Seaside City Council
December 1, 2022

Description Quantity Unit Price Extended Price
42 overheads,
2 bookcases, 2 pedestal, And 2 credenza return with lateral file/bookcase below the top, 2 task chairs
- Four pack panel run consisting of:
24 panels, 4 tops with height adjustable base, 8 monitor arms, 4 72 “ overheads
4 bookcases, 4 pedestals, And 4 credenza return with lateral/file bookcase below the top, 4 task chairs
- Two single stand alone workstations wrapped by panels:
4 panels, 2 tops with height adjustable base, 4 monitor arms, 2 pedestals, 2 task chairs
- Private office 1:

Credenza with fixed bbf, 2 tops to create L shaped worksurface with height adjustable base,
1 mobile pedestal, 1 bookcase , 1 lateral file, 2 guest chairs, 1 task chair
- Private office 2:
2 tops to create L shaped worksurface with height adjustbale base, 1 mobile pedestal, 1 bookcase
1 lateral file, 2 guest chairs, 1 task chair
- (1) Conference table 42 x 96, with 8 tizu guest chairs. - (9) existing vertical file cabinets currently located in the main admin building that they will want us to
relocate to the new trailer. Its across the parking lot. Snip below for reference.
* Please price these 9 cabinets being moved as a stair carry * - Included in the Cost -
Regular business hours: OWI Labor
* Cost assumes OWP will be delivering ALL product with Bobtail Trucks from SC Warehouse.
* Cost does not include Receiving Product Direct to Site. * Please Confirm *
* 11/18/2022 - Updated to include (4) single clamp on monitor arms to Labor Scope

ONEWORKPLA
43 SIYA004 - Siya Chair with 3-Way Adjustable Arms, Black Base, Black 10T 380.10 3,801.00 Seat Cover Finish: Buzz2 5F17 - Black
Packaging: Fully Assembled
AMQSolutio
Packet Page 221
Quotation 690956

Quotation Totals
Sub Total 63,913.78
Estimated Tax Rate - 9.250% 5,912.02
Grand Total 69,825.80
Select Images are provided as a preliminary color and type representation and should not be used for final color and product selection.

Due to individual computer/monitor/printer settings: color, texture, pattern, size and feature rendering may vary from the actual sample.

For accuracy, order and view an actual sample.

End of Quotation
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NEW CITY HALL STAFF TRAILER FURNISHING Exhibit B

EXHIBIT B

INSURANCE
Prior to the beginning of and throughout the duration of the Work, CONTRACTOR and its subcontractors shall maintain insurance in conformance with the requirements set forth below. CONTRACTOR will use existing coverage to comply with these requirements. If that existing coverage does not meet the requirements set forth herein, CONTRACTOR agrees to amend, supplement or endorse the existing coverage to do so.

CONTRACTOR acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required. Any insurance proceeds available to CONTRACTOR or its subcontractors in excess of the limits and coverage identified in this Agreement and which is applicable to a given loss, claim or demand, will be equally available to AGENCY.

A. CONTRACTOR shall provide the following types and amounts of insurance:

Without limiting CONTRACTOR’s indemnification of AGENCY, and prior to commencement of Work, CONTRACTOR shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to AGENCY.

General liability insurance. CONTRACTOR shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage, and a $2,000,000 completed operations aggregate. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Automobile liability insurance. CONTRACTOR shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the CONTRACTOR arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.

Umbrella or excess liability insurance. [Optional depending on limits required] CONTRACTOR shall obtain and maintain an umbrella or excess liability insurance that will provide bodily injury, personal injury and property damage liability coverage at least Packet Page 223
NEW CITY HALL STAFF TRAILER FURNISHING Exhibit B
as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond in the event that any primary insurance that would otherwise have applied proves to be uncollectable in whole or in part for any reason;
• Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

Workers’ compensation insurance. CONTRACTOR shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000) for CONTRACTOR’s employees in accordance with the laws of the State of California, Section 3700 of the Labor Code. In addition, CONTRACTOR shall require each subcontractor to similarly maintain Workers’ Compensation Insurance and Employer’s Liability Insurance in accordance with the laws of the State of California, Section 3700 for all of the subcontractor’s employees.

CONTRACTOR shall submit to AGENCY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of AGENCY, its officers, agents, employees and volunteers.

Pollution liability insurance. Environmental Impairment Liability Insurance shall be written on a CONTRACTOR’s Pollution Liability form or other form acceptable to AGENCY providing coverage for liability arising out of sudden, accidental and gradual pollution and remediation. The policy limit shall be no less than $1,000,000 dollars per claim and in the aggregate. All activities contemplated in this Agreement shall be specifically scheduled on the policy as “covered operations.” The policy shall provide coverage for the hauling of waste from the project site to the final disposal location, including nonowned disposal sites.

Builder’s risk insurance. Upon commencement of construction and with approval of AGENCY, CONTRACTOR shall obtain and maintain builder’s risk insurance for the entire duration of the Project until only the AGENCY has an insurable interest. The Builder’s Risk coverage shall include the coverages as specified below.

The named insureds shall be CONTRACTOR and AGENCY, including its officers, officials, employees, and agents. All Subcontractors (excluding those solely responsible for design Work) of any tier and suppliers shall be included as additional insureds as their interests may appear. CONTRACTOR shall not be required to maintain property insurance for any portion of the Project following transfer of control thereof to AGENCY. The policy Packet Page 224
NEW CITY HALL STAFF TRAILER FURNISHING Exhibit B
shall contain a provision that all proceeds from the builder’s risk policy shall be made payable to the AGENCY. The AGENCY will act as a fiduciary for all other interests in the Project.

Policy shall be provided for replacement value on an "all risk" basis for the completed value of the project. There shall be no coinsurance penalty or provisional limit provision in any such policy. Policy must include: (1) coverage for any ensuing loss from faulty workmanship, Nonconforming Work, omission or deficiency in design or specifications; (2) coverage against machinery accidents and operational testing; (3) coverage for removal of debris, and insuring the buildings, structures, machinery, equipment, materials, facilities, fixtures and all other properties constituting a part of the Project; (4) Ordinance or law coverage for contingent rebuilding, demolition, and increased costs of construction; (5) transit coverage (unless insured by the supplier or receiving contractor), with sub-limits sufficient to insure the full replacement value of any key equipment item; (6) Ocean marine cargo coverage insuring any Project materials or supplies, if applicable; (7) coverage with sub-limits sufficient to insure the full replacement value of any property or equipment stored either on or off the Site or any staging area. Such insurance shall be on a form acceptable to Agency to ensure adequacy of terms and sublimits and shall be submitted to the Agency prior to commencement of construction.

Other provisions or requirements
Proof of insurance. CONTRACTOR shall provide certificates of insurance to AGENCY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by AGENCY’s risk manager prior to commencement of performance. Current certification of insurance shall be kept on file with AGENCY at all times during the term of this contract. AGENCY reserves the right to require complete, certified copies of all required insurance policies, at any time.

Duration of coverage. CONTRACTOR shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Work hereunder by CONTRACTOR, his agents, representatives, employees or subcontractors.

CONTRACTOR must maintain general liability and umbrella or excess liability insurance for as long as there is a statutory exposure to completed operations claims. AGENCY and its officers, officials, employees, and agents shall continue as additional insureds under such policies.

Primary/noncontributing. Coverage provided by CONTRACTOR shall be primary and any insurance or self-insurance procured or maintained by AGENCY shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess Packet Page 225
NEW CITY HALL STAFF TRAILER FURNISHING Exhibit B
insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of AGENCY before the AGENCY’s own insurance or self-insurance shall be called upon to protect it as a named insured.

Products/completed operations coverage. Products/completed operations coverage shall extend a minimum of three (3) years after project completion. Coverage shall be included on behalf of the insured for covered claims arising out of the actions of independent contractors. If the insured is using subcontractors, the Policy must include work performed “by or on behalf” of the insured. Policy shall contain no language that would invalidate or remove the insurer’s duty to defend or indemnify for claims or suits expressly excluded from coverage. Policy shall specifically provide for a duty to defend on the part of the insurer. The AGENCY, its officials, officers, agents, and employees, shall be included as additional insureds under the Products and Completed Operations coverage.

Agency’s rights of enforcement. In the event any policy of insurance required under this Agreement does not comply with these requirements or is canceled and not replaced, AGENCY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by AGENCY will be promptly reimbursed by CONTRACTOR or AGENCY will withhold amounts sufficient to pay premium from CONTRACTOR payments. In the alternative, AGENCY may cancel this Agreement.

Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the AGENCY’s risk manager.

Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against AGENCY, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow CONTRACTOR or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. CONTRACTOR hereby waives its own right of recovery against AGENCY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

Enforcement of contract provisions (non estoppel). CONTRACTOR acknowledges and agrees that any actual or alleged failure on the part of the AGENCY to inform CONTRACTOR of non-compliance with any requirement imposes no additional obligations on the AGENCY nor does it waive any rights hereunder.

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NEW CITY HALL STAFF TRAILER FURNISHING Exhibit B
Requirements not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the CONTRACTOR maintains higher limits than the minimums shown above, the AGENCY requires and shall be entitled to coverage for the higher limits maintained by the CONTRACTOR. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the AGENCY.

Notice of cancellation. CONTRACTOR agrees to oblige its insurance agent or broker and insurers to provide to AGENCY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage.

Additional insured status. General liability policies shall provide or be endorsed to provide that AGENCY and its officers, officials, employees, agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to AGENCY and approved of in writing.

Separation of insureds. A severability of interests provision must apply for all additional insureds ensuring that CONTRACTOR’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions.

Pass through clause. CONTRACTOR agrees to ensure that its subconsultants, subcontractors, and any other party involved with the project who is brought onto or involved in the project by CONTRACTOR, provide the same minimum insurance coverage and endorsements required of CONTRACTOR. CONTRACTOR agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section.

CONTRACTOR agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the project will be submitted to AGENCY for review.

Agency’s right to revise requirements. The AGENCY reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the CONTRACTOR a ninety (90) day advance written notice of such change.

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NEW CITY HALL STAFF TRAILER FURNISHING Exhibit B
If such change results in substantial additional cost to the CONTRACTOR, the AGENCY and CONTRACTOR may renegotiate CONTRACTOR’s compensation.

Self-insured retentions. Any self-insured retentions must be declared to and approved by AGENCY. AGENCY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by AGENCY.

Timely notice of claims. CONTRACTOR shall give AGENCY prompt and timely notice of claims made or suits instituted that arise out of or result from CONTRACTOR’s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies.

Additional insurance. CONTRACTOR shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work.

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CITY OF SEASIDE

STAFF REPORT
Item No.: 9.A.

TO: City Council
FROM: Jaime M. Fontes, City Manager
BY: Sheri Damon, City Attorney
Victor Damiani, Finance Director
DATE: December 1, 2022
SUBJECT: ADOPT AN ORDINANCE LEVYING SPECIAL TAXES WITHIN CITY OF SEASIDE COMMUNITY FACILITIES DISTRICT NO. 2022-1
(FACILITIES AND MAINTENANCE SERVICES) (SECOND

READING - ROLL CALL VOTE)

RECOMMENDATION
Adopt an Ordinance levying special taxes within the CFD.

BACKGROUND
As development begins to occur in the former Fort Ord property and other currently undeveloped areas of the City, it is expected that there will be increased demand for public facilities and municipal services in the territories being developed. At its November 17, 2022 meeting, the City Council formed a community facilities district ("CFD") in order to provide funding for needed public facilities and municipal services within the CFD boundaries. This ordinance allows the levy of special taxes on property within the CFD boundaries to provide funds for identified public facilities and maintenance services resulting from development in the area of the community facilities district.

Some of the identified public facilities include a potential new fire station, a potential cultural museum or other community space, storm drainage facilities. Additionally, an example of some of the potential municipal services that might be provided include additional fire personnel and/or storm drain or other maintenance workers. Additional new development in the City will be able to annex into this CFD should the property owners choose to do so.

Any new bonds to build any public facility authorized by the CFD will need future City Packet Page 229

Item No. 9.A. Page 2 of 2
Council approval.

FISCAL IMPACT
Costs of formation are budgeted out of general fund revenues and may be reimbursed upon collection of special taxes.

ATTACHMENTS

1. Amended CFD Boundary Map

2. Ordinance Levying Special Taxes
Reviewed for Submission to the City Council by:
_________________________________________
Jaime M. Fontes, City Manager
Packet Page 230
Packet Page 231
03101.01:J18357
ORDINANCE NO. XXXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEASIDE

LEVYING SPECIAL TAXES WITHIN CITY OF SEASIDE COMMUNITY
FACILITIES DISTRICT NO. 2022-1 (FACILITIES AND MAINTENANCE

SERVICES)
WHEREAS, on October 6, 2022, this City Council of the City of Seaside (the “City”) adopted a resolution entitled “A Resolution of the City Council of the City of Seaside Declaring Its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes Therein – Facilities and Maintenance Services” (the “Resolution of Intention”), stating its intention to establish the City of Seaside Community Facilities District No. 2022-1 (Facilities and Maintenance Services) (the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, Section 53311 et seq. of the California Government Code (the “Law”), to finance costs of certain public facilities (the “Facilities”) and of certain municipal services (the “Services”); and WHEREAS, notice was published as required by the Law of the public hearing called pursuant to the Resolution of Intention relative to the intention of this City Council to form the District and to provide for the costs of the Facilities and of the Services; and WHEREAS, on November 17, 2022 this City Council held the public hearing relative to the determination to proceed with the formation of the District; and WHEREAS, at the public hearing all persons desiring to be heard on all matters pertaining to the formation of the District and the levy of special taxes in the District were heard, substantial evidence was presented and considered by this City Council and a full and fair hearing was held; and
WHEREAS, subsequent to said hearing, this City Council adopted resolutions entitled “A Resolution of the City Council of the City of Seaside of Formation of City of Seaside Community Facilities District No. 2022-1 (Facilities and Maintenance Services), Authorizing the Levy of a Special Tax Within the District, Preliminarily Establishing an Appropriations Limit for the District and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors of the District” (the “Resolution of Formation”), “A Resolution of the City Council of the City of Seaside Determining the Necessity to Incur Bonded Indebtedness Within City of Seaside Community Facilities District No. 2022-1 (Facilities and Maintenance Services) and Packet Page 232
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Submitting Proposition to the Qualified Electors of the District” (the “Resolution of Necessity”) and “A Resolution of the City Council of the City of Seaside Calling Special Election Within Community Facilities District No. 2022-1 (Facilities and Maintenance Services)”, which resolutions established the District, authorized the levy of a special tax with the District, and called an election within the District on the proposition of incurring indebtedness, levying a special tax and establishing an appropriations limit within the District, respectively; and
WHEREAS, on November 17, 2022 an election was held within the District in which the eligible landowner elector approved said propositions.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEASIDE ORDAINS AS FOLLOWS:

SECTION 1. By the passage of this Ordinance this City Council hereby authorizes and levies special taxes within the District, pursuant to the Law, at the rate and in accordance with the rate and method of apportionment of special taxes for the District approved by, and attached as Exhibit B to, the Resolution of Formation (the “Rate and Method”) which Resolution is by this reference incorporated herein. The special taxes are hereby levied commencing in Fiscal Year 2023-2024 and in each fiscal year thereafter until payment in full of any bonds issued by the City for the District (the “Bonds”) as contemplated by the Resolution of Formation and the Resolution of Necessity, payment in full all costs of administering the District, and so long as necessary to pay for the Services.

SECTION 2. The City Finance Director is hereby authorized and directed each fiscal year to determine the specific special tax rate and amount to be levied for each parcel of real property within the District, in the manner and as provided in the Rate and Method.

SECTION 3. Properties or entities of the State, federal or local governments shall be exempt from any levy of the special taxes, to the extent set forth in the Rate and Method attached as Exhibit B to the Resolution of Formation. In no event shall the special taxes be levied on any parcel within the District in excess of the maximum tax specified in the Rate and Method.

SECTION 4. All of the collections of the special tax shall be used as provided for in the Law and in the Resolution of Formation including the payment of principal and interest on the Bonds, the replenishment of the reserves for the Bonds, the payment of the costs Packet Page 233
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to provide the Services, the costs of the City and the City of Seaside in administering the District, and the costs of collecting and administering the special tax.

SECTION 5. The special taxes shall be collected from time to time as necessary to meet the financial obligations of the District on the secured real property tax roll in the same manner as ordinary ad valorem taxes are collected. The special taxes shall have the same lien priority, and be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes. In addition, the provisions of Section 53356.1 of the California Government Code shall apply to delinquent special tax payments. The Finance Director is hereby authorized and directed to provide all necessary information to the auditor/tax collector of the County of Monterey and to otherwise take all actions necessary in order to effect proper billing and collection of the special tax, so that the special tax shall be levied and collected in sufficient amounts and at the times necessary to satisfy the financial obligations of the District in each fiscal year until the Bonds are paid in full and so long as necessary to pay for the Services, and provision has been made for payment of all of the administrative costs of the District.

Notwithstanding the foregoing, the Finance Director may collect one or more installments of the special taxes on any one or more parcels in the District by means of direct billing by the City of the property owners within the District, if any of the Bonds bear interest at a variable interest rate, or otherwise if, in the judgment of the Finance Director, such means of collection will reduce the administrative burden on the City in administering the District or is otherwise appropriate in the circumstances. In such event, the special taxes shall become delinquent if not paid when due as set forth in any such respective billing to the applicable property owners.

SECTION 6. If for any reason any portion of this Ordinance is found to be invalid, or if the special tax is found inapplicable to any particular parcel within the District, by a Court of competent jurisdiction, the balance of this Ordinance, and the application of the special tax to the remaining parcels within the District shall not be affected.

SECTION 7. Effective Date. This Ordinance shall become effective thirty (30) days after its final passage and adoption at a duly noticed public hearing for the second reading of the proposed text amendments.

SECTION 8. The City Clerk shall certify to the adoption of this Ordinance and shall, within fifteen (15) days after passage, publish a summary of this Ordinance in accordance with Section 36933 of the Government Code of State of California with the names of City Council members voting for and against it.

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INTRODUCED at a regular meeting of the City Council of the City of Seaside on the 17th day of November, 2022, and
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Seaside, State of California on the 1st day of December, 2022.

AYES: COUNCIL MEMBERS
NOES: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
APPROVED:
____________________________
Ian N. Oglesby, Mayor
ATTEST:
____________________________
Dominique L. Davis, City Clerk
APPROVED AS TO FORM:
____________________________
Sheri L. Damon, City Attorney
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CITY OF SEASIDE

STAFF REPORT
Item No.: 9.B.

TO:

FROM: Jaime M. Fontes, City Manager
BY: Dan Meewis, Recreation Director
DATE: December 1, 2022
SUBJECT: ADOPTION OF AN ORDINANCE TO REPEAL AND REPLACE CHAPTER 10.32 SECTION 10.32.031 OF THE SEASIDE
MUNICIPAL CODE AND ADDING A NEW SECTION 10.32.035

ESTABLISHING A FOUR HOUR TIME LIMIT AT CERTAIN CITY

PARK PARKING LOTS (SECOND READING - ROLL CALL VOTE)

RECOMMENDATION
Adopt an ordinance for the repeal and replacement of Seaside Municipal Code Chapter

10.32 "Stopping, Standing, and Parking" to include the addition of new section

10.32.035 which establishes a four hour time limit for certain parking lots in city parks.

It is recommended the City Council hold a public hearing on the amendments to the Seaside Municipal Code Section 10.32.

BACKGROUND
The City currently has two parks with dedicated parking lots, and another one has a parking lot in the design phase. Laguna Grande Park has three dedicated parking lots with more than seventy parking spaces, while Robert's Lake has two parking lots with thirty-two spaces. Cutino Park currently has a parking lot in design, and should be constructed sometime in 2023. That parking lot will have fourteen dedicated spaces.

On any given day, the parking lots at the parks can be full with cars and RV's that stay for longer periods of time than the average park user. In some cases, vehicles are parked in these lots from the moment they are open at 6am until they close at 10pm.

This makes it difficult for Seaside residents and other visitors to access these parks and the coastal trail on a daily basis.

At the May 21, 2020, City Council Meeting, staff presented the idea of amending Seaside Municipal Code Section 10.32 "Stopping, Standing, and Parking" to institute a four hour parking time for the parking lots located at LagunaGrande Park and Robert's Packet Page 236

Item No. 9.B. Page 2 of 3
Lake Park. At that time, there was also a proposed amendment that included overnight parking one night a week in the Laguna Grande Parking Lot. The City Council directed staff at that time to come back with the proposed amendments to the ordinance. At the June 18, 2020, City Council meeting staff brought back the ordinance with the proposed amendments, and the first reading was approved with four ayes and one no vote. At the July, 2 2020, City Council meeting, the City Council denied the second reading, citing that overnight parking one night a week was not sufficient.

