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2004-01-28 e-packet
SPECIAL MEETING CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BUILDING CITY COUNCIL COMMUNITY ROOM 33 ARROYO DRIVE JANUARY 28, 2004 6:15 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, the 28~ day of January, 2004, at 6:15 p.m., in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: 1. Call to Order 2. Roll Call 3. Public Comments - comments are limited to items on the Special Meeting Agenda 4. Interview applicants for the Parking Place and Cultural Arts Commissions 5. Discussion and appointments to Parking Place and Cultural Arts Commissions 6. Adjoumment /s/Sylvia M. Payne City Clerk AGENDA REDEVELOPMENT AGENCY CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIPAL SERVICE BUILD1NG COMMUNITY ROOM JANUARY 28, 2004 7:00 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meetings of the Redevelopment Agency are held on the second and fourth Wednesday of each month at 7:00 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE GENERALLY LIMITED TO FIVE (5) MINUTES PER SPEAKER. In the event that there are more than six persons desiring to speak, the Chair may reduce the amount of time per speaker to three (3) minutes. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. RAYMOND L. GREEN Vice Chair RICHARD A. GARBARINO, SR. Boardmember RICHARD BATTAGLIA Investment Officer MICHAEL A. WILSON Executive Director KARYL MATSUMOTO Chair JOSEPH A. FERNEKES Boardmember PEDRO GONZALEZ Boardmember SYLVIA M. PAYNE Clerk STEVEN T. MATTAS Counsel PLEASE TURN OFF CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR 1. Motion to approve the minutes of January 14, 2004 2. Motion to confirm expense claims of January 28, 2004 ADMINISTRATIVE BUSINESS 3. Resolution authorizing the execution of a preconstruction loan agreement and promissory note with BRIDGE Housing Corporation for an affordable housing project at Oak and Grand Avenues in an amount not to exceed $400,000 4. Resolution approving the purchase and sale agreement for property located at 820 Tennis Drive in the amount of $840,000 and appropriating funds for the land acquisition CLOSED SESSION 5. Pursuant to Government Code Section 54956.8 real property negotiations related to 480 North Canal Street; Agency Negotiator: Redevelopment Agency Assistant Director Van Duyn ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING JANUARY 28, 2004 AGENDA PAGE 2 Redevelopment Agency Staff Report RDA AGENDA ITEM #3 DATE: January 28, 2004 TO: Redevelopment Agency Board FROM: Assistant Executive Director SUBJECT: PRE CONSTRUCTION LOAN FOR AFFORDABLE HOUSING RECOMMENDATION: It is recommended that the Agency Board adopt the attached Resolution authorizing execution of a Pre Construction Loan Agreement and Promissory Note with BRIDGE Housing Corporation, in an amount not to exceed $400,000, to undertake pre construction activities for the County owned site located at Oak and Grand Avenue. BACKGROUND/DISCUSSION: During 2003, the City and the County of San Mateo agreed to pursue use of the county surplus property, located next to the courthouse, to be developed for affordable rental housing for working families. The City issued a request for proposals, in May of 2003, soliciting development options for the 1.15 acre site located at the comer of Oak and Grand Avenue. The site, is currently unbuilt and used for agricultural purposes, will be provided by the County at favorable terms to the developer if they are able to meet the City's entitlement review requirements. The site is designated as high density residential in the General Plan (allowing 30 units/acre). However, the affordable housing density bonus allows for a 25% increase to 37.5 units/acre. Thus, the 50,100 square foot site allows for 34 units or 43 units with the density bonus. The site is bordered by surface parking lots on the county property to the west and a church and two apartment buildings to the south. Across Oak Avenue from the site is the new 30 unit townhouse development, Oak Farms. While the immediate vicinity is characterized largely by higher density residential uses fronting Mission Road and Chestnut Avenue with single-family homes behind the moderate-density apartment buildings. Redevelopment Agency Board BRIDGE Pre Construction Agreement January 28, 2004 Page 2 REOUEST FOR PROPOSALS: Last summer, nine developers were issued a Request for Proposals and three responded, among them: BRIDGE Housing, Mid Peninsula Housing Coalition, and Mercy Housing. Interestingly, the financial pro forma from each developer was very similar, that is, they all indicated the cost of the residential development to be approximately $13 million dollars. A project budget is attached to this report as Exhibit "B". The main difference was in the design concept for the proposed new construction. City Council held a study session in September to provide comments and direction to staff regarding the proposals received for the residential development. Council discussed various issues including on street parking, internal streets, accessibility, and design preferences. Based on Council's preliminary comments, the project was referred to the housing sub committee to make a recommendation regarding the preferred developer and design concept. The City Council housing sub committee reviewed all the submittals in October and interviewed the three applicants in November. The sub committee instructed staff to provide comments to the applicants in advance of the November interviews, thus giving applicants an opportunity to make changes to their design concept. Based on the interviews and City Council's comments, the sub committee recommends that BRIDGE Housing be the preferred developer for this housing project. Attached to this report is Exhibit "C", consisting of two pages (perspective and site plan) with the design concept preferred by the housing sub committee. PROJECT SCHEDULE: On January 13, 2004, the County Board of Supervisors adopted a Resolution declaring the site surplus to County needs, and authorizing the County Manager to negotiate a long term, nominal rate lease of the site, to the City or to the selected developer. This formal action by the Board of Supervisors allows BRIDGE to proceed with construction drawings, submit for entitlements from the City, and apply for construction funds from the State. The project will be subject to the City's Design Review and must be approved by the Planning Commission before returning to the Agency Board for a permanent loan agreement, affordable housing agreement and authorization to proceed with the development. At this time, a pre construction loan agreement allows BRIDGE Housing to proceed with environmental and geotechnical assessments, community outreach efforts, and preliminary drawings needed for the entitlement review process. It is anticipated that the project would go to Design Review this summer. The construction drawings would be prepared this summer and fall; and the entitlement review process is anticipated to result in approval from the Planning Redevelopment Agency Board BRIDGE Pre Construction Agreement January 28, 2004 Page 3 Commission by January of 2005. At that time, BRIDGE would submit for State Tax Credits and Multi Family Housing funds for construction costs, and return to the Agency Board for final approvals and a Construction Loan Agreement which would incorporate the pre construction loan and development requirements for the entire project. The total project cost is estimated by BRIDGE to be $13.7 million. This amount is indicative of the recent increases in construction and material costs. By comparison, Chestnut Creek, which was leased up in 2003, cost $8 million' to develop. This project will require a parking structure incorporated under the buildings and soils engineering to accommodate a sloping lot. These elements constitute a significant portion of the cost differential for the new development. The proposed per unit cost of $318,000 is still considered to be cost effective given current construction costs on the Peninsula and within the Agency's acceptable range for development costs. BRIDGE will submit for tax credits and State housing funds early next year. In order to be competitive and secure the $3.8 million anticipated from tax credits, the project will need a matching contribution from the Agency in the amount of $3.0 million. This $400,000 in pre construction loan funds is the first installment. A construction loan agreement will be brought to the Agency Board for approval, to put the final financing in place for construction, and to allow BRIDGE to secure tax credits and receive construction bids. In the unlikely event that this project does not move forward into the construction phase, it is anticipated that the pre construction loan would be forgiven. If that were the case, the Agency would be aware of the situation prior to expenditure of no more than 25% of the pre construction costs. CONCLUSION: It is recommended by the Council housing sub committee that BRIDGE Housing be authorized to proceed as developer for this project. It is further recommended that the Agency Board adopt the attached Resolution authorizing the Executive Director to execute a Pre Construction Loan Agreement and a Promissory Note with BRIDGE Housing for an amount not to exceed four hundred thousand dollars ($400,000). The terms of the Pre Construction Loan would be four percent (4%) simple interest per year. This is the same interest rate charged on the Chestnut Creek development. When the Agency and BRIDGE execute a construction loan agreement, all disbursements made under this Loan Agreement shall be considered disbursements under the construction loan agreement. BRIDGE would execute a new promissory note in favor of the Agency, which shall incorporate the funds disbursed and allocated under this Loan Agreement. Redevelopment Agency Board BRIDGE Pre Construction Agreement January 28, 2004 Page 4 Funds for this agreement are currently available from the Agency Housing Fund and budgeted for the current fiscal year in the City's Capital Improvement Budget for this residential development. The Pre Construction Loan Agreement and Promissory Note are attached as Exhibits "D" and "E" respectively. Also attached for Board review is the Resolution adopted by the Board of Supervisors, Exhibit "F". Executive Director MAW:MVD:NF Attachments: Resolution, Exhibit "A" Estimated Project Budget, Exhibit "B" Design Concepts, Exhibit "C" Pre Construction Loan Agreement, Exhibit "D" Promissory Note, Exhibit "E" San Mateo County Board Resolution, Exhibit "F" RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING A PRECONSTRUCTION LOAN AGREEMENT AND PROMISSORY NOTE WITH BRIDGE HOUSING CORPORATION TO FACILITATE DEVELOPMENT OF AFFORDABI HOUSING WHEREAS, the Agency wishes to promote the development of affordable family rental housing in the South San Francisco community and to provide a greater choice of housing opportunities for persons and families of low income; and WHEREAS, the Borrower proposes to acquire certain real property located at Oak Avenue and Grand Avenue in South San Francisco, which is owned by San Mateo County incorporated herein by reference (the "Property") to develop approximately 43 units of rental housing affordable to iow income households (the "Development"); and WHEREAS, the Borrower intends to conduct certain predevelopment activities to determine the feasibility and the scope of the intended Development and intends to prepare construction drawings and carry out other preconstruction activities for the Development; and WHEREAS, the County of San Mateo has surplused the site, and it is expected that the County will provide it to the City or Developer at favorable terms; and WHEREAS, the borrower wishes to borrow from the Agency and the Agency wishes to loan to the Borrower funds to support the Borrower's preconstruction activities, which will be used to secure commitments of State Tax Credits and grants; and WHEREAS, the Agency intends to make the loan from tax increment revenue received by the Agency for the purpose of increasing and improving the supply of low and moderate income housing pursuant to Section 3334.2 of the California Health and Safety Code. NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of South San Francisco that the Redevelopment Agency hereby approves the Preconstruction Loan Agreement with BRIDGE Housing Corporation ("Agreement"), attached hereto as Exhibit D, and the Promissory Note, attached hereto as Exhibit E. BE IT FURTHER RESOLVED that the Executive Director is authorized to execute the Agreement on behalf of the Agency. 00,0 EXHIBIT A Page 1 of 2 pages I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the __ day of ,2004 by the following vote: AYE S: NOES: ABSTAIN: ABSENT: ATTEST: S:\Current Reso's\l-281oan.for.afford. housing.rda.res.doc City Clerk EXHIBIT A Page 2 of 2 pages 00002 Alternative 2 - Tax Exempt Bonds, 4% Tax Credits, A. DEVELOPMENT EUDGET SUMMARY Land Acquisition & Related Construction Hard Cost Contingency Furnishings & Equipment Municipal & Utility Fees Archit ecture/Engineedng Construction Loan Fees Permanent Loan Fees Construction Loaf1 Interest Legal ! Title Taxes & Insurance Appraisal/Audit Marketing & Lease-up Operating Reserve Syndication Costs Soft Cost Contingency Oeveiope~' FeelAdm~n Costs 7.00% Total Uses MHP Amount Per Unit $1,500,000 $34,884 $7,682,396 $178,108 $581,081 $12,351 $75,000 $1,744 $349,458 $8,127 $833,410 $14,730 $154,345 $3,124 $114,280 $2,658 $406,838 $9,461 $135,000 $3,140 $146,207 $3,4O0 $55,000 $1,279 $85,000 $1,977 $121,308 $2,821 $1t6,736 $2,716 $150,000 $3,488 $1A32,368 $33,311 $13,648,429 $3t7,405 S. Financing Sources Construction Loan Fimt Mortgage - CHFA Bonds Bridge Loan (Tax Exempt) MHP Loan County Lend Agency Funds AHP LP T~quity GP Equity Deferred Oeveioper Fee TotalSources $0 $76,279 $34,884 $33,288 Construction InterimPermanent ......................... $8,956,304$2,496,107$0 $0 $2,496,107$2,496,107 $0 $3,931,867$0 $0 $3,280,000$3,280,000 $1,500,000$1,500,000$1,500,000 $1,431,396$1,43%396 $1,431,396 $215,000 $215,000 $215,000 $192,O53 $1,500,006$3,EA1,050 $0 $634,868 $634,888 $0 $250,000 $250,000 $12,204,753 $15,239,238 $13,648,429 C. Operating Expense Per Unit $4,100 C. UNIT MIX AND RENTS Unit Mix % Median Inc. Qb/. s.f. Mo. Rent RenUs.f. 1 Bedroom Flat 35% SMI 2 I Bedroom Fiat 45% 0 I Bedroom Fiat 50% 2 1 Bedroom Flat 60% 0 2 Bedroom TH 35% SMI g 2 Bedroom TH 45% 2 2 Bedroom TH 50% 15 2 Bedroom TH 60% 0 3 bedroom 'TH 35% SM1 4 3 Bedmom TH 45% 2 3 ~edmom TH 50% 7 3 Bedroom TH 60% 0 Total Annual Gross Rents E.FINANCING ASSUMPTIONS First MortgageAmounl $2,496,107 CalHFA Rale Term 30 MIn DCR 1.17 Erldge Loan Amount $3,931,367 Term (mos) 16 Draw Oow~ 55.00% Gap Loan Required Amounl $1,431,396 Developer Fee Gross $1,432,368 Net $547,300 600 $318 $0.53 600 $725 $1.21 600 $832 $1.39 600 $1,194 $1.99 1180 $376 $0.32 1180 $847 $0.72 1180 $925 $0.78 1180 $t,429 $1.21 1220 $431 $0.35 1220 $950 $0.78 1220 $1,050 $0,66 1220 $%647 $1.35 43 48,940 $428,898 EXHIBIT B Page 1 of 2 pages 00003, PREDEVELOPMENT BUDGET Project Name Predevelopment Time Period Total Units Total Affordable Units Total Market Rate Units Oak and Grand, South San Francisco Predevelopment 43 43 0 Cost Category Architecture/Engineering Market Study Legal Financial Consultant Fees/Permits Financing/Loan Fees Appraisal Tax Credit Fees Admin/Overhead Contingency TOTAL Total i June 2004 Predev i lnitial Amount iFeasibility $396,807i $25,000 $10000 $1o,ooo ' $15,000! $1,500 $17,500 $2,000 $3O,OOO $0 $95,890 $0 $15,000 $0 $2,000 $0 $5,OOO $1,500 $50,000 $10,000 $637,197 $50,000 Jan 2005 Planning Approvals $148,723 $o $1,500 $5,000 $12,000 $15,000 $15,000 $0 $1,500 $2O,OOO June 2005 Construction Documents TOTAL Notes $223,084 $398,807 75% of total design fees $0 $10,000 $12,000 $15,000 Acquisition and 1/2 loan doc $10,500 $17,500 1/2 fee $18,000 $30,000 Deferral Possible?? $80,890 $95,890 Total due prior to loan closing $0 $15,000 Land appraisal $2,000 $2,000 $2,000 $5,000 $20,000 $50,000 7.85% $218,723 $368,474 $637,197 EXHIBIT B Page 2 of 2 pages 00004 C~NCI~TL,IAL ~'*llON A-A OAK AVEI~IJE B. EVA'TIO~ SEIDEL/HOLZMAN OAK& GRAND AVENUES AFFORDABLE HOUSING ,,dP' B R i O O IBT'Iousin8 SEIDEL/HOLZMAN OAK& GI~AND AVENUES AFFOI~DABLE HOUSING B R I O 0 IL~°usin~ PRECONSTRUCTION LOAN AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO AND BRIDGE HOUSING CORPORATION JANUARY 2004 EXHIBIT D 00007 TABLE OF CONTENTS ARTICLE 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 DEFINITIONS .......................................................................................... 2 "AGENCY". ............................................................................................................. 2 "BORROWER" ......................................................................................................... 2 "BUDGET". ............................................................................................................. 2 "DEVELOPMENT" .................................................................................................... 2 "ELIGIBLE COSTS". ................................................................................................. 2 "LOAN". ................................................................................................................. 2 "LOAN AGREEMENT" ............................................................................................. 2 "NOTE". .................................................................................................................. 2 "PROPERTY". .......................................................................................................... 2 ARTICLE 2. 2.1 2.2 2.3 2.4 2.5 TERMS OF LOAN ................................................................................... 2 LOAN ...................................................................................................................... 2 AMOUNT OF LOAN .................................................................................................. 2 TERM OF LOAN ....................................................................................................... 3 USE OF FUNDS ........................................................................................................ 3 PREPAYMENT OF LOAN ........................................................................................... 3 ARTICLE 3. SCOPE OF ACTIVITIES ........................................................................ 3 3.1 PRECONSTRUCTION ACTIVITIES .............................................................................. 3 3.2 AGENCY OVERSIGHT .............................................................................................. 3 ARTICLE 4. LOAN DISBURSEMENT AND EARLY TERMINATION ................ 3 4.1 DISBURSEMENT OF LOAN PROCEEDS ...................................................................... 3 4.2 EARLY TERMINATION OF LOAN AGREEMENT ......................................................... 4 ARTICLE 5. INDEMNITY AND INSURANCE ...................................................... ... 4 5.1 INSURANCE COVERAGE .......................................................................................... 4 5.2 NON-LIABILITY OF OFFICERS, EMPLOYEES, AND AGENTS ..................................... 4 5.3 INDEMNITY ............................................................................................................. 5 ARTICLE 6. DEFAULT ................................................................................................. 5 6.1 BORROWER'S EVENTS OF DEFAULT ....................................................................... 5 6.2 NOTICE OF BORROWER'S DEFAULT AND OPPORTUNITY TO CURE .......................... 5 6.3 AGENCY'S REMEDIES .............................................................................................5 6.4 NOTICE OF AGENCY'S DEFAULT AND OPPORTUNITY TO CURE ............................... 5 6.5 BORROWER'S REMEDIES ........................................................................................ 6 ARTICLE 7. GENERAL PROVISIONS ....................................................................... 6 7.1 CONFLICTS OF INTEREST ........................................................................................ 6 7.2 BORROWER'S RECORDS .......................................................................................... 6 7.3 NONDISCRIMINATION ............................................................................................. 6 7.4 POLITICAL ACTIVITY .............................................................................................. 6 7.5 TERM OF THIS LOAN AGREEMENT .......................................................................... 6 00008 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 GOVERNING LAW ................................................................................................... 6 ATTORNEY FEES AND COSTS .................................................................................. 7 TIME OF THE ESSENCE ............................................................................................ 7 CONSENTS AND APPROVALS ................................................................................... 7 NOTICES, DEMANDS AND COMMUNICATIONS ......................................................... 7 BINDING UPON SUCCESSORS ..................... ~ ............................................................ 7 RELATIONSHIP OF PARTIES ..................................................................................... 7 ASSIGNMENT AND ASSUMPTION ............................................................................. 7 WAIVER .................................................................................................................. 8 INTEGRATION ......................................................................................................... 8 AMENDMENTS AND MODIFICATIONS ...................................................................... 8 8EVERABILITY ........................................................................................................ 8 00009 PRECONSTRUCTION LOAN AGREEMENT This Preconstruction Loan Agreement ("Loan Agreement") is entered into this __ day of ,2004 by and between the REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, a public body corporate and politic ("Agency"), and BRIDGE HOUSiNG CORPORATION, a California nonprofit public benefit corporation ("Borrower"). RECITALS WHEREAS, the Agency wishes to promote the development of affordable family rental housing in the South San Francisco community and to provide a greater choice of housing opportunities for persons and families of low income; and WHEREAS, the Borrower proposes to acquire certain real property located at Oak Avenue and Grand Avenue in South San Francisco, which is owned by San Mateo County incorporated herein by reference (the "Property") to develop approximately 43 units of rental housing affordable to low income households (the ,'Development"); and WHEREAS, the Borrower intends to conduct certain predevelopment activities to determine the feasibility and the scope of the intended Development and intends to prepare construction drawings and carry out other preconstruction activities for the Development; and WHEREAS, the County of San Mateo has surplused the site, and it is expected that the County will provide it to the City or Developer at favorable terms; and WHEREAS, the borrower wishes to borrow from the Agency and the Agency wishes to loan to the Borrower funds to support the Borrower' s preconstruction activities, which will be used to secure commitments of State Tax Credits and grants; and WHEREAS, the Agency intends to make the loan from tax increment revenue received by the Agency for the purpose of increasing and improving the supply of low and moderate income housing pursuant to Section 3334.2 of the California Health and Safety Code. NOW THEREFORE, in consideration of the mutual agreements, obligations, and representations, and in further consideration for the making of the Loan, the Borrower and the Agency hereby agree as follows: 1/22/04 BRIDGE Housing Corporation -Preconstruction Loan 00010 ARTICLE 1. DEFINITIONS The following terms have the meanings and content set forth in this section wherever used in this Loan Agreement, attached Exhibits, or documents incorporated into this Loan Agreement by reference. 1.1 "Agency" means the Redevelopment Agency of the City of South San Francisco, a public body corporate and politic, and its authorized representatives, officers, officials, directors, employees, and agents. 1.2 "Borrower" means the BRIDGE Housing Corporation, a California nonprofit corporation, and its authorized representatives, assigns, transferees, or successors-in-interest thereto. 1.3 "Budget" means that budget for the preconstruction activities for the Development attached as Exhibit B, incorporated herein by reference. 1.4 "Development" is the acquisition of the Property and the construction of approximately 43 units of rental housing affordable to low-income households. 1.5 "Eligible Costs" means all costs incurred by or paid by the Borrower in preparing construction drawings for the Development and other preconstruction activities, as more specifically described in the Budget. 1.6 "Loan" means the loan of funds provided by the Agency to the Borrower pursuant to this Loan Agreement. 1.7 "Loan Agreement" means this loan agreement entered into between the Agency and the Borrower. 1.8 "Note" is that unsecured promissory note executed by the Borrower in favor of the Agency evidencing the Loan in an amount not to exceed Four Hundred Thousand Dollars ($400,000.00), a form of which is attached hereto and incorporated herein as Exhibit E. 1.9 "Property" means that certain real property described in Exhibit F attached hereto and incorporated herein. ARTICLE 2. TERMS OF LOAN 2.1 Loan. The Agency agrees to provide a loan of funds to the Borrower under the terms and conditions of this Loan Agreement (the "Loan"). 2.2 Amount of Loan. On and subject to the terms and conditions of this Loan Agreement, the Agency agrees to make and the Borrower agrees to accept a Loan in an 1/22/04 BRIDGE Housing Corporation - Preconstruction Loan 2 00011 amount not to exceed Four Hundred Thousand Dollars ($400,000.00) evidenced by the Note. The Loan shall bear simple interest at the rate of four percent (4%) per annum on the principal amount outstanding from the date of the Note until paid, which interest shall be deferred and shall accrue for the term of the Loan. 2.3 Term of Loan. Subject to the provisions in Section 4.2 below, the principal of the Loan and all accrued interest thereon shall be due and payable on the earliest of (a) twenty (20) years from the date of the Note or (b) an Event of Default by the Borrower which has not been cured as provided for in this Loan Agreement. 2.4 Use of Funds. Loan proceeds may be used only for the Eligible Costs and in the amount specified in the Budget, unless otherwise approved in writing by the Agency. 2.5 Prepayment of Loan. No prepayment penalty will be charged to the borrower for payment prior to the end of the Loan term described herein, of all or any portion of the unpaid Loan principal and accrued interest. ARTICLE 3. SCOPE OF ACTIVITIES 3.1 Preconstruction Activities. The Borrower shall perform the preconstruction activities described herein within one (1) year from the date of this Loan Agreement. The Borrower shall conduct environmental and geological assessments, prepare construction documents, select a general contractor, bid subcontracts, obtain building permits and close construction financing. The Borrower shall submit the name of the proposed general contractor for the Development for the Agency's approval. The Agency's review of the general contractor shall be limited to the financial capability of the general contractor to successfully undertake a project o£the same size and scope as the Development. 3.2 Agency Oversight. The Borrower shall meet either in person or on the telephone with the Agency on a periodic basis but not less than once every two weeks to discuss the progress of the preconstruction activities for the Development. ARTICLE 4. LOAN DISBURSEMENT AND EARLY TERMINATION 4.1 Disbursement of Loan Proceeds. The Borrower shall submit requests for disbursement to the Agency at least 21 days prior to the date disbursement is needed by the Borrower. Requests for disbursement shall be made once a month unless the borrower can show a need for a more frequent disbursement of funds. Disbursement requests shall be accompanied by invoices or receipts evidencing the costs incurred or expended by Borrower in the preceding month. The Agency shall approve all requests for payment prior to disbursement of Loan proceeds for payment of any preconstruction costs incurred. At the request of the Agency, the Borrower shall provide the Agency with satisfactory documentation evidencing the payment of expenses previously funded by the Agency. 1/22/04 BRIDGE Housing Corporation - Preconstruction Loan 00012 4.2 Early Termination of Loan Agreement. (a) The Agency and the Borrower anticipate that they will enter into a Permanent Loan Agreement by December 1, 2005 in which the Agency shall loan funds to the Borrower to finance the development of the Property. If the Agency and Borrower execute a permanent loan agreement, all disbursements made under this Loan Agreement shall be considered disbursements under the permanent loan agreement. The Borrower shall execute a new promissory note in favor of the Agency, which shall incorporate the funds disbursed and allocated under this Loan Agreement. The new promissory note shall be secured by a deed of trust recorded against the Property in favor of the Agency. (b) If either the Agency or the Borrower decides that the development of the Property is not feasible and it is not advisable to enter into the permanent loan agreement, then upon ten (10) days advance written notice given to the other party, this Loan Agreement shall terminate and the Borrower shall assign to the Agency and the Agency shall assume from the Borrower all of the Borrower's rights and obligations, up to the amounts specified in the Budget, under any contracts and government approvals related to the preconstruction activities contemplated herein. The Borrower shall provide the Agency with all products prepared for the Development pursuant to this Loan Agreement, subject to the permission of Borrower's consultant(s), if such permission is required. The Agency shall immediately upon the termination of this Loan Agreement, forgive all principal and interest under the Loan and cancel the Note and reimburse the Borrower for all costs incurred by the Borrower pursuant to this Loan Agreement which have not been previously reimbursed by the Agency up to the maximum amount allowed under the Budget. The Borrower shall not be obligated to repay the Agency for any costs and expenses which may have been incurred by the Agency pursuant to this Loan Agreement, including but not limited to, any repayment under the Note. ARTICLE 5. INDEMNITY AND INSURANCE 5.1 Insurance Coverage. The Borrower shall maintain in full force and effect during the term of the Loan, public liability insurance to protect against loss from liability for property damage or bodily injury, including death therefrom, suffered by any person or persons, resulting directly or indirectly from any acts of the Borrower. Such property damage and bodily injury insurance shall also provide for and protect the Agency against incurring any legal cost in defending claims for alleged loss. Such bodily injury and property damage insurance shall name the Agency as an additional insured and shall be in the following amounts: a general aggregate eunount of not less than One Million dollars ($1,000,000.00); not less than five Hundred Thousand dollars ($500,000.00) of bodily injury and property damage insurance; provided, however, the limitation on the amount of insurance shall not limit the responsibility of the Borrower to indemnify the Agency or pay damages on account of injury to persons or property resulting from the Borrower's activities or the activities of Borrower's contractors or subcontractors. 5.2 Non-Liability of Officers, Employees, and Agents. No officer, employee, or agent of the Agency shall be held personally liable to the Borrower for any obligation 1/22/04 BRIDGE Housing Corporation- Preconstruction Loan 4 00013 created under the terms of this Loan Agreement except in the case of actual fraud or willful misconduct by such person. 5.3 Indemnity. Except for the negligence or willful misconduct of the Agency, the Borrower undertakes and agrees to defend, indermfify, and hold harmless the Agency from and against all suits and causes of action, claims, losses, demands and expenses, including, but not limited to, attorney fees and costs of litigation, damage or liability of any nature whatsoever, arising in any manner by reason of or incident to the performance of this Loan Agreement on the part of the Borrower or any contractor or subcontractor of the Borrower, whether or not contributed to by an act or omission of the Agency. ARTICLE 6. DEFAULT 6.1 Borrower's Events of Default. The occurrence of any of the following events shall constitute a "Borrower's Event of Default" under this Loan Agreement: A. the Borrower's failure to pay when due any sums payable under the Note or any advances made by the Agency under this Loan Agreement; and B. the Borrower's failure to obtain and maintain the insurance coverage required under this Loan Agreement. 6.2 Notice of Borrower's Default and Opportunity to Cure. The Agency shall give written notice to the Borrower of any Borrower's Event of Default by specifying: (a) the nature of the event or deficiency giving rise to the default, (b) the action required to cure the default, if an action to cure is possible, and (c) a date, which shall not be less than 30 calendar days from the date of receipt of the notice or the date the notice was refused, by which such action to cure must be taken, or if a cure cannot be accomplished in thirty (30) days a reasonable time thereafter. 6.3 Agency's Remedies. Upon the happening of a Borrower's Event of Default and a failure to cure said default within the time specified in the notice from Agency, the Agency's obligation to disburse Loan proceeds shall terminate and the Agency may proceed with any or all of the following remedies in any order or combination the Agency may choose in its sole discretion: A. Terminate this Loan Agreement, in which event the entire unpaid principal amount of the Loan and all accrued interest shall immediately become due and payable at the option of the Agency; B. Pursue any other remedy allowed at law or in equity. 6.4 Notice of Agency's Default and Opportunity to Cure. The Borrower shall give written notice to the Agency of any Agency's Event of Default by specifying: (a) the nature of the event or deficiency giving rise to the default, (b) the action required to cure 1/22/04 BRIDGE Housing Corporation - Preconstruction Loan 00014 the default, if an action to cure is possible, and (c) a date, which shall not be less than 30 calendar days from the date of receipt of the notice or the date the notice was refused, by which such action to cure must be taken, or if a cure cannot be accomplished in thirty (30) days a reasonable time thereafter. 