Agenda packet — Santa Barbara City Council, November 7, 2023 (part 1 of 2)

CITY OF SANTA BARBARA

CITY COUNCIL
Randy Rowse
Mayor
Rebecca Bjork
City Administrator
Alejandra Gutierrez
Mayor Pro Tempore
Oscar Gutierrez
Ordinance Committee Chair
Sarah J. Knecht
City Attorney
Eric Friedman
Finance Committee Chair
Meagan Harmon
Mike Jordan
Kristen W. Sneddon
City Hall
735 Anacapa Street
http://www.SantaBarbaraCA.gov
NOVEMBER 7, 2023, 2:00 PM
AGENDA
IN-PERSON PUBLIC COMMENT: At the beginning of each meeting of the City Council, Finance Committee, or Ordinance Committee, any member of the public may address the City Council concerning any item not on the Council's agenda. Any person wishing to make such address should first complete and deliver a "Request to Speak" form prior to the time that public comment is taken up by the City Council. Each speaker will be given a total of 3 minutes to address the Council. Pooling of time is not allowed during general public comment. The time allotted for general public comment at the beginning of the 2:00 p.m. session is 30 minutes.

Any member of the public who did not speak during the 2:00 p.m. session but who submitted a request to do so during the 2:00 p.m. 30 minute session may do so at the end of the meeting when the additional “Public Comment (If Necessary)” is announced. The City Council, upon majority vote, may decline to hear a speaker on the grounds that the subject matter is beyond their jurisdiction.

WRITTEN PUBLIC COMMENT: Public comments may also be submitted via email to [email protected] prior to the beginning of the Council Meeting. All public comments submitted via email will be provided to City Council and will become part of the public record.

ORDER OF BUSINESS: Regular meetings of the Finance Committee and the Ordinance Committee begin at 12:00 p.m. The regular City Council meeting begins at 2:00 p.m. in the Council Chambers at City Hall.

REPORTS: Copies of the reports relating to agenda items are available for review at http://www.SantaBarbaraCA.gov/CAP.In accordance with state law requirements, this agenda generally contains only a brief general description of each item of business to be transacted or discussed at the meeting. Should you wish more detailed information regarding any particular agenda item, you are encouraged to obtain a copy of the Council Agenda Report (a "CAR") online at the City's website (http://www.SantaBarbaraCA.gov/CAP). Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are posted to the City’s website as soon as reasonably feasible.

CONSENT CALENDAR: The Consent Calendar is comprised of items that will not usually require discussion by the City Council. A Consent Calendar item is open for discussion by the City Council upon request of a Councilmember, City staff, or member of the public. Items on the Consent Calendar may be approved by a single motion. Should you wish to comment on an item listed on the Consent Agenda, after turning in your "Request to Speak" form, you should come forward to speak at the time the Council considers the Consent Calendar.
(CONTINUED ON NEXT PAGE)
SPANISH INTERPRETATION: If you need interpretation of your communications to Council from Spanish into English, please contact the City Clerk’s Office at 564-5309 or by email at [email protected]. If possible, notification of at least 48 hours will usually enable the City to make arrangements.

INTERPRETACIÓN EN ESPAÑOL: Si necesita una interpretación del español al inglés, para sus comunicaciones al Consejo, comuníquese con la Oficina del Secretario Municipal al 564-5309, o por correo electrónico a [email protected]. Si es posible, la notificación de al menos 48 horas generalmente permitirá a la Ciudad hacer los arreglos.

AMERICANS WITH DISABILITIES ACT: If you need auxiliary aids or services or staff assistance to attend or participate in this meeting, please contact the City Administrator's Office at 564-5305 or by email at [email protected]. If possible, notification at least 48 hours prior to the meeting will usually enable the City to make reasonable arrangements. Additionally, a speaker may email [email protected] by 5:00 p.m. the day before a meeting, stating which item they wish to speak on.

Specialized services, such as sign language interpretation or documents in Braille, may require additional lead time to arrange. 11/07/2023 Santa Barbara City Council Final Agenda Page 1 NOVEMBER 7, 2023 AGENDA
ORDINANCE COMMITTEE MEETING - 12:00 P.M. IN THE COUNCIL CHAMBER

1. Subject: Specific Plan (SP11-CHC) for 3237 State Street (120.03) Recommendation: That Ordinance Committee consider a proposed Ordinance of the Council of the City of Santa Barbara Adding Chapter 30.136, Community Health Center Specific Plan (SP11-CHC) Zone, to the Municipal Code to regulate uses at 3237 State Street and forward the Ordinance to City Council for introduction and adoption.
11/07/2023 Santa Barbara City Council Final Agenda Page 2 REGULAR CITY COUNCIL MEETING - 2:00 P.M.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

ROLL CALL

CEREMONIAL ITEM

1. Subject: Employee Recognition – Service Award Pins (120.04) Recommendation: That Council authorize the City Administrator to express the City’s appreciation to employees who are eligible to receive service award pins for their years of service through November 30, 2023.

CHANGES TO THE AGENDA

CONSENT CALENDAR

2. Subject: Restructure of Santa Barbara Community Housing Corporation’s Loan on Property Located at 821 Bath Street [Ordinance Adoption] (640.08) Recommendation: That Council adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Approving a Restated Loan Agreement with Santa Barbara Community Housing Corporation, a California Nonprofit Public Benefit Corporation, Secured by a Restated Deed of Trust, and New Ninety-Year Affordability Control Covenant Imposed on Real Property Located at 821 Bath Street; and Authorizing the Community Development Director to Execute Such Agreements, Subject to Approval as to Form by the City Attorney, as Necessary.

3. Subject: Establish a Joint Powers Authority to Issue Future Debt [Ordinance Adoption] (210.01)
Recommendation: That Council adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Authorizing the Execution and Delivery of a Joint Exercise of Powers Agreement by and Between the City and the California Statewide Communities Development Authority and Other Matters Related Thereto.
11/07/2023 Santa Barbara City Council Final Agenda Page 3

4. Subject: Ordinance Authorizing and Regulating Parklets for Outdoor Dining in the Public Right of Way [Ordinance Introduction] (530.04) Recommendation: That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Amending the Santa Barbara Municipal Code by the Addition of Chapter 9.180 Relating to Parklets in the Public Right of Way.

5. Subject: Communication Facilities License Agreement with COX Business and SBA RAC Participants/DBA AvAirPros Services [Ordinance Introduction] (560.01)
Recommendation: That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Approving and Authorizing the Airport Director to Execute a Communication Facilities License Agreement with COX Business and SBA RAC Participants/DBA AvAirPros Services, Located at 25 David Love Place, Commencing Upon the Effective Date of the Enabling Ordinance.

6. Subject: Statement of Investment Policy and Delegation of Investment Authority for Calendar Years 2023 and 2024 [Resolution] (260.01) Recommendation: That Council adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Adopting the Investment Policy for the City and Rescinding Resolution No. 22-131.

7. Subject: Conservation Easement with Santa Barbara County for the Barger Canyon Open Space (APN 055-020-34) [Resolution] (630.02) Recommendation: That Council adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Authorizing the Sustainability and Resilience Director to Execute a Conservation Easement and All Necessary Related Documents with Santa Barbara County for the Barger Canyon Open Space (APN 055-020-34).
11/07/2023 Santa Barbara City Council Final Agenda Page 4

8. Subject: California Department of Parks and Recreation, Division of Boating and Waterways, Grant for Disposal of Surrendered or Abandoned Recreational Vessels [Resolution; Agreement] (570.03)
Recommendation: That Council:

A. Authorize the Waterfront Director to execute an agreement with the California Department of Boating and Waterways, Division of Boating and Waterways, accepting a $65,500 grant for the removal of abandoned or voluntarily surrendered recreational boats and associated hazards to navigation; and
B. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Resolution No. 23-076, Adopting the Budget for Fiscal Year 2024, to Appropriate Funds for the California Department of Parks and Recreation, Division of Boating and Waterways, Grant for Disposal of Surrendered or Abandoned Recreational Vessels.

9. Subject: Agreement with LCT Software LLC (DigEplan) for Accela Electronic Plan Review Software to Enhance the Plan Review Process and Improve Customer Service [Resolution; Agreement] (170.04)
Recommendation: That Council:

A. Authorize the Information Technology Director to execute a Master Customer Agreement contract with LCT Software LLC (DigEplan) in the amount of $175,050, for Accela Electronic Plan Review Software to include licensing, maintenance and support;
B. Authorize the Information Technology Director to execute a Professional Services Agreement contract with TruePoint Solutions, LLC in the amount of $36,730, the base contract amount is $34,980 with an additional $1,750 for extra services that may result from necessary changes in the scope of work, for Accela Electronic Plan Review Software to include implementation services for DigEplan; and
C. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Resolution No. 23-076, Adopting the Budget for Fiscal Year 2024, to Approve an Increase in Fiscal Year 2024 Expenditure Appropriations in the Capital Outlay Fund in the Amount of $38,277 Funded by Community Development and Public Works Technology Fee Reserves to Fund a Portion of the Fiscal Year 2024 DigEplan Licensing, Maintenance, and Support Costs.
11/07/2023 Santa Barbara City Council Final Agenda Page 5

10. Subject: Environmental Services for the Water Resources Operations and Maintenance Building Project [Resolution; Agreement] (540.01) Recommendation: That Council:

A. Authorize the Public Works Director to execute a City Professional Services contract with Dudek in the amount of $238,548 for environmental services for the Water Resources Operations and Maintenance Building Project and authorize $35,782 for potential extra services, for a total expenditure authority of $274,330; and
B. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Resolution No. 23-076, Adopting the Budget for Fiscal Year 2024, to Appropriate Funds for Environmental Services for the Water Resources Operations and Maintenance Building Project.

11. Subject: Amendment to Professional Services Agreement for Community Outreach Services [Resolution; Agreement] (170.01)
Recommendation: That Council:

A. That Council approve an amendment to the Professional Services Agreement with GrassrootsLab LLC. for Community Outreach Services to increase the contract amount by $77,000 for a new total amount of $112,000; and
B. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Resolution No. 23-076, Adopting the Budget for City Administrator’s Office Fiscal Year 2024, to Appropriate Available General Fund Reserves into the City Administrator's Office Budget for Community Outreach Services.

12. Subject: Professional Services Agreement with DesignARC, Inc. for Franceschi Park Interpretive Pavilion Preliminary Design [Agreement] (570.05)
Recommendation: That Council authorize the Parks and Recreation Director to execute a professional services agreement with DesignARC, Inc. in the amount of $302,530 for the preliminary design of the Franceschi Park Interpretive Pavilion Project, and approve expenditures of up to $30,253 to cover any additional cost that may result from necessary changes in the scope of work. 11/07/2023 Santa Barbara City Council Final Agenda Page 6

13. Subject: Design Services for the Fiscal Year 2025 Capital Pavement Maintenance Projects [Agreement] (530.04)
Recommendation: That Council:

A. Approve the extension of the selection of Flowers & Associates, Inc. to provide professional engineering design and construction management services for the annual Capital Pavement Maintenance Projects scheduled for Fiscal Years 2020 through 2024 to include Fiscal Year 2025; and B. Authorize the Public Works Director to execute a City Professional Services contract with Flowers & Associates, Inc. in the amount of $371,028 for design services of the Fiscal Year 2025 Capital Pavement Maintenance Projects, and authorize $37,103 for potential extra services, for a total expenditure authority of $408,131.

14. Subject: Construction Management Services for Water Main Replacement Projects [Agreement] (540.06)
Recommendation: That Council:

A. Authorize the Public Works Director to execute a City Professional Services contract with Flowers & Associates, Inc., in the amount of $1,288,176 for construction management and inspection services, and authorize $128,817 for potential extra services, for a total expenditure authority of $1,416,993 or the Fiscal Year 2023 Water Main Replacement Project; and B. Authorize the Public Works Director to execute the Second Contract Amendment with Flowers & Associates, Inc., for construction management and inspection services for the Fiscal Year 2021B Water Main Replacement Project Contract No. 28,217, in the amount of $59,252, for a total expenditure authority of $438,287.

15. Subject: Design Services for the Milpas Street Crosswalk Safety and Sidewalk Improvements Project [Agreement] (530.04)
Recommendation: That Council authorize the Public Works Director to execute a City Professional Services contract with GHD Inc. in the amount of $1,524,277 for design services of the Milpas Street Crosswalk Safety and Sidewalk Improvements Project, and authorize $152,428 for potential extra services, for a total expenditure authority of $1,676,705.
11/07/2023 Santa Barbara City Council Final Agenda Page 7

16. Subject: Approval of Transient Occupancy Tax and Cannabis Audit Services Agreement [Agreement] (220.03)
Recommendation: That Council authorize the Finance Director to execute an agreement with Hinderliter De Llamas & Associates (HdL) for Transient Occupancy Tax (TOT) and Cannabis Audit Services for three years, at an amount not to exceed $276,200.

17. Subject: Funding Recommendations for Community Arts, Organizational Development, and Events and Festivals Cultural Arts Grants (150.04) Recommendation: That Council review and approve the City of Santa Barbara Arts Advisory Committee and Community Events and Festivals Committee grant funding recommendations for Fiscal Year 2024.

18. Subject: Change Order for Purchase of Public Trash and Recycling Containers (630.02)
Recommendation: That Council authorize a change order to increase Purchase Order No. 32301596 by $326 with public trash and recycling container vendor, Forms & Surfaces, for a final not to exceed amount of $100,246.

19. Subject: Approval of Purchase Order to Hali-Brite, Inc. to Provide Runway Light Emitting Diode (LED) Retrofit Assemblies for Four (4) Runway Closure Markers (560.04)
Recommendation: That Council find it in the City's best interest to waive the formal bid process, as authorized by Municipal Code Section 4.52.060, and authorize the City General Services Manager to issue a Purchase Order to Hali-Brite, Inc. for providing LED retrofit assemblies for the four Runway Closure Markers at Santa Barbara Airport in an amount of $40,000.

20. Subject: Approval of Benefit Plans Effective January 1, 2024 (430.06) Recommendation: That Council:

A. Approve the renewal rates for the CalPERS Health Plans; Delta Dental Plans; Vision Service Plans; Employee Assistance Program (EAP); Health and Dependent Care Flexible Spending Accounts (FSA) benefits, and the carrier change from the Hartford Term Life and Disability Insurance Plans to the Standard Insurance Plans; and
B. Authorize the City Administrator to execute any necessary contracts or any amendments to agreements or contracts.
11/07/2023 Santa Barbara City Council Final Agenda Page 8

21. Subject: Cancellation of Certain Council Meetings in 2024 (120.09) Recommendation: That Council cancel the regular Council Meetings on the following dates: January 2, January 16, February 20, March 26, April 2, May 28, June 18, July 9, July 16, August 6, August 13, September 3, November 12, November 26, December 17, December 24, and December 31, 2024.

