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ARTICLE V
DISTRIBUTION OF BENEFITS
5.1 Payment of Distribution
Distribution shall only be made to the insurers, third party administrators, service providers, or other entities providing benefits or services under the OPEB Plan, or to Eligible Employees and Eligible Beneficiaries for reimbursement of OPEB Plan premiums ( or other payments for OPEB Plan benefits) paid by the Eligible Employee or Eligible Beneficiary, or to the Employer for the reimbursement of OPEB Plan benefits and expenses paid by the Employer. The Plan Administrator or its Delegatee shall provide instructions to the Trustee regarding how distributions and reimbursements are to be made.
ARTICLE VI
FUNDING AND INVESTMENT
6.1 Funding and Investment
The assets of the OPEB Plan shall be held in the OPEB Account of each Employer. In Section A.4.2.1 of the Adoption Agreement, each Employer shall elect between a discretionary or directed investment approach. If the Employer elects a discretionary investment approach, the Employer shall further elect between the various investment strategies offered in the investment strategy selection and disclosure form. If the Employer elects a directed investment approach, the Employer, in accordance with the Trust Agreement, shall have absolute discretion over the investment of the assets of its OPEB Account.
6.2 Type and Nature of Plan and Trust
Neither the faith and credit nor the taxing power of each Employer is pledged to the distribution of benefits hereunder. Except for contributions, earnings and other amounts held in the Trust, no amounts are pledged to the distribution of benefits hereunder. Distributions of benefits are neither general nor special obligations of the Employer, but are payable solely from contributions, as more fully described herein. No employee of any Employer or any other person may compel the exercise of the taxing power by the Employer. Distributions of benefits are not a debt of the Employer within the meaning of any constitutional or statutory limitation or restriction. Distributions are not a legal or equitable pledge, charge, lien or encumbrance, upon any of the Employer's property, or upon any of its income, receipts or revenues.
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ARTICLE VII
ADMINISTRATION, AMENDMENT AND TERMINATION OF PLAN
7.1 Designation of Plan Administrator
In Section A.2.2 of the Adoption Agreement, the Employer shall provide the name of the Plan Administrator that has been duly authorized and designated by the governing body of the Employer to act on its behalf in all matters pertaining to the OPEB Plan and the Trust pursuant to Section 3 .4 of the Trust Agreement. If no name is provided, the Employer is the Plan Administrator. In addition to a Plan Administrator the Employer may designate a Delegatee to perform those activities relating to the OPEB Plan as specified in the written appointment of such Delegatee certified to the Trust Administrator. Except where the context requires othe1wise, the term "Employer" as used in this Article shall mean the Plan Administrator or Delegatee where responsibility for administration of the OPEB Plan has been given to such parties.
7.2 Rules and Regulations
The Employer has full discretionary authority to supervise and control the operation of this OPEB Plan in accordance with its terms and may make rules and regulations for the administration of this OPEB Plan that are not inconsistent with the terms and provisions hereof.
The Employer shall determine any questions arising in coffilection with the interpretation, application or administration of the OPEB Plan (including any question of fact relating to age, employment, compensation or eligibility of Eligible Employees or Eligible Beneficiaries) and its decisions or actions in respect thereof shall be conclusive and binding upon all persons and parties.
The Employer shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:
(a) To determine all questions relating to an Eligible Employee's or Eligible Beneficiary's eligibility;
(b) To construe and interpret the terms and provisions of the OPEB Plan; (c) To compute, certify to, and direct the Trustee with regard to the amount and kind of benefits payable to health care providers;
( d) To authorize all disbursements from its OPEB Account; (e) To maintain all records that may be necessary for the administration of the OPEB Plan other than those maintained by the Trustee; and
(f) To appoint a Plan Administrator or, any other agent, and to delegate to them or to the Trustee such powers and duties in connection with the administration of the OPEB Plan as it may from time to time prescribe.
160
Expenses and fees incurred in connection with the administration of the OPEB Plan and the Trust shall be paid from the Trust assets to the fullest extent permitted by law, unless the Employer determines otherwise. The Employer may elect to make contributions to its OPEB Account sufficient to defray the expenses of administering the OPEB Plan or may pay such expenses directly.
7.3 Amendment and Termination
The Employer shall have the right to amend, modify or terminate the OPEB Plan at any time. If an Employer terminates the OPEB Plan, the Assets held in its OPEB Account shall be distributed by the Trustee as provided in Section 7 .3 of the Trust Agreement.
8.1 Nonalienation
ARTICLE VIII
MISCELLANEOUS
An Eligible Employee or Eligible Beneficiary does not have any interest in the OPEB Plan or the Assets held in the Trust. Accordingly, the Trust shall not in any way be liable to attachment, garnishment, assignment or other process, or be seized, taken, appropriated or applied by any legal or equitable process, to pay any debt or liability of an Eligible Employee, Eligible Beneficiary or any other party.
8.2 Investment
All contributions, interest earned, and any assets of the OPEB Plan shall at all times be invested and managed in accordance with the Trust Agreement and the requirements of applicable law.
8.3 Parties to the Plan
Eligible Employees, Eligible Beneficiaries and unions of each Employer are not parties to this OPEB Plan. The OPEB Plan is only a funding source for such Employer's post-employment health care and welfare benefits and does not increase the rights of any Eligible Employee, Eligible Beneficiary or union.
8.4 Confidential Medical Information
Each Employer and its health care providers or other service providers shall not share confidential medical information regarding employees of the Employer with the OPEB Plan, the Trustee, or the Trust Administrator.
161
AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement (“Agreement”) is made this _____ day of _____________, 2025, between Phase II Systems, a corporation organized and existing under the laws of the State of California, doing business as Public Agency Retirement Services and PARS (hereinafter “PARS”) and the [Agency Name] (“Agency”).
WHEREAS, the Agency has adopted the PARS Public Agencies Post-Employment Benefits Trust for the purpose of prefunding pension obligations and/or Other Post-Employment Benefits (“OPEB”) obligations (“Plan”) and is desirous of retaining PARS as Trust Administrator to the Trust, to provide administrative services.
NOW THEREFORE, the parties agree:
1. Services. PARS will provide the services pertaining to the Plan as described in the exhibit attached hereto as “Exhibit 1A” (“Services”) in a timely manner, subject to the further provisions of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as described in the exhibit attached hereto as “Exhibit 1B”.
3. Payment Terms. Payment for the Services will be remitted directly from Plan assets unless the Agency chooses to make payment directly to PARS. In the event that the Agency chooses to make payment directly to PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS within thirty (30) days of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless PARS has previously received written communication disputing the subject invoice that is signed by a duly authorized representative of the Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will be billed to the Agency at the rates indicated in the PARS’ standard fee schedule in effect at the time the services are provided and shall be payable as described in Section 3 of this Agreement. Before any such services are performed, PARS will provide the Agency with a detailed description of the services, terms, and applicable rates for such services. Such services, terms, and applicable rates shall be agreed upon in writing and executed by both parties.
5. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency providing PARS the information specified in the exhibit attached hereto as “Exhibit 1C” (“Data”). It shall be the responsibility of the Agency to certify the accuracy, content, and completeness of the Data so that PARS may rely on such information without further audit. It shall further be the responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a reasonable amount of time for the Services to be performed. Unless specified in Exhibit 1A, PARS shall be under no duty to question Data received from the Agency, to compute contributions made to the 162
Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable for nonperformance of Services to the extent such nonperformance is caused by or results from erroneous and/or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1C, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency.
6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS’ fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law.
7. Confidentiality. Without the Agency’s consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law.
8. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees, or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers’ compensation, and similar matters.
9. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless, including their respective officers, directors, and employees, from any claim, loss, demand, liability, or expense, including reasonable attorneys’ fees and costs, incurred by the other as a consequence of, to the extent, PARS’ or Agency’s, as the case may be, negligent acts, errors or omissions with respect to the performance of their respective duties hereunder.
10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan.
PARS shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement. 163
11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. In the event any party institutes legal proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any state court of competent jurisdiction.
12. Force Majeure. When a party’s nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that its performance is prevented by such cause. Such cause shall include, but not be limited to:
any incidence of fire, flood, acts of God or unanticipated communicable disease, acts of terrorism or war commandeering of material, products, plants or facilities by the federal, state or local government, a material act or omission by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state or local government, or any agency thereof, which becomes effective after the date of this Agreement that delays or renders impractical either party’s performance under the Agreement.
13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency.
14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement.
15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660; Attention: President
(B) To Agency: [Agency]; [Agency Address]; Attention: [Plan Administrator Title] Notices shall be deemed given on the date received by the addressee.
16. Term of Agreement. This Agreement shall remain in effect for the period beginning _______________, 2025 and ending _____________, 2028 (“Term”). This Agreement may be terminated at any time by giving thirty (30) days written notice to the other party of the intent to terminate. Absent a thirty (30) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve-month periods following the Term.
17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by the parties hereto.
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18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement.
In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions, and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition.
19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to receive its reasonable attorney’s fees.
20. Counterparts. Electronic Signatures. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, shall include digital electronic signatures (e.g., DocuSign). The use of digital electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law.
21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed.
AGENCY:
BY:
Plan Administrator Name
TITLE:
DATE:
PARS:
BY:
Tod Hammeras
TITLE: Chief Financial Officer
DATE:
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EXHIBIT 1A
SERVICES
PARS will provide the following services for the [Agency Name] Public Agencies PostEmployment Benefits Trust:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting, and submission requirements for contributions/reimbursements/distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and approved by Agency legal counsel. Resulting final Plan documentation must be approved by the Agency prior to the commencement of PARS Plan Administration Services outlined in Exhibit 1A, paragraph 2 below.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Public Agencies Post-Employment Benefits Trust (“Trustee”), based upon information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and investment activity, based upon information received from the Agency and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.
3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice.
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EXHIBIT 1B
FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit 1A based upon the following schedule:
An annual asset fee shall be paid from Plan assets based on the following schedule:
For Plan Assets from: Annual Rate:
$1 to $10,000,000 0.25%
$10,000,001 to $15,000,000 0.20%
$15,000,001 to $50,000,000 0.15%
$50,000,001 and above 0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included.
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EXHIBIT 1C
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the following information. Agency is solely responsible for ensuring that all information and documentation provided to PARS is true, correct, and authorized:
1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust (C) Trustee Investment Forms
2. Contribution – completed Contribution Transmittal Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)
3. Distribution – completed Payment Reimbursement/Distribution Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator (or authorized Designee)
4. Other information pertinent to the Services as reasonably requested by PARS and Actuarial Provider.
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This document is entered into by Client and U.S. Bank National Association (“U.S. Bank”), as discretionary trustee.
Client/Employer:
Plan/Trust Name: Public Agencies Post-Employment Benefits Trust Client/Employer directs the investment of assets of the above-referenced Plan/Trust in the (select one of the strategies listed below for each Account):
OPEB
Account
Pension
Account Strategy Primary Goal Strategic Range
Liquidity Management Generate current income with
liquidity. Money Market Fund
Conservative – Strategic Blend
Conservative – Index
Provide a consistent level of
inflation-protected income over
the long-term.
Equity: 5-20%
Fixed Income: 60-95%
Cash: 0-20%
Moderately Conservative – Strategic Blend
Moderately Conservative – Index
Provide current income with
capital appreciation as a
secondary objective.
Equity: 20-40%
Fixed Income: 50-80%
Cash: 0-20%
Moderate – Strategic Blend
Moderate – Index
Provide current income and
moderate capital appreciation.
Equity: 40-60%
Fixed Income: 40-60%
Cash: 0-20%
Balanced – Strategic Blend
Balanced – Index
Provide growth of principal and
income.
