Agenda packet — Solana Beach City Council, June 14, 2023 (part 1 of 6)

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 1 of 10 AGENDA
Joint REGULAR Meeting
Wednesday, June 14, 2023 * 6:00 p.m.

City Hall / Council Chambers, 635 S. Highway 101, Solana Beach, California  City Council meetings are video recorded and archived as a permanent record. The video recording captures the complete proceedings of the meeting and is available for viewing on the City's website.  Posted Reports & Supplemental Docs contain records up to the cut off time prior to meetings for processing new submittals. Complete records containing meeting handouts, PowerPoints, etc. can be obtained through a Records Request.

PUBLIC MEETING ACCESS
The Regular Meetings of the City Council are scheduled for the 2nd and 4th Wednesdays and are broadcast live. The video taping of meetings are maintained as a permanent record and contain a detailed account of the proceedings. Council meeting tapings are archived and available for viewing on the City’s Public Meetings webpage.

WATCH THE MEETING
• Live web-streaming: Meetings web-stream live on the City’s website on the City’s Public Meetings webpage.

Find the large Live Meeting button.
• Live Broadcast on Local Govt. Channel: Meetings are broadcast live on Cox Communications - Channel 19 / Spectrum (Time Warner)-Channel 24 / AT&T U-verse Channel 99. • Archived videos online: The video taping of meetings are maintained as a permanent record and contain a detailed account of the proceedings. Council meeting tapings are archived and available for viewing on the City’s Public Meetings webpage.

AGENDA MATERIALS
A full City Council agenda packet including relative supporting documentation is available at City Hall, the Solana Beach Branch Library (157 Stevens Ave.), La Colonia Community Ctr., and online www.cityofsolanabeach.org. Agendas are posted at least 72 hours prior to regular meetings and at least 24 hours prior to special meetings. Writings and documents regarding an agenda of an open session meeting, received after the official posting, and distributed to the Council for consideration, will be made available for public viewing at the same time. In addition, items received at least 1 hour 30 minutes prior to the meeting time will be uploaded online with the agenda posting. Materials submitted for consideration should be forwarded to the City Clerk’s Department 858-720-2400. The designated location for viewing of hard copies is the City Clerk’s office at City Hall during normal business hours.

PUBLIC COMMENTS
Written correspondence (supplemental items) regarding an agenda item at an open session meeting should be submitted to the City Clerk’s Office at [email protected] with a) Subject line to include the meeting date b) Include the Agenda Item # as listed on the Agenda. o Correspondence received after the official posting of the agenda, but two hours prior to the meeting start time, on the meeting day, will be distributed to Council and made available online along with the agenda posting. All submittals received before the start of the meeting will be made part of the record. o Written submittals will be added to the record and not read out loud.

And/Or
Verbal Comment Participation:

Please submit a speaker slip to the City Clerk prior to the meeting, or the announcement of the Section/Item, to provide public comment. Allotted times for speaking are outlined on the speaker’s slip for each agenda section: Oral Communications, Consent, Public Hearings and Staff Reports.

Public speakers have 3 minutes each to speak on each topic. Time may be donated by another individual

CITY OF SOLANA BEACH

SOLANA BEACH CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY,

PUBLIC FINANCING AUTHORITY, & HOUSING AUTHORITY
Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 2 of 10 who is present at the meeting to allow an individual up to 6 minutes to speak. Group: Time may be donated by two individuals who are present at the meeting allowing an individual up to 10 minutes to speak. Group Hearings: For public hearings only, time may be donated by two individuals who are present at the meeting allowing an individual up to 15 minutes to speak.

SPECIAL ASSISTANCE NEEDED
In compliance with the Americans with Disabilities Act of 1990, persons with a disability may request an agenda in appropriate alternative formats as required by Section 202. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s office (858) 720-2400 at least 72 hours prior to the meeting.

As a courtesy to all meeting attendees, please set all electronic devices to silent mode and engage in conversations outside the Council Chambers.

CITY COUNCILMEMBERS
Lesa Heebner
Mayor
David A. Zito
Deputy Mayor / Councilmember District 1
Jewel Edson
Councilmember District 3
Kristi Becker
Councilmember District 2
Jill MacDonald
Councilmember District 4
Gregory Wade
City Manager
Johanna Canlas
City Attorney
Angela Ivey
City Clerk
SPEAKERS:

Please submit your speaker slip to the City Clerk prior to the meeting or the announcement of the Item.

Allotted times for speaking are outlined on the speaker’s slip for Oral Communications, Consent, Public Hearings and Staff Reports.

READING OF ORDINANCES AND RESOLUTIONS:

Pursuant to Solana Beach Municipal Code Section 2.04.460, at the time of introduction or adoption of an ordinance or adoption of a resolution, the same shall not be read in full unless after the reading of the title, further reading is requested by a member of the Council. If any Councilmember so requests, the ordinance or resolution shall be read in full. In the absence of such a request, this section shall constitute a waiver by the council of such reading.

CALL TO ORDER AND ROLL CALL:

CLOSED SESSION REPORT:

FLAG SALUTE:

APPROVAL OF AGENDA:

PROCLAMATIONS/CERTIFICATES: Ceremonial
PRESENTATIONS: Ceremonial items that do not contain in-depth discussion and no action/direction. • Santa Fe Irrigation District 100th Year Anniversary
• Santa Fe Irrigation District 100th Year Anniversary
• Juneteenth
• Pride Month
Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 3 of 10 ORAL COMMUNICATIONS:

Comments relating to items on this evening’s agenda are taken at the time the items are heard. This portion of the agenda provides an opportunity for members of the public to address the City Council on items relating to City business and not appearing on today’s agenda by submitting a speaker slip (located on the back table) to the City Clerk. Pursuant to the Brown Act, no action shall be taken by the City Council on public comment items. Council may refer items to the City Manager for placement on a future agenda. The maximum time allotted for each presentation is THREE MINUTES. No donations of time are permitted (SBMC 2.04.190). Please be aware of the timer light on the Council Dais.

COUNCIL COMMUNITY ANNOUNCEMENTS / COMMENTARY:

An opportunity for City Council to make brief announcements or report on their activities. These items are not agendized for official City business with no action or substantive discussion.

A. CONSENT CALENDAR: (Action Items) (A.1. - A.9.)
Items listed on the Consent Calendar are to be acted in a single action of the City Council unless pulled for discussion. Any member of the public may address the City Council on an item of concern by submitting to the City Clerk a speaker slip (located on the back table) before the Consent Calendar is addressed. Those items removed from the Consent Calendar by a member of the Council will be trailed to the end of the agenda, while Consent Calendar items removed by the public will be heard immediately after approval of the Consent Calendar to hear the public speaker.

All speakers should refer to the public comment section at the beginning of the agenda for details.

Please be aware of the timer light on the Council Dais.

A.1. Minutes of the City Council.

Recommendation: That the City Council

1. Approve the Minutes of the City Council meetings held on May 12, 2023 and May 24, 2023.

Item A.1. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

A.2. Register Of Demands. (File 0300-30)
Recommendation: That the City Council

1. Ratify the list of demands for May 06, 2023 – May 26, 2023.

Item A.2. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

A.3. General Fund Adopted Budget for Fiscal Year 2022/2023 Changes. (File 0330-30) Recommendation: That the City Council

1. Receive the report listing changes made to the Fiscal Year 2022/2023 General Fund Adopted Budget.

Item A.3. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 4 of 10 A.4. Worker’s Compensation Claims Third Party Administrator (TPA). (File 0180-70) Recommendation: That the City Council

1. Adopt Resolution 2023-036:
a. Authorizing the City Manager to execute the Agreement for a Third-Party Administrator for the City’s Worker’s Compensation Program for one year with an authorization of agreement extensions for up to four additional years at the City Manager’s discretion.
b. Authorize the City Treasurer to amend the FY 2022/23 Adopted Budget to appropriate $13,400 for implementation in the Workers Compensation fund for Professional Services.
c. Authorize a contract amount for CorVel in the not-to-exceed amount of $125,000 per contract year.

Item A.4. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

A.5. Annual Investment Policy. (File 0350-30)
Recommendation: That the City Council

1. Adopt Resolution 2023-072 approving the City’s Investment Policy for Fiscal Year 2023/24.

Item A.5. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

A.6. Fire Benefit Fee – Fiscal Year (FY) 2023/24. (File 0495-20) Recommendation: That the City Council

1. Adopt Resolution 2023-071:
a. Setting the FY 2023/24 Fire Benefit Fee at $10.00 per unit, and b. Approving the Fee for levying on the tax roll.

Item A.6. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 5 of 10 A.7. Municipal Improvement Districts Benefit (MID) Fees – Fiscal Year (FY) 2023/24. (File 0495-20) Recommendation: That the City Council

1. Approve Resolution 2023-067, setting the Benefit Charges for MID No. 9C, Santa Fe Hills, at $232.10 per unit for FY 2023/24.

2. Approve Resolution 2023-068, setting the Benefit Charges for MID No. 9E, Isla Verde, at $68.74 per unit for FY 2023/24.

3. Approve Resolution 2023-069, setting the Benefit Charges for MID No. 9H, San Elijo Hills # 2, at $289.58 per unit for FY 2023/24.

4. Approve Resolution 2023-070, setting the Benefit Charges for MID No. 33, Highway 101/Railroad Right-of-Way, at $3.12 per unit for FY 2023/24.

Item A.7. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

A.8. Lomas Santa Fe Drive Bridge Repairs Project. (File 0820-15) Recommendation: That the City Council

1. Adopt Resolution 2023-080
a. Authorizing the City Council to accept, as complete, the Lomas Santa Fe Drive Bridge Repairs Project, Bid No. 2022-03, performed by Beador Construction Company.
b. Authorizing the City Clerk to file a Notice of Completion for the project.

Item A.8. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

A.9. Medical Expense Reimbursement Plan – Retiree Medical Trust provided by The California Firefighters Benefit Trust, Effective June 2023. (File 0500-00) Recommendation: That the City Council

1. Adopt Resolution 2023-083 to implement a Medical Expense Reimbursement Plan – Retiree Medical Trust for the Solana Beach Firefighters’ Association members.

2. Adopt the Side letter between the City and the Solana Beach Firefighters' Association to modify and update Section 20 of the MOU to reflect the new Medical Expense Reimbursement Plan.

3. Adopt the Joinder Agreement between the City of Solana Beach Fire Association and California Fire Benefit Trust in order to implement a Medical Expense Reimbursement Plan – Retiree Medical Trust.

Item A.9. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 6 of 10 B. PUBLIC HEARINGS: (B.1. – B.4.)
This portion of the agenda provides citizens an opportunity to express their views on a specific issue as required by law after proper noticing by submitting a speaker slip (located on the back table) to the City Clerk. After considering all of the evidence, including written materials and oral testimony, the City Council must make a decision supported by findings and the findings must be supported by substantial evidence in the record. An applicant or designee(s) for a private development/business project, for which the public hearing is being held, is allotted a total of fifteen minutes to speak, as per SBMC

2.04.210. A portion of the fifteen minutes may be saved to respond to those who speak in opposition. All other speakers should refer to the public comment section at the beginning of the agenda for time allotment. Please be aware of the timer light on the Council Dais.

B.1. Public Hearing: Solana Beach Lighting Maintenance District Annual Assessments. (File 0495-20)
Recommendation: That the City Council

1. Conduct the Public Hearing: Open the Public Hearing, Report Council Disclosures, Receive Public Testimony, and Close the Public Hearing.

2. Adopt Resolution 2023-078 confirming the diagram and assessment and approving the City of Solana Beach Lighting Maintenance District Engineer’s Report.

3. Adopt Resolution 2023-079 ordering the levy and collection of annual assessments for FY 2023/24 and ordering the transmission of charges to the County Auditor for collection.

Item B.1. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 7 of 10 B.2. Public Hearing: Solana Beach Coastal Rail Trail (CRT) Maintenance District Annual Assessments. (File 0495-20)
Recommendation: That the City Council

1. Conduct the Public Hearing: Open the Public Hearing, Report Council Disclosures, Receive Public Testimony, and Close the Public Hearing.

2. Adopt Resolution 2023-076, approving the Engineer's Report regarding the Coastal Rail Trail Maintenance District.

3. Adopt Resolution 2023-077, ordering the levy and collection of the annual assessments regarding the Coastal Rail Trail Maintenance District for Fiscal Year 2023/24.

Item B.2. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

B.3. Public Hearing: 141 Pacific Ave., Applicant: Maribel & Travis Bradberry, Case:

DRP23-001. (File 0600-40)
The proposed project meets the minimum objective requirements under the LUP, SBMC, is consistent with the General Plan and may be found, as conditioned, to meet the discretionary findings required as discussed in this report to approve a DRP.

Therefore, Staff recommends that the City Council:

1. Conduct the Public Hearing: Open the Public Hearing, Report Council Disclosures, Receive Public Testimony, and Close the Public Hearing.

2. Find the project exempt from the California Environmental Quality Act pursuant to Section 15301 of the State CEQA Guidelines; and

3. If the City Council makes the requisite findings and approves the project, adopt Resolution 2023-074 conditionally approving like for like replacement of the existing siding, windows, exterior doors, waterproofing, non-structural roofing and exterior light fixtures at 141 Pacific Avenue.

Item B.3. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 8 of 10 B.4. Public Hearing: 228 N. Helix Ave., Applicant: Ryan Bowers, Case No.: DRP22- 013, SDP22-011. (File 0600-40)
The proposed project meets the minimum zoning requirements under the SBMC, may be found to be consistent with the General Plan and may be found, as conditioned, to meet the discretionary findings required as discussed in this report to approve a DRP and SDP. Therefore, Staff recommends that the City Council:

1. Conduct the Public Hearing: Open the Public Hearing, Report Council Disclosures, Receive Public Testimony, and Close the Public Hearing.

2. Find the project exempt from the California Environmental Quality Act pursuant to Section 15303 of the State CEQA Guidelines; and

3. If the City Council makes the requisite findings and approves the project, adopt Resolution 2023-064 conditionally approving a DRP and SDP for a new two-story, single-family residence with a fully subterranean basement and an attached two-car garage and perform associated site improvements at 228 North Helix Avenue, Solana Beach.

Item B.4. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

C. STAFF REPORTS: (C.1. – C.2.)
Submit speaker slips to the City Clerk.

All speakers should refer to the public comment section at the beginning of the agenda for time allotments. Please be aware of the timer light on the Council Dais.

C.1. Community Grant Program Requests – Fiscal Year (FY) 2023/24. (File 0330-25) Recommendation: That the City Council

1. Receive the Staff Report, Community Grant applications and consider the presentations from the grant applicants. This item will come back to the City Council at the June 24, 2023 City Council Meeting for Council’s grant allocations.

Item C.1. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

C.2. Review of the Draft Fiscal Years 2023/24 and 2024/25 Budget. (File 0330-30) Recommendation: That the City Council

1. Review the FY 2021/22 and FY 2022/23 draft Budget and provide Staff with direction to formulate the budget for adoption on June 28, 2023.

Item C.2. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 9 of 10 WORK PLAN COMMENTS:

Adopted June 22, 2022
COMPENSATION & REIMBURSEMENT DISCLOSURE:

GC: Article 2.3. Compensation: 53232.3. (a) Reimbursable expenses shall include, but not be limited to, meals, lodging, and travel. 53232.3 (d) Members of a legislative body shall provide brief reports on meetings attended at the expense of the local agency “City” at the next regular meeting of the legislative body.

COUNCIL COMMITTEE REPORTS: Council Committees
REGIONAL COMMITTEES: (outside agencies, appointed by this Council) a. City Selection Committee (meets twice a year) Primary-Heebner, Alternate-Edson b. Clean Energy Alliance (CEA) JPA: Primary-Becker, Alternate-Zito c. County Service Area 17: Primary-MacDonald, Alternate-Edson d. Escondido Creek Watershed Authority: Becker / Staff (no alternate). e. League of Ca. Cities’ San Diego County Executive Committee: Primary-MacDonald, Alternate-Becker. Subcommittees determined by its members. f. League of Ca. Cities’ Local Legislative Committee: Primary-MacDonald, Alternate-Becker g. League of Ca. Cities’ Coastal Cities Issues Group (CCIG): Primary-MacDonald, Alternate-Becker
h. North County Dispatch JPA: Primary-MacDonald, Alternate-Becker i. North County Transit District: Primary-Edson, Alternate-MacDonald j. Regional Solid Waste Association (RSWA): Primary-Zito, Alternate-MacDonald k. SANDAG: Primary-Heebner, 1st Alternate-Zito, 2nd Alternate-Edson. Subcommittees determined by its members.
l. SANDAG Shoreline Preservation Committee: Primary-Becker, Alternate-Zito m. San Dieguito River Valley JPA: Primary-MacDonald, Alternate-Becker n. San Elijo JPA: Primary-Zito, Primary-Becker, Alternate-City Manager o. 22nd Agricultural District Association Community Relations Committee: Primary-Edson, Primary-Heebner
STANDING COMMITTEES: (All Primary Members) (Permanent Committees) a. Business Liaison Committee – Zito, Edson
b. Fire Dept. Management Governance & Organizational Evaluation – Edson, MacDonald c. Highway 101 / Cedros Ave. Development Committee – Heebner, Edson d. Parks and Recreation Committee – Zito, Becker
e. Public Arts Committee – Edson, Heebner
f. School Relations Committee – Becker, MacDonald
g. Solana Beach-Del Mar Relations Committee – Heebner, Edson

CITIZEN COMMISSION(S)
a. Climate Action Commission – Zito, Becker
ADJOURN:

Next Regularly Scheduled Meeting is June 28, 2023
Always refer to the City’s website Event Calendar for an updated schedule or contact City Hall. www.cityofsolanabeach.org 858-720-2400
Solana Beach City Council Regular Meeting Agenda June 14, 2023 Page 10 of 10

AFFIDAVIT OF POSTING

STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

CITY OF SOLANA BEACH
§
I, Angela Ivey, City Clerk of the City of Solana Beach, do hereby certify that this Agenda for the June 14, 2023 Council Meeting was called by City Council, Successor Agency to the Redevelopment Agency, Public Financing Authority, and the Housing Authority of the City of Solana Beach, California, was provided and posted on June 8, 2023 at 4:00 p.m. on the City Bulletin Board at the entrance to the City Council Chambers. Said meeting is held at 6:00 p.m., June 14, 2023, in the Council Chambers, at City Hall, 635 S. Highway 101, Solana Beach, California.

Angela Ivey, City Clerk
City of Solana Beach, CA
UPCOMING CITIZEN CITY COMMISSION AND COMMITTEE MEETINGS:

Regularly Scheduled, or Special Meetings that have been announced, are posted on each Citizen Commission’s Agenda webpage. See the Citizen Commission’s Agenda webpages or the City’s Events Calendar for updates. o Budget & Finance Commission
o Climate Action Commission
o Parks & Recreation Commission
o Public Arts Commission
o View Assessment Commission
}

MINUTES
Joint Meeting - Closed Session
Wednesday, May 10, 2023 at 5:00 p.m.

City Hall / Council Chambers, 635 S. Highway 101, Solana Beach, California

Mayor Heebner called the meeting to order at 5:00 p.m.

Present: Lesa Heebner, David A. Zito, Jewel Edson, Kristi Becker, Jill MacDonald

Absent: None
Also Present: Greg Wade, City Manager
Johanna Canlas, City Attorney
PUBLIC COMMENT ON CLOSED SESSION ITEMS (ONLY): None
CLOSED SESSION:

1. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency designated representative: Gregory Wade
Employee organizations: Marine Safety Unit, Miscellaneous

2. CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Pursuant to Government Code Section 54956.8
Property: APN: 263-352-03,04,05,06 and 07 and 263-342-02 City Negotiators: City Manager Gregory Wade and City Attorney Johanna Canlas Negotiating Parties: Matt Tucker, North County Transit District Under negotiation: Purchase Price and Terms

3. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Pursuant to Government Code Section 54956.9(d)(2)
One (1) Potential case
No reportable action.

ADJOURN:

Mayor Heebner adjourned the meeting at 6:10 p.m.

Angela Ivey, City Clerk Council Approved:

CITY OF SOLANA BEACH

SOLANA BEACH CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY, PUBLIC FINANCING AUTHORITY, & HOUSING AUTHORITY Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 1 of 9

MINUTES
Joint REGULAR Meeting
Wednesday, May 10, 2023 * 6:00 p.m.

City Hall / Council Chambers, 635 S. Highway 101, Solana Beach, California Minutes contain a summary of significant discussions and formal actions taken at a City Council meeting.  City Council meetings are video recorded and archived as a permanent record. The video recording captures the complete proceedings of the meeting and is available for viewing on the City's website.  Posted Reports & Supplemental Docs contain records up to the cut off time prior to meetings for processing new submittals. Complete records containing meeting handouts, PowerPoints, etc. can be obtained through a Records Request.

Please submit your speaker slip to the City Clerk prior to the meeting or the announcement of the Item.

Allotted times for speaking are outlined on the speaker’s slip for Oral Communications, Consent, Public Hearings and Staff Reports.

READING OF ORDINANCES AND RESOLUTIONS:

CALL TO ORDER AND ROLL CALL:

Mayor Heebner called the meeting to order at 6:19 p.m.

Present: Lesa Heebner, David A. Zito, Jewel Edson, Kristi Becker, Jill MacDonald

Absent: None
Also

Present:

Greg Wade, City Manager
Johanna Canlas, City Attorney
Angela Ivey, City Clerk
Dan King, Assistant City Manager
Mo Sammak, City Engineer/Public Works Dir.

Rod Greek, Interim Finance Dir.

Joseph Lim, Community Development Dir.

CITY OF SOLANA BEACH

SOLANA BEACH CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY,

PUBLIC FINANCING AUTHORITY, & HOUSING AUTHORITY
Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 2 of 9 CLOSED SESSION REPORT: None
FLAG SALUTE:

PROCLAMATIONS/CERTIFICATES: Ceremonial
• Mental Health Awareness Month
Mayor Heebner presented the proclamation.

APPROVAL OF AGENDA:

Motion: Moved by Councilmember Becker and second by Deputy Mayor Zito to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

ORAL COMMUNICATIONS:

Cindi Clemons spoke on behalf of the Seaweeders Garden Club and said that they would like to thank the Public Works Staff for quickly accommodating their needs during some of their projects including the Monarch Pledge program.

COUNCIL COMMUNITY ANNOUNCEMENTS / COMMENTARY:

An opportunity for City Council to make brief announcements or report on their activities. These items are not agendized for official City business with no action or substantive discussion.

A. CONSENT CALENDAR: (Action Items) (A.1. - A.12.)
Items listed on the Consent Calendar are to be acted in a single action of the City Council unless pulled for discussion. Any member of the public may address the City Council on an item of concern by submitting to the City Clerk a speaker slip (located on the back table) before the Consent Calendar is addressed. Those items removed from the Consent Calendar by a member of the Council will be trailed to the end of the agenda, while Consent Calendar items removed by the public will be heard immediately after approval of the Consent Calendar to hear the public speaker.

All speakers should refer to the public comment section at the beginning of the agenda for details.

Please be aware of the timer light on the Council Dais.

A.1. Minutes of the City Council.

Recommendation: That the City Council

1. Approve the Minutes of the City Council meetings held on April 12, 2023.

Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 3 of 9 Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.2. Register Of Demands. (File 0300-30)
Recommendation: That the City Council

1. Ratify the list of demands for April 08, 2023 – April 21, 2023.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.3. General Fund Adopted Budget for Fiscal Year 2022/2023 Changes. (File 0330-30) Recommendation: That the City Council

1. Receive the report listing changes made to the Fiscal Year 2022/2023 General Fund Adopted Budget.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.4. Solana Beach Lighting Maintenance District Annual Assessments. (File 0495-20) Recommendation: That the City Council

1. Adopt Resolution 2023-053 approving the Solana Beach Lighting Maintenance District Engineer’s Report for Fiscal Year 2023/24 for proceedings of the annual levy of assessments within a special maintenance district.

2. Adopt Resolution 2023-054 declaring intention to provide for an annual levy and collection of assessment in a special maintenance district and setting a time and date for a public hearing; and scheduling the public hearing for June 14, 2023.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.5. Solana Beach Coastal Rail Trail (CRT) Maintenance District Annual Assessments. (File 0495-20) Recommendation: That the City Council

1. Adopt Resolution 2023-050 initiating the proceedings for the annual levy of assessments within the Coastal Rail Trail Maintenance District for Fiscal Year 2023/24.

2. Adopt Resolution 2023-051, approving the Engineer's Report for proceedings of the annual levy of assessments within Coastal Rail Trail Maintenance District.

Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 4 of 9

3. Adopt Resolution 2023-052, declaring intention to provide for the annual levy and collection of assessments in Coastal Rail Trail Maintenance District and setting a time and date for a public hearing for June 14, 2023.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.6. Financial Audit Services. (File 0310-20)
Recommendation: That the City Council

1. Adopt Resolution 2023-055 approving a five-year professional services agreement with Davis Farr LLP for audit services (with two one-year options to extend).

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.7. Annual Deputy Mayor Appointment Guidelines. (File 0410-85) Recommendation: That the City Council

1. Review and consider adoption of Resolution 2023-057 updating guidelines for the annual appointment of the Deputy Mayor.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.8. Sewer and Storm Drain Rehabilitation Project. (File 1040-26) Recommendation: That the City Council

1. Adopt Resolution 2023-059:
a. Awarding the construction contract to Southwest Pipeline and Trenchless Corporation, in the amount of $649,634, for the Sewer & Storm Drain Rehabilitation Project, Bid 2023-04.
b. Approving an amount of $98,000 for construction contingency. c. Authorizing the City Manager to execute the construction contract on behalf of the City.
d. Authorizing the City Manager to approve cumulative change orders up to the construction contingency amount.
e. Authorizing an appropriation of $89,802 from the General Fund for the Storm Drain Improvements associated with the project.
f. Authorizing the City Treasurer to amend the Fiscal Year 2022/23 Adopted Budget accordingly.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 5 of 9 A.9. Property Tax Consulting Services. (File 0390-70)
Recommendation: That the City Council

1. Adopt Resolution 2023-056 authorizing the City Manager to execute a Professional Services Agreement with HDL Coren & Cone, in an amount not to exceed $91,191, for Property Tax Consulting Services for a Five-Year Agreement for Fiscal Year (FY) 2023/24 through FY 2027/28 with two additional one-year options to extend.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.10. Local Streets and Roads Funding Program (SB 1) Project List - Fiscal Year (FY) 2023/24. (File 0850-35)
Recommendation: That the City Council

1. Adopt Resolution 2023-060:
a. Authorizing the City Engineer to establish a project list for Local Streets and Roads Funding Program Road Maintenance and Rehabilitation Account FY 2023/24 revenues and designates the 2023 Annual Street Maintenance and Repair Project, as identified in the City’s FY 2023/24 Capital Improvement Program list, to receive the SB 1 funding. It is anticipated that the designated project will rehabilitate the pavement on portions of Lomas Santa Fe Drive and several residential streets including North Acacia Avenue from Estrella Street to Cliff Street, South Nardo Avenue from El Sueno to Corto Street, Patty Hill Drive from Barbara Avenue to North Granados Avenue, and the easterly portion of Via Mil Cumbres. It is also anticipated that the designated project is estimated to be completed by February 2024 and will have an estimated useful life of approximately 15 years.
b. Authorizing the City Engineer to submit the project list to the California Transportation Commission for the 2023/24 Local Streets and Roads Funding Program using funds from the Road Maintenance and Rehabilitation Account.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.11. Traffic Signal and Safety Lighting Maintenance. (File 0860-55) Recommendation: That the City Council

1. Adopt Resolution 2023-062:
a. Authorizing the City Manager to execute a Professional Services Agreement with Yunex Traffic, Inc., in an amount of $16,669.72 per year for annual maintenance service, and $16,000 per year for unforeseen as needed repairs, for a total not to exceed amount of $32,669.72 per year, for Citywide Traffic Signal and Safety Lighting Maintenance.

Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 6 of 9 b. Authorizing the City Manager to approve a one-time expenditure in the amount of $114,255 for Fiscal Year 2023/24, for Traffic Signal Phase 1 Immediate improvements.
c. Authorizing the City Manager to extend the agreement for up to four additional one-year terms, at the City’s option.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

A.12. Solid Waste Review Prop 218 Notification. (File 1030-15) Recommendation: That the City Council

1. Adopt Resolution 2023-061 setting the Solid Waste Rate Review Public Hearing protest vote for June 28, 2023.

Motion: Moved by Councilmember Edson and second by Councilmember MacDonald to approve. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried unanimously.

C. STAFF REPORTS: (C.1.)
Submit speaker slips to the City Clerk.

All speakers should refer to the public comment section at the beginning of the agenda for time allotments. Please be aware of the timer light on the Council Dais.

C.1. Adopt (2nd Reading) Ordinance 530: Zoning Text Amendment – San Elijo Hills. (File 0600-05) Recommendation: That the City Council

1. Adopt Ordinance 530 adding section 17.68.030(C)(1)(c)(i-vii) to the Solana Beach Municipal Code that would allow for modifications to roof structures of legal nonconforming garages that encroach into the required front yard setback and are located in the Low-Medium Residential Zone north of Lomas Santa Fe Drive and east of the Interstate 5 Freeway.

Item C.1. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Councilmember MacDonald recused herself due to the property interest within 500 ft. of the project property.

Johanna Canlas, City Attorney, read the title of the ordinance.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Becker to approve.

Approved 4/0/1. Ayes: Heebner, Zito, Edson, Becker. Noes: None. Absent: MacDonald (recused). Motion carried.

Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 7 of 9 B. PUBLIC HEARINGS: (B.1. – B.2.)
This portion of the agenda provides citizens an opportunity to express their views on a specific issue as required by law after proper noticing by submitting a speaker slip (located on the back table) to the City Clerk. After considering all of the evidence, including written materials and oral testimony, the City Council must make a decision supported by findings and the findings must be supported by substantial evidence in the record. An applicant or designee(s) for a private development/business project, for which the public hearing is being held, is allotted a total of fifteen minutes to speak, as per SBMC

B.1. Public Hearing: 424 Santa Bartola, Applicants: Bernier and Fleck, Case: DRP22- 009, SDP22-007, MEC23-001. (File 0600-40)
The proposed project meets the minimum zoning requirements under the SBMC, may be found to be consistent with the General Plan and may be found, as conditioned, to meet the discretionary findings required as discussed in this report to approve a DRP.

Therefore, Staff recommends that the City Council:

1. Conduct the Public Hearing: Open the Public Hearing, Report Council Disclosures, Receive Public Testimony, and Close the Public Hearing.

2. Find the project exempt from the California Environmental Quality Act pursuant to Section 15301 of the State CEQA Guidelines; and

3. If the City Council makes the requisite findings and approves the project, adopt Resolution 2023-063 conditionally approving a DRP, SDP, and Minor Exception for construction of a 377 square-foot first-floor and 377 square-foot second-floor additions to an existing two-story, single-family residence with an attached garage, reconstruct the flat roof to a gable roof over the nonconforming garage, and perform associated site improvements at 424 Santa Bartola, Solana Beach.

Item B.1. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Katie Benson, Sr. Planner, presented a PowerPoint (on file).

Mayor Heebner opened the public hearing.

Council disclosures.

Tim Bernier and Beth Fleck, Applicants, stated that the new space and remodel was intended for the use of an in-law moving in at a future date.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to close the public hearing. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried.

Council discussed that this project was a poster case for a rare SDP waiver, the entire garage sitting in front of house on a huge slope, and the benefit of Ordinance 530.

Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 8 of 9 Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried.

B.2. Public Hearing: Adoption of Revised 6th Cycle Housing Element Update. (File 0610-10)

1. Adopt Resolution 2023-058 adopting the Revised 6th Cycle Housing Element and submitting the document to the California Department of Housing and Community Development for certification.

Item B.2. Report (click here) Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Greg Wade, City Manager, introduced the item.

Joe Lim, Community Development Director, presented a PowerPoint (on file) reviewing the timeline since the initial draft of the Housing Element in 2021 and said that the City had received a conditional letter of approval from Housing and Community Development (HCD) of the draft presented this evening, that some items addressed were the site suitability analysis including the non-vacant sites, illustrating parcel specific analysis of existing uses to demonstrate that the City would not prohibit residential development, and that the current ADU numbers were estimated to be around 128 permits during the Element’s sixth cycle.

Mayor Heebner opened the public hearing.

Council disclosures.

Motion: Moved by Councilmember Edson and second by Deputy Mayor Zito to close the public hearing. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None.

Motion carried.

Council discussed that there had been many years of working back and forth with HCD, that the City had vigorously opposed the RHNA (Regional Housing Needs Assessment) numbers allocated to the City as they were not reasonable or equitable in the region, that the City had been clear on its duty and committed to reaching the allocation, and Staff’s diligence in working through the process.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried.

C. STAFF REPORTS: (C.2.)
Submit speaker slips to the City Clerk.

All speakers should refer to the public comment section at the beginning of the agenda for time allotments. Please be aware of the timer light on the Council Dais.

C.2. Revised Draft Work Plan – Fiscal Year 2023/2024. (File 0410-08) Solana Beach City Council Regular Meeting Minutes May 10, 2023 Page 9 of 9 Recommendation: That the City Council

1. Review and discuss the modifications to the draft Fiscal Year 2023/24 Work Plan and direct Staff to return to Council with the final Fiscal Year 2023/24 Work Plan for approval with the Budget in June 2023.

Item C.2. Report (click here)
Posted Reports & Supplemental Docs contain records up to the cut off time, prior to the start of the meeting, for processing new submittals.

The final official record containing handouts, PowerPoints, etc. can be obtained through a Records Request to the City Clerk’s Office.

Greg Wade, City Manager, introduced the item.

Council and Staff discussed traffic signal update category and leading walk delayed red lights, considering removing references to the geographical segmentation in the LIP (Land Implementation Plan), and a candidate’s forum for future elections.

Motion: Moved by Mayor Heebner and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried.

COMPENSATION & REIMBURSEMENT DISCLOSURE: None
GC: Article 2.3. Compensation: 53232.3. (a) Reimbursable expenses shall include, but not be limited to, meals, lodging, and travel. 53232.3 (d) Members of a legislative body shall provide brief reports on meetings attended at the expense of the local agency “City” at the next regular meeting of the legislative body.

COUNCIL COMMITTEE REPORTS: Council Committees
REGIONAL COMMITTEES: (outside agencies, appointed by this Council) STANDING COMMITTEES: (All Primary Members) (Permanent Committees)

CITIZEN COMMISSION(S)
ADJOURN:

Mayor Heebner adjourned the meeting at 6:56 p.m.