REPORT FROM THE ORDINANCE COMMITTEE

PUBLIC COMMENT

PULLED CONSENT ITEMS

COUNCILMEMBER COMMITTEE ASSIGNMENT REPORTS

CITY COUNCIL ADMINISTRATIVE AND ATTORNEY REPORTS

PUBLIC WORKS DEPARTMENT

22. Subject: Resolution to Call a Special Election and Approve a Ballot Measure to Amend the City Charter to Modernize Public Works Contracting [Resolution] (110.03)
Recommendation: That Council adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Approving and Calling for the Submission to the Voters of a City Council Proposed Measure to Amend City Charter Section 519 to Modernize Public Works Contracting at a Special Municipal Election to be Held in the City on Tuesday, March 5, 2024.

PUBLIC HEARING

COMMUNITY DEVELOPMENT DEPARTMENT

23. Subject: Elimination of Average Unit-Size Density Incentive Program Expiration Date [Ordinance Introduction] (610.04)
Recommendation: That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Amending Santa Barbara Municipal Code Sections 30.20.030, 30.25.030, 30.30.30, 30.140.220,

30.150.010, 30.150.040, and 30.150.050 to Eliminate the Expiration Date from the Average Unit-Size Density Incentive Program.
11/07/2023 Santa Barbara City Council Final Agenda Page 9 CEREMONIAL ITEM (ESTIMATED TIME 5:30 P.M.)

24. Subject: United Boys & Girls Club Gold Card Recipients - Westside & Downtown (120.04)
MAYOR AND COUNCIL REPORTS (ESTIMATED TIME 6:00 P.M.)

25. Subject: Interviews for City Advisory Groups (140.05) Recommendation: That Council hold interviews of applicants to various City Advisory Groups (Est. time 6:00 p.m.).

COUNCIL AND STAFF COMMUNICATIONS

COUNCILMEMBER ENGAGEMENTS

PUBLIC COMMENT (IF NECESSARY)

CLOSED SESSIONS

26. Subject: Conference with City Attorney – Existing Litigation – Gov. Code §54956.9(d)(1) (160.03)
Recommendation: That Council hold a closed session to consider pending litigation pursuant to subsection (d)(1) of section 54956.9 of the Government Code and take appropriate action as needed.

The pending litigation is Karen Barrows v. County of SB, et al. SBSC Case No. 22CV03508.

Scheduling: Duration 15 mins; anytime
Report: None anticipated
11/07/2023 Santa Barbara City Council Final Agenda Page 10

27. Subject: Conference with City Attorney – Existing Litigation – Gov. Code §54956.9(d)(1) (160.03)
Recommendation: That Council hold a closed session to consider pending litigation pursuant to subsection (d)(1) of section 54956.9 of the Government Code and take appropriate action as needed.

The pending litigation is City of Santa Barbara v. 3M Company, et al. USDC Case No. 2:22-cv-00993-RMG (MDL No. 2873) and In re: Aqueous Film-Forming Foams Products Liability Litigation, Master Docket No. 2:18-mn-02873-RMG (MDL No. 2873).

Scheduling: Duration 20 mins; anytime
Report: None anticipated

28. Subject: Public Employment/Public Employee Appointment (450.01) Recommendation: That Council hold a closed session, per Government Code Section 54957(b)(1), to discuss appointment for the position of Interim City Administrator and, if appropriate, make a decision regarding that appointment.

Scheduling: Duration: 30 minutes; anytime
Report: Report anticipated.

ADJOURNMENT

CITY OF SANTA BARBARA

ORDINANCE COMMITTEE MEETING

MEETING AGENDA
DATE: November 7, 2023 Oscar Gutierrez, Chair
TIME: 12:00 p.m. Mike Jordan
PLACE: Council Chambers Kristen W. Sneddon
Office of the City Office of the City
Administrator Attorney
Nicole Grisanti Sarah J. Knecht
Supervisor, City Administrator’s Office City Attorney
IN-PERSON PUBLIC COMMENT: Any person wishing to address the Ordinance Committee should first complete and deliver a "Request to Speak" form prior to the time that public comment is taken up by the Committee Member. Each speaker will be given a total of 3 minutes to address the Committee. The Ordinance Committee, upon majority vote, may decline to hear a speaker on the grounds that the subject matter is beyond their jurisdiction.

WRITTEN PUBLIC COMMENT: Public comments may also be submitted via email to [email protected] prior to the beginning of the Ordinance Committee Meeting. All public comments submitted via email will be provided to the Ordinance Committee and will become part of the public record.

AMERICANS WITH DISABILITIES ACT: If you need auxiliary aids or services or staff assistance to attend or participate in this meeting, please contact the City Administrator's Office at 564-5305 or by email at [email protected] if possible, notification at least 48 hours prior to the meeting will usually enable the City to make reasonable arrangements. Additionally, a speaker may email [email protected] by 5:00 p.m. the day before a meeting, stating which item they wish to speak on. Specialized services, such as sign language interpretation or documents in Braille, may require additional lead time to arrange.

ITEM FOR CONSIDERATION
SUBJECT: Specific Plan (SP11-CHC) for 3237 State Street RECOMMENDATION: That Ordinance Committee consider a proposed Ordinance of the Council of the City of Santa Barbara Adding Chapter 30.136, Community Health Center Specific Plan (SP11-CHC) Zone, to the Municipal Code to regulate uses at 3237 State Street and forward the Ordinance to City Council for introduction and adoption.

File Code No. 120.03

CITY OF SANTA BARBARA

ORDINANCE COMMITTEE AGENDA REPORT
AGENDA DATE: November 7, 2023
TO: Ordinance Committee
FROM: Planning Division, Community Development Department SUBJECT: Specific Plan (SP11-CHC) for 3237 State Street RECOMMENDATION:

That Ordinance Committee consider a proposed Ordinance of the Council of the City of Santa Barbara Adding Chapter 30.136, Community Health Center Specific Plan (SP11- CHC) Zone, to the Municipal Code to regulate uses at 3237 State Street and forward the Ordinance to City Council for introduction and adoption.

DISCUSSION:

Project Description
American Indian Health and Services (AIHS), a local non-profit health clinic that provides medical, dental, pediatric, and behavioral health services to both the American Indian/Alaska Native and non-Native medically underserved populations in Santa Barbara and Ventura Counties, is in the process of purchasing the 2.57-acre site at 3237 State Street from the federal government in order to develop a new community health center.

The site is currently developed with a one-story main building and a one-story maintenance building. The property (Fremont Hall USAR Center) was recently designated a City Structure of Merit. The proposed project includes demolition of a small portion of the main building and a new two-story addition. The total floor area for the entire project is 25,678 square feet.

AIHS has been leasing space at 4141 State Street for many years and has recently moved some of its operations to the project site. While the property is owned by the federal government uses are not required to adhere to local land use designations or development standards. Therefore, AIHS is presently allowed to provide community health center services at the site without City approvals. However, once the property is transferred from the federal government to AIHS, the uses on the site must comply with Agenda Item No. 1
File Code No. 120.03
Ordinance Committee Agenda Report
Specific Plan (SP11-CHC) for 3237 State Street
November 7, 2023

Page 2 ends

local Zoning and General Plan designations. As such, AIHS has requested approval of a Specific Plan (SP11-CHC) to replace the existing RS-7.5 zoning to allow the community health center and other uses, and a General Plan Amendment to change the land use designation from Parks and Open Space to Office/Low Density Residential (five dwelling units per acre) so that the zoning and the General Plan land use designations on the property will match the community health center use. The existing overlay zone on the property (USS – Upper State Street Area) would remain.

Specific Plan Process
Staff recommended a Specific Plan to Council rather than a Zoning Amendment to rezone the property from RS-7.5 (Residential Single Unit, 7,500 square-foot minimum lot size) to O-M (Office Medical), or another commercial designation that would allow a clinic use and medical and dental offices, in order to only allow uses that would be consistent with the surrounding area and benefit the community. The purpose of the Specific Plan is to restrict the allowed uses (e.g., allow some O-M uses but not all), and to allow other uses that provide a clear public benefit, such as affordable housing and emergency staging.

Specific Plans are regulated by Chapter 30.265 of the Zoning Ordinance. An application for a Specific Plan is reviewed and processed in the same manner as a General Plan Amendment; however, unlike the General Plan Amendment, it must also be reviewed by the Ordinance Committee. The Ordinance Committee makes a recommendation to the City Council regarding adoption of the Specific Plan. The Specific Plan would replace the base zone of the property, and the use regulations and development standards contained in the Specific Plan will take precedence over the Zoning Ordinance, where applicable.

In order to adopt a Specific Plan, the City Council must find that the Specific Plan implements and is consistent with the General Plan, and that the proposed development will be superior to development otherwise allowed under conventional zoning.

Review Hearings
City Council held a public hearing on February 9, 2021 to initiate the Specific Plan and General Plan Amendment for the project site. After much discussion, City Council postponed initiation of the Specific Plan and General Plan Amendment and referred the project to the Planning Commission for their comments and recommendations.

On November 11, 2021, Planning Commission reviewed the proposal and was in general support of the proposed Specific Plan uses, the proposed General Plan land use designation of Office/Medium Density Residential, and the proposed plans, and recommended that City Council initiate the Specific Plan and General Plan Amendment.

On February 8, 2022, City Council initiated the Specific Plan and the General Plan Amendment as well as designated the project as a Community Benefit Project so that the project could be allocated 2,500 square feet of nonresidential floor area from the Community Benefit category. The Council discussion included comments on the Specific Ordinance Committee Agenda Report
Specific Plan (SP11-CHC) for 3237 State Street
November 7, 2023

Page 3 ends

Plan uses with support for non-profit medical, dental, and behavioral health uses; 100% affordable housing; possible emergency staging; removal of mobile home park and recreational vehicle park as a possible use; removal of banks or financial institutions as a possible use; support of recreational facilities, public facilities, community care facilities for elderly care, and day care centers; continue to discuss use of the parking lot for emergency staging; and incorporate support for employee housing. Council’s motion to initiate the specific plan also modified the recommended land use designation from Office/ Medium Residential (12 dwelling units per acre) to Office/ Low Density Residential (5 dwelling units per acre).

On June 27, 2023, City Council approved an additional allocation of nonresidential square footage (5,838 square feet) from the Community Benefit Project category because the proposed project had been further developed to include a two-story addition.

On October 19, 2023, the Planning Commission unamimously approved the Development Plan for the proposed project and made a recommendation that City Council approve the Specific Plan (SP11-CHC) and the General Plan Amendment.

Proposed Specific Plan
The proposed Specific Plan is provided as Attachment 1. This is a reformatted version of the draft reviewed and recommended by the Planning Commission, and provides more simplified language in section in section 30.136.040 pertaining to front set back allowances. It is important to note that the intent and requirements of the draft ordinance reviewed by the Planning Commission have not changed. (Attachment 2) The change in the format of the proposed specific plan was done to conform more stylistically with the format found in the City’s current Zoning Ordinance.

As currently proposed, the following uses would be permitted in the SP11-CHC Zone:

A. Commercial, Industrial, Public and Semi-Public Uses permitted in Section

30.25.020 for the O-M Zone and subject to the permit requirements, restrictions, and limitations applicable in the O-M Zone, except the following uses shall be prohibited:

1. Recreational Vehicle Parks, Permanent;

2. Banks and Financial Institutions;

3. General Retail;

4. Neighborhood Market; and

5. Animal Keeping
B. Any residential use permitted in Section 30.25.020, Land Use Regulations, for the O-M Zone, provided however that all residential units must be sold or rented to very low, low, and/or moderate income households according to the procedures specified in the City’s Affordable Housing Policies and Procedures, except the following use shall be prohibited:

Ordinance Committee Agenda Report
Specific Plan (SP11-CHC) for 3237 State Street
November 7, 2023

Page 4 ends

1. Mobilehome Park.

C. Staging for emergency services by a public agency to the extent it does not interfere with the community health center’s existing and emergency center operations.

Staff requests that the Ordinance Committee review the attached proposed Specific Plan.

The allowed uses in the O-M Zone are also attached for reference. (Attachment 3.) BUDGET/FINANCIAL IMPACT:

This action does not have a budget/financial impact on the City.

ENVIRONMENTAL REVIEW:

Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15061). The proposed project would allow the existing community health center uses to remain onsite and for the zoning and land use designations to be changed to match the current uses.

There is no evidence that the proposed project would have a significant effect on the environment. Staff has also determined that the project qualifies for an exemption from further environmental review under Section 15301 (Existing Facilities) and Section 15331 (Historical Resource Restoration/ Rehabilitation) of the CEQA Guidelines. In addition, none of the exceptions to the exemption under CEQA Guidelines Section 15300.2 apply ATTACHMENTS: 1. Proposed Specific Plan

2. Draft Specific Plan, Planning Commission Review Version

3. OM Zone Uses
PREPARED BY: Kathleen Kennedy, Project Planner
SUBMITTED BY: Elias Isaacson, Community Development Director APPROVED BY: City Administrator’s Office
ATTACHMENT 1
Proposed Specific Plan
Chapter 30.136 COMMUNITY HEALTH CENTER SPECIFIC PLAN (SP11-CHC) ZONE Sections:

30.136.010 Purpose.

30.136.020 Applicability.

30.136.030 Land Use Regulations.

30.136.040 Development Standards.

30.136.050 Design Review Required.

30.136.010 Purpose.

It is the purpose of the Community Health Center Specific Plan to establish an overlay zone allowing a community health clinic in close proximity to public transit and existing commercial and recreational uses.

30.136.020 Applicability.

The regulations of this chapter apply within the SP11-CHC Zone depicted in Figure 30.136, Community Health Center Specific Plan (SPII-CHC) Area, at the end of this chapter and shown on the Official Zoning Map.

30.136.030 Land Use Regulations.

The following uses are permitted in the SP11-CHC Zone:

A. Commercial, Industrial, Public and Semi-Public Uses permitted in the Section 30.25.020, Land Use Regulations, for the O-M Zone and subject to the permit requirements, restrictions, and limitations applicable in the O-M Zone, except the following uses shall be prohibited:

1. Recreational Vehicle Parks, Permanent;

2. Banks and Financial Institutions;

3. General Retail;

4. Neighborhood Market; and

1. Mobilehome Park.

C. Staging for emergency services by a public agency to the extent it does not interfere with the community health center’s existing and emergency center operations.

30.136.040 Development Standards.

A. All development standards applicable in Section 30.25.030, Development Standards, for the O-M Zone shall apply.

B. All development standards applicable in Chapter 30.85, Upper State Street Area (USS) Overlay Zone, shall apply, except as follows:

1. Uncovered parking spaces may encroach a maximum of five feet into the required 10-foot front setback.

C. Pedestrian improvements in the public right-of-way consistent with the City’s Pedestrian Master Plan shall be installed along State Street and Las Positas Road. Improvements to the Las Positas Road driveway shall be required. A public works permit shall be required along with any required building permit, as determined by the Community Development and Public Works Departments.

