Agenda packet — Vallejo City Council, June 13, 2023 (part 4 of 10)

CONTACT
Christina Ratcliffe, AICP, Planning and Development Services Director (707) 648-4382 [email protected]

RESOLUTION NO. 23- _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO APPROVING A

FIRST AMENDMENT TO THE CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH ICCI, INC. FOR BUILDING CONSULTING SERVICES AUTHORIZING

THE CITY MANAGER TO EXECUTE SAME
WHEREAS, the Building Division’s current staffing level is not sufficient to support the work required to function appropriately and an outside consultant is required to provide technical expertise to process planning applications in a timely manner; and
WHEREAS, ICCI, Inc. is well-qualified, willing, and able to provide such staffing services; and WHEREAS, the City’s Planning and Development Services Department has sufficient funds in its Professional Services budget to pay for this work.

NOW, THEREFORE BE IT RESOLVED that the Council hereby approves the First Amendment to the Consultant and Professional Services Agreement between the City of Vallejo and ICCI, Inc. for building consulting services to increase the not to exceed total compensations set forth in the Agreement by $95,000 for a total of $195,000 through June 30, 2024.

BE IT FURTHER RESOLVED that the Council hereby authorizes the City Manager to execute the aforementioned First Amendment.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 13, 2023, with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
______________________________________

ROBERT MCCONNELL, MAYOR
ATTEST: ______________________________________
DAWN G. ABRAHAMSON, CITY CLERK

SUBMITTED BY:

Independent Code Consultants, Inc.
5870 Stoneridge Mall Road, Suite 200
Pleasanton, CA 94588
CONTACT:

Ms. Abigail Obligacion | President
T | 925.264.9559
E | [email protected]
SUBMITTED TO:

City of Vallejo
Building Inspection Division
555 Santa Clara Street, 2nd Floor
City Hall
Vallejo, CA 94590
Attention: Mr. Steve Arnold | CBO
T | 707.648.4387
E | [email protected]
June 9, 2022
Proposal for As-Needed Outside Plan Review, Permitting and Field Inspection Services

CITY OF VALLEJO
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 2
Primary Contacts within Company ....................................................................................................................................4 Information about the Firm ...............................................................................................................................................5 Staffing Capacity Management .........................................................................................................................................7 Experience .........................................................................................................................................................................15 Proposed Approach ..........................................................................................................................................................17 Fee Schedule .....................................................................................................................................................................19 References .........................................................................................................................................................................20 Professional Services Agreement / Insurance ................................................................................................................21

TABLE OF CONTENTS
5870 Stoneridge Mall Road, Suite 200
Pleasanton, CA 94588
T | 925.264.9559
June 9, 2022
Mr. Steve Arnold | Chief Building Official
City of Vallejo | Building Inspection Division
555 Santa Clara Street, 2nd Floor, City Hall
Vallejo, CA 94590
RE: Proposal for As-Needed Outside Plan Review, Permitting and Field Inspection Services Dear Mr. Arnold:

Independent Code Consultants, Inc. (ICCI) is pleased to submit our qualifications to assist the Building Division to obtain professional and technical assistance on short notice on an as-needed basis for the following services to assist with the enforcement of City and State laws, statutes and regulations:
Administrative Duties
Plan Check Services
ICCI is comprised of a team of knowledgeable and highly qualified professionals who have worked together for 9 years with a collective 30 years of experience in plan review, design and construction. Our team of professionals have extensive knowledge of building code requirements and local construction practices. We are experts in our specialized fields and are able to provide our clients code compliant solutions that show our team’s ability to exercise independent judgment and initiative.

For this contract, ICCI understands the scope of services to be provided. ICCI is committed to our clients and recognizes that our services do not start or end with only plan review services. We strive to work with you and your team to ensure the planning, design, construction, inspection and coordination of private development projects are reviewed for complete - ness and accuracy, and compliance with standard engineering practices and conditions of approval. We have the capability to attend pre-application project meetings that allow applicants to receive feedback on a specific project based on a preliminary review from all municipal divisions prior to the formal permit submittal and can assist throughout the project process through its completion and final certificate of occupancy.

Independent Code Consultants will always manage all communication and coordination with our Clients through the use of a single point of contact. This contact will coordinate and ensure resources and personnel are made available to you.

Thank you for the opportunity to submit our proposal and we hope that we can fulfill your building and safety service needs. Should you have any questions or require additional information, please do not hesitate to contact Kelly Park- Li ([email protected]) or Abigail Obligacion ([email protected]) at 925.264.9559.

Respectfully Submitted,
Abigail Obligacion | President Kelly Park-Li | Senior Plan Review Engineer Independent Code Consultants, Inc. Independent Code Consultants, Inc.

City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 4
List of ICCI Contacts & Role Phone Email
Abigail Obligacion* | President 925.264.9559 [email protected] Greg Shriver | Senior Plan Review Engineer 925.264.9559 [email protected] Kelly Park Li | Senior Plan Review Engineer 925.264.9559 [email protected] Marc Uytengsu | Office Manager 925.264.9559 [email protected] *Abigail Obligacion will be the primary contact for the RFP process.

PRIMARY CONTACTS WITHIN COMPANY
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 5

COMPANY PROFILE
Independent Code Consultants
Office Location: Pleasanton, CA
Established: January 1995
Re-Established: January 2018
Years in Business: 19
President: Abigail Obligacion
Principals: Abigail Obligacion; Greg Shriver;
Kelly Park-Li
Number of Employees: 10
Independent Code Consultants, Inc. (ICCI) was originally established in January 1995 by Greg Shriver, as a sole pro - prietor. After 15 years, he decided to work for a larger corporation which offered flexibility with his work schedule while meeting turn-around times and maintaining the quality plan reviews that his clients had come to expect.

After meeting and working with other members of this plan review team at that corporation, Mr. Shriver and his close as - sociates decided to re-establish ICCI in January 2018. ICCI is now comprised of a team of highly qualified and dedicated professionals that have a collective plan review experience of 30 years for various Building Departments, Fire Departments, and Engineering and Public Works Departments.

ICCI is grounded in the principle that our plan reviews are only as good as what our Clients think. We have provided quality building, fire, engineering and CASp plan reviews for several different municipalities throughout the Bay Area while provid- ing excellent customer service and proactive communication.

Our multi-disciplinary team members with specialized technical skills in both engineering and construction have worked collaboratively together for over 6 years. We have created a team that serves our clients’ specifics needs where costs and deadlines do not compromise the quality of our plan reviews.

INFORMATION ABOUT THE FIRM
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 6
We strategically plan the projects and clientele that we pursue to best suit our team and our capabilities. We only take on projects knowing that we can fulfill our clients’ expectations. What sets us apart from other firms is our dedication to provide proactive communication and excellent customer service. Our mission is to cultivate a team that helps streamline the plan review process not only for our clients, but also for applicants obtaining a permit.

ICCI specializes in plan review services for local building departments that require project management experience that bigger consultants firms are not able to provide. ICCI has a pool of individuals and subconsultants that will help expedite the plan review and to avoid any delays to the project.

For example, the City of Cupertino requested assistance with The Rise’s Solid Waste Management Review. ICCI contacted our Solid Waste Management consultant to assist the City on short notice and completed the review in less than 2 weeks.

City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 7
ICCI is dedicated to providing proactive communication and ex- cellent customer service. ICCI has developed a team that works collectively as a group where we utilize each others’ strengths.

Should the need arise, we can also reach out to an extended network of clients and peers for additional resources. ICCI and our partners share the philosophy that efficiency, streamlining processes and procedures, and open communication between all parties are key objectives that make a project a success. We are a collaborative team that will assist you with analyzing any issues and work on resolving them.

ICCI has its own process of tracking submittals. We cross reference our tracking log with each of our clients’ project man- agement sites multiple times a day to make sure our records match any projects assigned to us.

Our team frequently communicates with each other and each member of our plan review team can access ICCI’s tracking log in real time no matter where they are located. Daily, our project coordinators oversee the workflow, assess, and, if needed, redistribute projects based on each plan reviewer’s workload and project priority.

In addition, ICCI also communicates with our clients regularly. Our clients will let us know ahead of time of any high-profile projects coming in and which projects are time-sensitive. ICCI’s understands that flexibility, adaptability, and open commu- nication amongst its staff and clients are key elements to ensure plan reviews are completed on time or ahead of schedule.

Electronic Plan Review & Dynamic Plan Review Templates
ICCI will work with you and your team to create and develop electronic plan review process and procedures. ICCI is highly experienced in several different electronic plan review applications: DigEplan, Bluebeam, Avolve Software - ProjectDox, and Adobe Acrobat. Our key team members were an integral part of the City of Cupertino’s and the City of Pleasanton’s transition from paper plan review to all electronic plan review.

STAFFING CAPACITY MANAGEMENT
Quality building, fire, engineering and CASp plan
reviews are provided with the following structure:
What: Our plan reviewers clearly explain in a
comment letter what is not in compliance with
the plans, details and specifications. In addition,
our plan review team will cater their comments
based on their audience (i.e. designer, home -
owner, engineer, architect or contractor).
Where: Comment letter will clarify which sheet,
detail, etc. where on plans comment refers to
Why: A code section is cited to explain why the
plans/details are not in conformance
How: The plan reviewer will be able to com -
municate with the applicant how to resolve the
issue when questions arise from the applicant or
staff members
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 8
Our team works collectively as a group where we utilize each others’ strengths when reviewing and processing a set of plans. We ensure timelines are met and projects are billed accurately. Our structural engineers have several years of design and code enforcement experience and are capable of reviewing small projects such as patio covers to high-rise, mixed occupancy buildings and everything in between. Our senior plan reviewer has many years of construction experience that can help solve field problems should the need arise. From the planning design phase through the certificate of occupancy finalization, our seasoned civil and fire protection plan reviewers are able to foresee and help resolve any problems that may occur. With our knowledgeable and experienced team, ICCI can support your staff with all aspects of the permit and plan review processes.

ICCI has become known for creating dynamic plan review templates that are catered specifically to our Clients. The templates include local ordinances and policies and are continually updated to reflect changes when new information or feedback is provided by Clients.

Project Organization Chart
City of Vallejo
Plan Review
Kelly Park-Li
Administration
Marc Uytengsu
Building & Fire Plan Review
Abigail Obligacion
Non-Structural Review
Greg Shriver
CASp Review
Kelly Park-Li
Structural Plan Review
Flora Chen
Fire and Life Safety Plan Review
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 9

EDUCATION
B.S. | Structural Engineering
University of California | San Diego

LICENSES
Professional Civil Engineer | CA
#C74900
Professional Structural Engineer | CA
#S5855

CERTIFICATIONS
ICC Building Plans Examiner
ICC Residential Plans Examiner
CASp Certification #762

PROFILE
Kelly Park-Li is a licensed structural engineer with over 8 years of plan review experience in both the public and private sector. Her experience is built upon a foundation of 7 years as a project engineer for a structural engineering firm. Kelly has provided plan review services for city and county jurisdictions in the Bay Area. Kelly is familiar with the design and review of a diverse range of project types including apartment buildings, medical office buildings, senior care facilities, retail, multi-family residential housing, and commercial buildings.

WORK EXPERIENCE / PROJECT EXPERIENCE
CEL Consulting: Code Resource Group | San Ramon, CA
Served as plan review engineer. Reviewed projects ranging from apartment buildings, provided quality control for podium type mixed use commercial buildings, custom homes to tract homes. 4LEAF, Inc. | Pleasanton, CA
Responsible for reviewing drawings and documents submitted to obtain building permits for conformance with the Cal - ifornia Building Codes. Areas of review included life-safety, structural design, accessibility, energy standards, plumbing, electrical, mechanical and green building.

City of Walnut Creek
As plan check engineer, Kelly was responsible for reviewing drawings and documents submitted to the City, provided over-the-counter plan reviews, and assisted in the assessment of the structural integrity of a 2-story, multi-family residential building immediately after a catastrophic explosion.

KPFF Consulting Engineers
As project engineer, Kelly was responsible for the design and analysis of large and small-scale projects in new and existing construction. Kelly created structural drawings and details, along with calculation packages to obtain permit approvals from the City and OSHPD jurisdictions.

KELLY PARK-LI, PE, SE
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 10

EDUCATION
B.S. | Civil and Environmental
Engineering
University of California | Davis

CERTIFICATIONS
ICC Building Plans Examiner
SKILLS
Exceptional Customer Service
Organizational Skills
Quality of Work

PROFILE
Abigail Obligacion has 15 years of experience as a plan reviewer with nearly 6 years of project management and coordina- tion and served as director for over 1 year creating a new division for a medium to large size engineering company. Abigail has developed and maintained client relationships through her exceptional customer service, her quality of work, and her attention to detail and organization skills.

WORK EXPERIENCE / PROJECT EXPERIENCE
Apple 2 Campus Parking Structure | Cupertino, CA
Reviewed photovoltaic system and parking structure to meet minimum code requirements, attended plan review design meetings.

Tesla Motors Plan Review Services | Lathrop, CA
Project manager for the on-going retooling and expansion projects that included hazardous materials, exiting and over - head clearance.

CEL Consulting: Code Resource Group | San Ramon, CA
Served as Director of the Code Resources Group Division. Created new division from the ground up. Duties include recruit- ment, project management, staff augmentation, quality control, and created processes and procedures for new division.

Generated a million dollars in revenue during first 1.5 years of start-up. 4LEAF, Inc. | Pleasanton, CA
As a senior plans examiner and project manager, Abigail performed plan review quality control and oversaw the daily op- erational activities from plan review to document control.

TRB and Associates, Inc. | San Ramon, CA
As plan review engineer, Abigail reviewed plans and specifications to verify compliance with various building codes and zoning regulations and zoning regulations ranging from single family dwellings to new townhomes to commercial build - ings.

ABIGAIL OBLIGACION
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 11

EDUCATION
B.S. | Civil Engineering
California State University | Fresno

LICENSES
Professional Civil Engineer | CA
#38761

CERTIFICATIONS
CASp Certification #096

PROFILE
Greg Shriver has more than 30 years of experience in the performance of plan review engineering services. Greg originally established Independent Code Consultants and offered his clients his expertise in the California’s Title 24 Rules and Regu- lations. Greg continues to serve the industry on his expertise to his clients and will assist in providing his business expertise to ensure his legacy through the revival of his company.

WORK EXPERIENCE / PROJECT EXPERIENCE
Oracle Building “H” and Parking Structure | Pleasanton, CA Greg provided the complete shell and tenant improvement plan reviews for this four story building totaling 180,996 SF.

The structural systems consisted of conventional footings, structural steel framing and metal deck/concrete fill floor and roof diaphragms and special braced frames. The parking garage consisted of complete plan review services for the four story S-2 building. The Construction type was I-B with a total square footage of 351,265 SF. Structural systems consisted of conventional footings, post tensioned concrete floor slabs, and concrete shearwalls. 6088 / 6100 Sunol Boulevard | Pleasanton, CA
Greg provided the complete shell and tenant improvement plan reviews for this two building project consisting of one- three story building with basement and one two-story building totaling 184,233 SF. The structural systems consisted of conventional footings, structural steel, framing and metal deck/concrete fill floor and roof diaphragms, and special moment resisting frames.

CEL Consulting: Code Resource Group | San Ramon, CA
Served as client liaison of the Code Resources Group Division. Due to his relationship with clients and providing quality plan reviews, Greg helped the division obtain 16 clients during the first 1.5 years of startup. 4LEAF, Inc. | Pleasanton, CA
Greg was responsible for the management and performance of plan review for all of 4LEAF’s plan review clientele and assists in the development of 4LEAF’s Structural Engineers and Non-structural review staff.

GREG SHRIVER, PE
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 12

CERTIFICATIONS
Professional Fire Engineer | CA
#FP1608
Registered Professional Engineer | AZ
#44893
ICC Certified Commercial Building
Inspector

PROFILE
Flora Chen is a licensed Fire Protection Engineer in the States of California and Arizona. Flora holds a Bachelor’s degree in mechanical engineering and also holds a Master’s degree in fire engineering. She has over 25 years of experience working for local fire departments and consulting firms. She is skilled in fire protection performance-based design, fire hazard eval- uation, and code interpretation, modification and alternatives, and has served on various technical committees.

WORK EXPERIENCE / PROJECT EXPERIENCE
Eden Affordable Housing Project | Hayward, CA
Two 5-story buildings containing 151 residential units over 1-story parking structure.

Workday Development | Pleasanton, CA
New 430,000 SF office building on a 6.9-acre BART property adjacent to the West Dublin/Pleasanton station. The project consists of a six-story office building and two parking garages.

Fire Station | Hayward, CA
The new 13,000 SF Fire Station #7 replaces a badly deteriorating temporary structure, which had served as home to one of the Hayward Fire Department’s busiest stations for more than a decade. The new 2-story fire station building includes a four-bay wide, double-deep apparatus bay, a public lobby, Battalion Chief quarters, staff work spaces, living quarters, day room, kitchen, dining room, workshop, conference room, exercise room and other necessary facilities.

I-880 / SR-92 Street Improvements | Castro Valley, CA
Flora reviewed street improvements for I-880/SR-92 for street widening, intersection improvements and signal modifica - tions.

FLORA CHEN, FPE
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 13

EDUCATION
B.S., Business Management |
Philippines
SKILLS
Accela
ProjectDox
OpenGov

PROFILE
Marc Uytengsu originally joined Independent Code Consultants as the company’s Office Manager. With his exceptional organizational skills and his curiosity in the Building Safety Industry, he quickly learned the duties of a permit technician.

He utilizes his time efficiently and is a self-driven professional with strong interpersonal skills. Marc is proficient in Accela, ProjectDox, OpenGov and other permit tracking systems.

WORK EXPERIENCE / PROJECT EXPERIENCE
Executive Assistant to Managing Principal | First Priority Financial Ensured seamless integration of branch due to acquisition of First Priority Financial Obtained Mortgage Loan Originator license in the state of California. Provided high level support for both professional & personal matters. Provided Sales and Marketing (Origination), Processing, Accounting and Document Production & Post Closing sup- port to Loan Officers and Processors to ensure loan production & pipeline were progressing as needed. Oversaw, improved and maintained day-to-day branch operations and office systems to minimize any downtime to business functions. Typical responsibilities were as follows but, not limited to client relations, communication and correspondence, preparation for scheduled appointments & meetings, accounting/auditing, reporting, organization and maintenance of files, data destruction, IT, administrative functions, supply requisitions.

Investor Services Officer/Manager | California Mortgage and Realty, Inc. Took over SVP responsibilities & duties during downsizing. Oversaw & managed mortgage fund investor services operations. Including account processing, review, auditing, tax preparation, communication, correspondence & reporting. Coordinated and worked with different departments to complete various projects, most notably in the creation, testing, implementation of a vastly improved Investor Management System for the mortgage funds and trust deed investors. Including restructuring data, validation of data loads & testing user interface. Assisted Loan Administration with loan related calculations, filings, loan insurance maintenance, capital calls for ad- vances and agreements
Real Estate Owned (REO)/Entity administration including: formations, filings, insurance, maintenance, and investor capital calls
Provided Administrative support. Including but not limited to: Data Organization and Management, Accounting Support and Document Production for miscellaneous needs

MARC UYTENGSU
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 14
ICCI’s key personnel are committed to meeting and exceeding expectations and turnaround times. We are able to achieve this due to our open communication and diligence in maintaining accurate and comprehensive record keeping.

In 2020, ICCI provided the complete building plan review of The Atchison Multi-Family Housing Project in the City of Pittsburg.

The project included two (2) five-story buildings, a pool building, and several covered shade structures (carports). ICCI attended the pre-construction meeting to gain a better understanding of the proj- ect’s milestones and timelines.

After the first review, it was clear that the allowable building areas were not calculated correctly and that the covered shade structures would interfere with the allowable exterior wall openings based on fire separation distances. ICCI contacted the City Building Official immediately. Between formal plan review rounds, ICCI’s plan review staff worked extensively with the architect to review proposed op - tions for plan revisions to ensure the allowable building areas and exterior wall openings were compliant with the 2019 California Building Code.

Since a building permit was needed by a certain date for the developer to obtain funding, ICCI’s plan review staff divided the plan review by discipline among several reviewers and a project manager ensured overall quality control for the entire review by looking over all the comments. Additionally, ICCI was available outside of normal business hours, including working during the Thanksgiving holiday, and communicated with the design team and with the City Building Official throughout the process. A ready-to-issue permit letter was provided to the developer in order to obtain funding and the project was able to break ground shortly thereafter.

EXPERIENCE

City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 15
THE RISE | Cupertino, CA
ICCI was awarded the public works engineering and portions of building life safety plan review for The Rise in Cupertino. The Rise was one of the first projects approved using Senate Bill 35 to stream- line the ministerial review process. The mixed-use plans include approximately 2,400 residential units, 1.973 million square feet of commercial space for offices or laboratories, 429,000 square feet for retail or dining entertainment with a 29-acre green roof.

As of May 2022, ICCI worked with the City of Cupertino’s Public Works, Environmental Programs Division to complete the solid waste management review for the entire project.

WESTPORT CUPERTINO | Cupertino, CA
In 2021, ICCI completed both the building and on-site plan review for the 8.1-acre project located at the former Oaks Shopping Center will provide:
259 new housing units
35 memory care rooms
20,000 square feet of retail
44,100 square feet of open space
STIZZY CANNABIS DISPENSARY | Benicia, CA
Retail space for cannabis that includes a 600 SF art gallery. ICCI worked with the City of Benicia for over 3 years to introduce a retail cannabis location to the City of Benicia. ICCI attended preapplica - tion meetings in 2019 and continued to meet with City staff and design professionals during construction to ensure final and cer - tificate of occupancy was obtained with a grand opening date of September 2021.
10X GENOMICS | Pleasanton, CA
In 2021, ICCI completed building, on-site and fire plan review for the development of a new campus for a Biotechnology/Life Scienc - es Company. The development includes research and development, office and laboratory building on a 14.58-acre property.

City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 16
ICCI is independent, properly licensed to practice in California, and has no conflict of interest with regard to any other work performed by the firm for the City of Vallejo.

ICCI embraces new technology and since its establishment in 2018, the company is mostly cloud- based with the option for all employees to be mobile. ICCI’s personnel have performed electronic plan review for nearly 6 years using several permit- ting and workflow applications, such as ProjectDox, OpenGov, Accela, and DigEplan. Both ProjectDox and OpenGov have Bluebeam Revu built into the applications. ICCI’s plan review staff also has experience performing plan review within the DigEplan platform and all our plan review staff is proficient in Adobe Acrobat Pro. In 2020, most jurisdictions transitioned to electronic plan review and ICCI was able to continue providing plan review services and accommodate any changes to the process from hardcopy submissions. Some of our clients were not prepared or equipped to receive high volumes of electronic plans. ICCI can and has offered its clients a project management site to receive, retrieve, and upload electronic documents in one secure location.

In addition to our clients’ workflow or project management sites, ICCI has its own process of tracking submittals. We cross reference our tracking log with each of our clients’ project management sites multiple times a day to make sure our records match any projects assigned to us.

Internal Process and Methodology

1. Upon receipt of plans, submittals are screened by both our document control department and project manager to ensure all documents required for plan review are received.

2. Plans are the logged into our tracking system and routed to the appropriate plan reviewers.

PROPOSED APPROACH
City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 17

3. Submittals are reviewed for compliance with the latest adopted version of the California Building Code, California Residential Code, California Green Building Code, California Mechanical Code, California Plumbing Code, California Electrical Code, Title 24 - Accessibility and Energy Conservation requirements, municipal code and all applicable local amendments and ordinances that are recorded in our jurisdiction specific templates.

4. All plan reviews also go through our internal quality control process to ensure big ticket items and local amendments and ordinances are not missed.

5. Due to our team’s experience and understanding of construction and permit processing, we will contact our clients for any red flags that may pose a problem either during the plan review process or during construction. Our team will work with our clients and applicants and will be readily available to meet with all stakeholders to ensure all milestones are completed on time while ensure compliance with the latest adopted codes, local amendments and ordinances.

Communication, redundancy and cross training are keys to success in providing on-call professional services for Commu - nity Development Departments. ICCI’s permit technician staff are familiar with DigEplan and are able to perform solar plan reviews and small kitchen and bathroom remodel reviews. ICCI’s key plan review personnel can also help issue permits should the need arise.

