Agenda packet — Yountville City Council, August 1, 2023 (part 3 of 3)

Town of Yountville, California

INVESTMENT POLICY STATEMENT
April 2009

1. Policy
It is the policy of the Town of Yountville to invest public funds in a manner that will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Town and conforming to all California laws and local statutes governing the investment of public funds.

2. Scope
This investment policy applies to all the funds and investment activities under the direct authority of the Town of Yountville as accounted for in the Comprehensive Annual Financial Report (CAFR). Policy statements outlined in this document focus on the Town of Yountville’s pooled funds, but will also apply to all other funds under the Town Treasurers’ span of control unless specifically exempted by statue or ordinance. This policy is applicable, but not limited to, all funds listed below:
• General Fund
• Enterprise Funds
• Special Revenue Funds
• Capital Project Funds
• Debt Service Funds
• Trust and Agency Funds
Excluded funds are those held with a fiscal agent, which has their own specific “permitted investments” section in the bond covenants. These funds include funds reserved for debt service and pension funds.

3. Prudence
Investments shall be made with judgment and care -- under circumstances then prevailing -- which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

The standard of prudence to be used by the Town’s investment officials shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio. The Town Treasurer and/or Town Manager, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations that result in a loss of principal are reported to the Town Manager immediately, and to the Town Council at their next meeting addressing appropriate actions to be taken to control adverse developments.

4. Objective
The primary objectives in priority order of the Town of Yountville’s investment activities shall be:

4.1. Safety: Safety of principal is the foremost objective of the investment program.

Investments of the Town of Yountville shall be undertaken in a manner that seeks to ensure that capital losses are avoided, whether from securities default, broker-dealer default, or erosion of Investment Policy Statement 2009 SRA Council Meeting of April 7, 2009 Agenda Item #9B

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market value. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

4.2. Liquidity: The Town of Yountville’s investment portfolio will remain sufficiently liquid to enable the Town to meet all operating requirements that might be reasonably anticipated.

4.3. Return: The Town of Yountville’s investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the Town’s investment risk constraints and the cash flow characteristics of the portfolio.

No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinates. Delegation of authority shall expire one year from the date of adoption of this policy as required by State law.

6. Ethics and Conflicts of Interest
The Town Council, Town Manager and Town Treasurer shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Council Members, Town Manager and Town Treasurer shall disclose to the Town Attorney any material financial interests in financial institutions that conduct business within the jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the Town’s portfolio. The Town Attorney and Treasurer shall review all disclosures made to insure there are no conflicts with any planned investment.

7. Authorized Financial Dealers and Institutions
The Treasurer will maintain a list of financial institutions and primary dealers authorized to provide investment services. “Primary” dealers include those that regularly report to the Federal Reserve Bank and should qualify under Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule).

All financial institutions, dealers and cash managers who desire to become qualified bidders for investment transactions must supply the Town with the following: audited financial statements, proof of National Association of Security Dealers certification when applicable, completed questionnaire and certification of having read the Town of Yountville’s investment policy and depository contracts.

8. Authorized Investments and Limitations on Investments Investment of Town funds is governed by the California Government Code Sections 53600 et seq. Within the context of the limitations, the following investments are authorized, as further limited herein:

1. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio that can be invested in this category.

Investment Policy Statement 2009 SRA Council Meeting of April 7, 2009 Agenda Item #9B

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2. Federal Agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

3. Local Agency Investment Fund (LAIF) which is a State of California managed investment pool may be used up to the maximum permitted by LAIF.

4. Insured savings accounts are permitted without limitations.

Investments detailed in items 5 through 10 are further restricted to 5% of the purchase value of all investments and cash accounts (the portfolio), in any one issuer name. The total value invested in any one issuer shall also not exceed 5% of the issuer’s net worth.

5. Bills of exchange or time drafts drawn on and accepted by commercial banks, otherwise known as banker’s acceptances are permitted. Banker’s acceptances purchased may not exceed 180 days to maturity or 40% of the cost value of the portfolio.

Purchases of eligible commercial paper may not exceed 270 days to maturity nor represent more than 10% of the outstanding paper of the issuing corporation.

Purchases of commercial paper may not exceed 25% of the Town’s portfolio.

7. Negotiable certificates of deposit issued by nationally or state chartered banks or state or federal savings institutions. Purchases of negotiable certificates of deposit may not exceed 30% of total portfolio.

8. Time deposits, non-negotiable and collateralized in accordance with the California Government Code, may be purchased through banks or savings and loan associations.

Since time deposits are not liquid, no more than 25% of the investment portfolio may be invested in this investment type.

9. Medium Term Corporate Notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Securities eligible for investment shall be rated “AA” or better by Moody’s or Standard & Poor’s rating services. Purchase of medium term notes may not exceed 30% of the purchase value of the portfolio and no more than 5% of the purchase value of the portfolio may be invested in notes issued by one corporation.

10. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940. To be eligible for investment pursuant to this subdivision these companies shall either: (1) attain the highest ranking letter or numerical rating provided by not less than two of the three largest nationally recognized rating services or (2) have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in securities and obligations authorized by Government Code section 53601 and with assets under management in excess of $500,000,000. The purchase price of shares shall not exceed 15% of the investment portfolio.

Investment Policy Statement 2009 SRA Council Meeting of April 7, 2009 Agenda Item #9B

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11. California Asset Management Program (CAMP).

9. Ineligible Investments
The Town shall not invest any funds in inverse floaters, range notes, or interest-only strips that are derived from a pool or mortgages, or in any security that could result in zero interest accrual if held to maturity, or any other investment not listed in this policy.

10. Safekeeping and Custody
All securities owned by the Town, including collateral for repurchase agreements, shall be held in safekeeping by the Town’s custodian bank or a third party bank trust department, acting as agent for the Town under the terms of a custody or trustee agreement executed by the bank and by the Town. All securities will be received and delivered using standard delivery-versus-payment (DVP) procedures.

11. Percentage Limitations
Where a section specifies a percentage limitation for a particular category or investments, that percentage is applicable only at the date of purchase. Where a section does not specify a limitation on the term or remaining maturity at the time of the investment, no investment shall be made in any security, other than a security underlying a repurchase or reverse repurchase agreement or securities lending agreement authorized by this section, that at the time of the investment has a term remaining to maturity in excess of five years, unless the Town Council has granted express authority to make that investment either specifically or as a part of an investment program approved by the Town Council no less than three months prior to the investment.

12. Reporting Requirements
The Treasurer shall annually render to the Town Council a statement of investment policy, which the Council shall review and approve at a public meeting. The Council at a public meeting shall also review and approve any changes to the policy.

The Treasurer shall render a monthly transaction report to the Town Council. The Treasurer shall render a quarterly investment report to the Council within 30 days after the end of the subject quarter. The quarterly report shall include for each individual investment:
• Description of investment instrument
• Issuer name
• Maturity date
• Purchase price
• Par value
• Current market value and the source of the valuation.

