Vallejo City Council
June 10, 2025

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CONSENT CALENDAR 8.F.

DATE: June 10, 2025
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 2025-2026

RECOMMENDATION
Adopt a Resolution approving:

1. The 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 2025-2026.

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

Date: June 10, 2025
Subject: ADOPT RESOLUTION APPROVING STATEMENT OF INVESTMENT POLICY AND DELEGATION FOR FY 2025-2026

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.

Tonight, staff presents the Statement of Investment Policy, previously adopted by the City Council on June 11, 2024, with no changes to its content.

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.

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. Resolution - Investment Policy CAO Stamp

2. Attachment 2 - Vallejo Investment Policy for FY 25-26 (Updated clean copy)

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

Approved as to form:

By: for
Veronica Nebb, City Attorney
RESOLUTION NO. 25-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, 2025, THROUGH JUNE 30, 2026 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 11, 2024; and
WHEREAS, City Council renewed delegation of investment authority to the City Finance Director, serving as City Treasurer, for one year ending June 30, 2025; 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, 2025 through June 30, 2026.

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, 2025, through June 30, 2026, in accordance with the Policy.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 10, 2025 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
______________________________________

ANDREA SORCE, MAYOR

ATTEST:

______________________________________
DAWN G. ABRAHAMSON, CITY CLERK

.

CITY OF VALLEJO, CALIFORNIA

STATEMENT OF

INVESTMENT POLICY

Considered by the City Council

On June 10, 2025

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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 10, 2025

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 10, 2025, 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 10, 2025

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 10, 2025

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 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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).

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

11.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

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

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

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

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

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

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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 I nvestment Manager causes a loss of funds to the City where the Manager is held to be liable for the loss of funds, compensation due

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

to the City from the Investment 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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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 1 st 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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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 2 a-7 of the Investment Company Act of 1940.

M. LOCAL GOVERNMENT INVESTMENT POOLS (LGIP).

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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 1 0%

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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:

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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 collatera l. 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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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).

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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

City of Vallejo Investment Policy – Considered by the City Council on June 10, 2025

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.

CONSENT CALENDAR 8.G.

DATE: June 10, 2025
TO: Mayor and Members of the City Council
FROM: Rekha Nayar, Finance Director
SUBJECT: ADOPT A RESOLUTION ESTABLISHING THE FISCAL YEAR 2025-2026 CITY OF

VALLEJO GANN APPROPRIATIONS LIMIT

RECOMMENDATION
Adopt a Resolution establishing the Fiscal Year (FY) 2025-26 Appropriations Limit at $192,525,069 for the City of Vallejo.

REASONS FOR RECOMMENDATION
Article XIIIB of the California Constitution requires that the City compute an annual appropriations limit. This limit sets the maximum amount of appropriations that can be made from tax receipts.

BACKGROUND AND DISCUSSION
Article XIIIB of the California State Constitution, adopted as Proposition 4 (the Gann Initiative) by the voters of California in 1979, and later amended by Proposition 111, prohibits annual appropriations from exceeding an “Appropriations Limit.” The Appropriations Limit is calculated by adjusting the 1986-87 base year appropriations by annual changes in population and a cost-of-living index. For FY 2025-2026, appropriations that are subject to the Appropriations Limit cannot exceed the Appropriations Limit.

The Appropriations Limit for FY 2025-2026 is $192,525,069. This was determined by applying the percentage increase in California per capita income of 6.44% and the change in county population decrease of 0.03% to the FY 2024-25 Appropriations Limit of $180,928,567.

Article XIIIB requires that appropriations that are subject to the Appropriations Limit must not exceed $192,525,069. Based upon definitions contained in Article XIIIB, City of Vallejo appropriations that are subject to the limit for FY 2025-2026 are estimated to be $126,797,931. Therefore, the appropriations that are subject to the Appropriations Limit will not exceed the Appropriations Limit.

SB 1352 of 1980, which implemented the Gann Initiative, requires each local government to establish its appropriations limit by resolution each year at a regularly scheduled or noticed special meeting.

The annual adjustment made to the Appropriations Limit is based on a formula which adds the two following factors:

1. The change in City population or the change in population for the entire County, and

2. Change in State per capita income or change in non-residential assessed valuation.

An agency is allowed to select the population growth factor and financial factor that provides for the largest growth in the limit. For the calculation of the FY 2025-2026 Appropriations Limit, staff recommends the City use the change in State per capita income and the change in County population as they provide the greatest

Date: June 10, 2025
Subject: ADOPT A RESOLUTION ESTABLISHING THE FISCAL YEAR 2025-2026 CITY OF

VALLEJO GANN APPROPRIATIONS LIMIT

limit.

Not all revenues are restricted by the Appropriations Limit, only those which are referred to as "proceeds of taxes." The attachments provide a description of the “proceeds of taxes.”

The following is a list of factors used in the calculation:

Percentage Change in Solano County Population -0.03% Percentage Change in California Per Capita Personal Income 6.44% The FY 25-26 appropriation limit is calculated on the basis of FY 24-25 appropriations limit and applying change factor below:

Factor to be applied to Prior Year 1.06409437 (Population Factor x Income Factor)

FISCAL IMPACT
There is no fiscal impact associated with the approval of this Resolution.

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. FY25-26 GANN resolution CAO Stamp

2. Attachment 2 -Appropriations Limit

3. Attachment 3 - Proceeds of Taxes

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

Approved as to form:

By: for
Veronica Nebb, City Attorney
RESOLUTION NO. 25-_______

A RESOLUTION OF THE CITY COUCNIL OF THE CITY OF VALLEJO ESTABLISHING THE FISCAL YEAR 2025-2026 GANN APPROPRIATIONS LIMIT AT $192,525,069 AND CERTIFYING THAT FISCAL YEAR 2025-2026

APPROPRIATIONS THAT ARE SUBJECT TO THE APPROPRIATIONS LIMIT DO

NOT EXCEED THE APPROPRIATIONS LIMIT
WHEREAS, Article XIIIB of the California State Constitution, adopted as Proposition 4 (the “Gann Initiative”) by the voters of California on November 6, 1979, as expanded by Proposition 111, prohibits, with certain exceptions, the annual appropriations subject to limitation of any governmental entity from exceeding the base year appropriations except by a formula which adjusts the limit for changes in population and cost-of-living; and
WHEREAS, the Appropriations Limit for Fiscal Year 2025-2026 is calculated to be $192,525,069, as determined by applying a change factor of 1.06409437 to the Fiscal Year 2024-2025 Appropriations Limit of $180,928,567; with such change factor comprised of the change in California per capita personal income of 6.44% and the annual population change for the County of Solano as of January 1, 2025 showing a decrease of 0.03%, (as provided by the State Department of Finance); and WHEREAS, the Fiscal Year 2025-2026 appropriations subject to the Appropriations Limit have been determined to be $126,797,931, such amount being $65,727,138, below the Appropriations Limit; and
WHEREAS, the documentation for the Appropriations Limit and appropriations subject to the Appropriations Limit for Fiscal Year 2025-2026 is on file in the Finance Department.

NOW, THEREFORE, BE IT RESOLVED that the City Council hereby adopts an Appropriations Limit of $192,525,069, for Fiscal Year 2025-2026, and certifies that the budgeted appropriations subject to the Appropriations Limit for Fiscal Year 2025-2026 do not exceed such Appropriations Limit.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 10, 2024 with the following vote:

AYES:

NOES:

ABSENT:

ATTACHMENT 1
RESOLUTION NO. _____ N.C.

ABSTAIN:
______________________________________

ANDREA SORCE, MAYOR
ATTEST:

______________________________________
DAWN G. ABRAHAMSON, CITY
CLERK

City of Vallejo
Appropriations Limit Calculation
Fiscal Year 2025-2026
ATTACHMENT 2
I. Calculation of Appropriations Limit:

Fiscal Year 2024-2025 Appropriations Limit $180,928,567 a. CPI Factor (change in California per capita income) 1.0644 b. Population Factor (Change in County population) 0.9997 Change Factor (a. x b.) 1.06409437
Fiscal Year 2025-2026 Appropriations Limit $192,525,069 II. Calculation of appropriations subject to the Appropriations Limit:

Fiscal Year 2025-2026 Proceed of Taxes/Budgeted General Fund Revenue $153,425,999 Less: Non-proceeds of taxes -$26,628,068
Total FY 2025-2026 appropriations subject to the Appropriations Limit: $126,797,931

City of Vallejo
Proceeds of Taxes Calculation
Fiscal Year 2025-2026
ATTACHMENT 3
Proceeds of taxes Non-proceeds of taxes Total revenue
Operating Revenue:

Property Taxes 27,318,053 27,318,053
Sales Tax 57,174,190 57,174,190
Utility User Taxes 17,936,912 17,936,912 Franchise Fees 7,503,357 7,503,357 Transient Occupancy Tax 1,720,000 1,720,000 Business License Tax 2,130,012 2,130,012 Medical Marijuana Tax 2,000,000 2,000,000 Property Transfer Tax 2,500,000 2,500,000 Real Property Excise Tax 500,000 500,000 Motor Vehicle License Fees 14,365,877 14,365,877 Development Fees and Permits 284,733 284,733 Fines & Forfeitures 175,000 175,000 Lease & Rental Revenue 1,236,354 1,236,354 Mare Island Service Reimbursement 3,709,140 3,709,140 Engineering Fees 2,208,888 2,208,888 Other Miscellaneous Revenue 9,415,229 9,415,229 Six Flags/Marine World Fee 1,248,254 1,248,254 Total, before interest allocation 125,145,044 26,280,955 151, 425,999 Percentage of total revenue 82.64% 17.36% 100.00%
Interest allocation 1,652,887 347,113 2, 000,000 Total 126,797,931 26,628,068 153, 425,999

CONSENT CALENDAR 8.H.

DATE: June 10, 2025
TO: Mayor and Members of the City Council
FROM: Stephanie Sifuentes, Human Resources Director
SUBJECT: APPROVE A SIDE LETTER AGREEMENT BETWEEN THE CITY OF VALLEJO AND THE

VALLEJO POLICE OFFICERS' ASSOCIATION (VPOA) FOR THE RECRUITMENT,

RETENTION, AND REFERRAL INCENTIVE PLAN AND NOTICE OF INTENT TO AMEND FISCAL YEAR 2024-2025 BUDGET TO APPROPRIATE EXPENDITURE OF $2,000,000 FOR RECRUITMENT AND RETENTION (STEP 1 OF 2)

RECOMMENDATION
Approve the side letter agreement between the City and VPOA for the Recruitment, Retention, and Referral Plan and provide notice of intent to amend the City's Fiscal Year 2024-2025 Adopted Budget.

REASONS FOR RECOMMENDATION
Staff recommends approval of the side letter agreement between the City and VPOA for the Recruitment, Retention, and Referral Incentive Plan and notice of intent to amend the budget, to enhance the retention of existing staff and to incentivize recruitment efforts to attract the best qualified candidates.This is the first step of the required two-step budget amendment process to amend the FY 2024-25 Adopted Budget. If the City Council approves tonight's recommendation, the final action will be scheduled for City Council's consideration on June 10, 2025.