The proposed amendments are as follows:

Sub-Section 10.32.031 Amended
Municipal Code Sub-Section 10.32.031 related to definitions repelled and restated to read as follows:

10.32.031 Overnight parking at Laguna Grande Park, Robert's Lake, Cutino Park, Oldemeyer Center, Seaside Community Center and Seaside City Hall parking lots.

A. Unlawful. It is unlawful for the operator of any vehicle to park said vehicle in Laguna Grande Park, Robert's Lake Park, Cutino Park, Oldemeyer Center, Seaside Community Center and the Seaside City Hall parking lot between the hours of nine p.m. and six a.m. Mondays through Sundays.

Sub-Section 10.32.035 Added
Municipal Code Sub-Section 10.32.035 added to read as follows:

10.32.035 Parking time limited at Laguna Grande Park, Robert's Lake, and Cutino Park.

A. When authorized signs are in place giving notice thereof, no person shall park any vehicle in the parking lots at Laguna Grande Park, Robert's Lake, or Cutino Park for a period longer than four hours on any day.

B. Exemptions. Persons participating in activities sponsored by the City of Seaside, or attending a permitted park rental, or City employees, or officials who are working or are on official City business are exempt from the provisions of sub-section A of this section.

FISCAL IMPACT
There is no fiscal impact for this item.

ATTACHMENTS

1. Draft Parking Ordinance 3
Reviewed for Submission to the City Council by:

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Item No. 9.B. Page 3 of 3
_________________________________________
Jaime M. Fontes, City Manager
Packet Page 238
ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEASIDE REPEAL AND REPLACE CHAPTER 10.32 SECTION 10.32.031 OF THE SEASIDE MUNICIPAL CODE and ADDING A NEW SECTION 10.32.035 ESTABLISHING A FOUR HOUR TIME LIMIT AT CERTAIN CITY PARK PARKING LOTS.

WHEREAS, the City desires to expand the list of public areas which are not available for overnight parking; and
WHEREAS, The City desires to increase the ability for more residents and visitors to have access to specific parks, parking lots and coastal access points.

NOW THEREFORE, the City Council of the City of Seaside, California does ordain as follows:

SECTION 1. GENERAL PURPOSE AND FINDINGS.

A. The purpose of this Ordinance is to repeal and replace Section 10.32.031 to expand the park and other areas which are not available for overnight parking and to amend Chapter 10.32 of the Seaside Municipal Code adding a new section 10.32.035 to establish a four-hour time limit for certain parking lots at City parks.

SECTION 2. SECTION 10.32.031 REPEALED AND REPLACED.

Municipal Code Section 10.32.031 related to definitions is hereby repealed and replaced to read as follows:

10.32.031 Overnight parking at Laguna Grande Park, Robert’s Lake, Cutino Park, Oldemeyer Center, Seaside Community Center and Seaside City Hall parking lots.

A. Unlawful. It is unlawful for the operator of any vehicle to park said vehicle in Laguna Grande Park, Roberts Lake Park, Cutino Park, Oldemeyer Center, Seaside Community Center and the Seaside City Hall parking lot between the hours of nine p.m. and six a.m. Mondays through Sundays
B. Exemptions. Persons participating in activities sponsored by the city and Seaside city employees or officials who are working or are on official city business are exempt from the provisions of subsection A of this section.

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SECTION 3. NEW SECTION 10.32.035 ADDED.

Municipal Code Section 10.32.035 is hereby added to read as follows:

10.32.035 Parking time limited at Laguna Grande Park, Robert’s Lake, and Cutino Park
A. When authorized signs are in place giving notice thereof, no person shall park any vehicle in the parking lots at Laguna Grande Park, Robert’s Lake, or Cutino Park for a period longer than four hours on any day.

B. Exemptions. Persons participating in activities sponsored by the City of Seaside, or attending a permitted park rental, or city employees or officials who are working or are on official city business are exempt from the provisions of subsection A of this section.

SECTION 4. ENVIRONMENTAL COMPLIANCE
The proposed changes to the Ordinance will not result in direct or indirect changes to the environment and do not meet the definition of project under CEQA. (14 CCR 15378(b)) SECTION 5. SEVERABILITY.

A. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the Ordinance, including the application of such part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this Ordinance are severable.

B. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be held unconstitutional, invalid or unenforceable.

SECTION 6. EFFECTIVE DATE.

This Ordinance shall become effective thirty (30) days after its final passage and adoption.

INTRODUCED AND PASSED TO PRINT by the City Council of the City of Seaside this 17th day of November 2022.

PASSED AND ADOPTED by the City Council of the City of Seaside this __________ day of ____________ 2022, by the following roll call vote:

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AYES: COUNCIL MEMBERS
NOES: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
APPROVED:
__________________________________
Ian N. Oglesby, Mayor
ATTEST:
__________________________________
Packet Page 241

CITY OF SEASIDE

STAFF REPORT
Item No.: 9.C.

TO: City Council
FROM: Jaime M. Fontes, City Manager
BY: Roberta Greathouse, Human Resources Director/Risk Manager DATE: December 1, 2022
SUBJECT: ADOPT A RESOLUTION OF INTENTION AND INTRODUCTION OF

AN ORDINANCE AUTHORIZING AN AMENDMENT TO THE

CONTRACT WITH THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM TO
PROVIDE SECTION 20516 (EMPLOYEES SHARING ADDITIONAL

COST) FOR LOCAL MISCELLEANOUS MEMBERS IN THE SEASIDE

MANAGEMENT AND SUPERVISORY EMPLOYEES' ASSOCIATION,

UNREPRESENTED EXECUTIVE MANAGERS, UNREPRESENTED

CONFIDENTIAL EXEMPT EMPLOYEES, AND UNREPRESENTED

UNCLASSIFIED EXEMPT EMPLOYEES, AND LOCAL SAFETY

MEMBERS IN THE UNREPRESENTED EXECUTIVE MANAGERS

GROUP (FIRST READING - ROLL CALL VOTE)

RECOMMENDATION
Adopt the Resolution of Intention authorizing an amendment to the contract with the Board of Administration of the California Public Employees’ Retirement System to provide Section 20516 (Employees Sharing Additional Cost) for local miscellaneous members in the Seaside Management and Supervisory Employees' Association, Unrepresented Executive Managers, Unrepresented Confidential Exempt Employees, and Unrepresented Unclassified Exempt Employees, and local safety members in the Unrepresented Executive Managers group.; and introduction of an Ordinance authorizing an amendment to the contract between the City of Seaside and the Board of Administration of the California Public Employees’ Retirement System.

BACKGROUND
On August 18, 2022, the City Council approved the adoption of a new Memorandum of Understanding (MOU) with the Seaside Management and Supervisory Employees' Association and Listing of Benefits for the Unrepresented Confidential Exempt Packet Page 242

Item No. 9.C. Page 2 of 3
Employees and Unrepresented Unclassified Exempt Employees. On September 1, 2022, the Council approved a new Listing of Benefits for the Executive Managers. In those agreements, employees in the groups agreed to implement cost sharing for all members of the association. In order to implement the cost sharing provision of the MOU, the City is required to amend the contract with CalPERS.

Starting February 18, 2023, all members of the groups listed above will contribute 3% of the City’s contribution to CalPERS in addition to paying the employee contribution.

Plan New City Contribution New Employee Contribution
Safety Tier 1
3% @ 50

20.75% 12%
Safety “PEPRA”

2.7% @ 57

10.00 16%
Misc. Classic
2% @ 55

7.87% 10%
Misc. PEPRA
2% @ 62

4.47% 9.75%
The amendment of the contract with CalPERS requires several steps, including a secret ballot election by all affected employees. This election must be held following the adoption of the Resolution of Intention, and prior to the adoption of the Ordinance to amend the CalPERS contract.

IMPLEMENTATION SCHEDULE
CalPERS has provided the City the appropriate documents in order to implement the contract amendment in accordance with the following schedule:

December 1, 2022: Council adopts Resolution of Intent and Introduces Ordinance Amending PERS contract.

December 5 - 16, 2022: Secret Ballot Election Period
January 5, 2023: Council adopts the Ordinance Amending the PERS Contract February 4, 2023: Ordinance Becomes Effective
February 18, 2023: Contract Amendment Becomes Effective

FISCAL IMPACT
The fiscal impact of this item is approximately $4,900 for the remainder of the fiscal year, which is approximately $13,000 annually.

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Item No. 9.C. Page 3 of 3

ATTACHMENTS

1. Resolution of Intention

2. CalPERS Contract Amendment

3. Ordinance
Reviewed for Submission to the City Council by:
_________________________________________
Jaime M. Fontes, City Manager
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RESOLUTION OF INTENTION

TO APPROVE AN AMENDMENT TO CONTRACT

BETWEEN THE

BOARD OF ADMINISTRATION

CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM

AND THE

CITY COUNCIL

CITY OF SEASIDE
WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agency of a resolution giving notice of its intention to approve an amendment to said contract, which resolution shall contain a summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:

To provide Section 20516 (Employees Sharing Additional Cost) of 3% for local miscellaneous members in the Seaside Management and Supervisory Employees’ Association, Unrepresented Executive Managers group, Unrepresented Confidential Exempt Employees group, and Unrepresented Unclassified Exempt Employees group; and 3% for local safety members in the Unrepresented Executive Managers group.

NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby give notice of intention to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof.

By:_________________________________
Presiding Officer
_________________________________
Title
________________________________
Date adopted and approved
(Amendment)
CON-302 (Rev. 3/9/2016 rc)
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EXHIBIT
California
Public Employees’ Retirement System

AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees’ Retirement System
and the
City Council
City of Seaside

The Board of Administration, California Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective January 1, 1957, and witnessed December 14, 1956, and as amended effective February 22, 1975, March 18, 1978, May 1, 1982, June 18, 1993, April 22, 1995, June 17, 2001, January 12, 2008, April 5, 2009, January 8, 2011, February 28, 2015, July 4, 2015, January 14, 2017, and April 8, 2017, which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows:

A. Paragraphs 1 through 19 are hereby stricken from said contract as executed effective April 8, 2017, and hereby replaced by the following paragraphs numbered 1 through 19 inclusive:

1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age” shall mean age 55 for classic local miscellaneous members and age 62 for new local miscellaneous members; age 50 for classic local fire members and for those classic local police members entering membership in the police classification on or prior to January 8, 2011, age 55 for classic local police members entering membership for the first time in the police classification after January 8, 2011, and age 57 for new local safety members.

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2. Public Agency shall participate in the Public Employees' Retirement System from and after January 1, 1957, making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency.

3. Public Agency agrees to indemnify, defend and hold harmless the California Public Employees’ Retirement System (CalPERS) and its trustees, agents and employees, the CalPERS Board of Administration, and the California Public Employees’ Retirement Fund from any claims, demands, actions, losses, liabilities, damages, judgments, expenses and costs, including but not limited to interest, penalties and attorney fees that may arise as a result of any of the following:
(a) Public Agency’s election to provide retirement benefits, provisions or formulas under this Contract that are different than the retirement benefits, provisions or formulas provided under the Public Agency’s prior non-CalPERS retirement program.
(b) Any dispute, disagreement, claim, or proceeding (including without limitation arbitration, administrative hearing, or litigation) between Public Agency and its employees (or their
representatives) which relates to Public Agency’s election to amend this Contract to provide retirement benefits, provisions or formulas that are different than such employees’ existing retirement benefits, provisions or formulas.
(c) Public Agency’s agreement with a third party other than CalPERS to provide retirement benefits, provisions, or formulas that are different than the retirement benefits, provisions or formulas provided under this Contract and provided for under the California Public Employees’ Retirement Law.

4. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement:

a. Local Fire Fighters (herein referred to as local safety members); b. Local Police Officers (herein referred to as local safety members); c. Employees other than local safety members (herein referred to as local miscellaneous members).

5. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System:

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NO ADDITIONAL EXCLUSIONS

6. Public Agency and the Seaside Fire District have agreed to a merger of their contracts, and this contract shall be a continuation of the benefits of the contract of the Seaside Fire District, pursuant to Section 20567.5 of the Government Code. Such merger is effective as of March 1, 1960.

Legislation repealed said Section effective January 1, 1988.

7. Public Agency and the Seaside Redevelopment Agency have agreed to a merger of their contracts, and this contract shall be a continuation of the benefits of the contract of the Seaside Redevelopment Agency, pursuant to Section 20567.6 of the Government Code. Such merger is effective as of April 11, 1976. Public Agency, by this contract, assumes the assets and liabilities accumulated under the former contract of the Seaside Redevelopment Agency. Legislation repealed said Section effective January 1, 1988.

a. Service performed for the former agency prior to the effective date of this merger shall be subject to the terms and conditions of the former agency’s contract as it was effect at that time. Service performed after the effective date of this merger shall be subject to the terms and conditions of this contract. For purposes of computing retirement allowances, separate calculations shall be made for service performed under each contract.

8. The percentage of final compensation to be provided for each year of credited prior and current service as a classic local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full).

9. The percentage of final compensation to be provided for each year of credited prior and current service as a new local miscellaneous member shall be determined in accordance with Section 7522.20 of said Retirement Law (2% at age 62 Full).

10. The percentage of final compensation to be provided for each year of credited prior and current service as a classic local safety member entering membership in the safety classification on or prior to January 8, 2011, shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full).

11. The percentage of final compensation to be provided for each year of credited current service as a classic local fire member entering membership for the first time in the fire classification after January 8, 2011, shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full).

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12. The percentage of final compensation to be provided for each year of credited current service as a classic local police member entering membership for the first time in the police classification after January 8, 2011, shall be determined in accordance with Section 21363.1 of said Retirement Law (3% at age 55 Full).

13. The percentage of final compensation to be provided for each year of credited prior and current service as a new local safety member shall be determined in accordance with Section 7522.25(d) of said Retirement Law (2% at age 57 Full).

14. Public Agency elected and elects to be subject to the following optional provisions:
a. Section 20042 (One-Year Final Compensation) for classic members only.
b. Section 20965 (Credit for Unused Sick Leave).
c. Section 21574 (Fourth Level of 1959 Survivor Benefits). d. Section 20903 (Two Years Additional Service Credit). e. Section 20475 (Different Level of Benefits): Section 21362 (2% @ 50 Full formula) is applicable to classic local fire members entering membership for the first time with this agency in the fire classification after January 8, 2011.

Section 21363.1 (3% @ Full formula) is applicable to classic local police members entering membership for the first time with this agency in the police classification after January 8, 2011. f. Section 20516 (Employees Sharing Additional Cost):

From and after February 28, 2015, and until July 4, 2015, 2% for local miscellaneous members and local police members in the Seaside Police Officers’ Association.

From and after July 4, 2015, 3% for local miscellaneous members and local police members in the Seaside Police Officers’ Association.

From and after January 14, 2017, 3% for local fire members in the Seaside Firefighters Association.

From and after April 8, 2017, 3% for local safety members in the Seaside Public Safety Managers Association.

From and after the effective date of this amendment to contract, 3% for local miscellaneous members in the Seaside Management and Supervisory Employees’ Association.

Packet Page 249
From and after the effective date of this amendment to contract, 3% for local miscellaneous members in the Unrepresented Executive Managers group.

From and after the effective date of this amendment to contract, 3% for local miscellaneous members in the Unrepresented Confidential Exempt Employees group.

From and after the effective date of this amendment to contract, 3% for local miscellaneous members in the Unrepresented Unclassified Exempt Employees group.

From and after the effective date of this amendment to contract, 3% for local fire members in the Unrepresented Executive Managers group.

From and after the effective date of this amendment to contract, 3% for local police members in the Unrepresented Executive Managers group.

15. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on February 22, 1975. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834.

16. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System.

17. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 21574 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local miscellaneous members and local safety members.
b. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law.

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c. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law.

18. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law.

19. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by direct payments between the employee and the Board.

B. This amendment shall be effective on the _____ day of _______________, ______.

BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM CITY OF SEASIDE
BY____________________________________ BY______________________________

MELODY BENAVIDES, CHIEF PRESIDING OFFICER

PENSION CONTRACTS AND PREFUNDING

PROGRAMS DIVISION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
________________________________
Witness Date
Attest:
________________________________
Clerk
AMENDMENT CalPERS ID #1781333436
PERS-CON-702A
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ORDINANCE NO. xxxx

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEASIDE AUTHORIZING AN AMENDMENT TO THE

CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF SEASIDE AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM.

The City Council of the City of Seaside does ordain as follows:

Section 1.

That an amendment to the contract between the City Council of the City of Seaside and the Board of Administration, California Public Employees' Retirement System is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit, and by such reference made a part hereof as though herein set out in full.

Section 2.

The Mayor of the City Council is hereby authorized, empowered, and directed to execute said amendment for and on behalf of said Agency.

Section 3.

This Ordinance shall take effect 30 days after the date of its adoption, and prior to the expiration of 15 days from the passage thereof shall be published at least twice in the Monterey County Weekly, a newspaper of general circulation, published and circulated in the Monterey County and thenceforth and thereafter the same shall be in full force and effect.

ADOPTED AND APPROVED this ______________ day of
__________________________________________, ______________. _________________________________________
Ian N. Oglesby, Mayor
City of Seaside
Attest:
_______________________________
Dominique L. Davis, City Clerk
City of Seaside
Packet Page 252

CITY OF SEASIDE

STAFF REPORT
Item No.: 9.D.

TO: City Council
FROM: Jaime M. Fontes, City Manager
BY: Andrew Myrick, Economic Development & Community Planning Manager DATE: December 1, 2022
SUBJECT: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEASIDE EXTENDING URGENCY ORDINANCE 2011 AMENDING
TITLE 17 (ZONING ORDINANCE CODE) OF THE CITY OF
SEASIDE MUNICIPAL CODE TO ADD CHAPTER 17.13 (SENATE
BILL 9 DUPLEXES AND PARCEL MAPS FOR URBAN LOT SPLITS)
TO IMPLEMENT RECENT HOUSING BILLS (ROLL-CALL FOURFIFTHS VOTE)

RECOMMENDATION
Approve an Ordinance extending Urgency Ordinance 2011 amending Title 17 of the Seaside Municipal Code.

BACKGROUND
On September 16, 2021, Governor Newsom signed Senate Bill 9 (SB 9) into law, substantially altering low-density, single-family zoning throughout the state. The most significant component of this bill is that it requires ministerial approval of one-time, twolot subdivision and/or development projects for up to two (2) units per lot. The proposed subdivision or development project is required to meet certain qualifying location and development criteria. Although the new law supersedes varying City of Seaside regulations regarding subdivision and development standards, SB9 preserves some authority for local agencies to enact regulations through the adoption of new objective subdivision and zoning regulations. The law became effective on January 1, 2022.

On December 2, 2021, staff presented a summary of the new state regulations to the City Council. Following discussion of the issues surrounding the new law, the City Council directed staff to prepare an Urgency Ordinance which would allow the City of Seaside to establish regulations prior to January 1, 2022. On December 16, 2021, the Packet Page 253

Item No. 9.D. Page 2 of 4
Council adopted Urgency Ordinance 2011, which established interim standards to comply with the requirements of SB9 while the City evaluated a long-term regulatory program for SB9 projects. This Urgency Ordinance was effective for 45 days. On January 27, 2022, the Council approved Urgency Ordinance 2012, which extended the effective period of Urgency Ordinance 2011 by ten months and fifteen days through December 12, 2022.

The proposed Urgency Ordinance would extend the effectiveness of the provisions of Urgency Ordinance 2011 through December 12, 2023. City of Seaside staff is currently developing an update to the City's General Plan and anticipates that said update will be completed by the end of 2023. As a part of this process, staff is also working on a complete rewrite of the City's Zoning Code to implement the policies set forth in the new General Plan. This rewrite will, among other things, examine the implementation of SB9 more comprehensively. Further, it will provide a process which will enable public feedback on proposed provisions. By extending the time for Urgency Ordinance 2011, staff will have additional time to incorporate the provisions into a comprehensive plan for future development in the City that is subject to public review and feedback prior to Council consideration. Staff believes it has the ability and capacity to bring forward a long-term program implementing SB9 before the expiration of the proposed Urgency Ordinance.

ANALYSIS
As noted above, the purpose of the Urgency Ordinance is to retain previously-adopted objective standards and regulations to govern the subdivision of parcels and the development of new dwellings on residential parcels in the City of Seaside that are subject to recently passed Senate Bill 9. These regulations will result in the orderly subdivision and development of parcels while ensuring that the new units are consistent with the character of the City of Seaside and minimize impacts with regards to public infrastructure and public safety. The regulations establish what types of parcels are eligible for a lot-split, the size and shape of the parcels, the scale of development, and design standards for proposed dwellings.

Contents of Urgency Ordinance 2011
Urgency Ordinance 2011 established an applicable set of regulations to allow for the ministerial review of SB 9 projects in a comprehensive and thorough manner while being consistent with the City of Seaside’s character and its current General Plan. A copy of the text of the Zoning Code Amendment adopted by Urgency Ordinance 2011 is attached to this Report for reference.