The quarterly report also shall; (I) state compliance of the portfolio to the investment policy, or manner in which the portfolio is not in compliance, (II) include a description of any of the Town’s funds, investments or programs that are under the management of contracted parties, including lending programs, and (III) include a statement denoting the ability of the Town to meet its expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may not be available.

Adopted Resolution Number 1967-02, April 16, 2002
Current Review, Town Council, April 7, 2009
PUBLIC ENGAGEMENT AND LOCAL GOVERNMENT 101
1400 K Street, Suite 205 • Sacramento, CA 95814 • 916.658.8208 F 916.444.7535 • www.ca-ilg.org Strategies for Creating a More Collaborative,
Effective Council
www.ca-ilg.org/CollaborativeCouncilsStrategies
September 2011
Running local government successfully is
hard work. City officials know that it requires
serious commitment, time and knowledge on
the part of local officials and staff as well as
community members. Local policy-making is
also a collaborative activity. The current
economic and political challenges facing
California exert tremendous pressure on
mayors and council members to work
together collaboratively and effectively.

Issues that affect the future well-being of their cities also spur local officials to have conversations and collaborate with members of the public about the kind of community they envision for themselves and their children.

The need for collaboration — between individual council members, among councils as a whole and between local officials and the community — prompted the League to ask the Institute for Local Government (ILG) to conduct an Advanced Leadership Workshop on this topic during the League’s Legislative Action Days in May 2011.

Nearly 40 mayors and council members participated in this interactive, highly rated session titled “Creating More Collaborative Councils: Strategies for Effective Communication, Meeting Management and Public Engagement.” The workshop explored key issues related to the work of elected local officials and provided participants with the skills and strategies to more effectively:
• Communicate and problem-solve with colleagues;
• Maintain collaborative relationships with fellow council members; • Preside over and participate in city council meetings; • Interact with and respond to members of the public; and • Design effective and inclusive processes for engaging the public.

This article presents some of the workshop’s highlights.

Resources Available
through the Institute
The Institute’s Meeting Resource Center
aims to help local officials and agency
staff make the most of meeting time.
www.ca-ilg.org/MeetingResourceCenter
Town Council Handbook Appendix D
Strategies for Creating a More Collaborative,
Effective Council
September 2011
Institute for Local Government www.ca-ilg.org 2
Communication and Problem-Solving
On any given day, we all may do a better or worse job in effectively communicating information with others in our work, civic and family lives. The quality of communication with others can present a challenge for local elected officials, who work largely in the public sphere and must deal with multiple audiences, limited time and a broad range of content. The issue of communicating with council colleagues is no exception.

Proponents of effective communication suggest a few simple rules to help us keep our speaking and listening skills well honed, thus supporting our goals and relationships.

Be attentive. Whether with an individual colleague or in council chambers before a packed house, paying attention to the speaker, the subject at hand and (as appropriate) the interpersonal dynamics involved will make you a more effective communicator and help you to be perceived as a respectful, effective colleague and public servant.

Ask clarifying questions. This shows a desire to better understand the speaker and demonstrates both attentiveness and an interest in learning more. Typically this is a better communication choice than a quick emotional retort or an immediate explanation of your own views. Asking clarifying questions helps increase the likelihood of a more productive conversation or exchange.

Let people know you are listening. Two very simple ways to do this include paraphrasing and using a perception check. Paraphrasing is repeating the essence of the speaker’s remark, thus conveying that you’ve heard the substantive content of what he or she has said; for example, “So you’re saying that you believe this would kill all the fish in the stream — is that right?” A perception check involves acknowledging the emotional content of a speaker’s comment; for example, “I can hear that you’re very worried about the safety of neighborhood residents if we remove that stoplight,” or “I want you to know that I hear how angry you are about this and how important the issue is to you.” Both paraphrasing and a perception check can be important communication tools for council members. Neither suggests you are necessarily agreeing with the speaker or expressing your own opinion on the issue at hand.

Distinctions between Values, Interests and Positions
Your conversations with other individual council members or residents often concern topics that they (and perhaps you) feel very strongly about. It may seem there is no way to even begin to have a useful discussion about such topics. However, understanding the distinction between a value, an interest and a position can be helpful when tackling this type of situation. Consider these examples:

Strategies for Creating a More Collaborative,
Effective Council
September 2011
Institute for Local Government www.ca-ilg.org 3
• “Children are our community’s most important resource.” This is a value; • “I want a park and open space where our children can play.” This is an interest; and • “I want a park and skateboarding area at the corner of Palm and Main with the city contributing all the funds.” This is a position.

Listen for and ask about values and interests that underlie speakers’ expressed positions.

People can more readily understand each other’s values and interests than they can accept different positions. Typically there are more ways to satisfy interests than to bridge conflicting positions. A conversation about values or interests can often reduce or clarify differences.

The following basic principles of collaborative problem-solving (or “principled negotiation”), developed by Roger Fisher and William Ury and presented in their book, Getting to Yes, also offer helpful guidelines for working through a knotty issue with a colleague or guiding group discussions.

Separate the people from the problem. It’s not unusual for emotions to cloud problemsolving when people feel strongly about an issue. However, it is far more effective to attack the problem together, not each other. It’s also a much better way to preserve an important working relationship.

Focus on interests, not positions. Taking a hard negotiating position can obscure what is really wanted. A conversation about interests, which tend to be broader than positions, creates more opportunities for coming up with an idea that appeals to all participants.

Discussing interests rather than focusing on positions means that there’s a lot more to talk about and improves the chances of success.

Invent options for mutual gain. In the typical back and forth of “making your case” there is often little opportunity to jointly think about and creatively invent new ideas that may be in the interests of both (or all) negotiators. However, this type of creative thinking probably won’t occur unless it’s given a time and a place to happen, and making time for this step is especially important when addressing polarized local issues.

Insist on using objective criteria. This is perhaps the hardest problem-solving guideline to follow — but perhaps the most important — in what is often a challenging political environment. Working to creatively solve a problem or reach an accord can be advanced if the participants can agree on some sort of common standard or a result that they think makes sense.

Strategies for Creating a More Collaborative,
Effective Council
September 2011
Institute for Local Government www.ca-ilg.org 4
Civility and Council Member Behavior
Much media attention has focused lately on the question of civility in public discourse, and many city councils are grappling with the challenge of how to ensure civility among council members in their own deliberations.

Highlighting the current interest in this topic, the New Jersey State League of Municipalities recently published an article titled “The Need for Civility in Local Government Dialogue” (www.njslom.org/need_for_civility.html).