BACKGROUND AND DISCUSSION
On July 25, 2023, the City Council adopted a proclamation declaring a state of local emergency related to public safety staffing. In conjunction, and at the direction of City Council, the previous City Manager had assigned $2 million at the end of FY 2022-23 to help address recruitment and retention. The Human Resources Department was tasked with (1) conducting a study of surrounding agencies and their recruitment and retention incentives for Police Officers, (2) creating a recruitment and retention plan for City of Vallejo Police Officers, and (3) finding a way to amplify recruitment efforts and identify other means for resolving the staffing crisis in the short-term.

Staff are committed to addressing the public safety staffing emergency with a multipronged approach, which includes incentivizing current staff to stay, incentivizing current staff to assist the City in recruiting good candidates, obtaining additional support with recruitment efforts, incentivizing applicants to choose Vallejo, and working with VPOA to broaden our use of retired annuitants to address the short-term staffing needs.

Utilizing information gained from the study of other surrounding agencies who have implemented recruitment and retention incentives, a Recruitment, Retention, and Referral Incentive Plan was developed to address police officer recruitment and retention challenges over the long-term. There are three primary components to this plan, each with specific milestones and criteria as outlined in the attached plan:

1. The Recruitment Incentive is designed to recruit Lateral Police Officers only (meaning, Police Officers who can join VPD and be effective on the streets in a short period of time). This incentive is $15,000 per hire.

Date: June 10, 2025
Subject: APPROVE A SIDE LETTER AGREEMENT BETWEEN THE CITY OF VALLEJO AND

THE VALLEJO POLICE OFFICERS' ASSOCIATION (VPOA) FOR THE

RECRUITMENT, RETENTION, AND REFERRAL INCENTIVE PLAN AND NOTICE OF INTENT TO AMEND FISCAL YEAR 2024-2025 BUDGET TO APPROPRIATE EXPENDITURE OF $2,000,000 FOR RECRUITMENT AND RETENTION (STEP 1 OF 2)

2. The Retention Incentive is intended to recognize and demonstrate appreciation for those Vallejo Police Officers who have been with the City through challenging staffing times, and to encourage them to continue their good work as the City does everything possible to hire additional support for them. This retention incentive is $15,000 for each Vallejo Police Officer.

3. The Referral Incentive is intended to encourage Vallejo Police Officers to help the City recruit Lateral Police Officers. The Referral Incentive is $5,000 for each successful referral.

In addition to the Recruitment, Retention, and Referral Incentive Plan, the Human Resources Department and Vallejo Police Department collaborated on an RFP process to find a talent marketing and recruitment firm to increase methodologies, exposure, and success of recruitment efforts. A firm with demonstrated success in recruiting public safety positions in other agencies very similar to the City of Vallejo was identified as the top selection. HR and VPD have been working diligently with that firm to build out the recruitment platform as well as the accompanying media.

This is the first step of the required two-step budget amendment process to amend the FY 2024-25 Adopted Budget. City Council will consider tonight's notice of intent to amend the budget. If the City Council approves tonight's recommendation, the final action will be scheduled for City Council's consideration on June 17, 2025.

This amended budget would go into effect on June 18, 2025.

FISCAL IMPACT
This notice of intent does not have any fiscal impact. IF the City Council approves tonight’s recommendation, the fiscal impact of the final action that is scheduled for City Council consideration on June 17, 2025 will be as follows:

Proposed increase of General Fund expenditures of $2 million will be funded by the draw in assigned fund balance.

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. Side Letter and Attachment - COV VPOA Recruitment and Retention_25.06.10_LA

CONTACT
Stephanie Sifuentes, Human Resources Director (707) 649-4852 [email protected]

CONSENT CALENDAR 8.I.

DATE: June 10, 2025
TO: Mayor and Members of the City Council
FROM: Rekha Nayar, Finance Director
SUBJECT: ADOPT A RESOLUTION APPROVING A CONSULTANT AND PROFESSIONAL

SERVICES AGREEMENT WITH KNN PUBLIC FINANCE, LLC FOR MUNICIPAL

ADVISORY SERVICES AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAME

RECOMMENDATION
Adopt a resolution authorizing the City Manager to execute a Professional Services Agreement with KNN Public Finance, LLC (“KNN”) to provide municipal advisory services to the City for a period of five (5) years at a total cost not to exceed $300,000.

REASONS FOR RECOMMENDATION
The City requires expert advice with debt issuance, long term financial planning and related financial advisory services that require a high degree of technical skill and specialized knowledge. Approval of this action will authorize the procurement of municipal advisory services, on an as-needed basis, from KNN at the rates set forth in Exhibit A of the agreement accompanying this report, and contingent upon the availability of existing funds.

BACKGROUND AND DISCUSSION
The City regularly uses municipal advisory services for capital financial planning, including water rate study, debt issuance and structuring, market analysis, and evaluation of financing opportunities. PFM Financial Advisors, and its predecessor firm, have served as the City’s financial advisor for approximately 20 years.

Their current five-year contract has expired, and a new agreement is necessary.

While competitive proposals are not required for highly specialized professional services under VMC

3.20.090(A)(4), the Finance Department elected to issue a Request for Proposals (RFP) on November 5, 2024 to invite qualified firms to compete for the contract. Five firms which responded were: FRA Inc, KNN, NHA Advisors, PFM Financials, and Wuff Hansen. Copies of their proposals are available for review in the Finance Department.

A review committee comprised of City staff from the Finance, Public Works, and Water Departments evaluated the proposals based on criteria outlined in the RFP. Following a comprehensive review and interview process, KNN was selected as the firm best qualified to meet the City’s municipal advisory needs.

KNN offers a combination of experience and resources that will assist the City in achieving its strategic, capital, and financing goals. Specific responsibilities of the financial advisor will include:

1. On-going, general municipal advisory services - capital and debt issuance planning, water rate study, cash flow modeling, project funding and financing alternatives, debt management, policy development and review, annual reporting and continuing disclosure and other advisory needs.

2. Debt issuance advisory services - establishing financing objectives and schedules, preparing and reviewing the Official Statement, structuring and sizing debt issues, conducting presentations to rating agencies and investors, evaluating credit enhancements and market timing, assessing underwriter proposals and

Date: June 10, 2025
Subject: ADOPT A RESOLUTION APPROVING A CONSULTANT AND PROFESSIONAL

SERVICES AGREEMENT WITH KNN PUBLIC FINANCE, LLC FOR MUNICIPAL

ADVISORY SERVICES AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAME

recommending awards

FISCAL IMPACT
Municipal advisory services will be utilized on an as-needed basis as directed by City management:

1. Ongoing Advisory Services – will be billed hourly, at rates ranging from $275 to $400 depending on the assigned personnel, subject to a 3% annual escalation. These costs will be budgeted across relevant City department budgets as needed.

2. Debt Issuance Transactions – Fees for transactional services will vary based on the size, complexity, and time required for each transaction, generally ranging from $40,000 to $65,000 per issuance. There will be no immediate impact to the City’s General Fund, as costs related to debt issuance will be paid from bond proceeds. Compensation for debt issuance services will be contingent upon the successful sale and closing of a bond issuance.

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. Resolution - Municipal advisory Services CAO Stamp

2. KNN Consultant Professional Services Agreement CAO Stamp

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

Approved as to form:

By: for
Veronica Nebb, City Attorney
RESOLUTION NO. __________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO

APPROVING A CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT WITH

KNN PUBLIC FINANCE, LLC FOR MUNICIPAL ADVISORY SERVICES AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAME
WHEREAS, The City requires expert advice for debt issuance, long term financial planning and related financial advisory services that require a high degree of technical skill and specialized knowledge; and
WHEREAS, the City’s current municipal advisory contract with PFM Financial Advisors LLC will expire on June 30, 2025; and
WHEREAS, on November 5, 2024, the City of Vallejo Finance Department (“City”) initiated and advertised a Request for Proposal for municipal advisory services and received five bids; and WHEREAS, the City thoroughly reviewed and analyzed all of the five bids based on the evaluation criteria outlined in the Request for Proposal and determined KNN Public Finance LLC as the firm that best suited the city’s municipal advisory service needs; and WHEREAS, Vallejo Municipal Code 3.20.050 requires City Council approval to spend amounts in excess of $100,000 to a vendor in a fiscal year; and WHEREAS, the cost of professional and consulting services is estimated at $300,000 for three years.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF VALLEJO, CALIFORNIA AS FOLLOWS:

Section 1. The City Council hereby approves the Consultant and Professional Services Agreement between the City of Vallejo and KNN Public Finance LLC attached hereto as Exhibit A.

Section 2. The City Manager for the City of Vallejo is hereby authorized to execute said Agreement on behalf of the City of Vallejo with any modifications recommended by the City Attorney.

Section 3. The City Council authorizes the City of Vallejo to pay an amount for a term of Three years with an option for two additional years for a total not to exceed $300,000 for the entire five-year period.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 10, 2025 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________________

ANDREA SORCE, MAYOR
ATTEST: ________________________________ DAWN G. ABRAHAMSON, CITY CLERK

Consultant and Professional Services Agreement (Revised 01.2019) Page 1 of 11 Approved as to form:

By: for
Veronica Nebb, City Attorney

CONSULTANT AND PROFESSIONAL SERVICES AGREEMENT
This Consultant and Professional Services Agreement (“Agreement”) is made at Vallejo, California, dated for reference this 22nd day of March, 2025, by and between the City of Vallejo, a municipal corporation (“City”), and KNN Public Finance LLC, a California limited liability company, hereinafter referred to as “Consultant”, who agree as follows:

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

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

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

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

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

Consultant and Professional Services Agreement (Revised 01.2019) Page 2 of 11

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

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

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

8. Independent Contractor. Consultant is an independent contractor.

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

9. Licences, Permits, Etc. Consultant represents and warrants to City that all consultant services shall be provided by a person or persons duly licensed by the State of California to provide the type of services to be performed under this Agreement and that Consultant has all the permits, qualifications and approvals of

Consultant and Professional Services Agreement (Revised 01.2019) Page 3 of 11 whatsoever nature which are legally required for Consultant to practice its profession. Consultant represents and warrants to City that it shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals which are legally required for Consultant to practice its profession.

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

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

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

Consultant’s responsibilities under this section shall not be delegated. Consultant shall be responsible to City for acts, errors, or omissions of Consultant’s subcontractors.

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

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

Consultant and Professional Services Agreement (Revised 01.2019) Page 4 of 11

12. Force Majeure. Neither party shall be considered in default of this Agreement to the extent performances are prevented or delayed by causes or circumstances beyond either party’s reasonable control, such as war, riots, strikes, lockouts, work slowdown or stoppage, acts of God, such as floods or earthquakes, and electrical blackouts or brownouts.

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

13. Time is of the Essence. Time is of the essence in this Agreement. Any reference to days means calendar days, unless otherwise specifically stated.

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

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

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

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

16. Term. The term of this Agreement shall commence on April 1, 2025 and shall continue in full force and effect until March 31, 2028.

City shall, at its discretion, have the right to extend the term of this Agreement, in intervals of one year, by written notice to Consultant. The total duration of this Agreement, including the exercise of any options under this section, shall not

Consultant and Professional Services Agreement (Revised 01.2019) Page 5 of 11 exceed five years.