Solana Beach City Council Closed Session Agenda May 24, 2023 Page 1 of 2

MODIFIED AGENDA
Joint Meeting - Closed Session
Wednesday, May 24, 2023 at 5:00 p.m.

City Hall / Council Chambers, 635 S. Highway 101, Solana Beach, California

Mayor Heebner called the meeting to order at 5:01 p.m.

Present: Lesa Heebner, David A. Zito, Jewel Edson, Kristi Becker, Jill MacDonald

Absent: None
Also Present: Greg Wade, City Manager
Johanna Canlas, City Attorney
PUBLIC COMMENT ON CLOSED SESSION ITEMS (ONLY): None
Report to Council Chambers and submit speaker slips to the City Clerk before the meeting recesses to closed session.

CLOSED SESSION:

1. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency designated representative: Gregory Wade
Employee organizations: Marine Safety Unit, Miscellaneous

2. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to Government Code Section 4957
City Manager

3. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to Government Code Section 4957
City Attorney

CITY OF SOLANA BEACH

SOLANA BEACH CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY, PUBLIC FINANCING AUTHORITY, & HOUSING AUTHORITY Solana Beach City Council Closed Session Agenda May 24, 2023 Page 2 of 2

4. CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Pursuant to Government Code section 54956.8
Property: APN: 263-352-03,04,05,06 and 07 and 263-342-02 City Negotiators: City Manager Greg Wade and City Attorney Johanna Canlas
Negotiating Parties: Matt Tucker, North County Transit District Under negotiation: Purchase Price and Terms
No reportable action.

ADJOURN:

Mayor Heebner adjourned the meeting at 6:03 p.m.

Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 1 of 7

MINUTES
Joint REGULAR Meeting
Wednesday, May 24, 2023 * 6:00 p.m.

City Hall / Council Chambers, 635 S. Highway 101, Solana Beach, California Minutes contain a summary of significant discussions and formal actions taken at a City Council meeting.

City Council meetings are video recorded and archived as a permanent record. The video recording captures the complete proceedings of the meeting and is available for viewing on the City's website.  Posted Reports & Supplemental Docs contain records up to the cut off time prior to meetings for processing new submittals. Complete records containing meeting handouts, PowerPoints, etc. can be obtained through a Records Request.

Mayor Heebner called the meeting to order at 6:10 p.m.

Present: Lesa Heebner, David A. Zito, Jewel Edson, Kristi Becker, Jill MacDonald

Absent: None
Also

Present:

Greg Wade, City Manager
Johanna Canlas, City Attorney
Angela Ivey, City Clerk
Dan King, Assistant City Manager
Mo Sammak, City Engineer/Public Works Dir.

Rod Greek, Interim Finance Dir.

Joseph Lim, Community Development Dir.

CLOSED SESSION REPORT: None
FLAG SALUTE:

PRESENTATIONS: Ceremonial items that do not contain in-depth discussion and no action/direction. • San Dieguito River Park JPA

CITY OF SOLANA BEACH

SOLANA BEACH CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY,

PUBLIC FINANCING AUTHORITY, & HOUSING AUTHORITY
Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 2 of 7 Shawna Anderson, Executive Dir. San Dieguito River Park JPA, spoke about how the JPA was formed with many founders from Solana Beach.

Leana Bulay, Sr. Interpretive Ranger, presented a PowerPoint (on file) reviewing their programs.
• San Diego County Fair
Carlene Moore, CEO 22nd District Agricultural Association, spoke about this year’s county fair, the
theme being “Get out There” with a focus on recreational opportunities, parks, beaches, lagoons, and she showed a video.

PROCLAMATIONS/CERTIFICATES: Ceremonial
• National Public Works Week
Mayor Heebner presented the proclamation to the Solana Beach Public Works Dept.

Michelle Stribling, Solana Beach Civic and Historical Society, thanked the Public Works team for all of their work on the 125-year-old museum.

Cindi Clemons thanked the Public Works department for its leadership, partnership, and assistance on their project areas.

Luis Carrillo, Public Works Manager, thanked the Council for the proclamation and their support. He thanked the Public Works team for their hard work and dedication to the community.
• Gun Violence Awareness Day
Mayor Heebner presented the proclamation.

Laura Hoover thanked the Council for issuing the proclamation. She said that, as an educator, she has lost 3 former students to gun violence and that she felt passionate about the safety for all human beings.

Cindi Clemons spoke about today being the anniversary of the 19 people killed in Uvalde, asked for the public to support Senate Bill 25 banning assault weapons, and thanked Council for highlighting this national issue.

APPROVAL OF AGENDA:

Motion: Moved by Councilmember Becker and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

ORAL COMMUNICATIONS:

Comments relating to items on this evening’s agenda are taken at the time the items are heard. This portion of the agenda provides an opportunity for members of the public to address the City Council on Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 3 of 7 items relating to City business and not appearing on today’s agenda by submitting a speaker slip (located on the back table) to the City Clerk. Pursuant to the Brown Act, no action shall be taken by the City Council on public comment items. Council may refer items to the City Manager for placement on a future agenda. The maximum time allotted for each presentation is THREE MINUTES. No donations of time are permitted (SBMC 2.04.190). Please be aware of the timer light on the Council Dais.

Sarah Shulkin, Parks and Recreation Commission, said that they were encouraged with the Age Friendly Action Plan and had suggestions for social participation regular programs that would be low cost for the City, free to citizens, and easily accessible. She said that the Commission had some ideas including nature walks, craft activities at La Colonia Community Center, that they would be willing to assist, and asked that the City dedicate some resources to implement these ideas. She said that regarding the Glenmont Pocket Park, she would ask that the City focus on native plants.

Michele Jaffe spoke about the need for activities for the Age Friendly Plan, that it would require additional Staff to assist in the programs and would be beyond the volunteer capabilities of the Parks and Recreation Commission members such as someone committing to guide a weekly walk. She said that she hoped that the urban vegetable garden plots would be included in the Glenmont Pocket Park to bring people together.

COUNCIL COMMUNITY ANNOUNCEMENTS / COMMENTARY:

An opportunity for City Council to make brief announcements or report on their activities. These items are not agendized for official City business with no action or substantive discussion.

A. CONSENT CALENDAR: (Action Items) (A.1. - A.6.)
Items listed on the Consent Calendar are to be acted in a single action of the City Council unless pulled for discussion. Any member of the public may address the City Council on an item of concern by submitting to the City Clerk a speaker slip (located on the back table) before the Consent Calendar is addressed. Those items removed from the Consent Calendar by a member of the Council will be trailed to the end of the agenda, while Consent Calendar items removed by the public will be heard immediately after approval of the Consent Calendar to hear the public speaker.

All speakers should refer to the public comment section at the beginning of the agenda for details.

Please be aware of the timer light on the Council Dais.

A.1. Minutes of the City Council.

Recommendation: That the City Council

1. Approve the Minutes of the City Council meetings held on April 26, 2023.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

A.2. Register Of Demands. (File 0300-30)
Recommendation: That the City Council

1. Ratify the list of demands for April 22, 2023 – May 05, 2023.

Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 4 of 7 Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

A.3. General Fund Adopted Budget for Fiscal Year 2022/2023 Changes. (File 0330-30) Recommendation: That the City Council

1. Receive the report listing changes made to the Fiscal Year 2022/2023 General Fund Adopted Budget.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

A.4. Citywide Landscape Maintenance Services. (File 0750-25) Recommendation: That the City Council

1. Adopt Resolution 2023-047:
a. Authorizing the City Manager to execute a Professional Services Agreement with Nissho of California, Inc., in an amount not to exceed $388,652.84, for Citywide Landscape Maintenance effective July 1, 2023, for Fiscal Year 2023/24. b. Authorizing the City Manager to extend the agreement for up to four additional one-year terms, at the City’s option, at an amount not to exceed the amount budgeted in each subsequent year.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

A.5. Economic Consulting Services. (File 0390-00)
Recommendation: That the City Council

1. Adopt Resolution 2023-066 authorizing the City Manager to execute an amendment to the Professional Services Agreement, in an amount not to exceed $55,000, with Keyser Marston Associates, Inc. for economic consulting services.

2. Authorize an appropriation of $30,000 from the Professional Services account in the City Manager’s department.

3. Authorize the City Treasurer to amend the FY 2023/2024 Budget accordingly.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

A.6. 2023 Multi-Jurisdictional Hazard Mitigation Plan Update. (File 0240-30) Recommendation: That the City Council
Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 5 of 7

1. Adopt Resolution 2023-065 approving the updated City of Solana Beach Annex of the 2023 Multi-Jurisdictional Hazard Mitigation Plan.

Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to approve.

Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

B. PUBLIC HEARINGS: (B.1.)
This portion of the agenda provides citizens an opportunity to express their views on a specific issue as required by law after proper noticing by submitting a speaker slip (located on the back table) to the City Clerk. After considering all of the evidence, including written materials and oral testimony, the City Council must make a decision supported by findings and the findings must be supported by substantial evidence in the record. An applicant or designee(s) for a private development/business project, for which the public hearing is being held, is allotted a total of fifteen minutes to speak, as per SBMC

B.1. Public Hearing: 228 N. Helix Ave., Applicant: Ryan Bowers, Case No.: DRP22- 013, SDP22-011. (File 0600-40)
The proposed project meets the minimum zoning requirements under the SBMC, may be found to be consistent with the General Plan and may be found, as conditioned, to meet the discretionary findings required as discussed in this report to approve a DRP and SDP. Therefore, Staff recommends that the City Council:

1. Conduct the Public Hearing: Open the Public Hearing, Report Council Disclosures, Receive Public Testimony, and Close the Public Hearing.

2. Find the project exempt from the California Environmental Quality Act pursuant to Section 15303 of the State CEQA Guidelines; and

3. If the City Council makes the requisite findings and approves the project, adopt Resolution 2023-064 conditionally approving a DRP and SDP, for a new two-story, single-family residence with a fully subterranean basement and an attached twocar garage and perform associated site improvements at 228 North Helix Avenue, Solana Beach.

Greg Wade, City Manager, said that the applicant had requested that the item be continued to a date certain of June 14th.

Mayor Heebner opened the public hearing.

Council’s initial disclosures.

Ryan Bowers, Applicant, said that he wondered if he should continue the story poles as is or could they be lowered and asked how Council would like to see them erected.

Greg Wade, City Manager, stated that Staff could assist the Applicant with guidance on the story poles.

Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 6 of 7 Motion: Moved by Deputy Mayor Zito and second by Councilmember Edson to continue the public hearing to a date certain of June 14, 2023. Approved 5/0. Ayes: Heebner, Zito, Edson, Becker, MacDonald. Noes: None. Motion carried unanimously.

C. STAFF REPORTS: (C.1.)
Submit speaker slips to the City Clerk.

All speakers should refer to the public comment section at the beginning of the agenda for time allotments. Please be aware of the timer light on the Council Dais.

C.1. Short Term Vacation Rental (STVR) Ordinance Discussion. (File 0610-15) Recommendation: That the City Council

1. Provide input and direction regarding the City’s STVR regulations.

Greg Wade, City Manager, introduced the item.

Joe Lim, Community Development Dir., presented a PowerPoint (on file) reviewing the history of the code section. He said that there has been a range of 250-350 STVR permits per year, that 90% of code complaints received over the years where due to a lack of permitting or display of permits, that the City of San Diego’s ordinance had created four different tiers with caps of the number of STVRs in specific areas.

Kimberly Jackson, Vacation Rentals by Kimberly, said that they manage a handful of vacation rentals in Solana Beach for residents that are out of town for work assignments and other reasons, that their alliance is to the neighborhoods that the visitors are staying in, consider 100-150 unpermitted homes cited in the packet which are usually the culprit in code complaint issues, to direct Staff to pursue fines to un-permitted properties to bring them into compliance, that those residents renting out their homes without permits and rules for their guests give the industry a bad image, and that she would be happy to make contact with owners that are unpermitted to bring them into regulation.

Council and Ms. Jackson discussed that many renters have a second home and use it themselves or they inherited the home, and that she does not take on many condos because of the close proximity to neighbors.

Jessica Solano spoke about cracking down on those not abiding by the rules through code enforcement for the quiet hours, the number of guests, and number of nights, to focus on collecting TOT for the City, and that they would assist with helping build the regulation.

Dave Fox stated that he and his neighbors share some concerns about the effects on neighborhoods, to consider balancing the issue by 1) apply caps for the total days per year allowed such as 20 days a year, 2) to limit rentals in some locations like S. Rios where its not appropriate for short term rentals in the way that it effects the community, and 3) the total days rented so that short term rentals every weekend would not affect the community as much as a 15-day or longer rental period which would provide more continuity.

Solana Beach City Council Regular Meeting Minutes May 24, 2023 Page 7 of 7 Council and Staff discussed that the California Coastal Commission (CCC) requires access to the beach, that the main negotiating point allowing vacation rentals was the number of days that STVR’s could be rented, that Coastal Commission wanted a minimum of 3 day rentals for affordable lodging, that the 7 days was a compromise with the CCC, that the agreement to a 7-day rental was based on the composition of the community with two local hotels that provide short term accommodation, that a cap of the number of days allowed per year would require an amendment to the LUP, that Staff efforts to bring violators into compliance were based on complaints as well as some online reviews, that 3 or more violations in a year can be cause to revoke the permit, that the City had been meeting with consultants to consider more active enforcement on complaints, that the $500 fine was set in 2003 and the penalties were increased in 2004, and that maybe it was time to increase fines.

Council discussed that it was Council’s intent to solicit as much feedback as possible to understand what should be done, that the current ordinance was from 20 years ago before Air BnB and similar services, that enforcement can be tricky, that the City is mandated by the state to create affordable housing where CCC mandates serving visitor and coastal access, that different caps may be assessed to the condo areas, that too many STVRs in a neighborhood loses a sense of the community, the City of San Diego framework had been approved by CCC on a trial basis, maintaining the character of the neighborhoods, consider neighborhood zones with certain criteria specific rules, that the single-family neighborhoods are unique, that most complaints were from single-family homes, that long term renters had been lost to many short-term rentals, that HOAs seem to take care of their issues, that the CCC will only allow a 25% or higher cap on Condo HOAs, that all current STVRs were grandfathered in until there was a change of ownership, software programs and databases used by consultants, that placards with the permit number are currently required to be posted on the structure, an App called Noise Aware for owners to be notified, surprised that there were not more official complaints, that residents need to report if there are issues, that STVRs are depended on for family income and that visitors do support the local economy, that condos were often bought to be used for rentals, that long term neighbors do not use their pool daily with outdoor BBQs and loud noise, and that Staff will use these comments to prepare a program to bring to Council, the value visitors coming to the community, balancing the peace of the neighborhoods, and the conflicts between the Coastal Act and the State’s mandate for more affordable housing.

COUNCIL COMMITTEE REPORTS: Council Committees
REGIONAL COMMITTEES: (outside agencies, appointed by this Council) STANDING COMMITTEES: (All Primary Members) (Permanent Committees)

CITIZEN COMMISSION(S)
ADJOURN:

Mayor Heebner adjourned the meeting at 8:08 p.m. in honor of Alan Smerican.

CITY COUNCIL ACTION: ____________________________________________________ _________________________________________________________________________ AGENDA ITEM # A.2.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: June 14, 2023
ORIGINATING DEPT: Finance
SUBJECT: Register of Demands
BACKGROUND:

Section 3.04.020 of the Solana Beach Municipal Code requires that the City Council ratify a register of demands which represents all financial demands made upon the City for the applicable period.

DISCUSSION:

Staff certifies that the register of demands has been reviewed for accuracy, that funds are available to pay the above demands, and that the demands comply with the adopted budget.

CEQA COMPLIANCE STATEMENT:

Not a project as defined by CEQA.

FISCAL IMPACT:

The register of demands for May 06, 2023 through May 26, 2023 reflects total expenditures of $1,875,711.95 from various City sources.

WORK PLAN:

N/A
Register of Demands: 05/06/2023 through 05/26/2023
Check Register - Disbursement Fund (Attachment 1) $ 1,295,521.14 Net Payroll Council May 11, 2023 5,153.40
Net Payroll Staff N23 May 12, 2023 291,471.54
Net Payroll Staff NM5 May 19, 2023 4,494.00
Net Payroll Staff N24 May 26, 2023 279,071.87
TOTAL $ 1,875,711.95
June 14, 2023
Register of Demands

Page 2 of 2 ends

OPTIONS:
• Ratify the register of demands.
• Do not ratify and provide direction.

DEPARTMENT RECOMMENDATION:

Staff recommends that the City Council ratify the above register of demands.

CITY MANAGER’S RECOMMENDATION:

Approve Department Recommendation.
________________________
Gregory Wade, City Manager
Attachments:

1. Check Register – Disbursement Fund
Page: 1 of 9
City of Solana Beach
Register of Demands

5/6/2023 - 5/26/2023
Department
Vendor Description Date
Check/EFT
Number Amount
100 - GENERAL FUND
MISSION SQUARE PLAN 302817 PD 05/10/23-CNCL 05/11/2023 9000780 $4,780.43 MISSION SQUARE PLAN 302817 Payroll Run 1 - Warrant N23 05/11/2023 9000780 $18,094.81 MISSION SQUARE PLAN 302817 Payroll Run 4 - Warrant NM5 05/19/2023 9000793 $515.96 MISSION SQUARE PLAN 302817 Payroll Run 1 - Warrant N24 05/25/2023 9000811 $17,048.46 SOLANA BEACH FIREFIGHTERS ASSOC Payroll Run 1 - Warrant N23 05/11/2023 9000787 $850.00 SOLANA BEACH FIREFIGHTERS ASSOC Payroll Run 1 - Warrant N24 05/25/2023 9000815 $850.00 SAN DIEGO COUNTY SHERIFF'S DEPT. MAR 23-Sheriff Law Enforcement 05/11/2023 103764 $206.34 SAN DIEGO COUNTY SHERIFF'S DEPT. MAR 23- TOW CR FEE 05/11/2023 103764 ($273.55) DEPARTMENT OF CONSERVATION JAN-MAR 23-SMIP FEES 05/11/2023 103757 $5,171.36 MISSION SQUARE RHS 801939 Payroll Run 1 - Warrant N23 05/11/2023 9000781 $2,115.90 MISSION SQUARE RHS 801939 Payroll Run 1 - Warrant N24 05/25/2023 9000812 $2,115.90 SUN LIFE FINANCIAL MAY 23-SUPP LIFE INS 05/11/2023 9000789 $416.80 SUN LIFE FINANCIAL MAY 23-LTD 05/11/2023 9000789 $1,724.07 SUN LIFE FINANCIAL MAY 23-LIFE&ADD INS 05/11/2023 9000789 $1,421.03 STERLING HEALTH SERVICES, INC. NC11 FSA CONTRIBUTION 05/19/2023 9000801 $216.67 STERLING HEALTH SERVICES, INC. N24 FSA/DCA FUNDING 05/19/2023 9000801 $1,442.97 STERLING HEALTH SERVICES, INC. N24 FSA/DCA FUNDING 05/19/2023 9000801 $611.68 INSTATAX N23 TAX PAYMENT 05/17/2023 990120245 $40,068.44 INSTATAX N23 TAX PAYMENT 05/17/2023 990120245 $2,137.78 INSTATAX N23 TAX PAYMENT 05/17/2023 990120245 $8,866.44 INSTATAX N23 TAX PAYMENT 05/17/2023 990120245 $15,055.46 INSTATAX N23 TAX PAYMENT 05/17/2023 990120245 $2,311.35 INSTATAX NM5 TAX PAYMENT 05/24/2023 990120247 $143.38
INSTATAX NM5 TAX PAYMENT 05/24/2023 990120247 $215.68
INSTATAX NM5 TAX PAYMENT 05/24/2023 990120247 $56.76
INSTATAX NM5 TAX PAYMENT 05/24/2023 990120247 $492.33
BRIAN CHURCH ARCHITECTURE RFND-DRP19-001 05/25/2023 103818 $3,825.00 BRIAN CHURCH ARCHITECTURE RFND-DRP19-001 05/25/2023 103818 $535.00 LARSCOR, INC RFND-ZTA22-001/MEC23-001 05/25/2023 103831 $8,963.85 SEASCAPE MANAGEMENT CORP. C/O CURTIS RFND-CUP22-001/DRP22-022 05/25/2023 103836 $3,740.00 EDGAR COREA HERNANDEZ RFND-EVENT-06/03/23-CANCELED 05/25/2023 103825 $100.00 THOMAS SIDDERS RFND-CANCELED EVENT-05/07/23 05/25/2023 103838 $500.00 TOTAL GENERAL FUND $144,320.30
1005150 - CITY CLERK
CALEXPRESS ENTERPRISES INC. CITY CNCL CONVERSION-PCK UP #11 05/25/2023 103819 $55.00 CALEXPRESS ENTERPRISES INC. CITY CNCL CONVERSION-PCK UP#9/DRP OFF#10 05/25/2023 103819 $90.00 CALEXPRESS ENTERPRISES INC. CITY CNCL CONVERSION-PCK UP#10/DRP OFF#11 05/25/2023 103819 $80.00 TOTAL CITY CLERK $225.00
1005200 - CITY MANAGER
EMANUELS JONES AND ASSOCIATES MAY 23-CONSULTING SERVICES 05/11/2023 103758 $2,675.00 TOTAL CITY MANAGER $2,675.00
1005250 - LEGAL SERVICES
Page: 2 of 9
BURKE WILLIAMS & SORENSEN 96-0001.002-MARCH 23 PROF SVC 05/11/2023 103755 $248.40 BURKE WILLIAMS & SORENSEN 96-0006-MARCH 23 PROF SVC 05/11/2023 103755 $1,475.60 BURKE WILLIAMS & SORENSEN 96-0007-MARCH 23 PROF SVC 05/11/2023 103755 $82.80 BURKE WILLIAMS & SORENSEN 96-0014-MARCH 23 PROF SVC 05/11/2023 103755 $3,035.20 BURKE WILLIAMS & SORENSEN 96-0019-MARCH 23 PROF SVC 05/11/2023 103755 $703.80 BURKE WILLIAMS & SORENSEN 96-0040-MARCH 23 PROF SVC 05/11/2023 103755 $244.50 BURKE WILLIAMS & SORENSEN 96-0040.002-MARCH 23 PROF SVC 05/11/2023 103755 $54.80 BURKE WILLIAMS & SORENSEN RETAIN-MARCH 23 05/11/2023 103755 $11,644.00 TOTAL LEGAL SERVICES $17,489.10
1005300 - FINANCE
HDL-HINDERLITER, DE LLAMAS & ASSOC Q4/2022 STAX-CONTRACT/AUDIT 05/25/2023 103828 $12,041.54 HDL COREN & CONE APR-JUN 23-CONTRACT SRVC PROPERTY TAX 05/11/2023 9000779 $3,498.61 HDL COREN & CONE APR-JUN 23-CONTRACT SRVC PROPERTY TAX 05/11/2023 9000779 $248.89 KFORCE INC. 04/27/23-TEMP SERVICES-FIN 05/11/2023 9000782 $1,600.00 KFORCE INC. 05/04/23-TEMP SERVICES-FIN 05/19/2023 9000794 $1,280.00 KFORCE INC. 05/11/23-TEMP SERVICES-FIN 05/25/2023 9000813 $1,600.00 AMAZON.COM SALES, INC PHONE EXTENTION CORD 05/19/2023 103777 $16.29 AMAZON.COM SALES, INC USB EXTENTION CABLE 05/19/2023 103777 $21.19 TOTAL FINANCE $20,306.52
1005350 - SUPPORT SERVICES
XEROX CORPORATION APR 23-XEROX-FIERY-PLN/ENG 05/19/2023 103807 $132.61 XEROX CORPORATION APR 23-XEROX-FIERY-UPSTAIRS 05/19/2023 103807 $132.61 XEROX CORPORATION APR 23-XEROX-FIERY-CLK 05/19/2023 103807 $122.84 XEROX CORPORATION APR 23-XEROX UPSTAIRS 05/19/2023 103807 $218.22 XEROX CORPORATION APR 23-XEROX UPSTAIRS 05/19/2023 103807 $298.25 XEROX CORPORATION APR 23-XEROX CLERK 05/19/2023 103807 $112.96 XEROX CORPORATION APR 23-XEROX CLERK 05/19/2023 103807 $271.68 XEROX CORPORATION APR 23-XEROX PLN/ENG 05/19/2023 103807 $546.78 XEROX CORPORATION APR 23-XEROX PLN/ENG 05/19/2023 103807 $344.35 READY REFRESH BY NESTLE APR 23-DRINKING WATER-PW 05/19/2023 103797 $73.36 READY REFRESH BY NESTLE APR 23-DRINKING WATER-LC 05/19/2023 103797 $50.18 READY REFRESH BY NESTLE APR 23-DRINKING WATER-CH 05/19/2023 103797 $559.79 AMAZON.COM SALES, INC DOCUMENT FOLDERS 05/11/2023 103753 $18.45 AMAZON.COM SALES, INC NAPKINS 05/11/2023 103753 $29.26
AMAZON.COM SALES, INC TAPE 05/11/2023 103753 $39.14
AMAZON.COM SALES, INC COFFEE PODS/MARKERS/PENCILS 05/11/2023 103753 $76.18 AMAZON.COM SALES, INC PLASTIC KNIVES/FORKS/SPOONS 05/19/2023 103777 $79.27 AMAZON.COM SALES, INC PAPER CUPS/NAPKINS/CREAMER/COFFEE PODS 05/25/2023 103815 $150.51 TOTAL SUPPORT SERVICES $3,256.44
1005400 - HUMAN RESOURCES
SHARP REES-STEALY MEDICAL GROUP PRE-EMPLOYMENT SCREENING 05/11/2023 103766 $629.00 DEPARTMENT OF JUSTICE APR 23-FINGERPRINT APP 05/19/2023 103782 $352.00 KEENAN & ASSOCIATES REIMB-REPLCMNT FSA/DCA CARD COST 05/25/2023 103829 $50.00 TOTAL HUMAN RESOURCES $1,031.00
1005450 - INFORMATION SERVICES
COX COMMUNICATIONS INC 0013410039730701 - 04/19/23-05/18/23 05/25/2023 103821 $315.82 VERIZON WIRELESS-SD 670601022-03/24/23-04/23/23 05/25/2023 103840 $114.03 WESTERN AUDIO VISUAL MAY 23-AUDIO VISUAL MAINTENANCE 05/25/2023 103841 $499.00 MANAGED SOLUTION MAY 23- Managed Solution 05/25/2023 103832 $2,196.69 MANAGED SOLUTION MAY 23- Managed Solution 05/25/2023 103832 $550.00 TING FIBER INC. MAY 23-SB FACILITIES 05/25/2023 9000816 $3,249.00 Page: 3 of 9
TING FIBER INC. MAY 23-DEL MAR SHORE LG TOWER 05/25/2023 9000816 $450.00 TING FIBER INC. MAY 23-TIDE BEACH PARK LG TOWER 05/25/2023 9000816 $450.00 AMAZON.COM SALES, INC OUTLET BOX 05/11/2023 103753 $19.21 AMAZON.COM SALES, INC KEYBOARD 05/11/2023 103753 $43.49 AMAZON.COM SALES, INC WEBCAM LIGHTING/WEBCAM 05/11/2023 103753 $211.25 AMAZON.COM SALES, INC 8 PORT UNMANAGED SWITCH 05/11/2023 103753 $115.23 AMAZON.COM SALES, INC LAPTOP CHARGER REPLACEMENT 05/11/2023 103753 $99.54 AMAZON.COM SALES, INC CORD HIDER 05/11/2023 103753 $24.63 AMAZON.COM SALES, INC PRINTER 05/11/2023 103753 $152.11 TOTAL INFORMATION SERVICES $8,490.00
1005550 - PLANNING
UT SAN DIEGO - NRTH COUNTY PUB NTC-STVR REGULATION ADOPTED 05/25/2023 103839 $303.85 UT SAN DIEGO - NRTH COUNTY PUB HRNG-DRP22-013/SDP22-011 05/25/2023 103839 $346.88 AMAZON.COM SALES, INC STAPLER/MARKERS/NOTBOOKS/PENS/CARDSTOCK 05/25/2023 103815 $20.72 TOTAL PLANNING $671.45
1005560 - BUILDING SERVICES
ESGIL CORPORATION FEBRUARY 2023-BUILDING 05/19/2023 103788 $190,749.91 AMAZON.COM SALES, INC LETTER TABS 05/25/2023 103815 $142.70 AMAZON.COM SALES, INC STAPLER/MARKERS/NOTBOOKS/PENS/CARDSTOCK 05/25/2023 103815 $35.64 TOTAL BUILDING SERVICES $190,928.25
1005590 - PARKING ENFORCEMENT
DATATICKET INC. FEB 23-PARKING CITATION 05/19/2023 103780 $1,166.70 VERIZON WIRELESS-SD 442224168 - 03/24/23-04/23/23 05/11/2023 103771 $141.77 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $198.52 TOTAL PARKING ENFORCEMENT $1,506.99
1006110 - LAW ENFORCEMENT
SAN DIEGO COUNTY SHERIFF'S DEPT. MAR 23-Sheriff Law Enforcement 05/11/2023 103764 $399,063.64 TOTAL LAW ENFORCEMENT $399,063.64
1006120 - FIRE DEPARTMENT
SANTA FE IRRIGATION DISTRICT 005512-000 - 03/02/23-05/01/23 05/19/2023 103798 $505.60 ALERT-ALL CORP HATS/BADGES/BRACELETS 05/25/2023 103814 $707.14 ACE UNIFORMS LLC PANTS 05/11/2023 103752 $389.67
ACE UNIFORMS LLC BOOTS 05/11/2023 103752 $194.84
ACE UNIFORMS LLC PATCH/SEWING 05/25/2023 9000805 $667.85 VERIZON WIRELESS-SD 962428212 - 03/29/23-04/28/23 05/25/2023 103840 $564.35 ERIC PHILLIPS CALJAC CONFERENCE 05/19/2023 103787 $1,129.15 REGIONAL COMMS SYS, MS 056 - RCS APR 23-CAP CODE 05/25/2023 103835 $32.50 AT&T CALNET 3 9391059865-04/01/23-04/30/23 05/25/2023 103817 $395.89 CHARLES MEAD COMPANY OFFICER 2D 05/19/2023 103791 $450.00 WEX BANK MAR 23-FUEL/CR TAX 05/11/2023 103773 $1,896.65 WATTCO EQUIPMENT INC. FIRE LIGHTS 05/19/2023 103805 $2,803.92 WATTCO EQUIPMENT INC. FIRE LIGHTS 05/19/2023 103805 $57.81 NORTH COUNTY DISPATCH (JPA) Q3-Dispatch Services 05/19/2023 103793 $27,774.50 LINEGEAR FIRE & RESCUE EQUIPMENT PANTS 05/11/2023 103760 $451.12 AFECO INC LETTERING 05/11/2023 103767 $50.37
AFECO INC REPAIR/PATCH/RESTICHING 05/25/2023 103837 $380.72 JOHN MORGAN S-223-FIRELINE/PARAMEDIC QUALIFICATION 05/19/2023 103790 $200.00 JOHN MORGAN S-290-FIRELINE/PARAMEDIC QUALIFICATION 05/19/2023 103790 $415.00 TOTAL FIRE DEPARTMENT $39,067.08
1006150 - CIVIL DEFENSE
Page: 4 of 9
AT&T CALNET 3 9391012275 - 03/24/23-04/23/23 05/11/2023 103754 $154.88 TOTAL CIVIL DEFENSE $154.88
1006170 - MARINE SAFETY
CULLIGAN OF SAN DIEGO MAY 23-DRINKING WATER-MS 05/25/2023 103822 $54.32 VERIZON WIRELESS-SD 962428212 - 03/29/23-04/28/23 05/25/2023 103840 $152.04 TELEVISION EQUIPMENT ASSOCIATES INC HEADSET/ADAPTER INPECTION 05/11/2023 103770 $87.95 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $837.58 TOTAL MARINE SAFETY $1,131.89
1006510 - ENGINEERING
DEL MAR BLUE PRINT COMPANY, INC. GRADING & LANDSCAPE 05/19/2023 103781 $18.49 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $141.28 TOTAL ENGINEERING $159.77
1006520 - ENVIRONMENTAL SERVICES
MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $14.99 MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $14.97 SANTA FE IRRIGATION DISTRICT 005506-014-04/01/23-05/01/23 05/11/2023 103765 $232.74 MIKHAIL OGAWA ENGINEERING APR 23-STORMWATER PROGRAM 05/19/2023 103809 $197.50 MIKHAIL OGAWA ENGINEERING APR 23-STORMWATER PROGRAM 05/19/2023 103809 $7,904.67 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $410.99 CLEAN EARTH ENVIROMENTAL SOLUTIONS MAR 23-HHW 05/19/2023 103779 $922.40 IDRAINS LLC H-STORMDRAIN MAINT 05/19/2023 103776 $1,700.00 IDRAINS LLC O-STORMDRAIN MAINT 05/19/2023 103776 $1,340.00 TOTAL ENVIRONMENTAL SERVICES $12,738.26
1006530 - STREET MAINTENANCE
MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $25.68 MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $25.69 DIXIELINE LUMBER CO INC SAFETY VEST/SCREW HOOK 05/19/2023 103784 $40.60 DIXIELINE LUMBER CO INC PUSH BROOM/MAGNETIC DRIVE GUIDE 05/19/2023 103784 $113.01 DIXIELINE LUMBER CO INC BLACK TOP PATCH/EXTENSION CORD 05/19/2023 103784 $92.38 DIXIELINE LUMBER CO INC BLACK TOP PATCH 05/19/2023 103784 $157.58 SANTA FE IRRIGATION DISTRICT 011695-000-04/01/23-05/01/23 05/11/2023 103765 $124.37 SDG&E CO INC 02/08/23-04/07/23-UTILITIES 05/19/2023 103800 $913.03 SDG&E CO INC 03/01/23-04/07/23-UTILITIES 05/19/2023 103800 $443.05 UNDERGROUND SVC ALERT OF SOCAL INC APR 23-DIG ALERT 05/19/2023 9000803 $92.25 NISSHO OF CALIFORNIA MAR 23- LANDSCAPE MAINTENANCE 05/19/2023 103810 $3,646.88 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $372.48 SUMMIT EROSION CONTROL SAND BAGS/LABOR/TRUCK 05/19/2023 103802 $357.84 NORTH COUNTY DISPATCH (JPA) FY23- Q3- PW NORTH COUNTY DISPATCH JPA 05/19/2023 103793 $93.12 WEST COAST ARBORISTS, INC. APR 23- TREE MAINTENANCE SERVICES 05/19/2023 103806 $2,688.23 TOTAL STREET MAINTENANCE $9,186.19
1006540 - TRAFFIC SAFETY
SDG&E CO INC 02/08/23-04/07/23-UTILITIES 05/19/2023 103800 $1,220.46 SDG&E CO INC 03/01/23-04/07/23-UTILITIES 05/19/2023 103800 $559.58 DEPARTMENT OF TRANSPORTATION JAN-MAR 23-COST SHARE AGMT - I-5 TRAFFIC