6.5 Borrower's Remedies. Upon the happening of an Agency's Event of Default and a failure to cure said default within the time specified in the notice from the Borrower, the Borrower may: A. Demand payment from the Agency of any sums due the Borrower; and/or B. Pursue any other remedy allowed at law or in equity. ARTICLE 7. GENERAL PROVISIONS 7.1 Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Loan Agreement nor shall any such member, official or employee participate in any decision relating to the Loan Agreement which affects his or her personal interests or the interest of any corporation, partnership or association in which he or she is, directly or indirectly, interested. 7.2 Borrower's Records. The Borrower shall be accountable to the Agency for all funds disbursed to the Borrower pursuant to this Loan Agreement. The Borrower agrees to maintain records that accurately and fully show the date, amount, purpose, and payee of all expenditures drawn from Loan funds, and to keep all invoices, receipts, and other documents related to expenditures from said Loan funds for not less than three years after completion of the Development. 7.3 Nondiscrimination. The Borrower shall not discriminate or segregate in the development, construction, use, enjoyment, occupancy, conveyance, lease, sublease, or rental of any part of the Property on the basis of race, color, ancestry, national origin, religion, sex, sexual preference, age, marital status, family status, source of income, physical or mental disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS- related conditions, or any other arbitrary basis. The Borrower shall otherwise comply with all applicable local, state, and federal laws concerning discrimination in housing. 7.4 Political Activity. None of the funds, materials, property or services contributed by the Agency or the Borrower under this Loan Agreement shall be used for any partisan political activity or the election or defeat of any candidate for public office. 7.5 Term of This Loan Agreement. This Loan Agreement shall commence on the date first set forth above and remain in full force and effect throughout the term of the Loan. 7.6 Governing Law. This Loan Agreement shall be interpreted under and be governed by the laws of the State of California. 1/22/04 BRIDGE Housing Corporation- Preconstruction Loan 0O015 7.7 Attorney Fees and Costs. In the event any legal or administrative action is commenced to enforce the terms of this Loan Agreement, the prevailing party in any such action shall be entitled to recover all reasonable attorney fees and costs. 7.8 Time of the Essence. Time is of the essence of this Loan Agreement. 7.9 Consents and Approvals. Any consent or approval of the Agency or the Borrower required under this Loan Agreement shall not be unreasonably withheld. Any approval required under this Loan Agreement shall be in writing and executed by an authorized representative of the party granting such approval. 7.10 Notices, Demands and Communications. Notices required by this Loan Agreement shall be sufficiently given and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the principal office of the Borrower and the Agency as follows: If to Agency: Redevelopment Agency of South San Francisco 400 Grand Ave. P.O. Box 711 South San Francisco, Ca. 94083 Attn: City Clerk If to Borrower: BRIDGE Housing Corporation 1 Hawthorne Street, Suite 400 San Francisco, Ca. 94105 Attn: Lydia Tan 7.11 Binding Upon Successors. All provisions of this Loan Agreement shall be binding upon and inure to the benefit of the successors-in-interest, transferees, and assigns of each of the parties; provided, however that this section does not waive the prohibition on assignment of this Loan Agreement by the Borrower without the Agency's consent. 7.12 Relationship of Parties. The relationship of the Borrower and the Agency is and at all times shall remain solely that of a debtor and a creditor, and shall not be construed as a joint venture, equity venture, or partnership. The Agency neither undertakes nor assumes any responsibility or duty to the Borrower (except as provided for herein) or any third party with respect to the Development, the Property, or the Loan. Except as the Agency may specify in writing, the Borrower shall have no authority to act as an agent of the Agency or to bind the Agency to any obligation. 7.13 Assignment and Assumption. Other than to an affiliate of the Borrower or to a partnership of which an affiliate of the Borrower is the general partner, the Borrower shall not assign any of its interests under this Loan Agreement to any other party without 1/22/04 BRIDGE Housing Corporation- Preconstruction Loan 000:1.6 the prior written consent of the Agency. Any unauthorized assignment shall be void ab initio. 7.14 Waiver. Any waiver by the Agency or the Borrower of any obligation in this Loan Agreement must be in writing. No waiver will be implied from any delay or failure by the Agency to take action on any breach or default of the Borrower or to pursue any remedy allowed under this Loan Agreement or under applicable law. Any extension of time granted to the Borrower to perform any obligation under the Loan Agreement or Note shall not operate as a waiver or release from any of its obligations. Consent by the Agency to any act or omission by the Borrower shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the Agency's written consent to future waivers. 7.15 Integration. This Loan Agreement, including exhibits, contains the entire agreement of the parties and supersedes all prior and contemporaneous written and oral understandings. 7.16 Amendments and Modifications. Any amendments or modifications to this Loan Agreement must be in writing, and shall be effective only if executed by both the Borrower and the Agency. 7.17 Severability. Every provision of this Loan Agreement is intended to be severable. If any provision of this Loan Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 1/22/04 BRIDGE Housing Corporation -Preconstruction Loan 00017 IN WITNESS WHEREOF, the parties have executed this Loan Agreement as of the date first above written. AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO BORROWER: BRIDGE HOUSING CORPORATION By: Michael A. Wilson, Executive Director By: Approved as to form: By: Agency Counsel Attest: By: Agency Secretary 1/22/04 BRIDGE Housing Corporation - Preconstruction Loan 00015 EXHIBIT E PROMIS S ORY NOTE $400,000.00 South San Francisco, Califomia January __, 2004 FOR VALUE RECEIVED, the undersigned, BRIDGE Housing Corporation, a California nonprofit corporation, ("Borrower"), promises to pay to the order of the Redevelopment Agency of the City of South San Francisco ("Agency"), at 400 Grand Avenue, South San Francisco, California 94083, or at such other place as may be designated in writing by the holder, the principal sum of $400,000.00, together with interest in arrears from the date hereof on the unpaid principal balance, at the rate of four percent (4%) per annum. Principal shall be payable in equal annual installments, commencing on the first day of the fiscal year following the first year of stabilized operations of the Development described in that certain Loan Agreement between Agency and Borrower dated January __., 2004 ("Loan Agreement") and continuing on the same day of each year thereafter until and including the year 2024. Payment of interest accrued shall be deferred until the date this Note matures, which shall be the 20th anniversary of the date of this Note ("Maturity Date"). The remaining unpaid principal, together with any accrued interest, shall be due and payable in full on the Maturity Date, if not already paid. Provided, that any such payments shall be made only to the extent that funds are available from the net revenue generated by the Development referenced herein above, after payment of operating expenses and debt service on more senior obligations ("Residual Receipts"). All payments under this Note shall be in lawful money of the United States. In no event shall the interest and other charges in the nature of interest hereunder, if any, exceed the maximum amount of interest permitted by law. Any amount collected in excess of the maximum legal rate shall be applied to reduce the principal balance. All payments under this Note shall be applied first to late fees and costs, if any, second to interest then due, if any, and the balance to principal. The Borrower agrees to pay to the holder all costs, expenses and reasonable attorney's fees incurred in the collection of sums due hereunder, whether through legal proceedings or otherwise, to the extent permitted by law. This Note may be prepaid at any time, in whole or in part, without penalty or premium. At the option of the holder, this entire Note shall become immediately due and payable, without demand or notice, upon the occurrence of any one of the following events: (a) failure of the Borrower to pay any installment hereunder when due, which shall continue for 30 days, provided that Residual Receipts are available to pay said installment; (b) Borrower's failure to obtain and maintain the insurance required in the Loan Agreement; (c) insolvency or failure of Borrower or any guarantor to generally pay its debts as they 1/22/04 BRIDGE Housing Corporation- Preconstruction Loan 10 .00019 become due; (d) assignment for the benefit of creditors of, or appointment of a receiver or other officer for, all or any part of Borrower's or any guarantor's property; or (e) adjudication of bankruptcy, or filing of a petition under any bankruptcy or debtor's relief law by or against Borrower or any guarantor. The Borrower expressly waives presentment, demand, notice, protest, and all other demands and notices in connection with this Note. No renewal or extension of this Note, nor release of any collateral or party liable hereunder, will release the liability of Borrower. Failure of the holder to exercise any right or option shall not constitute a waiver, nor shall it be a bar to the exercise of any right or option at any future time. If any provision of this Note shall be invalid or unenforceable, the remaining provisions shall remain in full force and effect. This Note shall be governed by the laws of the State of California. IN WITNESS WHEREOF, this Promissory Note is executed on the day and year first above written. BORROWER: BRIDGE HOUSING CORPORATION By: 1/22/04 BRIDGE Housing Corporation - Preconstruction Loan 11 ' -. 00020 RESOLUTION NO. BOARD OF SUPERVISORS, COUNTY OF SAN MATEO, STATE OF CALIFORNIA RESOLUTION DECLARING REAL PROPERTY SURPLUS (C.O.P. #879) RESOLVED, by the Board of Supervisors of the County of San Mateo, State of California, that WHEREAS, on October 7, 1970 the County of San Mateo acquired certain real property as recorded in 5841 O.R. 512, records of the County of San Mateo, California, and further described as follows: Beginning at a point on the Southerly line of Grand Avenue Extension, which point is distant South 53° 15' West 118.07 feet from a granite monument set in the Westerly boundary line of the lands of the South San Francisco Land and Improvement Company, and marked "L7"; running thence Easterly line a curve to the left with a radius of 410 feet, 215.26 feet to a point on the Westerly line of Oak Avenue formerly Old Grand Avenue Extension; thence South 53° 15' West 500.59 feet along said Westerly line; thence North 36° 45' West 125 feet, to the Westerly boundary line of the lands of the South San Francisco Land and Improvement Company; thence along said Westerly boundary line North 53° 15' East 328.39 feet to the point of beginning, and WHEREAS, the herein described property is not needed for public use by the County of San Mateo, and EXHIBIT F Page 1 of 2 pages ,:00021 WHEREAS, it is the desire and intent of this Board to facilitate an increase in the affordable housing stock in the County of San Mateo. NOW THEREFORE, IT IS HEREBY DETERMINED AND ORDERED AS FOLLOWS: That it is the opinion of this Board that the real property herein described and located in the County of San Mateo is not needed for public use by the County of San Mateo. That the County Manager, or his designee, is hereby ordered and authorized to enter into negotiations with the City of South San Francisco, or its designated and duly selected developer, for a long-term, nominal rate lease of such real property for use in the development of affordable housing and, if necessary, to enter into an Exclusive Right to Negotiate Agreement to facilitate the negotiation of such lease agreement. EXHIBIT F Page 2 of 2 pages .00022 RDA AGENDA ITEM #4 Resolution approving the purchase and sale agreement for property located at 820 Tennis Drive in the amount of $840,000 and appropriating funds for the land acquisition Item to be removed from the agenda AGENDA CITY COUNCIL CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIPAL SERVICE BUILDING COMMUNITY ROOM JANUARY 28, 2004 7:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Council business, we proceed as follows: The regular meetings of the City Council are held on the second and fourth Wednesday of each month at 7:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the City Council on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Council Chamber's and submit it to the City Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents the City Council from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE GENERALLY LIMITED TO FIVE (5) MINUTES PER SPEAKER. In the event that there are more than six persons desiring to speak, the Mayor may reduce the amount of time per speaker to three (3) minutes. Thank you for your cooperation. The City Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Council action. KARYL MATSUMOTO Mayor RAYMOND L. GREEN Vice Mayor JOSEPH A. FERNEKES Councilman RICHARD A GARBARINO, SR. Councilman PEDRO GONZALEZ Councilman RICHARD BATTAGLIA City Treasurer SYLVIA M. PAYNE City Clerk MICHAEL A. WILSON City Manager STEVEN T. MATTAS City Attorney PLEASE TURN OFF CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT AVAILABLE FOR USE BY THE HEARING IMPAIRED AT CITY COUNCIL MEETINGS CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE INVOCATION PRESENTATIONS · Report on Regional Measure 2 - Representatives of the Metropolitan Transportation Commission and Water Transit Authority · Redwood League Soccer Tournament Winners - South San Francisco Galaxy (David Lucha, Youth Soccer League, to present trophies) AGENDA REVIEW PUBLIC COMMENTS ITEMS FROM COUNCIL · Community Forum · Subcommittee Reports CONSENT CALENDAR 1. Motion to approve the minutes of January 14 and 21, 2004 2. Motion to confirm expense claims of January 28, 2004 o Motion to adopt ordinance adopting a development agreement with Fairfield Residential LLC for the mixed use transit oriented development near the South San Francisco BART station Resolution authorizing entrance into the Califomia Public Entity Insurance Joint Powers Authority (CPEIA) to allow the City to obtain excess workers compensation insurance coverage and authorizing a policy through CPEIA for approximately $140,444 annually o Resolution approving the changes to the investment policy and transmittal of the quarterly investment report o Resolution accepting funds from Genentech, Inc. to apply toward the purchase of a Fire Department thermal imaging camera and/or portable radios in the amount of $5000 7. Acknowledgement of proclamation issued: Paul Scannell, 1/15/04, Greg Cochran, 1/23/04 PUBLIC HEARINGS o Consideration of appeal of Planning Commission decision to deny a Use Permit Modification to allow sale of beer and wine for off-site consumption at an existing service station at 300 South Airport Boulevard in the Planned Commercial (P-C-L) Zoning District; P03-0045 and UPM03-0001; Applicant: Greiner Service Stations, Inc.; Owner: American River Properties - Public hearing continued from January 14, 2004 REGULAR CITY COUNCIL MEETING JANUARY 28, 2004 AGENDA PAGE 2 9. Motion to waive reading and introduce ordinances a) Repealing SSFMC Chapter 15.08 and adding SSFMC Chapter 15.08, adopting and amending the California Building Code, 2001 Edition b) Amending SSFMC Chapter 15.06 and adding SSFMC Chapter 15.06, adopting and amending the Uniform Administrative Code, 1997 Edition c) Repealing SSFMC Chapter 15.20 and adding SSFMC Chapter 15.20, adopting and amending the California Electrical Code, 2001 Edition d) Repealing SSFMC Chapters 15.24, 15.32 and 15.44 and adopting SSFMC Chapter 15.24, adopting and amending the California Fire Code, 2001 Edition e) Repealing SSFMC Chapter 15.10 and adding SSFMC Chapter 15.10, adopting and amending the Uniform Housing Code, 1997 Edition Repealing SSFMC Chapter 15.16 and adding SSFMC Chapter 15.16, adopting and amending California Mechanical Code, 2001 Edition g) Repealing SSFMC Chapter 15.12 and adding SSFMC Chapter 15.12, adopting and amending the California Plumbing Code, 2001 Edition h) Amending Chapter 15.18 of the SSFMC, to Adopt the Uniform Code for the Abatement of Dangerous Buildings, 1997 Edition, and to Repeal the Uniform Code for the Abatement of Dangerous Buildings, 1994 Edition Motion to open public hearing and continue to February 11, 2004 ADMINISTRATIVE BUSINESS 10. Discussion: Report on San Mateo County Housing Endowment and Trust (HEAT), governed by a joint powers authority to address the shortage of affordable housing in San Mateo County CLOSED SESSION 11. Pursuant to Government Code Section 54956.9(a), conference with legal counsel- existing litigation, City of South San Francisco v. WorldCom; and conference with legal counsel - anticipated litigation: significant exposure to litigation Pursuant to Government Code Section 54956.9(b): one case ADJOURNMENT REGULAR CITY COUNCIL MEETING JANUARY 28, 2004 AGENDA PAGE 3 StaffReport AGENDA ITEM DATE: TO: FROM: SUBJECT: January 28, 2004 The Honorable Mayor and City Council Steven T. Mattas, City Attorney .. An Ordinance adopting a Development Agreement with Fairfield Residential LLC for the Mixed Use Transit Oriented Development near the South San Francisco BART Station RECOMMENDATION: Adopt an ordinance to approve a Development Agreement with Fairfield Residential LLC for the Mixed Use Transit Oriented Development near the South San Francisco BART Station BACKGROUND/DISCUSSION: Council has previously waived reading and introduced the following ordinance. The Ordinance is now ready for adoption. AN ORDINANCE ADOPTING A DEVELOPMENT AGREEMENT WITH FAIRFIELD RESIDENTIAL LLC FOR TI-EE MIXED USE TRANSIT ORIENTED DEVELOPMENT NEAR TI-IE SOUTH SAN FRANCISCO BART STATION (Introduced 01/14/04 - Vote 4-0, Mayor Karyl M. Matsumoto, absent) Steven T"'. Mattas, City Attorney Mi c~ a/~el A.~il~s~t an ager Enclosure: Ordinance ORDINANCE NO. AN ORDINANCE ADOPTING A DEVELOPMENT AGREEMENT WITH FAIRF1-ELD RESIDENTIAL LLC FOR THE MIXED USE TRANSIT ORIENTED DEVELOPMENT NEARTHE SOUTH SAN FRANCISCO BART STATION WHEREAS, the South San Francisco Municipal Code allows development of the approximately 8 acre vacant site located adjacent to the newly constructed Bay Area Rapid Transit Station located on E1 Camino Real, subject to further approvals; and, WHEREAS, Fairfield Residential ("Fairfield") has submitted and received approval for a plan to develop up to 360 housing units and up to 23,000 square feet of retail space constructed on the ground floors of proposed residential buildings along McLellan Drive of which approximatelyl2,000 square feet would consist of a retail-only building (grocery); and, WHEREAS, it is anticipated that retail uses along McLellan Dri've would serve project residents, BART passengers and surrounding neighborhoods. WHEREAS, the present proposed ("Agreement"); and, the 360 unit, 23,000 square feet commercial/office project ("Project") constitutes development and is the project subject to the terms of the Development Agreement WHEREAS, a Mitigated Negative Declaration and Statement of Oven-iding Considerations has been prepared which analyzes the anticipated environmental impacts of the proposed Project; and, WHEREAS, the Applicant instructed the City to process the proposed entitlements for the Project; and, WHEREAS, pursuant to Municipal Code section 19.60.050, the Director of Economic and Community Development reviewed the application for the Agreement and found the proposed Agreement to be in the proper form, determined that the application was complete, and referred the application and Agreement to the Planning Commission for a public hearing; and, WHEREAS, on December 4, 2003, the Planning Commission held a property noticed public hearing on the proposed Agreement for the Fairfield Project and recommended that the City Council approve the Project, including this Development Agreement; and, WHEREAS, on January 14, 2004, pursuant to Municipal Code section 19.060.110 the City Council conducted a property noticed public hearing on the proposed Agreement for the project. NOW THEREFORE, the City Council of the City of South San Francisco does hereby ordain as follows: SECTION 1. Findings mo The proposed Development Agreement for the Project is consistent with the objectives, policies, general land uses and programs specified in the General Plan, as amended and adopted. This finding is based upon all evidence in the record as a whole, including, but not limited to: the City Council's independent review of these documents. The Project provides for high density residential development with a strong mixed use retail component in the City's recently adopted Transit Village District. The proposed project complies with all zoning regulations, including set backs, provision for open space, payment of park fees and monetary contributions through payment of the City's child care fee. B° The City Council has independently reviewed the proposed Development Agreement, the certified and adopted Housing Element, the General Plan, Chapters 20.78 and 20.84 of the Zoning Ordinance, Title 15 of the Municipal Code, and applicable state and federal law and has determined that the proposed Development Agreement for the Project complies with all applicable zoning, subdivision, and building regulations and with the General Plan. This finding is based upon all evidence in the record as a whole, including, but not limited to: the City Council's independent review of these documents, oral and written evidence submitted at the public hearings on the Project, including advice and recommendations from City staff. The Project includes below market rate units and a marketing plan to target those units to both governmental employees and existing residents of the City. This reflects the general plan policies, including the adopted Housing Element, to provide workforce housing. Co The proposed Development Agreement for the Project states its specific duration. This finding is based upon all evidence in the record as a whole, including, but not limited to: the City Council's independent review of the proposed Development Agreement and its determination that Section 3.2 of the Agreement states that the Agreement shall expire ten years from the effective date of the Agreement. D. The proposed Development Agreement states the permitted uses, density and intensity of use for the property subject thereto. This finding is based upon all evidence in the record as a whole, including, but not limited to: the City Council's independent review of the proposed Development Agreement and its determination that Sections 3.3 and 3.4of the Agreement set forth the development standards and the documents constituting the Project. E. The proposed Development Agreement states the maximum permitted height and size of proposed buildings on the property subject thereto. This finding is based upon all evidence in the record as a whole, including, but not limited to: the City Council's independent review of the proposed Development Agreement and its determination that Section 3.4 of the Agreement sets forth the documents which state the maximum permitted height and size of buildings. The proposed Development Agreement describes the land which will be dedicated for public purposes from the property subject thereto. This finding is based upon all evidence in the record as a whole, including, but not limited to: the City Council's independent review of the proposed Development Agreement and its determination that Exhibit A to the Agreement and the specific project approvals establish the Project boundaries and the land required for future dedication. SECTION 2. The City Council of the City of South San Francisco hereby approves the proposed Development Agreement with Fairfield Residential LLC, attached hereto as Exhibit 1 and incorporated herein by reference. SECTION 3. Severability. In the event any section or portion of this ordinance shall be determined invalid or unconstitutional, such section or portion shall be deemed severable and all other sections or portions hereof shall remain in full force and effect. SECTION 4. Publication and Effective Date. Pursuant to the provisions of Government Code Section 36933, a summary of this Ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this Ordinance is scheduled to be adopted, the City Clerk shall (1) publish the Summary, and (2) post in the City Clerk's Office a certified copy of this Ordinance. Within fifteen (15) days after the adoption of this Ordinance, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance or otherwise voting. This ordinance shall become effective thirty days from and after its adoption. Introduced at a regular meeting of the City Council of the City of South San Francisco, held the day of ,2004. Adopted as an Ordinance of the City of South Francisco at a regular meeting of the City Council held the __ day of ,2004 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk As Mayor of the City of South San Francisco, I do hereby approve the foregoing Ordinance this __ day of ,2004. Mayor S:\Current Ord's\dev. fairfield.ord. DOC StaffReport AGENDA ITEM Date: January 28, 2004 To: Honorable Mayor and City Council From: Director of Finance Subject: Approval of Memorandum of Understanding to Join California Public Entity Insurance Joint Powers Authority to Obtain Excess Workers' Compensation Insurance Coverage RECOMMENDATION: It is recommended that the City Council approve a resolution authorizing the City Manager and Finance Director to: sign documents enabling the City of South San Francisco to enter into the California Public Entity Insurance Joint Powers Authority (CPEIA) to allow the City to obtain excess workers' compensation insurance coverage; and authorizing a policy through CPEIA for approximately $140,444 annually. BACKGROUND/DICUISSION: For a number of years, the City of South San Francisco is self-insured for base workers' compensation claims. For amounts over a deductible (or self insured retention, or "SIR"), the City has purchased insurance coverage. This excess workers' compensation coverage is intended to protect the City in the event of extremely large losses only. Prior to 2001, the City's deductible was $350,000, meaning it paid for any claims up to $350,000, with the excess insurance covering any amounts over that amount. Up until 2001, the cost of excess insurance was about $40,000. As the Council is undoubtedly aware from articles in the news, workers' compensation costs have escalated in California. As a result, the City's excess insurance coverage has gotten much more expensive. Last year, the City obtained a quote through an insurance broker, DiStefano Enterprises. The most favorable quote from several insurance companies DiStefano solicited quotes from was for a renewal of excess coverage with a $1.0 million deductible, for an annual premium of $90,000. As a point of reference, since 1985, the City has had six incurred claims above $300,000, with five of the claims between $300,000 and $450,000 and with the highest claim at $717,000. This year, DiStefano secured a quote for a renewal of excess coverage for the City with a $1.0 million deductible. The most favorable quote was for $148,000 through Midwestern Employers Casualty Company. Excess Workers' Compensation Insurance Page 2 As an alternative to the rising insurance premiums in the private market, staff also asked ABAG PLAN, the Joint Powers Authority for general liability coverage that the City belongs to through the Association of Bay Area Governments, to obtain a quote for excess coverage at several deductible levels. ABAG obtained the best quote through the California Public Insurance Entity Joint Powers Authority (CPEIA). That quote came back with various deductible and premium options, summarized below: Deductible Amount Premium Estimates* $1.0million $84,581 $750,000 $102,466 $500,000 $140,444 $300,000 $228,684 $150,000 $457,823 * Numbers above are subject to final adjustments based on final review of City claims history and approval of JPA Board. Staff does not expect the final numbers to change by more than 5%. Staff believes the $500,000 deductible is the best choice for the City for two reasons. First, for roughly the same cost as the alternative offered by DiStefano this year through Midwest Casualty, the City can lower its deductible from $1.0 million to $.5 million. Second, this level of coverage achieves what excess coverage should achieve: provides a level of coverage that would protect the City from larger claims, while at the same time is not such a small deductible that the premium would be expected to increase dramatically on an annual basis. Finally, staff also believes that it makes sense for the City to join this JPA; similar to the ABAG general liability pool, the City could potentially receive dividend rebates to the extent that the Pool's funding remains above its projected level over a few years. FISCAL IMPACT: The City pays for workers' compensation costs out of the Self Insurance Internal Service Fund, and bills departments for their prorated share, based on claims history. The recommended coverage level above has been budgeted in the Self Insurance Fund. Prepared by: Finance Director Michael A. Wilson City Manager Attachments: Resolution, Joint Powers Agreement, Memorandum of Understanding and additional information on Excess Workers' Compensation Program RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE CITY MANAGER AND FINANCE DIRECTOR TO SIGN DOCUMENTS ENABLING THE CITY OF SOUTH SAN FRANCISCO TO ENTER INTO THE CALIF()RNIA PIJBLIC ENTITY INSURANCE JOINT POV~fERS AUTHORITY (CPEIA) TO ALLOW THE CITY TO (_)BTAIN EXCESS WORKERS' COMPENSATION INSURANCE COVERAGE AND AUTHORIZING A POLICY THROUGH CPEIA FOR APPROXIMATELY $ ld~0,4.44 ANNUALLY WHEREAS, the City pays for workers' compensation costs out of the Self Insurance Internal Service Fund and bills departments for their prorated share based on claims history. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby authorizes the City Manager and Finance Director to sign documents enabling the City of South San Francisco to enter into the California Public Entity Insurance Joint Powers Authority (CPEIA) to allow the City to obtain excess Workers' Compensation Insurance Coverage and authorizing a policy through CPEIA for approximately $140,444 annually. