Agenda packet — Vallejo City Council, June 11, 2024 (part 1 of 6)

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VALLEJO CITY COUNCIL
REGULAR MEETING – 7:00 PM

COUNCIL CHAMBERS
555 Santa Clara Street, Vallejo, California
JUNE 11, 2024

REVISED AGENDA
Agenda has been revised to add Consent Calendar Items 8I and 8J

NOTICE: Members of the Public will be able to participate in-person or remotely via Zoom.

City Hall and the Council Chambers will be open to members of the public 30 minutes prior to the start of the meeting.

PUBLIC COMMENT: Members of the Public may provide public comments during the City Council Meeting in person or via ZOOM
(https://ZoomRegular.Cityofvallejo.net), or via phone, by dialing (669) 900-6833.

For additional instructions on how to speak remotely during public comment, please visit, www.cityofvallejo.net/publiccomment
VIEW THE MEETING:

There are four different ways you can view this public meeting:
• In Person
• Watch Vallejo local channel 28
• Stream from the City website: www.cityofvallejo.net/Streaming • Join the Zoom webinar:https://ZoomRegular.Cityofvallejo.net

Vallejo City Council Chambers ADA compliant. Devices for the hearing impaired are available from the City Clerk. Requests for disability related modifications or accommodations, aids or services may be made by a person with a disability to the City Clerk's office no less than 72 hours prior to the meeting as required by Section 202 of the Americans with Disabilities Act of 1990 and the federal rules and regulations adopted in implementation thereof.

1. CALL TO ORDER

2. ROLL CALL

3. PLEDGE OF ALLEGIANCE

4. REPORT OUT OF CLOSED SESSION

5. PRESENTATIONS AND COMMENDATIONS
A. PRESENTATION OF A PROCLAMATION DECLARING WEEK OF JUNE 15, 2024 AS "JUNETEENTH WEEK" IN THE CITY OF VALLEJO

6. FIRST COMMUNITY FORUM
The Community Forum is an opportunity to address the Council on any matter for which another opportunity to speak is not provided on the agenda, and which is within the jurisdiction of the Council to resolve. Any interested members of the public desiring to communicate with the City Council as part of the First Community Forum may do so in person by signing in to the Public Speaker's kiosk located in the back of the Council Chambers or via ZOOM:(https://ZoomRegular.Cityofvallejo.net), Option to join by phone: Dial (669) 900-6833. Enter Meeting ID: 914 0075 0676#. Press * 9 to digitally raise your hand from the phone. Press *6 to unmute/mute. For additional instructions on how to speak remotely during public comment, please visit, www.cityofvallejo.net/publiccomment. In person speakers will be recognized first. When called upon, each speaker should step to the podium, state his/her name for the record. The conduct of the community forum shall be limited to a maximum of fifteen (15) minutes, with each speaker limited to a maximum of three minutes pursuant to Vallejo Municipal Code Section 2.02.300.

7. PUBLIC COMMENT REGARDING CONSENT CALENDAR ITEMS
Members of the public wishing to address the Council on Consent Calendar items may do so in person by signing in to the Public Speaker's kiosk located in the back of the Council Chambers or via ZOOM:(https://ZoomRegular.Cityofvallejo.net), Option to join by phone: Dial (669) 900-6833. Enter Meeting ID: 914 0075 0676#. Press * 9 to digitally raise your hand from the phone. Press *6 to unmute/mute. For additional instructions on how to speak remotely during public comment, please visit, www.cityofvallejo.net/publiccomment. In person speakers will be recognized first. Each speaker is limited to three minutes pursuant to Vallejo Municipal Code Section 2.02.310. Requests for removal of Consent Items received from the public are subject to approval by a majority vote of the Council. Items removed from the Consent Calendar will be heard immediately after approval of the Consent Calendar and Agenda.

8. CONSENT CALENDAR AND APPROVAL OF AGENDA
A. APPROVAL OF MINUTES
Recommendation: Approves minutes for the special and regular meetings of May 28, 2024

Contact: Dawn G. Abrahamson, MMC (707) 648-4527
[email protected]
B. WAIVE FULL READING AND AUTHORIZING INTRODUCTIONS AND/OR

ADOPTION OF ORDINANCES BY TITLE ONLY
Recommendation: Waive reading and authorize introductions and/or adoption of any and all ordinances on this agenda, if any, by title only. This is a standard procedural action so the City Council does not have to read an ordinance in its entirety.

Contact: Dawn G. Abrahamson, MMC, City Clerk (707) 648-4527 [email protected]
C. ADOPT A RESOLUTION CALLING FOR THE NOVEMBER 2024 GENERAL

MUNICIPAL ELECTION AND CONSOLIDATING SAME AND ADOPT A

RESOLUTION ADOPTING REGULATIONS FOR CANDIDATE

STATEMENTS
Recommendation:

Adopt two resolutions:

1. A resolution calling for a General Municipal Election for purposes of electing municipal officers and requesting consolidation of the election, and

2. A resolution establishing regulations for the filing of candidate statement of qualifications.

Contact: Dawn G. Abrahamson, City Clerk, (707) 648-4528 [email protected]
D. ADOPT RESOLUTION APPROVING STATEMENT OF INVESTMENT
POLICY AND DELEGATION FOR FY 2024-2025
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 2024-2025.

Contact: Rekha Nayar, Finance Director (707) 648-4592
[email protected]
E. ADOPT RESOLUTION ESTABLISHING THE FISCAL YEAR 2024-2025 CITY

OF VALLEJO GANN APPROPRIATIONS LIMIT
Recommendation: Adopt a Resolution establishing the Fiscal Year (FY) 2024- 25 Appropriations Limit at $180,928,567 for the City of Vallejo.

Contact: Rekha Nayar, Finance Director. 707-648-4592
[email protected]
F. ADOPT A RESOLUTION AMENDING THE FISCAL YEAR 23-24 BUDGET

TO RECOGNIZE REVENUE AND EXPENDITURES FROM THE OFFICE OF

COMMUNITY POLICING SERVICES TECHNOLOGY GRANT IN THE
AMOUNT OF $830,000 (STEP 2)
Recommendation: Adopt a resolution amending the Fiscal Year 23-24 budget to recognize revenue and expenditures from the Office of Community Policing Services Technology and Equipment Program grant award in the amount of $830,000.

Contact: Jason Ta, Interim Chief of Police (707) 648-4540 [email protected]
G. ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

VALLEJO APPROVING A CONSTRUCTION CONTRACT WITH FJ&I
ENGINEERING FOR A NOT-TO-EXCEED AMOUNT OF $439,350.00, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE THE SAME, MAKING A

FINDING THAT IT IS IN THE BEST INTEREST OF THE CITY TO AWARD

THE CONTRACT WITHOUT FORMAL BIDDING AND APPROVING THE

PLANS AND SPECIFICATIONS FOR THE PROJECT
Recommendation: Adopt a Resolution approving the project plans and specifications for the Lake Curry Landslide Emergency Repair Project, approving a construction contract in the amount of $439,350.00 to FJ&I Engineering, Inc. of San Pablo, California, and authorizing the City Manager to execute the contract and make a finding that it is in the best interest of the City to proceed with the project without formal bidding.

Contact: Beth Schoenberger, Water Director (707) 648-5439 [email protected]
Randy Risner, Chief Assistant City Attorney(707) 648-4545 [email protected]
H. NOTICE OF INTENT TO AMEND THE BUDGET TO ACCEPT THE
INFLATION REDUCTION ACT: URBAN AND COMMUNITY FORESTRY
GRANT (STEP 1)
Recommendation: Accept notice of amending the budget to accept the Inflation Reduction Act: Urban and Community Forestry Grant Award (Step 1).

Contact: Gillian Haen, Assistant City Manager (707) 648-4576 [email protected]
I. ADOPT A RESOLUTION APPROVING A SIDE LETTER AGREEMENT

BETWEEN THE CITY OF VALLEJO AND THE INTERNATIONAL
BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 1245 AND

AUTHORIZING THE CITY MANAGER TO EXECUTE THE SAME
Recommendation: Adopt a resolution approving a Side Letter Agreement between the City of Vallejo and the International Brotherhood of Electrical Workers, Local 1245 and authorize the City Manager to execute the same.

Contact: Stephanie Sifuentes, Human Resources Director (707) 649-4852 [email protected]
J. ADOPT A RESOLUTION APPROVING AN ARPA GRANT AGREEMENT

WITH FIRM FOUNDATION COMMUNITY HOUSING IN THE AMOUNT OF $3,270,335 ALLOCATED BY CITY COUNCIL AND AUTHORIZING THE CITY

MANAGER TO EXECUTE SAME
Recommendation: Adopt a resolution of the City Council of the City of Vallejo approving an American Rescue Plan Act (ARPA) Grant Agreement with Firm Foundation Community Housing in the amount of $3,270,335 as previously allocated by City Council and authorizing the City Manager to execute same.

Contact: Gillian Haen, Assistant City Manager (707) 648-4163 [email protected]

9. ACTION CALENDAR
NOTICE: Members of the public wishing to address the Council on Action Calendar Items may do so in person by signing in to the Public Speaker's kiosk located in the back of the Council Chambers or via ZOOM (https://ZoomRegular.Cityofvallejo.net), or via phone, by dialing (669) 900-6833. Enter Meeting ID: 914 0075 0676#. Press *9 to digitally raise your hand from the phone. Press *6 to unmute/mute. For additional instructions on how to speak remotely during public comment, please visit, www.cityofvallejo.net/publiccomment. Each speaker is limited to five minutes pursuant to Vallejo Municipal Code Section 2.02.420 or as approved and announced by the Mayor. In person speakers will be recognized first.