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

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

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

Upon receipt of a notice of termination, Consultant shall perform no further work except as specified in the notice. Before the date of termination, Consultant shall deliver to City all City records and documents, all work product, whether completed or not, as of the date of termination and not otherwise previously delivered.

The City shall pay Consultant for services performed in accordance with this Agreement before the date of termination. If this contract provides for payment of a lump sum for all services or by task and termination occurs before completion of the work or any defined task which according to the performance schedule was commenced before the notice of termination, the fee for services performed shall be based on an amount mutually agreed to by City and Consultant for the portion of work completed in conformance with this Agreement before the date of termination. In addition, the City will reimburse Consultant for authorized expenses incurred and not previously reimbursed. The City shall not be liable for any fees or costs associated for the termination or abandonment except for the fees, and reimbursement of authorized expenses, payable pursuant to this section.

18. Products of Consulting Services. The work product, including without limitation, all writings, work sheets, reports, recordings, drawings, files, detailed calculations and other work products, whether complete or incomplete, of Consultant resulting from services rendered pursuant to this Agreement, shall become the property of City. Consultant agrees that all copyrights which arise from creation of the work under this Agreement shall be vested in the City and waives and relinquishes all claims to copyright or other intellectual property rights in favor of the City. City acknowledges that its use of the work product is limited to the purposes contemplated by the scope of work and that the Consultant makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work.

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

Consultant and Professional Services Agreement (Revised 01.2019) Page 6 of 11

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

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

If subcontracting of work is permitted, Consultant shall pay its subcontractor within ten (10) days of receipt of payment by City for work performed by a subcontractor and billed by the Consultant. Use of the term subcontractor in any other provision of this contract shall not be construed to imply authorization for Consultant to use subcontractors for performance of any service under this Agreement.

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

Any subcontractor or assignee consented to by City shall be bound by all terms and conditions of this agreement and the same shall be incorporated into and made a part of any assignment or subcontractor agreement.

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

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

Consultant warrants and represents it is an equal opportunity employer and agrees it shall not discriminate on the basis of race, religious creed, color, sex, national origin, ancestry, disability, medical condition, age, marital status or sexual

Consultant and Professional Services Agreement (Revised 01.2019) Page 7 of 11 orientation in the selection and retention of employees, subcontractors or procurement of materials or equipment.

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

Consultant shall include the above provisions of this section in every subcontract, including procurement of materials or equipment.
(b) Consultant agrees to comply with Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment Practices Act, the Americans with Disabilities Act of 1990, any other applicable federal and state laws and regulations and City ordinances and regulations hereinafter enacted.

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

If to City:

Rekha Nayar
Finance Director
555 Santa Clara Street
Vallejo, CA 94590
If to Consultant:

Melissa Shick
KNN Public Finance, LLC
2054 University Avenue, Ste 300
Berkeley, CA 94704
Any party may change its address for receiving notices by giving written notice of such change to the other party in accordance with this section.

Routine administrative communications shall be made pursuant to section 1 of Exhibit A.

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

Consultant and Professional Services Agreement (Revised 01.2019) Page 8 of 11

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

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

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

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

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

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

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

32. Confidentiality of City Information. During the performance of services under this Agreement, Consultant may gain access to and use City information regarding, but not limited to, procedures, policies, training, operational practices, and other vital information (hereafter collectively referred to as “City Information”) which are valuable, special and unique assets of the City. Consultant agrees that it will not use any information obtained as a consequence of the performance of services under this Agreement for any purpose other than fulfillment of Consultant’s scope of work , to protect all City Information and treat it as strictly confidential and proprietary to City, and that it will not at any time, either directly or indirectly, divulge, disclose or communicate in any manner any City Information to any third party, other than its own employees, agents or subcontractors who have

Consultant and Professional Services Agreement (Revised 01.2019) Page 9 of 11 a need for the City Information for the performance of services under this Agreement, without the prior written consent of City, or as required by law.

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

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

Consultant’s obligations under this section shall survive the completion of services, expiration or termination of this Agreement.

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

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

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

36. Facsimile Signature; Electronic Signature. This Agreement shall be binding upon the receipt of facsimile signatures or e-mailed by PDF or otherwise.

Any person transmitting his or her signature by facsimile or electronically shall promptly send an original signature to the other party pursuant to the notice provision of this Agreement. The failure to send an original shall not affect the binding nature of this Agreement.

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

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

Exhibit A, entitled “Scope of Work,” including any attachments Exhibit B, entitled “Compensation,” including any attachments Exhibit C, entitled “Insurance Requirements,” including attachments [SIGNATURES ON FOLLOWING PAGE]

Consultant and Professional Services Agreement (Revised 01.2019) Page 10 of 11

Consultant and Professional Services Agreement (Revised 01.2019) Page 11 of 11 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year shown below the name of each of the parties.

KNN Public Finance,
A California Limited Liability Company
By: ____________________
Melissa Shick
Managing Director
DATE: __________________
______________________
Business License Number
(City Seal)

CITY OF VALLEJO,
a municipal corporation
By: ____________________
Andrew Murray
City Manager
DATE: __________________
ATTEST:

By:

Dawn G Abrahamson
City Clerk
APPROVED AS TO CONTENT:

By: ________________________
Rekha Nayar
Finance Director
APPROVED AS TO FORM:

By: _______________________
Veronica A. F. Nebb
City Attorney
APPROVED AS TO INSURANCE:

By: ______________________
Armond Sarkis
Risk Manager

Consultant and Professional Services Agreement (Revised 01.2019) Page 1 of 2 Exhibit A – Scope of Work

EXHIBIT A

SCOPE OF WORK

1. Representatives. The City Representative for this Agreement is:

Rekha Nayar
Finance Director
555 Santa Clara Street
Vallejo, CA 94590
(707) 648-5433
The Consultant’s Representative for this Agreement is:

Melissa Shick
Managing Director
KNN Public Finance
2054 University Avenue, Ste 300
Berkeley, CA 94704
(510) 839-8200
All routine administrative communications between the parties will be between the above-named representatives and may be by personal delivery, mail, facsimile transmission, or electronic mail as agreed between the Consultant Representative and City’s Representative.

2. Services to be Provided. The services provided shall be as set forth in Attachment 1 of Exhibit A, attached hereto and incorporated herein by this reference.

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

Consultant will complete all services by January 31,2027.

4. Key Personnel. All of the individuals identified below are necessary for the successful prosecution of the services due to their unique expertise and depth and breadth of experience. There shall be no change in the personnel listed below, without written approval of the City Representative. Consultant recognizes that the composition of this team was instrumental in the City’s decision to award the work to Consultant and that compelling reasons for substituting these individuals must be demonstrated for the City’s consent to be granted. Any substitutes shall be persons of comparable or superior expertise and experience. Failure to comply with the provisions of this section shall constitute a material breach of Consultant’s

Consultant and Professional Services Agreement (Revised 01.2019) Page 2 of 2 Exhibit A – Scope of Work
obligations under this Agreement and shall be grounds for termination.

Key personnel are as follows: [List of employee names]

Consultant and Professional Services Agreement (Revised 01.2019) Page 1 of 3 Exhibit B - Compensation

EXHIBIT B

COMPENSATION

1. Consultant’s Compensation.

A. Services: City agrees to pay Consultant, at the rate(s) specified below, for those services set forth in Exhibit A of this Agreement and for all authorized reimbursable expenses, for a total not to exceed Two Hundred Fifty Thousand Dollars and Zero Cents ($250,000.00).

Consultant shall notify City in writing no later than thirty (30) days prior to the estimated date when Consultant will have billed City the maximum payment amount permitted under this Agreement, and Consultant shall provide City with an estimate of the additional compensation required to complete the project.

B. Additional Services:

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

2. Consultant’s compensation for Additional Services shall be based on the total number of hours spent on Additional Services multiplied by the employees’ appropriate billable hourly rate as established below. City, at its option, may negotiate a fixed fee for some or all Additional Services as the need arises.

Where a fixed fee for Additional Services is established by mutual Agreement between City and Consultant, compensation to Consultant shall not exceed the fixed fee amount.

2. Appropriate Billable Hourly Rates for Services and Additional Services. Consultant’s billable hourly rates shall be as listed in Attachment 1 of Exhibit B, attached hereto and incorporated herein by this reference.

3. Consultant’s Reimbursable Expenses. Reimbursable Expenses shall be limited to actual reasonable expenditures of Consultant for expenses that are necessary for the proper completion of the Services and shall only be payable if specifically authorized in advance by City.

Consultant and Professional Services Agreement (Revised 01.2019) Page 2 of 3 Exhibit B - Compensation

4. Payments to Consultant.

A. Payments to Consultant shall be made within a reasonable time after receipt of Consultant’s invoice, said payments to be made in proportion to services performed. Consultant may request payment on a monthly basis. Consultant shall be responsible for the cost of supplying all documentation necessary to verify the monthly billings to the satisfaction of City.

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

1. Description of services billed under this invoice

2. Date of Invoice Issuance

3. Sequential Invoice Number

4. City’s Purchase Order Number (if issued)

5. Social Security Number or Taxpayer Identification Number

6. Amount of this Invoice (Itemize all Reimbursable Expenses”)

7. Total Billed to Date
C. Items shall be separated into Services and Reimbursable Expenses.

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

D. Request for payment shall be sent to:

Rekha Nayar
Finance Director
555 Santa Clara Street
Vallejo, CA 94590
[email protected]

5. Accounting Records of Consultant. Consultant shall maintain for three (3) years after completion of all services hereunder, all records under this Agreement, including, but not limited to, records of Consultant’s direct salary costs for all Services and Additional Services performed under this Agreement and records of Consultant’s Reimbursable Expenses, in accordance with generally accepted accounting practices. Consultant shall keep such records available for audit, inspection and copying by representatives of the City’s Finance Department or other government agencies during regular business hours upon twenty four (24) hours’ notice.

The obligations of Consultant under this section shall survive this Agreement.

6. Taxes. Consultant shall pay, when and as due, any and all taxes incurred

Consultant and Professional Services Agreement (Revised 01.2019) Page 3 of 3 Exhibit B - Compensation
as a result of Consultant’s compensation hereunder, including estimated taxes, and shall provide City with proof of such payments upon request.

7. Taxpayer Identification Number. Consultant shall provide City with Consultant’s complete Request for Taxpayer Identification Number and Certification, Form W-9, as issued by the Internal Revenue Service, and any other State or local tax identification number requested by City.

Consultant and Professional Services Agreement (Revised 01.2019) Page 1 of 3 Exhibit C – Insurance Requirements

EXHIBIT C

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

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

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

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

C. Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance.

D. Professional Liability insurance appropriate to the Consultant’s profession (Errors and Omission).

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

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

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

C. Workers’ Compensation and Employer’s Liability: $1,000,000 per accident for bodily injury or disease. If Consultant is not subject to California Workers’ Compensation requirements, Consultant shall file a completed certificate of exemption form which may be obtained from the City prior to commencing any activity authorized hereunder.

Consultant and Professional Services Agreement (Revised 01.2019) Page 2 of 3 Exhibit C – Insurance Requirements
D. Professional Liability (Errors and Omission): $1,000,000 combined single limit per occurrence, and annual aggregate.