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of ,2004 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk S:\Current Reso's\ 1-28mou.caI.public.entity.res.doc Adopted: April 18, 2001 JOINT POWERS AGREEMENT CREATING THE CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY This Agreement is executed in the State of California by and among those public agencies organized and existing under the Constitution of the State of California, which are parties signatory to this Agreement. All such agencies which become members shall be listed in Appendix A, attached hereto and made a part hereof. RECITALS WHEREAS, Article 1, Chapter 5, Division 7, Title 1 of the California Government code (section 6500 et seq.) permits two or more public agencies by agreement to exercise jointly powers common to the contracting parties; and WHEREAS, the public agencies executing this Agreement desire to join together for the purpose of jointly funding, purchasing and/or establishing insurance and risk management programs as determined; and WHEREAS, Article 16, Section 6 of the California Constitution provides that insurance pooling arrangements under joint exercise of power agreements shall not be considered the giving or lending of credit as prohibited therein; and WHEREAS, California Government Code Section 990.4 provides that a local public entity may self-insure, purchase insurance through an authorized carrier, or purchase insurance through a surplus line broker, or any combination of these; and WHEREAS, California Government Code Section 990.6 provides that the cost of insurance is a proper charge against the local public entity; and WHEREAS, California Government Code Section 990.8 provides that two or more local public entities by a joint powers agreement may provide insurance by any one or more of the methods specified in Government Code Section 990.4, and the pooling of self-insured claims or losses is not considered insurance nor subject to regulation under the Insurance Code; and WHEREAS, California Govermnent Code Section 990.8 also provides that a joint powers agreement may provide that if any peril insured or covered under a contract has existed and the JPA, CPEIA Adopted: April 18, 2001 joint powers authority or other parties participating in the pool have been liable for any period, the agreement may provide that the insured or covered party is not entitled to the return of premiums, contributions, payments, or advances so far as the particular risk insured or covered is concerned; NOW THEREFORE, the parties agree as follows: ARTICLE 1. DEFINITIONS "Authority" or "CPEIA" shall mean the Califomia Public Entity Insurance Authority created by this Agreement. "Authority Program" or "CPEIA separate Program" shall mean a program authorized by the Board and apart from a program of the EIA. "Board of Directors" or "Board" shall mean the governing body of the Authority. "Excess Insurance Authority" or "EIA" shall mean the CSAC Excess Insurance Authority. "EIA Program" shall mean a program established by the EIA that is made accessible to the Authority and in which the Board may authorize Authority participation. "Fiscal Year" shall mean that period of twelve (12) months which is established by the Board as the fiscal year of the Authority. "Government Code" shall mean the California Government Code. "Insurance program" or "Program" shall mean a program of the Authority under which a participating member or other public entity is protected against designated losses, either through joint purchase of primary or excess insurance, pooling of self-insured claims or losses, purchased insurance or reinsurance or any other combination as determined by the Board. The Board may determine applicable criteria for determining eligibility in any program, as well as establishing program policies and procedures. Page 2 of 18 JPA, CPEIA Adopted: April 18, 2001 "Joint Powers Law" "Memorandum of Understanding" or "MOU" "Participating Member" or "Member" "Public Agency" "Reinsurance" "Self-Insured Retention" or "SIR" shall mean Article 1, Chapter 5, Division 7, Title 1 (commencing with section 6500) of the Government Code. shall mean a document executed by a member setting forth provisions for program coverage or establishing a program of the Authority or otherwise providing for implementation of the provisions of this Agreement. shall mean any public agency, which has entered a program of the [or, which has obtained insurance coverage through the] Authority pursuant to this Agreement and has not withdrawn or been canceled therefrom. shall also mean "public entity." shall mean insurance purchased by the Authority as part of an insurance program to cover that portion of any loss that exceeds the joint funding capacity of that program. shall mean that portion of a loss resulting from an occurrence experienced by a member that is retained as a liability or potential liability of the member and is not subject to payment by the Authority. ARTICLE 2. PURPOSES This Agreement is entered into by the members in order to jointly develop and fund insurance and other related programs as determined by members and other public entities wishing to participate in such programs or obtain services. Programs may be either EIA Programs or Authority Programs and may include, but are not limited to, the creation of joint insurance funds, including excess insurance funds, the pooling of self-insured claims and losses, purchased insurance, including reinsurance, and the provision of necessary administrative and other services. Such services may include, but shall not be limited to, risk management Page 3 of 18 JPA, CPEIA Adopted: April 18, 2001 consulting, loss prevention and control, centralized loss reporting, actuarial consulting, claims adjusting and legal defense services. ARTICLE 3. PARTIES TO THE AGREEMENT (a) Each member, as a party to this Agreement, certifies that it intends to and does contract with all other members as parties to this Agreement and, with such other members as may later be added as parties to this Agreement pursuant to Article 18 as to all programs in which the member participates. Each member also certifies that the removal of any party from this Agreement, pursuant to Articles 19 and 20, shall not affect this Agreement or the member's obligations hereunder. (b) Should any conflict arise between the provisions of this Article and any applicable Memorandum of Understanding or other similar document evidencing coverage, such Memorandum of Understanding or other document shall prevail. ARTICLE 4. TERM This Agreement shall become effective when executed and returned to the Authority within thirty (30) days after execution by at least two (2) public agencies. The Authority shall promptly notify all members in writing of the effective date of this Agreement. This Agreement shall remain in effect until terminated as provided herein. ARTICLE 5. CREATION OF THE AUTHORITY Pursuant to the joint powers law there is hereby created a public entity separate and apart from the parties hereto, to be known as the California Public Entity Insurance Authority, with such powers as are hereinafter set forth. ARTICLE 6. ACCOUNTABILITY AND REPORTS The Authority, pursuant to Govermnent Code Section 6505, shall provide for strict accountability of all funds and report of all receipts and disbursements. The auditor or controller Page 4 of 18 JPA, CPEIA Adopted: April 18, 2001 of the Authority shall contract with a certified public accountant to perform an annual audit of the accounts and records of the Authority. ARTICLE 7. POWERS OF THE AUTHORITY The Authority shall have all of the powers common to its members and all additional powers as set forth in the joint powers law, and it is hereby authorized to do all acts necessary in the exercise of said powers. Such powers include, but are not limited to, the following: (a) To make and enter into contracts. (b) To employ agents and employees. (c) To incur debts, liabilities and obligations. (d) To acquire, hold, or dispose of property, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations and public agencies. (e) To sue and be sued in its own name and to settle any claim against it. (f) To receive and use contributions and advances from members as provided in Government Code Section 6504, including contributions or advances of personnel, equipment or property. (g) To invest any money in its treasury that is not required for its immediate necessities, pursuant to Government Code Section 6509.5. (h) To carry out all provisions of this Agreement Said powers shall be exercised pursuant to the terms hereof and in the manner provided by law. ARTICLE 8. BOARD OF DIRECTORS The Authority shall be governed by a Board of Directors, which shall consist of the eleven (11) members. Beginning on July 1, 2001, the members shall consist of the nine (9) voting members of the EIA Executive Committee, plus two (2) representatives of parties to the Agreement appointed by the Board. As of January 1, 2002, the Board shall consist of seven (7) voting members of the EIA Executive Committee to be selected by the EIA Executive Committee, plus four (4) representatives of parties to the Agreement to be elected by the CPEIA members in a manner prescribed in the Bylaws. Page 5 of 18 JPA, CPEIA Adopted: April 18, 2001 ~ As of January 1, 2003 the Board shall consist of five (5) EIA Executive Committee members and six (6) elected CPEIA members. As of January 1, 2004, the Board shall consist of two (2) EIA members and nine (9) elected CPEIA members. As of January 1, 2004, the membership of the Board shall remain the same unless otherwise amended by this Agreement. If at any time sufficient CPEIA members are not available to fill their designated slots, then the EIA Executive Committee shall fill vacant positions from their own membership until the next annual election. The Board, through adoption or amendment of its Bylaws, may designate certain positions of the Board members to be from designated entities (for example, three (3) from Joint Powers Authorities, three (3) from cities, three (3) from other entities.). Seven (7) members of the Board shall constitute a quorum for the transaction of business. Each Board member shall have one vote. Except as otherwise provided in this Agreement or any other duly executed agreement of the participating members, action by the Board shall require an affirmative vote of a majority of the member present and voting. At any meeting at which a quorum is initially present the Board may continue to transact business notwithstanding the withdrawal of enough members to leave less than a quorum, provided that no action shall be valid or binding unless approved by a majority of the members of the Board. ARTICLE 9. POWERS OF THE BOARD OF DIRECTORS The Board of Directors shall have the following powers and functions: (a) The Board shall exercise all powers and conduct all business of the Authority, either directly or by delegation to other bodies or persons unless otherwise prohibited by this Agreement, or any other duly executed agreement of the member or by law. (b) The Board of Directors may adopt such resolutions as deemed necessary in the exercise of those powers and duties set forth herein. (c) The Board, in accordance with Article 12 of the Agreement, may create those committees it deems appropriate to carry out the work of the Authority. The Board may designate those committees that are advisory only, and may from time to time provide powers and duties to any committee, as the board deems appropriate. The committees may develop, evaluate and review all matters pertaining to the business of the Authority, as well as any of its Page 6 of 18 JPA, CPEIA Adopted: April 18, 2001 (e) adopt the delegated. (g) programs and services. The powers and duties so delegated shall be specified in resolutions adopted by the Board or otherwise set forth in the Bylaws. (d) The membership of any such committee may consist in whole or in part of persons who are not members of the Board. The Board may appoint or employ necessary staff in accordance with Article 13. The Board shall cause to be prepared, and shall review, modify as necessary, and annual operating budget of the Authority. Adoption of the budget may not be The Board shall develop, or cause to be developed, and shall review, modify as necessary, and adopt each program of the CPEIA, including all provisions for reinsurance and administrative services necessary to carry out such program and the Board shall determine those programs of the EIA that will be available to members of CPEIA (h) The Board shall provide for necessary services to the Authority and to members, by contract or otherwise, which may include, but shall not be limited to, staff, risk management consulting, loss prevention and control, centralized loss reporting, actuarial consulting, claims adjusting, and legal services. (i) The Board shall provide general supervision and policy direction to the staff. (j) The Board shall receive and act upon reports of the committees and the staff. (k) The Board shall act upon each claim involving liability of the CPEIA, directly or by delegation of authority to a committee, body or person, provided, that the Board shall establish monetary limits upon any delegation of claims settlement authority, beyond which a proposed settlement must be referred to the Board for approval. (1) The Board may require that the Authority review, audit, report upon, and make recommendations with regard to the safety or claims administration functions of any member, insofar as those functions affect the liability or potential liability of the Authority. The Board may forward any or all such recommendations to the member with a request for compliance and a statement of potential consequences for noncompliance. '(m) The Board shall receive, review and act upon periodic reports and audits of the funds of the Authority, as required under Article 16 of this Agreement. Page 7 of 18 JPA, CPEIA Adopted: April 18, 2001 (n) The Board may, upon consultation with a casualty actuary, declare that any funds established for any CPEIA program has a surplus of funds and determine a formula to return such surplus to the participating members that have contributed to such fund. (o) The Board shall have such other powers and duties as are reasonably necessary to carry out the purposes of the Authority. ARTICLE 10. MEETINGS OF THE BOARD OF DIRECTORS (a) The Board shall hold at least two (2) meetings each year and shall provide for such other meetings and for such special meetings, as it deems necessary. (b) The staff of the Authority shall provide for the keeping of minutes of regular and special meetings of the Board, and shall provide a copy of the minutes to each member of the Board at the next scheduled meeting. (c) All meetings of the Board and such committees as established by the Board pursuant to Article 12 herein, shall be called, noticed, held and conducted in accordance with the provisions of Government Code Section 54950 et seq. ARTICLE 11. OFFICERS The President and Vice President of the Board shall be selected as provided in the Bylaws and shall serve for one-year terms. The President, or in his or her absence, the Vice President, shall preside at and conduct all meetings of the Board. ARTICLE 12. COMMITTEES The Board of Directors may establish committees, as it deems appropriate to conduct the business of the Authority. Members of the committees shall be appointed by the Board, to serve two-year terms in accordance with the Bylaws. The members of each committee shall annually select one of their members to chair the Committee. Each committee shall be composed of at least five members and shall have those duties as determined by the Board, or as otherwise set forth in the Bylaws. Each committee shall meet on the call of its chair, and shall report to the Board. Page 8 of 18 JPA, CPEIA Adopted: April 18, 2001 ARTICLE 13. STAFF (a) Principal Staff. The following staff members shall be provided by the EIA to the Authority as set forth in the Joint Powers Agreement between the EIA and CPEIA, which provisions are incorporated herein by reference: (1) General Manager/Secretary/Treasurer. The General Manager/Secretary/Treasurer shall administer the business and activities of the Authority, subject to the general supervision and policy direction of the Board of Directors; shall be responsible for all minutes, notices and records of the Authority and shall perform such other duties as are assigned by the Board. (2) Treasurer. Pursuant to Government Code Section 6505.6, the Board shall use the Treasurer of the EIA, who shall comply with the provisions of Government Code Section 6505.5 (a-d). (3) Auditor. The Auditor shall draw warrants to pay demands against the Authority when approved by the Treasurer. Pursuant to Government Code Section 6505.6, the Board shall use the Auditor of the EIA, who shall comply with the provisions of Government Code Section 6505.5 (a-d). (b) Other Staff. The Board or General Manager/Secretary shall provide for the appointment of such other staff as may be necessary for the administration of the Authority. ARTICLE 14. DEVELOPMENT, FUNDING AND IMPLEMENTATION OF PROGRAMS (a) Access to the EIA's programs and services shall be made available to public entities and members as is more particularly set forth in the Joint Powers Agreement between the EIA and CPEIA. CPEIA programs and services may be established by the Board, the details of which will be outlined in a Memorandum of Understanding. (b) Program Coverage. Programs may include CPEIA Programs and EIA Programs both of which may provide coverage, including, but not limited to, excess or primary insurance coverage for: (1) (2) Workers' compensation; Comprehensive liability, including but not limited to general, personal injury, contractual, public officials errors and omissions, and incidental malpractice liability; Page 9 of 18 JPA, CPEIA Adopted: April 18, 2001 (3) Comprehensive automobile liability; (4) Health facilities professional liability; (5) Property and related programs; and may provide any other coverages authorized by the Board of Directors. (c) EIA Programs. CPEIA members participating in EIA programs shall execute a Memorandum of Understanding (MOU) for each EIA program in which they are a participant. Such MOU(s) may provide for, but not be limited to, program funding, Authority funding, development charges, annual premium, premium surcharge, implementation and effective date, late entry into program, administration of claims, underwriting and claims administration standards, and program withdrawal or cancellation. CPEIA members participating in EIA Programs shall fund program charges, program administrative costs and general administrative costs in accordance with the equitable allocation formula developed and approved by the EIA. (d) CPEIA Programs. Members participating in CPEIA programs shall execute a MOU for each CPEIA Program in which they are a participant. Such MOU(s) may provide for, but not be limited to, program funding, Authority funding, development charges, annual' premium, premium surcharge, implementation and effective date, late entry into program, administration of claims, underwriting and claims administration standards, and program withdrawal or cancellation. Members participating in CPEIA Programs shall fund program charges, program administrative costs and general administrative costs in accordance with an equitable allocation formula developed and approved by the Board of Directors. ARTICLE 15. ACCOUNTS AND RECORDS (a) Annual Budget. The Authority shall annually adopt an operating budget pursuant to Article 9 of this Agreement, which shall include a separate budget for each program under development or adopted and implemented by the Authority. (b) Funds and Accounts. The Auditor of the Authority shall establish and maintain such funds and accounts as may be required by good accounting practices and by the Board of Directors. Separate accounts shall be established and maintained for each program under development or adopted and implemented by the Authority. Books and records of the Authority Page 10 of 18 JPA, CPEIA Adopted: April 18, 2001 in the hands of the Auditor shall be open to inspection at all reasonable times by authorized representatives of the members. The Authority shall adhere to the standard of strict accountability for funds set forth in Government Code Section 6505. (c) Auditor's Report. The Auditor, within one hundred and twenty (120) days after the close of each fiscal year, shall give a complete written report of all financial activities for such fiscal year to the Board and to each member. (d) Annual Audit. Pursuant to Government Code Section 6505, the Authority shall either make or contract with a certified public accountant to make an annual fiscal year audit of all accounts and records of the Authority, conforming in all respects with the requirements of that section. ARTICLE 16. RESPONSIBILITIES FOR FUNDS AND PROPERTY (a) The Treasurer shall have the custody of and disburse the Authority's funds. He or she may delegate disbursing authority to such persons as may be authorized by the Board of Directors to perform that function, subject to the requirements of (b) below. (b) Pursuant to Government Code Section 6505.5, the Treasurer shall: (1) Receive and acknowledge receipt for all funds of the Authority and place them in the treasury of the Treasurer to the credit of the Authority. (2) Be responsible upon his or her official bond for the safekeeping and disbursements of all Authority funds so held by him or her. (3) Pay any sums due from the Authority, as approved for payment by the Board of Directors or by any body or person to whom the Board has delegated approval authority, making such payments from Authority funds upon warrants drawn by the Auditor. (4) Verify and report in writing to the Authority and to members, as of the first day of each quarter of the fiscal year, the amount of money then held for the Authority, the amount of receipts since the last report, and the amount paid out since the last report. (c) Pursuant to Government Code Section 6505.1, the General Manager/Secretary/Treasurer, and such other persons as the Board of Directors may designate shall have charge of, handle, and have access to the property of the Authority. Page 11 of 18 JPA, CPEIA Adopted: April 18, 2001 (d) The Authority shall secure and pay for a fidelity bond or bonds, in an amount or amounts and in the form specified by the Board of Directors, covering all officers and staff of the Authority, and all officers and staff who are authorized to have charge of, handle, and have access to property of the Authority. ARTICLE 17. RESPONSIBILITIES OF MEMBERS Members shall have the following responsibilities under this Agreement. (a) Each member shall appoint an officer or employee of the entity to be responsible for the risk management function for that member and to serve as a liaison between the member and the Authority for all matters relating to risk management. (b) Each member shall maintain an active safety program, and shall consider and act upon all recommendations of the Authority concerning the reduction of unsafe practices. (c) Each member shall provide the Authority such other information or assistance as may be necessary for the Authority to develop and implement insurance programs under this Agreement. (d) Each member shall cooperate with and assist the Authority, the EIA, and any insurer of the Authority or EIA, in all matters relating to this Agreement, and shall comply with all Bylaws, and other rules adopted by the Board of Directors. (e) Each member shall have such other responsibilities as are provided elsewhere in this Agreement, program MOU(s), and Bylaws, and as are established by the Board of Directors in order to carry out the purposes of this Agreement. ARTICLE 18. NEW MEMBERS Any non-member may become a party to this Agreement and participate in any CPEIA Program in which it is not presently participating upon approval of the Board of Directors, by a majority vote of the Board. For participation in an EIA Program, approval by the EIA in a manner prescribed by the EIA shall also be required. Page 12 of 18 JPA, CPEIA Adopted: April 18, 2001 ARTICLE 19. WITHDRAWAL A member, after becoming a participant in a program of the Authority, may withdraw from that program only at the end of a policy year for the program, and only if it gives the Authority at least sixty (60) days advance written notice of such action. ARTICLE 20. CANCELLATION (a) Notwithstanding the provisions of Article 19, the Board of Directors may: (1) Cancel any member from this Agreement and membership in the Authority, on a vote of two-thirds of the Board members present and voting. Such action shall have the effect of canceling the member's participation in all CPEIA Programs and EIA Programs as of the date that all membership is canceled. (2) Cancel any member's participation in a CPEIA or EIA Program, without canceling the member's membership in the Authority or participation in other programs, on a vote of two-thirds of the Board members present and voting. The Board shall give sixty (60) days advance written notice of the effective date of any cancellation under the foregoing provisions. Upon such effective date, the member shall be treated the same as if it had voluntarily withdrawn from this Agreement, or from the program, as the case may be. (b) A member which withdraws from all programs of the Authority in which it was a participant and does not enter any program for a period of six (6) months thereafter shall be considered to have withdrawn from the Agreement at the end of such period, and its membership in the Authority shall be automatically canceled as of that time, without action of the Board of Directors. ARTICLE 21. EFFECT OF WITHDRAWAL OR CANCELLATION (a) If a member's participation in a program is canceled under Article 20, with or without cancellation of membership in the Authority, and such cancellation is effective before the end of the policy year for that program, the Authority shall promptly determine and return to that member the amount of any unearned premium payment from the member for the policy year, such amount to be computed on a pro-rata basis from the effective date of cancellation. Page 13 of 18 JPA, CPEIA Adopted: April 18, 2001 (b) Except as provided in (a) above, a member which withdraws or is canceled from this Agreement and membership in the Authority, or from any CPEIA or EIA program, shall not be entitled to the return of any premium or other payment to the Authority, or of any property contributed to the Authority. However, in the event of termination of this Agreement, such member may share in the distribution of assets of the Authority to the extent provided in Article 22 provided; however, that any withdrawn or canceled member which has been assessed a premium surcharge pursuant to any Memorandum of Understanding shall be entitled to return of said member's unused surcharge, plus interest accrued thereon, at such time as the Board of Directors declares that a surplus exists in any insurance fund for which a premium surcharge was assessed. (c) Except as provided in (d) below, a withdrawn or cancelled member shall pay any premium charges which the Board of Directors determines are due from the member for losses and costs incurred during the entire coverage year in which the member was a participant in such program regardless of the date of entry into such program. Such charges may include any deficiency in a premium previously paid by the member, any premium surcharge assessed to the member under an MOU; and any additional amount of premium which the Board determines to be due from the withdrawn or cancelled member upon final dispOsition of all claims arising from losses under the program during the entire coverage year in which the member was a participant regardless of date of entry into such program. Any such premium charges shall be payable by the member in accordance with the Authority's invoice and payment policy. (d) Those members which who have withdrawn or been canceled pursuant to Articles 19 and 20 from any program of the Authority during a coverage year shall pay any premium charges which the Board of Directors determines are due from the members for losses and costs which were incurred during the member's participation in any program or as otherwise defined in any program MOU. ARTICLE 22. TERMINATION AND DISTRIBUTION OF ASSETS (a) This Agreement may be terminated by three-fourths of the members, acting through their governing bodies; provided, however, that this Agreement and the Authority shall continue to exist after such election for the purpose of disposing of all claims, distributing all assets, and performing all other functions necessary to conclude the affairs of the Authority. Page 14 of 18 JPA, CPEIA Adopted: April 18, 2001 (b) Upon termination of this Agreement, all assets of the Authority in each program shall be distributed among those members that participated in that program in proportion to their cash contributions, including premiums paid and property contributed (at market value when contributed). The Board of Directors shall determine such distribution within six (6) months after disposal of the last pending claim or other liability covered by the program. (c) Following termination of this Agreement, any member who was a participant in a program of the Authority shall pay any additional amount of premium, determined by the Board of Directors in accordance with a loss allocation formula, which may be necessary to enable final disposition of all claims arising from losses under that program in accordance with an applicable MOU. (d) Termination of this Agreement by any party shall not be construed as a completion of the purposes of the Agreement and shall not require the repayment or return to the parties of all or any portion of any contributions, payments, or advances made by the parties until the Agreement is rescinded or terminated as to all parties. ARTICLE 23. LIABILITY OF BOARD OF DIRECTORS, OFFICERS, COMMITTEE MEMBERS AND LEGAL ADVISORS The members of the Board of Directors, Officers, committee members and legal advisors to any Board or committees of the Authority shall use ordinary care and reasonable diligence in the exercise of their powers and in the performance of their duties pursuant to this Agreement. They shall not be liable for any mistake ofjudgrnent or any other action made, taken or omitted by them in good faith, nor for any action taken or omitted by any agent, employee or independent contractor selected with reasonable care, nor for loss incurred through investment of Authority funds, or failure to invest. No Director, Officer, committee member, or legal advisor to any Board or committee shall be responsible for any action taken or omitted by any other Director, Officer, committee member, or legal advisor to any committee. No Director, Officer, committee member or legal advisor to any committee shall be required to give a bond or other security to guarantee the faithful performance of their duties pursuant to this Agreement. The funds of the Authority shall be used to defend, indemnify and hold harmless the Authority and any Director, Officer, committee member or legal advisor to any committee for Page 15 of 18 JPA, CPEIA Adopted: April 18, 2001 their actions taken within the scope of the authority of the Authority. Nothing herein shall limit the right of the Authority to purchase insurance to provide such coverage, as is hereinabove set forth. ARTICLE 24. BYLAWS The Board may adopt Bylaws consistent with this Agreement, which shall provide for the administration and management of the Authority. ARTICLE 25. NOTICES The Authority shall address notices, billings and other communications to a member as directed by the member. Each member shall provide the Authority with the address to which communications are to be sent. Members shall address notices and other communications to the Authority to the General Manager/Secretary of the Authority, at the office address of the Authority as set forth in the Bylaws. ARTICLE 26. AMENDMENT This Agreement may be amended by a two-thirds (2/3) vote of the Board following a ninety (90) day review and comment period during which time proposed amendments shall be circulated to the members of the CPEIA and approved by the EIA Executive Committee. After five (5) years from the date of this Agreement, approval of the EIA Executive Committee shall no longer be needed for amendment of this Agreement. ARTICLE 27. PROHIBITION AGAINST ASSIGNMENT No member may assign any right, claim or interest it may have under this Agreement, and no creditor, assignee or third party beneficiary of any member shall have any right, claim or title to any part, share, interest, fund, premium or asset of the Authority. ARTICLE 28. AGREEMENT COMPLETE This Agreement constitutes the full and complete Agreement of the parties. Page 16 of 18 JPA, CPEIA Adopted: April 18, 2001 ARTICLE 29. EFFECTIVE DATE OF AMENDMENTS Any amendment of this Agreement shall become effective upon the approval of any Amended Agreement by the Board of Directors as set forth in Article 26. ARTICLE 30. DISPUTE RESOLUTION When a dispute arises between the Authority and a member, the following procedures are to be followed: (a) Request for Reconsideration. The member will make a written request to the Authority or the appropriate Committee to reconsider its position, citing the arguments in favor of the member and any applicable case law that applies. The member can also request a personal presentation to that Committee, if it so desires. (b) Committee Appeal. The committee responsible for the program or having jurisdiction over the decision in question will review the matter and reconsider the Authority's position. This committee appeal process is an opportunity for both sides to discuss and substantiate their positions based upon legal arguments and the most complete information available. If the member requesting reconsideration is represented on the committee having jurisdiction, that committee member shall be deemed to have a conflict and shall be excluded from any vote. (c) Board of Directors Appeal. If the member is not satisfied with the outcome of the committee appeal, the matter will be brought to the Board of Directors for reconsideration upon request of the member. If the member requesting reconsideration is represented on the Board, that Board member shall be deemed to have a conflict and shall be excluded from any vote. (d) Arbitration. If the member is not satisfied with the outcome of the Board of Directors appeal, the next step in the appeal process is arbitration. The arbitration may be binding or non-binding, as mutually agreed upon by the parties. The matter will be submitted to a mutually-agreed-upon arbitrator or panel of arbitrators for a determination. If binding arbitration is selected, the decision of the arbitrator or panel of arbitrators will be final and conclusive and the member and the Authority will abide by the decision of the arbitrator. The cost of arbitration will be shared equally by the involved member and the Authority. Page 17 of 18 JPA, CPEIA Adopted: April 18, 2001 (e) Litigation. If, after following the dispute resolution procedure set forth in paragraphs (a)-(d) above, either party is not satisfied with the outcome of the non-binding arbitration process, either party may consider litigation as a possible remedy to the dispute. ARTICLE 31. FILING WITH SECRETARY OF STATE The General Manager/Secretary of the Authority shall file a notice of this Agreement with the office of California Secretary of State within 30 days of its effective date, as required by Government Code Section 6503.5 and within 70 days of its effective date as required by Government Code Section 53051. IN WITNESS WHEREOF, the undersigned party hereto has executed this Agreement on the date indicated below. DATE: BY: MEMBER Page 18 of 18 Adopted: 06/01/01 CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY EXCESS WORKERS' COMPENSATION PROGRAM MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (hereafter "MEMORANDUM") iS entered into by and between the California Public Entity Insurance Authority (hereafter "CPEIA"), the CSAC Excess Insurance Authority (hereafter "EIA") and the participating public entities (hereafter "MEMBERS") who are signatories to this MEMORANDUM. JOINT POWERS AGREEMENT. Except as otherwise provided herein, all terms used shall be as defined in Article 1 of the Joint Powers Agreement Creating the CPEIA (hereafter "AGREEMENT"), and all other provisions of the AGREEMENT not in conflict with this MEMORANDUM shall apply. PURPOSE. CPEIA MEMBERS are signatories to this MEMORANDUM for the express purpose of joining the EIA's Excess Workers' Compensation (EWC) Program (hereafter "PROGRAM"). Under this PROGRAM, CPEIA EWC MEMBERS shall be considered to be one (1) MEMBER for purposes of participating in the PROGRAM. ENTRY INTO PROGRAM. Any public entity wishing to become a MEMBER of the PROGRAM shall make application to and be approved by the CPEIA Board of Directors in a manner prescribed by them and must also be approved by the EIA Board of Directors (hereafter "EIA BOARD") in a manner prescribed by the EIA BOARD. PROGRAM DEVELOPMENT. MEMBERS shall be charged a $350.00 program development charge that shall be a one-time charge assessed upon entry into the PROGRAM. ANNUAL PREMIUM. Participating MEMBERS shall be assessed an annual premium for the purpose of funding the PROGRAM. Premiums for the PROGRAM shall be established annually in conjunction with the insurance carriers. Premiums to CPEIA EWC MEMBERS shall be billed and paid annually in accordance with the EIA's Invoicing and Payment Policy (Resolution 94-003). Premium rates shall be established based upon factors that include, but are not limited to, negotiations with insurance carriers, expenditures, administrative costs and other appropriate factors. Adopted: 06~01/01 Cost A~.~.OCAT~ON, Each participating MEMBER'S share of annual premium shall be determined by the EIA BOARD. 2 7. ASSESSMENTS, DIVIDENDS AND PREMIUM SURCHARGE. (a) Assessments. The PROGRAM shall be funded in accordance with paragraph 5 above. In general, the annual premium, as determined by the EIA BOARD, will be established at a level that will provide adequate overall funding without the need for adjustments to past policy period(s) in the form of dividends and assessments. However, should the PROGRAM for any reason not be adequately funded, except as otherwise provided herein, pro-rata assessments to the participating MEMBERS may be utilized to ensure the approved funding level for those policy periods individually or for a block of policy periods, in accordance with the Premium Surcharge provision set forth below. (b) Dividends. Pre-rata dividends will be declared as provided herein. Dividends may also be declared as deemed appropriate by the EIA BOARD. (c) Premium Surcharge. (i) If there are an unusually large number of losses under the PROGRAM during a policy year, such that notwithstanding reinsurance coverage for large individual losses, the funds for the PROGRAM may be exhausted before the next annual premiums are due, the EIA BOARD may, upon consultation with a casualty actuary, impose premium surcharges on all MEMBERS; or (ii) If it is determined by the EIA BOARD, upon consultation with a casualty actuary, that the funds for the PROGRAM are insufficient to pay losses, fund known estimated losses, and fund estimated losses which have been incurred but not reported, the EIA BOARD may impose a surcharge on all participating MEMBERS. Premium surcharges imposed pursuant to (i) and/or (ii) above shall be in an amount that will assure adequate funds for the PROGRAM to be actuarially sound. Premium surcharges shall be assessed in accordance with paragraph 8 below. (iv) A MEMBER which is no longer participating in the PROGRAM at the time the premium surcharge is assessed shall pay such premium surcharges as it would have otherwise been assessed in accordance with the provisions of (i), (ii), and (iii) above. CLOSURE OF POLICY PERIODS. Notwithstanding any other provision of this MEMORANDUM, the following provisions are applicable: Excess Workers' Compensation Program Memorandum of Understanding Adopted 06101101 o 10. 