In addition, our CASp plan reviewer is also a licensed civil engineer with both plan review and design experience and is able to review both the site and grading plans in conjunction with the foundation plan. With our knowledge, experience and multi-disciplined team members, we are able to create an efficient and dynamic team that is capable of managing any complications that arise during the plan review and construction phases.

For complex projects, our team will work with the City of Vallejo to develop a plan review phasing plan to show we have the capacity and the right resources to streamline the plan review process and ensure major milestones are completed on schedule. For example, our proposed subconsultant team is not only aware of engineering standards and practices, but is also cognizant of Federal and California accessibility requirements when reviewing site grading and improvement plans.

ELECTRONIC PLAN REVIEW
ICCI will work with you and your team to create and develop electronic plan review process and procedures. ICCI is highly experienced in several different electronic plan review applications: Bluebeam, Avolve Software - ProjectDox, and Adobe Acrobat. Our key team members were an integral part of the City of Cupertino’s transition from paper plan review to all electronic plan review. ICCI has even provided free Bluebeam training via webinar for our clients.

Our team works collectively as a group where we utilize each others’ strengths when reviewing and processing a set of plans. We ensure timelines are met and projects are billed accurately. Our structural engineer has several years of design and code enforcement experience and is capable of reviewing small projects such as patio covers to high-rise, mixed oc - cupancy buildings and everything in between. Our senior plan reviewer has many years of construction experience that can help solve field problems should the need arise. From the planning design phase through the certificate of occupancy finalization, our seasoned civil and fire protection plan reviewers are able to foresee and help resolve any problems that may occur. With our knowledgeable and experienced team, ICCI can support your staff with all aspects of the permit and plan review processes.

City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 18
Building Plan Review Services Unit Rate Unit
Complete Plan Review Fee (first submittal plus two (2) additional subsequent submittals) 65% of Plan Review Fee All other Building, Safety Plan Review Submittals $120.00 Hour Structural Only Review $120.00 Hour
Basis of Charges Unit Rate
Work over 8 hours a day Time and One-Half
Work over 12 hours, Monday through Friday Double Time
Work on Saturdays Time and One-Half
Work over 8 hours on Saturday Double Time
Work on Sundays/Holidays Double Time
Reimbursables Cost

PLAN REVIEW TIMELINE
Independent Code Consultants will meet your plan review needs, which includes attending meetings and workshops when necessary. We also are able to meet or exceed the following timelines for plan review services:

Small to Mid-Scale Projects Larger to More Complex Projects Standard Turnaround Times: Standard Turnaround Times:

First Submittals: 10 days First Submittals: 15 days
Subsequent Submittals: 5 days Subsequent Submittals: 10 days Expedited Turnaround Times**: Expedited Turnaround Times**:

First Submittals: 5 days First Submittals: 10 days
Subsequent Submittals: 3 days Subsequent Submittals: 7 days ** Expedited Turnaround Times will be subject to discussion by all concerned parties to ensure milestones are met and completed on-time and on-schedule.

FEE SCHEDULE
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REFERENCES
City of Benicia | Plan Review and Permit Counter Services Independent Code Consultants’ key personnel has worked with Benicia’s Chief Building Official for nearly 5 years. Our team has worked on several buildings located along Benicia’s historic downtown. ICCI’s key personnel has worked with the City’s Planning, Building, Engineering and Fire Divisions by providing preliminary plan reviews and attending pre- application meetings for several high profile projects, including a Cannabis manufacturing facility.

City of Pleasanton | Civil On-Site, Fire & Building Plan Review and Permit Counter Services Independent Code Consultants’ key personnel provided both building and fire plan review services, including on-site plan review and permit technician services, for the City of Pleasanton. Greg Shriver has worked with the City of Pleasanton for over 20 years. Our team’s success is due not only to our quality plan reviews and proactive communication, but our relationships that we have developed with our clients throughout the years. We incorporate requirements from other City departments or divisions and other regulating agencies as it applies to plan review. We also review any revisions to previ- ously-approved plans in a timely manner and verify that corrections have been satisfactorily made.

City of Cupertino | Building and Civil Plan Review Services Independent Code Consultants’ key personnel provided plan review services for the City of Cupertino for over 4 years.

Abby Obligacion has worked with Albert Salvador, CBO, for nearly 15 years. Independent Code Consultants is prepared to do electronic plan review and our staff has been an integral part during the City of Cupertino’s transition from paper to electronic plan review.

Mr. Rob Queirolo | CBO
City of Pleasanton
PO Box 520 | Pleasanton, CA 94566
925.931.5300
[email protected]
Ms. Rachel O’Shea | CBO
City of Benicia
250 East L Street | Benicia, CA 94510
707.746.4233
[email protected]
Mr. Albert Salvador | CBO
City of Cupertino
10200 Torre Avenue | Cupertino, CA 95014
408.777.3228
[email protected]

City of Vallejo | As-Needed Outside Plan Review, Permitting & Field Inspection Services Page | 20

PROFESSIONAL SERVICES AGREEMENT /

INSURANCE
We have reviewed and accept the City of Vallejo's standard Consultant and Processional Services Agreement without modification, and is willing to obtain the minimum scope and limits of insurance contained in the exhibits of this RFP, including engineering errors and omissions coverage.

CONSENT CALENDAR 8.O.

DATE: June 13, 2023
TO: Mayor and Members of the City Council
FROM: Armond Sarkis, Risk Manager & Safety Officer
SUBJECT: ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.

RECOMMENDATION
Adopt a resolution authorizing the City Manager to execute an agreement with Sedgwick Claims Management Services, Inc. for Third-Party Liability Claims Administration Services. The proposed three-year agreement, from May 21, 2023, through May 22, 2026, will not exceed $220,500 increasing each year the greater of 3% or the percentage increase as reported by the U.S. Department of Labor ‐ Bureau of Labor Statistics for the Consumer Price Index for All Urban Consumers (CPI‐U) for the U.S. City Average, All Items, unadjusted and published during the month ending three months prior to the anniversary date of the contract, plus unforeseen small fees as needed in an amount not to exceed $6,000. The contract includes an initial three-year engagement, with the option to extend up to an additional two years.

REASONS FOR RECOMMENDATION
The third-party claims administrator (TPA) assists the City in responding to liability claims quickly and effectively and performs thorough investigations, as needed. Sedgwick Claims Management Services, Inc. provides guidance to the City regarding practices and decisions related to claims adjusting, performs regular reviews on outstanding claims with staff and the City's excess insurer, provides proactive risk mitigation advice, takes initiative on processing claims from submittal to close of file, and reports claims to the excess insurers.

BACKGROUND AND DISCUSSION
Sedgwick Claims Management Services, Inc., formerly known as York Risk Services Group, Inc., has been serving as the City's third-party claims administrator (TPA) since May 15, 2018. Sedgwick's current contract amendment allowed for annual extensions, which expires on May 20, 2023.

The City's Risk Management division issued a Request for Proposal (RFP) for liability claims Third-Party Claims Administration services in anticipation of the Professional Services Agreement with Sedgwick expiring.

Five written qualifying proposals were received from Innovative Claims Solutions, Sedgwick, InterCare, George Hills, and Carl Warren & Company. A panel consisting of representatives from the City Attorney's Office, City Manager's Office, and Risk Management evaluated them in nine categories and invited all five firms for an interview and presentation.

It was recommended that the services offered by incumbent Sedgwick best met the needs of the City.

Therefore, it is recommended that a Professional Services Agreement be awarded to Sedgwick Claims Management Services, Inc. for a three-year period, with the option for up to two additional years.

FISCAL IMPACT
The action has a fiscal impact as Sedgwick's first-year claims handling annual fee is $220,500 increasing each year the greater of 3% or the percentage increase as reported by the U.S. Department of Labor ‐ Bureau of Labor Statistics for the Consumer Price Index for All Urban Consumers (CPI‐U) for the U.S. City Average, All Items, unadjusted and published during the month ending three months prior to the anniversary date of the

Date: June 13, 2023
Subject: ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.

Page 2 ends

contract, plus some minor fees, compared to the expiring contract annual fee of $132,304, plus some minor fees. However, Sedgwick's proposal was not the most expensive the City received. Risk Management has anticipated and accurately budgeted for the new and increased annual fee. There is no impact to the General Fund.

ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines section 15378.

ATTACHMENTS

1. Sedgwick Reso_CAO Stamp

2. CPS Agreement 2023-2024 CSA 04192023

CONTACT
Armond Sarkis, Risk Manager & Safety Officer (707) 648-4143 [email protected]

RESOLUTION NO. _________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO

AUTHORIZING THE CITY MANAGER TO EXECUTE A CONSULTANT AND

PROFESSIONAL SERVICES AGREEMENT WITH SEDGWICK CLAIMS
MANAGEMENT SERVICES, INC. FOR THIRD-PARTY LIABILITY CLAIMS

ADMINISTRATION SERVICES
WHEREAS, the City of Vallejo (City) utilizes Sedgwick Claims Management Services, Inc. for the City’s Risk Management department; and
WHEREAS, on January 9, 2023, the City issued a Request for Proposals (RFP) for third-party claims administrator services and based on RFP responses and claims administrator interviews, the City of Vallejo Liability Claims TPA Evaluation Committee unanimously recommends Sedgwick Claims Management Services, Inc. as the third- party claims’ administrator for the City’s liability claims; and WHEREAS, approval of this agreement will allow the City to use Sedgwick’s claim services to meet its legal obligations under federal and state laws.

NOW THEREFORE, BE IT RESOLVED that the City Manager or his designee be authorized on behalf of the Vallejo City Council to execute a Consultant and Professional Services Agreement with Sedgwick Claims Management Services, Inc. for the purchase of third-party liability claims administration services for a term of three years, with option to extend up to two additional years, in the annual amount of $220,500 increasing each year the greater of 3% or the percentage increase as reported by the U.S. Department of Labor ‐ Bureau of Labor Statistics for the Consumer Price Index for All Urban Consumers (CPI‐U) for the U.S. City Average, All Items, unadjusted and published during the month ending three months prior to the anniversary date of the contract, plus unforeseen small fees as needed in an amount not to exceed $6,000.

Adopted by the Council of the City of Vallejo at a regular meeting held on June 13, 2023 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________________________
ROBERT H. MCCONELL, MAYOR
ATTEST:
_____________________________________
DAWN G. ABRAHAMSON, CITY CLERK

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CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT
This Consultant and Professional Services Agreement ("Agreement") is made at Vallejo, California, dated for reference this 25th day of April 2023, by and between the City of Vallejo, a municipal corporation ("City") and Sedgwick Claims Management Services, Inc., a California corporation, hereinafter referred to as "Consultant", who agree as follows:

1. Services. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide the City professional services as specified in Exhibit “A”, entitled "Scope of Work."

2. Payment. City shall pay Consultant for services rendered pursuant to this Agreement at the times and in the manner set forth in Exhibit “B”, entitled "Compensation." The payments specified in Exhibit “B” shall be the only payments to be made to Consultant for services rendered pursuant to this Agreement.

3. Facilities and Equipment. Consultant shall, at its sole cost and expense, furnish all facilities and equipment which may be required for furnishing services pursuant to this Agreement.

4. Indemnification. Consultant shall indemnify, hold harmless, and defend City, its officers, officials, directors, employees, agents and volunteers and each of them from any claims, demands, causes of action, damages , costs, expenses, actual attorney's fees, consultant's fees, expert fees, losses or liability, in law or in equity, arising directly out of Consultant's performance hereunder, or any subcontractor's associated performance hereunder , for Consultant's or subcontractor's tort negligence including active or passive, or strict negligence, including but not limited to, personal injury including, but not limited to, bodily injury, emotional injury, sickness or disease, or death to persons and/or damage to property of anyone, including loss of use thereof, caused or alleged to be caused by any act or omission of Consultant, or any subcontractor, or anyone directly or indirectly employed by any of them or anyone for the full period of time allowed by the law, regardless to any limitation by insurance, with the exception of the sole negligence or willful misconduct of the City or any of its officers, officials, directors, employees, agents, volunteers, and affiliates.

The provisions of this S ection shall survive the expiration or termination of this Agreement.

5. Insurance Requirements. Consultant agrees to comply with all of the Insurance Requirements set forth in Exhibit “C”, entitled "Insurance Requirements for Consultant." Failure to maintain required insurance at all times shall constitute a default and material breach of this Agreement.

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6. Accident Reports . Consultant shall immediately report (as soon as feasible, but not more than 24 hours) to the City any accident or other occurrence causing injury to persons or property during the performance of this Agreement. The report shall be made in writing and shall include, at a minimum: (a) the names, addresses, and telephone numbers of the persons involved; (b) the names, addresses, and telephone numbers of any known witnesses; and (c) the date, time, and description of the accident or other occurrence.

7. Conflict of Interest. Consultant warrants and represents that to the best of its knowledge, there exists no actual or potential conflict between Consultant's family, business, real property, or financial interests and the services to be provided under this Agreement. Consultant shall comply with the City of Vallejo Conflict of Interest Code and not enter into any contract or agreement during the performance of this Agreement which will create a conflict of interest with its duties to City under this Agreement. In the event that a change in Consultant's family, business, real property, or financial interests occurs during the term of this Agreement that creates an actual or potential conflict of interest, then Consultant shall disclose such conflict in writing to City. Every individual who performs services on behalf of Consultant pursuant to this Agreement must file a full Statement of Economic Interests (also known as Form 700) with the City Clerk if the work of the individual involves making a governmental decision whether to issue, deny, suspend, or revoke any permit, license, application, certificate, approval, order, or similar authorization or entitlement; authorizes the City to enter into, modify, or renew a contract; grants City approval of specifications for a contract; adopts or approves for the City any policy, standard, or guideline; lobbies on behalf of the City, or performs the same or substantially all the same duties for the City that would otherwise be performed by an individual holding a position specified in the City's Conflict of Interest Code.

8. Independent Contractor. Consultant is an independent contractor.

Neither Consultant nor any of Consultant's officers, employees, agents, or subcontractors, if any, is an employee of City by virtue of this Agreement or performance of any services pursuant to this Agreement. City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement, however, City shall not have the right to control the means by which Consultant accomplishes services pursuant to this Agreement.

9. Licenses, Permits, Etc. Consultant represents and warrants to City that all consultant services shall be provided by a person or persons duly licensed by the State of California to provide the type of services to be performed under this Agreement, and that Consultant has all the permits, qualifications, and approvals, of whatsoever nature, which are legally required for Consultant to practice its profession. Consultant represents and warrants to City that it shall, at its sole cost and expense, keep in effect, at all times during the term of this Agreement, any licenses, permits, and approvals which are legally required for Consultant to practice its profession.

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10. Business License. Consultant, and its subcontractors, has obtained or agrees to apply prior to performing any services under this Agreement to City's Finance Department for a business license, pay the applicable business license tax, and maintain said business license during the term of this Agreement. The failure to obtain such license shall be a material breach of this Agreement and grounds for termination by City. No payments shall be made to Consultant until such business license(s) have been obtained.

11. Standard of Performance. Consultant shall provide products and perform all services required pursuant to this Agreement in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised under similar conditions by a member of Consultant's profession currently practicing in California.

Consultant is responsible for making an independent evaluation and judgment of all conditions affecting performance of the work, including without limitation, applicable federal, state, and local laws and regulations, and all other contingencies or considerations.

Consultant's responsibilities under this Section shall not be delegated.

Consultant shall be responsible to City for acts, errors, or omissions of Consultant's subcontractors.

Consultant is responsible for making an independent evaluation and judgment of all conditions affecting performance of the work and shall prepare plans, reports, and/or other work products in such a way that additional costs will not be incurred beyond a project budget approved or amended by the City Manager or his or her designee.

Whenever the scope of work requires or permits review, approval, conditional approval or disapproval by City, it is understood that such review, approval, conditional approval or disapproval is solely for the purposes of administering this Agreement and determining whether the Consultant is entitled to payment for such work, and not be construed as a waiver of any breach or acceptance by the City of any responsibility, professional or otherwise, for the work, and shall not relieve the Consultant of responsibility for complying with the standard of performance or laws, regulations, industry standards, or from liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of Consultant.

12. Force Majeure. With the exception of City’ s continuing payment obligations hereunder, which shall only be suspended, not forgiven, neither party shall be considered in default of this Agreement to the extent performances are prevented or delayed by causes or
circumstances beyond either party's reasonable control, such as war, riots, strikes, lockouts, work slowdown or stoppage, acts of God, such as floods or earthquakes, and electrical blackouts or brownouts.

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In the event that the Consultant is unable to meet the completion date or schedule of services, Consultant shall immediately inform the City Representative of this in writing. If additional time is required to perform the work, the City Representative may adjust the schedule.

13. Time is of the Essence . Time is of the essence in this Agreement.

Any reference to days means calendar days, unless otherwise specifically stated.

14. Personnel. Consultant agrees to assign only competent personnel, according to the reasonable and customary standards of training and experience in the relevant field to perform services under this Agreement. Failure to assign such competent personnel shall constitute grounds for termination of this Agreement.

The payment made to Consultant, pursuant to this Agreement, shall be the full and complete compensation to which Consultant and Consultant's officers, employees, agents, and subcontractors are entitled for performance of any work under this Agreement. Neither Consultant nor Consultant's officers or employees are entitled to any salary or wages, or retirement, health, leave, or other fringe benefits applicable to employees of the City. The City will not make any federal or state tax withholdings on behalf of Consultant. The City shall not be required to pay any workers' compensation insurance on behalf of Consultant.

Consultant shall pay, when and as due, any and all taxes incurred as a result of Consultant's compensation hereunder, including estimated taxes, and shall provide City with proof of such payments upon request.

15. Consultant Not Agent. Except as authorized under this Agreement or as City may authorize in a letter of authorization signed by the City Manager or his or her designee, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, under this Agreement, to bind City to any obligation whatsoever.

16. Term. The term of this Agreement shall commence on May 21, 2023, and shall terminate on May 22, 2026 (each May 21 to May 22 referred to as Service Year 1, 2, or 3, respectively), unless extended in writing by the City upon (30) days written notice and upon terms and conditions mutually agreeable to the parties.

City shall, at its discretion, have the ri ght to extend the term of this Agreement twice, in intervals of one (1) year, by written notice to Consultant upon terms and conditions mutually agreeable to the parties . The total duration of this Agreement, including the exercise of any options under this Section, shall not exceed five (5) years.

If the term of this Agreement extends into fiscal years subsequent to that in which it is approved, such continuation of the Agreement is contingent on the appropriation of funds for such purpose by the City Council of the City of Vallejo. If funds

Consultant and Professional Services Agreement
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to effect such continued payment are not appropriated, Consultant agrees to terminate any services supplied to City of Vallejo under this Agreement, and relieve City of any further obligation therefore.

17. Termination or Abandonment by City. The City has the right, at any time and in its sole discretion, to terminate or abandon any portion or all of the services to be provided under this Agreement by giving sixty (60) days written notice to Consultant.

Upon receipt of a notice of termination, Consultant shall perform no further work except as specified in the notice. The Consultant has the right, at any time and in its sole discretion, to terminate or abandon any portion or all of the services to be provided under this Agreement by giving ninety (90) days written notice to City. Within thirty (30) days following the date of termination, Consultant shall deliver to City all City records and documents, all work product, whether completed or not, as of the date of termination and not otherwise previously delivered.

The City shall pay Consultant for services performed in accordance with this Agreement up to and including the final date of performance. If this contract provides for payment of a lump sum for all services or by task and termination occurs before completion of the work or any defined task which according to the performance schedule was commenced before the notice of termination, the fee for services performed shall be based on an amount mutually agreed to by City and Consultant for the portion of work completed in conformance with this Agreement before the date of termination. In addition, the City will reimburse Consultant for authorized expenses incurred and not previously reimbursed. The City shall not be liable for any fees or costs associated for the termination or abandonment except for the fees, and reimbursement of authorized expenses, payable pursuant to this Section.18. Products of Consulting Services . The work product, including without limitation, all writings, work sheets, reports, recordings, drawings, files, detailed calculations and other work products, whether complete or incomplete, produced by Consultant solely for use by City shall become the property of City. Consultant agrees that all copyrights which arise from creation of the work under this Agreement shall be vested in the City and waives and relinquishes all claims to copyright or other intellectual property rights in favor of the City. City acknowledges that its use of the work product is limited to the purposes contemplated by the scope of work and that the Consultant makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work.

Although Consultant authorizes City to use or have access to Consultant's proprietary claims handling system (the "Systems") in performance of the Services enumerated in this Agreement, this does not license Consultant's Systems to the City nor shall the City have, or assert, any property interest whatsoever in the Systems or any improvements or additions Consultant makes to its Systems during and/or in the course of Consultant's performance under this Agreement, whether or not such improvements or additions were made at the suggestions, request, or direction of the City.

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Documents submitted to the City in electronic format shall be formatted according to specifications provided by the City, or if not otherwise specified, in Microsoft Word, Excel, PowerPoint, or other Microsoft Office Suite (2002) format as appropriate for the particular work product or, if directed by the City Representative in Adobe Acrobat PDF format.

19. Cooperation by City. City shall, to the extent reasonable and practicable, assist and cooperate with Consultant in the performance of Consultant's services hereunder.

20. Assignment and Subcontracting. Consultant shall not subcontract, assign, or transfer, voluntarily or involuntarily, any of its rights, duties, or obligation under this Agreement without the express written consent of the City Manager or his or her designee in each instance which consent shall not be unreasonably withheld, delayed or conditioned. Any attempted or purported assignment of any right, duty, or obligation under this Agreement without said consent shall be void and of no effect.

If subcontracting of work is permitted, Consultant shall pay its subcontractor in accordance with its agreement(s) with such subcontractor for work performed by a subcontractor and billed by the Consultant. Use of the term subcontractor in any other provision of this contract shall not be construed to imply authorization for Consultant to use subcontractors for performance of any service under this Agreement.

The City is an intended beneficiary of any work performed by Consultant's subcontractor for purposes of establishing a duty of care between the subcontractor and City.

Any subcontractor or assignee consented to by City shall be bound by terms and conditions substantially the same as those in this agreement including, but not limited to, the insurance and indemnification requirements set forth herein.

21. Successors and Assigns. All terms, conditions, and provisions of this Agreement shall apply to and bind the respective heirs, executors, administrators, successors, and assigns of the parties. Nothing in this Section is intended to affect the limitation on assignment.

22. Non-Discrimination/Fair Employment Practices.

(a) Consultant shall not, because of race, religious creed, color, sex, national original, ancestry, disability, medical condition, age, marital status, or sexual orientation of any person, refuse to hire or employ, or to bar or discharge from employment, or to discriminate in compensation, or in terms, conditions or privileges any person, and every employee will receive equal opportunity for employment and shall be granted equal treatment with respect to compensation, terms, conditions or other privileges of employment, without regard to his race, religious creed, color, sex, national origin, ancestry, or disability, medical condition, age, marital status or sexual orientation.

Consultant and Professional Services Agreement
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Consultant warrants and represents it is an equal opportunity employer and agrees it shall not discriminate on the basis of race, religious creed, color, sex, national origin, ancestry, disability, medical condition, age, marital status, or sexual orientation in the selection and retention of employees, subcontractors or procurement of materials or equipment.

ln all solicitations, e ither by competitive bidding or negotiations made by Consultant for work to be performed under any subcontract, including procurement of materials or equipment, each potential subcontractor or supplier shall be notified by Consultant of Consultant's obligation under this Agreement relative to nondiscrimination and fair employment practices.

Consultant shall include the above provisions of this S ection in every subcontract, including procurement of materials or equipment.

Consultant agrees to comply with T itle VII of the Civil Rights Act of 1964, as amended, the California Fair Employment Practices Act, the Americans with Disabilities Act of 1990, any other applicable federal and state laws and regulations and City ordinances and regulations hereinafter enacted.

23. Notices. All notices or instruments required to be given or delivered by law or this Agreement shall be in writing and shall be effective upon receipt thereof and shall be by personal service or delivered by depositing the same in any United States Post Office, registered or certified mail, postage prepaid, addressed to:

If to City: Armond Sarkis
Risk Manager & Safety Officer
City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590

If to Consultant:

General Counsel - Americas
Sedgwick Claims Management Services,
Inc.
8125 Sedgwick Way
Memphis, TN 38125
ATTN: General Counsel - Americas

Any party may change its address for receiving notices by giving written notice of such change to the other party in accordance with this Section.