The Zoning Code regulations contain the following sections:
 Purpose and Intent.
 Definitions. – Provides definitions and clarification for commonly used terms in the new code.

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Item No. 9.D. Page 3 of 4
 Eligibility of properties for a subdivision. – Establishes the types of properties that cannot be subdivided due to the following: a previous SB 9 subdivision; historical designation; demolition of existing affordable housing or rental unit; existing natural hazards; environmental constraints; parcels encumbered with an open space easement; farmlands; wetlands; hazardous waste sites. These criteria are taken primarily from the state law.
 Objective standards and requirements for a subdivision. – Provides objective requirements for the ministerial evaluation of a two-lot subdivision by regulating minimum lot area, parcel width, access, grant of easements, utilities, and deed restrictions on further subdivisions and the provision of income restricted units.  Objective standards and requirements for dwelling units on a parcel that is not being subdivided. – Continues to use the City’s current formulas to determine maximum floor area ratio (FAR) for the existing parcel, allows for 4 units on the parcel, requires a signed affidavit that the owner intends to live on the parcel for 3 years, and places limits on SB 9 units with a maximum permitted floor area of 800 square feet for new SB 9 units, one parking space, 24-foot height limit, and rental limitations.
 Objective standards and requirements for dwelling units on a subdivided parcel. – Similar to the previous section but strictly limits the number of units to 2 (no ADU or JADU) and limits the floor area of any new SB9 units to a maximum of 800 square feet. The regulations also state that all new units are affordable for very low and low-income residents.
 Objective building design requirements for all SB 9 projects. – Provides objective standards for the development of dwelling units on all SB 9 projects. Including materials types, exterior colors, lighting, fire sprinklers, and location of structures.
 Permit review process. – Requires ministerial review of all projects.  Fees.
 Owner Occupancy Compliance.
 Environmental Clearance (CEQA). – The adoption of this Urgency Ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to the general rule described in Section 15061(b)(3) of the CEQA Guidelines, because the ordinance does not have the potential to cause a significant effect on the environment.

CONCLUSION
This temporary Urgency Ordinance retains a thorough and complete set of regulations that will allow staff to continue to comprehensively review all new SB 9 related development applications and enforce objective standards that retain the character of the community. In addition, it ensures that the City of Seaside remains compliant with current state law. This ordinance will also provide the basis for developing permanent regulations through future public hearings with the Planning Commission, where residents can provide additional public input and ultimately be reviewed and adopted by Packet Page 255

Item No. 9.D. Page 4 of 4
the City Council. Staff will also monitor and track the number of projects submitted under this article and provide updates to the City Council as requested.

FISCAL IMPACT
This item is not anticipated to have any signficant impact on the City of Seaside.

ATTACHMENTS

1. SB9 Urgency Ordinance - One Year Ext Dec 2022

2. Urgency Ordinance 2011 Zoning Code Text
Reviewed for Submission to the City Council by:
_________________________________________
Jaime M. Fontes, City Manager
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ORDINANCE ____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SEASIDE EXTENDING URGENCY ORDINANCE 2011 AMENDING
TITLE 17 (ZONING ORDINANCE CODE) OF THE CITY OF
SEASIDE MUNICIPAL CODE TO ADD CHAPTER 17.13 (SENATE
BILL 9 DUPLEXES AND PARCEL MAPS FOR URBAN LOT SPLITS)

TO IMPLEMENT RECENT HOUSING BILLS
WHEREAS, this Ordinance is adopted as an extension to Urgency Ordinance 2011 pursuant to Government Code Section 65858. The facts constituting the continued urgency are as follows:
a) On or about September 16, 2021, Governor Newsom signed into law Senate Bill 9 (“SB 9”), entitled the “California Home Act”, an act to amend Section 66452.6 of and to add Sections 65852.21 and 66411.7 to the Government Code relating to land use; and
b) On or about December 16, 2021, the City Council adopted Urgency Ordinance 2011 to implement the new state legislation SB 9 pursuant to Government Code 65858; and
c) On or about January 27, 2022, the City Council adopted Urgency Ordinance 2012 to extend Urgency Ordinance 2011 by an additional 10 months and 15 days which extended Urgency Ordinance 2011 to and through December 12, 2022; and
d) On or about January 6, 2022, Urgency Ordinance 2011 was published in the Monterey County Weekly; and
e) On or about <DATE>, notice of this public hearing to extend Urgency Ordinance 2011 was published in the Monterey County Weekly; and
f) The findings set forth in Urgency Ordinance 2011 (herein attached as Exhibit A) remain true and correct and the City Council hereby finds that to be the case; and
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g) During the past year, Staff has set up a process for Planning and Engineering department staff to receive SB 9 related project applications and has published Seaside’s Senate Bill 9 Duplex and Urban Lot Split Eligibility Checklist and related guidelines on the City’s website and advertised it to the public via social media sites. Further, staff has continued to work on the City of Seaside’s 2040 General Plan, including a new Housing Element, in preparation for adoption no later than December 2023; and
h) Planning staff will soon begin public outreach related to the General Plan update, which will allow for community input to be incorporated into the General Plan and enable the City to incorporate this feedback and develop policies to further implement SB 9 in a manner that will allow for orderly, planned development while protecting the needs of the community; and
i) The City Council finds that creating a set of regulations without properly incorporating them into the City’s long-range plans has the potential to permanently damage the community, since rampant and unplanned development and lots splits will not only be aesthetically displeasing and out of harmony with the character of this community so as to constitute visual blight which reduces the quality of life within the community to the extent that the overall public health is detrimentally affected, but also has the potential of creating public safety issues by increasing parking demand on already impacted streets and forcing residents, including school-age children, to travel further to reach parked vehicles; and j) The City Council finds that the public health need of the community was met by the immediate adoption of Urgency Ordinance 2011 adding Chapter 17.13 of the Seaside Municipal Code (SMC) as objective standards; and k) Consideration of and recommendations for the vast amount of options for objective standards and related code amendments will be undertaken by the Planning Commission (Commission) as a part of the General Plan Update process prior to action by the City Council. The Council therefore declares that Urgency Ordinance 2011 be extending in accordance with the provisions of Section 65858; and
l) California Government Code Section 65858 authorizes the City to extend an urgency measure by a four-fifths (4/5ths) vote where necessary to protect the public health, safety, and welfare without following the procedures otherwise required prior to adoption of a zoning ordinance; and
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m) During the effective term of the extension of the urgency ordinance, City staff intends to undertake further study and present its recommendations to the City Council regarding permanent revisions to the City’s regulatory scheme pertaining to residential development and subdivision projects and consistent with the goals and policies of the City’s General Plan, California Planning and Zoning Law, and the provisions of California Government Code Section 65858.

WHEREAS, The Council declares that this extension of Urgency Ordinance 2011, which is effective immediately, is necessary as an emergency measure to preserve the public peace, health, or safety, by adopting objective standards for the approval of two-unit development and urban lot splits on single-family zoned lots and related code amendments.

WHEREAS, pursuant to Government Code Sections 66411.7(n) and 65852.21(j), an ordinance adopted to implement the requirements of SB 9 shall not be considered a project under CEQA. The proposed ordinance is therefore exempt from CEQA.

NOW, THEREFORE, the City of Seaside City Council hereby ordain as follows:

SECTION I. FINDINGS.

Based on the entirety of the record as described above, the City of Seaside City Council for the hereby makes the following findings:

1. All of the facts and recitals above are true, correct, incorporated herein and made a part hereof such that there exists a current and immediate threat to the public health, safety, and welfare requiring immediate implementation of an urgency ordinance to regulate residential development projects, subdivisions and site developments in the City of Seaside.

2. The extension of Urgency Ordinance 2011, and its concomitant addition of Chapter 17.13 to the Seaside Municipal Code, is necessary for the immediate preservation of the public peace, health, and safety because the subdivision of lots and design and construction of single-family residences, duplexes, and accessory dwelling units pursuant to SB 9 without adequate standards can cause significant and permanent negative impacts, including land use and site development conflicts and incompatibilities impacting public safety, privacy, and acoustic and aesthetic impacts Packet Page 259

which would negatively impact the public welfare and the unique quality and character of the City. The City is studying, and intends to complete within a reasonable period of time, the establishment of objective standards and to update its current codes as a part of its nearly complete General Plan Update, including its Housing Element.

3. Based on the recent amendments to state law with respect to the regulation of SB 9 units and lot subdivisions, there is a need for the City to update its current codes. The City is studying the adequacy of its existing ordinances and the potential need to adopt or amend its regulations establishing objective standards to address SB 9 units and lot subdivisions. The City Council and the people of Seaside require a sufficient and reasonably limited time to consider and study legally appropriate and reasonable policies regulating duplex development and urban lot splits.

4. This Ordinance is not subject to CEQA as it is not a project pursuant to Government Code section 66411.7(n) and 65852.21(j).

SECTION II. AMENDMENT.

This Ordinance extends Urgency Ordinance 2011, and the inclusion of Chapter

17.13 entitled Objective Standards for Qualified Senate Bill 9 Subdivisions and Development Projects is hereby added to Title 17 of the City of Seaside Municipal Code.

SECTION III. CONFLICTING PROVISIONS DEEMED INEFFECTIVE
DURING ORDINANCE OPERATIVE PERIOD.

Any provision of the Municipal Code relating to residential development and lot subdivision standards which is in conflict with this ordinance is hereby deemed ineffective during the ordinance’s operative period.

SECTION IV. SEVERABILITY.

If any provision of this ordinance or Urgency Ordinance 2011 as extended by Ordinance 2012 or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of this ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this ordinance are severable. The City Council of the City of Seaside hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase Packet Page 260

hereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable.

SECTION V. EFFECTIVE DATE AND PUBLICATION.

This ordinance is an extension to an urgency ordinance enacted under California Government Code 65858. This extension to the urgency ordinance is effective upon adoption by a four-fifths (4/5) vote of the City Council.

This urgency ordinance shall be of no further force and effect twelve (12) months from its date of adoption.

INTRODUCED, PASSED AND ADOPTED at a regular meeting of the City Council of the City of Seaside, State of California, held on the 1st day of December 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
_______________________________
Ian N. Oglesby, Mayor
ATTEST:
______________________________
Dominique L. Davis, City Clerk
APPROVED AS TO FORM:
______________________________
Sheri L. Damon, City Attorney
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Ordinance 2011 - Exhibit A Page 1
Title 17. Zoning Ordinance Code
Chapter 17.13 Residential Zones
Objective Standards for Qualified
Senate Bill 9 Subdivisions and
Development Projects

17.13.010 Purpose and Intent.

The purpose of this Chapter is to establish objective standards and regulations to govern the development of qualified Senate Bill 9 subdivisions and development projects on single family residential zoned properties within the City of Seaside. The establishment of these regulations will result in the orderly subdivision and development of qualified Senate Bill No. 9 (2021) (“SB 9”) projects while ensuring that the new units are consistent with the character of the City and do not create any significant impacts with regards to public infrastructure or public safety. The regulations are established to implement the requirements under California Government Code Sections 65852.21 and 66411.7.

17.13.020 Definitions.

For purposes of this Chapter, the following definitions apply:
(a) “Accessory dwelling unit” or “ADU”, means an attached or a detached residential dwelling unit that provides complete independent living facilities for one or more persons and is located on a parcel with a proposed or existing primary residence.

It shall include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-family or multi-family dwelling is or will be situated. An accessory dwelling unit also includes an efficiency unit and a manufactured home, as defined in Section 18007 of the Health and Safety Code. (b) “Dwelling unit” includes an ADU, JADU, a primary dwelling unit, and a SB 9 dwelling unit.
(c) “Junior accessory dwelling unit” or “JADU”, or “efficiency unit”, means a dwelling unit that is up to 500 square feet in size and contained entirely within an existing primary dwelling unit that provides an efficiency kitchen and a separate exterior entrance, and may include separate sanitation facilities, or may share sanitation Packet Page 262
Ordinance 2011 - Exhibit A Page 2
facilities with the existing structure.
(d) “Conservation Easement” means restrictive covenants that run with the land and bind upon successive owners that protects against future development such as preservation of open space, scenic, riparian, historical, agricultural, forested, or similar conditions. Open space and riparian easements are included in this definition.
(e) “Existing dwelling unit” means a primary dwelling unit or other dwelling unit on a parcel that exists prior to any voluntary demolition or reconstruction or remodel where more than 50% of the exterior wall framing has been removed or altered.

Any existing dwelling unit where more than 50% of the exterior wall framing has been removed is considered a new dwelling for purposes of this Chapter. (f) “Panhandle” means the narrow strip of land on a flag lot, typically less than 30 feet in width, that provides access to a public or private road. “Primary dwelling unit” means a single-family residence on the parcel and is the larger of the two if there is an existing accessory dwelling unit on the parcel. (g) “Private Road” means a road, way, or street in private ownership and under private maintenance, not offered for dedication as a public road, way, place, or street, which affords the principal means of access to three or more lots or parcels which do not have frontage on a public street.
(h) “SB 9 dwelling unit” or “SB 9 unit” means a dwelling unit that is developed using the provisions in this Chapter and the provisions identified in California Government Code Sections 65852.21 and 66411.7.
(i) “Objective zoning standards,” “objective subdivision standards,” and “objective design review standards” mean standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal.

These standards may be embodied in alternative objective land use specifications adopted by a local agency, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances.

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Ordinance 2011 - Exhibit A Page 3

17.13.030 Eligibility of properties for a subdivision.

The following parcels are not eligible for a subdivision under this Chapter:
(a) Any parcel that was established through a prior exercise of a subdivision as provided for in this Chapter.
(b) Any parcel that is not located within existing single family residential zoning (R8 and R-12). (c) Any parcel proposing to be subdivided by a person or any person acting in concert with that person who has previously subdivided an adjacent parcel using the provisions of this Chapter. For the purposes of this Chapter, “any person acting in concert” with the owners includes, but is not limited to, an individual or entity operating on behalf of, acting jointly with, or in partnership or another form of cooperative relationship with, the property owner.
(d) Any parcel located within an historic district or included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code, or a parcel within a site that is designated or listed as a City of Seaside or Monterey County landmark or historic property or district pursuant to a City of Seaside or Monterey County ordinance.
(e) Any parcel where the subdivision would require the demolition or alteration of any of the following types of housing:
(1) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
(2) Housing that is subject to any form of rent or price control through a public entity's valid exercise of its police power.
(3) A parcel or parcels on which an owner of residential real property has exercised the owner's rights under Government Code section 7060 et seq. to withdraw accommodations from rent or lease within 15 years before the date that the development proponent submits an application. (4) Housing that has been occupied by a tenant in the last three years. (f) Any parcel located with a severe earthquake hazard zone as designated on the Geotechnical and Seismic Hazard Zones Map for the City of Seaside unless the Packet Page 264
Ordinance 2011 - Exhibit A Page 4
development complies with applicable seismic protection building code standards adopted by the California Building Standards Commission under the California Building Standards Law (Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code), and by the City’s Building Department pursuant to Government Code section 8875 et seq.
(g) Any parcel fully encumbered with a conservation easement or identified for conservation in an adopted natural community conservation plan pursuant to the Natural Community Conservation Planning Act (Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code), habitat conservation plan pursuant to the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), or other adopted natural resource protection plan. (h) Any parcel that is designated prime farmland or farmland of statewide importance, as defined pursuant to United States Department of Agriculture land inventory and monitoring criteria, as modified for California, and designated on the maps prepared by the Farmland Mapping and Monitoring Program of the Department of Conservation, or land zoned or designated for agricultural protection or preservation by a local ballot measure.
(i) Any parcel containing wetlands, as defined in the United States Fish and Wildlife Service Manual, Part 660 FW 2 (June 21, 1993), that would prevent the development of the parcel.
(j) Any parcel within a very high fire hazard severity zone, as determined by the Department of Forestry and Fire Protection pursuant to Government Code Section 51178, or within a high or very high fire hazard severity zone as indicated on maps adopted by the Department of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code. This subsection does not apply to parcels that have adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development.
(k) Any parcel with a hazardous waste site that is listed pursuant to Government Code Section 65962.5 or a hazardous waste site designated by the Department of Toxic Substances Control pursuant to Section 25356 of the Health and Safety Packet Page 265
Ordinance 2011 - Exhibit A Page 5
Code, unless the State Department of Public Health, State Water Resources Control Board, or Department of Toxic Substances Control has cleared the site for residential use.
(l) Any parcel within a special flood hazard area subject to inundation by the 1 percent annual chance flood (100-year flood) as determined by the Federal Emergency Management Agency (FEMA) in any official maps published by the FEMA. However, a subdivision and/or development project may be located on a parcel described in this subsection if (1) the parcel is otherwise eligible for approval under the provisions of this Chapter and (2) the project applicant is able to satisfy all applicable federal qualifying criteria demonstrating either of the following are met:
(1) The site has been subject to a Letter of Map Revision prepared by the FEMA and issued to the City.
(2) The site meets FEMA requirements necessary to meet minimum flood plain management criteria of the National Flood Insurance Program pursuant to Part 59 (commencing with Section 59.1) and Part 60 (commencing with Section 60.1) of Subchapter B of Chapter I of Title 44 of the Code of Federal Regulations.
(m) Any parcel within a regulatory floodway as determined by the FEMA in any official maps published by the FEMA, unless the subdivision and/or development project has received a no-rise certification in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations.
(n) Any parcel containing habitat for protected species identified as candidate, sensitive, or species of special status by state or federal agencies, fully protected species, or species protected by the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game Code) or Environmentally Sensitive Habitat Areas (ESHA) in the Coastal Zone.

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Ordinance 2011 - Exhibit A Page 6

17.13.040 Objective standards and requirements for a subdivision.

The following objective standards and regulations apply to all subdivisions under this Chapter:
(a) A Parcel Map and a Subdivision Application shall be submitted to the City for all proposed subdivisions, including but not limited to any ownership and rental questionnaires and affidavits.
(b) The subdivision shall create no more than two new parcels of approximately equal area provided that one parcel shall not be smaller than 40 percent of the lot area of the original parcel proposed for subdivision. In no instance shall any resulting parcel be smaller than 1,200 square feet in area. (c) Existing parcels shall be split approximately perpendicular to the longest contiguous property line. However, this requirement shall be waived if the subdivision applicant demonstrates that it would prohibit a subdivision that otherwise meets the requirements of subsection (b).
(d) The subdivision shall not result in a new parcel with an average width that is less than the average width of the original parcel. Any panhandle on a flag lot shall not be used to calculate the average width. However, this requirement shall be waived if the subdivision applicant demonstrates that it would prohibit a subdivision that otherwise meets the requirements of subsection (b). (e) The front parcel line of any newly created parcel shall be the parcel line that is closest to or parallel to the public or private road that serves the parcel. (f) The property owner for a lot served by a private road or common driveway shall, prior to issuance of a building permits, record an appropriate deed restriction guaranteeing the following to adjoining property owners who utilize the private road or common driveway for the primary access to their lot(s): a) a reciprocal ingress/egress easement; and b) participation in a reciprocal maintenance agreement. A 25-foot-wide panhandle (for a flag lot) or an ingress/egress easement and maintenance agreement shall be provided for all new parcels that do not have direct frontage on a public or private road. Driveway access to the new parcels shall be shared unless the new driveways are a minimum of 100 feet apart.

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Ordinance 2011 - Exhibit A Page 7
(g) Easements for access and public and private utilities shall be provided for any newly created parcel that does not front on a public or private street. (h) A note shall be placed on the parcel map that each building shall have separate meters.. (i) All newly created parcels shall be connected to public sewer. (j) Any existing structure must meet the setback requirements in section 17.13.060 from a newly proposed property line unless by doing so would prohibit the creation of a parcel that otherwise meets the requirements of this Chapter. (k) The subdivision is subject to all impact or development fees related to the creation of a new parcel and shall provide proof that all school fees, water or other impact fees have been paid.
(l) Upon receipt of a subdivision application using the provisions of this Chapter, the City shall notify all owners and occupants within a 500-foot radius from the subject parcel that a parcel map has been filed with the City of Seaside. (m) A note on the parcel map and a recorded deed restriction in a form approved by the City Attorney’s Office shall be applied to all newly created parcels indicating that the parcel was split using the provision of this Chapter, no further subdivision of the parcels is permitted and the parcels may only be used for residential use.

In addition, the deed restriction shall stipulate that all new units developed on the new parcels shall be for residential use only and income restricted to low and very low-income households based on the most recent Monterey County Area Median Income (AMI) levels. A timeshare or short term rental of less than 30 days is not considered residential use.
(n) The parcel map shall include a note stating the requirement for off-street parking of up to one space per unit, except if the parcel is located within ½ mile walking distance of either a high-quality transit corridor as defined in subdivision (b) of Section 21155 of the Public Resources Code or a major transit stop as defined in Section 21064.3 of the Public Resources Code.
(o) Prior to the recordation of the parcel map, the applicant shall sign and record an affidavit stating that the applicant intends to reside in one of the proposed or existing primary dwelling units or SB 9 units for three years from the date of the approval of the subdivision. This requirement shall not apply if the applicant is a Packet Page 268
Ordinance 2011 - Exhibit A Page 8
community land trust or a qualified nonprofit corporation as provided in Sections 402.1 and 214.15 of the Revenue and Taxation Code.

