase of eight (8) replacement mixing gearboxes for the aeration process at the Dry Creek Wastewater Treatment Plant, by and between the City of Roseville and Philadelphia Mixing Solutions, LLC, has been reviewed by the City Council; and

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said purchase order is approved.

BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to approve change orders for the project, consistent with the contract terms, provided that the net cost of all change orders shall not exceed ten percent (10%) of the contract price.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

_______________________________
MAYOR

ATTEST:

__________________________
City Clerk

Notice of Exemption

To: Placer County Clerk From: City of Roseville
Recorder’s Office Development Services Dept.
2954 Richardson Drive 311 Vernon Street
Auburn, CA 95603 Roseville, CA 95678

Project Title: Replacement Mixing Gearboxes for the Aeration Process at Dry Creek Wastewater Treatment Plant - Sole Source Purchase Order

Project Location(s): 1800 Booth Road, Roseville, CA 95747. Assessor’s Parcel Number s 474- 080-009-000, 474-110-001-000, 474-110-002-000, 473-080-000-000, and 473-080-002-000.

Project Description: The Environmental Utilities Department is requesting requests City Council approval of a sole source purchase order with Philadelphia Mixing Solutions, LLC for the purchase of eight (8) replacement mixing gearboxes for the aeration process at the Dry Creek Wastewater Treatment Plant (DCWWTP). DCWWTP currently has 8 mixing gearboxes on aeration basins 100 and 200. These gearboxes have outlived their life expectancy, replacement and repair parts are obsolete, and must now be replaced. The project would not result in an expansion of use or capacity.

Public Agency Approving Project: Roseville City Council

Agency/Individual Carrying Out Project: City of Roseville Environmental Utilities Department

Reason why this Project is Exempt: The project qualifies for a Class 1 Categorical Exemption as described in Section 15301 of the California Environmental Quality Act (CEQA) guidelines which states:

“Class 1 (Existing Facilities) consists of … maintenance… of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use.

Examples include but are not limited to:…(b) Existing facilities of both investor and publicly owned utilities to provides electric power, natural gas, sewerage, or other publi c utilities.”

The project consists of the purchase of new mixing gearboxes needed for ongoing maintenance of the DCWWTP. The project would not result in expansion of use. Consequently , the Class 1 and Categorical Exemption applies.

Lead Agency Contact Person : Audrey Ficker, Roseville Department of Environmental Utilities – Wastewater Division (916) 746-1865.

Signature: Date: 3/4/2025
Jessica Lynch, Environmental Coordinator
City of Roseville

COUNCIL COMMUNICATION
CC #:
3814
File #:
0900-01
Title:

Civic Center Heating, Ventilation and Air Conditioning Boxcar Replacement Project - Notice of Completion
Contact:

Rebecca McCoy 916-774-5706 [email protected]

Meeting Date: 4/2/2025
Item #: 7.6.

RECOMMENDATION TO COUNCIL
Staff recommends Council accept the Civic Center Heating, Ventilation and Air Conditioning Boxcar Replacement Project as complete and adopt a resolution to authorize the Public Works Director to execute the attached Notice of Completion.

BACKGROUND
The City of Roseville Civic Center, located at 311 Vernon St., is a two-story building housing multiple departments including the City Manager’s Office, City Attorney’s Office, City Clerk, Development Services, Economic Development, Finance, Human Resources, Public Affairs and Communications, and Public Works. Heating, Ventilation, and Air Conditioning (HVAC) provided to these and other spaces within the building are served by boxcar units on the roof, identified as AC-2, AC-3, and AC-4. These units were original to the building (24 years old) and had exceeded their useful lives. The Purchasing Division issued Request for Quotations No. 10-3380 for the replacement of all three units and the City awarded a Contract Purchase Agreement to B&M Builders, Inc. at the City Council Meeting on March 20, 2024, for the amount of $1,059,780. The work was successfully completed on March 11, 2025. Staff has inspected the work and found it complete.

FISCAL IMPACT
The total cost of this project was $1,059,780. The
Civic Center HVAC Boxcar Replacement
Project
was budgeted in the Public Works FY2021-22 Civic Center – Renovation and Rehabilitation Project and the FY2022-23 Civic Center – HVAC Boxcar Replacement Project budgets in the Facility Rehabilitation Fund.

ENVIRONMENTAL REVIEW
The project involved the repair of an existing facility. This activity is categorically exempt from CEQA as a Class 1 Exemption (State CEQA Guidelines Section 15301). The Exemption has been prepared and no further CEQA action is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal C – Maintain a safe and healthy community
Goal F – Invest in well-planned infrastructure and growth

Respectfully Submitted,
Rebecca McCoy, Project Coordinator
Jason Shykowski, Public Works Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Exhibit A - Location Map
Resolution 25-074
Notice of Completion
CEQA Exemption
"EXHIBIT A"

CIVIC CENTER BOXCAR REPLACEMENT PROJECT

PROJECT VICINITY MAP

BASELINE RD

HILLTOP
CIRCLE
LEGEND
PROJECT 0

LOCATION
0 RESOLUTION NO. 25-074

ACCEPTING THE PUBLIC WORK KNOWN AS THE CIVIC CENTER HVAC BOXCAR REPLACEMENT PROJECT, APPROVING THE “NOTICE OF COMPLETION”, AND

AUTHORIZING THE PUBLIC WORKS DIRECTOR TO EXECUTE SAID NOTICE

ON BEHALF OF THE CITY OF ROSEVILLE

BE IT RESOLVED by the City Council of the City of Roseville as follows:

1. The “Notice of Completion” on file in the City Clerk’s Department relative to that public work known as the Civic Center HVAC Boxcar Replacement Project, has been approved and the public work accepted.

2. The Public Works Director is hereby authorized and directed to execute said Notice on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ____ day of _____________________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

_________________________________
City Clerk

RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:

CITY
CLERK

CITY OF ROSEVILLE
311 VERNON STREET
ROSEVILLE, CA 95678
Exempt
from recording fees
Pursuant to Gov’t Code §27383

NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN that the public work of improvement known as the Project was completed and
accepted by the City of Roseville on . The location is situated in the City of Roseville, County of Placer, State of California and is indicated on the attached map, marked as Exhibit “A” and incorporated herein by this reference. The real property herein described is owned by the City of Roseville, 311 Vernon Street, Roseville CA 95678.

The direct/general contractor on said project was .

The surety on said project was
.
___________________________________
City o
f Roseville
Owner
ATTEST:
________________________________
_
Carmen Avalos, City Clerk

S
tate of California )
County of Placer )
I, , being first duly sworn, depose and say: I am the of the City of Roseville, a municipal corporation in the State of California, owner of the property described in the above Notice. I am duly authorized to make this verification for and on behalf of the City of Roseville. I have read the Notice of Completion and know its contents and the facts stated therein are true.
___________________________________
C
ity of Roseville
St
ate of California )
County of Placer )
Subscribed and sworn to (or affirmed) before
me on this _____ day of , 20__ _,
proved to me on the basis of satisfactory
evidence to be the person(s) who appeared
before me.
____________ ________________________
Place Notary Seal and/or Stamp Above Signature of Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

Notice of Exemption

To: Placer County Clerk From: City of Roseville
Recorder’s Office Development Services Dept.
2954 Richardson Drive 311 Vernon Street
Auburn, CA 95603 Roseville, CA 95678

Project Title: Civic Center Boxcar Units Replacement – Contract Purchase Agreement

Project Location(s): 311 Vernon Street, Roseville, California 95678

Project Description: This project would approve the authorization of a contract purchase agreement and replacement of the existing outdated Civic Center Boxcar Units with new Heating, Ventilation, and Air Conditional (HVAC) equipment for the Civic Center. The existing units have reached the end of their useful life and require replacement . The new HVAC units will not req uire any modifications to the building’s structural, electrical, or HVAC distribution systems, and there would be no expansion of use.

Public Agency Approving Project: Roseville City Council

Agency/Individual Carrying Out Project: City of Roseville Public Works Department

Reason why this Project is Exempt: This project qualifies for a Class 1 E xemption as described in Section 15301 of the California Environmental Quality Act (CEQA) guidelines which states:

“Class 1 consists o f the…repair…of existing public…structures, facilities, [or] mechanical equipment…involving negligible or no expansion of existing or former use…. Examples include but are not limited to: (a) Interior or exterior alterations involving such things as interior partitions, plumbing, and electrical conveyances…”

The project is confined to within the existing Civic Center located at 311 Vernon S treet and would not result in expansion of use. No environmentally sensitive resources are located within or adjacent to the property; therefore the Class 1 exemption is applicable to the proposed project.

Lead Agency Contact Person: Tiffany Valdez, Finance Department - Purchasing, 311 Vernon Street, Roseville, CA 95678. (916) 746-1109.

Signature: Date: 2/27/2024
Jessica Lynch, Environmental Coordinator, City of
Roseville

COUNCIL COMMUNICATION
CC #:
3817
File #:
0900-01
Title:

Fire Station No. 8 Project - Notice of Completion
Contact:

Andre Baranov 916-774-5342 [email protected]

Meeting Date: 4/2/2025
Item #: 7.7.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council accept the construction project work at the Fire Station No. 8 performed by Carter-Kelly, Inc. as complete and adopt a resolution to authorize the Public Works Director to execute the attached Notice of Completion.

BACKGROUND
On June 6, 2022, the City released a Request for Proposals for a design-assist construction contract for Fire Station No. 8. That project, now complete, has been inspected by City staff, found to be in compliance with the plans and specifications, and is ready for acceptance by the City.

FISCAL IMPACT
The total project cost including construction costs, FFE (furniture, fixtures, and equipment), design costs, construction soft costs, and a 5% contingency was $14,480,000. The project was funded by the Fire Facilities Fund and no additional funding is being requested.

ENVIRONMENTAL REVIEW
Development of the Fire Station 8 project was previously evaluated in the Hewlett Packard Master Plan EIR, certified May 15, 2008 (SCH No. 1995112022), and subsequently the Campus Oaks Master Plan Amendment to the Hewlett Packard Master Plan EIR on May 20, 2020 (Resolution 20-168). The Fire Station 8 project is within the scope of the project covered by the Hewlett Packard Master Plan Final EIR, and Campus Oaks Master Plan Amendment. As discussed in the Specific Plan EIR, the EIR provides environmental analysis of community infrastructure and facilities, to the extent applicable.

Because the project is consistent with the Hewlett Packard Master Plan EIR and Campus Oaks Master Plan Amendment, no new effects occurred and all applicable mitigation measures from the Hewlett Packard Master Plan EIR and Campus Oaks Master Plan Amendment were implemented during the design and construction of the Fire Station 8 project. As such, no additional environmental documentation is required for the Notice of Completion.

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,
Andre Baranov, Project Supervisor
Jason Shykowski, Public Works Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Location Map
Resolution 25-077
Notice of Completion

RESOLUTION NO. 25-077

ACCEPTING THE PUBLIC WORK KNOWN AS THE FIRE STATION NO. 8 PROJECT, APPROVING THE “NOTICE OF COMPLETION”, AND AUTHORIZING THE PUBLIC

WORKS DIRECTOR TO EXECUTE SAID NOTICE

ON BEHALF OF THE CITY OF ROSEVILLE

BE IT RESOLVED by the City Council of the City of Roseville as follows:

1. The “Notice of Completion” on file in the City Clerk’s Department relative to that public work known as the Fire Station No. 8 Project, has been approved and the public work accepted.

2. The Public Works Director is hereby authorized and directed to execute said Notice on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ____ day of _____________________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

_________________________________
City Clerk

RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:

CITY
CLERK

CITY OF ROSEVILLE
311 VERNON STREET
ROSEVILLE, CA 95678
Exempt
from recording fees
Pursuant to Gov’t Code §27383

NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN that the public work of improvement known as the Project was completed and
accepted by the City of Roseville on . The location is situated in the City of Roseville, County of Placer, State of California and is indicated on the attached map, marked as Exhibit “A” and incorporated herein by this reference. The real property herein described is owned by the City of Roseville, 311 Vernon Street, Roseville CA 95678.

The direct/general contractor on said project was .

The surety on said project was
.
___________________________________
City o
f Roseville
Owner
ATTEST:
________________________________
_
Carmen Avalos, City Clerk

S
tate of California )
County of Placer )
I, , being first duly sworn, depose and say: I am the of the City of Roseville, a municipal corporation in the State of California, owner of the property described in the above Notice. I am duly authorized to make this verification for and on behalf of the City of Roseville. I have read the Notice of Completion and know its contents and the facts stated therein are true.
___________________________________
C
ity of Roseville
St
ate of California )
County of Placer )
Subscribed and sworn to (or affirmed) before
me on this _____ day of , 20__ _,
proved to me on the basis of satisfactory
evidence to be the person(s) who appeared
before me.
____________ ________________________
Place Notary Seal and/or Stamp Above Signature of Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

COUNCIL COMMUNICATION
CC #:
3818
File #:
0800-03
Title:

Low Carbon Fuel Standard Customer Program - Low-Income Definition Policy Approval
Contact:

Sarah Kaufman 916-774-5656 [email protected]

Meeting Date: 4/2/2025
Item #: 7.8.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution to authorize the City Manager, or his designee, to execute a Low-Income Definition Policy for Roseville Electric Utility’s Low Carbon Fuel Standard (LCFS) Customer Programs.

BACKGROUND
Since 2017, Roseville Electric Utility has enrolled in the California Air Resource Board LCFS program and generates LCFS credits by providing electricity for electric vehicles in Roseville.

The Utility sells the credits, and uses the proceeds to support transportation electrification in the City. Additionally, participation in the LCFS program benefits the Roseville community without the use of rate payer funds. A required percentage of credit proceeds must be spent on low-income projects. To meet the LCFS low-income spending requirement, Section §95483 of the LCFS regulation allows the Publicly Owned Utility’s governing body to establish a definition of low- income.

The purpose of the LCFS regulation is to reduce the carbon intensity of transportation fuels used in California, to incentivize the production of low-carbon and renewable alternatives, and to increase energy security in the transportation sector. Roseville Electric Utility has contributed LCFS funds, as part of the LCFS low-income spending requirement, to increase electric vehicle and electric vehicle charger rebates for income-qualified residential customers and electrification of school and transit buses that operate in Roseville.

At least 50 percent of Roseville Electric Utility’s LCFS credit proceeds must be used to support transportation electrification for the primary benefit of disadvantaged communities, low-income communities, rural areas, or low-income individuals. The low-income criteria included in the LCFS regulation does not consider the characteristics and preferences of Roseville's customers or transportation electrification gaps within Roseville's service territory. Establishing a definition of low-income for Roseville's service territory will expand the impacts of LCFS low-income spending to more of Roseville Electric Utility’s under-resourced residential and commercial customers that are facing heightened barriers to transportation electrification or are disproportionately burdened by pollution.

By developing and adopting a low-income definition policy, Roseville Electric Utility will position itself to better serve the community's transportation electrification needs. The adoption of a low- income definition policy will provide access to funding, when available, to the Roseville low-income community through both individual and community projects that work to support zero-emission vehicles by installing charging infrastructure and supporting other projects beneficial to transportation electrification.

For Roseville Electric Utility’s LCFS Customer Programs and associated low-income spending requirement, the proposed policy defines low-income or primary benefit of low-income as meeting any of the criteria in LCFS regulation or any of the following criteria:

Census tracts with a CalEnviroScreen overall percentile greater than 50 percent.

Census tracts with a CalEnviroScreen poverty percentile greater than 50 percent.

Community gathering places located in Roseville service territory.

Public schools located in Roseville service territory.

Multifamily housing complexes with affordable units and located in Roseville service territory.

Not-for-profit organizations located in Roseville service territory that provide supportive services to under-resourced individuals and communities.

A location in Roseville service territory identified as a priority location by public agencies representing regional jurisdictions.

FISCAL IMPACT
This recommendation has no financial impact to the Electric Fund or the General 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 this policy meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal B - Support community engagement and advocacy
Goal C - Maintain a safe and healthy community
Goal F - Invest in well-planned infrastructure and growth

Respectfully Submitted,
Sarah Kaufman, Energy Services Account Representative
Dan Beans, Electric Utility Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 25-078
Low Carbon Fuel Standard Low-Income Policy
RESOLUTION NO. 25-078

ADOPTING A LOW-INCOME DEFINITION POLICY FOR ROSEVILLE ELECTRIC’S

LOW CARBON FUEL STANDARD CUSTOMER PROGRAMS

WHEREAS, since 2017, Roseville Electric Utility has enrolled in the California Air Resource Board Low Carbon Fuel Standard (LCFS) program and generates LCFS credits by providing electricity for electric vehicles in Roseville; and

WHEREAS, Roseville Electric sells the credits, and uses the proceeds to support transportation electrification in the City; and

WHEREAS, a required percentage of credit proceeds must be spent on low-income projects, and to meet the LCFS low-income spending requirement, Section §95483 of the LCFS regulation allows the Publicly Owned Utility’s governing body to establish a definition of low- income; and

WHEREAS, staff recommends that the City Council adopt the Low-Income Definition Policy for Low Carbon Fuel Standard Customer Programs for the City of Roseville.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Roseville that Low-Income Definition Policy for Low Carbon Fuel Standard Customer Programs for the City of Roseville is 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

Low-Income Definition Policy for Low Carbon Fuel Standard Customer Programs

April 2, 2025

Purpose

The purpose of this policy is the creation of a Low-Income Definition for the Low Carbon Fuel Standard (LCFS) Customer Programs, in an effort to adequately allocate the LCFS low-income spending requirement to electric vehicle (EV) projects that support the Roseville low-income community.

Background

The purpose of the California Air Resource Board’s (CARB) LCFS regulation is to reduce the carbon intensity of transportation fuels used in California, to incentivize the production of low- carbon and renewable alternatives, and to increase energy security in the transportation sector.

Roseville Electric Utility generates LCFS credits for providing electricity to EVs in Roseville Electric Utility’s service territory. Roseville Electric Utility sells these credits and uses the proceeds to support transportation electrification in Roseville service territory.

A required percentage of credit proceeds must be used to support transportation electrification for the primary benefit of disadvantaged communities, low-income communities, rural areas, or low-income individuals. In the LCFS regulation, low-income individuals are defined by the Department of Housing and Community Development State Income Limits. Whereas the definition of low-income communities includes 4 census tracts in Roseville that qualify as California Climate Investments Priority Populations which are low-income communities and households with incomes either at or below 80 percent of the statewide median or below a threshold designated as low-income by the Department of Housing and Community Development. Roseville does not have SB 535 disadvantaged communities, or rural areas.

The LCFS regulation does not consider the unique characteristics and preferences of Roseville Electric Utility customers or transportation electrification gaps within Roseville service territory.

However, Section §95483 of the LCFS regulation states that a definition of low-income can be established by the publicly owned utility’s governing body. Staff provides the following justification for the proposed definition of low-income in Roseville service territory specific to CARB’s LCFS regulation.

In addition to the criteria in the LCFS regulation, staff recommends using the Office of Environmental Health Hazard Assessment’s CalEnviroScreen overall and poverty percentiles.

CalEnviroScreen is a screening methodology that can be used to identify California communities that are disproportionately burdened by multiple sources of pollution. Staff recommends a CalEnviroScreen percentile threshold of 50 percent or greater because it is reflective of the census tracts in Roseville most affected by CalEnviroScreen indicators. This will allow Roseville Electric Utility to expand access to LCFS funds for EV projects that support Policy Memorandum
Roseville Electric Utility
electrification of fleets and increased access to workplace and public EV charging in more areas of Roseville.

Additionally, staff recommends including community gathering places located in Roseville service territory, public schools located in Roseville service territory, multifamily housing complexes located in Roseville service territory with affordable units, and not-for-profit organizations located in Roseville service territory that provide supportive services to under- resourced individuals and communities. This will allow Roseville Electric Utility to expand access to LCFS funds for EV projects all throughout Roseville, particularly in locations where people spend lengths of time conducive to EV charging.

Furthermore, to encourage regional collaboration, prevent EV charging gaps in Roseville, and support electrification of public transit and fleets, staff recommends including any location in Roseville service territory identified as a priority location by public agencies representing regional jurisdictions.

Policy

The definition of low-income in Roseville Electric Utility service territory, specific to the California Air Resource Board’s Low Carbon Fuel Standard regulation, shall include the following criteria in addition to existing criteria in the regulation:

• Census tracts with a CalEnviroScreen overall percentile greater than 50 percent. • Census tracts with a CalEnviroScreen poverty percentile greater than 50 percent. • Community gathering places located in Roseville service territory. • Public schools located in Roseville service territory. • Multifamily housing complexes with affordable units and located in Roseville service territory.
• Not-for-profit organizations located in Roseville service territory that provide supportive services to under-resourced individuals and communities. • A location in Roseville service territory identified as a priority location by public agencies representing regional jurisdictions.

Anticipated Outcome

Roseville Electric Utility’s adoption of this low-income definition policy for meeting the LCFS low- income spending requirement will impact the Roseville community in positive ways. This policy will allow for transportation electrification funds earmarked for low-income projects to be utilized in a wider array of potential projects that will benefit the Roseville low-income community.

Additionally, the low-income definition policy will allow for Roseville Electric Utility to provide funding for EV charging projects in Roseville, benefitting our community.

COUNCIL COMMUNICATION
CC #:
3819
File #:
0900-01
Title:

Pleasant Grove Wastewater Treatment Plant Ultraviolet Disinfection Addition Project – Notice of Completion
Contact:

Jeremy Snyder 916-413-9236 [email protected]

Meeting Date: 4/2/2025
Item #: 7.9.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council accept the Pleasant Grove Wastewater Treatment Plant Ultraviolet Disinfection Addition Project as complete and adopt a resolution to authorize the Director of Environmental Utilities to execute the Notice of Completion.

BACKGROUND
The Pleasant Grove Wastewater Treatment Plant (PGWWTP) Ultraviolet Disinfection Addition Project equipped a fourth channel, that existed from original construction, but was left empty, and added a fourth bank to all four channels. The project expanded the UV System from nine banks to 16 banks. Instruments, controls and SCADA equipment were upgraded as part of this expansion.

During this Project the PGWWTP Title 22 Recycled Water Report was updated and submitted to and approved by the Department of Drinking Water (DDW) and the Regional Water Quality Control Board (RWQCB).

On November 1, 2023, City Council approved and awarded a Design-Assist and Construction Agreement to Auburn Constructors LLC for the Project in the amount of $2,993,300. In addition, the City Council authorized the Environmental Utilities Director or his designee to approve and pay for contract change orders for the Project that could increase the contract amount by no more than 10% or $299,330.

Auburn Constructors LLC received a Notice to Proceed on November 9, 2023. The City’s Environmental Utilities Department completed final inspection of the Project on December 17, 2024, and found the work to be completed in accordance with the Contract Documents.

Therefore, the Project is now ready for final acceptance and approval of the Notice of Completion.

FISCAL IMPACT
A Design-Assist Construction Contract was awarded to Auburn Constructors LCC in the amount of $2,993,300. City Council also approved an allowance to pay contract change orders of up to 10% of the value of the contract ($299,330). There was only one negotiated change order at the end of construction, and it was a deductive change order for shared savings in the amount of $737,934.78. The contractor completed the project under their guaranteed maximum price (GMP) by a total of $1,054,192.54. Per the agreement, the split of the savings is 70% to the City and 30% to Auburn Constructors. Therefore, the final amount of the construction contract is $2,255,365.22. Funding for this project was provided by the South Placer Wastewater Authority.

ENVIRONMENTAL REVIEW
Implementation of the PGWWTP Ultraviolet Disinfection Addition Project was previously evaluated in the original Council Communication for the Design-Assist and Construction Agreement and it was determined to involve minor alterations of an existing facility. This activity was deemed categorically exempt from the California Environmental Quality Act (CEQA), as a Class 1 Exemption (State CEQA Guidelines Section 15301). The Exemption was prepared and no further CEQA action is required for the approval of this Notice of Completion.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal F - Invest in well-planned infrastructure and growth

Respectfully Submitted,
Jeremy Snyder, Preventative Maintenance Supervisor
Sean Bigley, Environmental Utilities Director

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 25-079
Attachment A - Notice of Completion and Vicinity Map
CEQA Notice of Exemption - Class 1
RESOLUTION NO. 25-079

ACCEPTING THE PUBLIC WORK KNOWN AS THE PLEASANT GROVE

WASTEWATER TREATMENT PLANT ULTRAVIOLET DISINFECTION ADDITION PROJECT, APPROVING THE “NOTICE OF COMPLETION”, AND AUTHORIZING THE

ENVIRONMENTAL UTILITIES DIRECTOR TO EXECUTE SAID NOTICE

ON BEHALF OF THE CITY OF ROSEVILLE

BE IT RESOLVED by the City Council of the City of Roseville as follows:

1. The “Notice of Completion” on file in the City Clerk’s Department relative to that public work known as the Pleasant Grove Wastewater Treatment Plant Ultraviolet Disinfection Addition Project, has been approved and the public work accepted.

2. The Environmental Utilities Director is hereby authorized and directed to execute said Notice 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

RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:

CITY
CLERK

CITY OF ROSEVILLE
311 VERNON STREET
ROSEVILLE, CA 95678
Exempt
from recording fees
Pursuant to Gov’t Code §27383
NO

TICE OF COMPLETION
N
OTICE IS HEREBY GIVEN that the public work of improvement known as the Project was completed and
accepted by the City of Roseville on . The location is situated in the City of Roseville, County of Placer, State of California and is indicated on the attached map, marked as Exhibit “A” and incorporated herein by this reference. The real property herein described is owned by the City of Roseville, 311 Vernon Street, Roseville CA 95678.

The direct/general contractor on said project was .

The surety on said project was
.
___________________________________
Cit
y of Roseville
Owner
ATTEST:
________________________________
_
Carmen Avalos, City Clerk

S
tate of California )
County of Placer )
I, , being first duly sworn, depose and say: I am the of the City of Roseville, a municipal corporation in the State of California, owner of the property described in the above Notice. I am duly authorized to make this verification for and on behalf of the City of Roseville. I have read the Notice of Completion and know its contents and the facts stated therein are true.
___________________________________
C
ity of Roseville
St
ate of California )
County of Placer )
Subscribed and sworn to (or affirmed) before
me on this _____ day of , 20__ _,
proved to me on the basis of satisfactory
evidence to be the person(s) who appeared
before me.
____________ ________________________
Place Notary Seal and/or Stamp Above Signature of Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

PROJECT

LOCATION

WESTBROOK BL

BLUE OAKS BL

FIDDYMENT RD

PLEASANT GROV E BL
W

OODCREEK
O
AKS
BL

VISTA GRANDE BL

FOOTHILLS
BL

ATLANTIC ST EUREKARD

DOUGLAS BL
W

ESTPARK
DR

WASHINGTONBL
I80I80

BASELINE RDBASELINE RD
HWY 65HWY 65

RROOSSEEVVIILLLLEE
PPWW
MM

AARRKKEETT
SSTT

INDUSTRIAL AVINDUSTRIAL AV

VERNON STVERNON ST

DDEE LL WWEEBB BB
BBLL

JJUU NNCCTTIIOONN BBLL
SS
AA
NNTT

UUCCCCIIBBLL
NN

HHAAYYDDEENN PPWW
Exhibit "A"

PLEASANT GROVE WASTEWATER TREATMENT PLANT

ULTRAVIOLET DISINFECTION ADDITION PROJECT
5051 WESTPA RK DRIVE
¯
City Boundary

Notice of Exemption

To: Placer County Clerk From: City of Roseville
Recorder’s Office Development Services Dept.
2954 Richardson Drive 311 Vernon Street
Auburn, CA 95603 Roseville, CA 95678

Project Title: Pleasant Grove Wastewater Treatment Plant Ultraviolet Dis infection System Addition Construction

Project Location(s): 5051 Westpark Drive, Roseville, CA 95747. Assessor’s Parcel Number 017-101-025-000.

Project Description : The Environmental Utilities Department (EU) recommends City Council adopt a resolution authorizing the City Manager to execute a design-assist agreement, for the Construction Cont ractor, with Auburn Constructors to provide channel modifications to accommodate a fourth bank in each channel, installation of new UV equipment including a complete installation in channel 4, installation of all new programmable logic controllers and new transformers for electrical infrastructure, testing, and commissioning for the Pleasant Grove Wastewater Treatment Plant (PGWWTP) Ultraviolet Disinfection Addition Project. When originally constructed, only three channel s were needed and the fourth channel was built for system expansion to plant designed flow rates and was to be equipped when the treatment flow approached the capacity of the first three channels. Growth in the Pleasant Grove WWTP service area is now gener ating sufficient flow to justify equipping the fourth channel . The project would accommodate planned growth that has already been considered and evaluated in the Roseville General Plan and General Plan EIR (SCH#2019080418). The project would not result in any additional new capacity or unplanned expansion beyond that which has already been approved.

Public Agency Approving Project: Roseville City Council

Agency/Individual Carrying Out Project: City of Roseville Environmental Utilities Department

Reason why this Project is Exempt: The project qualifies for a Class 1 Categorical Exemption as described in Section 15301 of the California Environmental Qual ity Act (CEQA) guidelines which states:

“Class 1 (Existing Facilities) consists of the… minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use. Examples include but are not limited to: (b) Existing facilities of both investor and publicly owned utilities used to provide electric power, natural gas, sewerage, or other public utility services.”

The project consists of ultraviolet c hannel modifications, demolition of some old equipment, installation of new equipment , testing, and commissioning of ul traviolet disinfection equipment, automation equipment (programmable logic controllers, instrumentation and electrical infrastructure) for the fourth and last remaining treatment channel located at the PGWWTP . The project would not result in increased capacity or unplanned expansion of use. Consequently , the Class 1 Categorical Exemption applies.

Lead Agency Contact Person : Jeremy Snyder, Roseville Department of Environmental Utilities (916-746-1829).

Signature: Date: 10-9-2023
Jessica Lynch, Environmental Coordinator
City of Roseville

COUNCIL COMMUNICATION
CC #:
3816
File #:
0200
Title:

Financial Policies for Fiscal Year 2025-26
Contact:

Scott Pettingell 916-746-1306 [email protected]

Meeting Date: 4/2/2025
Item #: 7.10.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution to approve the annual update of its financial policies.

BACKGROUND
The purpose of the City's financial policies is to determine appropriate and responsible financial guidelines for staff to follow when developing the budget, making recommendations, and fulfilling their role as fiscal stewards of public funds. As new policies are developed and approved by the City Council, they will be added to this document. Each year, the policies will be reviewed by staff, updated where recommended, and submitted to Council for approval. A summary of the current policies is provided below:

Investment Policy
The purpose of the Investment Policy is to establish cash management and investment guidelines for the Assistant City Manager/Chief Financial Officer, who is responsible for the stewardship of the City of Roseville's investment program. Each transaction and the entire portfolio must comply with California Government Code Sections 53600 and 53635 et seq. and the Investment Policy.

The Investment Policy conforms to the customary standards of prudent investment management, and any changes to the policy must be adopted by the City Council. The Investment Policy has been certified by the California Municipal Treasurers Association through their Investment Policy Certification Program. The recommended updates to the Investment Policy incorporate provisions of Assembly Bill (AB) 2618, Surplus Funds: Investment, and make nonsubstantive edits to the policy to improve clarity. AB 2618 provides for an increase in the percentage of local agency bank deposits that may be placed with a private company for allocation to multiple banks to maintain deposit insurance. Staff have incorporated this permitted investment into the policy and reflected the percentage limitation.

Debt Management Policy and Swap Policy
The purpose of the Debt Management Policy and Swap Policy is to provide guidelines for the issuance of bonds and other forms of indebtedness to finance necessary land acquisitions, capital construction, equipment, and other items for the City. There are no proposed changes to the existing policy.

Budget Development Policy
The purpose of the Budget Development Policy is to establish guidelines for developing the annual operating and capital budget. The policy maintains a citywide focus during the budget development process consistent with the General Principles of Governance adopted by the City Council. The policy includes guidelines for general revenues, a balanced budget, and public involvement. The recommended update clarifies how a smoothing period may be used for the City's indirect cost allocation plan.

General Fund Reserves Policy
The purpose of the General Fund Reserves Policy is to establish a targeted level of General Fund operating reserves, a basic component of a financially strong city. The policy maintains an amount equal to 10% of annual General Fund budgeted operating costs as the minimum level of funding in the City's General Fund Emergency Reserve and 15% of annual General Fund budgeted operating costs as the target level of funding for the City's new General Fund Stabilization Reserve Fund. Appropriation from the Emergency Reserve and Stabilization Reserve Funds requires the approval of at least four City Council members. The policy also includes the Litigation Reserve Fund, which was established to address legal matters that require proactive handling and funding. There are no proposed changes to the existing policy.

Development Services Stabilization Reserve Fund Policy
The purpose of the Development Services Stabilization Reserve (DSSR) Fund Policy is to maintain resources in a reserve that the City Council may draw from to maintain adequate staffing to continue delivering development services during an economic downturn. The City will use the DSSR to bridge gaps between projected and actual development revenues during periods of significant revenue decline. The reserve will be funded by fee revenue collected by Development Services in years when actual revenue exceeds budget estimates. The fee revenue used to fund the reserve will be General Fund fee revenue, which is often collected in one fiscal year and expended over more than one fiscal year (e.g., for building inspections); no nexus-based development impact fee revenue will be used to fund the reserve. The DSSR target goal is equivalent to six months of estimated Development Services Department Building, Planning, and Engineering General Fund revenues. There are no proposed changes to the existing policy.

Federal Stimulus Reserve Fund Policy
The purpose of this Federal Stimulus Reserve Fund Policy is to establish a temporary Federal Stimulus Reserve Fund with the City's allocation of the federal stimulus (2021 Coronavirus State and Local Fiscal Recovery Funds) until one-time expenditures or transfers to other City funds are approved and the funds are expended. The recommended change clarifies the December 31, 2024, deadline to obligate federal stimulus funding. The policy states that the fund will be closed after all funding, including interest earned, has been distributed.

Internal Service Funds - Operating and Replacement Reserves Policy The purpose of the Internal Service Funds - Operating and Replacement Reserves Policy is to establish (1) operating reserves to provide for continuity of service in the event of unanticipated changes to revenues or expenditures, particularly within a single fiscal year when charges for service on client operating departments already have been fixed through the adopted budget, and (2) replacement reserves to provide funding for capital improvement, rehabilitation, and replacement of capital assets, whose costs yield a burdensome or unaffordable peak in expenditure if assessed on client operating departments as they occur. There are no proposed changes to the existing policy.

Capital Improvement Program Rehabilitation Funding Policy The purpose of the Capital Improvement Program Rehabilitation Funding Policy is to address funding for the City's General Fund infrastructure rehabilitation and replacement. There are no proposed changes to the existing policy.

Pension Funding Policy
The Pension Funding Policy documents the City's method to determine its actuarially determined contributions to fund the long-term cost of pension benefits. The policy also guides annual budget decisions, demonstrates prudent financial management practices, reassures bond rating agencies, and shows employees and the public how pensions will be funded. There are no proposed changes to the existing policy.

Other Post-Employment Benefits (OPEB) Funding Policy
The purpose of the Other Post-Employment Benefits (OPEB) Funding Policy is to accumulate sufficient assets to fully finance the retiree healthcare benefits that retired employees receive throughout retirement. There are no proposed changes to the existing policy.

Workers' Compensation and General Liability Funding Policy The purpose of the Workers' Compensation and General Liability Funding Policy is to provide adequate financial resources to fund the City's Workers' Compensation and General Liability Programs and establish and maintain adequate reserves in the Workers' Compensation and General Liability Internal Service Funds. There are no proposed changes to the existing policy.

Interfund Loan Policy
The City's Interfund Loan Policy documents the methods used by the City to demonstrate prudent financial management over interfund loans. There are no proposed changes to the existing policy.

Request for Proposals (RFP) Policy
The purpose of the Request for Proposals (RFP) Policy is to provide a uniform process for the issuance, evaluation, and selection of competitive proposals for services and/or customized goods. There are no proposed changes to the existing policy.

Internal Control Policy
The purpose of the Internal Control Policy is to document the internal control framework adopted by the City and formalize certain policies and procedures to further the goal of fiscal responsibility through effective and comprehensive internal controls. There are no proposed changes to the existing policy.

Procurement Code of Ethics Policy
The purpose of the Procurement Code of Ethics Policy is to provide a well-defined and established code of ethics for City employees, including public procurement professionals, who interact with the public and represent the City in any way in relation to all procurement activities and to ensure integrity in the procurement and contracting process. There are no proposed changes to the existing policy.

Roseville Electric Utility Financial Policy
The purpose of Roseville Electric Utility's financial policies is to provide management guidance to maintain a fiscally sound utility. Roseville Electric Utility uses financial ratios from these policies to analyze performance trends and compare financial results to other utilities. Credit rating agencies, investors, and bond insurers also use these ratios and benchmarks to measure creditworthiness.

There are no proposed changes to the existing policy.

Environmental Utilities Financial Management Policy
The purpose of this Financial Management Policy is to give each utility a set of guidelines with which it can successfully and prudently manage its finances. The Policy affirms the currently used rehabilitation and enterprise fund guidelines, clarifies and adjusts targets for cash flows available for debt service and operating costs, and establishes targets for sizing reserves. There are no proposed changes to the existing policy.

Other Policies
In addition to the policies recommended for updates, staff is developing new financial policies in accounting and purchasing. Staff will bring forward new and updated policies for Council consideration individually or in annual updates of this Financial Policies document.

FISCAL IMPACT
Approval of the policies has no fiscal impact. However, implementing the policies is expected to improve the City's fiscal position and financial health. The Fiscal Year 2025-26 Proposed Budget is being developed based on these recommended financial policies.