The article presents author John C. Gillespie’s 10 commandments of public civility, which include these admonishments:
• Thou shalt not allow legitimate critique of policy and practice to become a personal attack aimed at the person who devised the policy or implements the practice; • Thou shalt not rudely interrupt a colleague midsentence nor “speak over” a colleague while he or she is speaking;
• Thou shalt not pretend something is much more important than it really is simply to score points with an audience; and
• Thou shalt always recognize that your colleagues were also elected, just as you were, and deserve the same level of respect for having run and won.

Gillespie’s 10 commandments serve as useful guidelines for councils striving to improve the tone of discussions. Another helpful resource, the Institute for Local Government’s Promoting Civility at Public Meetings: Concepts and Practices (www.ca-ilg.org/civility), examines civility in conceptual and ethical terms and offers practical strategies for achieving greater civility in public discourse.

A growing number of cities are creating handbooks that help council members (and the public) better understand city government and council members’ roles and responsibilities. In addition, cities are adopting ground rules for council meetings that extend beyond procedural rules and address expectations and guidelines for council member conduct. One example of such rules comes from the City of Davis:

Council members should actively pay attention while others are talking. Council members should be aware that side conversations, note writing and nonverbal expressions made by council members can be distracting to the meeting. Be aware that other council members, staff and the public in attendance can hear and see these actions.

The City of Hayward’s Council Member Handbook includes the following:

Strategies for Creating a More Collaborative,
Effective Council
September 2011
Institute for Local Government www.ca-ilg.org 5
Council members shall accord the utmost courtesy to each other, to city employees and to the public appearing before the council and shall refrain at all times from rude and derogatory remarks, reflections as to integrity, abusive comments and statements as to motives and personalities.

Other sections of Hayward’s handbook address sanctions for violating the various rules of procedure.

Beyond Robert’s Rules of Order
Whether you serve on a board, council, commission or other governing body, it is helpful to understand how to conduct public meetings. To simplify the rules of parliamentary procedure for those who participate in public meetings, Judge David Rosenberg created a video titled “Rosenberg’s Rules of Order: Simple Parliamentary Procedures for the 21st Century.” Prior to becoming a Yolo County Superior Court judge, Rosenberg served as mayor and council member for the City of Davis and as a Yolo County supervisor. (The video is based on a two-part article written by Rosenberg and originally published in Western City magazine in 2003. A newly revised pocket guide of Rosenberg’s Rules will be available later this year.)
As part of the Institute for Local Government’s service to local officials, the video and accompanying downloadable documents are available at www.ca-ilg.org/rosenbergrules.

Effective Public Engagement
The ability to effectively involve the public in decision-making is an essential skill for local officials. Many local agencies are facing serious challenges on issues ranging from budgeting and fiscal policy to climate change and public safety. Public engagement comprises a broad range of methods to inform members of the public about decisions that affect them and to invite their participation in the process. Such methods include but are not limited to public information and outreach efforts, public consultation and public deliberation (for more information, visit www.ca-ilg.org/PEbasics).

Successful public engagement can help local agencies manage challenges by contributing to the following outcomes:
• Better identification of the public’s values, ideas and recommendations.

Well-executed public engagement can provide more nuanced views about an issue from a broader spectrum of residents than a simple “yes” or “no” election. • Residents who are more fully informed about issues and local agencies. Public engagement presents opportunities for residents to better understand the issues and challenges impacting their community, grapple with practical problems and real trade-offs, and see local agency challenges as their own.

Strategies for Creating a More Collaborative,
Effective Council
September 2011
Institute for Local Government www.ca-ilg.org 6
• Improved local agency decision-making and actions with better results. Members of the public provide rich sources of information regarding their community history and needs. This information can inform local agency decision-making and potentially produce superior results.
• Enhanced community buy-in and support. Involving members of the community in a meaningful way can build a sense of ownership and greater support for the local agency decision. It can also reduce contentiousness.
• Faster project implementation with less need to revisit issues again. Mutually agreed-upon decisions are less likely to continually reappear as issues of concern both for local agencies and community members.
• More trust — in each other and in local government. Open dialogue, shared interests and mutual problem-solving can bring disparate groups of people together, potentially resulting in increased trust in the others’ ability to solve problems and make good decisions.
• Increased community participation and leadership development. Positive experiences with public engagement can lead to better informed residents who are more likely to participate in other community activities and have the confidence and skills to become future local government leaders.

G:\INSTITUTE\Public Engagement\Publications\PE One Pagers\More Collaborative_Effective Councils_2011
About the Institute for Local Government
This resource is a service of the Institute for Local Government (ILG) whose mission is to promote good government at the local level with practical, impartial, and easy-to-use resources for California communities. ILG is the nonprofit 501(c)(3) research and education affiliate of the League of California Cities and the California State Association of Counties.

For more information and to access the Institute’s resources on Public Engagement and Local Government 101, visit www.ca-ilg.org/engagement and www.ca-ilg.org/local-government-101.

If you would like to access this resource directly, go to www.cailg.org/CollaborativeCouncilsStrategies.

APPENDIX C

FISCAL POLICIES
Town of Yountville
Financial Policies
General Finance Policy
Revenue
• The Town recognizes that its primary revenue sources are locally generated, especially TOT and sales tax revenue, and for the most part this revenue is largely generated by non-residents. Efforts to ensure continued reliability in these revenue sources must be maintained and to develop and diversify other revenue sources as applicable.
• The Town will actively establish a practice of monitoring, auditing and collecting all locally generated taxes.
• The Town will establish and maintain all user fees and charges based on the cost of providing services and shall establish a cost recovery target for those programs which are subsidized by General Fund revenues.

Budgeting and Expenditure
• The Town Council shall adopt an annual balanced budget effective from July 1st to June 30th of the following calendar year. A balanced budget requires current year operating expenses to be fully funded by current year revenues and identified undesignated/unreserved fund balance.
• Fund Balance Reserves will be used only for non-recurring “one-time” and capital projects and not for on-going operations.
• Use of long-term debt shall be limited to capital projects or special projects that cannot be financed from current revenues.
• The Town Manager is authorized to implement the programs as approved in the adopted budget. Within a specific fund the Town Manager may transfer appropriations between categories, departments, projects and programs as needed to implement the adopted budget.
• With approval of the Town Manager, unexpected appropriations may be carried forward to the next fiscal year provided funds have been previously encumbered for a specific purpose.
• The annual budget will normally include a nominal $25,000 Designated Contingency for non-recurring, unanticipated expenditures. The Town Manager may approve expenditures from this contingency if needed during the fiscal year.

Town Council Handbook Appendix C
• A capital outlay (fixed asset) purchase will be any single item or piece of equipment which costs more than $10,000 and has an expected useful life exceeding one year.
• Regular budget reports and updates shall be presented to the Town Council to provide information on the status of the Town’s financial condition. The budget may be amended during the year if necessary to reflect changes to revenues and/or expenditure projections.
• The Town shall post on its website these budget reports and updates, sales tax and TOT reports and other financial information for the public to review.