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Routine administrative communications shall be made pursuant to Section 1 of Exhibit “A”.

24. Integration Clause. This Agreement, including all Exhibits, contains the entire agreement between the parties and supersedes whatever oral or writt en understanding they may have had prior to the execution of this Agreement. This Agreement shall not be amended or modified except by a written agreement executed by each of the parties hereto.

25. Severability Clause. Should any provision of this Agreement ever be deemed to be legally void or unenforceable, all remaining provisions shall survive and be enforceable.

26. Law Governing. This Agreement shall in all respects be governed by the law of the State of California without regard to its conflict s of law rules. Litigation arising out of or connected with this Agreement shall be instituted and maintained in the courts of Solano County in the State of California or in the United States District Court, Eastern District of California, Sacramento, California, and the party’s consent to jurisdiction over their person and over the subject matter of any such litigation in such courts, and consent to service of process issued by such courts.

27. Waiver. Waiver by either party of any default, breach, or condit ion precedent shall not be construed as a waiver of any other default, breach, or condition precedent or any other right hereunder.

28. Ambiguity. The parties acknowledge that this is a negotiated Agreement, that they have had the opportunity to have this Agreement reviewed by their respective legal counsel, and that the terms and conditions of this Agreement are not to be construed against any party on the basis of such party's draftsmanship thereof.

29. Gender. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identifications of the person or persons, firm or firms, corporation or corporations may require.

30. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

31. Compliance with Laws. Consultant will comply with all statutes, regulations, and ordinances in the performance of all services under this Agreement.

32. Confidentiality of City Information. During the performance of services under this Agreement, Consultant may gain access to and use City information

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regarding, but not limited to, procedures, policies, training, operational practices, and other vital information (hereafter collectively referred to as "City Information") which are valuable, special, and unique assets of the City. Consultant agrees that it will not use any information obtained as a consequence of the performance of services under this Agreement for any purpose other than fulfillment of Consultant's scope of work , to protect all City Information and treat it as strictly confidential and proprietary to City, and that it will not at any time, either directly or indirectly, divulge, disclose, or communicate in any manner any City Information to any third party, other than its own employees, agents, or subcontractors who have a need for the City Information for the performance of services under this Agreement, without the prior written consent o f City, or as required by law.

Consultant may use anonymized, aggregated data for auditing, compliance, internal assessments, process improvement, and related analytics.

Consultant shall treat all records and work product prepared or maintained by Consultant in the performance of this Agreement as confidential.

A violation by Consultant of this Section shall be a material violation of this Agreement and will justify legal and/or equitable relief.

Consultant's obligations under this S ection shall survive the completion of services, expiration, or termination of this Agreement.

33. News and Information Release. Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from City through the City Representative.

34. City Representative. The City Representative specified in Exhibit “A”, or the representative's designee, shall administer this Agreement for the City.

35. Counterparts. The parties may execute this Agreement in one or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

36. Facsimile Signature; Electronic Signature. This Agreement shall be binding upon the receipt of facsimile signatures or e- mailed by PDF or otherwise. Any - person transmitting his or her signature by facsimile or electronically shall promptly send an original signature to the other party pursuant to the notice provision of this Agreement.

The failure to send an original shall not affect the binding nature of this Agreement.

37. Authority. The person signing this Agreement for Consultant hereby represents and warrants that he/she is fully authorized to sign this Agreement on behalf of Consultant.

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38. Exhibits. The following Exhibits are attached hereto and incorporated herein by reference:

• Exhibit “A” entitled "Scope of Work," including any attachments; • Exhibit “B” entitled "Compensation," including any attachments; and • Exhibit “C” entitled "Insurance Requirements," including attachments.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year shown below the name of each of the parties.

SEDGWICK CLAIMS MANAGEMENT
SERVICES, INC.,
a California Corporation

By:

Date:

11718286
Vallejo Business License No.

(City Seal)

CITY OF VALLEJO,
a Municipal Corporation

By:

MICHAEL MALONE
City Manager

Date:

ATTEST:

By:

DAWN G. ABRAHAMSON
City Clerk

APPROVED AS TO CONTENT:

TERRANCE DAVIS
Assistant City Manager

APPROVED AS TO FORM:

VERONICA A.F. NEBB

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City Attorney

APPROVED AS TO INSURANCE:

ARMOND SARKIS
Risk Manager

Consultant and Professional Services Agreement
EXHIBIT “A”
12 EXHIBIT “A”

SCOPE OF WORK

1. Representatives.

The City Representative for this Agreement is:

Armond Sarkis
Risk Manager & Safety Officer
City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590
(707) 648-4143
[email protected]

The Consultant's Representative for this Agreement is:

General Counsel - Americas
Sedgwick Claims Management Services, Inc.
8125 Sedgwick Way
Memphis, TN 38125

The Consultant's Representative for daily account management is:

Erik Baumle
Director Client Services
Sedgwick Claims Management Services, Inc.
333 City Blvd Ste 1500
Orange, CA 92868
(360) 742-2799
[email protected]

All routine administrative communications between the parties will be between the above- named representatives and may be by personal delivery, mail, facsimile transmission, or electronic mail as agreed between the Consultant Representative and City's Representative.

2. Services to be Provided. The services provided shall be as set forth below:

a. Claims Administration

Consultant and Professional Services Agreement
EXHIBIT “A”
13 i. Determine liability for claimed losses on a timely basis and in accordance with the California Tort Claims Act and in accordance with the applicable provisions of the “ Liability Claims Administration Standards” required by Public Risk Innovation, Solutions, and Management (hereinafter PRISM), the City's excess insurance pool, as set forth in Attachment 1 of Exhibit “A’, and as may be amended during the term of this Agreement;

ii. Review, compute, and, after approval by the City, obtain the appropriate release document from the claimant and process payment of settlement checks.;

iii. Pay any and all penalties due in accordance with the California laws . Such penalties shall be paid by the claims administrator with liability for the action determined by the record unless such penalties were incurred as a result of the City's action or inaction; Consultant agrees that penalties incurred as a result of the failure of adjusting firm to comply with statutory laws and regulations shall be the sole responsibility and cost of Consultant. City shall be notified in writing within thirty (30) days of any penalty paid by the adjusting firm and the reason for the penalty;

iv. Establish files containing medical and factual information on each report ed claim, together with complete accounting records and maintain in accordance with statutory time requirements;

v. Prepare, file, and maintain all information and reports as required by the State of California.;

vi. Provide the City with information and recomm endations for implementation strategies for changes or proposed changes in statutes, rules and regulations affecting the City under California laws;

Review with the City the liability program's progress, including identification of problem areas and possible solutions;

vii. Attend quarterly meetings required by the City relative to the liability claims program;

viii. Arrange for and supervise all necessary investigations to determine eligibility for benefits and liability of negligent third parties;

Consultant and Professional Services Agreement
EXHIBIT “A”
14 ix. Establish proc edures to support the payment of allocated expenses together with appropriate documentation necessary to reconcile a trust fund checking account provided by the City; the City shall determine the amount that will be maintained in the trust fund checking account; a copy of all checks, vouchers or warrants drawn by the Consultant to pay benefits on City claims shall be provided to the City; a monthly check/voucher register of all transactions made for the period shall be provided by the Consultant; and the City reserves the right to conduct a financial audit of the trust fund to insure the integrity of the account;

x. Sponsor and pay for a membership in the nationwide Index System on the City's behalf; per reinsurer guidelines and instructions, submit all claims to the Index System as a regular practice;

xi. Refer litigated cases to attorneys approved by the City for purposes of defending the City's interest before courts of law;

xii. Attend, where indicated, trials, hearings, arbitrations, hearings and any and all legal proceedings;

xiii. Produce computer generated reports as specified by the City; such reports shall include a computerized loss analysis and summary report each month covering activity on all newly reported, open, and newly closed claims for the period; and other summary and responsive reports on demand at no additional cost to the City; prepare and submit in a timely manner all reports, including statistical reports, as required by the City's excess insurance pool;

xiv. Coordinate Medicare and Medicaid set asi de agreements in compliance with Section 111 ("Medicare Secondary Payer") of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) effective July 1, 2009, including required reporting, with a one-time charge of $9 per claim involving bodily injuries; and

xv. Comply with the City of Vallejo Liability Program Claims Handling Instructions as set forth in Attachment 2 of Exhibit “A”, which was updated as of November 28, 2022, and as may be amended during the term of this Agreement.

b. Other Services

i. Relinquish in good order and condition upon terminat ion of this Agreement all records, files, transcripts, computer tapes , and other materials

Consultant and Professional Services Agreement
EXHIBIT “A”
15 regarding City's claims activity; said material is the property of the City and City shall not be required to pay any additional cost for the transfer of files to City;

ii. Be available for spot audit checks by the City when requested;

iii. Cooperate with file and program audits with carrier designated and City designated auditors;

iv. Be available to respond to a major emergency or catastrophe involving the City to expedite claims processing;

v. Provide Internet email addresses for designated claims adjuster(s) to City staff;

vi. Provide 24-hour claims reporting capability; and

vii. Provide City staff access to electronic claims file when available to Consultant.

3. Time for Performance. Consultant will perform the services according to the schedule set forth above in paragraph 2. If the schedule calls for the services to be performed in phases or discrete increments, Consultant shall not proceed from one phase or increment to the next without written authorization from the City's Representative.

Consultant will complete all services by December 31, 2025.

4. Key Personnel. All of the individuals identified below are necessary for the successful prosecution of the services due to their unique expertise and depth and breadth of experience. Consultant shall not remove the personnel listed below, without written approval of the City Representative. Consultant recognizes that the composition of this team was instrumental in the City's decision to award the work to Consultant and that compelling reasons for substituting these individuals must be demonstrated for the City's consent to be granted. Any substitutes shall be persons of comparable or superior expertise and experience. Failure to comply with the provisions of this S ection shall constitute a material breach of Consultant's obligations under this Agreement and shall be grounds for termination.

Key personnel will be determined prior commencement of the Agreement.

Consultant shall seek approval of the City before appointing key personnel.

Addendum B: Liability
Claims Administration Guidelines

Page 1 of 8 ends

Adop ted: December 6, 1985
Last Amended: July 1, 2019

LIABILITY CLAIMS ADMINISTRATION STANDARDS
The fo
llowing Standards have been adopted by Public Risk Innovation, Solutions, and Management (hereinafter PRISM) in accordance with Article 18(b) of the PRISM Joint Powers Agreement. It is the intent that these standards shall be followed by the Member and/or third party administrator.

I. C

LAIMS INVESTIGATION
A. Com
plete initial investigation answering questions such as who, what, where, when and why. Investigations shall be completed within forty-five (45) days of the Member’s knowledge of claim, including statements from participants and witnesses, appropriate official reports, investigative reports , site inspections, relevant documents and photos/videos.

B. Id
entify liability issues, including immunities, comparative negligence, joint tortfeasors and joint and several liability.

C. In
itiate the development of information on damages including, but not limited to:

1. Property damage

2. Nature and extent of injuries

3. Medical costs (billed and paid)

4. Lost wages (past and future)

5. Other economic damages

6. Non-economic damages
D. Obt
ain and review relevant contracts and insurance documents, to determine whether there is any sharing or complete transfer of the risk.

1. Hold-harmless and/or indemnity agreements

2. Additional insured requirements
E. Ens
ure proper preservation of evidence.

F. Ev
aluate the need to utilize experts.

G. I
ndexing.

Attachment 1

EXHIBIT A
Addendum B: Liability
Claims Administration Guidelines

Page 2 of 8 ends

1. All bodily injury claims shall be initially reported to the Index Bureau and re-indexed on an as needed basis thereafter.

PRI
SM maintains a membership with the Index Bureau that members can access.

H. S
ecure estimates or appraisals for damaged property.

All notices (pertaining to claim insufficiency, returning late claims, claims rejections, etc.) shall be done in accordance with the relevant Governmental Code provisions.

II. P

RISM REPORTING REQUIREMENTS
A. F
irst Report
The M
ember shall give PRISM immediate written notice for any claims or suits which the Member becomes aware of that include injury of the following types:
a. Death
b. Paralysis, paraplegia, quadriplegia
c. Loss of eye(s), or limbs
d. Spinal cord or brain injury
e. Dismemberment or amputation
f. Sensory organ or nerve injury or neurological deficit g. Serious burns
h. Severe scarring
i. Sexual assault or battery including but not limited to rape, molestation or sexual abuse
j. Substantial disability or disfigurement
k. Any class action
l. Any claim or suit in which PRISM is named as a defendant; or m. Any injury caused by lead.

Ad
ditionally, the covered party must report to PRISM an occurrence, offense, or wrongful act as follows:

As
respect to the General Liability 1 Program members, this includes any occurrence, offense, or wrongful act in which the amount incurred has reached fifty (50) percent or more of their individual self- insured retention or $500,000, whichever is lower.

As
respect to the General Liability 2 Program members, this includes any occurrence, offense, or wrongful act in which the amount incurred has reached fifty (50) percent of their individual self-insured retention.

Addendum B: Liability
Claims Administration Guidelines

Page 3 of 8 ends

These reporting requirements are intended to be consistent with the requirements in the current year Memorandum of Coverage (MOC).

Reporting requirements specific to a loss outside the current MOC year should be verified through the MOC effective for that loss year.

Utilize the current First Report Potential Excess Liability Claims form, available through PRISM’s website, and transmit to PRISM by email to [email protected].

First report forms shall, at a minimum, include the following:

• Entity name
• Entity’s claim number
• Defense counsel’s name and firm name
• Lead Claimant’s first and last name
• Specific date of loss
• Brief description of the incident
• Established reserves for indemnity, litigation, and expense

B. Status Reports

After the First R eport to PRISM, status reports, whether provided by the Member, third party administrator or defense counsel, shall be provided at a minimum of every ninety (90) days (more frequently if warranted) . Status reports shall focus on changes in liability analysis, damages, and reserves.

C. Photos, diagrams, estimates, statements, contracts, medical, law enforcement and coroner's reports (where applicable), claim forms, lawsuits (including amended complaints), motions for summary judgment, demurrers, dismissals, appellate briefs and orders/rulings/judgments shall be in the claims file, and provided to PRISM, within ninety (90) days of receipt of the material.

D. Closure Reports

When a claim or suit that has been reported to PRISM is settled, dismissed or closed in any other fashion, PRISM shall be provided with the closing documents and an accounting of the final paid amounts on the exposure for indemnity, litigation, and expense within 90 days from the day the final defense bill is paid.

III. MEDICARE REPORTING

A. Proper verification of a claimant’s status as to Medicare eligibility shall be completed and documented in every file involving a bodily injury. In those Addendum B: Liability
Claims Administration Guidelines

Page 4 of 8 ends

cases where the claimant does meet the eligibility requirements, mandatory reporting to the Center for Medicare and Medicaid Services (CMS) must be completed directly or through a reporting agent in compliance with State Children’s Health Insurance Program (SCHIP) Section 111 of the Medicare Medicaid and SCHIP Extension Act of 2007.

IV. RESERVING

Each claim should be review ed and evaluated according to the merits of the claim and based upon the most current and reliable information received, starting with the initial report of claim and continuing through final resolution. Delays result in understated reserves and, possibly, missed opportunities to settle.

A. An accurate and appropriate initial indemnity reserve shall be established on all reportable claims based on facts known, upon completion of the initial investigative report or when suit is filed, whichever occurs first. In addition, separate legal and adjusting reserves shall be established.

Indemnity reserves shall reflect the most probable outcome plus exposure to plaintiff attorney’s fees and costs.

Most probable outcome is the potential total amount a plaintiff could expect to receive, either through settlement or verdict, after factoring in the Member’s percentage of liability. (This approach is neither the best or worst case outcome).

Factors to consider for when evaluating the potential total settlement or verdict a plaintiff could expect to receive include but are not limited to:

• Extent of injuries and/or damages
• Medical expenses
• Loss of income
• Any other related expenses
• Future anticipated expenses
• Total of both gross and out-of-pocket expenses
• Permanent injury
• Disfigurement/scarring
• Pain and suffering
• Any other intangible factors which may result in a higher or lower claim value such as jurisdiction, credibility of parties/witnesses, etc.

Percentage of liability is determined by various factors that are discovered during an investigation. Reserves shall be adjusted accordingly, as facts are developed, to properly reflect the exposure. These factors include but are not limited to:
a. Facts of loss
Addendum B: Liability
Claims Administration Guidelines

Page 5 of 8 ends

b. Applicable laws
c. Defense Counsel evaluations
d. Jury Verdict evaluation
e. The extent of plaintiff's liability (comparative negligence) f. The number of co-defendants and their percentage of liability g. The ability of the co-defendants to respond financially to any settlement or verdict.
h. On cases occurring after June 3, 1986, Proposition 51 allows defendants to limit their liability on non-economic damages to their percentage of fault.
i. On cases involving uninsured motorist claimants the recovery is limited to economic damages in accordance with California Code of Civil Procedures sections 3333.3 and 3333.4 (Prop 213).
j. Any other mitigating factors

2. Reserves shall be set at the most probable outcome even if it exceeds the Member’s Self-Insured Retention. In all litigated Excess reportable cases, the Member shall set a meaningful indemnity reserve.

3. Reserves shall be evaluated for adequacy at least every ninety ( 90) days.

All reserve changes shall be documented in a paper or electronic file providing explanation of the reason for the reserve change or notation that the current reserve is adequate and why . PRISM shall be notified of all reserve changes within thirty (30) days of the change being made.

V. DOCUMENTATION

A. Each file shall contain information necessary to document the decisions made, including all demands, offers of settlement and settlement authority.

For those cases in which the (1) Bodily Injury claims reserved above twenty- five (25) percent of the S.I.R., (2) Property Damage claims reserved above twenty-five (25) percent of the S.I.R., and (3) All claims that meet PRISM’s excess reporting requirements regardless of reserves, the following information shall be contained in each file:

1. Claimant(s) Information

2. Date of Loss

3. Claim Number

4. Facts of accident or occurrence

5. Witness/Participant Statement

6. Reserve rationale

7. Assessment of liability

8. Damages/injuries, including medical costs, lost wages, dependency, property damage estimates, total loss evaluations, loss of use claims, Addendum B: Liability
Claims Administration Guidelines

Page 6 of 8 ends

and other damages

9. Index Bureau reporting

10. Coverage questions

11. Excess potential

12. Structured Settlement possibilities (where applicable)

13. Alternative Dispute Resolution

14. Subrogation potential (where applicable)
12 Governmental Code compliance and immunities

13. Future course of action

14. Next diary date

15. If litigated, identify counsel on both sides

16. Offsets or liens that may need to be considered

17. Medicare eligibility and reporting

18. Risk and insurance transfer

VI. CASE SETTLEMENT FACTORS

A. Settlement evaluation and authority by the Member shall be documented. On cases exceeding the S.I.R., prior written settlement authority must be obtained from PRISM.

B. The settlement shall be reasonable in light of damages, injuries, liability, and any obligations to Medicare.

C. Settlements shall be effected in a timely manner, with consideration given to structures, statutory offers (Rule 68 or 998) where applicable, and/or alternative dispute resolution.

D. Contributions from joint tortfeasors shall be considered.

E. Proper releases and dismissals shall be secured and copies provided to PRISM.

VII. LITIGATED FILES

A. Defense litigation plan shall be in the file.

B. Defense attorney’s initial evaluation and budget shall be completed and in the file within sixty (60) days of assignment. If the billed amount of attorney’s fees and costs exceeds seventy-five (75) percent of the total budget, then the defense attorney shall provide an updated budget.

C. On litigated cases, defense counsel shall also include PRISM on their mailing lists for copies of correspondence, reports, evaluations, interrogatory summaries, deposition summaries and medical summaries. Actual deposition transcripts, interrogatories, their answers to interrogatories and Addendum B: Liability
Claims Administration Guidelines

Page 7 of 8 ends

interim billings are not required.

U
pdated reports shall provide a summary of pertinent information based on the status of a case. Pertinent information includes, but is not limited to:
• Identified experts – what their analysis has concluded, their credibility as a witness (both plaintiff and defense), and how their testimony will/will not influence the case potential.
• Witness deposition summaries including an evaluation of their credibility as a witness and how their testimony will/will not influence the case potential.
• A summary of relevant documents disclosed or obtained through discovery and an analysis of their impact on the case.
• A summary of applicable case law and immunities.
• Updated evaluation of damages including, but not limited to, billed and paid medical bills, estimated future medical expenses, past and future wage loss estimates, and general damage estimates.
• Analysis of liability and potential settlement/verdict value as well as suggested next steps (MSJ, Demurrer, Mediation, etc.).

D. The de
fense attorney shall make proper follow-up requests for investigation.

E. Ther
e shall be timely recommendations from defense firms regarding expert retention, settlements, and trial preparation.

F. D
efense costs shall be controlled by the Member. Depositions, retention of experts, expert costs, and other defense costs shall be approved by the Member.

Litigation outcome and total costs shall be documented.

H. Th
ere shall be timely notification to relevant employees and other parties regarding pending litigation.

N
o less than forty-five (45) days prior to trial, counsel shall provide a pre-trial report that discusses the following:

1. Case Summary
• Plaintiff and any individual Defendants including counsel’s opinion as to how each will be viewed by a jury
• List of claims
Addendum B: Liability
Claims Administration Guidelines

Page 8 of 8 ends

• Summary of Facts
• Expected percipient witness testimony
• Expected Liability Expert Testimony
• Critical Liability Issues
• Summary of Special and General Damages including
expected damage expert testimony
• Summary of Punitive Damages and non- monetary reli ef requested (if applicable)
• Attorneys’ fees and costs estimate for claims that involve the potential award of attorneys’ fees

2. Evaluation
• Potential Verdict Value
• Comparative Fault Analysis
• Settlement Discussion summary
• Probability of Defense Verdict

Throughout trial, a daily trial status update shall be provided to PRISM by defense counsel, the Member, or the Third-Party Administrator. This can be informal, such as an email or voicemail advising of the day’s activities, impressions of witnesses, any i mpacting developments, and an update regarding the next day’s schedule.

I. Appropriate Dismissal Motions shall be made for failure to meet the applicable Code of Civil Procedure statutes for timely serving, conducting discovery or bringing a complaint to trial.

VIII. SUMMARY

The file shall be completely documented.

Audits conducted by the PRISM Auditor shall measure whether performance is consistent with these standards.

Following is the history of amendments to this document:

Adopted: December 6, 1985
Amended: January 23, 1987
Amended: October 6, 1995
Amended: October 1, 1999
Amended: March 2, 2007
Amended: March 5, 2010
Amended: March 2, 2012
Amended: June 1, 2012
Amended: July 1, 2019
Adopted: June 3, 1988
Last Amended: July 1, 2019
G
ENERAL LIABILITY 1 & 2 PROGRAM

REPORTING/SETTLEMENT/REIMBURSEMENT

PROCEDURES
T
he following Liability procedures shall be complied with and reported to the Authority:

REPORTING
R
eporting of new claims/suits, status reports, defense litigation reports, trial reports, and reserve changes shall comply with the Addendum B Claims Administration Standards.

A
lthough the Member’s third party administrator may be performing all reporting, it is the ultimate responsibility of the Member to report to the Authority.

In cooperation with the Member, the Authority may become actively involved in the day-to-day handling of any claim.

II. SET

TLEMENT
Before a Member or its representative begins settlement negotiations, the Authority shall be notified. If any portion of the settlement is going to involve Authority funds , t he Member or its representative must obtain written authorization from the Authority before the settlement can be presented to the plaintiff. Keep in mind, outside defense costs (for GL1) and in- house/outside defense costs (for GL2), are applied to the S.I.R and must be considered during settlement negotiations.

The Authority shall be included in settlement negotiations on cases involving or having potential to involve the Authority’s funds, to protect the Pool’s interests.

III. REIMBURSEMENT PROCEDURES

1. Once prior written authorization is given to settle an excess case, or a Judgment puts it into the excess, the Member or its administrator must submit:

A) Copies of all settlement documents, including releases, annuity forms (if structured), and properly filed dismissals.