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. Adoption of financial policies meets the above criteria and is 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,
Scott Pettingell, Finance Director
Dennis Kauffman, Assistant City Manager/Chief Financial Officer

_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 25-076
Financial Policies Effective July 1 2025 - Clean
Financial Policies Effective July 1 2025 - Redline
RESOLUTION NO. 25-076

ADOPTING THE CITY OF ROSEVILLE FINANCIAL POLICIES,
EFFECTIVE JULY 1, 2025

WHEREAS, the City of Roseville Financial Policies, effective July 1, 2025, have been reviewed by the City Council; and

NOW, THEREFORE, BE IT RESOLVED by the Council of the city of Roseville that the City of Roseville Financial Policies, effective July 1, 2025 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

City of Roseville
Financial Policies

Effective July 1, 2025

City of Roseville  Financial Policies – Effective July 1, 2025  Return to Table of Contents

2 Table of Contents

Investment Policy ............................................................................................................................. 3 Debt Management Policy .............................................................................................................. 18 Swap Policy .................................................................................................................................... 34 Budget Development Policy ........................................................................................................... 48 General Fund Reserves Policy ........................................................................................................ 53 Development Services Stabilization Reserve (DSSR) Fund Policy .................................................. 57 Federal Stimulus Reserve Fund Policy ........................................................................................... 60 Internal Service Funds ‐ Operating and Replacement Reserves Policy ......................................... 62 Capital Improvement Program Rehabilitation Funding Policy ...................................................... 69 Pension Funding Policy .................................................................................................................. 71 Other Post‐Employment Benefits (OPEB) Funding Policy .............................................................. 75 Workers’ Compensation and General Liability Funding Policy ...................................................... 78 Interfund Loans Policy ................................................................................................................... 80 Request for Proposals (RFP) Policy ................................................................................................ 83 Internal Control Policy ................................................................................................................... 91 Procurement Code of Ethics Policy ................................................................................................ 99 Roseville Electric Utility Financial Policy ...................................................................................... 106 Environmental Utilities Financial Management Policy ................................................................ 109

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3 City of Roseville
Investment Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................... 4 II.  SCOPE .................................................................................................................................. 4 III.  PRUDENCE........................................................................................................................... 4 IV.  OBJECTIVES ......................................................................................................................... 5 V.  DELEGATION OF AUTHORITY .............................................................................................. 5 VI.  ETHICS AND CONFLICT OF INTEREST .................................................................................. 6 VII.  AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS ..................................................... 6 VIII.  PERMITTED INVESTMENT INSTRUCTIONS .......................................................................... 6 IX.  REVIEW OF INVESTMENT PORTFOLIO .............................................................................. 12 X.  INVESTMENT POOLS ......................................................................................................... 13 XI.  COLLATERALIZATION ......................................................................................................... 13 XII.  SAFEKEEPING AND CUSTODY ............................................................................................ 13 XIII.  DIVERSIFICATION .............................................................................................................. 13 XIV.  MAXIMUM MATURITY ...................................................................................................... 14 XV.  INTERNAL CONTROLS ........................................................................................................ 14 XVI.  PERFORMANCE BENCHMARK ........................................................................................... 14 XVII.  REPORTING REQUIREMENTS ............................................................................................ 14 XVIII.  INVESTMENT POLICY ADOPTION ...................................................................................... 15 XIX.  GLOSSARY ......................................................................................................................... 15

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4 I.  INTRODUCTION

The purpose of this document is to identify various policies and procedures that enhance opportunities for a prudent and systematic investment policy and to organize and formalize investment‐related activities.

The investment policies and practices of the City of Roseville (City) are based on state law and prudent money management. All funds will be invested in accordance with this investment policy and Article 2 of Chapter 4 of the California Government Code. This policy is in compliance with the provisions of the California Government Code, Sections 53600 through 53659, and the authority governing investments for municipal governments.

II.  SCOPE

The
investment policy applies to all financial assets of the City as accounted for in the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this document focus on the City’s pooled funds, but will also apply to all other funds under the City’s Assistant City Manager/Chief Financial Officer’s span of control unless specifically exempted by statute or ordinance.

Proceeds of debt issuance shall be invested in accordance with the permitted investment provisions of their specific bond indentures. If, in the opinion of the City’s Assistant City Manager/Chief Financial Officer, matching the segregated investment portfolio of the bond reserve fund with the maturity schedule of an individual bond issue is prudent given current economic analysis, the investment policy authorizes beyond the five‐year maturity limitation as outlined in this document. The intent to invest in securities with longer maturities shall be disclosed in the permitted investment language authorized by the City Council in an indenture of trust.

This policy does not cover funds held by the California Public Employees Retirement System, nor funds of the City’s deferred compensation program, Other Post Employment Benefit Trust or Pension Trust.

III.  PRUDENCE

The standard of care to be used by investment officials shall be the "prudent investor"
standard and shall be applied in the context of managing an overall portfolio. The “prudent investor” standard states that:

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5 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.

Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

IV.  OBJECTIVES

The primary objectives, in priority order, of the investment activities of the City shall be:

A.  Safety

Safety of principal is the foremost objective of the investment program.  City investments shall be undertaken in a manner that seeks to ensure preservation of Capital in the portfolio. To further achieve the safety objective, the amount invested in all investment categories is limited to a percentage of the portfolio as defined in the section “VIII.   PERMITTED INVESTMENT INSTRUMENTS”.

B.  Liquidity

The investment portfolio of the City will remain sufficiently liquid to enable the City to meet its cash flow requirements.

C.  Return on Investment

The investment portfolio of the City shall be designed with the objective of attaining a market rate of return on its investments consistent with the constraints imposed by its safety objective and cash flow considerations.

V.   DELEGATION OF AUTHORITY

The City Council hereby delegates management responsibly of the investment program to the Assistant City Manager/Chief Financial Officer. The Assistant City Manager/Chief
Financial Officer shall be responsible for all transactions undertaken and shall establish

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6 a system of controls to regulate the activities of subordinate officials. The Assistant City Manager/Chief Financial Officer may delegate investment decision making and execution to the Finance Director in absence of the Assistant City Manager/Chief Financial Officer. No person may engage in an investment transaction except as provided under the limits of this policy unless specifically exempted by statute or ordinance.

VI.  ETHICS AND CONFLICT OF INTEREST

Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.

VII.  AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

The Assistant City Manager/Chief Financial Officer and/or his/her designee will maintain a list of approved financial institutions authorized to provide investment services to the City in the State of California. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3‐1. A determination should be made to confirm that all approved broker/dealer firms, and individuals covering the public agency, are reputable and trustworthy. In addition, the broker/dealer firms should have the ability to meet all of their financial obligations in dealing with the Public Agency.  The firms, and individuals covering the agency, should be knowledgeable and experienced in Public Agency investing and the investment products involved. No public deposit shall be made except in a qualified public depository as established by the established state laws. All financial institutions and broker/dealers who desire to conduct investment transactions with the public agency must supply the Assistant City Manager/Chief Financial Officer with a completed broker/dealer questionnaire and certification of having read the City’s investment policy. In addition, broker/dealers must certify annually of having read the City’s investment policy.

VIII.  PERMITTED INVESTMENT INSTRUCTIONS

The City shall limit investments in any one non‐government issuer, except investment pools, to no more than 5% regardless of security type.

A.  U.S. Treasury obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. Up to 100% of the City’s investment portfolio may be invested
in government obligations.

B.  Federal agency or United States government‐sponsored enterprise obligations, participations, or other instruments, including those issued by or fully

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7 guaranteed as to principal and interest by federal agencies or United States government‐sponsored enterprises. This shall include any mortgage pass through security issued and guaranteed by a Federal Agency with a maximum final maturity of five years. Purchase of Federal Agency issued mortgage‐backed securities authorized by this subdivision may not exceed 20% of the City's surplus money; all other investments in Federal Agency securities are unrestricted.

C.  Obligations of the State of California or any local agency within the state, including bonds payable solely out of revenues from a revenue producing property owned, controlled or operated by the state
or any local agency or by a
department, board, agency or authority of the state or any local agency, provided that the obligations are rated in one of the two highest categories by a nationally recognized statistical‐rating organization (NRSRO). Up to 100% of the City’s investment portfolio may be invested in California municipal obligations.

D.  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 these states.

E.  Repurchase Agreements used solely as short‐term investments not to exceed 30 days. Up to 100% of the City’s investment portfolio may be invested in repurchase agreements.

The following collateral restrictions will be observed:

1.  Only U.S. Treasury securities or Federal Agency securities, as described in
section VIII. PERMITTED INVESTMENT INSTRUMENTS, paragraph (A) and (B) will be acceptable collateral. All securities underlying Repurchase Agreements must be delivered to the City’s custodian bank by book entry, physical delivery, or by a third party custodial agreement. The total of all collateral for each Repurchase Agreement must equal or exceed, on the basis of market value, 102% of the funds borrowed against those securities. For any Repurchase Agreement with a term of more than one day, the value of the underlying securities must be reviewed on a weekly basis and the value of the underlying securities brought back up to 102% no later than the next business day.

2.  Market value must be calculated each time there is a substitution of collateral.

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8 3.  The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to Repurchase Agreement.

4.  The City may enter into Repurchase Agreements only with primary dealers of the Federal Reserve Bank of New York.

5.  The City will have
specific written agreements with each firm with which
it enters into Repurchase Agreements.

6.  Reverse repurchase agreements will not be allowed.

F.  Banker’s Acceptances, otherwise known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank.

Purchases of Banker's Acceptances may not
exceed 180 days maturity or 40% of
the City’s investment portfolio.

G.  Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all of the following conditions in section “VIII.

PERMITTED INVESTMENT INSTRUMENTS”, paragraph (G1) or (G2).

1.  The entity meets the following criteria:

a.  Is organized and operating in the United States as a general corporation.

b.  Has total assets in excess of five hundred million dollars ($500,000,000).

c.  Has debt other than commercial paper, if any, that is rated “A” or higher by a NRSRO.

2.  The entity meets the following criteria:

a.  Is organized within the United States as a special purpose corporation, trust, or limited liability company.

b.  Has program wide credit enhancements including, but not limited to, over collateralizations, letters of credit, or surety bond.

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9 c.  Has commercial paper that is rated “A‐1” or higher, or the equivalent, by a NRSRO.

Purchases of eligible commercial paper may not exceed 270 days maturity nor represent more than 10% of the outstanding paper of an issuing corporation.

Purchases of commercial paper may not exceed 40% of
the City’s investment
portfolio.

H.  Medium‐term corporate notes issued by corporations organized and operating within the United States or by depository institutions licensed by the U.S. or any state and operating within the U.S. Medium‐term corporate notes shall be rated in a rating category "A" or its equivalent or better by a nationally recognized rating service.

Purchase of medium‐term corporate notes may not exceed 30% of the City’s investment portfolio.

I.  Federal Deposit Insurance Corporation (FDIC) insured or fully collateralized time certificates of deposit. Purchases of time certificates of deposit in combination with negotiable certificates of deposit may not exceed 30% of the City’s investment portfolio.

J.  Negotiable certificates of deposit or deposit notes issued by a nationally or state‐chartered bank, a state or federal savings and loan association, a state or federal credit union, or a federally‐licensed or state‐licensed branch of a foreign bank provided that the senior debt obligations of the issuing institution are rated "A" or better by an NRSRO.

The legislative body of a local agency and the treasurer or other official of the local agency having legal custody of the money are prohibited from investing local agency funds, or funds in the custody of the local agency, in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency or any person with investment decision making authority in the administrative office manager’s office, budget office, auditor‐controller’s office, or treasurer’s office of the local agency also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificates of deposits.

All certificates of deposit must be properly collateralized in accordance with Section 53652 of the California Government Code or fully insured by the Federal Deposit Insurance Corporation (FDIC).

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10 Purchase of time certificates of deposit in combination with negotiable certificates of deposit may not exceed 30% of the City’s investment portfolio.

K.  Investment in placement service assisted deposits, including certificates of deposit, is limited to 50% of funds that local agencies invest in depository institutions until January 1, 2031. On January 1, 2031, the limit will return to 30% of the amount local agencies invest in depository institutions. Placement service assisted deposits provide allocation to multiple financial institutions in order to maintain deposit insurance from the FDIC or the National Credit Union Association.

L.  State of California's Local Agency Investment Fund is an investment pool managed by the State Treasurer’s Office. The Local Agency Investment Fund (LAIF) portfolio should be reviewed periodically. Investment in LAIF may not exceed the legally authorized limits.

M.  Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a‐1, et seq.). To be eligible for investment pursuant to this subdivision these companies shall either: (1) have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations or (2) have an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds and with assets under management in excess of $500,000,000.

The purchase price of shares of beneficial interest purchased shall not include any commission that the companies may charge and shall not exceed 20% of the City’s investment portfolio. Further, no more than 10% of the City’s investment portfolio may be invested in shares of beneficial interest of any one money market fund.

N.  Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California that invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the Government Code of the State of California, as it may be amended. Up to 100% of the City’s investment portfolio may be invested in this investment type.

O.  Supranationals are United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the

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11 International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter‐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.

Purchases of supranationals shall not exceed 30% of the investment portfolio of the City. Supranationals are permitted by California Government Code § 53601 (q) effective January 1, 2015.

P.  A mortgage pass‐through security, collateralized mortgage obligation, mortgage‐backed or other pay‐through bond, equipment leased‐back certificate, consumer receivable passthrough certificate, or consumer receivable‐backed bond. Securities issued by private companies eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO and have a maximum remaining maturity of five years or less. Securities issued or guaranteed by the United States, a federal agency or United States government‐sponsored enterprise are not subject to the limitations placed on privately issued securities. No more than 20% of the City's surplus funds may be invested in this type of security.

Where this section specifies a percentage limitation for a particular category of investment, that percentage is applicable only on the date of purchase. Credit criteria listed in this section refers to the credit of the issuing organization at the time the security is purchased. If an investment falls below the minimum purchase rating, the Investment Review Committee will perform a timely review to sell or hold the investment.

Q.  Prohibited Investments

For purposes of this policy, a derivative is defined as any security where the value is linked to or derived from an underlying asset or benchmark. Any security type or structure not specifically approved by this policy is hereby specifically prohibited. The City will not use such derivatives as range notes, dual index notes, inverse floating rate notes, deleveraged notes, or notes linked to lagging indices or to long‐term indices, nor will the City invest in reverse repurchase agreements or interest‐only strips derived from a pool of mortgages. The City will not invest in securities that could result in zero or negative interest accrual if held to maturity, except, in the event of, and for the duration of, a period of negative market interest rates, securities issued by, or backed by, the U.S.

Government to preserve principal. This policy does not preclude the use of

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12 repurchase agreements and callable securities, as they do not fall within the definition of a derivative as described herein.

Summary of Maximum Percentage Limitations of Investments by Investment Type

Minimum
Credit
Quality at    Maximum     Maximum
Maximum    Time of     Percentage    Investment
Authorized Investment Type    Maturity    Purchase    Allowed    In One Issuer

U.S. Treasury Obligations    5 Years    None    None    None U.S. Agency Securities    5 Years    None    None    None State Obligations ‐ California and others   5 Years   None   None   None California Local Agency Bonds    5 Years    None    None    None Repurchase Agreements    30 days    None    None    None Bankers' Acceptances    180 days    None    40%    30%
Commercial Paper    270 days    A‐1    40%    10%
Medium‐Term Corporate Notes    5 Years    A    30%    10% Collateralized Time Deposits    5 Years    None    30%    None Negotiable Certificates of Deposit    5 Years    A    30%    None Placement Service Deposits   5 Years   None   50%   None Placement Service Certificates of Deposit   5 Years   None   50%   None Local Agency Investment Fund (LAIF)  N/A  None  None  LAIF limit Insured Saving Accounts    N/A    None    None    None
Money Market Mutual Funds    N/A    None    20%    10%
Shares in a California Common Law Trust    N/A    None    None    None Interest Rate Swaps     N/A    None    None    None
Supranational Obligations    5 Years    AA‐    30%    None Mortgage Pass‐Through Securities    5 Years    AA    20%    None

IX.  REVIEW OF INVESTMENT PORTFOLIO

The securities held by the City must be in compliance with Permitted Investments at the time of purchase. Because some securities may not comply subsequent to the date of purchase, the Assistant City Manager/Chief Financial Officer shall at least annually review the portfolio to identify
those securities that do not comply. The Assistant City Manager/Chief Financial Officer shall report major and critical incidences of noncompliance identified through the review of the portfolio.

The Investment Review Committee will meet at least quarterly to discuss the investments in the City’s portfolios.

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13 X.  INVESTMENT POOLS

A thorough investigation of any investment pool is required prior to investing and should be monitored on an ongoing basis. The following information should be obtained and analyzed.

A.  A description of eligible of investment securities.

B.  A written statement of investment policies and objectives.

C.

A description of interest calculations and their distribution, and the treatment of gains and losses.

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

E.  A description of who may invest in the program, how often, and what size of
deposits and withdraws are allowed.

XI.  COLLATERALIZATION

Collateral for Non‐negotiable Certificates of Deposit and Negotiable Certificates of Deposit must comply with California Government Code section 53652. In addition, if the Certificate of Deposit is not FDIC insured, collateral is required equal to 110% of principal.

XII.  SAFEKEEPING AND CUSTODY

The City shall take from such financial institution a receipt for securities so deposited. All security transactions, including collateral for repurchase agreements, entered into the City shall be conducted on a delivery‐versus‐payment (DVP) basis pursuant to the approved custodial safekeeping agreements. The authority of the legislative body to deposit for safekeeping may be delegated by the legislative body to the Assistant City Manager/Chief Financial Officer of the City; the Assistant City Manager/Chief Financial Officer shall not be responsible for securities delivered to and receipted for by a financial institution until they are withdrawn from the financial institution by the Assistant City Manager/Chief Financial Officer.

XIII.  DIVERSIFICATION

The City’s investment pool will be diversified to avoid incurring unreasonable and avoidable risks. The investments will be diversified by security type, maturities of those investments, and institutions in which those investments are made.

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14 XIV.  MAXIMUM MATURITY

Investment maturities shall be based on a review of cash flow forecasts. Maturities will be scheduled to permit the City to meet all projected obligations while minimizing interest rate risk and maximizing earnings. Unless specified below, the maximum maturity will be no more than five years from purchase settlement date to final maturity date.

City Council has granted permission to invest the following fund accounts where liquidity is not the primary investment objective, in Federal Treasury or Agency securities with maturities up to ten years. The specified fund accounts include:

•  The City’s Pooled Fund, limited to
25% of the total pool
•  Citizens’ Benefit Fund
•  North Central Wetlands Endowment
•  Aquatics Complex Maintenance
•  Woodcreek West Endowment

XV.  INTERNAL CONTROLS

The Assistant City Manager/Chief Financial Officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, fraud or misuse.  An analysis by an external independent accounting firm shall be conducted annually to review internal controls, account activity, and compliance with the investment policies.

XVI.  PERFORMANCE BENCHMARK

The investment portfolio will be designed to obtain a market rate of return during budgetary and economic cycles, taking into account the City’s investment risk constraints and cash flow needs. The Investment Review Committee has elected to use for its performance standard the Constant Maturity Treasury (CMT) Index.  For the Pooled Portfolio, the 12 month moving average yield on 3Yr CMT will be used and for Citizens’ Benefit Fund portfolio, the 12 month moving average yield on 5Yr CMT will be used. All other City portfolios will follow the 2Yr CMT.

XVII.  REPORTING REQUIREMENTS

The Assistant City Manager/Chief Financial Officer shall submit monthly investment reports to the City Manager and make these reports available to the City Council in the
Finance Department office. The reports shall include, at a minimum, the following information for each individual investment:

City of Roseville  Financial Policies – Effective July 1, 2025  Return to Table of Contents

15 •  Description of investment instrument
•  Issuer name
•  Yield on cost
•  Purchase date
•  Maturity date
•  Book value
•  Par value
•  Current market value
•  Transaction activity
•  Interest earnings summary

XVIII.  INVESTMENT POLICY ADOPTION

The City’s investment policy shall be adopted by resolution by the City Council. The policy shall be reviewed annually by the Assistant City Manager/Chief Financial Officer and/or his/her designee and any modifications made thereto must be approved by the City Council.

XIX.  GLOSSARY

Agencies ‐ Federal agency and instrumentality securities.

Asked ‐ The price at which securities are offered.

Bid ‐ The
price offered by a buyer of securities (when one sells securities, one asks for a bid). See “Offer”.

Benchmark ‐ A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of
the portfolio’s investments.

Broker‐Dealer – a person or a firm who can act as a broker or a dealer depending on the transaction. A broker brings buyers and sellers together for a commission. They do not take a position. A dealer acts as a principal in all transactions, buying and selling for his own account.

Certificate of Deposit (CD) – A time deposit with a specific maturity evidenced by a Certificate. Large‐denomination CDs are typically negotiable.

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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16 Custody – Safekeeping services offered by a bank, financial institution or trust company, referred to as the “custodian.” Service normally includes the holding and reporting of the customer’s securities, the collection and disbursement of income, securities settlement and market values.

Delivery Versus Payment –A type of securities transaction in which the purchaser pays
for the securities when they are delivered either to the purchaser or custodian. It ensures that securities are deposited in an eligible financial institution prior to the release of funds. Securities should be held by a third‐party custodian as evidenced by safekeeping receipts.

Diversification – Dividing investment funds among a variety of securities offering independent returns.

Federal Agency Obligation – A debt instrument issued by one of the federal agencies.

Federal agencies are considered second in credit quality and liquidity only to U.S.

Treasuries.

Investment Review Committee –The investment review committee consists of the City Manager,
Assistant City Manager/Chief Financial Officer and members of the Finance Department.

Liquidity – An investment that can be converted easily and rapidly into cash without a substantial loss of value.

Local Agency Investment Fund (LAIF) – The aggregate of all funds from political subdivisions that are placed in the custody
of the State Treasurer for investment and
reinvestment.

Market Value – The price at which a security is trading and could presumably be purchased or sold on a specific date.

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

Money Market
Fund – a type of safe investment comprising a variety of short‐term securities with high quality and high liquidity. The fund provides interest to shareholders and must maintain a stable net asset value (NAV) of $1 per share.

Offer ‐ The price asked by a seller of securities (when one buys securities, one asks for an offer). See “Asked” and “Bid”.

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17 Portfolio – Collection of securities held by an investor.

Principal – the original cost of a security. It represents the amount of capital or money that the investor pays for the investment.

Prudent Investor Standard – An investment standard that all investments should be made 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.

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

U.S. Treasury – Government
debt issued by the United States Department of the
Treasury through the Bureau of the Public Debt. Treasury securities are the debt financing instruments of the United States federal government, and they are often referred to simply as Treasuries. There are four types of marketable treasury securities:

Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities (TIPS). All of the marketable Treasury securities are very liquid and are heavily traded on the secondary market.

Yield ‐ The rate of annual income return on an investment, expressed as a percentage.

Yield‐To‐Call (YTC) ‐ The rate of return an investor
earns from a bond assuming the
bond is redeemed (called) prior to its nominal maturity date.

Yield‐To‐Maturity ‐ 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.

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18 City of Roseville
Debt Management Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 20 II.  SCOPE ................................................................................................................................ 20 III.  OBJECTIVES AND POLICY GOALS ....................................................................................... 20 IV.  DEBT ISSUANCE ................................................................................................................. 21 A.  Types of Bond Sales ............................................................................................. 21

1.  Competitive Sale ..................................................................................... 21

2.  Negotiated Sale ....................................................................................... 21

3.  Private Placement/Bank Direct Purchase (BDP) ..................................... 21 B.  Issuer Characteristics ........................................................................................... 22

1.  Market Familiarity .................................................................................. 22

2.  Credit Strength ........................................................................................ 22

3.  Policy Goals ............................................................................................. 22 C.  Financing Characteristics ..................................................................................... 22

1.  Type of Debt Instrument ........................................................................ 22

2.  Issue Size ................................................................................................. 22

3.  Market Conditions and Timing ............................................................... 23

4.  Story Bonds ............................................................................................. 23 V.  FINANCIAL SERVICE PROVIDERS ....................................................................................... 23 A.  Selection .............................................................................................................. 23 B.  Use of Independent Financial Advisors ............................................................... 24 C.  Communication/Solicitation ................................................................................ 24 VI.  DEBT MANAGEMENT PROCESS – TAX STATUS ................................................................. 24 A.  Tax‐Exempt .......................................................................................................... 24 B.  Taxable ................................................................................................................. 25 VII.  DEBT MANAGEMENT PROCESS – TYPE OF DEBT .............................................................. 25 A.  Fixed Rate Debt .................................................................................................... 25 B.  Variable Rate Debt ............................................................................................... 25 C.  Use of Alternative Debt Instruments ................................................................... 26

1.  Derivative Products ................................................................................. 26

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19 VIII.  DEBT MANAGEMENT PROCESS – DEBT CAPACITY............................................................ 26 IX.  DEBT MANAGEMENT PROCESS – SECURITY OF DEBT ...................................................... 27 A.  General Obligation (G.O.) Bonds ......................................................................... 27 B.  Revenue Bonds .................................................................................................... 27 C.  Certificates of Participation (COP) Bonds ............................................................ 27 D.  Housing Bonds ..................................................................................................... 27 E.  Community Facilities District (CFD) Bonds .......................................................... 27 F.  Special Assessment Bonds ................................................................................... 28 X.  DEBT MANAGEMENT PROCESS – PURPOSE OF FINANCING ............................................. 28 A.  New Money Financing ......................................................................................... 28 B.  Refunding Bonds .................................................................................................. 28 XI.  DEBT MANAGEMENT PROCESS ‐ CREDIT RATINGS ........................................................... 29 A.  Rating Agency Relationships ................................................................................ 29 B.  Use of Rating Agencies ........................................................................................ 29 XII.  DEBT MANAGEMENT PROCESS – CREDIT ENHANCEMENT .............................................. 30 A.  Bond Insurance .................................................................................................... 30

1.  Benefit Analysis ....................................................................................... 30

2.  Selection ................................................................................................. 30 B.  Bank Facilities (Letters of Credit) ......................................................................... 31 XIII.  DEBT MANAGEMENT PROCESS – STRUCTURAL FEATURES .............................................. 31 A.  Maturity ............................................................................................................... 31 B.  Debt Service Structure ......................................................................................... 31 C.  Lien Levels ............................................................................................................ 31 D.  Capitalized Interest .............................................................................................. 32 XIV.  INVESTMENT OF BOND PROCEEDS ................................................................................... 32 XV.  CONTINUING DISCLOSURE ................................................................................................ 32 XVI.  ARBITRAGE REBATE .......................................................................................................... 32 XVII.  INTERNAL CONTROLS AND POST ISSUANCE COMPLIANCE .............................................. 33

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20 I.  INTRODUCTION

The Finance Department of the City of Roseville (the “City”) has developed this Debt Management Policy (the “Debt Policy”) to provide guidelines for the issuance of bonds and other forms of indebtedness to finance necessary land acquisitions, capital construction, equipment, and other items for the City.

While the
issuance of debt is frequently an appropriate method of financing capital projects and major equipment acquisitions, such issuance must be carefully monitored to preserve the City’s credit strength and to provide the necessary flexibility to fund future capital needs.

II.  SCOPE

This Debt Policy shall govern, except as otherwise covered by the law, City Charter and City Code, the issuance and management of all debt and lease financings funded in the capital markets. While adherence to the Debt Policy is desired, the City recognizes that changes in the capital markets as well as unforeseen circumstances, may from time to time produce situations that are not covered by the Debt Policy and may require modifications or exceptions to achieve City goals.

The City’s Debt Policy shall be reviewed, and updated if necessary, on an annual basis.

The Assistant City Manager/Chief Financial Officer (CFO), with the assistance of the General Accounting staff, shall
have the responsibility and authority for structuring,
implementing and managing the City’s debt and financing program, in accordance with City Council authorizations.

III.  OBJECTIVES AND POLICY GOALS

The City has earned some of the highest credit ratings in the nation and as a result receives some of the lowest possible
interest rates on its debt. These low interest rates
result in a lower overall cost of capital to the City. This Debt Policy will assist the City in determining appropriate uses of debt financing, establish certain debt management goals and assist the City in maintaining its high credit ratings, while assuming a prudent level of financial risk and preserving the City’s flexibility to finance future capital programs and requirements. Additionally, this Debt Policy is intended to set forth criteria for selecting firms to provide certain financial, legal, and other related services that will ensure that a fair and open selection process is used which provides opportunities for all qualified firms, including minority and women owned businesses.

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21 IV.  DEBT ISSUANCE

There are three general methods of issuing debt obligations, a competitive sale, negotiated sale and private placement.

A.  Types of Bond Sales

1.  Competitive Sale

In a competitive sale, security dealers submit bids either in a sealed bid or electronically secure process and the security dealer
with the lowest True
Interest Cost (TIC) and in compliance with the bid parameters is awarded the bonds.

2.  Negotiated Sale

In a negotiated sale, an underwriter or underwriter syndicate is selected through a Request for Qualifications (RFQ) process or a Request for Proposal (RFP) process. The interest rate and underwriter’s fee are negotiated prior to the sale, based on market conditions.

3.  Private Placement/Bank Direct Purchase (BDP)

A private placement or bank direct purchase is a sale that is structured specifically for one purchaser, such as a mutual fund or a bank. BDPs are usually quicker and less expensive for municipalities than competitive or negotiated bond sales because they impose fewer requirements on the issuer. The interest rate may be a fixed or variable rate, as agreed between the issuer and purchaser. The term of the bonds may range from under 10 years to 15 years or not much longer, as agreed between the issuer and purchaser. The bonds may or may not be tax‐exempt bonds for federal income tax purposes. If the CFO, or his/her designee, determines that it is in the best interest of the City from a cost or administrative standpoint, the Finance Department may negotiate financing terms with banks and financial institutions for specific borrowings.

It shall be the policy of the City to ensure the lowest risk and lowest overall interest rate to the City when issuing debt either through a competitive sale, negotiated sale or private placement, where appropriate. The City shall use the following criteria to determine whether a competitive or negotiated sale should be used.

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22 B.  Issuer Characteristics

1.  Market Familiarity

A frequent issuer of a well‐recognized credit such as general obligation bonds can generally sell these bonds through a competitive sale since investors and underwriters are familiar with the quality of the credit. A negotiated sale may be appropriate if extensive pre‐marketing to
investors is desired or required.

2.  Credit Strength

The higher the credit quality of the bonds being issued, the more likely the bonds can be sold using a competitive sale due to the high demand for high quality municipal bonds. High quality credits fare well in competitive sales.

3.  Policy Goals

A competitive sale does not provide the City with the flexibility of choosing the underwriter or underwriter syndicate. If the CFO concludes that determining the composition of the underwriter syndicate to achieve certain policy objectives is important, then a negotiated sale will be required. However, if the CFO selects the negotiated sale solely for policy reasons then the specific rationale and criteria for selection should clearly be specified.

C.  Financing Characteristics

1.  Type of Debt Instrument

The market favors familiar debt instruments such as general obligation bonds backed by the full faith and credit of the City.

New credit types
may require an education process that is more conducive to a negotiated sale until the market becomes comfortable with the credit.

2.  Issue Size

The size of the bond sale will influence both investor interest in the bonds and the market’s ability to absorb the bonds. In general if the bond sale is too small or too large, a negotiated sale may be necessary. A small

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23 sale may require greater marketing to garner investor interest while a large sale may be difficult for the market to absorb without the presale activity available in the negotiated sale process.

3.  Market Conditions and Timing

During periods of stable interest rates, market timing is not as critical.

However, during periods of volatile interest rates, the timing of the sale becomes more critical. Bond refundings are also often very interest rate sensitive in terms of the potential level of savings or the general feasibility of the refunding. The negotiated sale provides more flexibility in terms of the structure of the bond sale as well as the timing of the bond sale and may be more appropriate when issuing refunding bonds and when interest rates are volatile.

4.  Story Bonds

Bonds that require a detailed explanation due to the complexity of the credit or the repayment of the bonds are often
referred to as “Story
Bonds”. Due to their complexity and the additional explanation these bonds require, an extensive pre‐marketing campaign is necessary. Story Bonds often require a negotiated sale composed of an underwriting syndicate that is qualified to market the bonds in order to obtain the lowest financing cost for the City.

V.  FINANCIAL SERVICE PROVIDERS

A.  Selection

In connection with debt financings, financial advisors, underwriters, and other service providers will be selected from a Qualified Vendors List (QVL) developed through a periodic Request for Qualifications (RFQ) process or, for individual financings, through a Request for Proposals (RFP) process, whichever method is deemed most appropriate given the specifics of the financing. At the discretion of the CFO, contracts may be awarded on a sole source basis if it is clear that an RFQ/RFP process is not feasible or not in the best interest of the City.

For competitive sales,
any security dealer meeting the qualification criteria
outlined in the competitive bid notice may bid in the competitive sale. For negotiated sales, only those underwriters qualified under the RFQ/RFP process may be selected. Underwriters or underwriter syndicates will be selected by the CFO. The allocation of bonds among syndicate members will be at the sole discretion of the CFO with the approval of the City Manager or his/her designee.

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24 B.  Use of Independent Financial Advisors

The City will hire financial advisors who are independent. In the event the best available financial advisor is an investment banking firm, the firm will under no circumstances be permitted to participate as the lead underwriter or as a member of an underwriter syndicate that is bidding on the bonds for which the firm is acting as a financial advisor. In addition, if the firm has any profit sharing or other type of agreement with any member of the underwriting syndicate for the transaction in question, they will not be allowed to act as the financial advisor. In general, no agreement will be permitted that would compromise the firm’s ability to provide independent advice or that could be reasonably perceived by the City as a conflict of interest. Advisors must alert the CFO, in writing, of any conflict, potential conflict, or potentially perceived conflict prior to entering into an agreement with the City, or if occurring after entering into an agreement with the City, as soon as the conflict, potential conflict, or potentially perceived conflict arises.

C.  Communication/Solicitation

All financial consultants, including all investment banking firms, financial advisors, bond counsel, and other consultants hired in connection with any bond transaction will direct all communications, solicitations and questions to the CFO or his/her designee. Underwriters are reminded that under Rule G‐37 of the Municipal Securities Rulemaking Board (MSRB) that a firm may be banned from providing underwriting services to the City for two years for making any political contributions to elected City officials.

VI.  DEBT MANAGEMENT PROCESS – TAX STATUS

Prior to the issuance of any bonds, the Finance Department, in conjunction with bond counsel and the City Attorney’s Office will evaluate the tax status of any bond sales.

A.  Tax‐Exempt

Interest on tax‐exempt bonds is excluded from the gross income of its owners for federal income tax purposes and from California income taxes and as a result tax‐exempt bonds can be sold at a lower true interest cost than taxable bonds.

The City, along with bond counsel, will evaluate all projects to be funded to assess their eligibility to be funded by tax‐exempt bonds. The City will make every effort to ensure that all tax regulations are complied with to ensure the bonds maintain their tax‐exempt status.

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25 B.  Taxable

Certain municipal bonds are sold as taxable bonds because they are issued for purposes that the federal government deems do not provide a significant benefit to the public at large or involve “private activity”. In addition, certain tax laws such as the alternative minimum tax (AMT) reduced the tax exemption applicable to certain types of bonds and to certain taxpayers. Taxable bonds will be used whenever a particular project has the potential for private activity or other uses that may call into question the eligibility to use tax‐exempt financing.

VII.  DEBT MANAGEMENT PROCESS – TYPE OF DEBT

A.  Fixed Rate Debt

Longer term debt usually consists of fixed interest rates over the term of the bonds and should be used to finance essential capital facilities, projects and certain equipment where it is appropriate to spread the cost of the project over more than one budget year and generally for a period not to exceed the useful life of the project being financed. In so doing, the City recognizes that future taxpayers who will benefit from the project will pay a share of its cost. Fixed rate debt provides the benefit of fixed payments during the life of the bonds and budget certainties for long‐term capital planning. However, fixed rate debt is typically longer term and carries higher interest payments (assuming an upward sloping yield curve) than variable rate debt but is not subject to changes in interest rates. Fixed rate debt is the most common type of debt issued by the City.

B.  Variable Rate Debt

The municipal bond market has developed several vehicles by which municipalities can borrow at short‐term, variable interest rates. Variable Rate Demand Notes may be issued with interest rates that “reset” daily, weekly, monthly or semiannually at the option of the City. Commercial paper is issued with a maturity of up to 270 days at the City’s option. As the commercial paper matures, it is resold by a commercial paper dealer for another period up to 270 days.

These products are structured as a rolling series of short‐term investments and
therefore are priced at the short‐end of the yield curve at lower interest rates than long‐term fixed rate bonds (assuming an upward sloping yield curve). By

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26 accepting the risks inherent in variable interest rates, the City can take advantage of the lowest rates available in the current market.

Factors that will be considered in the use of variable rate debt are the availability and size of fund balances to cover variable rate risk, and the budget flexibility of
the program being financed. Programs with large complex capital programs may use short‐term financing to fund uncertain construction cash flow requirements.

The short‐term debt can be refinanced as fixed‐rate, long term debt once the projects are complete. A project that must be carried in anticipation of grant funding may also be a candidate for the use of variable rate financing. Examples are the Electric, Water, and Wastewater enterprise funds.

C.  Use of Alternative Debt Instruments

1.  Derivative Products

The use of certain derivative products, such as swaps, swaptions and the sale of call options, allow the
City to realize lower all‐in costs on a new
debt issuance or to receive an upfront payment. One type of swap that may be used would allow the City to issue variable rate debt in exchange for fixed payments that are typically lower than fixed rate debt. However, such products have unique risks that the City and its financial advisors will evaluate as per the City’s Swap Policy. The current Swap Policy is included in Appendix A.

VIII.  DEBT MANAGEMENT PROCESS – DEBT CAPACITY

The determination of how much indebtedness the City can afford begins by assessing the sufficiency of future revenues. The amount of debt issued is based on the requirements of the approved 5‐year CIP, subject to the condition that sufficient revenues are projected to be available. Factors such as debt service coverage requirements outlined in the bond indentures, the impact on the residents (tax rates), and any impact on the bond ratings will be carefully considered. Different factors are considered for each type of credit. For example, Revenue or Certificates of Participation bonds for electric, water and wastewater bonds will consider the impact on customer utility bills. In the case of general obligation debt, State Statutes and the Constitution limit the amount of debt that a municipality can have outstanding.

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27 IX.  DEBT MANAGEMENT PROCESS – SECURITY OF DEBT

A.  General Obligation (G.O.) Bonds

G.O. bonds are backed by the full‐faith and credit of the City and are secured by secondary property taxes.

B.  Revenue Bonds

Revenue bonds are supported solely from fees generated from specific Enterprise Funds. Accordingly, in order to preserve debt capacity and budget flexibility, the City will issue revenue bonds when an identifiable revenue stream can be dedicated to support the payment of debt service. The final maturity of revenue obligations will be determined by the expected life of the project to be financed and the revenues available to repay the debt. The City’s various Enterprise Funds – Electric, Water, and Wastewater issue bonds backed by revenues of the enterprise. Revenue bonds are generally issued through the Roseville Finance Authority.

C.  Certificates of Participation (COP) Bonds

COP bonds are an instrument evidencing a pro rata share in a specific pledged revenue stream, usually lease payments by the issuer that are typically subject to annual appropriation. The certificate generally entitles the holder to receive a share, or participation, in the payments from a particular project. The payments are passed through the lessor to the certificate holders. The lessor typically assigns the lease and the payments to a trustee, which then distributes the payments to the certificate holders.

D.  Housing Bonds

Tax‐exempt housing bonds are an important source of capital, providing loans for single‐family homeownership and rental housing for very‐low, low and moderate‐income individuals and families. The relatively low tax‐exempt interest rates, combined with federal, state, and local housing assistance programs, provide the necessary subsidy to create a supply of much needed, below market interest‐rate loans.

E.  Community Facilities District (CFD) Bonds

CFD bonds are issued and backed entirely by a Community Facilities District established under State Statutes for the purpose of managing and financing

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28 public improvements benefiting the property within the CFD. Any CFDs established by the City are reviewed by the Finance Department, and the Finance Department will supervise the issuance of the debt on behalf of the CFD with the CFD paying all costs of issuance including administrative support. The creation of a CFD must be approved by City Council and follow a detailed legal process. Please refer to the City’s Goals and Policies Concerning Use of Mello‐ Roos Community Facilities Act of 1982, available on the City’s website, concerning CFD bonds.

F.  Special Assessment Bonds

Special assessment bonds are a special type of municipal bond used to fund development projects that benefit a discrete group of taxpayers within a special assessment district. Principal and interest owed on the bonds is paid from assessments on the property benefiting from the particular bond‐funded project.

The creation of an Assessment District must be approved by City Council and follow a detailed legal process.

X.  DEBT MANAGEMENT PROCESS – PURPOSE OF FINANCING

Generally, financings may be undertaken to fund new projects “new money financing” or to refund existing bonds.