17.13.045Map Extension. Any parcel map created pursuant to the provisions of this Chapter shall be subject to extension in compliance with the provisions of Government Code section 66452.6.

17.13.050 Objective standards and requirements for new dwelling units on a parcel that is not being subdivided.

The following objective standards and regulations apply to all new SB 9 development on a parcel that is not being subdivided:
(a) Notwithstanding Government Code Section 65852.2 or 65852.22 or any provision of this Chapter, no accessory dwelling unit or a junior accessory dwelling unit shall be permitted on any lot in single-family residence district (R-8 or R-12) if a lot split has been approved pursuant to Section 17.13.040 and two residential units have been approved for construction pursuant to this chapter 17 (Government Code Section 65852.21).
(b) The maximum floor area ratio (FAR) permitted on the parcel shall be determined as defined in Section 17.12.050 of the Municipal Code unless application of that FAR prohibits a 800 square foot SB 9 unit, in which case, additional floor area shall be allowed.
(c) The maximum floor area of an SB 9 unit shall be 800 square feet. Basements and bunkers are not permitted.
(d) Setbacks: The minimum setback for any new SB 9 dwelling unit shall be 15 feet from the front parcel line and four (4) feet from the side and rear parcel lines.

Exception:

A new SB9 dwelling unit shall not be required to meet the setbacks above if it replaces a non-conforming existing structure.
(e) The maximum height of all new SB 9 dwelling units shall be no higher than the height of the primary dwelling, but shall not exceed 24 feet and shall not impede 100% of an ocean or mountain viewshed of any property owners within 500’ radius of the property. In the case where viewshed or height limitations preclude the minimum sized SB 9 unit, the unit shall be placed in the least impactful Packet Page 269
Ordinance 2011 - Exhibit A Page 9
location.
(f) One uncovered parking space, located a minimum of 5-feet from the front parcel line abutting the street frontage and one (1) feet from the side and rear parcel lines, is required for each dwelling unit, except as provided in Chapter 17.34 of the Seaside Municipal Code. The parking space shall be at least 8 feet wide by 16 feet deep, except where such project is located within ¼ mile of a transit stop.
(g) A solid (no openings) one-hour rated fire wall is required between any SB 9 unit and the primary dwelling unit or an ADU.
(h) Driveway access to all new units shall be compliant with the City of Seaside Fire Department standard details and specifications for driveways and turnarounds. (i) The owner shall sign and record an affidavit placing a covenant that will run with the parcel to confirm that the owner will reside in either the primary dwelling unit or an SB 9 unit on the parcel for three years from the issuance of an SB 9 dwelling unit’s Certificate of Occupancy and closing of all construction permits pertaining to the parcel.
(j) All newly created dwelling units shall be connected to public sewer. (k) All outdoor patios, covered patios, decks, and other hardscape shall meet the City’s minimum 5-foot front yard and 4-foot side and rear yard setbacks. (l) No dwelling unit shall be rented for a period of less than thirty (30) days and cannot be occupied as a short-term rental unit, as defined under section

17.52.251.
(m) An SB 9 dwelling unit may be rented separately from the primary dwelling unit. (n) Development projects pursuant to this section shall be subject to all impact or development fees related to the development of a new dwelling unit.

17.13.060 Objective standards and requirements for dwelling units on a parcel subdivided pursuant to this chapter article.

The following objective standards and regulations apply to all development on a parcel that has been subdivided or concurrently subdivided under the provisions of this chapter:
(a) The following development is permitted on the parcel:

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Ordinance 2011 - Exhibit A Page
10 (1) A primary dwelling unit and an SB 9 unit; or
(2) If there is an existing primary dwelling unit and ADU on the property, then no further development is permitted for that property.
(b) The maximum floor area ratio (FAR) permitted on the parcel shall be determined as defined in Section 17.12.050 of the Municipal Code unless application of that FAR prohibits a 800 square foot SB 9 unit, in which case, additional floor area shall be allowed. Basements and bunkers are not permitted. (c) Setbacks: The minimum setback for any new primary dwelling unit or SB 9 dwelling unit shall be 15 feet from the front parcel line and four (4) feet from the side and rear parcel lines.

Exception:

A new SB9 dwelling unit shall not be required to meet the setbacks above if it replaces a non-conforming existing structure.
(d) The maximum height of all new SB 9 dwelling units shall be no higher than the height of the primary dwelling, but shall not exceed 24 feet and shall not impede 100% of an ocean or mountain viewshed of any property owners within 500’ radius of the property. In the case where viewshed or height limitations preclude the minimum sized SB 9 unit, the unit shall be placed in the least impactful location. ...
(e) One uncovered parking space, located a minimum of 5-feet from the front property line abutting the street frontage and One (1) feet from the side and rear property lines, is required for each new dwelling unit, except as provided in Chapter 17.34 of the Seaside Municipal Code. The parking space shall be at least 8 feet wide by 16 feet deep. All parking required for an existing primary dwelling on the parcel shall be retained.
(f) If the two SB 9 dwelling units are configured as a duplex on a parcel, a solid onehour fire wall between the units is required. In addition, a deed restriction in a form approved by the City Attorney’s Office shall be recorded stipulating that the duplex shall be maintained as two separate units.
(g) If the parcel is fully developed with the number of units permitted under section

17.13.060 above, then the applicant or property owner shall record a deed Packet Page 271
Ordinance 2011 - Exhibit A Page
11 restriction in a form approved by the City Attorney’s Office stipulating that no further development of the parcel is permitted.
(h) Driveway access to all new units shall be compliant with the City of SeasideFire Department standard details and specifications for driveways and turnarounds. (i) If the proposed dwelling units are developed subsequent to a subdivision completed pursuant to this Chapter, the owner shall sign and record an affidavit placing a covenant that will run with the parcel to confirm that the owner intends to reside in either the primary dwelling unit or an SB 9 unit on the parcel for three years from the issuance of an SB 9 dwelling unit’s Certificate of Occupancy and closing of all construction permits pertaining to the parcel. (j) All newly created dwelling units shall be connected to public sewer. (k) All outdoor patios, covered patios, decks, and other hardscape shall meet the minimum 5-foot front yard and 4-foot side and rear yard setbacks. (l) No dwelling unit shall be rented for a period of less than thirty (30) days and cannot be occupied as a short-term rental unit, as defined under section

17.52.251.
(m) An SB 9 dwelling unit may be rented separately from the primary dwelling unit. (n) Any development constructed in accordance with this section shall be subject to all impact or development fees related to the development of a new dwelling unit.

17.13.070 Objective building and design requirements for all SB 9 dwelling units.

All SB 9 dwelling units shall be reviewed and approved without discretionary review or a hearing. As part of the ministerial approval, the following objective design requirements shall be confirmed:
(a) The design of the dwelling unit shall be as follows:
(1) For a detached unit, the exterior materials and design shall match the design of any existing primary dwelling unit on the property through the use of the same exterior wall materials, identified color tones, window types, door and window trims, roofing materials and roof pitch. (2) For an attached unit, the exterior materials, windows and other architectural Packet Page 272
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12 features shall match the existing structure by employing the same building form, color tones, window design, door and window trims, roofing materials and roof pitch.
(b) Exterior building lighting shall be fully shielded and downward facing and limited to one exterior light fixture per exterior doorway, or the minimum necessary to comply with the California Building Standards Code.
(c) All new dwelling units are required to have fire sprinklers. (d) All portions of the SB 9 dwelling unit, include eave overhangs and other projections, shall meet the required setbacks as set forth in this Chapter. (e) Roof decks are permitted on SB 9 dwelling units.
(f) Structures shall not be located in the following locations:
(1) In areas encumbered by a recorded easement, including but not limited to, public utility easements, conservation easements, access easements, pedestrian pathway easements and open space easements;
(2) In areas within the critical root zone of any tree with a diameter of four (4) feet or greater measured at four (4) feet above grade. Review and approval of an arborist report prepared by a licensed or consulting arborist is required if a structure is proposed within the critical root zone of a heritage oak tree.
(g) All electrical and utility services to a new dwelling unit shall be undergrounded. (h) Notwithstanding the foregoing subsections, any development or design standards that physically precludes an SB 9 dwelling unit from being 800 square feet in floor area shall be waived.

17.13.070 Compliance with California Coastal Act. All projects seeking to either develop units or subdivide shall comply with the California Coastal Act and shall seek a coastal development permit. No public hearing shall be held for any such coastal development permit in accordance with Government Code section 66411.7.

17.13.080 Ineligible for Condominium Conversions. Any dwelling unit approved pursuant to this Chapter shall be ineligible for conversion to a condominium, community apartment, or stock cooperative project. Any application for a tentative subdivision map or tentative parcel map for a residential condominium conversion of a unit created pursuant Packet Page 273
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13 to this Chapter shall be denied.

17.13.090 Ministerial Reviews and Approvals. Any application submitted pursuant to the provisions of this Chapter for either a dwelling or urban lot split shall be reviewed and approved ministerially, if it meets the requirements of the Government Section 66411.7 and conforms to all the applicable requirements of this Chapter. Notwithstanding such review, an application, may be denied if the building official makes a written finding, based upon a preponderance of the evidence, that the proposed housing development project would have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

17.13.100 Consistency. All SB 9 dwelling units shall comply with, to the extent permissible, and not be in conflict with the specific provisions of this Chapter with the provisions of Chapter 17.12 related to residential development.

17.13.200 Permit review process.

All applications for lot splits and new development using this Chapter shall be ministerially approved without public hearings or discretionary review.

17.13.300 Effective Date. This Chapter shall remain in effect until such time as Government Code Section 65842.21 is repealed or superseded or its requirements for ministerial approval of housing development projects are materially amended, whether by legislation or initiative, or are held to be unenforceable by a court of competent jurisdiction, at which time this Section shall become null and void.

17.13.400 Fees.

The City Council may establish and set by resolution all fees and charges, consistent with Government Code sections 65852.2 and 65852.22, and related provisions, as may be necessary to effectuate the purpose of this Chapter.

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CITY OF SEASIDE

STAFF REPORT
Item No.: 10.A.

TO: City Council
FROM: Jaime M. Fontes, City Manager
BY: Nisha Patel, Public Works Director/City Engineer
DATE: December 1, 2022
SUBJECT: ADOPT A RESOLUTION APPROVING CONCEPT PLANS FOR PHASES 2 AND 3 OF THE CUTINO PARK IMPROVEMENTS PART
2 PROJECT

RECOMMENDATION
Adopt a resolution approving concept plans for Phases 2 and 3 of Cutino Park Improvements Part 2 Project. Or, alternatively, the City Council could provide other options for Phases 2 and 3.

BACKGROUND
Staff provided a presentation on the concept design (attachment 2) on Cutino Park Improvements Part 2 Project (Part 2 Plan) prepared by Whitson Engineers and BFS Landscape Architects team on September 1, 2022. The design included a playground, parking lot, lighting, bleachers, pickle ball court, picnic area, pathways, landscaping, and stormwater facilities at Cutino Park. City Council approved continuing with design of only the first phase (Phase 1) of the Part 2 Plan. Additionally, City Council requested staff to return to them with responses to their questions. The responses to the Council's questions are as follows:

1.) Determine if the pickleball courts could fit between the Boys & Girls Club (Club) and the sports field, with or without the fitness path. The pickleball courts will fit between the Club and sports field with the following changes:
a. The ConEx box will be relocated and concrete pad will be removed. b. The area will be graded to the elevation of the sports field. c. The play area width will be reduced to less than the ideal playing area for pickleball courts and access may be limited.
d. The electric utility area by the Club will shift the courts to protrude from the sports field and the Club.

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Item No. 10.A. Page 2 of 3
e. A retaining wall may be needed at the west end of the courts. f. The existing paved path and pad will need to be demolished and removed.

2.) Determine the geotechnical feasibility of constructing pickleball courts in the area between the sports field and Club. The consulting engineer stated the location between the Club and the sports field is likely to be geotechnically suitable for the construction of pickleball courts provided no unforeseen issues arise during site preparation and construction.

3.) Determine if more boring holes are needed for the area between the sports field and Club. New boring holes are not needed at the location between the Club and the sports field since the soil conditions are similar to previously bored areas.

4.) Determine if the project can be constructed in phases without negatively impacting previously constructed phases. The possibility of damaging Phase 1 features during construction of subsequent phases does exist.

Staff recommends approving the current Phase 2 concept for the following reasons:

1.) Enough room is available for 34-foot wide play area.

2.) The courts will be nearby accessible parking spaces along an accessible pathway, providing disabled residents to easily access the pickleball courts.

3.) Noise mitigation measures include a sound-dampening fence, a vegetated buffer, and a sound barrier wall.

4.) The courts would have a restriction to be used only during daylight hours, from sunrise to sunset.

5.) Retaining walls will not be needed for the courts.

6.) Have a shovel ready project to qualify for application for the Clean CA Grant opening in January 2023.

Alternatively, the Council can provide other options for features of Phases 2 and 3.

Staff recommends adopting a resolution (Attachment 1) approving the current concept plans for Phases 2 and 3 (attachment 2). Phase 2 has an estimated cost of $737,518.00, which includes construction and construction management of the pickleball courts and a picnic area. Phase 3 has an estimated cost of $932,316.00, which includes construction and construction management of the retaining walls, bleachers, fitness trail, fitness equipment, and signs.

FISCAL IMPACT
Cutino Park Improvements are funded by the Cutino Park Bond, account No. 348-8910- 9570. In addition, $250,000.00 of Community Development Block Grant (CDBG) funds is allocated to the project for fiscal year 2022/23, and another $250,000.00 for fiscal year 2023/24. To date, $700,000.00 of Cutino Park Bond funds are available and $250,000.00 from the Pump Track fund (account 342-8910-9580) was reallocated for Cutino Park Improvements, bringing the total funds to $1,450,000.00.

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Item No. 10.A. Page 3 of 3
Approving the concept plan for Phases 2 and 3 of Cutino Park Improvements Part 2 Project has no fiscal impact. Design of the two phases was already included in the Whitson Engineers contract approved on May 19, 2022. Staff will be requesting the construction of Phases 2 and 3 budgeted with the fiscal year 2023/24 budget.

Staff recommends the City Council adopt a resolution (Attachment 1) approving the Cutino Park Improvements Part 2 Project Phases 2 and 3 concept plans.

ATTACHMENTS

1. Resolution

2. Cutino Park Phases 2 & 3 Concepts
Reviewed for Submission to the City Council by:
_________________________________________
Jaime M. Fontes, City Manager
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RESOLUTION NO. 22-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEASIDE APPROVING THE CONCEPT PLAN FOR CUTINO PARK IMPROVEMENTS PART 2 PROJECT PHASES 2 AND 3
WHEREAS, City Council approved of a design contract with Whitson Engineers to perform design of Cutino Park Improvements Part 2 Project (Project) on May 19, 2022; and WHEREAS, City Council requested staff to return with responses to their requests and cost estimates for their requested changes and additions; and WHEREAS, Whitson Engineers and BFS Landscape Architects consultant team investigated the feasibility of requested features and provided a phased concept plan and cost estimate; and
WHEREAS, the cost estimate for the features originally planned and the features requested by City Council was over the City project budget; and WHEREAS, $250,000.00 for the pump track for fiscal year 2022/23 was reallocated to the Project; and
WHEREAS, the first phase can begin construction in fiscal year 2022/23 and the other two phases can be completed in subsequent years; and WHEREAS, full buildout design will address stormwater requirements and allow for staff to pursue future grant opportunities for subsequent phases; and WHEREAS, the first phase design was approved by City Council on September 1, 2022 and included a new playground, parking lot, lighting, and pathways; and WHEREAS, the second phase design includes two pickleball courts and a picnic area; and
WHEREAS, the third phase design includes retaining walls, bleachers, a fitness trail, fitness equipment, and signs.

NOW, THEREFORE BE IT RESOLVED, that the City Council of the City of Seaside approves design concepts for phases 2 and 3 of the Cutino Park Improvements Part 2 Project.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Seaside duly held on the 1st of December, 2022 by the following vote:

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AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:
________________________________
Ian Oglesby, Mayor
ATTEST:
_____________________________
Dominique Davis, City Clerk
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CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022
30 0 30 60

LA SALLE AVE

LOWELL ST

BOYS & GIRLS CLUBS OF

MONTEREY COUNTY LUXTON ST SAN PABLO AVE

NOCHE BUENA ST (E) BLDG (E) FIELDS
(E)

BASKETBALL

COURT (E) SKATE PARK SOUND BARRIER WALL
10' FITNESS TRAIL

FITNESS AREA

PICKLEBALL COURTS
120'X34'

PLAY AREA
66'X41'

ASPHALT

PARKING LOT
(14) SPACES
5-ROW ADA COMPATIBLE

ALUMINUM BLEACHERS
FOOD
CORNER
MARKET Packet Page 280
CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022
30 0 30 60

LA SALLE AVE

LOWELL ST

BOYS & GIRLS CLUBS OF

MONTEREY COUNTY LUXTON ST SAN PABLO AVE

NOCHE BUENA ST (E) BLDG (E) FIELDS
(E) CONTAINER

GROUP PICNIC AREA
33'X20'

FAMILY PICNIC AREA
(E) BASKETBALL COURT
(E) SKATE PARK
10' AMBULANCE ACCESS/

MAINTENANCE PATH

ROLLED CURB BIKE RACK
SOLAR BOLLARD LIGHT, TYP.

SOLAR POLE LIGHT, TYP. BIORETENTION SWALE 16' VEGETATED BUFFER SOUND BARRIER WALL

ADA ACCESSIBLE RAMP

WITH HANDRAILS,

CONNECT TO (E) SIDEWALK

CONCRETE STAIRS WITH

HANDRAILS, CONNECT TO
(E) SIDEWALK

CONCRETE

RETAINING WALL CONCRETE

RETAINING WALL

FITNESS AREA, RESILIENT

SURFACE
BENCH, TYP. MAN GATE

ADA ACCESSIBLE WALKWAY,

CONCRETE
10' FITNESS TRAIL, STALOK

STABILIZED DG
(E) 8' +/- CHAINLINK FENCE
10' BLACK VINYL COATED

CHAINLINK FENCE PICKLEBALL COURTS
120'X34', ASPHALT WITH

SPORTS COATING

PLAY AREA, ENGINEERED
WOOD FIBER, 66'X41'

RELOCATED (E)
BOULDER, TYP.

ASPHALT PARKING LOT WITH

CONRETE CURB AND GUTTER,
(14) SPACES

SHORT CONCRETE

SEAT WALL

PICNIC TABLE,
TYP.

BENCH, TYP.

DRINKING

FOUNTAIN

CONCRETE

RETAINING WALL ADA ACCESSIBLE WALKWAY,

CONCRETE
6' FITNESS TRAIL, STALOK

STABILIZED DG
SHADE TREE, TYP.

PLANTING AREA WITH

LOW-WATER USE SHRUBS AND
GROUNDCOVER, TYP.
5-ROW ADA COMPATIBLE

ALUMINUM BLEACHERS
(E) TREE TO
PRESERVE, TYP.

BENCH, TYP. FOOD
CORNER
MARKET Packet Page 281
CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022
30 0 30 60

LA SALLE AVE

LOWELL ST

BOYS & GIRLS CLUBS OF

MONTEREY COUNTY LUXTON ST SAN PABLO AVE

NOCHE BUENA ST (E) BLDG (E) FIELDS (E) SKATE PARK
FOOD
CORNER
MARKET
PHASE 2

PICKLEBALL COURTS,

PICNIC AREAS
PHASE 1

PARKING LOT,

PLAY AREA,

PATHWAYS
PHASE 3

FITNESS AREA,

FITNESS TRAIL,

BLEACHERS
Packet Page 282
CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022

SITE FURNISHINGS
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CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022
MIRACLE PLAYSYSTEMS. DESIGNING PLAY
Creating Fun Play Environments to Enrich Communities 8/02/2022 20_0290_Cutino_003
*Colors shown in rendering are for illustrative purposes only. Actual color and pattern may vary slightly.

INCLUSIVE PLAYGROUND
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CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022

SEESAW VARIATIONS
Alt 1: Miracle Multi-Pondo
Landscape Structure: We-Saw
Alt 2: Miracle Vippy
Packet Page 285
CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022

PLANTING AND TRAILS
Packet Page 286
CUTINO PARK - PART 2 CONCEPT PLAN

CITY OF SEASIDE
August 5, 2022

OUTDOOR FITNESS AND WELLNESS EQUIPMENT
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CITY OF SEASIDE

STAFF REPORT
Item No.: 10.B.