B) Copies of all itemized bills from defense attorneys, claims

Page 2 of 2 ends

administrators, expert witnesses and any other cost bills.

C) Copies of valid evidence of payment properly matched to the bills and settlement documents. Valid evidence of payment can take the form of check copies, data processing runs, Member warrant registers, department payment records, TPA claim payment screen printout, identifying the following:
a. Check or warrant number
b. Issue date
c. Payee
d. Paid amount

2. A cover letter requesting reimbursement of the net amount after deducting the S.I.R, must be submitted with the above documentation.

3. Once the figures are reconciled, a check request will be made to reimburse the Member in the appropriate amount. When issued this check will be mailed to the Member contact person, with a copy to the claims adminis trator (if applicable).

F
ollowing is the history of amendments to this document:

Adopted: June 3, 1988
Amended: October 2, 1992
Amended: March 1, 2002
Amended: March 5, 2010
Amended: March 2, 2012
Last Amended: July 1, 2019
Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 1 of 19 ends

Revision Date: 10/17/2022

EXAMINER HOT SHEET
QUICK LINKS:
• Account Contacts
• Banking
• CSI Table of Contents
• Carrier Reporting
• Excess Reporting
• Policy Information
• Program Basics
• Recent Changes
• Servicing Offices
SUBJECT (Click on the CSI Subject
Heading below to access the full CSI
narrative)

SUMMARY OF SERVICE REQUIREMENT
Audits / Claim Reviews • As needed.

Banking • Prefunding request needed at $10,000 ( usually completed at City level and Sedgwick is copied)
Billing • Billing will be generated on a quarterly basis.

Carrier Reporting • In accordance with Carrier Requirements.

Claim Intake/Set-up/Assignment
/ Conversion
• Client will report claim via portal.

Documentation and Coding • Examiner will update coding as needed.

File Supervision • Supervisor diaries: initial at 30 days and then every 120 days. Rejected claims to be reviewed at SOL expiration only.

Investigation and Determination • Timely contact with 1 business day • Custom Client Causes are created and neeed to be assigned on every claim in JURIS.

Litigation Management • Discuss with Benjamin and City Attorney Managed Care • Costs incurred as utilized.

Payments • Made timely; large payment notice at $10,000 Preferred Vendors • See preferred vendor list.

Report Generation • Monthly basis.

Reserving • Advisory need to client over $50,000.
• Initial reserves at $100 pending investigation
Responsiveness • 1 business day
Settlements • Client advisory needed.

Subrogation and Recovery • Pursued on every file.

1. Other: Medicare • Review prior to settlement if claimant is Medicare beneficiary.

2. Other: •
Attachment 2

EXHIBIT A
Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 2 of 19 ends

Revision Date: 10/17/2022
CLIENT SERVICE INSTRUCTIONS Back to Examiner Hot Sheet

TABLE OF CONTENTS
SECTION 1:

Account Contacts
Policy Information
Preferred Vendors List
Program Basics
Program Changes
Sedgwick CMS Servicing Offices and Contacts
SECTION 2:

Introduction
Audits / Claim Reviews
Banking
Billing
Carrier Reporting
Claim Intake / Set-up / Assignment
Documentation and Coding
File Supervision
Investigation and Determination
Litigation Management
Managed Care
Payments
Preferred Vendors
Report Generation
Reserving
Responsiveness
Settlements
Subrogation and Recovery

1. Other: Medicare

2. Other:

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 3 of 19 ends

Revision Date: 10/17/2022
Account Contacts:
(You may use the chart below or insert a hyperlink to account contact information currently saved to the client team site of the portal. Caution! If a hyperlink is used in this section, the name of the file and the location of that file on the portal should remain the same. If the file name or location is changed, the hyperlink will no longer work and will need to be updated.)

Company Title Name / Address Phone / Fax / Email
City of Vallejo Risk Manager &
Safety Officer
Armond Sarkis
Address: 555 Santa Clara
St.

Vallejo, CA 94590
Phone: (707) 648-4143
Mobile: (310) 663-3410
Email:

[email protected]
City of Vallejo

Risk Analyst Benjamin Smith
Address: 555 Santa Clara
St.

Vallejo, CA 94590
Office (707) 648-8607
Cell 707-334-8435
Email:
[email protected]
City of Vallejo City Attorney Veronica A.F Nebb
555 Santa Clara Street,
Third Floor
Vallejo, CA 94590
Phone (707)648-4545
City of Vallejo Assistant City
Attorney
Katelyn Knight
555 Santa Clara Street,
Third Floor
Vallejo, CA 94590
Phone (707)648-4545

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectation s.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 4 of 19 ends

Revision Date: 10/17/2022
Policy Information

(You may use the chart below or insert a hyperlink to policy information currently saved to the client team site of the portal. Caution! If a hyperlink is used in this section, the name of the file and the location of that file on the portal should remain the same. If the file name or location is changed, the hyperlink will no longer work and will need to be updated.)

Policy
Type Policy #
Begin
Date End Date Carrier
Retention/
Deductible Limit Report Level
GL PRISM-PE 20 GL2-21 7/1/2020 6/30/2021 CSAC $1,000,000 $500,000 GL PRISM-PE 21 GL2-22 7/1/2021 6/30/2022 CSAC $1,000,000 $500,000 GL PRISM-PE 22 GL2-21 7/1/2022 06/30/2022 CSAC $1,000,000 $25,000,000 $500,000

Please see team site for policies.

• 7/1/18-6/30/2020 SIR of $1,000,000 with a reporting level of $500,000 with CSAC/PRISM • 7/1/04-6/30/2018 SIR of $500,000 with reporting level of $250,000 with CJPRMA • 7/1/1986-6/30/2004 SIR of $1,000,000 with a reporting level of $500,000 with CJPRMA Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectation s.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 5 of 19 ends

Revision Date: 10/17/2022
Preferred Vendor List
Service Vendor Name Address Contact Name Phone / Email Comments Surveillance/
Investigations
Sedgwick SIU P.O. Box 14152
Lexington KY,
40512
Surveillance Dept. [email protected] Examiner must
obtain approval
prior to entering
the vendor referral
tab in JURIS.

Subrogation Sedgwick
Subrogation-
Central
P.O. Box 14152
Lexington KY,
40512
Subrogation Dept. [email protected] Examiner must obtain approval to
use Sedgwicks
subrogation unit.

Translation
Services
One Call Care
Management
841 Prudential Dr.

Ste 204,
Jacksonville, FL
32207
Sedgwick
Dedicated Referral
Line
Phone:
800-349-0117
Fax:
973-939-3856
Please utilize One
Call Care
Management for
Spanish
Translation for
initial and ongoing
contact.

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 6 of 19 ends

Revision Date: 10/17/2022
Program Basics
Lines of Business: WC
GL
Product
Auto
DB
Subrogation
Other
Other
Program Inception From: 5/15/2018
To: 5/16/2022
Insured: Yes No Lines of Business: WC LB PL Auto DB
States:

Self-Insured: Yes No Line of Business: GL LB PL Auto DB States:

CA
System / Products Focus View
viaOne Query
v viaOne OSHA
Intake National Intake Center 1- 866-409-2603
Dubuque Service Center
Vanity Email [email protected]
Vanity URL:
https://intake.sedgwick.com/u/cityofvallejoliability/intake Prior to migration to JURIS: https://5020.yorkrisk.com
Subsidiaries / Acquisitions Yes No
Client Service Manager: Name: Ashley Malady
Address: 8855 Haven Ave Rancho Cucamonga CA 91730
Phone: 951-342-5036
Email: [email protected]
Resource: Client Listing on Sedgwick CMS portal (requires permission) Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 7 of 19 ends

Revision Date: 10/17/2022
Program Changes
Section Effective Date Summary of Change
Moved to new template. 4/2/2021 Moved to new template.

Added Sedgwick preferred
vendors.
4/12/21 Vendor list.

Policies 4/19/21 Added Policy information
Accounts contacts 4/19/21 Removed John Auditor
Controller from account
contacts. No longer
employed.

Account contacts 6/21/21 Changed Sedgwick team
lead.

Investigation 7/26/21 Added examiner
instructions for JURIS.

Intake 9/22/21 Added new intake
methods.

Banking 9/28/21 Updated prefunding limit
instructions.

Documentation and Hot
Sheet
10/15/21 Added instructions to
select custom client cause
of loss description.

Banking 1/3/2022 Adjusting prefunding
notice contacts if the
funding was not handled in
advance by Executive
Secretary.

Sedgwick CMS Servicing
Offices and Contacts
1/24/2022 Removed Alex Davis and
added Linda M. Del Vigna
Sedgwick CMS Servicing
Offices and Contacts
5/31/22 Replaced Jaeran Ahn team
lead with Cathy Meginnis
Banking and elsewhere in
document
7/20/22 Replace Delia Chavez in
document with
[email protected]
Client Service Manager 7/20/22 Replaced Ashley Malady with Amanda Garcia.

Sedgwick CMS Servicing
Offices and Contacts
7/20/22 Replaced Cathy with Robin
Holmes.

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

Page 8 of 19 ends

Revision Date: 10/17/2022
Sedgwick CMS Servicing Offices and Con tacts
(You may use the chart below or insert a hyperlink to servicing offices and contact information currently saved to the client team site of the portal. Caution! If a hyperlink is used in this section, the name of the file and the location of that file on the portal should remain the same. If the file name or location is changed, the hyperlink will no longer work and will need to be updated.)
Office Contact Name States Serviced
Telecommuter, CA Robin Holmes
Team Lead
Direct: 714-572-4814
Email: [email protected]
CA
Telecommuter, CA RoseMary Jimenez,
Claims Examiner
Phone 805.288.4306
Fax 866.548.2637
[email protected]
CA
Telecommuter, CA Linda M. Del Vigna | Claims/Admin.

Assistant
Sedgwick
Property & Casualty, Public Entity
Oakland, CA
DIRECT 925.349.3864
| FAX 925.609.9264
EMAIL [email protected]
CA
Telecommuter, CA Linda DelVigna,
Claims Assistant
(925) 349-3864 Ext. 12005
[email protected]
CA
Telecommuter, CA Ayanah Rashad
Client Services Manager
[email protected]
(951) 606-3850
CA
Telecommuter, CA Amanda Garcia,
VP Client Services
[email protected]
CA
Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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INTRODUCTION
City of Vallejo has partnered with Sedgwick to administe r their General Liability program.

AUDITS / CLAIM REVIEWS
Client Audits
Held as needed.

Claim Reviews
Quarterly claim reviews are conducted and coordinated by Benjamin as needed.

Ben and Claims examiner have weekly meetings on claims.

BANKING
This Client utilizes a Client owned bank account.

Pre-Funding level - $10,000 is needed. The City Executive Secretary typically obtains prefunding approval on behalf of Sedgwick from City of Vallejo’s banking [email protected] and copies the examiner and claim assistant for awareness before a payment is initiated by the examiner. This is because legal invoices and settlements are filtered through the City prior to payment or settlement negotiation.

The examiner is to ensure that the City of Vallejo has c onfirmed the funding of payments greater than $10,000 is available in the client owned bank account prior to issuing payment and the step above was properly completed.

Once prefunding is confirmed that examiner is required to copy and paste the confirmati on from the City that funds are available for payment in a FN or Financial note for record keeping.

If the examiner was not copied on a pre-funding notice arranged by the City Executive Secretary and a payment is needed the exa miner should email [email protected], [email protected]; Winnie Daba [email protected] , Jon Oiler, Elinore Regresado <[email protected]> with copy to Ashley Malady and Cathy Meginnis to ensure there are funds in the b ank account to release payment.

When the examiner enters a payment greater than $10,000 a reminder will be triggered for the examiner to confirm prefunding process above was completed.

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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BILLING
The client will be billed on a quarterly basi s for claim service fees, in advance and payable upon receipt.

Invoices are to be emailed to Armond Sarkis and Chelsea Hernandez <[email protected]>
.

CARRIER REPORTING
In accordance with Sedgwick’s best practice and carrier Reporting requirements. (Contact Ayanah Rashad for additional reporting guidelines and refer to Carrier Relations site.

When a claim is reported to the excess carrier, Risk Management and the City Attorney’s office shall be cc’d.

For claims resulting from incidents occurring prior to July 1, 2018, the City is self-insured through CJPRMA. For cases with an occurrence date of 1986 through June 30 , 2004 the City’s self-insured retention was $1M. For cases with occurrence da tes from July 1, 2004 to June 30, 2018 the City’s self-insured retention was $500K.

For claims resulting from incidents occurring as of July 1, 2018, the City has excess insurance through CSAC-EIA. The City’s self-insured retention for all claims is $1M p er occurrence, with a $1M aggregate individual member corridor.

Sedgwick is to audit litigated files in which if a reserve over the reporting threshold is set Sedwick will ensure the file has either been reported or to let Risk and the CAO know that it should be reported.

EXCESS REPORTING TO CJPRMA
Sedgwick shall provide CJPRMA with immediate written notice of any claims, or the set ting of a reserve on any claim or suit inc luding multiple claims or suits aris ing out of one occurrence, such claim or reserve amounting to $250,000; Title 42 USC 1983 cases in which a complaint has been served and the plaintiff is represented by legal cou nsel or with reserves of $125,000; or regardless of reserve, any claim involvi ng:
1) One or more fatalities;
2) Loss of a limb;
3) Loss of use of any sensory organ;
4) Quadriplegia or paraplegia;
5) Third degree bums involving ten percent or more of the b ody; 6) Serious facial disfigurement;
7) Paralysis; or
8) Closed head injuries.

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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EXCESS REPORTING TO CSAC-EIA
A. These reporting requirements are intended to be consistent with the requirements in the current year CSAC-EIA Memorandum of Coverage (MOC) beg inning July 1, 2018.

B. On behalf of the City, Sedgwick must report an occurrence, offense, or wrongful act in which the amount incurred has reached 50 percent or more of the City’s self-insured retention or $500,000, whichever is lower.

C. Sedgwick shall provide CSAC-EIA with immediate written claims or suits, subject to the City first approving reporting to Excess, that it becomes aware of that include injury of the following types of losses occurring on or after July 1, 2018:
• Death
• Paralysis, paraplegia, quadriplegia
• Loss of eye(s), or limbs
• Spinal cord or brain injury
• Dismemberment or amputation
• Sensory organ or nerve injury or neurological deficit • Serious burns
• Severe scarring
• Sexual assault or battery including but not limited to rape, • molestation or sexual abuse
• Substantial disability or disfigurement
• Any class action
• Any claim or suit in which the Authority is named as a • defendant; or
• Any injury caused by lead
D. Reporting requirements specific to a loss outside the current MOC year should be verifie d through the MOC effective for that loss year.

E. For claims with loss dates on or after July 1, 2018, York shall utilize the current First Report Potential Excess Liability Claims form, available through the Authority website, and transmit to the Authority by email to LiabilityClaims@csac -eia.org.

F. For claims with loss dates before July 1, 2018, York shall utilize the CJPRMA’s current Excess Liability Claims form available through the CJPRMA, and shall follow its filing instructions.

G. Sedgwick shall provide CSAC-EIA with periodic reports on the claims reported.

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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H. If a matter is in the claims level (not yet litiga ted), Sedgwick reports the claim to the carrier.

If a matter is litigated, the City Attorney’s office reports it to the carrier.

Resources:
• Underwriting Carrier’s Parent Company
• Carrier Reporting Requirements Matrix
Resource: Carrier Relations Portal Site

CLAIM INTAKE / SET-UP / ASSIGNMENT / CONVERSION
New claims will be reported to Sedgwick CMS one of two ways:

Sedgwick Email Address: [email protected] m Sedgwick URL: https://intake.sedgwick.com/u/cityofvallejoliability/intake Prior to migrate to JURIS claim s were reported via the York 5020 portal.

Client Service requirements will be in accordance with established Sedgwick Service Expectations.

Reporting process:

Liability claims are filed with the City of Vallejo City Clerk. The City Clerk's Office wil l forward the claims to Sedgwick’s intake. Sedgwick’s Adjuster will communicate all actions on each file via email. Should City Council r equire a captioned report, that will be communicated on a per claim/per file basis.

Sedgwick will send a Claim Acknowledgement immediately by emailing Ben Smith at [email protected].

Within 20 days of assignment, the Adjuster will issue a full Captioned Report or Claims Management Report (CMR), depending on the City’s preference, summarizing the Adjuster’s investigation to that time.

HANDLING OF INCOMING FILES FROM PREVIOUS TPA (7/1 /2018 CONVERSION DATE) • Review incoming claim files for reserve adequacy and any activity needed on the file. • On files with inadequate reserves, complete a report to the City wit h recommended reserve changes.
• Create a plan of action.
• Diary files, add a diary for claim handler and supervisor • Ensure that all existing claims filed prior to July 1, 2018 have been properly reported to CJPRMA, if the claim meets the reporting guideline s.

DOCUMENTATION and CODING
Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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Documentation and coding will be completed by exam iner in accordance with Sedgwick CMS best practice. Documentation shall reflect any significant developments in th e file and include a plan of action. Plan of action statements shall be updated at the time of examiner diary review.

Miscellaneous Codes
Custom client cause of loss fields. The examiner is responsible for selecting this on every new claim file.

To select the proper new cause of loss code follow these steps:

1. Click on Options at top right of claim file screen

2. Then Miscellaneous Client fields

3. Then select client

4. Complete the field
NCCI Codes
N/A
Class Code Description States
N/A

FILE SUPERVISION
In accordance with established Sedgwick Service Expectations.

All files must have a documented supervisory review within 30 days of cl aim assignment. The review should evaluate the compensability position and provide direction on any c laim resolution barriers.

INVESTIGATION
A detailed compensability rationale must be clearly documented within the claim notes within 14 days of claim receipt.

Initial Contact
Two-point contact, preferably voice-to-voice request should be made with the Ci ty within 48 hours of receipt of the claim. The Adjuster s hould verify the facts of the loss, request documentation of damages (if any) and identify witne sses.

The Adjuster will make at least two phone cal l attempts to the claimant or attorney within 48 hours, and if the adjuster is unable to make contact durin g this timeframe, a follow-up email or letter of acknowledgement with a request for the claimant to call the adjuster should be mailed to the claiman t. The adjuster should also contact the City within 48 hours of receipt of notice of a claim in order to di scuss and to initiate the Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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investigation process in order to determine liability without delay. S uch contact with the City should be clearly documented in the file.

Contact attempts will continue daily. A letter to the claimant will be sent within business days requesting that they contact us. A copy of this letter will be included in initial report to the City Of Vallejo.

If the estimates submitted have the same name on them as the claim form, client does not require us to obtain proof of ownership o f the claimant vehicle Denials / Appeals
Prior to any claim delay or denial the examiner should outline their rationale for the delay and recommendation on the action plan to close the file to Maili prior to issuing a delay or claim denial.

If a claim is to be rejected, York will send the statutory letters of rejection to claimant.

The statutory notices shall be accompanied by a cover letter explaining the basi s for the City’s rejection in a manner that is easy to understand and legally defensible.

These letters shall be reviewed and approved by Risk Management before they are sent out.

Once a claim is rejected, all investigation shall cease, including contacti ng the claimant or counsel, unless further investigation is requested by the City.

Once the Adjuster issues a formal Rejection, the file is to remai n open until such time that the applicable suit filing statute of limitations has tolled. Once it has tolle d, the Adjuster is to check appropriate suit filings to ensure no suit has been file d before closing. Dependent on the type of claim, applicable stat utes of limitations may include:

State Court – 6 months post-Rejection
Potential Inverse Condemnation caus e of action – 3 years post-date of loss Federal Civil Rights/1983 claims – 2 years post- date of loss Employment practices – Various (could be 6 months post-Rejection for State Court, 2 years post-date of loss for Federal Court, 1 year post RTS if a DFEH o r EEOC complaint filed)
ADA claims – Various (could be 6 months post-Rejection for State Court, 2 years post- date of loss for Federal Court)
Index Bureau
All new workers compensation claims will au tomatically be indexed through the system at the time of claim set up/conversion.

Surveillance
Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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For any surveillance services the examiner must obtain cli ent approval and must first be approved by your supervisor prior to assignment. The examiner will forw ard a email to Ben outlining a brief description of the cl aim and its circumstances as well as their rationale for the referral.

City of Vallejo has elected to use Sedgwick SIU along with any client approve d and directed outside vendors. Prior to making any assignment for surveillance, investigative services or SIU, the examiner should follow client protocol for obtaining authorization and assigning a referral. All referrals must be sent through the JURIS referral process to Sedgwick SIU. If the client has directed to an outside vendor, please include that instruction in the special instructi ons box. Instructions on how to complete the referral in Juris can be found at Juris referral instructions.

The Sedgwick SIU department can be reached at:
855-395-6055
[email protected]
Recorded Statements
Recorded Statements of claimant will be taken on all bodily injury c laims and disputed liability claims as well as any other claim the claims examiner feels it is warranted.

Police Department Claims
• For any claims involving the Police Department, the Professional St andards Bureau will review and process claims and provi de the Department’s response as soon as practicable.
• For excessive force/racial discrimination/search and seizure and other civil rights claims, examiner will interview claimant but will not obtain witness statements without first obtaining approval from the City. The investigation of these typ es of claims will trail the Vallejo Police Department’s Internal Affairs investigation. • For claims that originate from a different department, but require a police report or other police documentation, Sedgwick shall contact Benjamin to obtain such materials.

Government Tort Claims
Upon receipt of claim, Sedgwick’s Adjuster will make Timeliness, Sufficiency and Liability assessments, and will forward recommendations for response to the City.

Notices will be sent by York to the claimants, in compliance with the statutory deadlines set forth in Government Code section 900 et seq.

Resources:
• Carrier Relations Portal Site
• ACE/AIG/Zurich Claims Instructions for Investigation

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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LITIGATION MANAGEMENT
In accordance with Sedgwick’s best practice and CSAC Reporting requirements. (Contact Ayanah Rashad for reporting guidelines and refer to Carrier Relations shite.

Assignment of Counsel:

The City Attorney’s Office will handle litigated cases in-house. City Attorney’s Office will refer cases to outside counsel when specialized de fense is need, when a conflict exists, or as deemed necessary by City Attorney.

The City Attorney will submit expense invoices to Risk Management, w hich will in turn submit them to Sedgwick for payment or entry in Focus of payments issued directly by the City. Invoices for outside counsel will be approved by the City Attorney’s office and submitted to Sedgwick for payment from the escrow account.

The City will complete check requests for an y payments the City initiates. Sedgwick will complete check requests for any payments Sedgwick initiates.

Sedgwick will represent the City’s inte rests in any Small Claims Court lawsuit where the City and/or its employee(s) are named as defendants in a ne gligence action.

Client Communication
Per Sedgwick’s Best Practice.

Sedgwick shall copy risk management on any and all communication sent to any third party on behalf of the City of Vallejo during claim process and shall immediately notify City of Vallejo of any and all legally represented claims and/or legal communica tions received.

Resource:
• Carrier Relations Portal Site
• ACE/AIG/Zurich Claims Instructions for Lit igation Management

MANAGED CARE
Any Managed Care costs incurred are to be allocated to the file as a loss adjustment expense.

Resource: Managed Care Portal Site

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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PAYMENTS
Payment should be issued timely and accurate.

For all payments in excess of $10,000, City staff will email Jon Oiler at [email protected] to verify available funds, with a carbon copy to Ashley Malady Sedgwick. Upon notification by Jon Oiler that funds ar e available, payments may be made by Sedgwick.

Resources: Carrier Relations Portal Site

PREFERRED VENDORS
See preferred vendor list.

Resources: Carrier Relations Portal Site

REPORT GENERATION
Sedgwick will provide provide quarterly loss reports to the City of Vallejo via email to the Risk Manager and the City Attorney on all open claims, reserves, claim by type, sorted by department, date claim file last touch ed and plan of action, including what is being delayed to another date. The Risk Manager m ay request ad hoc reports as needed for purposes of loss control and prevention efforts or other reporting n eeds. A yearly trending report shall also be provided to the Risk Manager.

RESERVING
In accordance with Sedgwick’s best practice and CSAC Reporting requirements. (Contact Ayanah Rashad for reporting guidelines and refer to Carrier Relations shite.