A.  New Money Financing

New money issues are those financings that generate funding for capital projects. These funds will be used for necessary land acquisitions, capital construction, equipment, and other items for the City. New money bond proceeds are generally not used to fund operational activities. The City also may use its commercial paper programs to provide interim new money funding. The commercial paper notes are retired upon receipt of bond proceeds from a long‐ term fixed rate financing.

B.  Refunding Bonds

A periodic review of the City’s outstanding debt will be undertaken by the Finance Department to determine refunding opportunities.

Refunding bonds are issued to retire all or a portion of an outstanding bond
issue. Most typically this is done to refinance at a lower interest rate to reduce overall debt service. Alternatively, some refundings are undertaken for reasons other than to achieve cost savings, such as to restructure debt service payments,

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29 to change the type of debt instruments being used, or to eliminate undesirable covenants.

In any event, a present value savings analysis must be prepared that identifies the economic effects of any refunding being considered by the City. The savings from any particular refunding candidate shall generally be at least 5% of the
refunded par amount, net of all transaction expenses. This 5% savings target may be waived by the CFO, or his/her designee, upon a finding that such a refunding is in the City's best overall financial interest and shall not be applicable for refunding transactions that are not solely undertaken to achieve cost savings.

XI.  DEBT MANAGEMENT PROCESS ‐ CREDIT RATINGS

The City seeks to obtain and maintain the highest possible credit ratings for all categories of short‐ and long‐term debt. The City will not issue bonds that do not carry investment grade ratings, except for CFD and Special Assessment bonds.

A.  Rating Agency Relationships

The CFO, or his/her designee, shall be responsible for maintaining relationships with rating agencies that assign ratings to the City's various debt obligations. This responsibility shall include coordinating meetings and presentations in conjunction with the issuance of debt. Full disclosure of operations and open lines of communication shall be maintained with the rating agencies used by the City.

B.  Use of Rating Agencies

The City may obtain a rating from at least one nationally recognized rating agency on all new bond issues being sold in the public market. The CFO, or his/her designee, shall determine whether or not any additional ratings will be requested on a particular financing. The CFO, or his/her designee, shall determine which major rating agencies will be asked to provide a rating.

Exceptions to this requirement, such as when using a private placement, are permissible, if warranted by the circumstances and approved by the CFO, or his/her designee.

The City and/or the financing team shall notify the rating agencies by telephone or through written correspondence when the City anticipates issuing bonds.

Bond documentation shall be sent several weeks prior to the bond sale to the selected rating agencies in order
to provide the rating agencies sufficient time to
perform their review. A personal meeting with the selected rating agencies may be scheduled if, in the opinion of the CFO, or his/her designee, such a meeting is

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30 in the best interest of the City in order to obtain the highest possible credit rating.

The City shall make every reasonable effort to maintain or improve its high quality credit ratings.

The City may request an underlying rating and an insured rating on all bond issues utilizing bond insurance.

The City shall submit its audited annual comprehensive financial report to all rating agencies utilized by the City.

XII.  DEBT MANAGEMENT PROCESS – CREDIT ENHANCEMENT

Although the City has high credit ratings, credit enhancement through the use of bond insurance or a bank facility such as a letter of credit to strengthen the underlying credit rating of certain bonds may be financially beneficial. Bonds insured by insurers rated AAA will also receive the AAA rating and thus be able to be sold at a lower interest rate.

Bank facilities, such as letters of credit from highly rated banks, can also be used to provide credit enhancement.

A.  Bond Insurance

Bond insurance will be considered when it provides an economic benefit to a particular bond maturity or entire issue. Bond insurance provides improved credit quality for the bonds as a result of the insurance provider’s guarantee of the payment of principal and interest on the bonds. Because of the decreased risk of non‐payment, investors are willing to purchase insured bonds at lower yields than uninsured bonds, thus providing the issuer with interest cost savings.

1.  Benefit Analysis

The decision to use bond insurance is an economic decision. A benefit analysis
compares the present value of the interest savings to the cost of the insurance premium. Insurance will be purchased when the premium cost is less than the present value of the projected interest savings. A copy of the benefit analysis shall be maintained in the files of the Finance Department.

2.  Selection

The City or its financial advisor will undertake a competitive selection process when soliciting pricing for bond insurance, or in the case of a

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31 competitive sale, facilitating the prequalification of bonds by insurance providers. The City recognizes that all providers may not be interested in providing bids to the City or pre‐qualifying the issue. The winning security dealer in a competitive sale will determine whether it will purchase insurance for the issue. For a negotiated sale, the CFO shall have the authority to purchase bond insurance when deemed advantageous and the terms and conditions governing the guarantee are satisfactory.

B.  Bank Facilities (Letters of Credit)

When used for credit enhancement, letters of credit (“LOC”) represent a bank’s promise to pay principal and interest when due for a defined period of time, subject to certain conditions. In the case of a direct‐pay LOC, the trustee will draw upon the LOC to make debt service payments and the City will reimburse the LOC provider the amount drawn on the LOC by the trustee. A stand‐by LOC is used to ensure the availability of funds to pay principal and interest of an obligation only if the funds in the debt service account held by the trustee are insufficient to make the debt service payment on the bonds.

XIII.  DEBT MANAGEMENT PROCESS – STRUCTURAL FEATURES

A.  Maturity

The final maturity of a bond sale shall be equal to or less than the remaining useful life of the assets being financed, and the average life of the financing shall not exceed 120% of the average useful life of the assets being financed.

B.  Debt Service Structure

The Finance Department will carefully consider the debt service structure for each bond issue. Factors such as the flow of revenues available for a particular credit, the need to fill in gaps created by refunding specific principal maturities or to structure savings from a refunding in a particular year will be considered.

Accelerated repayment may be considered within the bonding capacity constraints to provide capacity for future capital programs. Bonds will be amortized over a period of time not to exceed the useful life of the assets being financed.

C.  Lien Levels

Senior, Junior and Subordinated Junior Liens for each revenue source will be utilized in a manner that will maximize the most critical constraint ‐ typically

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32 either cost or capacity ‐ thus allowing for the most beneficial use of the revenue source securing the bond.

D.  Capitalized Interest

Subject to Federal and State law, interest may be capitalized from the date of issuance of the debt. Interest may also be capitalized for projects in which the revenue designated to pay debt service on the bonds will be collected at a future date, not to exceed six months from estimated completion of construction. Any use of capitalized interest will require a review by bond counsel and approval by the CFO.

XIV.  INVESTMENT OF BOND PROCEEDS

The City shall comply with all applicable Federal, State, and Indenture restrictions, if any, regarding the use and investment of bond proceeds. This includes compliance with any restrictions on the types of investment securities allowed, restrictions on the allowable yield of invested funds, as well as restrictions on the time period over which some bond proceeds may be invested. The CFO, or his/her designee, will direct the investment of bond proceeds in accordance with the permitted investments for each particular bond issue. Investments such as guaranteed investment contracts may be considered when their use is in the best interest of the City and will be selected on a competitive basis.

XV.  CONTINUING DISCLOSURE

The City will comply when applicable with Rule 15(c)2‐12 of the Securities and Exchange Commission by filing an annual report and annual financial information with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (EMMA) and filing material event notices within 10 days of occurrence of certain events as required by the Rule.

XVI.  ARBITRAGE REBATE

The City shall comply with all arbitrage rebate requirements as established by the Internal Revenue Service and the Finance Department shall establish a system of record keeping and reporting to meet the arbitrage rebate compliance requirements of the federal tax code. This effort shall include tracking project expenditures financed with bond proceeds, tracking investment earnings on bond proceeds, calculating rebate payments in compliance with tax law, and remitting any rebate earnings to the federal government in a timely manner in order to preserve the tax‐exempt status of the City's outstanding tax‐exempt debt issues. The CFO, or his/her designee, may enter into agreements with arbitrage service providers to assist the City with complying with arbitrage regulations.

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33 XVII.  INTERNAL CONTROLS AND POST ISSUANCE COMPLIANCE

The City shall comply with all applicable laws and regulations to ensure the tax‐exempt status of its bonds. The Finance Department shall maintain written procedures to document the processes used to monitor the appropriate use of bond proceeds and to ensure compliance with applicable laws and regulations, and shall specify the positions and individuals responsible for these processes.

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34 APPENDIX A

Swap Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 35 II.  APPROACH AND OBJECTIVES ............................................................................................ 35 III.  PERMITTED INSTRUMENTS ............................................................................................... 36 IV.  PROCEDURE FOR SUBMISSION AND EXECUTION ........................................................... 36 V.  SWAP ANALYSIS AND PARTICIPANT REQUIREMENTS ....................................................... 39 VI.  LEGAL AND CONTRACTUAL REQUIREMENTS .................................................................... 40 VII.  LIMITATIONS ON TERMINATION EXPOSURE .................................................................... 43 VIII.  ONGOING MANAGEMENT ................................................................................................ 45 IX.  ONGOING REPORTING REQUIREMENTS ........................................................................... 45

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35 I.  INTRODUCTION

The swap guidelines outlined herein are only intended to provide general procedural direction regarding the future use, procurement and execution of interest rate swaps and options. These guidelines are intended to relate to various interest rate hedging techniques, including the contractual exchange of different fixed and variable rate payment streams through interest rate swap agreements. The swap policies are not intended in any way to require the City to modify or terminate existing interest rate swaps. The City maintains the right to modify these guidelines and may make exceptions to any of them at any time in its sole discretion. Failure to comply in any manner with these swap guidelines shall not result in liability on the part of the City to any party.

II.  APPROACH AND OBJECTIVES

Interest rate swaps and options are appropriate interest rate management tools that can help the City meet important financial objectives. Properly used, these instruments can increase the City’s financial flexibility, provide opportunities for interest rate savings or enhanced investment yields, and help the City manage its balance sheet through better matching of assets and liabilities. Swaps should be integrated into the City’s overall debt and investment management guidelines and should not be used for speculation.

Swaps are appropriate to use when they achieve a specific objective consistent with the City’s overall financial strategies. Swaps may be used, for example, to lock‐in a current market fixed rate or create additional variable rate exposure. Swaps may be used to produce interest rate
savings, to alter the pattern of debt service payments, or for asset/liability matching purposes. Swaps may be used to cap, limit or hedge variable rate payments. Options granting the right to commence or cancel an underlying swap may be used to the extent the swap itself is consistent with these guidelines or the City determines there are other advantages to be derived in granting the option; however, the City must determine if the use of any such option is appropriate and warranted given the potential benefit, risks, and objectives of the City. The City’s staff, together with its Bond Counsel and its Financial Advisor, periodically shall review the City’s swap guidelines and recommend appropriate changes.

In connection with the use of any swaps, the City Council shall make a finding that, per Government Code Section 5922, the applicable swap is designed to reduce the amount or duration of the interest rate risk or result in a lower cost of borrowing when used in combination with the issuance or carrying of the Bonds or enhance the relationship between the risk and return with respect to the City’s investments or program of investment, as applicable.

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36 Rationales for Utilizing Interest Rate Swaps and Options

A.  Optimize capital structure; including schedule of debt service payments and/or fixed vs. variable rate allocations

B.  Achieve appropriate asset/liability match

C.  Reduce risk, including:

1.  Interest rate risk;

2.  Tax risk; or

3.  Liquidity renewal risk

D.  Provide greater financial flexibility

E.  Generate interest rate savings

F.  Enhance investment yields

G.  Manage exposure to changing markets in advance of anticipated bond issuances (through the use of anticipatory hedging instruments)

III.  PERMITTED INSTRUMENTS

The City may utilize the following financial products on a current or forward basis, after identifying the objective(s)
to be realized and assessing the attendant risks.

A.  Interest rate swaps, including fixed, floating and/or basis swaps; and

B.  Options, including swaptions, caps, floors, collars and/or cancellation or index‐ based features

IV.  PROCEDURE FOR SUBMISSION AND EXECUTION

Unsolicited proposals are to be mailed to the Chief Financial Officer and the Financial
Advisor for evaluation. Such unsolicited proposals need to be received four weeks prior to the next City Council meeting for consideration at such meeting. For proposals received within four weeks of the next City Council meeting, the City reserves the right to consider the proposal at the following month’s Council meeting.

Legal costs incurred in connection with an unsolicited proposal shall be paid by the firm submitting the proposal if for whatever reason the proposal does not close or should the City elect for any reason not to proceed. If the City elects to proceed with the

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37 proposed transaction and the proposed transaction closes, the City will absorb such legal costs through costs of issuance.

The City staff and the Financial Advisor shall review all unsolicited proposals prior to presentation to the City Council. The City shall only present proposals to the Council that the City, in its
sole discretion, believes should be considered further given, for example, the projected savings or other benefits and the ability to meet one or more of the objectives outlined herein. Only proposals that meet the savings guidelines (as described in the “Guidelines for Financing and Selection of the Financing Team”) or that the City staff find compelling for other reasons, shall be presented.

Procurement and Execution

The City will not have a fixed guideline with respect to swap procurement. The City will assess the benefits of competitively bidding financial products that are non‐proprietary or generally available in the marketplace. On
a product‐by‐product basis, the City will
have the authority to negotiate the procurement of financial instruments that have customized or specific attributes designed on the City’s behalf.

The use of financial derivative products will be recommended if they meet one of the benefits outlined herein or if they:

A.  Provide a specific benefit not otherwise available;

B.  Produce greater expected interest rate savings or incremental yield than cash market alternatives;

C.  Are not speculative or do not create unreasonable leverage or risk;

D.  Result in an improved capital structure or better asset/liability match; or

E.  Reasonably pass the risk evaluation required by these guidelines

Conformance with Dodd‐Frank

It is the intent of the City to conform this policy to the requirements relating to legislation and regulations for over‐the‐counter derivatives transactions under Title VII of the Wall Street Transparency and Accountability Act of 2010, as supplemented and
amended from time to time (herein collectively referred to as “Dodd‐Frank”). Pursuant to such intent, it is the policy of the City that: (i) each swap advisor engaged or to be engaged by the City will function as the designated qualified investment representative of the City, sometimes referred to as the “Designated QIR”; (ii) each swap advisor agrees to meet and meets the requirements specified in Commodity Futures Trading

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38 Commission Regulation 23.450(b)(1) or any successor regulation thereto (herein referred to as the “Representative Regulation”); (iii) each swap advisor provide a written certification to the City to the effect that such swap advisor agrees to meet and meets the requirements specified in the Representative Regulation; (iv) the City monitor the performance of each swap advisor consistent with the requirements specified in the Representative Regulation; (v) the City exercise independent judgment in consultation with its swap advisor in evaluating all recommendations, if any, presented by any counterparty with respect to transactions authorized pursuant to this Debt Policy; and (vi) the City rely on the advice of its swap advisor with respect to transactions authorized pursuant to this Debt Policy and not rely on recommendations, if any, presented by any counterparty with respect to transactions authorized pursuant to this Debt Policy.

Counter‐Party Risk Assessment

The City will only do business with highly rated
counter parties or counter parties whose
obligations are supported by highly rated parties. The City will structure swap agreements to protect itself from credit deterioration of counter parties, including the use of credit support annexes or other forms of credit enhancement to secure counter party performance. Such protection shall include any terms and conditions which in the City’s sole discretion are necessary or appropriate or in the City’s best interest.

The City shall enter into interest rate swap transactions only with qualified swap counter parties. Qualified swap counter parties are investment banks as will be identified by the Financial Advisor. Qualified
swap counter parties should be rated at least “Aa3” or “AA‐” by one of the nationally recognized rating agencies (i.e. Moody’s, Standard and Poor’s, and Fitch) and not rated lower than “A2” or “A” by any nationally recognized rating agency. In addition, the counter party must have a demonstrated record of successfully executing swap transactions as well as creating and implementing innovative ideas in the swap market. Each counter party shall have minimum capitalization of at least $150 million.

The City should not have an immutable credit standard. However, the City will attempt to do business with highly rated counter parties of “Aa3” or “AA‐” or better. For lower rated (below “Aa3” or “AA‐”) counter parties, the City should seek credit enhancement in the form of:

A.  Contingent credit support or enhancement; or

B.  Collateral consistent with the policies contained herein

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39 V.  SWAP ANALYSIS AND PARTICIPANT REQUIREMENTS

In connection with any swap, the City and its Financial Advisor shall review the proposed transaction and outline any considerations associated with the transaction to the City Council. Such a review should include the following:

A.  The identification of the proposed benefit and potential risks, which shall
include, but not necessarily be limited to, those risks outlined herein

B.  Independent analysis of potential savings from a proposed transaction

C.  Fixed versus variable rate and swap exposure before and after the proposed transaction

D.  Market Net Termination Exposure (as outlined herein) for all existing and proposed
transactions at the City

Swap Risks

A.  Counter party Risk – The risk of a payment default on a swap by an issuer’s counter party

B.  Termination Risk ‐ The risk that a swap has a negative value and the issuer owes a “breakage” fee if the contract has to be
liquidated

C.  Tax Risk – A mismatch between changes in the rate or price on an issuer’s underlying bonds and the swap caused by a reduction or elimination in the benefits of the tax exemption for municipal bonds, e.g. a tax cut, which results in an increase in the ratio of tax‐exempt to taxable yields

D.  Basis Risk – A mismatch between the rate on an issuer’s underlying bonds and the rate paid under the swap, e.g. a tax‐exempt variable rate issue which trades at 62% of LIBOR while the issuer only receives 60% of LIBOR under the swap

E.  Tax Exemption Risk – The risk that the transaction may make the issuer’s related bonds taxable

F.  Liquidity/Remarketing Risk – The risk that an issuer cannot secure a cost‐ effective renewal of a Letter or Line of Credit or suffers a failed auction or remarketing with respect to its
variable‐rate bonds

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40 Benefit Expectation

Financial transactions, using fixed rate swaps or other derivative products, should generate 2% greater projected savings than the savings guidelines (as described in the “Guidelines for Financing and Selection of the Financing Team”) then in effect for traditional bonds. This threshold will serve as a guideline and will not apply should the
transaction, in the City’s sole judgment, help to meet any of the objectives outlined herein. The higher savings target reflects the greater complexity and higher risk of derivative financial instruments. At a minimum, such financial transactions should provide a savings of no less than 5% over refunded par regardless of the spread between the financial transaction and a traditional bond refunding.

For example, assuming a refunding of $100 million of existing bonds, a traditional fixed rate advance refunding that does not use derivative products would have a present value savings threshold of $5 million, which is 5% of the refunded par. If the refunding structure utilizes a derivative product, the threshold would be $7 million in present value savings, 7% of the refunded par. Therefore, the transaction utilizing a swap or other derivative product would have to generate an additional $2 million to meet the target.

For variable
rate or other swap transactions that do not result in a fixed interest rate, the City will evaluate any additional value generated through the transaction in assessing the benefits of proceeding, including the ability to meet the objectives outlined herein. These benefits include, for example, reducing interest rate or tax risk, optimizing the capital structure or further reducing interest expense.

In determining any benefit in implementing a fixed‐to‐variable swap, the cost of remarketing, in addition to the cost of credit enhancement or liquidity fees must be added to the projected variable rate. Such a calculation should consider the trading performance of comparable bonds and any trading premium resulting from a specific form of credit enhancement or liquidity and/or any impact related to broader industry trends.

VI.  LEGAL AND CONTRACTUAL REQUIREMENTS

Unless otherwise approved by Council, the City will use standard ISDA swap documentation including the Schedule to the
Master Agreement and a Credit Support
Annex. The City may use additional documentation if the product is proprietary or the City deems in its sole discretion that such documentation is otherwise in its interest.

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41 Terms and Notional Amount of Swap Agreement

The City shall determine the appropriate term for an interest rate swap agreement on a case‐by‐case basis. In connection with the issuance or carrying of bonds, the term of the swap agreement between the City and a qualified swap counter party shall not extend
beyond the final maturity date of existing debt of the City on the related Project, or in the case of a refunding transaction, beyond the final maturity of the refunding bonds.

For purposes of calculating net exposure, credit shall be given to any fixed versus variable rate swaps that offset termination exposure for a specific Project or bond transaction. For variable rate transactions, credit may also be given for any assets that are used to hedge a transaction as long as in the City’s judgment such assets are reasonably expected to remain in place on a coterminous basis with the swap.

Terms and conditions of any swap shall be negotiated by the City in the best interests of the City subject to the provisions of the California Government Code and, unless otherwise waived or altered by the City, these guidelines. The swaps between the City and each counter party
shall include, as appropriate, payment, term, security, collateral, default, remedy, termination, and other terms, conditions and provisions as the City, in consultation with its Bond Counsel and Financial Advisor, deems necessary or desirable.

Subject to the provisions contained herein, the City swap documentation and terms should include the following:

A.  Downgrade
provisions triggering termination shall in no event be worse than those affecting the counter party

B.  Governing law for swaps will be New York law, but should reflect California authorization provisions

C.  The specified indebtedness related to credit events in any swap agreement should be narrowly drafted and refer only
to specific project debt

D.  Collateral thresholds should be set on a sliding scale reflective of credit ratings (see Collateral below)

E.  Eligible collateral as set forth in the Collateral section below.

F.  Termination value should be set by “market quotation” methodology, when the City deems appropriate

G.  The
City should only agree to an Additional Termination Event for the City to the extent that the ratings on the applicable the City bonds fall below a ratings

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42 trigger acceptable to the City and the counter party and no form of credit support or enhancement is in place

Termination Provision

All swap transactions shall contain provisions granting the City the right to optionally terminate a swap agreement at any time over the term of the agreement. Such a provision shall be required even if any termination is at market. In general, exercising the right to terminate an agreement should produce a benefit to the City, either through the receipt of a payment from a termination or, if the termination payment is made by the City, in conjunction with a conversion to a more beneficial (desirable) debt obligation of the City.

Collateral

As part of any swap agreement, the City shall require collateralization or other forms of credit enhancements to secure any or all swap payment obligations. As appropriate, the City, in consultation with its Bond Counsel and Financial Advisor, may require collateral
or other credit enhancement to be posted by each swap counter party under the following circumstances:

A.  Each counter party to the City may be required to post collateral if the credit rating of the counter party or parent falls below the “AAA” category. Additional collateral for further
decreases in credit ratings of each counter party shall be posted by each counter party in accordance with the provisions contained in the collateral support agreement to each counter party with the City the City.

Maximum un‐collateralized exposure for: (i) “AAA” rated counter parties is $40 million; (ii) “AA” rated counter parties is $10 million; and (iii) below “AA” category, uncollateralized exposure is zero

B.  Threshold amounts shall be determined by the City on a case‐by‐case basis. The City will determine the reasonable threshold limits for the initial deposit and for increments of collateral posting thereafter

C.  Collateral
shall be deposited with a third party trustee, or as mutually agreed upon between the City and the counter party

D.  A list of acceptable securities that may be posted as collateral and the valuation of such collateral will be determined and mutually agreed upon during negotiation of the swap
agreement with each swap counter party. A complete
list of acceptable securities and valuation percentages are included as Attachment A

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43 E.  The market value of the collateral shall be determined on at least a monthly basis, or more frequently if the City determines it is in the City’s best interest given the specific collateral security

F.  It shall be determined on a case‐by‐case basis whether other forms of credit enhancement are more beneficial to the City

VII.  LIMITATIONS ON TERMINATION EXPOSURE

In order to diversify the City’s counter party credit risk, and to limit the City’s credit exposure to any one counter party, limits will be established for each counter party based upon both the credit rating of
the counter party as well as the relative level of risk associated with each existing and projected swap transaction. The guidelines below provide general termination exposure guidelines with respect to whether the City should enter into an additional transaction with an existing counter party. The City Council may make exceptions to the guidelines at any time to the extent that the execution of a swap achieves one or many of the goals outlined in these guidelines or provides other benefits to the City.

Such guidelines will also not mandate or otherwise force automatic termination by the City or the counter party. Maximum Net Termination Exposure is not intended to impose retroactively any terms and conditions on existing transactions. Such provisions will only act as guidelines in making a determination as to whether or not a proposed transaction should be executed given certain levels of existing and projected net termination exposure to a specific counter party. Additionally, the guidelines below are not intended to require retroactively additional collateral posting for existing transactions. Collateral posting guidelines are described in the “Collateral” section above. The calculation of net termination exposure per counter party will take into consideration multiple transactions, some of which may offset the overall exposure to the City.

Maximum Net Termination Exposure will be based on the sum of (i) the market value of existing transactions as of the first day of the month prior to the execution of any new transaction plus (ii) the expected worse case termination value of the new transaction.

The maximum termination exposure will also be tied to the credit rating of a counter party and whether or not the counter party has posted collateral against this exposure.

Under this approach, the City will set limits on individual counter party exposure based on existing as well as new or
proposed transactions. For existing transactions, exposure will be based on the market value as of the last quarterly swap valuation report provided by the Financial Advisor. For a new or proposed transaction, the City will calculate the projected maximum exposure based on the estimated maximum exposure assuming two standard deviations. Standard deviation is a statistic obtained by squaring

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44 the average difference from the mean of a distribution of numbers. Two standard deviations capture 95% of the population of a distribution of numbers. For purposes of the calculation, two standard deviations shall be calculated as the annualized standard deviation of weekly swap rates over the preceding 52 weeks. The time period may vary according to market conditions which could range from flat to volatile.

The sum of the existing market value and the projected maximum exposure shall constitute the Maximum Net Termination Exposure. For purposes of this calculation, the City shall include all existing and projected transactions of an individual counter party
and all transactions will be analyzed in aggregate such that the maximum exposure will be additive and netted on a per project basis. The rationale behind aggregating and netting on a Project basis is that the exposure will vary for individual members depending on their participation in different projects.

For example, if the City has $13 million (i.e. the City would owe termination payment) of exposure to a counter party, the Maximum Net Termination Exposure under the definition above, is the projected maximum termination exposure less the outstanding exposure. If projected maximum termination exposure on the proposed transaction, assuming
two standard deviations, is $20 million, net termination exposure would be $7 million.

The exposure thresholds, which will be reviewed periodically to ensure that they remain appropriate, will also be tied to credit ratings of the counter parties and whether or not collateral has been posted. If collateral has been posted, the City cannot exceed $30.0
million of collateralized exposure. In addition, there would be a further limit on the amount of uncollateralized exposure, including any threshold amounts under the Credit Support Annex. For AAA‐rated counter parties, the City could have up to $40.0 million of uncollateralized exposure; for counter parties in the AA category, the City could have up to $10.0 million of uncollateralized exposure and for counter parties below the AA category, the City could have no uncollateralized exposure. If a counter party has more than one rating, the lowest rating will govern for purposes of the calculating the level of exposure. A summary table is provided below.

Credit Ratings
Maximum
Collateralized
Exposure
Maximum
Uncollateralized
Exposure
Maximum Total
Termination
Exposure
AAA  NA  $40 million  $40 million
AA Category  $30 million  $10 million  $40 million
Below AA  $30 million  None  $30 million

Assuming the same example as above, if the counter party is currently rated “Aa2” and “AA+,” the exposure thresholds would only take effect if Net Termination Exposure increased an additional $3 million (from the original $7 million above).

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45 If the exposure limit is exceeded by a counter party, the City shall conduct a review of the exposure limit per counter party. The City, in consultation with its Bond Counsel and Financial Advisor, shall explore remedial strategies to mitigate this exposure.

VIII.  ONGOING MANAGEMENT

The City will seek to
maximize the benefits and minimize the risks it carries by actively managing its swap program. This will entail frequent monitoring of market conditions, by both the Financial Advisor and swap counter party, for emergent opportunities and risks. Active management may require modifications of existing positions including, for example:

A.  Early
termination;
B.  Shortening or lengthening the term;
C.  Sale or purchase of options; or
D.  Use of basis swaps.

On an overall basis, the City’s swap program is not expected to be very large relative to all of its investment and debt activities. Swaps will be used in response to particular market conditions and needs of the City for which swaps are the best investment or debt‐management option.

IX.  ONGOING REPORTING REQUIREMENTS

A written report providing the status of all interest rate swap agreements entered into by the City will be provided to the City Council on an annual basis (or other basis, if so directed by Council) and shall include the following:

A.  A description of all outstanding interest rate swap agreements, including project and bonds series, type of swap, rates paid and received by the City, total notional amount, average life of each swap agreement, remaining term of each
swap agreement

B.  Highlights of all material changes to swap agreements or new swap agreements entered into by the City since the last report

C.  Termination exposure of each of the City’s interest rate swap agreements

D.  The credit rating of each swap counter party and credit enhancer insuring swap
payments, if any

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46 E.  If applicable, information concerning any default by a swap counter party to the City, including but not limited to the financial impact to the City, if any

F.  If applicable, information concerning any default by the City to a swap counter party

G.  A summary of swap agreements that were
terminated or that have expired

H.  For a swap transaction entered into to generate debt service savings, the City will calculate on an annual basis the actual debt service requirements versus the projected debt service on the swap transaction at the original time of execution.

Such a calculation shall include
a determination of the cumulative actual savings
(or, if applicable, additional payments made by the City) versus the projected savings at the time the swap was executed.

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47 Attachment A – Acceptable Collateral
______________________________________________________________________________ Security  Valuation Percentage
Cash  100%
Negotiable  debt  obligations  issued  by  the
U.S.  Treasury  Department  or  the
Government  National  Mortgage  Association
(“Ginnie  Mae”),  or  (y)  mortgage  backed
securities  issued  by  Ginnie  Mae  (but  with
respect to either (x) or (y) excluding interest
only  or  principal  only  stripped  securities,
securities  representing  residual  interests  in
mortgage  pools,  or  securities  that  are  not
listed  on  a  national  securities  exchange  or
regularly  quoted  in  a  national  quotation
service) and in each case having a remaining
maturity of:
(i) less than one year
(ii) one year or greater but less than 10 years
(iii) 10 years or greater

100%
98%
95%
Negotiable  debt  obligations  issued  by  the
Federal  Home  Loan  Mortgage  Corporation
(“Freddie  Mac”)  or  the  Federal  Home  Loan
Mortgage  Association  (“Fannie  Mae”)  or  (y)
mortgage backed securities issued by Freddie
Mac  or  Fannie  Mae  but  excluding  interest
only  or  principal  only  stripped  securities,
securities  representing  residual  interests  in
mortgage  pools,  or  securities  that  are  not
listed  on  a  national  securities  exchange  or
regularly  quoted  in  a  national  quotation
service

95%
Any other collateral acceptable to the City in
its sole discretion. The valuation percentage
shall be determined by the Valuation Agent
from  time  to  time  and  in  its  reasonable
discretion

The valuation percentage shall be determined
by the Valuation Agent from time to time and
in its reasonable discretion.

For example, if a counter party is required to post $1 million of collateral and wished to use bonds issued by Ginnie Mae with five years remaining to maturity, it would be required to post $1,020,409 ($1 million/0.98) to satisfy the collateral requirement.

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48 City of Roseville
Budget Development Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 49 II.  POLICY ............................................................................................................................... 49 A.  Citywide Focus ..................................................................................................... 49 B.  General Revenues ................................................................................................ 49 C.  Balanced Budget .................................................................................................. 49 D.  Public Involvement .............................................................................................. 50 E.  Operating Budget ................................................................................................. 50 F.  Capital Improvement Program (CIP) and Budget ................................................ 50 G.  Indirect Cost Allocation Plan ................................................................................ 51 H.  Indirect Costs Charged to Projects ....................................................................... 51 I.  Internal Service Funds.......................................................................................... 51 J.  General Fund Five‐Year Forecast ......................................................................... 51 K.  Basis of Budgeting ................................................................................................ 52

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49 I.  INTRODUCTION

This policy outlines the City of Roseville’s (City) guidelines for budget development.

Consistently following adopted policies will assist the City in achieving its current and future goals in a fiscally responsible and sustainable manner. This policy establishes guidelines for developing the City’s annual operating and capital budget as recommended by the Government Finance Officers Association (GFOA) and the National Advisory Council on State and Local Budgeting (NACSLB). This document shall be reviewed on an annual basis to reflect the highest standards of fiscal management and the City’s budgetary goals.

II.  POLICY

A.  Citywide Focus

Consistent with the General
Principles of Governance adopted by the City
Council in the Elections Ordinance, the City shall maintain a citywide focus during the budget development process and in the adopted budget. Revenues and expenditures shall be budgeted on a citywide basis and not tracked by Council district.

B.  General Revenues

General revenues
shall be deposited in the General Fund and appropriated during the budget process or by a separate Council action. General Fund revenues shall not be earmarked for any particular purpose, unless required by law or Generally Accepted Accounting Principles (GAAP).

C.  Balanced Budget

The City shall adopt and maintain a
balanced annual operating budget and an
integrated capital budget throughout the fiscal year. For each fund, annual expenditures shall not exceed annual revenues plus available fund balances. It shall remain a goal of the City to maintain a long‐term structurally balanced budget, where ongoing revenues support ongoing expenditures.

The City
will achieve a structurally balanced budget through efficiencies (i.e., streamlining), permanent reductions to the expenditure base (e.g., eliminating lower priority vacant positions and reducing service levels), and ongoing revenue enhancements. In addition, the City’s budget will not rely on reserves or the use of one‐time revenues for ongoing expenditures.

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50 D.  Public Involvement

Public involvement shall be encouraged in the annual budget decision‐making process through public hearings, public outreach, and the dissemination of accessible information. Public participation efforts allow the City to improve performance by identifying general needs, priorities, and service delivery expectations. Public involvement enables the City to be more responsive to the
community’s needs, thereby increasing the value that the public receives from the City.

E.  Operating Budget

The operating budget document shall contain the expected revenue and expenditure appropriations, staffing levels, and summaries for each department.

Summary information for each department featured in the budget shall include the primary services, strategic goals and strategies, accomplishments and initiatives, and key performance and workload measures. Department summaries shall be updated annually to illustrate how each department’s priorities and performance measures support the City Council’s Strategic Plan.

F.  Capital Improvement Program (CIP) and Budget

The City shall develop a Five‐Year CIP, which reflects a comprehensive approach to addressing the City’s capital needs and the identification of resources for those needs. Critical inputs include infrastructure condition assessments, service level evaluations, asset management information, and review of available funding sources. The Five‐Year CIP shall be the basis for the development of the annual CIP budget.

The annual CIP budget shall be developed in conjunction with the operating budget to ensure the effective utilization of the City's overall resources to operate and maintain facilities. The annual CIP budget shall include projects that span multiple fiscal years and result in capitalized
assets. The CIP budget may
consist of other projects of a capital nature that may not result in an asset and that span multiple fiscal years and have significant cost estimates.

The annual CIP budget shall reflect total estimated project costs for Council approved projects by including all historical expenditures, available

appropriations, and future funding needs. CIP projects shall only be established with partial funding if there is a reasonable expectation that the remaining funding will be identified within a reasonable timeframe.

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51 CIP appropriations remaining unspent at the end of each fiscal year shall be carried forward to the subsequent fiscal year until the project is completed or cancelled. CIP projects, however, shall be reviewed at least annually to identify projects that are not progressing to consider reprogramming project resources.

G.  Indirect Cost Allocation Plan

The City shall use an indirect cost allocation plan (CAP) to allocate the costs of those general government activities without significant assets or liabilities to all City funds and departments, except those between General Fund departments.

General government activities include City Council, City Manager, City Attorney, City Clerk, Finance, Human Resources, Public Affairs and Communications, and Economic Development. Substantial changes in the allocable indirect costs may be amortized or smoothed over a period not to exceed three fiscal years to allow receiving funds to adjust their rates. At the end of the maximum three‐year smoothing period, any remaining difference between the total indirect costs and the allocated indirect costs shall be paid in full in the fiscal year immediately following the smoothing period.

The CAP is also used to allocate indirect costs in Public Works Administration and Engineering and Parks, Recreation and Library Administration to their
departmental divisions they support.

H.  Indirect Costs Charged to Projects

The City shall use indirect cost rates to allocate the costs of overhead to all multi‐ year capital improvement projects for proper asset capitalization. Exceptions, other than federal or state grants that don’t allow indirect costs, must be approved by the Finance Department.

I.  Internal Service Funds

The City shall use internal service funds to allocate general government costs for activities with significant assets and/or liabilities to all City funds and departments. Internal service fund costs are budgeted in and allocated to General Fund departments. The City’s internal service fund activities include information technology, fleet management, facilities management, and risk management (general liability and workers compensation).

J.  General Fund Five‐Year Forecast

The City shall maintain a five‐year forecast for the General Fund as an essential fiscal planning tool. The forecast shall be based on the current budget and

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52 projections of future expenditures, revenues, and other funding sources over a multi‐year period. The evaluation of recommended fiscal actions will focus on a longer‐term, rather than short‐term context. The five‐year forecast is based on a set of point‐in‐time assumptions. The projected expenditure growth shall be realistic, mainly through the term of the current labor contracts. All revenue forecasts will utilize objective external research and internal forecasting methods. City revenues are economically sensitive, and the five‐year revenue forecasts are subject to the same uncertainty and downside risk surrounding national economic forecasts. It is important to note that the City’s significant tax revenues, property and sales taxes, trail economic trends.

K.  Basis of Budgeting

The City’s budgets for governmental funds, such as the General Fund, special revenue funds, debt service funds, and capital project funds, shall be prepared based on the modified accrual basis of accounting. In other words, revenues are recognized in the accounting period in which they become available and measurable, and expenditures are recognized in the accounting period in which the liability is incurred. An exception to this basis is that disbursements of interfund loans are budgeted as expenditures in lender funds and revenue in borrower funds, and repayments of interfund loans are budgeted as expenditures in borrower funds and revenue in lender funds.

The budget for the City’s proprietary funds, consisting of enterprise funds and internal service funds, shall be prepared on the full accrual basis of accounting for all operating revenues and most operating expenses. In other words, revenues are recognized when they are earned, and expenses are recognized when the
liability is incurred. Expenses related to long‐term assets, primarily capital outlay, and long‐term liabilities, including repayment of bonded debt as well as pension and other post‐employment benefit expenses, are budgeted on the modified accrual basis of accounting. Repayments of interfund loans are budgeted as expenditures in borrower funds and revenue in lender funds.

The City’s budget shall exclude unrealized gains or losses resulting from the change in fair value of investments, as well as amortization of premiums and discounts on the City’s investments. These calculations are performed solely for financial statement reporting purposes to comply with GAAP.

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53 City of Roseville
General Fund Reserves Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 54 II.  BACKGROUND ................................................................................................................... 54 III.  POLICY ............................................................................................................................... 55 A.  Minimum and Target Reserve Levels ................................................................... 55 B.  Methods to Achieve Funding Levels .................................................................... 55 C.  Criteria for Expenditure of Reserve Funds ........................................................... 55

1.  Emergency Reserve ................................................................................. 55

2.  Stabilization Reserve ............................................................................... 56

3.  Litigation Reserve ................................................................................... 56 D.  Timeline for Replenishment of the General Fund Reserves ................................ 56

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54 I.  INTRODUCTION

The purpose of this policy is to establish targeted levels of General Fund reserves, a basic component of a financially strong city. Adequate reserves help sustain City operations when adverse or unexpected circumstances affect the City, providing resources to minimize service disruption in the event of temporary revenue shortfalls, declared disasters, or unpredicted one‐time expenditures. This policy establishes the amounts the City will strive to maintain in the Emergency Reserve, Stabilization Reserve, and Litigation Reserve, and the conditions under which the reserves may be used.