11. (a) Upon reaching ten (10) years of maturity after the end of a program period, that period shall be "closed" and there shall be no further dividends declared or assessments made with respect to those program periods except as set forth in paragraphs 9(a) and 9(b), below. (b) Notwithstanding sub-paragraph (a) above, the EIA BOARD may take action to leave a policy period "open" even though it may otherwise qualify for closure. In addition, the last ten (10) policy periods shall always remain "open" unless the EIA BOARD takes specific action to declare any of the last ten (10) policy periods closed. (c) Dividends and assessments (other than as outlined in paragraphs 9(a) and 9(b), below) shall be administered to the participating MEMBER based upon the proportion of premiums paid to the PROGRAM in "open" periods only. For purposes of administering dividends and assessments pursuant to this sub- paragraph, all "open" policy periods shall be considered as one block. DECLARATION OF DIVIDENDS. Dividends shall be payable from the PROGRAM to a participating MEMBER in accordance with its proportionate funding to the PROGRAM during the applicable program period as follows: (a) A dividend shall be declared at the time a program period is closed on all amounts over the 90% confidence level. (b) A dividend shall be declared at the time a program period is closed on all amounts which represent premium surcharge amounts assessed pursuant to this MEMORANDUM where the funding exceeds the 80% confidence level. MEMORANDUM OF COVERAGE. A Memorandum of Coverage will be issued by the EIA evidencing membership in the PROGRAM and setting forth terms and conditions of coverage. CLAIMS ADMINISTRATION AND RESPONSIBILITY FOR CLAIMS. (a) Subject to subparagraph (e), each MEMBER shall be responsible for the investigation, settlement or defense, and appeal of any claim made, suit brought, or proceeding instituted against the MEMBER arising out of a loss. (b) CPEIA EWC MEMBERS are required to comply with the EIA's Underwriting and Claims Administration Standards (including Addendum AbW.C. Claims Administration Guidelines) as amended from time to time, and which are attached hereto as Exhibit A and incorporated herein. (c) Each participating MEMBER shall give the EIA timely written claims in accordance with the policy established by the EIA. Excess Workers' Compensation Program Memorandum of Understanding Adopted 06101101 notice of 12. 13. 14. 15. 16. 17. (d) A MEMBER shall not enter into any settlement involving liability of the EIA without the advance written consent of the EIA. (e) The EIA, at its own election and expense, shall have the right to participate with a MEMBER in the settlement, defense, or appeal of any claim, suit or proceeding which, in the judgment of the EIA, may involve liability of the EIA. DISPUTES. Any question or dispute with respect to the rights and obligations of the parties to this MEMORANDUM shall be determined by the EIA Executive Committee. If the MEMBER iS not satisfied with the Committee's decision, the matter may be appealed through arbitration. Arbitration may be either binding or non-binding, as mutually agreed upon by the parties. The matter will be submitted to a mutually agreed upon arbitrator or panel of arbitrators for determination. If binding arbitration is selected, the decision of the arbitrator or panel of arbitrators will be final and conclusive, and the MEMBER and EIA will abide by the decision. The cost of arbitration will be shared equally by the MEMBER and the EIA. AMENDMENT. This MEMORANDUM may be amended by a majority vote of the EIA BOARD and signature on the MEMORANDUM by the MEMBER'S designated liaison who shall have authority to execute this MEMORANDUM. Any MEMBER that fails or refuses to execute an amendment to this MEMORANDUM shall be deemed to have withdrawn from the PROGRAM on the next annual renewal date. WITHDRAWAL FROM THE PROGRAM. Withdrawal of a MEMBER from the PROGRAM shall be in accordance with the withdrawal provisions of Article 19 of the AGREEMENT. COMPLETE AGREEMENT. Except as otherwise provided herein, this MEMORANDUM constitutes the full and complete agreement of the MEMBERS. SEVERABILITY. Should any provision of this MEMORANDUM be judicially determined to be void or unenforceable, such determination shall not affect any remaining provision. EFFECTIVE DATE. This MEMORANDUM shall become effective on the first effective date of coverage for the MEMBER and upon the approval by the EIA and CPEIA and the signing of this agreement by the MEMBERS, the General ManagedSecretaryFFreasurer of the EIA and the President of the CPEIA. Excess Workers' Compensation Program Memorandum of Understanding Adopted 06/01/01 4 18. EXECUTION IN COUNTERPARTS. This MEMORANDUM may be executed in several counterparts, each of which shall be an original, all of which shall constitute but one and the same instrument. In Witness Whereof, the undersigned have executed this MEMORANDUM as of the date set forth below. CSAC Excess Insurance Authority Dated: By: California Public Entity Insurance Authority Dated: By: [Name of Public Entity] Dated: By: ¸ Excess Workers' Compensation Program Memorandum of Understanding Adopted 06/01/01 Adopted: December 6, 1985 Amended:January 23, 1987 Amended: ©ctober 6, 1995 Amended: October 1, 1999 EXHIBIT A CSAC Excess Insurance Authority Underwriting and Claims Administration Standards II. GENERAL Each Member shall appoint an official or employee of the Entity to be responsible for the risk management function and to serve as a liaison between the Member and the Authority for all matters relating to risk management. Each Member shall maintain a loss prevention program and shall consider and act upon all recommendations of the Authority concerning the reduction of unsafe conditions. Each Member shall maintain records of claims in each category of insurance covered by a program of the Authority and shall provide copies of such records to the Authority as directed by the ExeCutive, Underwriting or Claims Review Committees. Such records shall provide the following information by fiscal year: number of claims (open and closed); amounts paid, amounts reserved and total incurred. Allocated expenses shall be included. If losses are capped, the excess amount shall be indicated. EXCESS WORKERS' COMPENSATION PROGRAM The Member shall be responsible for the investigation, settlement, defense and appeal of any claim made, suit brought or proceeding instituted against the Member. The Member shall use only qualified personnel to administer its workers' compensation claims. At least one person in the claims office (whether in-house or outside administrator) shall be certified by the State of California as a qualified administrator of self -insured workers' compensation plans. Qualified defense counsel experienced in workers' compensation law and practice shall handle litigated claims. Counties are encouraged to utilize attorneys who have the designation "Certified Workers' Compensation Specialist, the State Bar of California, Board of Legal Specialization". o The Member shall use the Authority's Workers' Compensation Claims AdminiStration Guidelines (Addendum A) and shall advise its claims administrator that these guidelines are utilized in the Authority's workers' compensation claims audits. The Member shall provide the Authority written notice of any potential excess workers' compensation claims in accordance with the requirements of the Authority's bylaws. Updates on such claims shall be provided as requested by the Authority and/or the Authority's excess carrier. A claims administration audit utilizing the Authority's Workers' Compensation Claims Administration Guidelines (Addendum A) shall be performed once every three (3) years. In addition, an audit will be performed within twelve (12) months of any of the following events: There is an unusual fluctuation in the Member's claim experience or number of large claims or There is a change of workers' compensation claims administration firms or The Member is a new member of the Excess Workers' Compensation Program. The claims audit shall be performed by a firm selected by the Authority. Recommendations made in the claims audit shall be addressed by the Member and a written response outlining a program for corrective action shall be provided to the Authority within sixty (60) days of receipt of the audit. The Member shall obtain an actuarial study performed by a Fellow of the Casualty Actuarial Society (FCAS) at least once every three- (3) years. Based upon the actuarial recommendations, the Member should maintain reserves and make funding contributions equal to or exceeding the present value of expected losses and a reasonable margin for contingencies. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - CPEIA Version III. EXCESS LIABILITY PROGRAMS The Member shall be responsible for the investigation, settlement, defense and appeal of any claim made, suit brought or proceeding instituted against the Member. 1. The Member shall use only qualified personnel to administer its liability claims. Qualified defense counsel experienced in tort liability law shall handle litigated claims. Counties are encouraged to utilize defense counsel experienced in the subject at issue in the litigation. The Member shall use the Liability Claims Administration Guidelines (Addendum B) and shall advise its claims administrator that these guidelines be utilized in the Authority's liability claims audits. The Member shall provide the Authority written notice of any potential excess liability claim in accordance with the requirements of the Authority's bylaws. Updates on such claims shall be provided as requested by the Authority and/or the Authority's excess carrier. A claims administration audit utilizing the Authority's Liability Claims Administration Guidelines (Addendum B) shall be performed once every three (3) years. In addition, an audit will be performed within twelve (12) months of any of the following events: There is an unusual fluctuation in the Member's claims experience or number of large claims or 2. There is a change of liability claims administration firms or 3. The Member is a new member of the Excess Liability Program. The claims audit shall be performed by a firm selected by the Authority. Recommendations made in the claims audit shall be addressed by the Member and a written response outlining a program for corrective action shall be provided to the Authority within sixty (60) days of receipt of the audit. The Member shall obtain an actuarial study performed by a Fellow of the Casualty Actuarial Society (FCAS) at least once every three- (3) years. Based upon the actuarial recommendations, the Member should maintain reserves and make funding contributions equal to or exceeding the present value of expected losses and a reasonable margin for contingencies. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - CPEIA Version 3 IV. PROPERTY PROGRAMS Vo Ao The Member shall maintain appropriate records including a complete list of insured locations and schedule of values pertaining to all real property. Copies of such records shall be provided to the Authority or its brokers as requested by the Executive or Property Committees. Each Member shall perform a real property replacement valuation for all locations over one million dollars. Valuations shall be equivalent to the Marshall Swift system and shall be performed at least once every five- (5) years. New members shall have an appraisal or valuation performed within one year from entry into the program. MEDICAL MALPRACTICE PROGRAM Ao The Member, if a member of Medical Malpractice Program I (hereinafter Program I), or Mid Mai Program; or the third party administrator for Medical Malpractice Program II (hereinafter Program II); shall be responsible for the investigation, settlement, defense and appeal of any claim made, suit brought or proceeding instituted against the Member. 1. The Member (Program I and Mid Mai Program) or third party administrator (Program II) shall use only qualified personnel to administer its health facility claims. Qualified defense counsel experienced in health facility law shall handle litigated claims. The Member (Program I and Mid Mai Program) or third party administrator (Program II) shall use the "Claims Reporting And Handling Guidelines" in the CSAC/Excess Insurance Authority Medical Malpractice Excess Insurance Pro.qram Operatin.q And Guidelines Manual (hereinafter OPERATING AND GUIDELINES MANUAL), and shall advise its claims administrator that these claims handling guidelines are utilized in the Authority's medical malpractice claims audits. The Member (Program I and Mid Mai Program) or third party administrator (Program II) shall provide the Authority and its excess carrier written notice of any potential excess claim or "major incident" in accordance with the requirements of the Authority and of the excess carrier as stated in the OPERATING AND GUIDELINES MANUAL. Updates on such claims or major incidents shall be provided as requested by the Authority and/or the Authority's excess carrier. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - CPEIA Version 4 VI. Do A claims administration audit utilizing the Authority's Claims Reporting and Handing Guidelines in the OPERATING AND GUIDELINES MANUAL shall be performed once every three (3) years. In addition, an audit will be performed within twelve (12) months of any of the following events: There is an unusual fluctuation in the Member's claims experience or number of large claims or 2. There is a change of health facility claims administration firms or 3. The Member is a new member of the Medical Malpractice Program or 4. The Medical Malpractice Committee requests an audit. The claims audit shall be performed by a firm selected by the Authority. Recommendations made in the claims audit shall be addressed by the Member and a written response outlining a program for corrective action shall be provided to the Authority within sixty (60) days of receipt of the audit. If a member of Program I or the Mid Mai Program, the Member shall obtain an actuarial study performed by a Fellow of the Casualty Actuarial Society (FCAS) at least once every three (3) years. Based upon the actuarial recommendations, the Member should maintain reserves and make funding contributions equal to or exceeding the present value of expected losses and a reasonable margin for contingencies. The Member shall have an effective risk management program in accordance with the "Risk Management Guidelines" as states in the OPERATING AND GUIDELINES MANUAL. SANCTIONS The Authority shall provide the Member written notification of the Member's failure to meet any of the above-mentioned standards or of other concerns, which affect or could affect the Authority. The Member shall provide a written response outlining a program for corrective action within sixty (60) days of receipt of the Authority's notification. After approval by the Executive Committee of the Member's corrective program, the Member shall implement the approved program within ninety (90) days. The Member may request an additional sixty (60) days from the Executive Committee. Further requests for extensions shall be referred to the Board of Directors. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - CPEIA Version 5 Failure to comply with subsections B or C may result in cancellation of the Member from the affected Authority insurance program in accordance with the provisions in the Joint Powers Agreement. Notwithstanding any other provision herein, any member Member may be canceled pursuant to the provision of the Joint Powers Agreement. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - CPEIA Version Adopted: Amended: Amended: Amended: Amended: Amended: December 6, 1985 March 4, 1988 October 7, 1988 October 6, 1995 October 1, 1999 June 6, 2003 ADDENDUM A WORKERS', COMPENSATION CLAIMS ADMINISTRATION GUIDELINES The following Guidelines have been adopted by the CSAC Excess Insurance Authority in accordance with Article 18(b) of the March 1993 Amended Joint Powers A.qreement Creatin.q the CSAC Excess Insurance Authority. I. CASELOAD On or after 07/01/2004, the claims examiner assigned to the Member shall handle a caseload not to exceed 175 indemnity claims. This caseload will include future medical cases with every 4 future medical cases counted as 1 indemnity case. Supervisory personnel should not handle a caseload, although they may handle specific issues. II. CASE REVIEW AND DOCUMENTATION Documentation should reflect any significant developments in the file and include a plan of action. The examiner should review the file every 45 days. The supervisor shall monitor any significant activity on the file every 120 days. An accomplishment level of 95% shall be considered acceptable. III. COMPENSABILITY The initial compensability determination (accept claim, deny claim or delay acceptance pending the results of additional investigation) and the reasons for such a determination will be made and documented in the file within fourteen (14) calendar days of the filing of the claim with the employer. An accomplishment level of 100% shall be considered acceptable. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A IV. VI. VII. Delay of benefit letters shall be mailed in compliance with Department of Industrial Relations' guidelines. An accomplishment level of 100% shall be considered acceptable. The final compensability determination shall be made by the claims examiner or supervisor within 90 days of employer receipt of the claim form. An accomplishment level of 100% shall be considered acceptable. THREE POINT CONTACT The claims examiner shall conduct the three (3) point contact with the injured worker, employer representative and treating physician within five (5) working days of receipt of the notice of the claim. An accomplishment level of 95% shall be considered acceptable. INITIAL INDEMNITY PAYMENT Ao The initial indemnity payment will be issued and mailed to the injured employee within fourteen (14) days of the first day of disability. This shall not apply with salary continuation. An accomplishment level of 100% shall be considered acceptable. The properly completed DWC Benefit Notice shall be mailed to the employee within fourteen (14) days. An accomplishment level of 100% shall be considered acceptable. Late payments due directly to the injured worker must include the self imposed 10% penalty in accordance with Labor Code Section 4650. An accomplishment level of 100% shall be considered acceptable. SUBSEQUENT INDEMNITY PAYMENTS All indemnity payments subsequent to the first payment will be verified, except for obvious long-term disability, and issued in compliance with Labor Code Section 4651. An accomplishment level of 100% shall be considered acceptable. Late payments must include the self-imposed 10% penalty in accordance with Labor Code Section 4650. An accomplishment level of 100% shall be considered acceptable. FINAL INDEMNITY PAYMENTS Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A VIII. IX. Xl. All final payments will be issued with the appropriate DWC benefit notices. TRANSPORTATION EXPENSE Transportation reimbursement will be mailed within fifteen (15) working days of the receipt of the claim for reimbursement. Advance travel expense payments will be mailed to the injured employee ten (10) days prior to the anticipated date of travel. An accomplishment level of 100% shall be considered acceptable. MEDICAL PAYMENTS Medical treatment billings (physician, pharmacy, hospital, physiotherapist, etc.) will be matched to the file, reviewed for correctness, approved for payment and paid within sixty (60) calendar days of receipt. An accomplishment level of 100% shall be considered acceptable. Bo The medical provider must be notified in writing within 30 working days if a medical bill is contested, denied or incomplete. A bill review process should be utilized wherever possible. There should be participation in a PPO whenever possible. PHYSICIAN CONTACT ko In cases involving loss of time from work, the attending physician's office will be contacted within five (5) working days of notice of claim. Such contact will continue as needed during the continuation of temporary disability to assure that treatment is related to a compensable injury or illness. LITIGATED CASES The claims administrator and Member shall establish written guidelines for the handling of litigated cases. The guidelines should, at a minimum, include the points below, which may be adopted and incorporated by reference as "the guidelines". A. Defense of Litigated Claims The claims administrator shall promptly initiate investigation of issues identified as material to potential litigation. The Member shall be alerted to the need for in-house investigation, or the Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A need for a contract investigator who is acceptable to the Member. The Member shall be kept informed on the scope and results of investigations. The claims administrator shall, in consultation with the Member, assign defense counsel from a list approved by the Member. (Note: To comply with Government Code Section 25203, the Member's list should be approved by a two-thirds vote of the board of supervisors.) Settlement proposals directed to the Member shall be forwarded by the claims administrator or defense counsel in a concise and clear written form with a reasoned recommendation. Settlement proposals shall be presented to the Member as directed so as to insure receipt in sufficient time to process the proposal. Knowledgeable Member personnel shall be involved in the preparation for medical examinations and trial, when appropriate or deemed necessary by the Member so that all material evidence and witnesses are utilized to obtain a favorable result for the defense. The claims administrator shall comply with any reporting requirement of the Member. Subrogation o In all cases where a third party (other than a Member employee or agent) is responsible for the injury to the employee, the third party shall be contacted within 10 days with notification of the Member's right to subrogation and the recovery of certain claim expenses. If the third party is a governmental entity, a claim shall be filed with the governing board (or State Board of Control as to State entities) within 6 months of the injury or notice of the injury. Periodic contact shall be made with the responsible party and/or insurer to provide notification of the amount of the estimated recovery to which the Member will be entitled. The file will be monitored to determine the need to file a complaint in civil court in order to preserve the statute of limitations. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A 4 Xll. Xlll. If the injured worker brings a civil action against the party responsible for the injury, the claims administrator shall consult with the Member about the value of the subrogation claim and other considerations. Upon Member authorization, subrogation counsel shall be assigned to file a Lien or a Complaint in Intervention in the civil action. Whenever practical, the claims administrator will aggressively pursue recovery in any subrogation claim. They should attempt to maximize the recovery for benefits paid, and assert a credit against the injured workers' net recovery for future benefit payments. VOCATIONAL REHABILITATION Adjusting personnel will notify the injured worker of their potential rights to rehabilitation benefits per Labor Code Section 4636 after 90 days of aggregate temporary disability and get the treating doctor to determine if injured worker is a Qualified Injured Worker. Determination of the Qualified Injured WorkedNon-Qualified Injured Worker status shall be made in accordance with Labor Code Section 4637. The adjusting personnel shall advise the injured worker of his/her rehabilitation benefits in accordance with the Rules of the Division of Workers' Compensation, within ten (10) days of knowledge of medical eligibility. The claims administrator will: Notify the employer of the employee's permanent work restrictions so that the employer can determine the availability of permanent modified or alternate work. Make timely referral to a Qualified Rehabilitation Representative in accordance with Labor Code Section 4637 3. Control rehabilitation costs. 4. Attempt to secure the prompt conclusion of vocational rehabilitation benefits, and settle rehabilitation where appropriate. FISCAL HANDLING A. Active indemnity cases will be balanced with appropriate file documentation on a semi-annual basis to verify that statutory benefits Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A 5 XIV. XV. XVI. XVll. XVIII. are paid, and medical, legal and vocational rehabilitation charges are appropriate. An accomplishment level of 100% shall be considered acceptable. EXCESS INSURANCE Potential Workers' Compensation excess cases shall be reported in accordance with the reporting criteria established by The Bylaws of the. CSAC Excess Insurance Authority. All cases which meet the established reporting criteria are to be reported within five (5) working days of the day on which it is known the criterion is met. An accomplishment level of 100% shall be considered acceptable. AWARD PAYMENT Payments on undisputed Awards, Commutations, or Compromise and Releases will be issued within ten (10) days following receipt of the appropriate document. An accomplishment level of 100% shall be considered acceptable. PENALTIES If the Member utilizes a third party administrator, the Member will be advised of the assessment of any penalty for delayed payment and the reason thereof, and the administrators plans for payment of such penalty within five (5) days of assessment. An accomplishment level of 100% shall be considered acceptable. If the Member utilizes a third party administrator, the Member, in their contract with the administrator, shall specify who is responsible for specific penalties. RESERVES Using the information available at the time, an initial reserve will be established at the most probable case value. Claim reserves shall be reviewed on a regular basis and updated as case values increase or decrease. RESOLUTION OF CLAIM Within ten (10) days of receiving medical information indicating that a claim be finalized, the claims examiner shall take appropriate action to Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A 6 finalize the claim. An accomplishment level of 95% shall be considered acceptable. XlX. CASE CLOSURE All indemnity cases will be closed within sixty (60) days of the final financial transaction or final correspondence to the injured worker as required by law. An accomplishment level of 95% shall be considered acceptable. All medical only cases will be closed or transferred to an indemnity status by the ninetieth (90) day following incurral. An accomplishment level of 95% shall be considered acceptable. XX. TELEPHONE INQUIRIES Return calls will be made within one working day of the original telephone inquiry. An accomplishment level of 90% shall be considered acceptable. XXl. INCOMING CORRESPONDENCE Ali correspondence received will have the date of receipt clearly stamped on the front side. An accomplishment level of 100% shall be considered acceptable. XXlI. RETURN CORRESPONDENCE All correspondence requiring a written answer will have such answer completed and transmitted within five (5)working days of receipt, An accomplishment level of 95% is acceptable, XXlII. SETTLEMENTS The third party administrator shall obtain the Member's authorization on all settlements or stipulations in excess of the settlement authority provided in any provision of the individual contract between the Member and the claims administrator. Bo No agreement shall be authorized involving liability, or potential liability, of the Authority without the advance written consent of the Authority. Excess Workers' Compensation Program Memorandum of Understanding Exhibit A - Addendum A CSAC EXCESS INSURANCE AUTHORITY (CSAC EIA) EXCESS WORKERS' COMPENSATION PROGRAM Via CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY (CPEIA) INDICATION COVERED PARTY: City of South San Francisco COVERAGE PROVIDED CSAC Excess Insurance Authority, reinsured by American Re-Insurance Company BY: (Munich Re Group), Renaissance Reinsurance Limited, and DaVinci Reinsurance Ltd. BEST'S GUIDE RATING: CSAC EIA: Not Applicable American Re: A+ (Group) Superior, Financial Size Category 15, $2 Billion or more Renaissance Re: A+, Superior, Financial Size Category 12, $1 Billion to $1.25 Billion DaVinci Re: A, Excellent, Financial Size Category 10, $500 Million to $750 Million STANDARD & POOR'S RATING: CALIFORNIA STATUS: CSAC EIA: Not applicable American Re: A, Strong Renaissance Re: Not Rated DaVinci Re: Not Rated CSAC EIA: Not applicable American Re: Not applicable (reinsurance) Renaissance Re: Not applicable (reinsurance) DaVinci Re: Not applicable (reinsurance) COVERAGE TERM: To be determined to July 1, 2004 COVERAGE: Per the CSAC Excess Insurance Authority Excess Workers' Compensation Program Memorandum of Coverage. Coverage includes: Industrial Aid Aircraft, 120 day reporting of new craft over 8 seats Jones Act USL&H Incidental Operations Other States Volunteers and Board Members (subject to Board resolution) LIMITS OF LIABILITY: Pooled Retention $ 5,000,000 Workers' Compensation and Employers Liability each occurrence (difference between $5,000,000 and the Covered Party's SIR) Reinsured Laver $ 45,000,000 Workers' Compensation each occurrence excess of $5,000,000 Pooled Retention. Includes $5,000,000 Employers Liability Excess of $5,000,000 Pooled Retention. As Respects All Lavers Limits apply per occurrence for all program members combined $10,000,000 sub-limit for Terrorism Limits are eroded by allocated claims expense NOTE: THIS PROPOSAL IS FOR INFORHA I~TONAL PURPOSES ONL Y AND DOES NOT AMEND/ EXTEND OR AL TER THE POLICY IN ANY WA Y. PLEASE REFER TO TIlE POLICY FORH FOR COHPLETE COVEIOIGE ANO EXCLU$ION INFORHA TZON. CSAC EXCESS INSURANCE AUTHORITY (CSAC EIA) EXCESS WORKERS' COMPENSATION PROGRAM Via CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY (CPEIA) INDICATION SELF INSURED RETENTION: MAJOR EXCLUSIONS: 2003-2004 ESTIMATED ANNUAL PAYROLL Option 1 $ 150,000 SIR Per Occurrence Option 2 $ 300,000 SIR Per Occurrence Option 3 $ 500,000 SIR Per Occurrence Option 4 $ 750,000 SIR Per Occurrence Option 5 $ 1,000,000 SIR Per Occurrence Self Insured Retention is eroded by allocated claims expense War Nuclear Absolute Terrorism (excess of $10,000,000 sub-limit) Punitive or exemplary damages, fines or penalties Contractual Liability L.C. 4850 benefits L.C. 4856 benefits Any payments in excess of the benefits regularly provided by the Workers' Compensation law $ 35,160,531 NOTE: THIS PROPOSAL IS FOR INFORMA 7'ZONAL PURPOSES ONL Y AND DOES NOT AMEND, EXTEND OR ALTER THE POLICY IN ANY WAY. PLEASE REFER TO THE POLICY FORM FOR COMPLETE COVERAGE AND EXCLUSION INFORMA 7'ION. CSAC EXCESS INSURANCE AUTHORITY (CSAC EIA) EXCESS WORKERS' COMPENSATION PROGRAM Via CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY (CPEIA) INDICATION ESTIMATED ANNUAL PREMIUM: Option 1 $ $ 383,130 40,304 5,750 2,117 26,172 350 $ 457,823 150,000 SIR Pool Premium (Deposit)* Reinsurance Premium (Minimum & Deposit)* - Indication EIA Administration Fee CPEIA Fee Broker Fee Program Development Fee Total Estimated Annual Premium Option 2 $ 300,000 SIR $ 168,391 40,304 3,160 1,043 15,435 350 $ 228,684 Pool Premium (Deposit)* Reinsurance Premium (Minimum & Deposit)* - Indication EIA Administration Fee CPEIA Fee Broker Fee Program Development Fee Total Estimated Annual Premium Option 3 $ 500,000 SIR $ 85,632 40,304 2,231 630 11,297 350 $ 140,444 Pool Premium (Deposit)* Reinsurance Premium (Minimum & Deposit)* - Indication EIA Administration Fee CPEIA Fee Broker Fee Program Development Fee Total Estimated Annual Premium Option 4 $ 750,000 SIR $ 50,469 40,304 1,812 454 9,077 350 $ 102,466 Pool Premium (Deposit)* Reinsurance Premium (Minimum & Deposit)* - Indication EIA Administration Fee CPEIA Fee Broker Fee Program Development Fee Total Estimated Annual Premium Option 5 $ 1,000,000 SIR $ 34,457 40,304 1,620 374 7,476 350 $ 84,581 Pool Premium (Deposit)* Reinsurance Premium (Minimum & Deposit)* - Indication EIA Administration Fee CPEIA Fee Broker Fee Program Development Fee Total Estimated Annual Premium NOTE: THIS PROPOSAL I$ FOR INFORMATIONAL PURPOSES ONL Y AND DOES NOT AMEND, EXTEND OR ALTER THE POLICY IN ANY WAY. PLEASE REFER TO THE POLICY FORM FOR COMPLETE COVERAGE AND EXCLUSION INFORMATZON. CSAC EXCESS INSURANCE AUTHORITY (CSAC EIA) EXCESS WORKERS' COMPENSATION PROGRAM Via CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY (CPEIA) INDICATION *PREMIUM AUDIT CONDITIONS: BROKER: PROPOSAL DATE: Pool premiums and certain layers of the reinsurance premium are auditable and adjustable at June 30, 2004 based on actual payroll Premium is subject to change. Premium does not include cost for claim audit requirement Subject to: o The Covered Party obtaining appropriate loss prevention services. A detailed description of the services to be provided is due to the EIA within 30 days of binding. o Claims audit to be conducted in first year of participation o Receipt of a copy of the Covered Party's self insurance certificate o Receipt of the executed JPA agreement and EWC MOU prior to binding o Committee and Board approvals DRIVER ALLIANT INSURANCE SERVICES INC. Gordon DesCombes - Senior Vice President Nazie Arshi - First Vice President Shawn Kraatz - Associate Broker Seth Cole 12/29/03 This indication will expire 30 days from the proposal date. NOTE: THIS PROPOSAL IS FOR INFORHA TIONAL PURPOSES ONL Y AND DOES NOT AMEND, EXTEND OR AL TER THE POLICY IN AN)" WA Ir. PLEASE REFER TO THE POLICY FORH FOR COHPLETE COVERAGE AND EXCLUSION INFORHA 7'ION, CSAC EXCESS INSURANCE AUTHORITY (CSAC EIA) EXCESS WORKERS' COMPENSATION PROGRAM Via CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY (CPEIA) INDICATION Analyzing insurers' over-all performance and financial strength is a task that requires specialized skills and in-depth technical understanding of all aspects of insurance company finances and operations. Insurance brokerages such as Driver Alliant typically rely upon rating agencies for this type of market analysis. Both *A.M. Best and **Standard and Poor have been industry leaders in this area for many decades, utilizing a combination of quantitative and qualitative analysis of the information available in formulating their ratings. *A.M. Best has an extensive database of nearly 6,000 Life/Health, Property Casualty and International companies. You can visit them at www.ambest.com. **For additional information regarding insurer financial strength ratings visit Standard and Poor's website at www.standardandpoors.com. To learn more about companies doing business in California, visit the California Department of Insurance website at www.insurance.ca.gov NOTE: THIS PROPOSAL IS FOR INFORMA 1-ZONAL PURPOSES ONL Y AND DOES NOT AI~END, EXTEND OR AL TER THE POLICY IN ANY WAY. PLEASE REFER TO THE POLICY FORH FOR COHPLETE COVERAGE AND EXCLUSION INFORMA HON. CSAC Excess Insurance Authority EXCESS WORKERS' COMPENSATION PROGRAM Effective July 1, 2003 Terms & Conditions (BINDER ADDENDUM) INSURANCE PROVIDER: PROGRAM TERM: PROGRAM'S COVERAGE AND LIMITS: CSAC-EIA Memorandum of Coverage (MOC) Reinsured by American Re-Insurance Company July 1, 2003 to June 30, 2004 Pooled Retention · $5,000,000 Workers' Compensation and Employers Liability each occurrence (difference between $5,000,000 and the Covered Party's SIR). Reinsured Laver · $45,000,000 Workers Compensation each occurrence excess of $5,000,000 Pooled Retention. Includes $5,000,000 Employers Liability Excess of $5,000,000 Pooled Retention. As Resl~ects All Lavers · Limits apply per occurrence for all program members combined · $10,000,000 sub-limit for Terrorism · Limit are eroded by allocated claims expense COVERED PARTIES: SELF-INSURED RETENTION: $125,000 Self Insured Retention Alpine County *? Amador County Butte County Calaveras County Colusa County *? Del Norte County *? Humboldt County