A. HOLD A PUBLIC HEARING AND ADOPT A RESOLUTION APPROVING

THE ENGINEER'S REPORT AND ORDERING THE LEVY AND

COLLECTION OF ASSESSMENTS ON PROPERTIES IN THE BORDONI

RANCH, CARRIAGE OAKS, GARTHE RANCH, GLEN COVE III, GLEN COVE III 2015, HUNTER RANCH III, MARINE WORLD/FAIRGROUNDS,

MARIN VIEW, NORTHEAST QUADRANT, SANDPIPER POINT, SOUTH

VALLEJO BUSINESS PARK, AND TOWN AND COUNTRY II-V LANDSCAPE MAINTENANCE DISTRICTS FOR FISCAL YEAR 2024-2025
Recommendation: Hold a public hearing and adopt a resolution approving the engineer's report and ordering the levy and collection of assessments on properties in the Bordoni Ranch, Carriage Oaks, Garthe Ranch, Glen Cove III, Glen Cove III 2015, Hunter Ranch III, Marine World/Fairgrounds, Marin View, Northeast Quadrant, Sandpiper Point, South Vallejo Business Park, and Town & Country II-V Landscape Maintenance Districts for FY 2024-2025.

Contact: Melissa Tigbao, PE, Public Works Director (707) 648-4433 [email protected]
B. HOLD A PUBLIC HEARING AND ADOPT A RESOLUTION APPROVING

THE ENGINEER'S REPORT AND ORDERING THE LEVY AND

COLLECTION OF ASSESSMENTS ON PROPERTIES IN THE CIMARRON

HILLS-MADIGAN, COLLEGE HILLS, COSTA DEL RIO, SOMERSET I/II,

GREENMONT/SEAPORT HILLS, MONICA PLACE, RIDGECREST,

SOMERSET III, SPRINGTREE-FLEMING, SUMMIT II, TOWN & COUNTRY I,

WOODRIDGE, HUNTER RANCH I/II, AND GLEN COVE I/II LANDSCAPE MAINTENANCE DISTRICTS FOR FISCAL YEAR 2024-2025
Recommendation: Hold a public hearing and adopt a resolution approving the Engineer's Report and ordering the levy and collection of assessments on properties in the Cimmaron Hills-Madigan, College Hills, Costa del Rio, Somerset I/II, Greemont/Seaport Hills, Monica Place, Ridgecrest, Somerset III, Springtree-Fleming, Summit II, Town & Country I, Woodridge, Hunter Ranch I/II, and Glen Cove I/II Landscape Maintenance Districts for Fiscal Year 2024- 2025.

Contact: Melissa Tigbao, PE, Public Works Director (707) 648-4433 [email protected]
C. HOLD A PUBLIC HEARING AND ADOPT A RESOLUTION APPROVING

THE ENGINEER'S REPORT AND ORDERING THE LEVY AND

COLLECTION OF ASSESSMENTS ON PROPERTIES IN THE
HIDDENBROOKE MAINTENANCE DISTRICT FOR FISCAL YEAR 2024-2025 Recommendation: Hold a public hearing and adopt a resolution approving the Engineer's Report and ordering the levy and collection of assessments on properties in the Hiddenbrooke Maintenance District for FY 2024-2025.

Contact: Melissa Tigbao, PE, Public Works Director (707) 648-4433 [email protected]
D. ADOPT A RESOLUTION AWARDING AND APPROVING A LANDSCAPE MAINTENANCE SERVICES CONTRACT FOR REGION 2 (HIDDENBROOKE)

WITH NEW IMAGE LANDSCAPE COMPANY AND AUTHORIZING THE CITY

MANAGER TO EXECUTE SAME IN AN AMOUNT NOT TO EXCEED
$993,817 AND REJECTING ALL OTHER BIDS
Recommendation: Adopt a resolution approving a Landscape Maintenance Services Contract for Region 2 (Hiddenbrooke) with New Image Landscape Company and authorizing the City Manager to execute same in an amount not to exceed $993,817 and rejecting all other bids.

Contact: Melissa Tigbao P.E., Public Works Director, (707) 648-4433 [email protected]
E. ADOPT A RESOLUTION APPROVING A JANITORIAL SERVICES

AGREEMENT WITH KLEEN-TECH SERVICES, LLC FOR VARIOUS CITY FACILITIES IN AN AMOUNT NOT TO EXCEED $2,326,015 AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving a janitorial services agreement with Kleen-Tech Services, LLC, for various city facilities in an amount not to exceed $2,326,015 and authorizing the City Manager to execute same.

Contact: Melissa Tigbao P.E., Public Works Director (707) 648- 4433
[email protected]
F. HOLD A PUBLIC HEARING AND ADOPT RESOLUTIONS RELATING TO THE ADOPTION OF THE FY 2024-25 BUDGET AND RELATED ACTIONS;

FIRST READING INTRODUCING AN ORDINANCE TO RATIFY ALL CITY FUNDS
Recommendation:

Hold a public hearing and take public input for the FY 2024-25 Budget, and adopt six Resolutions as follows:

1. Resolution Adopting the FY 2024-25 Budget for the City of Vallejo, as set forth in Attachment B.

2. Resolution Adopting the FY 2024-25 Positions and Salaries as set forth in Attachment C.

3. Resolution Approving the FY 2024-25 Blue Rock Springs Golf Course Fees and Charges Schedule, as set forth in Attachment D.

4. Resolution Approving the FY 2024-25 Marina Fees and Charges Schedule, as set forth in Attachment E.

5. Resolution Authorizing the City Manager to Purchase Vehicles Scheduled and Funded for Replacement in FY 2024-25, as set forth in Attachment F.

6. Resolution Authorizing the City Manager to execute purchase orders for the vendors and amounts for FY 2024-25, as set forth in Attachment G.

1st hearing to introduce an ordinance:

1. Ordinance ratify the creation of all the City's funds, as set forth in Attachment H.

Contact: Rekha Nayar, Finance Director; (707) 648-5433
[email protected]
G. HOLD A PUBLIC HEARING AND ADOPT A RESOLUTION APPROVING

THE CAPITAL IMPROVEMENT PROGRAM BUDGET FOR FISCAL YEAR
2024-25 AND ACCEPTING THE FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 2024-25 THROUGH 2028-29
Recommendation: Hold a public hearing and adopt a Resolution approving the Capital Improvement Program Budget for Fiscal Year 2024-25 and accepting the five-year Capital Improvement Program for Fiscal Years 2024-25 through 2028-29.

Contact: Melissa Tigbao, PE, Public Works Director (707) 648-4433 [email protected]
Beth Schoenberger, Water Director (707) 648-5439
[email protected]

10. INFORMATION CALENDAR
NOTICE: Members of the public wishing to address the Council on Information Calendar Items may do so in person by signing in to the Public Speaker's kiosk located in the back of the Council Chambers or via ZOOM
(https://ZoomRegular.Cityofvallejo.net), or via phone, by dialing (669) 900-6833. Enter Meeting ID: 914 0075 0676#. Press *9 to digitally raise your hand from the phone. Press *6 to unmute/mute. For additional instructions on how to speak remotely during public comment, please visit, www.cityofvallejo.net/publiccomment. Each speaker is limited to five minutes pursuant to Vallejo Municipal Code Section 2.02.420 or as approved and announced by the Mayor. In person speakers will be recognized first.

A. RECEIVE AN UPDATE ON THE DECLARATION OF A STATE AND LOCAL

EMERGENCY RELATED TO PUBLIC SAFETY STAFFING
Recommendation: Receive an update on the public safety staffing emergency proclamation. This item is for informational purposes only. There is no staff report or action associated with this item.

Contact: Jason Ta, Interim Police Chief (707) 648-4540
[email protected]
B. POLICE CHIEF RECRUITMENT PRESENTATION
Recommendation: Receive report. There is no action or staff report associated with this item
Contact: Stephanie Sifuentes, Human Resources Director
[email protected]

11. CITY MANAGER’S REPORT

12. CITY ATTORNEY’S REPORT

13. COMMUNITY FORUM
NOTICE: Members of the public wishing to address the Council on Information Calendar Items may do so in person by signing in to the Public Speaker's kiosk located in the back of the Council Chambers or via ZOOM (https://ZoomRegular.Cityofvallejo.net), or via phone, by dialing (669) 900-6833. Enter Meeting ID: 914 0075 0676#. Press *9 to digitally raise your hand from the phone. Press *6 to unmute/mute. For additional instructions on how to speak remotely during public comment, please visit, www.cityofvallejo.net/publiccomment. Each speaker is limited to five minutes pursuant to Vallejo Municipal Code Section 2.02.420 or as approved and announced by the Mayor. In person speakers will be recognized first.

14. REPORT OF THE PRESIDING OFFICER AND MEMBERS OF THE CITY COUNCIL

15. ADJOURNMENT

___________________________________________________________________________________________

ADDITIONAL CITY INFORMATION
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Like us on Facebook and Instagram (@cityofvallejo)
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Dated: Friday, June 7, 2024

Robert H. McConnell, Mayor

I, Dawn Abrahamson, City Clerk do hereby certify that I have caused a true copy of the above notice and agenda to be delivered to each of the members of the Vallejo City Council, at the time and in the manner prescribed by law and that this agenda was posted at City Hall, 555 Santa Clara Street, CA at 2:30 p.m., Friday, June 7, 2024.