SIGNALS
05/19/2023 103783 $469.07
DEPARTMENT OF TRANSPORTATION JAN-MAR 23-COST SHARE AGMT - I-5 TRAFFIC

SIGNALS
05/19/2023 103783 $1,000.94
REDFLEX TRAFFIC SYSTEMS, INC APR 23-RED LIGHT CAMERA 05/19/2023 9000798 $7,694.85 TRAFFIC SUPPLY, INC CROSSWALK SIGNS 05/19/2023 103813 $401.22 STC TRAFFIC, INC MAR 23-ON-CALL TRAFFIC CONSULTING 05/19/2023 103812 $3,460.00 ALL CITY MANAGEMENT SERVICES, INC 04/16/23-04/29/23-CROSSING GUARDS 05/25/2023 9000807 $11,092.00 Page: 5 of 9
YUNEX LLC NOV 22-TRAFFIC SIGNAL & SAFETY LIGHT

MAINT/REPAIR
05/19/2023 9000804 $2,065.05
YUNEX LLC MAR 22-TRAFFIC SIGNAL & SAFETY LIGHT

MAINT/REPAIR
05/19/2023 9000804 $1,120.00
YUNEX LLC MAR 23-TRAFFIC SIGNAL & SAFETY LIGHT

MAINT/REPAIR
05/19/2023 9000804 $3,866.34
TOTAL TRAFFIC SAFETY $32,949.51
1006550 - STREET CLEANING
SANTA FE IRRIGATION DISTRICT 011695-000-04/01/23-05/01/23 05/11/2023 103765 $73.04 PRIDE INDUSTRIES APR 23-TRASH ABATEMENT SERVICES 05/19/2023 103794 $876.13 SCA OF CA, LLC APR 23- STREET SWEEPING SERVICES 05/19/2023 103799 $3,910.15 TOTAL STREET CLEANING $4,859.32
1006560 - PARK MAINTENANCE
MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $18.19 MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $18.19 RANCHO SANTA FE SECURITY SYS INC MAY 23- SCRTY PTRL, RSTRMLKUP, ALRM MNTR 05/19/2023 103796 $661.10 RANCHO SANTA FE SECURITY SYS INC NEW ALARM CODE USER 05/19/2023 103796 $10.00 RANCHO SANTA FE SECURITY SYS INC MAY 23- SCRTY PTRL, RSTRMLKUP, ALRM MNTR 05/19/2023 103796 $331.20 DIXIELINE LUMBER CO INC GLOVES/KNEE PAD/SUNSCREEN 05/19/2023 103784 $51.71 DIXIELINE LUMBER CO INC PAINT MIXER 05/19/2023 103784 $14.18 DIXIELINE LUMBER CO INC SQUEEGEE 05/19/2023 103784 $13.50 DIXIELINE LUMBER CO INC WALL SCRAPER/TAPE/CONTACT ADHSV 05/19/2023 103784 $29.82 DIXIELINE LUMBER CO INC SIGNS 05/19/2023 103784 $53.79
SANTA FE IRRIGATION DISTRICT 005506-018-04/01/23-05/01/23 05/11/2023 103765 $270.49 SANTA FE IRRIGATION DISTRICT 005506-019-04/01/23-05/01/23 05/11/2023 103765 $863.25 SANTA FE IRRIGATION DISTRICT 005506-000 - 03/02/23-05/01/23 05/11/2023 103765 $95.81 SANTA FE IRRIGATION DISTRICT 005506-001 - 03/02/23-05/01/23 05/11/2023 103765 $76.94 SANTA FE IRRIGATION DISTRICT 005506-002 - 03/02/23-05/01/23 05/11/2023 103765 $350.91 SANTA FE IRRIGATION DISTRICT 005979-001 - 03/02/23-05/01/23 05/11/2023 103765 $112.01 SANTA FE IRRIGATION DISTRICT 012448-000 - 03/02/23-05/01/23 05/11/2023 103765 $135.32 SANTA FE IRRIGATION DISTRICT 012448-001 - 03/02/23-05/01/23 05/11/2023 103765 $88.26 SANTA FE IRRIGATION DISTRICT 005506-009 - 03/02/23-05/01/23 05/11/2023 103765 $76.94 SANTA FE IRRIGATION DISTRICT 005506-010 - 03/02/23-05/01/23 05/11/2023 103765 $190.48 SANTA FE IRRIGATION DISTRICT 005506-011 - 03/02/23-05/01/23 05/11/2023 103765 $271.07 SANTA FE IRRIGATION DISTRICT 005506-012 - 03/02/23-05/01/23 05/11/2023 103765 $1,084.44 SANTA FE IRRIGATION DISTRICT 005506-013 - 03/02/23-05/01/23 05/11/2023 103765 $95.67 SANTA FE IRRIGATION DISTRICT 005506-004 - 03/02/23-05/01/23 05/11/2023 103765 $76.94 SANTA FE IRRIGATION DISTRICT 005506-005 - 03/02/23-05/01/23 05/11/2023 103765 $127.60 SANTA FE IRRIGATION DISTRICT 005506-006 - 03/02/23-05/01/23 05/11/2023 103765 $121.31 SANTA FE IRRIGATION DISTRICT 005506-007 - 03/02/23-05/01/23 05/11/2023 103765 $100.66 SANTA FE IRRIGATION DISTRICT 2 MONTH-MID-005506-015 05/19/2023 103798 $121.31 SANTA FE IRRIGATION DISTRICT 2 MONTH-MID-005506-016 05/19/2023 103798 $121.31 SANTA FE IRRIGATION DISTRICT 2 MONTH-MID-005979-003 05/19/2023 103798 $470.17 GRAINGER INC SERVOMOTOR/VALVE BODY/MULTI BIT SCREWDRIVER 05/19/2023 103789 $561.82 NISSHO OF CALIFORNIA REPLACE RECLAIMED WATER SIGNS 05/19/2023 103810 $390.00 NISSHO OF CALIFORNIA MAR 23- LANDSCAPE MAINTENANCE 05/19/2023 103810 $17,811.82 NISSHO OF CALIFORNIA MAR 23-LANDSCAPE MAINTENANCE SERVICES 05/19/2023 103810 $390.00 SUNBELT RENTALS, INC. BRUSH CUTTER 05/19/2023 103803 $95.10 THE HOME DEPOT PRO GROUND LINER 05/19/2023 103804 $687.48 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $77.07 NORTH COUNTY DISPATCH (JPA) FY23- Q3- PW NORTH COUNTY DISPATCH JPA 05/19/2023 103793 $93.13 LULU FARMS, LLC PLANTS 05/25/2023 103833 $635.89
Page: 6 of 9
TOTAL PARK MAINTENANCE $26,794.88
1006570 - PUBLIC FACILITIES
RANCHO SANTA FE SECURITY SYS INC INSTALLATION-MS 05/19/2023 103796 $1,442.00 DIXIELINE LUMBER CO INC GARDEN SPRAY/TOILET CLEANER/CLEANING SPRAY 05/19/2023 103784 $43.34 DIXIELINE LUMBER CO INC KNEEPADS/GLOVES 05/19/2023 103784 $71.74 DIXIELINE LUMBER CO INC GLOVES/SPRAY/URINAL KIT 05/19/2023 103784 $97.29 DIXIELINE LUMBER CO INC MASK/KNEE PAD/PAINT ROLLER 05/19/2023 103784 $64.66 DIXIELINE LUMBER CO INC SANDER/TOOL KIT 05/19/2023 103784 $303.41 SANTA FE IRRIGATION DISTRICT 005506-008 - 03/02/23-05/01/23 05/11/2023 103765 $365.88 SDG&E CO INC 02/08/23-04/07/23-UTILITIES 05/19/2023 103800 $7,766.60 SDG&E CO INC 03/01/23-04/07/23-UTILITIES 05/19/2023 103800 $1,707.52 NISSHO OF CALIFORNIA MAR 23- LANDSCAPE MAINTENANCE 05/19/2023 103810 $803.43 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-CH 05/19/2023 103808 $52.00 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-FCCC 05/19/2023 103808 $64.00 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-MS 05/19/2023 103808 $64.00 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-LC 05/19/2023 103808 $64.00 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-PW 05/19/2023 103808 $64.00 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-FC 05/19/2023 103808 $39.00 HABITAT PROTECTION, INC APR 23- PEST/RODENT CONTROL-FS 05/19/2023 103808 $38.00 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $128.44 WEST COAST ARBORISTS, INC. APR 23- TREE MAINTENANCE SERVICES 05/19/2023 103806 $182.77 PRIDE INDUSTRIES APR 23-TRASH ABATEMENT SERVICES 05/19/2023 103794 $876.12 TOTAL PUBLIC FACILITIES $14,238.20
1007110 - GF-RECREATION
1 STOP TONER & INKJET, LLC TONER-LC 05/11/2023 103762 $85.41 TOTAL GF-RECREATION $85.41
1205460 - SELF INSURANCE RETENTION
SECTRAN SECURITY INC MAY 23-CARRIER/FUEL 05/19/2023 103811 $168.65 GEORGE HILLS COMPANY, INC. APR 23-2202 05/11/2023 9000778 $269.50 GEORGE HILLS COMPANY, INC. APR 23-2302 05/11/2023 9000778 $146.30 GEORGE HILLS COMPANY, INC. APR 23-2302 05/11/2023 9000778 $53.90 GEORGE HILLS COMPANY, INC. APR 23-2305 05/11/2023 9000778 $123.20 GEORGE HILLS COMPANY, INC. APR 23-2306 05/11/2023 9000778 $223.30 BURKE WILLIAMS & SORENSEN 96-0040.003-MARCH 23 PROF SVC 05/11/2023 103755 $328.80 DAVBAR INDUSTRIES, INC. CR23.304 VEHICLE REPAIR 05/19/2023 103786 $2,902.01 TOTAL SELF INSURANCE RETENTION $4,215.66
135 - EQUIPMENT REPLACEMENT
BRIAN CHURCH ARCHITECTURE RFND-DRP19-001 05/25/2023 103818 $38.25 LARSCOR, INC RFND-ZTA22-001/MEC23-001 05/25/2023 103831 $89.64 SEASCAPE MANAGEMENT CORP. C/O CURTIS RFND-CUP22-001/DRP22-022 05/25/2023 103836 $37.40 TOTAL EQUIPMENT REPLACEMENT $165.29
1355450 - ASSET REPLACEMENT-INFO SYS
ELECTRO SPECIALTY SYSTEMS SECURITY BADGE SYSTEM UPGRADE 05/25/2023 103826 $2,661.43 AMAZON.COM SALES, INC VIDEO CONFERENCING SYSTEM 05/11/2023 103753 $745.24 TOTAL ASSET REPLACEMENT-INFO SYS $3,406.67
1356170 - ASSET REPLACEMENT-MARN SFTY
DAY WIRELESS SYSTEMS (20) OUTFITTING NEW MS VEHICLE 05/25/2023 103824 $6,117.45 TOTAL ASSET REPLACEMENT-MARN SFTY $6,117.45
1605360 - OPEB OBLIGATION
MIDAMERICA MAY 23-CTYSOLANAG5 05/19/2023 9000795 $7,320.00 Page: 7 of 9
MIDAMERICA JUN 23-CTYSOLANAG5 05/25/2023 9000814 $7,320.00 TOTAL OPEB OBLIGATION $14,640.00
2037510 - HIGHWAY 101 LANDSC #33
SANTA FE IRRIGATION DISTRICT 005979-000 - 03/02/23-05/01/23 05/11/2023 103765 $184.21 SANTA FE IRRIGATION DISTRICT 2 MONTH-MID-005979-004 05/19/2023 103798 $259.69 SANTA FE IRRIGATION DISTRICT 2 MONTH-MID-007732-000 05/19/2023 103798 $150.29 SDG&E CO INC 02/08/23-04/07/23-UTILITIES 05/19/2023 103800 $3,121.43 NISSHO OF CALIFORNIA MAR 23- LANDSCAPE MAINTENANCE 05/19/2023 103810 $1,150.98 TOTAL HIGHWAY 101 LANDSC #33 $4,866.60
2047520 - MID 9C SANTA FE HILLS
SANTA FE IRRIGATION DISTRICT 005979-026-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-020-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-021-04/01/23-05/01/23 05/11/2023 103765 $213.65 SANTA FE IRRIGATION DISTRICT 005979-022-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-023-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-024-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-025-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-014-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-015-04/01/23-05/01/23 05/11/2023 103765 $238.01 SANTA FE IRRIGATION DISTRICT 005979-016-04/01/23-05/01/23 05/11/2023 103765 $193.35 SANTA FE IRRIGATION DISTRICT 005979-017-04/01/23-05/01/23 05/11/2023 103765 $61.56 SANTA FE IRRIGATION DISTRICT 005979-018-04/01/23-05/01/23 05/11/2023 103765 $61.56 SANTA FE IRRIGATION DISTRICT 005979-019-04/01/23-05/01/23 05/11/2023 103765 $61.56 TOTAL MID 9C SANTA FE HILLS $2,183.14
2087580 - COASTAL RAIL TRAIL MAINT
SANTA FE IRRIGATION DISTRICT 005506-020-04/01/23-05/01/23 05/11/2023 103765 $801.02 SANTA FE IRRIGATION DISTRICT 005506-003 - 03/02/23-05/01/23 05/11/2023 103765 $121.31 NISSHO OF CALIFORNIA MAR 23- LANDSCAPE MAINTENANCE 05/19/2023 103810 $4,256.73 TOTAL COASTAL RAIL TRAIL MAINT $5,179.06
2117600 - STREET LIGHTING DISTRICT
SDG&E CO INC 03/01/23-04/07/23-UTILITIES 05/19/2023 103800 $9,046.53 YUNEX LLC NOV 22-STREETLIGHT MAINTENANCE/REPAIRS 05/19/2023 9000804 $670.50 YUNEX LLC MAR 23- STREETLIGHT MAINTENANCE/REPAIRS 05/19/2023 9000804 $1,782.64 TOTAL STREET LIGHTING DISTRICT $11,499.67
2135550 - DEVELOPER PASS-THRU- PLANNING
PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP19-003-APRIL 23 05/11/2023 9000785 $350.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP22-008-APRIL 23 05/11/2023 9000785 $350.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP22-026-APRIL 23 05/11/2023 9000785 $350.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP19-003-APRIL 23 05/11/2023 9000785 $350.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT REV22-0001-APRIL 23 05/11/2023 9000785 $650.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP19-003-APRIL 23 05/11/2023 9000785 $350.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP22-011-APRIL 23 05/11/2023 9000785 $500.00 PAMELA ELLIOTT LANDSCAPE ARCHITECT DRP21-003-APRIL 23 05/11/2023 9000785 $350.00 MICHAEL BAKER INTERNATIONAL, INC APR 23-PEER REVIEW OF BIO-STUDY/ESHA 05/11/2023 103761 $3,300.00 TOTAL DEVELOPER PASS-THRU- PLANNING $6,550.00
2196110 - COPS PROGRAM
SAN DIEGO COUNTY SHERIFF'S DEPT. MAR 23-Sheriff Law Enforcement 05/11/2023 103764 $8,092.95 TOTAL COPS PROGRAM $8,092.95
2505570 - COASTAL BUSINESS/VISITORS
ONE DAY SIGNS CONCERT @COVE STREET BANNER 05/25/2023 103834 $188.56 Page: 8 of 9
SAM CASTELLANO 06/26/23-CONCERT @ COVE 05/25/2023 103820 $535.00 SAM CASTELLANO 06/26/23-CONCERT @ COVE 05/25/2023 103820 $535.00 YURIY AKOPOV TEMP PUB ARTIST REIMB 05/25/2023 103843 $1,500.00 KITTY A NICHOLASON TEMP PUB ARTIST REIMB 05/25/2023 103830 $1,500.00 ALEXANDER N GALL TEMP PUB ARTIST REIMB 05/25/2023 103827 $1,500.00 DAVID BROWN TEMP PUB ARTIST REIMB 05/25/2023 103823 $1,500.00 TOTAL COASTAL BUSINESS/VISITORS $7,258.56
2556180 - CAMP PROGRAMS
AMIGO CUSTOM SCREENPRINTS JG UNIFORMS 05/25/2023 103816 $13,083.38 PARROT SCREEN PRINTING & EMBROIDERY, LLC DAY CAMP STAFF/VOLUNTEERS UNIFORMS 05/11/2023 103763 $946.52 TOTAL CAMP PROGRAMS $14,029.90
2706120 - PUBLIC SAFETY- FIRE
VERIZON WIRELESS-SD 962428212 - 03/29/23-04/28/23 05/25/2023 103840 $114.03 ZOLL MEDICAL CORPORATION CSA-17-X SERIES CARRY CASE 05/11/2023 103775 $1,522.05 STRYKER SALES CORPORATION CSA.17-LPCR REPLACEMENT BATTERY KIT 05/11/2023 103769 $297.63 STATION AUTOMATION CSA.17-ANNUAL LICENSE RENEWAL 05/11/2023 103768 $1,870.00 TOTAL PUBLIC SAFETY- FIRE $3,803.71
2706170 - PUBLIC SAFETY- MARINE SAFETY
GUARDIAN SAFTEY & SUPPLY, LLC CSA-17-MICROFLEX SUPRENO EC SEC-378 05/11/2023 103759 $271.99 TOTAL PUBLIC SAFETY- MARINE SAFETY $271.99
3207220 - CAPITAL LEASE FUND
CITY NATIONAL BANK CHVRON #12-015: 06/08 05/11/2023 103756 $29,655.51 CITY NATIONAL BANK CHVRON #12-015: 06/08 05/11/2023 103756 $5,531.50 TOTAL CAPITAL LEASE FUND $35,187.01
4506190 - SAND REPLNSHMNT/RETENTION
WARWICK GROUP CONSULTANTS, LLC APR 23-FEDERAL PUBLIC AFFAIRS CONSULTANT

SERVICES
05/11/2023 103772 $5,833.00
WARWICK GROUP CONSULTANTS, LLC APR 23-FEDERAL PUBLIC AFFAIRS CONSULTANT

SERVICES
05/11/2023 103772 $5,833.00
SUMMIT ENVIROMENTAL GROUP, INC. APR 23-PROF SERVICES 05/11/2023 9000788 $2,926.00 TOTAL SAND REPLNSHMNT/RETENTION $14,592.00
4506510 - SANDREPLNSHMNT/RETNTN-CIP
DOMUSSTUDIO ARCHITECTURE MAR 23- 9449 MS CENTR 05/19/2023 103785 $5,510.00 TOTAL SANDREPLNSHMNT/RETNTN-CIP $5,510.00
459 - MISC. CAPITAL PROJECTS
R.E. SCHULTZ CONSTRUCTION, INC. 9441.06 FCP TOT LOT RETENTION 05/19/2023 103795 ($4,349.95) TOTAL MISC. CAPITAL PROJECTS ($4,349.95)
4596510 - MISC.CAPITALPROJECTS-ENG
SEASIDE HEATING & AIR CONDITIONING 9407.23 CITY HALL HVAC UNIT REPLACEMENT 05/19/2023 103801 $13,400.00 R.E. SCHULTZ CONSTRUCTION, INC. 9441.06 FCP TOT LOT CONSTRUCTI 05/19/2023 103795 $86,999.00 TOTAL MISC.CAPITALPROJECTS-ENG $100,399.00
4596520 - MISC CAPITAL PROJ - ENVIR
UNIVERSITY OF SAN DIEGO MAR 23-CLIMATE ACTION PLAN UPDATE 05/11/2023 9000791 $2,655.75 TOTAL MISC CAPITAL PROJ - ENVIR $2,655.75
5097700 - SANITATION
MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $10.70 MISSION LINEN & UNIFORM INC LAUNDRY-PW 05/19/2023 103792 $10.71 SANTA FE IRRIGATION DISTRICT 005506-014-04/01/23-05/01/23 05/11/2023 103765 $698.24 AT&T CALNET 3 9391012277 - 03/24/23-04/23-23 05/19/2023 103778 $15.93 WEX FLEET UNIVERSAL 04/08/23-05/07/23-AUTO FUEL 05/11/2023 103774 $154.12 Page: 9 of 9
IDRAINS LLC C-SEWER CLEANING-20,021 05/19/2023 103776 $12,613.23 IDRAINS LLC SEWER CLEANING-FS 05/19/2023 103776 $525.00 IDRAINS LLC SEWER CLEANING-FC 05/19/2023 103776 $525.00 IDRAINS LLC J-SEWER CLEANING 05/19/2023 103776 $675.00
IDRAINS LLC SEWER CLEANING-FC 05/19/2023 103776 $525.00 IDRAINS LLC SEWER CLEANING-CH 05/19/2023 103776 $525.00 TOTAL SANITATION $16,277.93
652 - SUCCESSOR AGENCY
COMPUTERSHARE CORPORATE TRUST INT/PRIN 2017TA BOND 06/01 - LESS RV FUND CASH 05/11/2023 9000776 ($171.42) COMPUTERSHARE CORPORATE TRUST INT/PRIN 2017TA BOND 06/01 - LESS RV FUND CASH 05/11/2023 9000776 $35,305.20 COMPUTERSHARE CORPORATE TRUST INT/PRIN 2017TA BOND 06/01 - LESS RV FUND CASH 05/11/2023 9000776 $65,600.00 TOTAL SUCCESSOR AGENCY $100,733.78
6718510 - BARBARA UNDERGROUNDING-DS
WILLDAN Q2- LOCAL IMPROVMENT DISTRICT ADMIN 05/25/2023 103842 $352.14 TOTAL BARBARA UNDERGROUNDING-DS $352.14
6728520 - PACIFIC UNDERGROUNDING-DS
WILLDAN Q2- LOCAL IMPROVMENT DISTRICT ADMIN 05/25/2023 103842 $280.10 TOTAL PACIFIC UNDERGROUNDING-DS $280.10
6738530 - MARSOLAN UNDERGROUNDNG-DS
WILLDAN Q2- LOCAL IMPROVMENT DISTRICT ADMIN 05/25/2023 103842 $273.65 TOTAL MARSOLAN UNDERGROUNDNG-DS $273.65
REPORT TOTAL: $1,295,521.14
COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # A.3.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: June 14, 2023
ORIGINATING DEPT: Finance
SUBJECT: Report on Changes Made to the General Fund Adopted Budget for Fiscal Year 2022-23
BACKGROUND:

Staff provides a report at each Council meeting that lists changes made to the current Fiscal Year (FY) General Fund Adopted Budget. The information provided in this Staff Report lists the changes made through May 24, 2023.

DISCUSSION:

The following table reports the revenue, expenditures, and transfers for 1) the Adopted General Fund Budget approved by Council on June 23, 2021 (Resolution 2021-092) and 2) any resolutions passed by Council that amended the Adopted General Fund Budget.

Date Action Description Revenues Expenditures Transfers from GF Net Surplus 06/23/2021 Reso 2021-092 Adopted Budget 22,148,385 (20,867,260) (482,500) $ 798,625 07/14/2021 Reso 2021-097 MS MOU (11,570) 787,055
04/13/2022 Reso 2022-034 Keyser Marston (15,000) 772,055 06/08/2022 Reso 2022-041 On-Call Repair Svcs (30,000) 742,055 06/08/2022 Reso 2022-065 Janitorial (20,000) 722,055
06/22/2022 Reso 2022-082 FY23 Budget Update 1,965,100 (615,680) (1,423,000) 648,475 08/24/2022 Reso 2022-106 Lew Edwards Group (36,000) 612,475 09/14/2022 Reso 2022-102 SBFA MOU (182,000) 430,475
12/14/2022 Reso 2022-138 Pacific Ave Utility Underground - Pase 2 (42,000) 388,475 02/22/2023 Reso 2023-017 Yunex Traffic (45,000) 343,475 01/25/2023 Reso 2023-007 CIP - Roof Replacement FCCC and MS Cntr (120,000) 223,475 01/25/2023 Reso 2023-014 Emanuel Jones and Associates (150) 223,325 01/25/2023 Reso 2023-015 License Plate Recognition Cameras (46,064) 177,261 02/08/2023 Reso 2023-020 FC Tot Lot Construction (157,000) 20,261 02/22/2023 Reso 2023-022 Nissho Landscape Maint. Services (25,000) (4,739) 03/08/2023 Reso 2023-027 HDL Audit Services (25,000) (29,739) 03/08/2023 Reso 2023-028 USACE Construction Funding (313,556) (343,295) 03/22/2023 Reso 2023-023 FY23 Mid-Year Update 400,000 68,117 124,822 04/12/2023 Reso 2023-044 Principal Mgmt Analyst Position (20,000) 104,822 04/12/2023 Reso 2023-046 Building Permit Revenue and Services 220,000 (200,000) 124,822 05/10/2023 Reso 2023-059 Sewer & Storm Drain Rehab Project (89,802) 35,020

GENERAL FUND - ADOPTED BUDGET PLUS CHANGES
As of May 24, 2023
General Fund - Operations
June 14, 2023
General Fund Budget Changes - FY 2023

Page 2 of 2 ends

CEQA COMPLIANCE STATEMENT:

Not a project as defined by CEQA
FISCAL IMPACT:

N/A
WORK PLAN:

N/A
OPTIONS:
∙ Receive the report.
∙ Do not accept the report
DEPARTMENT RECOMMENDATION:

Staff recommends that the City Council receive the report listing changes made to the FY 2022-2023 General Fund Adopted Budget.

CITY MANAGER’S RECOMMENDATION:

Approve Department Recommendation
_________________________________
Gregory Wade, City Manager
Date Action Description Revenues Expenditures Transfers from GF Net Surplus 03/22/2023 Reso 2023-023 FY23 Mid-Year Update 750,000 750,000 Date Action Description Revenues Expenditures Transfers from GF Net 12/09/2022 Reso 2022-123 FY22 Surplus - PARS Contribution (720,000) (720,000) 12/09/2022 Reso 2022-123 FY22 Surplus - Pavement Mgmt Prgm (150,000) (870,000) General Fund Unreserved Balance
General Fund - Measure S
CITY COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # A.4.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: June 14, 2023
ORIGINATING DEPT: City Manager’s Department
SUBJECT: City Council Consideration of Resolution 2023-036 Authorizing the City Manager to Execute an Agreement
with CorVel for Third Party Administrator For Worker’s
Compensation Claims Administration
BACKGROUND:

On September 2, 2003, the City of Solana Beach City Council (Council) approved a selfinsured worker’s compensation program for the City. At the same time, Council also approved a Professional Services Agreement (PSA) with TriStar Risk Management (TriStar) to perform as the City’s Third-Party Administrator (TPA) for its Worker’s Compensation (WC) Program. The City has continued its partnership with TriStar since that time. Since the current PSA is set to expire on June 30, 2023, Staff determined it necessary and in the City’s best interest to issue a Request for Proposals (RFP) to solicit proposals from other WC TPAs.

The City of Del Mar also currently works with TriStar Risk Management as their WC TPA.

In September 2022, in a joint effort with the City of Del Mar, a RFP was drafted for a new worker’s compensation TPA and three proposals were received, one of which was from TriStar Risk Management. After a thorough review of all RFPs received, CorVel Corporation was unanimously chosen as the strongest proposal.

This item is before Council to consider adoption of Resolution 2023-036 (Attachment 1) authorizing the City Manager to execute a PSA (Attachment 2) with CorVel for the City’s WC TPA services for one year with an option to extend at the City Manager’s discretion for up to four additional years.

June 14, 2023
Worker’s Compensation TPA

Page 2 of 3 ends

DISCUSSION:

The joint issued RFP requested that TPAs address the following areas: Standards for claims handling, database management, investigative unit, utilization review process, bill review process, experience with the standards and reporting requirements of the City’s member-directed insurance risk sharing pool, Public Risk Innovation, Solutions, and Management (PRISM), COVID-19 claims processing, and various other management and standards pertinent to worker’s compensation claims processing.

A detailed outline of the responsibilities CorVel will undertake as the City’s new WC TPA can be found in the professional services agreement (Attachment 2) Exhibit “A” Scope of Services and Fee section. The transition from TriStar to CorVel will include the following:

1. Electronic Files Data Transfer

2. Movement of Physical Files

3. Benefit Payment Transfers (TD, PD, Life Pension, etc.)

4. Transition of Pending Utilization Review Authorizations CEQA COMPLIANCE STATEMENT:

Not a project as defined by CEQA.

FISCAL IMPACT:

For the FY 2022/2023 budget, an appropriation of $13,400 would be needed to cover the implementation and transition to CorVel from TriStar. Funds are available in the Workers Compensation Fund 125. The total costs for annual WC TPA services include an annual fee, in this case $10,000 per year, as well as ad-hoc fees as described in the fee scheduled attached the PSA. Costs under this contract, therefore, will be variable and dependent upon the nature and specifics of each WC claim handled. Total fees are estimated and included as part of the annual budget in the WC fund. The FY2024 and FY2025 proposed budgets will include sufficient funding to include the not-to-exceed amount of $125,000 per contract year.

WORK PLAN:

N/A
OPTIONS:
∙ Approve Staff recommendation.
∙ Approve Staff recommendation with alternative amendments/modifications. ∙ Deny Staff recommendation and provide direction.
∙ Provide direction or feedback.

June 14, 2023
Worker’s Compensation TPA

Page 3 of 3 ends

DEPARTMENT RECOMMENDATION:

Staff recommends that the City Council adopt Resolution 2023-036:

1. Authorizing the City Manager to execute the Agreement for a Third-Party Administrator for the City’s Worker’s Compensation Program for one year with an authorization of agreement extensions for up to four additional years at the City Manager’s discretion.

2. Authorize the City Treasurer to amend the FY 2022/23 Adopted Budget to appropriate $13,400 for implementation in the Workers Compensation fund for Professional Services.

3. Authorize a contract amount for CorVel in the not-to-exceed amount of $125,000 per contract year.

CITY MANAGER’S RECOMMENDATION:

Approve Department Recommendation
_________________________
Gregory Wade, City Manager
Attachments:

1. Resolution 2023-036

2. Professional Services Agreement for Worker’s Compensation Third Party Administrator Services between the City of Solana Beach and CorVel RESOLUTION 2023-036

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

SOLANA BEACH, CALIFORNIA, AUTHORIZING THE CITY

MANAGER TO EXECUTE AN AGREEMENT WITH CORVEL
AS THE CITY’S WORKER’S COMPENSATION THIRD PARTY

ADMINISTRATOR
WHEREAS, the City became self-insured for worker’s compensation insurance on September 2, 2003; and
WHEREAS, the City has a desire to update its worker’s compensation (WC) third party administer (TPA); and
WHEREAS, the City Council desires to update its WC TPA by entering into an Agreement for these services (Agreement); and
WHEREAS, the City would like professional ongoing WC TPA services; and WHEREAS, the City issued a Request for Proposal (RFP) to solicit proposals from qualified WC TPAs; and
WHEREAS, CorVel Corporation’s proposal demonstrated competence, qualifications and specialized expertise to become the City’s WC TPA for a fair and reasonable price.

NOW, THEREFORE, the City Council of the City of Solana Beach, California, does resolve as follows:

1. That the above recitations are true and correct.

2. That the City Council authorizes the City Manager to enter into a Professional Services Agreement with CorVel for WC TPA services for one year and authorizing extensions of the agreement for up to four additional years at the City Manager’s discretion.

3. That the City Council authorizes the City Treasurer to amend the FY 2022/23 budget to include an additional $13,400 for implementation in the Workers Compensation fund professional services account.

4. That the City Council authorizes a contract amount for CorVel in the not-toexceed amount of $125,000 per contract year.

Resolution 2023-036
WC TPA Professional Services Agreement

Page 2 of 2 ends

PASSED AND ADOPTED this 14th day of June, 2023, at a regularly scheduled meeting of the City Council of the City of Solana Beach, California by the following vote:

AYES: Councilmembers –
NOES: Councilmembers –
ABSTAIN: Councilmembers –
ABSENT: Councilmembers –
______________________________
LESA HEEBNER, Mayor
APPROVED AS TO FORM: ATTEST:
_____________________________ _______________________________ JOHANNA N. CANLAS, City Attorney ANGELA IVEY, City Clerk 1 City of Solana Beach

PROFESSIONAL SERVICES AGREEMENT

FOR WORKER COMPENSATION THIRD PARTY ADMINISTRATION
This Professional Services Agreement (“AGREEMENT”) is made and entered into this day of , 20 by and between the CITY OF SOLANA BEACH, a municipal corporation (“CITY”), and, CORVEL ENTERPRISE COMP, INC., a Delaware corporation (“CONSULTANT”) (collectively “PARTIES”).

WHEREAS, the CITY desires to employ a CONSULTANT to furnish Third Party Administration (“PROFESSIONAL SERVICES”) for Workers Compensation (“PROJECT”); and WHEREAS, the CITY has determined that CONSULTANT is qualified by experience and ability to perform the services desired by CITY, and CONSULTANT is willing to perform such services; and
WHEREAS, CONSULTANT will conduct all the work as described and detailed in this AGREEMENT to be provided to the CITY.

NOW, THEREFORE, the PARTIES hereto mutually covenant and agree with each other as follows:

1. PROFESSIONAL SERVICES.

1.1. Scope of Services. The CONSULTANT shall perform the PROFESSIONAL SERVICES as set forth in the written Scope of Services, attached as Exhibit “A” Scope of Services and Fee, at the direction of the CITY. CITY shall provide CONSULTANT access to appropriate staff and resources for the coordination and completion of the projects under this AGREEMENT. For all work to be performed on site in the City, the CITY and CONSULTANT agree that the Scope of Services begins when the CONSULTANT arrives on site and terminates when the CONSULTANT leaves the site. Travel time to and from project site shall not be considered time on the job or compensated by the CITY.

1.2. Project Coordinator. The Human Resources Director is hereby designated as the Project Coordinator for CITY and will monitor the progress and execution of this AGREEMENT. CONSULTANT shall assign a single Project Director to provide supervision and have overall responsibility for the progress and execution of this AGREEMENT for CONSULTANT. Sarah Tait, Account Executive, is hereby designated as the Project Director for CONSULTANT.