Equity: 50-70%
Fixed Income: 30-50%
Cash: 0-20%
Capital Appreciation – Strategic Blend
Capital Appreciation – Index
Primary goal is growth of
principal.
Equity: 65-85%
Fixed Income: 10-30%
Cash: 0-20%
Custom Attach separate guidelines
Strategic Blend strategies are invested in a blend of actively managed and index-based mutual funds and exchange traded funds. Index strategies are invested in index-based mutual funds and exchange traded funds.
Acknowledged and Approved
Authorized Signer Title
Print Name Date
SAMPLE 169
FEE SCHEDULE FOR PARS TRUST PROGRAM — PENSION /OPEB
This Fee Schedule relates to the U.S. Bank National Association (“USBNA”) Institutional Trust & Custody division (“IT&C”) account identified below (such account, including any sub-accounts therein, the “Account”) and is effective as of the date of the Account’s adoption of the governing trust agreement (the “Fee Schedule’s Effective Date”).
Trust Name: Public Agencies Post-Employment Benefits Trust Employer Name:
USBNA; PFM Asset Management LLC (“PFMAM”); PFM Fund Distributors, Inc. (“PFMFD”); U.S. Bancorp Asset Management, Inc. (“USBAM”); and U.S. Bancorp Fund Services, LLC (“USBFS”) are affiliates of U.S. Bancorp (collectively with U.S. Bancorp, "U.S. Bank"). This Fee Schedule, together with the trust agreement and adoption agreement between the Customer (as defined below) and USBNA regarding the Account (“Account’s Governing USBNA Service Contract(s)”), describes services that U.S. Bank expects to provide to the Account pursuant thereto and compensation that U.S. Bank expects to receive therefor:
Account Profile (Part A): Describes the Account and U.S. Bank’s role with respect to the Account.
Account-level Fees (Part B): Describes fees U.S. Bank receives directly from the Account (the “Account Fees”).
Fund-level Fees (Part C): Describes fees the Account pays on the investment of Account assets in open-end investment companies registered under the Investment Company Act of 1940 (“Mutual Funds”), 3(c)(1) or (7) funds (“Private Funds”), bank-maintained collective trust funds (“CTFs”), and nonbank-maintained group trusts (“Group Trusts”) (each of the foregoing, a "Fund") (the “Fund Fees”) and fees U.S. Bank receives from those investments or their agents (“U.S. Bank Revenue Share”).
Other Compensation (Part D): Describes compensation that U.S. Bank receives other than Account Fees or U.S. Bank Revenue Share (“Other Compensation”).
Changes (Part E): Describes circumstances under which this Fee Schedule may be changed.
Approval (Part F): Provides the customer’s approval of the fees described herein.
ACCOUNT PROFILE (PART A)
1. The Account holds assets of a health or welfare plan. The undersigned is the plan’s primary fiduciary (the “Customer”).
2. USBNA has discretion to invest Account assets to the extent provided in the Account’s Governing USBNA Service Contract(s) (to such extent, a “Managed Account”). PFMAM (the “Sub-Adviser”) invests Account assets in its discretion (a “Sub-Advised Account”) by way of a sub-contract between USBNA and the Sub-Adviser, the Sub-Adviser is an investment adviser registered under the Investment Advisers Act of 1940 (an “RIA”), and the Sub-Adviser’s Form ADV is available at https://adviserinfo.sec.gov/.
3. USBNA holds Account assets as trustee under a trust agreement adopted by the Customer. The Customer is the plan sponsor.
ACCOUNT-LEVEL FEES (PART B)
The Account Fees, which are in addition to Fund Fees and are paid directly to USBNA, are as follows. For a complete description of services that U.S. Bank expects to provide to the Account, see the Account’s Governing USBNA Service Contract(s).
Discretionary-trustee fee: Provide investment management. This fee is calculated in tiers:
35 basis points on the first $ 5,000,000 of Account assets 25 basis points on the next $ 5,000,000 of Account assets 20 basis points on the next $ 5,000,000 of Account assets 15 basis points on the next $ 35,000,000 of Account assets 10 basis points on the balance of Account assets
For assets invested in the First American Funds (as defined below) or PFMAM Funds (as defined below) or in a deposit account at USBNA, the rate is 0 bps, and the assets are excluded from the tiers above.
FOR A SUB-ADVISED ACCOUNT, if the Sub-Adviser or its affiliate is an investment advisor to a Mutual Fund (any such Mutual Fund, a “Sub-Adviser’s Mutual Fund”), then for assets invested in the Sub-Adviser’s Mutual Funds, the rate is 0 bps, and the assets are excluded from the tiers above. (U.S. Bank compensates the Sub-Adviser from U.S. Bank’s own fees; the Account does not pay fees in addition to the fees stated herein in connection with services provided by the SubAdviser.) Manner of Receipt. Account Fees will be calculated monthly. Account balances held in OPEB and Pension within the Trust will be combined for fee calculations. Any asset-based Account Fees will be based on the applicable Account balance (or portion thereof) as of the end of the SAMPLE 170
billing period. (The asset values used in such calculation may vary from the asset values reported on an asset statement because of timing issues, such as the posting of accruals or the late-pricing of securities.) Account Fees will then be charged to the Account.
FUND-LEVEL FEES (PART C)
Fund Fees. Fund Fees, and U.S. Bank Revenue Share, are based on investment in a Fund and may vary by Fund and by class of shares or units issued by the Fund. Fund Fees are charged against the Fund's assets and reduce the Fund’s average daily balance and investment yields. U.S. Bank Revenue Share is paid indirectly from the Fund Fees and is not in addition to the Fund Fees.
Additional Investment-Related Information. See a Mutual Fund’s prospectus; a Private Fund’s, CTF’s, or Group Trust’s governing documents (such as a limited liability company agreement, limited partnership agreement, trust agreement, or declaration of trust), offering documents (such as an offering circular, offering memorandum, private placement memorandum, prospectus, or summary description), and subscription documents (such as an adoption agreement or subscription agreement); and any Fund’s fund-fact sheet, schedule of portfolio holdings, and annual report (collectively, as applicable, the “Fund-Issuer’s Disclosure”) for Fund details not reflected in this Fee Schedule.
See, especially, sections thereof regarding fees, expenses, additional compensation, and payments to financial intermediaries.
Total Annual Operating Expenses (“TAOE”). From time to time, a Fund’s service provider may voluntarily waive a portion of the fees it is entitled to receive for servicing the Fund or refund such a portion to a Fund investor. The term TAOE, as used herein, means the TAOE before waivers and refunds. If a waiver is in effect, the Customer’s approval of Fund Fees and U.S. Bank Revenue Share includes approval up to the TAOE; if the service provider terminates the waiver as provided in the Fund-Issuer’s Disclosure, the approval persists.
Estimating U.S. Bank Revenue Share. To estimate the amount of U.S. Bank Revenue Share, multiply the Account’s average balance in a Fund over the relevant year by the fee rate set forth in the appropriate sub-column of the Rate-of-Fees-Received-By column below. (For help with estimating average balances, contact USBNA.) Except for the rates of USBNA’s fees from National Financial Services LLC (EIN: 04- 3523567) (“NFS”), USBAM’s fees, and PFMAM’s fees, those fee rates are estimates. U.S. Bank calculates those estimated fee rates as follows: (i) Start with the total amount of fees received by the applicable U.S. Bancorp affiliate with respect to the Fund during the most recently ended calendar year; and (ii) Divide by the total value of all Fund shares serviced by the affiliate as of that calendar-year end. The sum of the fee rates in the sub-columns will not necessarily equal the TAOE, because the TAOE might be based on a different time period than such fee rates and because service providers unaffiliated with U.S. Bank might receive fees from the Fund. Actual fees may vary from such estimates and year to year.
Omnibus Accounts. Certain portfolios known as “Omnibus Accounts” are available to the plan under the Account’s Governing USBNA Service Contract(s), and those portfolios include Mutual Funds. If the plan selects an Omnibus Account, then Account assets are invested in Mutual Funds accordingly. Such Mutual Funds are listed below if they pay U.S. Bank Revenue Share.
First American Funds. USBAM is the investment advisor to the Mutual Funds in the First American Funds Trust family (the "First American Funds"). First American Funds issue shares in multiple classes, and their fees may vary by class. U.S. Bank may enter into agreements with First American Funds or with First American Funds’ service providers (including investment advisers, administrators, or transfer agents) whereby U.S. Bank provides services to the First American Funds, including, as applicable, services provided by USBAM (investment advisory, shareholder services), by USBNA (custody, shareholder services), and by USBFS (accounting, administration, transfer agency, shareholder services), and receives fees for these services from the Fund or the Fund’s sponsor or agent. Prospectuses for First American Funds are available at https://www.firstamericanfunds.com/index/FundPerformance/ShareholderDocuments.html.
Rate Of Fees Received By (%)
Fund Name Ticker Share
Class USBAM1 USBNA1 USBFS1 TAOE(%)
TAOE After
Waiver
(%)2
First American Government Obligs X FGXXX X 0.10 0.10 - 0.14 0.13 1— These fees are received from the Fund.
2— This amount is the TAOE less U.S. Bank’s voluntary waiver, if any, of a portion of the fees it is entitled to receive for servicing the Fund.
PFMAM Funds. PFMAM is the investment advisor to the Mutual Funds in the PFM Multi-Manager Series Trust (the "PFMAM Funds"). U.S. Bank may enter into agreements with PFMAM Funds or with PFMAM Funds’ service providers (including investment advisers, administrators, transfer agents, or distributors) whereby U.S. Bank provides services to the PFMAM Funds, including, as applicable, services provided by PFMAM (investment advisory), by USBNA (shareholder services), and by PFMFD (distribution), and receives fees for these services from the Fund or the Fund’s sponsor or agent. Prospectuses for PFMAM Funds are available at https://mmst.pfmam.com/forms-documents.
Rate Of Fees Received By (%)
Fund Name Ticker Share
Class PFMAM1 USBNA1 PFMFD1 TAOE(%)
TAOE After
Waiver
(%)2
Not Applicable
SAMPLE 171
Other Mutual Funds. U.S. Bank may enter into agreements with Mutual Funds other than First American Funds or PFMAM Funds (“Other Mutual Funds”) or with Other Mutual Funds’ service providers (including investment advisers, administrators, transfer agents, or distributors) whereby U.S. Bank provides services to the Other Mutual Funds, including, as applicable, services provided by USBNA (custody, securities lending, shareholder services, National Securities Clearing Corporation (NSCC) networking) and by USBFS (accounting, administration, transfer agency), and receives fees for these services from the Fund or the Fund’s sponsor or agent. Prospectuses for Other Mutual Funds are available at https://www.sec.gov/edgar/searchedgar/prospectus.
Rate Of Fees Received By (%)
Fund Name Ticker Share
Class
USBNA3
(not from
NFS)
USBNA4
(from
NFS)
USBFS3 TAOE
(%)
Not Applicable
Private Funds; CTFs; Group Trusts. U.S. Bank may enter into agreements with Private Funds, CTFs, or Group Trusts or with their service providers, whereby U.S. Bank provides services to such Funds, including, as applicable, services provided by USBNA (custody) and by USBFS (accounting, administration, shareholder services, transfer agency), and receives fees for these services from the Fund or the Fund’s sponsor or agent.
OTHER COMPENSATION (PART D)
Float Income. USBNA may hold (i) cash awaiting either investment or distribution to proper recipients or (ii) funds held for other purposes (for example, pending investment following a trade fail, because funds were received too late to be posted the same day, or pursuant to an investment direction) in a noninterest-bearing deposit account at USBNA and, thereby, earn and retain income on the float as part of its fees for servicing the Account. The payors of the float income are other financial institutions that borrow USBNA’s deposits on a short-term basis.