Fund Balance Reserves
Reserves shall be established, dedicated and maintained annually to meet known and estimated future liabilities.

The specific Fund Balance reserve accounts include General Reserve with a current target of $1,025,000, Reserve for Drought Water Purchases $2,000,000, Reserve for Employee Retirement Benefits (OPEB) $529,935 with a commitment by the Council to continue to build the balance in future years, and Reserve for Liability Insurance to be maintained at a minimum of $30,000 for future claims.

Capital Improvement
• Capital Improvement Program (CIP) projects will be funded by the following revenue sources:
o Available General Fund Reserves
o Available Capital Project Fund balances
o Impact Fee Fund balances
o Water and Sewer revenues for Water and Sewer projects only o Grant funding
o Other State and Federal funding sources if available
• The Town will annually develop and update a multi-year plan for capital improvements. Future capital expenditures will be projected annually for a rolling 5-year period based on projections of available funding, changes in the community and needed replacement of infrastructure.
• The Town will coordinate development of the Five Year Capital Improvement Program with the development of the operating budget.
• The annual funding for the current year of the Capital Improvement Plan shall be approved as part of the operating budget.
• Capital projects financed by bonds or other debt instruments shall be paid back within a period not to exceed the useful life of the project. • The Town Manager is authorized to implement the projects as approved in the adopted Capital Improvement Program. Within a specific fund, the Town Manager may transfer appropriations between projects as needed to implement the adopted Capital Improvement Program.

INVESTMENT POLICY STATEMENT

4. Objective
The primary objectives in priority order of the Town of Yountville’s investment activities shall be:

4.1. Safety: Safety of principal is the foremost objective of the investment program. Investments of the Town of Yountville shall be undertaken in a manner that seeks to ensure that capital losses are avoided, whether from securities default, brokerdealer default, or erosion of market value. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

4.2. Liquidity: The Town of Yountville’s investment portfolio will remain sufficiently liquid to enable the Town to meet all operating requirements that might be reasonably anticipated.

5. Delegation of Authority
Authority to manage the Town’s investment program is derived from the California Government Code. Management responsibility for the investment program is hereby delegated to the Treasurer, who shall establish written procedures for the operation of the investment program consistent with this investment policy. Procedures shall include, but not limited to, references to: safekeeping, wire transfer agreements, collateral/depository agreements, banking services contracts, local banking preferences, and other investment-related activities. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinates. Delegation of authority shall expire one year from the date of adoption of this policy as required by State law.

1. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest.

There is no percentage limitation of the portfolio that can be invested in this category.

3. Local Agency Investment Fund (LAIF) which is a State of California managed investment pool may be used up to the maximum permitted by LAIF.

4. Insured savings accounts are permitted without limitations.

6. Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided by Moody’s Investor Services, Inc., Standard & Poor’s, or Fitch Financial Services, Inc. Commercial paper shall be issued by domestic corporations having assets in excess of $500,000,000 and having a “AA” or better rating on its long term debentures as provided by Moody’s, Standard & Poor’s, or Fitch. Purchases of eligible commercial paper may not exceed 270 days to maturity nor represent more than 10% of the outstanding paper of the issuing corporation. Purchases of commercial paper may not exceed 25% of the Town’s portfolio.

8. Time deposits, non-negotiable and collateralized in accordance with the California Government Code, may be purchased through banks or savings and loan associations. Since time deposits are not liquid, no more than 25% of the investment portfolio may be invested in this investment type.

11. California Asset Management Program (CAMP).

Use of Long-Term Debt Policy
The Town recognizes that it may need to enter into long-term financial obligations to meet the demands of providing a high quality level of government services to our community. The following long-term debt policy sets the considerations for issuing debt and provides guidance in the timing and structuring of long-term debt commitments by the Town.

General Practices:

1. The Town will strive to maintain good relations with credit rating agencies, investors of the Town’s long-term financial obligations and those in the financial community that participate in the Town’s financings. The Town also will strive to maintain and improve its bond rating in order to minimize borrowing costs and preserve access to credit.

2. Bond issue proposals are to be accompanied by an analysis defining how the new issue, combined with current debt, impacts the Town’s debt capacity and conformance with Town debt policies. Such analysis shall include identification of the funding source, an assessment of the ability to repay the obligation, the impact on the current budget, commitments to future budgets, maintenance and operational impact of the facility or asset and the impact on the Town’s credit rating, if any.

3. Town Council must review such analysis, including existing debt level, ability to pay debt service, impact on Town services, and make a finding that use of debt is appropriate.

4. Debt service costs (COP, Lease Purchase Agreements and other contractual debt which are backed by General Fund Operating Revenues) are not to exceed 25% of the Town’s General Fund operating revenues.

5. Projects financed by a non general fund revenue source such as utility rate revenue and specific voter approved authorizations such as Measure A Sales Tax for flood control are not subject to the 25% of general fund revenue maximum debt service limit.

The Town will consider the issuance of long-term obligations under the following conditions:

1. The Town will use debt financing only for one-time capital improvement projects and specific nonrecurring equipment purchases, and only under the following circumstances:
• When the project is included in the Town’s adopted five-year capital improvement program (CIP) and is in conformance with the Town’s adopted General Plan.
• When the project is not included in the Town’s adopted five-year capital improvement program (CIP), but the project is an emerging critical need whose timing was not anticipated in the five-year capital improvement program, or it is a project mandated by State or Federal requirements. • When the project’s useful life, or the projected service life of the equipment, will be equal to or exceed the term of the financing.
• When there are designated General Fund revenues sufficient to service the debt, whether from project revenues, other specified and/or reserved resources, or infrastructure cost-sharing revenues.
• Debt financing (other than tax and revenue anticipation notes) is not considered appropriate for any recurring purpose such as current operating and maintenance expenditures.

2. The Town will follow all State and Federal regulations and requirements related to bonds and debt financing instruments regarding bond provisions, issuance, taxation and disclosure.

3. Costs incurred by the Town, such as bond counsel and financial advisor fees, printing, underwriter’s discount, and project design and construction costs, will be charged to the bond issue to the extent allowable by law.

4. The Town will monitor compliance with bond covenants and adhere to federal arbitrage and disclosure regulations.

5. The Town shall continually review outstanding obligations for opportunities to achieve debt service savings through refunding and shall pursue refinancing when economically feasible and advantageous.

Fund Balance Policy
Background
The Governmental Accounting Standards Board (GASB) issued Statement No.54 Fund Balance Reporting and Governmental Fund Type Definitions in February 2009. The requirements of this statement are intended to improve financial reporting by providing five fund balance categories that will be more easily understood. The five fund balance categories are clearly defined to make the nature and extent of the constraints placed on a government’s fund balance more transparent. GASB 54 requires a formal fund balance policy be adopted to fully define any constraints imposed upon the use of resources and how those constraints may be modified or eliminated. The Town implemented GASB 54 in fiscal year ending June 30, 2011.