Dated: Friday, June 7, 2024

Dawn G. Abrahamson, City Clerk

Special City Council Meeting Minutes
May 28, 2024
Page | 1

VALLEJO CITY COUNCIL

SPECIAL MEETING MINUTES
MAY 28, 2024

COUNCIL CHAMBERS
555 Santa Clara Street, Vallejo, California

1. CALL TO ORDER
The meeting was called to order at 5:00 p.m.

2. ROLL CALL

Present: Mayor McConnell, Vice Mayor Loera-Diaz, Councilmembers Arriola, Bregenzer, Matulac, Palmares, and Verder-Aliga

Absent: None
Staff present: City Manager Murray, City Attorney Nebb, City Clerk Abrahamson, Assistant City Manager Haen, Chief Assistant City Attorney Risner, and Assistant City Attorney Zagaroli
City Attorney Nebb announced Closed Session Item 3A would not be heard this evening and would be scheduled at a subsequent meeting.

The Council convened into closed session in the Council Conference Room at 5:02 p.m.

3. CLOSED SESSION
A. Conference with Labor Negotiators Pursuant to Government Code Section 54957.6
Agency Designated Representatives: Stephanie Sifuentes, Human Resources Director
Employee Organizations: Confidential, Administrative, Managerial & Professional (CAMP) and International Brotherhood of Electrical Workers (IBEW), Local 1245 B. Conference with Legal Counsel – Anticipated Litigation – G.C. 54956.9(d)(2) Significant Exposure to Litigation (1 Case)

4. ADJOURNMENT
The meeting adjourned at 6:05 p.m.
________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
________________________________
DAWN G. ABRAHAMSON

CITY CLERK
Regular City Council Meeting Minutes
May 28, 2024
Page | 1

VALLEJO CITY COUNCIL

REGULAR MEETING MINUTES
MAY 28, 2024

COUNCIL CHAMBERS
555 Santa Clara Street, Vallejo, California

1. CALL TO ORDER
The meeting was called to order at 7:00 p.m.

2. ROLL CALL

Present: Mayor McConnell, Vice Mayor Loera-Diaz, Councilmembers Arriola, Bregenzer, Matulac, Palmares, and Verder-Aliga
Staff present: City Manager Murray, City Attorney Nebb and City Clerk Abrahamson

3. PLEDGE OF ALLEGIANCE

4. REPORT OUT OF CLOSED SESSION
City Attorney Nebb reported Closed Session Item 3A was not discussed and was removed from the Agenda. There was no action to report regarding Closed Session Item 3B.

5. PRESENTATIONS AND COMMENDATIONS
Action: presentations were made by Councilmembers Verder-Aliga, Matulac, Arriola, Palmares, Bregenzer, and a representative from WETA.

A. PRESENTATION OF A PROCLAMATION RECOGNIZING PHILIPPINE CULTURAL MONTH - JUNE 2024
B. PRESENTATION OF A PROCLAMATION RECOGNIZING LESBIAN, GAY, BISEXUAL, TRANSGENDER, AND QUEER PRIDE MONTH - JUNE 2024 C. VALLEJO FERRY TERMINAL RECONFIGURATION PROJECT

PRESENTATION BY WETA

6. FIRST COMMUNITY FORUM
Speakers: John Kenney, Lillie Hurd, Jose Carrizales, Karen Nemsick, and Daniel Boone.

7. PUBLIC COMMENT REGARDING CONSENT CALENDAR ITEMS
Speakers: AJ Zmudosky (Items 8M-8Q) and Daniel Boone (Item 8R).

8. CONSENT CALENDAR AND APPROVAL OF AGENDA
Action: moved by Vice Mayor Loera-Diaz and carried unanimously, unless otherwise noted, approval of the Agenda and the Consent Calendar with the removal of Item 8R from the Consent Calendar making it Item 8.1, noted recusals of Vice Mayor Loera-Diaz from Item 8G and Councilmember Verder-Aliga from Item 8H due to conflicts of interests related to owning property in the LMDs, and the reordering of the Action Calendar so that Item 9E followed immediately after Item 9B.

Regular City Council Meeting Minutes
May 28, 2024
Page | 2
A. APPROVAL OF MINUTES
Recommendation: Approve minutes for the special and regular meetings of May 14, 2024
Contact: Dawn G. Abrahamson, MMC, City Clerk (707) 648-4527 [email protected]
Action: approved minutes.

B. WAIVE FULL READING AND AUTHORIZING INTRODUCTIONS AND/OR

Contact: Dawn G. Abrahamson, MMC, City Clerk (707) 648-4527 [email protected]
Action: waived reading and authorized introductions and/or adoption of any and all ordinances on this agenda, if any, by title only. This is a standard procedural action so the City Council does not have to read an ordinance in its entirety.

C. ADOPT AN ORDINANCE AMENDING CHAPTER 2.36 OF THE VALLEJO

MUNICIPAL CODE RELATING TO THE ECONOMIC VITALITY COMMISSION Recommendation: Adopt an ordinance amending Chapter 2.36 of the Vallejo Municipal Code relating to the Economic Vitality Commission Contact: Veronica A.F. Nebb, CIty Attorney
[email protected]
Action: adopted Ordinance No. 1871 N.C. (2d)
D. PAYMENT OF CLAIMS: MARCH 2024
Recommendation: Ratify the payment of claims for the period of March 1, 2024, through March 31, 2024.

Contact: Rekha Nayar, Finance Director (707) 648-4592
[email protected]
Action: ratified payment of claims for March 1-31, 2024.

E. ADOPT A RESOLUTION APPROVING AN AMENDMENT TO THE

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH FOTH & VAN DYKE AND ASSOCIATES, INC. FOR PLANNING SERVICES
RELATING TO THE REMOVAL OF MARINA DOCK "A" AND AUTHORIZING

THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a resolution approving an amendment to the Consultant and Professional Services Agreement with Foth & Van Dyke and Associates, Inc. for planning services relating to the removal of the Marina Dock "A" and authorizing the City Manager to execute same.

Contact: Melissa Tigbao, PE, Public Works Director (707) 648-4433 [email protected]
Action: adopted Resolution No. 26-065 N.C.

F. NOTICE OF INTENT TO AMEND THE FISCAL YEAR 2023-2024 SOLID WASTE FUND BUDGET TO ACCEPT GRANT AWARDS (Step 1 of 2)
Regular City Council Meeting Minutes
May 28, 2024
Page | 3
Recommendation: Provide notice of Intent to amend the fiscal year 2023-24 Solid Waste Fund budget to accept grant awards.

Contact: Melissa Tigbao, P.E., Public Works Director (707) 648-4433 [email protected]
Action: provided notice of intent to amend the fiscal year 2023-24 Solid Waste Fund budget to accept grant awards.

G. ADOPT A RESOLUTION APPROVING THE ENGINEER'S REPORT AND

DECLARING THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2024-25 WITHIN THE FOLLOWING EXISTING

LANDSCAPE MAINTENANCE DISTRICTS FORMED PURSUANT TO THE
IMPROVEMENT ACT OF 1911: CIMARRON HILLS/MADIGAN; COLLEGE HILLS; COSTA DEL RIO (SEAVIEW); GLEN COVE I/II; SOMERSET HIGHLANDS I/II; HUNTER RANCH I/II; MONICA PLACE; RIDGECREST; SOMERSET HIGHLANDS III; SPRINGTREE/FLEMING HILL; SUMMIT HILL II; TOWN & COUNTRY I; WOODRIDGE; AND GREENMONT/SEAPORT
HILLS, AND SETTING A PUBLIC HEARING FOR JUNE 11, 2024 AT 7:00 P.M.

Recommendation: Adopt a Resolution approving the Engineer's Report and declaring the intention to levy and collect assessments for fiscal year 2024-25 within the following existing landscape maintenance districts formed pursuant to the Improvement Act of 1911: Cimarron Hills/Madigan; College HIlls; Costa del Rio (Seaview); Glen Cove I/II; Somerset Highlands I/II; Hunter Ranch I/II; Monica Place; Ridgecrest; Somerset Highlands III; Springtree/Fleming Hill; Summit Hill II; Town & Country I; Woodridge; and Greenmont/Seaport Hills; and setting a public hearing for June 11, 2024 at 7:00 P.M.

Contact: Melissa Tigbao, P.E., Public Works Director (707) 648-4433 [email protected]
Action: adopted Resolution No. 26-066 N.C. (Abstain Due to Conflict of Interest: Loera-Diaz)
H. ADOPT A RESOLUTION APPROVING THE ENGINEER'S REPORT AND

DECLARING THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2024-25 WITHIN THE BORDONI RANCH, CARRIAGE OAKS, GARTHE RANCH, GLEN COVE III, GLEN COVE III 2015, HUNTER

RANCH III, MARINE WORLD/FAIRGROUNDS, MARINVIEW, NORTHEAST

QUADRANT, SANDPIPER POINT, SOUTH VALLEJO BUSINESS PARK,

AND TOWN AND COUNTRY II - V LANDSCAPE MAINTENANCE DISTRICTS AND SETTING A PUBLIC HEARING FOR JUNE 11, 2024, AT 7:00 P.M.

Recommendation: Adopt a Resolution approving the Engineer's Report and declaring the intention to levy and collect assessments for fiscal year 2024-25 within the Bordoni Ranch, Carriage Oaks, Garthe Ranch, Glen Cove III, Glen Cove III 2015, Hunter Ranch III, Marine World/Fairgrounds, Marinview, Northeast Quadrant, Sandpiper Point, South Vallejo Business Park, and Town and Country II - V Landscape Maintenance Districts and setting a public hearing for June 11, 2024, at 7:00 PM.