30.136.050 Design Review Required.

Existing development on site includes historic resources; therefore, all development shall be subject to review and approval by the Historic Landmarks Commission pursuant to SBMC

30.220.020.

Figure 30.136:

Community Health Center Specific Plan Area
(SP11-CHC)
Draft Specific Plan – Planning Commission Review
Version
Chapter 30.XXX

COMMUNITY HEALTH CENTER
SPECIFIC PLAN (SP11-CHC) ZONE
Sections:

30.XXX.010 Purpose.

30.XXX.020 Applicability.

30.XXX.030 Land Use Regulations.

30.XXX.040 Development Standards.

30.XXX.050 Design Review Required.

30.XXX.010 Purpose.

30.XXX.020 Applicability.

The regulations of this chapter apply within the SP11-CHC Zone depicted in Figure 30.XXX, Community Health Center Specific Plan (SPII-CHC) Area, at the end of this chapter and shown on the Official Zoning Map.

30.XXX.30 Land Use Regulations.

The following uses are permitted in the SP11-CHC Zone:

1. Any non-residential use permitted in the O-M Zone subject to the permit requirements, restrictions, and limitations applicable in the O-M Zone, except the following uses shall be prohibited:
a. Recreational Vehicle Parks, Permanent;
b. Banks and Financial Institutions;
c. General Retail;
d. Neighborhood Market; and
e. Animal Keeping

2. Any residential use permitted in the O-M Zone, provided however that all residential units must be sold or rented to very low, low, and/or moderate income households according to the procedures specified in the City’s Affordable Housing Policies and Procedures, except the following use shall be prohibited:
a. Mobilehome Park.

3. Staging for emergency services by a public agency to the extent it does not interfere with the community health center’s existing and emergency center operations.

30.XXX.040 Development Standards.

1. All development standards applicable in the O-M Zone shall apply. All development standards applicable in the O-M Zone and Upper State Street Area Overlay Zone shall apply, except that the uncovered parking spaces along State Street and Las Positas Road may encroach into the required 10-foot setback.

ATTACHMENT 2
a. The parking spaces, including the 2’-6” vehicle overhang area, are allowed to be 5’-10” from the back of sidewalk dedication along State Street.
b. The parking spaces, including the 2’-6” vehicle overhang area, are allowed to be 7’-5” from the property line along Las Positas Road.

2. Pedestrian improvements in the public right-of-way consistent with the City’s Pedestrian Master Plan shall be installed along State Street and Las Positas Road.

Improvements to the Las Positas Road driveway shall be required. A public works permit shall be required along with any required building permit, as determined by the Community Development and Public Works Departments.

30.XXX.050 Design Review Required.

Existing development on site includes historic resources; therefore, all development shall be subject to review and approval by the Historic Landmarks Commission pursuant to SBMC 30.220.020.

Figure 30.XXX:

Community Health Center Specific Plan Area
(SP11-CHC)
1 30.25.020 Land Use Regulations – Commercial and Office Zones Table 30.25.020 prescribes the land use regulations for Commercial and Office Zones.

Use classifications are defined in Chapter 30.295, Use Classifications. In cases where a specific land use or activity is not defined, the Community Development Director shall assign the land use or activity to a classification that is substantially similar in character. Use classifications and subclassifications not listed in the table, or not found to be substantially similar to the uses below, are prohibited.

The table also notes additional land use regulations that apply to various uses. Numbers in parentheses refer to specific limitations listed at the end of the table. Section numbers in the right hand column refer to other sections of this Title.

TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations Residential Uses
Residential Housing Types
Single-Unit Residential A A A A
Two-Unit Residential A A A A
Multi-Unit Residential A A A A
Special Residential Unit
Types
Accessory Dwelling Unit A A A A §30.185.040, Accessory Dwelling Units
Caretaker Unit A A A A §30.185.120, Caretaker Unit
Community Care Facilities,
Residential Care Facilities
for the Elderly, and Hospices
6 or fewer individuals A A A A §30.185.140, Community Care Facilities, Residential Care
Facilities for the Elderly, and
Hospices
7 to 12 individuals A A A A
More than 12 individuals CUP CUP CUP CUP
Family Day Care Home
Small A A A A
Large A A A A
Group Residential PSP PSP PSP PSP §30.185.190, Group Residential Home Occupation A A A A §30.185.200, Home Occupation
ATTACHMENT 3
2 TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations Live-Work Unit
Allowed subject to the highest permit
level required for any individual use
or component of the project.
§30.185.240, Live-Work Units
Mobilehome Park CUP(1) CUP(1) CUP(1) CUP(1)
§30.185.280, Mobilehome and
Permanent Recreational Vehicle
Parks
Supportive Housing §30.185.430, Transitional and Supportive Housing Transitional Housing §30.185.430, Transitional and Supportive Housing Public and Semi-Public Uses (2)
Cemetery CUP CUP CUP A
College and Trade School CUP CUP CUP A
Community Assembly CUP CUP CUP A
Community Garden A A A A §30.185.130, Community and
Market Gardens
Cultural Institution CUP CUP CUP A
Day Care Center CUP CUP A A §30.185.150, Day Care Centers Emergency Shelter CUP CUP CUP CUP §30.185.170, Emergency Shelter Hospitals and Clinics
Hospital – CUP CUP CUP
Clinic CUP A CUP A
Birth Center – A A A
Instructional Services – – A A
Park and Recreation Facility CUP CUP CUP CUP §30.185.350, Recreation Facilities Public Facilities CUP CUP CUP A
Recreational Vehicle and
Camping Parks, Overnight – – CUP CUP
§30.185.320, Overnight
Recreational Vehicle and Camping
Parks
Recreational Vehicle Parks,
Permanent CUP(1) CUP(1) CUP(1) CUP(1)
§30.185.280, Mobilehome and
Permanent Recreational Vehicle
Parks
Schools CUP CUP CUP A
Skilled Nursing Facility – CUP CUP CUP
3 TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations Social Service Facilities CUP(3) CUP(3) CUP(3) CUP(3)
Commercial Uses
Adult Entertainment
Facilities – – – A §30.185.060, Adult Entertainment
Facilities
Agriculture A A A A §30.185.070, Agriculture
Animal Care, Sales and
Services
Animal Daycare – – A(4) A(4)
Animal Shelter and Boarding – – A(5) A(5)
Grooming and Pet Stores – – A(4) A(4)
Veterinary Services – – A(4) A(4)
Artist Studio – – A A
Automated Teller Machine A A A A §30.185.080, Automated Teller Machines
Automobile/Vehicle Sales
and Services
Automobile/Vehicle Rentals – – A A
Automobile/Vehicle Sales
and Leasing – – – A(6)
Car Washing Facilities – – PSP PSP
§30.185.090, Automobile/Vehicle
Fueling Stations or Car Washing
Facilities
Fueling Station – – PSP(7) PSP
§30.185.090, Automobile/Vehicle
Fueling Stations or Car Washing
Facilities
Service and Repair, Minor – – CUP A
Banks and Financial
Institutions A A/PSP(8) A A §30.185.100, Banks and Financial Institutions in the O-M Zone Business Services – – A A
Cannabis Storefront-Retailer – – A(19) A(19) Chapter 9.44 Commercial Cannabis Businesses
Commercial Entertainment
and Recreation
4 TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations Cinema/Theater – – – A
Large-scale – – – CUP §30.185.350, Recreation Facilities Small-scale – – A A
Eating and Drinking
Establishments – – A A
Food Preparation – – A(9) A(10) §30.185.380, Seafood Odor Control Funeral Parlors and
Interment Services – – A A
Hotels and Similar Uses CUP(11) – A A §30.185.220, Hotels and Similar Uses
Maintenance & Repair
Services – – A A
Market Garden A A A A §30.185.130, Community and
Market Gardens
Medical Cannabis
Dispensaries – – – –
Nonconforming Use. Formerly
codified as §30.185.250, Medical
Cannabis Dispensaries
Nurseries and Garden
Centers – – A A
Offices
Business and Professional A A(12) A A
Medical and Dental A A A A
Outdoor Sales and Display – – A(13) A §30.185.300, Outdoor Sales and Display
Outdoor Seating – – A(14) A(14)
Parking, Public or Private A A A A
Personal Services – – A A
Retail Sales
Food and Beverage Retail
Sales – – A A
General Retail – A/PSP(15) A A §30.185.260, Medical Equipment Supply Stores
5 TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations Neighborhood Market PSP PSP PSP PSP §30.185.370, Retail Sales, Neighborhood Market
Industrial Uses
Building Materials and
Services – – – A(16)
Custom Manufacturing – – – A(16)
Food and Beverage
Manufacturing,
Limited/Small Scale
– – A(16) A(16) §30.185.380, Seafood Odor Control
Household Hazardous Waste
Collection Facility – – A A
Industry, Limited – – – A(16)
Research and Development A(17) – A(17) A
Warehousing and Storage
Personal Storage – – – A(18)
Transportation, Communication, and Utilities Uses
Telecommunications
Facilities §30.185.410, Telecommunications Facilities
Transportation Passenger
Terminals – – – PSP
Public Works and Utilities §30.185.340, Public Works and Utilities Other Applicable Types
Accessory Uses and
Buildings A/PSP A/PSP A/PSP A/PSP §30.185.030, Accessory Uses and §30.140.020, Accessory Buildings Animal Keeping A A A A
§30.185.210, Horse Keeping and
SBMC 6.08, Care and Keeping of
Animals
Cannabis Cultivation,
Personal §30.185.110, Cannabis Cultivation for Personal Use Mixed-Use Development
Mixed-Use Development is allowed subject to the regulations of the specific uses and applicable zone and permit requirements for any individual use or component of the project.
6 TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations Mobilehome §30.185.270, Mobilehomes, Recreational Vehicles, and Modular Units, Individual Use; and §30.185.420 Temporary Uses
Nonconforming Use Chapter 30.165, Nonconforming Uses, Site Development, and Uses Solar Energy Systems §30.140.090.D.8, Solar Energy Systems, and §30.185.400, Solar Energy Systems
Temporary Use §30.185.420, Temporary Uses
Specific Limitations

1. Not allowed in a Historic or Landmark District. Allowed within a High Fire Hazard Area if designed to meet high fire construction standards adopted or enforced by the City, as determined by the Chief Building Official or the Fire Code Official.

2. Other public or semi-public facilities not specifically permitted may be allowed in any zone pursuant to Conditional Use Permit approval.

3. Must be located a minimum 300 feet from any other social service facility or emergency shelter.

4. All activities shall be conducted within an enclosed building.

5. Limited to boarding of cats and other household pets, excluding dogs. All activities shall be conducted within an enclosed building. Breeding is not permitted.

6. Limited to sales of used automobiles; new or used motorcycles and mopeds are allowed.

7. Limited to no more than six fuel dispensers, which may each serve two vehicles.

8. Banks with 1,000 square feet of floor area or less per lot are allowed. Banks with more than 1,000 square feet of floor area per lot require Performance Standard Permit approval.

9. Limited to no more than 10 employees at any given time.

10. Limited to no more than 20 employees at any given time.

11. Limited to Hotels located in Structures of Merit or Landmarks pursuant to Chapter 22.22, Historic Structures, or in another structure on the same lot as a Structure of Merit or Landmark used as a Hotel.

12. Limited to offices related to medical and dental field only.

13. Limited to outdoor uses associated with Fueling Stations and Nurseries and Garden Centers.

14. In conjunction with any establishment that serves or sells food or beverages.

15. Limited to pharmacies and medical equipment supply stores. Medical equipment supply stores with 3,000 square feet of floor area or less per lot are allowed. Medical equipment supply stores with more than 3,000 square feet of floor area per lot require a Performance Standard Permit.

16. Limited to no more than 10 employees engaged in manufacturing. Manufacturing activities are limited to accessory uses as defined in §30.185.030, Accessory Uses, and may occupy no more than 25% of the floor area in a structure in the C-R Zone and 50% in the C-G Zone. 7 TABLE 30.25.020: LAND USE REGULATIONS–COMMERCIAL AND OFFICE ZONES “A” Allowed Use
“PSP” Performance Standard Permit Required
“CUP” Conditional Use Permit Required
“–“ Use Not Allowed
“(#)” Specific Limitations at the end of the
table
Use Classification O-R O-M C-R C-G Additional Regulations

17. Limited to the Land Use Regulations, Operational and Performance Standards in Chapter 30.65, Research and Development (RD) Overlay Zone.

18. Individual storage compartments not to exceed 400 square feet in area.

19. Cannabis Storefront-Retailer uses require a commercial cannabis business permit pursuant to Chapter

9.44. (Ord. 5834, 2018; Ord. 5815, 2017)

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: November 7, 2023
TO: Mayor and Councilmembers
FROM: City Administrator’s Office
SUBJECT: Employee Recognition – Service Award Pins
RECOMMENDATION:

That Council authorize the City Administrator to express the City’s appreciation to employees who are eligible to receive service award pins for their years of service through November 30, 2023.

DISCUSSION:

The City appreciates the loyalty to the community and the dedication to public service that are demonstrated by City employees throughout the organization every day. Since 1980, the City Employees’ Recognition Program has recognized length of City Service. Service award pins are presented to employees for every five years of service. Those employees achieving 25 years of service or more are eligible to receive their pins in front of the City Council.

Attached is a list of those employees who will be awarded pins for their service through November 30, 2023.