Purpose
The Town of Yountville’s fund balance policy defines the five fund balance categories established by GASB and how the Town will report each of the categories. The policy is establishing the Town’s formal commitment of a specific amount of the Town’s fund balance to be set aside specifically for emergency contingencies defined as a state or federal emergency or declaration of a local emergency as defined in the Yountville Municipal Code Section 2.52.020. This amount and/or commitment may be changed with the adoption of a new fund balance policy resolution approved by the Town Council. This policy also provides definitions of other categories of fund balance for financial reporting and budgeting purposes. The policy authorizes and directs the Finance Director to prepare financial statements which accurately categorize fund balance per Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.

Definitions & Provisions
This Fund Balance Policy establishes the procedures for reporting unrestricted fund balance in the General Fund financial statements. Certain commitments and assignments of fund balance will help ensure accurate reporting of available resources and that there will be adequate financial resources to protect the Town against unforeseen circumstances and events such as revenue shortfalls and unanticipated expenditures.

Fund balance is essentially the difference between the assets and liabilities reported in each governmental fund. There are five separate components of fund balance, each of which identifies the extent to which the Town is bound to honor constraints on the specific purposes for which amounts can be spent.
• Non-spendable Fund Balance (inherently non-spendable) • Restricted Fund Balance (externally enforceable limitations on use) • Committed Fund Balance (self-imposed limitations on use) • Assigned Fund Balance (limitation resulting from intended use) • Unassigned Fund Balance (residual net resources)
Non-spendable fund balance is not specifically addressed in this policy due to the nature of the restriction. An example of non-spendable fund balance is a reserve for prepaid expense.

Restricted Fund Balance
PEG Fees
The Public Educational and Government Access Fund (PEG) has a restricted fund balance for PEG Fees, derived from a 1% charge that the Town’s cable franchise operator collects and remits to the Town. PEG Fees can only be used to cover capital expenses for public access television, and are prohibited from being used for operating expenses.

Committed Fund Balance
Emergency Reserve Fund
The Town’s General Fund balance committed for emergency reserves is established at a minimum of 20% of General Fund operating expenditures. The calculation and review of the 20% minimum will be part of the proposed budget each fiscal year. Use of the General Fund Emergency Reserve would be appropriate if the Town declared a state or federal emergency or declaration of a local emergency as defined in the Yountville Municipal Code Section 2.52.020:

2.52.020 Emergency defined:

As used in this chapter, “emergency” means the actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within the Town caused by such conditions as air pollution, fire, flood, storm, epidemic, riot or earthquake, or other conditions, including conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, personnel, equipment and facilities of the Town, requiring the combined forces of other political subdivisions to combat. (Ord. 225, 1991; Ord. 294-99)
OPEB Reserve Fund
The Town Council has made a commitment to funding OPEB (other post-employment benefits) and has established an IRC Section 115 Irrevocable Trust Fund to deposit these funds. There may, however, be a time when the Town is holding funds pending transfer to the OPEB Trust and those funds would be reported as the Town’s OPEB Reserve.

PERS Unfunded Actuarially Accrued Liability (UAAL) Fund The Town Council has made a commitment to funding PERS UAAL and has established a Pension Rate Stabilization Plan IRC Section 115 Irrevocable Trust Fund to deposit these funds. There may, however, be a time when the Town is holding funds pending transfer to the PERS UAAL Trust and those funds would be reported as the Town’s PERS UAAL Reserve.

Liability Insurance Reserve
The Town is a member of CIRA (California Intergovernmental Risk Authority) for purposes of liability and claims coverage. The Town’s self-insured retention for claims is $10,000 per occurrence and our policy coverage requires a minimum reserve balance for three (3) claims or $30,000. The Town may report a higher balance, but will always maintain the required $30,000 minimum.

Assigned Fund Balance
Amounts that are constrained by the Town’s intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. Both committed and assigned fund balance classifications include amounts constrained to being used for specific purposes by actions taken by the government itself. The nature of the actions necessary to remove or modify an assignment is not as prescriptive as it is with regard to the committed fund balance classification, resulting in the constraints imposed being more easily removed or modified than those imposed on committed fund balance. Furthermore, the nature of the actions necessary to remove or modify an assignment is not as prescriptive as those in the committed fund balance classification and the authority is not required to be the government’s highest level of decision making authority, but may be delegated to the Town Manager or Finance Director.

All remaining fund balance amounts that are reported in governmental funds, other than the general fund, that are not classified as non-spendable, and are neither restricted nor committed will be reported as assigned fund balance.

Arts Program Reserve
The Yountville Arts Commission has been successful in raising funds to support the Town's Art Program activities. The Arts Program was previously accounted for in the General Fund, but has been moved to the Town of Yountville Community Foundation as of fiscal Year 2018-19.

Capital Projects Reserve
The Town Council may assign a specific amount or percentage of unassigned fund balance at the end of the fiscal year to be transferred or reserved for transfer to the Town’s Capital Projects Fund.

Budget Contingency Reserve
The Town Council may assign a specific amount to be reserved for future appropriations to fund unanticipated costs or revenue shortfalls that were not anticipated at the adoption of the Town’s operating budget. As of December 4, 2018, this amount has been established at 5% of planned expenditures.

Leave Buy Out Reserve
The Town Council may assign a specific amount to be reserved for future appropriations to fund unanticipated costs related to covering costs of employees retiring and or separating from the Town to cover funding the cost of accrued leave (management and vacation leaves). The assigned amount for Fiscal Year 2023/24 is $160,000.

Legal Contingency Reserve
The Town Council may assign a specific amount to be reserved for future appropriations to fund unanticipated legal and litigation costs. As of July 1, 2020, this amount has been established at $200,000.

Unanticipated Tourism Revenue Deficit Reserve Fund (previously titled Revenue Stabilization Reserve Fund. Re-titled upon adoption of Fiscal Year 2023/2024 Budget per external auditor recommendation to better comply with Governmental Accounting Standards Board (GASB) definitions of reserve funds.)
Funds set aside to ensure the Town could respond to an unexpected drop in tourism based revenue, especially Transient Occupancy Tax (TOT). Unanticipated Tourism Revenue Deficit Reserve funding is established at a minimum of 25% of TOT revenue budget.

By approving specific assigned amounts or percentage allocations of unassigned fund balance as part of budget adoption, the Town Council would authorize Finance Director to report specific assigned amount on financial statements.

Unassigned Fund Balance
Fund balance that has no current assignment or commitment.