3. Deductible and Self-Insured Retention. Any deductibles or self-insured retention must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retention as respects the City of Vallejo, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.

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

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

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

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

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

E. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the City.

F. The workers’ compensation and employer’s liability policy required hereunder shall be endorsed to state that the workers’ compensation carrier

Consultant and Professional Services Agreement (Revised 01.2019) Page 3 of 3 Exhibit C – Insurance Requirements
waives its right of subrogation against City, its officers, officials, employees, agents and volunteers, which might arise by reason of payment under such policy in connection with Consultant’s performance under this Agreement.

5. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII.

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

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

8. Payment Withhold. City will withhold payments to Consultant if the certificates of insurance and endorsements required in Paragraph F, above, are canceled or Consultant otherwise ceases to be insured as required herein.

CONSENT CALENDAR 8.J.

DATE: June 10, 2025
TO: Mayor and Members of the City Council
FROM: Oscar Alcantar, Interim Public Works Director
SUBJECT: ADOPT A RESOLUTION APPROVING THE ENGINEER'S REPORT AND DECLARING THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2025– 2026 WITHIN THE CIMARRON HILLS/MADIGAN, COLLEGE HILLS, COSTA DEL

RIO (SEAVIEW), SOMERSET HIGHLANDS I/II, HUNTER RANCH I/II, GLEN COVE I/II, MONICA PLACE, SOMERSET HIGHLANDS Ill, SPRINGTREE/FLEMING HILL, SUMMIT

II, TOWN AND COUNTRY I, WOODRIDGE, AND GREENMONT/SEAPORT

HILLS LANDSCAPE MAINTENANCE DISTRICTS AND SETTING A PUBLIC HEARING ON THE MATTER FOR JUNE 24, 2025 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 (FY) 2025-26 within existing landscape maintenance districts formed pursuant to the Improvement Act of 1911, and setting a public hearing on the matter for June 24, 2025 at 7:00pm.

REASONS FOR RECOMMENDATION
The City Council directed SCI Consulting Group, Inc. to prepare an Engineer's Report containing fiscal information for each LMD regulated by the Improvement Act of 1911. The City Council is required to hold a public hearing to receive public comments regarding FY 2025-2026 assessments within the following thirteen ad valorem 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; Somerset Highlands III; Springtree/Fleming Hill; Summit II; Town & Country I; Woodridge; and Greenmont/Seaport Hills. The 1911 Act requires annual determination of each district's costs, and allocation of those costs by means of annual assessments to the parcels within each district.

BACKGROUND AND DISCUSSION
The City of Vallejo has 27 Landscape Maintenance Districts (LMDs), thirteen of which were established in accordance with the Landscape and Lighting Act of 1972 (1972 Act), and fourteen of which were established in accordance with the Improvement Act of 1911 (1911 Act). These districts require annual determination of each district’s costs, and allocation of these costs by means of annual assessment to the dwelling units within each district. The City Council considered the Ridgecrest Landscape Maintenance District and the 1972 Act districts under separate Council actions.

Previous City Council actions formed the 1911 Act LMDs and set a maximum annual assessment rate as determined by the City. The creation of these LMDs was approved by a majority of the parcel owners at the time of each LMD’s formation. The City has not exceeded the authorized maximum assessment rate for any LMD. The LMDs formed pursuant to the 1911 Act are exempt from the procedures and approval process of Proposition 218 until such time that it is necessary to exceed the authorized maximum approved rate.

The attached Engineer's Report, prepared by SCI Consulting Group, Inc., describes the proposed assessments, which are based on the estimated costs to maintain the improvements within each district. The Report also details each district’s landscape improvements, financial information, budget and boundaries.

Date: June 10, 2025
Subject: ADOPT A RESOLUTION APPROVING THE ENGINEER'S REPORT AND DECLARING

THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2025–2026 WITHIN THE CIMARRON HILLS/MADIGAN, COLLEGE HILLS, COSTA

DEL RIO (SEAVIEW), SOMERSET HIGHLANDS I/II, HUNTER RANCH I/II, GLEN COVE I/II, MONICA PLACE, SOMERSET HIGHLANDS Ill, SPRINGTREE/FLEMING

HILL, SUMMIT II, TOWN AND COUNTRY I, WOODRIDGE, AND

GREENMONT/SEAPORT HILLS LANDSCAPE MAINTENANCE DISTRICTS AND SETTING A PUBLIC HEARING ON THE MATTER FOR JUNE 24, 2025 AT 7:00 P.M.

Assessments for the 1911 Act LMDs are determined by applying the established assessment rate to each $100.00 in assessed value of each parcel.

The assessments are collected by the County of Solano and forwarded to the City for deposit into specific fund accounts for each LMD. All assessments are expended on landscape maintenance, repair of damage due to vandalism or natural occurrence, site rehabilitation or improvements, water and utilities, and City administration and inspection costs.

The approved FY 2024-25 and the proposed FY 2025-26 assessment rates are as follows:

DISTRICT MAX RATE / $100 APPROVED FY 2024-25

ASSESSMENT
PROPOSED FY 2025-26

ASSESSMENT
Cimarron Hills- Madigan $ 1.50 $ 0.162 $ 0.162
College Hills $ 1.50 $ 0.100 $ 0.100
Costa del Rio (Seaview) $ 4.00 $ 0.287 $ 0.287
Somerset I/II $ 1.25 $ 0.060 $ 0.060
Greenmont/Seaport Hills $ 1.25 $ 0.032 $ 0.032
Monica Place $ 1.25 $ 0.187 $ 0.187
Somerset III $ 1.50 $ 0.144 $ 0.144
Springtree-Fleming $ 1.50 $ 0.195 $ 0.195
Summit II $ 1.50 $ 0.095 $ 0.095
Town & Country I $ 1.50 $ 0.150 $ 0.150
Woodridge $ 1.50 $ 0.071 $ 0.071
Hunter Ranch I/II $ 1.50 $ 0.100 $ 0.100
Glen Cove I/II $ 1.50 $ 0.190 $ 0.190

The assessment rates for all of the LMDs are proposed to remain the same as for FY 2024-2025. The overall assessed value of a majority of the properties within the LMDs has increased by 4.74% since last year’s determination. The current assessed value of these properties is $1,343,987,425.

Rehabilitation projects will focus on areas such as:
• Improving landscape services
• Reducing water costs
• Street tree maintenance
• Additional rehabilitation of ornamental landscape and plant replacement • Reducing graffiti and other common area blight
• Extension of the grass cutting to provide a wider fire-defensive perimeter away from the residential structures

Date: June 10, 2025
Subject: ADOPT A RESOLUTION APPROVING THE ENGINEER'S REPORT AND DECLARING

THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2025–2026 WITHIN THE CIMARRON HILLS/MADIGAN, COLLEGE HILLS, COSTA

DEL RIO (SEAVIEW), SOMERSET HIGHLANDS I/II, HUNTER RANCH I/II, GLEN COVE I/II, MONICA PLACE, SOMERSET HIGHLANDS Ill, SPRINGTREE/FLEMING

HILL, SUMMIT II, TOWN AND COUNTRY I, WOODRIDGE, AND

GREENMONT/SEAPORT HILLS LANDSCAPE MAINTENANCE DISTRICTS AND SETTING A PUBLIC HEARING ON THE MATTER FOR JUNE 24, 2025 AT 7:00 P.M.

All the costs associated with the above LMDs are paid by the assessments levied upon the parcels within those districts. The amount of funds projected to be assessed for these 1911 Act Districts in FY 2025-2026 is $1,608,030.52.

The FY 2025-26 Engineer's Report for the 1911 Act LMDs is included as an attachment to this staff report, along with the proper resolution, and is also on file in the City Clerk’s Office (3rd floor) and in the Department of Public Works (4th Floor), City Hall, 555 Santa Clara Street, Vallejo, CA 94590.

FISCAL IMPACT
There is no fiscal impact from this action on the General Fund.

Landscape District budgets are separate from the City’s General Fund. Landscape Maintenance District assessments finance the maintenance of the districts. The Public Works Department costs for labor and materials associated with the Landscape Maintenance Districts are charged to the individual district budgets.

All City costs associated with maintaining and administering the Districts are covered by the annual assessments.

The financial health of the previously identified districts has been described in the Engineer's Report. The FY 2025-26 proposed assessments in the total amount of $1,608,030.52 are adequate to maintain the current minimal service levels and sustain the required operating reserves of the 1911 Act LMDs.

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

ATTACHMENTS

1. Reso - 1911 LMDs FY25-26_CAO Stamp

2. Vallejo 1911 Act ER 25-26

CONTACT
Oscar Alcantar, Interim Public Works Director
[email protected]

RESOLUTION NO. 25-___ N.C.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO
APPROVING THE ENGINEER’S REPORT AND DECLARING THE INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2025-2026 WITHIN

THE CIMARRON HILLS/MADIGAN, COLLEGE HILLS, COSTA DEL RIO (SEAVIEW), SOMERSET HIGHLANDS I/II, HUNTER RANCH I/II, GLEN COVE I/II, MONICA PLACE, SOMERSET HIGHLANDS Ill, SPRINGTREE/FLEMING HILL,

SUMMIT II, TOWN AND COUNTRY I, WOODRIDGE, AND GREENMONT/SEAPORT

HILLS LANDSCAPE MAINTENANCE DISTRICTS AND SETTING A PUBLIC HEARING FOR JUNE 24, 2025 AT 7:00 P.M.

WHEREAS, the City Council, by previous Resolutions, formed the Landscape Maintenance Districts of Cimarron Hills/Madigan, College Hills, Costa Del Rio (Seaview), Somerset Highlands I/II, Summit II, Glen Cove I/II, Hunter Ranch I/II, Monica Place, Somerset Highlands III, Springtree/Fleming Hill, Town & Country I, Woodridge, and, Greenmont/Seaport Hills (hereinafter referred to as the "Districts"), pursuant to the provisions of the Improvement Act of 1911 (California Streets and Highways Code section 5000 et seq.) (hereinafter referred to as the "1911 Act"); and
WHEREAS, the 1911 Act authorizes the City Council to annually levy and collect assessments for the Districts on the Solano County tax roll to pay the maintenance and services of the improvements and facilities related thereto, and
WHEREAS, SCI Consulting Group, Inc. has prepared an Engineer’s Report which documents each District’s costs and the allocation of those costs; and WHEREAS, the City Council is required to conduct a public hearing to take public comments regarding the Fiscal Year 2025-2026 assessments within the above-mentioned Districts pursuant to the Act.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Vallejo that:

1. The Engineer’s Report is preliminarily approved.

2. A Public Hearing on these matters is hereby set for June 24, 2025 at 7:00 p.m., at the City Council Chambers, located at 555 Santa Clara Street, Vallejo, California.

3. The City Clerk shall cause a notice of the hearing to be given by publishing a copy of this Resolution once, at least 10 days prior to the date of the hearing above specified, in a newspaper circulated in the City of Vallejo.