II.  BACKGROUND

Financial reserves strengthen the City’s financial status and provide valuable resources for managing through economic cycles and addressing unexpected events. Every fund of the City represents a stand‐alone financial set of accounts and has its own operating characteristics, financial capabilities, and constraints. The level of reserves needed should be based on the financial and operating characteristics of each fund.

According to the Government Finance Officers Association (GFOA), it is essential that governments maintain adequate levels of fund balance to mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) in order to protect taxpayers and employees from unexpected changes in financial conditions. GFOA recommends, at a minimum, that general‐purpose governments, regardless of size, maintain an unrestricted budgetary fund balance in their General Fund of no less than two months of regular general fund operating revenues or regular General Fund operating expenditures (an amount equivalent to 16.67% of the annual budget).

This policy establishes three months of operating costs (25% of annual budgeted
General Fund operating costs) as the City’s target level of reserves. This targeted level of reserves consists of the City’s Emergency Reserve (10% of annual budgeted General Fund operating costs) and the City’s Stabilization Reserve (15% of annual budgeted General Fund operating costs). This policy also establishes $250,000 as the minimum level in the City’s Litigation Reserve. The policy also outlines the methods the City will utilize to achieve the target reserve levels, defines the conditions under which these funds can be used and describes how the City’s expenditure and/or revenue levels will be adjusted to match any new economic realities that are causing the use of fund balance reserves as a financing bridge.

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55 III.  POLICY

A.  Minimum and Target Reserve Levels

The City will maintain an Emergency Reserve at a minimum of 10% of budgeted General Fund operating expenditures. Because the City relies on property tax and sales tax revenue to support over two‐thirds of the City’s General Fund budget and the
negative effects on property and sales tax revenue can be significant during economic downturns, the City will seek to build up and maintain a General Fund Stabilization Reserve equal to 15% of budgeted General Fund operating expenditures as the target reserve level. The Emergency Reserve and Stabilization Reserve shall be reported as commitments of fund balance in the General Fund for external financial reporting. Appropriations from the Emergency Reserve may only be made by a vote of the City Council to meet a critical, unpredictable financial need such as a declared emergency.

Appropriations from the Stabilization Reserve may only be made by a vote of the City Council in the event of temporary revenue shortfalls caused by an economic downturn.

B.  Methods to Achieve Funding Levels

Funding of the General Fund Reserves will generally come from the adopted budget, year‐end excess revenues over expenditures or anticipated one‐time revenues. At a minimum, during the budget process, staff shall review the current and five‐year projected reserves to ensure that they are appropriate given the economic and financial risk factors the City faces.

C.  Criteria for Expenditure of Reserve Funds

The Reserve Funds shall not normally be applied to recurring annual operating expenditures. Appropriation from the Emergency Reserve and Stabilization Reserve Funds requires approval of at least four City Council members. The Litigation Reserve is appropriated annually in the adopted budget.

1.  Emergency Reserve

The Emergency Reserve may be used to contend with significant short‐ term issues such as declared emergencies. It is the intent of the Council to limit use of the Emergency Reserve to addressing unanticipated, nonrecurring needs.

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56 2.  Stabilization Reserve

The Stabilization Reserve may be used strategically to allow time for the City to restructure its operation in a deliberate manner as required in an economic downturn while minimizing service disruption. Use of the Stabilization Reserve will only take place in the context of a Council‐ adopted long‐term plan. The Stabilization Reserve is intended to be used to address significant revenue shortfalls that occur during an economic downturn until the City’s operating expenditure and revenue levels are adjusted to eliminate structural deficits.

3.  Litigation Reserve

The Litigation Reserve may be used for legal matters that are unforeseen and/or unusual in nature and, as a result, typically require reactive measures such as seeking a budget adjustment and a funding source.

Some examples are contract disputes, municipal code enforcement, and other public safety enforcement matters. The purpose of this reserve is to address these situations by allowing for proactive handling and funding of such matters.

D.  Timeline for Replenishment of the General Fund Reserves

If the General Fund Reserves are drawn down below the minimum levels, a plan will be developed and implemented to replenish the reserves. Replenishing the reserves will be a priority use of one‐time
resources. Generally, the City should
seek to replenish the Emergency Reserve and the Litigation Reserve within one year and the Stabilization Reserve to the minimum reserve level within three years.

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57 City of Roseville
Development Services Stabilization Reserve (DSSR)
Fund Policy

TABLE OF CONTENTS

I.  PURPOSE ........................................................................................................................... 58 II.  BACKGROUND ................................................................................................................... 58 III.  POLICY ............................................................................................................................... 58

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58 I. PURPOSE

The purpose of the Development Services Stabilization Reserve (DSSR) Fund (Fund #1013) Policy is to maintain resources in a reserve fund that the City Council may draw from in years of lower development activity. The City will use the DSSR to bridge gaps between budgeted and actual development revenues during periods of significant revenue decline.

II. BACKGROUND

A sustainable funding plan for the Development Services Department’s building, planning, and engineering operations is necessary to respond to changes in the economic climate. Establishing a DSSR Fund will provide the department resources during a downturn in development‐related activity and time to react to those changes.

III. POLICY

The DSSR shall be established as set forth below, and any changes to the policy will be recommended to the City Council for approval.

A. The DSSR target goal is equivalent to six months of estimated building, planning and engineering revenues.

B. Actual year‐end General Fund revenues in excess of budget from select accounts in Development Service’s Building, Planning and Engineering operations will be transferred to the DSSR, provided that the net year‐end General Fund results (revenue and expenditure budget variance) of the Development Services Department are positive and the reserve is below the target goal.

C. If, at year‐end, the amount in reserve exceeds the six‐month estimate for the current fiscal year, the City Manager can transfer the excess amount to the General Fund or maintain reserve levels above the six‐month estimate if revenues are
anticipated to grow in the future fiscal year.

D. The year‐end calculation will occur each year in the summer following the fiscal year end (June 30). The six‐month revenue estimate will be based on the current year's budget. For example, the year‐end calculation for FY2023‐24 will occur in
summer 2024, and the six‐month revenue estimate calculation will be based on the FY2024‐25 budget.

E.   The City will only use the DSSR to bridge gaps between projected and actual development‐related revenues in Development Services during periods of significant revenue shortfalls. The reserve will help the department maintain

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59 services during a short‐term drop in revenue and will provide time to react to changes necessary during a long‐term economic decline.

F.  Appropriation from the DSSR Fund requires approval of at least four City Council members.

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60 City of Roseville
Federal Stimulus Reserve Fund Policy

TABLE OF CONTENTS

I.  PURPOSE ........................................................................................................................... 61

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61 I. PURPOSE

The purpose of this policy is to establish a temporary Federal Stimulus Reserve Fund with the City’s allocation of the federal stimulus (2021 Coronavirus State and Local Fiscal Recovery Funds) until one‐time expenditures or transfers to other City funds are approved over the remaining course of the pandemic.

The City is required to obligate the federal stimulus funding by December 31, 2024. This temporary reserve fund will be closed after all funding, including interest earned thereon, has been distributed.

Staff will recommend one‐time expenditures, or transfers to other City funds, for Council approval consistent with the requirement
for the use of the funds to:

A. respond to or mitigate the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts;

B. cover otherwise unreimbursed costs incurred as a result of such emergency;

C. replace revenue that was lost, delayed, or
decreased as a result of such
emergency; or

D. address the negative economic impacts of such emergency.

The federal stimulus funding shall not be applied to new ongoing operating expenditures.

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62 City of Roseville
Internal Service Funds ‐ Operating and Replacement Reserves Policy

TABLE OF CONTENTS

I.  PURPOSE ........................................................................................................................... 63 II.  POLICY ............................................................................................................................... 63 A.  Operating Reserves .............................................................................................. 63

1.  Applicability ............................................................................................ 63

2.  Targeted Reserve Level ........................................................................... 63

3.  Initial Establishment of the Reserve ....................................................... 64

4.  Annual Funding of the Reserve ............................................................... 64

5.  Excess Reserves ...................................................................................... 65 B.  Replacement Reserves ......................................................................................... 65

1.  Applicability ............................................................................................ 65

2.  Targeted Reserve Level ........................................................................... 66

3.  Initial Establishment of the Reserve ....................................................... 66

4.  Annual Funding of the Reserve ............................................................... 67

5.  Excess Reserves ...................................................................................... 68

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63 I. PURPOSE
As separate budget and accounting entities, internal service funds (ISFs) need to manage cash reserves within their funds. The purpose of cash reserves in the ISFs is two‐fold:

 Operating Reserves ‐ To provide for continuity of service in the event of unanticipated changes to revenues or expenditures, particularly within a single fiscal year when charges for service on client operating departments already have been fixed through the adopted budget.
 Replacement Reserves ‐ To provide funding for capital improvement, rehabilitation, and replacement of capital assets managed, whose useful lives span multiple fiscal years and whose costs yield a burdensome or unaffordable peak in expenditure if assessed on client operating departments as they occur.

In the ISFs, the accumulation and expenditure of reserve balances, including the establishment of targeted reserve levels, shall be as follows.

II. POLICY
A. Operating Reserves

1. Applicability

The following ISFs manage ongoing operations and therefore would benefit from the establishment of an operating reserve:

 Fleet Services
 Facility Services
 Information Technology Operations

Because ISFs do not function within a traditional retail environment, their revenues are not a material factor in the underlying risk to its financial sufficiency. An operating reserve incorporating the effects of billing cycles and collection rates is not applicable. Therefore, the operating reserve shall be established based singularly on a cushion for unforeseen change to critical cost drivers.

2. Targeted Reserve Level

An operating reserve equal to 5‐15 percent of annual operating expenditures is appropriate among these service types. Fleet Services and Facility Services will target a 10‐15 percent operating reserve level, and Information Technology Operations will target a 5‐10 percent operating

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64 reserve level. The fund balance of each ISF will serve as its operating reserve. For purposes of calculating the reserve target, operating expenditures include labor expenses and materials, services, and supplies expenses in the fund. As a metric for calculating a reserve level, operating expenditures should not include capital outlay, debt service, or transfers to other funds.

3. Initial Establishment of the Reserve

The available cash balance in the ISF may be used immediately to establish the operating reserve to its minimum level. If the minimum level is not feasible with existing cash, staff will develop a plan to begin adjusting the charges for service to begin funding the reserve, as described in the following paragraph.

4. Annual Funding of the Reserve

When the reserve is at its minimum level, there is no need to assess client operating departments for additional reserve funding in their annual charge for service. The
reserve exists until it is used and falls
below its minimum threshold, as designed.

When the operating reserve falls below its minimum level, a plan for replenishing the reserve shall be established as part of the next fiscal year’s annual rate calculation process. Under staff discretion at that time, options for replenishing the reserve may include:

 Immediate replenishment to the minimum level in one fiscal year, accomplished by an additional component to the annual charge for service, assessed on client operating departments in proportion to their total charge for services.

 Replenishment to the minimum level over multiple fiscal years, such as two or three, depending on fiscal conditions determined at that time. This moderated plan is also accomplished as an additional component to the annual charge for service assessed on client operating departments in proportion to their total charge for services.

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65 5. Excess Reserves

When cash held in the fund exceeds the minimum operating reserve level, fund managers should determine appropriate uses to avoid over‐ accumulation and stranding of City resources, as part of the annual rate calculation process in the next fiscal year. Under staff discretion at that time, options for
reducing excess reserves may include:

 Reduce client operating department charges for service on a one‐ time basis in proportion to their total charge for service. This option alternatively may be viewed as reducing the total cost pool driving charges for services by using reserves to fund planned operating expenditures in a single fiscal year.

 Fund previously deferred special projects associated with ISF operations, particularly those projects of broad benefit to all client operating departments.

 Transfer excess cash to the ISF’s companion asset
replacement/rehabilitation fund to reduce long‐term deficiencies or accelerate funding for defined capital needs as allowed by accounting controls.

B. Replacement Reserves

1. Applicability

The following ISFs manage capital assets and therefore would benefit from the establishment of a replacement reserve:

 Fleet Replacement
 Fleet Operations
 Equipment Replacement
 Facility Rehabilitation
 Information Technology Replacement

The replacement reserve shall be based
on analysis of long‐term
scheduled capital improvement, rehabilitation, and replacement of capital assets and equipment managed by the ISF in order to sustain municipal services and prevent City assets’ physical deterioration.

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66 Replacement reserves are not typically managed to handle increases in assets and equipment in service. Funding for new or growth in assets and equipment will need to be identified as a special funding component for client operating departments, the general resources of the City, or the ISF outside of this replacement reserve structure.

2. Targeted Reserve Level

Replacement reserves are dynamic: They are continually added to and spent as assets are rehabilitated or replaced. These ISF’s will not target a minimum cash balance but instead manage the reserve’s annual funding to enable adequate resources when expenditures are scheduled or needed.

3. Initial Establishment of the Reserve

The available cash balance in these ISF’s may be used immediately to establish the replacement reserve. These are the resources available to meet near‐term scheduled expenditures and the resources being accumulated for expenditure later as assets require reinvestment or replacement. In ideal circumstances, the cash currently available equals the amount of resources needed along current replacement schedules for all assets in service. The reasonableness of this circumstance will differ depending on the ISF evaluated for one or more of several reasons, such as:

 Past charges for service did not include any funding or included insufficient annual funding for future replacement.

 Assets are routinely replaced beyond their scheduled lives, particularly when ongoing maintenance can extend in‐service timelines without unmanageable costs or effort.

 Assets are ultimately replaced by another asset of entirely different cost structure, particularly in areas of more rapid technological change.

 The total value of future replacement needs may not be supportable by charges for service and will require identification of additional funding outside the ISF in the future.

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67 Regardless of the initial reserve establishment’s adequacy, charges for service in the next fiscal year should be set to continue funding the reserve on an annual basis, as described in the following paragraph.

4. Annual Funding of the Reserve

The replacement reserve’s underlying intention is to distribute the cost of asset replacement evenly over the life of the asset. Therefore, analysis by (individual or category of) asset is required to determine a total annual funding level. Steps for analyzing assets and determining their corresponding reserve funding component are as follows:

 Original Cost Basis: Record assets when placed in service. Assign an expected useful life. Calculate a straight‐line annual depreciation amount based on the original cost. This value represents the minimum annual replacement reserve funding amount for assets expected to be replaced at the end of their life cycle.

 Replacement Cost Basis: Alternatively, record assets when placed in service. Assign an expected useful life. Project a replacement cost based on estimated cost inflation indices from original cost or a known replacement value. Calculate a straight‐line depreciation amount based on estimated replacement cost, reducing for any material expected salvage value for fully depreciated assets. The resulting value represents the maximum annual reserve amount for assets expected to be replaced at the end of their life cycle.

 The method chosen – original cost or replacement cost basis – should be determined at staff discretion in each ISF. Factors influencing the choice of the method include impact to charges for service on client operating departments; external factors that substantially impact asset management between life cycles, such as rapid technological change; and magnitude of interest earnings in the replacement reserve contributing toward total resources available for asset replacement.

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68  The sum of annual funding amounts by asset (or asset category) represents the total annual reserve contribution to be collected through the ISF’s charges for service, dependent upon funding available for rehabilitation and replacement (See Capital Improvement Program Rehabilitation Funding Policy). This annual funding requirement should be allocated to the client operating departments based on the selected allocation metric for asset replacement in the ISF’s rate method, typically in proportion to the department’s use of the asset.

5. Excess Reserves

In the unlikely event that replacement reserves are found to exceed scheduled needs, as part of the annual rate calculation process in the next fiscal year, fund managers should determine appropriate uses to avoid over‐accumulation and stranding of City resources. Under staff discretion at that time, options for reducing excess reserves may include:

 A planned, one‐time reduction to service charges on client operating departments in proportion to their total charge for asset replacement‐related services.

 Funding previously deferred special projects associated with asset management for the ISF, particularly those projects of broad benefit to all client operating departments.

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69 City of Roseville
Capital Improvement Program Rehabilitation Funding Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 70 II.  BACKGROUND ................................................................................................................... 70 III.  POLICY ............................................................................................................................... 70

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70 I.  INTRODUCTION

The City has significant investments in facilities, equipment, park and recreation amenities and information technology (IT) hardware and software which require ongoing maintenance and eventual replacement. The CIP Rehabilitation funds, i.e., the Facility Rehabilitation Fund; the Equipment Replacement Fund, the Parks, Recreation and Library Capital Projects Fund; and the Information Technology Replacement Fund, are used to fund infrastructure needs for City buildings, equipment, park and recreation amenities and information technology capital replacement. In addition, the City maintains its significant investment in streets with external funding sources that are currently inadequate.

II.  BACKGROUND

The City maintains 10‐Year Rehabilitation/Replacement
plans for its General Fund assets
used in service delivery. The 10‐year plans reflect an annual General Fund funding requirement of over $10 million, however the actual amount budgeted in FY2021‐22 was $3.2 million leaving an annual gap of approximately $7 million.

The City performs an annual review of the 10‐year plans to develop CIP Rehabilitation budget recommendations for the City Manager that includes a prioritized list of capital projects that can be recommended for funding or deferral in conjunction with the adoption of the City's CIP Rehabilitation budget.

The expectation is that the annual average demand will
continue to trend upward based
on projects being deferred and new replacement costs.

Addressing these infrastructure needs has been a stated priority of the City Council and was reaffirmed at the City Council priorities workshop meeting on February 22, 2022. As outlined at that workshop, the proposed budget for CIP
Rehabilitation will be increased
for FY2022‐23 to include $1.6 million of General Fund resources for street maintenance.

III.  POLICY

On an annual basis during each budget process, and until the annual required funding level is attained, the General Fund contribution to CIP Rehabilitation shall increase by $1,000,000.

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71 City of Roseville
Pension Funding Policy
TABLE OF CONTENTS

I.  PURPOSE ........................................................................................................................... 72 II.  BACKGROUND ................................................................................................................... 72 III.  POLICY ............................................................................................................................... 73 A.  Actuarially Determine Contribution (ADC) .......................................................... 73 B.  Additional Discretionary Payment (ADP) Contribution ....................................... 73 C.  Pension Reserve Trust Fund Contribution ........................................................... 73 D  Transparency and Reporting ................................................................................ 74 E.  Review of Funding Policy ..................................................................................... 74

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72 I.  PURPOSE

The City’s Pension Funding Policy documents the method the City will use to determine its actuarially determined contributions to fund the long‐term cost of benefits to the plan participants and annuitants. The policy also:

•  Provides guidance in making annual budget decisions; •  Demonstrates prudent financial management practices; •  Reassures bond rating agencies; and
•  Shows employees and the public how pensions will be funded.

II.  BACKGROUND

The City provides defined benefit retirement benefits through the California Public Employees’ Retirement System (CalPERS). CalPERS is a multiple‐employer public employee defined benefit pension plan.

All full‐time
and certain part‐time City employees are eligible to participate in CalPERS.

CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members and their beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute.

The financial objective of a defined benefit pension plan is to fund the long‐term cost of benefits provided to the plan participants. In order to assure that the plan is financially sustainable, the plan should accumulate adequate resources in a systematic and
disciplined manner over the active service life of benefitting employees. This funding policy outlines the method the City will utilize to determine its actuarially determined contributions to fund the long‐term cost of benefits to the plan participants and annuitants.

Pension Funding: A Guide for Elected Officials, issued by eleven national groups including the U.S. Conference of Mayors, the International City/County Management Association, and the Government Finance Officers Association, established the following five general policy objectives for a pension funding policy:

 Actuarially Determined Contributions. A pension funding plan should be based upon an actuarially determined contribution (ADC) that incorporates both the cost of benefits in the current year and the amortization of the plan’s unfunded actuarial accrued liability.

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73  Funding Discipline. A commitment to make timely, actuarially determined contributions to the retirement system is needed to ensure that sufficient assets are available for all current and future retirees.

 Intergenerational equity. Annual contributions should be reasonably related to the expected and actual cost of each year of service so that the cost of employee benefits is paid by the generation of taxpayers who receives services from those employees.

 Contributions as a stable percentage of payroll. Contributions should be managed so that employer costs remain consistent as a percentage of payroll over time.

 Accountability and transparency. Clear reporting of pension funding should include an assessment of whether, how, and when the plan sponsor will ensure sufficient assets are available for all current and future retirees.

III.  POLICY

A.  Actuarially Determine Contribution (ADC)

CalPERS actuaries will determine the City’s ADC to CalPERS based on annual actuarial valuations.

The ADC will include the normal cost for current service and amortization of any under‐funded amount. The normal cost will be calculated using the entry age normal cost method using economic and non‐economic assumptions approved by the CalPERS Board of Administration.

The City will review the CalPERS annual actuarial
valuations to validate the
completeness and accuracy of the member census data and the reasonableness of the actuarial assumptions.

B.  Additional Discretionary Payment (ADP) Contribution

The City will consider making ADP contributions with one‐time General Fund resources, with the objectives of increasing the plan’s funded status, by reducing the unfunded actuarially accrued liability, and reducing ongoing pension costs.

C.  Pension Reserve Trust Fund Contribution

The City will establish and consider making contributions to an Internal Revenue Code Section 115 Pension Trust, with the objective of setting aside extra resources for future pension contributions at reduced investment risk to help smooth volatility from year‐to‐year fluctuations in annual required contributions.

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74 D.  Transparency and Reporting

Funding of the City’s pension plans should be transparent to vested parties including plan participants, annuitants, the City Council and Roseville residents.

In order to achieve this transparency, the following information shall be available:

 Copies of the annual actuarial valuations for the City’s CalPERS plans shall be made available to the City Council.

 The City’s Annual Comprehensive Financial Report shall be published on its website. This report includes information on the City’s annual contributions to the pension systems and their funded status.

 The City’s annual operating budget shall include the City’s contributions to CalPERS.

E.  Review of Funding Policy

Funding a defined benefit pension plan requires a long‐term horizon. As such, the City will review this policy at least every five years to determine if changes to this policy are needed to ensure adequate resources are being accumulated.

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75 City of Roseville
Other Post‐Employment Benefits (OPEB) Funding Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 76 II.  BACKGROUND ................................................................................................................... 76 III.  POLICY ............................................................................................................................... 76

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76 I.  INTRODUCTION

The purpose of this Funding Policy is to state the overall funding goals for the City of Roseville OPEB Trust. The objective is to accumulate sufficient assets to fully finance the retiree healthcare benefits that the retired employees receive throughout retirement. In meeting this objective, the City will strive to meet the following funding goals:

A.  The City plans to continue to fund retiree medical benefits from operations until such a time as those expenses exceed the City’s Actuarially Determined Contribution (ADC). At that time withdrawals from the OPEB Trust will be necessary.

B.  The City intends and
plans to ultimately achieve full funding of its actuarially determined OPEB contributions by making increasing contributions to the OPEB trust, to the extent feasible, in the context of other competing demands for public services and employee compensation.

C.  Nothing in this funding policy shall constitute an obligation upon the City, nor an
implied contract.  The City Council may revoke or amend this policy in the best interests of the City.

D.  Funding of the OPEB Trust does not change the City’s obligation or intent to fully pay annual medical costs for retirees.

II.  BACKGROUND

The City of Roseville has provided
a retiree health benefit to its employees for many
years. As a cost reduction strategy, this benefit was eliminated for all bargaining unit employees classified as Tier III. Although eliminated for new employees, this benefit still remains in effect for the majority of the City’s employees and must be addressed during the annual budget process.

In an effort to address the long‐term costs of this expense, a trust was created to begin funding this benefit. The process currently in place is to fund all actual retiree expenses incurred in the current year on a pay‐as‐you‐go basis and make additional contributions to the trust fund.

III.  POLICY

The City will engage an OPEB actuary to determine the City’s ADC based on biennial actuarial valuations. The ADC will include the normal cost for current service and amortization of the under‐funded liability. The normal cost is the current year cost of
the program to provide the benefit for current employees in the future. The normal cost

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77 will be calculated using the entry age normal cost method using appropriate economic and non‐economic assumptions approved by the City.

The City will review the actuarial valuations to validate the completeness and accuracy of the employee census data and the reasonableness of the actuarial assumptions.

Actuarial valuations involve estimates and
assumptions about the probability of
occurrence of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future.

The City will continue to appropriate the ADC in the annual budget for the pay‐as‐you‐
go costs of OPEB for current retirees and contributions to the OPEB Trust. In addition, a portion of any one‐time monies remaining at the end of each fiscal year may be deposited into the trust, which amount will be determined by Council based on available funds and other priorities.

Funding OPEB requires a long‐term horizon. The City will review this policy at a minimum biennially, coincident with preparation of the actuarial valuations, to determine if changes to this policy are necessary to ensure adequate resources are being accumulated to fund OPEB benefits.

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78 City of Roseville
Workers’ Compensation and General Liability Funding Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 79 II.  BACKGROUND ................................................................................................................... 79 III.  POLICY ............................................................................................................................... 79

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79 I.  INTRODUCTION

The Workers’ Compensation and General Liability Funding Policy documents the City’s approach to providing adequate financial resources to fund the City’s Workers’ Compensation and General Liability Programs and establishing and maintaining adequate reserves in the Workers’ Compensation and General Liability Internal Service Funds.

II.  BACKGROUND

The City is
self‐insured for workers' compensation and for general liability. The Workers’ Compensation and General Liability and Programs charge City departments and funds for the costs of providing for claims, as well as for the cost of administering the claims.

III.  POLICY

In order to methodically and consistently measure the City’s projected claims, the City will contract with a professional outside actuary to prepare annual actuarial valuation reports for both categories of claims. Program funding will be based on the annual actuarial valuation reports.

The City’s funding policy will provide program funding at the 75% confidence level, including recognition of anticipated
investment income. Confidence level is used by
actuaries to determine the realistic possibilities that a given funding rate will be sufficient to cover all claims that might be incurred in any one program year. A 75% confidence level indicates that the funding rate should be adequate 75% of the time.

If either program maintains a balance above the minimum funding requirement, the excess reserves will be used to subsidize City contributions over a 1‐5 year period depending upon the amount of the excess and the City’s economic condition.

If either program has excess claims requiring additional contributions to the fund, the
City will increase contributions over a 1‐3 year period depending on the amount of the shortfall and the City’s economic condition to get to the minimum funding requirement.

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80 City of Roseville
Interfund Loans Policy

TABLE OF CONTENTS

I.  PURPOSE ........................................................................................................................... 81 II.  BACKGROUND ................................................................................................................... 81 III.  POLICY ............................................................................................................................... 81 A.  Long‐term Loans .................................................................................................. 81 B.  Short‐term Loans ................................................................................................ 82 C.  Prohibited Uses .................................................................................................... 82

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81 I.  PURPOSE

The City’s Interfund Loan Policy documents the methods used by the City to demonstrate prudent financial management over interfund loans. The policy:

•  Requires City Council approval of interfund loans, except for short‐term working capital loans,

•  Permits short‐term interfund loans for working capital to cover Council‐
approved reimbursable grants and projects and other temporary timing differences in cash flows, and

•  Prohibits interfund loans from being used to solve ongoing structural budget issues or hindering the accomplishment of any function or project for which the lending fund was established.

II.  BACKGROUND

Interfund loans are
the lending of cash from one City fund to another for a specific purpose and with a requirement for repayment. The practice of interfund loans is a recognized and necessary aspect of municipal finance. Such loans are typically short‐ term in nature and constitute the allocation of resources between individual funds for working capital purposes.

III.  POLICY

A.  Long‐term Loans

Interfund loans, other than short‐term working capital loans, must be approved by the City Council. Council approval will include the following terms of the loan:

•  Purpose of Interfund Loan

•  Identification of the source fund

•
Availability of unrestricted funds in the source fund

•  Review of multi‐year plans for use of source fund cash

•  Analysis of legal or contractual restrictions

•  Repayment of Interfund Loan

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82 •  Repayment must have a payment source and funding stream

•  Specific repayment schedule

•  Interest imposed at a rate equal to at least investment earnings if loan did not occur

•  Other Considerations

•  Feasibility of repayment

•  Internal controls to monitor repayment

B.  Short‐term Loans

Short
‐term interfund loans for working capital to provide cash for Council‐ approved reimbursable grants and projects, are permitted. Short‐term working capital loans are also permitted for temporary timing differences in cash flows when expenditures are incurred before revenue is collected. The source funds for working capital interfund loans are the General Fund and the Automotive Replacement Fund.

C.  Prohibited Uses

•  Interfund loans will not be used to solve ongoing structural budget issues.

•  Interfund loans will not hinder the accomplishment of any function or project for which the lending fund was established.

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83 City of Roseville
Request for Proposals (RFP) Policy
TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 84 II.  DEFINITION ....................................................................................................................... 84 III.  USE OF AN RFP .................................................................................................................. 84 IV.  PUBLIC NOTICE .................................................................................................................. 85 V.  FORM OF PROPOSAL ....................................................................................................... 85 VI.  EVALUATION FACTORS ..................................................................................................... 86 VII.  DISCUSSIONS WITH PROPOSERS AND REVISIONS TO PROPOSALS ................................... 87 VIII.  AWARD PROCESS .............................................................................................................. 88 IX.  PUBLIC DISCLOSURE .......................................................................................................... 88 X.  PROTESTS .......................................................................................................................... 88 A.  Protest Requirements .......................................................................................... 88 B.  Grounds for Protest ............................................................................................. 89 C.  Administrative Review ......................................................................................... 89 D.  Stay of Action during a Protest ............................................................................ 89

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84 I.  INTRODUCTION

The purpose of this policy is to provide a uniform process for the issuance, evaluation, and selection of competitive proposals for services and/or customized goods.

II.  DEFINITION

Request for Proposals (“RFP”) is a competitive proposal process whereby the City solicits proposals from potential proposers. The RFP process is
used for requirements in which
the desired outcome is known, but it is difficult to define the methodology or the exact materials or services required to achieve the desired results.

Objectives of the RFP process are to:

A.  Describe the City’s requirements and desired outcomes within a written specification;

B.  Solicit proposers for their proposed solutions;

C.  Describe key criteria to be used in the evaluation of proposals;

D.  Outline the terms and conditions under which the proposer(s) will operate or supply goods and/or services.

The City should use its best efforts to ensure that any RFP is as complete and thorough
as possible, however should the scope of work or services of any RFP increase by twenty‐five percent (25%) or more after publishing the RFP, that RFP should be withdrawn and any proposals rejected and a new RFP should be issued that includes the increased scope of work or services.

III.  USE OF AN RFP

A.  Contracts for goods or services with an estimated value greater than the amount stated in Roseville Municipal Code (“RMC”) Sections 4.12.090 and 4.12.095 must be awarded by the use of competitive bids or an RFP, unless exempted by the City Council or law. Contracts for goods or services estimated to be equal or less than the amount stated in RMC Sections 4.12.090 and 4.12.095 may be awarded upon conclusion of informal interviews by representatives of the initiating department and other City staff, including the Purchasing Division (“Purchasing”), or by an RFP, as may be appropriate.

B.  Notwithstanding the foregoing, qualifying goods or services may be procured without issuing a RFP. A qualifying good or service is one where there is only a

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85 single source for obtaining the particular good and/or service. Examples of sole source goods or services include, but are not limited to, patented, copyrighted, licensed items, specialized test equipment/facilities, critical schedule requirements, unique services, and standardized goods or services for which there is only a single source. Prior to contracting with a sole source, the initiating department shall complete the sole source authorization form. Furthermore, with respect to professional services with an estimated amount exceeding the amount stated in RMC Sections 4.12.090 and 4.12.095, such services may not be procured through sole source without the prior authorization of the City Manager and City Attorney.

IV.  PUBLIC NOTICE

Public notice of the RFPs shall be given in the same manner as provided in RMC Section

4.12.090.

The originating department (“Department”) should also generate a list of potential proposers to notify and direct them to the RFP section of the City’s website to access
the RFP.

V.  FORM OF PROPOSAL

A.  City staff must use the City’s latest version of the RFP template for the initial framework of the document and the City’s Purchasing Guidelines should also be referred to. The RFP content should define the Department’s needs and describe the scope of
the work, allowing the potential proposer to develop the project details.

B.  Late proposals shall not be accepted, however staff may extend the time for submission of all proposals.

C.  Each proposal must be signed by an authorized representative of the proposer and include the legal name of the proposing organization and the signer’s title.

By signing the proposal it is presumed that the signer has authority to bind the proposer to the proposal’s terms.

D.  RFPs are scored based on the criteria presented in the RFP. Proposers may propose any method or process to satisfy the scope of work in the RFP that
maximizes responsiveness to the criteria stated in the RFP.

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86 VI.  EVALUATION FACTORS

Award of a RFP shall be made to the responsible proposer whose proposal is determined, through a formal evaluation panel process, to be the most advantageous to the City after the evaluation panel has taken into consideration the evaluation factors set forth in the RFP. A master
averaged score sheet shall be created based on the
evaluation panel’s initial evaluation. Proposals shall be scored according to the criteria stated in the RFP.

Proposals submitted will be reviewed by an evaluation panel. Members of the evaluation panel shall be comprised of City staff and at the option of City may include
non‐City staff upon approval of the City Manager and City Attorney. After the initial evaluation, proposers that have submitted the best and most complete proposals may be invited to one or more interviews. The number of proposers invited to an interview may vary depending upon the number of proposals submitted.

The RFP may indicate the relative importance of evaluation factors. The following are representative evaluation criteria that may be considered by the Department when preparing a RFP:

A.  Reputation and Experience. Does the proposer have a reputation of being reliable, delivering on schedule, and performing tasks to the satisfaction of
his/her clients? Does the proposer have sufficient experience in the kind of work required?

B.  Capability and Availability of Staff. Does the proposer have qualified and experienced staff needed to perform the work?

C.  Understanding of the Problem. Does the proposer demonstrate a thorough understanding of the issues
and has it developed a relevant and effective
approach?

D.  Proximity of the Proposer. Although no preference shall be given to local businesses, proposer’s office and/or staff proximity to City of Roseville offices or work location as it relates to the proposer’s ability to be responsive to the project requirements may be considered.

E.  Cost. Whenever possible and appropriate, a proposer’s fee or hourly rate should be secured as part of the proposal and considered in the evaluation process.

Whenever possible, RFPs should specify methods of submitting proposed costs that can be compared directly with competing proposals.

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87 The City reserves the right to make a selection without interviews; therefore, the proposal should be submitted on the most favorable terms that the proposer might propose.

Should the City elect to conduct interviews with any proposers, the following criteria shall be considered and each proposer ranked by the evaluation panel during the interview process:

 Quality of presentation
 Ability to meet the City’s business goals
 Communication style

A contract will be negotiated with the proposer considered best meeting the City’s need for the project. In the event a mutually satisfactory contract cannot be negotiated with the City’s first choice, negotiations may be terminated and commenced with the proposer considered next best in meeting the City’s needs for the particular project.

The selected proposer will be required to execute a City prepared contract. The contract may further refine the scope of services and will provide for the terms and conditions of
employment.

Evaluation Score Sheets. Upon a request pursuant to section 1.8 below, a proposer is entitled to a master averaged score sheet that reflects the averaged evaluation scores of the proposers during the evaluation panel’s initial evaluation and the ranking of proposers from any interview (individual score sheets
and/or notes are temporary and
are not retained following a determination of the evaluation panel). The master score sheet and ranking shall be prepared by City staff prior to notifying any proposers of the results.

VII.  DISCUSSIONS WITH PROPOSERS AND REVISIONS TO PROPOSALS

A.  As provided in the RFP, discussions
may be conducted with responsible
proposers. These discussions shall be for the purpose of clarification to assure full understanding of, and responsiveness to the solicitation requirements. The proposers shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals, and such revisions may be permitted prior to the evaluation panel’s determination of the award recommendation for the purpose of obtaining best and final proposals. In conducting discussions, there shall be no disclosure of any information derived from proposals submitted by competing proposers.

B.  After the evaluation panel has determined the proposer(s) to be recommended for award, the Department may enter negotiations with the recommended

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88 proposer(s) to finalize proposed services and price before the evaluation panel’s formal notice of intent to award is made.

VIII.  AWARD PROCESS

A.  The award is made to the proposer(s) that is determined to best meet the overall needs of the City. For contracts for goods or services with an estimated value greater than the amount stated in RMC Sections 4.12.090 and 4.12.095, the award of such contract is expressly contingent upon City Council approval and the availability of funds. City staff may not legally bind the City to a contract with an estimated value greater than the amount stated in RMC Sections 4.12.090 and 4.12.095.

B.  Rejection of RFP. The City reserves the right to reject any or all proposals, to waive defects or irregularities in any proposal or in the RFP process, and to offer to negotiate or contract with any proposer(s) in response to any RFP. RFPs do

not constitute any form of offer to contract.

C.  Multiple Award. The City reserves the right to award the contract to multiple proposers when applicable.

D.  A formal notice of the intent to award to the recommended proposer(s) shall be made by the Department.

IX.  PUBLIC DISCLOSURE

In accordance
with the California Public Records Act, proposals submitted in response to a RFP, master averaged score sheets from the initial evaluation, and/or rankings from any interview shall be made available upon a public records request only after: (1) the proposal evaluation process is complete, (2) a contract has been negotiated, and (3) notice of intent to award has been made and/or the contract is placed on a City Council meeting agenda.

X.  PROTESTS

A.  Protest Requirements

1.  Any proposer who is aggrieved in connection with the solicitation or award of a contract may file a protest with the City Clerk’s office. The
protest must be received in writing by the City Clerk’s office within seven (7) calendar days after such aggrieved proposer 1) knows or should have known of the facts giving rise thereto or 2) the date of the notice of intent to award, whichever is sooner. In no event shall a protest be

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89 allowed after an award has been made by City Council. If the seventh calendar day falls on a weekend or City holiday, the protesting party may submit the protest prior to close of business on the first business day following such weekend or holiday. Failure to submit a timely protest shall bar consideration of a protest.

2.  RFPs must include a notification to prospective proposers of this protest policy.

3.  Departments must notify and consult with Purchasing and the City Attorney’s Office immediately upon becoming aware of any potential or actual protest. In the event of a proper protest, the RFP process shall be
stayed pursuant to Section X (D) of this Policy.

B.  Grounds for Protest

1.  The alleged grounds for protest shall be limited to the following: (a) computation errors, (b) violations of local, state, or federal law, or (c) the City failed to follow the procedures specified in
this Policy.

2.  The protest shall state all grounds claimed for the protest and include supporting documentation. Failure to clearly state the grounds for the protest and provide supporting documentation shall be deemed a waiver of all protest rights.

C.  Administrative Review

Upon receipt of the protest in accordance with Section X (A), and after determining the protest was properly filed, the Department Director shall provide a copy of the protest to other proposers who might become aggrieved as a result of the protest and issue a written decision within fourteen (14) calendar days after receipt of the protest. The protest will be evaluated by the Department Director, the City Attorney’s Office, and the Purchasing Manager.

The protesting proposer shall promptly provide any information requested by City staff as part of such investigation. The decision shall either deny or uphold the protest and include reasons for the decision. The written decision shall be final.

D.  Stay of Action during a Protest

In the event a protest is filed under Section X, the City shall not proceed further with the award of the contract until the protest is resolved, unless:

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90 1.  The City Manager or designee makes a determination that the award of the contract without delay is necessary to protect a substantial interest of the City, or

2.  The City decides to reject all proposals and issue a new RFP.

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91 City of Roseville
Internal Control Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................. 92 II.  BACKGROUND ................................................................................................................... 92 III.  FIVE COMPONENTS OF INTERNAL CONTROL .................................................................... 92

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92 I. INTRODUCTION

The purpose of this City policy is to document the internal control framework adopted by the City and to formalize certain policies and procedures to further the goal of fiscal responsibility through effective and comprehensive internal controls.