For cash awaiting investment, the float period is generally no longer than one business day following the receipt by USBNA of such cash.
However, if the Customer fails to provide adequate information concerning the allocation of contributions (or, if applicable, if there is no participant investment direction), the float period may last until such date as USBNA receives clear, comprehensive directions (in accordance with applicable trading deadlines) as to how such cash should be allocated and invested. For distributions made from the Account, the float period commences on the date the check, wire transfer, or electronic transfer is issued to a proper recipient and ends on the date the check is presented to USBNA for payment and settles or wire or electronic transfer is accepted by the receiving institution. The time period involved varies for each payment issued, though the average time such payments remain outstanding is one (1) to fifteen (15) calendar days from the date of issuance. For funds held for other purposes, the float period commences on the date good funds are deposited in the applicable deposit account and ends on the date the funds are withdrawn or transferred therefrom, such as ending upon actual trade settlement (for funds held pending investment following a trade fail) or on the next business day (for funds received too late to be posted the same day).
The float rate on (i) cash awaiting investment; (ii) un-cashed checks, pending wire transfers, and pending electronic transfers and (iii) funds held for other purposes is generally no more than the Target Federal Funds Rate (the “Target Rate”) of interest applicable during the period involved. The Target Rate is the short-term rate objective announced by the Federal Reserve. The actual rate of interest paid between banks is the Effective Federal Funds Rate (the “Effective Rate”). The Effective Rate changes daily but is generally close to the Target Rate. Changes to the Target Rate are made by the Federal Reserve’s Open Market Committee. The announced Target Rate can be obtained upon request from your account representative or can be found in the Wall Street Journal.
Expenses. Expenses, fees, costs, and other charges incurred by USBNA in providing services under the Account’s Governing USBNA Service Contract(s) are expenses of the Account.
Advance of Funds. If USBNA advances funds in furtherance of settling the redemption of Fund shares or units, then the yield, if any, paid on the shares or units that were treated as redeemed is retained by USBNA as part of its fees for servicing the Account.
CHANGES (PART E)
USBNA may amend this Fee Schedule by delivering to the Customer an amended and restated Fee Schedule (or another written notice of the change). If the Customer does not deliver a written objection to USBNA within sixty (60) calendar days thereafter, the new fee schedule will become effective.
This Fee Schedule need not be amended to reflect the Account’s complete divestment from a Fund.
USBNA will not notify the Customer of (i) the re-investment of Account assets into a Fund not listed above which pays U.S. Bank Revenue Share or (ii) a change to a U.S. Bank Revenue Share rate listed above, except insofar as the Customer thereafter asks USBNA for an amended and restated Fee Schedule and such Fund or revised rate is reflected therein. The Customer’s approval of Fund Fees and U.S. Bank Revenue Share includes approval of the Fund Fees and U.S. Bank Revenue Share that would be described in any such amended and restated Fee Schedule. As such, the Customer should request an amended and restated Fee Schedule periodically and in connection with re-investment of Account assets.
SAMPLE 172
APPROVAL (PART F)
First American Funds or PFMAM Funds. The Customer hereby acknowledges as follows: Fund-level Fees (Part C) hereof describes Fund Fees and U.S. Bank Revenue Share of the identified First American Funds and PFMAM Funds, including any differential among Fund Fees and U.S. Bank Revenue Share of such Funds. Account-level Fees (Part B) hereof describes Account Fees, including the rate of the account-level investment-management fee for Account assets invested in such Funds. The prospectus for such a Fund provides additional information about fees paid by the Fund. Investment in such Funds offers diversified cash management investments and other features that are appropriate for the Account, including that the Funds are valued daily, may be bought or sold on any business day, and prices of the Funds are listed daily in most major newspapers and Internet financial sources. Account assets will not be invested in a share class that charges any sales commissions, loads, or transfer fees for buying or selling such Fund shares. Account assets will not be invested in a share class that charges any redemption fee for selling such Fund shares, unless such redemption fee is paid only to the Fund and is disclosed in the Fund’s prospectus atthe time of purchase and sale of such shares. Account assets may only be eligible to be invested in certain share classes of some of such Funds, as described in the Funds' prospectuses.
Acknowledgement. The Customer hereby acknowledges that it:
● is independent of U.S. Bank and has authority to enter into, extend, and renew contracts for the services described herein and to approve the fees described herein.
● received, read, understands, and executed the Account’s Governing USBNA Service Contract(s). ● obtained, read, and understands the Fund-Issuer’s Disclosure for each Fund, including, but not limited to, the sections thereof describing fees, expenses, and compensation, and acknowledges that the purchase or sale of Fund shares or units is subject to the terms of the Fund-Issuer’s Disclosure. ● expects to neither cause nor permit the Account to acquire any foreign securities. ● understands and approves the services and fees described herein, including the Account Fees, the Fund Fees for each Fund, U.S. Bank Revenue Share for each Fund, and the Other Compensation. ● agrees to the process described herein for amending this Fee Schedule. ● understands that, subject to the Account’s investment guidelines, Account assets may be invested in any Fund.
The Customer hereby executes this Fee Schedule.
Customer: _______________________________________________________ (Printed name of employer)
By: _______________________________________________________ (Signature of Customer’s authorized officer)
_______________________________________________________ (Printed name of Customer’s authorized officer)
Its: _______________________________________________________ (Title of Customer’s authorized officer)
Dated: _______________________________________________________ Shares of registered investment companies, and units of private funds, bank-maintained collective trust funds, and nonbank-maintained group trusts, are not deposits or obligations of, or endorsed or guaranteed in any way by, any bank, including any bank affiliated with U.S. Bancorp. Nor does the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other governmental agency insure such products. An investment in such products involves investment risks, including the possible loss of principal, due to fluctuations in each product's net asset value. Deposit products are offered by U.S. Bank National Association, member FDIC.
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT To help the United States fight the funding of terrorism and money laundering activities, U.S. law requires U.S. Bancorp, like other financial institutions, to obtain, verify, and record information that identifies each customer that opens an account.
What this means for you: When you open an account with us, we will ask for your legal name, address, tax identification number, and other identifying information that will assist us. We may ask for copies of certified articles of incorporation, an unexpired government-issued business license, a partnership agreement, or other documents that indicate the existence and standing of the entity.
SAMPLE 173
ADOPTION AGREEMENT
for the
POST-EMPLOYMENT SECTION 115 TRUST
A.1.1. Trust agreement with U.S. Bank National Association (the “Bank”) (the “Trust Agreement”):
Post-Employment Section 115 Trust. Public Agencies Post-Employment Benefits—Trust Agreement, effective November 5, 2014
A.1.2. OPEB Plan: Public Agencies Post-Employment Health Care Plan The plan document for the OPEB Plan is the Public Agencies PostEmployment Health Care Plan—Master Plan Document, effective as of November 5, 2014 (the “Plan Document”).
A.1.3. Pension Plan:
A.1.4. Pension Plan’s
effective date:
□ (Check if applicable) Additional Pension Plans (and their respective effective dates) are listed on an exhibit attached hereto.
A.2.1. Employer:
Name:
U.S. mail address:
Phone number:
EIN:
Fiscal year end:
A.2.2. Plan Administrator:
Position at Employer:
Incumbent:
U.S. mail address:
Phone number:
Email address:
174
A.3.1 Adoption. The Employer hereby:
A.3.1.1. Adopts the Trust Agreement as part of the (Check one or both of the following boxes.):
□ OPEB Plan
□ Pension Plan
(each such plan separately, the “Plan”) and agrees to be bound by the Trust Agreement’s terms, effective as of the Employer’s signature date below and subject to the investment approach selected below.
A.3.1.2.The following provisions apply if and only if the OPEB Plan box above is checked: (i) Adopts the Plan Document and agrees to be bound by the Plan Document’s terms, effective as of the Employer’s signature date below and (ii) acknowledges that the determination of Eligible Employees and Eligible Beneficiaries is finally and conclusively made by the Employer according to the Employer’s applicable policies and collective bargaining agreements and without reference to the Trust Agreement.
A.3.1.3. Ratifies, affirms, and approves Employer’s appointment of Phase II Systems as Trust Administrator and represents and warrants that attached hereto is a fully-executed original of Employer’s Agreement for Administrative Services with Phase II Systems, d/b/a Public Agency Retirement Services (PARS).
A.3.1.4. Agrees that capitalized terms used herein but not defined herein shall have the same meaning attributed to them as in the Trust Agreement or Plan Document, as the case may be.
A.4.1. The Employer hereby represents and warrants that:
A.4.1.1. Authorizing Law. Employer has reviewed with its legal counsel and has determined that Employer is authorized to establish and maintain the Plan and to establish a financialinstitution trust (separate and apart from the state) for the Plan, including the authority to adopt the Trust Agreement.
A.4.1.2. Authorizing Resolution. Attached hereto is a certified copy of a resolution of the Employer’s governing body authorizing the adoption of the Trust Agreement as part of the Plan and authorizing the appointment of the Plan Administrator designated by position of employment at the Employer to act on the Employer’s behalf in all matters relating to the trust.
A.4.1.3. Tax Status. The Plan is a “governmental plan” as defined in Section 414(d) of the Internal Revenue Code of 1986, as amended; is a “Section 401(a)(24) governmental plan” as defined in Revenue Ruling 2011-1; and is not subject to Federal income taxation. The Plan’s governing document expressly provides that it is irrevocably impossible for any part of the corpus or income of the Plan to be used for, or diverted to, purposes other than for the exclusive benefit of the Plan participants and their beneficiaries. The Pension Plan is a qualified plan under Code Section 401(a). (In addition, the Employer hereby acknowledges that the Plan is prohibited from assigning any part of its equity or interest in the trust.)
175
A.4.2. Investment Approach.
A.4.2.1. The following provisions apply if and only if the OPEB Plan box above is checked:
OPEB Account. OPEB Account assets are invested in the discretion of (check one and only one of the following boxes):
Discretionary investment approach:
□ The Bank, subject to Exhibit A (Investment Strategy Selection and Disclosure Form) hereto.
Directed investment approach:
□ The Plan Administrator.
□ The following registered investment adviser, bank (other than the Bank), or insurance company (a “Third-Party Manager”):
. The Employer
hereby represents and warrants that attached hereto is an executed copy of the agreement with the above appointed Third Party Manager.
A.4.2.2. The following provisions apply if and only if the Pension Plan box above is checked:
Pension Account. Pension Account assets are invested in the discretion of (check one and only one of the following boxes):
Discretionary investment approach:
□ The Bank, subject to Exhibit A (Investment Strategy Selection and Disclosure Form) hereto.
Directed investment approach:
□ The Plan Administrator.
□ The following registered investment adviser, bank (other than the Bank), or insurance company (a “Third-Party Manager”):
. The Employer
hereby represents and warrants that attached hereto is an executed copy of the agreement with the above appointed Third Party Manager.
A.4.3. It is intended that any references to GASB pronouncements and/or statements in the Public Agencies Post-Employment Health Care Plan and Trust Agreement shall incorporate any applicable successor pronouncements and/or statements.