Use of Drought Water Reserve Bank Policy
Background
The Town has established a reasonable water supply through a combination of its longterm supply contract with the Californian Veterans Home for use of Rector Reservoir water and the completion of the Yountville Municipal Water Well to meet the community’s annual water needs. However, the Town recognizes that it may need to purchase additional water supply in long-term drought situations and has established this Drought Water Reserve Bank from the sale of its State Water Supply surplus water rights to potentially fund the purchase of drought supply water. The following policy sets the considerations for use of the Drought Water Reserve Bank by the Town.

General Practices
• The Town will continue to develop and implement reasonable water conservation programs and educational programs to educate residential and business customers on how to use less water.
• The Town will evaluate future water conservation rebate programs to see if their implementation may be appropriate. Continuation of the ultra low flow toilet and water saving appliance program and implementation of turf replacement with drought tolerant and native plants and alternative irrigation systems are examples of how to reduce water consumption are possibilities. • Town will review, update if necessary, and maintain a water usage pricing structure which encourages water conservation as allowed by state law. • The Town will implement voluntary water rationing and/or increase water rates to reduce water usage and evaluate what impact those mechanisms may have had on water consumption prior to use of mandatory water rationing practices and/or purchase of additional drought water supply.
• Town Council must review such analysis, including existing available water resources, implementation of advisory and/or mandatory water conservation practices, available water production from emergency water well, and impact on Town services, and make a finding that use of drought water bank to purchase additional water supply is appropriate.
• The purpose of the initial deposit amount into the Drought Water Reserve Bank is to provide future Town Council’s with available resources to make immediate single year drought supply water purchases on the open market. • Any use of the Drought Water Reserve Bank by the Town Council will require implementation and adoption of a plan to replenish the Bank by the same amount as used to purchase drought water supply so that the fund is available in the event of a future drought situation.

The Town will consider use of the Drought Water Reserve Bank under the following conditions:
• The Town may use its Drought Water Reserve Bank for the purchase of additional water supply under the following circumstances:
• The Town Council has declared a local Water Emergency after evaluating local water supply with needs in accordance with the Town Code, Chapter

13.24, Water Shortage Emergencies, Sections 13.24.020 through

13.24.050, or as may be amended in the future.
• The Town Council has first implemented reasonable voluntary water conservation and rationing measures in accordance with Chapter 13.20, Water conservation or as may be amended in the future.
• The Town Council has implemented mandatory water rationing program if appropriate.
• The Town Council has developed and implemented a temporary water rate increase sufficient to replenish the amount of the draw down against the Drought Water Reserve Bank so that the Bank is available for future use if necessary.
• The Town Council may use the interest earnings from the Drought Water Reserve Bank to annually fund rebate programs (existing or new programs) that help to reduce overall municipal water usage by the customer. • The Town Council may use interest earnings and fund balance from the Drought Reserve Bank to make water utility capital projects possible and reduce the impact to the rate payer while maintaining a strong fund balance. • The Town Council may use the fund to pay for capital construction cost for water projects which are designed for the purpose of increasing the Town’s water storage capacity or increase water production to meet drought water supply needs.
• The Town shall continually review and work with its partner City of Napa to develop opportunities to achieve reduced water consumption through implementation of new technology, community education and implementation of appropriate water conservation programs when economically feasible and advantageous.

Adopted on December 5, 2017 by Resolution Number 17-3448 OPEB (Other-Post Employment Benefits) Funding Policy
Town Council initially adopted an OPEB funding policy and multi-year financing plan approving a funding rate schedule with the adoption of Resolution Number 2962-08 on June 24, 2008. The policy established the OPEB funding allocation percentage, calculated on full-time salaries, and each fiscal year considered allocating additional allocations to fund the Town’s OPEB liability.

The Town Council approved an updated OPEB funding policy with the adoption of Resolution Number 3006-11 on December 6, 2011 approving the following payroll allocation rates and funding:
• Fiscal Year 2012/13: 8% of full-time salaries.
• Fiscal Year 2013/14: 9% of full-time salaries.
• Fiscal Year 2014/15: 10% of full-time salaries.

Town Council may consider approval of additional funding allocations to OPEB at the time unassigned funds become available.

In June 2014 Council approved Resolution Number 3188-14 adopting the current OPEB funding policy. The policy statement is to fully fund the ARC (annual required contribution) each fiscal year. The policy establishes the following procedure:
• Each fiscal year staff will present the proposed budget with the payroll allocation funding rate required to fully fund the ARC.
• Town Council will review and approve and/or modify the rate during the budget review process each year.

Adopted June 17, 2014 by Resolution Number 3188-14
Water & Wastewater Utility Enterprise Fund Rate Philosophy Historical Background
The Town of Yountville operates both water and wastewater utility enterprise fund operations which serve the residents of the Town and, in the case of the water enterprise fund, an additional 32 accounts located along Yountville Cross Road.

Enterprise Fund operations are designed by nature to operate more like a private sector business model as compared to general government services. For the past decade the Town has operated its water and wastewater utility enterprise funds in a manner which included a significant General Fund subsidy averaging $300,000 per year to cover water operating expenses and capital project expenses for both the water and wastewater utility enterprise funds.

On February 10, 2011 the Town Council adopted a five (5) year phased rate schedule that was designed to end the General Fund subsidization of these enterprise funds. The Town Council issued a policy statement that the enterprise funds should no longer be subsidized and requested a formal policy be brought back to the Council.

Purpose
The Town will establish Utility Enterprise Funds for Town services when the intent of the Town is that all costs of providing the service shall be recovered primarily through ratepayer charges.

General Policy Practices
• Enterprise Funds will be established for Town-operated utility services such as the water and wastewater operations.
• Enterprise Fund expenditures will be established at a level sufficient to properly maintain the fund’s infrastructure and provide for necessary capital improvements.
• The Town Council will review and adopt utility rates as needed to appropriately cover the costs of all operations, including maintenance, depreciation, capital and debt service requirements, reserves as established by Town Council policy, and provide for an adequate level of working capital
• Enterprise Fund services will establish and maintain reserves for general contingency and capital purposes consistent with those maintained for general governmental services.
• Revenue bonds shall be issued only when projected operating revenues and reserves are insufficient for the timely completion of enterprise capital projects. • Town Council shall continue the five (5) year phased utility rate increase for water and wastewater approved on February 10, 2011 which is designed to end General Fund subsidy and operating deficits of each enterprise fund over the next five (5) years.

Adopted June 21, 2011 by Resolution Number 2974-11
Use of Water and Wastewater Utility Enterprise Capital Projects Restricted Fund Policy
Historical Background
The Town of Yountville operates both water and wastewater utility enterprise fund operations which serve the residents and business community of the Town, and, in the case of the water enterprise fund, an additional 32 accounts located along Yountville Cross Road. Enterprise Fund operations are designed by nature to operate more like a private sector business model as compared to general government services which are funded by the General Fund.