II. BACKGROUND

The City has a responsibility to taxpayers, ratepayers and constituents regarding stewardship of public funds and other assets. In the City’s efforts to serve the public as City officials or employees, the City establishes this Internal Control Policy using recognized best practices and state and federal guidelines. California Government Code (GC) section 12422.51 requires the State Controller to develop internal control guidelines applicable to local agencies. The intent of the legislation was to assist local agencies in establishing a system of internal control to safeguard assets and prevent and detect financial errors and fraud. The City’s Internal Control Policy conforms to the State Controller’s Office (SCO) Internal Control Guidelines for California Local Agencies, as well as to the federal Office of Management and Budget (OMB)’s “Green Book”, Standards for Internal Control in the Federal Government. The internal control framework adopted by the SCO and OMB in their guidelines was originally developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), an organization that develops guidelines for businesses to evaluate internal controls, risk management, and fraud deterrence.

Internal control is defined as a process effected by an entity’s oversight body, management and other personnel that provides reasonable assurance the entity’s objectives will be achieved. Internal controls are policies and procedures put in place to
help achieve goals and objectives. There is however an inherent limitation on the effectiveness of any internal control
due to the cost/benefit relationship that must be considered, meaning that the cost of the internal control should not outweigh the potential benefit of the control.

III. FIVE COMPONENTS OF INTERNAL CONTROL

Internal control is comprised of five components that work together in an integrated framework:

   Control Environment
 Risk Assessment
   Control Activities
   Information and Communication
   Monitoring Activities

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93 A. Control Environment

The control environment is the foundation for all other components of internal control, providing discipline and structure. Moreover, management establishes the tone at the top regarding the importance of internal control and expected standards of conduct and reinforces expectations at various levels. Control environment factors include the integrity, ethical values and competence of the City's personnel; the way management assigns authority and responsibility and organizes and develops its personnel; and the attention and direction provided by the City Council.

The control environment is the set of standards, processes, and structures that provide the basis for carrying out internal control across the City. The City Council and management establish the “tone at the top” regarding the importance of internal control, including expected standards of conduct, which then cascade down throughout the various levels of the organization and have a pervasive effect on the overall system of internal control. The control environment extends beyond the idea of culture and comprises the following:

1. The City’s integrity and ethical values

2. The City Council’s oversight responsibilities

3. The assignment of authority and responsibility

4. The process for attracting, developing, and retaining employees

5. The measures, incentives, and rewards to drive accountability for performance

The City’s control environment is influenced by a variety of factors including its history, values, market, and the competitive and regulatory landscape. An organization that establishes and maintains a strong control environment positions itself to be more resilient in the face of internal and external pressures.

The City’s policies and procedures include but are not limited to:

1. City Management has established the values and operating style for the organization through its Core Competencies, policies and procedures, and communicated them to all employees.

2. City Council and management receive and update their ethics training as required by AB 1234.

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94 3. The City regularly considers the structure of the organization in terms of its size and the nature of its operation.

4. Management has established policies and practices reflecting expectations of competence.

5. Management provides the mentoring and training needed to attract, develop, and retain sufficient and competent personnel.

B. Risk Assessment

A local government’s risk assessment process involves identifying risks to achieving organizational objectives, assessing the design of internal controls that mitigate these risks, and assessing whether the controls are effective. Risk assessment must be conducted by management on an on‐going basis and include the following steps:

1. Define objectives clearly to enable the identification of risks and define risk tolerances.

2. Identify, analyze and respond to risks related to achieving the defined objectives.

3. Consider the potential for fraud when identifying, analyzing and responding to risks.

4. Identify, analyze and respond to significant changes that could impact the internal control system.

Internal changes such as changes in operating activities, the control environment, or organizational structure in addition to external changes such as changes within the regulatory environment, technological and economic changes all have an effect on risk. For this reason, a continuing effort to assess changes in risk and their effect on internal controls must be conducted.

The City’s policies and procedures include but are not limited to:

1. City management addresses risk assessment in conjunction with the supervision of staff. When providing direction to staff in the performance of their duties, management may
identify information as to the types of
errors, policy violations, fraud, or noncompliance to which they should be attentive in the performance of their duties.

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95 2. City Department Head Team communicates regularly about new or changed risks, conditions, actions, or events that may impact the ability of departments to manage the risks relevant to their operations.

3. Finance personnel attend training sessions to become aware of new accounting pronouncements and emerging issues in order to further identify and manage risks associated with proper financial reporting.

4. Departments send staff to conferences and program training sessions for the purpose of identifying likely risks of noncompliance, fraud, and error relevant to the programs that they manage.

5. The Information Technology (IT) Department periodically identifies and communicates risks for which employees should be particularly vigilant.

C. Control Activities

Control activities are the policies and procedures that help ensure that management directives are carried out. Control activities, whether within IT or manual systems, have various objectives and are applied at various organizational and functional levels. Examples of specific control activities
include those relating to the following:

1. Authorization

2. Financial performance reviews

3. Information processing

4. Physical controls

5. Segregation of duties

The City’s policies and procedures include but are not limited to:

1. Staff perform timely bank reconciliations as an effective tool to detect errors.

2. Internal financial reports are reviewed and compared to budget on a periodic basis and variances are investigated.

3. Purchasing guidelines are established that detail authorization limits, when contracts are required, and when purchases are subject to bidding or informal quotes.

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96 4. Positive pay, which is a banking service to quickly detect check fraud, is employed.

5. Investment and debt policies are approved by Council to define the parameters and authorizations for investing and issuing long‐term debt.

6. Procedures are established to ensure timely repayment and compliance with on‐going debt covenants.

7. The Council‐adopted budget ordinance is the policy used to establish budgetary control and the approval process required for budget adjustments.

8. Exceptions to any City policy or Administrative Regulation must be documented in writing and approved by an Assistant City Manager or the City Manager.

D. Information and Communication

Information is necessary for an entity to carry out internal control responsibilities to support the achievement of its objectives. Management obtains or generates and uses relevant and quality information from both internal and external sources to support the functioning of other components of internal control. Communication is the continual, iterative process of providing, sharing, and obtaining necessary information. Internal communication is the means by which information is disseminated throughout the organization, flowing up, down, and across the entity. It enables staff to receive a clear message from management that control responsibilities must be taken seriously.

External communication is twofold as it enables inbound communication of relevant external information and provides information to external parties in response to requirements and expectations.

Communication is not an isolated internal control component. It affects every aspect of an organization's operations and helps support the system of internal control. The feedback from this communication network can help management evaluate how well the various components of the system of internal control are working.

The City’s policies and procedures include but are not limited to:

1. The City Council adopts annual budgets and budget adjustments after a budget development process that encourages public engagement.

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97 2. Staff provide quarterly financial reports to the City Council for review.

3. City management provides written instructions to all financial personnel with a role in the budget development and year‐end close processes.

4. The City uses intranet and internet sites to communicate important information to employees, the City Council, and the public. Information provided on internet sites includes annual financial reports, adopted budgets, and summaries of City Council actions.

5. The City uses management‐authorized job descriptions for all personnel.

6. The City monitors events at the state and national levels for pertinent legislative and regulatory actions.

7. Meetings of management personnel are conducted to review City Council agenda items, new initiatives, budget updates, and other important information.

8. City departments conduct staff meetings which provide an opportunity for information sharing up, down, and across the organization.

9. The City uses a whistleblower communication protocol called “Speak Up” for reporting potential wrongdoing, which allows anonymous reporting as an option and is a direct communication channel to the City Manager.

E. Monitoring

Monitoring involves evaluating the effectiveness of internal controls on an on‐ going basis and taking remedial actions when necessary. On‐going monitoring activities often are built into the normal recurring activities and include regular management and supervisory activities. Management’s monitoring of controls includes considering whether they are operating as intended and that they are modified as appropriate for changes in conditions.

The City’s policies and procedures include but are not limited to:

1. Staff use the quarterly review of budget‐to‐actual reports to ascertain the on‐going quality of the accounting controls that are used to produce reliable and consistent financial information about the City.

2. Staff respond to information received from employees regarding the accuracy of their payroll checks in order to give the City information

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98 about the quality of the internal controls associated with the payroll process.

3. Staff respond to information received from vendors regarding the accuracy of payments made on vendor invoices in order to give the City information about the quality of the internal controls associated with the accounts payable process.

4. Staff respond to information received from customers regarding the accuracy of utility billings in order to give the City information about the quality of the internal controls associated with the utility billing system.

5. Staff follow up on corrective action plans for audit findings until recommendations are implemented.

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99 City of Roseville
Procurement Code of Ethics Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................... 100 II.  PURPOSE ......................................................................................................................... 100 III.  POLICY ............................................................................................................................. 100 IV.  GENERAL STANDARDS OF CONDUCT .............................................................................. 100 V.  CONDUCT WITH OUTSIDE VENDORS AND CONTRACTORS ............................................ 101 VI.  CONFLICT OF INTEREST IN PROCUREMENT .................................................................... 101 VII.  CONFLICT OF INTEREST CHECKLIST ................................................................................. 103 VIII.  CONFIDENTIALITY DURING THE EVALUATION PROCESS ................................................ 105

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I. INTRODUCTION

Public employees are stewards of public funds and must ensure that expenditures of public funds, such as through the procurement and contracting process, occur in an ethical and responsible manner.  All employees must perform their duties impartially to assure fair, competitive access to governmental procurement and to discourage conduct

that is inconsistent with the proper execution of the employee’s duties.  Moreover, public employees must maintain a standard of conduct that inspires public confidence and trust in the integrity of the City’s procurement process.

II. PURPOSE

The purpose of this policy is to provide a well‐defined and established code of ethics for City of Roseville employees, including public procurement professionals, who interact with the public and represent the City in any way in relation to all procurement activities and to ensure integrity in the procurement and contract process.

III. POLICY

It is the policy of the City of Roseville to foster public confidence in the integrity of the City’s procurement process by ensuring that all employees who engage in public procurement adhere and commit to the City’s Procurement Code of Ethics Policy to perform their duties with integrity, honesty, fairness, and transparency and to avoid conflict of interests, engaging in questionable practices, and offers of personal benefit.

All employees shall uphold the following standards:

IV. GENERAL STANDARDS OF CONDUCT

A. Employees shall act impartially and with the highest degree of integrity to foster public confidence in city government and will make every effort to ensure open and fair competition for all available City business in accordance with the Roseville Municipal Code and this Policy.

B. Employees shall conduct themselves in a courteous and professional manner with vendors, contractors, consultants and suppliers, henceforth referred to as “vendors”; internal customers, and members of the public with whom they come into contact, striving to act objectively and without discrimination or bias of any form.

C. Employees shall not use confidential or sensitive information acquired in the course of their duties for personal gain or for the benefit of family or friends, and will act only within the official level of their authority.

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D. Employees shall keep their supervisor informed as necessary, immediately upon learning of a potential or existing problem that may impact the integrity of a procurement or contract activity.

E. Employees shall not willfully or unlawfully conceal, remove, mutilate, falsify, or destroy any government document or record, nor shall they make any false or fictious statements in connection with any official procurement matter, document or record.

V. CONDUCT WITH OUTSIDE VENDORS AND CONTRACTORS

A. Employees shall base all purchases on the principle of competitive bidding/quotes consistent with the existing laws and policies of the City.

B. Employees shall grant all competitive quotes or bids equal consideration, regard each transaction on its own merits, and promote fair, ethical, and legal trade practices.  Employees shall not give out information about bids or bidders prior to bid opening.  Any information provided must be provided in a controlled manner to ensure that all potential bidders receive the same information at the same time.

C. Employees shall refrain from showing favoritism or being influenced by outside vendors through the acceptance of gifts, gratuities, loans or favors.

D. Employees shall refrain from requiring outside vendors to pay to be included on an approved or preferred vendor/contractor list.

E. Employees shall refrain from requesting donations of goods or services to the City.

F. Employees shall avoid the exertion of undue influence or abuse of power.

VI. CONFLICT OF INTEREST IN PROCUREMENT

A. Employees shall avoid all potential or actual conflicts of interest to ensure that

all procurement decisions are made in an independent and impartial manner.

B. Purchasing staff and others who regularly participate in contract activities on behalf of the City must disclose relevant financial interests as required by State

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Law and by City policy and to annually review those statements in conjunction with this Policy and other ethical standards.

C. If a possible conflict of interest is identified, it must be reported to the Department Head and reviewed and documented with the City Attorney’s Office.

D. Employees involved in a procurement selection process shall not accept, directly or indirectly, any tangible or intangible benefit valued at $50.00 or more (including, but not limited to, money, gifts, favors, entertainment, discounts, passes, transportation, accommodation, hospitality, meals or offers of employment, etc.) from any person, firm, organization, company or corporation, that may influence or give the appearance of influencing procurement‐related decisions, within six months before or after a contract award.

E. Employees shall declare a conflict when a vendor is to be selected for contract award that employs them, or their immediate family member or partner, or is about to employ them.

F. Employees shall, upon learning that the City is conducting or intends to conduct business with a vendor with which they, or a member of their immediate family have a financial interest, immediately disclose this real or apparent potential conflict of interest to their supervisor and refrain from all activity with respect to this vendor.

G. Employees shall not, in the performance of their official duties, participate directly or indirectly in any matter pertaining to any contract, or subcontract, and any solicitation or proposal thereof, in which to the employee’s knowledge:

1. They or any member of their immediate family has a substantial financial interest;

2. A business or organization in which they or any member of their immediate family has a substantial financial interest as an officer, director, trustee, partner or employee, is a party; or

3. Any other person, business, or organization with whom they or a member of their immediate family is negotiating or has an agreement concerning prospective employment, is a party.

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H. Direct or indirect participation, for purposes for Section (VI)(G), shall include, but is not limited to, involvement through decision, approval, disapproval, recommendation, preparation of any part of a procurement transaction, influencing the content of any specification or purchase standard, rendering of advice, investigation, auditing, or in any other advisory capacity.

I. Employees and members of the employee’s immediate family shall not enter into an agreement (contract or purchase order) with the City of Roseville, and the City shall reject all bids and proposals that are submitted by a City employee’s immediate family.

VII. CONFLICT OF INTEREST CHECKLIST

A. Employees should consider all of the following questions to determine whether a potential or actual conflict of interest exists through their participation in a proposed procurement or contract activity:

1. Personal Relationships

a) Do you currently have or have had any official, professional, financial, or personal relationships with any person or firm associated with this assignment?

b) In your opinion, might this affect your judgment or your ability to execute this assignment in a fair and impartial manner?

2. Stock and Investments

a) Do you own any stock in any company likely to be affected by or involved in the proposed procurement activity?

b) Does your spouse, domestic partner, or a dependent own any stock in any company likely to be affected by or involved in the proposed procurement activity?

c) Do you hold any investments in any entity (e.g., partnership, limited liability company, or a trust) likely to be affected by or involved in the proposed procurement activity?

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d) Does your spouse, domestic partner, or a dependent hold any investments in any entity (e.g., partnership, limited liability company, or a trust) likely to be affected by or involved in the proposed procurement activity?

3. Employment and Consulting

a) Is your spouse, domestic partner, or a dependent
employed/retained by anyone likely to be affected by or involved in the proposed procurement activity?

b) Has your spouse, domestic partner, or dependent been previously employed/retained by anyone likely to be affected by or involved in the proposed procurement activity?

c) Have you been employed/retained by anyone likely to be affected by or involved in the proposed procurement activity?

4. Payment or Gifts

a) Within the past 12 months, have you received any payments or gifts of $50.00 or more from anyone likely to be affected by or involved in the proposed procurement activity?

b) Within the past 12 months, has your spouse, domestic partner, or a dependent received any payments or gifts of $50.00 or more from anyone likely to be affected by or involved in the proposed procurement activity?

5. Real Estate

a) Do you own real property that is likely to be affected by or involved in the proposed procurement activity?

b) Does your spouse, domestic partner, or a dependent own real property that is likely to be affected by or involved in the proposed procurement activity?

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6. Positions

a) Do you currently hold a position (e.g., member of a board of directors) of any entity (e.g., a company, partnership, association, nonprofit) that is likely to be affected by or involved in the proposed procurement activity?

b) Does your spouse, domestic partner, or a dependent hold a position (e.g., member of a board of directors) of any entity (e.g., a company, partnership, association, nonprofit) that is likely to be affected by or involved in the proposed procurement activity?

7. Are you aware of any facts or circumstances that might give someone the impression that your participation in this process would create a conflict of interest?

VIII. CONFIDENTIALITY DURING THE EVALUATION PROCESS

City employees, vendors, and outside evaluators who participate in the evaluation process shall not share any information about responses received and the evaluation process until the City issues a Notice of Intent to Award.

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City of Roseville
Roseville Electric Utility Financial Policy

TABLE OF CONTENTS

I.  PURPOSE ......................................................................................................................... 107 II.  BACKGROUND ................................................................................................................. 107 III.  POLICY ............................................................................................................................. 107

1.  Rate Stabilization Fund ................................................................................................... 107

2.  Debt Service Coverage Ratio ........................................................................................... 108

3.  Days Cash on Hand ......................................................................................................... 108

4.  Fixed Cost Coverage ........................................................................................................ 108

5.  Debt Service Reserve ...................................................................................................... 108

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I.  PURPOSE

The purpose of Roseville Electric Utility’s financial policies is to provide management guidance to maintain a fiscally sound utility.

II.  BACKGROUND

Establishing financial policies assists the utility by:

1. Providing long term direction

2. Providing guidance for managing resources

3. Setting goals for rate planning

4. Maintaining and improving bond ratings and outlooks

5. Adopting metrics to measure and sustain a strong financial position.

Roseville Electric Utility uses financial ratios from these policies to analyze performance trends and compare financial results to other utilities. These ratios and benchmarks are also used by credit rating agencies, investors, and bond insurers to measure credit worthiness.

III. POLICY

The five financial policies include:

 Rate Stabilization Fund
 Debt Service Coverage Ratio
 Days Cash on Hand
 Fixed Cost Coverage
 Debt Service Reserve

1. Rate Stabilization Fund
Maintain a rate stabilization fund (contingency reserves) balance of a minimum 40% and maximum 90% of operating expenses with a target balance of 65%.

The purpose of the rate stabilization fund is to provide reserves to cover large contingencies such as fluctuation in fuel costs, while limiting or leveling out the impact
of cost increases to rate payers.  Reserve adequacy is reviewed carefully by rating agencies, bond insurers, and bondholders when evaluating a company’s financial position.

The balance in the rate stabilization fund will fluctuate from year to year as funds are transferred into and from operations, maintaining level rates for our customers.  The
goal is to maintain an average target for the rate stabilization fund of 65% of the annual operating expenses, accepting a range of 40% to 90% in any fiscal year.  By establishing a goal to maintain the rate stabilization fund at 65% of operating costs, Roseville Electric Utility should possess sufficient reserves available for contingencies.

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2. Debt Service Coverage Ratio
Maintain an annual debt service coverage ratio of minimum 2.0.  Maintain a debt service coverage requirement as required by bond covenants.

The debt service coverage ratio is one of the primary measures of a utility’s financial position.  This ratio calculates funds available to pay debt service and measures a utility’s ability to meet its annual debt obligations.  This is a key indicator used by rating agencies, bond insurers, and investors in evaluating our ability to meet our annual debt obligations. The formula is (annual net revenues annual debt service obligations).

3. Days Cash on Hand
Maintain a cash balance (excluding restricted items) greater than 250 days.

Days cash on hand is an indication of how many days operating expenses could be paid before additional income is needed.  It measures a utility’s ability to meet its annual operating obligations.  This is a key indicator used by rating agencies, bond insurers, and
investors in evaluating our ability to meet our operating obligations.  The formula is (cash*365 / annual operating expenses ‐ depreciation).

Restricted cash and cash held with joint powers agencies are excluded from the calculation.

4. Fixed Cost Coverage
Minimum fixed cost coverage ratio of 1.5.

Fixed cost coverage is an indication of how many times fixed costs can be paid from income.  This is a key indicator used by rating agencies, bond insurers, and investors in evaluating the utility’s ability to pay fixed costs.  The formula is (Net revenue – net
transfers (including General Fund transfers) not included in net revenue + total debt service) / (total debt service). The debt service includes Roseville’s off balance sheet debt obligation held by joint powers agencies.

5. Debt Service Reserve
Maintain a fully funded debt service reserve as required by bond covenants.

Debt service reserve ensures adequate cash is available to fund payments to bond holders.  Actual cash is held by a fiscal agent and a reservation of fund balance is recorded in the financial statements.  The value is set by bond covenant documents and is typically equal to one full year of debt service.

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City of Roseville
Environmental Utilities Financial Management Policy

TABLE OF CONTENTS

April 2015

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Table of Contents

1.   Executive Summary .......................................................................................................  111

2.   Introduction  .................................................................................................................  111

3.   Purpose  ........................................................................................................................  112

4.   Defining Financial Strength and Credit Considerations .................................................  112 Anticipated and Unanticipated Financial Considerations ........................................  113 Ratings as Indicators of Financial Strength  .............................................................  113

5.   Enterprise Fund Rates and Fees  ...................................................................................  114 Policy  .....................................................................................................................  114

6.   Rehabilitation Funds  ....................................................................................................  115 Policy  .....................................................................................................................  115

7.   Recommended Debt Service Coverage and Operating Ratio Policies  ........................... 117 Policy ......................................................................................................................  117

8.   Recommended Reserve Policy  .....................................................................................  118 Policy  .....................................................................................................................  118

9.   Interaction Between Coverage and Ratios, Reserves, and Rates ..................................  121

10.   Conclusion ....................................................................................................................  121 Appendix I – Peer Water Utility Financial Management Results  ..............................................  123 Appendix II – Peer Wastewater Utility Financial Management Results  ....................................  124

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1.   Executive Summary

The Roseville Environmental Utilities Department (the “EUD” or the “Department”) manages the city’s water, wastewater and solid waste utilities (the “Utilities”). The Utilities are separately managed financial entities and as such, each faces different constraints and environments and must manage its finances accordingly. With this notion in mind, the Utilities developed this Financial Management Policy (the “Policy”) with the intent of giving each Utility a set of guidelines with which it can successfully and prudently manage its finances.

The Policy affirms the currently used Rehabilitation and Enterprise Fund guidelines, clarifies and adjusts targets for cash flows available for debt service and operating costs, and
establishes targets for sizing Reserves (previously 10% of Operating Expenses).

Specifically, the Policy sets cash flow management guidelines for both the debt holding and non‐debt holding enterprises and recommends reserve levels based on each Utility’s respective risk profile. To the extent that a Utility holds public debt, the Policy establishes
Debt Service Coverage (“DSC”) targets to ensure the Utility’s ability to meet both its operating and debt service obligations; otherwise, the Policy recommends managing cash flow by targeting an Operating Ratio (Operating Income divided by Operating Expenses).

The Policy then sets recommends reserve levels in order to help the Utilities manage exposure to operating risks, critical failures, and rate volatility. The Policy also provides recommended conditions for rate actions when cash flows and/or Reserves deviate from their prescribed targets.

2.   Introduction

The Utilities are publicly‐owned community assets for the City of Roseville (“Roseville” or the “City”) that provide safe, reliable, competitively‐priced water, wastewater, solid waste, and recycled water services to all of their customers. The Utilities prepared the Policy with the intent of establishing guidelines for managing the financial profiles of each Utility.1

The Policy is divided into six sections: Purpose, Defining Financial Strength, Enterprise Fund Fees and Rates, Rehabilitation Funds, Recommended Debt Service Coverage and Operating Ratio Policies, Recommended Reserve Policies, and Interaction between Coverage and Reserves.

It is intended that to maintain relevance, the Utilities will revisit the Policy periodically if there
is a material change in risk exposures or conditions.

1The Policy focuses on the Water, Wastewater, and Solid Waste Utilities as the Recycled Water Utility does not keep independent financial records but is currently part of the Wastewater Utility.

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3.   Purpose

The purpose of this Financial Management Policy is to provide a set of guidelines for prudently managing the financial profiles of the Utilities. In practice, this Policy will discipline the budgeting and rate setting practices, establish guidelines to improve the financial health of each Utility over the long term, and seek to balance the need for capacity growth while maintaining competitively low rates.

Like all enterprises, the Utilities manage cash flow to cover expenditures and hold reserves to address anticipated and unanticipated funding requirements.

The Policy is based upon the understanding that the following factors are important and should serve as
the relevant goals of the Policy. These goals establish that each Utility should:

1.   Manage rates to avoid significant year‐over‐year rate adjustments.

2.   Strive to maintain and invest in its respective system.

3.   Maintain reserves for financial exposures.

4.   Cost‐effectively obtain funds to maintain and invest in its respective system.

The Policy is further intended to offer the Roseville City Council (the “City Council”) guiding directives to staff for decisions and recommendations related to the financial profile of each Utility.

The Policy is not prescriptive in terms of how the Utilities set rates; however, there is a

nexus between the rates that each Utility charges and its respective financial profile. While the Policy attempts to recognize the balance between each enterprise’s risk management, financial risk management and rate setting, the Policy cannot resolve conflicts between competing objectives and so it instead provides guidelines for the financial management of each Utility to be considered by the City Council and staff in coordination with other considerations.

4.   Defining Financial Strength and Credit Considerations

The Utilities’ businesses are subject to a number of significant environmental, market, and regulatory considerations on national, state, and local levels. The determination of financial strength is subjective, but it ultimately relates to the expectation that the Utilities can continue to meet their primary financial goals in the context of the macro considerations that each Utility faces.

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Anticipated and Unanticipated Financial Considerations

One characteristic of financial strength is the ability to prepare for anticipated events and obligations including, but not limited to:

 Operation and maintenance expenses (O&M).
 Debt service payments.
 Exposure to weather related events such as droughts.
 Response to existing or impending regulations.

Another characteristic of financial strength is the ability to address unanticipated considerations including, but not limited to:

 Unanticipated general reduction in customer demand.
 One or more operational events (natural disaster or other events including force majeure, etc.) that could dramatically increase costs or reduce resource options, the loss of one or more large customers.
 Market disruption that increases the cost of borrowed funds.  Counterparty’s inability to perform on a contract.
 Change in regulatory or environmental regulations.
 Unanticipated increase in compensation costs.

While such considerations are by nature, unanticipated, the Policy recognizes that the financial strength of each Utility is at least partially related to the ability to address such considerations should they arise.

Ratings as Indicators of Financial Strength

While credit ratings are important yardstick indicators of financial strength, the Policy is not focused on maintaining credit ratings but rather the overall financial strength of the Utilities as only some of the Utilities have or will have ratings. It is expected, however, that by following the guidelines of the Policy, the Utilities will maintain strong credit ratings.

Specifically, it is expected that the Water Utility will be able to maintain A+ category ratings and will be able to make a strong case for AA‐ category ratings while the Wastewater Utility will be able to support the South Placer Wastewater Authority (“SPWA”) in maintaining A or
higher, category ratings. SPWA issues debt on behalf of the City of Roseville, Placer County and South Placer Municipal Utility District for regional wastewater treatment facilities to be used by these agencies.

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5.   Enterprise Fund Rates and Fees

Environmental Utilities are 100% self‐sufficient. The primary revenue streams for the Utilities are rates and fees established by the City Council. This Policy identifies the manner in which rates and fees are set and the extent to which they cover the cost of services provided. A revenue system that requires the identification of both the cost of the programs and the portions of the cost that will be recovered through those revenues allow the Department and its utility customers to develop a better understanding of the cost of services and to consider the appropriateness of established rates and fees.

Policy

The City will set rates and fees at levels related to cover the reasonable cost of providing services which includes direct and indirect costs such as operating and maintenance, overhead, infrastructure rehabilitation, and debt service. The Department will review these rates and fees annually in the budget process and will recommend rates that are expected to produce revenues sufficient to fully fund the reasonable costs of providing services.

Further,

 All rates and fees shall be adopted in accordance with the provisions of Prop 218 and AB1600.
 The City will examine utility rates through the cost of service process every two years or as otherwise determined in an effort to avoid the rate shock that occurs when rates are evaluated less frequently.
 Revenue and expenses will be projected using conservatism.  Revenue requirements will be based on long‐term planning objectives.

During the rate and fee setting process, the City will consider the rates and fees of other agencies as comparing the City’s rates and fees to other agencies’ provides useful background information because:

 Other agencies’ rates and fees reflect in some ways the current “market’s” rates for similar services provided by the Utilities and can assist the City is assessing the reasonableness of proposed rate and fee changes.
 They can serve as a benchmark for how cost‐effectively the Utilities are providing their services.

Rates and fee comparisons, however, should never be the sole or primary criteria used in the City’s rate and fee setting process. The City should also place under consideration:

 What level of cost recovery is the rate and/or fee intended to achieve?  What costs are considered in the computation of rates and fees?  Timing: When was the last time the other agencies’ fees were comprehensively evaluated?

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 What level of service do the other agencies provide compared to the City’s?  Are other agencies’ rate structures significantly different than the City’s and what is each entities’ rate structure intended to achieve?

6.   Rehabilitation Funds
The Utilities have established Water, Wastewater and Solid Waste Rehabilitation Funds (the “Rehabilitation Funds”. The Water and Wastewater Rehabilitation Funds administer the capital rehabilitation and replacement of existing infrastructure assets. Solid Waste Rehabilitation Funds are used for the rehabilitation and replacement of bins and cans.

Policy

Sources of Revenue

The primary source of revenue for the Rehabilitation Funds is Utility rates. City Council adopted Utility rate schedules include an amount for the rehabilitation or replacement of infrastructure assets or capital assets for each utility. The rates are collected in the Operations Funds and transferred to the
Rehabilitation Funds.

The Wastewater Rehabilitation Fund also includes local wastewater connection fees. These fees are collected for the specific purpose of purchasing and/or replacing capital equipment required for the maintenance of wastewater facilities. Other sources of revenue for the Wastewater Rehabilitation Fund include:

 Interest earned on unexpended funds or reserves that will remain in the Rehabilitation Funds and be available for approved expenditures.  Any grant, loan, or other source of revenue obtained for the purpose of capital rehabilitation or replacement or infrastructure assets will be included in the Rehabilitation Fund, made available for approved expenditures, and accounted for as required by the grant, loan, or other source.

Expenditures

Rehabilitation Funds may only be used for Water and Wastewater infrastructure asset or Solid Waste capital asset capital rehabilitation or replacement expenditures. These expenditures:

 Must serve the purpose of benefiting the existing Water, Wastewater, or Solid Waste Utility
customers.
 Must be approved by City Council.
 Must be included in the Rehabilitation Plan unless needed for unanticipated utility emergency purposes.

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 May include updates necessary to comply with changes to regulatory requirements.
 Must be necessary to maintain the existing level of service which may include technological advancements.
 Must not increase capacity or conduct improvements beyond the scope described above.
 May be approved to pay for the respective utilities’ debt service.  If incurred in conjunction with an outside source of revenue (i.e. grant), must be accounted for as required by the outside revenue source.

Investments

Investments must be made in accordance with City investment policies.

Fund Balances

The Rehabilitation Funds will be administered independent of each other and of any other
funds within the Utilities or the City. Lending of funds to or from the Rehabilitation Funds must be approved by City Council, must be considered only for the benefit of the respective water, wastewater, and solid waste systems and utility funds, and only for the benefit of the respective water, wastewater, and solid waste customers. Interest will be paid at the then prevailing interest rate for city‐pooled investments. Further, the majority of each Utility’s Rehabilitation Fund balances should be invested or held in “liquid” assets (e.g. cash, money market accounts, treasuries, etc.) in order to ensure that immediate rehabilitation expenses can be met in a timely manner. Lending from the Rehabilitation funds will only be considered if they do not conflict with planned capital plan needs over the horizon of the repayment period.

Assessment of Capital Plan

The water and wastewater capital rehabilitation and replacement needs will be reevaluated
periodically. Items to be considered include, but are not limited to:

 Asset lifetimes by class of asset
 Inflation rates for both operating and capital costs
 Unit costs for asset replacement
 Fund interest yield rates
 Condition, criticality, and operational usefulness of assets  Desired levels of service
 Consequences when desired levels are not met
 Risk of asset failure and level of acceptable risk of failure  Measurements of various asset attributes that indicate how well an asset performs

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The amounts transferred from Operation Funds to Rehabilitation Funds will be adjusted as necessary to reflect changes in the rehabilitation and replacement funding requirements.

The impact of such adjustments on utility rates will also be analyzed to determine if an adjustment to water, wastewater, or solid waste utility rates is necessary.

Roseville Public Utilities Commission

The Roseville Public Utilities Commission will provide recommendations on the implementation of these policies, as appropriate, consistent with their role as an advisory body to the Roseville City Council.

Rehabilitation Fund Policy Review

The Rehabilitation Fund Policies designate a reassessment of the policies from time to time to determine if any changes are necessary. Any changes must be approved by the City Council.

7.   Recommended Debt Service Coverage and Operating Ratio Policies

This Policy recommends managing funds primarily to Debt Service Coverage (“DSC”) or Operating Ratios while maintaining a focus on reserves as well in order to meet each Utility’s management goals.

Policy

A practical minimum DSC is 1.00x without reserves because at 1.00x, the Utilities are paying operating costs and debt service on a cash flow basis. There are, however, below the line cash outflows that should also be considered.

Direct Debt Service Coverage and Operating Ratio Policy

This Policy recommends the
Water and Wastewater Utilities maintain DSC of 1.80x. This level maintains a cushion above the bond covenant requirement of 1.10x for the Wastewater Utility and 1.20x for the Water Utility. At 1.80x DSC, the Water and Wastewater Utilities can reliably use cash flow to pay for their operations including related depreciation expenses. The 1.80x DSC would leave adequate cash funding available to invest in general system improvements; however, significant capital improvements or additions would probably have to be financed with debt. This strikes a balance between funding capital through higher rates paid by current customers and funding capital through bond financing paid by future customers.

The Solid Waste Utility has historically enjoyed stable Net Operating Revenues. Due to the lack of volatility and overall lack of depreciable assets, it is recommended that the Solid Waste Utility maintain an Operating Ratio of 1.30x. The 1.30x Operating Ratio would leave

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sufficient cash funding available to invest in any necessary capital improvements on a pay‐ go basis.

Using Reserves to Meet Coverage

The Policy recommends that the Utilities calculate DSC and Operating Ratios without Reserves and without accounting for Rate Stabilization Fund draws. The use of rolling coverage in calculating DSC
is very useful for legal compliance purposes but it is not recommended for operating and financial management purposes as it may give an inaccurate depiction of financial health.

8.   Recommended Reserve Policy

Reserves are important to the Utilities because they help to:

 Ensure cash exists for the timely payment of bills.
 Maintain the short‐term and long‐term financial health of each Utility.  Maintain stable rates for customers.
 Fund unanticipated cost contingencies.
 Ensure funds exist for system improvements.
 Act as a significant factor in bond ratings.
 Identify when financing should be procured.
 Identify the need for rate actions.

Policy

The most common approach to sizing Reserves is by number of days of expenses. Water and wastewater utilities of about equivalent size to the City of Roseville Water and Wastewater Utilities typically have reserves of at least 250 days. Reserves of approximately 365 Days’ Cash would be more typical for AA‐/A+ category rated utilities and would be more appropriate to match the risks that the Water and Wastewater Utilities manage. It is recommended that the Solid Waste Utility maintain Days’ Cash of approximately 90 days for the reasons described below.

Operating Risk Management

The Utilities use reserves to handle
fluctuations and adjustments in every day expenses.

It is recommended that each Utility maintains approximately 90 days’ worth of Operating Expenses as one subcomponent of the Reserves. Such reserves would, amongst other things, be intended to cover timing issues with regard to payments, fluctuations in purchased water costs, and other operational issues. In consideration of these fluctuations in cost and cash requirement, 90 Days’ Cash for regular operation management is a modest first component of the recommended Reserves.

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System Critical Failure

Each Utility should consider maintaining a portion of the Reserves that is for a single emergency event (e.g. treatment facility closure, conveyance disruption, etc.). In total, it is recommended that the Reserves set aside for system critical failure be equivalent to approximately 1.0 ‐ 2.0% of the Capital
Assets belonging to each respective Utility. Due to
the lack of Capital Assets possessed by the Solid Waste Utility, it is not recommended that the Solid Waste Utility keep any reserves for the event of a system critical failure.

This component of the Reserves may be forgone if it is determined that each Utility’s exposure to critical failures is adequately covered through insurance.

Rate Stabilization

In addition to addressing operating and maintenance issues, Reserves serve two other important purposes:

1.   Reserves act as a shock absorber for ratepayers.

2.   Reserves offer security to each Utility’s debt holders. If an unusual financial or operating event leaves a Utility short of cash, Reserves can be used to avoid an immediate increase in rates to cover the shortfall.

Keeping some Reserves for rate stabilization would allow the Utilities to ensure that under virtually no circumstance would an Event of Default situation occur within a single year, and that the City Council would have the year to contemplate ways to prevent investors from
enforcing rate actions on the Utilities’ customers.

For such reasons, it is advisable that the Water and Wastewater Utilities target Reserves sized for rate stabilization at approximately 50% of annual operating expenses or roughly 180 Days’ Cash.

Because the Solid Waste Utility does not hold any debt
and has historically experienced very
stable net revenues, it is recommended that the Solid Waste Utility not hold any reserves for the purpose of rate stabilization.

Other Uses for Reserves

The aforementioned categories are those that most clearly merit the allocation of Reserves but are by no means the only
categories of financial exposure that the Utilities could manage with Reserves. For instance, the Utilities have significant Pension and Other Post‐ Employment Benefit liabilities that could generate a cash requirement. Further, to the extent that the Solid Waste Utility faces fees for the closure of a landfill or similar occurrence, it may be prudent to hold additional reserves for such an event. Other risk categories such as interest rate exposure are relatively small and do not need to be reserved for separately, but are real risks that could potentially be managed with Reserves.

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Reserve Policy Summary

These recommendations would suggest that the following would be the appropriate Reserve levels for each Utility:

 Operating Risk Management: 90 Days’ Cash
 System Critical Failure (Water and Wastewater Only): 1.0 ‐ 2.0% of Capital Assets  Rate Stabilization (Water and Wastewater only): ~180 Days’ Cash 
Total Reserves: ~270 Days’ Cash plus 1.0 ‐ 2.0% of Capital Assets (Water and Wastewater); 90 Days’ Cash (Solid Waste)

While these areas of consideration were evaluated in order to conceptualize the appropriate size of the Reserves, each Utility intends to maintain a single Reserve without separate buckets. These Reserve allocations are neither abnormally high nor low for industry standards. Each component of the Reserves is sized at less than the maximum possible exposure for each component because there is a recognition that it is unlikely several of the risks each Utility faces would materialize simultaneously.

Building and Drawing Upon Reserves

The Water and Wastewater Utilities are targeting Reserves of about 270 Days’ Cash plus 1.0 ‐ 2.0% of Capital Assets while the Solid Waste Utility is targeting 90 Days’ Cash, however, there is no intention of setting rates to maintain Reserves equal to the levels prescribed above. The purpose of Reserves is to address the financial impacts of revenue and expense fluctuations and unanticipated events. Excess reserves can be used for several financial imperatives including but not limited to: financing capital improvements on a pay‐go basis, paying down existing debt, or lowering rates. The general philosophy of the proposed range is that the Water and Wastewater Utilities should target 270 Days’ Cash plus 1.0 ‐ 2.0% of Capital Assets and the Solid Waste Utility should target reserves of 90 Days’ Cash. Each of the Utilities should limit reserves to 130% of the respective reserve targets.