Contact: Melissa Tigbao, P.E., Public Works Director (707) 648-4433 [email protected]
Action: adopted Resolution No. 26-067 N.C. (Abstain Due to Conflict of Regular City Council Meeting Minutes
May 28, 2024
Page | 4
Interest: Verder-Aliga)
I. ADOPT A RESOLUTION APPROVING THE ENGINEER'S REPORT AND

DECLARING THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2024-25 WITHIN THE HIDDENBROOKE MAINTENANCE

DISTRICT AND SETTING A PUBLIC HEARING ON THE MATTER FOR JUNE 11, 2024, AT 7:00 P.M.

Recommendation: Adopt a Resolution approving the Engineer's Report and declaring the intention to levy and collect assessments for Fiscal Year 2024-25 within the Hiddenbrooke Maintenance District (HMD) and setting a public hearing on the matter for June 11, 2024, at 7:00 PM.

Contact: Melissa Tigbao, P.E., Public Works Director, (707) 648-4433 [email protected]
Action: adopted Resolution No. 24-068 N.C.

J. ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

VALLEJO TO APPROVE A COOPERATIVE PURCHASE AGREEMENT WITH

EMBANKSCAPE EQUIPMENT, LLC TO PROVIDE REMOTE-OPERATED

SLOPE MOWERS FROM RC MOWERS IN AN AMOUNT NOT-TO-EXCEED
$300,000 THROUGH JUNE 30, 2025 AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE SAME.

Recommendation: Adopt a resolution of the City Council of the City of Vallejo to approve a Cooperative Purchase Agreement with EmbankScape Equipment, LLC to provide Remote-Operated Slope Mowers from RC Mowers in an amount not-to-exceed $300,000 through June 30, 2025 and authorizing the City Manager to execute the same.

Contact: Beth Schoenberger, Water Director, 707-648-5439 [email protected]
Action: adopted Resolution No. 24-069 N.C.

K. ADOPT A RESOLUTION APPROVING THE FIRST AMENDMENT TO THE

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH CAL INC. AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving the First Amendment to the Consultant and Professional Services Agreement with Cal Inc. and authorizing the City Manager to execute same.

Contact: Melissa Tigbao, P.E., Public Work Director, 707-648-4433 [email protected]
Action: adopted Resolution No. 24-070 N.C.

L. ADOPT A RESOLUTION APPROVING AN AMENDMENT TO THE

CONTRACT WITH THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT

SYSTEM (CALPERS) TO ALLOW NON-PERS ELECTED OFFICIALS TO OPT

INTO HEALTH-ONLY COVERAGE WHILE ACTIVE IN THE CALPERS

SYSTEM SUBJECT TO THE PUBLIC EMPLOYEES' MEDICAL & HOSPITAL

CARE ACT (PEMHCA)
Recommendation: Adopt a Resolution approving an amendment to the contract with the California Public Employees' Retirement System (CalPERS) to allow Non-PERS elected officials to opt into health-only coverage while active in the Regular City Council Meeting Minutes
May 28, 2024
Page | 5
CalPERS system subject to the Public Employees' Medical & Hospital Care Act (PEMHCA).

Contact: Stephanie Sifuentes, Human Resources Director (707) 648-4363 [email protected]
Action: adopted Resolution No. 24-071 N.C.

M. ADOPT A RESOLUTION APPROVING A FIRST AMENDMENT TO THE

EXISTING CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH BUREAU VERITAS, NORTH AMERICA, INC. TO PROVIDE

ADDITIONAL BUILDING SERVICES AND TO INCREASE THE MAXIMUM NOT-TO-EXCEED AMOUNT OF THE AGREEMENT TO $130,000 THROUGH AUGUST 31, 2024, AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving a First Amendment to the existing Consultant and Professional Services Agreement with Bureau Veritas, North America, Inc. to provide additional Building Services and to increase the maximum not-to-exceed amount of the Agreement to $130,000 through August 31, 2024, and authorizing the City Manager to execute same.

Contact: Christina Ratcliffe, AICP, Planning and Development Services Director [email protected]
Action: adopted Resolution No. 26-072 N.C.

N. ADOPT A RESOLUTION APPROVING A SECOND AMENDMENT TO THE

EXISTING CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH TRB ASSOCIATES, INC. TO INCREASE THE MAXIMUM NOT-TO- EXCEED AMOUNT OF THE AGREEMENT TO $310,000, AND AUTHORIZING

THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving a Second Amendment to the existing Consultant and Professional Services Agreement with TRB Associates, Inc. to increase the maximum not-to-exceed amount of the Agreement to $310,000, and authorizing the City Manager to execute same.

Contact: Christina Ratcliffe, AICP, Planning & Development Services Director [email protected]
Action: adopted Resolution No. 24-073 N.C.

O. ADOPT A RESOLUTION APPROVING A SECOND AMENDMENT TO THE

EXISTING CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH INTERWEST CONSULTING GROUP, INC. TO INCREASE THE
MAXIMUM NOT-TO-EXCEED AMOUNT OF THE AGREEMENT TO $131,520 AND TO EXTEND THE TIME FRAME THROUGH AUGUST 31, 2024, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving a Second Amendment to the existing Consultant and Professional Services Agreement with Interwest Consulting Group, Inc. to increase the maximum not-to-exceed amount of the Agreement to $131,520 and to extend the time frame through August 31, 2024, and authorizing the City Manager to execute same.

Contact: Christina Ratcliffe, AICP
Planning and Development Services Director
[email protected]
Regular City Council Meeting Minutes
May 28, 2024
Page | 6
Action: adopted Resolution No. 24-074 N.C.

P. ADOPT A RESOLUTION APPROVING THE THIRD AMENDMENT TO THE

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH LAND LOGISTICS, INC. FOR PLANNING CONSULTANT SERVICES TO INCREASE THE CONTRACT AMOUNT BY $100,000 FOR A MAXIMUM NOT-TO-
EXCEED AMOUNT OF $200,000 THROUGH AUGUST 31, 2024, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving the Third Amendment to the Consultant and Professional Services Agreement with Land Logistics, Inc. for Planning Consultant Services to increase the contract amount by $100,000 for a maximum not-to-exceed amount of $200,000 through August 31, 2024, and authorizing the City Manager to execute same.

Contact: Christina Ratcliffe, AICP, Planning and Development Services Director [email protected]
Action: adopted Resolution No. 24-075 N.C.

Q. ADOPT A RESOLUTION APPROVING A FIRST AMENDMENT TO THE

EXISTING CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH SHUMS CODA & ASSOCIATES, INC. TO INCREASE THE MAXIMUM NOT-TO-EXCEED AMOUNT OF THE AGREEMENT TO $175,000, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
Recommendation: Adopt a Resolution approving a First Amendment to the Existing Consultant and Professional Services Agreement to increase the maximum not-to-exceed amount of the Agreement to $175,000, and authorizing the City Manager to execute same.

Contact: Christina Ratcliffe, AICP, Planning & Development Services Director [email protected]
Action: adopted Resolution No. 24-076 N.C.

R. ADOPT A RESOLUTION APPROVING AN AGREEMENT WITH FLOCK SAFETY FOR CAMERAS IN THE AMOUNT OF $1,492,500 FOR A TERM OF 60-MONTHS AND AUTHORIZING THE CITY MANAGER TO EXECUTE
SAME
Recommendation: Adopt a resolution authorizing the City Manager to execute an agreement with Flock Safety for the renewal of automated license plate readers (Flock Falcons) and security cameras (Flock Condors) in an amount not to exceed $1,492,500 over a term of 60 months.

Contact: Jason Ta, Interim Chief of Police (707) 648-4540 [email protected]
Action: item was removed from the Consent Calendar.

Staff responded to questions from Councilmembers. Councilmembers provided comment.

Speaker: Andrea Sorce (Chair, Surveillance Advisory Board).

Regular City Council Meeting Minutes
May 28, 2024
Page | 7
Action: moved by Councilmember Arriola and carried unanimously to continue the item to allow the Surveillance Advisory Board to discuss the item at their June 20 meeting and to return to Council with the item at their June 25, 2024 regular meeting.

S. CONSIDER AND ADOPT A RESOLUTION AUTHORIZING THE DISPLAY OF

TWO CITY COMMEMORATIVE FLAGS
Recommendation: Consider and adopt a resolution authorizing City Staff to display the Juneteenth and Pride City commemorative flags at city facilities for the dates specified.

Contact: Natalie Peterson, Assistant to the City Manager (707) 649-3415 [email protected]
Action: adopted Resolution No. 24-077 N.C.

9. ACTION CALENDAR
Items on the Action Calendar were taken out of order with Item 9E heard immediately following the conclusion of Item 9B. Minutes reflect the items in the order as they appeared on the meeting agenda.

A. CONSIDERATION OF AND FINDING TO CONTINUE THE STATE OF LOCAL

EMERGENCY RELATING TO PUBLIC SAFETY STAFFING AND UPDATE

ON ACTIONS TAKEN TO DATE
Recommendation: Receive the update and confirm the continued existance of the conditions leading to the declaration of a state of local emergency.