[signature page follows]
176
EMPLOYER
By:
Its:
Date:
Accepted by: PHASE II SYSTEMS, DBA PUBLIC AGENCY
RETIREMENT SERVICES (PARS)
By:
Daniel Johnson
Its: President
Date:
U.S. BANK NATIONAL ASSOCIATION
By:
Ryan Maxey
Its: Vice President and Relationship Manager
Date:
177
Internal Revenue Service
Index Number: 115.00-00
U.S. Bank National Association
c/o Susan Hughes, Vice President
3121 Michelson Drive (Suite 300)
Irvine, CA 92612
Legend
Department of the Treasury
Washington, DC 20224
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
Robin J. Ehrenberg, ID No. 1000219292
Telephone Number:
(202) 317-5800
Refer Reply To:
CC:TEGE:EOEG:EO3
PLR-146796-14
Date: June 5, 2015
Trust =
Trust Agreement =
Public Agencies Post-Employment Benefits Trust
Public Agencies Post-Employment Benefits Trust
Agreement
Trustee =
Dear Ms. Hughes:
U.S. Bank National Association
This letter responds to a letter from your authorized representative dated December 22, 2014, requesting rulings that (1) the Trust's income is excludable from gross income under section 115 of the Internal Revenue Code (IRC) and (2) the Trust is not required to file annual federal income tax returns under IRC section 6012(a)(4). The Trust represents the facts as follows:
FACTS
The Trust is a multiple employer trust established to enable public-agency employers to fund post-retirement employee benefits. Each participating employer must be a public agency that is a state, political subdivision of a state, or an entity the income of which is excludable from gross income under IRC section 115. The employer's governing body must authorize in writing the adoption of the Trust and the employer must execute the adoption agreement, which approves the Trust's administrator and provides that the agency adopts and agrees to be bound by the Trust Agreement. In the adoption agreement, the employer elects to fund obligations to provide benefits under a postemployment health care plan and contribute to a defined-benefit pension plan maintained by the employer that is qualified under IRC section 401 (a). The employer may elect to fund either or both obligations.
178
PLR-146796-14 2
The Trust Agreement provides that assets are held by the Trust for the exclusive purpose of funding participating employers' benefit obligations and defraying the reasonable expenses of the Trust. The Trust's assets may not be used for any other purpose. Each employer's contributions to the Trust, together with any allocable investment earnings and losses, are held in a separate account for that employer.
Assets allocated to satisfy an employer's health and welfare benefit obligation or the employer's pension obligation may only be used for purposes of satisfying that particular obligation. The assets held in an employer's account are not available to pay any obligations incurred by any other employer.
The employers appoint the Trustee and the Trust's administrator and may remove the Trustee or the administrator by a two-thirds vote of all employers. The employers may amend the Trust Agreement with the approval of two-thirds of all employers then participating in the Trust. The employers may terminate the Trust by unanimous agreement of all employers.
Upon termination of the Trust, any assets remaining in an employer's account, after satisfaction of benefit and the Trust's obligations are returned to the employer to the extent permitted by law and consistent with the requirements of IRC section 115.
LAW AND ANALYSIS
Issue 1 - IRC section 115(1)
IRC section 115(1) provides that gross income does not include income derived from any public utility or the exercise of any essential governmental function and accruing to a state or any political subdivision thereof.
Rev. Rul. 77-261, 1977-2 C.8. 45, holds that income generated by an investment fund that is established by a state to hold revenues in excess of the amounts needed to meet current expenses is excludable from gross income under IRC section 115(1 ), because such investment constitutes an essential governmental function. The ruling explains that the statutory exclusion is intended to extend not to the income of a state or municipality resulting from its own participation in activities, but rather to the income of an entity engaged in the operation of a public utility or the performance of some governmental function that accrues to either a state or political subdivision of a state. The ruling points out that it may be assumed that Congress did not desire in any way to restrict a state's participation in enterprises that might be useful in carrying out projects that are desirable from the standpoint of a state government and that are within the ambit of a sovereign to conduct.
179
PLR-146796-14 3
Rev. Rul. 90-74, 1990-2 C.B. 34, holds that the income of an organization formed, funded, and operated by political subdivisions to pool various risks (e.g., casualty, public liability, workers' compensation, and employees' health) is excludable from gross income under IRC section 115(1 ), because the organization is performing an essential governmental function. The revenue ruling states that the income of such an organization is excludable from gross income so long as private interests do not participate in the organization or benefit more than incidentally from the organization.
The benefit to the employees of the insurance coverage obtained by the member political subdivisions was deemed incidental to the public benefit.
Through the Trust, participating public agency employers fund health and welfare and pension obligations for retired employees. Each of the Trust's participating employers is required to be a state, political subdivision of a state or an entity the income of which is excludable from gross income under IRC section 115. Providing health, welfare and pension benefits to current and former employees constitutes the performance of an essential government function within the meaning of IRC section 115(1 ). See Rev. Rul. 90-74 and Rev. Rul. 77-261.
The Trust's income accrues to its participating employers, all of which are political subdivisions of a state or entities the income of which is excludable from gross income under IRC section 115. No private interests will participate in, or benefit from, the operation of Trust, other than as providers of goods or services. The benefit to employees is incidental to the public benefit. See Rev. Rul. 90-74.
In no event, including dissolution, will the Trust's assets be distributed or revert to any entity that is not a state, a political subdivision of a state, or entity the income of which is excludable from its gross income by application of IRC section 115(1 ).
Issue 2- IRC section 6012(a)(4)
Section 301. 7701-1 (b) of the Procedure and Administration Regulations (Regulations) provides that the classification of organizations that are recognized as separate entities is determined under sections 301.7701-2, 301.7701-3, and 301.7701-4, unless a provision of the IRC provides for special treatment of that organization.
Section 301.7701-4(a) of the Regulations provides that, in general, an arrangement will be treated as if it can be shown that the purpose of the arrangement is to vest in trustees responsibility for the protection and conservation of property for beneficiaries who cannot share in the discharge of this responsibility and, therefore, are not associates in a joint enterprise for the conduct of business for profit.
The Trust enables public-agency employers to set aside funds to be used to satisfy each employer's separate pension and health and welfare benefit obligations. The 180
PLR-146796-14 4
Trustee is charged with the responsibility of the protection and conservation of the Trust property for the benefit of the beneficiaries of the Trust. The beneficiaries of the Trust cannot share in the discharge of the Trustee's responsibility for the protection and conservation of property and, therefore, are not associates in a joint enterprise for the conduct of business for profit. IRC section 6012(a)(4) provides that every trust having for the taxable year any taxable income or having gross income of $600 or more, regardless of the amount of taxable income, shall make returns with respect to income taxes under Subtitle A.
Based solely on the facts and representations submitted by the Trust, we conclude that:
1. Because the income of the Trust derives from the exercise of an essential governmental function and will accrue to a state or a political subdivision thereof, the Trust's income is excludable from gross income under IRC section 115( 1 ).
2. The Trust is classified as a trust within the meaning of IRC section 7701 (a) and section 301. 7701-4(a) of the Regulations. Because Trust's income is excludabfe from gross income under IRC section 115, the Trust is not required by IRC section 6012(a)(4) to file an annual income tax return.
Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter. This ruling concerns only the federal tax treatment of the Trust's income and may not be cited or relied upon by any taxpayer, including the Trust, employers participating in the Trust, and any recipients of benefits paid under the terms of the Trust, as to any matter relating to the taxation of accident or health contributions or benefits.
This ruling is directed only to the taxpayer who requested it. IRC section 611 0(k)(3) provides that it may not be used or cited as precedent.
In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.
A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter ruling.
181
PLR-146796-14 5
The rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination. cc: Marcus Wu
Sincerely,
K Kenneth M. n in
Branch Chief, Exempt Organizations Branch 3
(Tax Exempt and Government Entities)
Pillsbury Winthrop Shaw Pittman LLP
12255 El Camino Real, Suite 300
San Diego, CA 92130-4088
Paul Marmolejo
Director, Office of Federal, State and Local Governments SE:T:GE:FSL
182
CITY COUNCIL STAFF REPORT
Agenda Item 8.b
Meeting Date: August 11, 2025
SUBJECT: Wine Country Half Marathon Update
PREPARED BY: Candice Libera, Marketing and Events Coordinator
DISCUSSION
This informational report outlines the specific stipulations and mitigation measures required of the Wine Country Half Marathon organizers for all future events. These measures are in direct response to concerns raised by residents, business owners, and City staff following the 2025 event.
BACKGROUND:
The Wine Country Half Marathon is a well-attended annual event that draws more than 2,500 participants and visitors, 30% which are from out of state and from six different countries, contributing meaningful economic benefits to Solvang and the surrounding region. However, the 2025 event raised some operational and community concerns, particularly regarding event setup, insufficient recognition of the host city, disruptions to local businesses, and inadequate post-event cleanup.
To address these issues and minimize negative impacts moving forward, City staff have collaborated with event organizers to develop a comprehensive list of stipulations for the 2026 event.
Stipulations and Mitigation Measures:
1. Event Course Layout and Economic Impact
Concern: The current finish line location on Copenhagen Drive between Second Street and First Street has created access issues for surrounding businesses that some feel have negatively impacted sales.
Mitigation: The course layout will be revised to reduce disruption to downtown commerce, particularly along Copenhagen Drive. Final approval of the course will be determined by the City. The event organizer has committed to submitting a revised finish line layout for review.
2. Event Cleanup and Equipment Removal
Concern: Post-event cleanup was incomplete, with equipment left behind and trash—including debris like zip ties and electrolyte packets scattered along the course and in Solvang Park.
Mitigation: A formal post-event cleanup contract with a City-approved vendor will be required.
Additionally staff reached out and are working collaboratively with Santa Barbara County, which is also requiring the same contract for the portion of the route in their jurisdiction. Additional waste and recycling receptacles must be placed throughout the event route. Organizers are responsible for full cleanup of all race-related materials along the entire course and venue area.
3. Park and Turf Protection
Concern: Equipment with metal bases, such as umbrella stands, caused burn marks in Solvang Park, damaging the turf.
Mitigation: No equipment with metal bases may be placed directly on grass unless protective measures are used. Turf pads with aeration holes or risers are required beneath all such equipment. Any park or landscaping damage, including burned grass, will be repaired at the organizer’s expense. 183
4. Branding and Host City Recognition
Concern: The event title, "Santa Barbara Wine Country Half Marathon," lacks clear acknowledgment of Solvang as the host city.
Mitigation: All marketing materials, digital platforms, and event swag will prominently feature "Solvang, CA".
5. Compliance Deposit
A refundable compliance deposit of $5,000 is required no later than 21 days before the event. This deposit will be used to cover actual City costs related to the event (e.g., staff time, cleanup, infrastructure support). Any unused portion of the deposit will be returned following the event, pending final inspection. The compliance deposit is in addition to any and all other required special event fees and deposits.
RECOMMENDED MOTION:
None. Informational item only.
ALTERNATIVES: N/A
FISCAL IMPACT: There is no direct fiscal impact from this report. However, City costs related to public safety, traffic control, and Public Works support will be recovered through the Special Event Permit process and compliance deposit as applicable.
ATTACHMENTS: None
184
CITY COUNCIL STAFF REPORT
Agenda Item 8.c
Meeting Date: August 11, 2025
SUBJECT: Discussion and Update on Julefest 2025
PREPARED BY: Candice Libera, Marketing and Events Coordinator
DISCUSSION
This informational report provides an update on the planning and logistics for Julefest 2025 and proposes a partial street closure on Copenhagen Drive to enhance pedestrian safety and improve event and traffic flow through the month of December
Julefest is Solvang’s signature holiday celebration, attracting hundreds of thousands of visitors throughout the month of December. Approximately 807,000 out of market visitors come through Solvang in December. The event includes a variety of family-friendly programming such as the Tree Lighting ceremony, Julefest Parade, Santa’s Village, nightly light and music shows, outdoor Maker’s Market, a New Years event, and Tree Burn. With increasing foot traffic during weekends and peak event days, the City continues to explore strategies to balance public safety, traffic circulation, parking availability, and budget-conscious staffing models.