Each Utility’s Reserves would increase or decrease depending upon many factors for a given year; however, to the extent that each Utility achieves its DSC or Operating Ratio Policy targets, Reserves would remain fairly stable. Reserves would increase or decrease under the following conditions:

 Net Revenues Available for Debt Service are higher or lower than budgeted/projected as a result of higher or lower Revenues and Expenses  Debt Service is higher or lower than budgeted/projected  Capital investment in the system from Net Revenues is higher or lower than budgeted/projected
 Debt issued for capital investment is greater or less than budgeted/projected

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9.   Interaction Between Coverage and Ratios, Reserves, and Rates

For reasons described in the sections above, the Policy prescribed specific targets for DSC and Operating Ratios and Reserves. However, the Policy anticipates that in practice there is a range of acceptable results and a balance between cash flow and reserve levels is warranted.

A rate increase should be considered by the City Council if any of the following conditions (the “Rate Increase Conditions”) are projected in the five‐year forecast:

 DSC without Reserves will be less than 1.80x
 Operating Ratios (Solid Waste Only) without Reserves will be less than 1.30x  Any rate increase would be greater than six percent
 A major expenditure is expected

Rate increases indicated by the above conditions that would exceed six percent in any one year can be spread over multiple years.

No rate increase for the purpose of increasing reserves or DSC should be considered if DSC or Operating Ratios without
Reserves are above their respective targeted levels and Reserves are projected to be greater than the targeted levels of 270 Days’ Cash plus 1.0 –

2.0% of Capital Assets for the Water and Wastewater Utilities and 90 Days’ Cash for the Solid Waste Utility.

Lastly, it is important to note
that recommendations in the Policy are associated with
projected financial conditions for the Fiscal Year End of future years. Actual results will vary based on weather, market conditions, etc. In addition, Reserves and cash flow may be more or less robust within a Fiscal Year, relative to the Fiscal Year End but considering such fluctuations within a year would overly complicate monitoring with only marginal benefit.

10.   Conclusion

The Policy was drafted with the intent of providing guiding directives to the Utilities’ management and staff for decisions and recommendations related to each Utility’s financial profile.

The Policy is a fairly incremental change from existing policies. Specifically, the Policy affirms the currently used Rehabilitation and Enterprise Fund guidelines, clarifies and adjusts targets for cash flows available for debt service and operating costs, and adjusts targets for sizing Reserves (previously 40% of Operating Expenses).

In its most abbreviated form, the Policy targets 1.80x DSC without Reserves for the Water and Wastewater Utilities and an Operating Ratio of 1.30x for the Solid Waste Utility. It
targets Unrestricted Reserves sized at 270 Days’ Cash plus 1.0 – 2.0% of Capital Assets for

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the Water and Wastewater Utilities and 90 Days’ Cash for the Solid Waste Utility and establishes tolerable maximums. The Policy also provides recommended conditions for rate actions when cash flows and/or Reserves deviate from the targets. The table below summarizes the policy targets described above. Summary

Summary of Policy Targets
Utility   Water  Wastewater  Solid Waste
Debt Service Coverage or
Operating Ratio (x)

1.80 DSC  1.80 DSC  1.30
Reserves (Days’ Cash)
Operating Risk Management   90  90  90
System Critical Failure (% of
Capital Assets)
1‐2%  1‐2%  0%
Rate Stabilization   180  180  0
Total   270 + 1‐2% of
Capital Assets
270 + 1‐2% of
Capital Assets
90 The Policy is intended to be revisited and updated periodically if there are material changes in the risk exposures or conditions each Utility faces.

Finally, and perhaps most importantly, the Policy is ultimately intended to serve as a guide and it in no way restricts the ability of the City Council to review proposed rate actions, debt
issuances, or other actions of substance to each Utility.

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Appendix I –Peer Water Utility Financial Management Results

1Issues debt through the Redding Joint Powers Financing Authority 2 City of Sacramento reports data rounded to the nearest thousand 3If not specified, assumed to be Net Operating Revenue (Excluding Depreciation) plus Non-Operating Income 4Unrestricted Cash defined as: "Unrestricted Net Assets" Data from City of Redding, City of Sacramento, and Yuba City comprehensive annual financial reports

Peer Water Utility Financial Results (FY2014)
Utility   City of Redding1  City of Sacramento2  Yuba City Ratings (M/S/F)   ‐ /AA/‐  ‐ /AA‐/AA‐  ‐ /A+/AA‐
Revenues/Expenses
Operating Revenues   $18,423,339  $94,382,000  $11,794,764 Operating Expenses
(Excluding Depreciation)
$13,245,963  $43,215,000  $4,815,664
Net Operating Revenue   $5,177,376  $51,167,000  $6,979,100 Non‐Operating Revenue
(Expenses)
$1,074,049  ($4,373,000)  $2,468,918
Net Revenue Available for
Debt Service3
$6,515,804  $46,794,000  $5,204,350
Depreciation & Amortization   $3,457,758  $16,951,000  $4,718,299 Net Revenue after
Depreciation & Amortization
$2,793,667  $29,843,000  $4,729,719
Cash
Unrestricted4   $23,402,105  $71,087,000  $14,543,831
Days' Cash on Hand   645  600  1,102
Debt
Total Debt Outstanding   $5,925,956  $399,134,612  $50,214,569 Annual Debt Service   $1,091,335  $11,279,000  $2,915,149 Debt Service Coverage
(Operating)

5.97x  4.15x  1.79x
Debt Service Coverage   4.74x  4.54x  2.39x

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Appendix II –Peer Wastewater Utility Financial Management Results

1Issues debt through the Redding Joint Powers Financing Authority 2If not specified, assumed to be Net Operating Revenue (Excluding Depreciation) plus Non-Operating Income 3Unrestricted Cash defined as: "Unrestricted Net Assets" Data from City of Redding, City of Stockton, and City of Vacaville comprehensive annual financial reports

Peer Wastewater Utility Financial Results (FY2014)
Utility   City of Redding 13  City of Stockton  City of Vacaville Ratings (M/S/F)   ‐ /AA/‐  Ba1/‐/A‐  ‐ /‐/‐
Revenues/Expenses
Operating Revenues   $22,720,092  $59,953,318  $32,219,462 Operating Expenses
(Excluding Depreciation)
$12,527,074  $40,172,822  $18,603,458
Net Operating Revenue   $10,193,018  $19,780,496  $13,616,004 Non‐Operating Revenue
(Expenses)
($175,350)  ($3,662,856)  ($662,109)
Net Revenue Available
for Debt Service2
$11,645,032  $21,057,331  $12,953,895
Depreciation &
Amortization
$5,924,400  $11,161,304  $5,367,829
Net Revenue after
Depreciation &
Amortization
$4,093,268  $4,956,336  $7,586,066
Cash
Unrestricted3   $20,151,993  $38,576,321  $61,918,880
Days' Cash on Hand   587  350  1,215
Debt
Total Debt Outstanding   $91,119,042  $81,270,000  $168,768,665 Annual Debt Service   $8,117,463  $7,373,138  $8,557,860 Debt Service Coverage
(Operating)

1.26x  2.68x  1.59x
Debt Service Coverage   1.43x  2.86x  1.51x
City of Roseville
Financial Policies

Effective July 1, 20242025

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2 Table of Contents

Investment Policy ............................................................................................................................. 3 Debt Management Policy .......................................................................................................... 2018 Swap Policy ................................................................................................................................ 3634 Budget Development Policy ....................................................................................................... 5048 General Fund Reserves Policy .................................................................................................... 5553 Development Services Stabilization Reserve (DSSR) Fund Policy .............................................. 5957 Federal Stimulus Reserve Fund Policy ....................................................................................... 6260 Internal Service Funds ‐ Operating and Replacement Reserves Policy ..................................... 6462 Capital Improvement Program Rehabilitation Funding Policy .................................................. 7169 Pension Funding Policy .............................................................................................................. 7371 Other Post‐Employment Benefits (OPEB) Funding Policy .......................................................... 7775 Workers’ Compensation and General Liability Funding Policy .................................................. 8078 Interfund Loans Policy ............................................................................................................... 8280 Request for Proposals (RFP) Policy ............................................................................................ 8583 Internal Control Policy ............................................................................................................... 9391 Procurement Code of Ethics Policy .......................................................................................... 10199 Roseville Electric Utility Financial Policy ................................................................................ 108106 Environmental Utilities Financial Management Policy .......................................................... 111109

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3 City of Roseville
Investment Policy

TABLE OF CONTENTS

I.  INTRODUCTION ................................................................................................................... 4 II.  SCOPE .................................................................................................................................. 4 III.  PRUDENCE........................................................................................................................... 4 IV.  OBJECTIVES ......................................................................................................................... 5 V.  DELEGATION OF AUTHORITY .............................................................................................. 5 VI.  ETHICS AND CONFLICT OF INTEREST .................................................................................. 6 VII.  AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS ..................................................... 6 VIII.  PERMITTED INVESTMENT INSTRUCTIONS .......................................................................... 6 IX.  REVIEW OF INVESTMENT PORTFOLIO .......................................................................... 1412 X.  INVESTMENT POOLS ..................................................................................................... 1513 XI.  COLLATERALIZATION ..................................................................................................... 1513 XII.  SAFEKEEPING AND CUSTODY ........................................................................................ 1513 XIII.  DIVERSIFICATION .......................................................................................................... 1513 XIV.  MAXIMUM MATURITY .................................................................................................. 1614 XV.  INTERNAL CONTROLS .................................................................................................... 1614 XVI.  PERFORMANCE BENCHMARK ....................................................................................... 1614 XVII.  REPORTING REQUIREMENTS ........................................................................................ 1614 XVIII.  INVESTMENT POLICY ADOPTION .................................................................................. 1715 XIX.  GLOSSARY ..................................................................................................................... 1715

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4 I.  INTRODUCTION

The purpose of this document is to identify various policies and procedures that enhance opportunities for a prudent and systematic investment policy and to organize and formalize investment‐related activities.

The investment policies and practices of the City of Roseville (City) are based on state law and prudent money management. All funds will be invested in accordance with this investment policy and Article 2 of Chapter 4 of the California Government Code. This policy is in compliance with the provisions of the California Government Code, Sections 53600 through 53659, and the authority governing investments for municipal governments.

II.  SCOPE

The
investment policy applies to all financial assets of the City as accounted for in the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this document focus on the City’s pooled funds, but will also apply to all other funds under the City’s Assistant City Manager/Chief Financial Officer’s span of control unless specifically exempted by statute or ordinance.

Proceeds of debt issuance shall be invested in accordance with the permitted investment provisions of their specific bond indentures. If, in the opinion of the City’s Assistant City Manager/Chief Financial Officer, matching the segregated investment portfolio of the bond reserve fund with the maturity schedule of an individual bond issue is prudent given current economic analysis, the investment policy authorizes beyond the five‐year maturity limitation as outlined in this document. The intent to invest in securities with longer maturities shall be disclosed in the permitted investment language authorized by the City Council in an indenture of trust.

This policy does not cover funds held by the California Public Employees Retirement System, nor funds of the City’s deferred compensation program, Other Post Employment Benefit Trust or Pension Trust.

III.  PRUDENCE

The standard of care to be used by investment officials shall be the "prudent investor"
standard and shall be applied in the context of managing an overall portfolio. The “prudent investor” standard states that:

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5 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.

Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

IV.  OBJECTIVES

The primary objectives, in priority order, of the investment activities of the City shall be:

A.  Safety

Safety of principal is the foremost objective of the investment program.  City investments shall be undertaken in a manner that seeks to ensure preservation of Capital in the portfolio. To further achieve the safety objective, the amount invested in all investment categories is limited to a percentage of the portfolio as defined in the section “VIII.   PERMITTED INVESTMENT INSTRUMENTS”.

B.  Liquidity

The investment portfolio of the City will remain sufficiently liquid to enable the City to meet its cash flow requirements.

C.  Return on Investment

The investment portfolio of the City shall be designed with the objective of attaining a market rate of return on its investments consistent with the constraints imposed by its safety objective and cash flow considerations.

V.   DELEGATION OF AUTHORITY

The City Council hereby delegates management responsibly of the investment program to the Assistant City Manager/Chief Financial Officer. The Assistant City Manager/Chief
Financial Officer shall be responsible for all transactions undertaken and shall establish

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6 a system of controls to regulate the activities of subordinate officials. The Assistant City Manager/Chief Financial Officer may delegate investment decision making and execution to the Controller Finance Director in absence of the Assistant City Manager/Chief Financial Officer. No person may engage in an investment transaction except as provided under the limits of this policy unless specifically exempted by statute or ordinance.

VI.  ETHICS AND CONFLICT OF INTEREST

Officers and employees involved in the investment process shall refrain from personal business activities that could conflict
with proper execution of the investment program,
or which could impair their ability to make impartial decisions.

VII.  AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

The Assistant City Manager/Chief Financial Officer and/or his/her designee will maintain a list of approved financial institutions authorized to provide investment services to the City in the State of California. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3‐1. A determination should be made to confirm that all approved broker/dealer firms, and individuals covering the public agency, are reputable and trustworthy. In addition, the broker/dealer firms should have the ability to meet all of their financial obligations in dealing with the Public Agency.  The firms, and individuals covering the agency, should be knowledgeable and experienced in Public Agency investing and the investment products involved. No public deposit shall be made except in a qualified public depository as established by the established state laws. All financial institutions and broker/dealers who desire to conduct investment transactions with the public agency must supply the Assistant City Manager/Chief Financial Officer with a completed broker/dealer questionnaire and certification of having read the City’s investment policy. In addition, broker/dealers must certify annually of having read the City’s investment policy.

VIII.  PERMITTED INVESTMENT INSTRUCTIONS

The City shall limit investments in any one non‐government issuer, except investment pools, to no more than 5% regardless of security type.

A.  U.S. Treasury obligations for which the full faith and credit of the United States are pledged for the
payment of principal and interest. Up to 100% of the City’s investment portfolio may be invested in government obligations.

B.  Federal agency or United States government‐sponsored enterprise obligations, participations, or other instruments, including those issued by or fully

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7 guaranteed as to principal and interest by federal agencies or United States government‐sponsored enterprises. This shall include any mortgage pass through security issued and guaranteed by a Federal Agency with a maximum final maturity of five years. Purchase of Federal Agency issued mortgage‐backed securities authorized by this subdivision may not exceed 20% of the City's surplus money; all other investments in Federal Agency securities are unrestricted.

C.  Obligations of the State of California or any local agency within the state, including bonds payable solely out of revenues from a revenue producing property owned, controlled or operated by the state
or any local agency or by a
department, board, agency or authority of the state or any local agency, provided that the obligations are rated in one of the two highest categories by a nationally recognized statistical‐rating organization (NRSRO). Up to 100% of the City’s investment portfolio may be invested in California municipal obligations.

D.  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 these states.

E.  Repurchase Agreements used solely as short‐term investments not to exceed 30 days. Up to 100% of the City’s investment portfolio may be invested in repurchase agreements.

The following collateral restrictions will be observed:

1.  Only U.S. Treasury securities or Federal Agency securities, as described in
section VIII. PERMITTED INVESTMENT INSTRUMENTS, paragraph (A) and (B) will be acceptable collateral. All securities underlying Repurchase Agreements must be delivered to the City’s custodian bank by book entry, physical delivery, or by a third party custodial agreement. The total of all collateral for each Repurchase Agreement must equal or exceed, on the basis of market value, 102% of the funds borrowed against those securities. For any Repurchase Agreement with a term of more than one day, the value of the underlying securities must be reviewed on a weekly basis and the value of the underlying securities brought back up to 102% no later than the next business day.

2.  Market value must be calculated each time there is a substitution of collateral.

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8 3.  The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to Repurchase Agreement.

4.  The City may enter into Repurchase Agreements only with primary dealers of the Federal Reserve Bank of New York.

5.  The City will have
specific written agreements with each firm with which
it enters into Repurchase Agreements.

6.  Reverse repurchase agreements will not be allowed.

F.  Banker’s Acceptances, otherwise known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank.

Purchases of Banker's Acceptances may not
exceed 180 days maturity or 40% of
the City’s investment portfolio.

G.  Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all of the following conditions in section “VIII.

PERMITTED INVESTMENT INSTRUMENTS”, paragraph (G1) or (G2).

1.  The entity meets the following criteria:

a.  Is organized and operating in the United States as a general corporation.

b.  Has total assets in excess of five hundred million dollars ($500,000,000).

c.  Has debt other than commercial paper, if any, that is rated “A” or higher by a NRSRO.

2.  The entity meets the following criteria:

a.  Is organized within the United States as a special purpose corporation, trust, or limited liability company.

b.  Has program wide credit enhancements including, but not limited to, over collateralizations, letters of credit, or surety bond.

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9 c.  Has commercial paper that is rated “A‐1” or higher, or the equivalent, by a NRSRO.

Purchases of eligible commercial paper may not exceed 270 days maturity nor represent more than 10% of the outstanding paper of an issuing corporation.

Purchases of commercial paper may not exceed 40% of
the City’s investment
portfolio.

H.  Medium‐term corporate notes issued by corporations organized and operating within the United States or by depository institutions licensed by the U.S. or any state and operating within the U.S. Medium‐term corporate notes shall be rated in a rating category "A" or its equivalent or better by a nationally recognized rating service.

Purchase of medium‐term corporate notes may not exceed 30% of the City’s investment portfolio.

I.  Federal Deposit Insurance Corporation (FDIC)FDIC insured or fully collateralized time certificates of deposit. Purchases of time certificates of deposit in combination with negotiable certificates of deposit may not exceed 30% of the City’s investment portfolio.

J.  Negotiable certificates of deposit or deposit notes issued by a nationally or state‐chartered bank, a state or federal savings and loan association, a state or federal credit union, or a federally‐licensed or state‐licensed branch of a foreign bank provided that the senior debt obligations of the issuing institution are rated "A" or better by an NRSRO.

The legislative body of a local agency and the treasurer or other official of the local agency having legal custody of the money are prohibited from investing local agency funds, or funds in the custody of the local agency, in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency or any person with investment decision making authority in the administrative office manager’s office, budget office, auditor‐controller’s office, or treasurer’s office of the local agency also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificates of deposits.

All certificates of deposit must be properly collateralized in accordance with Section 53652 of the California Government Code or fully insured by the Federal Deposit Insurance Corporation (FDIC).

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10 Purchase of time certificates of deposit in combination with negotiable certificates of deposit may not exceed 30% of the City’s investment portfolio.

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11 K.  Investment in placement service assisted deposits, including certificates of deposit, is limited to 50% of funds that local agencies invest in depository institutions until January 1, 2031. On January 1, 2031, the limit will return to 30% of the amount local agencies invest in depository institutions. Placement service assisted deposits provide allocation to multiple financial institutions in order to maintain deposit insurance from the FDIC or the National Credit Union Association.

KL.  State of California's Local Agency Investment Fund is an investment pool managed by the State Treasurer’s Office.

The Local Agency Investment Fund (LAIF) portfolio should be reviewed periodically.

Investment in LAIF may not exceed the legally authorized limits.

LM.  Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a‐1, et seq.). To be eligible for investment pursuant to this subdivision these companies shall either: (1) have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations or (2) have an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds and with assets under management in excess of $500,000,000.

The purchase price of shares of beneficial interest purchased shall not include any commission that the companies may charge and shall not exceed 20% of the City’s investment portfolio. Further, no more than 10% of the City’s investment portfolio may be invested in shares of beneficial interest of any one money market fund.

MN.  Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California that invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the Government Code of the State of California, as it may be amended. Up to 100% of the City’s investment portfolio may be invested in this investment type.

NO.  Supranationals 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 Inter‐American Development Bank (IADB), with a maximum remaining maturity of five years or less, and eligible for purchase and

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12 sale within the United States. Investments under this subdivision shall be rated "AA‐", its equivalent, or better by an NRSRO.

Purchases of supranationals shall not exceed 30% of the investment portfolio of the City. Supranationals are permitted by California Government Code § 53601 (q) effective January 1, 2015.

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13 OP.  A mortgage pass‐through security, collateralized mortgage obligation, mortgage‐backed or other pay‐through bond, equipment leased‐back certificate, consumer receivable passthrough certificate, or consumer receivable‐backed bond. Securities issued by private companies eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO and have a maximum remaining maturity of five years or less. Securities issued or guaranteed by the United States, a federal agency or United States government‐sponsored enterprise are not subject to the limitations placed on privately issued securities. No more than 20% of the City's surplus funds may be invested in this type of security.

Where this section specifies a percentage limitation for a particular category of investment, that percentage is applicable only on the date of purchase. Credit criteria listed in this section refers to the credit of the issuing organization at the time the security is purchased. If an investment falls below the minimum purchase rating, the Investment Review Committee will perform a timely review to sell or hold the investment.

PQ.  Prohibited Investments

For purposes of this policy, a derivative is defined as any security where the value is linked to or derived from an underlying asset or benchmark. Any security type or structure not specifically approved by this policy is hereby specifically prohibited. The City will not use such derivatives as range notes, dual index notes, inverse floating rate notes, deleveraged notes, or notes linked to lagging indices or to long‐ term indices, nor will the City invest in reverse repurchase agreements or interest‐only strips derived from a pool of mortgages. The City will not invest in securities that could result in zero or negative interest accrual if held to maturity, except, in the event of, and for the duration of, a period of negative market interest rates, securities issued by, or backed by, the U.S.

Government to preserve principal. This policy does not preclude the use of repurchase agreements and callable securities, as they do not fall within the definition of a derivative as described herein.

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14 Summary of Maximum Percentage Limitations of Investments by Investment Type

Minimum
Credit
Quality at    Maximum     Maximum
Maximum    Time of     Percentage    Investment
Authorized Investment Type    Maturity    Purchase    Allowed    In One Issuer

U.S. Treasury Obligations    5 Years    None    None    None U.S. Agency Securities    5 Years    None    None    None Forward Delivery Agreements    N/A    A    None    None State Obligations ‐ California and others    5 Years    None    None    None California Local Agency Bonds    5 Years    None    None    None Repurchase Agreements    30 days    None    None    None Bankers' Acceptances    180 days    None    40%    30%
Commercial Paper    270 days    A‐1    40%    10%
Medium‐Term Corporate Notes    5 Years    A    30%    10% Collateralized Time Deposits    5 Years    None    30%    None Negotiable Certificates of Deposit    5 Years    A    30%    None Placement Service Deposits    5 Years    None    50%    None Placement Service Certificates of Deposit    5 Years    None    50%    None Local Agency Investment Fund (LAIF)    N/A    None    None    LAIF limit Insured Saving Accounts  N/A  None  None  None
Money Market Mutual Funds  N/A  None  20%  10%
Shares in a California Common Law Trust    N/A    None    None    None Interest Rate Swaps     N/A    None    None    None
Supranational Obligations    5 Years    AA‐    30%    None Mortgage Pass‐Through Securities    5 Years    AA    20%    None

IX.  REVIEW OF INVESTMENT PORTFOLIO

The securities held by the City must be in compliance with Permitted Investments at the time of purchase. Because some securities may not comply subsequent to the date of purchase, the Assistant City Manager/Chief Financial Officer shall at least annually review the portfolio to identify
those securities that do not comply. The Assistant City Manager/Chief Financial Officer shall report major and critical incidences of noncompliance identified through the review of the portfolio.

The Investment Review Committee will meet at least quarterly to discuss the investments in the City’s portfolios.

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15 X.  INVESTMENT POOLS

A thorough investigation of any investment pool is required prior to investing and should be monitored on an ongoing basis. The following information should be obtained and analyzed.

A.  A description of eligible of investment securities.

B.  A written statement of investment policies and objectives.

C.

A description of interest calculations and their distribution, and the treatment of gains and losses.

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

E.  A description of who may invest in the program, how often, and what size of
deposits and withdraws are allowed.

XI.  COLLATERALIZATION

Collateral for Non‐negotiable Certificates of Deposit and Negotiable Certificates of Deposit must comply with California Government Code section 53652. In addition, if the Certificate of Deposit is not FDIC insured, collateral is required equal to 110% of principal.

XII.  SAFEKEEPING AND CUSTODY

The City shall take from such financial institution a receipt for securities so deposited. All security transactions, including collateral for repurchase agreements, entered into the City shall be conducted on a delivery‐versus‐payment (DVP) basis pursuant to the approved custodial safekeeping agreements. The authority of the legislative body to deposit for safekeeping may be delegated by the legislative body to the Assistant City Manager/Chief Financial Officer of the City; the Assistant City Manager/Chief Financial Officer shall not be responsible for securities delivered to and receipted for by a financial institution until they are withdrawn from the financial institution by the Assistant City Manager/Chief Financial Officer.

XIII.  DIVERSIFICATION

The City’s investment pool will be diversified to avoid incurring unreasonable and avoidable risks. The investments will be diversified by security type, maturities of those investments, and institutions in which those investments are made.

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16 XIV.  MAXIMUM MATURITY

Investment maturities shall be based on a review of cash flow forecasts. Maturities will be scheduled to permit the City to meet all projected obligations while minimizing interest rate risk and maximizing earnings. Unless specified below, the maximum maturity will be no more than five years from purchase settlement date to final maturity date.

City Council has granted permission to invest the following fund accounts where liquidity is not the primary investment objective, in Federal Treasury or Agency securities with maturities up to ten years. The specified fund accounts include:

•  The City’s Pooled Fund, limited to
25% of the total pool
•  Citizens’ Benefit TrustFund
•  North Central Wetlands Endowment
•  Aquatics Complex Maintenance
•  Woodcreek West Endowment

XV.  INTERNAL CONTROLS

The Assistant City Manager/Chief Financial Officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, fraud or misuse.  An analysis by an external independent accounting firm shall be conducted annually to review internal controls, account activity, and compliance with the investment policies.

XVI.  PERFORMANCE BENCHMARK

The investment portfolio will be designed to obtain a market rate of return during budgetary and economic cycles, taking into account the City’s investment risk constraints and cash flow needs. The Investment Review Committee has elected to use for its performance standard the Constant Maturity Treasury (CMT) Index.  For the Pooled Portfolio, the 12 month moving average yield on 3Yr CMT will be used and for Citizens’ Benefit Trust Fund portfolio, the 12 month moving average yield on 5Yr CMT will be used. All other City portfolios will follow the 2Yr CMT.

XVII.  REPORTING REQUIREMENTS

The Assistant City Manager/Chief Financial Officer shall submit monthly investment reports to the City Manager and make these reports available to the City Council in the Finance Department office. The reports shall include, at a minimum, the following
information for each individual investment:

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17 •  Description of investment instrument
•  Issuer name
•  Yield on cost
•  Purchase date
•  Maturity date
•  Book value
•  Par value
•  Current market value
•  Transaction activity
•  Interest earnings summary

XVIII.  INVESTMENT POLICY ADOPTION

The City’s investment policy shall be adopted by resolution by the City Council. The policy shall be reviewed annually by the Assistant City Manager/Chief Financial Officer and/or his/her designee and any modifications made thereto must be approved by the City Council.

XIX.  GLOSSARY

Agencies ‐ Federal agency and instrumentality securities.

Asked ‐ The price at which securities are offered.

Bid ‐ The
price offered by a buyer of securities (when one sells securities, one asks for a bid). See “Offer”.

Benchmark ‐ A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of
the portfolio’s investments.

Broker‐Dealer – a person or a firm who can act as a broker or a dealer depending on the transaction. A broker brings buyers and sellers together for a commission. They do not take a position. A dealer acts as a principal in all transactions, buying and selling for his own account.

Certificate of Deposit (CD) – A time deposit with a specific maturity evidenced by a Certificate. Large‐denomination CDs are typically negotiable.

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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18 Custody – Safekeeping services offered by a bank, financial institution or trust company, referred to as the “custodian.” Service normally includes the holding and reporting of the customer’s securities, the collection and disbursement of income, securities settlement and market values.

Delivery Versus Payment –A type of securities transaction in which the purchaser pays
for the securities when they are delivered either to the purchaser or custodian. It ensures that securities are deposited in an eligible financial institution prior to the release of funds. Securities should be held by a third‐party custodian as evidenced by safekeeping receipts.

Diversification – Dividing investment funds among a variety of securities offering independent returns.

Federal Agency Obligation – A debt instrument issued by one of the federal agencies.

Federal agencies are considered second in credit quality and liquidity only to U.S.

Treasuries.

Investment Review Committee –The investment review committee consists of the City Manager,
Assistant City Manager/Chief Financial Officer and members of the Finance Department.

Liquidity – An investment that can be converted easily and rapidly into cash without a substantial loss of value.

Local Agency Investment Fund (LAIF) – The aggregate of all funds from political subdivisions that are placed in the custody
of the State Treasurer for investment and
reinvestment.

Market Value – The price at which a security is trading and could presumably be purchased or sold on a specific date.

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

Money Market
Fund – a type of safe investment comprising a variety of short‐term securities with high quality and high liquidity. The fund provides interest to shareholders and must maintain a stable net asset value (NAV) of $1 per share.

Offer ‐ The price asked by a seller of securities (when one buys securities, one asks for an offer). See “Asked” and “Bid”.

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19 Portfolio – Collection of securities held by an investor.

Principal – the original cost of a security. It represents the amount of capital or money that the investor pays for the investment.

Prudent Investor Standard – An investment standard that all investments should be made 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.

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

U.S. Treasury – Government
debt issued by the United States Department of the
Treasury through the Bureau of the Public Debt. Treasury securities are the debt financing instruments of the United States federal government, and they are often referred to simply as Treasuries. There are four types of marketable treasury securities:

Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities (TIPS). All of the marketable Treasury securities are very liquid and are heavily traded on the secondary market.

Yield ‐ The rate of annual income return on an investment, expressed as a percentage.

Yield‐To‐Call (YTC) ‐ The rate of return an investor
earns from a bond assuming the
bond is redeemed (called) prior to its nominal maturity date.

Yield‐To‐Maturity ‐ 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.

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20 City of Roseville
Debt Management Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 2220 II.  SCOPE ............................................................................................................................ 2220 III.  OBJECTIVES AND POLICY GOALS ................................................................................... 2220 IV.  DEBT ISSUANCE ................................................................................................................. 21 A.  Types of Bond Sales ......................................................................................... 2321

1.  Competitive Sale ................................................................................. 2321

2.  Negotiated Sale ................................................................................... 2321

3.  Private Placement/Bank Direct Purchase (BDP) ................................. 2321 B.  Issuer Characteristics ....................................................................................... 2422

1.  Market Familiarity .............................................................................. 2422

2.  Credit Strength .................................................................................... 2422

3.  Policy Goals ......................................................................................... 2422 C.  Financing Characteristics ................................................................................. 2422

1.  Type of Debt Instrument .................................................................... 2422

2.  Issue Size ............................................................................................. 2422

3.  Market Conditions and Timing ........................................................... 2523

4.  Story Bonds ......................................................................................... 2523 V.  FINANCIAL SERVICE PROVIDERS ................................................................................... 2523 A.  Selection .......................................................................................................... 2523 B.  Use of Independent Financial Advisors ........................................................... 2624 C.  Communication/Solicitation ............................................................................ 2624 VI.  DEBT MANAGEMENT PROCESS – TAX STATUS ............................................................. 2624 A.  Tax‐Exempt ...................................................................................................... 2624 B.  Taxable ............................................................................................................. 2725 VII.  DEBT MANAGEMENT PROCESS – TYPE OF DEBT .......................................................... 2725 A.  Fixed Rate Debt ................................................................................................ 2725 B.  Variable Rate Debt ........................................................................................... 2725 C.  Use of Alternative Debt Instruments ............................................................... 2826

1.  Derivative Products ............................................................................. 2826

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21 VIII.  DEBT MANAGEMENT PROCESS – DEBT CAPACITY........................................................ 2826 IX.  DEBT MANAGEMENT PROCESS – SECURITY OF DEBT ...................................................... 27 A.  General Obligation (G.O.) Bonds ......................................................................... 27 B.  Revenue Bonds ................................................................................................ 2927 C.  Certificates of Participation (COP) Bonds ........................................................ 2927 D.  Housing Bonds ................................................................................................. 2927 E.  Community Facilities District (CFD) Bonds ...................................................... 2927 F.  Special Assessment Bonds ............................................................................... 3028 X.  DEBT MANAGEMENT PROCESS – PURPOSE OF FINANCING ......................................... 3028 A.  New Money Financing ..................................................................................... 3028 B.  Refunding Bonds .............................................................................................. 3028 XI.  DEBT MANAGEMENT PROCESS ‐ CREDIT RATINGS ....................................................... 3129 A.  Rating Agency Relationships ............................................................................ 3129 B.  Use of Rating Agencies .................................................................................... 3129 XII.  DEBT MANAGEMENT PROCESS – CREDIT ENHANCEMENT .......................................... 3230 A.  Bond Insurance ................................................................................................ 3230

1.  Benefit Analysis ................................................................................... 3230

2.  Selection ............................................................................................. 3230 B.  Bank Facilities (Letters of Credit) ..................................................................... 3330 XIII.  DEBT MANAGEMENT PROCESS – STRUCTURAL FEATURES .......................................... 3331 A.  Maturity ........................................................................................................... 3331 B.  Debt Service Structure ..................................................................................... 3331 C.  Lien Levels ........................................................................................................ 3331 D.  Capitalized Interest .............................................................................................. 32 XIV.  INVESTMENT OF BOND PROCEEDS ............................................................................... 3432 XV.  CONTINUING DISCLOSURE ............................................................................................ 3432 XVI.  ARBITRAGE REBATE ...................................................................................................... 3432 XVII.  INTERNAL CONTROLS AND POST ISSUANCE COMPLIANCE .............................................. 33

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22 I.  INTRODUCTION

The Finance Department of the City of Roseville (the “City”) has developed this Debt Management Policy (the “Debt Policy”) to provide guidelines for the issuance of bonds and other forms of indebtedness to finance necessary land acquisitions, capital construction, equipment, and other items for the City.

While the
issuance of debt is frequently an appropriate method of financing capital projects and major equipment acquisitions, such issuance must be carefully monitored to preserve the City’s credit strength and to provide the necessary flexibility to fund future capital needs.

II.  SCOPE

This Debt Policy shall govern, except as otherwise covered by the law, City Charter and City Code, the issuance and management of all debt and lease financings funded in the capital markets. While adherence to the Debt Policy is desired, the City recognizes that changes in the capital markets as well as unforeseen circumstances, may from time to time produce situations that are not covered by the Debt Policy and may require modifications or exceptions to achieve City goals.

The City’s Debt Policy shall be reviewed, and updated if necessary, on an annual basis.

The Assistant City Manager/Chief Financial Officer (CFO), with the assistance of the General Accounting staff, shall
have the responsibility and authority for structuring,
implementing and managing the City’s debt and financing program, in accordance with City Council authorizations.

III.  OBJECTIVES AND POLICY GOALS

The City has earned some of the highest credit ratings in the nation and as a result receives some of the lowest possible
interest rates on its debt. These low interest rates
result in a lower overall cost of capital to the City. This Debt Policy will assist the City in determining appropriate uses of debt financing, establish certain debt management goals and assist the City in maintaining its high credit ratings, while assuming a prudent level of financial risk and preserving the City’s flexibility to finance future capital programs and requirements. Additionally, this Debt Policy is intended to set forth criteria for selecting firms to provide certain financial, legal, and other related services that will ensure that a fair and open selection process is used which provides opportunities for all qualified firms, including minority and women owned businesses.

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23 IV.  DEBT ISSUANCE

There are three general methods of issuing debt obligations, a competitive sale, negotiated sale and private placement.

A.  Types of Bond Sales

1.  Competitive Sale

In a competitive sale, security dealers submit bids either in a sealed bid or electronically secure process and the security dealer
with the lowest True
Interest Cost (TIC) and in compliance with the bid parameters is awarded the bonds.

2.  Negotiated Sale

In a negotiated sale, an underwriter or underwriter syndicate is selected through a Request for Qualifications (RFQ) process or a Request for Proposal (RFP) process. The interest rate and underwriter’s fee are negotiated prior to the sale, based on market conditions.

3.  Private Placement/Bank Direct Purchase (BDP)

A private placement or bank direct purchase is a sale that is structured specifically for one purchaser, such as a mutual fund or a bank. BDPs are usually quicker and less expensive for municipalities than competitive or negotiated bond sales because they impose fewer requirements on the issuer. The interest rate may be a fixed or variable rate, as agreed between the issuer and purchaser. The term of the bonds may range from under 10 years to 15 years or not much longer, as agreed between the issuer and purchaser. The bonds may or may not be tax‐exempt bonds for federal income tax purposes. If the CFO, or his/her designee, determines that it is in the best interest of the City from a cost or administrative standpoint, the Finance Department may negotiate financing terms with banks and financial institutions for specific borrowings.

It shall be the policy of the City to ensure the lowest risk and lowest overall interest rate to the City when issuing debt either through a competitive sale, negotiated sale or private placement, where appropriate. The City shall use the following criteria to determine whether a competitive or negotiated sale should be used.

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24 B.  Issuer Characteristics

1.  Market Familiarity

A frequent issuer of a well‐recognized credit such as general obligation bonds can generally sell these bonds through a competitive sale since investors and underwriters are familiar with the quality of the credit. A negotiated sale may be appropriate if extensive pre‐marketing to
investors is desired or required.

2.  Credit Strength

The higher the credit quality of the bonds being issued, the more likely the bonds can be sold using a competitive sale due to the high demand for high quality municipal bonds. High quality credits fare well in competitive sales.

3.  Policy Goals

A competitive sale does not provide the City with the flexibility of choosing the underwriter or underwriter syndicate. If the CFO concludes that determining the composition of the underwriter syndicate to achieve certain policy objectives is important, then a negotiated sale will be required. However, if the CFO selects the negotiated sale solely for policy reasons then the specific rationale and criteria for selection should clearly be specified.

C.  Financing Characteristics

1.  Type of Debt Instrument

The market favors familiar debt instruments such as general obligation bonds backed by the full faith and credit of the City.

New credit types
may require an education process that is more conducive to a negotiated sale until the market becomes comfortable with the credit.

2.  Issue Size

The size of the bond sale will influence both investor interest in the bonds and the market’s ability to absorb the bonds. In general if the bond sale is too small or too large, a negotiated sale may be necessary. A small

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25 sale may require greater marketing to garner investor interest while a large sale may be difficult for the market to absorb without the presale activity available in the negotiated sale process.

3.  Market Conditions and Timing

During periods of stable interest rates, market timing is not as critical.

However, during periods of volatile interest rates, the timing of the sale becomes more critical. Bond refundings are also often very interest rate sensitive in terms of the potential level of savings or the general feasibility of the refunding. The negotiated sale provides more flexibility in terms of the structure of the bond sale as well as the timing of the bond sale and may be more appropriate when issuing refunding bonds and when interest rates are volatile.

4.  Story Bonds

Bonds that require a detailed explanation due to the complexity of the credit or the repayment of the bonds are often
referred to as “Story
Bonds”. Due to their complexity and the additional explanation these bonds require, an extensive pre‐marketing campaign is necessary. Story Bonds often require a negotiated sale composed of an underwriting syndicate that is qualified to market the bonds in order to obtain the lowest financing cost for the City.