Adopted by the City Council of the City of Vallejo at a regular meeting held on June 10, 2025 with the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_________________________________

ANDREA SORCE, MAYOR
ATTEST:
_________________________________
DAWN G. ABRAHAMSON, CITY CLERK

OVERVIEW REPORT
City of Vallejo
Landscape Maintenance Districts
Fiscal Year 2025-26

Pursuant to the Improvement Act of 1911

Page i

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Page ii
Table of Contents
Table of Contents ......................................................................................................... ii Introduction ................................................................................................................. 1 Overview.................................................................................................................................... 1 Assessment Process .................................................................................................................. 2 Overview Report ........................................................................................................................ 3 Legal Requirements ...................................................................................................... 4 Method of Apportionment ........................................................................................... 5 Method of Apportionment ........................................................................................................ 5 Discussion of Benefit ................................................................................................................. 5 General versus Special Benefit .................................................................................................. 6 Benefit Finding .......................................................................................................................... 7 Budget Definitions ..................................................................................................... 10 Description of the Districts and Budgets ..................................................................... 14 Cimarron Hills – Madigan Ranch ............................................................................................. 14 College Hills ............................................................................................................................. 17 Sea View (Costa Del Rio) .......................................................................................................... 20 Glen Cove I & II ........................................................................................................................ 23 Greenmont – Seaport Hills ...................................................................................................... 26 Hunter Ranch I/II ..................................................................................................................... 29 Monica Place ........................................................................................................................... 32 Ridgecrest ................................................................................................................................ 35 Somerset Highlands (I/II) ......................................................................................................... 38 Somerset Highlands III ............................................................................................................. 41 Springtree ................................................................................................................................ 44 Summit II ................................................................................................................................. 47 Town & Country ...................................................................................................................... 50 Woodridge ............................................................................................................................... 53

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City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Introduction
Overview
The City of Vallejo (the “City”) annually levies and collects special assessments in order to provide and maintain the improvements within the fo urteen (14) separate landscape maintenance districts (“District” or “Distric ts”). The Districts have been fo rmed between the years 1977 and 1981 pursuant to the Improvement Act of 1911, Part 3 of Division 7 of the California Streets and Highways Code (the “1911 Act”). The Districts are as follows:
 Cimarron Hills/Madigan Ranch
 College Hills
 Seaview (Costa del Rio)
 Glen Cove I/II
 Greenmont-Seaport Hills
 Hunter Ranch I/II
 Monica Place
 Ridegecrest
 Somerset I/II
 Somerset III
 Springtree
 Summit II
 Town & Country I
 Woodridge
This Overview Report (the “Report”) describes the Districts, any changes to the Districts, and the proposed assessments for Fiscal Year 2025-2026. The proposed assessments are based on the estimated cost to maintain the improvements within each District. The Report also details each District’s landscaped improvements, financial information, budget and boundaries.

The Report contains a section for recommenda tions and analysis based on the financial information presented for each District.

The various improvements provided and assessed wi thin each District may include local street lighting, local landscaping improvements and special services. All local landscaping improvements maintained by the Districts and associated with ea ch District were either installed as a condition of development for properties within the District or were installed for the benefit of the properties within the Districts. The landscaping improvemen ts associated with each District may include parkways, perimeters, entryways, medians, slopes , retention and detention basin areas, internal landscaped amenities, neighborhood parks, open space areas and other easements and public right-of-ways within the Districts.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

I m p r o v e m e n t s w i t h i n e a c h D i s t r i c t m a y a l s o include turf, ground cover, shrubs and trees, irrigation systems, lighting, water features, en try monuments, drainage systems and associated appurtenances. Special services provided in clude tree trimming, graffiti removal, weed abatement and landscape maintenance of flood control areas, operations, administration and all services and maintenance required to keep th e improvements in a healthy, vigorous, and satisfactory condition.

Similar to landscape improvements, street ligh ting improvements funded through District assessments were installed for th e benefit of properties within each of the Districts. The assessments in each District provide for the main tenance, operation and energy costs related to their specific street light improvements.

Assessment Process
This Report was prepared to establish the budge ts for the continued maintenance and services expenditures that would be funded by the proposed 2025-2026 assessments. This Report and the proposed assessments have been made pursuant to the provisions of the 1911 Act.

In each subsequent year for which the assessments will be continued, the City must determine the budgets and costs for the upcoming year and allocate these costs to parcels within each District. This Report includes this information. After the Report is completed, the Council may approve the proposed assessments and establish the date for a public hearing on the continuation of the assessments. If the Council approves the proposed assessments by resolution, a notice of public hearing must be published in a local paper.

Following the minimum 10-day time period after publishing the notice, a public hearing is held for the purpose of allowing public testimony about the proposed continuation of the assessments.

This hearing is currently scheduled for June 10, 2025. At this hearing, the Council would consider approval of a resolution ordering the levy of assessments for fiscal year 2025-2026. If so confirmed and approved, the assessments would be submitted to the County Auditor/Controller for inclusion on the property tax rolls for Fiscal Year 2025-2026.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Overview Report
Beginning in 2011-12, SCI Consulting Group be came the Assessment Engineer for these Assessments. To maintain an accurate reference and legally defensible record of the Assessments, pertinent language used in the previous Overview Reports has been retained herein, and the fundamental methodology has been maintained, essentially verbatim. (In most cases, language taken from the prev ious Overview Report is shown in Times New Roman, 10 pt.

Font.)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Legal Requirements
All assessments described in this Report and approved by the City Council are prepared in accordance with the 1911 Act and are in compliance with the provi sions of the California Constitution Article XIIID (Proposition 218).

The 1911 Act provides that assessments be determined by applying the established assessment rate to each one hundred dollars of assessed value of each parcel.

On November 5, 1996, California voters approved Proposition 218, which subsequently became a California Constitutional Amendment (Articles XIIIC and XIIID). Proposition 218 established additional requirements with respect to taxes, fees and assessments levied by California agencies. All new and existing assessments (with some exceptions) are required to comply with the substantive and procedural requirements of Article XIIIC & XIIID.

Pursuant to the California Constitution Article XIIID Section 5, certain existing assessments are exempt from the substantive and procedural requirements of Article XIIID Section 4 and property owner balloting for the assessments is not required until such time that the assessments are increased. Specifically, the City determined that all improvements and the annual assessments originally established for the District were part of the conditions of property development and approved by the original property owner (developer). As such, pursuant to Article XIIID Section 5(b), all the property owners approved the existing District assessments at the time the assessments were created (originally imposed pursuant to a 100% landowner petition). Therefore, the existing assessment amount (the maximum assessment ra te for each District identified in this Report) is exempt from the procedural requirements Article XIIID Section 4.

The current maximum assessment rates per each one hund red dollars of assessed value of each parcel were originally approved by the property owners. Accordingly, any assessment amount equal to or below the maximum amount is considered an exempt assessment pursuant to Article XIIID Section 5(b). The annual assessments for this fiscal year 2025-2026 are significantly less than the maximum assessment allowed. The proposed assessment for any fiscal year may be incr eased over the previous fiscal year provided the assessment rate does not exceed the maximum assessme nt rate for each District . Any proposed new or increased assessment that exceeds th e current maximum assessment shall comply with all provisions of Article XIIID Section 4 including a property owner protest proceeding (property owner assessment balloting).

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Method of Apportionment
Method of Apportionment
Assessments for the 1911 Act landscape maintenance districts of the City of Vallejo are determined by applying the established assessment rate to each one hundred dollars ($100) of assessed value of each parcel.

The word “parcel” refers to an individual property assigned its own Assessor Parcel Number by the Solano County Assessor’s Office. The Solano County Auditor/Controller uses Assessor Parcel Numbers and specific Fund Numbers to identify assessed properties on the tax roll. The annual assessments outlined in this Report are proposed to cover the estimated costs to provide a ll necessary service, operation, administration, and maintenance required each year to keep these improv ements in a healthy, vigorous, and satisfactory condition.

Discussion of Benefit
In summary, the assessments can only be levied based on the special benefit to property. This benefit is received by property over and above any general benefits.

Proposition 218, which added Article XIIID of the California Constitution, provides as follows:
"No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel." Benefit categories have been established that represent the types of special benefit to residential, commercial, industrial and other lots and parcels resulting from the installation, maintenance and servicing lighting and landscaping improvements to be provided with the assessment proceeds.

These categories of special benefit are summarized as follows:

A. Proximity to Improved Landscaped Areas and Other Public Improvements within the Assessment Districts.

B. Access to Improved landscaped areas and Other Public Improvements within the Assessment Districts.

C. Improved Views within the Assessment Districts.

D. Extension of a property’s outdoor areas and green spaces for properties within close proximity to the Improvements.

E. Creation of individual lots for resident ial and commercial use that, in absence of the assessments, would not have been created.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Case law interpreting Proposition 218 provides en hanced clarity to the definitions of special benefits to properties in three distinct areas:
 Proximity
 Expanded or improved access
 Views
This case law also clarifies that a special benefit is a service or improvement that provides a direct advantage to a parcel and that indirect or derivative advantages resulting from the overall public benefits from a service or improvement are general benefits. The case law also provides specific guidance that park improvements are a direct advan tage and special benefit to property that is proximate to a park that is improved by an assessment:
the characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement (e.g. proxim ity to a park) or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement (e.g. general enhancement of the district’s property values).

Proximity, improved access and views, in additi on to the other special benefits listed above further strengthen the basis of these assessments.

General versus Special Benefit
In absence of the assessments, the Improvements in the Districts would not be provided, so the Improvements are “over and above” what otherwise would be provided. Many of the parcels would not even exist if the assessments were not established because an assessment for the specific Improvements within the Districts was a condition of development approval.

All of the Assessment proceeds derived from the Districts will be utilized to fund the cost of providing a level of tangible “special benefits” in the form of landscaped parkways, landscaped medians, landscaped corridors, open space areas and other Improvements and costs incidental to providing the Improvements and collecting the Assessments.

Although these Improvements may be available to the general public at large, the permanent public Improvements in the Districts were specifically designed, located and created to provide additional and improved public resources for the direct advantage of property inside the Districts, and not the public at large. Other properties that are either outside the Districts or within the Districts and not assessed, do not enjoy the unique proximity, access, views and other special benefit factors described previously. Moreover, the homes in the Districts would not have been built if the Assessments were not established because an assessment for the Improvements was a condition of development approval.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Benefit Finding
In summary, real property located within the bou ndaries of the Districts distinctly and directly benefits from closer proximity, access and views of Improvements funded by the Assessments, the creation of developable parcels and from the extension of usable land area provided by the assessments. The Improvements are specifically designed to serve properties in the Districts, not other properties or the public at large. The Di stricts have been narrowly drawn to include those parcels that receive a direct advantage from th e Improvements. The public at large and other properties outside the Districts receive only limited benefits from the Improvements because they do not have proximity, good access or views of the Improvements. These are special benefits to property in the Districts in much the same wa y that sewer and water facilities, sidewalks and paved streets enhance the utility and desirability of property and make them more functional to use, safer and easier to access.

Without the Assessments, the public improvements within the Districts would not be maintained and would turn into brown, unmaintained and un usable public improvements and public lands.