Parking and Access Management
Parking demand increases significantly during Julefest, creating challenges in managing the City’s limited parking supply and maintaining efficient traffic circulation. To address these concerns, the City is evaluating several strategies, including collaboration with private property owners to expand parking availability, and the implementation of improved wayfinding signage. These efforts aim to reduce congestion, enhance the visitor experience, and ensure continued access for residents, employees, and local businesses.
Pedestrian Safety, Circulation, and Traffic Flow Management Another ongoing challenge during Julefest is ensuring safe and manageable pedestrian and vehicle circulation, particularly at the intersection of Alisal Road and Copenhagen Drive, where heavy foot traffic intersects with regular vehicle movement. To address this issue last year, the City implemented multiple crossing guards to manage pedestrian crossings.
To enhance pedestrian safety, streamline event operations, and improve overall traffic flow management, staff proposes a partial closure of Copenhagen Drive between First Street and Alisal Road during Julefest. This section experiences significant pedestrian volume. Closing this segment to vehicles would reduce congestion, eliminate right and left hand turns onto Copenhagen Drive, minimize vehicle-pedestrian conflict points, and simplify traffic control in the area. Additionally, this closure would reduce the need for a crossing guards at Alisal Road, allowing funds for that one crossing guard to be reallocated toward additional crossing guards at other intersections and broader security coverage throughout downtown on weekends, further enhancing public safety during the busy event season. For high-attendance events such as the Tree Lighting Ceremony and Copenhagen Countdown, staff also propose temporarily closing First Street between Mission Drive and Copenhagen Drive. This closure will ensure a safe and efficient pedestrian exit and help prevent potential conflicts between vehicles and large crowds.
Anticipated Benefits and Considerations
• Improved Pedestrian Experience: Creates a safe, car-free environment allowing families and children to move freely.
185
• Operational Efficiency: Eliminates the need for at least one staffed pedestrian crossing location, reducing the number of required crossing guards and associated expenses that can be budgeted elsewhere.
• Enhanced Public Safety: By reducing traffic flow through key pedestrian areas, the City can proactively prevent accidents and enhance emergency response access during crowded conditions.
• Parking Consideration: The proposed closure would result in the temporary loss of approximately 30 parking spaces. This impact should be considered in the context of the potential improvements to pedestrian safety and overall event operations.
RECOMMENDED MOTION:
None. This information is being provided to Council so that they and our residents will be aware of the proposed changes for this year’s Julefest festivities.
ALTERNATIVES:
If Council wishes to modify the changes proposed, please provide alternative direction.
FISCAL IMPACT:
Additional crossing guards, signage and barricades will be included in the overall traffic control plan and absorbed within the approved Julefest event budget.
ATTACHMENTS:
A – Julefest Street Closure Map
186
Copenhagen Drive Closure
First Street Closure
Mission Drive
187
CITY COUNCIL STAFF REPORT
Agenda Item 8.d
Meeting Date: August 11, 2025
SUBJECT: Vacation Rental/Short Term Rental Ordinance Amendment PREPARED BY: A. Rafael Castillo, AICP, Community Development Director DISCUSSION:
Background
At its March 2025 meeting, the City Council directed city staff to begin revisions to the City’s Vacation rental ordinance which would include a framework of an ordinance for further input from the City Council and residents.
Short Term Rental Ordinance Framework
To complete the framework of the ordinance, staff requests input from the City Council on a few components of the draft ordinance.
Should the City of Solvang allow vacation rentals outside the Village Mixed Use zone (VMU, formerly TRC)?
There are pros and cons to expanding the area where short-term rentals are allowed and only allowing them in the village. The Council may elect to continue with its current approach of only allowing shortterm rentals in the village. Property owners who are currently advertising short-term rentals outside of the village will have no path forward to legalizing these units and will enter into code enforcement for compliance with the existing and future ordinance. If the Council chooses to direct staff to allow shortterm rental units within other residential areas, owners currently operating unpermitted short-term rentals would have a path forward to come into compliance under a new ordinance. This action would likely reduce the number of units either utilized for permanent long term rental housing or for sale units and may create neighborhood friction between existing residents in the neighborhood and the unit being rented out to visitors.
The potential components of an ordinance and additional considerations for Council under either approach are discussed below.
If the Council directs staff to continue to only allow short term rentals in the village, then City staff recommends bringing back a draft ordinance that would:
• Allow vacation rentals in the Village Mixed-Use Zone only, removing the existing carve out for R-3 zoned properties. Permits would be non-transferable and must be renewed annually. • Allow existing vacation rental owners in R-3 zones properties to apply as a “non-conforming” vacation rental within a certain time frame from adoption of the ordinance. o For the “non-conforming” short-term vacation rentals, staff requests City Council provide direction on whether to:
i. Allow only the existing property owner to apply for a “non-conforming” short term rental permit that is non-transferable at time of sale and must be renewed annually. If this option is selected, the maximum number of “non-conforming” short term rental permits would be set and would naturally decline over time. ii. Allow the right for a short-term rental permits to be transferred to a new property owner.
• Staff also requests Council direction on whether to place a cap on the number of short-term rental permits to ensure new residential units are preserved for permanent housing. The cap could be on the total number of permits allowed in the City at a given time, or it could limit the number of permits that may be issued per property or structure. 188
If Council directs staff to allow vacation rentals outside of the VMU, staff requests the Council also consider and provide direction on whether to:
• Issue permits on a first come, first served basis.
• Establish a cap on the number of vacation rental permits issued. The Housing Element estimated approximately 2,380 existing housing units in the City. Of those, 898 units were considered “renter occupied”. The Council could consider a percentage of renter occupied units as a cap for either the entire program (including the village), or no cap within the village, and cap outside the village. For example, a cap of 45 units would be 5% of the “renter occupied units”.
• Require a minimum distance between permitted vacation rentals. City staff has the ability to create measured distances from each permit. Utilizing property boundaries, a minimum distance criteria could be utilized, such as 500 feet or 1,000 feet from each permit. • Allow only “owner occupied” vacation rentals, or “home stay rentals” outside of the VMU. This would allow for homeowners to only rent out rooms and to be present on site for stays. • Require enforcement of minimum parking requirements for all units. This would require on-site parking spaces be provided in an amount proportional to the number of bedrooms proposed to be rented. On-street parking could not be utilized to meet parking requirements. Parking would need to be dedicated either on the driveway or in a garage. • Require “Quiet times” from the hours of 10 p.m. to 7 a.m. • Require a cap on the maximum number of occupants proportional to the number of bedrooms rented.
• Require a cap on the number of “daytime visitors” to the rented unit or bedroom. • Establish a 24/7 hotline for neighbors to report illegal activities at permitted short term rentals.
This hotline would be funded through the annual permit fees. • Require notification to neighbors that are within 150-200 feet of an issued short term rental permit.
• Other requirements necessary to alleviate potential neighborhood issues.
RECOMMENDED MOTION
None. Provide direction to staff as discussed below.
ALTERNATIVES:
None. City Council may provide direction to city staff on the above options to continue crafting the revisions to the short-term vacation rental ordinance.
FISCAL IMPACT:
City staff time to craft the proposed ordinance amendments.
ATTACHMENTS:
A – Framework of proposed Vacation Rental Ordinance
189
Draft Vacation Rental/Short Term Rental Ordinance Outline A. Purpose.
1. This Section provides standards to regulate short-term rentals
2. This Section is not intended to provide any owner with the right or privilege to violate any private conditions, covenants and restrictions.
B. Applicability.
1. The provisions of this Section shall apply to all short-term rental units
2. Short-term rental units shall only be allowed within legally constructed units
3. Short-term rentals shall be prohibited in any residence or development subject to an affordable housing covenant (i.e. deed restricted housing) deed restriction imposed or required by the city or qualified density bonus project, Accessory Dwelling Units, and Junior Accessory Dwelling Units.
4. Short-term rentals shall be prohibited in recreational vehicles, motorhomes etc.
C. Permit Required.
1. Requirement to obtain permits.
2. A short-term rental permit must be renewed on an annual basis.
3. Any proposed change to the permit conditions or material facts relating to the information contained in the permit application shall require the owner to submit a new short-term rental permit application.
4. A short-term rental permit is only valid for the address and owner on the short-term rental permit.
5. A short-term rental permit shall be valid only for the number of bedrooms in existence at the time the short-term rental permit is issued.
D. Application Requirements. The owner shall submit a short-term rental permit application, application submittal requirements, and fee approved in the City’s Adopted Fee Schedule.
E. Application Approval. The Review Authority shall approve the short-term rental permit if the owner demonstrates compliance with this Section plus site inspection.
F. Permit Approval Notification. The City shall notify all property owners and occupants in writing within a ___ foot radius upon issuance of a short-term rental permit.
G. Maximum Number of Permits. Section if the Council were to initiate a cap on the number of short term rental permits.
H. Permit Location. Section where short-term rental permits are allowed.
I. Permit and Operating Requirements.
1. Maximum Occupancy requirements based on bedroom size.
2. Parking. Parking requirements.
3. Local Contact Person. Requirement for a local contact person and definition
4. Property Maintenance. Minimum property maintenance standards.
5. Life Safety Measures. Fire and life safety standards.
6. Posting Permit. Requirement to post permits
7. Noise and Conduct.
8. Signage. No on-site signage
9. Advertising Requirements. Minimum requirements for listing on-line.
10. Payment of Transient Occupancy Tax.
11. Business Certificate Requirement
12. Compliance with laws including private governing documents, including, without limitation, conditions, covenants and restrictions (“CC&Rs”) that are valid and enforceable pursuant to the Davis-Stirling Common Interest Development Act, as set 190
forth in California Civil Code Section 4000 et seq., pertaining to the use and occupancy of the short-term rental.
13. Additional conditions or requirements
J. Rental Agreements. Requirements for agreements to rent to occupants or 3rd party platforms.
K. Owner Responsibilities. Requirement that owner or authorized agent takes responsibility for compliance and liability.
L. Violations.
1. Notice of Violation.
2. Hotline. Section provided if Council elects to allow within residential neighborhoods.
3. Administrative Citation. The City may issue an administrative citation to the owner, local contact person, renters,
4. Misdemeanor. Outlines citations that may be elevated to misdemeanors.
5. Additional Conditions.
6. Permit Modification, Suspension and Revocation.
7. Public Nuisance. It shall be a public nuisance for any person to commit, cause or maintain a violation of this Section.
M. Permit Revocations. Section on revoking short-term rental permits.
N. Permit Revocation Process.
1. The Community Development Director shall notify the property owner
2. A property that has a short-term rental permit revoked cannot reapply for a certain period
3. Notification shall be sent to all owners and occupants within ____ feet of the subject short-term rental of any revocation.
4. A decision by the Community Development Director to revoke a short-term rental permit is appealable to the Planning Commission.
O. Denial of Permit. Section for denial of short-term rental permits.
P. Administrative Rules. Should the Council elect to open up rentals in residential neighborhoods, administrative rules document should be crafted in conjunction with any new ordinance.
Q. Definitions.
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CITY COUNCIL STAFF REPORT
AGENDA ITEM 8.e
Meeting Date: August 11, 2025
SUBJECT: Approve Video Surveillance Policy
PREPARED BY: Randy Murphy, City Manager and Olivia Uribe Mutal, Assistant to the City Manager DISCUSSION:
Following the Council's February 2025 direction to explore surveillance expansion and the July 14th, 2025 approval of the XIT Solutions contract for seven Verkada AI-enabled cameras ($147,407.01), staff presents a comprehensive Video Surveillance Policy to guide the implementation and operation of the City's enhanced surveillance system.