ATTACHMENT: November 2023 Service Awards
PREPARED BY: Talhia Dorado, Administrative Specialist
SUBMITTED BY: Rebecca Bjork, City Administrator
APPROVED BY: City Administrator's Office
Agenda Item No. 1
File Code No. 120.04

ATTACHMENT
November 2023 SERVICE AWARDS
November 7, 2023 Council Meeting
5 Years
Michael Ranson, Risk Analyst II, Finance Department
Liliana Encinas, Fire Public Education Coordinator, Fire Department Luke Ortega, Cross Connection Specialist, Public Works Department Nicholas Krantz, Water Distribution Operator Technician OIT, Public Works Department Logan Pirkle, Wastewater Treatment Plant Operator III, Public Works Department 10 YEARS
Gabriele Cook, Administrative Analyst III, Public Works Department Nicholas Galati, Water Wastewater Maintenance Planner Scheduler, Public Works Department
15 YEARS
Michael Pease, Public Works Business Manager, Public Works Department Evan Ellison, Airport Patrol Officer II, Airport Department 25 YEARS
Melissa Velasco, Public Safety Dispatcher III, Police Department Florencio Herrera, Streets Maintenance Worker II, Public Works Department 35 YEARS
Jose Guerrero, Senior Custodian, Public Works Department 1 ORDINANCE NO.____________

AN ORDINANCE OF THE COUNCIL OF THE CITY OF

SANTA BARBARA APPROVING A RESTATED LOAN

AGREEMENT WITH SANTA BARBARA COMMUNITY

HOUSING CORPORATION, A CALIFORNIA NONPROFIT

PUBLIC BENEFIT CORPORATION, SECURED BY A

RESTATED DEED OF TRUST, AND NEW NINETY-YEAR

AFFORDABILITY CONTROL COVENANT IMPOSED ON
REAL PROPERTY LOCATED AT 821 BATH STREET;

AND AUTHORIZING THE COMMUNITY DEVELOPMENT

DIRECTOR TO EXECUTE SUCH AGREEMENTS,

SUBJECT TO APPROVAL AS TO FORM BY THE CITY

ATTORNEY, AS NECESSARY

WHEREAS, SANTA BARBARA COMMUNITY HOUSING CORPORATION
(“Owner”) is restating an existing loan on the real property commonly known as 821 Bath Street in the City of Santa Barbara ("Property”); and
WHEREAS, by minute action on October 31, 2023, the City Council approved a 30-year repayment of an existing loan in the amount of Four Hundred Seventy Thousand ($470,000) with a rate of 4.5% simple interest and a 30-year repayment of an existing loan’s interest in the amount of approximately Four Hundred Fifty Thousand ($450,000) with a zero percent interest rate (“City Loan”); and
WHEREAS, in exchange for the City Loan restructure, Owner and City agree to record an Affordability Control Covenant imposed on Real Property restricting the rental of the Property to Lower-Income residents (“Covenant”) for a total of ninety (90) years to comply with the City’s Affordable Housing Policies and Procedures; and WHEREAS, on October 31, 2023, the City Council introduced and subsequently adopted, an ordinance approving the restated City Loan, restated Deed of Trust and Covenant; and
WHEREAS, the City Loan is secured by the Restated Deed of Trust recorded in the office of the County Recorder on ________, 2023, as Instrument No. __________________of official records for the purpose of securing Owner’s obligations under the Restated City Loan; and
WHEREAS, Owner agrees to comply with Covenant recorded in the office of the County Recorder on _________, 2023, as Instrument No. ____________ of official records.

Agenda Item No. 2
File Code No. 640.08
2 THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

In accordance with the provisions of Section 521 of the Charter of the City of Santa Barbara, an Ordinance of the Council of the City of Santa Barbara approving the Restated City Loan, Restated Deed of Trust and Covenant is hereby approved.

ORDINANCE NO. _____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

SANTA BARBARA AUTHORIZING THE EXECUTION AND

DELIVERY OF A JOINT EXERCISE OF POWERS

AGREEMENT BY AND BETWEEN THE CITY AND THE

CALIFORNIA STATEWIDE COMMUNITIES

DEVELOPMENT AUTHORITY AND OTHER MATTERS
RELATED THERETO.

WHEREAS, the City of Santa Barbara (the “City”) and the Redevelopment Agency of the City of Santa Barbara (the “Agency”) have heretofore entered into a Joint Exercise of Powers Agreement, dated as of April 1, 2002 (the “Joint Powers Agreement”), which Joint Powers Agreement creates and establishes the Santa Barbara Financing Authority (the “Authority”); and
WHEREAS, as a consequence of the dissolution of the Agency and the eventual impact on the continuity of certain powers of the Authority, the City has considered alternate agencies to assist with its financing needs; and
WHEREAS, the City, acting pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “JPA Law”), may enter into a joint exercise of powers agreement with one or more other public agencies pursuant to which such contracting parties may jointly exercise any power common to them and, pursuant to Government Code §6588, to exercise certain additional powers; and
WHEREAS, under the Joint Exercise of Powers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with section 6500) of the California Government Code (the “JPA Act”), a number of California cities, counties, and special districts entered into a joint exercise of powers agreement pursuant to which the California Statewide Communities Development Authority (“CSCDA”) was organized; and WHEREAS, the City is a member of CSCDA in order to facilitate the promotion of economic, cultural and community development activities in the City, including the financing of projects therefor by CSCDA; and
WHEREAS, the City and CSCDA desire to create and establish the Finance Authority of the City of Santa Barbara (the “FACSB”) pursuant to the JPA Act to assist the City as the Authority has in the past; and
WHEREAS, there has been presented to this meeting a proposed form of Joint Exercise of Powers Agreement, dated as of ______ 1, 2023 (the “Agreement”), by and between the City and CSCDA, which Agreement creates and establishes the FACSB; and WHEREAS, under California law and the Agreement, the FACSB will be a public entity separate and apart from the parties to the Agreement, and the debts, liabilities, and Agenda Item No. 3
File Code No. 210.01
obligations of the FACSB will not be the debts, liabilities, or obligations of the City or any representative of the City serving on the governing body of the FACSB or of the CSCDA or any of its members.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

SECTION 1. The recitals are true and correct.

SECTION 2. The form of Agreement, a copy of which is on file with the City Clerk is approved. The City Administrator is authorized and directed, on behalf of the City, to execute and deliver the Agreement substantially in the approved form, with such changes as the City Administrator may, with the concurrence of the City Attorney, require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 3. The execution and delivery of the Agreement and any and all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the Government Code using DocuSign.

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: November 7, 2023
TO: Mayor and Councilmembers
FROM: City Attorney’s Office
SUBJECT: Ordinance Authorizing and Regulating Parklets for Outdoor Dining in the Public Right of Way [Ordinance Introduction]
RECOMMENDATION:

That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Amending the Santa Barbara Municipal Code by the Addition of Chapter 9.180 Relating to Parklets in the Public Right of Way.

DISCUSSION:

On October 17, 2023, the Council approved staff’s recommendation to create a citywide program for parklets and directed the City Attorney to prepare an ordinance to implement the program and bring it back to the Council for introduction and adoption. The draft ordinance implements that direction. The Council also directed the City Attorney to prepare a resolution establishing process and license fees. The fee resolution will be presented to the Council at a meeting in December.

Parklets are structures used for outdoor dining and located within parking spaces on City streets. They were initially authorized under Ordinance No. 6055 and its predecessors.

Ordinance No. 6055 expires on December 31, 2023. On October 3, 2023, the Council adopted an ordinance adding Title 31 to the Santa Barbara Municipal Code authorizing outdoor business facilities within the State Street Promenade, the 00 block of West Victoria, and the 400 and 1300 blocks of State Street. The proposed ordinance will add Chapter 9.180 to the Municipal Code to authorize and regulate parklets citywide outside the area covered by Title 31. Existing Chapter 9.95 authorizes outdoor dining on sidewalks pursuant to an outdoor dining license agreement. Chapter 9.180 will provide separate authorization for outdoor dining in parklets. A separate Municipal Code chapter is required because parklets are located within the roadway where there are different safety, drainage, and structural considerations than for facilities located on sidewalks.

Agenda Item No. 4
File Code No. 530.04
Council Agenda Report
Ordinance Authorizing and Regulating Parklets for Outdoor Dining in the Public Right of Way [Ordinance Introduction]
November 7, 2023

Page 2 ends

Location and Safety
Location and safety were significant concerns addressed by staff and discussed by the Council at the October 17, 2023 meeting. Thus, parklets will be prohibited on all one-way streets having two or more travel lanes and on all two-way streets having two or more travel lanes in any one direction. At the request of businesses on Coast Village Road, parklets will also be prohibited on that street. (Section 9.180.040.) Parklets must also be protected by approved traffic safety barriers, which may be integrated into the parklet design as approved by the City Engineer. The City Engineer is directed to maintain standard specifications for the type and location of traffic safety barriers. (Section

9.810.080 C.) A provision is included to authorize the City Engineer to require traffic safety barriers for outdoor business facilities on the 00 block of West Victoria and the 400 and 1300 blocks of State Street. (Section 9.180.030 B.) Additional safety related location restrictions include spaces with red or blue curbs, spaces immediately adjacent to an intersection or crosswalk, where the parklet would interfere with a designated path of travel, along the shoulder of any street that does not have curb, gutter, and sidewalk, and other incompatible locations as determined by the City Engineer. (Section 9.180.050).

Parklets are also prohibited in other restricted parking spaces (e.g., white or yellow curb spaces) unless an approved replacement is provided. Parklets are limited to the spaces entirely within the frontage of the eating and drinking establishment for which the parklet is established.

Under proposed Section 9.180.070, a parklet owner assumes all risks and agrees to defend and indemnify the city for liabilities arising from the existence, use, or condition of a parklet. The section also requires the parklet owner to maintain insurance approved by the Risk Manager. This requirement is similar to the existing requirement under Ordinance No. 6055.

Requirements applicable to all parklets
Proposed Section 9.180.060 establishes requirements applicable to all parklets. In addition to requirements that are carried over from Ordinance No. 6055, such as compliance with the Americans with Disabilities Act and Chapter 11B of Title 24 of the California Code of Regulations and compliance with regulations of the Department of Alcoholic Beverage Control, there is a new prohibition against roofs and overhead structures and a limitation of the height and width of parklets. The height and width dimensions are based on the dimension limits for oversized vehicles that are restricted under Municipal Code Section 10.44.210, but also have a limit on side height to enhance visibility. (Section 9.180.060 G.) Parklets are considered temporary use of public space and not part of the occupancy of the restaurant or bar. The license serves as the permit for the parklet. (Sections 9.180.030 A and 9.180.060 B.) Parklets may not be built or operated except pursuant to license. (Section 9.180.090.) Council Agenda Report
Ordinance Authorizing and Regulating Parklets for Outdoor Dining in the Public Right of Way [Ordinance Introduction]
November 7, 2023

Page 3 ends

Administration and License Issuance
The Public Works Director is responsible for the administration and enforcement of the new chapter, including issuing parklet licenses. (Section 9.180.080.) The process for obtaining a license is specified in Section 9.180.110. To obtain a parklet license an owner must first request a pre-application review by the Public Works Department. The purpose of the review is to advise the owner of all the applicable requirements and provide preliminary advice on whether a parklet is feasible at the particular location. Following preliminary review, the owner may file an application for a license with the Public Works Department. If the Public Works Department determines that the parklet meets all of the location and other mandatory requirements, then the application will be referred to the Community Development Department for design review. Further, the applicant will be advised of the need to apply for a coastal development permit when a parklet is proposed in the coastal zone. (Section 9.180.130.) This early review by the Public Works Department will assure that only those parklets that meet the location and other mandatory requirements will be processed by Community Development. Following design review, and coastal permitting if required, the application will be returned to the Public Works Department for final issuance of a parklet license.

The Council found that parklets are exempt from CEQA when it approved the program.

Section 9.180.120 incorporates that exemption for individual parklets and issuance of a parklet license.

The type and location of traffic safety barriers are not subject to design review. However, the design review body may specify coloring, coating, or other aesthetic features of the barriers. This limitation is necessary because of the City Engineer’s delegated authority with respect to preservation of the City’s design immunity. The Public Works Director may adopt design guidelines for parklets and for traffic safety barriers. Separate guidelines may be adopted for areas subject to the respective jurisdictions of the Historic Landmarks Commission and the Architectural Board of Review. The guidelines may be applied in lieu of design review upon approval of the guidelines by the Historic Landmarks Commission or Architectural Board of Review. (Section 9.180.140.) Parklet Licenses
Parklet licenses will be in the form of an agreement, approved by the City Attorney. It will contain all of the terms and conditions for construction, operation, and maintenance of the parklet. A license will have a duration of up to five years as determined by the Public Works Director. Licenses are renewable. A licensee must pay an annual license fee in an amount established by City Council resolution. The license fee is similar to rent. (Sections 9.180.110 D, 9.180.150, 9.180.060.) There is no vested right to a parklet and a parklet license does not create any vested right. Parklets are considered temporary use of public property. (Section 9.180.170.) The Public Works Director is authorized to abate parklets for violations. (Section 9.180.180.)
Council Agenda Report
Ordinance Authorizing and Regulating Parklets for Outdoor Dining in the Public Right of Way [Ordinance Introduction]
November 7, 2023

Page 4 ends

Existing Parklets.

Provisions for existing parklets are contained in Section 2 of the proposed ordinance.

Parklets in prohibited locations or on prohibited streets must be removed by January 1, 2024. Existing parklets in authorized locations may remain if the owner submits a preliminary review application not later than December 20, 2023, but are required to install traffic safety barriers by March 1, 2024. A parklet owner who submits a preliminary review application and desires to keep the parklet must also file an application under the new license process by April 22, 2024, and must process the application and bring the parklet into full compliance, including design review by December 31, 2024. Existing parklet owners will be required to pay the annual license fee starting February 1, 2024, while the application is pending. The Public Works Department will provide the form for the preliminary review applications.

Thus, it is likely that modifications to existing parklets will need to be made to comply with the requirement for traffic safety barriers. For example, if a parklet occupies the entire parking space area, then the width of the parklet will need to be reduced by approximately two feet to accommodate the traffic safety barriers.

ENVIRONMENTAL REVIEW
At its meeting on October 17, 2023, the Council determined that the citywide parklet program is categorically exempt from CEQA under CEQA Guidelines Sections 15301 and 15303 and directed the filing of a notice of exemption.

PREPARED BY: Daniel S. Hentschke, Assistant City Attorney SUBMITTED BY: Sarah J. Knecht, City Attorney
APPROVED BY: City Administrator's Office

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1 ORDINANCE NO. _____

AN ORDINANCE OF THE COUNCIL OF THE CITY OF

SANTA BARBARA AMENDING THE SANTA BARBARA
MUNICIPAL CODE BY THE ADDITION OF CHAPTER 9.180

RELATING TO PARKLETS IN THE PUBLIC RIGHT OF WAY

THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

SECTION 1. Title 9 of the Santa Barbara Municipal Code is amended by adding Chapter 9.180 to read as follows:

Chapter 9.180 Parklets in Public Right of Way

9.180.010 Purpose

9.180.020 Definitions

9.180.030 General Authorization

9.180.040 Prohibited Areas

9.180.050 Location Requirements

9.180.060 Requirements Applicable to All Parklets

9.180.070 Assumption of Risk and Liability

9.180.080 Administration

9.180.090 Parklet License Required

9.180.100 Parklet License Application

9.180.110 Application Processing and Issuance

9.180.120 Environmental Review

9.180.130 Parklets in the Coastal Zone

9.180.140 Design Review

9.180.150 Annual License Fee

9.180.160 Parklet License Term and Renewal

9.180.170 No Vesting of Rights

9.180.180 Abatement

9.180.010 Purpose.

The purpose of the regulations and standards in this Chapter are to supplement the opportunity for increased business and pedestrian traffic on sidewalks under Chapter

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2 9.95 of this Code by providing safe and visually appealing opportunities for placement of facilities for outdoor dining within parking spaces on City streets.