Inyo County Lake County Lassen County *? Madera County Mendocino County Modoc County *~- Mono County Nevada County Placer County Plumas County San Benito County *? Sierra County *? Siskiyou County Solano County Participating Members within CSAC Excess Insurance Authority Excess Workers' Compensation Program Sutter County Tehama County Trinity County * ? Yuba County CPEIA Members Casitas Municipal Water Dist Central Sierra Child Support Agency 09-15-03 City of Del Mar 11/1/03 City of E1 Cai on City of Hemet City of Imperial Beach City of Lancaster 8/1/03 City of Lemon Grove 1/1/04 City of Solana Beach 10/01/03 CSAC-EIA 12/31/03 Eastside Union School. Dist CPEIA Members (Cont) Irvine Ranch Water District Kings Waste & Recycling Authority PARDEC Sacramento Co Contracts - -City of Elk Grove-Police -City of Elk Grove -Animal Control -City of Citrus Heights- Transportation&Animal Cntrl -City of Folsom-Animal Control -City of Rancho Cordova, Construction & Inspection 10-6.03 Santa Cruz Fire Agencies SIRMA I JPA Southern CA Schools Risk Management JPA Trinity Hospital 12-31-03 West San Gabriel JPA EXCESS WORKERS' COMPENSATION PROGRAM Terms & Conditions (Continued) $250,000 Self Insured Retention Napa County San Luis Obispo County Shasta County CPEIA Member Berkeley Unified School District 01/01/04 Ca. Housing Work Comp Authority (CHWCA) CPEIA Member (Continued) Golden State Risk Management Authority Lake Elsinore USD Northern California Special District Insurance Authority (NCSDIA) Special District Risk Management Authority (SDRMA) $300,000 Self Insured Retention E1 Dorado County Imperial County Kings County Mariposa County Merced County Santa Barbara County Sonoma County Tuolumne County CPEIA Members City of Hawthorne City of Lompoc - 9/1/03 City of Moreno Valley City of Napa City of Pacific Grove PASIS -San Bernardino $350,000 Self Insured Retention CPEIA Member City of Daly City $400,000 Self Insured Retention County of Monterey $500,000 Self Insured Retention Fresno County Marin County San Joaquin County Santa Cruz County Stanislaus County Yolo PARMIA 12/31/03 CPEIA Members ACCEL - City of Bakersfield ACCEL - City of Mt. View ACCEL - City of Ontario ACCEL - City of Santa Cruz Antelope Valley Hosp Dist. BICEP - City of Oxnard BICEP - City of Santa Ana California Fair Services Authority Community Development Comm of the County of L.A. City of Chula Vista 10/01/03. CPEIA Member ACCEL - City of Monterey City of Rialto CPEIA Members (Continued) City of Concord City of Covina 01/01/04 City of Cupertino 01/01/04 City of Escondido 10/1/03 City of National City 10/01/03 City of Oceanside 10/01/03 City of San Buenaventura City of Simi Valley City of Stockton Contra Costa County Municipal RMIA Elk Grove Unified School District Fire Districts Assn. Of CA-Fire Assn. Self Ins. System (FDAC-FASIS) Northern Ca. Cities Self Ins. Fund (NCCSIF) Orange County Sanitation District PASIS - San Diego Santa Cruz Metropolitan Transit Dist. 10-24-03 CSAC Excess Insurance Authority Excess Workers' Compensation Program Effective July 1, 2003 Terms & Conditions $750,000 Self Insured Retention Contra Costa County CPEIA Members ACCEL - City of Modesto ACCEL - City of Palo Alto ACCEL - City of Santa Barbara City of South San Francisco 1/1/04 $1,000,000 Self Insured Retention Santa Clara County Central Fire District CPEIA Members ACCEL - City of Anaheim ACCEL - City of Santa Monica BICEP - City of Huntington Beach BICEP - City of San Bemardino CPEIA Members (Continued) City of Corona 07/30/03 City of Fairfield City of West Covina Independent Cities Risk Mgmt. Authority (ICRMA) $2,000,000 Self Insured Retention Alameda County Riverside County Sacramento County San Bemardino County CPEIA Member Alameda County Medical Center Califomia JPIA City of Burlingame 10/01/03 $3,000,000 Self Insured Retention CPEIA Member City of Orange 08/27/03 CPEIA Member (Continued) City of Fresno City of Torrance Local Agency Workers' Comp. Excess Joint Powers Authority (LAWCX) $4,000,000 Self Insured Retention Santa Clara County $5,000,000 Self Insured Retention CPEIA Member City of Long Beach Single SIR applies in event of a combined Workers' Compensation and Employer's Liability claim. SIR is eroded by payment of allocated claims costs CSAC Excess Insurance Authority Excess Workers' Compensation Program Effective July 1, 2003 Terms & Conditions *Trindel Insurance Fund Member of CSA C-EIA Primary Workers' Compensation Program Staff Xeport AGENDA ITEM t45 DATE: January 28, 2004 TO: The Honorable Mayor and City Council FROM: Richard Battaglia, City Treasurer and Jim Steele, Finance Director SUBJECT: Changes to Investment Policy and Transmittal of Quarterly Investment Report RECOMMENDATION: It is recommended that the City Council: - Approve a resolution adopting the attached investment policy, with changes described herein; and - Read, review, and accept the attached quarterly investment report. BACKGROUND/DISCUSSION: Investment Policy The Council adopted the former City Treasurer's investment policy in August 2003. Since that time, the new City Treasurer is recommending several changes to that policy. They are as follows: Under "Authorized Investments", language is added to clarify that there is no upper limit to the investments made in the State investment pool (LAW). Many cities have this provision, as LAI]F is considered very secure; o Change the section on the use of investment brokers. Currently, only Wells Fargo and First Tennessee are authorized. The new policy allows the Treasurer to obtain additional brokers to allow for more competitive bids for purchases and/or sales. Language has been added to clarify additional criteria that will be used to evaluate whether a broker may be authorized for use by the City. o A new section is added for "Competitive Purchase and Sale of Allowed Securities", which specifies that at least three verbal or written quotes should be solicited when making investment transactions, except for transactions with LAIF, with the County Pool, or with a mutual fund otherwise allowed under the policy. Language has been omitted from the policy, which was added last year, which requires brokers to notify the Treasurer within 24 hours if a medium term corporate note has been downgraded by a rating institution. Several reputable investment banks recommended by other cities Changes to Investment Policy Quarterly Investment Report Page 2 expressed concern with this language, as their firms' attorneys would likely not accept that language. However, the City has acquired the services of investment advisor Richard Guilbault, who does have access to real-time ratings information. Mr. Guilbault is exploring developing an automated watch list to provide quick information to the City on rating changes related to its investments. Ouarterly Investment Report Section 53646 (b) (1) of the State Government Code requires the City Treasurer to report on a quarterly basis to the City Council on the City's investments. A quarterly investment report for the fourth quarter of calendar 2003 is attached for Council's information. The market value of the portfolio as of 12/31/03 was $86,220,433. This compares to a book value of $85,593,528. The market value is therefore 100.732% of book value. The effective investment-earning rate for the quarter ended December 31, 2003 was 3.14%. The average days to maturity for the portfolio is 171 days or 0.47 year. The previous Treasurer's investment in WorldCom, which is in bankruptcy proceedings, matured in August. It is therefore no longer carried on the portfolio, although the Attorney's Office is still pursuing several courses of action to attempt to recover City funds. The Treasurer is also exploring options for the possible sale of the City' s shares of WorldCom bonds, and will have more information by the time of this meeting. The City did not receive its principal of $1.0 million upon its maturity in August, or the last two interest payments that had been due. The Finance Department had previously booked the expected losses into the financial statements. Investment changes over the past quarter include the following: New Investments: None Redemptions & Maturities: The following investment was sold over the last quarter, as it had slipped to a BBB+ rating. Total INA Holding (ACE Ltd.) Purchase Sales Interest Total Annualized Price Price Earnings Earnings Yield $ 1,027,350 $ 1,043,100 $ 345,083 $ 360,833 8.37% Changes to Investment Policy Quarterly Investment Report Page 3 Ratings: The City's investment policy requires that medium term corporate notes be of at least an "A" rating, or of upper medium grade credit quality, at the time of their purchase. No investments are currently lower than an A rating by either Moody's or Standard and Poor's. One security, Hewlitt-Packard, is rated A-. Investment Oversight Committee The investment policy requires that the Oversight Committee (City Treasurer, City Manager, Finance Director, outside investment consultant) meet on a quarterly basis on review investments, strategy, and the investment environment. The committee met on December 5. Points discussed were the following: The outside consultant, Richard Guilbault will review County Pool investment reports with the goal of seeing if there are any issues with their holdings or investment practices. The new Treasurer and Finance Director will then meet with the County investment staff to follow-up on any questions. The committee agreed it continues to make sense to keep new investments short, as interest rates are low, and are expected to rise slowly in the next 6-12 months. The City will be getting a lot of extra cash in December (one of two semi-annual payments from the County for property taxes occur in December), while the earliest in which large, irregular cash outlays will occur will be in February, as the City completes its first land acquisition authorized by Council. Mr. Guilbault also agreed to do an analysis of at what crossover point it may make sense for the City Treasurer to begin investing in securities again, instead using the County Investment Pool. The Pool currently earns just under 3%, or equivalent to a 3 V2 year U.S. Government Agency instrument (such as Fannie Mae), but the Pool's yield will continue to drop in the foreseeable future as their longer-term investments mature, reflecting the overall decline in interest rates. Mr. Guilbault also agreed to work on a bid form for the Treasurer to use in obtaining quotes from brokers when the City is looking to buy or sell a security. The former City Treasurer had only used two brokers, so the Finance Director had begun getting recommendations on brokers from other cities. He and the City Treasurer will go over the qualifications of brokers he finds. (One change in the Investment Policy before the Council tonight would allow the Treasurer to use more than the two current brokers). There was again discussion on the status of the medium term corporate notes held by the City. The Finance Director had obtained two quotes and sold one security at a profit for the City, INA Holdings, because it's rating had slipped recently to a BBB+. The Finance Director raised the issue of increasing the required rating for new medium term corporate purchases from the current "A" rating (the minimum required by the State Government Code) to a "AA" rating, advising that a AA rating requirement was a more common minimum threshold for cities. The investment committee did not see a need to increase the minimum- rating requirement, however, since staff is now monitoring ratings on corporate holdings once a month. Attached for Council's information is quarterly investment report. I hereby certify that the City's Changes to Investment Policy Quarterly Investment Report Page 4 investments comply with the City's investment policy, and that the City will have sufficient cash flow from revenues, liquid cash resources, and maturing investments to meet City obligations over the next six months. Prepared by: ~ Finance Director Reviewed by: Richard Guilbault, Registered Investment Advisor Approved b~~ Michael A. Wilson City Manager Attachments: Resolution Investment Policy Investment Report Glossary Long Term Bond Rating Definitions Letter from San Mateo County- Monthly Investment Reports RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE CHANGES TO THE INVESTMENT POLICY AND TRANSMITTAL OF THE QUARTERLY INVESTMENT REPORT WHEREAS, the City Treasurer desires approval of changes to the Investment Policy; and WHEREAS, a quarterly investment report for the fourth quarter of calendar year 2003 is attached for Council's information. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby approves the changes to the Investment Policy, attached hereto as Exhibit A. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of ,2004 by the following vote: AYES: NOES: ABSTAIN: ABSENT: S:\Current Reso's\l-28change.to.invest.policy.res.doc ATTEST: City Clerk City of South San Francisco Investment Policy January 2004 Exhibit A INTRODUCTION: The following statement is intended to provide guidelines for the "Prudent Person Standard" of investment of the City's temporary idle cash and to outline the policies for an effective cash management system. Investments shall be made with judgment and care which persons of prudence and intelligence exercise in the management of their own affairs considering safety of principal as well as probable income to be derived. The City's cash management system's goal is to accurately monitors and forecasts revenues and expenditures enabling the City to invest funds to the fullest extent possible. The City Treasurer attempts to obtain the highest yield possible as long as investments meet the criteria established for safety and liquidity. This investment policy applies all City funds except retirement, pension, or bond funds. The investment policies and practices of the Treasurer of the City of South San Francisco are based upon federal, state, and local laws as well as prudent money management. The primary objectives of these policies are, in priority order: To assure compliance with all federal, state, and local laws governing the investment of monies. 2. To maintain the principal of the City' s investments. 3. To remain sufficiently liquid to meet all expenses. After safety and liquidity are assured, to generate the maximum amount of investment income within the parameters of this statement of investment policy. TREASURER'S INVESTMENT OBJECTIVES: SAFETY OF PRINCIPAL is the foremost objective of the investment policy. The Treasurer shall seek to ensure that capital losses are avoided with each investment transaction. The objective is to mitigate credit risk (the loss due to failure of the security issuer or broker) and interest rate risk (the market value of the security in the portfolio will fall due to changes in general interest rates). LIQUIDITY is the second most important objective of the investment policy. It is important that a portion of the portfolio contain investments, which can be easily liquidated with minimal, or no risk to principal and/or interest. The longest maturity of any investment shall be five years. The portfolio shall be structured so that sufficient 1 City of South San Francisco Investment Policy January 2004 funds are readily available to meet all reasonably anticipated operating expenses. o YIELD is the interest earned by the City Treasurer on monies invested. The City's fund shall be designed to attain a market-average rate of return (defined as the average return on a three month U.S. treasury bill) through various economic cycles. Yield will'be considered only after the basic requirements of safety, liquidity, and credit quality have been met. AUTHORIZED INVESTMENTS: The City is governed by the California Government Code, Section 53600 et. seq. Within the context of these limitations, the following investments are authorized: U.S. TREASURY SECURITIES for which the faith and credit of the U.S. are pledged for the payment of principal and interest. OBLIGATIONS ISSUED BY AGENCIES OF THE UNITED STATES GOVER~NT, including the Government National Mortgage Association (GNMA), the Federal Farm Credit Bank System (FFC), the Federal Home Loan Bank Board (FHLB), the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), and the Tennessee Valley Authority (TVA). BANKER'S ACCEPTANCES are bills of exchange or time drafts drawn on and accepted by a commercial bank, which are eligible for purchase by the Federal Reserve System. There is a time limit (180 days) and a 20% limit of surplus money, which may be invested in bankers' acceptances by municipalities. No more than $5.0 million may be invested in any one institution. COMMERCIAL PAPER must be of prime quality of the highest rating (P1 by Moody's or A1 by Standard and Poors). Eligible paper is limited to corporations organized and operating within the U.S. and having total assets of at least $500,000,000. There are also limitations as to the percent (15%) of the portfolio, the time of investment (270 days), and the 'dollar amount invested in any one bank or corporation ($3.0 million). CERTBCrlCATES OF DEPOSIT are not really considered investments in the true sense of the word. They allow the City Treasurer to select the exact amount, the day of maturity, as well as the exact depository. (There are penalties for withdrawal of funds prior to the original maturity date.) Since time deposits are not liquid, no more than 20% shall be invested in this type of investment for longer than one year. Any investment over the $100,000 FDIC insurance shall be collateralized at 110% with United States Treasuries. No more than $5.0 million may be placed in any one institution. REPURCHASE AGREEMENTS (Repos) allow a purchase of securities by a local agency; by agreement, the seller will repurchase the securities on or before a specified date and for a specified amount. The maturity should not exceed ninety days. Repos should only be purchased when a purchase agreement is executed with a bank in which the underlying U.S. Treasuries 2 City of South San Francisco Investment Policy January 2004 pledged as security shall have a market value of at least 102% of the funds borrowed. THE LOCAL AGENCY INVESTMENT FUND is a pooled fund managed by the state treasurer whose permitted investments are identified in the government code. L.A.I.F. provides for deposits up to a maximum of forty million dollars ($40,000,000). L.A.I.F. offers high liquidity as deposits and withdrawals can be wired to and from South San Francisco on the same day, provided the request is made before 10:00 A.M. No maximun't limit for LA~ is set by this investment policy. THE SAN MATEO COUNTY INVESTMENT FUND established for the benefit of local agencies, is a pooled fund managed by the San Mateo County Treasurer. Various county monies due local agencies are deposited in the fund rather than forwarded to the local agencies in check form. MUTUAL FUNDS are shares of beneficial interest issued by diversified management companies, as defined by Section 23701 M of the Revenue and Taxation Code. To be eligible for investment, these funds must strive to maintain a net asset value of $1.00 per share at all times and: a) Attain the highest ranking in the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services; or b) Have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in the securities and obligations, and with assets under management in excess of five hundred million dollars; and c) Invest solely in those securities and obligations authorized by Sections 53601 and 53635 of the California Government Code. Where the City's Investment Policy may be more restrictive than the State Code, the Policy authorizes investments in mutual funds that shall have minimal investment in securities otherwise restricted by the City's Policy. Minimal investment is defined as less than 5 percent of the mutual fund portfolio. Mutual fund investments shall not exceed 20% of the portfolio, with no more than 10% of the portfolio invested with any one institution. MEDIUM-TERM NOTES 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. Notes eligible for investment under this subdivision shall be rated in a rating category of "A" or its equivalent or better by a nationally recognized rating service (Standard and Poors or Moody' s). Purchases of medium-term notes may not exceed 10 percent of the agency's surplus money nor to be invested for longer than five years. No more than $2.0 million may be invested in a single issuer corporation. City of South San Francisco Investment Policy January 2004 DEPOSITORY SERVICES Monies must be deposited in state or national banks, state or federal savings and loan associations, or state or federal credit unions in the state of California. The monies may be in inactive deposits, active deposits, or interest-bearing active deposits. The deposits in any institution cannot exceed the amount of the bank's or savings and loan's paid up capital and surplus. The bank, savings and loan, or federal credit union must secure the active and inactive deposits with eligible government securities having a market value of at least 110% of the total amount of the deposits. QUALIFIED DEALERS AND INSTITUTIONS Except for transactions with the State and County investment pools, the City shall transact investment business only with banks, savings and loans, and with investment securities dealers as defined in Government Code Section 53601.5: "The purchase by a local agency of any investment authorized pursuant to Section 53601 or 53601..1, not pm'chased 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 deft.ned by Section 5102 of the Financial Code) or from a brokerage fi~Tn designated as a primary government dealer by the Federal Reserve bank." The City Treasurer shall investigate institutions that wish to do business with the City in order to determine if they are adequately capitalized, make markets in securities appropriate to the City's needs. Specifically, in order to achieve these objectives: The Treasurer shall establish a list of qualifi ed sec urities dealers, and shall Obtain a ce~lification submitted by all financial institutions with which the City has an investment relationship on an annual basis. The certification shall state that the institution has reviewed the City's investment management plan and that it ~vill: Exercise due diligence in monitoring the activities of its officers and employees engaged in transactions with the City. Ensure that all of its officers and employees offering investments to the City are trained in the precautions appropriate to public sector investments. In order to be qualified for use by the City, a qualifying institution must have: a) At least three years experience operating with California municipalities. In addition, individual traders or agents representing a dealer must have a minimum of one year of experience operating with California municipalities; 4 City of South San Francisco Investment Policy January 2004 b) An inventory of trading securities of at least $1.0 million. SAFEKEEPING AND CUSTODY OF SECURITIES To protect against potential losses caused by the collapse of individual securities dealers, all securities owned by the City, except for investments with LAIF, the San Mateo County Investment Pool, Repurchase Agreements, CD's, mutual funds as authorized in this Policy, or Commercial Paper with maturities of ten days or less shall be kept in safekeeping by a trust department of a third party bank acting as agent for the City under the terms of a custody agreement executed by the bank and by the City. These funds will be held in the City' s name. All trades will be executed by delivery vs. payment (DVP). This ensures that securities are deposited to the third party safekeeper prior to release of the City' s funds to the broker, for a purchase, and ensures that cash is deposited with the sakekeeper prior to release of the City's security for a sale. The one exception is for the existing Wells Fargo investment account, which is held by the safekeeping department of Wells Fargo Bank. No additional dollars shall be invested in this account unless it is transferred to a third party safekeeping bank. COMPETITIVE PURCHASE AND SALE OF ALLOWED SECURITIES Except for purchases in [,AW, the County Pool, or with a Mutual Fund otherwise authorized in this policy, any purchase or sale of individual securities shall be made after soliciting at least three quotes from authorized brokers, either verbally or in writing. The Treasurer shall make the purchase or sale from the broker that offers the highest yield. In the case of a tie of two or more brokers, the Treasurer shall select by his/her choice. The Treasurer shall maintain documentation .relating to investment quotes for six months. COLLATERALIZATION Collateralization is required on two types of investments: certificates of deposit of over $100,000 (CD' s) and repurchase agreements (Repos). The collateralization level must be at least 102% for Repos and 110% for CD's. ETHICS AND CONFLICTS OF INTEREST There is a yearly mandated Form 700 issued by the state of California whereby all elected officials, including the City Treasurer, must disclose all personal assets such as stocks, bonds, properties, business entities, etc., in which said officials may be involved and which could create a conflict of interest with the proper execution of their offices or impair their ability to make impartial decisions. INTERNAL CONTROLS The Treasurer and the Finance Director are responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft, or misuse. The internal control of the structure shall be designed to provide reasonable assurance that these objectives are met. 5 City of South San Francisco Investment Policy January 2004 The Director of Finance shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures. The auditor shall meet with the City Treasurer and propose possible needed changes to the investment policy and/or comment on the diversification of the portfolio. Management responsibility for the investment program is delegated to the elected City Treasurer who shall be responsible for all investment transactions. The Deputy City Treasurer, appointed by the City Treasurer, acts at the discretion and direction of the City Treasurer. The City shall establish an investment oversight committee. The committee shall consist of the City Treasurer, the City Manager, the Finance Director, and the Assistant Finance Director as his alternate, and an outside investment advisor with which the City does not do business. The purpose of the committee is to: · Review the portfolio on a quarterly basis to ensure compliance with the City's investment policy and the requirements of the State of California. · Make recommendations to Council to change the investment policy where appropriate. Meet as needed to review the investment portfolio as a result of changes in the marketplace or the economic position of any company or agency that affects the City' s investments. City Treasurer and Finance Director shall monitor ratings on Medium Term Notes on a monthly basis. The City Treasurer will report on any recommendations and/or actions taken by the investment oversight committee in his/her quarterly reports to the City Council. REPORTING The Treasurer shall present to the City Council a quarterly report showing the types of investments, institutions of investment, dates of maturity, amounts of deposit, current market value for all securities, rates of interest, and such data as may be required by the City Council. The State of California will be supplied with yearly reports per the State Code. WIRE TRANSFER CONFIRMATIONS Due to the need to preserve segregation of duties and checks and balances, all non-recurring, outgoing wire transactions initiated by the City Treasurer or a Deputy Treasurer appointed by the City of South San Francisco Investment Policy January 2004 City Treasurer shall be confirmed by the bank with a second person, either a Deputy Treasurer or within the Finance Department, prior to the completion of that wire transfer. Recurring/repetitive wire transactions, such as with LAIF, the County Investment Pool, or to meet regular debt service payments, may be exempted provided that a list of recurring wire transfers is established with the bank and that both the City Treasurer and the Finance Director approve the list. POLICY REVIEW This investment policy shall be reviewed annually to ensure its consistency with the overall objectives of safety of principal, liquidity, and yield. The policy should also be relevant to current law, financial and e~mic trends, and should meet the needs of the City of South San Francisco. (c//~~d~at g~l~ia~// ~ity?'reasurer, South San Fr~ihcisco / RB:JS:js 7 City of South San Francisco Portfolio Management Portfolio Summary December 3'1, 2003 Par Market Book Investments Value Value Value Cash and Equivalents 67,886,600.33 68,175,739.92 67,886,600.33 Federal Agency Coupon Securities 13,270,000.00 13,490,207.69 13,316,996.06 Corporate Notes 4,350,000.00 4,554,465.00 4,389,931.62 % of Days to YTM YTM Portfolio Term Maturity 360 Equiv. 365 Equiv. 79.31 1 1 2.445 2.479 15.56 1,462 962 3.054 3.096 5.13 1,383 398 5.319 5.393 Investments Total Earnings Current Year Average Daily Balance Effective Ra City of ~ .? Return CA~~..~~ 85,506,600.33 December 31 Month Ending 224,967.61 75,123,572.59 3.53% 86,220,432.61 Fiscal Year To Date 1,196,710.83 77,751,877.54 3.05% 85,593,528.01 100.00% 299 171 2.687 2.725 Run Date: 01/1412004 - 11:59 Poltfolio CITY AP PM (PRF_PM1) SymRept V6.21 Report Ver. 5.00 CUSIP Investment # Cash and Equivalents FIRST NATIONAL 2075 FIRST NATIONAL 2079 FIRST NATIONAL 2080 FIRST NATIONAL 2081 LAIF-RDA 2010 LAIF-CITY 2011 WFB-MM 2013 SM INVEST POOL 2014 WFB-ASSET 2015 City of South San Francisco Portfolio Management Portfolio Details - Investments December 31, 2003 Average Purchase Issuer Balance Date Par Value First National Bank First National Bank First National Bank First National Bank Local Agency Inv Fund Local Agency Inv Fund Wells Fargo Money Market Fd San Mateo Investment Pool Wells Fargo Bank Account Subtotal and Average 57,414,283.84 Federal Agency Coupon Securities 31359MKW2 2076 3133MJ2A7 2077 WFB-ASSET 2082 3136F3MD5 2096 3136F3T71 2098 3133XOP29 2099 912828AC4 2088 3133MYGM3 2094 31339Y6G2 2097 Federal Nat'l Mortgage Assn Federal Home Loan Bank Various Fed Agency Securities Federal Nat'l Mortgage Assn Federal Nat'l Mortgage Assn Federal Home Loan Bank United States Treasury Federal Home Loan Bank Federal Home Loan Bank Subtotal and Average 13,317,778.30 Bear Stearns Co Int Lease Finance Corp. Merrill Lynch & Co Hewlett-Packard Co Corp Notes Computer Sciences Corp Note Subtotal and Average 4,391,510.45 Total and Average 75,123,572.59 Corporate Notes 073902AM0 1052 45974VXZ6 2086 WFB-ASSET-CN1 2083 428236AD5 2067 205363AD6 2065 10,267,496.44 2,476,253.93 172,818.95 33,179.67 3,090,837.54 4,813,740.02 8,901.23 46,764,695.55 258,677.00 67,886,600.33 05/10/2002 05/10/2002 02/28/2001 04/25/2003 07/26/2003 09/09/2003 07/03/2002 05/16/2003 07/17/2003 845,000.00 515,000.00 2,910,000.00 1,500,000.00 1,000,000.00 1,000,000.00 3,000,000.00 1,500,000.00 1,000,000.00 13,270,000.00 02/09/1999 05/01/2002 03/20/2002 12/07/2001 07/26/2001 1,000,000.00 1,000,000.00 250,000.00 1,000,000.00 1,100,000.00 4,350,000.00 85,506,600.33 Market Value 10,267,496.44 2,476,253.93 172,818.95 33,179.67 3,093,604.46 4,818,049.28 8,901.23 47,046,758.96 258,677.00 68,175,739.92 858,203.13 524,495.31 2,931,103.00 1,507,500.00 997,187.50 1,003,750.00 3,177,187.50 1,500,468.75 990,312.50 13~90,207.69 1,001,360.00 1,015,550.00 256,140.00 1,075,120.00 1,206,315.00 4,554,485.00 86,220,432.61 Book Value 10,267,496.44 2,476,253.93 172,818.95 33,179.67 3,090,837~54 4,813,740.02 8,901.23 46,764,695.55 258,677.00 67,886,600.33 845,101.89 515,404.65 2,915,249.80 1,504,525.04 996,985.28 1,000,000.00 3,039,729.40 1,500,000.00 1,000,000.00 13,316,996.06 1,000,216.23 1,004,974.00 251,118.46 1,024,518.08 1,109,104.85 4,389,931.62 85,593,528.01 Page 2 Stated YTM Days to Maturity Rate Moody's 365 Maturity Date 1.100 1.080 0.080 0.080 1.545 1.545 0.670 3.030 1.520 3.5OO 3.625 3.100 3.000 2.540 3.350 4.375 2.500 2.000 1.100 1 1.080 1 0,080 1 0,080 1 1.545 1 1.545 1 0.670 1 3.030 1 1.520 1 2.479 I Aaa 3.481 258 09/15/2004 Aaa 3,519 288 10/15/2004 Aaa 2.890 288 10/15/2004 Aaa 2,886 1,026 10/23/2006 Aaa 2.645 1,107 01/12/2007 Aaa 3.350 1,162 03/08/2007 Aaa 3.939 1,230 05/15/2007 Aaa 2.500 1,597 05/16/2008 Aaa 2,000 1,659 07/17/2008 3.096 962 A1 5.974 14 01/15/2004 A1 4.143 152 06/01/2004 Aa3 4.306 166 06/15/2004 A3 5.281 531 06/15/2005 A2 6.350 896 06/15/2006 5.393 398 2.725 171 6.625 5,400 5.350 7.150 6.750 Run Date: 01/14/2004 - 11:59 Podfolio CITY AP PM (PRF_PM2) SymRept V6.21 RepoR Ver. 5.00 Glossary of Investment Terms: Book Value: The value of an investment on the City's books at the time. The book value is different from the coupon, or par value of the bond, because investments are often purchased either at a premium or a discount, meaning more or less than the face value, or stated value of the investment. That is because most bonds are purchased on the secondary market, as bonds are continually traded and re-traded after their original purchase. When current interest rates are lower than interest rates were at the time the bonds were initially sold, for example, the purchase price will be higher than the face value, that is, the bond will be sold at a premium. For example, if a 4-year Federal Home Loan Bank bond was originally issued by the government in 2002 for 3.5%, and now the interest rates are 3%, the new purchaser would have to buy the bond at more than the face value. For example, instead of buying it at $1.0 million, he or she may have to pay $1.1 million for it. That means that the effective interest rate over the life of the bonds will now be 3%, while the face value of the bonds (the coupon) remains unchanged at 3.5%. The correct way to account for bonds bought at a premium (or discount) is to amortize that premium (or discount) over the remaining term of the bond. In the example above, when the City initially purchases the Federal Home Loan Bank bond in the example above, it is booked at the actual amount paid for it, $1.1 million. It is amortized each month by an equal amount so that by the time it matures, its book value is equal to its face value, $1.0 million. Coupon: See Par Value Effective Interest Rate: The actual interest earned compared to the purchase price, adjusting for whether the initial investment was purchased at par (face value), or at a premium or a discount. Market Value: Market values of bonds fluctuate daily as interest rates change. The market value of a bond at any given point in time is what that bond could sell for on the open market at that time. Maturity Date: When a bond expires, and the investor gets his/her initial investment (the face value, or principal) back. Par Value: Another way to describe the "coupon" is the stated rate on the bond itself. Par value is typically in whole, round numbers, since that's how bonds are initially sold ($1.0 million, $2.0 million, etc.). As described under "book value", the correct way to account for a bond is to record its actual purchase price, and then adjust it monthly by amortizing the premium or discount. Total Earnings: Reflects interest earnings plus any gain or loss on the sale or maturity of the investment, compared to the original purchase price. Total Annualized Yield: Takes the total earnings (see above) as a percent of the original purchase price, expressed on an annualized basis. YTM (Yield to Maturity): The actual interest the City will earn on a bond if it is held to maturity, taking into account its original purchase price (regardless of whether that was at par, at a premium, or at a discount). The YTM will vary slightly depending on whether the year is calculated to have 360 days (12 months X 30 days) or 365 days. Neither figure is right or wrong, or better or worse than the other. Debt Ratings from Moody's Investor Services Aa~ Bonds and preferred stock which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa Bonds and preferred stock which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long- term risk appear somewhat larger than the Aaa securities. A Bonds and preferred stock which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future. Baa Bonds and preferred stock which are rated Baa are considered as medium- grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. ga Bonds and preferred stock which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B Bonds and preferred stock which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Call Bonds and preferred stock which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca Bonds and preferred stock which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C Bonds and preferred stock which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing Office. of'.the C.O~ty '~e' asu~er. LEE B~F~G.TON TAX DATE: TO: FROM: SUBJECT: January 12, 2004 San Mateo County Pool Participants Lee Buffington, Tax Collector-Treasurer Monthly Investment Reports Gross earnings for the month of December 31, 2003 were 3.03% and for the quarter ended December 31, 2003 were 3.04%. The current average maturity of the portfolio is 2.3 years with an average duration of 2.0 years. The portfolio continues to hold no derivative products. San Mateo County Pool fulfills Govenanent Code Section 53646, which states its ability to meet its expenditure requirements for the next six months. I certify these reports are in compliance with the investment policy dated January 2004. If you have any questions regarding any of these reports, please call Charles Tovstein or myself at (650) 363 - 4580. . '~. ~.