V.  FINANCIAL SERVICE PROVIDERS

A.  Selection

In connection with debt financings, financial advisors, underwriters, and other service providers will be selected from a Qualified Vendors List (QVL) developed through a periodic Request for Qualifications (RFQ) process or, for individual financings, through a Request for Proposals (RFP) process, whichever method is deemed most appropriate given the specifics of the financing. At the discretion of the CFO, contracts may be awarded on a sole source basis if it is clear that an RFQ/RFP process is not feasible or not in the best interest of the City.

For competitive sales,
any security dealer meeting the qualification criteria
outlined in the competitive bid notice may bid in the competitive sale. For negotiated sales, only those underwriters qualified under the RFQ/RFP process may be selected. Underwriters or underwriter syndicates will be selected by the CFO. The allocation of bonds among syndicate members will be at the sole discretion of the CFO with the approval of the City Manager or his/her designee.

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26 B.  Use of Independent Financial Advisors

The City will hire financial advisors who are independent. In the event the best available financial advisor is an investment banking firm, the firm will under no circumstances be permitted to participate as the lead underwriter or as a member of an underwriter syndicate that is bidding on the bonds for which the firm is acting as a financial advisor. In addition, if the firm has any profit sharing or other type of agreement with any member of the underwriting syndicate for the transaction in question, they will not be allowed to act as the financial advisor. In general, no agreement will be permitted that would compromise the firm’s ability to provide independent advice or that could be reasonably perceived by the City as a conflict of interest. Advisors must alert the CFO, in writing, of any conflict, potential conflict, or potentially perceived conflict prior to entering into an agreement with the City, or if occurring after entering into an agreement with the City, as soon as the conflict, potential conflict, or potentially perceived conflict arises.

C.  Communication/Solicitation

All financial consultants, including all investment banking firms, financial advisors, bond counsel, and other consultants hired in connection with any bond transaction will direct all communications, solicitations and questions to the CFO or his/her designee. Underwriters are reminded that under Rule G‐37 of the Municipal Securities Rulemaking Board (MSRB) that a firm may be banned from providing underwriting services to the City for two years for making any political contributions to elected City officials.

VI.  DEBT MANAGEMENT PROCESS – TAX STATUS

Prior to the issuance of any bonds, the Finance Department, in conjunction with bond counsel and the City Attorney’s Office will evaluate the tax status of any bond sales.

A.  Tax‐Exempt

Interest on tax‐exempt bonds is excluded from the gross income of its owners for federal income tax purposes and from California income taxes and as a result tax‐exempt bonds can be sold at a lower true interest cost than taxable bonds.

The City, along with bond counsel, will evaluate all projects to be funded to assess their eligibility to be funded by tax‐exempt bonds. The City will make every effort to ensure that all tax regulations are complied with to ensure the bonds maintain their tax‐exempt status.

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27 B.  Taxable

Certain municipal bonds are sold as taxable bonds because they are issued for purposes that the federal government deems do not provide a significant benefit to the public at large or involve “private activity”. In addition, certain tax laws such as the alternative minimum tax (AMT) reduced the tax exemption applicable to certain types of bonds and to certain taxpayers. Taxable bonds will be used whenever a particular project has the potential for private activity or other uses that may call into question the eligibility to use tax‐exempt financing.

VII.  DEBT MANAGEMENT PROCESS – TYPE OF DEBT

A.  Fixed Rate Debt

Longer term debt usually consists of fixed interest rates over the term of the bonds and should be used to finance essential capital facilities, projects and certain equipment where it is appropriate to spread the cost of the project over more than one budget year and generally for a period not to exceed the useful life of the project being financed. In so doing, the City recognizes that future taxpayers who will benefit from the project will pay a share of its cost. Fixed rate debt provides the benefit of fixed payments during the life of the bonds and budget certainties for long‐term capital planning. However, fixed rate debt is typically longer term and carries higher interest payments (assuming an upward sloping yield curve) than variable rate debt but is not subject to changes in interest rates. Fixed rate debt is the most common type of debt issued by the City.

B.  Variable Rate Debt

The municipal bond market has developed several vehicles by which municipalities can borrow at short‐term, variable interest rates. Variable Rate Demand Notes may be issued with interest rates that “reset” daily, weekly, monthly or semiannually at the option of the City. Commercial paper is issued with a maturity of up to 270 days at the City’s option. As the commercial paper matures, it is resold by a commercial paper dealer for another period up to 270 days.

These products are structured as a rolling series of short‐term investments and
therefore are priced at the short‐end of the yield curve at lower interest rates than long‐term fixed rate bonds (assuming an upward sloping yield curve). By

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28 accepting the risks inherent in variable interest rates, the City can take advantage of the lowest rates available in the current market.

Factors that will be considered in the use of variable rate debt are the availability and size of fund balances to cover variable rate risk, and the budget flexibility of
the program being financed. Programs with large complex capital programs may use short‐term financing to fund uncertain construction cash flow requirements.

The short‐term debt can be refinanced as fixed‐rate, long term debt once the projects are complete. A project that must be carried in anticipation of grant funding may also be a candidate for the use of variable rate financing. Examples are the Electric, Water, and Wastewater enterprise funds.

C.  Use of Alternative Debt Instruments

1.  Derivative Products

The use of certain derivative products, such as swaps, swaptions and the sale of call options, allow the
City to realize lower all‐in costs on a new
debt issuance or to receive an upfront payment. One type of swap that may be used would allow the City to issue variable rate debt in exchange for fixed payments that are typically lower than fixed rate debt. However, such products have unique risks that the City and its financial advisors will evaluate as per the City’s Swap Policy. The current Swap Policy is included in Appendix A.

VIII.  DEBT MANAGEMENT PROCESS – DEBT CAPACITY

The determination of how much indebtedness the City can afford begins by assessing the sufficiency of future revenues. The amount of debt issued is based on the requirements of the approved 5‐year CIP, subject to the condition that sufficient revenues are projected to be available. Factors such as debt service coverage requirements outlined in the bond indentures, the impact on the citizens residents (tax rates), and any impact on the bond ratings will be carefully considered. Different factors are considered for each type of credit. For example, Revenue or Certificates of Participation bonds for electric, water and wastewater bonds will consider the impact on customer utility bills. In the case of general obligation debt, State Statutes and the Constitution limit the amount of debt that a municipality can have outstanding.

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29 IX.  DEBT MANAGEMENT PROCESS – SECURITY OF DEBT

A.  General Obligation (G.O.) Bonds

G.O. bonds are backed by the full‐faith and credit of the City and are secured by secondary property taxes.

B.  Revenue Bonds

Revenue bonds are supported solely from fees generated from specific Enterprise Funds. Accordingly, in order to preserve debt capacity and budget flexibility, the City will issue revenue bonds when an identifiable revenue stream can be dedicated to support the payment of debt service. The final maturity of revenue obligations will be determined by the expected life of the project to be financed and the revenues available to repay the debt. The City’s various Enterprise Funds – Electric, Water, and Wastewater issue bonds backed by revenues of the enterprise. Revenue bonds are generally issued through the Roseville Finance Authority.

C.  Certificates of Participation (COP) Bonds

COP bonds are an instrument evidencing a pro rata share in a specific pledged revenue stream, usually lease payments by the issuer that are typically subject to annual appropriation. The certificate generally entitles the holder to receive a share, or participation, in the payments from a particular project. The payments are passed through the lessor to the certificate holders. The lessor typically assigns the lease and the payments to a trustee, which then distributes the payments to the certificate holders.

D.  Housing Bonds

Tax‐exempt housing bonds are an important source of capital, providing loans for single‐family homeownership and rental housing for very‐low, low and moderate‐income individuals and families. The relatively low tax‐exempt interest rates, combined with federal, state, and local housing assistance programs, provide the necessary subsidy to create a supply of much needed, below market interest‐rate loans.

E.  Community Facilities District (CFD) Bonds

CFD bonds are issued and backed entirely by a Community Facilities District established under State Statutes for the purpose of managing and financing

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30 public improvements benefiting the property within the CFD. Any CFDs established by the City are reviewed by the Finance Department, and the Finance Department will supervise the issuance of the debt on behalf of the CFD with the CFD paying all costs of issuance including administrative support. The creation of a CFD must be approved by City Council and follow a detailed legal process. Please refer to the City’s Goals and Policies Concerning Use of Mello‐ Roos Community Facilities Act of 1982, available on the City’s website, concerning CFD bonds.

F.  Special Assessment Bonds

Special assessment bonds are a special type of municipal bond used to fund development projects that benefit a discrete group of taxpayers within a special assessment district. Principal and interest owed on the bonds is paid from assessments on the property benefiting from the particular bond‐funded project.

The creation of an Assessment District must be approved by City Council and follow a detailed legal process.

X.  DEBT MANAGEMENT PROCESS – PURPOSE OF FINANCING

Generally, financings may be undertaken to fund new projects “new money financing” or to refund existing bonds.

A.  New Money Financing

New money issues are those financings that generate funding for capital projects. These funds will be used for necessary land acquisitions, capital construction, equipment, and other items for the City. New money bond proceeds are generally not used to fund operational activities. The City also may use its commercial paper programs to provide interim new money funding. The commercial paper notes are retired upon receipt of bond proceeds from a long‐ term fixed rate financing.

B.  Refunding Bonds

A periodic review of the City’s outstanding debt will be undertaken by the Finance Department to determine refunding opportunities.

Refunding bonds are issued to retire all or a portion of an outstanding bond
issue. Most typically this is done to refinance at a lower interest rate to reduce overall debt service. Alternatively, some refundings are undertaken for reasons other than to achieve cost savings, such as to restructure debt service payments,

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31 to change the type of debt instruments being used, or to eliminate undesirable covenants.

In any event, a present value savings analysis must be prepared that identifies the economic effects of any refunding being considered by the City. The savings from any particular refunding candidate shall generally be at least 5% of the
refunded par amount, net of all transaction expenses. This 5% savings target may be waived by the CFO, or his/her designee, upon a finding that such a refunding is in the City's best overall financial interest and shall not be applicable for refunding transactions that are not solely undertaken to achieve cost savings.

XI.  DEBT MANAGEMENT PROCESS ‐ CREDIT RATINGS

The City seeks to obtain and maintain the highest possible credit ratings for all categories of short‐ and long‐term debt. The City will not issue bonds that do not carry investment grade ratings, except for CFD and Special Assessment bonds.

A.  Rating Agency Relationships

The CFO, or his/her designee, shall be responsible for maintaining relationships with rating agencies that assign ratings to the City's various debt obligations. This responsibility shall include coordinating meetings and presentations in conjunction with the issuance of debt. Full disclosure of operations and open lines of communication shall be maintained with the rating agencies used by the City.

B.  Use of Rating Agencies

The City may obtain a rating from at least one nationally recognized rating agency on all new bond issues being sold in the public market. The CFO, or his/her designee, shall determine whether or not any additional ratings will be requested on a particular financing. The CFO, or his/her designee, shall determine which major rating agencies will be asked to provide a rating.

Exceptions to this requirement, such as when using a private placement, are permissible, if warranted by the circumstances and approved by the CFO, or his/her designee.

The City and/or the financing team shall notify the rating agencies by telephone or through written correspondence when the City anticipates issuing bonds.

Bond documentation shall be sent several weeks prior to the bond sale to the selected rating agencies in order
to provide the rating agencies sufficient time to
perform their review. A personal meeting with the selected rating agencies may be scheduled if, in the opinion of the CFO, or his/her designee, such a meeting is

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32 in the best interest of the City in order to obtain the highest possible credit rating.

The City shall make every reasonable effort to maintain or improve its high quality credit ratings.

The City may request an underlying rating and an insured rating on all bond issues utilizing bond insurance.

The City shall submit its audited annual comprehensive financial report to all rating agencies utilized by the City.

XII.  DEBT MANAGEMENT PROCESS – CREDIT ENHANCEMENT

Although the City has high credit ratings, credit enhancement through the use of bond insurance or a bank facility such as a letter of credit to strengthen the underlying credit rating of certain bonds may be financially beneficial. Bonds insured by insurers rated AAA will also receive the AAA rating and thus be able to be sold at a lower interest rate.

Bank facilities, such as letters of credit from highly rated banks, can also be used to provide credit enhancement.

A.  Bond Insurance

Bond insurance will be considered when it provides an economic benefit to a particular bond maturity or entire issue. Bond insurance provides improved credit quality for the bonds as a result of the insurance provider’s guarantee of the payment of principal and interest on the bonds. Because of the decreased risk of non‐payment, investors are willing to purchase insured bonds at lower yields than uninsured bonds, thus providing the issuer with interest cost savings.

1.  Benefit Analysis

The decision to use bond insurance is an economic decision. A benefit analysis
compares the present value of the interest savings to the cost of the insurance premium. Insurance will be purchased when the premium cost is less than the present value of the projected interest savings. A copy of the benefit analysis shall be maintained in the files of the Finance Department.

2.  Selection

The City or its financial advisor will undertake a competitive selection process when soliciting pricing for bond insurance, or in the case of a

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33 competitive sale, facilitating the prequalification of bonds by insurance providers. The City recognizes that all providers may not be interested in providing bids to the City or pre‐qualifying the issue. The winning security dealer in a competitive sale will determine whether it will purchase insurance for the issue. For a negotiated sale, the CFO shall have the authority to purchase bond insurance when deemed advantageous and the terms and conditions governing the guarantee are satisfactory.

B.  Bank Facilities (Letters of Credit)

When used for credit enhancement, letters of credit (“LOC”) represent a bank’s promise to pay principal and interest when due for a defined period of time, subject to certain conditions. In the case of a direct‐pay LOC, the trustee will draw upon the LOC to make debt service payments and the City will reimburse the LOC provider the amount drawn on the LOC by the trustee. A stand‐by LOC is used to ensure the availability of funds to pay principal and interest of an obligation only if the funds in the debt service account held by the trustee are insufficient to make the debt service payment on the bonds.

XIII.  DEBT MANAGEMENT PROCESS – STRUCTURAL FEATURES

A.  Maturity

The final maturity of a bond sale shall be equal to or less than the remaining useful life of the assets being financed, and the average life of the financing shall not exceed 120% of the average useful life of the assets being financed.

B.  Debt Service Structure

The Finance Department will carefully consider the debt service structure for each bond issue. Factors such as the flow of revenues available for a particular credit, the need to fill in gaps created by refunding specific principal maturities or to structure savings from a refunding in a particular year will be considered.

Accelerated repayment may be considered within the bonding capacity constraints to provide capacity for future capital programs. Bonds will be amortized over a period of time not to exceed the useful life of the assets being financed.

C.  Lien Levels

Senior, Junior and Subordinated Junior Liens for each revenue source will be utilized in a manner that will maximize the most critical constraint ‐ typically

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34 either cost or capacity ‐ thus allowing for the most beneficial use of the revenue source securing the bond.

D.  Capitalized Interest

Subject to Federal and State law, interest may be capitalized from the date of issuance of the debt. Interest may also be capitalized for projects in which the revenue designated to pay debt service on the bonds will be collected at a future date, not to exceed six months from estimated completion of construction. Any use of capitalized interest will require a review by bond counsel and approval by the CFO.

XIV.  INVESTMENT OF BOND PROCEEDS

The City shall comply with all applicable Federal, State, and Indenture restrictions, if any, regarding the use and investment of bond proceeds. This includes compliance with any restrictions on the types of investment securities allowed, restrictions on the allowable yield of invested funds, as well as restrictions on the time period over which some bond proceeds may be invested. The CFO, or his/her designee, will direct the investment of bond proceeds in accordance with the permitted investments for each particular bond issue. Investments such as guaranteed investment contracts may be considered when their use is in the best interest of the City and will be selected on a competitive basis.

XV.  CONTINUING DISCLOSURE

The City will comply when applicable with Rule 15(c)2‐12 of the Securities and Exchange Commission by filing an annual report and annual financial information with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (EMMA) and filing material event notices within 10 days of occurrence of certain events as required by the Rule.

XVI.  ARBITRAGE REBATE

The City shall comply with all arbitrage rebate requirements as established by the Internal Revenue Service and the Finance Department shall establish a system of record keeping and reporting to meet the arbitrage rebate compliance requirements of the federal tax code. This effort shall include tracking project expenditures financed with bond proceeds, tracking investment earnings on bond proceeds, calculating rebate payments in compliance with tax law, and remitting any rebate earnings to the federal government in a timely manner in order to preserve the tax‐exempt status of the City's outstanding tax‐exempt debt issues. The CFO, or his/her designee, may enter into agreements with arbitrage service providers to assist the City with complying with arbitrage regulations.

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35 XVII.  INTERNAL CONTROLS AND POST ISSUANCE COMPLIANCE

The City shall comply with all applicable laws and regulations to ensure the tax‐exempt status of its bonds. The Finance Department shall maintain written procedures to document the processes used to monitor the appropriate use of bond proceeds and to ensure compliance with applicable laws and regulations, and shall specify the positions and individuals responsible for these processes.

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36 APPENDIX A

Swap Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 3734 II.  APPROACH AND OBJECTIVES ........................................................................................ 3734 III.  PERMITTED INSTRUMENTS ........................................................................................... 3835 IV.  PROCEDURE FOR SUBMISSION AND EXECUTION ....................................................... 3835 V.  SWAP ANALYSIS AND PARTICIPANT REQUIREMENTS ................................................... 4138 VI.  LEGAL AND CONTRACTUAL REQUIREMENTS ................................................................ 4240 VII.  LIMITATIONS ON TERMINATION EXPOSURE ................................................................ 4543 VIII.  ONGOING MANAGEMENT ............................................................................................ 4745 IX.  ONGOING REPORTING REQUIREMENTS ....................................................................... 4745

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37 I.  INTRODUCTION

The swap guidelines outlined herein are only intended to provide general procedural direction regarding the future use, procurement and execution of interest rate swaps and options. These guidelines are intended to relate to various interest rate hedging techniques, including the contractual exchange of different fixed and variable rate payment streams through interest rate swap agreements. The swap policies are not intended in any way to require the City to modify or terminate existing interest rate swaps. The City maintains the right to modify these guidelines and may make exceptions to any of them at any time in its sole discretion. Failure to comply in any manner with these swap guidelines shall not result in liability on the part of the City to any party.

II.  APPROACH AND OBJECTIVES

Interest rate swaps and options are appropriate interest rate management tools that can help the City meet important financial objectives. Properly used, these instruments can increase the City’s financial flexibility, provide opportunities for interest rate savings or enhanced investment yields, and help the City manage its balance sheet through better matching of assets and liabilities. Swaps should be integrated into the City’s overall debt and investment management guidelines and should not be used for speculation.

Swaps are appropriate to use when they achieve a specific objective consistent with the City’s overall financial strategies. Swaps may be used, for example, to lock‐in a current market fixed rate or create additional variable rate exposure. Swaps may be used to produce interest rate
savings, to alter the pattern of debt service payments, or for asset/liability matching purposes. Swaps may be used to cap, limit or hedge variable rate payments. Options granting the right to commence or cancel an underlying swap may be used to the extent the swap itself is consistent with these guidelines or the City determines there are other advantages to be derived in granting the option; however, the City must determine if the use of any such option is appropriate and warranted given the potential benefit, risks, and objectives of the City. The City’s staff, together with its Bond Counsel and its Financial Advisor, periodically shall review the City’s swap guidelines and recommend appropriate changes.

In connection with the use of any swaps, the City Council shall make a finding that, per Government Code Section 5922, the applicable swap is designed to reduce the amount or duration of the interest rate risk or result in a lower cost of borrowing when used in combination with the issuance or carrying of the Bonds or enhance the relationship between the risk and return with respect to the City’s investments or program of investment, as applicable.

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38 Rationales for Utilizing Interest Rate Swaps and Options

A.  Optimize capital structure; including schedule of debt service payments and/or fixed vs. variable rate allocations

B.  Achieve appropriate asset/liability match

C.  Reduce risk, including:

1.  Interest rate risk;

2.  Tax risk; or

3.  Liquidity renewal risk

D.  Provide greater financial flexibility

E.  Generate interest rate savings

F.  Enhance investment yields

G.  Manage exposure to changing markets in advance of anticipated bond issuances (through the use of anticipatory hedging instruments)

III.  PERMITTED INSTRUMENTS

The City may utilize the following financial products on a current or forward basis, after identifying the objective(s)
to be realized and assessing the attendant risks.

A.  Interest rate swaps, including fixed, floating and/or basis swaps; and

B.  Options, including swaptions, caps, floors, collars and/or cancellation or index‐ based features

IV.  PROCEDURE FOR SUBMISSION AND EXECUTION

Unsolicited proposals are to be mailed to the Chief Financial Officer and the Financial
Advisor for evaluation. Such unsolicited proposals need to be received four weeks prior to the next City Council meeting for consideration at such meeting. For proposals received within four weeks of the next City Council meeting, the City reserves the right to consider the proposal at the following month’s Council meeting.

Legal costs incurred in connection with an unsolicited proposal shall be paid by the firm submitting the proposal if for whatever reason the proposal does not close or should the City elect for any reason not to proceed. If the City elects to proceed with the

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39 proposed transaction and the proposed transaction closes, the City will absorb such legal costs through costs of issuance.

The City staff and the Financial Advisor shall review all unsolicited proposals prior to presentation to the City Council. The City shall only present proposals to the Council that the City, in its
sole discretion, believes should be considered further given, for example, the projected savings or other benefits and the ability to meet one or more of the objectives outlined herein. Only proposals that meet the savings guidelines (as described in the “Guidelines for Financing and Selection of the Financing Team”) or that the City staff find compelling for other reasons, shall be presented.

Procurement and Execution

The City will not have a fixed guideline with respect to swap procurement. The City will assess the benefits of competitively bidding financial products that are non‐proprietary or generally available in the marketplace. On
a product‐by‐product basis, the City will
have the authority to negotiate the procurement of financial instruments that have customized or specific attributes designed on the City’s behalf.

The use of financial derivative products will be recommended if they meet one of the benefits outlined herein or if they:

A.  Provide a specific benefit not otherwise available;

B.  Produce greater expected interest rate savings or incremental yield than cash market alternatives;

C.  Are not speculative or do not create unreasonable leverage or risk;

D.  Result in an improved capital structure or better asset/liability match; or

E.  Reasonably pass the risk evaluation required by these guidelines

Conformance with Dodd‐Frank

It is the intent of the City to conform this policy to the requirements relating to legislation and regulations for over‐the‐counter derivatives transactions under Title VII of the Wall Street Transparency and Accountability Act of 2010, as supplemented and
amended from time to time (herein collectively referred to as “Dodd‐Frank”). Pursuant to such intent, it is the policy of the City that: (i) each swap advisor engaged or to be engaged by the City will function as the designated qualified investment representative of the City, sometimes referred to as the “Designated QIR”; (ii) each swap advisor agrees to meet and meets the requirements specified in Commodity Futures Trading

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40 Commission Regulation 23.450(b)(1) or any successor regulation thereto (herein referred to as the “Representative Regulation”); (iii) each swap advisor provide a written certification to the City to the effect that such swap advisor agrees to meet and meets the requirements specified in the Representative Regulation; (iv) the City monitor the performance of each swap advisor consistent with the requirements specified in the Representative Regulation; (v) the City exercise independent judgment in consultation with its swap advisor in evaluating all recommendations, if any, presented by any counterparty with respect to transactions authorized pursuant to this Debt Policy; and (vi) the City rely on the advice of its swap advisor with respect to transactions authorized pursuant to this Debt Policy and not rely on recommendations, if any, presented by any counterparty with respect to transactions authorized pursuant to this Debt Policy.

Counter‐Party Risk Assessment

The City will only do business with highly rated
counter parties or counter parties whose
obligations are supported by highly rated parties. The City will structure swap agreements to protect itself from credit deterioration of counter parties, including the use of credit support annexes or other forms of credit enhancement to secure counter party performance. Such protection shall include any terms and conditions which in the City’s sole discretion are necessary or appropriate or in the City’s best interest.

The City shall enter into interest rate swap transactions only with qualified swap counter parties. Qualified swap counter parties are investment banks as will be identified by the Financial Advisor. Qualified
swap counter parties should be rated at least “Aa3” or “AA‐” by one of the nationally recognized rating agencies (i.e. Moody’s, Standard and Poor’s, and Fitch) and not rated lower than “A2” or “A” by any nationally recognized rating agency. In addition, the counter party must have a demonstrated record of successfully executing swap transactions as well as creating and implementing innovative ideas in the swap market. Each counter party shall have minimum capitalization of at least $150 million.

The City should not have an immutable credit standard. However, the City will attempt to do business with highly rated counter parties of “Aa3” or “AA‐” or better. For lower rated (below “Aa3” or “AA‐”) counter parties, the City should seek credit enhancement in the form of:

A.  Contingent credit support or enhancement; or

B.  Collateral consistent with the policies contained herein

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41 V.  SWAP ANALYSIS AND PARTICIPANT REQUIREMENTS

In connection with any swap, the City and its Financial Advisor shall review the proposed transaction and outline any considerations associated with the transaction to the City Council. Such a review should include the following:

A.  The identification of the proposed benefit and potential risks, which shall
include, but not necessarily be limited to, those risks outlined herein

B.  Independent analysis of potential savings from a proposed transaction

C.  Fixed versus variable rate and swap exposure before and after the proposed transaction

D.  Market Net Termination Exposure (as outlined herein) for all existing and proposed
transactions at the City

Swap Risks

A.  Counter party Risk – The risk of a payment default on a swap by an issuer’s counter party

B.  Termination Risk ‐ The risk that a swap has a negative value and the issuer owes a “breakage” fee if the contract has to be
liquidated

C.  Tax Risk – A mismatch between changes in the rate or price on an issuer’s underlying bonds and the swap caused by a reduction or elimination in the benefits of the tax exemption for municipal bonds, e.g. a tax cut, which results in an increase in the ratio of tax‐exempt to taxable yields

D.  Basis Risk – A mismatch between the rate on an issuer’s underlying bonds and the rate paid under the swap, e.g. a tax‐exempt variable rate issue which trades at 62% of LIBOR while the issuer only receives 60% of LIBOR under the swap

E.  Tax Exemption Risk – The risk that the transaction may make the issuer’s related bonds taxable

F.  Liquidity/Remarketing Risk – The risk that an issuer cannot secure a cost‐ effective renewal of a Letter or Line of Credit or suffers a failed auction or remarketing with respect to its
variable‐rate bonds

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42 Benefit Expectation

Financial transactions, using fixed rate swaps or other derivative products, should generate 2% greater projected savings than the savings guidelines (as described in the “Guidelines for Financing and Selection of the Financing Team”) then in effect for traditional bonds. This threshold will serve as a guideline and will not apply should the
transaction, in the City’s sole judgment, help to meet any of the objectives outlined herein. The higher savings target reflects the greater complexity and higher risk of derivative financial instruments. At a minimum, such financial transactions should provide a savings of no less than 5% over refunded par regardless of the spread between the financial transaction and a traditional bond refunding.

For example, assuming a refunding of $100 million of existing bonds, a traditional fixed rate advance refunding that does not use derivative products would have a present value savings threshold of $5 million, which is 5% of the refunded par. If the refunding structure utilizes a derivative product, the threshold would be $7 million in present value savings, 7% of the refunded par. Therefore, the transaction utilizing a swap or other derivative product would have to generate an additional $2 million to meet the target.

For variable
rate or other swap transactions that do not result in a fixed interest rate, the City will evaluate any additional value generated through the transaction in assessing the benefits of proceeding, including the ability to meet the objectives outlined herein. These benefits include, for example, reducing interest rate or tax risk, optimizing the capital structure or further reducing interest expense.

In determining any benefit in implementing a fixed‐to‐variable swap, the cost of remarketing, in addition to the cost of credit enhancement or liquidity fees must be added to the projected variable rate. Such a calculation should consider the trading performance of comparable bonds and any trading premium resulting from a specific form of credit enhancement or liquidity and/or any impact related to broader industry trends.

VI.  LEGAL AND CONTRACTUAL REQUIREMENTS

Unless otherwise approved by Council, the City will use standard ISDA swap documentation including the Schedule to the
Master Agreement and a Credit Support
Annex. The City may use additional documentation if the product is proprietary or the City deems in its sole discretion that such documentation is otherwise in its interest.

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43 Terms and Notional Amount of Swap Agreement

The City shall determine the appropriate term for an interest rate swap agreement on a case‐by‐case basis. In connection with the issuance or carrying of bonds, the term of the swap agreement between the City and a qualified swap counter party shall not extend
beyond the final maturity date of existing debt of the City on the related Project, or in the case of a refunding transaction, beyond the final maturity of the refunding bonds.

For purposes of calculating net exposure, credit shall be given to any fixed versus variable rate swaps that offset termination exposure for a specific Project or bond transaction. For variable rate transactions, credit may also be given for any assets that are used to hedge a transaction as long as in the City’s judgment such assets are reasonably expected to remain in place on a coterminous basis with the swap.

Terms and conditions of any swap shall be negotiated by the City in the best interests of the City subject to the provisions of the California Government Code and, unless otherwise waived or altered by the City, these guidelines. The swaps between the City and each counter party
shall include, as appropriate, payment, term, security, collateral, default, remedy, termination, and other terms, conditions and provisions as the City, in consultation with its Bond Counsel and Financial Advisor, deems necessary or desirable.

Subject to the provisions contained herein, the City swap documentation and terms should include the following:

A.  Downgrade
provisions triggering termination shall in no event be worse than those affecting the counter party

B.  Governing law for swaps will be New York law, but should reflect California authorization provisions

C.  The specified indebtedness related to credit events in any swap agreement should be narrowly drafted and refer only
to specific project debt

D.  Collateral thresholds should be set on a sliding scale reflective of credit ratings (see Collateral below)

E.  Eligible collateral as set forth in the Collateral section below.

F.  Termination value should be set by “market quotation” methodology, when the City deems appropriate

G.  The
City should only agree to an Additional Termination Event for the City to the extent that the ratings on the applicable the City bonds fall below a ratings

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44 trigger acceptable to the City and the counter party and no form of credit support or enhancement is in place

Termination Provision

All swap transactions shall contain provisions granting the City the right to optionally terminate a swap agreement at any time over the term of the agreement. Such a provision shall be required even if any termination is at market. In general, exercising the right to terminate an agreement should produce a benefit to the City, either through the receipt of a payment from a termination or, if the termination payment is made by the City, in conjunction with a conversion to a more beneficial (desirable) debt obligation of the City.

Collateral

As part of any swap agreement, the City shall require collateralization or other forms of credit enhancements to secure any or all swap payment obligations. As appropriate, the City, in consultation with its Bond Counsel and Financial Advisor, may require collateral
or other credit enhancement to be posted by each swap counter party under the following circumstances:

A.  Each counter party to the City may be required to post collateral if the credit rating of the counter party or parent falls below the “AAA” category. Additional collateral for further
decreases in credit ratings of each counter party shall be posted by each counter party in accordance with the provisions contained in the collateral support agreement to each counter party with the City the City.

Maximum un‐collateralized exposure for: (i) “AAA” rated counter parties is $40 million; (ii) “AA” rated counter parties is $10 million; and (iii) below “AA” category, uncollateralized exposure is zero

B.  Threshold amounts shall be determined by the City on a case‐by‐case basis. The City will determine the reasonable threshold limits for the initial deposit and for increments of collateral posting thereafter

C.  Collateral
shall be deposited with a third party trustee, or as mutually agreed upon between the City and the counter party

D.  A list of acceptable securities that may be posted as collateral and the valuation of such collateral will be determined and mutually agreed upon during negotiation of the swap
agreement with each swap counter party. A complete
list of acceptable securities and valuation percentages are included as Attachment A

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45 E.  The market value of the collateral shall be determined on at least a monthly basis, or more frequently if the City determines it is in the City’s best interest given the specific collateral security

F.  It shall be determined on a case‐by‐case basis whether other forms of credit enhancement are more beneficial to the City

VII.  LIMITATIONS ON TERMINATION EXPOSURE

In order to diversify the City’s counter party credit risk, and to limit the City’s credit exposure to any one counter party, limits will be established for each counter party based upon both the credit rating of
the counter party as well as the relative level of risk associated with each existing and projected swap transaction. The guidelines below provide general termination exposure guidelines with respect to whether the City should enter into an additional transaction with an existing counter party. The City Council may make exceptions to the guidelines at any time to the extent that the execution of a swap achieves one or many of the goals outlined in these guidelines or provides other benefits to the City.

Such guidelines will also not mandate or otherwise force automatic termination by the City or the counter party. Maximum Net Termination Exposure is not intended to impose retroactively any terms and conditions on existing transactions. Such provisions will only act as guidelines in making a determination as to whether or not a proposed transaction should be executed given certain levels of existing and projected net termination exposure to a specific counter party. Additionally, the guidelines below are not intended to require retroactively additional collateral posting for existing transactions. Collateral posting guidelines are described in the “Collateral” section above. The calculation of net termination exposure per counter party will take into consideration multiple transactions, some of which may offset the overall exposure to the City.

Maximum Net Termination Exposure will be based on the sum of (i) the market value of existing transactions as of the first day of the month prior to the execution of any new transaction plus (ii) the expected worse case termination value of the new transaction.

The maximum termination exposure will also be tied to the credit rating of a counter party and whether or not the counter party has posted collateral against this exposure.

Under this approach, the City will set limits on individual counter party exposure based on existing as well as new or
proposed transactions. For existing transactions, exposure will be based on the market value as of the last quarterly swap valuation report provided by the Financial Advisor. For a new or proposed transaction, the City will calculate the projected maximum exposure based on the estimated maximum exposure assuming two standard deviations. Standard deviation is a statistic obtained by squaring

City of Roseville  Financial Policies – Effective July 1, 20242025  Return to Table of Contents

46 the average difference from the mean of a distribution of numbers. Two standard deviations capture 95% of the population of a distribution of numbers. For purposes of the calculation, two standard deviations shall be calculated as the annualized standard deviation of weekly swap rates over the preceding 52 weeks. The time period may vary according to market conditions which could range from flat to volatile.

The sum of the existing market value and the projected maximum exposure shall constitute the Maximum Net Termination Exposure. For purposes of this calculation, the City shall include all existing and projected transactions of an individual counter party
and all transactions will be analyzed in aggregate such that the maximum exposure will be additive and netted on a per project basis. The rationale behind aggregating and netting on a Project basis is that the exposure will vary for individual members depending on their participation in different projects.

For example, if the City has $13 million (i.e. the City would owe termination payment) of exposure to a counter party, the Maximum Net Termination Exposure under the definition above, is the projected maximum termination exposure less the outstanding exposure. If projected maximum termination exposure on the proposed transaction, assuming
two standard deviations, is $20 million, net termination exposure would be $7 million.

The exposure thresholds, which will be reviewed periodically to ensure that they remain appropriate, will also be tied to credit ratings of the counter parties and whether or not collateral has been posted. If collateral has been posted, the City cannot exceed $30.0
million of collateralized exposure. In addition, there would be a further limit on the amount of uncollateralized exposure, including any threshold amounts under the Credit Support Annex. For AAA‐rated counter parties, the City could have up to $40.0 million of uncollateralized exposure; for counter parties in the AA category, the City could have up to $10.0 million of uncollateralized exposure and for counter parties below the AA category, the City could have no uncollateralized exposure. If a counter party has more than one rating, the lowest rating will govern for purposes of the calculating the level of exposure. A summary table is provided below.

Credit Ratings
Maximum
Collateralized
Exposure
Maximum
Uncollateralized
Exposure
Maximum Total
Termination
Exposure
AAA  NA  $40 million  $40 million
AA Category  $30 million  $10 million  $40 million
Below AA  $30 million  None  $30 million

Assuming the same example as above, if the counter party is currently rated “Aa2” and “AA+,” the exposure thresholds would only take effect if Net Termination Exposure increased an additional $3 million (from the original $7 million above).

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47 If the exposure limit is exceeded by a counter party, the City shall conduct a review of the exposure limit per counter party. The City, in consultation with its Bond Counsel and Financial Advisor, shall explore remedial strategies to mitigate this exposure.

VIII.  ONGOING MANAGEMENT

The City will seek to
maximize the benefits and minimize the risks it carries by actively managing its swap program. This will entail frequent monitoring of market conditions, by both the Financial Advisor and swap counter party, for emergent opportunities and risks. Active management may require modifications of existing positions including, for example:

A.  Early
termination;
B.  Shortening or lengthening the term;
C.  Sale or purchase of options; or
D.  Use of basis swaps.

On an overall basis, the City’s swap program is not expected to be very large relative to all of its investment and debt activities. Swaps will be used in response to particular market conditions and needs of the City for which swaps are the best investment or debt‐management option.

IX.  ONGOING REPORTING REQUIREMENTS

A written report providing the status of all interest rate swap agreements entered into by the City will be provided to the City Council on an annual basis (or other basis, if so directed by Council) and shall include the following:

A.  A description of all outstanding interest rate swap agreements, including project and bonds series, type of swap, rates paid and received by the City, total notional amount, average life of each swap agreement, remaining term of each
swap agreement

B.  Highlights of all material changes to swap agreements or new swap agreements entered into by the City since the last report

C.  Termination exposure of each of the City’s interest rate swap agreements

D.  The credit rating of each swap counter party and credit enhancer insuring swap
payments, if any

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48 E.  If applicable, information concerning any default by a swap counter party to the City, including but not limited to the financial impact to the City, if any

F.  If applicable, information concerning any default by the City to a swap counter party

G.  A summary of swap agreements that were
terminated or that have expired

H.  For a swap transaction entered into to generate debt service savings, the City will calculate on an annual basis the actual debt service requirements versus the projected debt service on the swap transaction at the original time of execution.

Such a calculation shall include
a determination of the cumulative actual savings
(or, if applicable, additional payments made by the City) versus the projected savings at the time the swap was executed.

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49 Attachment A – Acceptable Collateral
______________________________________________________________________________ Security  Valuation Percentage
Cash  100%
Negotiable  debt  obligations  issued  by  the
U.S.  Treasury  Department  or  the
Government  National  Mortgage  Association
(“Ginnie  Mae”),  or  (y)  mortgage  backed
securities  issued  by  Ginnie  Mae  (but  with
respect to either (x) or (y) excluding interest
only  or  principal  only  stripped  securities,
securities  representing  residual  interests  in
mortgage  pools,  or  securities  that  are  not
listed  on  a  national  securities  exchange  or
regularly  quoted  in  a  national  quotation
service) and in each case having a remaining
maturity of:
(i) less than one year
(ii) one year or greater but less than 10 years
(iii) 10 years or greater

100%
98%
95%
Negotiable  debt  obligations  issued  by  the
Federal  Home  Loan  Mortgage  Corporation
(“Freddie  Mac”)  or  the  Federal  Home  Loan
Mortgage  Association  (“Fannie  Mae”)  or  (y)
mortgage backed securities issued by Freddie
Mac  or  Fannie  Mae  but  excluding  interest
only  or  principal  only  stripped  securities,
securities  representing  residual  interests  in
mortgage  pools,  or  securities  that  are  not
listed  on  a  national  securities  exchange  or
regularly  quoted  in  a  national  quotation
service

95%
Any other collateral acceptable to the City in
its sole discretion. The valuation percentage
shall be determined by the Valuation Agent
from  time  to  time  and  in  its  reasonable
discretion

The valuation percentage shall be determined
by the Valuation Agent from time to time and
in its reasonable discretion.