9.180.020 Definitions.

A. “Eating and drinking establishment” means a business engaged in serving prepared food or beverages typically for on-site consumption, as described in Section

30.295.040 of this Code, and includes establishments that are exclusively eating or drinking.

B. “Outdoor dining” means the service or consumption of food or beverages in conjunction with the operation of an eating and drinking establishment.

C. “Parklet” means a structure used exclusively for outdoor dining located within one or more parking spaces on a City street.

D. “Parking space” means the area of a City street set aside for parking of vehicles between the curb face and vehicular travel way having a width of 7 feet perpendicular to the curb and a length of 20 feet parallel to the travel way unless a different dimension has been designated by striping or other painted street markings. In areas designed for diagonal parking, the width of a parking space will be determined by the painted striping and the depth will be a distance of 20 feet measured from the curb face along each side.

E. “Street Frontage” means the area measured along any front lot line, as described in Section 30.15.110 of this Code. If a lot has more than one business along a frontage, the frontage for the parklet is limited to the frontage of the eating or drinking establishment for which the parklet is licensed.

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3 9.180.030 General Authorization.

A. Notwithstanding Chapter 9.48 of this Code, parklets may be located in parking spaces on City streets adjacent to eating and drinking establishments in compliance with all requirements of this Chapter, except as otherwise provided in Section

9.180.040. Parklets licensed and placed under this Chapter will be considered permitted temporary, minor encroachments and not subject to any other provision of this Code governing issuance of permits for encroachments on City streets.

B. This Chapter does not apply to outdoor business facilities authorized under Chapter 31.30 of this Code. The City Engineer may require outdoor business facilities authorized under Section 31.30.040 C to install traffic safety barriers.

C. A parklet may be operated in conjunction with outdoor dining authorized under Chapter 9.95 provided that the eating or drinking establishment has obtained separate authorization for the outdoor dining area under Chapter 9.95 and for the parklet under this Chapter.

9.180.040 Prohibited Areas.

A. Parklets are prohibited on:

1. All one-way streets having two or more travel lanes.

2. All two-way streets having two or more travel lanes in any one direction.

B. Parklets are prohibited on Coast Village Road.

9.180.050 Location Requirements.

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4 A. An eating and drinking establishment may locate a parklet in the parking spaces that are entirely within the establishment’s street frontage.

B. An eating and drinking establishment may not locate a parklet in any of the following areas:

1. A parking space where parking is entirely prohibited as designated by a posted sign or red curbing.

2. A parking space reserved for parking by persons with disabilities as designated by a posted sign or blue curbing.

3. A parking space designated as a pedestrian loading zone (white curb) or as a commercial loading zone (yellow curb) unless a replacement loading zone is approved by the City Engineer.

4. A parking space immediately adjacent to an intersection of two streets or a street and an alley as determined by the City Engineer.

5. A parking space immediately adjacent to a crosswalk as determined by the City Engineer.

6. Within 15 feet of a fire hydrant.

7. Where the parklet would interfere with a designated safe path of travel for a parking space designated for persons with disabilities as determined by the City Engineer.

8. Where the parklet would interfere with access to essential utility facilities located within or adjacent to the parking space as determined by the City Engineer.

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5 9. Where the parklet would interfere with the normal operation of storm drains or storm drain facilities as determined by the City Engineer.

10. Along the shoulder of any street that does not have a curb, gutter, and sidewalk except as otherwise permitted by the City Engineer.

11. Where the speed, volume, or nearness of vehicular traffic or proximity to a driveway is not compatible with placement of a parklet as determined by the City Engineer.

9.180.060 Requirements Applicable to All Parklets.

A. The parklet owner must construct, operate, and maintain the parklet in compliance with the applicable accessibility provisions of the Americans with Disabilities Act and Chapter 11B of Title 24 of the California Code of Regulations. The Public Works Director may require an owner to submit a report by a person certified under California Government Code Section 44559.5 (commonly referred to as a “CASp”) demonstrating compliance accessibility requirements before issuance of a Parklet License and at any time during the term of a license.

B. A parklet is considered use of public space and not part of the occupancy of the licensed eating and drinking establishment.

C. A parklet must be protected by traffic safety barriers approved by the City Engineer. The traffic safety barrier may be integrated into the parklet design as approved by the City Engineer. The City Engineer is directed to maintain standard specifications for the type and location of approved traffic barriers.

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6 D. A parklet may be used solely for the purpose of serving or consuming food or beverage of the licensed eating and drinking establishment. Adjoining eating and drinking establishments may establish joint or attached parklets.

E. Outdoor cooking facilities are prohibited. Portable heaters and lighting are permitted as approved by the Fire Marshal. Portable gas heaters must have tanks and may not be directly connected to building plumbing systems. Lighting and other electrical equipment must be either solar powered or connected to the building electrical system and not connected to the City street electrical systems. Gas generators are prohibited.

F. Service of alcoholic beverages is permitted as authorized by and subject to the requirements of the license issued by the California Department of Alcoholic Beverage Control to the licensed eating and drinking establishment or as otherwise authorized by state law.

G. A parklet may not exceed 80 inches in width or have sides exceeding 42 inches or posts exceeding 82 inches in height measured from the surface of the right of way. Roofs, overhead structures, and shade canopies are prohibited. Umbrellas are permitted but may not extend beyond the edge of the parklet and must maintain a height clearance of not less than 6 feet 8 inches along pedestrian paths of travel and not exceed a height of 10 feet. The City Engineer may further limit the height and width of a parklet based on site specific safety reasons.

9.180.070 Assumption of Risk and Liability.

A. By placing a parklet, the owner assumes all risk and agrees to defend, indemnify, and hold harmless the City and its officers, employees, and agents from and

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7 against any liability arising from the existence, use, or condition of the parklet or any of its facilities, equipment, or furnishings.

B. The parklet owner must maintain insurance at coverage limits and with conditions thereon determined from time to time by the Risk Manager. The parklet owner must maintain a current certificate of insurance on file with the Risk Manager. The certificate of insurance must be provided to the Public Works Director before approval of a parklet license.

9.180.080 Administration.

A. The Public Works Director is responsible for the administration and enforcement of this Chapter, including the issuance and enforcement of parklet licenses.

The Public Works Director may delegate authority under this Subsection. Reference to the Public Works Director includes reference to any employee to whom the director has delegated authority under this Subsection.

B. The Public Works Director is authorized to promulgate and issue administrative policies for the implementation and administration of this Chapter.

9.180.090 Parklet License Required.

It is unlawful for a person to place or cause to be placed a parklet unless the person has first obtained a parklet license issued by the Public Works Director. It is unlawful for a person to operate and maintain a parklet except in full compliance with the license issued for the parklet.

9.180.100 Parklet License Application.

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8 A. A person considering applying for a parklet license must request a preapplication review of the proposed parklet by the Public Works Department. The request must be submitted on a form provided by the Public Works Director. The request must be accompanied by a pre-application review fee as established by City Council resolution.

Pre-application review is advisory and non-binding.

B. To obtain a parklet license, the owner of an eating and drinking establishment or the owner’s authorized agent must submit an application to the Public Works Director using the application form provided by the director. The application must be complete and include any supporting materials necessary to accurately describe existing conditions and the proposed parklet as required by the Public Works Director, including all information required for design review under Section 9.180.150 and to determine compliance with accessibility requirements under Title 22 of this Code.

Applications and all application materials are public records subject to public review. The application must be accompanied by an application processing fee in an amount established by resolution of the City Council. An application will not be accepted as complete and processed without payment of the application processing fee.

9.180.110 Application Processing and Issuance.

A. The Public Works Director will review a complete application and in consultation with the City Engineer determine if the proposed parklet meets the requirements of Sections 9.180.040, 9.180.050, and 9.180.060. The Public Works Director will deny an application if the Director determines that the proposed parklet does not meet the requirements of Sections 9.180.050 and 9.180.060. The Director will state

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9 the reasons for the denial in writing provided to the applicant. The Director’s decision is final and not subject to further administrative appeal.

B. If the Public Works Director determines that the proposed parklet meets the requirements of Sections 9.180.040, 9.180.050, and 9.180.060, then the Director will refer the application to the Community Development Department for design review; if the proposed parklet does not qualify for administrative design review, the Community Development Department will advise the applicant of the requirement to file an application for design review. The Public Works Director will inform the applicant in writing of the referral. If the parklet is located in the Coastal Zone, the Public Works Director will advise the applicant of the requirement to file an application for a coastal development permit according to Section 9.180.130 and the applicable provisions of Titles 28 and 30.

C. Upon completion of the review under Subsection B, and issuance of a coastal development permit if applicable, the Community Development Director will return the application to the Public Works Director with a report of the terms and conditions established through that review process and by the coastal development permit, if applicable. The Public Works Director may then take final action to approve, conditionally approve, or deny the application and to issue a parklet license subject to all of the terms and conditions established by the review process.

D. A parklet license will be in the form of an agreement, approved by the City Attorney, and executed by the owner of the eating and drinking establishment.

9.180.120 Environmental Review.

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10 Issuance of a parklet license is categorically exempt from CEQA under Section

22.100.70, Subdsections C.1. and C.3. of this Code.

9.180.130 Parklets in the Coastal Zone.

In addition to a parklet license, parklets in the Coastal Zone, as defined in Section

28.44.020 of this Code, are subject to the permitting requirements for development in the Coastal Zone. An application for a coastal development permit may not be submitted until the Public Works Department makes a preliminary determination that a proposed parklet meets the requirements of Sections 9.180.040 and 9.180.050. A parklet license will not be issued until the coastal development permitting process has been completed, including the expiration of any appeal period.

9.180.140 Design Review.

A. Parklets are subject to design review under Section 22.68.090 and Title 30 of this Code.

B. The type and location of the traffic safety barriers for a parklet as required under Section 9.180.060 C are not subject to design review. The design review body may specify coloring, coating, or other aesthetic features of the traffic safety barriers as part of the design review for a parklet. Except as limited by this Subsection, all other aspects of a parklet are subject to design review.

C. The Public Works Director may adopt design guidelines for parklets and for traffic safety barriers. Separate guidelines may be adopted for areas subject to the respective jurisdictions of the Historic Landmarks Commission and the Architectural Board of Review, subject to approval by Historic Landmarks Commission and the

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11 Architectural Board of Review, as applicable. Parklets consistent with the adopted guidelines may be approved by the Community Development Director without full review by the Historic Landmarks Commission or Architectural Board of Review, as applicable.

9.180.150 Annual License Fee.

A parklet owner must pay the annual parklet license fee in the amount established by resolution of the City Council. The parklet license fee is a fee for the use of City property and is not a regulatory or permit processing fee. The annual fee must be paid in advance and no refund will be given for early abandonment or termination of a license.

9.180.160 Parklet License Term and Renewal.

A. A parklet license may have a duration of not less than one or more than five years as determined by the Public Works Director.

B. A parklet license may be renewed upon submission of a renewal application. The Public Works Director may renew a parklet license upon a determination that the license holder has faithfully performed the terms of the license. The renewal term may be up to five years as determined by the Public Works Director. A renewed license may be subsequently renewed. The renewal application must be accompanied by a fee in an amount established by resolution of the City Council.

9.180.170 No Vesting of Rights.

A parklet license is a revocable license and not an easement, lease, or other interest in land. A parklet license does not confer any vested right to continue any activity or use authorized thereunder. Parklets, regardless of the duration of a parklet license or

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12 any renewals, are considered temporary and are subject to removal upon demand of the City.

9.180.180 Abatement.

A. The Public Works Director may immediately remove and dispose of any parklet for which a parklet license has not been issued or for which the parklet license has expired and not been renewed. The owner is responsible for payment to the City of the cost of removal and disposal.

B. In addition to any enforcement remedy under Chapters 1.25 or 1.28 of this Code, violation of a term or condition of a parklet license may result in revocation of the license upon written notice by the Public Works Director. A business owner may appeal revocation to the City Administrator by filing a written appeal within 7 days of the date of the notice. The decision of the City Administrator is final. Notices under this Subsection may be given to the address of the person stated on the parklet license or posted on the parklet.

SECTION 2.

A. This section establishes special provisions for parklets established under Ordinance No. 6055 and existing on the date of introduction of this Ordinance.

B. Existing parklets located on a street on which parklets are prohibited by Section 9.180.040 must remove the parklet by January 1, 2024.

B. Subject to compliance with Sections 9.180.040, 9.180.050, and 9.180.060, parklets established under Ordinance No. 6055 and existing on December 20, 2023, may remain after December 31, 2023, subject to all of the following:

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13 1. The parklet owner submits a preliminary review application on a form provided by the Public Works Director not later than December 20, 2023. A parklet owner who has not submitted a preliminary application by December 20, 2023, must remove the parklet by December 31, 2023.

2. The parklet owner applies for a parklet license under the provisions of Chapter 9.180 as adopted by this ordinance no later than April 22, 2024.

3. The parklet is not located on a street on which parklets are prohibited by Section 9.180.040 and further complies with the requirements of Sections 9.180.050, or

9.180.060.

4. Parklets for which a preliminary review application is submitted that do not comply with the requirement for a traffic safety barrier on the date of adoption of this ordinance must be brought into compliance with that requirement no later than March 1, 2024.

5. The parklet owner is issued a parklet license and brings the parklet into compliance with the license no later than December 31, 2024.

6. The parklet owner pays an annual fee as provided in Section 9.180.160 on a monthly basis starting February 1, 2024, while the application is pending.

C. A parklet owner who has submitted a preliminary application but has not submitted an application under Chapter 9.180 by April 22, 2024, must remove the parklet by May 3, 2024.

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: November 7, 2023
TO: Mayor and Councilmembers
FROM: Business Development/Properties, Airport Department SUBJECT: Communication Facilities License Agreement with COX Business and SBA RAC Participants/DBA AvAirPros Services [Ordinance
Introduction]
RECOMMENDATION:

That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Approving and Authorizing the Airport Director to Execute a Communication Facilities License Agreement with COX Business and SBA RAC Participants/DBA AvAirPros Services, Located at 25 David Love Place, Commencing Upon the Effective Date of the Enabling Ordinance.

DISCUSSION:

SBA RAC Participants, Inc., doing business as AvAirPros Services (AvAirPros) presently leases the property at 25 David Love Place. AvAirPros submitted a request to the City of Santa Barbara, seeking permission to engage in a Communication Facilities License Agreement with COX Business for installation and ongoing maintenance of fiber optic communication infrastructure at 25 David Love Place COX required the Airport, as the property owner, to be party to the Facilities License Agreement.