If this happened, it would create a significant and material negative impact on the desirability, utility and value of property in the Districts. Most importantly, without the Assessments, the developed properties would not exist, becaus e the subdivisions and development proposals would not have been approved. The Improvements are, therefore, clearly above what otherwise would be provided and the Improvements uniquely and specially benefit parcels in the Districts in a way that is not enjoyed by the general public or other property. We therefore conclude that all the Improvements funded by the Assessment are of special benefit to the identified benefiting properties located within the Districts and that the value of the special benefits from such Improvements to property in the Districts reas onably exceeds the cost of the Assessments for every assessed parcel in the Dist ricts. (In other words, as required by Proposition 218; the reasonable cost of the proportional special bene fit conferred on each parcel reasonably exceeds the cost of the assessments.) Any general bene fits to surrounding properties outside of the Districts, if there were any, are collateral and conferred concomitantly.

The original determination of benefits to property and the method of special benefit apportionment to property were developed by Willdan Financial Services when the Districts were originally approved by property owners as noted in the Description of Districts section of this Report. The description of benefits and the de termination and apportionment of benefits to property in this Report are consistent with the original benefit determination and apportionment.

The original method of apportionment of assessment and other relevant elements of the original Reports for the Districts are hereby incorporated by reference.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Quantification of General Benefit
Although the analysis used to support these asse ssments concludes that the benefits are solely special, as described above, consideration is made for the suggestion that a portion of the benefits are general. General benefits cannot be funded by these assessments - the funding must come from other sources.

The maintenance and servicing of these improvements is also partially funded, directly and indirectly from other sources including the Ci ty of Vallejo, Solano County and the State of California. This funding comes in the form of grants, development fees, special programs, and general funds, as well as direct maintenance and servicing of facilities (e.g. curbs, gutters and streets, etc.) This funding from other sources more than compensates for general benefits, if any, received by the properties within the assessments district.

The General Benefits from these Assessments may be quantified as illustrated in the following table.

Benefit Factor
Relative
Weight
General Benefit
Contribution
Relative General
Benefit
Creati on of parcel s 90 0% 0
Proximity and access to open space and landscape areas 5 10% 0.5 Improved vi ews 5 10% 0.5
100 1
Total Calculate d Ge ne ral Be ne fit = 1.0%
As a result, City of Vallejo will contribute at least 1% of the total budget from sources other than the assessment. This contribution offsets any general benefits from the assessment services.

This general benefit contribution is the sum of the following components:

The City of Vallejo owns, maintains, rehabilitates and replaces curb and gutter along the border of the Districts improvements. Th is curb and gutter serves to support, contain, retain, manage irrigation flow and growth, and provide a boundary for the improvements. The contribution from the City of Vallejo towards general benefit from the maintenance, rehabilitation and replacement of the curb and gutter is conservatively estimated to be 1%.

The City of Vallejo owns and maintains local publ ic streets along the border of the Districts improvements. These public streets provide access to the improvements for its enjoyment as well as efficient maintenance. The contribution from the City of Vallejo towards general benefit from the maintenance of local public streets is conservatively estimated to be 1%.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

The value of the construction of the improvements can be quantified and monetized as an annuity. Since this construction was performed and paid for by non-assessment funds, this “annuity” can be used to offset general benefi t costs, and is conservatively estimated to contribute 25%.

Therefore, the total General Benefit is conservatively quantified at 1.0% which is more than offset by the total non-assessment contribution towards general benefit of 27%.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Budget Definitions
The following provides a summary of the services and costs that are incl uded in the District Budgets:

Direct Costs:

Contract Maintenance Costs — Includes all contra cted labor, material and equipment required to properly maintain the landscaping, irrigation sy stems, drainage systems, fencing, and entry monuments within the District. All improvements within the District are maintained and serviced on a regular basis.

Salaries & Benefits — Staff time devoted to mana ging and inspecting Districts. The Public Works LMD reimbursement is proportionally spread amongst twenty-seven (27) Districts based on each District’s budgeted direct and maintenance expense, inspections as a percentage of total costs in these categories for all Districts. Inspection costs are budgeted directly to the District as Field Inspection based on the historical and projected time spent in the inspection efforts.

Services & Supplies - Vehicles, supplies and services devoted to managing and inspecting Districts.

Landscape Water — Utility costs for water required to irrigate landscaped areas.

Utilities — Includes the cost of the furnishing of electricity required for the irrigation systems and hardwire telephone connections at upgraded irrigation controllers, monitored by City Staff.

Landscape Rehabilitation & Vandalism — Landscap e projects, which significantly benefit and upgrade a specific Landscape Maintenance District . These costs reflect only a proportional share of the entire cost of the project and are noted because the amount of design, planning, coordination and execution. This budget item represents a cost to the individual Landscape Maintenance District, which is representative and has been identified by the city as above normal routine landscape maintenance inspection.

Vandalism includes repairs and rehabilitation th at are generally unforeseen and not normally included in the yearly maintenance contract costs. This may include repair of damaged amenities due to vandalism, storms, frost, etc. These upgrades could include replacing plant materials and/or renovation of irrigation or lighting systems.

Capital Projects – This item includes major repairs or capital improvement projects.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Administration Costs:

Administration & Overhead — The cost allocation of all particular departments and staff of the City, for providing general support, services and operations related to the various districts, enterprises and accounts of the City.

County Administration Fee — This is the estimated cost to the District for the County to collect District assessments on the property tax bills. This charge is based on a flat rate per fund number plus a charge per assessment levied.

Professional Services — This is the estimated cost to the District for th e Assessment Engineer to prepare this report and to calculate and submit the assessments to the Solano County Auditor’s office.

Levy Breakdown:

Operating Reserve Collection/(Transfer) — This budg et item is provided to illustrate collection by the District of funds to operate the District from the time period of July 1 (beginning of the Fiscal Year) through January or when the County provides the City with the first installment of assessments collected from the property tax b ills. Transfer amounts (Negative amounts) shown for this budget item represent transfers from th e reserve fund that reduces the Balance to Levy.

Maintaining an adequately funded reserve fund eliminates the need for the City to transfer funds from non-District accounts to pay for operational ex penses during the first half of the fiscal year and also provides the District with sufficient funds to address any unforeseen or unusual expenditures that may occur during the year.

Rehabilitation Fund Collection/(Transfer) — This bu dget item is provided to illustrate collection by the District of funds to cover costs of repairs, landscape maintenance that may be unforeseen and are not normally included in the yearly main tenance contract costs or for planned capital improvement projects. These amounts are held in or paid from the refurbishment/rehabilitation fund. Negative amounts shown for this budget item are transfers from the refurbishment/rehabilitation fund to be used to reduce the Balance to Levy. Transfer amounts (Negative amounts) will only occur after the pla nned projects have been completed and excess funds are being credited back to the District’s regular accounts. The refurbishment/rehabilitation fund eliminates the need for the City to tr ansfer funds from non-District accounts. The Rehabilitation fund can be utilized to cover operating costs should the revenue and reserve fund be insufficient.

Other Revenue Source — This item includes additional funds designated for the District that are not annual assessments. These funds are applied to reduce assessments, and may be from non- District or District sources including City General Fund Contributions and/or interest earnings. Any funds indicated on this line will be shown as a negative number indicating a reduction in the amount to be levied and represent funds that do not have to be repaid.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Balance to Levy — This is the total amount to be collected for the current fiscal year through assessments. The Balance to Levy represents the sum of Total Direct and Administration Costs, Reserve collections or transfers, Rehabilitation co llections or transfers, contributions from other sources and contribution repayments. Only those costs related to the improvements identified as special benefits are levied and collected on the tax roll.

Districts Statistics:

Total Parcels Levied — The total number of pa rcels levied within the District boundary.

Anticipated Total Assessed Values/$100 — The sum of all the assessed values of all parcels within the District as established by the Solano County Assessor’s Office divided by $100.

Rate per $100 of AV — The established assessment rate to each one hundr ed dollars ($100) of assessed value of each parcel.

Minimum Cost Recovery Rate per $100 of AV— Th e estimated assessment rate to each one hundred dollars ($100) of assessed value of each parcel to recover sufficient revenue for the District Direct, Administration and Rehabilitation costs.

Fund Balance Information:

Beginning Operating Reserve Fund Balance — The projected reserve fund balance as provided by the City of Vallejo.

Operating Reserve Fund Adjustments — Positive amounts shown for this budget item represent additions to the reserve fund from levy revenue exceeding the total of all Direct, District Administration and Rehabilitation Costs. Surplus levy revenue is allocated to the reserve fund until the balance is equivalent to six months of levy revenue. The reserve fund negative amounts shown for this budget item represent transfers from the reserve fund to be used to reduce the Balance to Levy as a result of total Di rect and District Administration Co sts exceeding total levy revenue.

Additionally, negative amounts shown for this budget item may represent a reduction of the reserve fund balance in excess of six months of levy revenue; excess balances may be used to increase the refurbishment/rehabilitation fund.

Anticipated Operating Reserve Balance — The projected ending balance in the reserve fund as based on activity provided by the City of Vallejo. A negative Operating Reserve Fund balance represents cumulative contributions from the General Fund.

Beginning Rehabilitation Reserve Fund Balance — The projected rehabilitation fund balance as provided by the City of Vallejo.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Rehabilitation Reserve Fund Adjustments — Positive amounts shown for this budget item represents additions to the rehabilitation fund from levy revenue. The rehabilitation fund negative amounts shown for this budget item represent transfers from the rehabilitation fund to be used to reduce the Balance to Levy as a result of excess funds on project completion.

Anticipated Rehabilitation Reserve Balance — The projected ending balance in the rehabilitation fund as based on activity provided by the City of Vallejo. A negative Rehabilitation Reserve Fund balance represents cumulative contributions from the General Fund.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Description of the Districts and Budgets
Cimarron Hills – Madigan Ranch
The Cimarron Hills – Madigan Ranch Landscape Maintenance District serves a residential neighborhood of ten developments located in northeast Vallejo. The District is fully developed.

Special District Features
 The District was formed in 1979.
 The District has 12 acres of native and ornamental ground cover, shrubbery and trees.  The District has 13 acres of weed control and plantings.  Weed control in open space areas assists in fire protection.  Ad Valorem rate per $100 of assessed valuation: Current Rate: $0.162, Maximum Rate:
$1.50.

Boundaries
The District lies within the City of Vallejo, generally located within the area bounded by Fairgrounds Drive, Napa County line, Borges Lane , and Griffin Drive including open space below Highway 80.

Improvements
The District maintains landscaping and weed control on the following areas:

Along Fairgrounds Drive near the intersection of Taper to the Napa County Line.  Borges Lane to Griffin Drive.
 Open space below Highway 80 including the water tank site.

Financial Information
The Direct Costs of the District have not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $52,356
Salaries & Benefits $39,219
Services & Supplies $4,487
Landscape Water $15,000
Utilities $1,680
Landscape Rehabilitation / Vandalism $20,000
Capital Projects $0
Total Direct Costs $132,742
Administration Costs
Administration & Overhead $18,131
County Administration Fees $0
Professional Fees $2,244
Total Administration Costs $20,375
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $153,117
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $287,667
Contribution (from) General Fund / Other Revenue ($27,689) Balance to Levy $413,095
District Statistics
Total Parcels 811
Total Parcels Levied 811
Anticipated Total Assessed Value / $100 $2,549,970.30
Proposed Rate per $100 of Assessed Value $0.162
Maximum Rate per $100 of Assessed Value $1.50
Total Assessment Levy $413,095.19
Fund Balance Information
Beginning Operating Reserve Fund Balance $76,558.50
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $76,558.50
Beginning Rehabilitation Reserve Fund Balance $2,692,357.50 Rehabilitation Reserve Fund Adjustments $287,667.00
Anticipated Rehabilitation Reserve Fund Balance $2, 980,024.50 Anticipated Total Ending Fund Balance $3,056,583.00
Estimate of Cost
City of V allejo
Cimarron Hills / Madigan Ranch Landscape Maintenance District Fund Number 0189 (#171)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded.