On February 10, 2011, the Town Council adopted a five (5) year phased rate schedule that was designed to end the General Fund subsidization of these enterprise funds. The Town Council issued a policy statement that the enterprise funds should no longer be subsidized and requested a formal policy be brought back to the Council. For the prior decade the Town had operated its water and wastewater utility enterprise funds in a manner which included a significant General Fund subsidy averaging more than $300,000 per year to cover water operating expenses and capital project expenses for both the water and wastewater utility enterprise funds.

Due to strong overall management of revenues and controlling expenditures, the Town’s fiscal condition has improved significantly since 2011. The Town Council has been disciplined with its financial fund management and principally through use of the year end Unassigned Fund Balance allocation process the Town has been able to incrementally increase funding for its Emergency Reserve Fund, Revenue Stabilization Fund, and Capital Projects Fund 50, and to establish irrevocable OPEB and Pension UAL Reserve Funds, establish and fund Fleet & Equipment Reserve Funds, and set aside funding to support for affordable housing. On October 18, 2022, the Town Council created the Water and Wastewater Utility Enterprise Capital Projects Restricted Fund which could be funded by allocations from the General Fund Unassigned Fund Balance allocation process.

Purpose
Funds may only be used for the purpose of paying down utility enterprise fund capital debt expenses or to fund the costs of projected utility enterprise fund capital costs only and may not be used to pay for annual operating costs.

General Practices
• Enterprise Funds will be established for Town-operated utility services such as the water and wastewater operations.
• Enterprise Capital Fund expenditures will be established at a level sufficient to properly maintain infrastructure and provide for necessary capital improvements. • The Town Council will review and adopt utility rates as needed to appropriately cover the costs of all operations, including maintenance, depreciation, capital and debt service requirements, reserves as established by Town Council policy, and provide for an adequate level of working capital.
• As a part of its periodic five (5) year phased utility rate review process, the Town Council may allocate and transfer funds from the General Fund Water and Wastewater Utility Enterprise Capital Projects Restricted Fund for the purposes of paying off debt or to pay for planned enterprise fund capital projects identified in the next five (5) year of planned capital projects thereby reducing impact to ratepayers.
• Enterprise Fund services will establish and maintain reserves for general contingency and capital purposes consistent with those maintained for general governmental services.
• Revenue bonds shall be issued only when projected operating revenues and reserves are insufficient for the timely completion of enterprise capital projects. • General Fund revenues are not to be used for annual operating expenses for the Water and Wastewater Utility Enterprise Funds.

Funding and Replenishment
This restricted fund could receive funding through a re-allocation of prior year General Fund Unassigned Fund Balance upon completion of the annual audit process if funds are available. Future contributions would either grow the existing fund balance or replenish funds that were used.

Adopted by the Yountville Town Council on October 18, 2022. - 1 -

TOWN OF YOUNTVILLE
Capitalization and Depreciation Policy
The Town of Yountville has a Capital (Fixed) Asset Accounting System to safeguard a sizeable investment, fix responsibility for the custody of equipment, assist in the formulation of acquisition and retirement policies through accumulation of data regarding prices, sources of supply and useful life, to provide data for financial reporting, to provide record support and to account for reimbursement of depreciation under grants and proprietary service programs, and to provide information for insurance purposes.

Fixed assets are capitalized because they are used in the production of the goods or services provided and sold. Depreciation must be recorded to determine total expenses, user charges, net income, and changes in fund equity. Capital assets also may serve as a basis for debt issued to establish, acquire, or improve a public enterprise.

Capital assets are reported in the applicable proprietary funds or in the general fixed assets account group.

Definitions
Capital assets are assets of a relatively permanent nature and of significant value, and are broadly classified as property, plant, equipment, and infrastructure (e.g. roads, bridges, sidewalks, and similar items) assets.

Land includes the investment in real estate other than:
a. Structures, pipeline, pump stations, reservoirs and other improvements, and b. Land acquired for pipeline and road purposes.

All land, as above defined, shall be capitalized without regard for significance of cost.

Buildings and improvements are physical property of a permanent nature, examples of which are buildings, structural attachments, storage tanks, reservoirs, pump stations, wells, and parking areas.

Sidewalks, trees and drives in connection with other structures should also be capitalized. Fixtures are permanent attachments to structures which are not intended to be removed and which function as part of the structure, such as boilers, pumps, lighting fixtures or plumbing.

Pipelines include mains, services, valves, hydrants, manholes, and other appurtenances. Paving of ditch lines is also included in plant values.

Equipment includes moveable personal property of a relatively permanent nature and of significant value, such as machines, tools, and vehicles, computer equipment and software.

Relatively permanent is defined as a useful life in excess of one year.

Significant value is defined as a minimum initial cost of more than $10,000 ($25,000 for infrastructure type assets.
- 2 -
Treatment of Costs Subsequent to Acquisition
Expenditures on fixed assets which are incurred after their original acquisition are defined and recorded as follows:

Maintenance is defined as expenditures, which neither materially add to the value of property nor appreciably prolong its life, but merely keep it in an ordinary efficient operating condition.

Maintenance costs shall not be capitalized.

Capitalized Expenditures are defined as expenditures, which materially add to the value of property or appreciably extend its life. The cost of capitalized expenditures should be added to the book value of the asset where the original cost of a component being improved can be specifically identified. This amount should be written off and the new cost capitalized. Capitalized expenditures are on occasion referred to as betterments. The decision as to whether an expenditure should be capitalized shall be made by an evaluation of engineering, physical, or other relevant factors apart from cost.

Additions are new and separate units, or extensions of existing units, and are considered to be fixed assets. As with betterments the test of significance should be applied.

Alterations are changes in the physical structure or arrangement of fixed assets, the cost of which does not qualify as an increase in fixed assets under the foregoing definitions of betterments and additions. Alterations shall not be capitalized.

Valuation
Reasons for Assigning Value
A dollar-value should be assigned to each fixed asset item for the following reasons:
a. Dollar amounts serve as a control device; they are an important aspect of identification of a particular item or group of items.
b. Dollar amounts make it possible to present to the public the Town’s investment in fixed assets.
c. Dollar amounts provide a check on the adequacy of the Town’s insurance coverage. d. Dollar amounts on individual items provide information for cost accounting.

Valuation Basis
Fixed assets should be accounted for at historical cost, or estimated historical cost if purchased or constructed. Donated fixed assets should be recorded at their estimated fair market value at the date of donation. Surplus property purchases at nominal prices far below actual value are in part donations and should be so valued.

Land Cost
The cost of land includes all expenditures in connection with its acquisition, such as: purchase price; appraisal and negotiation fees; title search fees; surveying fees; cost of consents; relocation costs; condemnation costs; clearing land for use; demolishing or removing structures; and filing costs.