Contact: Jason Ta, Interim Chief of Police (707) 648-4540 [email protected]
Interim Police Chief Ta provided an update on Phase 1 (Service Model Reduction), Phase 2 (Rotation of Officers to Patrol Shifts), Phase 3 (Collapsing Traffic & Detective Divisions), Phase 4 (Modifying Patrol Shifts to 12-hours or another Staffing Model), and outside assistance, provided updated current staffing numbers, and the status of police facilities (Dispatch Center and Police Headquarters).

Human Resources Director Sifuentes provided an update on recruitment and retention efforts.

Staff responded to questions from Councilmembers. Councilmembers provided comment.

Speakers: Anne Carr, AJ Zmudosky, and Dela Morris.

Action: moved by Vice Mayor Loera-Diaz and carried to receive the update and confirmed the continued existence of the conditions leading to the declaration of a state and local emergency (Noes: Bregenzer; Absent: Verder-Aliga).

B. ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF Regular City Council Meeting Minutes
May 28, 2024
Page | 8
VALLEJO: (1) AMENDING RESOLUTION NO. 22-213 N.C. TO

REALLOCATE AMERICAN RESCUE PLAN ACT (ARPA) FUNDS IN THE AMOUNT OF $900,000 PREVIOUSLY ALLOCATED TOWARD PROPERTY

MAINTENANCE RELATING TO PROPERTIES THE CITY IS NO LONGER ACQUIRING AND $1,100,000 FROM THE SACRAMENTO STREET

PROJECT, REALLOCATING SAID AMOUNTS TOWARD THE BROADWAY
PROJECT; AND (2) AMENDING RESOLUTION 24-047 AND ALLOCATING UNSPENT ARPA FUNDS IN THE AMOUNT OF $1,270,335 TOWARD THE BROADWAY PROJECT; AND (3) AMENDING THE CAPITAL GRANTS AND CONTRIBUTION FUND #201 FISCAL YEAR 2023-2024 BUDGET TO
RECOGNIZE (a) $3,270,335 IN (ARPA) FUNDING; (b) $3,050,000 IN

MEASURE P FUNDING AND APPROPRIATING FUNDS FOR
CONSTRUCTION OF THE BROADWAY PROJECT Project #HKEY22 (STEP 2 OF 2 STEP PROCESS)
Recommendation:

1. Adopt a resolution of the City Council of the City of Vallejo: (1) Amending Resolution NO. 22-213 N.C. to reallocate American Rescue Plan Act (ARPA) funds in the amount of $900,000 previously allocated toward property maintenance relating to properties the City is no longer acquiring and $1,100,000 from the Sacramento Street Project reallocating said amounts toward the Broadway Project; and (2) amending the resolution 24-047 and allocating unspent ARPA funds in the amount of $1,270,335 toward the Broadway Project; and (3) amending the FCapital Grants and Contribution Fund #201 to recognize (a) $3,270,335 in (ARPA) funding; (b) $3,050,000 in Measure P funding and appropriating funds for construction of the Broadway Project, Project # HKEY22 (step 2 of 2 step process);

2. Provide direction to Staff to return with a Measure P funding loan and Affordable Housing/Transfer Agreement, as well as Audit information for the Broadway Project, on June 11, 2024.

Contact: Gillian Haen, Assistant City Manager (707) 648-4163 [email protected]
Assistant City Manager Haen provided an overview of the project and the project history, discussed the timeline and budget, outlined the current recommended funding plan as requested by Council at the May 14 meeting and next steps.

Staff responded to questions from Councilmembers.

Speakers: Anne Carr, AJ Zmudosky, Eloise Scott, and William Baker.

Another question and answer period followed. Councilmembers provided comment.

Action: moved by Mayor McConnell and carried to 1) adopt Resolution No. 24- 078 N.C.as amended to make corrections to the second “Be It Further Resolved” paragraph to remove sentence 1, correcting the total of Measure P Regular City Council Meeting Minutes
May 28, 2024
Page | 9
funding in the form of a loan to the Project which Loan would be initially made to Firm Foundation in the amount of $2,879,665 and requiring the payoff of said loan upon sale of the Project by the City to be conditioned upon the liens being paid first, correcting the third “Be It Further Resolved” paragraph directing staff to return on June 25, 2024 with a loan agreement for the $2,879,665 Measure P Loan, an Affordable Housing/Transfer Agreement including the requirement of the project to transfer to City ownership upon issuance of a certificate of occupancy; and 2) provided direction to staff to return with a Measure P funding loan and Affordable Housing/Transfer Agreement, as well as Audit information for the Broadway Project on June 25, 2024 (Noes: Loera-Diaz).

Action Calendar Item 9E was taken out of order and heard before Item 9C.

C. ADOPT A RESOLUTION APPROVING THE FARRAGUT SCHOOL LEASE WITH OPTION AT 301 FARRAGUT BY AND BETWEEN THE CITY OF

VALLEJO AND THE VALLEJO CITY UNIFIED SCHOOL DISTRICT AND

AUTHORIZING THE CITY MANAGER TO EXECUTE THE SAME
Recommendation: Adopt a resolution of the Vallejo City Council to authorizing the City Manager to execute the lease with option with the Vallejo Unified School District at 301 Farragut Street in Vallejo, CA.

Contact: Gillian Haen, Assistant City Manager (707) 648-4163 [email protected]
Assistant City Manager Haen provided background information, discussed the proposed transaction and uses and outlined next steps.

Speakers: Anne Carr and Daniel Boone.

Councilmembers provided comment.

Action: Moved by Vice Mayor Loera-Diaz and carried to adopt Resolution No. 24-079 N.C. (Noes: Arriola).

D. CREATION OF A PUBLIC SAFETY AND QUALITY OF LIFE AD-HOC

SUBCOMMITTEE TO WORK WITH STAFF ON DEVELOPING AND

IMPLEMENTING A STRATEGY PLAN FOR REQUESTING STATE AND/OR FEDERAL RESOURCES TO ADDRESS VALLEJO’S PUBLIC SAFETY

STAFFING EMERGENCY AND OTHER QUALITY OF LIFE ISSUES AND APPOINTING 3 MEMBERS TO SAME.

Recommendation: By motion, create a Public Safety and Quality of Life Ad-Hoc Subcommittee to work with Staff on developing and implementing a strategy plan for requesting state and/or federal resources to address Vallejo's Public Safety Staffing Emergency and other quality of life issues and appoint 3 Council members to serve on same.

Contact: Veronica A.F. Nebb, City Attorney
[email protected]
City Attorney Nebb provided an overview of the staff report and outlined the recommendation.

Regular City Council Meeting Minutes
May 28, 2024
Page | 10
Staff responded to questions from Councilmembers.

Speakers: Anne Carr
Councilmembers provided comment.

Action: moved by Vice Mayor Loera-Diaz and carried unanimously to create a Public Safety and Quality of Life Ad-Hoc Subcommittee for a duration of 1 year to work with staff on developing and implementing a strategy plan for requesting state and/or federal resources to address Vallejo’s Public Safety Staffing Emergency and other quality of life issues and appointed Mayor McConnell and Councilmembers Bregenzer and Matulac to serve on the ad-hoc committee.

E. CONSIDER REQUEST BY VICE MAYOR LOERA-DIAZ TO ADD AN

AGENDA ITEM TO AUTHORIZE AN INDEPENDENT FINANCIAL, DATE,

TIMELINE AND DEADLINE AUDIT OF THE BROADWAY PROJECT TO BE

COMPLETED BY AN INDEPENDENT AUDITOR OF THE COUNCIL'S

CHOOSING THAT WILL REPORT DIRECTLY TO THE COUNCIL AND CITY

MANAGER
Recommendation: Consider Vice Mayor Loera-Diaz's request and direct staff to prepare and present relevant materials at a subsequent meeting.

Contact: Vice Mayor Loera-Diaz
[email protected]
This item was taken out of order and heard following the conclusion of Item 9B.

Councilmembers provided comment.

Action: by consensus of the City Council, staff was directed to return to council at its June 25 regular meeting to present relevant materials to include auditor selected by the City Council and reporting directly to the City Manager and City Council, Firm Foundation be included as part of the independent audit, and funding for independent audit should not come from Measure P funds.

The item was reopened to hear from members of the public.

Speaker: William Baker.

10. INFORMATION CALENDAR - None

11. CITY MANAGER’S REPORT
City Manager Murray provided welcoming remarks.

12. CITY ATTORNEY’S REPORT
City Attorney Nebb provided an update on a recent lawsuit and provided an update on the tobacco ordinance which will come before the Council following the Planning Commission’s action on the matter.

Regular City Council Meeting Minutes
May 28, 2024
Page | 11

13. COMMUNITY FORUM
Speakers: Anne Carr.

14. REPORT OF THE PRESIDING OFFICER AND MEMBERS OF THE CITY COUNCIL Councilmembers reported on various community events and meetings attended.

15. ADJOURNMENT
The meeting adjourned at 11:45 p.m.
________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
________________________________
DAWN G. ABRAHAMSON

CITY CLERK
CONSENT CALENDAR 8.C.

DATE: June 11, 2024
TO: Mayor and Members of the City Council
FROM: Dawn G. Abrahamson, City Clerk
SUBJECT: ADOPT A RESOLUTION CALLING FOR THE NOVEMBER 2024 GENERAL MUNICIPAL

ELECTION AND CONSOLIDATING SAME AND ADOPT A RESOLUTION ADOPTING

REGULATIONS FOR CANDIDATE STATEMENTS

RECOMMENDATION
Adopt two resolutions:

1. A resolution calling for a General Municipal Election for purposes of electing municipal officers and requesting consolidation of the election, and

2. A resolution establishing regulations for the filing of candidate statement of qualifications.

REASONS FOR RECOMMENDATION
In order for the City Council to call for the General Municipal Election on November 5, 2024 they must adopt a resolution (Attachment 1) requesting that the General Municipal Election be conducted and requesting the Solano County Board of Supervisors to consolidate the election to be held on the same date, and requesting that the Solano County Registrar of Voters provide election services.