Airport is supportive of the installation of this fiber optic connectivity as it serves to significantly enhance the stability and reliability of services for the rental car agencies operating at the Santa Barbara Airport. This development is poised to guarantee uninterrupted performance of the security system and all other digital equipment within the premises. Furthermore, it is expected to elevate the overall customer service experience for our tenants who rely on this property, thereby fostering improved tenant satisfaction.

Because this agreement is for a term longer than five years, pursuant to City Charter section 521, adoption of an ordinance is necessary to approve the agreement. For the Agenda Item No. 5
File Code No. 560.01
Council Agenda Report
Communication Facilities License Agreement with COX Business and SBA RAC Participants/DBA AvAirPros Services [Ordinance Introduction] November 7, 2023

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reasons stated above, staff recommends that Council adopt the proposed ordinance to allow the Airport to enter into the Facilities License Agreement.

BUDGET/FINANCIALINFORMATION:

There is no cost to the City of Santa Barbara for the installation of fiber to 25 David Love Place.

A copy of the Facilities License Agreement is available at the Airport Administration Offices located at 601 Firestone Road, Santa Barbara, CA 93117.

PREPARED BY: John Feldhans, Acting Airport Properties Manager SUBMITTED BY: Christopher Hastert, Airport Director
APPROVED BY: City Administrator’s Office
COUNCIL INTRODUCTION DRAFT 11/07/23
ORDINANCE NO.____________

AN ORDINANCE OF THE COUNCIL OF THE CITY OF SANTA

BARBARA APPROVING AND AUTHORIZING THE AIRPORT

DIRECTOR TO EXECUTE A COMMUNICATION FACILITIES

LICENSE AGREEMENT WITH COX BUSINESS AND SBA RAC
PARTICIPANTS/DBA AVAIRPROS SERVICES, LOCATED AT 25

DAVID LOVE PLACE, COMMENCING UPON THE EFFECTIVE

DATE OF THE ENABLING ORDINANCE

THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

SECTION 1. In accordance with the provisions of Section 521 of the Charter of the City of Santa Barbara, an Ordinance of the Council of the City of Santa Barbara approving and authorizing execution of a communication facilities license agreement with Cox Business and SBA RAC Participants/DBA AvAirPros Services, located at 25 David Love Place, a copy of which is on file with the City Clerk, is approved.

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: November 7, 2023
TO: Mayor and Councilmembers
FROM: Treasury Division, Finance Department
SUBJECT: Statement of Investment Policy and Delegation of Investment Authority for Calendar Years 2023 and 2024 [Resolution]
RECOMMENDATION:

That Council adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Adopting the Investment Policy for the City and Rescinding Resolution No. 22- 131.

DISCUSSION:

California Government Code (State Code) Section 53600 establishes legally permitted investments for local governments statewide. While not required by the State Code, each year the City Council adopts a Statement of Investment Policy, which further defines the suitable and authorized investments specifically for the City. In some cases, the City’s policy is more restrictive than the State Code. Moreover, the policy serves as a guide for setting and achieving the City’s own investment objectives and defines guidelines for the management of the portfolio.

Except for County governments, the State Code does not contain any provisions specifying what must be included in the investment policy of a local agency. The City has developed a comprehensive investment policy that includes all critical components recommended by various professional agencies and organizations, and the policy has been awarded several certifications. Therefore, staff recommends that the policy be updated annually to incorporate any statutory and/or internal policy changes, thereby maintaining this standard of excellence.

If a local agency’s policy is submitted to the legislative body, it must be an agenda item at a public meeting and should be approved by a vote of the legislative body no later than the end of the first quarter of the year to which it applies.

Agenda Item No. 6
File Code No. 260.01
Council Agenda Report
Statement of Investment Policy and Delegation of Investment Authority for Calendar Years 2023 and 2024
November 7, 2023

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Revisions to the annual investment policy are made each year, as needed, to incorporate policy or statutory changes affecting the City’s investment program and daily investing activities. Policy revisions are generally technical in nature, such as process changes or language clarifications. Statutory changes are changes in state law affecting allowable investments or procedures related to investing activities.

Staff Recommended Changes
Staff recommends one change to the policy for Calendar Years 2023-24, described below:
(1) Add the Placement service deposits and placement service certificates of deposit to the City’s list of suitable and authorized investments (section VII.A.16 of the Investment Policy). This addition will further diversify the list of investment instruments available to the City and allow, for example, the City’s Clean Energy Department to use placement service deposits to better manage the CCE (Community Choice Energy) cash reserves.

The policy, as submitted, contains no statutory change that was made since the policy was adopted by Council in December 2022. There is sufficiently broad language in the policy to allow for any changes that may occur during the year on an administrative basis rather than a formal revision to the policy.

As provided in the Investment Policy, Council formally delegates authority to the City Treasurer (i.e., the City Administrator) to invest and reinvest funds and to sell or exchange securities for a one-year period, as specified on page 3 of the proposed Investment Policy.

Management and oversight of the investment program is delegated to the Finance Director. The Assistant Finance Director is authorized to conduct daily investment activities under supervision of the Finance Director per the terms of the Investment Policy and the written investment procedures established by the Finance Director. All investment purchases and sales require signature approval from the Treasurer and Finance Director or their designee by the close of business on the next business day following the purchase or sale.

ATTACHMENT: Annual Statement of Investment Policy – Calendar Years 2023 and 2024
PREPARED BY: Salvatore Parrilla, Treasury Analyst
SUBMITTED BY: Lyndsay Maas, Assistant Finance Director
APPROVED BY: City Administrator's Office
City of Santa Barbara
Finance Department
Statement of Investment Policy
Calendar Years 2023 and 2024
Effective 11/07/2023
ATTACHMENT 1
City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

TABLE OF CONTENTS
I. MISSION STATEMENT ........................................................................................................................... 1 II. SCOPE
A. Pooling of Funds ............................................................................................................................ 1 B. Funds Included in this Policy ........................................................................................................ 1 C. Funds Excluded from this Policy .................................................................................................. 1 III. GENERAL OBJECTIVES
A. Safety ............................................................................................................................................... 1 B. Liquidity ............................................................................................................................................ 2 C. Yield ................................................................................................................................................. 2 IV. STANDARDS OF CARE
A. Prudence ......................................................................................................................................... 3 B. Ethics and Conflicts of Interest ..................................................................................................... 3 C. Delegation of Authority .................................................................................................................. 3 D. Internal Controls .............................................................................................................................4 V. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS .......................................................... 5 VI. SAFEKEEPING AND CUSTODY .......................................................................................................... 5 VII. SUITABLE AND AUTHORIZED INVESTMENTS
A. Investment Types ........................................................................................................................... 6 B. Collateralization ........................................................................................................................... 10 C. Social Responsibility ................................................................................................................... 11 D. Investments Not Approved ......................................................................................................... 11 E. Exceptions to Prohibited and Restricted Investments ........................................................... 12 VIII. INVESTING PARAMETERS
A. Diversification............................................................................................................................... 12 B. Maximum Maturities .................................................................................................................... 12 IX. REPORTING
A. Monthly Reporting to City Council ............................................................................................ 13 B. Quarterly Reporting to City Council .......................................................................................... 13 C. Performance Standards ............................................................................................................. 14 X. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes .............................................................................................. 14 B. Annual Statement of Investment Policy ................................................................................... 15 GLOSSARY OF INVESTMENT TERMS .......................................................................................................... 16 City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
- 1 -
I. MISSION STATEMENT
It is the policy of the City to invest public funds in a manner that will provide maximum security, adequate liquidity and sufficient yield, while meeting the daily cash flow demands of the City and conforming to all statutes and regulations governing the investment of public funds.

II. SCOPE
This investment policy applies to all the financial assets of City of Santa Barbara. These funds are accounted for in the City’s audited Comprehensive Annual Financial Report. If the City invests funds on behalf of another agency and, if that agency does not have its own policy, the City's investment policy shall govern the agency's investments.

A. Pooling of Funds
Except for cash in certain restricted and special funds, the City shall consolidate cash balances from all funds to maximize investment earnings. Investment income shall be allocated to various funds as identified in the investment procedures manual in accordance with generally accepted accounting principles.

B. Funds Included by this Policy
General Fund
Special Revenue Funds
Capital Project Funds
Enterprise Funds
Internal Service Funds
Trust and Agency Funds
Any new fund created by City Council unless specifically exempted C. Funds Excluded from this Policy
Bond Proceeds. Investment of bond proceeds shall be subject to the conditions and restrictions of bond documents and are not governed by this policy. Bond investment conditions and restrictions shall be reviewed by the Finance Committee and forwarded to City Council for approval.

III. GENERAL OBJECTIVES
The primary objectives, in priority order, of the City’s investment activities are safety, liquidity and yield.

A. Safety
Preservation of principal is the foremost objective of the investment program.

Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective shall be to mitigate credit City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
- 2 -
risk and interest rate risk. To attain this objective, the City shall diversify its investments by investing funds among several financial institutions and a variety of securities offering independent returns.

1. Credit Risk
The City shall minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by:
 Limiting investments to the safest types of securities  Pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisers with which the City will do business
 Diversifying the investment portfolio so as to minimize the impact any single industry/investment class can have on the portfolio

2. Interest Rate Risk
To minimize the negative impact of material changes in the market value of securities in the portfolio, the City shall:
 Structure the investment portfolio so that securities mature concurrent with cash needs to meet anticipated demands, thereby avoiding the need to sell securities on the open market prior to maturity
 Invest operating funds primarily in shorter-term securities, money market mutual funds, and the State of California’s Local Agency Investment Fund (LAIF)
B. Liquidity
The City’s investment portfolio shall remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated without requiring a sale of securities. Since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds or LAIF which offer same-day liquidity for short-term funds.

C. Yield (Return on Investment)
The City’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and the liquidity characteristics of the portfolio. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.

City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
- 3 -
IV. STANDARDS OF CARE
A. Prudence
The standard of prudence to be used by City investment officials shall be the “Prudent Investor Standard” in that 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 City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of an enterprise of a like character and with like aims. This standard shall be applied in the context of managing the overall portfolio. City 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.

B. Ethics and Conflicts of Interest
Officers and employees involved in the City investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or that could impair their ability to make impartial investment decisions.

City employees and investment officials shall disclose any material financial interests in financial institutions that conduct business within their jurisdiction, and they shall further disclose any personal financial/investment positions that could be related to the performance of the City immediately to the City of Santa Barbara Treasurer and annually to the Fair Political Practices Commission. City employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City.

C. Delegation of Authority
Authority to manage the City’s investment program is derived from the Charter of the City of Santa Barbara. City Council shall delegate to the Treasurer, for a 1-year period, the authority to invest or to reinvest funds, or to sell or exchange securities.

The Treasurer shall thereafter assume full responsibility for those transactions until the delegation of authority is revoked or expires.

Management responsibility for the investment program is delegated to the Finance Director who shall establish a separate written investment procedures manual. The operation of the investment program shall be consistent with this policy and the investment procedures manual. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Finance Director. The Assistant Finance Director is authorized to conduct investment related activities, under the supervision of the Finance Director, on behalf of the City. All investment purchases and sales require signature approval from the Treasurer and Finance Director or their designee, by the close of business on the next business day following the purchase or sale.

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ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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The following documents are by reference incorporated in the investment procedures manual:

1. Listing of authorized personnel

2. Relevant investment statutes and ordinances

3. Repurchase agreements and tri-party agreements

4. Listing of authorized broker/dealers and financial institutions

5. Credit ratings and/or reports for securities purchased and financial institutions used

6. Safekeeping agreements

7. Sample investment reports

8. Investment accounting documents

9. Methodology for calculating rate of return

10. Banking services contracts

11. Cash flow forecasting

12. Collateral/depository agreements
D. Internal Controls
The Finance Director is responsible for establishing and maintaining a system of written internal controls. These controls shall be reviewed annually with an independent external auditor who will notify the City Council if there is a material non-compliance with its policies and procedures. The internal controls shall be designed to prevent losses of public funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent action by City employees and officers. The internal structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management.

The internal controls shall address the following points:

1. Control of collusion

2. Separation of transaction authority from accounting and record-keeping

3. Custodial safekeeping

4. Delivery versus payment (DVP)

5. Clear delegation of authority to subordinate staff members

6. Written confirmation of transactions for investments and wire transfers

7. Wire transfer agreements
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ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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V. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The Finance Director shall establish selection criteria for pre-approval of financial institutions and security broker/dealers to do business with the City of Santa Barbara. The Finance Director shall maintain a list of City approved financial institutions and security broker/dealers who are authorized to provide investment services to the City. These may include primary dealers, or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). To qualify for consideration, a financial institution or a security broker/dealer must also have an office in California and that office must perform the transactions with the City.

All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply the following to the Finance Director as appropriate:
 Current audited financial statements
 Proof of Financial Industry Regulatory Authority (FINRA), formerly National Association of Security Dealers (NASD), certification
 Trading resolution
 Complete broker/dealer questionnaire
 Proof of State of California registration
 For banking institutions, a statement of compliance with the Federal Reserve Bank of New York’s capital guideline
 Statement of having read, understood and agreeing to comply with the City’s investment policy and depository contracts
The Finance Director shall annually review each of the approved financial institutions and security broker/dealers selected for current State of California registrations and financial condition.

VI. SAFEKEEPING AND CUSTODY
All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery-versus-payment (DVP) basis which will ensure that securities are deposited in an eligible financial institution prior to the release of funds. Securities shall be held by a third-party custodian designated by the Finance Director and evidenced by safekeeping receipts with a written custodial agreement. The only exception to the foregoing shall be depository accounts and securities purchases made with: LAIF, time certificates of deposit, and money market mutual funds, since the purchased securities are not deliverable.

Settlement instructions sent to the safekeeping agent shall require dual authorization. The Treasurer and the Finance Director shall be bonded to protect the public against possible embezzlement and malfeasance. Safekeeping procedures shall be reviewed annually by an independent external auditor and any irregularities noted should be reported promptly to the Treasurer and City Council.

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ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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VII. SUITABLE AND AUTHORIZED INVESTMENTS
The City shall be governed by the California Government Code, Sections 53600 et seq. If the Code is amended to allow additional investments or is changed regarding the limits on certain categories of investments, the City is authorized to conform to the changes in the revised Code, provided that the changes are not specifically prohibited by the City's policy. The City shall be required to present those changes in the annual review of the policy and to incorporate the new legislation within the policy. Surplus funds are defined as funds not required for the immediate necessities of the City and include investments in individually managed portfolio(s), money market fund(s) and/or State LAIF, and all portfolio limitations and restrictions shall apply to this aggregate amount. For purposes of compliance with the California Government Code and the City’s Investment Policy, the credit rating requirement for medium-term notes, deposit notes, bank notes and commercial paper shall be based on the quality ratings at the time of purchase.