Receipts from the sales of salvage should be credited against the land cost. - 3 -
Buildings and Improvements Cost
The cost of structures and improvements includes all expenditures in connection with their acquisitions, such as: purchase price or construction cost; fixtures attached to the structure; architects’ fees; accident or injury costs; payment of damages; insurance during construction; cost of permits and licenses; and net interest cost during construction.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

The cost should be reduced for: sale of salvage from materials charged against the construction; discounts, allowance and rebates secured; and amounts recovered through surrender of liability and casualty insurance. Rentals of property during the construction period should be credited to revenue unless otherwise restricted.

Equipment Cost
The cost of equipment includes: purchase price or construction cost less discounts; freight or other carriage charges; sale, use, or transportation taxes; and installation costs.

Construction by Force Account
Fixed assets constructed by the Town are recorded in the same manner as those acquired by purchase or construction contract. Costs are initially charged to the accounts of the cost center performing the construction and are then transferred to the project. These costs include direct labor, materials, equipment usage and overhead. Overhead is limited to those items, such as worker’ s compensation and employee group insurance premiums, retirement, sick leave and vacation allowances, which can be distributed on the basis of direct labor. Administrative overhead outside the cost center may be capitalized when clearly related to the construction.

Assets Acquired Under Lease Purchase Agreements
Lease contracts convey property to another for a specific period of time for a specified rent. Lease contracts are accounted for either by the operating method under which periodic payments are charged as expenditures, or by the financing method under which the payments are treated as debt service.

Sources of Information
Information regarding fixed asset additions is best taken from purchase invoices and contracts, even though there is sometimes an undue lag between physical possession of the property and the receipt of these documents. The individual department head controls the purchase, movement, and disposition of assets.

Disposition of Fixed Assets
With Town Manager approval, capital assets may be sold, abandoned or traded in on new assets.

Regardless of the manner of disposition or the amount of the proceeds, the asset must be removed from the fixed asset account at its recorded value along with the asset’s accumulated depreciation. - 4 -
The resulting gain or loss is recorded in the revenue and expense accounts.

Recordkeeping
Individual Records
An individual record of each unit of accountability should be maintained. Information recorded should include:
a. Date acquired.
b. Classification, such as: Buildings, Vehicles, Machinery & Equipment, etc. c. The vehicle unit number assigned.
d. An abbreviated word description.
e. Cost or other basis.
f. Method by which acquired, such as: lease, grant, donation, purchase. g. Grant from which purchased, if applicable.
h. Vendors name, if purchased.
i. Date and method of retirement.
j. Posting reference.

Optional data might include value for insurance purposes, estimated life, and equipment class code.

Subsidiary Records
For control purposes it is convenient to group detailed records by classification, department, or by location. Such records constitute a subsidiary ledger to the fixed asset control accounts.

Physical Inventories
To ensure that the system is functioning as intended, complete physical inventories of equipment should be taken at intervals prescribed by law, or, in the absence of applicable statute, the judgement of the local governing body. The taking of inventories will be facilitated if the property accounting officer provides a current listing in numerical order of the equipment charged to departments. The listing form should provide space for checking each item present, notation of exceptions and certification. In addition to the above, the property accounting officer, in the interests of internal control, should conduct test-check physical inventories of departments or item-groups selected at random. Failure to find any item should be discussed with the department head as promptly as possible.

Shortages and Overages
An investigation of any shortages or overages should be made in cooperation with the department involved. Frequently such a condition is due to an accounting lag in recording acquisitions, transfers and dispositions. Overages are seldom unexplainable. Shortages may exist because of the above lag, or because of pilferage. Any shortage still unexplained after a reasonable effort to determine the cause should be reported to the board of directors for appropriate action.

Depreciation
Depreciation, depletion, or amortization of capital assets must be recorded to determine the total expenses, net income, and changes in fund equity. In addition, as an option, depreciation on fixed - 5 -
assets acquired by contributed capital can be closed to the contributed capital account. This method should be considered when there is no obligation and the policy is not to replace the fixed assets with future contributed capital. In such circumstances, the contributed capital rather than the retained earnings account is decreased by the related depreciation expense.

Depreciation is computed using the straight-line method over the estimated years of useful life at the time the asset is placed in service. Useful life shall be determined by the Public Works Director, Finance Director or Town Manager, as appropriate, using the following guidelines:

Assets Years
Buildings 30
Building improvements 15-20
Public Domain Infrastructure 50
System Infrastructure 50-100
Vehicles 7
Office Equipment 3-7
Computer Equipment 3-5
Once established, the useful life may be modified as necessary to account for betterments or impairments of an asset.

Adopted by Town Council February 3, 2009
Investment Policy Statement 2009 SRA Council Meeting of April 7, 2009 Agenda Item #9B

Page 1 of 4 ends

Town of Yountville, California

INVESTMENT POLICY STATEMENT
April 2009

4. Objective
The primary objectives in priority order of the Town of Yountville’s investment activities shall be:

4.1. Safety: Safety of principal is the foremost objective of the investment program.

Page 2 of 4 ends

market value. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

4.2. Liquidity: The Town of Yountville’s investment portfolio will remain sufficiently liquid to enable the Town to meet all operating requirements that might be reasonably anticipated.

Investment Policy Statement 2009 SRA Council Meeting of April 7, 2009 Agenda Item #9B

Page 3 of 4 ends

3. Local Agency Investment Fund (LAIF) which is a State of California managed investment pool may be used up to the maximum permitted by LAIF.

4. Insured savings accounts are permitted without limitations.

Purchases of eligible commercial paper may not exceed 270 days to maturity nor represent more than 10% of the outstanding paper of the issuing corporation.

Purchases of commercial paper may not exceed 25% of the Town’s portfolio.

8. Time deposits, non-negotiable and collateralized in accordance with the California Government Code, may be purchased through banks or savings and loan associations.

Since time deposits are not liquid, no more than 25% of the investment portfolio may be invested in this investment type.

Investment Policy Statement 2009 SRA Council Meeting of April 7, 2009 Agenda Item #9B

Page 4 of 4 ends

11. California Asset Management Program (CAMP).

Adopted Resolution Number 1967-02, April 16, 2002
Current Review, Town Council, April 7, 2009

APPENDIX D

STRATEGIES FOR CREATING A MORE

COLLABORATIVE, EFFECTIVE COUNCIL
PUBLIC ENGAGEMENT AND LOCAL GOVERNMENT 101
1400 K Street, Suite 205 • Sacramento, CA 95814 • 916.658.8208 F 916.444.7535 • www.ca-ilg.org Strategies for Creating a More Collaborative,
Effective Council
www.ca-ilg.org/CollaborativeCouncilsStrategies
September 2011
Running local government successfully is
hard work. City officials know that it requires
serious commitment, time and knowledge on
the part of local officials and staff as well as
community members. Local policy-making is
also a collaborative activity. The current
economic and political challenges facing
California exert tremendous pressure on
mayors and council members to work
together collaboratively and effectively.