The second resolution (Attachment 2) establishes regulations for candidates for elective office pertaining to candidate statements to be submitted to the voters, including the cost of candidate statements.

BACKGROUND AND DISCUSSION
Pursuant to Charter section 1000, the City's General Municipal Election is to be held on the first Tuesday after the first Monday in November of each even-numbered year. On November 5, 2024 the City will be conducting its third district-based election. On July 23, 2019 the City Council adopted Ordinance No. 1817 N.C. (2d), an ordinance providing for the election of six members of the City Council by Districts and the election of the Mayor city-wide, establishing the boundaries and identification number of each district, establishing the election order of each district (Map 616, sequence option 1) (Attachment 3). Elections Code section 21620 et. seq. requires the City Council to adjust the boundaries of each City Council district following each decennial federal census. Following the completion of the federal census in 2020, the City Council completed the redistricting process and adopted Ordinance No. 1862 N.C. (2d), adopting a new district map (Draft Map B).

Electors will be electing one mayor and three members to the City Council, one each from Districts 1, 3 and 6.

The mayor is elected at-large and will be elected for a term of four years. The councilmembers representing each of the three districts will all be elected for a term of four years. The City Charter and the California Elections Code require that the City adopt a Resolution at each election requesting that the General Municipal Election be conducted, requesting the Solano County Board of Supervisors to consolidate the election to be held on the same date, and requesting that the Solano County Registrar of Voters provide elections services.

In addition, Vallejo Municipal Code section 2.56.060 states that each candidate submitting a candidate statement shall pay the cost of printing, handling, translating and mailing the candidate statement as set forth

Date: June 11, 2024
Subject: ADOPT A RESOLUTION CALLING FOR THE NOVEMBER 2024 GENERAL MUNICIPAL

ELECTION AND CONSOLIDATING SAME AND ADOPT A RESOLUTION

ADOPTING REGULATIONS FOR CANDIDATE STATEMENTS

Page 2 ends

by a resolution of the City Council, and that the Council has the discretion to charge all, none, or only a portion of the cost. Staff is recommending that the City Council adopt a Resolution requiring the candidates to pay the full cost of the candidate statement and that the word limit be set at 200 words for the candidate's education and qualifications as expressed by the candidate himself or herself.

FISCAL IMPACT
The estimated $207,000 cost of services provided by the Solano County Registrar of Voters for the City's General Municipal Election has been included in the Fiscal Year 2024-25 Budget.

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 Guideline section 15378.

ATTACHMENTS

1. 2024 Calling for General Municipal Election_dga CAO Stamp

2. 2024 Establishing Regulations for the Fling of Candidate Statement of Qualifications_dga CAO Stamp

3. 1817 N.C. (2d) Adding Chaper 2.01 to the Vallejo Municipal Code

4. 1862 Revised Council District Ordinance Amending Chapter 2.01

CONTACT
Dawn G. Abrahamson, City Clerk, (707) 648-4528
[email protected]

RESOLUTION NO. 24-_____ N.C.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO CALLING AND

PROVIDING FOR A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF VALLEJO, TUESDAY, NOVEMBER 5, 2024 FOR THE PURPOSE OF ELECTING

MUNICIPAL OFFICERS, AND REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF SOLANO TO CONSOLIDATE A GENERAL MUNICIPAL ELECTION WITH THE

VALLEJO CITY UNIFIED SCHOOL DISTRICT ELECTION AND ANY OTHER ELECTION

WITHIN THE TERRITORIAL LIMITS OF THE CITY
WHEREAS, City of Vallejo Charter section 1000 requires that a general municipal election be held in said City on the first Tuesday after the first Monday in November of each even- numbered year; and
WHEREAS, the first Tuesday after the first Monday in November in the year 2024 falls on November 5; and
WHEREAS, it is advisable and necessary to make provisions for the conduct and holding of said election; and
WHEREAS, it is desirable that the November 5, 2024 General Municipal Election be consolidated with the election to be held by the Vallejo City Unified School District on the same date and that within the City the precincts, polling places and elections officers of the two elections be the same, and that the Solano County Registrar of Voters canvass the returns of the general municipal election and the election be held in all respects as if there were only one election; and
WHEREAS, in the course of conduct of the election it is necessary for the City to request services of the Solano County Registrar of Voters; and

WHEREAS, all necessary expenses in performing such services shall be paid by the City of Vallejo.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VALLEJO DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1A general municipal election is hereby called and ordered to be held in the City of Vallejo on Tuesday, November 5, 2024 for the object and purpose of electing the following municipal officers for the City of Vallejo:

One Mayoral seat, at-large, term ending January 2, 2029 One council member seat, District 1, term ending January 2, 2029 One council member seat, District 3, term ending January 2, 2029

One council member seat, District 6, term ending January 2, 2029 SECTION 2The ballots to be used at the election shall be in form and content as required by law and substantially in the following form:

CITY OF VALLEJO MUNICIPAL OFFICES – DISTRICT 1
FOR MAYOR (At-Large) VOTE FOR ONE
FOR COUNCILMEMBER, DISTRICT 1 VOTE FOR ONE
CITY OF VALLEJO MUNICIPAL OFFICES – DISTRICT 3
FOR MAYOR (At-Large) VOTE FOR ONE
FOR COUNCILMEMBER, DISTRICT 3 VOTE FOR ONE
CITY OF VALLEJO MUNICIPAL OFFICES – DISTRICT 6
FOR MAYOR (At-Large) VOTE FOR ONE
FOR COUNCILMEMBER, DISTRICT 6 VOTE FOR ONE
SECTION 3The one candidate for mayor and the one candidate for councilmember from Districts 1, 3 and 6 receiving the highest number of votes and elected at said general municipal election shall serve for the regular four-year term pursuant to City Charter section 302 and pursuant to Chapter 2.01 of the Vallejo Municipal Code adopted by the City Council on July 23, 2019.

SECTION 4The City Clerk is authorized, instructed and directed to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election.

SECTION 5That pursuant to the requirements of Election Code section 10403, the Board of Supervisors of the County of Solano is hereby requested to consent and agree to the consolidation of said general municipal election with the Vallejo City Unified School District election to be held on November 5, 2024 for the purpose of the election of one mayor, and one councilmember from Districts 1, 3 and 6.

SECTION 6The Board of Supervisors of Solano County is requested to issue instructions to the Solano County Registrar of Voters to take any and all steps necessary for the holding of the consolidated election.

SECTION 7That the City of Vallejo recognizes that additional costs will be incurred by Solano County by reason of this consolidation and agrees to reimburse Solano County its pro-rata share for the costs of this consolidation.

SECTION 8The Solano County Registrar of Voters is hereby authorized to canvass the results of said general municipal election with respect to the votes cast for the candidates for municipal office in the City of Vallejo. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used.

SECTION 9After the canvass of the return of said general municipal election by the Registrar of Voters of Solano County, the City Council shall certify the results thereof, and shall cause to be spread upon its minutes a statement of the results of said general municipal election as ascertained by said canvass.

SECTION 10The notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law.

SECTION 11The City Clerk is hereby directed to publish a list of the names of the nominees, in the order in which they appear on the ballot, and the respective offices for which they have been nominated, said list to be published once a week for two successive weeks in the Vallejo Times Herald, a daily newspaper published in the City of Vallejo, and the official newspaper of said City. Said list shall be headed, "Nominees for Public Office,” and shall be in substantially the following form:

NOMINEES FOR PUBLIC OFFICE
Notice is hereby given that the following persons have been nominated for the offices hereinafter mentioned to be filled at the General Municipal Election to be held in the City of Vallejo on Tuesday, November 5, 2024.

FOR MAYOR
List of Nominees
FOR COUNCILMEMBER, DISTRICT 1
List of Nominees
FOR COUNCILMEMBER, DISTRICT 3
List of Nominees
FOR COUNCILMEMBER, DISTRICT 6
List of Nominees
SECTION 12That in all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 13The City Clerk is authorized to administer said election and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill.

SECTION 14The City Clerk is hereby directed to file a certified copy of this Resolution with the Solano County Board of Supervisors and the Solano County Registrar of Voters.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 11, 2024 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
______________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
_________________________________________
DAWN G. ABRAHAMSON, CITY CLERK
RESOLUTION NO. 24-_____ N.C.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO ADOPTING

REGULATIONS FOR CANDIDATES FOR ELECTIVE OFFICE PERTAINING TO CANDIDATE

STATEMENTS SUBMITTED TO THE VOTERS AT THE ELECTION TO BE HELD ON NOVEMBER 5, 2024
WHEREAS, California Elections Code section 13307 provides that the governing body of any local agency shall adopt regulations pertaining to materials prepared by any candidate for a municipal election, including the costs of the candidate statement; and WHEREAS, the Solano County Board of Supervisors has estimated the costs associated with the printing, handling, mailing and translation of candidate statements.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Vallejo declares, determines and orders as follows:

1. GENERAL PROVISIONS. Pursuant to California Election Code section 13307, each candidate for elective office to be voted for at an election to be held in the City of Vallejo on November 5, 2024 may prepare a candidate statement on an appropriate form provided by the City Clerk. The statement may include the name, age and occupation of the candidate and a brief description, of no more than 200 words, of the candidate's education and qualifications expressed by the candidate himself or herself. The statement shall not include party affiliation of the candidate, nor membership or activity in partisan political organizations. The statement shall be submitted in a format pursuant to the guidelines established by the Registrar of Voters for Solano County. The statement shall be filed in the office of the City Clerk at the time the candidates’ nomination papers are filed. The statement may be withdrawn, but not changed, during the period for filing nomination papers and until 5:00 p.m. of the next working day after the close of the nomination period.