This policy incorporates California Joint Powers Insurance Authority (CJPIA) best practices, San Francisco Municipal Transportation Agency models, and California legal requirements including Government Code §34090.6 (365-day retention) and focuses specifically on video surveillance (excluding body cameras).
The policy establishes: Authorized Uses, Prohibited Uses, Technical Standards, Privacy Protection and Transparency, Data Management and Accountability, and Implementation Benefits.
Staff recommends approval of the Video Surveillance Policy to ensure legal compliance, protect civil liberties, provide operational clarity, maintain public transparency, and protect the City's surveillance system investment. The policy serves as a living document that will be reviewed annually and updated as needed, with significant changes returning to Council for approval.
RECOMMENDED MOTION
I move to approve the City Video Camera Surveillance Policy as presented.
ALTERNATIVES:
Direct staff to modify portions of the Policy.
FISCAL IMPACT:
None.
ATTACHMENTS:
A. Draft Video Surveillance Policy
B. CJPIA Brochure – Security Cameras: Legal Risks and Best Practices 192
City Video Camera
Surveillance Policy
Section: City Council
Adopted: August 11, 2025
CA Reviewed
Last Amended: N/A
PURPOSE
This policy establishes comprehensive guidelines for the ethical, transparent, and limited deployment, use, and management of the City of Solvang’s AI-enabled Surveillance Camera System and all City cameras. The City is committed to enhancing public safety and security while explicitly recognizing and protecting the established civil rights, civil liberties, and privacy interests of all individuals, including employees, residents, and visitors. This policy applies to all City personnel, including employees, contractors, and volunteers, who are authorized to access or operate the system. Appropriate safeguards shall be implemented to ensure accountability, data protection, and adherence to all applicable privacy standards.
DEFINITIONS
• AI-enabled Surveillance Camera System: A system that uses cameras and computer technology to capture, store, and process audio, electronic, visual, location, thermal, olfactory, or similar information specifically associated with, or capable of being associated with, any individual or group. This system incorporates artificial intelligence capabilities such as object detection, similarity search, motion detection, and event triggering. • Personally Identifiable Information (PII): Any information about an individual maintained by an agency, including (1) any information that can be used to distinguish or trace an individual's identity, such as name, Social Security number, date and place of birth, mother's maiden name, or biometric records; and (2) any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information.
AUTHORIZED USE
City Surveillance Camera Systems shall only be used for the following authorized purposes, aligning with the City's public safety objectives:
1. Monitoring of public areas to enhance safety and security and to deter criminal activity, vandalism, and property damage.
2. Recording and reviewing footage following security incidents or public safety concerns.
3. Providing video footage to law enforcement or authorized persons following an incident in accordance with applicable laws.
4. Supporting emergency management capabilities, particularly given the limited access routes in and out of the city, and for emergency evacuation planning.
5. Using AI-enabled analytics for object similarity search, motion detection, and event triggering.
6. Using AI-enabled features traffic flow optimization to enhance infrastructure management and safety.
7. Safeguarding the City's unique Danish-inspired architecture and cultural preservation.
8. Documenting Code of Conduct violations and ensuring workplace safety for staff protection.
9. Responding to Public Records Act (PRA) requests, as the footage constitutes a public record and is subject to disclosure unless an applicable exemption applies under state or local law. 193
PROHIBITED USE
Prohibited use cases include any uses not stated in the Authorized Use section.
Additionally, City Surveillance Camera Systems shall not be used for:
1. Targeting individuals based on race, ethnicity, national origin, religion, disability, gender, or sexual orientation.
2. Monitoring private property without appropriate legal authorization, recognizing that recording is limited to areas exposed to public view (e.g., vehicles on public roads or streets, or on private property with visible license plates from public access areas).
3. Recording in areas where there is a reasonable expectation of privacy.
4. Processing data to identify racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, gender, gender identity, disability status, or sex life or sexual orientation.
5. Any personal purpose.
CAMERA PLACEMENT AND PRIVACY IMPACT ASSESSMENT
Strategic Placement Criteria
Surveillance cameras shall be installed only in public areas with legitimate security needs, including:
• Strategic downtown intersections
• Building entry/exit points
• Public spaces and tourist areas
• Parking facilities
• Critical infrastructure locations
No cameras shall be placed in locations with a reasonable expectation of privacy.
Privacy Impact Assessment
Privacy Review Process - Before installing new surveillance cameras, the City will implement an internal agency privacy assessment to evaluate potential effects on privacy. This internal review process shall consider:
• The specific purpose and security needs for each proposed camera location. • Potential privacy impacts on employees, residents, and visitors. • Camera field of view optimization to minimize unnecessary capture of private areas. • Periodic reviews of existing camera locations to ensure ongoing alignment with privacy guidelines.
MONITORING APPROACHES AND PUBLIC EXPECTATIONS
The City shall clearly communicate the type of monitoring that will be employed for each surveillance camera location:
• Active Monitoring—Designated personnel monitor surveillance cameras in real time. This type of monitoring may be used in high-risk areas or during special events where immediate response capabilities are required.
• Passive Monitoring - Cameras continuously record footage, footage, which is only reviewed retrospectively, typically after an incident has been reported. This is common for areas where immediate response is not critical.
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• Hybrid Monitoring - A combination of active and passive monitoring. Certain cameras or areas may be actively monitored at specific times or during certain events, while the same cameras may operate in a passive mode at other times.
BUSINESS JUSTIFICATION
AI-enabled surveillance cameras support City operations through:
• Public Safety: Protecting staff, residents, visitors, and facilities while maintaining our welcoming Danish American village atmosphere.
• Evidence Collection: Providing footage for investigations and legal proceedings when formally requested.
• Cultural Preservation: Safeguarding our unique Danish-inspired architecture. • Emergency Response: Enhancing capabilities in a city with limited access points • Resource Efficiency: 24/7 monitoring without full-time staffing, supplementing patrol personnel. • Staff Protection: Documenting Code of Conduct violations and ensuring workplace safety. • Infrastructure Management: Monitoring key intersections for improved traffic flow and safety.
TECHNICAL SPECIFICATIONS & AI CAPABILITIES
City surveillance cameras shall incorporate the following technical features and AI capabilities. Policy will be revised if technology requirements are expanded:
Hardware Requirements:
• High-resolution imaging (5MP+, 30fps, HDR-capable) for clear footage in all conditions. • Fixed-position cameras with defined fields of view (no mechanical pan/tilt/zoom capabilities):
o Verkada CH52-E Outdoor Multisensor Camera: Fixed multisensor unit deployed at most locations
o Verkada CD53-E Outdoor Dome Camera: Fixed dome unit deployed at Solvang Park and optional locations
• Durable construction (IK10/IK11 rating) with full weatherization for outdoor deployment. • Minimum 30-day onboard storage with secure network connectivity options.
AI-Enabled Analytics:
• Object detection and similarity search across multiple camera feeds. • Smart edge processing to optimize bandwidth and storage requirements. • Motion detection and automated incident alerting with customizable parameters. • Privacy-compliant detection features for authorized purposes. • Surveillance capabilities are limited by resolution, field-of-view constraints, and environmental factors affecting footage clarity.
DATA MANAGEMENT
Collection, Security, Retention, and Sharing
Types of Data Collected:
• Video and images.
• Date, time, and location metadata.
• AI-generated analytics data.
Security Requirements:
• Access is limited to authorized personnel with appropriate training. • Encryption and cybersecurity safeguards for all stored data. 195
• HTTPS, strong password enforcement, and lockout mechanisms. • Comprehensive access logging and audit trails.
• Compliance with Department of Homeland Security guidelines. • Prohibition of equipment from banned manufacturers (e.g. – Dahua, Hikvision) • All data will be closely safeguarded and protected by both procedural and technological means.
Retention Policy:
• The City Manager or designee is responsible for ensuring systems and processes are in place for the proper collection and retention of data. The City's AI-enabled camera vendor, Verkada, is responsible for data hosting, ensuring proper maintenance and security of data stored in their data centers. Verkada will purge this data after 30 days. However, the City of Solvang will retain any relevant data obtained from the system beyond this 30-day period in accordance with its established retention schedule. All video surveillance footage obtained from the Verkada system, or recordings of routine video monitoring, as defined in Government Code Section 34090.6, shall be retained for no less than 365 calendar days from the date of recording. This period is deemed appropriate to further the stated purposes of this policy. Footage obtained from the Verkada system or recordings of routine video monitoring, as defined in Government Code Section 34090.6, may not be deleted, altered, or overwritten before 365 days unless legally ordered and approved by the City Attorney.
• Incident-related footage may be retained longer when necessary for ongoing criminal or civil actions, discovery requests, or other lawful reasons.
• All video surveillance footage shall be automatically deleted after the retention period unless preserved for specific purposes. Secure deletion methods, including wiping, reformatting, or degaussing, will be used to ensure footage is unrecoverable. Storage will be maintained in an authorized, secure cloud service.
Data Sharing Protocol:
• Authorized recipients include internal departments, law enforcement, City Attorney, and other government agencies, or the public as required by law.
• Sharing procedure requires:
o Verification that the purpose aligns with the City's mission. o Consideration of alternatives to data sharing.
o Appropriate redaction of personally identifiable information (PII) to protect individual privacy, unless prohibited by law or court order.
o Review of safeguards against civil rights impacts.
o Evaluation of public records request requirements.
o Export in clean, machine-readable format.
• Requests for recorded video images from other government agencies or by the submission of a court order or subpoena shall be promptly submitted to the City Manager, who will research the request and submit the results of such search through the City Attorney's office for further handling.
• Any agency accessing shared information should be a signatory to a data sharing Memorandum of Understanding (MOU) that mandates compliance with the City’s data policies and safeguards.
Data Disposal:
• Automatic overwriting of files at the end of the retention period. • Secure deletion methods, including wiping, reformatting, or degaussing as appropriate, will be used to ensure footage is unrecoverable.
• Any accidental or unauthorized deletions must be reported immediately to the City Manager's Office.
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SIGNAGE AND NOTIFICATIONS
All surveillance camera locations must display clear signage stating:
• "VIDEO SURVEILLANCE IN OPERATION: This area is monitored for safety purposes. City of Solvang (805) 688-5575" The City will maintain a dedicated webpage on its website providing comprehensive information about the surveillance system, including technology specifications, approved use cases, and contact information for public inquiries. This webpage will serve as a publicly accessible Surveillance Impact Report.
ACCESS CONTROLS
Prior to accessing or using data from the City's Security Camera System, authorized individuals shall receive training in system access and operation, and instruction regarding authorized and prohibited uses.
Access to live views and recorded footage is restricted to specific trained personnel. Recorded footage is accessed only in response to an incident.
Authorized access is limited to:
• City management and designated department heads
• Sheriff personnel upon written request to the City Manager whose approval shall not be unreasonably withheld, for ensuring public safety and investigating incidences • IT staff responsible for system maintenance per explicit authorization of the City Manager
INCIDENT RESPONSE PROTOCOL
The City shall establish clear procedures for managing footage related to incidents such as illegal activities, accidents, or other significant events:
Footage Preservation
• Footage related to an incident must be immediately preserved to prevent deletion under routine processes.
• The preservation process must be initiated within 24 hours of incident notification. • A separate secure copy of incident footage shall be maintained with restricted access.
Incident Reporting
• Staff shall document all incidents requiring footage review using the City's incident reporting form.
• Documentation shall include the date, time, and nature of the incident, the camera(s) involved, and the reason for footage review.
• Staff must be trained in proper incident handling procedures.