~_) Lee-Buffm~ton Tax''CoHect0r-Tre~er COUNTY OF SAN MATEO ESTIMATED SUMMARY OF POOL EARNINGS DECEMBER 2003 Fixed Income Investments U $ Treasury Notes Corporate Notes Asset Backed Securities Federal Agencies Floating Rate Securities Short Term Investments Repurchase Agreements U S Treasury Notes Corporate Notes Federal Agencies Commercial Paper LAIF SUBTOTAL - ACCRUED INCOME 12J31/03 Par Value $510,000,000 $358,000,000 $49,426,816 $435,000,000 $212,000,000 182,250,000 75,000,000 $66,500,000 $105,000,000 $345,000,000 $37,OOO,OOO $2,375,176,816 Gross Earnin,qs $1,140,529 $1,165,921 $64,657 $1,166,929 $164,724 $4,101 $132,924 $249,491 $188,619 $135,203 $48,575 $4,461,672 Realized Gain/Loss & Interest Received Repurchase Agreements U S Treasury Notes Corporate Notes Floating Rate Securities Asset Backed Securities Federal Agencies Commercial Paper $277,103 $326,400 $90,078 $77,259 $42,244 $548,166 $91,076 Teeter Pool Loan Securities Lending Income $67,019 $162,472 GROSS POOL RATE/EARNINGS* 3.03% $6,143,488 POOL 1 NET EARNINGS RATE* POOL 2 NET EARNINGS RATE* POOL 3 NET EARNINGS RATE* 2.78% 2.86% 2.90% * - Earnings %'s are based on DECEMBER 2003 Average Daily Balance Pool 1 & 2 rates include banking charges COUNTY OF SAN MATEO ESTIMATED SUMMARY OF POOL EARNINGS FOR THE 2ND QUARTER ENDED DECEMBER 3~, 200:3 Fixed Income Investments U S Treasury Notes Corporate Notes Asset Backed Securities Federal Agencies 12/31103 Par Value $510,000,000 $358,000,000 $49,426,616 $435,000,000 Gross Earnin.qs $1,960,743 $3,010,051 $64,791 $2,881,611 Short Term Investments Repurchase Agreements U S Treasury Notes Corporate Notes Federal Agencies Floating Rate Securities Commercial Paper LAIF SUBTOTAL - ACCRUED INCOME 182,250,000 $75,000,000 $66,500,000 $105,000,000 $212,000,000 $345,000,000 $37,000,000 $2,375,176,816 $4,101 $350,940 $535,765 $441,679 $251,962 $144,286 $142,227 $9,788,156 Realized Gain/Loss & Interest Received Repurchase Agreements U S Treasury Notes Corporate Notes Asset Backed Securities Federal Agencies F~oating Rate Securities Commercial Paper $694,582 $2,106,699 61,303,580 $235,041 $1,765,235 $390,108 $134,790 Securities Lending Income Teeter Pool Loan $171,943 $202,374 GROSS POOL RATEJEARNiNGS* 3.04% $16,792,507 POOL BREAKDOWN Pool t Pool 2 Pool 3 TOTAL Average Balance 259,953,026 519,804,976 1,417,982,172 2,197,740,173 Gross Earnings 1,986,251 3,971,729 10,834,527 16,792,507 Admln Fees (81,679) (163,327) (445,541) (690,547) Bank Fees (85,665) (57,110) (142,775) Net Earnings 1,8t 8,907 3,751,293 10,388,987 15,959,186 Net Earnings % 2.78% 2.87% 2.91% 2.89% Earnings %'s are based on Q2 03-04 average daily balance of investment pools. Pool I and Pool 2 are charged with bank fees associated with their disbursement/depository activity. SAN MATEO COLqgTY TREASURER'S OFFICE FIXED INCOME DISTRIBUTION - SETTLED TRADES SAN31A TEO COUNTY POOL December 31, 2005 Summary Information Par Value Market Value Total Cost Net @ain/Loss Annual Income Accrued Interest Number of Issues Totals 2,375,176,816 2,405,616,854.86 2, 379,293,603.45 26,323,251.41 58,953,315~86 11,972,432.90 127 Weighted Averages Average YTM Average Maturity (yrs) Average Coupon (%) Average Duration AverageMoody Rating Average S&P Rating 2.1 2.3 2.505 2.0 Aal AA Maturity Under 1 Yr 1 Yr- 3 Yrs 3 Yrs - 5 Yrs 5 Yrs - 7 Yrs 7 Yrs - 10 Yrs Number 3O 55 36 1 5 Distribution by Maturity % Bond Average Mkt Value Holdings Y T M 815,056,231.87 33.9 1.1 771,156,954.07 32.1 1.9 763,457,800.85 31.7 3.2 5,502,291.67 0.2 3.6 50,443,576.39 2.1 4.9 Average Average Coupon Duration 1.182 % 0.2 2.898 % 2.0 3.347 % 3.5 5.250 % 4.3 4.934 % 7.1 Coupon % Under 1% 1% -3% 3%-5% 5%-7% 7% - 10% Number 9 50 39 28 1 Distribution by Coupon % Bond Average Mkt Value Holdings Y T M 527,103,831.00 21.9 1.0 952,221,803.32 39.6 2.1 681,010,608.10 28.3 2.8 234,392,118.31 9.7 2.7 10,888,494.12 0.5 1.8 Average Average Coupon Duration 0.280 % 0.0 2.106 % 2.4 3.652 % 2.8 5.621% 2.5 7.750 % 1.4 Duration Under 1 1-3 3-5 Number 31 6O 31 Distribution by Duration % Bond Average Mkt Value Holdings Y T M 914,993,731.87 38.0 1.3 841,733,680.65 35.0 2.0 598,445,865.94 24.9 3.2 Average Coupon 1.394 3.081 3.197 Average Duration 0.3 2.1 4.0 SAN MATEO COUNTY TREASURER'S OFFICE FIXED INCOME DISTRIBUTION - SETTLED TRADES SAN i~4 TEO CO UNTY POOL December ,~1, 200.~ 5 - 7 2 21;122,256.94 0.9 5.1 5.707 % 6.5 7 - 10 3 29,321,319.44 1.2 4.8 4.381% 7.4 Distribution by Moody Rating -- % Bond Average Average Average Rating Number Mkt Value Holdings Y T M Coupon Duration Aaa 72 1,595,756,764.67 66.3 2.2 2.574 % 2.1 Aal 5 45,671,922.87 1.9 2.8 4.160 ~ 3.1 Aa2 14 195,526,847.61 8.1 2.5 3.476 % 3.0 Aa3 22 355,937,472.38 14.8 1.6 1.783 % 1.2 A1 9 176,576,824.02 7.3 1.3 1.551% 0.7 A 4 31,109,366.27 1.3 2.3 4.366 % 2.3 A3 1 5,037,657.02 0.2 1.2 1.600 % 1.7 Distribution by S&P Rating % Bond Average Average Average Rating Number Mkt Value t[oldings Y T M Coupon Duration AAA 74 1,613,777,412.20 67.1 2.2 2.596 % 2.2 AA 7 78,733,309.04 3.3 2.4 3.224 % 2.6 AA- 20 266,744,057.00 11.1 2.2 3.216 % 2.1 A+ 18 299,819,429.88 12.5 1.6 1.716 % 1.5 A 8 146,542,646.74 6.1 1.3 1.455 % 0.6 1 ~ MARKET VALUE ON THE FIXED INCOME DISTR/B~ION REPORT INCLUDES ANY ACCRUED INTEREST THAT A SECURITY I-LiS EARNED. TOTAL COST DOES NOT REFLECT AMORTIZATIONS OR ACCRETIONS BUT INCLUDES PURCHASED ACCRUED INTEREST. Security LOCAL AGENCY INVESTMENT FUND LAIF 1.600 % Due 01-31-04 REPURCHASE AGREEMENTS REPURCHASE AGREEMENT(U.S. TiLEAS NTS COLLAT) 0.810 % Due 01-02-04 COiVLMERCI AL PAPER LEI-LIVlAN BROT ~HE_RS HOLDINGS 0.000 % Due 01-02-04 GENERAL ELECTRIC CAPiTAL CORPORATION 0.000 % Due 01-06-04 MORGAN STANLEY DEAN WITTER 0.000 % Due 01-07-04 MORGAN STANLEY DEAN 'vVITTEK 0.000 % Due 01-09-04 MORGAN STANLEY DEAN WITTER 0.000 % Due 01-21-04 GENERAL ELECTRIC CAPiTAL CORPORATION 0.000 % Due 02-06-04 MORGAN STANLEY DEAN 'vVITTER 0.000 % Due 02-06-04 MORGAN STANLEY DEAN 'WITTER 0.000 % Due 02-20-04 ASSET BACR.ED SECURITIES DAIMLER CHRYSLER AUTO TRUST 2.200 % Due 04-06-05 NISSAN AUTO LEASE TRUST 1.690 % Due 12-I5-05 NISSAN AUTO RECEIVABLES OWNER. TRUST 1.620 % Due 04-17-06 DAIMLF_~ CHRYSLER AUTO TRUST 2.930 % Due 06-06-06 TOYOTA AUTO RECEIVABLES OWNER TRUST 3.760 % Due 06-15-06 NISSAN AUTO RECEIVABLES OWNER. TRUST 2.600 % Due 08-15-06 HARLEY-DAVIDSON MOTORCYCLE TRUST 1.910 % Due 04-15-07 FLOATIIqG RATE SECURITIES INTEKNATIONAL LEASE FINANCE 2.360 % Due 01-13-05 WAL-MART STORES CB FLOATER 1.087 % Due 02-22-05 IP MORGAN CHASE & CO SAN MATEO COUNTY TREAS~R'S OFFICE PORTFOLIO APPRAISAL SAN 3gATEO COUNTY POOL December $1, 2003 Call D ate C all 'Unit T oral Market Price Quantity Cost Cost Price 37,000,000 100.00 37,000,000.00 100.00 182,250,000 100.00 182,250,000.00 100.00 100,000,000 99.99 99,994,722.22 99.99 50,000,000 99.98 49,988,555.56 99.98 25,000,000 99.94 24,984,250.00 99.98 50,000,000 99.86 49,931,875.00 99.97 50,000,000 99.88 49,940,000.00 99.94 30,000,000 99.82 29,946,408.33 99.89 25,000,000 99.84 24,961,000.00 99.89 15,000,000 99.80 14,970,300.00 99.85 345,000,000 344,717,111.11 2,214,471 99.98 2,214,090.90 100.10 7,000,000 99.99 6,999,636.70 100.21 10,000,000 100.00 9,999,945.00 100.t5 10,000,000 99.99 9,998,6.50.00 101.02 8,398,600 I00.00 8,398,529.50 101.28 9,432,407 100.00 9,432,049.22 100.83 2,381,338 99.98 2,380,833.56 100.28 49,426,816 49,423,734.88 20,000,000 100.00 20,000,000.00 101.22 20,000,000 99.87 19,975,000.00 100.01 10,000,000 I00.00 10,000,000.00 100.31 Market Value Market Accrued +Accrued Value Interest Interest 37,000,000.00 149,644.44 37,149,644.44 182,250,000.00 99,994,700.00 49,991,415.00 24,994,750.00 49,986,375.00 49,968,500.00 29,966,391.00 24,973,750.00 14,977,950.00 344,853,831.00 2,216,741.72 7,015,019.20 10,015,089.00 10,103,136.00 8,505,740.10 9,510,671145 2~387,993.84 49,753,391.31 20,244,540.40 20,001,220.70 10,030,819.70 0.00 182,250,000.00 0.00 99,994,700.00 0.00 49,991~15.00 0.00 24,994,750.00 0.00 49,986,375.00 0.00 49,968,500.00 0.00 29,966,391.00 0.00 24,973,750.00 0.00 14,977,950.00 0.00 344,853,831.00 3,383.22 2,220,124.94 5,257.78 7,020,276.98 7,200.00 10,022,289.00 20,347.22 . 10,122~83.22 14,034.99 8,519,775.09 10,899.67 9,521,571.12 2,021.49 2,390,015.33 63,144.38 49,816,535.69 102,266.67 20,346,807.07 23,551.67 20,024,772.37 13,033.33 10,043,~53.03 Pct AsseL~ 1.55 7.61 4.18 2.09 1.04 2.09 2.09 1.25 1.04 0.63 14.41 0.09 0 29 0.42 0.42 0.36 0.40 0.10 2.08 0.85 0.84 0.42 SAN MATEO COU-NTY TREASURER'S OFFICE PORTFOLIO APPRAISAL SAN MATEO COUNTY POOL December 31, 2003 Security 1.380 % Due 02-244)5 PdvlEILICAN -,EXPRESS CiLEDIT CORPOB-KTION 1.238 % Due 02-25-05 GENERAL F_J_ECTRIC CAPITAL CORP. CB FLOATER 1.243 % Due 03-15-05 ~ ~%LL$ FARGO &COMPANY 1.160 % Due 06-17-05 LEHMAN BR©TIdE1LS HOLDINGS-FLOATER 1.600 % Due 09-28-05 US BANK NA 1.171 % Due 12-05-05 MORGAN STANLEY GROUP - FLOATER 1.280 % Due 03-27-06 GENERAL ELECTRIC CAPITAL CORP. CB FLOATER 1.300 % Due 05-12-06 WELLS FARGO & CO/VIPA--'NrY' 1.230 % Due 06-12-06 CITI GROUP INC. 1.920 % Due 06-19-06 OENERAL ELECTRIC CAPITAL CORP. CB FLOATER 1.270 % Due 09-18-06 MORGAN STANLEY DEAN WiTTER CB FLOATER t.320 % Due 11-24-06 Call D ate Call Price Quantity 13,o00,ooo 15,000,000 10,000,000 5,000,000 20,000,000 30,000,000 15,000,000 25,000,000 10,000,000 12,000,000 7,000,000 212,000,000 Unit Total Cost Cost 100.00 13,000,000.00 100.00 15,000,000.00 100.00 I0,000,000.00 99.79 4,989,450.00 100.00 20,000,000.00 100.00 30,000,000.00 I00.00 15,000,000.00 100.00 25,000,000.00 100.00 10,000,000.00 100.00 12,000,000.00 100.00 7,000,000.00 211,964,450.00 Market Price 100.12 100.17 99.97 100.74 100.00 100.32 100.28 100.11 99.94 100.18 99.94 Market Value 13,015,964.35 15,026,099.40 9,997,079.47 5,036,990.35 19,999,099.74 30.095,338.44 15,041,745.76 25,028,575.90 9,993,870.54 12,022,188.72 6,995,559.75 212,529,123.24 Market Value Accrued Interest 2,682.33 7,250.83 4,511.11 666.67 16,918.06 4,266.67 26,541.67 93,104.17 6,400.00 5,503.33 9,496.67 316,193.17 +Accrued Interest 13,018,646.68 15,033,350.23 10,001,590.58 5,037,657.02 20,016,017.80 30,099,605.11 15,068,287.43 25,121,680.07 10,000,270.54 12,027,692.05 7,005,086.42 212,845,316.40 Pct Asse~ 0.54 0.63 0.42 0.21 0.84 1.26 0.63 1,05 0.42 0.50 0.29 8.88 CORPORATE BONDS MERRILL LYNCH & CO INC. 5.880 % Due 0145-04 MORGAN STANLEY DEAN WITTER 5.625 °A Due 01-20-04 HOUSEHOLD FINANCE COI~ORATION 6.000 % Due 05-01-04 BANK OF AM2ERICA CORPORATION 6.625 % Due 06-15-04 FIRST UNION COILP SR HOLDINGS 6.625 % Due 06-15-04 INTERNATIONAL LEASE FINANCE 5.125 % Due 08-01-04 M/NNESOTA MINING & MA/qUFACTUIUNG 4.250 % Due 09-01-04 PFIZER INC 3.625 % Due 11-01-04 U.S. BANCORP 6.875 % Due 124)1-04 MERCK & CO, INC. 4.125 % Due 01-18-05 GENERAL ELECTRIC CAt>II'AL CORPORATIO~ 4.250 % Due 01-28-05 COLGATE-PALMOLIVE CO 3.980 % Due 04-29-05 5,000,000 5,000,000 5,000,0O0 5,000,000 5,000,000 10,000,000 6,500,000 20,000,000 5,000,000 10,000,000 10.000,0o0 10,000,000 100.00 5,000,000.00 99.54 4,977,250.00 99.98 4,998,900.00 99.80 4,989,950.00 99.80 4,990,050.00 102.62 10,262,500.00 100.07 6,504,550.00 100.00 20,000,000.00 99.74 4,986,900.00 99.91 9,991,500.00 99.77 9,977,100.00 99.80 9,980,000.00 100.11 100.17 101.53 102.40 102.41 102.03 101.92 101.86 104.74 102.72 102.81 103.42 5,005,740.35 5,008,699.80 5,076,490.02 5,119,760.13 5,120,435.33 10,202,870.18 6,624,962.54 20,372,219.84 5,237,120.05 10,271,780.40 10,281,309.51 10,342,390.44 135,566.67 125,781.25 50,000.00 14,722.22 14,722.22 213,541.67 92,083.33 120,833.33 28,645.83 186,770.83 180,625.00 68,544.44 5,141,307.02 5,134,481,05 5,126,490.02 5,134,482.35 5,135,157.56 10,416,411.85 6,717,045.87 20,493,053.17 5,265,765.89 10,458,551.23 10,461,934.51 10,410,934.88 0.21 0.21 0.21 0.21 0.21 0.43 0.28 0.85 0.22 0.43 0.43 0.43 SAN MATEO COUNTY TREASURER'S OFFICE PORTFOLIO APPRAISAL SAN MATEO COUNTY POOL December $1, 200.~ Call Call Unit Total Securitw Date Price Quantity Cost Cost MORGAN STANLEY DEAN WITTER 10,000,000 108.22 10,822,000.00 7.750 % Due 06-15-05 INTEILNATIONAL BUSINESS MACHINE CORPOP, ATION 5,000,000 98.44 4,922,100.00 4.125 % Due 06-30-05 ASSOCIATES CORPORATION NA 4,000,000 100.97 4,038,720.00 6.000 % Due 07-15-05 WELLSFARGO &COMPANY 25,000,000 100.28 25,070,650.00 4.800 % Due 07-29-05 WELLS FARGO BANKNA STEP-UP 07-02-04 100 10,000,000 100.00 10,000,000.00 1.500 % Due 01-02-06 GENERAL ELECTRIC CREDIT COP~PORATION 20,000,000 100.53 20,105,300.00 2.850 % Due 01-30-06 MORGAN STANLE~r DEAN WITTER. 10,000,000 100.03 10,003,050.00 6.100 % Due 04-15-06 LEHMAN BROTHERS HOLDI2qGS 10,000,000 100.02 10,002,200.00 6.250 % Due 05-15-06 ABBOTT LAB ORATOR/~S 10,000,000 99.67 9,967,100.00 5.625 % Due 07-01-06 WAi,-MA~T STOB2ES 5,000,000 99.81 4,990,700.00 5.450 % Due 08-01-06 GENERAL ELECTRIC CAPITAL CORPORA.T/ON 10,000,000 99.88 9,987,800.00 2.750 % Due 09-25-06 US BANK NA 10,000,000 99.99 9,999,100.00 2.850 % Duo 11-15-06 JP MORGAN CHASE & CO 10,000,000 99.95 9,994,600.00 3.125 %Due 12-11-06 GENERAl, ELECTRIC CAPITAL CORPORATION 15,000,000 99.82 14,973,150.00 5.000 % Due 02-15-07 JP MORGAN CHASE & CO 10,000,000 99.88 9,988,000.00 5.350 % Due 03-01-07 MOP, GAN STANLEY DEAN WITTER 10,000,000 99.70 9,969,780.00 5.800 % Due 04-01-07 GENERAL ~I.~CTRIC CAPITAL CORPORATION 10,000,000 99.49 9,948,600.00 5.000 % Due 06-15-07 WAL-MART STORES 15,000,000 99.66 14,948,700.00 4.375 % Due 07-12-07 CHEVRON TEXACO CAPITAL CO 10,000,000 99.55 9,955,300.00 3.500 % Due 09-17-07 GIII FTTE COMPANY 10-15-04 100 10,000,000 99.83 9,982,900.00 3.500 %Due 10-15-07 El DUPONT DE NEMOLrRS 10,000,000 99.55 9,954,800.00 3.375 %Due 11-15-07 CI-rEVRON TEXACO CAPITAL CO 10,000,000 99.92 9,991,700.00 3.375 %Due 02-15-08 MORGAN STA~ DEAN WITTER 12,000,000 99.86 11,983,680.00 3.625 % Due 04-01-08 WSLLSFARGO COMPA_NY 15,000,000 99.89 14,984,100.00 3.500 % Due 04-04-08 JP MOI~GAN CHASE &CO 10,000,000 99.88 9,988,100.00 3.625 % Due 05-01-08 Market Price 108.54 103.90 106.50 104.60 99.42 101.43 108.21 108.64 107.86 107.66 100.37 100.48 100.81 106.34 107.03 108.70 106.51 104.89 101.85 100.75 101.14 100.47 100.14 100.32 100.20 Market Value 10,854,049.68 5,194,860.07 4,260,076.29 26,150,848.40 9,941,859.44 20,286,041.26 10,821,200.56 10,863,999.94 10,786,380.00 5,383,004.76 10,036,749.27 10,048,379.52 10,081,370.54 15,950,624.08 10,702,949.52 10,869,819.64 10,651,469.42 15,733,605.19 10,184,759.52 10,075,230.41 10,114,019.78 10,047,450.26 12,016,955.57 15,047,879.79 10,020,120.24 Market Value Accrued Interest 34,444.44 0.00 110,666.67 506,666.67 74,583.33 237,500.00 128,777.78 79,861.11 281,250.00 113,54.1.67 73,333.33 36,416.67 17,361.11 283,333.33 178,333.33 145,000.00 22,222.22 308,072.92 101,111.11 73,888.89 43,125.00 127,500.00 108,750.00 126,875.00 60,416.67 +Accrued Interest 10,888,494.12 5,194,860.07 4,370,742.96 26,657,515.07 10,016,442.77 20,523,541.26 10,949,978.34 10,943,861.05 11,067,630.00 5,496,546.43 10,110,082.60 10,084,796.19 10,098,731.65 16,233,957.42 10,881,282.85 11,014,819.64 10,673,691.64 16,041,678.11 I 0,285,870.63 10,149,119.30 10,157,144.73 10,174,950.26 12,125,705.57 ! 5,174,754 ~79 10,080,536.91 Pct Assets 0.45 0.22 0.18 1.09 0.42 0.85 0.45 0.45 0.45 0.22 0.42 0.42 0.42 0.67 0.45 0.45 0.44 0.66 0.43 0.42 0.42 0.42 0.50 0.63 0.42 SAN MATEO COUNTY TREASURER'S OFFICE PORTFOLIO APPRAISAL SAN MATEO COUNTY POOL December 3i, 2003 Secm'ity GILLETTE COMPA/qY 2.500 %Due 06-01-08 TOYOTA IviOTOR CREDIT CORPORATION 2.875 % Due 08-01-08 LEHMAN BROTHERS HOLDINGS 3.500 % Due 08-07-08 WELLS FARGO COMPANY 3.120 %Due 08-15-08 WAL-MART STORES INC 3.375 % Due I0-01-08 FEDERAL AGENCY SECURITIES FEDERAL NATIONAL MORTGAGE ASSOCIATION 5.625 % Due 05-14-04 FEDEIKAL NATIONAL MORTGAGE ASSOCIATION 3.000 % Due 06-15-04 FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.030 % Duo 07-26-04 FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.200 % Due 08-13-04 FEDERAL NATIONAL MORTGAGE ASSOCIATION 6.500 0/% Due 08-15-04 FEDERAL NATIONAL MORTGAGE ASSOCIATION 3.500 % Due 09-15-04 FEDE1LAL NATIONAL MORTGAGE ASSOCIATION 1.500 % Due 09-27-04 FEDERAL NATIONAL NIORTGAGE ASSOCIATION 1.550 Si Duo 12-06-04 FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.650 % Due 12~30-04 FEDERAL NATIONAL MORTGAGE ASSOCIATION 3.875 % Due 03-15-05 FEDERAL NATIONAL MORTGAGE ASSOCIATION 5.750 % Due 06-15-05 FEDERAL NATIONAL MORTGAGE ASSOCIATION 2.375 %Due 08-10-05 . FEDERAL HOME LOAN MORTGAGE CORPORATION - FLOATER 1.107 % Due 09-0%05 FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.875 % Due 09-15-05 FEDERAL NATIONAL MORTGAGE ASSOCIATION 3.000 % Due 11-01 FEDERAL HOME LOAN MORTGAGE CORPORATION 2.125 %Duc 11-15-05 FEDEP. AL NATIONAL MORTGAGE ASSOCIATION 6.000 % Due 12-15-05 FEDEILt'd~ FARM CREDIT BANK 2.500 % Due 03-15-06 D 08-15-05 04-024)4 01.224)4 03-03-04 02-12-04 03-08-04 02-10-04 I 1 -Ol -04 Call Price 100 100 lO0 lO0 100 lOO lO0 100 Quantity. 10,000,000 7,000,000 5,000,000 10,000,000 10,000,000 414,500,000 5.000,000 10,000,000 20,000,000 10,000,000 5,000,000 15,000,000 10,000,000 20,000,000 10,000,000 20,000,000 5.000,000 15,000,000 10,000,000 10,000,000 lO,000,ooo 20,000,000 10,000,000 10,000,000 Unit Tot~ Cost Cost 99.18 9,918,000.00 99.48 6,963,460.00 99.56 4,978,050.00 100.00 10,000,000.00 99.62 9,962,200.00 415,052J40.00 99.96 4,998,000.00 99.80 9,980~00.00 100.00 20,000,000.00 100.00 10.000,000.00 100.88 5,044,050.00 99.68 14,952,300.00 100.00 10,000,000.00 100.00 20,000,000.00 100.00 10,000,000.00 99.76 19,951,600.00 99.49 4,974,600.00 100.40 15,060,000.00 lO0.O0 10,000,000.00 99.79 9~79,000.00 100.00 10,000,000.00 99.98 19,997,000.00 99.62 9,961,800.00 99.78 9,977,800.00 Market Price 96.27 98.13 99.37 98.79 99.08 101.66 100.84 99.91 99.97 103.25 101.56 100.03 100.03 100.06 102.94 106.00 100.12 100.00 100.25 101.62 100.44 107.69 100.75 h4arket Value 9,626,750.18 6,869,163.36 4,968,744.66 9,878,799.44 9,908,070.37 426,039,009.78 5,082,812.50 10,084,375.00 19,981,250.00 9,996,875.00 5,162,500.00 15,234,375.00 10,003,125.00 20,006,250.00 10,006,250.00 20,587,500.00 5,300,000.00 15,018,750.00 9,999,830.63 10,025,000.00 10,162,500.00 20,087,500.00 10,768,750.00 10,075,000.00 Market Value Accrued Interest 20,833.33 83,854.17 70,000.00 117,866.67 84,375.00 4,881,797.22 35,937.50 13,333.33 I02A27.78 53,000.00 122,777.78 154,583.33 49,166.67 42,194.44 10,541.67 228,194.44 12,777.78 139,531.25 6,766.16 +Accrued Interest 9,647,583.51 6,953,017.53 5,038,744.66 9,996,666.11 9,992,445.37 430,920,807.01 5,118,750.00 10,097,708.33 20,083,677.79 10,049,875.00 5,285,277.78 15,388,958.33 10,052,291.67 20,048,444.44 10,016,791.67 20,815,694.44 5,312,777.78 15,15:8,281.25 10,006,596.79 55,208.33 50,000.00 54,305.56 26,666.67 73,611.11 10,080,208.33 10,212,500.00 20,141,805.56 10,795,4.16.67 10,148,611.11 Pct Assets 0.40 0.29 0.21 0.41 0.41 17.80 0.21 0.42 0.83 0.42 0.22 0.64 0.42 0.84 0.42 0.86 0.22 0.63 0.42 0.42 0.42 0.84 0.45 0.42 SAN MATEO COUNTY TR_EASUKEK'S OFFICE PORTFOLIO APPRAISAL SAN MA TEO COUNTY POOL December 31, 2003 Security FEDERAL HOME LOAN BANK 2.500 % Due 03-15-06 INTERNATIONAL BANK RECON & DEVELOPMENT 5.000 % Due 03-28-06 FEDERAL NATIONAL MORTGAGE ASSOCIATION 2.250 % Due 05-15-06 " FEDERAL HOME LOAN BANK 03-30434 2.250 .% Due 06-30-06 FEDERAL HOME LOAN MORTGAGE CORPORATION 06-30-04 2.625 % Due 06-30-06 FEDERAL HOME LOAN BANK 07-26-04 5.625 % Due 07-26-06 FEDERAL NATIONAL MORTGAGE ASSOCIATION 02-28434 3.000 % Due 08-28-06 FEDERAL HOME LOAN MORTGAGE CORPORATION 11-03-04 2.875 %Due 11-03-06 FEDERAL FARM CREDIT BANK 11-24434 2.700 % Due 11-24-06 FEDERAL NATIONAL MORTGAGE ASSOCIATION-SUB NOTE 4.750 % Due 01432-07 FEDF_~,AL NATIONAL MORTGAGE ASSOCIATION 5.000 % Due 01-15-07 FEDERAL NATIONAL MORTGAGE ASSOCIATION 05-14-04 5.000 % Due 05-14-07 FEDERAL HOME LOAN MORTGAGE CORPOR.ATION 07-23-04 4.500 % Due 07-23-07 FEDERAL HOME LOAN MORTGAGE CORPORATION 09-13-04 4.000 % Due 09-13-07 FEDERAL NATIONAL MORTGAGE ASSOCIATION 01-28435 3.500 % Due 01-28-08 FEDERAL HOME LOAN MORTGAGE CORPORATION 02-25-05 3.250 % Due 02-25-08 FEDERAL HOME LOAN BANK 2.750 % Duc 03-14-08 FEDERAL HOME LOAN BANK 10-22-04 3.500 % Due 04-22-08 FEDEI~cL NATIONAL MORTGAGE ASSOCIATION 05-19435 2.875 % Due 05-19-08 FEDERAL NATIONAL MORTGAGE ASSOCIATION 2.500 % Due 06-15-08 FEDERAL HOME LOAN MORTGAGE CORPOILATION-STEP 07-11 435 2.000 % Due 07-11-08 FEDEiLa. L NATIONAL MORTGAGE ASSOCIATION 09-154)5 3.750 % Due 09-15-08 FEDERAL HOME LOAN MORTGAGE CORPORaTION-STEP 11-25435 3.000 % Due 11-25-08 FEDERAL NATIONAL MORTGAGE ASSOCIATION Date Call Unit Total Price 0uantit3' Cost Cost 20,000,000 99.78 19,955,200.00 10,000,000 99.93 9,992,600.00 20,000,000 99.94 19,988,200.00 100 10,000,000 100.00 I0,000,000.00 100 10,000,000 100.00 10,000,000.00 100 5,000,000 100.00 5,000,000.00 100 10,000,000 100.00 10,000,000.00 100 20,000,000 99.97 19,994,800.00 100 10,000,000 100.00 10,000,000.00 20,000,000 99.71 19,942,000.00 10,000,000 99.90 9,990,300.00 100 10,000,000 99.24 9,923,900.00 100 10,000,000 99.84 9,983,600.00 100 10,000,000 99.62 9,962,500.00 100 i0,000,000 99.80 9,979,900.00 100 15,000,000 99.61 14,940,900.00 5,000,000 99.61 4,980,300.00 100 20,000,000 99.82 19,964,600.00 100 10,000,000 99.65 9,965,100.00 20,000,000 99.59 19,918,600.00 100 10,000,000 lO0.O0 10,000,000.00 Market Value Market Market Accrued +Accrued Price Value Interest Interest 100.81 20,162,500.00 147,222.22 20,309,722.22 106.44 10,643,750.00 129,166.67 10,772,916.67 100.00 20,000,000.00 57,500.00 20,057,500.00 99.72 9,971,875.00 0.00 9,971,875.00 100.51 10,050,590.52 0.00 10,050,590.52 102.41 5,120,312.50 121,093.75 5,241,406.25 100.25 10,025,000.00 102,500.00 10,127,500.00 100.03 20,006,250.00 92,638.89 20,098,888.89 100.03 10,003,125.00 27,750.00 10,030,875.00 105.34 21,068,750.00 472,361.11 21,541,1t1.11 106.73 10,675,000.00 230,555.56 10,905,555.56 101.34 10,134,375.00 65,277.78 10,199,652.78 101.56 10,156,250.00 197,500.00 10,353,750.00 102.06 10,206,250.00 120,000.00 10,326,250.00 100.00 10,000,000.00 148,750.00 10,148,750.00 99.12 14,868,750.00 170,625.00 15,039,375.00 98.16 4,907,812.50 40,868.06 4,948,680.56 99.56 19,912,500.00 134,166.67 20,046,666.67 97.56 9,756,250.00 33,541.67 9,789,791.67 96.62 19,325,000.00 22,222.22 19,347,222.22 99.32 9,932,330.32 94,444.44 10,026,774.76 9,993,750.00 110,416.67 10,104,166.67 5,061,315.15 15,000.00 5,076,315.15 100 10,000,000 99.72 9,971,900.00 99.94 100 5,000,000 99.59 4,979,687.50 101.23 5,000,000 99.43 4,971,550.00 107.62 5,381,250.00 121,041.67 5,502,291.67 Pct Assets 0.84 0.44 0.84 0.42 0.42 0.21 0.42 0.84 0.42 0.88 0.45 0.42 0.42 0.43 0.42 0.62 0.21 0.83 0.41 0.81 0.41 0.42 0.21 0.22 SAN MATEO COUNTY TREASUreR'S OFFICE PORTFOLIO APPRAISAL SAN MATEO COUNTY POOL December 31, 2003 Security 5.250 % Due 01-15-09 FEDERAL HOME LOAN MORTGAGE COltP - SUB NOTE 03-05.07 6.250 % Due 03-05-12 FEDERAL HO1ME LOAN MORTGAGE CORPORATION 08-20-04 5.125 % Due 08-20-12 FEDERAL HOME LOAN MORTGAGE CORPORATION 4.500 %Due 01-15-13 FEDERAL NATIONAL MORTGAGE ASSOCIATION SUB NOTE '~ 4.625 % Due 05-01-13 FEDERAL HOME LOAN MORTGAGE CORPORATION 06-12-06 4.000 % Due 06-12-13 UNITED STATES TREASURIES UNITED STATES TREAS NTS 2.250 % Due 07-31-04 IfNITED STATES TREAS NTS 2.125 %Due 10-31-04 UNITED STATES TREAS NTS 3.500 % Due 11-15-06 UNITED STATES TREAS NTS 5.625 % Due 05-15-08 UNITED STATES TREAS NTS 2.625 % Due 05-15-08 UNITED STATES TREAS NTS 3.125 % Due 09-15-08 UNITED STATES T/LEAS NTS 3.750 % Due 12-15-08 Call Call D ate Price lOO 100 100 Unit Total Market Quantity Cost Cost Price 10,000,000 99.80 9,980,200.00 107.31 10,000,000 99.29 9,929,000.00 100.03 10,000,000 99.02 9,901,700.00 99.50 10,000,000 99.09 9,908,900.00 97.31 10,000,000 99.88 9,987,700.00 93.34 550,000,000 548,989,687.50 50,000,000 100.00 50,000,000.00 100.69 25,000,000 100.69 25,171,875.00 100.78 100,000,000 99.91 99,906,250.00 103.37 10,000,000 108.08 10,807,812.50 110.78 250,000,000 101.02 252,562,500.00 98.50 100,000,000 100.95 100,945,913.46 99.94 50,000,000 101.00 50,501,729.00 100.69 Market Value 10,731,250.00 10,003,125.00 9,950,000.00 9,731,250.00 9,334,375.00 554,695,629.12 50,343,750.00 25,195,31Z50 103,375,000.00 11,078,125.00 246,250,000.00 99,937,500.00 50,343,750.00 Market Value Accrued +Accrned Pct Interest Interest Assets 201,388.89 10,932,638.89 0.45 186,493.06 10,189,618.06 0.42 207,500.00 10,157,500.00 0.42 77,083.33 9,808,333.33 0.41 21,111.11 9,355,486.11 0.39 4,579,242.55 559,274,871.68 23.17 467,730.98 50,811,4.80.98 2.10 89,993.17 25,285,305.67 1.05 442,307.69 103,817,307.69 4.32 7!,085.16 '11,149,210.16 0.,16 829,326.92 247,079,326.92 10.29 0.00 99,937,500.00 4.18 81,967.21 50,425,717.21 2.10 585,000,000 589,896,079.96 586,523,437.50 1,982,411.14 588,505,848.64 24.50 '~'~'~'t~''~.'' ~ ...... ' ;~':¢t' ~'r~ ~',~'.~ .~' '~m~'~V,.~ ' ~ ~ ~' -~ ~' .~ ~ ~ - ~ ,,~ ~ · , ~..,~ ~ ,~.~, ~,~ ~.~,~ .,, ,~, ~.., ,~,.~. ~,~ · .~ ,.. ~ 1 ~ ***TOTAL COST DOES NOT REFLECT AMORTIZATIONS OR ACCRETIONS BUT INCLUDES PURCHASED ACCRUED INTEREST. MARKET PRICES ARE DOWNLOADED TI-~OUGH (IDC) INTERACTIVE DATA CORP. SAN MATEO COUNTY TREASURER'S OFFICE REALIZED GAINS AND LOSSES - SETTLED TRADES SAN S~IA TE O CO UNTY POOL From 12-01-05 Through ]2-$1-05 Open Date Clo~e Co~t Date Quantity Secnrlty Basis Proceeds Gain Or Loss Short Term Long Term 12-02-03 124)3-03 12-08-03 124)8-03 12-08-03 124)8-03 12-08-03 12-08-03 12-08-03 12-08-03 12-08-03 12-08-03 03-26-01 12-08-03 08-18-03 12-09-03 12-10-03 12-11-03 02-08-99 12-12-03 04-02-01 12-16-03 04-23-99 12-16-03 12-15-03 12-15-03 12-15-03 12-15-03 12-15-03 12-15-03 12-10-03 12-16-03 12-18-03 12-18-03 12-18-03 12-18-03 12-19-03 12-19-03 08-01-01 12-30-03 50,000,000 UNITED STATES TREAS NT8 49,886,718.75 3.375% Due 11-15-08 50,000,000 UNITED STATES TREAS NTS 50,226,562.50 3.375% Due 11-15-08 50,000,000 UNITED STATES TREAS NT8 50,390,625.00 3.375% Due 11-15-08 50,000,000 UNITED STATES TREAS NTB 50,394,531.25 3.375% Due 11-15-08 50,000,000 UNITED STATES TREAS N'TS 50,386,718.75 3.375% Due 11-15-08 50,000,000 UNITED STATES TREAS NTS 50,402,343.75 3.375% Due 11-15-08 5,000,000 FEDERAL NATIONAL 4,997,350.00 MORTGAGE ASSOCIATION 4.750% Due 03 -15 -04 10,000,000 FEDERAL HOMELOAN 9,520,000.00 MORTGAGE CORPORATION 3.290% Due 06-16-09 50,000,000 UNITED STATES TREAS NT8 50,101,562.50 3.375% Due 11-15-08 5,000,000 FEDERAL NATIONAL 4,994,250.00 MORTGAGE AS80CIATION 5.125% Due 02-13-04 5,000,000 ASSOCIATES 4,993,750.00 CORPORATION NA 5.500% Due 02-15-04 5,000,000 ASIAN DEVELOPMENT 4,976,500.00 BANK 5.500% Due 04-23-04 50,000,000 UNITED STATES TREA8 NTg 50,417,968.75 3.750% Due 12-15-08 50,000,000 UNITED STATE8 TREAS NTB 50,421,875.00 3.750°.4 Due 12-15-08 50,000,000 UNITED STATES TREAg NTB 50,332,031.25 3.750% Due 12-15-08 50,000,000 UNITED STATES TREAS NTB 50,246,093.75 3.375% Due l 1-15-08 50,000,000 UNITED STATES TREAS NTS 50,484,375.00 3.750% Due 12-15-08 50,000,000 UNITED STATES TREAS NTB 50,484,375.00 3.750% Due 12-15-08 50,000,000 UNITED STATES TREAS NTB 50,421,875.00 3.750% Due 12-15-08 10,000,000 TENNESSEE VALLEY 9,997,800.00 AUTHORITY 4.750% Due 07-15-04 49,925,781.25 39,062.50 50,29t5,~75.00 70,312.50 50,363,281.25 -27,343.75 50,312,500.00 -82,031.25 50,406,250.00 19,531.25 50,433,593.75 31,250.00 5,048,000.00 9,575,000.00 50,179,687.50 5,033,660.00 5,034,850.00 5,075,500.00 55,000.00 78,125.00 50,398,437.50 -19,531.25 50,453,125.00 31,250.00 50,367,187.50 35,156.25 50,371,093.75 125,000.00 50,546,875.00 62,500.00 50,527,343.75 42,968.75 50,460,937.50 39,062.50 10,192,800.00 50,650.00 39,410.00 41,100.00 99,000.00 195,000.00 TOTAL GAINS 629,218.75 425,160.00 TOTAL LOSSES -128,906.25 0.00 TOTAL REALIZED GAIN/LOgS 925,472.50 1 ~ **THESE ARE GROSS PRINC~AL FIGURES ONLY. THEY DO NOT REFLECT ANY AMORTIZATIONS OR ACCRETIONS. ~ COST BASIS DOES NOT REFLECT ANY PURCHASED ACCRUED D,TTEREST. /2__ SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SANMA TEO COUN1Y POOL From t2-01-05 To 12-$1-05 Tran Trade Settle Close S/D Code Security Date Date Quantity Meth. T},pe Symbol by REPLrRCHASE AGREEM2ENTCU.s. 12-01-03 12-01-03 175,250,000 caus cash TREAS NTS COLLAT) 1.030% Due 12-02-03 si GENERAL ELECTRIC CAPITAL 12-01-03 12-01-03 50,000,000 s caus cash CORPORATION 0.000% Due 12-01-03 sa GENERAL ELECTRIC CAPITAL 12-01-03 12-01-03 taus cash CORPORATION 0.000% Due 12-01-03 sl REPURCHASE AGREEMENT(U.S. 12-01-03 12-01-03 111,250,000 s caus cash TREAS NT$ COLLAT) 0.990% Due 12-01-03 sa REPURCHASE AGREEMENT(U.S. 12-01-03 12-01-03 caus cash TREAS NT$ COLLAT) 0.990% Due 12-01-03 in U.S. BANCORP 12-014)3 12-01-03 caus cash 6.875% Due 12-01-04 in GILLETTE COMPAI'~' 12-01-03 12-01-03 caus cash 2.500% Due 06-01-08 by UNITED STATES TREAS NTS 12-014)3 12-02-03 50,000,000 caus cash 3.375% Due 11-15-08 pa UNITED STATES TREAS NTS t2-01-03 12-02-03 caus cash 3.375% Due 11-15-08 by REPURCHASE AGREEMENT(U.S. 12-02-03 12-02-03 206,500,000 caus cash TREAS NTS COLLAT) 0.980% Due 12-03-03 si MORGAN STANLEY DEAN 12-02-03 12-02-03 21,000,000 s caus cash WITTER 0.000% Due 12-02-03 sa MORGAN STANLEY DEAN 12-02-03 12-02-03 caus cash WITTER 0.000% Due 12-02-03 si MORGAN STANLEY DEAN 12-02-03 12-02-03 50,000,000 s caus cash WITTER 0.000% Due 12-02-03 sa MORGAN STANLEY DEAN 12-02-03 12-02-03 caus cash WITTER 0.000% Due 12-02-03 si REPURCHASE AGREEMENT(U.S. 12-02-03 12-02-03 175,250,000 s caus cash TREAS NTS COLLAT) 1.030% Due 12-02-03 sa REPURCHASE AGREEMENT(U.S. 12-02-03 12-02-03 caus cash TREAS NTS COLLAT) 1.030% Due 12-02-03 sl UNITED STATES TREAS N'TS 12-02-03 12-03-03 50,000,000 s caus cash 3.375% Due 11-15-08 sa UNITED STATES TKEAS NTS 12-02-03 12-03-03 caus cash 3.375% Due 11-15-08 by REPURCHASE AG1LEEN[ENTCU.S. 12-03-03 12-03-03 287,500,000 taus cash T1LEAS NTS COLLAT) 0.980°/0 Due 12-04-03 by GENERAL ELECTRIC CAPITAL 12-03-03 12-03-03 50,000,000 caus cash CORPORATION 0.000°/0 Due 12-15-03 by GENERAL ELECTRIC CAPITAL 12-03-03 12-03-03 25,000,000 caus cash CORPORATION 0.000GA Due 12-17-03 sl GENERAL ELECTRIC CAPITAL 12-03-03 12-03-03 50,000,000 s caus cash CORPORATION' 0.000% Due 12-03-03 sa GENERAL ELECTRIC CAPITAL 12-03-03 12-03-03 caus cash CORPORATION 0.000°/0 Due 12-03-03 sl GENERAL ELECTRIC CAPIT.~L 12-03-03 12-03-03 50,000,000 s caus cash CORPORATION 0.000% Due 12-03-03 Trade Amount 175,250,000.00 49,990,180.56 9,819.44 111,250,000.00 15,296.68 171,875.00 127,777.80 49,886,718.75 78,811.81 206,500,000.00 20,995,753.33 4,246.67 49,989,888.89 10,111.11 175,250,000.00 5,014.10 49,925,781.25 83,447.80 287,500,000.00 49,983,333.33 24,990,277.78 49,979,777.78 20,222.22 49,979,777.78 Lot 11 I1 SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SANMATEO COUNTY POOL From 12-01-05 To 12-31-05 Tran Trade Settle Close S/D S/D Code Security Date Date Quantity Meth.__ Type Symbol sa GENERAL ELECTKIC CAPITAL 12-03-03 12-03-03 caus cash COKPOKATION 0.000% Due 12-03-03 si REPURCHASE AGREEMENT(U.S. 12-03-03 12-03-03 206,500,000 s taus cash TREAS NTS COLLAT) 0.980% Due 12-03-03 sa tLEPURCI-IASE AGREEMENT(U.S. 12-03-03 12-03-03 caus cash TREAS NTS COLLAT) 0.980% Due 12-03-03 by REPURCHASE AGREEMENT(U.S. 12-04-03 12-04-03 310,750,000 caus cash TREAS NTS COLLAT) 0.970°/6 Due 12-05-03 sl REPURCHASE AGREEMENT(U.S. 12-04-03 12-04-03 287,500,000 s caus cash TREA$ NTS COLLAT) 0.980O~ Due 12-04-03 sa REPURCHASE AGREEMZNT(U.S. 12-04-03 12-04-03 caus cash TKEAS NTS COLLAT) 0.980% Due t 2-04-03 by REPURCHASE AGREEMENT(U.S. 12-05-03 12-05-03 333,500,000 caus cash TREAS NTS COLLAT) 0.970% Due 12-08-03 si REPURCHASE AGREEMENT(U.S. 12-05-03 12-05-03 310,750,000 s caus cash TREAS NTS COLLAT) 0.970% Due 12-05-03 sa REPURCHASE AGREEMENT(U.S. 12-05-03 12-05-03 taus cash TREAS NTB COLLAT) 0.970% Due 12-05-03 by FEDERAL NATIONAL 12-01-03 12-08-03 10,000,000 caus cash MORTGAGE ASSOCIATION 1.650% Due 12-30-04 by UNITED STATES TREAS NTS 12-05-03 12-08-03 50,000,000 caus cash 3.375% Due 11-15-08 pa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 by LrNITED STATES TREAS NTS 12-05-03 12-08.03 50,000,000 caus cash 3.375% DUe 11-15-08 pa UNITED STATES TREAS NT8 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 by UNITED STATES TREAS NTS 12-05-03 12-08-03 50,000,000 caus cash 3.375% DUe 11-15-08 pa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 by UNITED STATES TREAS NTS 12-05-03 12-08-03 50,000,000 caus cash 3.375% Due 11-15-08 pa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 by UNITED STATES TREAS NTS 12-05-03 12-08-03 50,000,000 caus cash 3.375% Due 11-15-08 pa UNITED STATES TREAS ~-",rl'S 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 si UNITED STATES TREAS NTB 12-05-03 12-08-03 50,000,000 s caus cash 3.375% Due 11-15-08 sa LrNITED STATES TREAS NTS 12-05-03 t2-08-03 caus cash 3.375% Due 11-15-08 sl UNITED STATES TREA$ NTS 12-05-03 12-08-03 50,000,000 s caus cash 3.375% Due 11-15-08 sa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 si UNITED STATES TREAS NTS 12.05-03 12-08-03 50,000,000 s cam cash 3.375% Due 11-15-08 sa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 sl UNITED STATES TREAS NTS 12-05-03 12-08-03 50,000,000 s caus cash 3.375% Due 11-15-0S sa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 Trade Amount 20,222.22 206,500,000.00 5,621,39 310,750,000.00 287,500,000.00 7,826.39 333,500,000.00 310,750,000.00 8,372.99 10,000,000.00 50,226,562.50 106,627.75 50,390,625.00 106,627.75 50,394,531.25 106,627.75 50,386,718.75 106,627.75 50,402,343.75 106,627.75 50,296,875.00 106,627.75 50,363,281.25 106,627.75 50,312,500.00 106,627.75 50,406,250.00 106,627.75 Lot 12 13 14 15 16 12 13 14 15 SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SANMA TEO COUN'I~ POOL From 12-01-05 To Tran Trade Settle Close S/D S/D Cede Security Date Date Quantity Meth. Type Symbol sl UNITED STATES TREAS NTS 12-05-03 12-08-03 50,000,000 s caus cash 3.375% Due 11-15-08 sa UNITED STATES TREAS NTS 12-05-03 12-08-03 caus cash 3.375% Due 11-15-08 sl FEDERAL NATIONAL 12-05-03 12-08-03 5,000,000 s caus cash MORTGAGE ASSOCIATION 4.750% Due 03-15-04 sa FEDERAL NATIONAL 12-05.03 12-08-03 taus cash MORTGAGE ASSOCIATION 4. 