2. SPANISH AND TAGALOG LANGUAGE TRANSLATION. The City Clerk shall have translated, at the candidate’s expense, the candidate statements of those candidates who request translation into Spanish and Tagalog and shall print the translation in the voter’s pamphlet at the candidate’s expense. The translation shall be provided by a person from the list of approved Spanish and Tagalog language translators and interpreters of the superior court of the county or from an institution accredited by the Western Association of Schools and Colleges.

3. MISCELLANEOUS. The City Clerk shall comply with all recommendations and standards set forth by the California Secretary of State regarding occupational designations and other matters related to elections.

4. ADDITIONAL MATERIALS. No candidate shall be permitted to include additional materials in the sample ballot package.

5. PAYMENT.
a. The candidate at the time of filing his or her candidate statement is required to pay the estimated cost of printing, handling, and mailing of the candidate statement of qualifications in English in the amount as follows:
•Mayoral candidates - $792.17
•District 1 councilmember candidates - $249.44
•District 3 councilmember candidates - $252.31
•District 6 councilmember candidates - $227.74
b. The candidate at the time of filing his or her candidate statement is required to pay the estimated cost of printing, handling, translating and mailing the candidate statement in Spanish and Tagalog in the amount as follows:
•Mayoral candidates - $842.17 for each translation
•District 1 councilmember candidates - $299.44 for each translation •District 3 councilmember candidates - $302.31 for each translation •District 6 councilmember candidates - $277.74 for each translation c. The above estimated payments are just an approximation of the actual cost that varies from one election to another election and may be significantly more or less than the estimate, depending on the actual number of candidates filing statements. Accordingly, the City Clerk is not bound by the estimate and may, on a pro rata basis, bill the candidate for additional actual expenses or refund any excess paid depending on the final actual cost. In the event of underpayment, the City Clerk may require the candidate to pay the balance of the cost incurred. In the event of an overpayment, the City Clerk shall prorate the excess amount among the candidates and refund the excess amount paid within thirty days of the election.

6. INDIGENT CANDIDATE. Any candidates unable to pay in advance the requisite fee for submitting a candidate statement in English shall file a Statement of Financial Worth with the City Clerk pursuant to California Elections Code section 13309.

7. PROVISION OF COPY OF RESOLUTION. The City Clerk is directed to provide each candidate or the candidate’s representative a copy of this Resolution.

8. PREVIOUS RESOLUTIONS. All previous resolutions establishing City Council policy on payment for candidate statements are repealed.

9. APPLICABILITY. This Resolution shall apply only to the election to be held on November 5, 2024 and shall then be without further effect.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 11, 2024 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
______________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:

______________________________________
DAWN G. ABRAHAMSON, CITY CLERK

ORDINANCE NO. 1862 N.C. (2d)

A REVISED ORDINANCE OF THE CITY COUNCIL OF THE CITY OF VALLEJO AMENDING SECTION 2.01.030 TO THE VALLEJO MUNICIPAL CODE AND

AMENDING THE BOUNDARIES OF THE SIX EXISTING CITY COUNCIL

DISTRICTS

WHEREAS, the City of Vallejo (“City”) is a charter city, duly organized under the Constitution and the laws of the State of California; and
WHEREAS, in July 2019, the City Council adopted Ordinance 1817 N.C.(2d) establ ishing the election of City Council Members by district and the election of the mayor at large; and WHEREAS, Ordinance 1817 N.C.(2d) added section 2.01.030 of the Vallejo Municipal Code establishing the boundaries of six City Council districts; and WHEREAS, Elections Code section 21620 et seq. requires the City Council to adjust the boundaries of each City Council district following each decennial federal census; and WHEREAS, the decennial federal census was completed in 2020; and WHEREAS, in compliance with Elections Code 21627.1, the City has held four public hearings throughout the City and received public input concerning the adjustment of the City Council district boundaries. Said hearings were held on June 22, 2021; July 27, 2021; January 11 2022 and February 8, 2022; and
WHEREAS, in compliance with Elections Code section 21628, the City provided language translations services at each of the public hearings as well as interpretation of qualifying materials in English, Spanish and Filipino; and
WHEREAS, pursuant to Elections Code section 21628(c) and 21628(g)(3) for each of the public hearings the City published dates, times and locations five days in advance of each hearing on the City’s Redistricting internet page. In addition, for the hearing conducted on January 24, 2022, the City in addition to publishing on the City’s website, the City also published the notice of the hearing in the Vallejo Times Herald. The hearing notices were published in English, Spanish and Filipino; and
WHEREAS, in compliance with Elections Code section 21628(d)(1), the City published the draft maps at least seven days before the hearing held before the City Council on February 8, 2022; and WHEREAS, on February 8, 2022, the City Council held a public hearing and introduced an ordinance on the advice of the City’s demographer, mistakenly adopting Map A; and WHEREAS, the purpose of adopting Map A was to limit the number of voters temporarily disenfranchised as part of the redistricting process; and WHEREAS, the adoption of Map B would have limited the number of temporarily disenfranchised voters rather than Map A; and
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WHEREAS, prior to the public hearing to be held on March 8, 2022, a citizen introduced a proposed draft map to the City referred to as Public Map 101; and WHEREAS, in compliance with Elections Code section 21628(d)(1), the City published the draft maps at least seven days before the hearing held by the City Council on March 8, 2022; and WHEREAS, the City Council has considered the three maps before it.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VALLEJO DOES HEREBY FIND AND ORDAIN AS FOLLOWS:

SECTION 1. CEQA. The City Council finds that the proposed amendments to the Vallejo Municipal Code are exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Title 14 of the Californi a Code of Regulations, section 15061(b)(3) because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment given that the redistricting process involves no physical changes to the environment.

SECTION 2. Elections Code Compliance. The above recitals are hereby incorporated into this resolution. The City Council finds that the City has fully complied with the requirements of the California Elections Code as set forth in the recitals above.

SECTION 3. The City Council does hereby rescind its introduction of an Ordinance of the City Council of the City of Vallejo Amending Section 2.01.030 to the Vallejo Municipal Code and Amending the Boundaries o f the Six Existing City Council Districts which was introduced at a meeting of the City Council held on February 8, 2022.

SECTION 4. Section 2.01.030 “City Council District Boundaries” of the Vallejo Municipal Code is hereby amended to read as follows:

2.01.030 City Council District Boundaries.

Six city c ouncil districts are hereby established in the C ity of Vallejo. The boundaries and identifying number of each district shall be as described on the Council District Map adopted by the City Council by ordinance on March 8, 2022 attached hereto as Exhibit “A” and incorporated herein by this reference.

SECTION 5. Validity of Chapter 2.01
This ordinance shall amend only section 2.01.030 of Chapter 2.01 of the Vallejo Municipal Code.

It shall not affect the remaining provisions of Chapter 2.01 which remain in effect unless specifically repealed or amended by the City Council.

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SECTION 6. Severability.

If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force a nd effect. The City C ouncil of the City of Vallejo hereby declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable.

SECTION 7
. Effective Date.

The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after passage.

First read at a regular meeting of the Council of the City of Vallejo held on the 8 th day of
February, 2022 and finally adopted at a regular meeting of the Council of the City of Vallejo on the 22
th day of February, 2022 by the following vote:

AYES: Mayor McConnell, Vice Mayor Verder-Aliga, Councilmembers Arriola, Brown, Dew, Loera-Diaz and Miessner
NOES: None
ABSENT: None
ABSTAIN: None

______________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:

______________________________________

DAWN ABRAHAMSON, CITY CLERK

DocuSign Envelope ID: 6E735151-E667-42FE-B4FA-87247EA57C95

5 6
3 4
2 1
80 780
City of Vallejo
Redistricting 2021
©2021 CALIPER
DocuSign Envelope ID: 6E735151-E667-42FE-B4FA-87247EA57C95 DocuSign Envelope ID: 6E735151-E667-42FE-B4FA-87247EA57C95 Draft B
District 1
Total Pop 20,592
Deviation from ideal -490
% Deviation -2.32%
% Hisp 16.1%
% NH White 18%
% NH Black 17%
% Asian-American 43%
Total 15,017
% Hisp 11%
% NH White 27%
% NH Black 16%
% Asian/Pac.Isl. 43%
Total 12,955
% Latino est. 25%
% Spanish-Surnamed 23%
% Asian-Surnamed 6%
% Filipino-Surnamed 14%
% NH White est. 36%
% NH Black 21%
Total 10,330
% Latino est. 24%
% Spanish-Surnamed 22%
% Asian-Surnamed 5%
% Filipino-Surnamed 14%
% NH White est. 37%
% NH Black 20%
Total 6,965
% Latino est. 22%
% Spanish-Surnamed 20%
% Asian-Surnamed 5%
% Filipino-Surnamed 13%
% NH White est. 40%
% NH Black est. 21%
ACS Pop. Est. Total 20,311
age0-19 20%
age20-60 54%
age60plus 26%
immigrants 30%
naturalized 71%
english 63%
spanish 6%
asian-lang 26%
other lang 4%
Language Fluency Speaks Eng. "Less than Very Well" 14%
hs-grad 45%
bachelor 26%
graduatedegree 8%
Child in Household child-under18 31%
Pct of Pop. Age 16+ employed 63%
income 0-25k 10%
income 25-50k 14%
income 50-75k 12%
income 75-200k 50%
income 200k-plus 15%
single family 80%
multi-family 20%
rented 32%
owned 68%
Total population data from the 2010 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