The following are recommendations to the City:
 Ensure the District Reserve Fund remains adequately funded.  Consider decreasing the assessment rate if direct costs are anticipated to remain at the current level.

College Hills
The College Hills Landscape Maintenance District (District) is a residential neighborhood consisting of two developments located in northeast Vallejo. The District is fully developed.

Special District Features
 The District was formed in 1977.
 The District has 2 acres of ornamental and native ground cover, shrubbery, and trees.  The District has 0.5 acre of weed control and plantings.  Weed control in open space areas assists in fire protection.  Concrete walkway and sound wall.
 Ad Valorem rate per $100 of assessed valuation: Current Rate: $0.100, Maximum Rate:
$1.50.

Boundaries
The District lies within the city of Vallejo, generally located within the area bounded by Fairgrounds Drive, Whitney Avenue, and Olympic Drive.

Improvements
The District maintains landscaping and weed control in the following areas:
 Slope along the west side of Fairgrounds Drive, including the concrete walkway and sound wall.
 North side of Whitney Avenue, between Fairgrounds Drive and Pembroke Drive.  Easement behind Chapman and above Frodham Circle up to the access walkway.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Financial Information
The Direct Costs of the District have not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $12,672
Salaries & Benefits $10,017
Services & Supplies $1,146
Landscape Water $2,500
Utilities $568
Landscape Rehabilitation / Vandalism $7,000
Capital Projects $0
Total Direct Costs $33,903
Administration Costs
Administration & Overhead $4,631
County Administration Fees $0
Professional Fees $300
Total Administration Costs $4,931
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $38,834
Contribut ion to / (f rom) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $20,901
Contribution (from) General Fund / Other Revenue ($4,057) Balance to Levy $55,678
District Statistics
Total Parcels 213
Total Parcels Levied 213
Anticipated Total Assessed Value / $100 $556,781.42
Proposed Rate per $100 of Assessed Value $0.100
Maximum Rate per $100 of Assessed Value $1.50
Total Assessment Levy $55,678.14
Fund Balance Information
Beginning Operating Reserve Fund Balance $19,417.00
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $19,417.00
Beginning Rehabilitation Reserve Fund Balance $386,263.00 Rehabilitation Reserve Fund Adjustments $20,901.00
Anticipated Rehabilitation Reserve Fund Balance $407,164.00 Anticipated Total Ending Fund Balance $426,581.00
Estimate of Cost
City of V allejo
College Hills Landscape Maintenance District
Fund Number 0119 (#175)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded. The following are recommendations to the City:
 Ensure the District Reserve Fund remains adequately funded.  Consider decreasing the assessment rate if direct costs are anticipated to remain at the current level.

Sea View (Costa Del Rio)
The District lies within the City of Vallejo, generally located within the area bounded by Seaport Drive, Seawind Drive, Moonraker Drive, Sea Crest, and Schooner Way.

Special District Features
The District was formed in 1980.

The District has 5 acres of native and ornamental ground cover, shrubbery and trees.

The District has 1.5 acre of weed control and plantings.

Weed control in open space areas assists in fire protection.

Ad Valorem rate per $100 of assessed valuation: Current Rate: $0.287, Maximum Rate:
$4.00.

Boundaries
The District lies within the City of Vallejo, generally located within the area bounded by Seaport Drive, Seawind Drive, Moonraker Drive, Sea Crest, and Schooner Way.

Improvements
The District maintains landscaping and weed control in the following areas:
 Landscaping and irrigation along Seaport Drive, Seawind Drive, Moonraker Drive, the upper most north facing slope of Sea Crest and Schooner Way.  Open space weed control at the point on Seawind Drive.  Street lights
 Sidewalks including curbs, gutters and striping
 Retaining walls
 Street signs
 Street maintenance
There are currently several rehabilitation projects in the District needed i.e. street paving, curb, gutter and sidewalk replacements, irrigation upgrades and vegetation replacement.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Financial Information
The Direct Costs of the District have not significantly changed from fiscal year 2024-2025 to fiscal year 2025-2026. As noted above there are severa l rehabilitation projec ts pending that the rehabilitation reserve fund is currently not adequate to fund. The assessment was increased fiscal year 2017-2018 in order to accumulate enough fund s to complete these projects in the future.

The proposed assessment is below the maximum ra te and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $19,920
Salaries & Benefits $24,130
Services & Supplies $2,761
Landscape Water $15,000
Utilities $360
Landscape Rehabilitation / Vandalism / Street Sweeping $19,500 Capital Projects $0
Total Direct Costs $81,671
Administration Costs
Administration & Overhead $11,155
County Administration Fees $0
Professional Fees $778
Total Administration Costs $11,933
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $93,604
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $56,726
Contribution (from) General Fund / Other Revenue ($7,559) Balance to Levy $142,771
District Statistics
Total Parcels 125
Total Parcels Levied 125
Anticipated Total Assessed Value / $100 $497,457.37
Proposed Rate per $100 of Assessed Value $0.287
Maximum Rate per $100 of Assessed Value $4.00
Total Assessment Levy $142,770.27
Fund Balance Information
Beginning Operating Reserve Fund Balance $46,802.00
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $46,802.00
Beginning Rehabilitation Reserve Fund Balance $709,136.00 Rehabilitation Reserve Fund Adjustments $56,726.00
Anticipated Rehabilitation Reserve Fund Balance $765,862.00 Anticipated Total Ending Fund Balance $812,664.00
Estimate of Cost
City of V allejo
Seaview (Costa Del Rio) Landscape Maintenance District
Fund Number 0121 (#166)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is not adequately funded due to pending rehabilitation projects in the District.

The following are recommendations to the City:
 Ensure the District Reserve Fund adequately funded.
 Increase the assessment in the future in order to provide adequate funding of capital improvement and rehabilitation projects.

Glen Cove I & II
The Glen Cove One and Two Landscape Maintenance District (District) serves a residential neighborhood located in southeast Vallejo. The District is fully developed.

Special District Features
 The District was formed in 1978 with three annexations occurring in 1979 and 1980.  The District has 3 acre of ornamental and native landscaping which includes ground cover, shrubbery and trees.
 The District has 7 acres of weed control and plantings.  Weed control in open space areas assists in fire protection.  Ad Valorem rate per $100 of assessed valuation: Current Rate: $0.19, Maximum Rate:
$1.50.

Boundaries
The District lies within the City of Vallejo, generally located within the area bounded by Honeydew Drive, Highway 780, Peppercorn & Wildberry Court, Wildflower Drive, Shady Lane and Silktree Lane.

Improvements
The District maintains landscaping and weed control in the following areas:
 South side of the street just across from the entrance to the shopping center and east to the rear fence line of lot 60 on Honeydew Drive.
 Stonewood Court cul-de-sac along the east side of the Highway 780 fence line and along the rear yard fences of Peppercorn and Wildberry Court.  East and west sides of Shady Lane to Wildflower Drive including the v-ditches and fence line of Highway 780.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

 Downhill slope side of Wildflower Drive including the v-ditches and the out fall structures as well as the siltation basin on Wildflower Drive.  The east and west sides of Silktree up to the fence lines on each side.  The median island on Bluebell Place and the landscaped slopes of Wildflower, Ironwood, Buckeye, Applenut, and Dogwood Lane.

Financial Information
The Direct Costs of the District have not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $33,720
Salaries & Benefits $31,443
Services & Supplies $3,597
Landscape Water $10,861
Utilities $1,800
Landscape Rehabilitation / Vandalism $25,000
Capital Projects $0
Total Direct Costs $106,421
Administration Costs
Administration & Overhead $14,536
County Administration Fees $0
Professional Fees $1,068
Total Administration Costs $15,604
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $122,025
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $88,538
Contribution (from) General Fund / Other Revenue ($16,128) Balance to Levy $194,435
District Statistics
Total Parcels 239
Total Parcels Levied 239
Anticipated Total Assessed Value / $100 $1,023,341.97
Proposed Rate per $100 of Assessed Value $0.190
Maximum Rate per $100 of Assessed Value $1.50
Total Assessment Levy $194,434.97
Fund Balance Information
Beginning Operating Reserve Fund Balance $61,012.50
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $61,012.50
Beginning Rehabilitation Reserve Fund Balance $1,551,801.50 Rehabilitation Reserve Fund Adjustments $88,538.00
Anticipated Rehabilitation Reserve F und Balance $1,640,339.50 Anticipated Total Ending Fund Balance $1,701,352.00
Estimate of Cost
City of Vallejo
Glen Cove I & II Landscape Maintenance District
Fund Number 0191 (#182)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded.

The following are recommendations to the City:
 Ensure the District Reserve Fund continues to be adequately funded.  Decrease the assessment rate if direct costs are anticipated to remain at the current level in order to decrease the contribution to the Reserve Fund.

Greenmont – Se aport Hills
The Greenmont – Seaport Hills Landscape Maintenance District (District) serves a residential area of 4 developments located in northeast Vallejo. The District is fully developed.

Special District Features
The District was formed in 1978 with one annexation in 1979.

The District has 10 acres of ornamental and native landscaping which includes wild flowers and native grasses acting as ground cover, shrubbery and trees.

The entire District is treated as a weed control Di strict for purposes of fire protection when fire season is declared each year in May.

Ad Valorem rate per $100 of assessed valuation: Current Rate: $.032, Maximum Rate: $1.25.

Boundaries
The District lies within the City of Vallejo, generally located within the area bounded by Columbus Parkway, Greenmont Drive, and Devlin Drive.

Improvements
The District maintains landscaping and weed control in the following areas:
 Slopes surrounding the residential neighborhood primarily overlooking Columbus Parkway and Greenmont Drive as well as Devlin Drive.

Financial Information
The Direct Costs of the District have not significantly changed from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $17,400
Salaries & Benefits $14,272
Services & Supplies $1,633
Landscape Water $0
Utilities $0
Landscape Rehabilitation / Vandalism $15,000
Capital Projects $0
Total Direct Costs $48,305
Administration Costs
Administration & Overhead $6,598
County Administration Fees $0
Professional Fees $251
Total Administration Costs $6,849
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $55,154
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund ($5,831)
Contribution (from) General Fund / Other Revenue ($2,473) Balance to Levy $46,850
District Statistics
Total Parcels 407
Total Parcels Levied 407
Anticipated Total Assessed Value / $100 $1,464,077.88
Proposed Rate per $100 of Assessed Value $0.032
Maximum Rate per $100 of Assessed Value $1.25
Total Assessment Levy $46,850.49
Fund Balance Information
Beginning Operating Reserve Fund Balance $27,577.00
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $27,577.00
Beginning Rehabilitation Reserve Fund Balance $219,707.00 Rehabilitation Reserve Fund Adjustments ($5,831.00)
Anticipated Rehabilitation Reserve Fund Balance $213,876.00 Anticipated Total Ending Fund Balance $241,453.00
Estimate of Cost
City of Vallejo
Greenmont Seaport Hills Landscape Maintenance District
Fund Number 0187 (#168)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded.