750% Due 03-15-04 by REPURCHASE AGREEMA-NT(U.S. 12-084)3 12-08-03 365,500,000 caus cash TREAS NTS COLLAT) 0.98~ Due 12-09-03 sl REPURCHASE AGREEMENT(U.S. 12-08-03 12-08-03 333,500,000 s caus cash TREAS NTS COLLAT) 0.970% Due 12-08-03 sa REPURCHASE AGREEMENT(U.S. 12-08-03 12-08-03 caus cash TREAS NTS COLLAT) 0.970% Due 12-08-03 in DAIMLER CHRYSLER AUTO 12-08-03 12-08-03 caus cash TRUST 2.930% Due 06-06-06 in DAIMLER CHRYSLER AUTO 12-08-03 12-08-03 caus cash TRUST 2.200°/6 Due 04-06-05 si FEDERAL HOME LOAN 12-08-03 12-09-03 10,000,000 s caus cash MORTGAGE CORPORATION 3.290°/6 Due 06-16-09 sa FEDERAL HOME LOAN 12-084)3 12-09-03 caus cash MORTGAGE CORPORATION 3.290°/6 Due 06-16-09 by REPURCHASE AGREEM~ENT(U.8. 12-09-03 12-09-03 374,750,000 caus cash TREA8 NTS COLLAT) 0. 970°/6 Due 12-10-03 by GENERAL ELECTRIC CAPITAL 12-09-03 12-09-03 30,000,000 taus cash CORPORATION 0.000°/6 Due 02-06-04 sl REPURCHASE AGREEMENT(U.S. 12-09-03 12-09-03 365,500,000 s caus cash TPO~AS NTS COLLAT) 0.980% Due 12-09-03 sa REPURCHASE AGREEMENT(U.S. 12-09-03 12-09-03 caus cash TREAS NTS COLLAT) 0.980% Due 12-09-03 in FEDERAL HOMELOAN 12-09-03 12-09-03 caus cash MORTGAGE CORPORATION - FLOATER 1.107% Due 09-09-05 by US BANKNA 12-04-03 12-10-03 20,000,000 caus cash 1.171% Due 12-05-05 by LrNITED STATES TREAS NTS 12-09-03 12-10-03 50,000,000 cam cash 3,375% Due 11-15-08 pa UNITED STATES TREAS N'TS 12-09-03 12-10-03 taus cash 3.375% Due 11-15-08 by UNITED STATES TREAS NTS 12-09-03 12-10-03 50,000,000 caus cash 3.375% Due 11-15-08 pa UNITED STATES TREAS NTS 12-09-03 12-10-03 caus cash 3.375% Due 11-15-08 by REPURCHASE AGREEMENT(U.S. 12-10-03 12-10-03 303,000,000 caus cash TREAS NTS COLLAT) 0.970°/6 Due 12-11-03 si REPURCHASE AGREEMENT(U.S. 12-10-03 12-t0-03 374,750,000 s caus cash TREAS NTS COLLAT) 0.970% Due 12-10-03 sa REPURCHASE AOI~EMENT(U.S. 12-10-03 12-10-03 taus cash TREAS NTS COLLAT) 0.970% Due 12-10-03 Trade Amount 50,433,593.75 106,627.75 5,048,000.00 54,756.94 365,500,000.00 333,500,000.00 26,957.92 24,416.60 5,206.50 9,575,000.00 158,102.78 374,750,000.00 29,946,408.33 365,500,000.00 9,949.72 27,987.30 20,000,000.00 50,101,562.50 115,899.73 50,246,093.75 115,899.73 303,000,000.00 374,750,000.00 10,097.43 Lot 16 1 17 18 SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SAN MA TE O COUNTY POOL From 12-01-05 To 12-$1-0.~ Tran Trade Settle Close S/D $/D Code Security Date Date Quantity Meth. Type S,~nnb Gl by JP MORGAN CHASE & CO 12-04-03 12-11-03 10,000,000 caus cash 3.125% Due 12-11-06 si UNITED STATES TREAS NTS 12-10-03 12-11-03 50,000,000 s caus cash 3.375% Due 11-15-08 sa UNITED STATES TREAS NTS 12-10-03 12-11-03 caus cash 3.375% Due 11-i5-08 by REPURCHASE AGREEMENT(U,S. 12-11-03 12-11-03 342,500,000 caus cash TREAS NTS COLLAT) 0.980% Due 12-12-03 by MORGAN STANLEY DEAN 12-11-03 12-11-03 50,000,000 caus cash WITTER 0. 000O/O Due 12-18-03 $1 REPURCHASE AGREEMENT(U.S. 12-11-03 12-11-03 303,000,000 s caus cash TREAS NTS COLLAT) 0.970% Due 12-11-03 sa REPURCHASE AGREEIvI~-NT(U.S. 12.11-03 12-11-03 caus cash TREAS NTS COLLAT) 0.970% Due 12-11-03 si FEDERAL NATIONAL 12-11-03 12-12-03 5,000,000 s caus cash MORTGAGE ASSOCIATION 5.125% Due 02-13-04 sa FEDERAL NATIONAL 12-11-03 12-12-03 caus cash MORTGAGE ASSOCIATION 5.125% Due 02-13-04 by REPURCHASE AGREEMENT(U.S. 12-12-03 12-12-03 345,000,000 cau~ cash TREAS NTS COLLAT) 0.970o/o Due 12-15-03 by MORGAN STANLEY DEAN 12-12-03 12-12-03 50,000,000 caus cash WITTER 0.000o/O Due 01-21-04 sl REPURCHASE AGREEMENT(U.S. 12-12-03 12-12-03 342,500,000 s caus cash TREAS NTS COLLAT) 0.950o,~ Due 12-12-03 sa REPURCHASE AGKEElVI~NT(U.S. 12-12-03 12-12-03 caus cash TREAS NT8 COLLAT) 0.980o/~ Due 12-12-03 in FEDERAL HOME LOAN 12-12-03 12-12-03 caus cash MORTGAGE CORPORATION 4.000o/o Due 06-12-13 in WELLS FARGO & COMPANY 12-12-03 12-12-03 caus cash 1.23 0O/O Due 06-12-06 in FEDERAL HOME LOAN 12-12-03 12-12-03 caus cash MORTGAGE CORPORATION 4. 000% Due 06-12-13 by UNITED STATES TREAS NTS 12-12-03 12-15-03 50,000,000 caus cash 3.750% Due 12-15-08 by UNITED STATES TREAS NTS 12-12-03 12-15-03 50,000,000 caus cash 3.750O/O Due 12-15-08 by UNITED STATES TREAS NTS 12-12-03 12-15-03 50,000,000 caus cash 3.750% Due 12-15-08 si UNITF. D STATEB TREAS NTS 12-12-03 12-15-03 50,000,000 s caus cash 3.750% Due 12-15-08 sl UNITED STATES TREAS NTS 12-12-03 12-15-03 50,000,000 s caus cash 3.750% DUe 12-15-08 sl UNITED 8TATES TREAS NTS 12-12-03 12-I5-03 50,000,000 s taus cash 3.750°/6 Due 12-15-08 by REPURCHASE AGREEMENT(U.S. 12-15-03 12-15-03 229,000,000 caus cash TREAS NTS COLLAT 1.020% Due 12.16.03 by REPURCHASE AGREEMENT(U.S. 12,15-03 12-15-03 200,000,000 caus cash TREAS NTS COLLAT 1.020% Due 12-16-03 si GENERAL ELECTRIC CAPITAL 12-15-03 12-15-03 50,000,000 s caus cash CORPORATION 0.000% Due 12-15-03 sa GENERAL ELECTRIC CAPITAL 12-15-03 12-15-03 caus cash ~rade Amount 9,994,600.00 50,179,687.50 120,535.71 342,500,000.00 49,990,083.33 303,000,000.00 8,164.17 5,033,660.00 83,281.25 345,000,000.00 49,940,000.00 342,500,000.00 9,323.61 200,000. O0 77,729.00 200,000.00 50,417,968.75 50,421,875.00 50,332,031.25 50,398,437.50 50,453,125.00 50,367,187.50 229,000,000.00 200,000,000.00 49,983,333.33 16,666.67 Lot 1 17 SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SAN MA TEO COUNTY POOL From 12-01-05 To 12-$1-05 si sa in in in in in in in in sl by by Tran Trade Settle Close S/D S/D Trade Code Security Date Date Quantity Meth. Type Symbol Amount CORPORATION 0.000°,6 Due 12-15-03 REPURCHASE AGREEMENT(U.S. 12-154)3 12-15-03 TREAS NTS COLLAT) 0.970°,6 Due 12-15-03 REPURCHASE AGREEMENT(U.S. 12-154)3 12-15-03 TtLEAS NTS COLLAT) 0.970% Due 12-15-03 TOYOTA AUTO RECEIVABLES 12-15-03 12-15-03 OWNEK TRUST '- 3,760O,6 Due 06-15-06 HARLEY-DAVIDSON 12-15-03 12-15-03 MOTORCYCLE TRUST 1.910% Due 04-15-07 NISSAN AUTO RECEIVABLES 12-15-03 12-15-03 OWNER TRUST 2.600% Due 08-15-06 NISSAN AUTO LEASE TRUST 12-15-03 12-15-03 1.690°/6 Due 12-15-05 NISSAN AUTO RECEIVABLES 12-15-03 12-I5-03 OWNER TRUST 1.620°/6 Due 04-17-06 FEDERAL NATIONAL 12-15-03 12-15-03 MORTGAGE ASSOCIATION 5.750% Due 06-15-05 BANK OF AMERICA 12-15-03 12-15-03 CORPORATION 6.625% Due 06-15-04 FIRST UNION CORP SR 12-154)3 12-15-03 HOLDINGS 6.625% Due 06-15-04 FEDERAL NATIONAL 12-15-03 12-15-03 MORTGAGE ASSOCIATION 6.000% Due 12-15435 GENERAL ELECTRIC CAPITAL 12-15-03 12-15-03 CORP. CB FLOATER 1.243% Due 03-15-05 MORGAN STANLEY DEAN 12-154)3 12-15-03 WITTER 7.750°,6 Due 06-15-05 GENERAL ELECTRIC CAPITAL 12-154)3 12-15-03 CORPORATION 5.000% Due 06-15-07 FEDERAL NATIONAL 12-15-03 12-15-03 MORTGAGE ASSOCIATION 3.000°,6 Due 06-15434 FEDERAL NATIONAL 12-154)3 12-15-03 MORTGAGE ASSOCIATION 2.500°/6 Due 06-15-08 ASSOCIATES CORPORATIONNA 12-11-03 12-16-03 5.500°/6 Due 02-15-04 ASSOCIATES CORPORATIONNA 12-11-03 12-16-03 5,500% Due 02-15-04 ASIAN DEVELOPIvlENT BANK 12-11-03 12-16-03 5.500°/6 Due 04-23-04 ASIAN DEVELOPMENT BANK 12-114)3 12-16-03 5.500°/6 Due 04-23-04 UNITED STATES TREAS NTS 12-154)3 12-16-03 3.375% Due 11-15-08 LrNITED STATES TREAS NTS 12-15-03 12-16-03 3.375% Due 11.15-08 REPURCHASE AGREEMENT(U.S. 12-16-03 12-t6-03 TREAS NTS COLLAT) 0.990O/& Due 12-i7-03 MORGAN STANLEY DEAN 12-16-03 12-16-03 WITTER 345,000,000 s caus cash 345,000,000.00 caus cash 27,887.50 caus cash 28,415.00 caus cash 4,151.42 caus cash 21,666.60 caus cash 9,858.31 caus cash 13,950.00 eaus cash 143,750.00 caus cash 165,625.00 caus cash 165,625.00 caus cash 300,000.00 caus cash 47,964.45 caus cash 387,500.00 cam cash 250,000.00 cam cash 150,000.00 caus cash 280,555.60 caus cash 5,034,850.00 caus cash 92,430.56 caus cash 5,075,500.00 caus cash 40,486.11 caus cash 50,371,093.75 caus cash 143,715.66 caus cash 444,750,000.00 caus cash 14,970,300.00 5,000,000 s 5,000,000 s 50,000,000 s 444,750,000 15,000,000 Lot 1S SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SANM,4 TEO COU~'I'Y POOL From 12-01-03 To 12-$1-03 Tran Code Trade Settle Close S/I) S/D Security Date Date Quantity Meth. Type Symbol 0,000% Duc 02-20-04 by MORGAN STANLEY DEAN 12-164)3 12-164)3 25,000,000 caus cash WITTER 0.000% Due 02-06-04 sl REPURCHASE AG1LEEMENT(U.S. 12-16..03 12-16-05 200,000,000 s taus cash TREAS NTS COLLAT 1,020% Due 12-164)3 sa REPURCHASE AGREEMZTNT(U.S. 12-16-03 12-16-03 caus cash TREAS NTS C OLLAT 1.020°/6 Due 12-16-03 '- si REPURCHASE AGREEMZrNT(U.S. 12-16-03 12-16-03 229,000,000 s caus cash TREAS NTS COLLAT 1,020°/6 Due 12-16-03 sa REPURCHASE AGREEMENT(U.S. 12-16-03 12-16-03 caus cash TREAS NTS COLLAT 1.020°/6 Due 12-16-03 by CITI GROUP INC. 12-10-03 12-17-03 10,000,000 caus cash 1.920% Due 06-19-06 by WELLS FARGO & COMPANY 12-10-03 12-17-03 10,000,000 cam cash 1.160O/b Due 06-17-05 by REPURCHASE AGREEMENT(U.S. 12-17-03 12-17-03 408,500,000 cam cash TREAS NTS COLLAT) 1.000% Due 12-18-03 by MORGAN STANLEY DEAN 12-17-03 I2-1%03 25,000,000 caus cash WITTER 0.000% Due 01-07-04 si GENERAL ELECTRIC CAPITAL 12-17-03 12-17-03 25,000,000 s taus cash CORPORATION 0.000% Due 12-17-03 sa GENERAL ELECTRIC CAPITAL 12-17-03 12-17-03 taus cash CORPORATION 0.000°,4 Due 12-1%03 si REPURCHASE AGREEMENT(U.S. 12-174)3 12-17-03 444,750,000 s caus cash TREAS NTS COLLAT) 0.990% Due 12-17-03 sa REPURCHASE AGREEMENT(U.S. 12-174)3 12-17-03 caus cash TREAS NTS COLLAT) 0.990% Due 12-17-03 by UNITED STATES TREAS NTS 12-17.03 12-18-03 50,000,000 caus cash 3.750% Due 12-15-08 pa UNITED STATES TREAS NTS 12-17.03 12-18-03 caus cash 3.750OA Due 12-15-08 by UNITED STATES TREAS NTS 12-i7-03 12-18-03 50,000,000 caus cash 3.750% Due 12-15-08 pa UNITED STATES TREAS NTS 12-17-03 12-18-03 taus cash 3.750% Due 12-15-08 si UNITED STATES TREAS NTS 12-174)3 12-18-03 50,000,000 s caus cash 3.750°/6 Due 12-15-08 sa UNITED STATES TREAS NTS 12-17-03 12-18-03 caus cash 3.750°/6 Due 12-15-08 si UNITED STATES TREAS lq'rs 12.17.03 12-18-03 50,000,000 s caus cash 3.75 0O/O Due 12-15-08 sa UNITED STATES TREAS NTS 12-17-03 12-18-03 taus cash 3.75 0O/6 Due 12-15-08 by REPURCHASE AGREEMENT(U.S. 12-184)3 12-18-03 200,000,000 caus cash TREAS NTS COLLAT) 1.010°/6 Due 12-19-03 by REPURCHASE AGREEMENT(U.S. 12-18-03 12-18-03 249,750,000 caus cash TREAS NTS COLLAT) 1.000% Due 12-19-03 sl MORGAN STANLEY DEAN 12-18,03 12-18-03 50,000,000 s caus cash WITTER 0.000°/6 Due 12-18-03 sa MORGAN STANLEY DEAN 12-18-03 12-1§-03 caus cash WITTER 0.000°/6 Due 12-18-03 Trade Amount 24,961,000.00 200,000,000.00 5,666.67 229,000,000.00 6,488.33 10,000,000.00 10,000,000.00 408,500,000.00 24,984,250.00 24,990,277.78 9,722.22 444,750,000.00 12,230.63 50,484,375.00 13,831.97 50,484,375.00 13,831.97 50,546,875.00 13,831.97 50,227,343.75 13,831.97 200,000,000.00 249,750,000.00 49,990,083.33 9,916.67 Lot SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SAN MA TEO CO UNTY POOL From 12-01-05 To 12-$1-0.9 Tran Trade Settle Code Security Date Date si REPURCHASE AGILEE1V[ENT(U.S. 12-18-03 12-18-03 TREAS NTS COLLAT) 1.000% Due 12-18-03 sa REPURCHASE AGREEMENT(U.S. 12-13-03 12-18-03 TREAS NT8 COLLAT) 1.000% Due 12-18-03 in GENERAL ELECTRIC CAPITAL 12-18-03 12-18-03 CORP. CB FLOATER 1.270°/6 Due 09-18-06 by UNITED STATES TREAS NTS 12-18-03 12-19-03 3.750°/6 Due 12-15-08 pa UNITED STATES TREAS lq'rs 12-18-03 12-19-03 3.750% Due 12-15-08 sl UNITED STATES TREAS NTS 12-18-03 12-19-03 3.750% Due 12-15-08 sa UNITED STATES TREAS NTS 12-18-03 12-1~-03 3.750°,4 Due 12-15-08 by REPURCHASE AOREBMENT(U.S. 12-19.03 12-19-03 TREA$ NTS COLLAT) 1.000°,4 Due 12-22-03 sl REPURCHASE AGREEMENT(U.S. 12-19-03 12-19-03 TREAS NTS COLLAT) 1.010% Due 12-19-03 sa REPURCHASE AGREEMENT(U.S. 12-19-03 12-19-03 TREAS NTS COLLAT) 1.010o,4 Due 12-19-03 si REPURCHASE AGREEMENT(U.8. 12-19-03 12-19-03 TREA8 NTS COLLAT) 1.000% Due 12-19-03 sa REPURCHASE AGREEM~iqT(U.8. 12-19.03 12-19-03 TILEAS NTS COLLAT) 1.000% Due 12-19-03 by REPURCHASE AGREEMENT(U.S. 12-22.03 12-22-03 TREAS NTS COLLAT) 1.00 0O/b Due 12-23 -03 si REPURCHASE AGREEiV[ENT(U.S. 12-22-03 12-22-03 TRBAS NTS COLLAT) 1.000oA Due 12-22-03 sa REPURCHASE AGREEMENT(U.S. 12-22-03 12-22-03 TREAS NTS COLLAT) 1.000o/6 Due 12-22-03 by UNITED STATES TREAS NTS 12-22-03 12-23-03 3.750O/~ Due 12-15-08 pa UNITED STATES TREAS NTS 12-22-03 12-23-03 3.750O~6 Due 12-15-08 by REPURCHASE AGREEMBNT(U.S. 12-23-03 12-23-03 TREAS NTS COLLAT) 1.000% Due 12-24-03 si REPURCHASE AGREEMENT(U.S. 12-23-03 12-23-03 TREAS NTS COLLAT) 1.000O/6 Due 12-23-03 sa REPURCHASE AGREEMBaqT(U.S. 12-23-03 12-23-03 TRBAS NTS COLLAT) 1.000°,4 Due 12-23-03 by REPURCHASE AGREEMENT(U.S. 12-24-03 12-24-03 TREA$ NTS COLLAT) 0.990% Due 12~26-03 sl REPURCHASE AOREEMENT(U.$. 12-24-03 12-24-03 TREAS NTS COLLAT) 1.000o/o Due 12-24-03 sa REPURCHASE AGREEMENT(U.S. 12-24-03 12-24-03 TILEAS NTS COLLAT) 1.000o/o Due 12-24-03 by REPURCHASE AOREEIVlENTCu'.S. 12-26-03 12-26-03 TREAS NT$ COLLAT) 0.990% Due 12-29-03 Close S/D S/D Quantity Meth. Type Symbol 408,500,000 s caus cash caus cash caus cash 50,000,000 caus cash caus cash 50,000,000 s caus cash caus cash 396,000,000 caus cash 200,000,000 s taus cash caus cash 249,750,000 s caus cash caus cash 388,500,000 caus cash 396,000,000 s caus cash taus cash 50,000,000 caus cash caus cash 320,500,000 caus cash 388,500,000 s caus cash cam cash 319,750,000 caus cash 320,500,000 s taus cash cam cash 324,000,000 caus cash Trade Amount 408,500,000.00 11,347.22 38,946.60 50,421,875.00 18,442.62 50,460,937.50 18,442.62 396,000,000.00 200,000,000.00 5,611.11 249,750,000.00 6,937.50 388,500,000.00 396,000,000.00 33,000.00 50,464,843.75 36,885.25 320,500,000.00 388,500,000.00 10,791.67 319,750,000.00 320,500,000.00 8,902.78 324,000,000.00 Lot SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SAN~A TEO COUNTY POOL From 12-01-03 To 12-$1-05 Trail Code Trade Settle Close S/D S/D Security Date Date Quantity Meth. Type Symbol by GENERAL ELECTRIC CAPITAL 12-26-03 12-26-03 4,900,000 caus cash CORPORATION 0.000O/6 Due 12-29-03 si REPURCHASE AGREEMENT(U.S. 12-26-03 12-26-03 319,750,000 s caBs cash TREAS NTS COLLAT) 0.990°/6 Due 12-26-03 sa REPURCHASE AGREEMENT(U.S. 12-26-03 12-26-03 TREAS NTB COLLAT) 0.990% Duc 12-26-03 by ILEPURCHASE AGREEMENT[U.S. 12-29-03 12-29-03 TREAS NTS COLLAT) 0. 980% Du¢ 12-30-03 by GENERAL ELECTRIC CAPITAL 12-29-03 12-29-03 CORPORATION 0.000% Due 01-06-04 sl GENERAL ELECTRIC CAPITAL 12-29-03 12-29-03 CORPORATION 0.000O~ Due 12-29-03 sa GENERAL ELECTRIC CAPITAL 12-29-03 12-29-03 COKPOKATION 0.000% Due 12-29-03 si REPURCHASE AGREEMENT(U.S. 12-29-03 12-29-03 TREAS NTS OOLLAT) 0.990% Due 12-29-03 sa REPURCHASE AGREEMENT(U.S. 12-29-03 12-29-03 TREAS NTS COLLAT) 0.990% Due 12-29-03 in AMERICAN EXPRESS CREDIT 12-29-03 12-29-03 CORPORATION 1.238% Due 02-25-05 in MORGAN STANLEY GROUP - 12-29-03 12-29-03 FLOATER 1.250% Due 03-27-06 in LEHMAN BROTHERS 12-29-03 12-29-03 HOLDINGS-FLOATER 1.600% Due 09-25-05 by FEDERAL HOME LOAN 12-18-03 12-30-03 MORTGAGE CORPORATION 2.625% Due 06-30-06 by FEDERAL HOME LOAN 12-18-03 12-30-03 MORTGAGE CORPORATION 2.625% Due 06-30-06 si TENNESSEE VALLEY 12-29-03 12-30-03 AUTHORITY 4.75 0O/~ Due 07-15-04 sa TENNESSEE VALLEY 12-29-03 12-30-03 AUTHORITY 4.750°/o Due 07-15-04 by REPURCHASE AGREEMENT(U.S. 12-30-03 12-30-03 TREAS NTS COLLAT) 0.950°/0 Duc 12-31-03 sl REPURCHASE AGREEMENT(U.S. 12-304)3 12-30-03 TREAS NTS COLLAT) 0,9800/~ Duc 12-30-03 sa REPURCHASE AOREEMENT(U.S. 12-30-03 12-30-03 TREAS NT$ COLLAT) 0.9800/~ Due 12-30-03 in II~VrERNATIONAL BUSINESS 12-3003 12-30-03 MACHINE CORPORATION 4.123% Due 06.30.05 in FEDERAL HOME LOAN BANK 12.30-03 12-30-03 2.250°/6 Due 06-30-06 by REPURCHASE AGREEMENT(U.S. 12-31-03 12-31-03 TREAS NTS COLLAT) 0.810% Due 01-02-04 by LEHMAN BROTHERS HOLDINGS 12-31-03 12-31-03 CaBS cash 273,000,000 CaBS cash 50,000,000 CaBS cash 4,900,000 s CaBS cash taus cash 324,000,000 s CaBS cash CaBS cash caus cash caus cash caus cash 5,000,000 caus cash 5,000,000 taus cash 10,000,000 s CaBS cash CaBS cash 276,000,000 caus cash 273,000,000 s caus cash CaBS cash CaBS cash cam cash 182,250,000 caus cash 50,000,000 taus cash Trade Amount 4,899,644.75 319,750,000.00 17,586.25 273,000,000.00 49,988,555.56 4,899,644.75 355.25 324,000,000.00 26,730.00 15,204.80 107,653.20 20,727.75 5,000,000.00 5,000,000.00 10,192,800.00 217,708.33 276,000,000.00 273,000,000.00 7,431.67 103,125.00 112,500.00 182,250,000.00 49,997,361.11 Lot 1 SAN MATEO COUNTY TREASURER'S OFFICE TRANSACTION SUMMARY ON SETTLEMENT DATE SAN MA TEO CO UiVI~ POOL From 12-01-03 To 12-$1-05 Tran Trade Settle Close S/D S/D Trade Code Security Date Date Quantity Meth. Type Symbol Amount 0.000% Due 01-02-04 by LEHMAN BRO THER.8 HOLDING 8 12-31-03 12-31-03 0.000% Due 01-02-04 si REPURCHASE A@REEM~ENT(U'.S. 12-31-03 12-31-03 TREA8 NT8 COLLAT) 0.950% Due 12-31-03 sa R. EPURCHASE AGREEMENT(U.S. 12-314)3 12-31-03 TREAS NTS COLLAT) 0.950% Due 12-31-03 50,000,000 caus cash 49,997,361.11 276,000,000 s caus cash 276,000,000.00 caus cash 7,283.33 Lot MERRILL LYNCH TAXABLE BOND INDEX vs. SAN MATEO COUNTY POOL CHARACTERISTICS INDEX i 2/3i/03 POOL 2.15 AVERAGE MATURITY (yrs) 2.30 2.02 DURATION (yrs) 2.00 2.10 YIELD TO MATURITY (%) 2.10 TIME WEIGHTED TOTAL RETURN 0.59 1 MONTH (%) 0.53 0.07 3 MONTHS (%) 0.00 0.27 6 MONTHS (%) 0.15 2.30 1 YEAR (%) 2.07 SYNTHETIC BENCHMARK ALLOCATION OF INDEX 30% 0-1 year U.S. Government 20% 1-2.99 year U.S. Government 20% 3-5 year U.S. Government 10% 1-10 year U.S. Government 20% 1-5 year Corporate Bonds *** THE MEASURE THAT CAN BE USED TO ASSESS THE PERFORMANCE OF A PORTFOLIO OVER SOME INVESTMENT HORIZON IS THE TOTAL RETURN. TOTAL RETURN IS THE SUM OF PRINCIPAL AND INTEREST PAYMENTS AS WELL AS ANY REINVESTMENT INCOME RECEIVED OVER A HOLDING PERIOD PLUS ANY CAPITAL GAIN OR LOSS. Staff Xeport AGENDA ITEM #6 DATE: TO: FROM: SUBJECT: January 28, 2004 Honorable Mayor and City Council Philip White, Acting Fire Chief Resolution to Accept a Donation in the Amount of $5,000.00 from Genentech, Inc. to Apply Toward the Purchase of a Thermal Imaging Camera and/or Portable Radios. RECOMMENDATION It is recommended that the City Council approve a resolution accepting a donation in the amount of $5,000 to apply toward the purchase of a thermal imaging camera and/or portable radios. BACKGROUND/DISCUSSION Genentech, Inc. has donated $5,000.00 to the Fire Department. The money will be combined with other donation funds to purchase a thermal imaging camera and/or portable radios. FUNDING: Funding from Genentech will be combined with other donation funds as appropriate and the appropriate items will be purchased. This funding does not create any ongoing financial obligation for the City of South San Francisco By: "~ ..... ~... .... ',-,~"-"(,~-. --.-' Approved: Phi:i:ip4Vhite Acting Fire Chief Michael A. Wilson City Manager Attachment: Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ACCEPTING A DONATION IN THE AMOUNT OF $5,000 TO APPLY TOM~ARDS THE PURCHASE ()F A THERMAl, IMAGING CAMERA AND/OR PORTABLE RADI()S WI-~REAS, staff recommends the acceptance of a donation in the amount of $5,000 to apply towards the purchase of a thermal imaging camera and/or portable radios; and WHEREAS, funding from Genentech will be combined with 6ther donation funds as appropriate and the appropriate items will be purchased; and WHEREAS, this funding does not create any ongoing financial obligation for the City of South San Francisco. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council accepts a donation in the amount of $5,000 to apply towards the purchase of a thermal imaging camera and/or portable radios. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of ,2004 by the following vote: AYES: NOES: ABSTAIN: ABSENT: S:\Current Reso's\1-28donation.fl'om.genentech.res.doc ATTEST: City Clerk Staff Report AGENDA ITEM #8 DATE: (January 14, 2004) January 28, 2004 TO: Honorable Mayor and City Council FROM: Assistant City Manager SUBJECT: Appeal of Planning Commission decision to deny a Use Permit Modification to allow sales of beer and wine for off-site consumption at an existing service station in the Planned Commercial (P-C-L) Zoning District in accordance with SSFMC 20.24.070(0 and 20.91. Site Address: Owner: Applicant: Case Nos.: 300 So. Airport Blvd. American River Properties Greiner Service Stations P03-0045/UPM03-0001 RECOMMENDATION: That the City Council uphold the Planning Commission's decision and deny the appeal. BACKGROUND: In November 2003, the Planning Commission reviewed an application to allow the Chevron Station at 300 South Airport Boulevard to sell beer and wine for off-site consumption fi.om its convenience store. The Police Department informed the applicant in the beginning of the review the process that it would recommend that the Commission deny the application. At the Planning Commission heating of November 6, 2003, Police Chief Mark Rafaelli and Sergeant Jim Thane explained to the Commission that the Police Department opposed the application primarily because there is currently an over-saturation of pre-existing liquor licenses allowing off-site consumption in the subject area. The Commission agreed with the Pohce Department and denied the application unanimously. The applicant subsequently appealed this decision on November 21, 2003. PLANNING COMMISSION DISCUSSION: The Department of Alcoholic Beverage Control (ABC) limits the number of off-site liquor licenses in each census tract based on how many people live in the tract. Any additional licenses above and beyond what the ABC allows can only be granted if the City's Police Department submits a Letter of Public Convenience or Necessity to ABC stating that it is willing to authorize the additional licenses. It is the Police Department's opinion that in this case there are already City Council Staff Report To: Honorable Mayor and City Council Subject: P03-0045/UPM03-0001 January 14, 2004 Page 2 of 2 too many off-site licenses operating in this particular area of the City, and therefore the Police Department is not willing to submit a Letter of Public Convenience or Necessity in support of the application. ABC only allows for three (3) off-site liquor licenses in the census tract where the service station is located, while there are currently nineteen (19) legally in operation. The Police Department views this area of the City as being heavily over-saturated, and is particularly concerned about the impact allowing a gas station convenience store to sell alcohol might have on public safety. CONCLUSION: The Department of Alcoholic Beverage Control (ABC) limits the number of off-site liquor licenses in each census tract based on how many people live in the tract. The tract in which the applicant's service station is situated already contains sixteen (16) more licenses than the ABC deems sufficient. The Police Department is particularly concerned about the impacts allowing a gas station to sell alcohol may have on traffic safety on both City streets and the adjacent highway. For these reasons, staff recommends that the City Council uphold the Planning Commission's decision and deny Use Permit Modification Application P03-0045/UPM03-0001. Assistant City Manager City Manager ATTACHMENTS: Draft Findings of Denial Applicant's Appeal Application Applicants' Basis for Appeal Minutes of Regular Planning Commission Meeting of November 6, 2003 Planning Commission Staff Report dated November 6, 2003 Applicant's Information Packet Floorplan DRAFT FINDINGS OF DENIAL SOUTH AIRPORT CHEVRON LIQUOR LICENSE P03-0045/UPM03-0001 (As recommend by City Staff on January 14, 2004) As required by the Use Permit Procedures (SSFMC Section 20.81.050), the following finding is made in denial of Application P03-0045/UPM03-0001 to modify a use permit to allow sales of beer and wine for off-site consumption at an existing service station in the Planned Commercial (P-C-L) Zoning District in accordance with SSFMC Chapters 20.24 and 20.91, based on public testimony and materials submitted to the South San Francisco Planning Commission which include, but are not limited to: Project Summary packet submitted by applicant; Planning Commission Staff Report dated November 6, 2003: Minutes of Regular Planning Commission Meeting of November 6, 2003; and City Council Staff Report dated January 14, 2004: The proposed use would be adverse to the public health, safety or general welfare of the community in that there are already sixteen (16) more liquor licenses operating out of the South Airport Boulevard corridor than the Department of Alcoholic Beverage Control (ABC) deems appropriate for the area. ABC's standards allow for three licenses in this particular area of the City, and there are currently nineteen in operation RECE V .D 'Y OF SOUTH SAN FRANCISCO N0~ 2 ~ ~0~B Planning Division ,315 Maple Avenue, South San Francisco, CA 94080* (650) 87%8535 RECEIVED N 0¥ 2 I 00:] APPLICATION FOR APPEAL OFFICE' CF ~_ppI_ica~ts ,, ~3~ ~i~,~?Peal of a decision of the ClaefPla,mer oz the P]amang Cm~ission, or a Desi~ Review decision, ~hall submit the following (a letter or additional sheets may also be submitted): What, specifically, is being appealed? Case No: ./~f~t~f, i~ i~ ~.~. /q ~ ;~ -,~., r~, ~ ~'~-- r~ ~ p 2 What is the basis of your appeal? Include ffacts to support your appeal and ail pertinent information. 3 If you are the original applicant, submit th/rty-five (35) reduced copies (8. 1/2" x 11 ") of all exkibits (i:naps, plans, elevations, etc) wlzich were submitted with the original application. Filing fee - See Fee Schedule Name: Mailin~ Address: Date Phone No. C,%Q> -7 %'7 9 ,.T~C~q · *'Mailing Address: P.O. Box 711, South San Francisco, CA 94083 What is the basis of your appeal? The findings of denial are inaccurate. The basis of denial, as stated within the findings, conctude this proposal would present an adverse affect to the public welfare in that there exists sixteen (16) liquor licenses operating out of the South Airport corridor. This fact is incorrect. There are cun-ently zero number 20 (off sale beer and wine) licenses located within the South Airport corridor. Additionally, the police department gave distorted and inconclusive evidence to the Planning Commission which led them to believe there is public safety issue within our neighborhood. Due to the police department's distortions and inconclusive evidence the Commission rendered a negative declaration towards our proposal. Planning Commission of November 6, 2003 Verbatim Transcript American River Properties/Owner Greiner Service Stations, Inc./Applicant 300 So. Airport Boulevard P03-0045/UPM03-0001 and Categorical Exemption Class :t Section 1530! Existing Facilities. (Continued from October lS, 2003) Denied use Permit Modification to allow sales of beer and wine for off-site consumption at an existing service station in the Planned Commercial (P-C-L) Zoning District in accordance with SSFMC 20.24.070(0 and 20.9:[. Associate planner Kowalski: When the applicant first inquired about the idea to sell beer and wine for offsite consumption at his service station at 300 South Airport Boulevard. Planning staff directed him to contact the Police Department before proceeding with the use permit application. Upon doing so, the applicant was informed by the Police Department that it would not support its request due to a pre-existing oversaturation of liquor licenses already in operation in this particular area of the City. Sergeant Jim Thane of the Police Department is in attendance tonight and would like to make presentation to the commission regarding this application. At this time, ]: would like to turn the microphone over to him. Sergeant Jim Thane: Thank you Mr. Chair, Commissioners. ! would like to present this PowerPoint presentation to help address some of the ABC issues and clarify some of the sticky points regarding the application. This presentation is basically opposing the use permit to sell alcohol beverages. ! would like to address Greiner Service Station's proposal of permitting an Off-Sale Type 20 ABC license at 300 South Airport Boulevard. The Police Department opposes this license since we don't believe a Public Convenience and Necessity exists in this area based on undue concentration and crime statistics. South San Francisco is divided into Census Tracts that are established by the Census Bureau. The Chevron Station is located within Census Tract 6023. The applicant is requesting an Off-Sale Type 20 license, which is for beer and wine sales. The California State Department of Alcoholic Beverage Control authorizes 3 Off-Sale ABC Licenses within this Census Tract. Census Tract 6023 exceeds this limit with 21 active Off-Sales ABC Licenses. A number of these licenses are related to wholesale distributors. Off-Sale wholesale distributors have not been required to obtain use permits unless their business exceeds over 100 daily vehicle trips per day. Other ABC Off-Sale licenses issued in Census Tract 6023 predated the formal Use Permit process such as liquors stores and grocery stores. This map in front of you demonstrates or illustrates what census tract 6023 is. !f you look at the legend up on the top, the right hand corner, the off sale, it looks like a brown color that represents the off sale sites. The blue represents on sale eating places; and the yellow represents the off sale distributors. Those are importers and wholesalers. !n addition to the 21 Off-Sale Licenses in this Census Tract, there are currently 29 active On-Sale ABC Licenses in Census Tract 6023. Several these On-Sale ABC licensed businesses have Off-Sale privileges under the law. For example, hotels on the South Airport corridor can legally sell beer and wine with their existing licenses for Off-Sale purposes. The Police Department opposes this license based solely on adding another Off-Sale establishment in this area when there are numerous eating-places and hotels where the public can make purchases of alcoholic beverages. The applicant's request to sell alcoholic beverages to hotel guests doesn't meet the threshold of meeting a Public Convenience and Necessity. The hotels should reasonably be able to accommodate their guests using their existing ABC Licenses. The Convention Center was another business the applicant stated they would cater to. However, the Convention Center already has an existing ABC License. Not only is this area oversaturated by the standards of the Department of Alcoholic Beverage and Control, but also crime statistics reveals a significant number of crimes are directly correlated to the area of South Airport Boulevard. !ntroducing more alcoholic beverages into this area by exceeding standards set by the Department of Alcohol and Beverage Control may increase calls for service, and adversely impact public safety in the area. Within immediate proximity to the Chevron Station, from Marco Way on South Airport Boulevard to Mitchell Avenue, there have been significant crimes that have occurred between 09-30-02 thru 09-30-03. Crimes statistics from these dates revealed that 142 crimes and arrests were reported in this area with the following offenses: 6 Public intoxications 1 of 9 themselves, the hotel industry as well as the Convention Center, send their customers to our Station for the purchases of beer and wine products. Their business is devoted strictly to the customer who wish to relax in a lounge atmosphere and / or in the restaurants and en~ioy a glass of wine and / or a bottle of beer. Our business is strictly purchase and go. We will not be permitted to allow drinking on the premises. One of the things here, this evening, that the Police Department had shown is that they said that the hotel industry can offer people the alcohol beverages that they do want on an off-sale basis. This is true, however, the hotel industry does not wish to do that. And the reason that they do not wish to do that is because as :i went into one of the hotels attempting to buy a 6-pack of beer the bartender told me in the lounge. He said, "! Would love to sell you that 6-pack of beer but you're not going to like the price. The price is $3.50 per bottle. :If you want the 6-pack, it's gonna cost you over $20.00. ! suggest you try the Chevron across the street or one of the surrounding liquor stores." ! said, ":I am on foot. T don't have a car. Where else can T go?" He said, "You're out of luck, there is no place." That leads me into fact two. Is there a community need? The Police Department does not think so, but I do. I'm at that site on a day-by-day basis, watching who comes into my store requesting products. One of those products is obviously beer and wine. I want to identify to you where our customer base comes from. Our customer base comes from 3 areas: The hotel patrons; The Convention Center; And people who work in the surrounding area. Each one of these groups constitutes demand for beer and wine. Now when we're talking about the hotel community, basically I've already said that the hotel community is actually coming across the street to us for convenience items; we're a convenience store. One of those is beer and wine. Most of the people are on foot. No one is in the cars. They come over; they request it and we need to send them elsewhere. Our problem is where do we send them? We attempt to send them back to the hotel where they originated from, but they have all stated to us they don't want to go back there because the prices are too high. I find it extremely concerning that a governmental agency would come out this evening and tell a business what they should or should not do as far as selling products. Yes, it is true, that the hotels do sell it on an off-sale basis. However, it is not cost effective. They know that. They don't want to insult their customers. So what they do is they sell them elsewhere. Fact 3: and I would like to turn to the map. I think each of you received one of these maps. Unfortunately I don't have the facilities to do a PowerPoint presentation, but you should - did each of you receive the color map? I want to first of all correct something in Mr. Kowalski's statement that I believe is untrue. In his draft Findings of Denial and I quote "there already exists 16 more licenses operating out of the South Airport corridor than the ABC deems appropriate for this area." Now ladies and gentlemen, I would like you to look at your map, or you're free to look at this one. The purple dot is Airport Chevron. The South Airport corridor is located usually I would call from the Grosvenor, as far south as the Grosvenor, as far north as the Hungry Hunter. There is no license 20 facility on South Airport Boulevard. I believe what the Planning staff meant is in this census tract there are 21 licenses. However in my report you will notice that there are 19 because 2 of those licenses are located in San Bruno. This census tract encompasses more than South San Francisco. It encompasses South City, parts of San Bruno, and as far north into Brisbane as that Sierra Point. I'd like to concentrate on the licenses that are only in South San Francisco. In South San Francisco in this particular census tract there are 19 active license 20 beer and wine licenses. The - if we are talking about our hotel patrons, our Convention Center attendees and the people that uu,,,~ into our station fro,,m ...............u J~ ~u, ,uu, Ju,,,~ business community, Iua, .... ~ say there is,,um,~ on the retail basis that they can go. :if they are working in this area, the closest spot is Costco. Now we all know that Costco is not convenient when you just want to go in for a 6-pack of beer. And by the way they don't sell 6-packs, its 16, 24 or 48 packs or if you wanted to buy a bottle of wine. !t wouldn't be convenient. :Its not convenient for this committee to force the hotel community to go down to Costco via South Airport Boulevard. Where is the next convenient license 20? The most convenient. If it is convenient? Would be the Gateway Boulevard, the Hampton Inn? They have a license 20. The problem with the Hampton Inn is that you must be a guest and it's served out of your mini bar. So if you wish to drive in or walk in to purchase a 6-pack of beer or bottle of wine, you will not be able to do so. Again it is not a clear alternative to our station. The last and third license 20 for retail purposes would be way down at Oyster Point in the Marina. And that is so far remote from our station that that's not even an alternative. What are these blue dots? These blue dots are all licenses