Using the information available at claim file set up, an initi al reserve shall be established for the most probable case value.

Reserve Authority Levels
A $100 reserve will be established for potential liability unti l such time a preliminary investigation is completed.

Prior to posting additional reserves greater then $50,000 the examiner will need to send a advisory email to Ben outlining their reserve change rationale for their review prior to posting on the claim file.

Resources:

Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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• Carrier Relations Portal Site
• ACE / AIG / Zurich Claims Instructions for Reserving

RESPONSIVENESS
All phone calls and emails are to be returned within one business day of receipt.

Sedgwick unit Manager and/or Sr. Adjuster will meet with the City and attend any City meetings upon request.

SETTLEMENTS
In accordance with Sedgwick’s best practice.

Sedgwick will clearly document a written disposition stra tegy and plan of action with specific time frames for completion in file. Consideration of all possible settlement avenues, such as Alternative Dispute Resolutions, mediation, arbitration, and struc tured settlements should be given. The claimant’s Medicare eligibility must be determined and Medicare’s interest resolved prior to any settlement checks being issued.

When rejecting claims, York will send a rejec tion letter to the claimant with clear reasoning for the rejection.

Settlement Authority Levels
Sedgwick has settlement authority up to $5,000. Sedgwick will request Risk Manager authorization for settlements up to $10,000. If over that amount, the Risk Manager will request City Attorney authorization for indemnity settlements up to $50,000. Authori ty for claims in excess of $50,000 are required to be approved by City Council.

The examiner is required to use the Client specific settlement form for all proposed settlements for the City’s review.

For all payments in excess of $10,000, City staff will verify available funds, with a carbon copy to Sedgwick. Upon notification by City that funds are available, payments may be made by Sedgwick.

Structured Settlements
Pursue as appropriate.

Resources:
• Carrier Relations Portal Site
• ACE / AIG / Zurich Claims Instructions for Settlements / Struc tured Settlements SUBROGATION and RECOVERY
Client Name: City of Vallejo
Line of Business: GL
Contract #: 7735 (Legacy York 8356
Responsible Office: Roseville
Client Service Manager: Amanda Garcia

1. Except where client variances are outlined in this document, client service standards are in accordance with establishe d Sedgwick CMS Service Expectations.

2. Contact your Supervisor and Program Manager if you believe there is a conflict between Client Service Instructions and Carrier Claims Handling Requirements.

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Subrogation
Examiner will review the file to determine if subrogation and recovery is a possibility. If it is determined that subrogation is an issue t he examiner should advise the employer and obtain approval to seek recoveries, obtain necessary information, designate resources and secure evidence if appropri ate.

SUBROGATION STATUTE OF LIMITATIONS
Private Entity – A complaint must be filed within two years from the date of injury.

Local Government Agency – A complaint must be filed within six months from the date of injury.

Federal Government Agency – A complaint must be filed within two years (minimum statute) from the date of injury.

Resources:
• Carrier Relations Portal Site
• ACE / AIG / Zurich Claims Instructions for Subrogation / Contributions

1. Other: Medicare
The Medicare, Medicaid and SCHIP Exte nsion Act of 2007 (MMSEA) requires a Responsible Reporting Entity (RRE) to identify and report bodily injury claims involving a potential Medicare recipient. To do so, requires collect ing specific claimant data, including:
a) Legal name
b) Date of birth
c) Social security number
d) Gender
Adjuster is responsible for confirming all paye es are NOT Medicare Beneficiaries prior to issuing a settlement check. If the claimant is a Medicare Beneficiary, the Adjuster will be responsible for coordinating with COBC and confirming Medicare’s interest are protected as part of the settlement.

2. Other:

Consultant and Professional Services Agreement
EXHIBIT “B”
16 EXHIBIT “B”
CO

MPENSATION

1. C
onsultant's Compensation.

A. Services: City agrees to pay Consultant, at the basic annual fee rate(s) specified below, for those life of contract claims services set forth in Exhibit “A” of this Agreement and for all authorized reimbursable expenses, upon satisfactory completion of the services and delivery of the work product, for a total not to exceed the following:

Cla
ims Services:

A
nnual fee of Two Hundred Twenty Thousand Five Hundred Dollars ($220,550.00) increasing each year the greater of three percent (3%) or the percentage increase as reported by the U.S. Department of Labor ‐ Bureau of Labor Statistics (http://www.bls.gov/cpi/home.htm) for the Consumer Price Index for All Urban Consumers (CPI‐U) for the U.S. City Average, All Items, unadjusted and published during the month ending three months prior (to allow time for reports to be published) to the anniversary date of the contract.

T
hus, if the Consumer Price Index does not exceed 3% during the relevant period, the annual fees shall be:
• Y
ear 1 - Two Hundred Twenty Thousand Five Hundred Dollars ($220,500.00)
• Year 2 – Two Hundred Twenty Seven Thousand One Hundred Fifteen Dollars ($227,115.00);
• Year 3 – Two Hundred Thirty Three Thousand Nine Hundred Twenty Eight Dollars ($233,928.00);
• Year 4- Two Hundred Forty Thousand Nine Hundred Forty Six Dollars ($240,946.00) – OPTIONAL;
• Year 5 – Two Hundred Forty Eight Thousand One Hundred Seventy Four Dollars ($248,174.00) – OPTIONAL.

C
laims Services for Year 4 and 5 are listed as Optional should City exercise its option to extend the Agreement for up to two (2) additional one (1) year terms as set forth in Section 16 of the Agreement.

A
nnual Fee: Consultant's Annual Fee is a guaranteed flat annual fee and applies to claims administration services provided during each twelve (12) month contract

Consultant and Professional Services Agreement
EXHIBIT “B”
17 term. If there is a n increase in claims volume greater than 10% that impacts staffing requirements of the unit, Consultant may propose a written modification of the annual fee on one hundred and twenty (120) days written notice . Consultant must be able to demonstrate the significant increased claims volume by appropriate documentary proof.

If City agrees to such additional charges within thirty (30) days, the fees will be adjusted accordingly. If City does not agree to such charges, Consultant will have the right to terminate services on sixty (60) days' written notice.

Services of the Account Manager, along with telephonic claim reviews, are provided at no additional charge.

Claims services shall be billed on a monthly basis. For detailed billing, pricing, fees, and funding terms and conditions, see Exhibit “B” - Attachment 1.

In the event that any apparent conflict between Exhibit B – Attachment 1 and the terms set forth in this Agreement, the terms set forth in this Agreement shall control.

B. Additional Services:

1. Additional Services are those services related to the scope of Services of Consultant as set forth in Exhibit “ A” but not anticipated at the time of execution of this Agreement. Additional Services shall be provided only when a Supplemental Agreement authorizing such Additional Services is approved by the City Manager, or his or her designee. City reserves the right to perform any Additional Services with its own staff or to retain other Consultants to perform said Additional Services.

2. Consultant's compensation for Additional Services shall be based on the total number of hours spent on Additional Services multiplied by the employees' appropriate billable hourly rate as established below. City, at its option, may negotiate a fixed fee for some or all Additional Services as the need arises. Where a fixed fee for Additional Services is established by mutual Agreement between City and Consultant, compensation to Consultant shall not exceed the fixed fee amount.

2. Appropriate Billable Rates for Other Services . In addition to the fee schedule for Claims Services as set forth above in Section 1, City agrees to pay, upon satisfactory completion of the services, for all Allocated Loss Adjustment Expenses (ALAE) as set forth Attachment 1 of Exhibit “B”, attached hereto and incorporated herein by this reference, which are billed directly to the claim file as a claim expense not to exceed $6,000 annually.

Consultant and Professional Services Agreement
EXHIBIT “B”
18 3. Consultant's Reimbursable Expenses. Reimbursable Expenses shall be limited to actual reasonable expenditures of Consultant for expenses that are necessary for the proper completion of the Services and shall only be payable if specifically authorized in advance by City.

4. P
ayments to Consultant.

A. P
ayments to Consultant shall be made within30 days after receipt of Consultant's invoice, said payments to be made in proportion to services performed.

Consultant may request payment on a monthly basis. Consultant shall be responsible for the cost of supplying all documentation necessary to verify the monthly billings to the satisfaction of City.

B. A
ll invoices submitted by Consultant shall contain the following information:

1. D
escription of services billed under this invoice;

2. Date of Invoice Issuance;

3. Sequential Invoice Number;

4. City's Purchase Order Number (if issued);

5. Social Security Number or Taxpayer Identification Number;

6. Amount of this Invoice (Itemize all Reimbursable Expenses"); and

7. Total Billed to Date.

C. I
tems shall be separated into Services and Reimbursable Expenses.

Billings that do not conform to the format outlined above shall be returned to Consultant for correction. City shall not be responsible for delays in payment to Consultant resulting from Consultant's failure to comply with the invoice format described above.

D. R
equest for payment shall be sent to:

A
rmond Sarkis
Risk Manager
City of Vallejo
555 Santa Clara Street
Vallejo CA 94590

5. A
ccounting Records of Consultant. Consultant shall maintain for three (3) years after completion of all services hereunder, all records under this Agreement, including, but not limited to, records of Consultant's direct salary costs for all Services and Additional Services performed under this Agreement and records of Consultant's Reimbursable Expenses. Consultant shall keep such records available for audit, Consultant and Professional Services Agreement
EXHIBIT “B”
19 inspection and copying by representatives of the City's Finance Department or other government agencies during regular business hours at a time and place and in a manner mutually agreeable to both parties
T
he obligations of Consultant under this S ection shall survive this Agreement.

6. T
axes. Consultant shall pay, when and as due, any and all taxes incurred as a result of Consultant's compensation hereunder, including estimated taxes, and shall provide City with proof of such payments upon request.

7. T
axpayer Identification Number . Consultant shall provide City with Consultant's complete Request for Taxpayer Identification Number and Certification, Form W-9, as issued by the Internal Revenue Service, and any other State or local tax identification number requested by City.
1 Sedgwick Copyright © 2022 The information contained herein is confidential and proprietary to Sedgwick. It is being provided in order to allow evaluation of Sedgwick’s services and capabilities.

Nothing contained herein should be disclosed to a third party without the prior consent of Sedgwick.

Customized Program Design and Pricing Proposal 02.10.2023 Contract term: 05.21. 2023 – 05.20.2028
Program Design
We select a claims team for each client program based on industry expertise that aligns with the client’s requirements. In today's virtual world, the teams report to local leadership and reflect our flexible-first work environment — providing the flexibility of working from home with the ability to collaborate in person as needed. General liability claims will be managed from the Rancho Cucamonga, CA area.

Summary of first year fees
Liability Estimated
frequency
New GL – Bodily Injury 29
New GL – Property Damage 16
New AL – Property Damage 90
Open – Bodily Injury 27
Open – Property Damage 48
Annual flat fee option
Sedgwick offers an first year annual flat fee pricing option in the amount of $220,500 based on the estimated claim volumes outlined above and the estimated required staffing to service those claims. Under this option, Sedgwick reserves the right to modify the annual flat fee if acquisitions, divestitures, changes in program requirements or an increase in claim volume of greater than 10% impacts the staffing requirements of the unit.

Claims open at contract termination will either be transferred to the new administrator or handled by Sedgwick for an additional annual fee.

Attachment 1

EXHIBIT B

Nothing contained herein should be disclosed to a third party without the prior consent of Sedgwick.

First year claim fee estimates
Coverage line First Year Life of
contract
Liability

$220, 500 Program management fee (annual)

RMIS (annual)

Implementation fee (one-time) No Charge as
Incumbent
Total estimated first year fees $220,500
Items included in the quoted fees include:
• RMIS access: viaOne® access for four users, which provides a platform-independent, web-based suite of services for viewing and analyzing claims data. Access provides secure, near real-time information from Sedgwick’s proprietary claims information systems, including:
o Customizable dashboards with drill-down capabilities
o Detailed information about the incidents, claimant work status and time tracking information o Financial information about an event, including the claim’s payment history and available reserves
o City of Vallejo diary capability, allowing for the creation of client diaries and customized alerts o Access to viaOne reports, which create ad hoc detailed reports with user-specified fields and filters
o Access to Sedgwick’s advanced analytics portal, a data warehousing platform that takes a deep dive to discover meaningful risk information at the program level • RMIS data outgoing feed: Monthly data file to a single carrier • Claims reporting: Sedgwick’s pricing includes the use of the Sedgwick call center and/or web reporting technology. Any other method (i.e., fax, email, land mail) will incur a fee of $24 per reported incident
• Claim reviews: Semi-annual telephonic claim reviews with electronic status reports Additional bundled services and fees:
• Subrogation and other recovery services (second injury funds and other special funds) will be charged 25% of recoveries
3 Sedgwick Copyright © 2022 The information contained herein is confidential and proprietary to Sedgwick. It is being provided in order to allow evaluation of Sedgwick’s services and capabilities.

Nothing contained herein should be disclosed to a third party without the prior consent of Sedgwick. • Special investigation unit (SIU) services will be charged at prevailing rates • RMIS access: Additional viaOne user access is $870 per user per year • RMIS data feeds: Additional interface files are $225 per month for monthly file, $645 per month for w
eekly file or $1,945 per month for daily file
• RMIS: System interfaces or custom programming charged at $185 per hour • Loss control and ergonomic services will be charged at prevailing rates • MMSEA/SCHIP Medicare reporting fee: One-time $9 charge per claim for claims involving bodily injuries (workers’ compensation, liability, no fault)
a. Sedgwick will make reasonable efforts to obtain the relevant Medicare reporting data from the prior claim system during the implementation process. However, it is possible that closed claims will contain Medicare reporting errors that are not in compliance with Medicare rules and regulations and require additional Sedgwick resources to correct. There will be a charge of $15 per claim to correct these errors and the fee will be invoiced in lump sum once all errors are identified.
• Escheatment services charged at $15,850 per year for claim-related payments issued from an escrow account in Sedgwick’s tax ID. Under this process, Sedgwick reports uncashed claim-related payments to the appropriate state according to each state’s unclaimed property law. Sedgwick offers an alternative escheatment service for free; however, the City is responsible for filing unclaimed property to the states
Definitions, terms and conditions
Definitions
Life of contract: Sedgwick will administer all claims received during the contract for the quoted fee. Claims open at contract termination will either be transferred to the new administrator or handled by Sedgwick for an additional annual fee.

Incident only: Incident only claims are claims reported by the City that require no payment or activity other than generating a record in the claims administration system. These claims carry no reserves and no contacts are made by Sedgwick. If contacts are required on incident only cases, additional fees will apply.

Liability claim clarification: Any liability claimant filing both a property damage claim and a bodily injury claim, or any combination of the two, will incur the per claim fee for each claim. Additionally, any event with claims filed by multiple claimants will incur the per claim fee for each claim filed.

Allocated expenses: The claim fees agreed to shall include all costs incurred by Sedgwick in handling claims submitted except those costs normally referred to as “allocated expenses.” These expenses will be billed to the individual claim file when incurred.

In some cases, Sedgwick engages subcontractors to assist us in providing services. In order to hold down the cost to our clients, Sedgwick may have arrangements with these subcontractors to cover expenses for certain

Nothing contained herein should be disclosed to a third party without the prior consent of Sedgwick. activities, including but not limited to development of integrated data systems, account management, quality oversight and ongoing projects that improve penetration and efficiency for our examiners. These cooperative service agreements are not transactional-based and are not dependent on any activity generated by the City.. In fact, the flat cooperative service fees remain the same regardless of whether the City uses these vendors on their program or not.

Allocated expenses include but are not limited to:
• Attorney fees and costs
• Hearing representation in lieu of attorney fees, including preparation, travel expenses, attendance and system notations
• Court costs and appeal bonds
• Cost of providing rehabilitation services
• Cost of surveillance activities and other outside investigations • Cost of expert witnesses, accident reconstruction specialists or any other specialist necessary for the investigation and/or defense of a claim
• Cost incurred to obtain statements, photographs, records, transcripts, depositions, digital call recordings, etc.
• Cost of inspections, appraisals, repair management, rental/replacement, etc. • Cost of independent medical exam
• Cost of medical bill review, PPO, managed care and other similar programs • Cost of medical experts, peer review, UR, case management, pre-certifications and medical necessity evaluations
• Cost of translation services
• Medicare reporting and compliance services fees and costs • Index filings
• Cost of vocational evaluations, vocational services, training or other vocational activities • Cost of outside assistance necessary to prepare or protect the City’s subrogation right or Special Disability Trust Fund claim
• Expenses for travel to depositions, mediations, arbitrations, hearings or other legal proceedings at the City’s request or as required by law or rule of a federal, state or local agency Terms and conditions
Quotation expiration: All pricing quoted is valid for a period of 180 days from submission unless a written extension is requested.

Nothing contained herein should be disclosed to a third party without the prior consent of Sedgwick.

Payment terms: If a flat fee pricing option is selected, all recurring fees are billed on a quarterly basis in advance based on annual estimates. All invoices are payable within 30 days.

Invoices are payable upon receipt.

All service fees contemplate program service commencing 05.21.2023. In the event the effective date of services is delayed at the request of the City, Sedgwick reserves the right to bill the City for program deployment expenses incurred outside of the scope of the agreed implementation period, up to and including full fees for service on the originally scheduled implementation date, with invoices payable upon receipt.

Taxes: All applicable taxes will be added to the service fees where this is required. Sedgwick may be required, in some jurisdictions, to collect and remit sales tax on the services provided to the City of Vallejo. If billed, the taxes will be stated separately on the invoice. If Sedgwick is provided an exemption certificate, in good faith, tax will not be charged. In the event that a jurisdiction invalidates or does not accept the exemption certificate, Sedgwick will not be liable for any penalty or interest that may be charged.

File storage: The City is responsible for storage of claim files closed at the time that Sedgwick begins claims administration.

Submission of all applicable claims: The fees quoted are based on the assumption that The City will forward to Sedgwick all claims arising during the applicable time period in a covered jurisdiction. In the event that the Citydoes not forward all such claims to Sedgwick, we reserve the right to adjust the fees accordingly.

Contract term: All fees assume that the parties will enter into a three-year contract with two (2) one-year options with an annual increase to all fees of the greater of three percent (3%) or the percentage increase as reported by the U.S. Department of Labor - Bureau of Labor Statistics (http://www.bls.gov/cpi/home.htm) for the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average, All Items, unadjusted and published during the month ending three months prior (to allow time for reports to be published) to the anniversary date of the contract.

Consultant and Professional Services Agreement
EXHIBIT “C”
20 EXHIBIT “C”
I

NSURANCE REQUIREMENTS
C
onsultant shall procure and maintain for the duration of this Agreement, including any extensions thereto, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of services hereunder by the Consultant, their agents, representatives, or employees, or subcontractors.

1. M
inimum Scope of Insurance. Coverage shall be at least as broad as:

A. I
nsurance Services Office form number GL 0002 covering
Comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General Liability or Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).

B. I
nsurance Services Office form number CA 0001 covering
Automobile Liability, code 1 any auto and endorsement CA 0025.

C. W
orkers' Compensation insurance as required by the State of California and Employer's Liability Insurance.

D. P
rofessional Liability insurance appropriate to the Consultant's profession (Errors and Omission).

2. M
inimum Limits of Insurance . Consultant shall maintain limits no less than:

A. General Liability : $2,000,000.00 per occurrence for bodily injury, personal injury, and property damage. If Commercial General Liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.

B. Automobile Liability: $1,000,000.00 per accident for bodily injury and property damage.

C. Workers' Compensation and Employer's Liability : $1,000,000.00 per accident for bodily injury or disease. If Consultant is not subject to California Workers' Compensation requirements, Consultant shall file a completed certificate of exemption

Consultant and Professional Services Agreement
EXHIBIT “C”
21 form, which may be obtained from the City prior to commencing any activity authorized hereunder.

D. Professional Liability (Errors and Omission) : $1,000,000.00 per wrongful act combined single limit per occurrence, and annual aggregate.

4. Other Insurance Provisions. The general liability and automobile liability policies, as can be provided, are to contain, or be endorsed to contain, the following provisions:

The City of Vallejo, its officers, officials, employees, agents, and volunteers are to be included as additional insureds as respects; liability, including defense costs, arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; pr emises owned, occupied, or used by the Consultant; or automobiles owned, leased, hired, or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City of Vallejo, its officers, officials, employees, agents, or volunteers. The insurance is to be issued by companies licensed to do business in the State of California.

For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City of Vallejo, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City of Vallejo, its officers, officials, employees, agents, or volunteers shall be excess of the Consultant's insurance and shall not contribute with it.

Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents, or volunteers.

The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.

Should any of the above- described policies be cancelled before the expiration date thereof, notice will be delivered to the City in accordance with the policy provisions.

The workers' compensation and employer's liability policy required hereunder shall be endorsed to state that the workers' compensation carrier waives its right of subrogation against City, its officers, officials, employees, agents, and volunteers, which might arise by reason of payment under such policy in connection with Consultant's performance under this Agreement.

Consultant and Professional Services Agreement
EXHIBIT “C”
22 5. Acceptability of Insurers. Insurance is to be placed with insurers with a current AM. Best's rating of no less than A-: VII.

6. V
erification of Coverage. Consultant shall furnish the City with certificates of insurance and original endorsements effecting general and automobile liability insurance coverage required by this clause. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences.

7. S
ubcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.

8. Pa
yment Withhold. The City can terminate this agreement immediately if the certificates of insurance and endorsements required above are canceled or Consultant otherwise ceases to be insured as required herein.

CONSENT CALENDAR 8.P.

DATE: June 13, 2023
TO: Mayor and Members of the City Council
FROM: Rekha Nayar, Finance Director
SUBJECT: ADOPT RESOLUTION APPROVING STATEMENT OF INVESTMENT POLICY AND DELEGATION FOR FY 2023-2024

RECOMMENDATION
Adopt a Resolution approving the (1) annual Statement of Investment Policy (Attachment 2) and (2) delegation of investment authority to the City Finance Director, serving as City Treasurer, for Fiscal Year 2023-2024.

REASONS FOR RECOMMENDATION
The investment of funds by a California local agency, including the types of securities in which an agency may invest, is governed by state law and local policy. Government Code Section 53646 allows a local agency at its option to provide for the chief fiscal officer to render a statement of investment policy for consideration and amendment by the City Council at a public meeting.

BACKGROUND AND DISCUSSION
The City Council annually reviews and approves a Statement of Investment Policy.

Vallejo City Charter Section 725 delegates the authority for investing City funds to the City Manager.

Furthermore, the City Manager has delegated his authority for investing the unexpended cash of the City Treasury and daily management of the investment portfolio to the City Finance Director who serves as the City Treasurer.

State law specifies permitted investments for local governments, while the City’s Statement of Investment Policy defines the suitable and authorized investments for the City. In some cases, the City’s policy is more restrictive than state law. Moreover, the investment policy serves as a guide for setting and achieving the City’s own investment objectives and defines guidelines for the management of the City’s portfolio.

Once adopted by the City Council, the investment policy sets portfolio management objectives and practices, specifies allowable investment instruments, states the criteria for purchasing those securities, prohibits certain types of security purchases, and fixes the maximum investment horizon (generally five years). The City’s Finance Director, serving as City Treasurer, uses these guidelines to manage and safeguard the investment of public funds held by the City.

Revisions to the annual investment policy are made, if needed, during the annual review to incorporate policy or statutory changes affecting the City’s investment program and daily investing activities. Policy revisions are generally technical in nature, such as process changes or language clarifications. Statutory changes are changes in state law affecting allowable investments or procedures related to investing activities. Further, the annual review is also a good time to clarify certain terms, remove ambiguity in the policy language, and better reflect changes in current market trading technologies.

Date: June 13, 2023
Subject: ADOPT RESOLUTION APPROVING STATEMENT OF INVESTMENT POLICY AND DELEGATION FOR FY 2023-2024

Page 2 ends

Tonight, staff returns with an updated Statement of Investment Policy that the City Council adopted on May 24, 2022 containing minor revisions.

Changes of note include:
• Reporting quarterly investment reports to the City Council from 30 to 45 days (Section 9.0) • Change Maturity Limit from the date of purchase to date of trade settlement (Section 18.0)

Chandler Asset Management (Chandler) is the City's investment advisor and all funds managed by Chandler are in full compliance with state law and with the City's investment policy. Principal Financial Group is the City’s third- party custodian for safekeeping of all its investments, with the exception of the Local Agency Investment Fund (LAIF). ComputerShare is the City’s Bond Trustee.