For example, if a counter party is required to post $1 million of collateral and wished to use bonds issued by Ginnie Mae with five years remaining to maturity, it would be required to post $1,020,409 ($1 million/0.98) to satisfy the collateral requirement.

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50 City of Roseville
Budget Development Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 5149 II.  POLICY ........................................................................................................................... 5149 A.  Citywide Focus ................................................................................................. 5149 B.  General Revenues ............................................................................................ 5149 C.  Balanced Budget .............................................................................................. 5149 D.  Public Involvement .......................................................................................... 5250 E.  Operating Budget ............................................................................................. 5250 F.  Capital Improvement Program (CIP) and Budget ............................................ 5250 G.  Indirect Cost Allocation Plan ............................................................................ 5351 H.  Indirect Costs Charged to Projects ................................................................... 5351 I.  Internal Service Funds...................................................................................... 5351 J.  General Fund Five‐Year Forecast ..................................................................... 5351 K.  Basis of Budgeting ............................................................................................ 5452

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51 I.  INTRODUCTION

This policy outlines the City of Roseville’s (City) guidelines for budget development.

Consistently following adopted policies will assist the City in achieving its current and future goals in a fiscally responsible and sustainable manner. This policy establishes guidelines for developing the City’s annual operating and capital budget as recommended by the Government Finance Officers Association (GFOA) and the National Advisory Council on State and Local Budgeting (NACSLB). This document shall be reviewed on an annual basis to reflect the highest standards of fiscal management and the City’s budgetary goals.

II.  POLICY

A.  Citywide Focus

Consistent with the General
Principles of Governance adopted by the City
Council in the Elections Ordinance, the City shall maintain a citywide focus during the budget development process and in the adopted budget. Revenues and expenditures shall be budgeted on a citywide basis and not tracked by Council district.

B.  General Revenues

General revenues
shall be deposited in the General Fund and appropriated during the budget process or by a separate Council action. General Fund revenues shall not be earmarked for any particular purpose, unless required by law or Generally Accepted Accounting Principles (GAAP).

C.  Balanced Budget

The City shall adopt and maintain a
balanced annual operating budget and an
integrated capital budget throughout the fiscal year. For each fund, annual expenditures shall not exceed annual revenues plus available fund balances. It shall remain a goal of the City to maintain a long‐term structurally balanced budget, where ongoing revenues support ongoing expenditures.

The City
will achieve a structurally balanced budget through efficiencies (i.e., streamlining), permanent reductions to the expenditure base (e.g., eliminating lower priority vacant positions and reducing service levels), and ongoing revenue enhancements. In addition, the City’s budget will not rely on reserves or the use of one‐time revenues for ongoing expenditures.

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52 D.  Public Involvement

Public involvement shall be encouraged in the annual budget decision‐making process through public hearings, public outreach, and the dissemination of accessible information. Public participation efforts allow the City to improve performance by identifying general needs, priorities, and service delivery expectations. Public involvement enables the City to be more responsive to the
community’s needs, thereby increasing the value that the public receives from the City.

E.  Operating Budget

The operating budget document shall contain the expected revenue and expenditure appropriations, staffing levels, and summaries for each department.

Summary information for each department featured in the budget shall include the primary services, strategic goals and strategies, accomplishments and initiatives, and key performance and workload measures. Department summaries shall be updated annually to illustrate how each department’s priorities and performance measures support the City Council’s Strategic Plan.

F.  Capital Improvement Program (CIP) and Budget

The City shall develop a Five‐Year CIP, which reflects a comprehensive approach to addressing the City’s capital needs and the identification of resources for those needs. Critical inputs include infrastructure condition assessments, service level evaluations, asset management information, and review of available funding sources. The Five‐Year CIP shall be the basis for the development of the annual CIP budget.

The annual CIP budget shall be developed in conjunction with the operating budget to ensure the effective utilization of the City's overall resources to operate and maintain facilities. The annual CIP budget shall include projects that span multiple fiscal years and result in capitalized
assets. The CIP budget may
consist of other projects of a capital nature that may not result in an asset and that span multiple fiscal years and have significant cost estimates.

The annual CIP budget shall reflect total estimated project costs for Council approved projects by including all historical expenditures, available

appropriations, and future funding needs. CIP projects shall only be established with partial funding if there is a reasonable expectation that the remaining funding will be identified within a reasonable timeframe.

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53 CIP appropriations remaining unspent at the end of each fiscal year shall be carried forward to the subsequent fiscal year until the project is completed or cancelled. CIP projects, however, shall be reviewed at least annually to identify projects that are not progressing to consider reprogramming project resources.

G.  Indirect Cost Allocation Plan

The City shall use an indirect cost allocation plan (CAP) to allocate the costs of those general government activities without significant assets or liabilities to all City funds and departments, except those between General Fund departments.

General government activities include City Council, City Manager, City Attorney, City Clerk, Finance, Human Resources, Public Affairs and Communications, and Economic Development. Substantial changes in the allocable indirect costs may be amortized or smoothed over a period not to exceed three fiscal years to allow receiving funds to adjust their rates. At the end of the maximum three‐year smoothing period, any remaining difference between the total indirect costs and the allocated indirect costs shall be paid in full in the fiscal year immediately following the smoothing period.

The CAP is also used to allocate indirect costs in Public Works Administration and Engineering and Parks, Recreation and Library Administration to their departmental divisions they support.

H.  Indirect Costs Charged to Projects

The City shall use indirect cost rates to allocate the costs of overhead to all multi‐ year capital improvement projects for proper asset capitalization. Exceptions, other than federal or state grants that don’t allow indirect costs, must be approved by the Finance Department.

I.  Internal Service Funds

The City shall use internal service funds to allocate general government costs for activities with significant assets and/or liabilities to all City funds and departments. Internal service fund costs are budgeted in and allocated to General Fund departments. The City’s internal service fund activities include information technology, fleet management, facilities management, and risk management (general liability and workers compensation).

J.  General Fund Five‐Year Forecast

The City shall maintain a five‐year forecast for the General Fund as an essential fiscal planning tool. The forecast shall be based on the current budget and

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54 projections of future expenditures, revenues, and other funding sources over a multi‐year period. The evaluation of recommended fiscal actions will focus on a longer‐term, rather than short‐term context. The five‐year forecast is based on a set of point‐in‐time assumptions. The projected expenditure growth shall be realistic, mainly through the term of the current labor contracts. All revenue forecasts will utilize objective external research and internal forecasting methods. City revenues are economically sensitive, and the five‐year revenue forecasts are subject to the same uncertainty and downside risk surrounding national economic forecasts. It is important to note that the City’s significant tax revenues, property and sales taxes, trail economic trends.

K.  Basis of Budgeting

The City’s budgets for governmental funds, such as the General Fund, special revenue funds, debt service funds, and capital project funds, shall be prepared based on the modified accrual basis of accounting. In other words, revenues are recognized in the accounting period in which they become available and measurable, and expenditures are recognized in the accounting period in which the liability is incurred. An exception to this basis is that disbursements of interfund loans are budgeted as expenditures in lender funds and revenue in borrower funds, and repayments of interfund loans are budgeted as expenditures in borrower funds and revenue in lender funds.

The budget for the City’s proprietary funds, consisting of enterprise funds and internal service funds, shall be prepared on the full accrual basis of accounting for all operating revenues and most operating expenses. In other words, revenues are recognized when they are earned, and expenses are recognized when the
liability is incurred. Expenses related to long‐term assets, primarily capital outlay, and long‐term liabilities, including repayment of bonded debt as well as pension and other post‐employment benefit expenses, are budgeted on the modified accrual basis of accounting. Repayments of interfund loans are budgeted as expenditures in borrower funds and revenue in lender funds.

The City’s budget shall exclude unrealized gains or losses resulting from the change in fair value of investments, as well as amortization of premiums and discounts on the City’s investments. These calculations are performed solely for financial statement reporting purposes to comply with GAAP.

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55 City of Roseville
General Fund Reserves Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 5654 II.  BACKGROUND ............................................................................................................... 5654 III.  POLICY ........................................................................................................................... 5755 A.  Minimum and Target Reserve Levels ............................................................... 5755 B.  Methods to Achieve Funding Levels ................................................................ 5755 C.  Criteria for Expenditure of Reserve Funds ....................................................... 5755

1.  Emergency Reserve ............................................................................. 5755

2.  Stabilization Reserve ........................................................................... 5856

3.  Litigation Reserve ............................................................................... 5856 D.  Timeline for Replenishment of the General Fund Reserves ............................ 5856

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56 I.  INTRODUCTION

The purpose of this policy is to establish targeted levels of General Fund reserves, a basic component of a financially strong city. Adequate reserves help sustain City operations when adverse or unexpected circumstances affect the City, providing resources to minimize service disruption in the event of temporary revenue shortfalls, declared disasters, or unpredicted one‐time expenditures. This policy establishes the amounts the City will strive to maintain in the Emergency Reserve, Stabilization Reserve, and Litigation Reserve, and the conditions under which the reserves may be used.

II.  BACKGROUND

Financial reserves strengthen the City’s financial status and provide valuable resources for managing through economic cycles and addressing unexpected events. Every fund of the City represents a stand‐alone financial set of accounts and has its own operating characteristics, financial capabilities, and constraints. The level of reserves needed should be based on the financial and operating characteristics of each fund.

According to the Government Finance Officers Association (GFOA), it is essential that governments maintain adequate levels of fund balance to mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) in order to protect taxpayers and employees from unexpected changes in financial conditions. GFOA recommends, at a minimum, that general‐purpose governments, regardless of size, maintain an unrestricted budgetary fund balance in their General Fund of no less than two months of regular general fund operating revenues or regular General Fund operating expenditures (an amount equivalent to 16.67% of the annual budget).

This policy establishes three months of operating costs (25% of annual budgeted
General Fund operating costs) as the City’s target level of reserves. This targeted level of reserves consists of the City’s Emergency Reserve (10% of annual budgeted General Fund operating costs) and the City’s Stabilization Reserve (15% of annual budgeted General Fund operating costs). This policy also establishes $250,000 as the minimum level in the City’s Litigation Reserve. The policy also outlines the methods the City will utilize to achieve the target reserve levels, defines the conditions under which these funds can be used and describes how the City’s expenditure and/or revenue levels will be adjusted to match any new economic realities that are causing the use of fund balance reserves as a financing bridge.

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57 III.  POLICY

A.  Minimum and Target Reserve Levels

The City will maintain an Emergency Reserve at a minimum of 10% of budgeted General Fund operating expenditures. Because the City relies on property tax and sales tax revenue to support over two‐thirds of the City’s General Fund budget and the
negative effects on property and sales tax revenue can be significant during economic downturns, the City will seek to build up and maintain a General Fund Stabilization Reserve equal to 15% of budgeted General Fund operating expenditures as the target reserve level. The Emergency Reserve and Stabilization Reserve shall be reported as commitments of fund balance in the General Fund for external financial reporting. Appropriations from the Emergency Reserve may only be made by a vote of the City Council to meet a critical, unpredictable financial need such as a declared emergency.

Appropriations from the Stabilization Reserve may only be made by a vote of the City Council in the event of temporary revenue shortfalls caused by an economic downturn.

B.  Methods to Achieve Funding Levels

Funding of the General Fund Reserves will generally come from the adopted budget, year‐end excess revenues over expenditures or anticipated one‐time revenues. At a minimum, during the budget process, staff shall review the current and five‐year projected reserves to ensure that they are appropriate given the economic and financial risk factors the City faces.

C.  Criteria for Expenditure of Reserve Funds

The Reserve Funds shall not normally be applied to recurring annual operating expenditures. Appropriation from the Emergency Reserve and Stabilization Reserve Funds requires approval of at least four City Council members. The Litigation Reserve is appropriated annually in the adopted budget.

1.  Emergency Reserve

The Emergency Reserve may be used to contend with significant short‐ term issues such as declared emergencies. It is the intent of the Council to limit use of the Emergency Reserve to addressing unanticipated, nonrecurring needs.

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58 2.  Stabilization Reserve

The Stabilization Reserve may be used strategically to allow time for the City to restructure its operation in a deliberate manner as required in an economic downturn while minimizing service disruption. Use of the Stabilization Reserve will only take place in the context of a Council‐ adopted long‐term plan. The Stabilization Reserve is intended to be used to address significant revenue shortfalls that occur during an economic downturn until the City’s operating expenditure and revenue levels are adjusted to eliminate structural deficits.

3.  Litigation Reserve

The Litigation Reserve may be used for legal matters that are unforeseen and/or unusual in nature and, as a result, typically require reactive measures such as seeking a budget adjustment and a funding source.

Some examples are contract disputes, municipal code enforcement, and other public safety enforcement matters. The purpose of this reserve is to address these situations by allowing for proactive handling and funding of such matters.

D.  Timeline for Replenishment of the General Fund Reserves

If the General Fund Reserves are drawn down below the minimum levels, a plan will be developed and implemented to replenish the reserves. Replenishing the reserves will be a priority use of one‐time
resources. Generally, the City should
seek to replenish the Emergency Reserve and the Litigation Reserve within one year and the Stabilization Reserve to the minimum reserve level within three years.

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59 City of Roseville
Development Services Stabilization Reserve (DSSR)
Fund Policy

TABLE OF CONTENTS

I.  PURPOSE ....................................................................................................................... 6058 II.  BACKGROUND ............................................................................................................... 6058 III.  POLICY ........................................................................................................................... 6058

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60 I. PURPOSE

The purpose of the Development Services Stabilization Reserve (DSSR) Fund (Fund #1013) Policy is to maintain resources in a reserve fund that the City Council may draw from in years of lower development activity. The City will use the DSSR to bridge gaps between budgeted and actual development revenues during periods of significant revenue decline.

II. BACKGROUND

A sustainable funding plan for the Development Services Department’s building, planning, and engineering operations is necessary to respond to changes in the economic climate. Establishing a DSSR Fund will provide the department resources during a downturn in development‐related activity and time to react to those changes.

III. POLICY

The DSSR shall be established as set forth below, and any changes to the policy will be recommended to the City Council for approval.

A. The DSSR target goal is equivalent to six months of estimated building, planning and engineering revenues.

B. Actual year‐end General Fund revenues in excess of budget from select accounts in Development Service’s Building, Planning and Engineering operations will be transferred to the DSSR, provided that the net year‐end General Fund results (revenue and expenditure budget variance) of the Development Services Department are positive and the reserve is below the target goal.

C. If, at year‐end, the amount in reserve exceeds the six‐month estimate for the current fiscal year, the City Manager can transfer the excess amount to the General Fund or maintain reserve levels above the six‐month estimate if revenues are
anticipated to grow in the future fiscal year.

D. The year‐end calculation will occur each year in the summer following the fiscal year end (June 30). The six‐month revenue estimate will be based on the current year's budget. For example, the year‐end calculation for FY2023‐24 will occur in
summer 2024, and the six‐month revenue estimate calculation will be based on the FY2024‐25 budget.

E.   The City will only use the DSSR to bridge gaps between projected and actual development‐related revenues in Development Services during periods of significant revenue shortfalls. The reserve will help the department maintain

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61 services during a short‐term drop in revenue and will provide time to react to changes necessary during a long‐term economic decline.

F.  Appropriation from the DSSR Fund requires approval of at least four City Council members.

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62 City of Roseville
Federal Stimulus Reserve Fund Policy

TABLE OF CONTENTS

I.  PURPOSE ....................................................................................................................... 6361

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63 I. PURPOSE

The purpose of this policy is to establish a temporary Federal Stimulus Reserve Fund with the City’s allocation of the federal stimulus (2021 Coronavirus State and Local Fiscal Recovery Funds) until one‐time expenditures or transfers to other City funds are approved over the remaining course of the pandemic.

The City is required to disburse obligate the federal stimulus funding by December 31, 2024. This temporary reserve fund will be closed after all funding, including interest earned thereon, has been distributed.

Staff will recommend one‐time expenditures, or transfers to other City funds, for Council approval consistent with the requirement for the use of the funds to:

A. respond to or mitigate the public
health emergency with respect to the
Coronavirus Disease 2019 (COVID–19) or its negative economic impacts;

B. cover otherwise unreimbursed costs incurred as a result of such emergency;

C. replace revenue that was lost, delayed, or decreased as a result of such emergency; or

D. address the negative economic impacts of such emergency.

The federal stimulus funding shall not be applied to new ongoing operating expenditures.

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64 City of Roseville
Internal Service Funds ‐ Operating and Replacement Reserves Policy

TABLE OF CONTENTS

I.  PURPOSE ....................................................................................................................... 6563 II.  POLICY ........................................................................................................................... 6563 A.  Operating Reserves .......................................................................................... 6563

1.  Applicability ........................................................................................ 6563

2.  Targeted Reserve Level ....................................................................... 6563

3.  Initial Establishment of the Reserve ................................................... 6664

4.  Annual Funding of the Reserve ........................................................... 6664

5.  Excess Reserves .................................................................................. 6765 B.  Replacement Reserves ..................................................................................... 6765

1.  Applicability ........................................................................................ 6765

2.  Targeted Reserve Level ....................................................................... 6866

3.  Initial Establishment of the Reserve ................................................... 6866

4.  Annual Funding of the Reserve ........................................................... 6967

5.  Excess Reserves .................................................................................. 7068

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65 I. PURPOSE
As separate budget and accounting entities, internal service funds (ISFs) need to manage cash reserves within their funds. The purpose of cash reserves in the ISFs is two‐fold:

 Operating Reserves ‐ To provide for continuity of service in the event of unanticipated changes to revenues or expenditures, particularly within a single fiscal year when charges for service on client operating departments already have been fixed through the adopted budget.
 Replacement Reserves ‐ To provide funding for capital improvement, rehabilitation, and replacement of capital assets managed, whose useful lives span multiple fiscal years and whose costs yield a burdensome or unaffordable peak in expenditure if assessed on client operating departments as they occur.

In the ISFs, the accumulation and expenditure of reserve balances, including the establishment of targeted reserve levels, shall be as follows.

II. POLICY
A. Operating Reserves

1. Applicability

The following ISFs manage ongoing operations and therefore would benefit from the establishment of an operating reserve:

 Fleet Services
 Facility Services
 Information Technology Operations

Because ISFs do not function within a traditional retail environment, their revenues are not a material factor in the underlying risk to its financial sufficiency. An operating reserve incorporating the effects of billing cycles and collection rates is not applicable. Therefore, the operating reserve shall be established based singularly on a cushion for unforeseen change to critical cost drivers.

2. Targeted Reserve Level

An operating reserve equal to 5‐15 percent of annual operating expenditures is appropriate among these service types. Fleet Services and Facility Services will target a 10‐15 percent operating reserve level, and Information Technology Operations will target a 5‐10 percent operating

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66 reserve level. The fund balance of each ISF will serve as its operating reserve. For purposes of calculating the reserve target, operating expenditures include labor expenses and materials, services, and supplies expenses in the fund. As a metric for calculating a reserve level, operating expenditures should not include capital outlay, debt service, or transfers to other funds.

3. Initial Establishment of the Reserve

The available cash balance in the ISF may be used immediately to establish the operating reserve to its minimum level. If the minimum level is not feasible with existing cash, staff will develop a plan to begin adjusting the charges for service to begin funding the reserve, as described in the following paragraph.

4. Annual Funding of the Reserve

When the reserve is at its minimum level, there is no need to assess client operating departments for additional reserve funding in their annual charge for service. The
reserve exists until it is used and falls
below its minimum threshold, as designed.

When the operating reserve falls below its minimum level, a plan for replenishing the reserve shall be established as part of the next fiscal year’s annual rate calculation process. Under staff discretion at that time, options for replenishing the reserve may include:

 Immediate replenishment to the minimum level in one fiscal year, accomplished by an additional component to the annual charge for service, assessed on client operating departments in proportion to their total charge for services.

 Replenishment to the minimum level over multiple fiscal years, such as two or three, depending on fiscal conditions determined at that time. This moderated plan is also accomplished as an additional component to the annual charge for service assessed on client operating departments in proportion to their total charge for services.

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67 5. Excess Reserves

When cash held in the fund exceeds the minimum operating reserve level, fund managers should determine appropriate uses to avoid over‐ accumulation and stranding of City resources, as part of the annual rate calculation process in the next fiscal year. Under staff discretion at that time, options for
reducing excess reserves may include:

 Reduce client operating department charges for service on a one‐ time basis in proportion to their total charge for service. This option alternatively may be viewed as reducing the total cost pool driving charges for services by using reserves to fund planned operating expenditures in a single fiscal year.

 Fund previously deferred special projects associated with ISF operations, particularly those projects of broad benefit to all client operating departments.

 Transfer excess cash to the ISF’s companion asset
replacement/rehabilitation fund to reduce long‐term deficiencies or accelerate funding for defined capital needs as allowed by accounting controls.

B. Replacement Reserves

1. Applicability

The following ISFs manage capital assets and therefore would benefit from the establishment of a replacement reserve:

 Fleet Replacement
 Fleet Operations
 Equipment Replacement
 Facility Rehabilitation
 Information Technology Replacement

The replacement reserve shall be based
on analysis of long‐term
scheduled capital improvement, rehabilitation, and replacement of capital assets and equipment managed by the ISF in order to sustain municipal services and prevent City assets’ physical deterioration.

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68 Replacement reserves are not typically managed to handle increases in assets and equipment in service. Funding for new or growth in assets and equipment will need to be identified as a special funding component for client operating departments, the general resources of the City, or the ISF outside of this replacement reserve structure.

2. Targeted Reserve Level

Replacement reserves are dynamic: They are continually added to and spent as assets are rehabilitated or replaced. These ISF’s will not target a minimum cash balance but instead manage the reserve’s annual funding to enable adequate resources when expenditures are scheduled or needed.

3. Initial Establishment of the Reserve

The available cash balance in these ISF’s may be used immediately to establish the replacement reserve. These are the resources available to meet near‐term scheduled expenditures and the resources being accumulated for expenditure later as assets require reinvestment or replacement. In ideal circumstances, the cash currently available equals the amount of resources needed along current replacement schedules for all assets in service. The reasonableness of this circumstance will differ depending on the ISF evaluated for one or more of several reasons, such as:

 Past charges for service did not include any funding or included insufficient annual funding for future replacement.

 Assets are routinely replaced beyond their scheduled lives, particularly when ongoing maintenance can extend in‐service timelines without unmanageable costs or effort.

 Assets are ultimately replaced by another asset of entirely different cost structure, particularly in areas of more rapid technological change.

 The total value of future replacement needs may not be supportable by charges for service and will require identification of additional funding outside the ISF in the future.

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69 Regardless of the initial reserve establishment’s adequacy, charges for service in the next fiscal year should be set to continue funding the reserve on an annual basis, as described in the following paragraph.

4. Annual Funding of the Reserve

The replacement reserve’s underlying intention is to distribute the cost of asset replacement evenly over the life of the asset. Therefore, analysis by (individual or category of) asset is required to determine a total annual funding level. Steps for analyzing assets and determining their corresponding reserve funding component are as follows:

 Original Cost Basis: Record assets when placed in service. Assign an expected useful life. Calculate a straight‐line annual depreciation amount based on the original cost. This value represents the minimum annual replacement reserve funding amount for assets expected to be replaced at the end of their life cycle.

 Replacement Cost Basis: Alternatively, record assets when placed in service. Assign an expected useful life. Project a replacement cost based on estimated cost inflation indices from original cost or a known replacement value. Calculate a straight‐line depreciation amount based on estimated replacement cost, reducing for any material expected salvage value for fully depreciated assets. The resulting value represents the maximum annual reserve amount for assets expected to be replaced at the end of their life cycle.

 The method chosen – original cost or replacement cost basis – should be determined at staff discretion in each ISF. Factors influencing the choice of the method include impact to charges for service on client operating departments; external factors that substantially impact asset management between life cycles, such as rapid technological change; and magnitude of interest earnings in the replacement reserve contributing toward total resources available for asset replacement.

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70  The sum of annual funding amounts by asset (or asset category) represents the total annual reserve contribution to be collected through the ISF’s charges for service, dependent upon funding available for rehabilitation and replacement (See Capital Improvement Program Rehabilitation Funding Policy). This annual funding requirement should be allocated to the client operating departments based on the selected allocation metric for asset replacement in the ISF’s rate method, typically in proportion to the department’s use of the asset.

5. Excess Reserves

In the unlikely event that replacement reserves are found to exceed scheduled needs, as part of the annual rate calculation process in the next fiscal year, fund managers should determine appropriate uses to avoid over‐accumulation and stranding of City resources. Under staff discretion at that time, options for reducing excess reserves may include:

 A planned, one‐time reduction to service charges on client operating departments in proportion to their total charge for asset replacement‐related services.

 Funding previously deferred special projects associated with asset management for the ISF, particularly those projects of broad benefit to all client operating departments.

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71 City of Roseville
Capital Improvement Program Rehabilitation Funding Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 7270 II.  BACKGROUND ............................................................................................................... 7270 III.  POLICY ........................................................................................................................... 7270

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72 I.  INTRODUCTION

The City has significant investments in facilities, equipment, park and recreation amenities and information technology (IT) hardware and software which require ongoing maintenance and eventual replacement. The CIP Rehabilitation funds, i.e., the Facility Rehabilitation Fund; the Equipment Replacement Fund, the Parks, Recreation and Library Capital Projects Fund; and the Information Technology Replacement Fund, are used to fund infrastructure needs for City buildings, equipment, park and recreation amenities and information technology capital replacement. In addition, the City maintains its significant investment in streets with external funding sources that are currently inadequate.

II.  BACKGROUND

The City maintains 10‐Year Rehabilitation/Replacement
plans for its General Fund assets
used in service delivery. The 10‐year plans reflect an annual General Fund funding requirement of over $10 million, however the actual amount budgeted in FY2021‐22 was $3.2 million leaving an annual gap of approximately $7 million.

The City performs an annual review of the 10‐year plans to develop CIP Rehabilitation budget recommendations for the City Manager that includes a prioritized list of capital projects that can be recommended for funding or deferral in conjunction with the adoption of the City's CIP Rehabilitation budget.

The expectation is that the annual average demand will
continue to trend upward based
on projects being deferred and new replacement costs.

Addressing these infrastructure needs has been a stated priority of the City Council and was reaffirmed at the City Council priorities workshop meeting on February 22, 2022. As outlined at that workshop, the proposed budget for CIP
Rehabilitation will be increased
for FY2022‐23 to include $1.6 million of General Fund resources for street maintenance.

III.  POLICY

On an annual basis during each budget process, and until the annual required funding level is attained, the General Fund contribution to CIP Rehabilitation shall increase by $1,000,000.

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73 City of Roseville
Pension Funding Policy
TABLE OF CONTENTS

I.  PURPOSE ....................................................................................................................... 7472 II.  BACKGROUND ............................................................................................................... 7472 III.  POLICY ........................................................................................................................... 7573 A.  Actuarially Determine Contribution (ADC) ...................................................... 7573 B.  Additional Discretionary Payment (ADP) Contribution ................................... 7573 C.  Pension Reserve Trust Fund Contribution ....................................................... 7573 D  Transparency and Reporting ............................................................................ 7674 E.  Review of Funding Policy ................................................................................. 7674

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74 I.  PURPOSE

The City’s Pension Funding Policy documents the method the City will use to determine its actuarially determined contributions to fund the long‐term cost of benefits to the plan participants and annuitants. The policy also:

•  Provides guidance in making annual budget decisions; •  Demonstrates prudent financial management practices; •  Reassures bond rating agencies; and
•  Shows employees and the public how pensions will be funded.

II.  BACKGROUND

The City provides defined benefit retirement benefits through the California Public Employees’ Retirement System (CalPERS). CalPERS is a multiple‐employer public employee defined benefit pension plan.

All full‐time
and certain part‐time City employees are eligible to participate in CalPERS.

CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members and their beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute.

The financial objective of a defined benefit pension plan is to fund the long‐term cost of benefits provided to the plan participants. In order to assure that the plan is financially sustainable, the plan should accumulate adequate resources in a systematic and
disciplined manner over the active service life of benefitting employees. This funding policy outlines the method the City will utilize to determine its actuarially determined contributions to fund the long‐term cost of benefits to the plan participants and annuitants.

Pension Funding: A Guide for Elected Officials, issued by eleven national groups including the U.S. Conference of Mayors, the International City/County Management Association, and the Government Finance Officers Association, established the following five general policy objectives for a pension funding policy:

 Actuarially Determined Contributions. A pension funding plan should be based upon an actuarially determined contribution (ADC) that incorporates both the cost of benefits in the current year and the amortization of the plan’s unfunded actuarial accrued liability.

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75  Funding Discipline. A commitment to make timely, actuarially determined contributions to the retirement system is needed to ensure that sufficient assets are available for all current and future retirees.

 Intergenerational equity. Annual contributions should be reasonably related to the expected and actual cost of each year of service so that the cost of employee benefits is paid by the generation of taxpayers who receives services from those employees.

 Contributions as a stable percentage of payroll. Contributions should be managed so that employer costs remain consistent as a percentage of payroll over time.

 Accountability and transparency. Clear reporting of pension funding should include an assessment of whether, how, and when the plan sponsor will ensure sufficient assets are available for all current and future retirees.

III.  POLICY

A.  Actuarially Determine Contribution (ADC)

CalPERS actuaries will determine the City’s ADC to CalPERS based on annual actuarial valuations.

The ADC will include the normal cost for current service and amortization of any under‐funded amount. The normal cost will be calculated using the entry age normal cost method using economic and non‐economic assumptions approved by the CalPERS Board of Administration.

The City will review the CalPERS annual actuarial
valuations to validate the
completeness and accuracy of the member census data and the reasonableness of the actuarial assumptions.

B.  Additional Discretionary Payment (ADP) Contribution

The City will consider making ADP contributions with one‐time General Fund resources, with the objectives of increasing the plan’s funded status, by reducing the unfunded actuarially accrued liability, and reducing ongoing pension costs.

C.  Pension Reserve Trust Fund Contribution

The City will establish and consider making contributions to an Internal Revenue Code Section 115 Pension Trust, with the objective of setting aside extra resources for future pension contributions at reduced investment risk to help smooth volatility from year‐to‐year fluctuations in annual required contributions.

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76 D.  Transparency and Reporting

Funding of the City’s pension plans should be transparent to vested parties including plan participants, annuitants, the City Council and Roseville residents.

In order to achieve this transparency, the following information shall be available:

 Copies of the annual actuarial valuations for the City’s CalPERS plans shall be made available to the City Council.

 The City’s Annual Comprehensive Financial Report shall be published on its website. This report includes information on the City’s annual contributions to the pension systems and their funded status.

 The City’s annual operating budget shall include the City’s contributions to CalPERS.

E.  Review of Funding Policy

Funding a defined benefit pension plan requires a long‐term horizon. As such, the City will review this policy at least every five years to determine if changes to this policy are needed to ensure adequate resources are being accumulated.

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77 City of Roseville
Other Post‐Employment Benefits (OPEB) Funding Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 7876 II.  BACKGROUND ............................................................................................................... 7876 III.  POLICY ........................................................................................................................... 7876

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78 I.  INTRODUCTION

The purpose of this Funding Policy is to state the overall funding goals for the City of Roseville OPEB Trust. The objective is to accumulate sufficient assets to fully finance the retiree healthcare benefits that the retired employees receive throughout retirement. In meeting this objective, the City will strive to meet the following funding goals:

A.  The City plans to continue to fund retiree medical benefits from operations until such a time as those expenses exceed the City’s Actuarially Determined Contribution (ADC). At that time withdrawals from the OPEB Trust will be necessary.

B.  The City intends and
plans to ultimately achieve full funding of its actuarially determined OPEB contributions by making increasing contributions to the OPEB trust, to the extent feasible, in the context of other competing demands for public services and employee compensation.

C.  Nothing in this funding policy shall constitute an obligation upon the City, nor an
implied contract.  The City Council may revoke or amend this policy in the best interests of the City.

D.  Funding of the OPEB Trust does not change the City’s obligation or intent to fully pay annual medical costs for retirees.

II.  BACKGROUND

The City of Roseville has provided
a retiree health benefit to its employees for many
years. As a cost reduction strategy, this benefit was eliminated for all bargaining unit employees classified as Tier III. Although eliminated for new employees, this benefit still remains in effect for the majority of the City’s employees and must be addressed during the annual budget process.

In an effort to address the long‐term costs of this expense, a trust was created to begin funding this benefit. The process currently in place is to fund all actual retiree expenses incurred in the current year on a pay‐as‐you‐go basis and make additional contributions to the trust fund.

III.  POLICY

The City will engage an OPEB actuary to determine the City’s ADC based on biennial actuarial valuations. The ADC will include the normal cost for current service and amortization of the under‐funded liability. The normal cost is the current year cost of
the program to provide the benefit for current employees in the future. The normal cost

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79 will be calculated using the entry age normal cost method using appropriate economic and non‐economic assumptions approved by the City.

The City will review the actuarial valuations to validate the completeness and accuracy of the employee census data and the reasonableness of the actuarial assumptions.

Actuarial valuations involve estimates and
assumptions about the probability of
occurrence of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future.

The City will continue to appropriate the ADC in the annual budget for the pay‐as‐you‐
go costs of OPEB for current retirees and contributions to the OPEB Trust. In addition, a portion of any one‐time monies remaining at the end of each fiscal year may be deposited into the trust, which amount will be determined by Council based on available funds and other priorities.

Funding OPEB requires a long‐term horizon. The City will review this policy at a minimum biennially, coincident with preparation of the actuarial valuations, to determine if changes to this policy are necessary to ensure adequate resources are being accumulated to fund OPEB benefits.

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80 City of Roseville
Workers’ Compensation and General Liability Funding Policy

TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 8179 II.  BACKGROUND ............................................................................................................... 8179 III.  POLICY ........................................................................................................................... 8179

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81 I.  INTRODUCTION

The Workers’ Compensation and General Liability Funding Policy documents the City’s approach to providing adequate financial resources to fund the City’s Workers’ Compensation and General Liability Programs and establishing and maintaining adequate reserves in the Workers’ Compensation and General Liability Internal Service Funds.

II.  BACKGROUND

The City is
self‐insured for workers' compensation and for general liability. The Workers’ Compensation and General Liability and Programs charge City departments and funds for the costs of providing for claims, as well as for the cost of administering the claims.

III.  POLICY

In order to methodically and consistently measure the City’s projected claims, the City will contract with a professional outside actuary to prepare annual actuarial valuation reports for both categories of claims. Program funding will be based on the annual actuarial valuation reports.

The City’s funding policy will provide program funding at the 75% confidence level, including recognition of anticipated
investment income. Confidence level is used by
actuaries to determine the realistic possibilities that a given funding rate will be sufficient to cover all claims that might be incurred in any one program year. A 75% confidence level indicates that the funding rate should be adequate 75% of the time.

If either program maintains a balance above the minimum funding requirement, the excess reserves will be used to subsidize City contributions over a 1‐5 year period depending upon the amount of the excess and the City’s economic condition.

If either program has excess claims requiring additional contributions to the fund, the
City will increase contributions over a 1‐3 year period depending on the amount of the shortfall and the City’s economic condition to get to the minimum funding requirement.

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82 City of Roseville
Interfund Loans Policy

TABLE OF CONTENTS

I.  PURPOSE ....................................................................................................................... 8381 II.  BACKGROUND ............................................................................................................... 8381 III.  POLICY ........................................................................................................................... 8381 A.  Long‐term Loans .............................................................................................. 8381 B.  Short‐term Loans ............................................................................................ 8482 C.  Prohibited Uses ................................................................................................ 8482

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83 I.  PURPOSE

The City’s Interfund Loan Policy documents the methods used by the City to demonstrate prudent financial management over interfund loans. The policy:

•  Requires City Council approval of interfund loans, except for short‐term working capital loans,

•  Permits short‐term interfund loans for working capital to cover Council‐
approved reimbursable grants and projects and other temporary timing differences in cash flows, and

•  Prohibits interfund loans from being used to solve ongoing structural budget issues or hindering the accomplishment of any function or project for which the lending fund was established.

II.  BACKGROUND

Interfund loans are
the lending of cash from one City fund to another for a specific purpose and with a requirement for repayment. The practice of interfund loans is a recognized and necessary aspect of municipal finance. Such loans are typically short‐ term in nature and constitute the allocation of resources between individual funds for working capital purposes.

III.  POLICY

A.  Long‐term Loans

Interfund loans, other than short‐term working capital loans, must be approved by the City Council. Council approval will include the following terms of the loan:

•  Purpose of Interfund Loan

•  Identification of the source fund

•
Availability of unrestricted funds in the source fund

•  Review of multi‐year plans for use of source fund cash

•  Analysis of legal or contractual restrictions

•  Repayment of Interfund Loan

City of Roseville  Financial Policies – Effective July 1, 20242025  Return to Table of Contents

84 •  Repayment must have a payment source and funding stream

•  Specific repayment schedule

•  Interest imposed at a rate equal to at least investment earnings if loan did not occur

•  Other Considerations

•  Feasibility of repayment

•  Internal controls to monitor repayment

B.  Short‐term Loans

Short
‐term interfund loans for working capital to provide cash for Council‐ approved reimbursable grants and projects, are permitted. Short‐term working capital loans are also permitted for temporary timing differences in cash flows when expenditures are incurred before revenue is collected. The source funds for working capital interfund loans are the General Fund and the Automotive Replacement Fund.

C.  Prohibited Uses

•  Interfund loans will not be used to solve ongoing structural budget issues.

•  Interfund loans will not hinder the accomplishment of any function or project for which the lending fund was established.

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85 City of Roseville
Request for Proposals (RFP) Policy
TABLE OF CONTENTS

I.  INTRODUCTION ............................................................................................................. 8684 II.  DEFINITION ................................................................................................................... 8684 III.  USE OF AN RFP .............................................................................................................. 8684 IV.  PUBLIC NOTICE .............................................................................................................. 8785 V.  FORM OF PROPOSAL ................................................................................................... 8785 VI.  EVALUATION FACTORS ................................................................................................. 8886 VII.  DISCUSSIONS WITH PROPOSERS AND REVISIONS TO PROPOSALS ............................... 8987 VIII.  AWARD PROCESS .......................................................................................................... 9088 IX.  PUBLIC DISCLOSURE ...................................................................................................... 9088 X.  PROTESTS ...................................................................................................................... 9088 A.  Protest Requirements ...................................................................................... 9088 B.  Grounds for Protest ......................................................................................... 9189 C.  Administrative Review ..................................................................................... 9189 D.  Stay of Action during a Protest ........................................................................ 9189

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86 I.  INTRODUCTION

The purpose of this policy is to provide a uniform process for the issuance, evaluation, and selection of competitive proposals for services and/or customized goods.

II.  DEFINITION

Request for Proposals (“RFP”) is a competitive proposal process whereby the City solicits proposals from potential proposers. The RFP process is
used for requirements in which
the desired outcome is known, but it is difficult to define the methodology or the exact materials or services required to achieve the desired results.

Objectives of the RFP process are to:

A.  Describe the City’s requirements and desired outcomes within a written specification;

B.  Solicit proposers for their proposed solutions;

C.  Describe key criteria to be used in the evaluation of proposals;

D.  Outline the terms and conditions under which the proposer(s) will operate or supply goods and/or services.