TO: City Council
FROM: Jaime M. Fontes, City Manager
BY: Victor Damiani, Finance Director
DATE: December 1, 2022
SUBJECT: ADOPT A RESOLUTION APPROVING THE ESTABLISHMENT OF

THE PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST
(115 TRUST) ADMINISTERED BY PUBLIC AGENCY RETIREMENT

SERVICES (PARS) WITH AN INITIAL INVESTMENT OF
$3,000,000.00, APPOINTING THE CITY'S FINANCE DIRECTOR

AS PLAN ADMINISTRATOR, AUTHORIZING THE PLAN

ADMINISTRATOR TO EXECUTE THE AGREEMENT FOR

ADMINISTRATIVE SERVICES WITH PARS, AND APPROVING A

PENSION FUNDING POLICY

RECOMMENDATION
Adopt a resolution approving the establishment of the public agencies post-employment benefits trust (115 Trust) administered by PARS with an initial investment of $3,000,000.00, appointing the City’s Finance Director as plan administrator, authorizing the plan administrator to execute the agreement for administrative services with PARS, and approving a pension funding policy.

BACKGROUND
Pension Liability:

The City of Seaside, like most cities in California, has an unfunded accrued liability (UAL) associated with its CalPERS pension plan. A UAL occurs when the current pension plan assets are not projected to be sufficient to pay total pension costs in future years. As of June 30, 2021 (the most recent CalPERS valuation), the City's UAL was $40.2 million. CalPERS, however, has reported an investment return of -7.5% for fiscal year 2021-22 (recently revised from -6.1%), which will likely increase the City's UAL to approximately $60.1 million. CalPERS charges the City a 6.8% interest rate on this debt and requires a repayment schedule that escalates quickly over the next decade.

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Item No. 10.B. Page 2 of 6
Historical Efforts:

The City has taken some proactive steps in an effort to control pension costs. In 2007, the City issued Pension Obligation Bonds (POB), which reduced the interest rate on the UAL (as it existed in 2007) from the CalPERS discount rate of 7.75% to the bond interest rate of 5.69%. These bonds will mature on June 1, 2025. Additionally, the City has historically taken advantage of the prepayment discount offered by CalPERS by making a lump sum UAL payment at the beginning of each fiscal year. Currently, the prepayment discount is approximately 3.3%. With pension costs increasing dramatically, however, staff believe more action is prudent.

At the September 1, 2022, City Council meeting, staff and its Municipal Advisor (NHA Advisors) delivered a comprehensive presentation that focused on the City’s various CalPERS Plans, historical cost trends, and various cost management strategies that can be considered. The City Council directed staff, in a 4-1 vote, to move forward with setting up a Section 115 Trust.

Benefits of a Section 115 Trust:

As discussed in the September presentation, setting aside funds in a Section 115 Trust should, over time, allow the City to earn more on its reserves than it normally would if those funds were left in the General Fund (which is highly restricted in investment options). Especially in today’s inflationary environment, even the more conservative/moderate Section 115 Trust portfolio options are yielding significantly more (>4.0%) than what the City is earning in LAIF (<1.5%) given the rise in fixed income rates of return.

Other benefits include:

1. Ability to “smooth out” higher UAL payments in the future by withdrawing funds from the Section 115 Trust to supplement payments from the General Fund (see chart below)
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Item No. 10.B. Page 3 of 6

2. Investment diversification from CalPERS (CalPERS manages $146 million of the City’s pension assets, as of the 6/30/2021 CalPERS actuarial valuation)

3. Increased budgetary flexibility

4. Ability to prefund OPEB within the same Section 115 Trust at a later date

5. Potential for positive rating agency and investor consideration $3 Million Initial Deposit and Other Follow Up from 9/1/2022 Council Meeting:

As shown in the previous chart, based on an initial deposit of $3 million into the Section 115 Trust, and future annual allocations of $500,000 per year for four years, the City can use the trust to help smooth out future payments and enhance budget predictability and resiliency to future economic shocks. At the previous City Council meeting, a question was asked about the potential savings/benefit of depositing a larger amount than $3 million. Depositing more will only increase potential savings and the City’s ability to smooth payments at an even lower level, while contributing less than these amounts will reduce projected savings and lessen the City’s ability to smooth payments. For comparison purposes, the matrix below depicts the projected savings, and annual payment levels (payable by the General Fund), assuming initial deposits ranging from $1 million, up to $6 million. For each scenario, it is assumed that $500,000 is deposited annually in years 2 through 5. For the investment earnings assumption, a 5.85% rate is used, which is the 10-year average rate of return for the PARS Moderate Fund (see further below re: recommended fund allocation).

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Item No. 10.B. Page 4 of 6
Section 115 Trust vs. Additional Discretionary Payments (ADPs):

An alternative cost management option is an Additional Discretionary Payment, which is where the City would send funds to CalPERS to directly reduce a portion of the UAL, and eliminate the required payments associated with that portion paid off (principal and 6.8% interest). While the City would get credit at 6.8% interest, the City is still subject to future CalPERS returns, and any underperformance (<6.8%) means that UAL will continue to be added. While an ADP may be a prudent strategy at some point soon, staff and NHA are currently recommending the implementation of the Section 115 Trust for a couple reasons:
 Diversification and Matching Time Horizon With Investment Objectives: CalPERS already manages $146 million of the City’s pension assets, which are invested fairly aggressively and on a longer-term horizon (20+ years). The proposed Section 115 Trust portfolio (see below for further detail) will be a Moderate Portfolio given the City’s likely shorter time horizon (7 to 15 years) for withdrawals. Diversifying a small amount to be invested with a different provider and investing in a way to better match the time horizon of withdrawals, are potential benefits of this recommendation.
 Budgetary Flexibility: Given the potential risk of recession or economic downturn, budgetary flexibility is a key consideration. The Section 115 Trust provides more budgetary flexibility than an ADP, as those monies can be used in a variety of ways (ADPs, normal contributions, reimbursements) and can provide more substantive cash flow assistance (vs. an ADP) if the City found itself in challenging economic times.

It should be noted that the City can still execute an ADP with CalPERS at any time in the future using funds from the Section 115 Trust or any other funds from the General Fund, and staff and NHA will continue to monitor this as a strategic option each year.

If the City wishes to contribute more than the recommended $3 million initial Section 115 Trust deposit, it could consider a ADP strategy at this time as well, in conjunction with the Section 115 deposit.

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Item No. 10.B. Page 5 of 6
Proposed Section 115 Trust Provider:

After reviewing the qualifications of the various Section 115 Trust providers, staff and NHA determined PARS (Public Agency Retirement Services) as best suited to be the City’s provider. PARS is the pioneer of Section 115 Trusts, establishing the first one in 2004, and is the most active provider to cities in California. To date, approximately 500 public agencies (including 150 cities/towns) have adopted programs through PARS to reduce their liabilities, including neighboring local agencies such as the cities of Carmel, Capitola, Gilroy, Morgan Hill, Del Rey Oaks, the County of Monterey, Monterey Bay UAPCD, Monterey County MAD, and Hartnell CCD. PARS partners with US Bank to serve as trustee and HighMark Capital Management, Inc., to provide investment management services for the program.

After selecting PARS, staff met with PARS and Highmark’s dedicated investment advisor to discuss the details of how the City’s assets in the Section 115 Trust will be invested, including the objective of investing the assets, the timing of potential deposits and withdrawals, and the City’s investment risk tolerance. Based on staff’s assessment of the City’s overall risk tolerance, combined with the City’s projected need to use funds in the Section 115 Trust as soon as fiscal year 2027-28 to smooth UAL payments, staff decided that investing assets in a “Moderate” portfolio would best suit the City. The “Moderate” portfolio is the most commonly selected investment strategy by other PARS members and is right in the middle of the risk tolerance spectrum for PARS’ five investment options. More details on the “Moderate” investment strategy can be found in the attached “Draft Investment Guidelines Document – Moderate Strategy” and “PARS Diversified Portfolios – 2022 Q3”.

The staff is also recommending the “passive” investment option vs. the “active” investment option for the moderate portfolio, given the lower fees.

Proposed Pension Funding Policy:

Staff has attached a proposed funding policy for Council consideration. The funding policy calls for a $3,000,000 initial deposit and four subsequent annual deposits of $500,000. Thereafter, 20% of any realized year end surplus is proposed to be deposited into the Section 115 Trust.

FISCAL IMPACT
At the September 1, 2022, City Council meeting, staff proposed a $3,000,000 initial deposit into the Section 115 Trust. At this asset level, the total annual fee is $18,000 (0.60% of $3,000,000), which is composed of $7,500 (0.25% of $3,000,000) for administration and $10,500 (0.35% of $3,000,000) for trustee/investment management. Annual fees are paid from Section 115 Trust assets. The Section 115 Trust balance has the potential to generate $2.86 million in interest earned, which may be used to pay down the City's UAL.

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Item No. 10.B. Page 6 of 6

ATTACHMENTS

1. Resolution

2. Pension Funding Policy

3. Agreement for Administrative Services

4. City of Seaside - PARS Presentation (with OPEB)

5. City of Seaside - Draft Investment Guidelines Document (Moderate Strategy) Nov 2022

6. PARS Diversified Portfolios - 2022 Q3
Reviewed for Submission to the City Council by:
_________________________________________
Jaime M. Fontes, City Manager
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RESOLUTION NO. 22-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEASIDE APPROVING THE ESTABLISHMENT OF THE PUBLIC AGENCIES POSTEMPLOYMENT BENEFITS TRUST ADMINISTERED BY PUBLIC AGENCY

RETIREMENT SERVICES (PARS) WITH AN INITIAL INVESTMENT OF $3,000,000.00, APPOINTING THE CITY’S FINANCE DIRECTOR AS PLAN

ADMINISTRATOR, AUTHORIZING THE PLAN ADMINISTRATOR TO EXECUTE

THE AGREEMENT FOR ADMINISTRATIVE SERVICES WITH PARS AND

APPROVING A PENSION FUNDING POLICY
WHEREAS, At the September 1, 2022, City Council meeting, staff and its Municipal Advisor (NHA Advisors) delivered a comprehensive presentation that focused on the City’s various CalPERS Plans, historical costs trends, and various cost management strategies that can be considered; and
WHEREAS, The City Council directed staff in a 4-1 vote, to move forward with setting up a Section 115 Trust; and
WHEREAS, The City Council directed staff in a 4-1 vote, to draft a Pension Funding Policy for Council consideration; and
WHEREAS, After reviewing qualifications of the various Section 115 Trust providers, staff and NHA determined PARS (Public Agency Retirement Services) as best suited to be the City’s provider; and
WHEREAS, PARS has made available the PARS Public Agencies PostEmployment Benefits Trust (the “Program”) for the purpose of pre-funding pension obligations and/or OPEB obligations; and
WHEREAS, the City of Seaside (“City”) is eligible to participate in the Program, a tax-exempt trust performing an essential governmental function within the meaning of Section 115 of the Internal Revenue Code, as amended, and the Regulations issued there under, and is a tax-exempt trust under the relevant statutory provisions of the State of California; and
WHEREAS, the City’s adoption and operation of the Program has no effect on any current or former employee’s entitlement to post-employment benefits; and WHEREAS, the terms and conditions of post-employment benefit entitlement, if any, are governed by contracts separate from and independent of the Program; and Packet Page 294
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WHEREAS, the City’s funding of the Program does not, and is not intended to, create any new vested right to any benefit nor strengthen any existing vested right; and
WHEREAS the City reserves the right to make contributions, if any, to the Program; and
WHEREAS City Staff has drafted a Pension Funding Policy for Council consideration.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Seaside, as follows:

1. The City Council hereby adopts the PARS Public Agencies Post-Employment Benefits Trust, effective December 1, 2022 with an initial investment of $3,000,000.00; and

2. The City Council hereby appoints the City’s Finance Director, or his/her successor or his/her designee as the City’s Plan Administrator for the Program; and

3. The City’s Plan Administrator is hereby authorized to execute the PARS legal and administrative documents on behalf of the City and to take whatever additional actions are necessary to maintain the City’s participation in the Program and to maintain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City’s Program.

4. The City Council hereby adopts the proposed Pension Funding Policy.

PASSED AND ADOPTED at the regular meeting of the City Council of the City of Seaside duly held on the 1st day of December 2022 by the following vote:

AYES: COUNCIL MEMBERS
NOES: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
_______________________________
Ian N. Oglesby, Mayor
ATTEST:

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______________________________
Dominique L. Davis, City Clerk
APPROVED TO FORM:
______________________________
Sheri L. Damon, City Attorney
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City of Seaside
Pension Funding Policy
Policy:

It is the policy of the City to fulfill its obligation to maintain fiscally responsible management practices and to ensure that promised pension benefits are funded. To that end, the City will meet its pension funding obligations as follows:

1. Actuarially Determined Contributions: Each fiscal year, the City will contribute to CalPERS the amount determined by CalPERS actuaries to be the minimum required employer contribution for that year. The minimum contribution consists of two components, normal cost and unfunded accrued liability (“UAL”). The normal cost is expressed as a rate that is applied to pensionable payroll costs and reflects the cost of pension benefits earned by employees in the current fiscal year. The UAL payment is a flat dollar amount that represents a portion of the cost of past benefits earned by employees, but for which, because of deviations in actual experience and changes in assumptions about investment performance, the normal cost rates established for those prior years have been determined to be insufficient to provide the promised retirement benefit. The CalPERS actuaries recalculate the total UAL each year and an updated multi-year amortization schedule is provided to show the projected annual minimum payments.

2. Annual UAL Prepayment: CalPERS offers the option to make monthly payments on the UAL or prepay the entire annual UAL amount at a discounted level by the end of July. Assuming the City’s current reserves meet their respective reserve policies, the City will prepay its annual UAL payment each July to achieve budgetary savings.

3. Funded Ratio Goal: The City’s goal is to achieve and maintain a funded ratio, for each of its pension plans, of 90%. A funded ratio of 100% signifies that the City’s assets held with CalPERS, in addition to assets held in other pension restricted reserves, match its accrued liabilities for pension. If the City has assets in a Section 115 Trust, these assets should be included in the City’s funded ratio calculation.

4. Section 115 Pension Trust: The City will establish and maintain a pension stabilization fund in the form of a Section 115 Pension Trust (“Trust”). Assets in the Trust may be used only for pension related costs and at the direction of the City Council. The City’s objective with the Trust is to accumulate assets to fund its CalPERS pension costs, as well as mitigate the budget impact of costs associated with future UAL. The City will strive to meet the following guidelines:
• Initial Deposit: It is recommended that $3,000,000 be used to initially fund the Trust in FY 2022-23.
• Ramp Up Deposits: It is recommended that $500,000 be deposited to the Trust in each of the four following fiscal years; FY 2023-24, FY 2024-25, FY 2025-26, FY 2026-27. • Ongoing Deposits: In any fiscal year thereafter, the City will make annual contributions to the Trust in an amount of 20% of any realized year-end surplus remaining after all other City reserve policies have been met. An updated description of the City’s reserve policies can be found in the City’s most recent annual budget.

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• Investment Portfolio Selection: City staff will work with its advisory team, including the Trust’s investment advisor, to select investment portfolios based on the City’s risk tolerance and projected withdrawal schedule from the Trust. • Enterprise Funds: A portion of the City’s pension costs within its CalPERS Miscellaneous Plan are attributable to employees within the City’s Enterprise Funds. Therefore, the City will ensure that any deposits to the Trust and withdrawals from the Trust are made in consideration of this fact to ensure equitable cost/benefit between City funds and CalPERS Plans. In years when Enterprise Funds have met their minimum reserve policy goals, such Enterprise Funds can contribute a portion of remaining surplus to the Trust.

The City will strive to ensure that any withdrawals from the Trust benefit the Enterprise Funds equitably.
• Use of Trust Funds: The funds in the Trust may be used for any of the following purposes at the City’s discretion: (1) City’s annual UAL payment to CalPERS, (2) City’s annual normal cost payment to CalPERS, (3) reimbursement to the City for CalPERS pension costs, and (4) Additional Discretionary Payments to CalPERS.
• Funding Goals: As stated above, the City is targeting a funded ratio of 90% for each of its pension plans. When measuring its funded ratio, the City should incorporate assets in the Trust, in addition to the assets under management by CalPERS. The City may consider foregoing contributions to the Trust if its funded ratio is determined to be too high, or if the current assets on deposit in the Trust are projected to be sufficient to cover budgetary fluctuations in the future.

5. Additional Discretionary Payments: CalPERS allows member agencies to make Additional Discretionary Payments (“ADPs”) at any time and in any amount, which would serve to reduce the City’s UAL and future required contributions. Once the City’s Trust is established, the City has the option to make ADPs to CalPERS using the assets held in the Trust, if desired. The City will consider ADPs within the context of its annual evaluation of reserve levels, budgetary requirements, funded ratio, and other timing considerations unique to CalPERS’ investment performance. ADPs may prove to be advantageous in the future once Trust levels are funded to sufficient thresholds to stabilize budgetary volatility.

6. Pension Obligation Bonds: Pension Obligation Bonds (“POBs”) are a tool that can be used to provide an ADP to CalPERS upon the determination that the cost to borrow the funds for the payment is less than continuing to make the projected prescribed UAL payments at the current discount rate. If the City considers issuing POBs, the following guidelines will apply:
• Expert advice and analysis by actuaries and municipal advisors will be utilized to quantify the risk of CalPERS investment underperformance (including discount rate reductions, stock market crashes, or sustained investment underperformance) and the threshold at which the City would be worse off issuing POBs versus not. • Significant education and evaluation will occur at the City staff and Council level given the complexity of POBs.
• The interest rate on the POBs shall be at least 2.5% less than the current CalPERS discount rate.
• The final maturity date on the POBs will be no greater than the final projected payment date of the UAL at the time the POBs are issued.

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• The POBs structure will contain an early call provision. • The POBs shall not finance normal cost and shall only be used to refinance UAL. • The POBs should provide significant demonstrated cash flow savings. • The City shall budget and transfer a portion of projected cash flow savings to the Trust to mitigate against future UAL likely to occur. Any cash flow savings not transferred to the Trust shall be transferred to the City’s other reserves.

7. Review of Funding Policy: The City will review this policy periodically to determine if changes to this policy are necessary to ensure progress is being made towards funding the City’s CalPERS pension costs and mitigating the impact of the costs associated with future UAL.

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AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement (“Agreement”) is made this _____ day of _____________, 2022, between Phase II Systems, a corporation organized and existing under the laws of the State of California, doing business as Public Agency Retirement Services and PARS (hereinafter “PARS”) and the [Agency Name] (“Agency”).

WHEREAS, the Agency has adopted the PARS Public Agencies Post-Employment Benefits Trust for the purpose of pre-funding pension obligations and/or Other Post-Employment Benefits (“OPEB”) obligations (“Plan”) and is desirous of retaining PARS as Trust Administrator to the Trust, to provide administrative services.

NOW THEREFORE, the parties agree:

1. Services. PARS will provide the services pertaining to the Plan as described in the exhibit attached hereto as “Exhibit 1A” (“Services”) in a timely manner, subject to the further provisions of this Agreement.

2. Fees for Services. PARS will be compensated for performance of the Services as described in the exhibit attached hereto as “Exhibit 1B”.

3. Payment Terms. Payment for the Services will be remitted directly from Plan assets unless the Agency chooses to make payment directly to PARS. In the event that the Agency chooses to make payment directly to PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS within thirty (30) days of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless PARS has previously received written communication disputing the subject invoice that is signed by a duly authorized representative of the Agency.

4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will be billed to the Agency at the rates indicated in the PARS’ standard fee schedule in effect at the time the services are provided and shall be payable as described in Section 3 of this Agreement. Before any such services are performed, PARS will provide the Agency with a detailed description of the services, terms, and applicable rates for such services. Such services, terms, and applicable rates shall be agreed upon in writing and executed by both parties.

5. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency providing PARS the information specified in the exhibit attached hereto as “Exhibit 1C” (“Data”). It shall be the responsibility of the Agency to certify the accuracy, content, and completeness of the Data so that PARS may rely on such information without further audit. It shall further be the responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a reasonable amount of time for the Services to be performed. Unless specified in Exhibit 1A, PARS shall be under no duty to question Data received from the Agency, to compute contributions made to the Packet Page 300

Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable for nonperformance of Services to the extent such nonperformance is caused by or results from erroneous and/or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1C, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency.

6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS’ fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law.

7. Confidentiality. Without the Agency’s consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law.

8. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees, or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers’ compensation, and similar matters.

9. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless, including their respective officers, directors, and employees, from any claim, loss, demand, liability, or expense, including reasonable attorneys’ fees and costs, incurred by the other as a consequence of, to the extent, PARS’ or Agency’s, as the case may be, negligent acts, errors or omissions with respect to the performance of their respective duties hereunder.

10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan.

PARS shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement.