This investment policy applies to all financial assets and investment activities of the City of Vallejo, except those financial assets explicitly excluded from coverage by the Investment Policy.

FISCAL IMPACT
There is no immediate financial impact or budget action necessary as a result of the recommended actions.

ATTACHMENTS

1. Attachment 2 - Vallejo Investment Policy for FY 23-24 (Updated clean copy)

2. Vallejo - Investment Policy for FY 23-24 (Redline)

3. Resolution - Investment Policy

CONTACT
Rekha Nayar, Finance Director (707) 648-4592
[email protected]

CITY OF VALLEJO, CALIFORNIA

STATEMENT OF

INVESTMENT POLICY

Considered by the City Council

On June 13, 2023

City of Vallejo Investment Policy – Considered by the City Council on June 13, 2023

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TABLE OF CONTENTS

1.0 POLICY ................................................................................................................................................................................. 3

2.0 DELEGATION OF AUTHORITY ........................................................................................................................................ 3

3.0 SCOPE ................................................................................................................................................................................... 3

4.0 INVESTMENT INCOME AND EXPENSE ALLOCATIONS ............................................................................................. 4

5.0 PRUDENCE .......................................................................................................................................................................... 4

6.0 INVESTMENT OBJECTIVES .............................................................................................................................................. 5

7.0 PERFORMANCE STANDARDS ......................................................................................................................................... 7

8.0 DIVERSIFICATION ............................................................................................................................................................. 7

9.0 REPORTING ......................................................................................................................................................................... 8

10.0 SAFEKEEPING AND CUSTODY ....................................................................................................................................... 9

11.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS ....................................................................................... 9

12.0 COLLATERALIZATION ..................................................................................................................................................... 9

13.0 DELEGATION OF AUTHORITY ...................................................................................................................................... 10

14.0 ETHICS AND CONFLICT OF INTEREST ........................................................................................................................ 10

15.0 POLICY REVISION AND ADOPTION ............................................................................................................................. 10

16.0 PROHIBITED TRANSACTIONS ....................................................................................................................................... 10

17.0 SOCIAL RESPONSIBILITY .............................................................................................................................................. 11

18.0 MAXIMUM MATURITY LIMIT ....................................................................................................................................... 12

19.0 PORTFOLIO MANAGEMENT .......................................................................................................................................... 12

20.0 USE OF EXTERNAL PROFESSIONAL INVESTMENT MANAGERS .......................................................................... 12

21.0 INDEMNIFICATION OF CITY INVESTMENT OFFICIALS .......................................................................................... 13

22.0 ALLOCATION OF ANY INVESTMENT GAIN OR LOSS .............................................................................................. 13

23.0 POLICY EXCEPTIONS ...................................................................................................................................................... 13

24.0 USE OF STATE GUIDELINES .......................................................................................................................................... 13

25.0 LEGISLATIVE CHANGES ................................................................................................................................................ 14 SCHEDULE OF AUTHORIZED INVESTMENT INSTRUMENTS........................................................................................... 15 SUMMARY OF AUTHORIZED SECURITIES AND CRITERIA INCLUDING DIVERSIFICATION CRITERIA ................ 20 GLOSSARY OF CASH MANAGEMENT TERMS ..................................................................................................................... 23

City of Vallejo Investment Policy – Considered by the City Council on June 13, 2023

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CITY OF VALLEJO INVESTMENT POLICY

1.0 POLICY

A. It is the policy of the City of Vallejo (hereinafter “City”) to invest public funds of the City in a prudent manner which will preserve principal, maintain liquidity and achieve a reasonable rate of return . Sufficient liquidity will insure that the City is able to meet daily cash flow requirements, while conforming to all state and local statutes governing the investment of said public funds. This Investment Policy is now amended and adopted as of June 13, 2023, and will serve as the City of Vallejo Investment Policy. This Investment Policy replaces any previous investment policies of the City. The Investment Policy will be reviewed annually and recommendations for revision will be made to the Council when necessary.

2.0 DELEGATION OF AUTHORITY

Authority to manage the City’s investment program is set forth in the City Charter and state law.

The Charter authorizes the City Manager to invest funds as follows “after taking into account the amounts required to meet the current and pending requirements of the City , the City Manager may arrange for the term deposit or investment in securities authorized by law of any balances available for such purpose, and the yield therefrom shall be credited as revenue to each fund from which investments are made”. In accordance with the Vallejo City Charter Section 725, the responsibility of investing these funds resides in the City Manager. Furthermore, the City Manager has delegated his or her responsibility for investing t hese funds and daily management of the investment portfolio to the City Finance Director who serves as the City Treasurer. The City Finance Director/Treasurer is authorized to invest or reinvest the City’s funds, to sell or exchange securities so purchased, and to deposit securities for safekeeping in accordance with this Policy.

3.0 SCOPE

A. This Investment Policy applies to all financial assets and investment activities of the various funds of the City, with the exception of those financial assets explicitly excluded from coverage under section B below. The funds covered by this policy are accounted for and incorporated in the Vallejo Annual Comprehensive Financial Report (ACFR) and include:
a. General Fund
b. Special Revenue Funds
c. Debt Service Funds
d. Capital Project Funds
e. Enterprise Funds
f. Internal Service Funds
g. Trust and Agency Funds

City of Vallejo Investment Policy – Considered by the City Council on June 13, 2023

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B. This Investment Policy does not apply to the following financial assets and investment activities:

a. Funds held by the California Public Employees Retirement System (CalPERS). b. Funds held in trust in the City’s name in pension or other post -retirement benefit programs.
c. Investments held by the administrators of the City’s IRS code section 457 deferred compensation program.
d. Investments held in trust by another entity to fund the employees’ retiree health savings plans.
e. Cash and investments raised from conduit debt financing. f. The proceeds of the City bond issues, notes or similar financings including, but not limited to reserve funds, project funds, debt service funds and capital trust funds derived from such financings, as well as funds set aside to defease City debt in conjunction with an advance refunding agreement, shall be invested pursuant to their respective bond or trust indentures or the State of California Government Code 53600 et. seq., as applicable and not necessarily in compliance with this policy. g. Cash and investments held in lieu of retention by banks or other financial institutions for construction projects.
h. Short or long term loans made to other entities by the City or Successor Agency.

4.0 INVESTMENT INCOME AND EXPENSE ALLOCATIONS

Investment income will be allocated to the various funds based on their respective participation based on the cash balance in each fund as a percentage of the entire pooled portfolio, or other such method as directed by the City Finance Director/Treasurer, and in accordance with generally accepted accounting principles.

The costs of managing the investment portfolio, including but not limited to: investment management fees; accounting for the investment activity; custody of the assets and oversight control expenses are charged to the individual funds on an annual basis, based upon actual expenses incurred , or using other such methods as directed by the City Finance Director/Treasurer.

Except for cash in certain restricted and special funds, the City will consolidate cash balances from all funds to maximize investment options.

5.0 PRUDENCE

The City will manage the investment portfolio under the Prudent Investor Standard, which as authorized under California Government Code Section 53600.3 states that:

“Except as provided in subdivision (a) of Section 27000.3, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds,

City of Vallejo Investment Policy – Considered by the City Council on June 13, 2023

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a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with lik e aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law."

In determining whether an investment official has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration the investment of all funds over which the official had responsibility rather than consideration as to the prudence of a single investment and, whether the investment decision was consistent with the City’s Investment Policy and written investment procedures.

The City recognizes that in a diversified portfolio selected losses may occur when selected securities are sold to meet cash flow needs or to improve the overall portfolio performance and must be considered within the context of the overall portfolio's investment return.

This standard of prudence shall be applied in the context of managing the City ’s investment portfolios.

6.0 INVESTMENT OBJECTIVES

The objective of this policy is to provide guidance to invest City funds in accordance with California Government Code Section 53600.5 which states that when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, the primary objective of a trustee shall be to safeguard the principal of the funds under its control. The secondary objective shall be to meet the liquidity needs of the depositor . The third objective shall be to achieve a return on the funds under its control. Using sound treasury management principles, this policy seeks to achieve, in order of priority:

A. Safety: Safety of invested funds is the first and primary objective of the City’s investment program. The highest priority must be accorded to the preservation and protection of principal.

B. Liquidity: Maintenance of sufficient liquidity to meet all cash flow requirem ents that might be reasonably anticipated for at least six (6) months.

C. Return: The City’s investment portfolio shall be designed with the objective of attaining a pre-established benchmark rate of return, throughout budgetary and economic cycles, comme nsurate with the City’s investment risk constraints and the cash flow requirements of the portfolio . Return will however be a secondary consideration subordinate to the higher priorit ies accorded to the safety and liquidity of principal. The core of investments shall be limited to relatively low risk securities with the intention of earning a fair return commensurate with the constraints set forth herein.

City of Vallejo Investment Policy – Considered by the City Council on June 13, 2023

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Investments shall be selected in a manner that will attempt to ensure the safety of the City’s principal. This will be accomplished through a program of investment instrument selection, diversification, maturity limitations, and quality constraints. Investment transactions shall seek to keep principal losses at a minimum, whether they are from individual security defaults/downgrades or general erosion of market value due to rising interest rates.

A. SAFETY

To protect the value of the principal and interest of the invested funds, the City will invest only in securities with acceptable credit quality as outlined in the California Government Code Section 53600 et. Seq. which include, but are not limited to, those backed by the U.S. Government or its agencies; those which have insurance on principal backed by FDIC, or those which have been legally defeased with U.S. Government collateral.

Investments shall be undertaken in a manner that seeks to ensure the preservation of principal in the overall portfolio. This statement refers to the overall portfolio as opposed to individual investments. The objective will be to minimize credit risk and market risk.

It is recognized that within a well-diversified portfolio, at any particular point in time, that security valuations are impacted by changes in interest rates and economic conditions. Accordingly, securities may at times be worth less than the original purchase price based on market fluctuations. It is further understood, that in the event of the need for a forced liquidation of investments to meet unplanned or unanticipated cash flow demands, a potential loss of investment principal might occur.

The City recognizes that investment risk can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to minimize and control these risks.

a. Credit Risk - Credit Risk is the risk of loss due to the failure, degradation, or decreased likelihood that the security issuer or backer will fulfill its obligations with respect to timely principal and interest payment. Credit risk will be mitigated by:
• Limiting investments to the acceptable credit quality as outlined in the California Government Code Section 53600 et. Seq.; and
• Pre-qualifying the financial institutions, broker/dealers and intermediaries with which the City will do business; and
• Diversifying the investment portfolio so that the failure of any one issuer would not unduly harm the City's cash flow. No more than 5% of the total portfolio may be invested in securities issued by any single issuer unless otherwise specified in this policy.
b. Market Risk - Market risk is the risk that the market value of securities in the portfolio will fall due to market influence such as changes in general interest rates. Market risk may be minimized by:
• Structuring the investment portfolio to limit the average maturity of the City’s portfolio to a maximum of three years and the maximum legal final maturity of any one security in

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the portfolio to five years, and by structuring the portfolio with an adequate mix of highly liquid securities and maturities to meet major cash outflow requirements.

B. LIQUIDITY

Maturity dates of investments will be timed to assure that funds are available for payment obligations that may be reasonably anticipated. Liquidity refers to the ability to sell investments at any given moment while minimizing the chance of losing some portion of principal. Since all possible cash demands cannot be anticipated, the portfolio should consist largely of liquid securities with active secondary or resale markets.

Furthermore, the City shall maintain short term investments which offer same day liquidity for short-term funds.

C. RETURN ON INVESTMENTS

The City of Vallejo’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and the cash flow characteristics of the portfolio. Return on investments is subordinate to the requirements of safety and liquidity. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.

7.0 PERFORMANCE STANDARDS

In order to assist in the evaluation of the portfolios’ performance, the City will employ a relevant performance benchmark for the portfolio consistent with the Investment Policy mandated maturity, quality and concentration constraints. Useful comparative benchmarks of the City’s portfolio performance will be the quarter-to-date LAIF apportionment rate, and the two-year U.S.

Treasury Note yield. This maturity range is an appropriate benchmark based on the objectives of the City and the investment constraints set forth herein . Since return on investment is not the most important objective of the portfolio, the benchmark will be used solely as a reference tool. The reporting of a benchmark does not imply that the City Treasurer will add additional investment risk to the portfolio in order to attain or exceed the benchmark. Whenever possible, and consistent with risk limitations as defined herein and prudent investment principles, the Treasurer shall seek to augment returns above the risk free rate of return.

8.0 DIVERSIFICATION

The City will diversify its investments to reduce credit risk or market risk losses to the portfolio as a whole, while still attaining a market-average rate of return. Diversification requires not just an array of instrument types, but also an array of maturities and issuers. The following represents the quality and concentration limits to which the investment portfolio must conform:

a. No more than 5% of the total portfolio may be invested in securities issued by any single issuer unless otherwise specified in this policy.

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b. No more than 50% of the portfolio will be invested in any one asset class ( with the exception of U.S. Treasury securities, and authorized pools).

9.0 REPORTING

California Government Code Section 53607 requires monthly reporting of transactions to the City Council and Section 53646 provides for a quarterly investment report to be submitted to the City Council. This Investment Policy requires the quarterly investment report to be submitted no later than 45 days following the City’s receipt of the last monthly trustee investment statement for the reporting period covered by the report. The report will identify each security held under the management of contracting parties and the City , the earnings of the portfolio, and a statement of the Investment Program's ability to meet the expected net expenditure requirements for the next six months.

The report shall include the following information:

A. Type of investment, issuer, date of maturity, par value and dollar amount invested in all securities, investments and money held by the City at the end of the reporting period; and

B. A listing of individual securities held at the end of the reporting period by authorized investment category and percentage of portfolio represented by each investment category; and

C. Average life and final maturity of all investments listed, and coupon, discount or earnings rate; and

D. Par Value, Fair Value and Cost Value; and

E. A description of any City funds, investments, or programs that are under the management of contracted parties; and

F. For all securities held by the City or under management by an outside party that is not a local agency pool or the State of California Local Agency Investment Fund, the current market value as of the date of the report, including the source of this valuation; and

G. State that the City has the ability to meet its pooled expenditure requirements (cash flow) for the next six months or provide an explanation as to why sufficient money shall or may not be available.

H. State that the portfolio is in compliance with this Investment Policy or state the manner in which the portfolio is not in compliance.

If the City places all of its investments in the Local Agency Investment Fund, Federal Deposit Insurance Corporation -insured accounts in a bank or savings and loan association (or any combination of these three), the Finance Director can simply submit, on at least a quarterly basis, the most recent statements from these institutions to meet the requirements of items A - H above.

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10.0 SAFEKEEPING AND CUSTODY

All security transactions of the City, including collateral on repurchase agreements, will be executed by delivery-versus-payment (DVP). This ensures that securities are deposited in the eligible financial institution prior to the release of funds. A third party custodian, as designated by the Treasurer and as evidenced by safekeeping receipts, will hold securities of the City.

11.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

The Treasurer’s office will maintain a list of financial institutions authorized to provide investment services, including approved security broker/dealers.

A. The City shall transact business only with banks, savings and loans, and with investment securities dealers as defined in Government Code Section 53601.5:

53601.5 – Designated entities from whom a local agency may purchase authorized investments:

“The purchase by a local agency of any investment authorized pursuant to Section 53601 or 53601.1, not purchased directly from the issuer, shall be purchased either from an institution licensed by the state as a broker -dealer, as defined in Section 25004 of the Corporations Code, or from a member of a federally regulated securities exchange, from a national or state -chartered bank, from a federal or state association (as defined by Section 5102 of the Financial Code) or from a brokerage firm designated as a primary government dealer by the Federal Reserve Bank.”

B. Before accepting funds or engaging in investment transactions with the City, the supervising officer at each depository and recognized securities broker/dealer shall submit a certification that the officer has reviewed the investment policies and objectives and agrees to disclose potential conflicts or risks to public funds that might arise out of business transactions between the firm/depository and the City of Vallejo.

C. If the City has engaged the services of a registered investment advisory firm, the firm is authorized to conduct investment transactions on the City’s behalf with their own list of approved broker/dealers and financial institutions. The investment advisor’s approved list must be made available to the City upon request. In selecting financial institutions for the deposit or investment of City funds, the credit rating of these institutions will be considered. These financial institutions shall be authorized to provide investment services in California.

12.0 COLLATERALIZATION

Collateralization will be required on two types of investments: certificates of deposit and repurchase agreements. In order to anticipate market changes and provide a level of security for all funds, the collateralization level for any amount exceeding FDIC coverage shall be in accordance with California Government Code Section 53652 and/or 53651 (m)(1).

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The City chooses to limit acceptable collateral to the following: Cash, U.S. Treasury Bills, Notes and Bonds, and Federal Agency issues.

Collateral will always be held in the City’s name by an independent third party with whom the City of Vallejo has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City.

The right of collateral substitution is reserved by the City.

13.0 DELEGATION OF AUTHORITY

In accordance with the Vallejo City Charter, Section 725, the authority to invest City funds is delegated to the City Manager. The City Manager delegates this authority to the Director of Finance, serving as City Treasurer. No person may engage in an investment transaction except as provided for under the terms of this policy. Although the Finance Director/Treasurer may delegate these duties to another official in the Department of Finance, the Finance Director shall be responsible for all transactions undertaken and will establish a system of controls to regulate the activities of subordinate officials.

14.0 ETHICS AND CONFLICT OF INTEREST

In accordance with California Government Code Sections 1090 et seq. and 87100 et seq., officers and employees of the City and professional investment managers (“investment officials”) will refrain from any personal business activity that could conflict wit h the proper execution and management of the investment program or which could impair their ability to make impartial investment decisions for the City . All investment personnel , including pr ofessional investment managers, shall comply with the reporting requirements of the Political Reform Act, to include the annual filing of Statements of Economic interest.

No investments will be made with or
through any family or blood-related relative or any firm that employs any family or blood-related relative of any City Elected Official, Appointed Official, or City employee. Additionally, investment officials must refrain from undertaking personal investment transactions with the same individuals employed by the financial institution with whom business i s conducted on behalf of the City.

15.0 POLICY REVISION AND ADOPTION

This Investment Policy shall be reviewed and adopted at least annually by resolution of the City Council of Vallejo. Furthermore, it
can be revised whenever necessary by the City Council or Finance Director with City Council approval, and any modifications made thereto must be approved by the City Council, as required by law.

16.0 PROHIBITED TRANSACTIONS

Certain investment practices and instruments may be inconsistent with the safety of invested funds, or prohibited by the State of California Government Code Section 53601.6 and are

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therefore prohibited transactions. Prohibited investments include securities not listed in Attachment A below, as well as but not limited to:

A. Investments Prohibited by State of California Government Code Section 53601.6:

1. Mortgage Derived Interest-Only Strips.

2. Any security that could result in zero interest accrual if held to maturity.

3. "Complex" derivative structures such as range notes or inverse floaters.

4. Auction-rate preferred securities.

B. Additional Investments Prohibited by the City of Vallejo:

1. No direct investment in financial agreements whose returns are linked to or derived from the performance of some underlying assets such as stocks, bonds, currencies or commodities products (“Derivatives”). Only allowed as part of the City’s investments in Government Investment Pools and sweep accounts. This may include dual index notes, leveraged or de-leveraged floating rate notes, or any other complex variable rate or structured note, and any other financial derivative.

2. Leveraged investing, such as in margin accounts or any form of borrowing against or otherwise obligating city investments for the purpose of investment.

3. Options and future contracts.

4. Taking short positions; that is, selling securities that the City does not own.

5. Equity Securities (Common or Preferred Stocks).

Purchasing these types of instruments does not coincide with the City’s Investment Policy objectives and would require a thorough review and monitoring of the underlying security. Although some of these transactions are legal under California Government C ode, they do not meet the objectives contained in this Investment Policy.

Prohibited investments already held in the portfolio at the time of adoption of this policy may continue to be held until maturity at the discretion of the Finance Director/Treasurer.

17.0 SOCIAL RESPONSIBILITY

Investment of funds should be guided by the following socially responsible investment goals when investing in corporate securities and depository institutions. Investments should be made in compliance with these goals to the ex tent that such investments achieve substantially equivalent safety, liquidity and yield compared to investments permitted by California state law.

The City shall seek opportunities for investing in companies that have a positive impact on the environment and fair workplace practices. Investments are encouraged in entities that support

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equality of rights, regardless of sex, race, religion, age, disability or sexual orientation. No investment is to be made in a company that receives more than 51 percent of its gross revenues from the production or manufacture of fossil fuels, weapons manufacturing, cigaret tes, alcohol or gaming products.

18.0 MAXIMUM MATURITY LIMIT

To the extent possible, the City of Vallejo will attempt to match its investments with anticipated cash flow requirements. In compliance with State of California Government Code Section 53601, the City will not directly invest in any securities with a legal final maturity of more than five years from the date of trade settlement, unless the City Council has granted express authority to make that investment either specifically or as a part of an investment program approved by the City Council no less than three months prior to the investment.

Furthermore, in order to maintain liquidity, the weighted average time to maturity of the City’s investment portfolio shall not exceed three years. The Treasurer shall adjust average portfolio maturity to market conditions and specific investment goals/return objectives, as needed.

19.0 PORTFOLIO MANAGEMENT

Following the primary objective of preservation of capital, the investment portfolio may be actively managed to take advantage of market opportunities. In doing so, negotiable securities may be sold prior to their maturity to provide liquid funds as needed for cash flow purposes, to enhance portfolio returns, or to restructure maturities to increase yield and/or decrease risk. In addition, fluctuations in market rates or changes in credit quality may produce situations where securities may be sold at a loss in order to mitigate further erosion of principal or to reinvest proceeds of sale in securities that will out-perform the original investment. In practice, however, it is primarily a hold to maturity portfolio.

20.0 USE OF EXTERNAL PROFESSIONAL INVESTMENT MANAGERS

The City may employ the services of professional investment managers to assist in the management of the City's investment portfolio. Such managers may be granted the discretion to purchase and sell investment securities in accordance with this Investment Policy. In addition, such managers may review cash flow requirements, formulat e investment strategies, and execute security purchases, sales and deliveries. External investment managers must be well established and exceptionally reputable. Members of the staffs of such companies who will have primary responsibility for managing the City’s investments must have a working familiarity with the special requirements and constraints of investing municipal funds in general and this City's funds in particular. Such managers shall only be retained by written agreement with the City, and approved by th e City Council. They must contractually agree to conform to the City’s Investment Policy and all provisions of governing law and collateralization and other requirements contained herein.

Investment Managers shall exercise reasonable care in compliance with this Investment Policy and their Investment Management Agreements. If an Investment Manager causes a loss of funds to the City where the Manager is held to be liable for the loss of funds, compensation due to the City from the I nvestment Manager for such loss of funds is defined in each investment management agreement.

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21.0 INDEMNIFICATION OF CITY INVESTMENT OFFICIALS

The City Finance Director/Treasurer and any other City of Vallejo employee designated or assigned to perform the investment transactions and/or manage the City’s investment portfolio, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, will not be held personally liable for any individual investment losses
or total portfolio losses and shall be relieved of personal responsibility and liability for any individual security's credit risk or market price changes. Such indem nity shall extend to judgments, fines, attorney fees, and any other amounts paid in settlement of any such claim, suit, or proceeding, including any appeal thereof.

22.0 ALLOCATION OF ANY INVESTMENT GAIN OR LOSS

Any gain or loss realized on any investments will be distributed on a pro rata basis to all non- restricted funds which at the time of the investment gain or loss were part of the City’s portfolio, or using other such methods as directed by the City Finance Director/Treasurer, and in accordance with generally accepted accounting principles.

23.0 POLICY EXCEPTIONS

Occasionally, exceptions to some of the requirements specified in this Investment Policy may occur for pooled investments because of events subsequent to the purchase of investment instruments, e.g., the rating of a corporate note held in the portfolio is downgraded below an "A" rating, or total assets in the portfolio decline causing the percentage invested in corporate notes to rise above 30%.