Latino voter registration and turnout data are Spanish-surname counts adjusted using Census Population Department undercount estimates. NH White and NH Black registration and turnout counts estimated by NDC. Citizen Voting Age Pop., Age, Immigration, and other demographics from the 2013-2017 American Community Survey and Special Tabulation 5-year data. 2 20,880
-202
-0.96%
39%
9%
20%
28%
12,928
23%
16%
25%
33%
11,006
33%
30%
3%
11%
21%
33%
7,927
32%
30%
3%
11%
21%
33%
4,931
29%
27%
2%
10%
22%
36%
20,281
27%
53%
20%
32%
64%
51%
24%
23%
2%
19%
55%
18%
3%
41%
63%
9%
22%
20%
46%
5%
97%
3%
33%
67%
3 20,180
-902
-4.28%
17%
25%
20%
33%
15,508
13%
32%
18%
34%
13,550
22%
20%
4%
10%
41%
23%
10,617
22%
20%
4%
10%
42%
23%
7,628
20%
19%
3%
9%
44%
23%
20,340
19%
54%
27%
28%
76%
67%
10%
20%
3%
12%
48%
25%
10%
29%
62%
10%
16%
17%
47%
9%
76%
24%
35%
65%
4 21,569
487

2.31%
27%
21%
27%
20%
13,759
18%
28%
32%
19%
11,028
20%
19%
2%
5%
33%
37%
7,935
19%
18%
3%
5%
34%
36%
5,281
17%
16%
2%
5%
36%
35%
19,651
23%
54%
23%
24%
63%
67%
17%
14%
2%
14%
53%
16%
7%
30%
63%
28%
23%
18%
28%
3%
45%
55%
64%
36%
5 21,596
514

2.44%
33%
29%
19%
12%
14,111
22%
44%
21%
11%
11,677
20%
19%
2%
3%
53%
20%
8,764
19%
19%
2%
3%
54%
19%
6,219
16%
16%
2%
3%
57%
18%
21,253
25%
53%
22%
22%
44%
64%
27%
7%
2%
16%
54%
14%
8%
32%
67%
21%
23%
19%
33%
5%
73%
27%
53%
47%
6 21,677
595

2.82%
37%
23%
20%
14%
14,119
24%
35%
25%
14%
11,092
25%
24%
2%
4%
41%
27%
7,966
24%
23%
2%
5%
42%
26%
5,172
20%
20%
2%
4%
44%
27%
20,337
24%
56%
21%
21%
50%
65%
24%
8%
2%
13%
59%
13%
5%
32%
64%
17%
22%
24%
33%
5%
80%
20%
44%
56%
Total
126,494
1,497

7.10%
28%
21%
21%
24%
85,441
18%
31%
23%
26%
71,308
24%
22%
3%
8%
38%
26%
53,539
23%
22%
3%
8%
39%
26%
36,196
20%
19%
3%
7%
42%
26%
122,173
23%
54%
23%
26%
63%
63%
18%
16%
2%
15%
52%
19%
7%
32%
64%
16%
20%
18%
39%
7%
73%
27%
45%
55%
02/08/2022 21:59 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
DocuSign Envelope ID: 6E735151-E667-42FE-B4FA-87247EA57C95 CONSENT CALENDAR 8.D.

DATE: June 11, 2024
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 2024-2025

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 2024-2025.

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 11, 2024
Subject: ADOPT RESOLUTION APPROVING STATEMENT OF INVESTMENT POLICY AND DELEGATION FOR FY 2024-2025

Page 2 ends

Tonight, staff returns with an updated Statement of Investment Policy that the City Council adopted on June 13, 2023 containing minor revisions.

Changes of note include:
• Update Performance Standards as the City will utilize benchmark to measure risk being taken at portfolio outcomes. (Section 7.0)
• Adding optional quarterly investment report to align with California Government code. (Section 9.0) • Adding to the extent practicable investment transactions be executed using a competitive bid process whenever possible. Section 11.0 (C) to align with best practice that the City currently follows to retrieve quotes from multiple brokers.
• Adding securities with forward settlement date exceeding 45 days is prohibited. Seciton 16.0 (B) (6) per Senate Bill.

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 of 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. Resolution - Investment Policy CAO STAMP

2. Attachment 2 - Vallejo Investment Policy for FY 24-25 (Updated clean copy)

3. Vallejo - Investment Policy for FY 24-25 (Redline)

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

Approved as to form:

By: for
Veronica Nebb, City Attorney
RESOLUTION NO. 24-XXX N.C.

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

THE STATEMENT OF INVESTMENT POLICY AND RENEWING DELEGATION OF

INVESTMENT AUTHORITY TO THE CITY FINANCE DIRECTOR, SERVING AS CITY TREASURER, FOR THE PERIOD JULY 1, 2024, THROUGH JUNE 30, 2025 WHEREAS, California 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; and WHEREAS, California Government Code Section 53607 provides that a legislative body may delegate the authority to invest to the treasurer on an annual basis; and WHEREAS, the legislative body of a local agency may invest surplus monies not required for the immediate necessities of the local agency in accordance with the provisions of California Government Code Section 53601 et seq.; and WHEREAS, the Annual Statement of Investment Policy was last reviewed and adopted on June 13, 2023; and
WHEREAS, City Council renewed delegation of investment authority to the City Finance Director, serving as City Treasurer, for one year ending June 30, 2024; WHEREAS, the term of the delegation of investment authority should coincide with the term of the Investment Policy.

NOW, THEREFORE, BE IT RESOLVED that the Vallejo City Council hereby approves the Statement of Investment Policy for the City of Vallejo, as amended and set forth in Attachment 2 of the Staff Report accompanying this Resolution for the period from July 1, 2024 through June 30, 2025.

BE IT FURTHER RESOLVED that the Council hereby renews delegation of investment authority to the City Finance Director, serving as City Treasurer, for a period of one year, from July 1, 2024, through June 30, 2025, in accordance with the Policy.

CITY OF VALLEJO, CALIFORNIA

STATEMENT OF

INVESTMENT POLICY

Considered by the City Council

On June 11, 2024

City of Vallejo Investment Policy – Considered by the City Council on June 11, 2024

Page 2 of 37 ends

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 ....................................................................................................................................... 8

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 11, 2024

Page 3 of 37 ends

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 11, 2024, 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 11, 2024

Page 4 of 37 ends

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 11, 2024

Page 5 of 37 ends

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 like 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 requirements 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, commensurate 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 11, 2024

Page 6 of 37 ends

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 pur chase 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. The City will utilize benchmark to measure risk being taken at portfolio outcomes. 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 Tr easurer 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.
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).

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9.0 REPORTING

California Government Code Section 53607 requires monthly reporting of transactions to the City Council and Section 53646 provides for an optional 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.

10.0 SAFEKEEPING AND CUSTODY

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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 o f 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. To the extent practicable, investment transactions should be executed using a competitive bid process whenever possible.

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 FDI C 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 with 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).

6. Securities with a forward settlement date exceeding 45 days is prohibited.

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 extent that such investments achieve substantially equivalent safety, liquidity and yield compared to investments permitted by California state law.

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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 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 the City Council. They must contractually agree to conform to the City’s Investment Policy and all pr ovisions 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

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to the City from the I nvestment Manager for such loss of funds is defined in each investment management agreement.

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 indemnity 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 legislative change, the Ci ty 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 Code 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 the 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

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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

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 agencies 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 right 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

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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.

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 y ears 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

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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 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).

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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:

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%

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of the agency’s portfolio. Furthermore, the maximum principal amount in any one issuer will not exceed 5% of the City’s portfolio.

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, fluctuations 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
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

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January 1,
2026
issuing corporation.
5% per issuer limit.

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 through 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.

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

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 exist 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 for loss of income and ownership.

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

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 because 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 affected 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 requi rement 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

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money for the securities. Delivery vs. receipt is delivery of securities with an exchange of a signed receipt for the securities.

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 Congres s. These securities 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 maturi ty 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 System (FHLB), and the Federal Farm Credit System (FFCS).

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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 bon d where the semiannual 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 months. 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

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Government Securities in the open market as a means of influencing the volume of bank credit and money.

FEDERAL RESERVE SYSTEM - The central bank of the United States 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 require 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 Association, 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 backed by the government as to both principal and interest payments. Other securities, such as those is sued 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 clients 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.

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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.

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 directi on 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 the 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.

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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.

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 collater al 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.

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2. Disseminate timely and accurate information regarding the fund's holdings, performance, management and general investment policy.

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 individuals 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 rating 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 thi s 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 sy stem and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool.

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PAR VALUE - The nominal or face value of a debt security; that is, the value at maturity.

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 income 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

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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.

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 purchase 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 in 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 payment 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.

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STRIPPED TREASURIES - U.S. Treasury debt obligations in which coupons are removed by brokerage houses, creating zero-coupon bonds.

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 rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

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 perform ance 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 followi ng 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 vehicle 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

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with maturities 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 t he Federal Government has the 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 interval, 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

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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.

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 value. 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 13, 2023

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