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11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. In the event any party institutes legal proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any state court of competent jurisdiction.

12. Force Majeure. When a party’s nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that its performance is prevented by such cause. Such cause shall include, but not be limited to:
any incidence of fire, flood, acts of God or unanticipated communicable disease, acts of terrorism or war commandeering of material, products, plants or facilities by the federal, state or local government, a material act or omission by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state or local government, or any agency thereof, which becomes effective after the date of this Agreement that delays or renders impractical either party’s performance under the Agreement.

13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency.

14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS.

Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement.

15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660; Attention: President
(B) To Agency: [Agency]; [Agency Address]; Attention: [Plan Administrator Title] Notices shall be deemed given on the date received by the addressee.

16. Term of Agreement. This Agreement shall remain in effect for the period beginning _______________, 2022 and ending _____________, 2025 (“Term”). This Agreement may be terminated at any time by giving thirty (30) days written notice to the other party of the intent to terminate. Absent a thirty (30) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve-month periods following the Term.

17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by the parties hereto.

Packet Page 302

18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement.

In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions, and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition.

19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to receive its reasonable attorney’s fees.

20. Counterparts. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart.

21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed.

AGENCY:

BY:

Plan Administrator Name
TITLE:

DATE:

PARS:

BY:

Tod Hammeras
TITLE: Chief Financial Officer
DATE:

Packet Page 303

EXHIBIT 1A

SERVICES
PARS will provide the following services for the [Agency Name] Public Agencies PostEmployment Benefits Trust:

1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting, and submission requirements for contributions/reimbursements/distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and approved by Agency legal counsel. Resulting final Plan documentation must be approved by the Agency prior to the commencement of PARS Plan Administration Services outlined in Exhibit 1A, paragraph 2 below.

2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Public Agencies Post-Employment Benefits Trust (“Trustee”), based upon information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and investment activity, based upon information received from the Agency and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.

3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice.

Packet Page 304

EXHIBIT 1B

FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit 1A based upon the following schedule:

An annual asset fee shall be paid from Plan assets based on the following schedule:

For Plan Assets from: Annual Rate:
$1 to $10,000,000 0.25%
$10,000,001 to $15,000,000 0.20%
$15,000,001 to $50,000,000 0.15%
$50,000,001 and above 0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included.

Packet Page 305

EXHIBIT 1C

DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the following information. Agency is solely responsible for ensuring that all information and documentation provided to PARS is true, correct, and authorized:

1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust (C) Trustee Investment Forms

2. Contribution – completed Contribution Transmittal Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)

3. Distribution – completed Payment Reimbursement/Distribution Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator (or authorized Designee)

4. Other information pertinent to the Services as reasonably requested by PARS and Actuarial Provider.

Packet Page 306
City of seaside 1
City of Seaside
PARS 115 Trust – OPEB Prefunding Program & Pension Rate Stabilization Program (PRSP) October 4, 2022
Packet Page 307
City of seaside 2
Contacts
Rachael Sanders, CEBS
Senior Manager, Consulting
(800) 540-6369 x121
[email protected]
Jennifer Meza, CEBS
Manager, Consulting
(800) 540-6369 x141
[email protected]
Packet Page 308
City of seaside 3
PARS Plans and Programs
Pension Rate Stabilization Program (PRSP)
A pension prefunding trust designed specifically to address GASB 68 liabilities on its financial statements and stabilize future costs. 1 OPEB Trust Program
An OPEB prefunding trust designed to address OPEB liabilities and increase investment rates of return (discount rate).
2 Alternate Retirement System (ARS)
An alternative to Social Security for part-time employees offered to provide a valuable benefit for employees and permanent payroll savings to the Agency. 3 Supplemental Defined Contribution Plan
A locally designed retirement plan offered in addition to PERS or 37-Act retirement system with the goal of attracting and retaining select employees to the Agency. 4 Accumulated Leave Plan
A Defined Contribution solution that reduces leave balances on an annual basis during employment and minimizes total payout amounts. 5 Packet Page 309
City of seaside 4
Pars 115 Trust Team
Trust Administrator & Consultant
38 Years of Experience
(1984-2022)
2,000+
Plans under
Administration
1,000+
Public Agency
Clients
$6.2B
Assets under
Administration
Investment Manager
• Investment sub-advisor to trustee U.S. Bank
• Investment policy assistance
• Uses open architecture
• Active and passive platform options
• Customized portfolios (with minimum asset level)
103
Years of Experience
(1919-2022)
$20.2B
Assets under
Management &
Advisement
Trustee
• 5th largest commercial bank and one of the
nation’s largest trustees for Section 115 trusts
• Safeguard plan assets
• Oversight protection as plan fiduciary
• Custodian of assets
159
Years of Experience
(1863-2022)
$9.0T
Assets under
Administration
490+
115 Trust Clients
• Serves as record-keeper, consultant,
and central point of contact
• Sub-trust accounting
• Coordinates all agency services
• Monitors plan compliance
(IRS/GASB/State Government Code)
• Processes contributions/disbursements
• Hands-on, dedicated support teams
500 K+
Plan Participants
Packet Page 310
City of seaside 5
115 Trust – OPEB/PENSION Client list
COUNTIES (34)
Alpine
Amador
Calaveras
Colusa
Contra Costa
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Mariposa
Mendocino
Merced
Mono
Monterey
Napa
Nevada
Placer
Plumas
Riverside
San Benito
San Joaquin
Shasta
Siskiyou
Solano
Sonoma
Sutter
Tehama
Trinity
Tulare
Yolo
Yuba
CITIES & TOWNS (154)
Updated October 2022
Alameda
Alhambra
Anaheim
Angels Camp
Atherton
Atwater
Bakersfield
Beaumont
Bell Gardens
Benicia
Beverly Hills
Bishop
Brea
Brisbane
Burlingame
Calabasas
Camarillo
Capitola
Carmel
Chino Hills
Chula Vista
Claremont
Colma
Commerce
Corcoran
Coronado
Costa Mesa
Covina
Crescent City
Cudahy
Cupertino
Cypress
Daly City
Dana Point
Del Rey Oaks
Dinuba
Duarte
Dublin
El Cajon
El Centro
El Segundo
Elk Grove
Emeryville
Escondido
Fairfax
Fairfield
Fort Bragg
Fountain Valley
Fullerton
Galt
Garden Grove
Gilroy
Glendale
Glendora
Goleta
Grand Terrace
Grass Valley
Half Moon Bay
Hawthorne
Healdsburg
Hemet
Hercules
Hermosa Beach
Huntington Beach
Indian Wells
Indio
Ione
La Habra
Lakeport
La Mesa
La Quinta
Laguna Niguel
Lake Forest
Lakewood
Lemon Grove
Livermore
Lodi
Los Alamitos
Los Altos Hills
Mammoth Lakes
Manhattan Beach
Merced
Modesto
Monrovia
Morgan Hill
Morro Bay
Napa
National City
Norco
Norwalk
Novato
Oakley
Orinda
Oroville
Pacifica
Palmdale
Palo Alto
Pasadena
Patterson
Perris
Pico Rivera
Piedmont
Pinole
Pittsburg
Placentia
Pleasant Hill
Pleasanton
Port Hueneme
Rancho Cucamonga
Redding
Redwood City
Rialto
Richmond
Rio Vista
Ripon
Riverside
Rohnert Park
Rolling Hills
Rosemead
Ross
San Anselmo
San Jacinto
San Leandro
San Ramon
Santa Ana
Santa Clara
Santa Clarita
Sausalito
Selma
Solana Beach
South El Monte
Stanton
Stockton
Taft
Temecula
Temple City
Thousand Oaks
Tiburon
Tustin
Twentynine Palms
Union City
Upland
Vallejo
Villa Park
Walnut
West Covina
West Sacramento
Westminster
Winters
Woodland
Woodside
Yountville
Yuba City
Yucca Valley
Packet Page 311
City of seaside 6
115 Trust – OPEB/PENSION Client list
Agoura Hills/Calabasas Community Center Authority
Alameda County Mosquito Abatement District
Alpine Fire Protection District
Beach Cities Health District
Bighorn-Desert View Water Agency
Bodega Bay Public Utilities District
Calaveras County Water District
California Joint Powers Insurance Authority
California Joint Powers Risk Management Authority
Central Contra Costa Sanitary District
Central Contra Costa Transit Authority
Coastline Regional Occupational Program
Coastside Fire Protection District
Colusa Mosquito Abatement District
Contra Costa County EEs' Retirement Association
Contra Costa Mosquito and Vector Control District
Crestline Village Water District
Delta Diablo
Desert Recreation District
East Bay Regional Park District
East Contra Costa Fire Protection District
East Orange County Water District
Eastern Sierra Community Services District
Eastern Sierra Transit Authority
El Dorado Hills County Water (& Fire) District
Fallbrook Public Utility District
Fresno Irrigation District
Fresno Metropolitan Flood Control District
Glenn-Colusa Irrigation District
Goleta Cemetery District
Goleta West Sanitary District
Great Basin Unified Air Pollution Control District
Greater Vallejo Recreation District
Hayward Area Recreation & Park District
Hesperia Fire Protection District
Housing Authority of the County of Butte
Housing Authority of the County of Contra Costa
Housing Authority of the County of San Bernardino
Housing Authority of the County of Santa Cruz
Humboldt Bay Fire Joint Powers Authority
Humboldt Bay Municipal Water District
Humboldt No. 1 Fire Protection District
Menlo Park Fire Protection District
Mesa Water District
Metropolitan Transportation Commission
Midpeninsula Regional Open Space District
Mid-Peninsula Water District
Mojave Desert Air Quality Management District
Montecito Fire Protection District
Monterey Bay Unified Air Pollution Control District
Monterey County Mosquito Abatement District
Moraga-Orinda Fire Protection District
Mosquito & Vector Mgmt Dist. of Santa Barbara Co.

Municipal Pooling Authority
Municipal Water District of Orange County
Napa County Mosquito Abatement District
Nevada County Consolidated Fire District
North Central Fire Protection District
North County Fire Protection District
Novato Sanitary District
Orange County Fire Authority
Orange County LAFCO
Orange County Mosquito and Vector Control District
Orange County Sanitation District
Orange County Water District
Orchard Dale Water District
Public Agency Risk Sharing Authority of CA (PARSAC)
Pebble Beach Community Services District
Placentia Library District
Placer County Air Pollution Control District
Placer County Resource Conservation District
Rancho Cucamonga Fire Protection District
Rancho Murieta Community Services District
Regional Housing Authority
Rowland Water District
Sacramento Area Flood Control Agency
San Andreas Sanitary District
San Elijo Joint Powers Authority
San Mateo County Mosquito & Vector Control District
Santa Barbara County Law Library
Santa Cruz Regional 9-1-1 JPA
Santa Fe Irrigation District
Sewer Authority Mid-Coastside
Shasta Valley Cemetery District
South Coast Water District
South Montebello Irrigation District
South Orange County Wastewater Authority
South Placer Fire Protection District
Southern Marin Fire Protection District
State Water Contractors
Superior Court of CA, County of Imperial
Superior Court of CA, County of Inyo
Superior Court of CA, County of Kern
Superior Court of CA, County of Marin
Superior Court of CA, County of Merced
Superior Court of CA, County of Orange
Superior Court of CA, County of San Mateo
Superior Court of CA, County of Shasta
Superior Court of CA, County of Siskiyou
Superior Court of CA, County of Sonoma
Sweetwater Springs Water District
Three Valleys Municipal Water District
Twentynine Palms Water District
Union Sanitary District
Ventura Regional Sanitation District
Walnut Valley Water District
West Bay Sanitary District
West County Wastewater District
Western Riverside Council of Governments
Yolo-Solano Air Quality Management District
Yorba Linda Water District
Zone 7 Water Agency
SPECIAL DISTRICTS (113)
Shasta County Office of Education
Sonoma County Office of Education
Intelecom
EDUCATION DISTRICTS (3)
Updated October 2022
Packet Page 312
City of seaside 7
115 Trust – OPEB/PENSION Client list
SCHOOL DISTRICTS (57)
Alisal Union School District
Alta Loma School District
Auburn Union School District
Bass Lake Joint Union Elementary School District
Bellflower Unified School District
Beverly Hills Unified School District
Brea Olinda Unified School District
Calistoga Joint Unified School District
Campbell Union High School District
Compton Unified School District
Corning Union Elementary School District
Coronado Unified School District
Cotati-Rohnert Park Unified School District
El Dorado Union High School District
El Monte Union High School District
Folsom Cordova Unified School District
Fontana Unified School District
Fowler Unified School District
Hermosa Beach City School District
Hesperia Unified School District
Hughes-Elizabeth Lakes Union E. School District
John Swett Unified School District
Lakeside Union School District (San Diego)
Le Grand Union HSD
Lemon Grove School District
Lindsay Unified School District
Madera Unified School District
Manteca Unified School District
Moreno Valley Unified School District
Napa Valley Unified School District
Natomas Unified School District
Newport-Mesa Unified School District
Ocean View School District (Ventura)
Ontario-Montclair School District
Orcutt Union School District
Palmdale School District
Palos Verdes Peninsula Unified School District
Placer Union High School District
Porterville Unified School District
Poway Unified School District
Red Bluff Joint Union High School District
Red Bluff Union Elementary School District
River Delta Unified School District
Riverdale Joint Unified School District
Roseville Joint Union High School District
San Bruno Park School District
San Dieguito Union High School District
San Marino Unified School District
Santa Barbara Unified School District
Santa Rita Union School District
Taft Union HSD
Trona Joint Unified School District
Upland USD
Visalia Unified School District
Westside Union School District
Whittier City School District
Wilsona School District
Allan Hancock CCD
Citrus CCD
Coast CCD
Grossmont-Cuyamaca CCD
Hartnell CCD
Imperial CCD
Marin CCD
Palo Verde CCD
Pasadena Area CCD
Rancho Santiago CCD
Rio Hondo CCD
San Bernardino CCD
San Luis Obispo County CCD (Cuesta)
Shasta-Trinity-Tehama Joint CCD
State Center CCD
Victor Valley CCD
West Valley-Mission CCD
Yosemite CCD
Yuba CCD
COMMUNITY COLLEGE DISTRICTS (19)
Updated October 2022
Packet Page 313
City of seaside 8
Subaccounts
OPEB and Pension assets are
individually sub-accounted,
and can be divided by dept.,
bargaining group, or cost center.

Assets in the PARS Section 115
Combination Trust can be used
to address unfunded liabilities.

Financial Stability
Allows separate investment
strategies for OPEB and
Pension subaccounts.

Flexible Investing
OPEB and Pension assets
aggregate and reach lower fees
on tiered schedule sooner –
saving money!
Anytime Access Economies-of-Scale
Trust funds are available
anytime; OPEB for OPEB
and Pension for Pension.

No set-up costs, no minimum
annual contribution amounts,
and no fees until assets are added.

No Set Up Cost or Minimums
Retiree Medical Benefits
Prefund OPEB GASB 75
OPEB
Reimburse agency; or
Pay benefits provider
Pension Rate Stabilization Program
Prefund Pension (PRSP) GASB 68
Pension
Reimburse agency; or
Pay retirement system
Assets can be used to: Assets can be used to:
prefund
either or both
General Fund
PARS IRS-Approved Section 115 Trust
Packet Page 314
City of seaside 9
PARSOPEB TRUST Program
for prefunding Other Post-Employment Benefits
The
Packet Page 315
City of seaside 10
OPEB Actuarial Results
Data from 2021 ACFR
Measurement Date:

June 30, 2021
Pay-as-you-Go
Discount Rate: 2.20% Percent Change Prefunding Discount Rate: 5.20% Actuarial Accrued
Liability (AAL) $11,571,760 30-36%▼ ?
Actuarial Value of Assets $0 -- $0
Unfunded Actuarial
Accrued Liability (UAAL) $11,571,760 30-36%▼ ?
Service Cost
for FY 2020-21 $283,264 30-36%▼ ?
Annual Benefit Payments
(Pay-as-you-Go)
for FY 2020-21
$808,090 -- $808,090
Rule of thumb: For every one percent increase in the discount rate, the unfunded liability is lowered by 10-12%.

Packet Page 316
City of seaside 11
Why Prefund OPEB?
Potential Greater Return
Diversification of trust assets can result in a greater rate of return, which can be helpful in addressing your District’s liability
1 Rule of Thumb
For every 1% increase in return, your District’s liability will be lowered about 10-12%.

A typical unfunded District has a ~2% discount rate and OPEB prefunding could lower liabilities by 36%.
2 GASB 75
GASB 75 requires OPEB liabilities to be placed directly on your balance sheet, similar to pension liabilities under GASB 68
3 Assets which Reduce Liabilities
Contributions into the trust are considered “assets” which reduce liabilities on your District’s financial statements
4 GFOA Recommended
GFOA recommends prefunding OPEB and considers it “best practice” (January 2012) 5 Credit Rating
Credit rating companies look more favorably on agencies who adopt an Irrevocable Trust and prefund
6 Packet Page 317
City of seaside 12
PARSPension Rate
Stabilization Program
for prefunding pension obligations
The
Packet Page 318
City of seaside 13
• Since 2015, GASB 68
has required disclosing
Net Pension Liability on financial
statements as a line item on the
balance sheet
• Before the concept of pension
prefunding, the only way to
reduce retirement system
unfunded liabilities was to send
additional contributions in
excess of annual required
employer contributions
• Pension trust prefunding
assets can be transferred to
the retirement system at the
Agency’s direction, which can
help offset future rate increases
(i.e., pension rate stabilization)
Background – Pension
CalPERS Changes
CalPERS has announced changes directly
affecting unfunded liability amounts and
employer contributions:

Lowering of Discount Rate 1
CalPERS is lowering the
discount rate from 7.0% to 6.8%.

The impact will be reflected in the
June 30, 2021 valuation reports.

Shortened Amortization Period 2
New actuarial liabilities are
amortized over 20 years instead of
30, increasing required annual
employer contribution amounts*

7.0%

6.8%
30 years
20 years
2 5-year ramp up in payments beginning
FY 15-16 with full impact in FY 19/20.
1 Contributions from policy changes beginning
FY 23-24.

Packet Page 319
City of seaside 14
Combined
Miscellaneous & Safety Groups *
Valuation as of
June 30, 2020
Valuation as of
June 30, 2021 Change
Actuarial Liability $178.2 M $186.6 M 4.7% ↑
Assets $124.1 M $146.4 M 17.9% ↑
Unfunded Liability $54.1 M $40.2 M 25.7% ↓
Funded Ratio 69.7% 78.5% 12.6% ↑
Employer Contribution Amount $6.2 M $6.7 M 8.0% ↑ (FY 21-22) (FY 22-23) Employer Contribution Amount – Projected * --- $6.5 M 2.6% ↓ (FY 28-29) Pension Funding Status
As of June 30, 2021, City of Seaside’s CalPERS pension plan is funded as follows:
* Data through 2028-29 from Agency’s latest CalPERS actuarial valuation.

Packet Page 320
City of seaside 15
Why Prefund Pension Obligations?
Complete Local Control over Assets
Agency has complete control over assets, including contributions, disbursements and the timing, amount, and risk tolerance level of investments

1. Pension Rate Stabilization
Assets can be transferred to the retirement system at the Agency’s direction, potentially reducing/eliminating large fluctuations in employer contribution amounts

2. Rainy Day Fund
Emergency source of funds when employer revenues are strained in difficult budgetary or economic times

3. Diversification
Allows for investment flexibility and offers the potential for assets to earn greater returns than the general fund; spread the risk vs. sending additional money to CalPERS

4. Packet Page 321
City of seaside 16
• Agency maintains oversight of the
investment manager and the portfolio’s
risk tolerance level
• Investment restrictions that apply to the
general fund (CA Government Code 53601)
are not applicable to assets held in
The PARS Section 115 Irrevocable Trust
• Assets held in The PARS Section 115
Irrevocable Trust can be invested per
Government Code Sections 53216 (Pension)
and 53620 (OPEB)
• Investments can be diversified and invested
in a prudent fashion
• Investments can be tailored to the Agency’s unique demographics and needs • Increased risk diversification
Investment Flexibility
Diversified Investing
Assets held in The PARS Section
115 Irrevocable Trust can be
diversely invested in a prudent
fashion per Government Code
Sections 53216 (Pension)
and 53620 (OPEB).