State law is silent as to how exceptions should be corrected. Exceptions may be temporary or more lasting; they may be self-correcting or require specific action. If specific action is required, the City Finance Director/Treasurer should determine the course of action that would correct exceptions to move the portfolio into compliance with State and City requirements. Decisions to correct exceptions should not expose the assets of the portfolio to undue risk, and should not impair the meeting of financial obligations as they fall due. Evaluation of divestiture of securities will be determined on a case- by-case basis. At maturity or liquidation, such monies shall be reinvested only as provided by this policy.

24.0 USE OF STATE GUIDELINES

State of California Government Code Sections 16340, 16429.1, 53600, 53601, 53601.6, 53601.8, 53635, 53635.2, 53635.8, 53638, 53646, and 53684 regulate investment practices. It is the policy of the City of Vallejo to use the State's provisions for local government investments as a guide in the developing and implementing the City's investment policies and practices with the exception of those investments listed as Prohibited Transactions in Section 15 above.

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25.0 LEGISLATIVE CHANGES

Any State of California legislative action that further restricts allowable maturities, investment types or percentage allocations will be incorporated into the City of Vallejo Statement of Investment Policy and supersede any and all previous applicable language. If the City is holding an investment that is subsequently prohibited by a legisl ative change, the City may hold that investment until the maturity date, if it is deemed prudent by the Finance Director/Treasurer.

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ATTACHMENT A

SCHEDULE OF AUTHORIZED INVESTMENT INSTRUMENTS

Allowable Investment Instruments
The City Finance Director/Treasurer is authorized to invest in any of the investment instruments allowed by Sections 16340, 16429.1, 53600, 53601, 53601.6, 53601.8, , 53635.2, 53635.8, 53638, and 53684 of the California Government Co de with the exception of those investments listed as Prohibited Transactions in Section 16 above. Exclusion of the instruments in Section 16 (B) is consistent with the City's overall objective of achieving reasonable yields on public funds while minimizing risk and capital losses. Although the potential exists for greater interest yields with these instruments, it is believed that the potential level of risk exceeds their benefits except in very limited circumstances. Accordingly, City Council approval is required on a case-by-case basis for any investments listed in Prohibited Transactions Section 16 (B). Percentage holding limits listed in this section apply at the time the security is purchased.

Term
Reserve funds from the proceeds of debt issues of the City may be invested by the City Finance Director/ Treasurer in government agency securities with terms exceeding five (5) years if the maturity of such investments is made to coincide as nearly as practicable with the life of the debt issue.

In all other cases, City Council approval to make investments with terms in excess of five (5) years is required on a case-by-case basis.

Authorized Investments

The City’s funds may not be invested in those prohibited funds described in California Government Code 53601.6, but must only be invested in any of the following instruments as permitted by law (California Government Code Section 53601):

A. U.S. TREASURY BILLS. Commonly referred to as T -Bills, these are short -term marketable securities sold as obligations of the U.S. Government. They are offered in three-month, six-month, and one-year maturities. T-Bills do not accrue interest but are sold at a discount to pay face value at maturity. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries.

B. U.S. TREASURY NOTES. These are marketable, interest -bearing securities sold as obligations of the U.S. Government with original maturities of one to ten years at issuance.

Interest is paid semiannually. Purchases of these assets are limited to a remaining maturity of 5 years or less. There are no limits on t he dollar amount or percentage that the City may invest in U.S. Treasuries.

C. U.S. TREASURY BONDS. These are the same as U.S. Treasury Notes except they have original maturities of ten years or longer at issuance. Purchases of these assets are limited to a remaining maturity of 5 years or less, unless specifically approved by the City Council in accordance with California Government Code section 53601. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries

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D. U.S. GOVERNMENT AGENCY ISSUES AND GOVERNMENT SPONSORED ENTERPRISES (GSE’s). This includes obligations, participations, or other instruments of, or issued by, a federal government agency or a United States government-sponsored enterprise. Purchase of U.S. Government Agency securities may not exceed 50% of the City’s Portfolio. No more than 30% of the portfolio may be invested in any single Agency/GSE. The maximum percent of agency callable securities in the portfolio will be 20%.

The allowable securities fall into two categories: 1) Issues which are backed by the full faith and credit of the United States, 2) Issues which are implicitly backed by the full faith and credit of the United States and/or are in conservatorship.

These Issues include, but are not limited to:

1. Issues, which are unconditionally backed by the full faith and credit of the United States, including: Government National Mortgage Association (GNMA), Small Business Administration (SBA) and General Services Administration (GSA).

2. Issues which are not backed by the full faith and credit of the United States including but are not limited to: Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC ), Federal Home Loan Bank (FHLB), Farm Credit System, Banks for Cooperation (Co-ops), Federal Lands Banks (FLB), Federal Intermediate Credit Banks (FICB), and Tennessee Valley Authority (TVA).

E. LOCAL AGENCY INVESTMENT FUND (LAIF). As authorized in Government Code Section 16429.1, local agencies may invest in the Local Agency Investment Fund (LAIF), a pooled investment money market fund established by the State of California, and overseen by the State Treasurer, which allows local ag encies to pool their investment resources.

Principal may be withdrawn on a one- day notice. Interest earned is paid quarterly. The fees charged are limited to one-quarter of one percent of the earnings of the fund.

Current
policies of LAIF set minimum and maximum amounts of monies that may be invested as well as maximum numbers of transactions that are allowed per month. The City may invest up to the maximum amount permitted by LAIF. The LAIF is in trust in the custody of the State Treasurer. The City’s ri ght to withdraw its deposited monies from LAIF is not contingent upon the State’s ability to adopt a State Budget by July 1st of each new fiscal year.

F. BANKER'S ACCEPTANCES. Otherwise known as bills of exchange or time drafts, are negotiable instruments with a maturity of six months or less drawn on and accepted by a commercial bank. These instruments must be rated “A-1” or its equivalent or better by at least one Nationally Recognized Statistical Rating Organization (NRSRO); or long- term debt obligations which are rated in a category of “A” or its equivalent or better by at least one NRSRO. Banker’s Acceptances are usually created to finance the import or export of goods, or the shipment of goods within the United States. No more than 40% of the portfolio may be invested in Banker’s Acceptances. No more than 5% of the portfolio may be invested in any single issuer. The maximum maturity may not exceed 180 days.

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G. CERTIFICATE OF DEPOSIT (CDs). As authorized in Government Code Section 53601.8, local agencies may invest in Certificates of Deposit. These instruments must comply with Government Code Sections 16500 or 16600. This is a receipt for funds deposited in a Bank or Savings and Loan Association for a specified period at a specified rate of interest.

The first $ 250,000 of a CD is insured by the FDIC ; as such, the Finance Director/Treasurer may waive collateral requirements for CD investments up to this amount. Investments in CD's in excess of $ 250,000 must be collateralized by Treasury Department Securities, which must be at least 110% of the face value of the CD's in excess of the first $ 250,000, or by first mortgage loans, which must be at least 150% of the face value of the CD balance in excess of the first $ 250,000. No more than 20% of the portfolio may be invested in certificates of deposit. Maturities may not exceed more than five years.

All institutions must: (1) have a minimum of $100 million in assets; (2) have a demonstrated history of positive earnings; and, (3) must carry a minimum 3.5% equity ratio and hold that ratio for at least one year prior to the City’s investment. All institutions must be located within the State of California. For collateralized or negotiable certificates of deposit, the institution must have a minimum $1 billion in assets, in addition to meeting the above criteria.

H. NEGOTIABLE CERTIFICATE OF DEPOSIT (NCD). Allowable certificates of deposits must be issued by a nationally or state-chartered bank or a state or federal association, a state or federal credit union, or by a federally-licensed or state-licensed branch of a foreign bank. The amount of the NCD insured up to the FDIC limit does not require any credit ratings. Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO. The maturity period for this investment vehicle may not exceed five years unless approved by the Council. No more than 30% of the total portfolio may be invested in these securities. No more than 5% of the portfolio may be invested in any single issuer.

I. COMMERCIAL PAPER. As authorized in Government Code Section 53601(h), 25% of the City's portfolio may be invested in "prime" quality commercial paper. The securities must be rated “A-1” or its equivalent or better by at least one NRSRO and issued by a corporation which has long-term obligations with a rating of “A” or better by at least one NRSRO with maturities not to exceed 270 days. These notes are secured promissory notes of industrial corporations, utilities and bank holding companies. The issuer must be a corporation organized and operating in the United States with assets in excess of $500 million. The City may not purchase more than 10% of the outstanding commercial paper of any single issuer. No more than 5% of the portfolio may be invested in any single issuer. Under a provision sunsetting on January 1, 2026, no more than 40% of the portfolio may be invested in Commercial Paper if the City’s investment assets under management are greater than $100,000,000.

J. REPURCHASE AGREEMENTS. As authorized in Government Code Section 53601( j), repurchase agreements are agreements between the local agency and seller for the purchase of government securities to be resold at a specific date and for a specific amount.

Repurchase agreements are generally used for short term investments for the City’s daily automatic sweep account and will generally not exceed 30 days. The legal limitation on the

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maturity period for a repurchase agreement is for one year with the required market value underlying the agreement at 102% of the funds borrowed with the value adjusted quarterly.

K. MUNICIPAL BONDS OF THE STATE OF CALIFORNIA OR LOCAL AGENCIES . As authorized in Government Code Section 53601(e), local agencies may invest in Bonds of the State of California and any local government in the State of California, which are rated in the “A” category or better by one NRSRO at the time of investment . In no event shall this classification of investment exceed 10% of the value of the portfolio. No more than 5% of the portfolio may be invested in any single issuer.

L. MUTUAL FUNDS and MONEY MARKET MUTUAL FUNDS. Mutual Funds are referred to in California Government Code Section 53601( l), as "shares of beneficial interest issued by diversified management companies." Mutual Funds and Money Market Mutual Funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940 are authorized investments for funds subject to the following provisions:
a. Mutual Funds that invest in the securities and obligations as authorized under California Government Code Section 53601(a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

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

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

3. No more than 10% of the total portfolio may be invested in Mutual Funds.

4. No more than 5% of the total portfolio may be invested in any one issuer.

b. Money Market Mutual Funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:

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

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

3. No more than 20% of the total portfolio may be invested in Money Market Mutual Funds.

4. No more than 5% of the total portfolio may be invested in any one issuer.

5. All Money Market Mutual Funds must be compliant with Rule 2a -7 of the Investment Company Act of 1940.

M. LOCAL GOVERNMENT INVESTMENT POOLS (LGIP).

Established to aggregate funds from public agencies placed in the custody of the pool for investment and reinvestment. There are no issuer limitations for Local Government Investment Pools. Government Code section 53601 (p) states:

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Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (q), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:
(1) The adviser is registered or exempt from registration with the Securities and Exchange Commission.
(2) The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q), inclusive. (3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

N. MEDIUM TERM NOTES. As authorized in Government Code Section 53601( k), local agencies may invest in medium term notes issued by corporations organized and operating in the United States or by depository institutions licensed by the United States or any state and operating within the United States that are rated in the rating category of “A” or its equivalent or higher rating for the issuer’s debt as provided by one NRSRO and having a maximum remaining maturity period of five years or less in an amount not to exceed 30% of the agency’s portfolio. Furthermore, the maximum principal amount in any one issuer will not exceed 5% of the City’s portfolio.

O. MORTGAGE-BACKED SECURITIES (MBS), COLLATERALIZED MORTGAGE

OBLIGATIONS (CMO), AND ASSET BACKED SECURITIES (ABS) FROM ISSUERS

NOT DEFINED IN SECTIONS A THROUGH D OF THE AUTHORIZED INVESTMENTS SECTION OF THS POLICY. As authorized in Government Code Section 53601(o), local agencies may invest in any mortgage pass -through security, collateralized mortgage obligation, mortgage- backed or other pay -through bond, equipment lease- backed certificate, consumer receivable pass-through certificate or consumer receivable-backed bond with a maximum remaining maturity of five years.

Securities eligible for investment under this subdivision shall be rated in the rating category of “AA” or its equivalent or better by a nationally recognized rating service.

Purchases of securities authorized by this subdivision may not exceed 20% of the agency’s portfolio. No more than 5% of the portfolio may be invested in any single Asset- Backed or Commercial Mortgage security issuer.

P. MUNICIPAL BONDS OF OTHER STATES. As authorized in Government Code Section 53601(d), local agencies may invest in r egistered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United States, in addition to California. Securities eligible for investment under this subdivision shall be rated in the rating category of “A” or its equivalent or better by one NRSRO at the time of investment. Purchases of securities authorized by this subdivision may not exceed 10% of the agency’s portfolio. Furthermore, the maximum principal amount in any one issuer will not exceed 5% of the City’s portfolio.

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Q. EQUITY SECURITIES (COMMON AND PREFERRED STOCKS ). The City may not purchase equity securities. From time to time, however, equity securities may be received as a gift, through bankruptcies or as payment in lieu of monies due the City. Such stock shall be sold unless received through a gift or bequest with restrictions on its sale. Sale proceeds will be distributed to the appropriate program fund. If the stock has no market value or if the cost of selling it exceeds the market value, the stock will be written off or monitored periodically to be sold when a break-even market value can be realized.

R. SUPRANATIONALS. Issues are U.S. dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter - American Development Bank. Supranationals are permitted by California Government Code § 53601 (q), and must be rated in a rating category of AA or its equivalent or higher by at least one NRSRO. No more than 30% of the total portfolio may be invested in Supranationals. No more than 10% of the portfolio may be invested in any single issuer.

The maximum maturity may not exceed five years.

It should be noted that while the Government Code specifies the maximum percentage of the portfolio that may be held in each type of investment at any one time, fluc tuations in the portfolio balance will prevent strict adherence to such restrictions. Therefore, the constraints listed in this policy are to be applied at the time the investment is made and not necessarily to subsequent events which may change the percentage.

SUMMARY OF AUTHORIZED SECURITIES AND CRITERIA INCLUDING

DIVERSIFICATION CRITERIA

The following table (Exhibit 1 to Attachment A) provides a summary of Permitted Investments and is not designed to include all restrictions and constraints a specific Permitted Investment may be subject to as an authorized investment in conformance with California Government Code Sections 16340, 16429.1, 53601 et seq., 53638, and 53684. Authorized investments shall also include, in accordance with California Government Code Section 16429.1 et seq., investments into the Local Agency Investment Fund (LAIF) or the County Pool Fund in accordance with California Government Code Section 53684. The City’s investment portfolio, in aggregate, will be diver sified to limit market and credit risk by observing the following maximum percentage limits, by instrument, for the City Policy Legal limitations.

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EXHIBIT 1 TO ATTACHMENT A
The City’s authorized investments must be in conformance with California Government Code Sections 53601 et seq. and 53635 et seq, and 53638. Authorized investments shall also include, in accordance with California Government Code Section 16429.1 et seq., investments into the Local Agency Investment Fund (LAIF) or the County Pool Fund in accordance with California Government Code Section 53684. Within the context of these limitations, the following investments are authorized:

State Code City Policy City
Maximum

Section Legal Limit Legal Limit Maturity City Policy
Ref # Permitted Investments (% or $) (% or $) Constraints Other Constraints A U.S. Government
Treasury Bills
Unlimited Unlimited 5 years None
B U.S. Government
Treasury Notes
Unlimited Unlimited 5 years None
C U.S. Government
Treasury Bonds
Unlimited Unlimited 5 years None
D U.S. Government
Agencies (e.g., GNMA,
FNMA)
Unlimited 50% 5 years 30% per issuer, 20%
limit on callable
agencies
E LAIF State Pool Up to
statutory
limits
Up to statutory
limits
On Demand Limited to 15
transactions per
month, per account,
per State Policy
F Bankers Acceptances 40% 40% 180 days No more than 5% of the portfolio invested
in any one
commercial bank:

Rated A-1 or better
G Certificates of Deposit Unlimited 20% 5 years Must be collateralized to 110% of the CD
value by other eligible
securities. The
Finance Director may
waive collateral
requirements for
amounts insured by
the FDIC
H Negotiable Certificates
of Deposit
30% 30% 5 years State and Federally
chartered banks and
savings institutions,
“A” rating or better by
one agency. 5%
issuer limit.

I Commercial Paper 40% when
City has over
$100 million
in investible
assets, until
January 1,
2026
40% when City
has over $100
million in
investible assets,
until January 1,
2026
270 days U.S. Corporations
with assets in excess
of $500,000,000; “A”
long-term debt rating
or better; maximum of
$1,000,000 from an
issuing corporation.
5% per issuer limit.

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Section
Ref #

Permitted
Investments
State Code

Legal Limit
(% or $)
City Policy

Legal Limit
(% or $)

City
Maximum
Maturity
Constraints

City Policy
Other Constraints
J Repurchase
Agreements
Unlimited 20% N.A. Collateralized by
securities with a
market value of at
least 102% of the loan
amount.

K Municipal State of
California or Local
Agency Bonds
Unlimited 10% 5 years Minimum “A” Debt
rating or better. 5%
issuer limit.

L a. Mutual Funds and

b. Money Market
Mutual Funds
a. 10%

b. 20%
a. 10%

b. 20%
4 years Funds invested as
defined in Section
53601 (a) to (g)
M Local Government
Investment Pools
Unlimited Unlimited On Demand None
N Corporate Medium
Term Notes
30% 30% 5 years U.S. Corporations;
minimum “A” debt
rating or better,
maximum of 5% of
portfolio per issuing
company
O Mortgage Backed
Securities
Collateralized
Mortgage Obligations,
Asset Backed
Securities
20% 20% 5 years Minimum “AA” Debt
rating or better. 5%
per issuer limit.

P Municipal Bonds of
Other States
Unlimited 10% 5 years Minimum “A” rating or
better and Maximum
of 5% of portfolio per
issuer
Q Equity Securities
(Common or Preferred
Stocks)
0% 0% N.A. Only received by gift,
bankruptcy, or in lieu
of moneys due City
R Supranationals 30% 30% 5 years 10% per issuer limit

1) Limits on percent of portfolio do not apply to investments made by LAIF or other Government Investment Pools.

2) U.S. Treasury Bonds have a maturity of 10 years or more, which currently prohibits the purchase of “New Issue” Treasury bonds as an investment tool. Purchase of Treasury bonds in the secondary market is allowed only if the remaining term to maturity is less than 5 years , unless approved by the City Council.

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ATTACHMENT B

GLOSSARY OF CASH MANAGEMENT TERMS

ACCRETION OF DISCOUNT - Periodic straight -line increases in the book or carrying value of a security so the amount of the purchase price discount below face value is completely eliminated by the time the bond matures or by the call date, if applicable.

ACCRUED INTEREST - Interest earned but not yet received. The interest accumulated on a bond since issue date or the last coupon payment. The buyer of the bond pays the market price and accrued interest, which is payable to the seller.

AGENCIES - A debt security issued by a federal or federally sponsored agency.

In the government securities industry, investors frequently refer to all debt instruments issued by U.S. government agencies, departments, and related instrumentalities as agency securities. Only those securities backed by the full faith and credit of the U. S. Government are true agency securities. Only securities issued by the Government National Mortgage Association (Ginnie Mae or GNMA) are widely used by public investors as tr ue agency securities backed by the full faith and credit of the U.S.

Government.

Generally, the underlying security associated with a U.S. agency is considered to be as risk -free as direct Treasury securities. The key difference in risk with these instruments is their liquidity and marketability, which is diminished as a result of smaller, irregular, and less familiar issues.

U.S. Government Instrumentalities, also known as government sponsored enterprises (GSEs), are financial intermediaries established by the federal government to fund loans to certain groups of borrowers, such as homeowners, farmers, and students. In short, GSEs are privately owned corporations with a public purpose. The most common instrumentalities are:
• Federal Farm Credit System Banks (FFCB),
• Federal Home Loan Banks (FHLB),
• Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC), • Federal National Mortgage Association (Fannie Mae or FNMA), • Tennessee Valley Authority (TVA).

GSEs sell securities on a regularly scheduled basis throug h selling groups, which are chosen groups of dealers that the GSE uses to "bring the paper to the streets." Short -term securities are regularly issued as discount notes with maturities ranging from overnight to 360 days. GSEs also issue securities with fixed interest rates, ranging in maturity from three months to 30 years.

AMORTIZATION OF PREMIUM - Periodic straight-line decreases in the book or carrying value of a security so the premium paid for a bond above its face value or call price is completely eliminated.

ASK – The price at which securities are offered for sale.

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ASSET BACKED SECURITIES (ABS) – Asset Backed Securities are pass -through instruments collateralized by installment loans, leases, revolving lines of credit or other consumer finance receivables. Securitizations are structured to separate the credit of the ABS issuer from the assets being securitized.

AVERAGE MATURITY - A weighted average of the expiration dates for a portfolio of debt securities.

An income fund's volatility can be managed by shortening or lengthening the average maturity of its portfolio.

BANK WIRE - A virtually instantaneous electronic transfer of funds between two financial institutions.

BANKERS ACCEPTANCES (BAs) - Bankers Acceptances generally are created based on a letter of credit issued in a foreign trade transaction. They are used to finance the shipment of commodities between countries as well as the shipment of some specific goods within the United States. BAs are short-term, non -interest bearing notes sold at a discount and redeemed by the accepting bank at maturity for full face value. These notes trade at a rate equal to or slightly higher than Certificates of Deposit (CDs), depending on market supply and demand.

Bankers Acceptances are sold in amounts that vary from $100,000 to $5,000,000, or more, with maturities ranging from 30 - 270 days. They offer liquidity to the investor as it is possible to sell BAs prior to maturity at the current market price.

BASIS POINT - A measure of an interest rate, i.e., 1/100 of 1 percent, or .0001.

BID - The indicated price at which a buyer is willing to purchase a security or commodity. When selling a security a bid is obtained.

BOND - A long-term debt security, or IOU, issued by a government or corporation that generally pays a stated rate of interest and returns the face value on the maturity date.

BOOK ENTRY SECURITIES - U.S. government and federal agency securities that do not exi st in definitive (paper) form; they exist only in computerized files maintained by the Federal Reserve Bank.

BOOK VALUE - The amount at which an asset is carried on the books of the owner. The book value of an asset does not necessarily have a significant relationship to market value.

BROKER – A broker brings buyers and sellers together for a commission.

CALLABLE BOND - A bond issue in which all or part of its outstanding principal amount may be redeemed before maturity by the issuer under specified conditions. Bonds are generally called when interest rates fall so that the bond issuer can save money by floating new bonds at the lower rate. The first call date is the date which a specific call price will be offered by the issuer, usually a premium price to par, as an incentive to the bondholder to redeem the bond.

CALL PRICE - The price at which an issuer may redeem a bond prior to maturity. The price is usually at a slight premium to the bond's original issue price to compensate the holder f or loss of income and ownership.

CALL RISK - The risk to a bondholder that a bond may be redeemed prior to maturity.

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CASH SALE\PURCHASE - A transaction which calls for delivery and payment of securities on the same day that the transaction is initiated.

CERTIFICATES OF DEPOSIT - Certificates of Deposit, familiarly known as CDs, are certificates issued against funds deposited in a bank for a definite period of time and earning a specified rate of return.

Certificates of Deposit bear rates of interest in line with money market rates current at the time of issuance.

COLLATERALIZATION - Process by which a borrower pledges securities, property, or other deposits for the purpose of securing the repayment of a loan and/or security.

COMMERCIAL PAPER - Commercial paper is an unsecured promissory note issued by a corporation for a specific amount and maturing on a specific day that cannot be farther into the future than 270 days. Commercial Paper is typically rated by credit agencies that attempt to evaluate the liquidity, cash flow, profitability, and backup credit availability of the entity that is issuing the paper.

COMPETITIVE BID PROCESS - A process by which three or more institutions are contacted via the telephone to obtain interest rates for specific securities.

CONVEXITY - A measure of a bond's price sensitivity to changing interest rates. A high convexity indicates greater sensitivity of a bond's price to interest rate changes.

CORPORATE NOTES – A debt security issued by a corporation and sold to investors. The bond is usually a “general obligation” of the company. In some cases, the company's physical assets may be used as collateral for bonds, or certain bonds may be “subordinated” to others that the Company issues.

Subordinated notes and/or bonds are not permitted.