1.3. City Modification of Scope of Services. CITY may order changes to the Scope of Services within the general scope of this AGREEMENT consisting of additions, deletions, or other revisions. If such changes cause a change in the CONSULTANT’s cost of, or time required for, completion of the Scope of Services, an equitable adjustment to CONSULTANT’s compensation and/or contract time shall be made, subject to the CITY’S approval. All such changes shall be authorized in writing, executed by CONSULTANT and CITY.

2. DURATION OF AGREEMENT.

2.1. Term. The term of this AGREEMENT shall begin from the date of execution of the AGREEMENT and remain in effect continuously until June 30, 2024. Time is of the essence in the performance of work under this AGREEMENT, unless otherwise specified. 2 2.2. Extensions. If marked, the CITY shall have the option to extend the AGREEMENT for four (4) additional one (1) year periods or parts thereof. Extensions shall be in the sole discretion of the City Manager and shall be based upon CONSULTANT’s satisfactory past performance, CITY needs, and appropriation of funds by the City Council. The CITY shall give written notice to CONSULTANT prior to exercising the option.

2.3. Delay. Any delay occasioned by causes beyond the control of CONSULTANT may merit an extension of time for the completion of the Scope of Services. When such delay occurs, CONSULTANT shall immediately notify the Project Coordinator in writing of the cause and the extent of the delay, whereupon the Project Coordinator shall ascertain the facts and the extent of the delay and grant an extension of time for the completion of the PROFESSIONAL SERVICES when justified by the circumstances.

2.4. Right to Terminate for Default. Should CONSULTANT be in default of any covenant or condition hereof, CITY may immediately terminate this AGREEMENT for cause if CONSULTANT fails to cure the default within thirty (30) calendar days of receiving written notice of the default. Should CITY be in default of its payment obligations hereunder, CONSULTANT may immediately terminate this AGREEMENT for cause if CITY fails to cure the default within thirty (30) calendar days of receiving written notice of the default.

2.5. Right to Terminate without Cause. Without limiting its rights in the event of CONSULTANT’s default, CITY may terminate this AGREEMENT, without cause, by giving written notice to CONSULTANT. Such termination shall be effective upon receipt of the written notice. After the first year of the initial term of the AGREEMENT, CONSULTANT may terminate this AGREEMENT, without cause, by giving at least 180 days’ written notice to CITY. CONSULTANT shall be compensated for all effort and material expended on behalf of CITY under the terms of this AGREEMENT, up to the effective date of termination. All personal property remaining in CITY facilities or on CITY property thirty (30) days after the expiration or termination of this AGREEMENT shall be, at CITY’s election, considered the property of CITY.

3. COMPENSATION.

3.1. Total Amount. The total cost for all work described in the Scope of Services and Fee (Exhibit “A”) shall be as set forth in such Exhibit A. CONSULTANT shall bill the CITY for actual work provided and shall present a written request for such payment monthly.

3.2. Additional Services. CITY may, as the need arises or in the event of an emergency, request additional services of CONSULTANT. Should such additional services be required, CITY and CONSULTANT shall agree to the cost prior to commencement of these services.

3.3. Costs. Any costs billed to the CITY shall be approved in writing in advance and in accordance with any terms negotiated and incorporated herein as part of Exhibit “A” Scope of Services and Fee.

4. INDEPENDENT CONTRACTOR.

4.1. CONSULTANT is, for all purposes arising out of this AGREEMENT, an independent contractor. The CONSULTANT has and shall retain the right to exercise full control and supervision of all persons assisting the CONSULTANT in the performance of said services hereunder, the CITY only being concerned with the finished results of the work being performed. Neither CONSULTANT nor CONSULTANT’s employees shall in any event be entitled to any benefits to which CITY employees are entitled, including, but not limited to, overtime, retirement benefits, workers’ compensation benefits, injury leave or other leave benefits. CONSULTANT is solely responsible for all such matters, as well as compliance with social security and income tax withholding and all other regulations and laws governing such matters.

4.2 PERS Eligibility Indemnification. In the event that CONSULTANT’s employee providing services under this AGREEMENT claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS of the CITY, CONSULTANT shall indemnify, defend, and hold harmless CITY for the payment of any employer and employee contributions for PERS benefits on behalf of the employee as well as for payment of any penalties and interest on such contributions which would otherwise be the responsibility of the ~
3 CITY. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, CONSULTANT’s employees providing service under this AGREEMENT shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation and benefit including but not limited to eligibility to enroll in PERS as an employee of CITY and entitlement to any contributions to be paid by CITY for employer contributions and/or employee contributions for PERS benefits.

4.3 Indemnification for Employee Payments. CONSULTANT agrees to defend and indemnify the CITY for any obligation, claim, suit or demand for tax, retirement contribution including any contribution to the PERS, social security, salary or wages, overtime payment, or workers’ compensation payment which the CITY may be required to make for work done under this AGREEMENT.

4.4 The provisions of this section 4 are continuing obligations that shall survive expiration or termination of this AGREEMENT.

5. STANDARD OF PERFORMANCE.

While performing the PROFESSIONAL SERVICES, CONSULTANT shall exercise the reasonable professional care and skill customarily exercised by reputable members of CONSULTANT’s profession practicing in the metropolitan Southern California Area, and will use reasonable diligence and best judgment while exercising its professional skill and expertise.

6. WARRANTY OF CONSULTANT’S LICENSE.

CONSULTANT warrants that CONSULTANT is properly licensed with the applicable government agency(ies) for any PROFESSIONAL SERVICES that require a license. If the CONSULTANT lacks such license, this AGREEMENT is void and of no effect.

7. AUDIT OF RECORDS.

7.1. At any time during normal business hours and as often as may be deemed necessary the CONSULTANT shall make available to a representative of CITY for examination all of its records with respect to all matters covered by this AGREEMENT and shall permit CITY to audit, examine and/or reproduce such records. CONSULTANT shall retain such financial and program service records for at least four (4) years after termination or final payment under this AGREEMENT. Notwithstanding anything to the contrary herein or in the AGREEMENT, in no event shall CITY be permitted to direct audit or testing of CONSULTANT’s information technology systems or an on-site of CONSULTANT’s facilities other than in direct relation to records related to the provision of PROFESSIONAL SERVICES under the AGREEMENT.

8. CONFIDENTIALITY AND SECURITY.

8.1. Confidential Work Product. All professional services performed by CONSULTANT, including but not limited to all drafts, data, correspondence, proposals, reports, research and estimates compiled or composed by CONSULTANT, pursuant to this AGREEMENT, are for the sole use of the CITY, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the CITY. This provision does not apply to information that (a) was publicly known, or otherwise known to CONSULTANT, at the time that it was disclosed to CONSULTANT by the CITY, (b) subsequently becomes publicly known through no act or omission of CONSULTANT or (c) otherwise becomes known to CONSULTANT other than through disclosure by the CITY. Except for any subcontractors that may be allowed to receive such information based upon a prior written agreement, neither the documents nor their contents shall be released to any third party without the prior written consent of the CITY. The sole purpose of this section is to prevent disclosure of CITY’s confidential and proprietary information by CONSULTANT or subcontractors.

8.2. Confidentiality. Both parties recognize that their respective employees and agents, in the course of performance of this AGREEMENT, may be exposed to confidential information and that disclosure 4 of such information could violate the rights of private individuals and entities, including the parties and third parties. Confidential information is nonpublic information that a reasonable person would believe to be confidential and includes, without limitation, personal identifying information (e.g., social security numbers) and trade secrets, each as defined by applicable state law, and all other information protected by applicable law (“Confidential Information”). The party receiving Confidential Information (“Receiving Party”) of the other (“Disclosing Party”) shall not, and shall cause its employees and agents who are authorized to receive Confidential Information, not to use Confidential Information for any purpose except as necessary to implement, perform or enforce this AGREEMENT or comply with its legal obligations. Receiving Party will use the same reasonable efforts to protect the Confidential Information of Disclosing Party as it uses to protect its own proprietary information and data. The Receiving Party will not disclose or release Confidential Information to any third person without the prior written consent of the Disclosing Party, except for where required by law or for authorized employees or agents of the Receiving Party. Prior to disclosing the Confidential Information to its authorized employees or agents, Receiving Party shall inform them of the confidential nature of the Confidential Information and require them to abide by terms that are materially similar to the applicable terms of this AGREEMENT. Receiving Party will promptly notify Disclosing Party if Receiving Party discovers any improper use or disclosure of Confidential Information and will promptly commence all reasonable efforts to investigate and correct the causes of such improper use or disclosure. If Receiving Party believes the Confidential Information must be disclosed under applicable law, Receiving Party may do so provided that, to the extent permitted by law, the other party is given a reasonable notice and opportunity to contest such disclosure or obtain a protective order. Confidential Information does not include information that: (i) is or becomes known to the public without fault or breach of the Receiving Party; (ii) the Disclosing Party regularly discloses to third parties without restriction on disclosure; or (iii) the Receiving Party obtains from a third party without restriction on disclosure and without breach of a non-disclosure obligation. Confidential Information does not include any information that is required to be provided to the public pursuant to the laws of the United States and/or California such as the California Public Records Act, due to the nature of CITY being a local governmental agency. The non-disclosure and non-use obligations of this AGREEMENT will remain in full force with respect to each item of Confidential Information for a period of ten (10) years after the Receiving Party’s receipt of that item.

8.3. Security.

8.3.1. Implementation. CONSULTANT shall implement commercially reasonable administrative, technical and physical safeguards designed to: (i) ensure the security and confidentiality of data and information provided by the CITY or used in connection with providing services under this AGREEMENT, including data or information about third parties (“CITY’S Data”); (ii) protect against any anticipated threats or hazards to the security or integrity of CITY’S Data; and (iii) protect against unauthorized access to or use of CITY’S Data.

CONSULTANT shall review and test such safeguards on no less than an annual basis.

8.3.2. Network. If CONSULTANT makes CITY’S Data accessible through the Internet or other networked environment, CONSULTANT shall be solely responsible for all aspects of Internet use, and shall maintain, in connection with the operation or use of CITY’S Data, adequate technical and procedural access controls and system security requirements and devices, necessary for data privacy, confidentiality, integrity, authorization, authentication and nonrepudiation and virus detection and eradication.

8.3.3. Personal Data. If CONSULTANT processes or otherwise has access to any “personal data,” “personal information,” “personally identifiable information,” “personal health information,” “nonpublic information,” “personal financial information,” or similar such term, each as defined by applicable state data privacy and protection laws relating to CONSULTANT’s collection, use, sharing, storage, transmission, and/or disclosure of data pursuant to the Agreement (“CITY’s Personal Information”) on CITY’s behalf when performing CONSULTANT’s services and obligations under this AGREEMENT, then: (i) 5 CITY shall be the data controller (where “data controller” means an entity which alone or jointly with others determines purposes for which and the manner in which Personal Information are, or are to be, processed) and CONSULTANT shall be a data processor (where “data processor” means an entity which processes the data only on behalf of the data controller and not for any purposes of its own); (ii) CITY shall ensure that it has obtained all necessary consents and it is entitled to transfer the relevant Personal Information to CONSULTANT so that CONSULTANT may lawfully use, process and transfer the Personal Information in accordance with this AGREEMENT on CITY’s behalf in order for CONSULTANT to provide the services and perform its other obligations under this AGREEMENT; (iii) CONSULTANT shall process the Personal Information only in accordance with any lawful and reasonable instructions given by CITY from time to time and in accordance with the terms of this AGREEMENT; and (iv) each party shall take appropriate technical and organizational measures against unauthorized or unlawful processing of the Personal Information or its accidental loss, destruction or damage so that, having regard to the state of technological development and the cost of implementing any measures, the measures taken ensure a level of security appropriate to the harm that might result from such unauthorized or unlawful processing or accidental loss, destruction or damage in relation to the Personal Information and the nature of the Personal Information being protected. If necessary, the parties will cooperate to document these measures taken. “Personal Information” shall be limited to that data provided by CITY to CONSULTANT for processing, or collected by CONSULTANT or its authorized employees or agents on behalf of CITY, pursuant to the AGREEMENT.

8.3.4. Information Security. CONSULTANT represents and warrants that its collection, access, use, storage, disposal and disclosure of Personal Information accessed and/or collected from CITY does and will comply with all applicable federal and state privacy and data protection laws. In the event of any security breach of CONSULTANT’s systems containing CITY’s Personal Information (“Security Breach”), CONSULTANT shall: (a) Provide CITY with the name and contact information for an employee who shall serve as CITY’s primary security contact and shall be available to assist CITY twenty-four (24) hours per day, seven (7) days per week as a contact in resolving obligations associated with a Security Breach; (b) confirm the security breach as soon as practicable; and (c) Notify CITY of a Security Breach impacting CITY’s Personal Information as soon as practicable, but no later than forty-eight (48) hours after CONSULTANT confirms the Security Breach. Immediately following CONSULTANT’s notification to CITY of a Security Breach, the parties shall coordinate with each other to investigate the Security Breach.

CONSULTANT agrees to fully cooperate with CITY in CITY’s handling of the matter. CONSULTANT shall use best efforts to immediately remedy any Security Breach and employ commercially reasonable methods to prevent any further Security Breach at CONSULTANT’s own expense in accordance with applicable privacy rights, laws, regulations and standards. CONSULTANT agrees to provide, at its expense, up to one year of credit monitoring, services, if required by applicable state law, to third parties impacted by any Security Breach involving the loss of personally identifiable information. 6 8.3.5. Nothing shall prohibit CONSULTANT from creating or using aggregate, statistical and deidentified data generated or submitted through CITY’s use or receipt of PROFESSIONAL SERVICES, provided that such data is (i) not individually identifiable to any individual person, (ii) not Personal Information, (iii) otherwise qualifies as deidentified or aggregated under applicable state data privacy and protection laws, and (iv) does not violate any applicable law. In order to facilitate the provision of PROFESSIONAL SERVICES, CONSULTANT may use CITY Data to improve the
PROFESSIONAL SERVICES being provided to CITY, including by developing and enhancing efficiencies and the means by which CONSULTANT provides the PROFESSIONAL SERVICES to CITY, so long as such use is solely in furtherance of providing PROFESSIONAL SERVICES to the CITY and does not violate any applicable law.

8.4. Indemnity. CONSULTANT shall defend (with counsel acceptable to CITY), indemnify and hold CITY harmless from and against all claims, actions, proceedings, losses, costs (including attorney fees and other charges), liabilities, damages, judgments, settlements, and court awarded attorney’s fees resulting from, arising out of or related to a Security Breach unless the breach is proven to be caused solely by CITY. The terms of this section shall survive termination of this AGREEMENT.

8.5. Notice and Remedy of Breaches. Each party shall promptly give notice to the other of any confirmed breach by it of any of the provisions of Section 8 of this AGREEMENT, whether or not intentional, and the breaching party shall, at its expense, take all steps reasonably requested by the other party to prevent or remedy the breach.

8.6. Enforcement. Each party acknowledges that any breach of any of the provisions of Section 8 of this AGREEMENT may result in irreparable injury to the other for which money damages would not adequately compensate. If there is a breach, then the injured party shall be entitled, in addition to all other rights and remedies which it may have, to have a decree of specific performance or an injunction issued by any competent court, requiring the breach to be cured or enjoining all persons involved from continuing the breach.

9. CONFLICTS OF INTEREST.

9.1. CONSULTANT shall at all times comply with all federal, state and local conflict of interest laws, regulations, and policies applicable to public contracts and procurement practices, including but not limited to California Government Code Section 81000 et seq. (Political Reform Act) and Section 1090 et seq. CONSULTANT shall immediately disqualify itself and shall not use its official position to influence in any way any matter coming before the CITY in which the CONSULTANT has a financial interest as defined in Government Code Section 87103. CONSULTANT represents that it has no knowledge of any financial interests which would require it to disqualify itself from any matter on which it might perform services for the CITY.

9.2. If, in performing the PROFESSIONAL SERVICES set forth in this AGREEMENT, the CONSULTANT makes, or participates in, a “governmental decision” as described in Title 2, Section 18700.3(a) of the California Code of Regulations, or performs the same or substantially all the same duties for the CITY that would otherwise be performed by a CITY employee holding a position specified in the department's conflict of interest code, the CONSULTANT shall be subject to a conflict of interest code requiring the completion of one or more statements of economic interests disclosing the CONSULTANT’s relevant financial interests.

9.3. If checked, the CONSULTANT shall comply with all of the reporting requirements of the Political Reform Act. Specifically, the CONSULTANT shall file a Fair Political Practices Commission Form 700 (Assuming Office Statement) within thirty (30) calendar days of the CITY’s determination that the CONSULTANT is subject to a conflict of interest code. The CONSULTANT shall also file a Form 700 (Annual Statement) on or before April 1 of each year of the AGREEMENT, disclosing any financial interests held during the previous calendar year for which the CONSULTANT was subject to a conflict of interest code.

9.4. CITY represents that pursuant to California Government Code Section 1090 et seq., none of its elected officials, officers, or employees has an interest in this AGREEMENT. □
7 10. DISPOSITION AND OWNERSHIP OF DOCUMENTS.

10.1. All documents, data, studies, drawings, maps, models, photographs and reports prepared by CONSULTANT under this AGREEMENT, whether paper or electronic, shall become the property of CITY for use with respect to this PROJECT, and shall be turned over to the CITY upon completion of the PROJECT or any phase thereof, as contemplated by this AGREEMENT.

10.2. Contemporaneously with the transfer of documents, the CONSULTANT hereby assigns to the CITY and CONSULTANT thereby expressly waives and disclaims, any copyright in, and the right to reproduce, all written material, drawings, plans, specifications or other work prepared under this AGREEMENT, except upon the CITY’s prior authorization regarding reproduction, which authorization shall not be unreasonably withheld. The CONSULTANT shall, upon request of the CITY, execute any further document(s) necessary to further effectuate this waiver and disclaimer.

11. INSURANCE

11.1. CONSULTANT shall procure and maintain for the duration of the AGREEMENT 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 and the results of that work by the CONSULTANT, their agents, representatives, employees or subcontractors. Insurance shall be placed with insurers with a current A.M.

Best’s rating of no less than “A” and “VII” unless otherwise approved in writing by the CITY’s Risk Manager.

11.2. CONSULTANT’s liabilities, including but not limited to CONSULTANT’s indemnity obligations, under this AGREEMENT, shall not be deemed limited in any way to the insurance coverage required herein. All policies of insurance required hereunder must provide that the CITY is entitled to thirty (30) days prior written notice of cancellation or non-renewal of the policy or policies, or ten (10) days prior written notice for cancellation due to non-payment of premium. Maintenance of specified insurance coverage is a material element of this AGREEMENT.

11.3. Types and Amounts Required. CONSULTANT shall maintain, at minimum, the following insurance coverage for the duration of this AGREEMENT. If CONSULTANT maintains broader coverage and/or higher limits than the minimums shown below, the CITY shall be entitled to the broader coverage and/or the higher limits maintained by the CONSULTANT. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY.

11.3.1. Commercial General Liability (CGL). If checked the CONSULTANT shall maintain CGL Insurance written on an ISO Occurrence form or equivalent providing coverage at least as broad as CG 00 01 which shall cover liability arising from any and all personal injury or property damage, including ongoing and completed operations, in the amount no less than $2,000,000.00 per occurrence and subject to an annual aggregate of $4,000,000.00. If limits apply separately to this project (CG 25 03 or 25 04) the general aggregate limit shall not apply. There shall be no endorsement or modification of the CGL limiting the scope of coverage for either insured vs. insured claims or contractual liability. All defense costs shall be outside the limits of the policy. Excess or umbrella policies may be used to meet the required limits of insurance. Such policies will be evaluated separately and must meet the same qualifications as the CONSULTANT’s primary policy.

11.3.2. Commercial Automobile Liability. If checked the CONSULTANT shall maintain Commercial Automobile Liability Insurance for all of the CONSULTANT's automobiles including owned, hired and non-owned automobiles, automobile insurance written on an ISO form CA 00 01 12 90 or a later version of this form or an equivalent form providing coverage at least as broad for bodily injury and property damage for a combined single limit no less than $1,000,000.00 per occurrence. Insurance certificate shall reflect coverage for any automobile (any auto).

11.3.3. Workers' Compensation. If checked the CONSULTANT shall maintain IZI IZI IZI 8 Worker’s Compensation insurance for all of the CONSULTANT's employees who are subject to this AGREEMENT and to the extent required by applicable state or federal law, a Workers' Compensation policy providing at minimum $1,000,000.00 employers' liability coverage. The CONSULTANT shall provide an endorsement that the insurer waives the right of subrogation against the CITY and its respective elected officials, officers, employees, agents and representatives.

11.3.4. Professional Liability. If checked the CONSULTANT shall also maintain Professional Liability (errors and omissions) coverage with a limit no less than $1,000,000 per claim and $2,000,000 annual aggregate. The CONSULTANT shall ensure both that (1) the policy retroactive date is on or before the date of commencement of the Scope of Services; and (2) the policy will be maintained in force for a period of three years after substantial completion of the Scope of Services or termination of this AGREEMENT whichever occurs last. The CONSULTANT agrees that for the time period defined above, there will be no changes or endorsements to the policy that increase the CITY's exposure to loss. All defense costs shall be outside the limits of the policy..

11.3.5. Cyber Liability. If checked the CONSULTANT shall also maintain Cyber Liability coverage on a claims made basis with a limit no less than $2,000,000 per occurrence or claim and $2,000,000 annual aggregate. The CONSULTANT shall ensure both that (1) the policy retroactive date is on or before the date of commencement of any services under this AGREEMENT; and (2) the policy will be maintained in force for a period of three years after substantial completion of the Scope of Services or termination of this AGREEMENT whichever occurs last. Coverage shall be sufficiently broad to respond to the duties and obligations as are undertaken by CONSULTANT in this AGREEMENT and shall include claims involving infringement of intellectual property, infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, alteration of electronic information, extortion and network security. The policy shall provide coverage for breach response costs as well as regulatory fines and penalties as well as credit monitoring expenses with limits sufficient to respond to such obligations.

All defense costs shall be outside the limits of the policy.

11.3.6. Fidelity and Crime Liability. If checked, the CONSULTANT shall also maintain Fidelity and Crime coverage for theft of CITY property for an amount no less than $1,000,000 per loss.

11.3.7. Sexual Abuse and Molestation (“SAM”) Insurance. If checked, the CONSULTANT shall also maintain sexual abuse and molestation (SAM) insurance with limits not less than $1,000,000 per occurrence or claim with an aggregate of not less than $2,000,000. The policy shall provide coverage including but not limited to claims for improper sexual conduct, damages because of bodily injury, and negligent hiring and supervision. All defense costs shall be outside the limits of the policy.

11.3.8. Contractor’s Pollution Legal Liability. If checked, the CONSULTANT shall procure and maintain contractors’ pollution legal liability and/or errors and omissions with limits no less than $1,000,000 per occurrence or claim with an aggregate of not less than $2,000,000 to cover liability and legal expenses arising out of cleanup, removal, storage, or handling of hazardous or toxic chemicals, materials, substances, or any other pollutants by the CONSULTANT or any subcontractor resulting from pollution conditions. □
□
9 11.4. Self-Insured Retentions. Any self-insured retentions are the responsibility of the CONSULTANT and must be declared to and approved by the CITY. At the option of the CITY, either (1) the insurer shall reduce or eliminate such self-insured retentions as respects the CITY, its officers, officials, employees and volunteers, or (2) the CONSULTANT shall provide a financial guarantee satisfactory to the CITY guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

11.5. Waiver of Subrogation. CONSULTANT hereby grants to CITY and its respective elected officials, officers, employees, agents and representatives a waiver of any right to subrogation under its Workers’ Compensation, General Liability and Auto Liability coverages which any insurer of said CONSULTANT may acquire against the CITY by virtue of the payment of any loss under such insurance.

CONSULTANT agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the CITY has received a waiver of subrogation endorsement from the insurer.

11.6. Additional Required Provisions. The commercial general liability, including any excess or umbrella policies being used to meet the required limits of insurance, and automobile liability policies shall contain, or be endorsed to contain, the following provisions:

11.6.1. The CITY, its officers, officials, employees, and representatives shall be named as additional insureds with respect to liability arising out of work or operations performed by or on behalf of the CONSULTANT including materials, parts, or equipment furnished in connection with such work or operations. The CITY's additional insured status must be reflected on additional insured endorsement form (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38 and CG 20 37) which shall be submitted to the CITY.

11.6.2. The policies are primary and non-contributory to any insurance that may be carried by the CITY, as reflected in an endorsement at least as broad as CG 20 01 04 13 which shall be submitted to the CITY. Any insurance or selfinsurance maintained by the CITY, its officers, officials, employees, or representatives shall be excess of the CONSULTANT’s insurance and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.

11.7. Verification of Coverage. CONSULTANT shall furnish the CITY with original certificates and amendatory endorsements effecting coverage required by this Section 11 and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements.

The endorsements should be on forms approved by the CITY or on other than the CITY’s forms provided those endorsements conform to CITY requirements. All certificates and endorsements are to be received and approved by the CITY before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications at any time.

11.8. Excess or Umbrella Policies. If any Excess or Umbrella Liability policies are used to meet the limits of liability required by this agreement, said policies shall meet all of the insurance requirements stated in this document, including, but not limited to, the additional insured, contractual liability, “insured contract” definition, occurrence definition, primary and non-contributory, indemnity, and defense requirements.

No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the CONSULTANT’s primary and excess liability policies are exhausted.

11.9. Special Risks or Circumstances. CITY reserves the right to modify these requirements, including limits, based on the nature of risk, prior experience, insurer, coverage, or other special circumstances.
10 12. INDEMNIFICATION.

12.1. CONSULTANT agrees to indemnify, defend (with counsel acceptable to CITY), and hold harmless the CITY, and its officers, officials, agents and employees from any and all claims, demands, costs or liabilities that arise out of, or pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its employees, agents, and subcontractors in the performance of or failure to perform services or obligations under this AGREEMENT. CONSULTANT’s duty to indemnify under this section shall not include liability for damages for death or bodily injury to persons, injury to property, or other loss, damage or expense arising from the sole negligence or willful misconduct by the CITY or its elected officials, officers, agents, and employees. CONSULTANT's indemnification obligations shall not be limited by the insurance provisions of this AGREEMENT. The PARTIES expressly agree that any payment, attorney's fees, costs or expense CITY incurs or makes to or on behalf of an injured employee under the CITY's self-administered workers' compensation is included as a loss, expense, or cost for the purposes of this section, and that this section will survive the expiration or early termination of this AGREEMENT.

12.2. CITY shall defend, indemnify and hold harmless CONSULTANT against any third party suits, claims or action, and shall reimburse CONSULTANT for any and all damages, liabilities and reasonable costs and expenses, including legal fees, arising out of or relating to (i) CITY’s mis-use of, modification to, rejection of or failure to implement on a timely basis any of CONSULTANT’s recommendations made hereunder, (ii) acts or omissions by CONSULTANT that were undertaken at the express direction of CITY, (iii) CITY’s use of the CareMC Application in violation of the terms of the CareMC License Agreement, (iv) data or content included in or omitted from CITY’S Data not caused by a breach by CONSULTANT of its obligations hereunder and (v) any claim by an employee of CITY brought against CONSULTANT due to the recommendations made by CONSULTANT hereunder and not caused by a breach by CONSULTANT of its obligations hereunder in providing such recommendations.

13. SUBCONTRACTORS.

13.1. The CONSULTANT is generally authorized to hire or retain third parties (i.e. subcontractors) to perform services in the ordinary course of its business without seeking CITY’s approval.

Notwithstanding the foregoing, CONSULTANT’s retention of investigators and attorneys as subcontractors to perform services directly related to the PROJECT is subject to the CITY’S prior written approval.

13.2. All contracts entered into between the CONSULTANT and its subcontractor shall also provide that each subcontractor shall obtain insurance policies which shall be kept in full force and effect during any and all work on this PROJECT and for the duration of this AGREEMENT. The CONSULTANT shall require the subcontractor to maintain insurance coverage similar but not lesser than the amounts as defined in the Agreement. CONSULTANT providing any services under this AGREEMENT shall submit additional insured endorsements specifically only under the General Liability and Auto Liability coverages CONSULTANT SHALL PROVIDE to the CITY before commencing performance.

13.3. In any dispute between the CONSULTANT and its subcontractor, the CITY shall not be made a party to any judicial or administrative proceeding to resolve the dispute. The CONSULTANT agrees to defend and indemnify the CITY as described in Section 12 of this AGREEMENT should the CITY be made a party to any judicial or administrative proceeding to resolve any such dispute. 11 14. NON-DISCRIMINATION.

CONSULTANT shall not discriminate against any employee or applicant for employment because of sex, race, color, age, religion, ancestry, national origin, military or veteran status, disability, medical condition, genetic information, gender expression, marital status, or sexual orientation. CONSULTANT shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their sex, race, color, age, religion, ancestry, national origin, military or veteran status, disability, medical condition, genetic information, gender expression, marital status, or sexual orientation and shall make reasonable accommodation to qualified individuals with disabilities or medical conditions. Such action shall include, but not be limited to the following:
employment, upgrading, demotion, transfer, recruitment, or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. CONSULTANT agrees to post in conspicuous places available to employees and applicants for employment any notices provided by CITY setting forth the provisions of this nondiscrimination clause.

15. NOTICES.

All communications to either party by the other party shall be delivered to the persons listed below.

Any such written communications by mail shall be conclusively deemed to have been received by the addressee five (5) calendar days after the deposit thereof in the United States mail, postage prepaid and properly addressed as noted below.

Pouneh Sammak, Human Resources Director
City of Solana Beach
635 S. Highway 101
Solana Beach, CA 92075
Legal Department
CorVel Corporation
1920 Main Street Suite 900
Irvine CA 92614

16. ASSIGNABILITY.

This AGREEMENT and any portion thereof shall not be assigned or transferred, nor shall any of the CONSULTANT’s duties be delegated or sub-contracted, without the express written consent of the CITY.

17. RESPONSIBILITY FOR EQUIPMENT.

CITY shall not be responsible nor held liable for any damage to persons or property consequent upon the use, misuse, or failure of any equipment used by CONSULTANT or any of CONSULTANT’s employees or subcontractors, even if such equipment has been furnished, rented, or loaned to CONSULTANT by CITY. The acceptance or use of any such equipment by CONSULTANT, CONSULTANT’s employees, or subcontractors shall be construed to mean that CONSULTANT accepts full responsibility for and agrees to exonerate, defend, indemnify and hold harmless CITY from and against any and all claims for any damage whatsoever resulting from the use, misuse, or failure of such equipment.

18. CALIFORNIA LAW; VENUE.

This AGREEMENT shall be construed and interpreted according to the laws of the State of California.

Any action brought to enforce or interpret any portion of this AGREEMENT shall be brought in the county of San Diego, California. CONSULTANT hereby waives any and all rights it might have pursuant to California Code of Civil Procedure Section 394.

19. COMPLIANCE WITH LAWS.

19.1. The CONSULTANT shall comply with all laws, ordinances, regulations, and policies of the federal, state, and local governments applicable to this AGREEMENT whether now in force or subsequently enacted. This includes maintaining a City of Solana Beach Business Certificate. 12 19.2. If checked, CONSULTANT represents and warrants that CONSULTANT is familiar with the requirements of AB506 (Business and Professions Code section 18975) and the Child Abuse and Neglect Reporting Act (Penal Code sections 11164 - 11174.3), and that it and each and every person performing any of the PROFESSIONAL SERVICES under this AGREEMENT on CONSULTANT’s behalf does and will, at all times, comply with such requirements.

20. ENTIRE AGREEMENT.

This AGREEMENT sets forth the entire understanding of the PARTIES with respect to the subject matters herein. There are no other understandings, terms or other agreements expressed or implied, oral or written, except as set forth herein. No change, alteration, or modification of the terms or conditions of this AGREEMENT, and no verbal understanding of the PARTIES, their officers, agents, or employees shall be valid unless agreed to in writing by both PARTIES.

21. NO WAIVER.

No failure of either the City or the Consultant to insist upon the strict performance by the other of any covenant, term or condition of this AGREEMENT, nor any failure to exercise any right or remedy consequent upon a breach of any covenant, term, or condition of this AGREEMENT shall constitute a waiver of any such breach of such covenant, term or condition.

22. SEVERABILITY.

The unenforceability, invalidity, or illegality of any provision of this AGREEMENT shall not render any other provision unenforceable, invalid, or illegal.

23. DRAFTING AMBIGUITIES.

The PARTIES agree that they are aware that they have the right to be advised by counsel with respect to the negotiations, terms and conditions of this AGREEMENT, and the decision of whether or not to seek advice of counsel with respect to this AGREEMENT is a decision which is the sole responsibility of each Party. This AGREEMENT shall not be construed in favor of or against either Party by reason of the extent to which each Party participated in the drafting of the AGREEMENT.

24. CONFLICTS BETWEEN TERMS.

If an apparent conflict or inconsistency exists between the main body of this AGREEMENT and the Exhibits, the main body of this AGREEMENT shall control. If a conflict exists between an applicable federal, state, or local law, rule, regulation, order, or code and this AGREEMENT, the law, rule, regulation, order, or code shall control. Varying degrees of stringency among the main body of this AGREEMENT, the Exhibits, and laws, rules, regulations, orders, or codes are not deemed conflicts, and the most stringent requirement shall control. Each Party shall notify the other immediately upon the identification of any apparent conflict or inconsistency concerning this AGREEMENT.

25. EXHIBITS INCORPORATED.

All Exhibits referenced in this AGREEMENT and listed below are incorporated into the AGREEMENT by this reference.

26. SIGNING AUTHORITY.

26.1. The representative for each Party signing on behalf of a corporation, partnership, joint venture, association, or governmental entity hereby declares that authority has been obtained to sign on behalf of the corporation, partnership, joint venture, association, or entity and agrees to hold the other Party or PARTIES hereto harmless if it is later determined that such authority does not exist.

26.2. If checked, a proper notary acknowledgement of execution by CONSULTANT must be attached.
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13 IN WITNESS WHEREOF, the PARTIES hereto have executed this AGREEMENT the day and year first hereinabove written.