GOV § 53216 (Pension)
GOV § 53620 (OPEB)
Packet Page 322
City of seaside 17

1. Input Phase
– Target discount rate
– Risk tolerance
– Investment philosophy
– Asset allocation
– Timing on use of funds

2. Model Portfolios 3. Dedicated Portfolio Manager
– Makes recommendation
– Fiduciary responsibility
– Drafts investment policy
– Annual on-site reviews
– Cell phone access
Strategy Equity
Capital Appreciation 65-85%
Balanced 50-70%
Moderate 40-60%
Moderately Conservative 20-40%
Conservative 5-20%
Simple Investment Approach
Packet Page 323
City of seaside 18
Strategy Equity (%) 1 Year 3 Years 5 Years 10 Years
Capital
Appreciation 65-85% -14.04% 5.30% 6.42% 8.03%
Balanced 50-70% -13.63% 4.28% 5.51% 6.90%
Moderate 40-60% -12.97% 3.51% 4.77% 6.01%
Moderately
Conservative 20-40% -11.85% 1.82% 3.24% 4.32%
Conservative 5-20% -10.88% 0.60% 2.15% 3.05%
HighMark Capital Management

ACTIVE PORTFOLIO RETURNS
* Past performance does not guarantee future results.

As of June 30, 2022
Packet Page 324
City of seaside 19
Strategy Allocation* (%)
Capital Appreciation
(65-85% Equity) 6.36%
Balanced
(50-70% Equity) 26.82%
Moderate
(40-60% Equity) 40.00%
Mod. Conservative
(20-40% Equity) 15.45%
Conservative
(5-20% Equity) 1.82%
Other
(Custom) 9.55%
TOTAL 100.00%
OPEB Strategy Allocation – Clients

HIGHMARK CAPITAL MANAGEMENT
Active Platform: 58% / Passive Platform: 42%
Capital Appreciation

6.36%
Balanced

26.82%
Moderate

40.00%
Moderately
Conservative

15.45%
Conservative

1.82%
Other

9.55%
As of June 30, 2022
*Allocations are based on agencies who have funded
Packet Page 325
City of seaside 20
Strategy Allocation* (%)
Capital Appreciation
(65-85% Equity) 5.83%
Balanced
(50-70% Equity) 10.00%
Moderate
(40-60% Equity) 37.50%
Mod. Conservative
(20-40% Equity) 36.25%
Conservative
(5-20% Equity) 4.17%
Other
(Custom) 6.25%
TOTAL 100.00%
PRSP Strategy Allocation – Clients

HIGHMARK CAPITAL MANAGEMENT
Capital Appreciation

5.83%
Balanced

10.00%
Moderate

37.50%
Moderately
Conservative

36.25%
Conservative

4.17%
Other

6.25%
Active Platform: 54% / Passive Platform: 46%
As of June 30, 2022
*Allocations are based on agencies who have funded
Packet Page 326
City of seaside 21
Plan Set-Up Fee: Ongoing Fees:

None 0.35% for assets under $5 million

0.25% for assets $5-10 million

0.20% for assets $10-15 million

0.15% for assets $15-50 million

0.10% for assets over $50 million
Program Fees
Plan Set-Up Fee: Ongoing Fees:

None 0.25% for assets $0-10 million

0.20% for assets $10-15 million

0.15% for assets $15-50 million

0.10% for assets over $50 million
* PARS does not receive any compensation from the investments or any commissions, back-end loads, or any other forms of compensation. ** Subject to change due to rebalancing, as fees are waived for plan assets in First American Funds (money market).

Trust Administration/Consulting Fees*
Discretionary Trustee/Investment Management Fees**
As of June 30, 2022
Packet Page 327
City of seaside 22
Sample Funding Policies

1. Contribute 50% of a given year’s realized year
end surplus to address pension liability

2. Contribute full amount of annual PERS employer cont., allowing anytime access to trust assets

3. Contribute funds to stabilize PERS employer
Misc. and Safety rates through FY 23-24

4. “One equals five plan” - $1M contribution for 5 years will save taxpayers $5M over 25 years

5. Contribute Employer contribution equal to the 2.8%
discount rate, with difference going into the Section 115 Trust

6. Contribute the annual savings realized from Reduction in UAL payment resulting from Pension Obligation Bonds issuance

7. Earmark a portion of a local sales tax to be set
aside for unfunded pension liabilities

8. Use ongoing savings from prepaying CalPERS
unfunded liability vs. higher monthly payments

9. Use one-time revenue source and lower the
minimum General Fund Reserve level (30%  20%)
Alameda/Solana Beach
City of Brea
City of Healdsburg
City of Huntington Beach
City of Sausalito
City of Placentia
City of Fountain Valley
City of Pasadena
City of Glendale
Packet Page 328
City of seaside 23
Steps to Implementation
1 City Council adopts resolution authorizing City to join PARS Combo Trust and appoints Plan Administrator (PA)
2 City sends signed copy of resolution to PARS
3 PARS sends set of signature-ready documents to City
4 PARS coordinates meeting with City and Highmark Capital Management to discuss investment options and select strategy
5 City signs documents and returns to PARS
6 PARS works with Trustee/U.S. Bank to establish account 7 PARS notifies City account is ready and includes Contribution Instructions 8 City makes Contribution using Transmittal Form
9 PARS and Highmark conduct annual reviews (unless more frequently desired) Packet Page 329
HighMark Plus Composite (Active)
Current Quarter* -6.46%
Blended Benchmark*,** -5.26%
Year To Date* -11.36%
Blended Benchmark*,** -9.66%
1 Year -10.88%
Blended Benchmark** -8.85%
3 Year 0.60%
Blended Benchmark** 0.89%
5 Year 2.15%
Blended Benchmark** 2.21%
10 Year 3.05%
Blended Benchmark** 2.83%

PARS DIVERSIFIED PORTFOLIOS

CONSERVATIVE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
CONSERVATIVE PORTFOLIO?
Q2 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 7.5% S&P500,

1.5% Russell Mid Cap, 2.5% Russell 2000, 1% MSCI EM (net), 2% MSCI EAFE (net), 52.25% Bloomberg US Agg, 25.75% ICE BofA 1-3 Yr US Corp/Gov’t, 2% ICE BofA US High Yield Master II, 0.5% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012, the blended benchmark was 12% S&P 500; 1% Russell 2000, 2% MSCI EAFE (net), 40% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 15% S&P 500, 40% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide a consistent level of
inflation-protected income over
the long-term. The major portion
of the assets will be fixed
income related. Equity securities
are utilized to provide inflation
protection.

Conservative
Moderately Conservative
Moderate
Balanced
Capital Appreciation
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Strategic Range Policy Tactical
Equity 5 – 20% 15% 14%
Fixed Income 60 – 95% 80% 81%
Cash 0 – 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Index Plus Composite (Passive)
Current Quarter* -5.61%
Blended Benchmark*,** -5.26%
Year To Date* -10.67%
Blended Benchmark*,** -9.66%
1 Year -9.97%
Blended Benchmark** -8.85%
3 Year 0.66%
Blended Benchmark** 0.89%
5 Year 2.02%
Blended Benchmark** 2.21%
10 Year 2.76%
Blended Benchmark** 2.83%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 07/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 07/2004
No of Holdings in Portfolio 13
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -9.04%
2009 15.59%
2010 8.68%
2011 2.19%
2012 8.45%
2013 3.69%
2014 3.88%
2015 0.29%
2016 4.18%
2017 6.73%
2018 -1.35%
2019 11.05%
2020 9.03%
2021 2.20%
Index Plus Composite (Passive)
2008 -6.70%
2009 10.49%
2010 7.67%
2011 3.70%
2012 6.22%
2013 3.40%
2014 4.32%
2015 0.06%
2016 3.75%
2017 5.52%
2018 -1.09%
2019 10.37%
2020 8.56%
2021 1.97%
Packet Page 330

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.8
billion in assets under management and $8.8 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA ®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria:

Accounts are managed by HighMark with full investment authority according to the PARS Conservative active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios.

US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank.

The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free floatadjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the midcap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years.

The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

2.4%
Interm-Term Bond

61.9%
High Yield

1.1%
Short-Term Bond

18.0%
Large Cap Core

4.2%
Large Cap Growth

1.6%
Mid Cap

1.4%
Intl Stocks

2.4%
Cash

4.7%
Large Cap Value

1.8% Real Estate

0.5%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 331

PARS DIVERSIFIED PORTFOLIOS

MODERATELY CONSERVATIVE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — MODERATELY CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
MODERATELY CONSERVATIVE PORTFOLIO?
Q2 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 15.5% S&P500, 3% Russell Mid Cap, 4.5% Russell 2000, 2% MSCI EM (net), 4% MSCI EAFE (net), 49.25% Bloomberg US Agg, 14% ICE BofA 1- 3 Yr US Corp/Gov’t, 1.75% ICE BofA US High Yield Master II, 1% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 - 9/30/2012: the blended benchmark was 25% S&P 500; 1.5% Russell 2000, 3.5% MSCI EAFE (net), 25% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007, the blended benchmark was 30% S&P 500, 25% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide current income, with
capital appreciation as a
secondary objective. The major
portion of the assets is
committed to income-producing
securities. Market fluctuations
should be expected.

Strategic Range Policy Tactical
Equity 20 - 40% 30% 29%
Fixed Income 50 - 80% 65% 66%
Cash 0 - 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -8.10%
Blended Benchmark*,** -7.44%
Year To Date* -12.84%
Blended Benchmark*,** -12.03%
1 Year -11.85%
Blended Benchmark** -10.30%
3 Year 1.82%
Blended Benchmark** 2.07%
5 Year 3.24%
Blended Benchmark** 3.37%
10 Year 4.32%
Blended Benchmark** 4.29%
Index Plus Composite (Passive)
Current Quarter* -7.28%
Blended Benchmark*,** -7.44%
Year To Date* -12.25%
Blended Benchmark*,** -12.03%
1 Year -10.69%
Blended Benchmark** -10.30%
3 Year 1.86%
Blended Benchmark** 2.07%
5 Year 3.14%
Blended Benchmark** 3.37%
10 Year 4.11%
Blended Benchmark** 4.29%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 08/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2005
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -15.37%
2009 18.71%
2010 10.46%
2011 1.75%
2012 10.88%
2013 7.30%
2014 4.41%
2015 0.32%
2016 4.94%
2017 9.56%
2018 -2.60%
2019 13.73%
2020 10.76%
2021 5.15%
Index Plus Composite (Passive)
2008 -12.40%
2009 11.92%
2010 9.72%
2011 3.24%
2012 8.24%
2013 6.78%
2014 5.40%
2015 -0.18%
2016 5.42%
2017 8.08%
2018 -2.33%
2019 13.53%
2020 9.74%
2021 5.33%
Packet Page 332

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.8
billion in assets under management and $8.8 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderately Conservative active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees).

Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S.

Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap 4.4%
Interm-Term Bond

51.5%
High Yield 1.0%
Short-Term Bond

13.5%
Large Cap Core

8.2%
Large Cap Growth

3.3%
Mid Cap 2.7%
Intl Stocks 5.1%
Cash 5.4%
Large Cap Value

3.8%
Real Estate 1.1%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 333

PARS DIVERSIFIED PORTFOLIOS

MODERATE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — MODERATE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
MODERATE PORTFOLIO?
Q2 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 26.5% S&P500, 5% Russell Mid Cap, 7.5% Russell 2000, 3.25% MSCI EM (net), 6% MSCI EAFE (net), 33.50% Bloomberg US Agg, 10% ICE BofA 1-3 Yr US Corp/Gov’t, 1.50% ICE BofA US High Yield Master II, 1.75% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012: the blended benchmark was 43% S&P 500; 2% Russell 2000, 5% MSCI EAFE (net), 15% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 50% S&P 500, 15% ICE BofA 1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide current income and
moderate capital appreciation.

It is expected that dividend and
interest income will comprise a
significant portion of total return,
although growth through capital
appreciation is equally important.

Strategic Range Policy Tactical
Equity 40 - 60% 50% 48%
Fixed Income 40 - 60% 45% 46%
Cash 0 - 20% 5% 6%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -10.16%
Blended Benchmark*,** -9.86%
Year To Date* -14.71%
Blended Benchmark*,** -14.34%
1 Year -12.97%
Blended Benchmark** -11.49%
3 Year 3.51%
Blended Benchmark** 3.77%
5 Year 4.77%
Blended Benchmark** 4.92%
10 Year 6.01%
Blended Benchmark** 6.19%
Index Plus Composite (Passive)
Current Quarter* -9.45%
Blended Benchmark*,** -9.86%
Year To Date* -14.32%
Blended Benchmark*,** -14.34%
1 Year -11.58%
Blended Benchmark** -11.49%
3 Year 3.48%
Blended Benchmark** 3.77%
5 Year 4.59%
Blended Benchmark** 4.92%
10 Year 5.85%
Blended Benchmark** 6.19%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2006
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -22.88%
2009 21.47%
2010 12.42%
2011 0.55%
2012 12.25%
2013 13.06%
2014 4.84%
2015 0.14%
2016 6.45%
2017 13.19%
2018 -4.03%
2019 17.71%
2020 12.92%
2021 9.31%
Index Plus Composite (Passive)
2008 -18.14%
2009 16.05%
2010 11.77%
2011 2.29%
2012 10.91%
2013 12.79%
2014 5.72%
2015 -0.52%
2016 7.23%
2017 11.59%
2018 -4.03%
2019 17.52%
2020 11.23%
2021 10.18%
Packet Page 334

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.8
billion in assets under management and $8.8 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderate active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual subadvisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1- month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

7.3%
Interm-Term Bond

34.8%
High Yield

1.0%
Short-Term Bond

10.7%
Large Cap Core

14.0%
Large Cap Growth

5.6%
Mid Cap

4.5%
Intl Stocks

7.9%
Cash

6.0%
Large Cap Value

6.4%
Real Estate

1.8%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 335

PARS DIVERSIFIED PORTFOLIOS

BALANCED

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — BALANCED PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
BALANCED PORTFOLIO?
Q2 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 32% S&P500, 6% Russell Mid Cap, 9% Russell 2000, 4% MSCI EM (net), 7% MSCI EAFE (net), 27% Bloomberg US Agg, 6.75% ICE BofA 1-3 Yr US Corp/Gov’t, 1.25% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012: the blended benchmark was 51% S&P 500; 3% Russell 2000, 6% MSCI EAFE (net), 5% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 60% S&P 500, 5% ICE BofA 1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide growth of principal
and income. While dividend and
interest income are an important
component of the objective’s
total return, it is expected that
capital appreciation will
comprise a larger portion of the
total return.

Strategic Range Policy Tactical
Equity 50 – 70% 60% 57%
Fixed Income 30 – 50% 35% 36%
Cash 0 – 20% 5% 7%

ANNUALIZED TOTAL RETURNS
(Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -11.24%
Blended Benchmark*,** -11.09%
Year To Date* -15.71%
Blended Benchmark*,** -15.55%
1 Year -13.63%
Blended Benchmark** -12.19%
3 Year 4.28%
Blended Benchmark** 4.58%
5 Year 5.51%
Blended Benchmark** 5.67%
10 Year 6.90%
Blended Benchmark** 7.13%
Index Plus Composite (Passive)
Current Quarter* -10.66%
Blended Benchmark*,** -11.09%
Year To Date* -15.47%
Blended Benchmark*,** -15.55%
1 Year -12.17%
Blended Benchmark** -12.19%
3 Year 4.28%
Blended Benchmark** 4.58%
5 Year 5.26%
Blended Benchmark** 5.67%
10 Year 6.68%
Blended Benchmark** 7.13%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2006
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 10/2007
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -25.72%
2009 21.36%
2010 14.11%
2011 -0.46%
2012 13.25%
2013 16.61%
2014 4.70%
2015 0.04%
2016 6.81%
2017 15.46%
2018 -4.88%
2019 19.85%
2020 13.85%
2021 11.44%
Index Plus Composite (Passive)
2008 -23.22%
2009 17.62%
2010 12.76%
2011 1.60%
2012 11.93%
2013 15.63%
2014 6.08%
2015 -0.81%
2016 8.26%
2017 13.39%
2018 -5.05%
2019 19.59%
2020 12.07%
2021 12.63%
Packet Page 336

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.8
billion in assets under management and $8.8 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria:

Accounts are managed by HighMark with full investment authority according to the PARS Balanced active and passive objectives.

The composite name has been changed from PARS Balanced/Moderately Aggressive to PARS Balanced on 5/1/2013. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The

0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of

0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free floatadjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the midcap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years.

The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

8.6%
Interm-Term Bond

27.6%
High Yield

0.9%
Short-Term Bond
Large Cap Core 7.5%

17.0%
Large Cap Growth

6.8%
Mid Cap

5.5%
Intl Stocks

9.4%
Cash

7.0%
Large Cap Value

7.7%
Real Estate

2.0%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 337

PARS DIVERSIFIED PORTFOLIOS

CAPITAL APPRECIATION

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — CAPITAL APPRECIATION PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
CAPITAL APPRECIATION PORTFOLIO?
Q2 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: 39.5% S&P500, 7.5% Russell Mid Cap,

10.5% Russell 2000, 5.25% MSCI EM (net), 10.25% MSCI EAFE (net), 16% Bloomberg US Agg, 3% ICE BofA 1-3 Yr US Corp/Gov’t, 1% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill.

To provide growth of principal.

The major portion of the assets
are invested in equity securities
and market fluctuations are
expected.

Strategic Range Policy Tactical
Equity 65 - 85% 75% 72%
Fixed Income 10 - 30% 20% 20%
Cash 0 - 20% 5% 8%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Consolidated Composite
Current Quarter* -12.59%
Blended Benchmark*,** -12.84%
Year To Date* -17.12%
Blended Benchmark*,** -17.27%
1 Year -14.04%
Blended Benchmark** -13.26%
3 Year 5.30%
Blended Benchmark** 5.59%
5 Year 6.42%
Blended Benchmark** 6.60%
10 Year 8.03%
Blended Benchmark** 8.36%

PORTFOLIO FACTS
Consolidated Composite
Composite Inception Date 01/2009
No of Holdings in Portfolio 20
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Consolidated Composite
2008 N/A
2009 23.77%
2010 12.95%
2011 -1.35%
2012 13.87%
2013 20.33%
2014 6.05%
2015 -0.26%
2016 8.79%
2017 16.72%
2018 -5.82%
2019 22.62%
2020 14.50%
2021 14.96%
Packet Page 338

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.8
billion in assets under management and $8.8 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Capital Appreciation active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual subadvisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

10.0%
Interm-Term Bond

16.1%
High Yield

0.8%
Short-Term Bond

3.3%
Large Cap Core Large Cap Growth 21.5%

8.3%
Mid Cap

6.9%
Intl Stocks

13.2%
Cash

8.5%
Large Cap Value

9.4%
Real Estate

2.0%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation – Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 339
Investment Guidelines Document
City of Seaside
Employee Benefits Fund Pension Plan
November 2022
DRAFT
Packet Page 340
City of Seaside Employee Benefit Fund Pension Plan DRAFT Investment Guidelines Document – HighMark Capital Management, Inc. (v. 11/2/2022- ARB) 2
Investment Guidelines Document
Scope and Purpose
The purpose of this Investment Guidelines Document is to:
• Facilitate the process of ongoing communication between the Plan Sponsor and its plan fiduciaries;
• Confirm the Plan’s investment goals and objectives and management policies applicable to the investment portfolio identified below and obtained from the Plan Sponsor; • Provide a framework to construct a well-diversified asset mix that can potentially be expected to meet the account’s short- and long-term needs that is consistent with the account’s investment objectives, liquidity considerations and risk tolerance; • Identify any unique considerations that may restrict or limit the investment discretion of its designated investment managers;
• Help maintain a long-term perspective when market volatility is caused by short-term market movements.

Key Plan Sponsor Account Information as of November 2022 Plan Sponsor: City of Seaside
Governance: The City Council for the City of Seaside
Plan Name (“Plan”): City of Seaside Employee Benefit Fund Pension Plan Trustee: US Bank
Contact: Susan Hughes, 949-224-7209
[email protected]
Type of Account: Pension Plan
ERISA Status: Not subject to ERISA
Investment Manager: US Bank, as discretionary trustee, has delegated investment management responsibilities to HighMark Capital Management, Inc. (“Investment Manager”), an SEC-registered investment adviser
Contact: Andrew Brown, CFA, 415-705-7605
[email protected]
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City of Seaside Employee Benefit Fund Pension Plan DRAFT Investment Guidelines Document – HighMark Capital Management, Inc. (v. 11/2/2022- ARB) 3
Investment Authority: Except as otherwise noted, the Trustee, US Bank, has delegated investment authority to HighMark Capital Management, an SEC-registered investment adviser.

Investment Manager has full investment discretion over the managed assets in the account.

Investment Manager is authorized to purchase, sell, exchange, invest, reinvest and manage the designated assets held in the account, all in accordance with account’s investment objectives, without prior approval or subsequent approval of any other party(ies).

Investment Objectives and Constraints
The goal of the Plan’s investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay the present and future obligations of the Plan. The following objectives are intended to assist in achieving this goal:
• The Plan should seek to earn a return in excess of its policy benchmark over the life of the Plan.
• The Plan’s assets will be managed on a total return basis which takes into consideration both investment income and capital appreciation. While the Plan Sponsor recognizes the importance of preservation of capital, it also adheres to the principle that varying degrees of investment risk are generally rewarded with compensating returns. To achieve these objectives, the Plan Sponsor allocates its assets (asset allocation) with a strategic perspective of the capital markets.