Chain of Custody
• All access to incident footage shall be logged with user identification, date, time, and purpose. • If footage is provided to law enforcement or used in legal proceedings, a chain of custody documentation must be maintained.
• Transfers of incident footage must be securely conducted with appropriate safeguards.
SYSTEM MANAGEMENT AND FUTURE CONSIDERATIONS
To ensure optimal performance, the surveillance system will receive regular maintenance, including software updates, security patches, and physical inspections. Based on ongoing security assessments, 197
the City may strategically expand the system to integrate with access control systems, incorporate advanced AI capabilities as technology evolves, and extend coverage to additional locations. Any future expansion beyond this policy's scope will require appropriate review and approval through the established governance process.
SYSTEM MAINTENANCE AND SUPPORT
The City shall ensure proper maintenance and support of the surveillance system, including:
a) Regular System Updates:
• Software updates and patches.
• Firmware upgrades.
• Security vulnerability remediation.
b) Preventive Maintenance:
• Physical inspection of cameras.
• Lens cleaning and adjustment.
• Mount and connection verification.
• Environmental Protection assessment.
c) Technical Support:
• Remote system monitoring.
• Emergency response procedures.
• Issue tracking and resolution.
d) Performance Optimization:
• Regular system performance reviews.
• Storage capacity management.
• Network bandwidth optimization.
• AI analytics tuning.
e) Regular Audits
• The video system shall be subject to regular audits. Any unauthorized use of the video system shall be reported to the City Manager or his/her designee.
COMPLAINT HANDLING PROCESS
The City shall establish a formal mechanism for handling complaints or concerns regarding surveillance practices:
Submission Process
• Clear instructions on how to submit concerns or complaints about the surveillance system. • Multiple submission methods to ensure accessibility.
• Prompt acknowledgment of receipt.
Response Protocol
• Designation of a responsible point of contact for receiving and investigating complaints. • Timely review of concerns.
• Documentation of all complaints and responses.
Resolution Process
• Assessment of whether policy revisions or further investigations are needed. • Implementation of appropriate corrective actions when necessary. • Notification to complainant of resolution, to the extent permissible by law.
PRIVACY COMPLIANCE REQUIREMENTS:
• The City will protect individuals' constitutional right to privacy while balancing legitimate security needs
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• California Public Records Act (Government Code Section 6252) requests for footage will be evaluated to balance transparency with privacy protection. Video recordings are generally released in response to a public records request unless an exemption, such as a pending law enforcement investigation, applies under state or local law. • Prior to implementation affecting employees, the City will fulfill applicable meet-and-confer obligations with recognized employee organizations.
COMPLIANCE AND ENFORCEMENT
The City Manager shall oversee and enforce compliance with this Policy. Violations of this policy by City staff may result in disciplinary action consistent with City personnel policies, applicable labor agreements, and state and federal laws, including, but not limited to, criminal prosecution, civil liability, and/or administrative sanctions, up to and including termination.
POLICY REVIEW AND UPDATES
This policy shall be reviewed annually by the City Manager's Office. Updates or modifications require approval from:
• City Manager.
• City Attorney's Office.
• City Council (for substantial changes).
LEGAL AUTHORITY
This policy is established pursuant to California Government Code sections 37100 (General Legislative Authority), and Article I, Section 1 of the California Constitution (Right to Privacy).
AUTHORIZATION
This Surveillance Technology Policy is authorized by the City Council of Solvang, which has determined that the benefits of the surveillance technology outweigh its costs, that it will safeguard civil liberties and civil rights, and that its use will not be based upon discriminatory or viewpoint-based factors or have a disparate impact on any community or Protected Class. 199
Purpose
The use of security cameras is an important measure that enhances safety and security. This document outlines general best practices and an overview of legal risks associated with the use of security cameras.
Security Cameras:
Legal Risks and Best Practices
200
IMPORTANT
This reference material is compiled for use by Authority members in the preparation, development, and implementation of risk management policies, programs, and procedures. Since this document is designed to meet the needs of the general pool membership, please be aware that the present form is best considered a template for use by your agency in drafting specific documents. This template should not be construed as legal advice. Accordingly, any policy, program, or procedure resulting from this template should always be reviewed and approved as is customary by your agency, including the purview of any
necessary legal, governing body authorities, and/or bargaining units to ensure the policy being developed meets the unique needs of your jurisdiction. Policies should be implemented after proper training has been provided.
This reference material is to be considered proprietary and confidential and may not be disclosed to any person without the express, prior permission of the California JPIA. This reference material is for Authority member use only and does not apply in any criminal or civil proceeding. This reference material should not be construed as a creation of a higher legal standard of safety or care in an evidentiary sense with respect to third-party claims. 201
Security Cameras: Legal Risks and Best Practices
Background
The use of security cameras is an important measure that enhances safety and security. However, this practice introduces legal and ethical concerns, particularly around privacy, data protection, and access to footage. This document outlines general best practices, and an overview of legal risks associated with the use of security cameras.
I. Legal Risks and Considerations
A. Privacy Violations
While the United States Constitution does not expressly mention a right to privacy, the United States Supreme Court has interpreted a number of federal constitutional provisions, primarily contained in the Bill of Rights, as the basis for a federal right to privacy. For example, the Fourth Amendment protects against unreasonable searches and seizures. Under the California Constitution’s Article I, Section 1, individuals are guaranteed a right to privacy. As such, Agencies considering the use of security cameras should work with legal counsel to determine how best to safeguard individuals' legally protected privacy interests, reasonable expectations of privacy, and avoid invasions of privacy interests. Such determination is made on a case-by-case basis.
B. Data Privacy Laws
The California Consumer Privacy Act (CCPA) imposes strict regulations on the collection, storage, and sharing of personal data, including security footage. The CCPA generally does not apply to nonprofit organizations or government agencies. Agencies should work with legal counsel to ensure exclusion from the CCPA and/or any mandated legal compliance.
The Family Educational Rights and Privacy Act (FERPA) establishes requirements for educational agencies that receive federal funds. Agencies should work with legal counsel to determine coverage under the FERPA and/or any mandated legal compliance. This includes identifying when footage qualifies as an education record under FERPA, ensuring staff understand FERPA rights related to access, disclosure, and amendment requests, and providing guidance on handling footage that involves students.
C. Union and Employee Rights
Prior to implementing any form of surveillance or related policy, including whether surveillance will be used for non-investigatory work-related purposes, as well as for investigating work-related misconduct, Agencies should work with legal counsel to 202
ensure compliance with state and federal laws to avoid violating employees’ privacy and other legal rights. For example, the California Labor Code restricts workplace surveillance in locations where employees would not reasonably expect to be the subject of surveillance. Unless authorized by court order, employers are prohibited from causing audio or video recordings to be made of an employee in a restroom, locker room, or room designated by an employer for changing clothes.
California’s public sector labor relations statutes generally require employers and recognized employee organizations to meet and negotiate (or “meet and confer”) in good faith with one another on matters that are within the “scope of representation” and prohibits employers from imposing changes to such matters absent compliance with this requirement. A party violates its duty to bargain if the party fails to negotiate in good faith on a topic within the scope of representation. Prior to implementing any form of surveillance or related policy, Agencies should consider and comply with applicable meet and confer obligations. Compliance with employment and labor laws helps prevent grievances and potential legal challenges from employees and unions.
D. Public Access to Records
Under the California Public Records Act (“CPRA”), Agencies may be required to disclose footage captured using surveillance systems. As a result, Agencies should have clear policies governing access to surveillance footage. Requests for footage may come from the public, employees, or law enforcement. The Agency should define policies regarding when and how such footage can be released while balancing privacy rights and public interest.
E. Managing Public Expectations
The public and employees should understand the capabilities and limitations of the Agency’s surveillance systems. Agencies should clearly communicate how cameras operate, including for example, whether cameras are actively monitored in real-time, passively recorded, or monitored using a hybrid approach. Additionally, technical limitations (e.g., resolution, field of view) should be clarified to prevent public and employee misconceptions about the system's ability to capture specific details, such as license plate numbers or facial features under certain conditions. Misunderstanding the surveillance system's capabilities and limitations could lead to legal disputes or dissatisfaction, particularly when footage does not meet expectations in cases such as parking lot incidents or public disturbances.
F. Misuse of Surveillance Data
Strict protocols must be in place to prevent unauthorized access to or use of surveillance footage, especially for purposes other than those explicitly stated within the Agency’s adopted policy. Misuse of footage can lead to legal actions and to privacy violations.
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II. Camera Placement and Usage
A. Strategic Placement of Cameras
Security camera placement should be restricted to public areas where security concerns are prevalent and where they serve a clear security purpose, such as building entrances, exits, hallways, parking lots, and public spaces like lobbies. Cameras should not be placed in areas where there is a reasonable expectation of privacy, such as restrooms, locker rooms, or private offices. When determining a camera placement location, it is important to clearly identify the purpose, the potential use of evidence, and any possible risks or concerns. The following is a recommended guide to determine camera placement:
Location Purpose Potential Use as
Evidence
Main entrances/exits Monitor entry and exit; deter
unauthorized access Recordkeeping; security
Hallways Monitor foot traffic; reduce
security incidents
Recordkeeping; monitor
incidents
Public meeting rooms Monitor public activities; deter
unlawful behavior Recordkeeping; security
Parking lots Monitor vehicle activity;
prevent theft
Evidence in
accidents/criminal cases
Administrative office
public areas Track visitor activities Recordkeeping; security Playgrounds/athletic fields Monitor public gatherings;
deter vandalism Record accidents; security
Public lobbies Monitor public interactions Recordkeeping; security For each location, see Section I above to review the legal risks and considerations.
When selecting a location, Agencies should conduct Privacy Impact Assessments (PIAs) to ensure that camera placements and monitoring practices comply with privacy laws and minimize risks of privacy violations. These assessments should help ensure that cameras are placed appropriately and that privacy concerns are mitigated, particularly in areas where individuals have a reasonable expectation of privacy. The assessment should also consider the Legal Risks and Considerations discussed in Section I above. An analysis of legal risk must be conducted on a case-by-case basis.
B. Unacceptable Locations
Cameras should not be installed in restrooms, locker rooms, or rooms designated for changing clothes. It is recommended to consult with legal counsel to identify specific locations in your Agency where a reasonable expectation of privacy may exist and to fully evaluate the legal risk.
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C. Signage and Notifications
Signs should be clearly posted at all Agency building entrances notifying the public, employees, and visitors that surveillance cameras are in use. Sample signage could state:
“VIDEO SURVEILLANCE ON PREMISES: This building is equipped with electronic surveillance for the safety of employees, visitors, and the public. ‘Cameras are actively monitored during business hours" or "Surveillance is conducted for retrospective review only.” Your actions may be recorded and preserved.
Notifications should also be included in employee handbooks, public-facing websites, and other communication materials to set realistic expectations. When developing signage and notifications, and prior to implementation, Agencies should also consider the Legal Risks and Considerations discussed in Section I above.
III. Data Management and Access
A. Access Control and Cybersecurity
Agencies must enforce strict access controls to limit access to surveillance footage to authorized personnel only, such as IT staff, security officers, and designated administrators. Additionally, the Agency should implement encryption and other robust cybersecurity measures to prevent unauthorized access to footage. Detailed audit trails should be maintained to log every instance of access, ensuring that footage is protected and that the Agency complies with privacy laws.
B. Handling and Retention of Footage
Retention policies must be clear and compliant with legal standards, such as those specified in the California Government Code. In general, data should be retained for at least one year unless specific incidents, or the law, require longer storage. For incidents involving potential legal action, data should be preserved until a disclosure determination is made, and a backup copy should be maintained.