CITY OF SOLANA BEACH, a municipal
corporation
CORVEL ENTERPRISE COMP, INC., a
Delaware corporation
By: By:

City Manager, Gregory Wade Signature
Print Name and Title
ATTEST:

Date
City Clerk. Angela Ivey
APPROVED AS TO CONTENT:

Pouneh Sammak, Human Resources Director
APPROVED AS TO FORM:

City Attorney, Johanna N. Canlas
14 EXHIBITS
Exhibit A – Scope of Services and Fee
Schedule A – Workers’ Compensation Claims Management Services Schedule 2 – Case Management Services
Schedule 2-A – Care Advocacy Services
Schedule 3 – Bill Audit, Review and Payment Services
Schedule 3-A – Clinical and Technical Assessment Services Schedule 3-B – CERiS
Schedule 4 – Preferred Provider Network Access Services (PPO) Schedule 4-A – CA MPN
Schedule 5 – CAREIQ Services
Schedule 6 – Pharmacy Benefit Program
Schedule 7 – Peer Review/Medical Records Review Program Schedule 8-A – Medicare Set-Aside Services
Schedule 8-B – Medicare Agent Services – Managed Care Liability Claims Schedule 9 – Clearinghouse Payer Agent Services Program Schedule 11 – Advocacy 24/7 Nurse Triage Services
Schedule 12 – Medication Review Services
Schedule 13 – TeleHealth Services
Schedule 14 – Workers’ Compensation Lien Resolution Services Exhibit B – Fees
Exhibit C – CareMC License Agreement
15 EXHIBIT “A”

SCOPE OF SERVICES AND FEE
Claims Administration and Managed Care Services Selected by Customer Customer has chosen the Claims Administration and Managed Care Services indicated below. The specific terms and conditions that apply to CorVel’s provision and Customer’s receipt of such Claims Administration and Managed Care Services are set forth in the indicated Schedules, which are hereby incorporated by reference into this Agreement.

Service
Selected by
Customer
(check box if yes)
Applicable
Terms & Conditions
Claims Administration Services:

Workers Compensation Claims Administration Services
Liability Claims Administration Services
Texas Non-Subscriber Services
X Schedule A
Schedule A-1
Schedule A-2
Managed Care Services:

Intentionally removed
Case Management Services
Care Advocacy
X
X
Schedule 1
Schedule 2
Schedule 2-A
Network Solutions:

Bill Review Services to include: X Schedule 3
Clinical/Technical Review X Schedule 3-A
CERiS Services X Schedule 3B
Preferred Provider Network Access Services X Schedule 4 MPN Network Services X Schedule 4-A
ePPO Network Access Services Schedule 4B
CareIQ Services:

Independent Medical Exams (IME)
Durable Medical Equipment (DME)
Diagnostic Services
Transportation and Translation Services
Occupational Therapy
Chiropractic
Home Health
X Schedule 5
□
□
□
□
16 Pharmacy Benefit Management Services X Schedule 6
Peer Review/Medical Records Review
Medicare Agent Services
Medicare Set Asides
Clearinghouse Payer Agent Services Program
Clearinghouse Services
NCCI Medical Data Call Services
Advocacy 24/7 Nurse Triage Services
X
X
X
X
Schedule 7
Schedule 8A
Schedule 8B
Schedule 9
Schedule 9A
Schedule 10
Schedule 11
Medication Review Services
Telehealth Services
Workers’ Compensation Lien Resolution Services
Liability Lien Resolution Services
X
X
X
Schedule 12
Schedule 13
Schedule 14
Schedule 14A
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17 SCHEDULE A
Workers’ Compensation Claims Management Services
Terms and Conditions
I. DESCRIPTION OF WORKERS’ COMPENSATION CLAIMS MANAGEMENT

SERVICES
(a) Customer shall promptly notify CorVel of all incidents subject to the services described in this Agreement.
(b) First report of loss services involve gathering pertinent information related to a work injury and reporting such information to the appropriate state industrial accident board or commission as required by law, and is used to facilitate CorVel’s initial review of the claim to determine whether the claim is likely to be medicalonly or lost time and to help guide the initial determination of Services that may be required (“First Report Services”).
(c) CorVel’s Workers’ Compensation Claims Management services provide Customer with a process to comply with Customer’s workers’ compensation issues in the applicable jurisdiction. CorVel shall provide workers’ compensation claims management services set forth herein to Customer on behalf of employees that sustain work related injuries (“Injured Employees”). CorVel may subcontract with a third party to provide some portion or all of its claims management services obligations hereunder.

II. DELIVERY OF FIRST REPORT OF LOSS SERVICES
(a) CorVel shall provide First Report Services to Customer upon receipt by CorVel of specific requests from Customer. Prior to the implementation of CorVel First Report Services and as required during the Term of this Agreement, Customer may provide CorVel with instructions regarding the scope and extent of the First Report to be performed by CorVel. Absent such instruction, CorVel First Report Services shall be performed as described below.
(b) Customer shall initiate First Report Services by (i) entering such information online through CareMC, (ii) calling CorVel via a toll free number provided by CorVel, or (iii) faxing such information to the CorVel intake specialist. Customer or the Customer representative entering such information on CareMC, making such calls, or faxing such information shall provide CorVel with all information required to complete the First Report of Loss form required by the applicable state (“Required Information”). Required Information generally includes the following:
name/address of claimant, date of incident, description of injuries, social security number, date of birth, employer, salary, and other descriptive information reasonably required by CorVel, and may include information required by applicable statute (e.g., employer TIN). CorVel shall (i) provide sufficient staff to handle all incoming calls, and (ii) be prepared to complete First Report of Loss forms for all applicable states.
(c) Once the Required Information is validated and confirmed by a CorVel representative, First Report of Loss forms will be made available to Customer through the CareMC Application. CorVel will, upon request of Customer, provide a hard copy of the completed First Report of Loss form to the Customer. An electronic copy shall be available to Customer via CareMC. To the extent permitted by the applicable state industrial accident board or commission, the 18 Required Information shall be transmitted electronically. (d) To the extent required by applicable statute or otherwise agreed in writing by CorVel, CorVel will file additional reports on earlier-filed First Reports of Loss (“Subsequent Reports”).
(e) Unless agreed to otherwise in writing by the parties, any questions or concerns from an industrial accident board or commission concerning First Reports of Loss forms completed by CorVel hereunder will be handled directly by CorVel. All such inquiries will receive an initial response within the next business day following CorVel’s receipt of the inquiry. CorVel will keep Customer apprised of any inquiries it receives and the response thereto. CorVel will send a written response to the inquiry within five (5) business days outlining the nature of the inquiry and the resolution of same by CorVel. A copy of such response will also be sent to the attention of the designated Customer representative if requested in writing by Customer. Customer shall have the right, but not the obligation, at any time and at Customer’s expense, to interject itself into the inquiry between CorVel and the industrial accident board or commission, and in connection therewith to resolve the inquiry in a manner acceptable to Customer at its sole discretion, in which case Customer shall defend, indemnify and hold harmless CorVel from and against any claim, liability, damages or costs arising from Customer’s handling of such inquiry or the resolution thereof.

III. DELIVERY OF CLAIMS MANAGEMENT SERVICES
(a) Customer shall arrange so that all claims and all related bills of any type, as well as all other correspondence that Customer receives relating to such claims, are sent directly to CorVel. CorVel shall perform all of the following “Claims Services” in connection with each portion of a Claim related to Workers’ Compensation benefit payments shall be defined as:

Claims requiring work beyond the standard scope for each claim type will be invoiced at the next higher rate. The following section indicates the basis for the categorization of claims fees. You will be provided with reports that provide full transparency of the fees invoiced.
• Record Only – system notation of an event that does not require any claims handling, including contact or investigation. These are used solely for the purpose of record keeping.
• Medical Only – claims where time-off does not exceed the state waiting period and the scope of work is within the parameters noted in the Pricing section (“Fees”), Exhibit B.
• Indemnity – claims not otherwise classified as either Record Only or Medical Only.

All Claims Services provided by CorVel under this Agreement shall be performed in accordance with the guidelines set forth in Sections II-IV of this Exhibit A:
(i) CorVel shall immediately assign each new Indemnity Claim and Medical Only Claim to CorVel’s designated claims professional.
(ii) Utilizing CorVel’s CareMC Application or other applicable CorVel Online System, CorVel shall maintain a chronological record of all Claims Services performed by CorVel.
(iii) CorVel shall make all filings related to Indemnity Claims and Medical Only Claims with the appropriate state Workers’ Compensation regulatory authorities.
19 (iv) CorVel shall maintain a complete and accurate claim file for each Indemnity Claim and Medical Only Claim.
(v) CorVel shall perform reasonable and necessary administrative and clerical work including, without limitation, the following:
(A) Investigate all Indemnity Claims and Medical Only Claims. . (B) Determine and evaluate any coverage and/or compensability issues and provide Customer with appropriate recommendations and advice regarding the same.
(C) Adjust, handle, or settle to a conclusion those Indemnity Claims and Medical Only Claims that CorVel believes the Customer is legally obligated to pay under applicable state law and regulations, and in accordance with the authority granted to CorVel by Customer under the Agreement.
(D) Prepare checks for payments of Indemnity claims, Medical Only Claims and Allocated Loss Adjustment Expenses.
(E) Prepare documents as necessary to close out Indemnity Claims and Medical Only Claims.
(b) CorVel shall process claims and initiate the processes for the disbursement of benefit payments to claimants and providers entitled to such payments from Customer. Funding for the payment of all benefits to claimants, providers, vendors and “allocated loss adjustment expenses” (as defined below) is the sole responsibility of Customer and Customer agrees to be liable for and fund all proper claims processed by CorVel. Such payment shall be made through a Wells Fargo bank account established by CorVel. There shall be one account established for claims relating to both First Reports of Loss arising prior to, on or after July 1, 2023 (the “bank account”)). CorVel shall provide Customer with a payment register in a mutually agreed format for each check run drawn on a bank account prior to releasing payments. CorVel also will provide Customer information as necessary for Customer to prepare periodic bank account reconciliation reports. CorVel will initiate a debit against a customer approved account to approved claims and to maintain the advance deposit set forth below and to provide CorVel with such authorizations as shall be necessary to make the required instruments valid claims against Customer. Notwithstanding the other provisions of this Agreement, if funds are not available when due or returned, Customer shall be in default and subject to Section 8C (“Termination for Cause”)..
(i) Corvel will initiate a debit against a customer approved bank account on a daily basis as necessary in an amount equal to a report to be provided by CorVel on a daily basis (“Zero funded account”). CorVel shall not be responsible to fund the customer approved debited bank account nor be responsible for any penalties, fees, costs or damages arising from the Zero funded account not being properly funded by Customer.
(ii) CorVel shall not be responsible to fund the debited bank account nor be responsible for any penalties, fees, costs or damages arising from the debited bank account not being properly funded by Customer. (iii) Allocated loss adjustment expenses (“ALAE”) generally encompasses costs which can be directly allocated to a particular claim. As used herein, that term shall include, but not necessarily be limited to, the following: claim adjustment costs and expenses incurred by CorVel or its 20 subcontractor and allocated by CorVel to the investigation, adjustment and settlement or defense of a claim for benefits, including, without limitation, attorneys’ fees and disbursements; pre- and post- judgment interest; court reporter services and transcripts; deposition charges and transcripts; fees for service of process or summons; court costs; courier/express mail; appeal bonds and filing fees; travel, printing costs related to trials and appeals; witness and expert fees and expense; alternate dispute resolution fees and expense; mediation fees and expense; arbitration fees and expense; ombudsman fees and expense; medical examinations and reviews to determine issues such as causal connection, length or extent of disability, degree of permanency, and other issues related to determining liability of the Customer; laboratory costs; engineering fees and expense; autopsy fees and expense; independent adjuster and private investigator fees and expense; surveillance and activity checks; photography; fees and expense related to the defense of controverted or litigated claims, including subrogation recovery; medical cost containment expense including, but not limited to, medical bill auditing expenses, hospital and other treatment utilization reviews, including precertification/preadmission and concurrent or retrospective reviews; peer reviews; preferred medical provider network or similar organization expenses; medical fee review panel expense; pharmacy benefit management expense; drug testing expense; indexing fees; expense and fees related to Medicare set aside agreements; vocational rehabilitation or return to work expense; telephonic and field medical case management expense; fees and expense for reproduction of medical and/or hospital records; fees for police reports, birth certificates, death certificates, OSHA reports and other similar regulatory authority reports; copying fees assessed by a vendor other than TPA; translation services; legal bill audit expenses; other costs and expenses reasonably incurred and related to the investigation and defense of claims or the protection and collection of subrogation rights of the Customer; and other expenses that are not defined as losses and are directly related to and directly allocated to the handling of a particular claim for services that are required to be performed by statute or regulation. Unless expressly stated as a separate fee or otherwise included within Corvel’s service fees, each of the above ALAE items is subject to reimbursement at the rate charged.
(c) CorVel shall provide Customer with payment services through Check Writing services in accordance with specifications mutually agreed by Customer and CorVel.
(i) The checks referred to in Section II (d) will be drawn on CorVel’s account at Wells Fargo Bank, Portland, Oregon or CorVel’s account at such other bank as the parties of this Agreement may mutually accept, as evidenced by a letter or written document signed by both parties (hereafter, the “Bank”), with Customer identified on each check as the insurer or any insurance carrier as such may be required. Check Writing services shall also include IRS form 1099 filing and associated follow-up, bank reconciliation, and bank fees specifically related to such processing if Customer is using CorVel’s bank account. Otherwise, such services will be subject to an additional fee.
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21 (d) CorVel agrees to provide the following services to Customer relating to the processing and payment of claims:
(i) to receive claims and process payment of benefits in accordance with applicable State(s) program guidelines required for the payment of workers’ compensation claims;
(ii) to correspond with the claimants, providers of services and vendors if additional information is deemed necessary to complete the processing of claims;
(iii) to determine the amount of benefits payable;
(iv) to provide notice to claimants as to the reason(s) for denial of benefits (when such are denied) and to provide for the review of such denied claims; (v) to receive and process for payment claims for benefits incurred prior to the Effective Date in consideration for the separate fees established in Exhibit B; and
(vi) at Customer’s request, to provide specified additional services for such fees as the parties mutually agree;
(e) Subject to applicable law, all claims files, data, systems and records and associated documents and notices regarding the administration of claims and provision of services pursuant to this Agreement and the payment of claims and allocated loss adjustment expenses, may be audited, examined, and copied by Customer, its representatives, excess carriers, reinsurers or any state insurance department or other regulatory body that so requires, at Customer’s expense, at any time or times during CorVel’s normal business hours and with not less than thirty (30) days advance notice; and notwithstanding anything to the contrary contained in this Agreement.
(f) CorVel is and shall remain an independent contractor with respect to the services being performed hereunder and shall not for any purpose be deemed an employee of Customer, nor shall CorVel and Customer be deemed partners, joint venturers or governed by any legal relationship other than that of independent contractor as set forth herein. CorVel does not assume any responsibility for the adequacy of the funding of benefits or any act or omission or breach of duty by Customer. (g) CorVel is not in any way to be deemed an insurer, underwriter or guarantor with respect to any benefits payable under Customer’s workers’ compensation program.
(h) CorVel may rely on instructions received from such person or persons as Customer may from time to time designate in writing, provided that no such instruction may vary the terms of this Agreement.
(i) Unless otherwise directed by Customer or precluded by law, CorVel shall seek subrogation recoveries on behalf of Customer and shall provide Customer with any recoveries obtained, minus the attorneys’ fees and costs incurred in obtaining such recoveries. Customer represents and warrants that its workers’ compensation program provides for rights of subrogation. Customer delegates and/or assigns these subrogation rights and third party recovery rights to CorVel as its agent for purposes of subrogation only. Customer shall assist CorVel in its subrogation efforts by providing requested information and documentation. CorVel may engage the services of a subrogation management firm to assist with the identification and management of subrogation cases. The fees charged by the 22 subrogation management firm will be deducted from any recovery. In those cases where the subrogation recovery efforts of the claimant’s attorney should be compensated, Customer delegates to CorVel full authority to act on behalf of the Customer to negotiate reasonable attorneys’ fees. In those instances where Customer’s subrogation lien, in the opinion of CorVel, should be compromised or abandoned, Customer delegates to CorVel full authority to act on behalf of Customer to compromise or abandon the lien. Any determination by CorVel with respect to subrogation liens shall be final and conclusive, unless overturned by order of a limited arbitrary and capricious standard of review. (j) CorVel shall consult and cooperate with Customer with respect to any loss or claim resulting in a lawsuit being instituted against Customer. Nothing in this paragraph shall be construed in any way as a waiver by CorVel of any attorney/client, work product or other applicable privilege with respect to any materials or documents prepared by CorVel or its counsel in anticipation of litigation. (k) CorVel shall assist, cooperate and participate with Customer, carriers and reinsurers in connection with claim reviews and audits and catastrophic injury claim analysis and excess claim related reporting.

IV. SERVICE CRITERIA, STANDARDS AND GUIDELINES
(a) Assignments: Customer will notify CorVel, either via CareMC, telephone or facsimile, that Customer’s employee has sustained a work related injury. All new Lost Time claims will be acknowledged and established by CorVel within the next business day following such notice. The acknowledgement will included the name and contact information of the assigned Adjuster.
(b) Contacts: As warranted, and always with regard to lost time, or anticipated lost time claim situations, initial contact with the injured employee will be made within the next business day following receipt of a new assignment claim. Contact with the Physician, and employer, if required will be made by the next business day. (c) Investigation: Completed and documented within 30 days from date of assignment.

V. INVESTIGATIVE SERVICES
(a) CorVel shall provide investigative services (“Special Investigative Unit” (“SIU”) via an outside panel through CorVel’s third party vendor providing such SIU services to include, but not limited to:
(i) Receipt and examination of all reports of accidents, incidents, and claims cases which are or may be the subject of such liability claims; (ii) Investigation of such accidents, incidents, claims or cases where examination warrants such investigation to include on-site investigation, photographs, statements of clients, claimants and witnesses, evaluation and determination of losses, and other such investigative services necessary to determine liability and losses, but not to include extraordinary investigative services as set forth in Section b(iii) below; (iii) Timely and periodic reporting to the Customer of the in-progress investigation efforts and the results of the investigations, as well as offering recommendations to the Customer of extraordinary investigative services, if required;
(iv) All reporting must be made via CorVel’s third party vendor’s proprietary portal (“Portal”) for any SIU services to ensure full compliance. Customer 23 shall direct assignment outside of Portal for any services or activities all fines or penalties for such action are the sole responsibility of the Customer.
(v) All compliance processes for SIU with the carrier or applicable state is completed by CorVel’s third party vendor where required. If Customer directs assignment outside of CorVel’s third party vendor for any compliance services or activities all fines or penalties for such action shall be the sole responsibility of the Customer.
(b) To the extent extraordinary investigative services are required:
(i) Customer agrees to pay the cost of all reasonable and supportable extraordinary investigative services such as, but not limited to, service performed by other adjusting and/or investigating companies, professional photographs, independent medical examinations, professional engineering services, laboratory services and legal services. CorVel shall order such extraordinary investigative services only with prior written authorization from the Customer. To the extent circumstances do not permit prior written authorization from the Customer, CorVel shall obtain verbal authorization from the Customer to proceed with the recommended extraordinary investigative services and CorVel shall promptly confirm in writing the verbal authorization provided by the Customer.
(c) If Customer utilizes its own third party vendor or internally provides SIU Services, Customer shall be fully responsible and liable for any Losses which arise as a result of such services being provided outside of CorVel. Customer shall indemnify, defend and hold harmless CorVel from and third party claims brought against Customer from such Losses.
24 SCHEDULE 2
Case Management Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Case management services are provided to manage a claimant’s case in order to identify the most appropriate rehabilitative treatment and/or most cost-effective health care alternatives (“Case Management Services”). Case managers may confer with the adjuster, attending physician, other medical providers, employer(s), attorney(s), the patient and the patient’s family.
(b) In certain states if requested by Customer, Case Management Services may include vocational rehabilitation services.

2. DELIVERY OF SERVICES
(a) CorVel shall provide Case Management Services to Customer upon receipt by CorVel of specific requests from Customer as mutually agreed by both parties under the special handling instructions.
(b) Telephonic Case Management: Telephonic case management (“TCM”) includes a fourpoint contact with claimant, employer, claims professional and provider. CorVel case managers (“CMs”) do the following: (i) facilitate communication among all appropriate parties regarding the diagnosis, prognosis and treatment plan provided by claimant’s treating physician, (ii) channel or direct claimant to a PPO Network provider as appropriate, (iii) monitor and facilitate treatment planning, (iv) coordinate early return to work, and (v) subsequently provide periodic assessments of treatment and return to work plans. CMs may recommend additional services or coordinate claim closure, as appropriate.
(c) Medical/Field Case Management: CorVel’s medical/field case management (“MCM”) personnel perform field based case management services as directed by the employer and/or Authorized TPA which may include on-site contact with claimant, employer, and provider, as well as telephonic communication with the claims professional. MCM’s provide the CM services set forth in Section A above.
(d) Vocational Case Management: Vocational case management services may include the following: (i) coordinating return to work, (ii) providing job analysis, (iii) assisting with job placement, (iv) providing expert testimony, (v) assisting with job development, (vi) providing job analysis of essential and non-essential duties for employers under the American’s With Disabilities Act, (vii) providing vocational testimony, (viii) providing advice regarding job seeking skills, and (ix) providing transferable skills analysis. (e) Utilization Review:
(i) CorVel’s utilization management program reviews proposed inpatient hospital admissions and ambulatory care to determine the appropriateness, frequency, length of stay, and setting for such proposed treatment. In addition, CorVel can monitor and assess the appropriate utilization of treatment for all orthopedic and soft tissue injuries requiring ambulatory diagnostics and treatment.
(ii) In California, certain medical diagnostics, treatments and durable medical equipment can be approved at the claims professional level. Utilizing the Adjuster Only Approval letter allows the claim specialist to expedite medically necessary care, meet California Division of Workers’ Compensation (DWC) regulations and Senate Bill 1160 that 25 requires all treatment determinations are included in a database reportable to the DWC. This process is completed by CorVel’s California Utilization Management departments.
(iii) CorVel nurses make recommendations to the claims adjuster based on nationally accepted medical guidelines, including Optimed Managed Care System, a clinical protocol software; the American College of Occupational and Environmental Medicine (ACOEM) Occupational Medicine Practice Guidelines: Evaluation and Management of Common Health Problems and Functional Recovery in Workers; other nationally accepted treatment practice guidelines, as well as any state mandated treatment guidelines.
(iv) Any nurse recommendations for limitation or denial of care based on lack of medical necessity are reviewed by a CorVel Physician Advisor. The Physician Advisor makes a final recommendation to the claims adjuster to approve or deny. If a final recommendation is made to deny treatment, the treating physician is notified in writing of the decision and the appeals process.
(f) Critical Incident Stress Debriefing Services (“CISD”):

CorVel shall provide its Critical Incident Stress Debriefing Services (“CISD”) to Customer.

CISD is a core component of Critical Incident Stress Management. CISD is group and/or individual onsite or virtual meetings with employees who have witnessed or been subjected to a traumatic incident at work. CISD allows for employee ventilation, reassurance, education, continued productivity and stability. The goal of CISD is to mitigate the impact of the critical incident, accelerate employee recovery and facilitate identification of individuals who may benefit from additional services. Indicators for CISD include but are not limited to violence (burglary, assault, rape), motor vehicle accident, amputations, electrical shock, crushing injuries, machine injuries, thermal or chemical burns, witnessed fatality, weather-related incidents. Group and/or individual meetings are led by a CorVel case manager certified in CISD.

3. PROFESSIONAL FEE
(a) CorVel’s case management nurses and vocational rehabilitation counselors are required to be licensed in the jurisdictions they provide patient care or counseling.

CorVel’s case managers may provide care in multiple jurisdictions. Such case managers are required to maintain multiple state licenses and corresponding continuing education credits in maintaining these licenses. Additionally, CorVel’s case managers are required to utilize up to date nationally recognized treatment guidelines, including American College of Occupational and Environmental Medicine (ACOEM), Official Disability Guidelines (ODG) and the MDGuidelines. An incremental professional fee as described hereunder in Exhibit B (“Fees”) shall be invoiced to Customer for the substantial costs associated with obtaining and maintaining the national guidelines for CorVel’s case management nurses. Such professional fee allows CorVel to maintain the applicable licenses and certifications for CorVel’s case managers as well as keeping appropriate treatment guidelines up to date.

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SCHEDULE 2-A
Care Advocacy Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Care Advocate nurse service (“Care Advocate nurse”) are provided following the work injury to guide the claimant’s injury recovery, up to 30 days following injury. The Care Advocate nurses oversee clinical assessment of the injury severity, validate/secure medical information, act as patient advocates and sets expectations for medical care and return to work. They identify the most appropriate treatment and/or most cost-effective health care alternatives. Care Advocate nurses may confer with the adjuster, attending physician, other medical providers, employer(s), attorney(s), the patient and the patient’s family.

2. DELIVERY OF SERVICES
(a) CorVel shall provide Care Advocate Services for those cases that meet the established Care Advocate referral criteria.
(b) Care Advocate nurse service: Care Advocate nurse service includes a three-point contact with claimant, provider and employer, or a two-point contact with claimant and provider as mutually agreed upon with the customer. Information obtained from the claimant, provider and employer will be provided to the adjuster. CorVel care advocates do the following: (i) facilitate communication among all appropriate parties regarding the diagnosis, prognosis and treatment plan provided by claimant’s treating physician, (ii) channel or direct claimant to a PPO Network provider as appropriate, (iii) monitor and facilitate treatment planning, (iv) coordinate early return to work, and (v) subsequently provide periodic assessments of treatment and return to work plans up to 30 days following the work injury. Care Advocates may recommend additional services or coordinate claim closure, as appropriate.
(c) Care Advocate nurses are responsible for completing detailed documentation within CareMC focusing on the claimant’s medical condition, treatment plan and return to work status.

Documentation includes but is not limited to primary injury diagnosis, comorbidities, treatment plan, medical goals, obstacles to recovery, work status and return to work. (d) Care Advocate nurses assess appropriate medical follow-up, work closely with the claim team to identify potential barriers to recovery that may require further follow-up or additional services and develop medical action plans to ensure timely recovery and restoration of function, advocating for the injured worker and consulting with the claim team.

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SCHEDULE 3
Bill Audit, Review and Payment Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) CorVel’s proprietary bill review program enables an application of the appropriate Standard Fee Schedules or usual and customary values, includes PPO, Technical and Clinical Review, and CERiS, applied to provider bills.

2. DEFINITIONS
Bill (per Bill): Each transaction of a bill is considered a separate per bill count. CorVel is able to logically link transactions across logical sequences, but each is its own bill transaction.

Clean/Prepared Bill: When the provider charges are deemed to be an accurate reflection of the services rendered based on the provider’s documentation. Network Solutions savings such as Clinical Review and Technical Evaluation and other review types can be applied first to the bill for the bill to qualify for the Prepared Bill status. Once at the prepared bill state Standard Fee Schedule savings can be applied.

Clinical Review: An additional level of review performed by nurses, system, or coding experts to evaluate appropriateness, relatedness of submitted charges with provided documentation.

Implant Analysis: Review of implant charges submitted to a proprietary pricing database and documentation. Implant Analysis results are included as part of Clinical Review.

Line Item Bill Review (LIBR):

Out of Network Line Item Bill Review:
· Original charge data
· U&C review by zip code
· Fee re-bundling and error removal
· Separation of charges by diagnosis/procedure
· Facility to facility cost comparison
· Individual facility chargemaster analysis and price trending Fair and Reasonable - Universal Chargemaster: The Universal Chargemaster is a compilation of individual hospital line item descriptions from over 85% of the nation’s hospitals.

It is a virtual thesaurus of hospital billing terms, codes and abbreviations. Specific, unique line item descriptions are defined by the Universal Chargemaster and appropriately compared to the same service or supply for other hospitals in the same geographical area.

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Minimum Transaction Fee (MTF): For each bill transaction if the fees on a bill transaction instance do not meet the minimum transaction fee amount, the difference between the fees and the min transaction fee will be automatically added to the fees.

Negotiations: A one time or ongoing agreement with the provider to accept a specific payment amount.

PPO Network Access: A preferred provider organization (PPO) is a medical care arrangement in which medical professionals and facilities provide services at a negotiated/contracted rate. PPO medical and healthcare providers are called preferred providers.

Provider Sendback: Sendbacks occuring when a bill instance does not have enough supporting information from the provider to be a Prepared Bill. The bill is sent back to the provider requesting further information.

Standard Fee Schedule: Savings defined as the amount reduced from the Prepared Bill status to the jurisdictional state fee schedule amounts when those amounts are expressly assigned a specific value, not through reference methodologies developed by a third party or federal agency.

Substantive Denials: Sendbacks occur when a bill instance does not have enough supporting information from the provider to be a Prepared Bill. The bill is sent back to the provider requesting further information. If the provider does not provide the necessary supporting information after 90 days of the sendback status all bill savings will be considered Substantive Denial Savings and charged accordingly through an automatic bill instance. If the bill is later submitted through another bill instance with further information from the provider, another review will occur which may reverse all or part of the Substantive Denial savings and fees.

Technical Evaluation: Applicable to bills when reimbursement is not fully addressed in the jurisdictional fee schedule. State regulations may require payment to be made in accordance with payment methodologies developed by a third party (typically the Centers for Medicare and Medicaid Services (CMS)), often with exceptions or special exemptions added by the state.

UCR: “UCR” is defined as :
· Usual – A charge is considered “Usual” if it is the fee that most providers in the area charge for the same service.
· Customary – A charge is considered “Customary” if it is within the range of fees that most providers who practice in the area charge.
· Reasonable – A charge is considered “Reasonable” if it is both usual and customary or if it is justified by the Payor because of complexity. Payor, CorVel or its designees use a nationally recognized third party database for UCR charges.

In determining UCR prevailing rates, Payors, CorVel or their designees use either (a) CorVel’s Enhanced Bill Review database or other nationally recognized databases to provide benchmarks for hospital charges in a hospital Health Care Provider’s geographic area and (b) databases Agreement modified 6/5/2023 Page 4 of 61 ACA approved template October 2022 4876-6185-0466 v1
provided by FAIR Health, Inc. or other nationally recognized databases to provide benchmarks for charges by non-hospital Health Care Providers in the applicable geographic area. The UCR prevailing rate is the 80th percentile of the relevant database benchmark for the fees and charges in Provider’s geographic area.

2. DELIVERY OF SERVICES
(a) Customer’s Obligations
(i) During the term of this Agreement, unless agreed to otherwise by the parties in writing, Customer shall utilize CorVel exclusively for audit, review and repricing services for Bills related to workers’ compensation claims. A breach of the foregoing obligation shall constitute a material breach under this Agreement. Without limiting any other remedies available under law, a breach of the foregoing obligation with respect to PPO (as defined in Schedule 7) Provider Bills will result in immediate termination of all PPO discounts provided by CorVel.
(b) CorVel’s Obligations
(i) CorVel shall provide Bill Review Services described herein to Customer upon receipt of specific requests from Customer. In the absence of instructions from Customer to the contrary, which CorVel must approve, Bill Review Services shall be performed as described herein.
(ii) Bill Review Services shall be completed within a reasonable period of time of CorVel’s receipt by CorVel of all necessary billing information from Customer (“Complete Billing Information”).
(iii) To facilitate timely processing CorVel shall process (A) each Provider Bill within a reasonable period of time and within industry standards after CorVel’s receipt thereof, and (B) batches of Provider Bills on a daily basis or as volume dictates. (iv) CorVel shall process PPO Provider reimbursements on behalf of Customer industry standards from receipt of the corresponding Bill Review Audit analysis from CorVel. (v) CorVel will be responsible for monitoring, “flagging” and returning to Customer duplicate copies of a Bill (“Duplicates”).
(vi) Any conflicts or complaints from medical providers (“Complaints”) concerning Bill Review Services completed by CorVel initially will be handled directly by CorVel. CorVel will provide an initial response to a Complaint and will send a written response to the complainant that summarizes the nature of the Complaint and the steps CorVel has taken to resolve it.

Customer may be asked to interject itself into a Complaint between CorVel and a medical provider to resolve the Complaint in a manner acceptable to Customer and as needed by CorVel. Notwithstanding the foregoing, Customer shall retain full responsibility for payment of all benefits and any other expenses or services required to be paid or provided under applicable policies or state and federal workers’ compensation laws. (vii)CorVel agrees to supply Customer in the CorVel’s standard format a transmission reflecting the results of the Bill Review Services provided hereunder. (c) Savings for the Fee schedule or usual and customary service shall be:
(i) for states having a Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the billed amount resulting from the allowance based on specified conversion factor(s) multiplied by referenced value(s).

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(ii) for states not having a state mandated Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from UCR.
(d) Scanning Services
(i) CorVel will provide Scanning Services and, when appropriate, Optical Character Recognition (“OCR”) Services. CorVel will timely and within industry standards, scan all bills and attached medical notes delivered to CorVel necessary for providing Bill Review services.

Subject to applicable law and obtaining any required authorizations, CorVel also shall provide Scanning Services for additional claim-related documentation. (ii) All material scanned by CorVel hereunder shall be accessible to Customer through CareMC.

SCHEDULE 3-A
Clinical and Technical Assessment Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Clinical and Technical Assessment Services. CorVel provides this service to evaluate state specific complex rules and verify coding by providers when appropriate and supported by documentation. This can include clinical review to validate coding is correct for all applicable Provider bills, Ambulatory Surgical Center bills, and all Hospital bills (inpatient and outpatient) including:
(i) review and analysis of codes, charges, and billing structure for incorrect coding, incorrect billing, bundling, and up-coding of procedures which affect Standard Fee Schedule values; (ii) review of bills, records, and documentation by a nurse and/or by a coder; (iii) separation of charges not related to the compensable injury; (iv) review and apply complex state specific rules;
(v) application of utilization review determinations and clinical edits; (vi) diagnostic related group validation (i.e., verification that the diagnostic related group billed is appropriate for the services rendered); and
(vii)cost shifting of revenue and CPT codes.

2. DELIVERY OF SERVICES
(a) CorVel will timely and within industry standards, complete Review Services and return the reviewed Bills to Customer, with any adjustments to identified overcharges. (b) Savings for the Review Services shall be:
(i) for states having a state mandated Standard Fee Schedule: (A) the bill amount in the Fee Schedule; less (B) the bill amount resulting from the nurse review services. (ii) for states not having a state mandated Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the nurse review services. (iii) for states having a state mandated Standard Fee schedule (A) the medical provider’s original bill amount; less (B) the bill amount resulting from technical review services.

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(iv) for states not having a state mandated Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the technical review services. (v) CorVel shall pay bills on behalf of Customer for bills reviewed by CorVel in a timely manner in accordance with all state guidelines, and Customer agrees to waive any secondary third party bill reviews and/or other retrospective reviews regarding all bills for which CorVel has secured a reduction from the original billed charges.
(vi) If a medical provider submits an appeal, the bill will be reviewed again and, if any adjustment is necessary, CorVel will provide that information on the Explanation of Review (EOR).