If the quality rating of the issuer is downgraded, subsequent to purchase, by any of the Nationally Recognized Statistical-Rating Organizations below "A", or its equivalent, it shall be reported to the Finance Committee and City Council with a recommendation, and ongoing information shall be provided if the bond is not sold. Percentage limitations of surplus funds invested are noted for the various investment instruments. Where there is a specified percentage limitation for a particular category of investments, that percentage is applicable only at the date of purchase. A later increase or decrease in a percentage resulting from a change in values or assets shall not constitute a violation of that restriction.

The City is empowered by statute to invest in the following types of securities and those that the investment managers are trained and competent to handle.

A. Investment Types

1. Bonds, notes, or other forms of indebtedness issued by the City, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the local agency.

2. United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

3. Federal Agency or United States government-sponsored enterprise obligations (GSE), participations, or other instruments.

4. State of California and Local Agency Obligations. Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state; and bonds, notes, warrants, or other evidence of indebtedness of any local agency within this state including bonds payable solely out of the revenues from revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. Notes eligible for investment, other than those issued by the City or operated by a department, board, agency, or authority of the local agency, shall be rated in a category of "A" or its equivalent or better by two Nationally Recognized Statistical-Rating Organizations.

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Calendar Years 2023 and 2024
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5. Medium-Term Notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of 5 years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Purchases of medium-term notes may not exceed 30 percent of the City's surplus funds. Notes eligible for investment shall be rated in a rating category of "A" or its equivalent or better by two Nationally Recognized StatisticalRating Organizations. Investments in medium-term notes for any single nongovernment issuer shall be limited to no more than 5 percent of surplus funds for issuers rated “AA” or its equivalent or better by two Nationally Recognized Statistical-Rating Organizations, and to no more than 3 percent for issuers rated in a rating category of “A” or its equivalent or better by two Nationally Recognized Statistical-Rating Organizations.

6. Bankers Acceptances otherwise known as bills of exchange or time drafts, drawn on and accepted by a commercial bank, which are eligible for purchase by the Federal Reserve System. Purchased bankers acceptances may not exceed 180 days maturity or 40 percent of the City's surplus funds, and no more than 10 percent of the City's surplus funds may be invested in the bankers’ acceptances of any single commercial bank.

7. Commercial Paper of “prime” quality of the highest ranking or the highest letter and number rating as provided for by a Nationally Recognized Statistical-Rating Organization. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (a) or paragraph (b):
a. The entity is organized and operating in the United States as a general corporation and has total assets in excess of $500,000,000. In addition, its debt other than commercial paper, if any, must be rated in a rating category of “A” or higher by a Nationally Recognized Statistical-Rating Organization.
b. The entity is organized within the United States as a special purpose corporation, trust, or limited liability company and has a program wide credit enhancement including, but not limited to, over collateralization, letters of credit, or surety bond. In addition, the entity has commercial paper that is rated “A-1” or higher, or the equivalent, by a Nationally Recognized Statistical-Rating Organization.

Eligible commercial paper shall have a maximum maturity of 270 days or less.

The City may not invest more than 40 percent of its surplus funds in commercial paper, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

8. Negotiable Certificates of Deposit issued by a nationally or state-chartered bank or savings association or federal association or a state or federal credit union or by a state-licensed branch of a foreign bank. Purchases of negotiable certificates of deposit shall not exceed 15 percent of the City's surplus money invested and shall be limited to no more than 3 percent of any single issuer. Deposit notes and bank notes purchased through a broker or dealer shall be included with negotiable City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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certificates of deposit in calculating allowable maximum percentages. Purchases of negotiable certificates of deposit, deposit notes and bank notes of up to $250,000 are allowable in any institution that insures its deposits with the Federal Deposit Insurance Corporation, while purchases greater than $250,000 shall be rated in a category of "A" or its equivalent or better by two Nationally Recognized Statistical-Rating Organizations.

9. Time Deposits. The City may invest in non-negotiable Certificates of Deposit at commercial banks and savings and loan associations that are collateralized in accordance with the California Government Code. To be eligible to receive City funds, the depository institution shall have received an overall rating of not less than “satisfactory” in its most recent evaluation of its record of meeting the credit needs of California’s communities, including low and moderate-income neighborhoods. In selecting depositories, the credit worthiness of institutions shall be considered. Banks and Savings and Loan Associations seeking to establish an investment relationship with the City shall submit an audited financial report that shall be reviewed for compliance with the City's investment standards. Any institution not providing an audited annual financial report shall be removed from the approved list and all funds maturing will be withdrawn. A list of eligible institutions shall be maintained in the investment procedures manual. Qualification shall be determined by the following criteria:
a. Tangible capital must equal or exceed 1.5 percent; core capital must equal or exceed 4 percent; and, risk-based capital must equal 8 percent of assets adjusted for assigned risk-weightings.
b. Return on Assets of a minimum of 0.5 percent; a Return on Equity of a minimum of 8 percent; an Equity to Assets Ratio of a minimum of 5 percent; and, City investments shall be no greater than 0.5 percent of the total assets of the depository.
c. Independent auditor's statement must have a clean opinion.

10. Savings accounts. Savings accounts when used in conjunction with the City's checking accounts at a qualified bank where funds are collateralized in accordance with the California Government Code.

11. U.S. Government money market funds registered with the Securities and Exchange Commission and which comply with rule 2a7 of the Investment Company Act of 1940. The fund must be comprised of only U.S. Treasury bills, notes and bonds, repurchase agreements and obligations issued or guaranteed as to principal and interest by the U.S. Government or its agencies or instrumentalities. The percentage of repurchase agreements in the fund shall be reviewed and approved based on the fund's policy limits. The dollar weighted average maturity of the portfolio shall be less than 90 days and the portfolio is managed to maintain a $1.00 share price. Also, the fund shall meet either of the following criteria: (a) attained the highest ranking or the highest letter and numerical rating provided by not less than two Nationally Recognized Statistical-Rating Organizations; (b) retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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not less than 5 years' experience managing money market mutual funds with assets under management in excess of $500,000,000. Purchase of securities authorized by this section shall not exceed 20 percent of the City’s surplus money invested and no more than 10 percent may be invested in any single money market fund.

12. Repurchase Agreements. Investments in repurchase agreements or reverse repurchase agreements or securities lending agreements of any securities authorized by the Code, so long as the proceeds of the repurchase agreement are invested solely to supplement the income normally received from these securities. The City shall adopt as a standard the Bond Market Association Master Repurchase Agreement and shall maintain a list of approved counterparts and limit counter parties to primary dealers rated "A" or better by two Nationally Recognized Statistical-Rating Organizations. Reverse repurchase agreements and securities lending agreements shall require City Council authorization separate from City Council approval of this policy.

Securities lending agreements shall include the following safeguard measures:
terms of lending agreements, indemnification provisions, reinvestment guidelines, liquidity provisions, credit risks and monitoring requirements.

Additionally, any securities lending agreement shall be reviewed by the City Attorney to ensure the City’s interests are properly protected. a. Investments in repurchase agreements may be made, on any authorized investment, when the term of the agreement does not exceed 1 year. b. Reverse repurchase agreements or securities lending agreements may be utilized when the security to be sold on the reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale; the total of all reverse repurchase agreements on investments owned by the City does not exceed 20 percent of the base value of the portfolio; and the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between sale of a security using a reverse repurchase agreement and the final maturity date of the same security.

13. Local Agency Investment Fund (LAIF). The City may invest in LAIF up to the $75,000,000 maximum established by the California State Treasurer on January 1, 2020 in accordance with State law; therefore, there is a $75,000,000 deposit limit for the City of Santa Barbara. The City's investment in LAIF is based on, among other criteria, the following information provided by LAIF: a written statement of portfolio management goals, objectives and policies, including a description of eligible investment securities; a disclosure of LAIF's safekeeping practices; eligible LAIF participants, the monthly transaction limit, and minimum and maximum deposit and withdrawal amounts permitted; calculation of quarterly earnings and apportionment, including gains and losses; disclosure of administrative costs and the assessment process; monthly statements of the City's transaction activity and balances; monthly summaries of LAIF investment data, including market valuation and accrued City of Santa Barbara

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Calendar Years 2023 and 2024
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interest; and a description of the audit process. At least quarterly, the Finance Director shall report to the Finance Committee on the composition of the LAIF portfolio.

The California Government Code states that moneys placed for deposit in LAIF are in trust in the custody of the State Treasurer and cannot be borrowed or be withheld from the City. Further, the right of the City to withdraw its deposited money from the LAIF upon demand may not be altered, impaired, or denied in any way by any state official or agency based upon the State’s failure to adopt a budget by July 1 of each new fiscal year.

14. United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or InterAmerican Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States.

Investments under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by a Nationally Recognized Statistical-Rating Organization and shall not exceed 30 percent of the agency’s moneys that may be invested pursuant to this section.

15. Commercial paper, debt securities, or other obligations of a public bank, as defined in Section 57600. (This section shall remain in effect only until January 1, 2026, and as of that date is repealed).

16. Placement service deposits and placement service certificates of deposit at a commercial bank, savings bank, savings and loan association, or credit union that uses a private sector entity that assists in the placement of deposits, as defined in Section 53601.8. No more than 30 percent of the City's surplus funds may be invested in deposits, including certificates of deposit, through a placement service as authorized under Section 53601.8.

B. Collateralization
Collateralization shall be required on two types of investments: certificates of deposit and repurchase (and reverse) agreements. A collateral agreement must be current and on file before any funds can be transferred for collateralized certificates of deposit. Collateral shall be held by an independent third party with whom the City has a current written custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and retained. The right of collateral substitution is granted.

1. Certificates of Deposit
a. Government Securities used as collateral require 102 percent of market value to the face amount of the deposit
b. Promissory Notes secured by first trust deeds used as collateral require 150 percent of market value to the face amount of the deposit c. Irrevocable Letters of Credit issued by the Federal Home Loan Bank of San Francisco require 105 percent of market value to the face amount of the deposit
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Calendar Years 2023 and 2024
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2. Repurchase and Reverse Repurchase Agreements
a. Only U.S. Treasury securities or Federal Agency securities are acceptable collateral. All securities underlying repurchase agreements must be delivered to the City’s custodian bank versus payment or be handled under a properly executed tri-party repurchase agreement. The total market value of all collateral for each repurchase agreement must equal or exceed 102 percent of the total dollar value of the money invested by the City for the term of the investment. For any repurchase agreement with a term of more than 1 day, the value of the underlying securities must be reviewed on an ongoing basis according to market conditions. Market value must be calculated each time there is a substitution of collateral. b. The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to the repurchase agreement.

C. Social Responsibility
In addition to and subordinate to the objectives set forth in Section III herein, investment of funds should be guided by the following socially responsible investment goals when investing in corporate securities and depository institutions.

Investments shall be made in compliance with the socially responsible goals to the extent that such investments achieve substantially equivalent safety, liquidity and yield compared to investments permitted by state law. Prior to making investments, the City’s Finance Director will reasonably verify an entity’s support of the socially responsible goals listed below through direct contact or through the use of a third party resource. The entity will be evaluated at the time of purchase of the security.

Investments are encouraged in entities that support community well-being through safe, environmentally sound, practices and fair labor practices. Investments are encouraged in entities that support equality of rights regardless of race, sex, religion, age, national or ethnic origin, sexual orientation, or disability. Investments are encouraged in entities that promote community economic development. Investments are discouraged in entities that manufacture, distribute or provide financing for tobacco products, weapons, military systems, nuclear power and fossil fuels.

Investments are discouraged in entities that exhibit corrupt corporate ethics and governance.

D. Investments Not Approved
Any security type or structure not specifically approved by this policy is hereby prohibited. Security types, which are thereby prohibited include, but are not limited to: investment pools (except State LAIF), shares of beneficial interest issued by diversified management companies (except U. S. Government money market funds), collateralized mortgage obligations (CMO's), mortgage pass-through securities, reverse repurchase agreements used as a leveraging vehicle, "exotic" derivatives structures such as range notes, dual index notes, inverse floating-rate notes, leveraged or de-leveraged floating-rate notes, interest-only strips that are derived from a pool of mortgages and any security that could result in zero interest accrual if held to maturity, or any other complex variable or structured note with an unusually high degree of volatility or risk.

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ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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E. Exceptions to Prohibited and Restricted Investments

1. The City shall not be required to sell securities prohibited or restricted in this policy, or any future policies, or prohibited or restricted by new State regulations, if purchased prior to their prohibition and/or restriction. Insofar as these securities provide no notable credit risk to the City, holding of these securities until maturity is approved. At maturity or liquidation, such monies shall be reinvested only as provided by this policy.

2. The City may invest in securities issued by, or backed by, the United States government that could result in zero- or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. The City may hold these instruments until their maturity dates. (This section shall remain in effect starting January 1, 2021 and only until January 1, 2026).

VIII. INVESTING PARAMETERS
A. Diversification
The City shall diversify its investments by security type, issuer, maturity, and financial institutions. No percentage limitations are established for United States government, United States government agencies and United States government sponsored enterprises; however percentage limitations are established for other permitted investments, as noted in Section VII of this policy. The investments shall be diversified by limiting investments to avoid overconcentration in securities from a specific issuer or business sector (excluding U.S. Treasury securities), limiting investment in securities that have higher credit risks, and investing in securities with varying maturities.

The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity.

Portfolio diversification is employed as a way to control risk. Investment managers are expected to display prudence in the selection of securities as a way to minimize default risk. No individual investment transaction shall be undertaken which jeopardizes the total capital position of the overall portfolio. To control market price risks, volatile investment instruments shall be avoided. To control risks of illiquidity, a minimum of 10 percent of the total portfolio shall be held in highly marketable U.S.

Treasury Bills and Notes and/or the State of California Local Agency Investment Fund and/or Money Market Funds and/or securities maturing within 90 days.

B. Maximum Maturities
To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Where there is no specified maturity limitation on an investment, no investment shall be made in any security which, at the time of the investment, has a term remaining to maturity in excess of 5 years (measured from the settlement date to final maturity, with a forward settlement date not to exceed 45 days from the time of investment), unless the City Council has granted express authority to make that investment no less than 3 months prior to the investment.

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ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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In addition to the 5 year limitation on investments specified in this policy, the average maturity of the City's combined portfolio shall not exceed 2.5 years without prior approval of the City Council.

IX. REPORTING
The Treasurer shall submit investment reports to the City Council that provide a clear picture of the status of the current investment portfolio and shall contain sufficient information to permit an independent organization to evaluate the performance of the investment program. Based on the discretion of Finance Committee, an independent advisor may be contracted, from time to time to perform one or more of the following functions: confirm that the portfolio is in compliance with the Government Code of the State of California and with the Statement of Investment Policy of the City of Santa Barbara; present an evaluation of the portfolio and investment strategy recommendations; and, provide any other information that may be helpful to Finance Committee in their review of the portfolio.