COUPON RATE - The annual rate of interest received by an investor from the issuer of certain types of fixed-income securities. Also known as the "interest rate." CREDIT QUALITY - The measurement of the financial strength of a bond issuer. This measurement helps an investor to understand an issuer’s ability to make timely interest payments and repay the loan principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest rate paid by the issuer becaus e the risk of default is lower. Credit quality ratings are provided by nationally recognized rating agencies.

CREDIT RATINGS: An investment rating given to a debt instrument that indicates its credit worthiness.

Private independent rating services such as Standard & Poor's, Moody's and Fitch provide these evaluations of the issuer's financial strength, or its ability to pay principal and interest in a timely fashion.

High graded credit ratings are as follows:

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Moody’s Standard & Poor’s Fitch
Long Term Short Term Long Term Short Term Long Term Short Term Aaa
P1
AAA
A1+

AAA
A1+ Aa1 AA+ AA+
Aa2 AA AA
Aa3 AA- AA-
A1 A+
A1
A+
A2 A A
A3
P2
A-
A2
A-
A2
Baa1 BBB+ BBB+

CREDIT RISK - The risk that another party to an investment transaction will not fulfill its obligations.

Credit risk can be associated with the issuer of a security, a financial institution holding the entity's deposit, or a third party holding securities or collateral. Credit risk exposure can be affec ted by a concentration of deposits or investments in any one investment type or with any one party.

CUSIP NUMBER - A nine -digit number established by the Committee on Uniform Securities Identification Procedures that is used to identify publicly traded securities. Each publicly traded security receives a unique CUSIP number when the security is issued.

CURRENT YIELD - A yield calculation determined by dividing the annual interest received on a security by the current market price of that security.

CUSTODIAN - An independent third party (usually bank or trust company) that holds securities in safekeeping as an agent for the city.

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

DEFEASE - To discharge the lien of an ordinance, resolution, or indenture relating to a bond issue, and in the process, render inoperative restrictions under which the issuer has been obliged to operate.

Comment: Ordinarily an issuer may defease an indenture requirement by depositing with a trustee an amount sufficient to fully pay all amounts under a bond contract as they become due.

DELIVERY - The providing of a security in an acceptable form to the City or to an agent acting on behalf of the City and independent of the seller. Acceptable forms can be physical securities or the transfer of book entry securities. The important distinction is that the transfer accomplishes absolute ownership control by the City.

DELIVERY VS PAYMENT - There are two methods of delivery of securities: Delivery vs. payment and delivery vs. receipt (also called free). Delivery vs. payment is delivery of securities with an exchange of money for the securities. Delivery vs. receipt is delivery of securities with an exchange of a signed receipt for the securities.

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DEPOSITORY BANK - A local bank used as the point of deposit for cash receipts.

DEPOSITORY INSURANCE - Insurance on deposits with financial institutions. For purposes of this policy statement, depository insurance includes: a) Federal depository insurance funds, such as those maintained by the Federal Deposit Insurance Corporation (FDIC).

DERIVATIVE SECURITY - Financial instrument created from, or whose value depends upon, one or more underlying assets or indexes of asset values.

DISCOUNT - 1. (n.) selling below par; e.g., a $1,000 bond selling for $900. 2. (v.) anticipating the effects of news on a security's value; e.g., "The market had already discounted the effect of the labor strike by bidding the company's stock down."
DISCOUNT SECURITIES – Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills.

DIVERSIFICATION - Dividing available funds among a variety of securities and institutions so as to minimize market risk.

DOLLAR-WEIGHTED AVERAGE MATURITY - The sum of the amount of each outstanding investment multiplied by the number of days to maturity, divided by the total amount of outstanding investment.

EFFECTIVE RATE - The yield you would receive on a debt security over a period of time taking into account any compounding effect.

FACE VALUE - The value of a bond stated on the bond certificate; thus, the redemption value at maturity. Most bonds have a face value, or par, of $1,000.

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

FEDERAL AGENCY SECURITIES - Several government-sponsored agencies, in recent years, have issued short and long-term notes. Such notes typically are issued through dealers, mostly investment banking houses. These Federal government -sponsored agencies were established by the U.S.

Congress to undertake various types of financing without tapping the public treasury. In order to do so, the agencies have been given the power to borrow money by issuing securities, generally under the authority of an act of Congress. These securiti es are highly acceptable and marketable for several reasons, mainly because they are exempt from state, municipal and local income taxes. Furthermore, agency securities must offer a higher yield than direct Treasury debt of the same maturity to find investors, partly because these securities are not direct obligations of the Treasury.

The main agency borrowing institutions are the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC ), the Federal Home Loan Bank Sy stem (FHLB), and the Federal Farm Credit System (FFCS).

FLOATING-RATE NOTES - The term floating- rate notes includes different types of securities with a similar feature that the interest rate or coupon rate is adjusted periodically to a benchmark or base rate.

A simple example of a floating- rate instrument is a Series EE savings bond where the semiannual

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interest rate is determined in May and November based on 85 percent of the average market return of the five-year Treasury note for the preceding six mont hs. In theory, floating -rate notes are securities with coupons based on a short-term rate index.

FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION - issues notes tailored to the maturity needs of the investor. Maturities range from 30 days up to 10 years. These notes are made attractive by their denominations from $5,000 to $1 million.

FHLB - FEDERAL HOME LOAN BANK SYSTEM - consists of twelve Federal Home Loan Banks, issues, in addition to long- term bonds, coupon notes with maturities of up to one year. Their attractiveness stems from their investment denominations of $10,000 to $1 million.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) - A Federal institution that insures bank deposits.

FEDERAL FUNDS (Fed Funds) - Funds placed in Federal Reserve banks by depository institutions in excess of current reserve requirements. These depository institutions may lend fed funds to each other overnight or on a longer basis. They may also transfer funds among each other on a same -day basis through the Federal Reserve banking system. Fed funds are considered to be immediately available funds.

FEDERAL FUNDS RATE - The rate of interest at which Fed Funds are traded between banks. Fed Funds are excess reserves held by banks that desire to invest or lend them to banks needing reserves.

The particular rate is heavily influenced through the open market operations of the Federal Reserve Board. Also referred to as the "Fed Funds rate."
FEDERAL HOME LOAN BANKS (FHLB) - The institutions that regulate and lend to savings and loan associations. These are Government sponsored wholesale banks which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLB’s is to liquefy the housing related assets of its members who must purchase stock in their district bank.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a Federal corporation working under the auspices of the Department of Housing and Urban Development, HUD. It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed- rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.

FEDERAL OPEN MARKET COMMITTEE (FOMC) – Consists of seven members of the Federal Reserve Board and five of the twelve Federal reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis.

The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.

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FEDERAL RESERVE SYSTEM - The central bank of the United States which has regulated credit in the economy since its inception in 1913. Includes the Federal Reserve Bank, 12 district banks and the member banks of the Federal Reserve, and is governed by the Federal Board.

FLEXIBLE REPURCHASE AGREEMENTS (Flex Repos) - Similar to a term repurchase agreement, a flex repo is a contractual transfer of U.S. government securities during the investment period, whereby the Seller agrees to repurchase the collateral securities from the Buyer on the Buyer's demand, subject to provisions of the agreement. The Seller is generally a financial institution such as a securities dealer or a bank. As buyers, most issuers re quire over-collateralization, marking-to-market of collateral and delivery-vs.-payment of collateral.

GINNIE MAES (GNMAs) - Mortgage securities issued and guarantied, as to timely interest and principal payments, by the Government National Mortgage Associ ation, an agency within the Department of Housing and Urban Development (HUD).

GOVERNMENT SECURITY - Any debt obligation issued by the U.S. government, its agencies or instrumentalities. Certain securities, such as Treasury bonds and Ginnie Maes, are back ed by the government as to both principal and interest payments. Other securities, such as those issued by the Federal Home Loan Mortgage Corporation, or Freddie Mac, are backed by the issuing agency.

GOVERNMENT-SPONSORED ENTERPRISES (GSE’s) - Payment of principal and interest on securities issued by these corporations is not guaranteed explicitly by the U.S. government, however, most investors consider these securities to carry an implicit U.S. government guarantee. The debt is fully guaranteed by the issuing corporations. GSE’s include: Farm Credit System, Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, and the Tennessee Valley Authority.

HAIRCUT - This term describes the way brokers and client s protect themselves from market risk in doing repos. An entity wanting to finance the purchase of $100 million in Treasury bonds may borrow just $98 million of the money. The two percent difference between the amount of securities purchased and the amount of money borrowed is the haircut. Similarly, an entity looking to borrow $100 million may need to provide, as collateral, Treasury securities with a market price equal to $102 million.

INTERNAL CONTROLS - An internal control structure designed to ensure that the assets of the entity are protected from loss, theft, or misuse. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be derived and 2) the valuation of costs and benefits requires estimates and judgments by management. Internal controls should address the following points:

1. Control of collusion - Collusion is a situation where two or more employees are working in conjunction to defraud their employer.

2. Separation of transaction authority from accounting and record keeping - By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved.

3. Custodial safekeeping - Securities purchased from any bank or dealer including appropriate collateral (as defined by state law) shall be placed with an independent third party for custodial safekeeping.

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4. Avoidance of physical delivery securities - Book-entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.

5. Clear delegation of authority to subordinate staff members - Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions.

Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities.

6. Written confirmation of transactions for investments and wire transfers - Due to the potential for error and improprieties arising from telephone and electronic transactions, all transactions should be supported by written communications and approved by the appropriate person. Written communications may be via fax if on letterhead and if the safekeeping institution has a list of authorized signatures.

7. Development of a wire transfer agreement with the lead bank and third-party custodian - The designated official should ensure that an agreement will be entered into and will address the following points: controls, security provisions, and responsibilities of each party making and receiving wire transfers.

INVERSE FLOATER - A bond or note that does not earn a fixed rate of interest. Rather, the interest rate that is earned is tied to a specific interest -rate index identified in the bond/note structure. The interest rate earned by the bond/note will move in the opposite direction of the index, e.g., if market interest rates as measured by the selected index rises, the interest rate earned by the bond/note will decline. An inverse floater increases the market rate risk and modified duration of the investment.

INVERTED YIELD CURVE - A chart formation that illustrates long-term securities having lower yields than short-term securities. This configuration usually occurs during periods of high inflation coupled with low levels of confidence in the economy and a restrictive monetary policy.

INVESTMENT COMPANY ACT OF 1940 - Federal legislation which sets the standards by which investment companies, such as mutual funds, are regulated in the areas of advertising, promotion, performance reporting requirements, and securities valuations.

INVESTMENT POLICY - A concise and clear statement of the objectives and parameters formulated by an investor or investment manager for a portfolio of investment securities.

INVESTMENT-GRADE OBLIGATIONS - An investment instrument suitable for purchase by institutional investors under the prudent person rule. Investment-grade is restricted to those obligations rated BBB or higher by a rating agency.

LIQUIDATION - Conversion into cash.

LIQUIDITY - Refers to the ease and speed with which an asset can be converted into cash without a substantial loss in value. In the money market, a security is said to be liquid if th e spread between bid and asked prices is narrow and reasonable size can be done at those quotes.

LOSS - The excess of the cost or book value of an asset over selling price.

LOCAL GOVERNMENT INVESTMENT POOL (LGIP) - The aggregate of all funds from political subdivisions that are placed in the custody of the Treasurer for investment and reinvestment.

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LONG-TERM INVESTMENTS - Investments considered long- term are generally defined as those instruments maturing in one year or longer.

MARK-TO-MARKET - The practice of valuing a security or portfolio according to its market value, rather than its cost or book value. An adjustment in the valuation of a securities portfolio to reflect the current market values of the respective securities in the portfolio.

MARKETABILITY - Ability to sell large blocks of money market instruments quickly and at competitive prices.

MARKET VALUE - The price at which a security is trading and could presumably be sold.

MARKET RISK - The risk associated with declines or rises in interest rates which cause an investment in a fixed- income security to increase or decrease in value. The risk that the market value of an investment, collateral protecting a deposit, or securities underlying a repurchase agreement will decline.

MASTER REPURCHASE AGREEMENT - An agreement between the investor and the dealer or financial institute. This agreement defines the nature of the transactions, identifies the relationship between the parties, establishes normal practices regarding ownership and custody of the collateral securities during the term of the investment, provides for remedies in the event of a default by either party and otherwise clarifies issues of ownership.

MATURITY - The date upon which the principal or stated value of an investment becomes due.

MONEY MARKET – The market in which short -term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.

MORTGAGE-BACKED SECURITIES - Mortgage-backed securities have several unique characteristics, beginning with the payment of interest on a monthly basis. Mortgage Backed Securities also differ from standard Treasury investments in that the cash flow pattern is uncertain due to the risk of prepayments or the unscheduled payment of principal. Moreover, a change in the future assumption for prepayments will also affect the rate of return on the investment of a mortgage- backed security.

Mortgage-backed securities are created when mortgage pools are collateralized into interest -bearing securities. This securitization process can be accomplished via either a sale of assets or as a debt obligation of the issuer. In the former, a mortgage pass -through security is created, while in the latter case a mortgage-backed bond is originated.

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

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

1. Report standardized performance calculations.

2. Disseminate timely and accurate information regarding the fund's holdings, performance, management and general investment policy.

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3. Have the fund's investment policies and activities supervised by a board of trustees, which are independent of the adviser, administrator or other vendor of the fund.

4. Maintain the daily liquidity of the fund's shares.

5. Value their portfolios on a daily basis.

6. Have all individu als who sell SEC- registered products licensed with a self -regulating organization (SRO) such as the National Association of Securities Dealers (NASD).

7. Have an investment policy governed by a prospectus which is updated and filed by the SEC annually.

MUTUAL FUND STATISTICAL SERVICES - Companies that track and rate mutual funds, e.g., IBC/Donoghue, Lipper Analytical Services, and Morningstar.

NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD) - A self -regulatory organization (SRO) of brokers and dealers in the over -the-counter securities business. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities.

NATIONALLY RECOGNIZED STATISTICAL RATINGS ORGANIZATION. The formal term to describe credit rati ng agencies that provide credit ratings that are used by the U.S. government in several regulatory areas. Ratings provided by Nationally Recognized Statistical Ratings Organizations (NRSRO) are used frequently by investors and are used as benchmarks by federal and state agencies.

Generally, to be considered an NRSRO, the agency has to be "nationally recognized" in the U.S. and provide reliable and credible ratings. Also taken into consideration is the size of the credit rating agency, operational capability and its credit rating process.

NEGOTIABLE CERTIFICATES OF DEPOSIT - Large denomination ($100,000 or more) interest bearing time deposits, paying the holder a fixed amount of interest at maturity. Issues can be sold to a new owner before maturity.

NET ASSET VALUE - The market value of one share of an investment company, such as a mutual fund. This figure is calculated by totaling a fund's assets which includes securities, cash, and any accrued earnings, subtracting this from the fund's liabilities and dividing this total by the number of shares outstanding. This is calculated once a day based on the closing price for each security in the fund's portfolio. [(Total assets) - (Liabilities)]/(Number of shares outstanding) NO LOAD FUND - A mutual fund which does not levy a sales charge on the purchase of its shares.

NOMINAL YIELD - The stated rate of interest that a bond pays its current owner, based on par value of the security. It is also known as the "coupon," "coupon rate," or "interest rate." OFFER - The indicated price at which a seller is willing to sell a security or commodity. When buying a security an offer is obtained.

OPEN MARKET OPERATIONS – Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market oper ations are the Federal Reserve’s most important and most flexible monetary policy tool.

PAR VALUE - The nominal or face value of a debt security; that is, the value at maturity.

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PORTFOLIO – Collection of securities held by an investor.

POSITIVE YIELD CURVE - A chart formation that illustrates short -term securities having lower yields than long-term securities.

PREMIUM - The amount by which a bond sells above its par value.

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

PRIME RATE - The interest rate a bank charges on loans to its most credit worthy customers.

Frequently cited as a standard for general interest rate levels in the economy.

PRINCIPAL - An invested amount on which interest is charged or earned.

PRUDENT PERSON RULE – An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state – the so- called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.

QUALIFIED PUBLIC DEPOSITORY - A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated, for the benefit of the commission, eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits.

RANGE NOTE - An investment whose coupon payment varies (e.g. either 7% or 3%) and is dependent on whether the current benchmark (e.g. 30 year Treasury) falls within a pre -determined range (e.g. between 6.75% and 7.25%).

RATE OF RETURN - The amount of income received from an investment, expressed as a percentage.

A market rate of return is the yield that an investor can expect to receive in the current interest -rate environment utilizing a buy-and-hold to maturity investment strategy.

REGISTERED SECURITY - A security that has the name of the owner written on its face. A registered security cannot be negotiated except by the endorsement of the owner.

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

REPURCHASE AGREEMENT (REPO) - The Repo is a contractual transaction between an investor and an issuing financial institution (not a secured loan). The investor exchanges cash for temporary ownership of specific securities, with an agreement between the parties that on a future date, the financial institution will repurchase the securities at a prearranged price. An "Open Repo" does not have a specified repurchase date and the repurchase price is established by a formula computation.

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REPRICING - The revaluation of the market value of securities.

REVERSE REPO ’s - The opposite of the transaction undertaken through a regular repurchase agreement. In a "reverse" the City initially owns securities and the bank or dealer temporarily exchanges cash for this collateral. This is, in effect, temporarily borrowing cash at a high interest rate. Most typically, a Repo is initiated by the lender of funds. Reverses are used by dealers to borrow securities they have shorted. Such investments are not authorized in the City of Vallejo’s Investment Policy.

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

SAFEKEEPING - A service to customers rendered by banks for a fee whereby all securities and valuables of all types and descriptions are held in the bank's vaults for protection, or in the case of book entry securities, are held and recorded in the customer's name and are inaccessible to anyone else.

SECONDARY MARKET – A market made for the purc hase and sale of outstanding issues following the initial distribution.

SECURITIES - Bonds, notes, mortgages, or other forms of negotiable or non-negotiable instruments.

SECURITIES & EXCHANGE COMMISSION – Agency created by Congress to protect investors i n securities transactions by administering securities legislation.

SERIAL BOND - A bond issue, usually of a municipality, with various maturity dates scheduled at regular intervals until the entire issue is retired.

SETTLEMENT DATES - The day on which pay ment is due for a securities purchase. For stocks and mutual funds bought through an investment dealer, settlement is normally five business days after the trade date. Bonds and options normally settle one business day after the trade date, mutual fund shares purchased directly by mail or wire settle on the day payment is received.

SHORT-TERM INVESTMENTS - Short-term investments are generally defined as those instruments maturing in one year or less.

SINKING FUND - Money accumulated on a regular basis in a separate custodial account that is used to redeem debt securities or preferred stock issues.

SPREAD - (a) Difference between the best buying price and the best selling price for any given security. (b) Difference between yields on or prices of two securities of differing quality or differing maturities. (c) In underwriting, difference between price realized by the issuer and price paid by the investor.

STRIPS - Separation of the principal and interest cash flows due from any interest-bearing securities into different financial instruments. Each coupon payment is separated from the underlying investment to create a separate security. Each individual cash flow is sold at a discount. The amount of the discount and the time until the cash flow is paid determine the investor’s return.

STRIPPED TREASURIES - U.S. Treasury debt obligations in which coupons are removed by brokerage houses, creating zero-coupon bonds.

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STRUCTURED NOTES – A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes that have coupons that increase when other interest rates are falling, and which fall when other interest rates are r ising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

Notes issued by government Sponsored Enterprises (GSE) such as FHLB, FNMA, and Corporations which have imbedded options (e.g., call features, step- up coupons, floating rate coupons, derivative- based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.

SUPRANATIONAL. A Supranational is a multi -national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.

TERM BOND - Bonds comprising a large part or all of a particular issue which come due in a single maturity. The issuer usually agrees to make periodic payments into a sinking fund for mandatory redemption of term bonds before maturity.

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

For mutual funds, return on an investment is composed of share price appreciation plus any realized dividends or capital gains. This is calculated by taking the following components during a certain time period. (Price Appreciation) + (Dividends and Interest received) + (Capital gains) = Total Return TRIPARTITE CUSTODIAN AGREEMENT - An agreement that occurs when a third party or custodian becomes a direct participant in a repurchase transaction. The custodian ensures that the exchange occurs simultaneously and that appropriate safeguards are in place to protect the investor’s interest in the underlying collateral.

THIRD-PARTY SAFEKEEPING - A safekeeping arrangement whereby the investor has full control over the securities being held and the dealer or bank investment department has no access to the securities being held.

TIME DEPOSIT - Interest-bearing deposit at a savings institution that has a specific maturity.

TREASURY BILLS - Treasury bills are short-term debt obligations of the U.S. Government. They offer maximum safety of principal since they are backed by the full faith and credit of the United States Government. Treasury bills, commonly called "T -Bills," account for the bulk of government financing, and are the major v ehicle used by the Federal Reserve System in the money market to implement national monetary policy. T-Bills are sold in three, six, nine, and twelve- month bills. Because treasury bills are considered "risk-free," these instruments generally yield the lowest returns in the major money market instruments.

TREASURY NOTES AND BONDS - While T-Bills are sold at a discount rate that establishes the yield to maturity, all other marketable treasury obligations are coupon issued. These include Treasury Notes with m aturities from one to ten years and Treasury Bonds with maturities of 10- 30 years. The instruments are typically held by banks and savings and loan associations. Since Bills, Notes and Bonds are general obligations of the U.S. Government, and since the Fed eral Government has the

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lowest credit risk of all participants in the money market, its obligations generally offer a lower yield to the investor than do other securities of comparable maturities.

UNDERLYING SECURITIES - Securities transferred in accordance with a repurchase agreement.

UNIFORM NET CAPITAL RULE – Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

VARIABLE RATE - An interest rate which is adjusted periodically, usually based on a standard market rate outside the control of the bank or savings institution, such as that prevailing on a Treasury bill or the prime interest rate. These rates often have a specified floor and/or ceiling, called a cap or a collar, which limit the adjustment. Also called adjustable rate or floating rate.

WEIGHTED AVERAGE MATURITY - The sum of the amount of each outstanding investment multiplied by the number of days to maturity, divided by the total amount of outstanding investment.

WHEN-ISSUED TRADES - Typically, there is a lag between the time a new bond is announced and sold and the time it is actually issued. During this inter val, the security trades " WI," "when, as, and if issued."
WI - When, as, and if issued. See When-issued trades.

YIELD - The rate at which an investment pays out interest or dividend income, expressed in percentage terms and calculated by dividing the amount paid by the price of the security and annualizing the result.

YIELD BASIS - Stated in terms of yield as opposed to price. As yield increases for a traded issue, price decreases and vice versa. Charts prepared on a yield basis appear exactly opposite of those prepared on a price basis.

YIELD CURVE - A graphic representation that depicts the relationship at a given point in time between yields and maturity for bonds that are identical in every way except maturity. A normal yield curve may be alternatively referred to as a positive yield curve.

YIELD SPREAD - The variation between yields on different types of debt securities; generally a function of supply and demand, credit quality and expected interest rate fluctuations. Treasury bonds, for example, because they are so safe, will normally yield less than corporate bonds. Yields may also differ on similar securities with different maturities. Long-term debt, for example, carries more risk of market changes and issuer defaults than short-term debt and thus usually yields more.

YIELD-TO-CALL (YTC) - The rate of return an investor earns from a bond assuming the bond is redeemed (called) prior to its nominal maturity date. It is the percentage rate of a bond or note, if an investor were to buy and hold the security until the call date. This yield is valid only if the security is called prior to maturity. Generally bonds are callable over several years and normally are called at a slight premium. The calculation of yield to call is based on the coupon rate, length of time to the call and the market price.

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YIELD-TO-MATURITY (YTM) - The rate of return yielded by a debt security held to maturity when both interest payments and the investor's potential capital gain or loss are included in the calculation of return. The calculation for YTM is based on the coupon rate, length of time to maturity and market price.

It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.

ZERO-COUPON BONDS - Securities that do not pay interest but are instead sold at a deep discount from face val ue. They rise in price as the maturity date nears and are redeemed at face value upon maturity.

CITY OF VALLEJO, CALIFORNIA

STATEMENT OF

INVESTMENT POLICY

Considered by the City Council

On June 8, 2021 MayJune 2413, 20232

City of Vallejo Investment Policy – Considered by the City Council on June 813, 20231