SCHEDULE 3-B
CERiS
(Hospital Bill Itemization Review Services; Negotiation Services; Implant Cost Review Service)
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Hospital Line Itemization Review Services. (CERiS) performs its Services on Hospital Bills (inpatient and outpatient) and consist of procurement of actual bill itemization, (i) a line-by-line validation and comparison of the itemization description charges actually billed by a particular hospital to what CMS billing guidelines allow to be separately billed for in order to disallow inappropriate charges, and then will compare the valid itemization descriptions to the average itemization description charges utilized by other hospitals within a pre-designated geographic area, and (ii) a review of charges that fall outside of any pre-contracted discounts or fee schedules, and generates payment recommendations in accordance with the Customer’s “Payors Allowable” language. This service does not itself include negotiation services nor Implant Cost Services.
(b) Negotiation Services. (CERiS) will provide negotiation services with respect to all Hospital Bills (inpatient and outpatient). CorVel will contact the provider for agreement of the negotiated rate.

A signed agreement regarding such rates will be maintained by CorVel. CorVel will use its commercially reasonable efforts to enter into an agreement regarding negotiated rates in accordance with a mutually agreed upon schedule.
(c) Implant Cost Review Service. (CERiS) includes Implant Cost Review services with respect to the applicability of the Customer’s “Payors Allowable” plan or policy language that specifically addresses implant payments. CorVel will identify and provide the manufacturers implant cost through its proprietary repository of national implant invoice data. CorVel then determines the recommended payment in accordance with the Customer’s “Payors Allowable”. In the event there is insufficient implant invoice data for the requested implant, CorVel will notify the Customer and CorVel shall not be responsible for any costs, fees, damages or penalties for any such inability of CorVel to produce a cost savings per Customer’s request.

2. DELIVERY OF SERVICES
(a) When applicable CorVel will timely within industry standards, complete CERiS Services and return the reviewed Hospital Bills to Customer, together with a written summary of any adjustments to identified overcharges.
(b) Savings for the CERiS Services shall be:

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(i) for states having a state mandated Fee Schedule: (A) the bill amount in the Fee Schedule; less (B) the bill amount resulting from CERiS Services. (ii) for states not having a state mandated Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the CERiS Services. (iii) CorVel shall pay bills on behalf of Customer reviewed by CorVel in a timely manner in accordance with all state guidelines, and Customer agrees to waive any secondary third party bill reviews and/or other retrospective reviews regarding all bills for which CorVel has secured a reduction from the original billed charges.
(iv) CorVel will identify all bills that are not eligible for CERiS Services due to: (A) compensability; (B) a pre-negotiated rate with Customer or other previously established discount; (C) services that are “review only” due to litigation or other non-payment issues; and (D) duplicate bills.
(c) If a medical provider questions the adjustment and/or balance bills the patient, and the claim payor notifies CorVel of such communication, CorVel will provide documentation of its findings.

If the hospital provides corrective or qualifying information sufficient to alter our original adjustments, CorVel will revise its report, advise the claim payor of the new, corrected adjustment. Only in the event of a successful appeal of the reduction of the bill by the medical provider shall Customer be entitled to receive a credit for the portion of the fee previously charged for the amount of the adjustment successfully appealed.

SCHEDULE 4
Preferred Provider Network Access Services (PPO)
Terms and Conditions
I. DESCRIPTION OF SERVICES
(a) CorVel’s preferred provider organization is a network of hospitals, physicians and other providers (“Participating Providers”) that offer services at pre-negotiated Provider rates (“PPO Network”). CorVel also provides state certified preferred provider organization networks in states that maintain such networks.

II. DELIVERY OF SERVICES
(a) CorVel will provide Customer with access to its PPO Network provided it is the exclusive preferred provider organization utilized by Customer. CorVel may at any time and in its sole discretion add and/or terminate any provider to or from the PPO Network. (b) CorVel will provide Customer with a web-based directory of its PPO Network providers. (c) Customer agrees that, during the Term of this Agreement Customer will not contract directly or indirectly with Participating Providers made known to Customer under this Agreement. (d) Customer will make reasonable effort to channel all Covered Persons to the Participating Providers as are allowed under the laws of that service area or state.

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SCHEDULE 4-A
CA MPN
Custom Preferred Provider Network Access Services (Custom PPO) Terms and Conditions
I. DESCRIPTION OF SERVICES
(a) CorVel shall assist Customer in the development and management of a preferred provider networks of hospitals, physicians and other health care providers that offer services at pre-negotiated rates for the exclusive use of Customer employees (“Custom PPO Networks”), through the following activities:

1. CorVel shall provide access to all providers within its Standard PPO Network to Customer and Customer employees as provided and described hereunder

2. If applicable, CorVel will make commercially reasonable efforts to recruit Customer nominated non-network providers into the Custom PPO Network subject to such medical professionals being credentialed by CorVel;

3. CorVel shall file with Customer’s assistance with the state administrative filings for the management of the Custom PPO Network, including filing of the California MPN documents for Customer’s MPN;

4. CorVel will provide the formation and management of the Custom PPO Network, including methodologies for provider network inclusion, suspension and termination provisions consistent with all applicable laws in the relevant jurisdiction.

Customer shall be responsible for all Customer Custom PPO Network determinations, including which providers should be included or excluded from its preferred provider network. Customer is also responsible for notifying CorVel which providers should be suspended or terminated from its own preferred provider network consistent with all applicable laws in the relevant jurisdiction and pursuant to CorVel’s Quality Assurance policies and procedures.

II. DELIVERY OF SERVICES
(a) CorVel shall provide Customer with access to each Custom PPO Network provided it is the exclusive preferred provider organization utilized by Customer for workers’ compensation, auto liability, and general liability claimants. CorVel may at any time and in its sole discretion terminate any provider to or from the Custom PPO Network(s).
(b) Customer agrees that, during the Term of this Agreement and for (12) twelve month period thereafter, Customer will not contract directly or indirectly with Participating Providers made known to Customer under this Agreement.
(c) Customer will make reasonable efforts to channel all Covered Persons to the Participating Providers as are allowed under the laws of that service area or state. (d) Savings for each Custom PPO Network shall be:
(i) for non-fee schedule negotiated contracts: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the contract rate.

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(ii) for fee schedule negotiated contracts; (A) the fee schedule amount less (B) the bill amount resulting from the contract rate.

SCHEDULE 5
CAREIQ Services
Terms and Conditions
I. DESCRIPTION OF SERVICES
CareIQ is CorVel Nationwide Ancillary Benefit Management Program. CareIQ’s network is comprised of direct provider contracts, affiliate networks and national vendor agreements. CareIQ is responsible to pay rendering providers timely for covered and approved services performed.

The CareIQ Ancillary Benefit Management Program includes; referral management and coordination, billing and invoicing, credentialed provider network management, and/or clinical oversight of treatment.

Services Included; Durable Medical Equipment, Home Healthcare, Transportation, Interpretation, Imaging and Diagnostics, Independent Medical Examinations, Age of Injury Determinations, Physical Therapy, Occupational Therapy, and other Rehabilitation and Ancillary Healthcare services.

II. PAYMENT FOR CAREIQ SERVICES
CorVel shall invoice and bill the CareIQ Services directly to the specific claims file.

CorVel reserves the right to increase and amend the rates set forth herein by notifying Customer of such amendment in writing, and Customer shall, if such amendment is unacceptable, have thirty (30) days from the date said notice is received to reject such amendment by delivery of written notice of rejection to CorVel. If CorVel does not receive such notice of termination within such thirty (30) day period, the amendment to the rates shall be deemed accepted by Customer and this Agreement shall continue in full force and effect, as so amended.

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SCHEDULE 6
Pharmacy Benefit Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel shall be the exclusive provider of a Pharmacy Program inclusive of a PBM and a Provider Network representing Participating Pharmacy Providers that are obligated upon and after identification of a participant within CorVel’s PBM to:
i. Accept a contracted rate, and
ii. Apply mandated processes and CorVel’s Formulary and Concurrent Drug Utilization Review program at point-of-service before dispensing prescribed medications.

II. DEFINITIONS.
(a) “AWP” shall mean the Average Wholesale Price for a Brand or Generic Drug Product. CorVel bases Customer pricing off of the reported AWP value from Medi-Span and the date of service. (b) “AWP Discount” shall mean the PBM discounts CorVel applies, per Customer’s negotiated rates, to Covered Brand and Generic Drug Products, Compound Drugs and Specialty Meds. (c) "Brand Drug" shall mean a Covered Drug defined as a brand name drug in PBM proprietary Generic Code Conversion ("GCC") logic.
(d) “Compound Drugs” shall be systematically identified when processing through the PBM via the Formulary. Drug compounding is often regarded as the process of combining, mixing, or altering ingredients to create a medication tailored to the needs of an individual patient. Compounding includes the combining of two or more drugs. Compounded drugs are not FDA-approved. (e) “Concurrent Drug Utilization Review” (“DUR”) shall mean the algorithm systematically applied at a Participating Pharmacy before dispensing that considers the Presenting Drug’s safety and efficacy in context with other drugs that have been dispensed. In addition, the algorithm includes applicable protocols and guidelines based on the Presenting Drug and specific claim history, such as the time period from the last fill of the same Drug. (f) “First Fill” shall mean a prescription filled by a Participating Pharmacy for a limited supply of Covered Drugs for a claim that is not, at the time, eligible. First Fill transactions follow CorVel’s First Fill Formulary. The First Fill Formulary is for the immediate treatment of injuries, including common exposure drugs/vaccines. The pharmacy is instructed to fill any formulary prescription written by the treating physician, whether or not the claim is accepted as a workers' compensation claim. Most claims are ultimately accepted. (g) “Formulary” shall mean CorVel’s Workers’ Compensation Standard or state specific drug/drug class and brand/generic specific triggers systematically applied at a Participating Pharmacy before dispensing a Presenting Drug that prompts the pharmacy through its adjudication system to either: dispense the Presenting Drug, convert from brand to generic, attain approval to dispense,.
(h) "Generic Drug" shall mean a Covered Drug, whether identified by its chemical, proprietary, or non-proprietary name, that (i) is accepted by the FDA as therapeutically equivalent and interchangeable with drugs having an identical amount of the same active ingredient; and (ii) defined as a generic drug in PBM proprietary Generic Code Conversion ("GCC") logic. In the adjudication process, CorVel applies Customer’s negotiated Generic Drug discount rate to the AWP value of Covered Generic Drugs.

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(i) “GCC” refers to PBM proprietary Generic Code Conversion logic. GCC logic converts MediSpan codes to the brand and generic codes used for claims adjudication. (j) “Good Samaritan (Emergency) Fill” shall mean a limited supply of Covered Drugs that are outside of the Formulary and typically dispensed outside of normal business hours (overnight, weekends or holidays) by a Participating Pharmacy without Customer’s or CorVel’s approval in order to meet, in the pharmacist’s professional judgment, an immediate or urgent need.

Customer is responsible for payment of drug charges processed through Good Samaritan Fills; CorVel assumes no liability.
(k) “Mail Order Program” or “Home Deliver Program” shall mean the managed program from which Covered Drugs are dispensed and billed through CorVel’s PBM. A pharmacy’s status as a mail order pharmacy does not indicate participation in the CorVel PBM Mail Order Program. Mail Order participation is limited to designated pharmacies operating within the strict parameters of CorVel’s Mail Order Program.
(l) “Multi Source Brand” shall mean a Covered Drug specified as a brand name drug available from more than one manufacturer as determined by CorVel primarily using a combination of data fields provided to CorVel by Medi-Span (or another nationally available reporting source that may be selected by CorVel). Multi Source Brand Drugs are eligible for conversions to Generic Drugs at the Participating Pharmacy.
(m)“Multi Source Generic” shall mean a Covered Drug specified as a multi source generic drug as determined by CorVel primarily using a combination of data fields provided to CorVel by MediSpan (or another nationally available reporting source that may by selected by CorVel). Generic Drugs in their six month exclusivity period or limited supply drugs may be excluded from Multi Source Generic Drugs.
(n) “PBM” shall mean Pharmacy Benefits Manager. CorVel performs as the PBM on behalf of its Customers.
(o) “Presenting Drug” shall mean the drug ordered by the prescriber and presented on a signed prescription to a Participating Pharmacy and processed through CorVel’s PBM. (p) “Rate application exceptions,” per Billing and Payments of Pharmacy Program (below) sections (d) and (e), apply when either State Fee Schedule AWP Values or Customer’s Negotiated PBM AWP Discount rates are lower than CorVel’s Acquisition Price. CorVel’s Acquisition Price reflects CorVel’s cost of the Covered Drug plus a processing and management fee. (q) “Single Source Brand” shall mean a Covered Drug specified as a brand name drug available from only one manufacturer as determined by CorVel primarily using a combination of data fields provided to CorVel by Medi-Span (or another nationally available reporting source that may by selected by CorVel). Single Source Brand Drugs are not eligible for conversions to Generic Drugs.
(r) “Single Source Generic” shall mean a Covered Drug as determined by CorVel that may not have been purchased by pharmacies at standard Multi Source Generic Drug rates because of limited manufacturers, limited supply or exclusivity rights. In the adjudication process, Customer’s Brand Drug AWP Discount value may be applied to Single Source Generic Drugs. (s) “Specialty Medications” shall mean certain pharmaceuticals, biotech or biological drugs, that are Covered Drugs used in the management of chronic or genetic disease, including but not limited to, injectable, infused, or oral medications, or products that otherwise require special handling.

In the adjudication process, Customer’s Claims Professional’s approval is required, and Customer’s Brand Drug AWP Discount value and dispensing fee may be applied irrespective of the Presenting Drug’s GCC (Generic Code Conversion) status.

III. DELIVERY OF SERVICES.

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(a) CorVel shall provide its Pharmacy Program’s PBM and Network for the benefit of Customer. (b) Eligibility, First Fill, Pharmacy Identification (ID) Cards, and Mail Order/Home Delivery.

Pharmacy ID cards contain the necessary data elements to enable a Participating Pharmacy provider to electronically process through and transmit claim data to CorVel’s PBM. The electronic transmission that occurs at the point of sale is required for application of Formulary, Concurrent Drug Utilization Review and contractual pricing. i. Customer agrees to promptly provide CorVel all information needed to produce and distribute Pharmacy ID cards to Eligible Claimants. Subject to applicable law, Customer will instruct Eligible Claimants to use the Pharmacy ID cards at participating network providers in order to facilitate the Pharmacy Program.
ii. Distribution of Pharmacy ID cards does not guarantee that Pharmacy ID cards will be appropriately utilized by Eligible Claimants or Participating Pharmacies; therefore, Customer understands that claims assigned by Pharmacies to third party billers or paper bills submitted by the Pharmacies are not adjudicated through the prospective PBM. iii. CorVel, agrees to produce and distribute Pharmacy ID cards to Eligible Claimants upon receipt of all necessary Eligible Claimant information from Customer. CorVel will also send an introduction letter to the Eligible Claimant along with the Pharmacy ID card. iv. CorVel will provide access for Eligible Claimants to the PBM Mail Order Program. CorVel will work with Customer to establish the parameters of the Mail Order Program and the process which will be utilized to encourage Eligible Claimant use of the Mail Order Program.
(c) CorVel’s PBM will present a proprietary or state mandated Formulary to Customer. Upon presentation of identification to a Participating Pharmacy, the Formulary will trigger the Participating Pharmacy’s adjudication system to either:
i. Automatically dispense certain medications, or
Obtain Prior Authorization (PA) approval from claims professional to dispense, (d) CorVel’s PBM will implement a Concurrent Drug Utilization Review (“DUR”) program on behalf of Customer, Concurrent DUR includes a review of the drug history at the time the prescription is presented. Absent Customer’s directions, DUR shall be performed in accordance with CorVel’s PBM’s standard service model.

IV. BILLING AND PAYMENTS OF PHARMACY PROGRAM.
(i) Financial obligations of parties.
(i) Customer shall be financially responsible for all drug charges incurred by claimants for dispensed medications processed under CorVel’s PBM. CorVel assumes no liability for drug charges with the exceptions noted below in subsection iii. (ii) If the CorVel claims professional determines, upon receipt of CorVel’s PBM invoice, that specific formulary and non-formulary drugs should not have been dispensed, the CorVel claims professional should inform the PBM as soon as possible.

1. The PBM will request a reversal from the Participating Pharmacy. If granted, CorVel will reverse the drug charges, however, if the Pharmacy does not grant Agreement modified 6/5/2023 Page 13 of 61 ACA approved template October 2022 4876-6185-0466 v1
the PBM’s request, Customer is responsible for payment of the drug charges; CorVel assumes no liability for drug charges with the exceptions noted below in subsection iii.
(iii)Upon receipt of an invoice, CorVel claims professional may timely dispute charges for drugs that were dispensed in error, triggering CorVel’s PBM to reverse the drug charges, by notifying CorVel for any of the following reasons:

1. CorVel’s PBM and/or the Participating Pharmacy’s violation of Formulary or Utilization Review Parameters set forth in Customer’s DUR program, or in the Claimant Level Formulary; or

2. Duplicate or inadvertent entries or other clerical mistakes on a PBM invoice. (ii) Invoicing and Payment.

On a per Covered Drug basis CorVel will apply daily for all drug charges and fees related to the PBM directly to the claim file.

CorVel shall invoice and bill directly all prescription fees to the specific claims file.

CorVel uses Medi-Span as our AWP data source. CorVel’s Medi-Span database is updated daily and AWP values are applied on the date of dispense.

In all states with the exception of California, Customer will be billed the lessor of the state fee schedule AWP or the CorVel’s negotiated rate.
(iii)Both parties understand that pricing indices historically used (including under this Agreement) for determining the financial components of pharmacy billing rates are outside the control of CorVel and Customer. The parties also understand there are extra-market industry, legal, governmental and regulatory activities which may lead to changes relating to, or elimination of, these pricing indices that could alter the financial positions and expectations of both parties as intended under this Agreement.

Both parties agree that, upon entering into this Agreement and thereafter, their mutual intent has been and is to maintain pricing neutrality as intended and not to benefit one party to the detriment of the other. Accordingly, to preserve this mutual intent, if pricing neutrality does change and CorVel undertakes any or all of the following:
(i) Changes the AWP source, or other source if AWP is not applicable, across its book of business (e.g., from Medi-Span to First Databank); or
(ii) Maintains AWP, or other source if AWP is not applicable, as the pricing index with an appropriate adjustment in the event the AWP, or other, methodology and/or its calculation is changed, whether by the existing or alternative sources; or (iii)Transitions the pricing index from AWP, our other source if AWP in not applicable, to another index or benchmark (e.g., to Wholesale Acquisition Cost); Customer’s negotiated PBM pricing will be modified as reasonably and equitably necessary to maintain the pricing intent under this Agreement.

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V. CALIFORNIA MODIFICATION
On April 15, 2016, the State of California Department of Industry Relations applied the new Federal Upper Limit (FUL) index to the California Pharmacy Workers’ Compensation Fee Schedule. The new FUL index has resulted in a need for CorVel to modify our current pricing structure based on the fee schedule changes and our contract language.

The FUL’s impact and the modification is limited to generic drugs; brand drug pricing will not change.

As per our contract, the modification will maintain “pricing neutrality” between both parties.

SCHEDULE 7
Peer Review/Medical Records Review Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel shall provide access, and deliver the services described in this Schedule 7 in connection with such access, to a panel of medical professionals who have been credentialed by CorVel as “Credentialed Providers” and who will perform Peer Review (“Peer Reviews”) and Medical Record Reviews (“MRRs”).
(b) Peer Review/Medical Records Review is defined as the process of reviewing and commenting on the work, decisions and/or recommendations by one’s equal (peer) to ensure that it meets specific criteria such as federal and state regulations, and nationally accepted standards of care in rendering medical services.

II. DELIVERY OF SERVICES.
(a) CorVel shall work only with Credentialed Providers under this Agreement. “Credentialed Providers” are medical professionals with respect to whom CorVel has performed its standard credentialing process. CorVel shall also verify that the medical professionals who are Credentialed Providers meet all applicable statutory and/or legal requirements regarding who can conduct a Peer Review or MRR.
(b) Customer shall have the right to nominate medical professionals as candidates for addition to the panel of Credentialed Providers provided by CorVel for access by Customer (“Credentialed Panel”), subject to such medical professionals being credentialed by CorVel as Credentialed Providers.
(c) Customer shall have the right, with written notice to CorVel, to request that CorVel cease using a specific medical professional from the Credentialed Panel for Customer’s claimants. Upon receipt of such notice from Customer, Supplier shall promptly cease using the specified medical professional as requested by Customer in such notice.
(d) Customer may submit a request for a Peer Review or a MRR via phone, fax, or electronically via CorVel’s CareMC website, if applicable.
(e) CorVel shall ensure that the MRR is assigned to a provider within 2 business days of receipt of request or in accordance with applicable State law.
(f) CorVel will copy required medical records for the Peer Review or MRR as provided by the Customer’s file handler or legal office. CorVel will obtain additional medical records as requested.

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(g) CorVel shall deliver to Customer completed Peer Review and MRR reports within 7 business days of assignment to the Credentialed Provider. Prior to such delivery to Customer, CorVel shall complete its quality review of such report.
(h) CorVel shall provide Customer quarterly activity reports within twenty (20) business days following the applicable quarter.

SCHEDULE 8-A
Medicare Set-Aside Services
Terms and Conditions
I. DESCRIPTION OF OTHER SERVICES
a. Medicare Set-Asides: CorVel provides an extensive review of medical records and medical bills, producing a comprehensive report and cost projection outlining future Medicare eligible costs in anticipation of settling out future medical care on a Customer’s employee or insured individual. Costs are determined through CorVel’s proprietary Bill Review system as well as utilization of the online Red Book™ access for medication costs. Red Book™ is the accepted authority by CMS for pricing on all medications.
b. Life Care Plans/Future Cost Projections: Life Care Plans/Future Cost Projections are a plan for optimal utilization of health care dollars that document objective view of the future health needs, services and related costs. It provides for comprehensive reports summarizing medical treatment and care and outlining life time needs for a Customer’s employee or injured individual when they are catastrophically injured. Life Care Plans/Future Cost Projections are also used both for litigious settlements as well as projecting reserves setting. c. Medicare Conditional Payment Resolution: CorVel’s service includes securing Medicare Conditional Payment letters and disputing the Medicare Conditional Payments unrelated to the claim. CorVel communicates directly with the Medicare contractors, the CRC (Commercial Repayment Center) or BCRC (Benefits Coordination & Recovery Center) to resolve the Medicare Conditional Payment debt.

II. DELIVERY OF SERVICES OF MEDICARE SET ASIDES
a. Customer/Carrier shall provide the CorVel Medicare Set-Aside Hub office with a copy of the first report of injury, most recent two years of medical records and medical bills including indemnity payout, all operative reports, IMEs/AMEs as well as orders rendered by the workers’ compensation judicial system. Appropriate releases for completion of request for service will be forwarded either to the Customer or, at the Customer’s request, directly to counsel representing the injured worker to obtain the injured worker’s signature. b. Customer may submit a request for a Medicare Set-Aside via email, phone, fax, or electronically via CorVel’s CareMC website, if applicable. c. A certified Medicare Consultant (“Consultant”) will review the medical records and bill summary, prepare a detailed summary of the records and a projection for future medical expense which are Medicare eligible. If requested, the Consultant will also provide a projection of those costs which are not Medicare eligible in order to provide the customer with their total medical exposure.

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d. The Consultant will return the completed Medicare Set-Aside report to the Customer within fifteen (15) business days of receiving all relevant medical records and related information. If a rated age is warranted, the Consultant will acquire same. If the Medicare status of injured party is unknown or unclear, a request for Medicare status will be submitted to the Social Security Administration. Once the Medicare status is known, the Coordination of Benefits Contractor will be notified and conditional payments requested.
e. Upon Customer’s request, CorVel Medicare Set-Aside Hub office will submit through the web-portal all required documents to enable CMS to review and approve the proposal. Items submitted include the Medicare Set-Aside report, the tentative settlement amount, along with other required documentation, to the Centers for Medicare & Medicaid Services (CMS). Upon receipt, CorVel Medicare Set-Aside Hub office will forward the CMS Determination letter to the Customer. Final executed settlement documents (reflecting CMS recommended Medicare SetAside amount) will be provided to CorVel Medicare Set-Aside Hub by the Customer/counsel and then forwarded by CorVel to CMS through the web-portal. f. Upon request from Customer, CorVel shall provide Customer quarterly activity report within twenty (20) business days following the applicable quarter.

III. DELIVERY OF SERVICES OF LIFE CARE PLANS/FUTURE COST PROJECTIONS a. Customer shall provide all available medical records and billing to CorVel Medicare SetAside Hub office as well as any other pertinent records for initial review. b. For a Life Care Plan, a visit to the residence of the Customer’s employee or injured individual with interview of claimant and family will be conducted after permission is acquired by the Customer. The interview will include evaluation of the home setting, extensive information gathering, and pictures of the various equipment and housing structures.
c. Letters will be sent to all treating physicians to obtain their opinions on future medical treatments including medications and therapies for the claimant. The physician’s opinions will be included as recommendations within the Life Care Plan summaries. d. Future cost projections are utilized to immediately set reserves for future medical needs regarding catastrophic or major injuries. Home visits are not conducted for a future cost projection.
e. Customer may submit a request for a life care plan or future cost projection via email, phone, fax, or electronically via CorVel’s CareMC website, if applicable.

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SCHEDULE 8-B
Medicare Agent Services – Managed Care Customer
Liability Claims
Terms and Conditions
I. DESCRIPTION OF OTHER SERVICES
In order to assist Customer, as a Responsible Reporting Entity (“RRE”), in complying with the mandatory quarterly electronic reporting requirements issued by the Centers for Medicare/Medicaid Services (“CMS”) under the Medicare/Medicaid and S-CHIP Extension Act of 2007, Section 111 (the “Act”) regarding certain injured parties who are Medicare Beneficiaries, CorVel provides Medicare Agent services as described below subject to the provisions of the final regulations to be issued by CMS.

II. DESCRIPTION OF MEDICARE AGENT SERVICES
(a) Upon designation as Customer’s Medicare Agent, CorVel shall provide Customer assistance with Customer’s registration as a Responsible Reporting Entity (“RRE”). (b) CorVel and Customer will establish a manual interface to facilitate the exchange of specific claims data required to be reported to CMS under the Act; thereafter, as Customer’s designated Medicare Agent, CorVel will initiate a test file interface with CMS within the statutory timeframes required by CMS under the Act. (c) Upon successful completion of the test file interface, CorVel will commence an ongoing monthly query process on behalf of Customer where CorVel will transmit through the CMS Query Tool certain basic claims data elements (claimant name, social security number, date of birth and gender) on the liability claims the Customer provides to CorVel via the manual interface, for CMS to determine if such claim data elements match a valid CMS record indicating Medicare eligibility. CorVel will report the results of such query on CareMC and in a Monthly Eligibility Query report for Customer to review. In the event the Medicare Reporting Queue determines any such liability claim is invalid due to an error or missing information, then Customer shall be responsible for reviewing, researching and correcting such claims data from the Monthly Eligibility Query report supplied by CorVel to the Customer, for resubmission by CorVel through the CMS Query Tool on the next monthly query process transmission; provided, however, if Customer so requests, CorVel will provide such research regarding Medicare eligibility at an additional hourly rate and such research shall include claimant’s name, social security number, date of birth, gender and any other required data field. (d) Once it is determined through the Medicare Reporting Queue that a liability claimant is Medicare eligible, the Customer will provide CorVel through the manual interface all data elements necessary to commence the transmission of mandatory quarterly electronic claims reporting of those liability claimants to the CMS Benefits Coordination & Recovery Center (BCRC) on Customer’s behalf within the specific 7-day reporting period assigned to Customer by CMS. A copy of the initial report shall also be posted by CorVel on CareMC for Customer to review. The BCRC will confirm either acceptance of the Medicare eligible claims thus reported or return any files for which data is missing or incorrect. CorVel shall post on CareMC and provide Quarterly Claim Submission reports to the Customer with any error reports from the BCRC showing such files containing missing or incorrect data for Customer to research and correct by the manual interface to CorVel. Once corrected, CorVel will enter the data and resubmit such files to the Agreement modified 6/5/2023 Page 18 of 61 ACA approved template October 2022 4876-6185-0466 v1
BCRC during the next quarterly reporting file.
(e) CorVel, as Customer’s designated Medicare Agent, will continue to electronically transmit to the BCRC on a quarterly basis all new and updated liability claims provided by the Customer to CorVel through the manual interface, identified through the Medicare Reporting Queue and the Customer provided CorVel the necessary data to report the Customer’s Medicare eligible claims.
(f) CorVel, as Customer’s designated Medicare Agent, will also electronically transmit to the BCRC any monetary settlement data received by the Customer to CorVel through the manual interface on Customer’s Medicare eligible claims. (g) CorVel shall provide Customer quarterly activity reports within twenty (20) business days following the applicable quarter.

III. LIMITATION OF LIABILITY REGARDING MEDICARE AGENT SERVICES In order to assist Customer, as a Responsible Reporting Entity (“RRE”), in complying with the mandatory quarterly electronic reporting requirements issued by the Centers for Medicare/Medicaid Services (“CMS”) under the Medicare/Medicaid and S-CHIP Extension Act of 2007, Section 111 (the “Act”) regarding certain injured parties who are Medicare Beneficiaries, CorVel agrees to provide Medicare Agent services as described in Schedule 2 attached hereto subject to the provisions of the final regulations to be issued by CMS, including information relating to such claimant, and the establishment and maintenance of an electronic data interface with CMS’s computer system to the extent required by law and within the time period required by CMS so as to avoid the incurrence of penalties and fines (“RRE Reporting Obligations”). (a) In order for Customer to meet its RRE Reporting Obligations, Customer shall promptly review the results of the Medicare Reporting Queue, research any errors or missing data and resubmit such corrected or missing data promptly to CorVel within the applicable timeframes so that CorVel can timely report such corrected or missing data to CMS. (b) In the event that information supplied by Customer to CorVel is incorrect, incomplete or untimely delivered and prevents CorVel from completing a timely transmission to CMS, or leads to errors in transmissions to CMS, Customer shall be solely responsible for promptly resubmitting corrected data to CorVel, and CorVel will not be liable for any damages, fines, penalties or other amounts to the extent arising from such incorrect, incomplete or untimely delivered information. CorVel shall notify Customer via a posting on CareMC and the Quarterly Claim Submission report if CorVel receives notice from CMS that a transmission submitted by CorVel on behalf of Customer as an RRE contains incorrect, incomplete or untimely delivered information. The Customer shall correct errors necessary to complete successful transmission to CMS.
(c) Customer shall release CorVel from any and all penalties or other fines imposed by CMS and its related governmental agencies, in the event information supplied by Customer to CorVel is incorrect, incomplete or untimely delivered and prevents CorVel from submitting a report to CMS or leads to errors in submissions to CMS.

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SCHEDULE 9
Clearinghouse Payer Agent Services Program
Terms and Conditions

1. DESCRIPTION OF SERVICES
(a) Clearinghouse Payer Agent Services: CorVel shall act as Customer’s agent under this Agreement. CorVel’s clearinghouse receives bills from health care providers in electronic form, verifies the data integrity of the information on the bills, and routes directly to CorVel’s Bill Review system for completion of CorVel’s Bill Review service. Explanation of Benefit (EOR) information will be transmitted to providers from CorVel in the ANSI 835 format. CorVel will send 835 data to health care providers via it’s clearinghouse upon CorVel’s completion and approval of all Explanation of Reviews (EOR’s) via CorVel’s Bill Review service in compliance with the local governing state laws and regulations.
(b) Compliance with applicable law: CorVel shall ensure that Clearinghouse Services are provided in compliance with the applicable laws, statutes, rules and regulations of the state service shall be provided in. Customer agrees to timely provide to CorVel information and assistance requested by CorVel and reasonably required to ensure such compliance.

2. SETUP AND DELIVERY OF SERVICES
(a) Routing Directly to Bill Review: A test sample of Customer’s bills will be pulled from the clearinghouse test system and imported to the bill Review test system. Bill Review results will be output to Customer through the existing format. Routing bills through CorVel’s Test bill review system may require three to four weeks. CorVel will make reasonable efforts to begin testing within five business days of the request for services.

3. PRICING STRUCTURE
The cost of Clearinghouse Payer Agent Services is as follows:
• For customers for whom CorVel provides bill review services – No additional charge Agreement modified 6/5/2023 Page 20 of 61 ACA approved template October 2022 4876-6185-0466 v1
SCHEDULE 11
Advocacy 24/7 Nurse Triage Services
Terms and Conditions
CorVel shall provide to Customer the following Services related to Nursing Coordination of Care Services:
• Answer calls received 24 hours a day/7 days per week on CorVel maintained Customer triage telephone line.
• Instruct the caller / injured employee on first aid and or initial injury treatment. • Facilitate assessment at a designated outpatient clinic or emergency room as needed. • Follow up with the injured employee within 24 hours of initial report to evaluate current condition. • Document all calls and communicate to appropriate parties.

An incident shall encompass
• The nurse receipt of the initial call,
• The gathering of necessary information and distribution of said information to the appropriate parties, and
• One clinical follow-up to the injured employee in the first 24 hours following the initial call.

SCHEDULE 12
Medication Review Services
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel acknowledges there is a subset of patients in the system that do not improve despite extensive diagnostic testing and numerous treatments. CorVel knows these relatively fewer cases drive a disproportionate amount of costs. Interestingly, these “creeping catastrophic” claims often present as a simple strain or sprain injury or diffuse spinal pain. There is ample data to suggest that bio-psychosocial factors can amplify, sustain or mitigate a patient’s perception of disability in these cases. CorVel shall use clinical modeling to identify those patients at risk for delayed recovery and apply an interdisciplinary bio-psychosocial approach to their care. (b) CorVel offers a variety of interventions that are recommended depending on the severity and chronicity of the claim. They can be utilized separately or integrated in a more comprehensive management plan again depending on claim severity and patient characteristics.

II. DELIVERY OF SERVICES.

Medication Review:
• CorVel’s contracted physician will evaluate the medical necessity of each currently used or prescribed medication.
• CorVel’s contracted physician will recommend elimination of duplicative medications.