within the eastern quadrant of 101 where our station is that would serve retail people. However they are all wholesalers. The closest one, say if you were working in this industrial park, would be Utah. And that Vel - Italiano that sells gourmet wines. It's in an office space. The next one is located down on Ridgefield and that would be Zosnich and he is also a wholesale. Ladies and gentlemen if we are approved here 3 of 9 Chairperson Romero: You've indicated in your testimony that the hotels are sending their customer to you to purchase alcohol. Mr. Campagna: That is correct. Chairperson Romero: And you're just turning them away? Mr. Campagna: Yes, basically. Well, at first what we were doing - This process started back in :[997. So we've been on this for about 6 years gathering data and what happened was that the hotels would send those over and we would send them back. And then what was happening is that the hotels were saying don't send them back because the customers are irate with the amount of money we have to charge them for beer and wine. So we were sending them over the Grand Avenue, but the problem was that a great deal of these hotel people are walkers because they're tourists. They rely on public transportation and they just gave up. Chairperson Romero: Does the Commission have any questions of the applicant? Commission: [No questions] Chairperson Romero: Thank you very much. Mr, Campagna: Thank you. Chairperson Romero: Someone else would like to speak on behalf of the applicant at this time? Or is that the applicant's presentation. Associate Planner Kowalski: [ believe that was it. T believe so. Chairperson Romero: Bertha, are there any cards on this item? Bertha Aguilar: No cards. Chairperson Romero: Is there anyone else that would like to address the Commission on this item? Chief would you like to address the Commission? Police Chief Raffaelli: Yes, Mr. Commission and members of the Commission. There were some comments made by Mr. Campagna which I think need a clarification. He indicated that he had a meeting a meeting with me and at the time the only reason given was my personal views on it. He's right, I did tell him my personal views but also told him that that does not make a difference because there are other things that we have to look at in compliance with ABC and that's over- saturation in an area and crime stats for an area. So whether my personal views are opposed or not, it doesn't meet the ABC criteria. Then there is notJh,ng we can do about it, because personal views don't matter to ABC. So [ did want to clarify that point. As far as the other points he makes. The hotels do have an opportunity to lower their prices. If the hotels were concerned about their clientele and the welfare of their clientele then they could take care of business if they wanted to. For whatever reason they have chosen not to. What he doesn't mention is that he is also making money on this. I find it that he - He based all his argument on is - I'm trying to do something for the community. Well it is also a profit maker for him. Contacting the CHP and asking them if they had any statistics on alcohol sales in gas stations and any type of crime and them saying no. And coming to the conclusion that that isn't a problem is erroneous. ]ust because they don't keep statistics doesn't mean it is not a problem. No agency keeps statistics on that if they are arresting drunk drivers. They don't ask them, "Gee, where'd you buy your alcohol, are you doing this?" Your normal question is asking where they have been drinking. A lot of people say, ! have been drinking on my own. Because you are look for the ABC violation if you have people coming out of bars or liquor establishments. So that other information isn't going to be established. With regard to the current gas station in town, that license was approved from a previous administration. In fact that's a rather old license. We cannot say that there are or there are no problems as a result of that because we don't keep 5 0£9 Kirk Ryder: 300 South Airport Boulevard, I am Joe's partner. And I have to tell you that I work there a lot. 7 days a week sometimes. I am there at night. What we are dealing with is a totally unmet need. I have to tell people all the time walk up to Grand Avenue to get beer and wine if that's what you wanted. It is completely spurious to say go over to the hotel and buy a &pack. I mean - I don't know about you guys but I go out and get a 6-pack of beer now and then myself alright. I am not going to spend $21.00 for a 6-pack. And ! have to tell tourist after tourist after tourist that comes to the City that there is no alternative. There is no place to get it on that corridor. There is no 7-Eleven. There is liquor store. There is no reasonable place to buy beer and wine in that area. And for the Police Department to say otherwise is just ridiculous. If the Police Department has a problem with licenses then a year and a half ago when the Four Points came and applied for a new license in that area. They should have denied that on over-saturation as well. That license was granted less than two years ago and it is across the street from our station. It seems that they do not have a problem with hotels selling beer and wine and adding to the license load in the area. They just have a problem with convenience stores and it sounds like the argument is not based solely on over-saturation but on one person's opinion of what should and shouldn't be allowed at a place. You can make all the arguments you want about gasoline and alcohol, about destinations and what have you but we are not a neighborhood gas station. We don't have a residential area around us. We are catering to tourists and people that visit the City. And right now there is no alternative. There is no place they can go to get a convenient 6-pack of beer or a bottle of wine. Do we want to make money on it? Of course. ! mean we are in business, that's what we are there for. When you talk about meeting a need, we are trying to meet a need. Were trying to make some money as well and we are not ashamed of that. But we are not just out there to cause a problem in our community. We lived in South San Francisco. We work in South San Francisco. I've been at that station since 1976 and believe me I do not want to cause a problem for my community. But I have seen time after time where people are looking for something and they simply can't get it. And when people visit an area and they can't get the things they want what do they do? Well the next time they don't go to that area. They chose another area that is more customer friendly, more tourist friendly as it were. So that's why we feel this is completely appropriate with the area that wer'e in, and that's my comment on it. Chairperson Romero: Thank you. Sergeant Thane: Mr. Chair and Commissioners I'd like to take a brief moment and clarify a couple of erroneous statements. The applicant is confusing on-sale establishments as opposed to off-sale. He is trying to compare the off-sale Chevron station to on-sale hotels. We have the Grosvenor Hotel, which is an on-sale, they do have off-sale privileges. We have the Ramada that is an on-sale, they do have off-sale privileges. We have the Holiday Tnn that is an on-sale, they also have off-sale privileges. 4 Seasons which is directly across the street, is a on-sale, they have off-sale privileges. The applicant also stated that the City somehow magically granted 19 or so off-sale licenses. Well the fact of the matter is there is no Public Convenience and Necessity required for wholesalers and importers. The fact of the matter is ABC authorizes three off-sale licenses within that census tract. We currently have 21, so we are way over-saturated. It is true two of those licenses are in San Bruno. We also have over 20 on-sale licenses in that area. So clearly anybody that wants to buy a beer, a single, a 6-pack, a bottle of wine can go to any of the hotels that have the type 41 and type 47 ABC license and they can buy the product that they desire. There is Costco, there's Safeway, there's two ABC off-sale establishments on Grand Avenue, there's the Airport Boulevard Corridor. So the applicant is confusing the argument and ! just needed to clarify some of those issues here, Thank you. Chairperson Romero: Thank you Sergeant Mr. Campagna: Mr. Chair, can I address the Commission? Chairperson Romero: Make it brief okay. Because we want to move on. Mr. Campagna: ! am not confusing anything. First of all 19 licenses are given in that particular area. And the Sergeant is again trying to distort the facts and ! want to make sure that you each individually understand this. The ABC allows three. The City has allowed 16 others and it hasn't been all wholesale. And more importantly than that, yes it is true that those on-sale licenses can sell off-sale. But again that is not their clientele. They are not looking to sell to the purchase and go. And we feel its unjustified for a governmental agency to tell some - a business on how they should conduct their business. The hotel that's the reason why they did not apply for a license 20. They truly wanted to go after the off-sale community; they would have a license 20, which is an off-sale license. They didn't choose to do that they wanted on-sale. And T am sorry, ! am not confused. ! have people coming into my station all the time asking for beer and wine. Don't you think it is a little ridiculous that I would send them to the Hungry Hunter to buy a 6-pack of beer? Or over to IHOP to say 7 of 9 Chairperson Romero: Yes Commissioner Teglia: :[ would agree with you. It is very important to know that the difference between on-sale and off-sale is almost apples and oranges. On-sale is a much more controlled license. And based on the testimony by the Police Department, crime statistics, and the licensing statistics provided by the ABC f think this proposed use would be adverse to the public health, safety and / or general welfare of the community. So based on these attached Findings of Denial ! would move that the Planning Commission -. ........... Just a slight elaboration on these findings. As ! mentioned earlier the on-sale licenses. There is a reason why the hotels charge the prices they do and why those sales take place the way they do. :It is to have a more controlled environment. You're not going to have somebody taking a 6-pack or a 12-pack back to the hotel room and having a party, which is clearly adverse to anybody in the hotel. Your going to have drinking in an open environment of the bar, the lounge etc... Obviously this is going to reduce mischief, vandalism and etc... So with that elaboration are the difference between the two types of licenses and the fact that we do have over- saturation of the off-sale type, ! move that the Planning Commission, based on the Findings of Denial, deny this use permit application P03-0045 and use permit modification 03-0001. Chairperson Romero: !s there a second? Commissioner Giusti: I'll second. Chairperson Romero: All in favor. Commission: Aye Chairperson Romero: All opposed No Commissioners were in opposition. Chairperson Romero: Motion passes and your application has been denied. There is a 15-day appeal period. 9 of 9 Planning Co Staff Report remission DATE: November 6, 2003 TO: Planning Commission SUBJECT: Use Permit Modification to allow sales of beer and wine for off-site consumption at an existing gas station in the Planned Commercial (P-C-L) Zoning District in accordance with SSFMC 20.24.070(0 and 20.91. Owner: American River Properties Applicant: Greiner Service Stations, Inc. (Joe Campa~wna - agent) Site Address: 300 South .~rport Blvd. Case No.: P03-0045/UPM03-0001 RECOMMENDATION: That the Planning Commission make the recommended fmdings and deny Use Permit Application P03-0045/UPM03-0001. BACKGROUND: The existing Chevron service station at 300 South Airport Boulevard features a 1,650 square-foot convenience store which sells a variety of food and beverages as well as various other sundries. The owner of the station is requesting permission to sell beer and wine for off-site consumption in addition to the other beverages currently offered in the store. No changes would be made to the inter/or of the store; the appiicant wouid merely designate an existing comer ofkis reff/gerator for beer and wine displays. DISCUSSION: The Department of Alcoholic Beverage Control (or ABC) permits a maximum number of liquor licenses .per U.S. Census Tract. ABC only allows for three (3) liquor Licenses permitting sales of beer and ',vine for off-site consumption in the subject property's census tract. According to ABC data, there are currently nineteen (19) active liquor licenses in the tract that allow for the sale of beer and wine for off-site consumption (see information submitted by apphcant). Any time a new liquor license is applied for which would result in a total number exceeding the three license limit allowed in the Census Tract, ABC requires a Letter of Pubiic Convenience or Necessity from the City before it will issue the license. Staff Report To: Planning Commission Subject: P03-0045/UPM03-0001 Chevron November 6, 2003 Page 2 of 2 The Police Department is particularly concerned about the over-saturation of off-site consumption liquor licenses in this particular area of the City and the impact it could have on public safety. It is the Police Department's recommendation that this application be denied on the grounds that the subjecr area is already significantly over-saturated with licenses by _ABC standards and therefore the Letter of Public Convenience or Necessity would be inappropriate in this particular case. CONCLUSION: The applicant's service station is situated in an area that is already sigrdficantly over-saturated with liquor licenses by the Department of Alcohohc Beverage Control's standards. City staff does not believe that the proposed use would be of benefit to the community in light of the large amount of licenses already in operation, and therefore staff recommends that the Commission make the required findings and deny the application. / Stephen Kowalski, Associate Planner ATTACHMENTS: Draft Findings of Denial Planning Commission Staff Report dated October 16, 2003 (1 page) Site Photographs Project Summary Packet from Applicant (7 pages) Service Station Floorplan S:\StaffReportsl2003/DRAFT\l 1-06-03 PCIP03-0045 Chevron. doc Greiner Service Stations Inc., located at 300 South Airport Blvd., is applying for a modification of its use permit in order to sell beer and wine. This proposal should be approved because: 1. It will serve an unmet community need. 2. Zoning of our business permits its use. 3. The City of South San Francisco has set a precedent that allows for convenience stores/gasoline station to sell beer and wine products. 4. It will have no adverse affect on the neighborhood. 5. It adopts the City of South San Francisco's vision for expanding tourism and visitors to the South Airport corridor. We have been informed by the city's Planning Department, that our application will be denied based on the Police Department's negative declaration. The Police Department believes the sale of beer and wine, in conjunction with gasoline, will cause an adverse affect on the surrounding neighborhood and to the City of South San Francisco in general. Additionally, the Police Department believes our immediate area is over saturated with the sale of beer and wine products. We have had several discussions with the Police Chief and his designated officers in attempt to mitigate their concerns. We offered to limit the hours of beer and wine sales. We offered to accept a conditional-use permit for 1 year. We believe the sale of beer and wine, in conjunction with gasoline, will not adversely affect the public. This belief is based upon the information gathered by the Highway Patrol and the South San Francisco Police Department. Neither law enforcement agency could provide statistical data correlating driving under the influence with gasoline and beer/wine purchases. The Olympian station located on South Linden sells beer and wine, in conjunction with gasoline. There has not been an adverse affect to the public. Our immediate area is not over saturated with the sale of beer and wine products. Within our census track, the city has granted 19 off-sale beer and wine licenses (ABC License No. 20/21). Nine licenses are located on the west-side of Highway 101. Ten licenses are located on the east-side of Highway 101 (where our business is located). Within the 9 licenses located near or around our business, 7 are wholesale oriented and the other 2 are limited retail. Our business will be the only ABC License 20 on the east-side of Highway 101 that will service the South Airport Corridor. A map that illustrates the above comments is attached to this proposal. In conclusion, the sale of beer and wine, in conjunction with gasoline, has not adversely affected the public. Our particular location is not over saturated. Our application should be approved based on the above 5 areas. The following represents a detailed response to the Police Department's concerns. Back~round Greiner Service Stations Inc., located at 300 South Airport Blvd., has been in operation since 1973. Through the years we have developed our business to provide superior service while presenting a clean and safe environment for our customers. We have won several Chevron service awards to include the most recent "True Blue Award for Service Excellence". We employ a staff which has a long history with our firm. We do not have a "turn-over" problem. We provide our employees with excellent salaries, fully paid health benefits, and a flex-time program. The purpose for adding beer and wine to our retail merchandise is two-fold. First, it will provide an additional revenue source for our business. The additional revenue will be used to increase employee salaries and benefits. The additional revenue will also be used to continue a clean and safe environment for our customers. Secondly, it will service the surrounding hotel patrons, travelers, businesses, and the city's convention center attendees. Currently our business is the only source in the immediate area that provides convenience items not easily found within the surrounding area. On a daily basis, we receive numerous complaints from our patrons that we are unable to provide beer and wine. Furthermore, the complaints extend to how far a customer must travel to purchase these items. We visited our hotel neighbors and solicited their input on the possibility of our business selling beer and wine. We found an overwhelming support. Therefore, we began to search for an off-sale beer and wine license to purchase. We began the process in 1998. Due to the current moratorium on new licenses, we were required to find an existing license to purchase. In late 2002 we found a license and started the application process to modify our use permit. We were informed by the planning department our application would most likely be denied. The planner, Mr. Steve Carlson, stated the police department has a policy not to permit convenience stores to sell beer and wine in conjunction with gasoline. We met with the Police Chief, and had numerous discussions with the department's Community Service Officer regarding our application. During these meetings we attempted to mitigate the concerns of the Police Department by offering limited hours of the beer and wine sales. We suggested a conditional-use permit for 1 year. To summarize, the Police Department felt the sale of alcohol, in conjunction with gasoline, was a "bad idea". The Police Department also felt our area is "over saturated" with the sale of beer and wine. We disagree with the opinions of the Police Department. The following section details our research and conclusions as to the negative declaration regarding our application. Gasoline Sales vs. Beer/Wine Sales We believe by selling beer and wine, in conjunction with gasoline, will not adversely affect the public. We contacted the Highway Patrol to ascertain whether there were any facts or statistical data regarding gasoline stations adversely contributing to driving under the influence of alcohol. The Highway Patrol did not have any data correlating driving under the influence with the purchase of gasoline and beer/wine products. Additionally, we contacted the South San Francisco Police Department and requested the same information. The Police Department could not provide any statistical data that would support beer and wine sales, in conjunction with gasoline, adversely affected the public. Furthermore, the concept of selling beer and wine in conjunction with gasoline is not a new concept to the City of South San Francisco. The Olympian station located on South Linden sells gasoline, in conjunction with beer and wine. We solicited from the Police Department any problems relating to the sale of alcohol at this site. The Police Department could not f'md any police reports or documentation that illustrated the sale of alcohol, in conjunction with gasoline, presented an adverse affect to the neighborhood or the city. We believe there is little liability risk in selling beer and wine, in conjunction with gasoline. We contacted our insurance agent and request they provide an assessment of the additional risk of selling alcohol at our location. The annual premium for adding the "risk" of selling alcohol would be an additional $371.00 annually. Our current premium is over $5,000.00 annually. In summary, the addition of beer and wine sales does not materially affect our premium, thus the "risk" is minimal. Lastly, we found that less than 15% of our store revenue comes from customers purchasing gasoline. Eighty percent (80%) of our store sales come from the surrounding hotels, businesses, and the convention center. In summary, the sale of alcohol, in conjunction with gasoline, is not a problem. There is no statistical data to support that selling the 2 products will cause an adverse affect on the public. This statement can be additionally supported by the existence of an off-sale beer and wine license at the Olympian station on South Linden. There has been no adverse affect to the South Linden neighborhood. Furthermore, our insurance premium only increases fractionally; therefore supporting the notion those alcohol sales, in conjunction with gasoline, is not an issue. Finally, our store is no different from other convenience stores within the city. The only difference is the location and the lack of immediate competition that surrounds our business. The Over Saturation Issue Our business is located within Census Track 6023. Attached to this proposal is a map outlining the census track and the relating beer and wine licenses. We are currently seeking a License 20. License 20 is defined by the Alcohol Beverage Control as a license "to authorize the sale of beer and wine for the consumption off the premises where sold." Within our census track the city has granted 19 License 20/21. Nine licenses, out of the 19, are located on the west-side of Highway 10 I, while 10 are located on the east-side of the freeway. It is very important to note that out of the 10 licenses; only 3 licenses are for retail, the other 7 are wholesale oriented. The 3 retail licenses belong to Costco (on Belle Air Road), The Hampton Inn (on Gateway Blvd), Michael Rouston (on Marina Blvd). Neither of these licenses would be are direct competition. The Hampton Inn permits only the purchase of beer if you are a hotel guest, therefore eliminating walk-in traffic. Costco is a member's only store, therefore eliminating customers that do not have a Costco membership. Costco does not sell cold beer or six-packs. Costco only sells large quantities of beer, therefore eliminating any customer who wishes a small or cold purchase. Furthermore, our customer base as outlined in the previous section (hotel patron, businesses, and convention center attendees) will not shop at Costco for beer and wine products due to the inconvenience of such a purchase. Mr. Ruston's store, located on Marina Blvd, is so far removed from our business he can not be considered a competitor. To summarize, our business will be the only ABC License 20 on the east-side of Highway 101 where the public can purchase beer or wine products. The existing licenses are either wholesale oriented, the customer must be a member or guest to purchase beer or wine or is to far remove from our business. These restrictions, as well as others, mark our business as a prime and exclusive location to service the need of community. Therefore the over saturation argument is inaccurate and our application should not be denied based on this argument. Ros! EMETERY San to Eccles OYSTER COVE Oyster Point Oyster B~yd. _~ Point Marina Horbo~ Masters Office Marina % Key: · Wholesale License 20/21 · Retail License 20121 Wind · Airl~ort Chevron Point San Bruno Track 6023 License Type 20/21 Census Track 6023 Abushaerfaten, Jamel Nemeh 115 Grand Ave. SSF J Sosnick and Son Inc. 258 Littlefield Dr. SSF Gallo Sales Company 440 Forbes Blvd. SSF Ababesh, Khaldon 1031 Airport Blvd. SSF Mountanos,Mark 1361 Lowrie Ave. SSF Safeway Inc. 170 E1 Camino, SSF Costco Wholesale Corp. 451 So. Airport Blvd, SSF Pacific Research Development 35 S Linden Ave. SSF Longs Drag Stores Inc. 186 E1Camino SSF JFC International Wholesale 540 Forbes SSF Columbus Distributing wholesale 465 Cabot SSF Kim In Sook 1051 Airport Blvd. SSF A and D Distributing Inc. 231 S. Maple SSF Hansvin Inc. 130 S. Spruce Ave. SSF #21-395335 #20-177071 #20-60922 #20-136210 #2O-163829 #21-194297 #21-380957 #20-389806 #21-204514 #20-219835 #20-239470 #21-264163 #20-261§52 #20-394883 Villa Italia Gourmet Wholesale Food/Wine 175 Utah Ave. SSF N A Sales Inc. 170 Associated Rd. SSF Chrissa Imports LTD 280 Harbor Wy. SSF SRI Ram Emerprises 300 Gateway Blvd, SSF Routson, Michael 985 Marina Blvd SSF #20-298943 #20-309982 #20-326412 #20-355106 #20-369872 AGENDA ITEM #9 CITY COUNCIL AGENDA ITEM NO. 9 - Ordinances amending uniform codes Motion to open public hearing and continue public hearing to February 11, 2004. For Council's information - the legal ad/public hearing notice for the above referenced item, was scheduled to be printed in the Saturday, January 17, 2004 edition of the Peninsula Independent for South San Francisco/Daly City/Colma/Brisbane area. It was inadvertently printed in the San Mateo Independent. The legal ad will be re-printed in the correct newspaper, at no charge, but not in time to meet the legal requirements for the January 28th meeting. Therefore, it is requested that the public hearing be continued to February 11, 2004. Sylvia Payne, City Clerk City Council Staff Report AGENDA ITEM #10 DATE: TO: FROM: SUBJECT: January 28, 2004 Honorable Mayor and City Council Assistant City Manager San Mateo County Housing Endowment and Trust (HEAT) RECOMMENDATION: Discussion of San Mateo County Housing Endowment Trust Fund (HEAT) governed by a Joint Powers Authority (JPA) to address the shortage of affordable housing in the County. BACKGROUND/DISCUSSION: In February of 2002, the Board of Supervisors indicated its desire to see a housing trust fund established for San Mateo County. The Board allocated $3 million from County reserves as "seed" money for the trust. The Board appointed Supervisors Rose Jacobs Gibson and Richard Gordon as a subcommittee to complete the steps necessary to establish the trust. The goal of the Endowment is to raise and distribute funds to increase the number of permanently affordable housing units in the County. The proposed amount is $10 million per year for ten years, a total of $100 million for much-needed affordable housing. Supervisors Jacobs Gibson and Gordon convened a Development Group with broad representation to identify strategies for governance, funding, and program for the Housing Endowment. The Development Group met from June 2002 to November 2002, when it delivered its final report. The Development Group's's report suggested that a Joint Powers Authority (JPA) be established by the County and Cities. The governing board would include public, private, and nonprofit representatives. The San Mateo County Board of Supervisors is proceeding with plans to set up the San Mateo County housing trust fund. In January 2003, Supervisors Jacobs Gibson and Gordon recommended that the trust indeed be established as The Housing Endowment and Trust of San Mateo County (HEAT-SMC). Honorable Mayor and City Council Housing Endowment and Trust of San Mateo County January 28, 2004 Page 2 Summary of Development Group Recommendations: A Joint Powers Authority established by the County and the Cities should serve as the structure for governance of the Housing Endowment. The Board of the Endowment should reflect both public and private sector membership. The initial funding goal of the Endowment should be $100 million over the first ten years. The specific tactics for accomplishing this goal should be decided by the initial governing body of the Endowment. As it relates to support from the cities and the county, a mechanism for fair and equitable participation should be established. Funds from the Endowment should be flexibly used as a housing trust fund to create a full range of housing options. Emphasis should be on permanent housing meeting local needs, and be for brick and mortar activities including land acquisition and new construction. The board of the JPA should have a maximum of 21 members reflecting the public and private sector. The total number should be an odd number with the public sector having one more seat than the private sector. As it relates to funding from the cities and the county, policies should be adopted which guarantee equitable public agency participation. In recognition that some public jurisdictions can and want to build housing (builders) and that other jurisdictions might be better poised to assist financially (bankers), mechanisms should allow for public agencies to participate differently. Initial funding approaches could include: a fair share cost formula consisting of a per capita amount (for example $2 per city resident per year) contributed annually for long term sustainability; new tax, growth on tax or city general fund contributions; county bond issue; or issuance of debt, secured by Redevelopment Agencies in the county. Long term funding approaches could include: ongoing fund-raising campaign, transient occupancy tax, real estate property transfer tax, sales tax, or commercial development linkage fee imposed by cities. Proceeds from such sources would be placed with the Housing Endowment. Funds should be loans or grants and produce housing affordable to households at 30% to 60% of area median. Benefits and Difficulties of Membership for South San Francisco: Philosophically the City is supportive of the Endowment. However, unanswered questions exist regarding funding projects in other cities while we have obligations to produce units in our city; unknown administrative costs; limitations of proposed city funding resources; and potential conflicts between trust funded projects which may not secure city entitlements. Honorable Mayor and City Council Housing Endowment and Trust of San Mateo County January 28, 2004 Page 3 The following list ofpro's and con's has been prepared as initial comments regarding the obvious benefits and difficulties apparent in the Endowment as it exists today. Pro/Benefits Creates broad-based entity to access new funds for housing, including the potential to pull in up to $2 million in Prop 46 state funds earmarked for housing that would otherwise be unavailable to individual cities, the County, and housing developers. The Trust will potentially raise public and private funds to provide an ongoing funding source that allows for effective long-term regional planning, innovation, and flexibility for housing development. Participants can share resources (capital, land, etc.) across city boundaries to provide affordable housing solutions that benefit all of San Mateo County. The County has contributed $3 million in seed money and $75,000 for operational costs. The Trust Fund is targeted primarily for very low and low-income families which are the most difficult and expensive to house. At least 60% of the funds are targeted to households at 60% and below of area median income. The task force discussed the potential for State legislation to give credit to cities toward achieving their "fair-share" housing obligations for contributions made to the trust. Assembly member Mullin has expressed a willingness to explore the potential for such legislation once the Housing Endowment and Trust is created Con/Difficulties Cities are being asked to adopt a JPA Agreement that does not indicate how much capital funding each city will have to contribute to the Trust Fund. In addition the JPA Agreement does not give any indication what process or formula will be used to determine each city's capital contribution. Criteria for allocating funds has not been set. Contributing existing housing funds such as CDBG and RDA to the Trust funds is not creating new housing money. It is merely shuffling housing funds around and creating a new costly layer of bureaucracy. Even if a city decides to make CBDG and/or RDA funds contributions to the Trust Fund, serious questions about the legality of these transfers remain. Proposed legislation and plans to make these transfers possible should be in place before cities are asked to join the Trust Fund. Honorable Mayor and City Council Housing Endowment and Trust of San Mateo County January 28, 2004 Page 4 There is a lot of discussion about creating a countywide commercial linkage fee to fund the Trust Fund. Because of the poor economy and the existing glut of office space it will be years before a commercial linkage fee generates a significant amount of money for the trust fund. A commercial linkage fee will initially hurt SSF more than other cities because biotech development is still going strong compared to office/commercial development in other cities. As a result, in the early years SSF may find itself making an inequitable contribution to the Trust Fund. CONCLUSION: While the City is supportive of the Endowment which leverages and raises public and private resources for new affordable housing in San Mateo County, it may be premature for South San Francisco to participate. At this time, several aspects of the JPA have not been clarified and the City is waiting for resolution of the issues raised in this report. Furthermore, the City and its Redevelopment Agency have undertaken an aggressive housing production program, as required by the Association of Bay Area governments, that has resulted in: The creation 156 inclusionary rental units, of which 14 have been produced (7 of which are first time home buyer units) with the balance of units having received entitlements; The completed construction (2003) of 40 units affordable to very low income seniors; The joint sponsorship of a new 43 unit affordable family housing development with San Mateo County currently in pre development; The sponsorship of 40 new affordable family units with Mid Peninsula Housing Coalition currently in land acquisition; The sponsorship of 4 new home buyer units with Habitat for Humanity, targeted for households at 30% to 50% of median, and scheduled to begin construction this year; An acquisition and rehabilitation program that has made 36 existing units permanently affordable to working families in the last two years. The Agency has $8 million dollars currently committed for the above listed developments from its low and moderate housing fund. At this time, it would be difficult for the City to send funds to another trust, when it must first meet its current obligations. Marty Van Duyn Assistant City Manager City Manager