A. Monthly Reporting to City Council
The Treasurer shall submit to City Council, within 30 days following the end of the month, an investment report that summarizes all securities in the portfolio and a separate listing of investment transactions occurring during the month. The report shall be prepared by the Assistant Finance Director and approved by the Finance Director. The report shall include:

1. Investment type

2. Purchase date

3. Maturity date

4. Credit quality

5. Coupon and yield

6. Book value

7. Market value

8. Book gain/loss

9. Market gain/loss

10. Source of valuation

11. Average days to maturity

12. Variable rate(s) or call features
B. Quarterly Reporting to City Council
In addition to the components required in the monthly investment report, a narrative shall accompany the portfolio report addressing noteworthy items, deviations from the investment policy, comments on the fixed income markets and economic conditions, possible changes in the portfolio going forward, and thoughts on City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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investment strategies. The quarterly report shall also include a statement of compliance with the investment policy and a statement of the ability to meet expenditures for the next 6 months (or an explanation as to why sufficient money shall, or may, not be available).

C. Performance Standards
The investment portfolio shall be managed in accordance with the parameters specified within this policy and always with consistently safe and prudent treasury management. Securities shall not be sold prior to maturity with the following exceptions:
 A security with declining credit sold early to minimize loss of principal  A security swap that would improve the quality, yield, or target duration in the portfolio
 Unforeseen liquidity needs of the portfolio require that the security be sold  A security that, subsequent to purchase, fails to meet the City’s socially responsible goals

1. Market Yield (Benchmark)
The City’s overall investment strategy is passive: investments are generally held to maturity. The quarter-to-date LAIF apportionment rate, the 3-month U.S.

Treasury Bill and the 2-year U.S. Treasury Note shall also be considered useful benchmarks of the City’s portfolio performance.

2. Marking to Market
The market value of the portfolio shall be calculated at least monthly and a statement of the market value of the portfolio shall be issued at least quarterly.

This will ensure that review of the investment portfolio, in terms of value and price volatility, has been performed. In defining market value, consideration shall been given to pronouncements from the Government Accounting Standards Board (GASB) that address the reporting of investment assets and investment income for all investment portfolios held by governmental entities. The fair value of all securities reported in the City’s portfolio is based on currently quoted market prices.

X. INVESTMENT POLICY COMPLIANCE AND ADOPTION
A. Policy Compliance and Changes
Any deviation from the policy shall be reported to Finance Committee at the next scheduled meeting and to City Council as part of the monthly review of the portfolio The Treasurer shall promptly notify Finance Committee and City Council of any material change in the policy and any modifications to the policy must be approved by Finance Committee and City Council.

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ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024
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B. Annual Statement of Investment Policy
The Treasurer shall render a written Statement of Investment Policy that shall be reviewed at least annually by Finance Committee and City Council to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. City Council shall consider the annual Statement of Investment Policy and any changes therein at a public meeting. The Statement of Investment Policy shall be adopted by resolution of City Council.
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City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

GLOSSARY OF INVESTMENT TERMS
AGENCY: A debt security issued by a federal or federally sponsored agency. Federal agencies are backed by the full faith and credit of the U.S. Government (i.e. Government National Mortgage Association). Federally sponsored agencies (FSA's) are backed by each particular agency with a market perception that there is an implicit government guarantee (i.e. Federal National Mortgage Association).

ASK: The price at which securities are offered for sale; also known as offering price.

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.

BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) BOND PROCEEDS: The money paid to the issuer by the purchaser or underwriter of a new issue of municipal securities. These moneys are used to finance the project or purpose for which the securities were issued and to pay certain costs of issuance as may be provided in the bond contract.

BOOK VALUE: The value at which a debt security is shown on the holder's balance sheet. Book value is often acquisition cost plus/minus amortization and accretion, which may differ significantly from the security’s current value in the market.

BROKER: Someone who brings buyers and sellers together and is compensated for his/her service.

CD PLACEMENT SERVICE: A service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution while still maintaining FDIC insurance coverage. See “CDARS”.

CDARS (CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM): A private CD placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage. CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.

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.

ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR): The official annual financial report for a public agency. It includes combined statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and detailed statistical section.

CREDIT QUALITY: The measurement of the financial strength of a bond issuer. This measurement helps an investor to understand an issuer's ability to make timely interest payments and repay the loan principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest rate paid by the issuer because the risk of default is lower. Credit quality ratings are provided by a Nationally Recognized Statistical-Rating Organization.

CREDIT RISK: The risk to an investor that an issuer will default in the payment of interest and/or principal on a security.

CUSTODIAN: A bank or other financial institution that keeps custody of stock certificates and other assets.

CURRENT YIELD (CURRENT RETURN): A yield calculation determined by dividing the annual interest received on a security by the current market price of that security. - 17 -
City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

GLOSSARY OF INVESTMENT TERMS
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, by buying and selling for his/her own account.

DELIVERY VERSUS PAYMENT: There are 2 methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment, also referred to as “cash on delivery”, is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.

DERIVATIVES: (1) financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities).

DIVERSIFICATION: Dividing investment funds among a variety of security types by sector, maturity and quality ratings offering independent returns.

DURATION: A measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.

FAIR VALUE: The amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

FEDERAL CREDIT AGENCIES: Agencies of the Federal Government set up to supply credit to various classes of institutions and individuals, e.g., savings and loan associations, small-business firms, students, farmers, farm co-operatives, and exporters.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): The federal agency that insures bank deposits up to $250,000 per deposit at participating banking institutions. In an effort to increase consumer confidence in the banking system, the previous $100,000 insurance limit was temporarily increased to $250,000 in 2008, extended to 2013, and then permanently increased on July 21, 2010 with the passage of the Wall Street Reform and Consumer Protection Act.

FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks) that lend funds and provide correspondent banks services to member commercial banks, thrift institutions, credit unions and insurance companies.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages.

FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of 7 members of the Federal Reserve Board and 5 of the 12 Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.

FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a 7 member Board of Governors in Washington, D.C., 12 Regional Banks and approximately 3,000 commercial banks that are members of the system.

FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA): A private corporation that acts as a selfregulatory organization (SRO) of all stock market operations in the United States, including brokerage firms and exchange markets. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities.
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City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

GLOSSARY OF INVESTMENT TERMS
GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB): A standard-setting body, associated with the Financial Accounting Foundation, which prescribes standard accounting practices for governmental units.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHA mortgages.

The term “pass-throughs” is often used to describe Ginnie Maes.

GOVERNMENT SECURITIES: An obligation of the U.S. government, backed by the full faith and credit of the government. These securities are regarded as the highest quality of investment securities available in the U.S. securities market. See "Treasury Bills, Notes, and Bonds." INTEREST RATE RISK: The risk associated with declines or rises in interest rates which cause an investment in a fixed-income security to increase or decrease in value.

INTERNAL CONTROLS: An internal control structure designed to ensure that the assets of the entity are protected from loss, theft, or misuse. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be derived and 2) the valuation of costs and benefits requires estimates and judgments by management. Internal controls should address the following points:
 Control of collusion - Collusion is a situation where 2 or more employees are working in conjunction to defraud their employer.
 Separation of transaction authority from accounting and record keeping - By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved.  Custodial safekeeping - Securities purchased from any bank or dealer including appropriate collateral (as defined by state law) shall be placed with an independent third party for custodial safekeeping.
 Avoidance of physical delivery securities - Book-entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.
 Clear delegation of authority to subordinate staff members - Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions.

Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities.  Written confirmation of transactions for investments and wire transfers - Due to the potential for error and improprieties arising from telephone and electronic transactions, all transactions should be supported by written communications and approved by the appropriate person. Written communications may be via fax if on letterhead and if the safekeeping institution has a list of authorized signatures.
 Development of a wire transfer agreement with the lead bank and third-party custodian - The designated official should ensure that an agreement will be entered into and will address the following points: controls, security provisions, and responsibilities of each party making and receiving wire transfers.
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City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

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

LOCAL AGENCY INVESTMENT FUND (LAIF): Chapter 730, Statutes of 1976 of the State of California, established the Local Agency Investment Fund. This fund enables local governmental agencies to remit money not required for immediate needs to the State Treasurer for the purpose of investment. In order to derive the maximum rate of return possible, the State Treasurer has elected to invest these monies with State monies as a part of the Pooled Money Investment Account. Each local governmental unit has the exclusive determination of the length of time its money will be on deposit with the State Treasurer.

At the end of each calendar quarter, all earnings derived from investments are distributed by the State Controller to the participating government agencies in proportion to each agency's respective amounts deposited in the Fund and the length of time such amounts remained therein. Prior to the distribution, the State's costs of administering the program are deducted from the earnings.

MARK-TO-MARKET: The process whereby the book value or collateral value of a security is adjusted to reflect its current market value.

MARKET RISK: The risk that the value of a security will increase or decrease as a result of changes in market conditions.

MARKET VALUE: The current price at which a security is trading and could presumably be purchased or sold at that particular point in time.

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

MATURITY: The date upon which the principal or stated value of a financial obligation is due and payable.

MONEY MARKET MUTUAL FUND: Mutual funds that invest solely in money market instruments (shortterm debt instruments, such as Treasury bills, commercial paper, bankers' acceptances, repos and federal funds).

MUTUAL FUND: An investment company that pools money and can invest in a variety of securities, including fixed-income securities and money market instruments. Mutual funds are regulated by the Investment Company Act of 1940 and must abide by Securities and Exchange Commission (SEC) disclosure guidelines.

NATIONALLY RECOGNIZED STATISTICAL-RATING ORGANIZATION (NRSRO): Standard and Poor’s, Moody’s, and Fitch Financial Services are examples of such organizations.

OFFER: An indicated price at which market participants are willing to sell a security or commodity. Also referred to as the "Ask” or “Ask Price”.

PLACEMENT SERVICE CERTIFICATES OF DEPOSIT: Certificates of deposit placed with a private sector entity that assists in the placement of certificates of deposit with eligible financial institutions located in the United States.

PLACEMENT SERVICE DEPOSIT: Deposits at depository institutions placed by a private sector placement service entity.

PAR VALUE: The amount of principal that must be paid at maturity. Also referred to as the face amount of a bond, normally quoted in $1,000 increments per bond. - 20 -
City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

GLOSSARY OF INVESTMENT TERMS
PORTFOLIO: Combined holding of more than one stock, bond, commodity, real estate investment, cash equivalent, or other asset. The purpose of a portfolio is to reduce risk by diversification.

PRINCIPAL: The face value or par value of a debt instrument, or the amount of capital invested in a given security.

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

PRINCIPAL: (1) The face amount or par value of a debt instrument. (2) One who acts as a dealer buying and selling for his own account.

PUBLIC BANK: A corporation, organized as either a nonprofit mutual benefit corporation or a nonprofit public benefit corporation for the purpose of engaging in the commercial banking business or industrial banking business that is wholly owned by a local agency, as specified, local agencies, or a joint powers authority.

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 or the current income return.

REINVESTMENT RISK: The risk that a fixed-income investor will be unable to reinvest income proceeds from a security holding at the same rate of return currently generated by that holding.

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

REVERSE REPURCHASE AGREEMENT: An agreement of one party (for example, a financial institution) to purchase securities at a specified price from a second party (such as a public agency) and a simultaneous agreement by the first party to resell the securities at a specified price to the second party on demand or at a specific date.

RISK: Degree of uncertainty of return on an asset.

RULE 2A-7 OF THE INVESTMENT COMPANY ACT: Applies to all money market mutual funds and mandates such funds to maintain certain standards, including a 13-month maturity limit and a 90-day average maturity on investments, to help maintain a constant net asset value of $1.00.

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

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

SECURITIES LENDING: An agreement under which a local agency agrees to transfer securities to a borrower who, in turn, agrees to provide collateral to the local agency. During the term of the agreement, both the securities and the collateral are held by a third party. At the conclusion of the agreement, the securities are transferred back to the local agency in return for the collateral.

STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises, (FHLB, FNMA, FHLMC, etc.), and Corporations that have imbedded options, (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns), into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.
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City of Santa Barbara

ANNUAL STATEMENT OF INVESTMENT POLICY
Calendar Years 2023 and 2024

GLOSSARY OF INVESTMENT TERMS
SUPRANATIONAL INSTITUTIONS: International institutions formed by two or more governments that transcend boundaries to pursue mutually beneficial economic or social goals. There are three supranational institutions that issue obligations that are eligible investments for California local agencies:
the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Inter-American Development Bank (IADB).

SWAP: Trading one asset for another.

TOTAL RETURN: The sum of all investment income plus changes in the capital value of the portfolio.

TREASURY BILLS: Short-term U.S. government non-interest bearing discounted debt securities with maturities of no longer than 1 year and issued in minimum denominations of $10,000. Auctions of 3- and 6-month bills are weekly, while auctions of 1-year bills are monthly. The yields on these bills are monitored closely in the money markets for signs of interest rate trends.

TREASURY BOND: A long-term coupon-bearing U.S. Treasury security issued as a direct obligation of the U.S. Government and having an initial maturity of more than 10 years and issued in minimum denominations of $1,000.

TREASURY NOTE: A medium-term coupon-bearing U.S. Treasury security issued as a direct obligation of the U.S. Government and having an initial maturity of from 1 to 10 years and issued in denominations ranging from $1,000 to $1 million or more.

UNIFORM NET CAPITAL RULE: Securities and Exchange Commission (SEC) Rule 15C3-1 outlining requirements that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio.

Indebtedness covers all money owed to a firm, including margin and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

VOLATILITY: A degree of fluctuation in the price and valuation of securities.

YIELD: The current rate of return on an investment security generally expressed as a percentage of the security’s current price. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

RESOLUTION NO. _________
A RESOLUTION OF THE COUNCIL OF THE ClTY OF

SANTA BARBARA ADOPTING THE INVESTMENT
POLICY FOR THE ClTY AND RESCINDING
RESOLUTION NO. 22-131
WHEREAS, the City Council adopted Resolution Nos. 85-065 and 85-121, establishing a policy regarding the investment of City funds;
WHEREAS, the Council last reaffirmed the policy by adopting Resolution No. 22-131; and WHEREAS, the City of Santa Barbara has consistently maintained a policy of due diligence and the minimizing of risk in the investment of City funds.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE ClTY OF SANTA BARBARA AS FOLLOWS:

SECTION 1. The attached Exhibit, City of Santa Barbara Statement of Investment Policy, is hereby adopted and made a part of this resolution.

SECTION 2. Resolution No. 22-131 is hereby rescinded.

City of Santa Barbara
Finance Department
Statement of Investment Policy
Calendar Years 2023 and 2024
Effective 11/07/2023

EXHIBIT
City of Santa Barbara