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• CorVel’s contracted physician will determine and recommend medications that may replace and be equally or more effective than one or a group of currently used/prescribed medications. • CorVel’s contracted physician will recommend medications that are pharmacologically similar to currently used or prescribed medications when available at a lower cost (same or similar class, less cost, generic when available).
• CorVel’s contracted physician will attempt Peer to Peer contact by calling the PTP. • CorVel’s contracted physician will provide the customer a written agreement from the prescribing physician (if agreement is reached) for alternate treatment plan. • On cases where agreement is not met between CorVel and the PTP a written report will be generated and sent to the customer that includes a written summary of all activity that will include recommendations, rationales and potential savings identification made by CorVel’s contracted physician.
• Allowances will be made for the attending physician to bill for their time spent on the teleconference at the applicable fee schedule.

Wellness Program:

Cases can be initially referred to a network of cognitive behavioral therapists who function to help the patient/claimant improve their pain coping skills, change their perception of disability and decrease fearavoidance behaviors that are often a significant barrier for RTW.

SCHEDULE 13
TeleHealth Services
Terms and Conditions
CorVel shall provide TeleMedicine visits to Customer’s injured employees who opt for such service for as level of care determinations are made through our 24/7 nurse triage hotline. A TeleMedicine visit is a single synchronous virtual consultation through CorVel’s third party vendor platform between a Qualified Professional and a claimant (“TeleMedicine”).

CorVel’s 24/7 triage nurses are trained to provide an initial assessment and will provide immediate referral to medical care when needed. Nurses may refer to TeleMedicine as appropriate (i.e., musculo-skeletal injuries). • TeleMedicine virtual visits are always an “option” for the injured employee. • If opted by the injured employee, CorVel connects the injured employee to a physician immediately via a computer, tablet or phone.
• If the injured employee decides that he/she does not want a TeleMedicine visit, CorVel will immediately offer to schedule the injured employee with a traditional, in-person PPO medical provider located at a convenient, clinic-based location.

A TeleMedicine “visit” is defined as “A Consultation Unit” is a single synchronous consultation through the Platform between a Qualified Professional and a patient.” Agreement modified 6/5/2023 Page 22 of 61 ACA approved template October 2022 4876-6185-0466 v1
SCHEDULE 14
Workers’ Compensation Lien Resolution Services
Terms and Conditions

1. DESCRIPTION OF SERVICES
a) Lien Resolution Services. CorVel shall provide Lien Resolution Services for Customer through its CareMC Application to control and provide resolution and closures to lien file cases. CorVel shall utilize industry standard processes including having CorVel attend Workers Compensation Appeals Board (“WCAB”) conferences & trials, and negotiate as required or applicable. b) Workers Compensation Appeals Boards Serviced:

AHM – Anaheim SBR – San Bernardino
OXN - Oxnard SDO – San Diego
POM – Pomona VNO – Van Nuys
RIV- Riverside SAC – Sacramento
ANA - Santa Ana OAK – Oakland
LBO – Long Beach SFO – San Francisco
LAO – Los Angeles STK – Stockton
MDR – Marina Del Rey
c) Workers Compensation Appeals Boards Serviced on a case-by-case basis:

SBA – Santa Barbara RED – Redding
SLO – San Luis Obispo FRE – Fresno
SJO – San Jose BAK – Bakersfield

2. DELIVERY OF SERVICES
a) Claim Referral. Lien resolution services are on a referral basis per claim and subject to prior Customer approval.
b) Reporting. CorVel shall provide monthly reports at no charge to Customer. c) Case-in-chief walk-through service.
(i) CorVel shall provide Walk-throughs for pro-per cases, and as needed for litigated claims.
(ii) Customer’s claims adjuster professional shall provide referrals for each lien resolution settlement agreement.
(iii) CorVel shall prepare all required documentation and file packets, obtain the adjudicating number and the order approving from the judges at the WCAB. (iv) Results are reported by CorVel to Customer weekly at the end of the same week they are assigned.
d) Service and Review of Initial Discovery.

CorVel shall review, gather and serve all documents relevant to the case and the outstanding liens that will be necessary to satisfy the requirements of discovery and due process, including, but not limited to: Settlement documents, medical reports, Request for Agreement modified 6/5/2023 Page 23 of 61 ACA approved template October 2022 4876-6185-0466 v1
Authorizations (“RFA’s”) Utilization Review (“UR”)determinations, objection letters, and bill review.
e) Declaration of Readiness Filings.

CorVel shall utilize an electronic filing of a declaration of readiness to proceed to request a hearing date with the WCAB in order to facilitate or expedite Lien Resolution and/or Litigation (if necessary).
f) Attendance at the WCAB for Lien Conference and/or Lien Trials CorVel shall have its own experienced hearing representatives appear at the WCAB on behalf of the Customer with the goal of resolving any outstanding liens, or moving towards litigation (if necessary).
g) Litigation Review and Support
CorVel shall review and analyze the lien claimant evidence provided in support of CorVel’s position when a matter is set for a lien trial.
h) CorVel’s Obligations
(i) CorVel shall provide Lien Resolution Services as described herein to Customer upon receipt of specific referral from Customer. In the absence of instructions from Customer to the contrary, which CorVel must approve and Lien Resolution Services shall be performed as described herein.
(ii) CorVel shall complete its Lien Resolution Services within sixty (60) days of referrals without litigation, provided there are no delays from litigation. (iii) Any conflicts or complaints from providers and/or their lien claimant vendors (“Complaints”) concerning Lien Resolution Services completed by CorVel initially will be handled directly by CorVel. CorVel will provide an initial response to a Complaint within one (1) business day following the date on which CorVel received the Complaint. CorVel will send a written response to the complainant within five (5) business days that summarizes the nature of the Complaint and the steps CorVel has taken to resolve it. A copy of this response will be sent to the attention of the designated Customer account representative. Different or more specific parameters of CorVel's authority to respond to and resolve Complaints hereunder may be agreed to mutually by the parties. Further, Customer shall have the right, but not the obligation, at any time, to interject itself into a Complaint between CorVel and a provider and to resolve the Complaint in a manner acceptable to Customer at its sole discretion. Notwithstanding the foregoing, Customer shall retain full responsibility for payment of all benefits and any other expenses or services required to be paid or provided under applicable policies or state and federal workers’ compensation laws. (iv) CorVel agrees to supply Customer, at no additional cost, a transmission or report in the format in which it is then customarily stored by CorVel reflecting the results of Lien Resolution Services provided monthly. Such data shall be provided as to further allow for the application of Lien Resolution Service fees to the individual claim file and the payment of said fees.

3. PRICING
(a) Pricing is based on a percent of savings after fee schedule application. There is a per lien cap that ensures the client pays no more than this maximum amount per lien. Some items, such as a walk-through service and an adequacy hearing are billed at a flat rate.

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(b) Method of Pricing: Percentage of savings per lien after fee schedule is applied, versus total billed amount. Savings is defined as the difference between total claimed lien amount after fee schedule reduction and final lien settlement amount, or amount ordered paid by WCAB. (i) For liens not subject to Official Medical Fee Schedules (“OMFS”) nor Usual and Customary, pricing will be calculated at percentage of savings from overall difference between total amount billed and final lien settlement amount.
(c)Authority to resolve liens without determination of OMFS granted by employer to expedite file closure will be invoiced at a reduced percentage of savings from the billed amount. (d) Litigation pricing is applied to liens that are the subject of a pre-trial conference statement. This includes, but is not limited to: service of trial exhibits, review of lien claimant trial exhibits, pre-trial and post-trial briefings as well as points & authorities, petitions for reconsideration, and petitions for costs and/or sanctions for frivolous litigation.

Claim Referral:

Lien resolution services are on a referral basis per claim, and subject to client approval.

Litigation pricing is only applied to liens that are the subject of a pre-trial conference statement. This includes, but is not limited to: service of trial exhibits, review of lien claimant trial exhibits, pre-trial and post-trial briefings as well as points & authorities, petitions for reconsideration, and petitions for costs and/or sanctions for frivolous litigation.

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EXHIBIT B
Fees
(1) During Initial Term. Fees during the Initial Term of this Agreement shall be as follows:

Workers' Compensation Claims Administration
Description Pricing
Life of Contract Claims Handling Fee - Per Claim
Medical-Only $185.00
Indemnity $1,495.00
Employer's Liability $1,495.00
Indemnity Tail Claims $550.00
Medical-Only Tail Claims $95.00
Medical Only claims requiring the following work will be invoiced at the rates shown here. Claims previously invoiced as a Medical Only will be invoiced based on the difference between this rate and the amount previously invoiced. This increase is limited to claims with paid medical expense exceeding Five Thousand Dollars ($5,000.00); claims requiring investigation to determine compensability, apportionment, medical causation, and subrogation; claims where medical benefits are disputed or denied, or claims where defense counsel is retained to respond to a legal proceeding or regulatory matter.

Program Management
Description Pricing
Data Conversion - Per Data Source Waived
Administration Fee - Per Annum ¹ $10,000.00
Implementation Fee - One Time Fee $10,000.00
CareMC Access - Per
Annum ² First 5 Full
Access Users

Included
$1,500.00
¹ Includes Assistance with Self-Insured Data for State Reports, State Statistical Reporting & All State Filing Requirements
² Includes Executive Dashboard, Claim Details, Claims Summary Screen & Claims Reporting Account Management and Technical Support
Description Pricing
Account Management Staff Included
Electronic Data Transmission - (Per Month, Based on
Frequency) Monthly File
Weekly
File Daily
$212.00
$636.00
$2,120.00
Training – Onsite and Online Included
Technical Support Included
State EDI Files Included
Monthly Reporting Included
Ad hoc Report Programming - Per Hour $212.00
Communication Materials/Posters Pass through printing cost Agreement modified 6/5/2023 Page 26 of 61 ACA approved template October 2022 4876-6185-0466 v1
Account Management and Technical Support continued
Description Pricing
Annual Banking Fees
Additional Account(s) - Per Account
One account included
$1,060.00
Carrier TPA Oversight Fees ¹ Bill from Carrier to Client ¹ Fees charged by the carrier (Oversight fees, Tail Claim transfer / takeover fees, etc.) are the responsibility of the client and will be billed directly to the client by the carrier or by CorVel should CorVel be invoiced for such fees.

Intake and Immediate Intervention Services
Description Pricing
Claim Intake (includes one FNOL distribution) - Per Intake $37 Incident Only Reporting - Per Incident $37
Advocacy 24/7 - Per Call $106
Telehealth Services Fee Schedule or U&C value by CPT code Allocated Expense Fees
Legal Services
Description Pricing
Subrogation 25% of Recoveries
Legal Bill Auditing ¹ 2.5% of gross legal charges
reviewed
Indexing and OFAC Compliance - Per Index Pass through
¹ Fees will never exceed the savings generated. No mark-up on services from Bottomline.

Bill Review Services
Description Pricing
Bill Review: Includes Standard Fee Schedule and UCR - Per Bill ¹˒² $9.50 + Network Solutions Includes: ²
Clinical Review, Implant Analysis, Line Item Bill Review, Negotiations, PPO Network Access,
Substantive Denials, Technical Evaluation
27% of Savings
Minimum Transaction Fee ² $9.50
State EDI, Scanning/OCR, Initial 1099 Provider Notification Letter Included
¹ Includes bill intake, document imaging, file upload, state EDI’s, and initial 1099 provider notification letters. ² Minimum transaction fee (MTF) per bill transaction. Applied per transaction if all other applicable fees do not meet the minimum transaction fee. Applies to all transactions, including but not limited to, Specialty Bills, Duplicate Bills and bills sent for Re-consideration or Re-evaluation. Maximum fee per bill of $9,000.00.

Agreement modified 6/5/2023 Page 27 of 61 ACA approved template October 2022 4876-6185-0466 v1
Provider and Nurse Review Services
Description Pricing
Liability Bill Review (Reasonable and necessary and related) – Per Bill $21.00 Liability Nurse Review
Option 1 – Per Hour $164.00
$95.00 up to 1,000 pages
Option 2 – Flat Rate $265.00 per each additional 500
Pages
Peer Review / Physician Advisor – Per Hour $212.00
Independent Medical Reviews
Chiropractic See 2023 IME/Peer Fee Schedule
Orthopedic See 2023 IME/Peer Fee Schedule
Neurologic See 2023 IME/Peer Fee Schedule
Physical Medicine and Rehabilitation See 2023 IME/Peer Fee Schedule Patient Management
Description Pricing
Telephonic Case Management, Field Case Management
and Return to Work Coordinator - Per Hour
Alaska, California, Hawaii and New York $164.00
All Other States ¹˒² $131.00
Vocational Rehabilitation - Per Hour ² $175.00
Specialty Services (Catastrophic, Life Care Plan, Medicare Conditional Payments, Medicare Set Asides, Bilingual, Critical Incident Stress Debriefing (CISD)) - Per Hour
$218.00
Nurse Utilization Review - Per Review $159.00
Physician Utilization Review - Per Review $292.00
UR Authorization Only (Adjuster Review) - CA - Per Review $42.00 Care Advocate - Per Claim $53.00
¹ Fee applies to all States with the exception of premium states (CA, HI, AK, and NY). ¹Statutory rates supersede if applicable. Prevailing
IRS Mileage Rate applies.

Each invoice for Case Management Services shall have an additional professional service fee of $0.00 billed to Customer.*Adjustment to additional professional service fee approved by Ronda Cruz.

Pharmacy Solutions
Description Pricing
Retail Pharmacies
Brand
Generic
AWP -17% + $3.00 dispensing fee
AWP -45% + $3.00 dispensing fee
Mail Order
Brand
Generic
AWP -18% + $2.00 dispensing fee
AWP -55% + $2.00 dispensing fee
Clinical Modeling
Integration of Pharmacy Data Dynamic
Calculation/Display inCareMC
Included
Included
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Pharmacy Solutions continued
Description Pricing
Pharmacy Interventions Certified
Pharmacy Technician Rx Nurse
Nurse Management
Pharmacy Review - Per Review Cognitive
Behavioral Therapy - Per Hour Medication Review -
Per Hour
Included
Included
Case Management hourly rate
$405.00
$270.00
$270.00
Ancillary Benefit Management Services
Description Pricing
Medical Imaging Services Varies by State and Diagnostic Independent Medical Exam See 2023-24 IME/Peer Fee Schedule Physical and Occupational Therapy Varies by State
Durable Medical Equipment Varies by State and Equipment IME Peer Review - Per Hour See 2023-24 IME/Peer Fee Schedule Transportation Varies by State and Service
Translation Varies by State and Service Level
Medicare Agent Reporting
Description Pricing
Set up and engagement $750.00
Monthly Maintenance $250.00
Quarterly Reporting Included
California Lien Program
Description Pricing
Set up fee/minimum fee - Per Lien ¹ $53.00
Percent of savings off Fee Schedule 20% of savings
Lien Cap $3,180.00
Lien Conference $530.00
Lien Trial
Half Day $530.00
Full Day $795.00
DOR Filing Included
Service and Review of Initial Discovery Included
Litigation Review and Support - Per Hour $133.00
¹ Deducted from total fee if over $100.00
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State Certified Managed Care Networks
Description Pricing
Implementation, Filing, Setup (one-time fee) ¹
Standard Network - CA MPN, TX HCN, IL PPP, KY MCO, NY Certified Standard Network - CA MPN & CA Kaiser Custom
Network (CA MPN)
$2,650.00 per network
$3,710.00 per network
$5,724.00 per network
Administration²
CA MPN, TX HCN: +$2.65/bill
IL PPP, KY MCO, NY Certified : +$1.35/bill
All other State MCOs ¹ : Included
Optional Services (Appointment Scheduling, Training, Panel Creation, etc) Varies by State ¹ Implementation & administration for all other MCOs (AR MCO, CT MCO, FL MCA, GA MCO, MN MCO, NE MCO, NH MCO, NJ MCO, OK CMP & WV MHCP) are included in bill review fees. Each applicable state represents a separate network.
² Additional bill fee is applied to all Bill Review transactions relating to the applicable state regardless of the bill’s network utilization.

The above pricing per claim is based on handling of all claims that occur and are reported during the agreement period.

If life of contract pricing is selected, claims will be handled until closed or until the end of the agreement period, whichever comes first. If life of claim pricing is selected, claims will be handled until closed. Pricing is valid for first year of the contract. At the end of the first year and each year thereafter, all fees outlined on the claims and managed care pricing sheet shall increase the greater of CPI or 3.5%.

Any service not identified in this proposal will be provided at a later time.

Transition Fees
Description
Fee:

Tail Claim Transfer $500.00 per open claim (this is a one-time fee to transfer the tail claims, if and when they are transferred)
Annual Administration Fee $10,000.00 annually
CareMC Access for Tail Claims No Charge First Five Users Additional users beyond the first five users $1,500.00 per user annually
(2) Fees for Additional Professional Services: If Customer requires any additional professional services from CorVel relating to the Services or the CareMC Application, including but not limited to integration of the CareMC Application with EDI or other Customer systems, Customer shall submit a written request to CorVel for such services. CorVel shall, in good faith, consider providing such services at its then-current professional services fee rate and standard terms and conditions. (3) Billing and Payments for Case Management. CorVel will invoice Customer monthly for all fees related to Case Management Services directly to the specific claims file. Billing for Case Management is based on actual time per activity. Activity is based on ten (10) minute, a sixth (.17) of an hour, units. Time billed that exceeds the base billing unit multiple, i.e., 10 minutes, 20 minutes, etc., will be converted to the next billing unit.

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EXHIBIT C
CareMC License Agreement
This CAREMC LICENSE AGREEMENT (the “CareMC License Agreement”) is incorporated by reference into the Professional Services Agreement (the “Master Agreement”) to which it is attached. The parties acknowledge and agree that the terms and conditions under which the Services are provided by CorVel and received by Customer shall be governed by the Master Agreement (including without limitation all additional Exhibits and applicable Schedules attached thereto), while the terms and conditions under which Customer may access and use the Online Services shall be governed by the terms and conditions of this CareMC License Agreement. All defined terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Master Agreement.

1. ACCESS TO THE CAREMC APPLICATION
A. Registration Information. Prior to accessing the CareMC Application, Customer shall provide CorVel with certain registration information requested therein (“Registration Information”). Customer covenants that the Registration Information Customer provides will be true, accurate, current and complete and will be updated as necessary.

B. Passwords and Levels of Access. As soon as practicable after the execution of this Agreement, CorVel shall create a unique username and password for each individual Authorized User identified by Customer as requiring access to the Online Services. Customer shall then designate a group of Authorized Users. The group of Authorized Users (“Restricted Users”) shall have “read only” access to only the data available on the CareMC Site that relates to claims specific to that Authorized User and such other data that Customer specifically requests in writing be accessible to such Authorized User. If Customer requires a second group of Authorized Users (“NonRestricted Users”) shall have editing access to all data available on the CareMC Site that relates to claims specific to Customer. Access by Individual Users and Non-Restricted Users to data available on the CareMC Site shall be subject in all cases to any limitations imposed by applicable law.

C. Personal Information Data. Authorized Users shall have access to all data available through the CareMC Application, including data that constitutes or contains “Personal Information” as such term is defined in applicable state and federal privacy laws, but shall only have access to Personal Informaiton to the extent necessary for Customer to read only a claim, and then only to those portions or amounts of Personal Information that are determined by CorVel, in its sole discretion, to be the minimum necessary for Customer to edit such claim.

D. Security of Passwords. Customer acknowledges and agrees that it shall be solely responsible for (i) selecting Authorized Users, (ii) assigning the various levels of authority and access each Authorized User may have to the CareMC Application, Online Services and Customer Data, including by determining which Authorized Users shall be Non-Restricted Users, (iii) ensuring that only Authorized Users have access to the passwords provided by CorVel or changed by Authorized Users, (iv) implementing a system to control, track and account for all passwords, (v) strictly maintaining the confidentiality and integrity of all passwords and levels of authority among Authorized Users, and (vi) ensuring that Authorized Users shall at all times comply with the terms and conditions of this Agreement. Customer further agrees that it shall notify CorVel immediately in writing if the security or integrity of a password has been compromised. CorVel will provide reasonable cooperation to Customer in the event of a security breach. Such support will include but not be limited to suspending service for passwords whose security or integrity has been violated. Passwords may be changed at any time by Authorized Users, and must be changed at least once every ninety (90) days.

E. Customer Data. Responsibility for ensuring that the content and data provided by or for Customer (“Customer Data”) to be entered into the CareMC Application by CorVel is accurate and reflects Customer’s requirements lies solely with Customer. All data generated by and through Customer’s use of the CareMC Application and Online Services shall reside on CorVel’s server. CorVel reserves the right to temporarily suspend Agreement modified 6/5/2023 Page 31 of 61 ACA approved template October 2022 4876-6185-0466 v1
access to any Customer Data that it determines, in its sole discretion, violates the terms and conditions of this CareMC License Agreement or any applicable laws.

F. Customer Representations. Customer represents that it has the legal authority to provide the Customer Data to CorVel hereunder. CITY and CONSULTANT each represent and warrant that it is fully aware and knowledgeable of and shall comply with its duties and responsibilities with respect to the privacy and confidentiality of medical records and protected health information under applicable federal and state laws, including but not limited to those imposed by applicable state and federal privacy laws. Upon written notice to Customer, CorVel may modify or temporarily suspend Customer’s access to and use of the CareMC Application, Online Services and/or CareMC Site as necessary to comply with any law or regulation.

2. LICENSE AND RESTRICTIONS
A. Limited License. Subject to the terms and conditions of this CareMC License Agreement, CorVel grants to Customer during the License Term (as defined in Section 5A below) a limited, non-exclusive, non-transferable, non-sublicensable license to access and use, and allow Authorized Users to access and use, the CareMC Application via the CareMC Site solely for Customer’s own internal business use and operations. Customer shall access and use the CareMC Application in accordance with the user’s guides and online instruction provided to Customer by CorVel (“Documentation”) and all applicable laws, statutes, rules and regulations.

B. Restrictions. Customer shall not, and shall not allow Authorized Users or any third party to (i) rent, lease, re-license or otherwise provide access to the CareMC Application or Online Services to any third party, (ii) alter, modify or create derivative works of the CareMC Application, (iii) use any reverse compilation, decompilation or disassembly techniques or similar methods to determine any design structure, concepts and construction method of the CareMC Application or replicate the functionality of the CareMC Application for any purpose, or (iv) copy the CareMC Application or any content, materials, information and other data provided by CorVel on the CareMC Site or used in providing the Online Services (“CorVel Content”) and/or Documentation without CorVel’s prior written consent.

C. Third Parties. Customer shall not allow any third party to have access to the CareMC Application or Online Services without prior written consent of CorVel and ensuring that (i) such third party enters into a legally enforceable written agreement with CorVel, or (ii) CorVel and Customer enter into an agreement whereby Customer assumes all responsibility and liability for access by such third party.

D. Ownership and Changes. CorVel represents and warrant that it owns and shall retain all right, title and interest in and to the CareMC Application, Documentation, CareMC Site, Online Services, CorVel Content and any intellectual property rights inherent therein or arising therefrom. CorVel represents and warrants that all such content and all services provided under the AGREEMENT will not infringe on the intellectual property of any third party. In addition to CorVel’s rights in the individual elements of the CorVel Content, CorVel represents and warrant that owns a copyright in the selection, coordination, arrangement and enhancement of the CorVel Content.

Neither Customer nor any Authorized User shall obtain any ownership rights, express or implied, or any other rights other than those expressly set forth herein in the CareMC Application, Documentation or CorVel Content.

CorVel reserves the right, at any time in its sole discretion and without liability to Customer, to delete or change features of the CareMC Application, CareMC Site or Online Services provided such changes do not materially alter the functionality of the CareMC Application.

E. Compliance Monitoring and Audits. CorVel may monitor and perform remote audits of Customer’s use of the CareMC Application and CareMC Site for the purpose of verifying that Customer and Authorized Users are using the CareMC Application in compliance with the terms of this CareMC License Agreement. CorVel reserves the right to temporarily suspend Customer’s or any Authorized User’s access to the CareMC Application in the event Customer or such Authorized User engages in, or CorVel in good faith suspects is engaged in, any unauthorized conduct.

F. Indemnity. PURSUNA TPO TO SECTOIPN 8.4 of the Master Agreement.

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3. INFRASTRUCTURE, MAINTENANCE AND SUPPORT
A. CorVel Infrastructure Obligations. CONSULTANT represents and warrants that all licensed content and services provided under the AGREEMENT will conform substantially to CONSULTANT’s documentation.

Subject to Customer’s compliance with the terms and conditions of this CareMC License Agreement, CorVel shall be responsible for providing and maintaining the hardware, software and other equipment required to host the CareMC Application for Customer (“CareMC Infrastructure”). The CareMC Infrastructure is subject to modification by CorVel from time to time for purposes such as adding new functionality, maximizing operating efficiency and upgrading hardware, provided such modifications shall not in the aggregate degrade the performance of the Online Services utilized by Customer. Customer acknowledges and agrees that such modifications may require changes to Customer’s Internet access and/or telecommunications infrastructure to maintain Customer’s desired level of performance. CorVel shall give Customer reasonable prior written notice of any required modifications.

B. Customer Infrastructure Obligations. Except for the CareMC Infrastructure, which will be provided by CorVel, Customer shall be responsible for obtaining and maintaining all hardware, software, equipment, Internet access and/or telecommunications services and other items or services furnished by third party venders or providers (“Third Party Providers”) required to enable Customer to access and use the CareMC Application and CareMC Site as contemplated hereunder.

C. Support. CorVel will provide general support regarding questions on the CareMC Application via email and by telephone from Monday through Friday between the hours of 5:00 a.m. and 6:00 p.m. Pacific Standard Time, excluding holidays.

D. Scheduled Maintenance. CorVel will use reasonable efforts to (i) perform any scheduled downtime outside of Customer’s normal business hours, (ii) notify Customer of all scheduled downtimes at least seventytwo (72) hours in advance, and (iii) perform software updates to the CareMC Application with minimal disruption to Customer’s use of the Online Services.

E. System Monitoring. CorVel will use reasonable efforts to continuously monitor its web servers and database servers to ensure that they are functioning properly.

F. Security. CorVel will implement and use reasonable efforts to maintain secure systems through the use of firewalls, virtual private networks (VPN) and other security technologies. Any security violations that affect the data of Customer will be reported to Customer pursuant to applicable state and federal security laws and the terms of the Master Agreement.

G. Disaster Recovery and Backup. CorVel will use reasonable efforts to perform nightly backups of essential data on its web servers and database servers. CorVel has implemented third party backup and restoration technology to enable high speed recovery of data. CorVel utilizes redundant load balanced industry standard servers and Cloud Computing Platform and Services provided by Microsoft for 24x7, 365 day access, except for regularly scheduled system maintenance and upgrade processes. SQL Server databases are hosted on clustered servers offering fall-over capability, redundant communication links, and load balanced application servers.

Backup tapes are restored into a test environment not less than quarterly to confirm validity of backups. The CareMC Site has redundant inbound Internet and Intranet connectivity.

4. APPLICATION SPECIFIC DISCLAIMERS
A. Disclaimers. TO THE EXTENT ALLOWED BY APPLICABLE LAW, EXCEPT FOR THE LIMITED

WARRANTIES DESCRIBED IN THE MASTER AGREEMENT, CORVEL MAKES NO OTHER

WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AND EXPRESSLY DISCLAIMS ANY IMPLIED

WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND SATISFACTORY QUALITY.

B. Internet Usage. Customer acknowledges that the Internet is essentially an unregulated, insecure and unreliable environment, and that the ability of Customer to access and use the CareMC Application is dependent on the Internet and hardware, software and services provided by various Third Party Providers. CORVEL SHALL Agreement modified 6/5/2023 Page 33 of 61 ACA approved template October 2022 4876-6185-0466 v1
NOT BE RESPONSIBLE FOR CUSTOMER’S INABILITY TO ACCESS OR USE THE CAREMC

APPLICATION TO THE EXTENT CAUSED BY FAILURES OR INTERRUPTIONS OF ANY HARDWARE, SOFTWARE OR SERVICES PROVIDED BY CUSTOMER OR THIRD PARTY PROVIDERS.

C. CareMC Application. CUSTOMER ACKNOWLEDGES AND AGREES THAT CORVEL DOES NOT

WARRANT THAT THE CAREMC APPLICATION OR ONLINE SERVICES ARE ERROR FREE, THAT

CUSTOMER WILL BE ABLE TO ACCESS OR USE THE CAREMC APPLICATION OR ONLINE

SERVICES WITHOUT PROBLEMS OR INTERRUPTIONS, OR THAT THE CAREMC SITE AND CAREMC

APPLICATION ARE NOT SUSCEPTIBLE TO INTRUSION, ATTACK OR COMPUTER VIRUS INFECTION.

5. LICENSE TERM AND TERMINATION
A. License Term. This CareMC License Agreement shall be effective as of the Effective Date and, unless terminated earlier as provided below, shall automatically terminate upon expiration or termination of the Master Agreement (the term of this CareMC License Agreement, the “License Term”).

B. Termination for Convenience. Either party shall have the right to terminate this CareMC License Agreement for any reason or for no reason, upon ninety (90) days written notice to the other party.

C. Termination for Cause. This CareMC License Agreement may be terminated by either party for cause as follows: (i) upon thirty (30) days written notice if the other party breaches or defaults under any material provision of this Agreement and does not cures such breach prior to the end of such thirty (30) day period, (ii) effective immediately and without notice if the other party ceases to do business, or otherwise terminates its business operations, except as a result of an assignment, as permitted under the terms and conditions of this CareMC License Agreement, or (iii) effective immediately and without notice if the other party becomes insolvent or seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement, composition or comparable proceeding, or if any such proceeding is instituted against the other (and not dismissed within ninety (90) days).

D. Effect of Termination. Expiration or termination of this CareMC License Agreement shall have the following effects: (i) CorVel shall provide Customer with any proprietary data belonging to Customer, in the current format in which it is stored at CorVel at the termination of this CareMC License Agreement, (ii) all licenses granted under this CareMC License Agreement shall terminate immediately, (iii) all rights to use the CareMC Application and Online Services shall cease immediately, and (iv) each party shall promptly return all information, documents, manuals and other materials belonging to the other party related to this CareMC License Agreement, whether in printed or electronic form, including without limitation all confidential information of the other party then currently in its possession, provided each party may retain one (1) copy of such materials for archival purposes.

E. Survival. Except to the extent expressly provided to the contrary herein or in the Master Agreement, any right of action for breach of the CareMC License Agreement prior to termination, and the following provisions shall survive the termination of this CareMC License Agreement: Sections 1B-F, 2B, 2D, 2F, 4 and 5E.

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Attachment A
End User License Agreement
Terms are non-negotiable
Such access shall provide Customer’s claimants an opportunity to (i) review the current status of their individual claim, (ii) share pain level data with their healthcare provider by taking a Pain Level Survey, (iii) receive Electronic Funds Transfer (“EFT”) direct deposit transactions with respect to claims, and (iv) utilize other functions designed to assist users in interactions with their health plan and healthcare providers (the “App Services”). For access by Customer claimant, such Customer claimant will be required to have a smartphone including but not limited to an Apple smartphone or Android smartphone or other smartphone device with such access capabilities. Customer acknowledges the terms of Attachment A hereunder which shall be a part of the My Care App and which the End User (“Claimant”) shall be responsible for. The My Care App is at no costs to Customer for these Services.

PLEASE READ THIS LICENSE AGREEMENT BEFORE USING THE APP. USE OF THE APP INDICATES END USER’S ACCEPTANCE OF THIS END USER LICENSE AGREEMENT. IF END USER DOES NOT AGREE WITH THE TERMS, END USER SHOULD NOT USE THE APP.

1. License Grant; License Restrictions. Either of CorVel Enterprise Comp, Inc. or CorVel Healthcare Corporation, as applicable, (“CorVel”) provides the mobile software application program and user manual(s) or help files contained therein, and any modifications, updates, revisions, or enhancements thereto received by End User from CorVel (collectively, the "App"), and licenses its use solely pursuant to the terms stated below:
a. End User is granted a nontransferable license to use the App under the terms stated in this Agreement for personal use. End User may not use the App for commercial purposes. Title and ownership of the App and of the copyright in the App remains with CorVel; b. The App may be used by End User on a single mobile device, which End User owns or uses and for which the App is designed to operate;
c. End User may not make copies, translations, or modifications of or to the App. End User may not alter, obscure, or remove the copyright notice on any copy of the App; d. End User may not assign, sell, distribute, lease, rent, sublicense, or transfer the App or this license or disclose the App to any other person. End User may not reverse-engineer, disassemble, or decompile the App or otherwise attempt to discover the source code or structural framework of the App; and e. CorVel may terminate this Agreement and the license granted hereunder at any time. This Agreement and the license granted hereunder automatically terminates if End User fails to comply with any provision of this Agreement. End User agrees upon termination to: (i) cease using the App and providing or accessing any data or information by or through the App, and (ii) destroy the App, together with all copies, modifications, and merged portions in any form, including any copy on End User’s mobile device or on any computer.

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2. Limited Warranty. The App is provided "AS IS" and with all faults. NO WARRANTIES ARE EXPRESSED AND NONE SHALL BE IMPLIED. CORVEL SPECIFICALLY EXCLUDES ANY IMPLIED

WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. CORVEL DOES NOT WARRANT THAT USE OF THE APP WILL BE UNINTERRUPTED OR ERROR-FREE.

3. Maintenance & Support. The App is maintained by CorVel or its subcontractors. From time to time, CorVel may provide modifications, updates, revisions, or enhancements, all of which are offered pursuant to the terms and conditions of this Agreement. CorVel does not provide support to End Users.

All support requests should be directed at End User’s employer or other person responsible to manage End User’s claims and not at CorVel.

4. Consent to use Data. All data or information submitted by End User through the App shall be used by CorVel in accordance with CorVel’s Privacy Policy posted at: http://www.corvel.com/privacy-policy/

6. Governing Law; Exclusive Jurisdiction. This Agreement is governed by the laws of California. End User agrees that the federal or state courts sitting in State of California, shall be the exclusive courts of jurisdiction and venue for any litigation, special proceeding or other proceeding as between the parties that may be brought, or arise out of, or in connection with, or by reason of this Agreement. The United Nations Convention on Contracts for the International Sale of Goods is expressly disclaimed.

7. Indemnification (End User). End User shall defend, indemnify and hold harmless CorVel from and against damages, liabilities and reasonable costs and expenses, including reasonable legal fees arising out of or relating to: (i) End User’s use of the App in violation of the terms of this Agreement, (ii) data or content included in or omitted from content and data input into the App by End User or any other third party using End User’s mobile device, and (iii) any claim by an employee of End User or End User’s insureds brought against CorVel due to the recommendations made by CorVel through the App.

8. Disclaimer. CorVel shall not be responsible or liable for any third party claims arising from the negligent acts, errors, omissions, willful misconduct or fraud caused by End User in connection with its use of the App or otherwise attributable this Agreement.