Investment Time Horizon: 5-7 years until projected distributions begin Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of future rate increases from CalPERS. It is not anticipated in the early years of the Plan that cash flow requirements will be significant.

Investment Objective: The primary objective is to generate a reasonable level of growth. The assets in this Plan will eventually be used to fund Pension Plan obligations for assets managed in the CalPERS Trust.

Risk Tolerance: Moderate
The account’s risk tolerance has been rated moderate, which demonstrates that the account can accept price fluctuations to pursue its investment objectives.

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City of Seaside Employee Benefit Fund Pension Plan DRAFT Investment Guidelines Document – HighMark Capital Management, Inc. (v. 11/2/2022- ARB) 4
Strategic Asset Allocation: The asset allocation ranges for this objective are listed below:

Strategic Asset Allocation Ranges
Cash Fixed Income Equity
0-20% 40%-60% 40%-60%
Policy: 5% Policy: 45% Policy: 50%
Market conditions may cause the account’s asset allocation to vary from the stated range from time to time. The Investment Manager will rebalance the portfolio no less than quarterly and/or when the actual weighting differs substantially from the strategic range, if appropriate and consistent with your objectives.

Security Guidelines:

Equities
With the exception of limitations and constraints described above, Investment Manager may allocate assets of the equity portion of the account among various market capitalizations (large, mid, small) and investment styles (value, growth). Further, Investment Manager may allocate assets among domestic, international developed and emerging market equity securities.

Total Equities 40%-60%
Equity Style Range
Domestic Large Cap Equity 15%-45%
Domestic Mid Cap Equity 0%-10%
Domestic Small Cap Equity 0%-15%
International Equity (incl. Emerging Markets) 0%-15%
Real Estate Investment Trust (REIT) 0%-15%
Fixed Income
In the fixed income portion of the account, Investment Manager may allocate assets among various sectors and industries, as well as varying maturities and credit quality that are consistent with the overall goals and objectives of the portfolio.

Total Fixed Income 40%-60%
Fixed Income Style Range
Long-term bonds (maturities >7 years) 0%-25%
Intermediate-term bonds (maturities 3-7 years) 25%-60%
Short-Term bonds (maturities <3 years) 0%-25%
High Yield bonds 0%-10%
Packet Page 343
City of Seaside Employee Benefit Fund Pension Plan DRAFT Investment Guidelines Document – HighMark Capital Management, Inc. (v. 11/2/2022- ARB) 5
Performance Benchmarks:

The performance of the total Plan shall be measured over a three and five-year periods. These periods are considered sufficient to accommodate the market cycles experienced with investments. The performance shall be compared to the return of the total portfolio blended benchmark shown below.

Total Portfolio Blended Benchmark

26.50% S&P 500 Index

5.00% Russell Mid Cap Index

7.50% Russell 2000 Index

3.25% MSCI Emerging Market Index

6.00% MSCI EAFE Index

1.75% Wilshire REIT Index

33.50% Bloomberg US Aggregate Bond Index

10.00% ICE BofA 1-3 Year US Corp/Gov’t Index

1.50% ICE BofA High Yield Master II Index

5.00% FTSE 1Mth T-Bill Index
Asset Class/Style Benchmarks
Over a market cycle, the long-term objective for each investment strategy is to add value to a market benchmark. The following are the benchmarks used to monitor each investment strategy:

Large Cap Equity S&P 500 Index
Growth S&P 500 Growth Index
Value S&P 500 Value Index
Mid Cap Equity Russell Mid Cap Index
Growth Russell Mid Cap Growth Index
Value Russell Mid Cap Value Index
Small Cap Equity Russell 2000 Index
Growth Russell 2000 Growth Index
Value Russell 2000 Value Index
REITs Wilshire REIT Index
International Equity MSCI EAFE Index
Investment Grade Bonds Bloomberg US Aggregate Bond Index High Yield ICE BofA High Yield Master II Index
Security Selection
Investment Manager may utilize a full range of investment vehicles when constructing the investment portfolio, including but not limited to individual securities, mutual funds, and exchangetraded funds. In addition, to the extent permissible, Investment Manager is authorized to invest in shares of mutual funds in which the Investment Manager serves as advisor or sub-adviser.

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City of Seaside Employee Benefit Fund Pension Plan DRAFT Investment Guidelines Document – HighMark Capital Management, Inc. (v. 11/2/2022- ARB) 6
Investment Limitations:

The following investment transactions are prohibited:
• Direct investments in precious metals (precious metals mutual funds and exchange-traded funds are permissible).
• Venture Capital
• Short sales*
• Purchases of Letter Stock, Private Placements, or direct payments • Leveraged Transactions*
• Commodities Transactions Puts, calls, straddles, or other option strategies* • Purchases of real estate, with the exception of REITs • Derivatives, with exception of ETFs*
*Permissible in diversified mutual funds and exchange-traded funds Duties and Responsibilities
Responsibilities of Plan Sponsor
The Plan Administrator for City of Seaside is responsible for:
 Confirming the accuracy of this Investment Guidelines Document, in writing.  Advising Trustee and Investment Manager of any change in the plan/account’s financial situation, funding status, or cash flows, which could possibly necessitate a change to the account’s overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to the overall investment objective and goals for the account.  Monitoring and supervising all service vendors and investment options, including investment managers.
 Avoiding prohibited transactions and conflicts of interest.

Responsibilities of Trustee
The plan Trustee is responsible for:
 Valuing the holdings.
 Collecting all income and dividends owed to the Plan.  Settling all transactions (buy-sell orders).

Responsibilities of Investment Manager
The Investment Manager is responsible for:
 Assisting the Plan Administrator with the development and maintenance of this Investment Policy Guideline document annually.
 Meeting with the Plan Administrator annually to review portfolio structure, holdings, and performance.
 Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this statement.
 Researching and monitoring investment advisers and investment vehicles.  Purchasing, selling, and reinvesting in securities held in the account.  Monitoring the performance of all selected assets.
 Voting proxies, if applicable.
 Recommending changes to any of the above.

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City of Seaside Employee Benefit Fund Pension Plan DRAFT Investment Guidelines Document – HighMark Capital Management, Inc. (v. 11/2/2022- ARB) 7
 Periodically reviewing the suitability of the investments, being available to meet with the committee at least once each year, and being available at such other times within reason at your request.
 Preparing and presenting appropriate reports.
 Informing the committee if changes occur in personnel that are responsible for portfolio management or research.

Acknowledgement and Acceptance
I/We being the Plan Sponsor with responsibility for the account(s) held on behalf of the Plan Sponsor specified below, designate Investment Manager as having the investment discretion and management responsibility indicated in relation to all assets of the Plan or specified Account. If such designation is set forth in the Plan/trust, I/We hereby confirm such designation as Investment Manager.

I have read the Investment Guidelines Document, and confirm the accuracy of it, including the terms and conditions under which the assets in this account are to be held, managed, and disposed of by Investment Manager. This Investment Guidelines Document supersedes all previous versions of an Investment Guidelines Document or investment objective instructions that may have been executed for this account.
__________________________________________________ Date:________________ Plan Sponsor: City of Seaside
__________________________________________________ Date:________________ Investment Manager: Andrew Brown, CFA, Senior Portfolio Manager, (415) 705-7605 Packet Page 346
HighMark Plus Composite (Active)
Current Quarter* -3.93%
Blended Benchmark*,** -3.63%
Year To Date* -14.84%
Blended Benchmark*,** -12.94%
1 Year -14.21%
Blended Benchmark** -12.10%
3 Year -1.23%
Blended Benchmark** -0.84%
5 Year 1.01%
Blended Benchmark** 1.19%
10 Year 2.35%
Blended Benchmark** 2.27%

PARS DIVERSIFIED PORTFOLIOS

CONSERVATIVE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
CONSERVATIVE PORTFOLIO?
Q3 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 7.5% S&P500,

1.5% Russell Mid Cap, 2.5% Russell 2000, 1% MSCI EM (net), 2% MSCI EAFE (net), 52.25% Bloomberg US Agg, 25.75% ICE BofA 1-3 Yr US Corp/Gov’t, 2% ICE BofA US High Yield Master II, 0.5% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012, the blended benchmark was 12% S&P 500; 1% Russell 2000, 2% MSCI EAFE (net), 40% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 15% S&P 500, 40% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide a consistent level of
inflation-protected income over
the long-term. The major portion
of the assets will be fixed
income related. Equity securities
are utilized to provide inflation
protection.

Conservative
Moderately Conservative
Moderate
Balanced
Capital Appreciation
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Strategic Range Policy Tactical
Equity 5 – 20% 15% 14%
Fixed Income 60 – 95% 80% 82%
Cash 0 – 20% 5% 4%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Index Plus Composite (Passive)
Current Quarter* -3.97%
Blended Benchmark*,** -3.63%
Year To Date* -14.22%
Blended Benchmark*,** -12.94%
1 Year -13.40%
Blended Benchmark** -12.10%
3 Year -1.25%
Blended Benchmark** -0.84%
5 Year 0.94%
Blended Benchmark** 1.19%
10 Year 2.11%
Blended Benchmark** 2.27%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 07/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 07/2004
No of Holdings in Portfolio 13
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -9.04%
2009 15.59%
2010 8.68%
2011 2.19%
2012 8.45%
2013 3.69%
2014 3.88%
2015 0.29%
2016 4.18%
2017 6.73%
2018 -1.35%
2019 11.05%
2020 9.03%
2021 2.20%
Index Plus Composite (Passive)
2008 -6.70%
2009 10.49%
2010 7.67%
2011 3.70%
2012 6.22%
2013 3.40%
2014 4.32%
2015 0.06%
2016 3.75%
2017 5.52%
2018 -1.09%
2019 10.37%
2020 8.56%
2021 1.97%
Packet Page 347

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.7
billion in assets under management and $8.7 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA ®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria:

Accounts are managed by HighMark with full investment authority according to the PARS Conservative active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios.

US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank.

The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free floatadjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the midcap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT Index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years.

The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

2.3%
Interm-Term Bond

62.4% High Yield

1.1%
Short-Term Bond

18.0%
Large Cap Core

4.2%
Large Cap Growth

1.6%
Mid Cap

1.4%
Intl Stocks

2.2%
Cash

4.5%
Large Cap Value

1.8% Real Estate

0.5%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 348

PARS DIVERSIFIED PORTFOLIOS

MODERATELY CONSERVATIVE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — MODERATELY CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
MODERATELY CONSERVATIVE PORTFOLIO?
Q3 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 15.5% S&P500, 3% Russell Mid Cap, 4.5% Russell 2000, 2% MSCI EM (net), 4% MSCI EAFE (net), 49.25% Bloomberg US Agg, 14% ICE BofA 1- 3 Yr US Corp/Gov’t, 1.75% ICE BofA US High Yield Master II, 1% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 - 9/30/2012: the blended benchmark was 25% S&P 500; 1.5% Russell 2000, 3.5% MSCI EAFE (net), 25% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007, the blended benchmark was 30% S&P 500, 25% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide current income, with
capital appreciation as a
secondary objective. The major
portion of the assets is
committed to income-producing
securities. Market fluctuations
should be expected.

Strategic Range Policy Tactical
Equity 20 - 40% 30% 28%
Fixed Income 50 - 80% 65% 67%
Cash 0 - 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -4.11%
Blended Benchmark*,** -4.12%
Year To Date* -16.43%
Blended Benchmark*,** -15.65%
1 Year -14.98%
Blended Benchmark** -13.82%
3 Year 0.00%
Blended Benchmark** 0.18%
5 Year 1.91%
Blended Benchmark** 2.11%
10 Year 3.51%
Blended Benchmark** 3.58%
Index Plus Composite (Passive)
Current Quarter* -4.21%
Blended Benchmark*,** -4.12%
Year To Date* -15.94%
Blended Benchmark*,** -15.65%
1 Year -14.17%
Blended Benchmark** -13.82%
3 Year -0.10%
Blended Benchmark** 0.18%
5 Year 1.87%
Blended Benchmark** 2.11%
10 Year 3.36%
Blended Benchmark** 3.58%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 08/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2005
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -15.37%
2009 18.71%
2010 10.46%
2011 1.75%
2012 10.88%
2013 7.30%
2014 4.41%
2015 0.32%
2016 4.94%
2017 9.56%
2018 -2.60%
2019 13.73%
2020 10.76%
2021 5.15%
Index Plus Composite (Passive)
2008 -12.40%
2009 11.92%
2010 9.72%
2011 3.24%
2012 8.24%
2013 6.78%
2014 5.40%
2015 -0.18%
2016 5.42%
2017 8.08%
2018 -2.33%
2019 13.53%
2020 9.74%
2021 5.33%
Packet Page 349

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.7
billion in assets under management and $8.7 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderately Conservative active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees).

Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S.

Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap 4.3%
Interm-Term Bond

52.5%
High Yield 1.0%
Short-Term Bond

13.5%
Large Cap Core

8.2%
Large Cap Growth

3.3%
Mid Cap 2.7%
Intl Stocks 4.7%
Cash 5.0%
Large Cap Value

3.8% Real Estate 1.0%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 350

PARS DIVERSIFIED PORTFOLIOS

MODERATE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — MODERATE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
MODERATE PORTFOLIO?
Q3 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 26.5% S&P500, 5% Russell Mid Cap, 7.5% Russell 2000, 3.25% MSCI EM (net), 6% MSCI EAFE (net), 33.50% Bloomberg US Agg, 10% ICE BofA 1-3 Yr US Corp/Gov’t, 1.50% ICE BofA US High Yield Master II, 1.75% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012: the blended benchmark was 43% S&P 500; 2% Russell 2000, 5% MSCI EAFE (net), 15% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 50% S&P 500, 15% ICE BofA 1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide current income and
moderate capital appreciation.

It is expected that dividend and
interest income will comprise a
significant portion of total return,
although growth through capital
appreciation is equally important.

Strategic Range Policy Tactical
Equity 40 - 60% 50% 47%
Fixed Income 40 - 60% 45% 48%
Cash 0 - 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -4.40%
Blended Benchmark*,** -4.37%
Year To Date* -18.47%
Blended Benchmark*,** -18.08%
1 Year -15.92%
Blended Benchmark** -15.01%
3 Year 1.69%
Blended Benchmark** 1.85%
5 Year 3.20%
Blended Benchmark** 3.43%
10 Year 5.10%
Blended Benchmark** 5.33%
Index Plus Composite (Passive)
Current Quarter* -4.42%
Blended Benchmark*,** -4.37%
Year To Date* -18.11%
Blended Benchmark*,** -18.08%
1 Year -15.03%
Blended Benchmark** -15.01%
3 Year 1.51%
Blended Benchmark** 1.85%
5 Year 3.09%
Blended Benchmark** 3.43%
10 Year 4.97%
Blended Benchmark** 5.33%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2006
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -22.88%
2009 21.47%
2010 12.42%
2011 0.55%
2012 12.25%
2013 13.06%
2014 4.84%
2015 0.14%
2016 6.45%
2017 13.19%
2018 -4.03%
2019 17.71%
2020 12.92%
2021 9.31%
Index Plus Composite (Passive)
2008 -18.14%
2009 16.05%
2010 11.77%
2011 2.29%
2012 10.91%
2013 12.79%
2014 5.72%
2015 -0.52%
2016 7.23%
2017 11.59%
2018 -4.03%
2019 17.52%
2020 11.23%
2021 10.18%
Packet Page 351

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.7
billion in assets under management and $8.7 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderate active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub- advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1- month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

7.0%
Interm-Term Bond

36.3%
High Yield

1.0% Short-Term Bond

10.7%
Large Cap Core

14.0%
Large Cap Growth

5.6%
Mid Cap

4.5%
Intl Stocks

7.3%
Cash

5.4%
Large Cap Value

6.4%
Real Estate

1.8%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 352

PARS DIVERSIFIED PORTFOLIOS

BALANCED

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — BALANCED PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
BALANCED PORTFOLIO?
Q3 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 32% S&P500, 6% Russell Mid Cap, 9% Russell 2000, 4% MSCI EM (net), 7% MSCI EAFE (net), 27% Bloomberg US Agg, 6.75% ICE BofA 1-3 Yr US Corp/Gov’t, 1.25% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012: the blended benchmark was 51% S&P 500; 3% Russell 2000, 6% MSCI EAFE (net), 5% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 60% S&P 500, 5% ICE BofA 1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide growth of principal
and income. While dividend and
interest income are an important
component of the objective’s
total return, it is expected that
capital appreciation will
comprise a larger portion of the
total return.

Strategic Range Policy Tactical
Equity 50 – 70% 60% 56%
Fixed Income 30 – 50% 35% 38%
Cash 0 – 20% 5% 6%

ANNUALIZED TOTAL RETURNS
(Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -4.53%
Blended Benchmark*,** -4.57%
Year To Date* -19.53%
Blended Benchmark*,** -19.41%
1 Year -16.46%
Blended Benchmark** -15.76%
3 Year 2.47%
Blended Benchmark** 2.62%
5 Year 3.79%
Blended Benchmark** 4.04%
10 Year 5.93%
Blended Benchmark** 6.18%
Index Plus Composite (Passive)
Current Quarter* -4.55%
Blended Benchmark*,** -4.57%
Year To Date* -19.32%
Blended Benchmark*,** -19.41%
1 Year -15.61%
Blended Benchmark** -15.76%
3 Year 2.28%
Blended Benchmark** 2.62%
5 Year 3.63%
Blended Benchmark** 4.04%
10 Year 5.75%
Blended Benchmark** 6.18%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2006
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 10/2007
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -25.72%
2009 21.36%
2010 14.11%
2011 -0.46%
2012 13.25%
2013 16.61%
2014 4.70%
2015 0.04%
2016 6.81%
2017 15.46%
2018 -4.88%
2019 19.85%
2020 13.85%
2021 11.44%
Index Plus Composite (Passive)
2008 -23.22%
2009 17.62%
2010 12.76%
2011 1.60%
2012 11.93%
2013 15.63%
2014 6.08%
2015 -0.81%
2016 8.26%
2017 13.39%
2018 -5.05%
2019 19.59%
2020 12.07%
2021 12.63%
Packet Page 353

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.7
billion in assets under management and $8.7 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria:

Accounts are managed by HighMark with full investment authority according to the PARS Balanced active and passive objectives.

The composite name has been changed from PARS Balanced/Moderately Aggressive to PARS Balanced on 5/1/2013. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The

0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of

0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float- adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid- cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years.

The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

8.4%
Interm-Term Bond

29.6%
High Yield

0.9%
Short-Term Bond

7.5%
Large Cap Core

17.0%
Large Cap Growth

6.8%
Mid Cap

5.5%
Intl Stocks

8.6%
Cash

6.0%
Large Cap Value

7.7%
Real Estate

2.0%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 354

PARS DIVERSIFIED PORTFOLIOS

CAPITAL APPRECIATION

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — CAPITAL APPRECIATION PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
CAPITAL APPRECIATION PORTFOLIO?
Q3 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: 39.5% S&P500, 7.5% Russell Mid Cap,

10.5% Russell 2000, 5.25% MSCI EM (net), 10.25% MSCI EAFE (net), 16% Bloomberg US Agg, 3% ICE BofA 1-3 Yr US Corp/Gov’t, 1% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill.

To provide growth of principal.

The major portion of the assets
are invested in equity securities
and market fluctuations are
expected.

Strategic Range Policy Tactical
Equity 65 - 85% 75% 70%
Fixed Income 10 - 30% 20% 23%
Cash 0 - 20% 5% 7%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Consolidated Composite
Current Quarter* -4.72%
Blended Benchmark*,** -4.90%
Year To Date* -21.04%
Blended Benchmark*,** -21.32%
1 Year -16.95%
Blended Benchmark** -16.94%
3 Year 3.43%
Blended Benchmark** 3.59%
5 Year 4.57%
Blended Benchmark** 4.76%
10 Year 7.03%
Blended Benchmark** 7.30%

PORTFOLIO FACTS
Consolidated Composite
Composite Inception Date 01/2009
No of Holdings in Portfolio 20
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Consolidated Composite
2008 N/A
2009 23.77%
2010 12.95%
2011 -1.35%
2012 13.87%
2013 20.33%
2014 6.05%
2015 -0.26%
2016 8.79%
2017 16.72%
2018 -5.82%
2019 22.62%
2020 14.50%
2021 14.96%
Packet Page 355

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.7
billion in assets under management and $8.7 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 16
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Capital Appreciation active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub- advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. 350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

9.7%
Interm-Term Bond

18.6%
High Yield

0.8%
Short-Term Bond

3.3%
Large Cap Core

21.5%
Large Cap Growth

8.3%
Mid Cap

6.9%
Intl Stocks

12.2%
Cash

7.3%
Large Cap Value

9.4%
Real Estate

2.0%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation – Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Packet Page 356