The following are recommendations to the City:
 Ensure the District Reserve Fund remains adequately funded.  Consider decreasing the assessment rate if direct costs are anticipated to remain at the current level.

Hunter Ranch I/II
The Hunter Ranch I/II Landscape Maintenance Dist rict serves a residential neighborhood of two developments located in northeast Vallejo. The District is fully developed.

Special District Features
 The District was initially formed in 1981.
 The District has 2 acres of native and ornamental ground cover, shrubbery and trees.  The District has 6 acres of plantings and weed control.  Weed control in open areas assists in fire protection.  Ad Valorem rate per $100 of assessed valuation: Current Rate: $.100, Maximum  Rate: $1.50.

Boundaries
The District lies within the City of Vallejo, generally located within the areas bounded by Foothill Drive, Sterling Drive, Redwood Parkway, and Doncaster.

Improvements
The District maintains landscaping and weed control in the following areas:
 South side of Sterling from the sound wall at Ascot Drive to the curve at Legend Drive.  North and south sides of each crossing at Clydesdale, Pacer, and Dapples Drives including the open spaces between each street crossing to Redwood Parkway behind the fence line.
 Landscaping strip on the east and west side of the intersection of Doncaster and Redwood Parkway.

Planned capital improvement projects include remove and replace landscape and irrigation to keep up with current standards.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Financial Information
The Direct Costs of the District have not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $6,504
Salaries & Benefits $13,943
Services & Supplies $1,595
Landscape Water $15,000
Utilities $150
Landscape Rehabilitation / Vandalism $10,000
Capital Projects $0
Total Direct Costs $47,192
Administration Costs
Administration & Overhead $6,446
County Administration Fees $0
Professional Fees $667
Total Administration Costs $7,113
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $54,305
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $77,227
Contribution (from) General Fund / Other Revenue ($10,520) Balance to Levy $121,012
District Statistics
Total Parcels 377
Total Parcels Levied 377
Anticipated Total Assessed Value / $100 $1,210,118.48
Proposed Rate per $100 of Assessed Value $0.100
Maximum Rate per $100 of Assessed Value $1.50
Total Assessment Levy $121,011.85
Fund Balance Information
Beginning Operating Reserve Fund Balance $27,152.50
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $27,152.50
Beginning Rehabilitation Reserve Fund Balance $1,024,849.50 Rehabilitation Reserve Fund Adjustments $77,227.00
Anticipated Rehabilitation Reserve Fund Balance $1,102,076.50 Anticipated Total Ending Fund Balance $1,129,229.00
Estimate of Cost
City of V allejo
Hunter Ranch I & II Landscape Maintenance District
Fund Number 0172 (#181)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded.

The following are recommendations to the City:
 Ensure the District Reserve Fund remains adequately funded.  Decrease the assessment rate provided the current level of service is unchanged and there are no unforeseen expenditures in order to decrease the contribution to the Reserve Fund.

Monica Place
The Monica Place Landscape Main tenance District (District) serv es a residential neighborhood located in northeast Vallejo. The District is fully developed.

Special District Features
 The District was formed in 1976.
 The District has 1,000 square feet of weed control and plantings.  Landscape is ornamental ground cover.
 Weed control areas along Monica Place assist in fire protection and protection of the asphalt.
 Ad Valorem rate per $100 of assessed valuation: Current Rate: $.187, Maximum Rate:
$1.25.

Boundaries
The District lies within the City of Vallejo, generally located along the roadside of Monica Place.

Improvements
The District maintains weed control easements found along the edge of the asphalt and behind the sidewalk along Monica Place.

Financial Information
The Direct Costs of the District have not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $3,240
Salaries & Benefits $0
Services & Supplies $0
Landscape Water $0
Utilities $0
Landscape Rehabilitation / Vandalism $0
Capital Projects $0
Total Direct Costs $3,240
Administration Costs
Administration & Overhead $0
County Administration Fees $0
Professional Fees $17
Total Administration Costs $17
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $3,257
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $291
Contribution (from) General Fund / Other Revenue ($465) Balance to Levy $3,083
District Statistics
Tot al Parcels 5
Total Parcels Levied 5
Anticipated Total Assessed Value / $100 $16,487.87
Proposed Rate per $100 of Assessed Value $0.187
Maximum Rate per $100 of Assessed Value $1.25
Total Assessment Levy $3,083.23
Fund Balance Information
Beginning Operating Reserve Fund Balance $1,628.50
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $1,628.50
Beginning Rehabilitation Reserve Fund Balance $44,896.50 Rehabilitation Reserve Fund Adjustments $291.00
Anticipated Rehabilitation Reserve Fund Balance $45,187.50 Anticipated Total Ending Fund Balance $46,816.00
Estimate of Cost
City of V allejo
Monica Place Road Landscape Maintenance District
Fund Number 0163 (#167)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded.

The following are recommendations to the City:
 Ensure the District Reserve Fund remains adequately funded.  Consider decreasing the assessment in the future provided the current level of service is unchanged and there are no unforeseen expenditures.

Ridgecrest
The Ridgecrest Point Landscape Maintenance District (District) serves a residential neighborhood located in northeast Vallejo. The District is fully developed.

Special District Features
 The District was formed in 1978.
 Ad Valorem rate per $100 of assessed valuation: Current Rate: $0.115, Maximum Rate:
$1.50.
 The District is composed of six Pacific Gas & Electric easements and one area of ornamental plantings. The PG&E easements are composed of four with ornamental plants and two with weed height control and native/drought resistant plants.  Weed control assists in fire protection.

Boundaries
The District lies within the City of Vallejo, generally located within the Woodvale Court cul-de-sac and the area bounded by Sylvia Court, Hale Str eet, Delgado Street, Clatyon Court, Elna Drive, Henry Street, and Woodvale Court.

Improvements
The District maintains landscaping and weed control in the following areas:
 The PG&E easements found within chain-link fence enclosures on each side of Woodvale Street crossing extending north to and crossing Skyline Drive and along the south side of Goheen Circle
 Rear yard fence lines.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Financial Information
The Direct Costs of the District not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. This proposed assessment is below the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $19,500
Salaries & Benefits $0
Services & Supplies $0
Landscape Water $4,000
Utilities $0
Landscape Rehabilitation / Vandalism $15,000
Capital Projects $0
Total Direct Costs $38,500
Administration Costs
Administration & Overhead $0
County Administration Fees $0
Professional Fees $390
Total Administration Costs $390
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $38,890
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $34,319
Contribution (from) General Fund / Other Revenue ($2,610) Balance to Levy $70,599
District Statistics
Total Parcels 171
Total Parcels Levied 171
Anticipated Total Assessed Value / $100 $613,905.57
Proposed Rate per $100 of Assessed Value $0.115
Maximum Rate per $100 of Assessed Value $1.50
Total Assessment Levy $70,599.14
Fund Balance Information
Beginning Operating Reserve Fund Balance $19,445.00
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $19,445.00
Beginning Rehabilitation Reserve Fund Balance $241,516.00 Rehabilitation Reserve Fund Adjustments $34,319.00
Anticipated Rehabilitation Reserve Fund Balance $275,835.00 Anticipated Total Ending Fund Balance $295,280.00
Estimate of Cost
City of Vallejo
Ridgecrest Landscape Maintenance District
Fund Number 0193 (#169)

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Recommendations
The Reserve Fund balance for the District is adequately funded.

The following are recommendations to the City:
 Ensure the District Reserve Fund is adequately funded.  Consider decreasing the assessment in the future provided the current level of service is unchanged and there are no unforeseen expenditures.

Somerset Highlands (I/II)
The District lies within the City of Vallejo, generally located within the area bounded by Columbus Parkway, Georgia Street, and Regents Parkway.

Special District Features
 The District was originally formed in 1975.
 The District has 2 acres of native and ornamental ground cover, shrubbery and trees.  The District has 5 acres of weed control.
 Weed control in open space areas assists in fire protection.  Ad Valorem rate per $100 of assessed valuation: Current Rate: $.06, Maximum Rate:
$1.25.

Boundaries
The District lies within the City of Vallejo, generally located within the area bounded by Columbus Parkway, Georgia Street, and Regents Parkway.

Improvements
The District maintains landscaping and weed control in the following areas:
 Slope along Columbus Parkway from Georgia Street north to the rail fence and south to Regents Parkway.
 Open space along Regents Parkway to Brunswick.

Financial Information
The Direct Costs of the District have not changed significantly from fiscal year 2024-2025 to fiscal year 2025-2026. The proposed assessment is belo w the maximum rate and is considered an exempt assessment pursuant to Californian Constitution Article XIIID Section 5(b).

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

The amounts identified as “Landscape Rehabilitation” or “Capital Projects” may be budgeted and spent each fiscal year as shown, or collected and held for the future in the Rehabilitation Fund.

The program can also draw from the Operating Reserve Fund as necessary if funds are in excess of six months of levy revenue. Replacement, rehabilitation or refurbishment of the improvements is an essential part of maintenance, but these projects and expenses will often impact the long- term financial stability of the District. Prior to the implementation of any rehabilitation plan, the City should closely evaluate the merits of the project.

City of Vallejo
Landscape Maintenance Districts
Overview Report, FY 2025-2026

Direct Costs 2025-26 Budget
Contract Maintenance Costs $16,800
Salaries & Benefits $11,056
Services & Supplies $1,265
Landscape Water $3,000
Utilities $300
Landscape Rehabilitation / Vandalism $5,000
Capital Projects $0
Total Direct Costs $37,421
Administration Costs
Administration & Overhead $5,111
County Administration Fees $0
Professional Fees $629
Total Administration Costs $5,740
Collections / (Credits) Applied To Levy
Total Direct and Administration Costs $43,161
Contribution to / (from) Reserve Fund $0
Contribution to / (from) Rehabilitation Fund $76,622
Contribution (from) General Fund / Other Revenue ($4,504) Balance to Levy $115,279
District Statistics
Tot al Parcels 533
Total Parcels Levied 533
Anticipated Total Assessed Value / $100 $1,921,317.04
Proposed Rate per $100 of Assessed Value $0.060
Maximum Rate per $100 of Assessed Value $1.25
Total Assessment Levy $115,279.02
Fund Balance Information
Beginning Operating Reserve Fund Balance $21,580.50
Operating Reserve Fund Adjustments $0.00
Anticipated Operating Reserve Fund Balance $21,580.50
Beginning Rehabilitation Reserve Fund Balance $428,866.50 Rehabilitation Reserve Fund Adjustments $76,622.00
Anticipated Rehabilitation Reserve Fund Balance $505,488.50 Anticipated Total Ending Fund Balance $527,069.00
City of V allejo
Somerset Highlands I & II Landscape Maintenance District Fund Number 0109 (#173)
Estimate of Cost