9. Assignment. End User may not assign any of End User’s rights or delegate any of End User’s obligations under this Agreement without the prior written consent of CorVel. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns.

10. Notice. All notices required to be sent hereunder shall be in writing and shall be deemed to have been given when mailed by first class mail to the address listed below.

11. Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force.

12. Waiver. The waiver by either party of a breach of any provision of this Agreement or the failure by either party to exercise any right hereunder shall not operate or be construed as a waiver of any subsequent breach of that right or as a waiver of any other right.

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13. Export Administration. End User agrees to comply fully with all relevant export laws and regulations of the United States ("Export Laws") to assure that neither the App nor any direct product thereof is (1) exported, directly or indirectly, in violation of Export Laws; or (2) are used for any purposes prohibited by the Export Laws, including, without limitation, nuclear, chemical, or biological weapons proliferation.

14. Entire Agreement. This Agreement shall constitute the complete agreement between the parties and supersede all prior or contemporaneous agreements or representations, written or oral, concerning the subject matter of this Agreement. This Agreement may not be modified or amended except in writing signed by a duly authorized representative of each party; no other act, document, usage or custom shall be deemed to amend or modify this Agreement.

15. Survival. The provisions of Sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 shall survive the termination of this Agreement.

This documentation and the corresponding App are the property of CorVel and are licensed to the user under the terms of this End User License Agreement. Unauthorized use or copying of the App, documentation, or any other associated materials is a violation of state and federal laws. These materials must be returned to CorVel if so demanded.

CITY COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # A.5.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: June 14, 2023
ORIGINATING DEPT: Finance
SUBJECT: City Council Consideration of Resolution 2023-072 Adopting the Fiscal Year 2023/24 City Investment Policy BACKGROUND:

Pursuant to its own terms, the City’s Investment Policy (Policy) must be reviewed and adopted annually by a resolution of the City Council. The terms of the Policy must be in compliance with the California Government Code (Code) Section 53601.

This item is before the City Council to consider Resolution 2023-072 (Attachment 1) adopting the City’s Investment Policy for Fiscal Year (FY) 2023/24.

DISCUSSION:

The investment policy states the goals of the City’s investment activities, the types of investments allowed by Government Code, and the reporting requirements. The ultimate goal is to enhance the economic status of the City while protecting its pooled cash. The City has determined that its investment goals are, in order of priority, safety, liquidity, and yield.

The proposed Policy (Attachment 2) is not intended to be comprehensive for all situations, but instead serves as a guideline for the City Treasurer, under the direction of the City Manager, to assist in the adequate safeguarding of the City’s financial assets. The attached Policy conforms to Code Section 53601. The City’s Policy is more restrictive in terms of allowable investments than what is allowed by the Code.

After review by the City Treasurer and the City’s investment advisors, Chandler Asset Management, Staff has incorporated the recommended changes to the policy from last year. Staff believes the investments allowed under the attached Policy are appropriate for the City. The Policy will be included on the City’s website and, therefore, is subject to public scrutiny.

The Fiscal Year 2023/24 City Investment Policy incorporates SB 1489, which was signed into law on September 18, 2022 and became effective on January 1, 2023, for California local June 14, 2023
Adoption of City Investment Policy

Page 2 of 2 ends

government agencies, the provisions that apply to the City’s investment policy are listed below:

IX. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
• Prohibits the purchase of securities with a forward settle of more than 45 days. (Page 13)
XIX. REPORTING
• Extends the timeframe in which the quarterly report must be submitted to the Council from 30 days to 45 days after the end of the reporting period. (Page 17) XVI. GLOSSARY OF INVESTMENT TERMS
• Further defines that maturity is measured from the settlement date to final maturity. (Page A-4)
CEQA COMPLIANCE STATEMENT:

Not a project as defined by CEQA.

FISCAL IMPACT: N/A
WORK PLAN: N/A
OPTIONS:
∙ Approve Staff recommendation adopting the City’s Investment Policy for FY 2023/24. ∙ Do not approve and provide direction.

DEPARTMENT RECOMMENDATION:

Staff recommends that the City Council adopt Resolution 2023-072 (Attachment 1) approving the City’s Investment Policy for FY 2023/24.

CITY MANAGER’S RECOMMENDATION:

Approve Department Recommendation.
________________________________
Gregory Wade, City Manager
Attachments:

1. Resolution 2023-072

2. City of Solana Beach Investment Policy FY 2023/24

3. City of Solana Beach Investment Policy FY 2023/24 Redline RESOLUTION 2023-072

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF SOLANA BEACH, CALIFORNIA, APPROVING THE
CITY OF SOLANA BEACH’S INVESTMENT POLICY FOR
FISCAL YEAR 2023/24
WHEREAS, the Legislature of the State of California has declared that the deposit and investment of public funds by local officials and local agencies is an issue of statewide concern (California Government Code Sections 53600.6 and 53630.1); and WHEREAS, the City Council may invest surplus monies not required for the immediate necessities of the local agency in accordance with the provisions of California Government Code Section 53600 et seq. and this policy; and WHEREAS, the City Treasurer of the City of Solana Beach may invest surplus monies not required for the immediate necessities of the local agency in accordance with the provisions of California Government Code Section 53600 et seq. and this policy; and WHEREAS, the City Treasurer of the City of Solana Beach, under the direction of the City Manager, has prepared and submitted a statement of investment policy and such policy, and any changes thereto, have been considered by the City Council at a public meeting.

NOW, THEREFORE, the City Council of the City of Solana Beach, California, does resolves as follows:

1. That the above recitations are true.

2. That the City Council approves the updated Investment Policy for Fiscal Year 2023/24.

PASSED AND ADOPTED this 14th day of June 2023, at a regularly scheduled meeting of the City Council of the City of Solana Beach, California by the following vote:

AYES: Councilmembers –
NOES: Councilmembers –
ABSENT: Councilmembers –
ABSTAIN: Councilmembers –
______________________________
LESA HEEBNER, Mayor
APPROVED AS TO FORM: ATTEST:
________________________________ _______________________________ JOHANNA N. CANLAS, City Attorney ANGELA IVEY, City Clerk

CITY OF SOLANA BEACH

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2023-24

CITY COUNCIL

MAYOR LESA HEEBNER
DEPUTY MAYOR DAVID A. ZITO

COUNCILMEMBER KRISTI BECKER

COUNCILMEMBER JEWEL EDSON

COUNCILMEMBER JILL MACDONALD

CITY MANAGER CITY TREASURER

GREG WADE RODNEY GREEK
City of Solana Beach 2022-23 Investment Policy 1

CITY OF SOLANA BEACH
Investment Policy
FISCAL YEAR 2023/24

CONTENTS
I. INTRODUCTION ..................................................................................................... 2 II. OBJECTIVES......................................................................................................... 2 III. SCOPE................................................................................................................. 3 IV. PRUDENCE........................................................................................................... 3 V. DELEGATION OF AUTHORITY.................................................................................. 4 VI. ETHICS AND CONFLICTS OF INTEREST .................................................................... 5 VII. INTERNAL CONTROLS............................................................................................ 5 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS ........ 5 IX. AUTHORIZED INVESTMENTS ................................................................................... 7 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES............................................. 13 XI. FOSSIL FUELS RESTRICTION................................................................................ 13 XII. INVESTMENT POOLS/MUTUAL FUNDS ................................................................... 13 XIII. COLLATERALIZATION ........................................................................................... 14 XIV. DELIVERY, SAFEKEEPING AND CUSTODY .............................................................. 15 XV. MAXIMUM MATURITY........................................................................................... 15 XVI. RISK MANAGEMENT AND DIVERSIFICATION............................................................ 15 XVII. REVIEW OF INVESTMENT PORTFOLIO.................................................................... 16 XVIII. PERFORMANCE EVALUATION ............................................................................... 17 XIX. REPORTING........................................................................................................ 17 XX. REVIEW OF INVESTMENT POLICY.......................................................................... 18 APPENDIX A – GLOSSARY OF INVESTMENT TERMS……………………………………………A-1 City of Solana Beach 2022-23 Investment Policy 2
I. INTRODUCTION
The purpose of this document is to outline the City’s policy for the investment of public funds.

It is the policy of the City of Solana Beach, the Solana Beach Public Financing Authority and the Solana Beach Public Facilities Corporation (hereafter referred collectively as the “City”) to predicate their investment policies, procedures and practices upon the limitations placed upon them by the governing legislative bodies. These policies shall have four primary goals:
• To assure compliance with federal, state, and local laws governing the investment of public monies under the control of the City Treasurer. • To provide sufficient liquidity to meet normal operating and unexpected expenditures.
• To protect the principal monies entrusted to the City. • To generate the maximum amount of investment income within the parameters of prudent risk management as defined in this Investment Policy.

This policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal Treasurers Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public Treasurers (APT).

II. OBJECTIVES
The City’s overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives of the program are to preserve principal, provide sufficient liquidity, and manage investment risks, while seeking a market-rate of return. • SAFETY. The protection of principal is the foremost objective of the investment program. Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns.
• LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. • RETURN ON INVESTMENTS. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and City of Solana Beach 2022-23 Investment Policy 3
economic cycles, taking into account the investment risk constraints for safety and liquidity needs.

III. SCOPE
This policy covers all funds and investment activities under the direct authority of the City, as set forth in the State Government Code, Sections 53600 et seq., with the following exceptions:
• Proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their specific bond indentures.
• Any other funds specifically exempted by the City Council.

Funds not included in the policy include the City’s deferred compensation plans (Plans). These Plans will be excluded from the policy under the following circumstances:
i. A third-party administrator administers the plan
ii. Individual plan participants have control over the selection of investments
iii. The City has no fiduciary responsibility to act as a “trustee” for the Plan.

POOLING OF FUNDS
Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.

IV. PRUDENCE
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, City of Solana Beach 2022-23 Investment Policy 4
acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”
V. DELEGATION OF AUTHORITY
The Treasurer and other authorized persons responsible for managing City funds acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes provided that the Treasurer or other authorized persons acted in good faith. Deviations from expectations of a security’s credit or market risk should be reported to the City Council in a timely fashion and appropriate action should be taken to control adverse developments.

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

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

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

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

If the City Treasurer is unavailable, then the Finance Manager, Deputy City Manager, or the City Manager shall authorize the investment transactions, in writing, prior to execution.

The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and City of Solana Beach 2022-23 Investment Policy 5
must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.

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

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Thus employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

Employees and investment officials shall disclose to the City Manager any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.

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

Periodically, as deemed appropriate by the City and/or the City Council, an independent analysis by an external auditor shall be conducted to review internal controls, account activity and compliance with policies and procedures.

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

The Treasurer shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City. Due inquiry shall determine whether such authorized broker/dealers, and the individuals covering the City are reputable and trustworthy, knowledgeable and City of Solana Beach 2022-23 Investment Policy 6
experienced in Public City investing and able to meet all of their financial obligations. These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).

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

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

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

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

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

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IX. AUTHORIZED INVESTMENTS
The City’s investments are governed by California Government Code, Sections 53600 et seq. Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits and credit quality minimums listed in this section apply at the time the security is purchased.

Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.

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

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

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3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest.

There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:
• The maximum maturity is five (5) years.

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

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

6. COMMERCIAL PAPER, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
a. SECURITIES issued by corporations:
(i) The issuer is organized and operating in the United States with assets more than $500 million.
(ii) The securities are rated “A-1” or its equivalent or higher by at least one NRSRO.
(iii) If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or higher by at least one NRSRO.

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b. SECURITIES issued by other entities:
(i) The issuer is organized and operating in the United States as a special purpose corporation, trust, or limited liability company. (ii) The securities must have program-wide credit enhancement including, but not limited to, overcollateralization, letters of credit, or a surety bond.
(iii) The securities are rated “A-1” or its equivalent or higher by at least one NRSRO.
• City may purchase no more than 10% of the outstanding commercial paper of any single issuer.
• No more than 25% of the portfolio may be invested in Commercial Paper. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 270 days.

7. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or statechartered bank, a savings association, or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
• The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
• Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or the equivalent or higher by at least one NRSRO; or long-term obligations rated in the “A” category or the equivalent or higher by at least one NRSRO. • No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
• The amount per institution is limited to the maximum covered under federal insurance.

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• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

10.CERTIFICATE OF DEPOSIT PLACEMENT SERVICE (CDARS), provided that:
• No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARS.
• The maximum maturity does not exceed five (5) years.

11.COLLATERALIZED BANK DEPOSITS. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.

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

13.STATE OF CALIFORNIA LOCAL CITY INVESTMENT FUND (LAIF), provided that:
• The City may invest up to the maximum amount permitted by LAIF.

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• LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the Treasurer to adequately judge the risk inherent in LAIF’s portfolio.

14.INVESTMENT TRUST OF CALIFORNIA (CALTRUST), which is a joint powers authority (JPA), organized and managed by the Investment Trust of California JPA for the benefit of local agencies, pursuant to California Government Code Section 6509.7

15.CORPORATE MEDIUM TERM NOTES (MTNS), provided that:
• The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
• The securities are rated in the “A” category or the equivalent or higher by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

16.ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES, AND COLLATERALIZED MORTGAGE OBLIGATIONS from issuers not defined in sections 3 and 4 of the Authorized investments section of this policy, provided that:
• The securities are rated in the “AA” category or the equivalent or higher by a NRSRO.
• No more than 20% of the total portfolio may be invested in these securities. • No more than 5% of the portfolio may be invested in any single AssetBacked or Commercial Mortgage security issuer. There is no issuer limitation on any Mortgage security where the issuer is the US Treasury or a Federal City/GSE.
• The maximum legal final maturity does not exceed five (5) years.

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17.MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

1. Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or

2. Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.

3. No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:

1. Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or

2. Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.

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

18.SUPRANATIONALS, provided that:
• Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
• The securities are rated in the “AA” category or the equivalent or higher by a NRSRO.
• No more than 30% of the total portfolio may be invested in these securities. • No more than 10% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

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X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
• State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. • In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. • Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2026, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. The presence of any of these securities will be promptly reported to the Treasurer. • Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
• Purchasing or selling securities on margin is prohibited. • The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
• The purchase of foreign currency denominated securities is prohibited. • The purchase of a security with a forward settlement exceeding 45 days from the time of the investment is prohibited.

XI. FOSSIL FUELS RESTRICTION
• The purchase of securities issued by fossil fuel companies that directly source the majority (more than 50%) of their revenue from oil, gas and/or coal production is prohibited.

XII. INVESTMENT POOLS/MUTUAL FUNDS
The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. The Treasurer shall develop a questionnaire which will answer the following general questions:

1. A description of eligible investment securities, and a written statement of investment policy and objectives.

2. A description of interest calculations and how it is distributed, and how gains and losses are treated.

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

4. A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.

5. A schedule for receiving statements and portfolio listings.

6. Are reserves, retained earnings, etc. utilized by the pool/fund?

7. A fee schedule, and when and how is it assessed.

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

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

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

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

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

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

XV. MAXIMUM MATURITY
To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities.

The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment.

XVI. RISK MANAGEMENT AND DIVERSIFICATION

MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
• The diversification requirements included in the “Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio. • No more than 5% of the total portfolio may be invested in securities of any single issuer, except where the issuer is the US Government, its Agencies and GSEs, an authorized Supranational issuer or where the security is a Money Market Mutual Fund, Local City Investment Fund (LAIF) or other Local City of Solana Beach 2022-23 Investment Policy 16
Government Investment Pool, or where otherwise specified in this investment policy.
• The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences. • If securities owned by the City are downgraded to a level below the quality required by this investment policy, making the security ineligible for additional purchases, the following steps will be taken:
• Any actions taken related to the downgrade by an investment manager will be promptly communicated to the Treasurer.
• If a decision is made to retain the security in the portfolio, the credit situation will be monitored and reported promptly to the City Council.

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

The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
• The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.
• The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy. • The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances.

XVII. REVIEW OF INVESTMENT PORTFOLIO
The Treasurer shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish City of Solana Beach 2022-23 Investment Policy 17
protocols for reporting major and critical incidences of noncompliance to the City Council.

XVIII. PERFORMANCE EVALUATION
The investment portfolio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account the City’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.

The Treasurer shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the Treasurer’s quarterly report. The Treasurer shall select an appropriate, readily available index to use as a market benchmark.

XIX. REPORTING

MONTHLY REPORTS
Monthly transaction reports will be submitted by the Treasurer to the City Council within 30 days of the end of the reporting period in accordance with California Government Code Section 53607.

QUARTERLY REPORTS
The Treasurer will submit a quarterly investment report to the City Council which provides full disclosure of the City’s investment activities within 45 days after the end of the quarter per Government Code Section 53646(b)(1). These reports will disclose, at a minimum, the following information about the City’s portfolio:

1. An asset listing showing par value, cost, and independent third-party fair market value of each security as of the date of the report, the source of the valuation, type of investment, issuer, maturity date, interest rate and interest rate.

2. Transactions for the period.

3. A description of the funds, investments and programs (including lending programs) managed by contracted parties (i.e. LAIF; investment pools, outside money managers and securities lending agents)
City of Solana Beach 2022-23 Investment Policy 18

4. A one-page summary report that shows:
a. Average maturity of the portfolio and modified duration of the portfolio; b. Maturity distribution of the portfolio;
c. Percentage of the portfolio represented by each investment category; d. Average portfolio credit quality; and,
e. Time-weighted total rate of return for the portfolio for the prior one month, three months, twelve months and since inception compared to the City’s market benchmark returns for the same periods;

5. A statement of compliance with investment policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio and a timetable for resolution.

6. A statement that the City has adequate funds to meet its cash flow requirements for the next six months.

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

XX. REVIEW OF INVESTMENT POLICY
The investment policy will be reviewed and adopted at least annually within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. Any recommended modifications or amendments shall be presented by Staff to the City Council for their consideration and adoption.

City of Solana Beach 2023-24 Investment Policy Appendix A-1 Appendix A
Glossary of Investment Terms
AGENCIES. Shorthand market terminology for any obligation issued by a governmentsponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.

FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.

FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “Freddie Mac” issues discount notes, bonds and mortgage pass-through securities.

FNMA. Like FHLB and Freddie Mac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “Fannie Mae,” issues discount notes, bonds and mortgage passthrough securities.

GNMA. The Government National Mortgage Association, known as “Ginnie Mae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.

TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.

ASKED. The price at which a seller offers to sell a security.

ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.

City of Solana Beach 2023-24 Investment Policy Appendix A-2 BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

BID. The price at which a buyer offers to buy a security.

BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from their own position.

CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline since an issuer issues securities, it will likely call its current securities and reissue them at a lower rate of interest. Callable securities have reinvestment risk as the investor may receive its principal back when interest rates are lower than when the investment was initially made.

CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs may be marketable.

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

COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.

COMMERCIAL PAPER. The short-term unsecured debt of corporations.

COST YIELD. The annual income from an investment divided by the purchase cost.

Because it does not give effect to premiums and discounts which may have been included in the purchase cost, it is an incomplete measure of return.

COUPON. The rate of return at which interest is paid on a bond.

CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.

City of Solana Beach 2023-24 Investment Policy Appendix A-3 CURRENT YIELD. The annual income from an investment divided by the current market value. Since the mathematical calculation relies on the current market value rather than the investor’s cost, current yield is unrelated to the actual return the investor will earn if the security is held to maturity.

DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position.

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

DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.

DERIVATIVE. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.

DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.

DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.

DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a bond to changes in interest rates. (See modified duration).

FEDERAL FUNDS RATE. The rate of interest charged by banks for short-term loans to other banks. The Federal Reserve Bank through open-market operations establishes it.

FEDERAL OPEN MARKET COMMITTEE. A committee of the Federal Reserve Board that establishes monetary policy and executes it through temporary and permanent changes to the supply of bank reserves.

LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.

LIQUIDITY. The speed and ease with which an asset can be converted to cash.

City of Solana Beach 2023-24 Investment Policy Appendix A-4 LOCAL AGENCY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.

MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole."
MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.

MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.

MARKET VALUE. The price at which a security can be traded.

MARKING TO MARKET. The process of posting current market values for securities in a portfolio.

MATURITY. The final date upon which the principal of a security becomes due and payable.

An investment’s term or remaining maturity is measured from the settlement date to final maturity.

MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.

MODIFIED DURATION. The percent change in price for a 100-basis point change in yields.

Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.

MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.

MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.

City of Solana Beach 2023-24 Investment Policy Appendix A-5 MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.

NEGOTIABLE CD. A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market.

PREMIUM. The difference between the par value of a bond and the cost of the bond, when the cost is above par.

PREPAYMENT SPEED. A measure of how quickly principal is repaid to investors in mortgage securities.

PREPAYMENT WINDOW. The time period over which principal repayments will be received on mortgage securities at a specified prepayment speed.

PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market.

PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
REALIZED YIELD. The change in value of the portfolio due to interest received and interest earned and realized gains and losses. It does not give effect to changes in market value on securities, which have not been sold from the portfolio.

REGIONAL DEALER. A financial intermediary that buys and sells securities for the benefit of its customers without maintaining substantial inventories of securities and that is not a primary dealer.

REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.

SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.

City of Solana Beach 2023-24 Investment Policy Appendix A-6 STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities, or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate.

Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

SUPRANATIONAL. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.

TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.

U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.

TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.

TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.

TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.

VOLATILITY. The rate at which security prices change with changes in general economic conditions or the general level of interest rates.

YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.

CITY OF SOLANA BEACH

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2023-242-23

CITY COUNCIL

MAYOR LESA HEEBNER
DEPUTY MAYOR DAVID A. ZITOKELLY HARLESS

COUNCILMEMBER KRISTI BECKER
COUNCILMEMBER DAVID A. ZITO JEWEL EDSON

COUNCILMEMBER JILL MACDONALDJEWEL EDSON

CITY MANAGER CITY TREASURER
City of Solana Beach 2022-23 Investment Policy 1

GREG WADE RYAN SMITHRODNEY
GREEK

CITY OF SOLANA BEACH
Investment Policy
FISCAL YEAR 2023/242/23

CONTENTS
I. INTRODUCTION ..................................................................................................... 2 II. OBJECTIVES ......................................................................................................... 2 III. SCOPE................................................................................................................. 3 IV. PRUDENCE ........................................................................................................... 3 V. DELEGATION OF AUTHORITY .................................................................................. 4 VI. ETHICS AND CONFLICTS OF INTEREST .................................................................... 5 VII. INTERNAL CONTROLS ............................................................................................ 5 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS ........ 5 IX. AUTHORIZED INVESTMENTS ................................................................................... 7 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES......................................... 1313 XI. FOSSIL FUELS RESTRICTION ................................................................................ 13 XII. INVESTMENT POOLS/MUTUAL FUNDS ................................................................... 13 XIII. COLLATERALIZATION ....................................................................................... 1414 XIV. DELIVERY, SAFEKEEPING AND CUSTODY .......................................................... 1515 XV. MAXIMUM MATURITY ........................................................................................... 15 XVI. RISK MANAGEMENT AND DIVERSIFICATION............................................................ 15 XVII. REVIEW OF INVESTMENT PORTFOLIO ................................................................ 1617 XVIII. PERFORMANCE EVALUATION ........................................................................... 1717 XIX. REPORTING ........................................................................................................ 17 XX. REVIEW OF INVESTMENT POLICY .......................................................................... 18

APPENDIX A – GLOSSARY OF INVESTMENT TERMS……………………………………………A-1

City of Solana Beach 2022-23 Investment Policy 2
I. INTRODUCTION
The purpose of this document is to outline the City’s policy for the investment of public funds.

It is the policy of the City of Solana Beach, the Solana Beach Public Financing Authority and the Solana Beach Public Facilities Corporation (hereafter referred collectively as the “City”) to predicate their investment policies, procedures and practices upon the limitations placed upon them by the governing legislative bodies. These policies shall have four primary goals:
 To assure compliance with federal, state, and local laws governing the investment of public monies under the control of the City Treasurer.  To provide sufficient liquidity to meet normal operating and unexpected expenditures.
 To protect the principal monies entrusted to the City.  To generate the maximum amount of investment income within the parameters of prudent risk management as defined in this Investment Policy.

II. OBJECTIVES
The City’s overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives of the program are to preserve principal, provide sufficient liquidity, and manage investment risks, while seeking a market-rate of return.  SAFETY. The protection of principal is the foremost objective of the investment program. Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns.
 LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.  RETURN ON INVESTMENTS. The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and City of Solana Beach 2022-23 Investment Policy 3
economic cycles, taking into account the investment risk constraints for safety and liquidity needs.

III. SCOPE
This policy covers all funds and investment activities under the direct authority of the City, as set forth in the State Government Code, Sections 53600 et seq., with the following exceptions:
 Proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their specific bond indentures.
 Any other funds specifically exempted by the City Council.

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

If the City Treasurer is unavailable, then the Finance Manager, Deputy City Manager, or the City Manager shall authorize the investment transactions, in writing, prior to execution.

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

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

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

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

City of Solana Beach 2022-23 Investment Policy 8

3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest.

There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:
 The maximum maturity is five (5) years.

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

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

City of Solana Beach 2022-23 Investment Policy 9
b. SECURITIES issued by other entities:
(i) The issuer is organized and operating in the United States as a special purpose corporation, trust, or limited liability company. (ii) The securities must have program-wide credit enhancement including, but not limited to, overcollateralization, letters of credit, or a surety bond.
(iii) The securities are rated “A-1” or its equivalent or higher by at least one NRSRO.
 City may purchase no more than 10% of the outstanding commercial paper of any single issuer.
 No more than 25% of the portfolio may be invested in Commercial Paper.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed 270 days.

7. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or statechartered bank, a savings association, or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
 The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
 Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or the equivalent or higher by at least one NRSRO; or long-term obligations rated in the “A” category or the equivalent or higher by at least one NRSRO.  No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
 No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
 The amount per institution is limited to the maximum covered under federal insurance.

City of Solana Beach 2022-23 Investment Policy 10
 No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
 The maximum maturity does not exceed five (5) years.

9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
 No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
 The maximum maturity does not exceed five (5) years.

10. CERTIFICATE OF DEPOSIT PLACEMENT SERVICE (CDARS), provided that:
 No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARS.
 The maximum maturity does not exceed five (5) years.

11. COLLATERALIZED BANK DEPOSITS. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.

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

13. STATE OF CALIFORNIA LOCAL CITY INVESTMENT FUND (LAIF), provided that:
 The City may invest up to the maximum amount permitted by LAIF.

City of Solana Beach 2022-23 Investment Policy 11
 LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the Treasurer to adequately judge the risk inherent in LAIF’s portfolio.

14. INVESTMENT TRUST OF CALIFORNIA (CALTRUST), which is a joint powers authority (JPA), organized and managed by the Investment Trust of California JPA for the benefit of local agencies, pursuant to California Government Code Section 6509.7

15. CORPORATE MEDIUM TERM NOTES (MTNS), provided that:
 The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
 The securities are rated in the “A” category or the equivalent or higher by at least one NRSRO.
 No more than 30% of the total portfolio may be invested in MTNs.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

16. ASSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES, AND COLLATERALIZED MORTGAGE OBLIGATIONS from issuers not defined in sections 3 and 4 of the Authorized investments section of this policy, provided that:
 The securities are rated in the “AA” category or the equivalent or higher by a NRSRO.
 No more than 20% of the total portfolio may be invested in these securities.  No more than 5% of the portfolio may be invested in any single AssetBacked or Commercial Mortgage security issuer. There is no issuer limitation on any Mortgage security where the issuer is the US Treasury or a Federal City/GSE.
 The maximum legal final maturity does not exceed five (5) years.

City of Solana Beach 2022-23 Investment Policy 12

17. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

1. Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or

1. Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or

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

18. SUPRANATIONALS, provided that:
 Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
 The securities are rated in the “AA” category or the equivalent or higher by a NRSRO.
 No more than 30% of the total portfolio may be invested in these securities.  No more than 10% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

City of Solana Beach 2022-23 Investment Policy 13
X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES
 State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options.  In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited.  Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2026, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. The presence of any of these securities will be promptly reported to the Treasurer.  Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
 Purchasing or selling securities on margin is prohibited.  The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
 The purchase of foreign currency denominated securities is prohibited.  The purchase of a security with a forward settlement exceeding 45 days from the time of the investment is prohibited.

XI. FOSSIL FUELS RESTRICTION
 The purchase of securities issued by fossil fuel companies that directly source the majority (more than 50%) of their revenue from oil, gas and/or coal production is prohibited.

1. A description of eligible investment securities, and a written statement of investment policy and objectives.

2. A description of interest calculations and how it is distributed, and how gains and losses are treated.

City of Solana Beach 2022-23 Investment Policy 14

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

4. A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.

5. A schedule for receiving statements and portfolio listings.

6. Are reserves, retained earnings, etc. utilized by the pool/fund?

7. A fee schedule, and when and how is it assessed.

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

XV. MAXIMUM MATURITY
To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities.

The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment.

XVI. RISK MANAGEMENT AND DIVERSIFICATION

MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
 The diversification requirements included in the “Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio.  No more than 5% of the total portfolio may be invested in securities of any single issuer, except where the issuer is the US Government, its Agencies and GSEs, an authorized Supranational issuer or where the security is a Money Market Mutual Fund, Local City Investment Fund (LAIF) or other Local City of Solana Beach 2022-23 Investment Policy 16
Government Investment Pool, or where otherwise specified in this investment policy.
 The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.  If securities owned by the City are downgraded to a level below the quality required by this investment policy, making the security ineligible for additional purchases, the following steps will be taken:
 Any actions taken related to the downgrade by an investment manager will be promptly communicated to the Treasurer.
 If a decision is made to retain the security in the portfolio, the credit situation will be monitored and reported promptly to the City Council.

The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
 The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.
 The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy.  The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances.

XIX. REPORTING

QUARTERLY REPORTS
The Treasurer will submit a quarterly investment report to the City Council which provides full disclosure of the City’s investment activities within 30 45 days after the end of the quarter per Government Code Section 53646(b)(1). These reports will disclose, at a minimum, the following information about the City’s portfolio:

2. Transactions for the period.

6. A statement that the City has adequate funds to meet its cash flow requirements for the next six months.

City of Solana Beach 20232-24-23 Investment Policy Appendix A-1
Appendix A
Glossary of Investment Terms
AGENCIES. Shorthand market terminology for any obligation issued by a governmentsponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.

FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.

GNMA. The Government National Mortgage Association, known as “Ginnie Mae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.

ASKED. The price at which a seller offers to sell a security.

ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

City of Solana Beach 20232-24-23 Investment Policy Appendix A-2
BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

BID. The price at which a buyer offers to buy a security.

BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from theirhis own position.

CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs may be marketable.

COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.

COMMERCIAL PAPER. The short-term unsecured debt of corporations.

COST YIELD. The annual income from an investment divided by the purchase cost.

Because it does not give effect to premiums and discounts which may have been included in the purchase cost, it is an incomplete measure of return.

COUPON. The rate of return at which interest is paid on a bond.

CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.

City of Solana Beach 20232-24-23 Investment Policy Appendix A-3
CURRENT YIELD. The annual income from an investment divided by the current market value. Since the mathematical calculation relies on the current market value rather than the investor’s cost, current yield is unrelated to the actual return the investor will earn if the security is held to maturity.

DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for theirhis own position.

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

DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.

DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.

FEDERAL FUNDS RATE. The rate of interest charged by banks for short-term loans to other banks. The Federal Reserve Bank through open-market operations establishes it.

FEDERAL OPEN MARKET COMMITTEE. A committee of the Federal Reserve Board that establishes monetary policy and executes it through temporary and permanent changes to the supply of bank reserves.

LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.

LIQUIDITY. The speed and ease with which an asset can be converted to cash.

City of Solana Beach 20232-24-23 Investment Policy Appendix A-4
LOCAL AGENCY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.

MARKET VALUE. The price at which a security can be traded.

MARKING TO MARKET. The process of posting current market values for securities in a portfolio.

MATURITY. The final date upon which the principal of a security becomes due and payable.

An investment’s term or remaining maturity is measured from the settlement date to final maturity.

MODIFIED DURATION. The percent change in price for a 100-basis point change in yields.

Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.

MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.

MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.

City of Solana Beach 20232-24-23 Investment Policy Appendix A-5
MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.

PREMIUM. The difference between the par value of a bond and the cost of the bond, when the cost is above par.

PREPAYMENT SPEED. A measure of how quickly principal is repaid to investors in mortgage securities.

PREPAYMENT WINDOW. The time period over which principal repayments will be received on mortgage securities at a specified prepayment speed.

REGIONAL DEALER. A financial intermediary that buys and sells securities for the benefit of its customers without maintaining substantial inventories of securities and that is not a primary dealer.

SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.

City of Solana Beach 20232-24-23 Investment Policy Appendix A-6
STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities, or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate.

Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.

TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.

VOLATILITY. The rate at which security prices change with changes in general economic conditions or the general level of interest rates.

YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.

CITY COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # A.6.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: June 14, 2023
ORIGINATING DEPT: Finance
SUBJECT: City Council Consideration of Resolution 2023-71 Adopting the Fiscal Year 2023/24 Fire Benefit Fee
BACKGROUND:

On April 8, 1980, voters in the Solana Beach Fire Protection District (District) approved a Fire Benefit Fee (Fee) by more than a two-thirds vote in an amount not to exceed $10.00 per unit of benefit per year, on real property within the boundaries of the District. The District was subsequently merged with the City of Solana Beach (City), and the City now has the responsibility of administering this Fee. Because the Fee was adopted by the voters before the passage of Proposition 218, it is not subject to its requirements.

There is no legal requirement for a public hearing, however, the City has published a “Notice of Setting the Fire Benefit Fee” (Notice) to notify residents that they have the right to request that this item be removed from the consent agenda for discussion. The Notice was published in the local newspaper on May 25, 2023.

This item is before Council to consider approval of Resolution 2023-71 setting the Fire Benefit Fee and authorizes the fee to be placed on the County Assessment rolls.

DISCUSSION:

Each year, the City Council is required to formally set the Fire Benefit Fee for levying on the tax roll. Staff is recommending that the Fee remain at the same level for Fiscal Year (FY) 2023/24 at $10.00 per benefit unit. This Fee has not been increased since it was approved by voters in 1980. In order to increase the Fire Benefit Fee, the City would need a public vote with two-thirds of the voters approving any increase.

Properties in the City would be charged an annual amount for the Fire Benefit Fee at $10.00 per benefit unit according to the schedule outlined on the next page.

June 14, 2023
FY 2023/24 Fire Benefit Fee

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Solana Beach City CouncilJune 14, 2023

Solana Beach City Council
June 14, 2023