C. Incident Response Protocol
In the event of an incident (e.g., accidents, unlawful activity), footage must be promptly preserved to avoid deletion under routine processes. Staff involved in the surveillance process should be trained in how to properly handle such incidents.
D. Incident Handling and Reporting
To minimize legal risks and ensure compliance with privacy and data protection laws, Agencies must implement clear protocols for incident handling. When an incident 205
occurs, such as an illegal activity, accident, or significant event, all related footage must be promptly preserved and secured from deletion. Appropriate personnel should be designated to handle and report such incidents, following established procedures for securing footage, notifying authorities, and maintaining an audit trail. Agencies should ensure that incident-related footage is retained for a longer period, consistent with legal and operational needs.
IV. Best Practices for Managing Legal Risks
• Policy Development. Implement a clear, detailed surveillance policy that outlines the purposes, camera placement, monitoring practices, operational procedures, access controls, data retention protocols for footage, and privacy considerations. Develop and update the policy annually with legal counsel and when feasible, community feedback.
• Transparency and Public Engagement. Ensure transparency with both employees and the public. Post notifications prominently, hold public hearings if necessary, and ensure that individuals know how to request footage or lodge complaints.
• Training. Train employees on the Agency’s policy, the legal aspects of surveillance, proper data handling, and incident response. Ensure employees understand the potential legal consequences of mishandling footage. • Legal Review. Regularly review surveillance policies with legal experts to ensure they comply with evolving state and federal laws. This review should address camera placement, handling of footage, and compliance with privacy, employment, and labor laws.
• Technology Management. As technology advances, such as the introduction of facial recognition or artificial intelligence (AI) analytics, ensure that policies are reviewed by legal counsel before policies are updated to address these new capabilities and their implications.
V. Policy Development Guidance
A comprehensive surveillance policy is the cornerstone of a legally sound and operationally effective security camera system. The policy should be designed to balance the need for security with the legal and ethical requirements surrounding privacy, transparency, and data protection. The policy must be carefully structured to cover all aspects of surveillance, including its purpose, operational procedures, access controls, data retention, and privacy considerations. The following are key components that the policy should cover:
A. Purpose of Surveillance
The policy should clearly state the primary purposes for which security cameras are used. Common objectives may include:
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• Enhancing the safety and security of staff, visitors, and the public. • Safeguarding public assets and preventing vandalism or theft. • Monitoring public spaces to deter criminal activity and ensure public order. • Supporting law enforcement investigations by providing access to recorded evidence, if required.
• Providing visual evidence for resolving disputes or incidents that occur on Agency property.
The policy should also clearly state whether surveillance will be used for noninvestigatory work-related purposes or for investigating work-related misconduct.
Agency employers should remember that employees can claim that they have a reasonable expectation of privacy in their place of work. In order to reduce the effectiveness of an employee’s claim, employers should develop carefully drafted policies that are specifically tailored to their particular workplace.
By clearly defining the purpose, the policy should ensure that the surveillance system is aligned with its intended goals and helps avoid mission creep (e.g., using footage for purposes not included within an Agency’s adopted policy).
B. Legal Framework and Compliance
The policy should outline how the Agency complies with state and federal laws, including but not limited to those discussed in Section I above. For example:
• California Public Records Act (CPRA). The policy should address how the Agency will manage requests for footage under CPRA, including identifying which footage qualifies as public records and how privacy exceptions will be handled. • Right of Privacy. The policy should address privacy expectations, ensuring that cameras do not intrude into areas where there is a reasonable expectation of privacy (e.g., restrooms, private offices).
• Employment and Labor Laws. The policy should acknowledge the rights of employees under employment and labor laws. It should also ensure that cameras are not used for unauthorized monitoring or outside the permitted purposes of the Agency’s adopted policy, and otherwise comply with both employment and labor laws.
C. Camera Placement and Monitoring Practices
The policy must detail the approved locations for installing security cameras and the specific monitoring practices employed. It should:
• Define public areas where cameras will be deployed (e.g., entrances, lobbies, hallways, parking lots).
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• Explicitly prohibit cameras in locations where individuals have a reasonable expectation of privacy (e.g., restrooms, locker rooms, private offices). • If cameras are used in work areas, such as open administrative offices, clearly state the purpose of their use (e.g., to ensure security).
• Include a provision for regular privacy impact assessments before the deployment of new cameras or expansion of existing surveillance systems.
D. Data Collection and Retention Protocols
The policy should provide clear guidelines on how footage is collected, stored, and retained. It should:
• Specify the duration for which footage will be retained, typically aligning with California Government Code requirements (e.g., one year, unless a longer retention period is justified by legal or operational needs).
• Establish procedures for preserving footage that is linked to a specific incident, such as an accident or security breach. This ensures that important data is not deleted during routine purging cycles.
• Detail how footage related to ongoing investigations or legal disputes will be handled, including instructions for securing and safeguarding it from unauthorized access.
• Define criteria for automatically deleting footage after the retention period ends while protecting sensitive or incident-related footage.
E. Access Controls and Data Security
To protect against misuse or unauthorized access to footage, the policy must establish strict access controls. It should:
• Outline the specific roles within the Agency (e.g., IT personnel, security officers, senior administrators) who are authorized to access surveillance footage. • Implement password protections, encryption, and other cybersecurity measures to safeguard stored footage from breaches.
• Detail a process for maintaining audit trails, documenting who accessed footage, when, and for what purpose to ensure accountability and prevent unauthorized viewing or tampering with surveillance data.
F. Data Sharing and Disclosure
The policy should clearly define the circumstances under which surveillance footage may be shared with third parties, such as law enforcement, insurance companies, or legal entities. It should:
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• Specify if and when footage may be shared internally (e.g., between departments, Human Resources) and under what conditions it may be viewed. • Detail the process for sharing footage with law enforcement or other external entities during criminal investigations, including the need for appropriate warrants or subpoenas.
• Address how public records requests under the CPRA will be handled, including how the Agency will balance transparency with privacy protections for individuals depicted in the footage.
• If the Agency is covered by FERPA, clarify compliance with the FERPA.
G. Incident Handling and Reporting Procedures
The policy should establish clear procedures for managing footage related to incidents such as illegal activities, accidents, or other significant events. Specifically, the policy should include:
• Steps to immediately preserve footage related to the incident to ensure it is not deleted under routine processes and it should be secured in a manner consistent with privacy and security protocols.
• Steps to immediately notify the appropriate authorities (e.g., law enforcement, risk management, Human Resources, internal investigation teams) as required by the nature of the incident and permitted by law.
• The responsible staff assigned (e.g., security officers or legal advisors) to manage the handling and reporting of incidents.
• Steps to maintaining an audit trail for all access to the footage related to the incident. • The proper chain-of-custody procedures when providing footage to law enforcement or legal entities, documenting who accessed the footage, the time of access, and the reason for sharing.
• A notification process for individuals involved in or affected by the incident, informing them when footage has been captured and, if applicable, provided to external authorities.
• The proper retention period for incident-related footage, as required by the nature of the incident and legal requirements, until final resolution of the claim or matter.
H. Transparency and Stakeholder Engagement
The policy should outline measures for notifying the public and Agency employees about surveillance. It should:
• Establish the posting of signage in all areas where cameras are in use, informing visitors, employees, and the public about ongoing surveillance. 209
• Include surveillance information that will be provided in employee handbooks and public communications to ensure that all stakeholders are informed about the Agency’s surveillance practices and policies.
• Establish a process for regular consultations with stakeholders, including union representatives, to address concerns or negotiate changes to surveillance practices and policies that may impact employees and as may be required by law.
In addition to ensuring transparency, the policy should outline a formal mechanism for handling complaints or concerns regarding surveillance practices. This complainthandling process should be documented and made easily accessible through the Agency’s website, employee handbook, or public communications, depending on the specific individual who is governed by the policy. For example, only employees are covered by an employee handbook, not members of the public. Similarly, an employee complaint procedure may vary from a procedure for a member of the public. In general, the process should:
• Provide clear instructions on how employees, members of the public, or other stakeholders can submit concerns or complaints about the surveillance system. • Assign a designated point of contact within the Agency, such as a privacy officer to receive such complaints from members of the public, and Human Resources or supervisors to receive such complaints from employees. Consult with legal counsel to assist your Agency with responding to complaints.
• Develop a response protocol to ensure that concerns are reviewed in a timely manner, discussed with legal counsel when needed, and that appropriate actions, such as policy revisions or further investigations, are taken where necessary. • Ensure the process is accessible to all individuals, including those with disabilities.
Consider informing complainants of the disposition, to the extent permissible by law.
I. Clarifying Expectations of Surveillance Capabilities An individual's understanding of the Agency's surveillance system can often be skewed by assumptions that cameras are always monitored or can capture high-detail images in every scenario. The policy should clearly explain the differences between active, passive, and hybrid monitoring approaches, based on the Agency’s specific practices.
This distinction helps manage expectations and informs stakeholders about the level of surveillance in place at any given time.
• Active Monitoring. Surveillance cameras are monitored in real time by designated staff. This type of monitoring may be used in high-risk areas or at specific times, such as after hours or during special events, where immediate response capabilities are necessary. For example, "Cameras are actively monitored during public events and in high-traffic areas between 10:00 p.m. and 6:00 a.m." • Passive Monitoring. Cameras continuously record footage, but the footage is only reviewed retrospectively, typically after an incident report. This is common for areas 210
where immediate response is not critical or where staffing for constant monitoring is not feasible. For example, "Routine footage is recorded and reviewed only when a security issue is reported."
• Hybrid Monitoring. This is a combination of active and passive monitoring. In this approach, certain cameras or areas may be actively monitored at specific times or during certain events, while at other times, the same cameras may operate in a passive mode. This allows the Agency to optimize resources by focusing real-time monitoring where and when it is most needed while maintaining continuous recording elsewhere. For example, "Cameras in public parks are monitored in realtime during weekend events but operate in passive mode during weekdays. Footage can be reviewed if incidents are reported."
In addition to differentiating monitoring types, it is important to set realistic expectations about the capabilities of the surveillance system. Often, due to portrayals in the media, individuals may have unrealistic assumptions about what the cameras can capture. To prevent confusion or complaints, the policy should clarify:
• Resolution limitations. The camera system may not be capable of capturing fine details, such as facial features or license plate numbers, especially in low-light conditions or from a distance.
• Field of view and coverage. Cameras are positioned to monitor specific public areas and may not cover every angle or blind spot. Not all areas are under surveillance.
• Environmental factors. Poor lighting, weather conditions, or physical obstructions may impact the clarity and usefulness of footage.
• Retention and availability. Older footage may be automatically deleted after the retention period, so it may not be available if incidents are not reported promptly.
Providing clear examples of these limitations will help manage public and employee expectations of what the system can realistically achieve.
J. Annual Policy Review and Updates
The policy should be reviewed regularly and at least annually to help ensure it remains up to date.
• Legal Review. Conduct a formal review of the surveillance policy with legal counsel to ensure ongoing compliance with any new privacy laws, court rulings, or legal developments. This includes privacy, employment, and labor laws affecting the Agency’s operations.
• Community and Employee Feedback. Actively seek feedback from both the public and Agency employees through appropriate means, which may include surveys, public meetings, or community forums. Consider incorporating this feedback, to the 211
extent it is feasible and lawful as a method to adjust or refine surveillance practices to better meet the needs of all stakeholders.
• Technology Review. Assess advances in surveillance technology (e.g., facial recognition, AI-based analytics) with legal counsel to determine if updates to the policy are recommended or required. Before new technology is introduced, ensure that it aligns with privacy protections and legal requirements. 212