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HomeMy WebLinkAbout2011-06-08 e-packet o �Ta s,�v AGENDA _ 'yam REDEVELOPMENT AGENCY o CITY OF SOUTH SAN FRANCISCO %Foto' REGULAR MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, JUNE 8, 2011 6:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meeting of the Redevelopment Agency is held on the second Wednesday of each month at 6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the 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 LIMITED TO THREE (3) MINUTES PER SPEAKER. 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. KEVIN MULLIN Chair RICHARD A. GARBARINO MARK N. ADDIEGO Vice Chair Boardmember PEDRO GONZALEZ KARYL MATSUMOTO Boardmember Boardmember RICHARD BATTAGLIA KRISTA MARTINELLI Investment Officer Clerk BARRY M. NAGEL STEVEN T. MATTAS Executive Director Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING - IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at City Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. CALL TO ORDER TIME: ROLL CALL: AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR 1. Motion to approve the minutes of March 2, 2011 and May 11, 2011. 2. Motion to approve expense claims of June 8, 2011. 3. Resolution approving additional loan amount of $75,000 for the Buon Gusto Ristorante expansion and authorizing the executive director to execute loan documents. ADMINISTRATIVE BUISNESS 4. Resolution Confirming City Treasurer's Appointment of Deputy City Treasurers and certifying the City's Investment Policy for Fiscal Year 2011 -2012. ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING JUNE 8, 2011 AGENDA PAGE 2 SPECIAL MEETING MINUTES . <0 ail4r CITY COUNCIL A AND ND o REDEVELOPMENT AGENCY 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: CITY HALL CITY MANAGER'S CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA WEDNESDAY, MARCH 2, 2011 NOTE: The original numbers of the items below have been maintained. Actions are reflected in the order they were discussed during the meeting. For convenience purposes, these minutes employ the convention of referring to speakers via their City Council titles except in the text relaying a vote of the Redevelopment Agency. 1. Call to Order Time: 4:02 p.m. 2. Roll Call. All present. 3. Agenda Review. City Manager Nagel stated items eight (8) and nine (9) should be heard in reverse order. 4. Public Comments — comments are limited to items on the Special Meeting Agenda. None. 5. Resolutions of the City Council of the City of South San Francisco and the Redevelopment Agency of the City of South San Francisco approving the acquisition by the City of South San Francisco of real property from the Redevelopment Agency of the City of South San Francisco and approving Disposition and Development Agreements between the City of South San Francisco and the South San Francisco Redevelopment Agency. Before beginning, City Attorney Mattas noted for the record that Councilman Addiego had historically abstained from items pertaining to 938 Linden ( "938 "). Therefore, 938 should be dealt with first, excusing the Councilman and calling him back to deal with the other properties. Councilman Addiego noted his abstention from items pertaining to 938 and left the meeting. Director of the Redevelopment Agency ( "RDA "), Marty Van Duyn noted RDA had acquired 938 approximately one (1) year ago. The action being requested was to secure the successor in interest for the City's benefit consistent with the RDA plan. Attorney Mattas reminded Council to direct questions and direction specific to 938 property only. Questions regarding CEQA were asked. Council Mattas stated that the only action today was to transfer ownership from the Agency to the City. Council still reserved the right to discuss specific use. Mayor Mullin asked if the City would be the successor agency regardless of action taken by the State towards RDA in the future. Attorney Mattas stated the action authorized the transfer regardless of whether or not the law changed. Motion- Boardmember Gonzalez/Second — Vice Chairman Garbarino: to authorize the transfer of 938 Linden Avenue from the RDA to the City of South San Francisco and that the Agency's motion be included into the final resolution if remainder adopted by Council. AYES: Boardmember Gonzalez and Matsumoto, Vice Chairman Garbarino, Chairman Mullin. NOES: None. ABSTAIN: Boardmember Addiego. ABSENT: None. Proceeding with other properties, Councilwoman Matsumoto asked if transferring some of the properties would mean the City would have to meet housing requirements out of the general fund. She did not want to obligate general fund money. Director Van Duyn stated 20% was set aside for low to moderate income housing, which could be done using the current method. Beyond that, the general fund money could be used to subsidize. Councilman Addiego wanted clarity with respect to Fire Station 61. City Attorney Mattas explained there was greater flexibility in terms of how this property was dealt with. Councilman Addiego asked about low and moderate income restrictions regarding Alta Vista. SPECIAL CITY COUNCIL & REDEVELOPMENT AGENCY MEETING MARCH 2, 2011 MINUTES PAGE 2 Attorney Mattas stated there was a need for consistency. Deed restrictions could be included to transfer at market rate with proceeds used to build low and moderate income units. Mayor Mullin asked if changes could be made once transferred to the City. Attorney Mattas responded technically it was better to do now and RDA could enforce restrictions against the City. Motion — Councilman Addiego /Second — Vice Mayor Garbarino: approving Resolution No. 31- 2011 with change pertaining to 380 Alta Vista. Unanimously approved by voice vote. Motion — Boardmember Gonzalez/Second — Vice Chariman Garbarino: approving RDA Resolution No.7 -2011. Unanimously approved by voice vote. 6. Resolutions of the City Council of the City of South San Francisco and the Redevelopment Agency of the City of South San Francisco authorizing (1) the expenditure of tax increment funds for specified public improvements associated with the Oak Avenue Extension Roadway project, the Miller Avenue Parking Garage and the Oyster Point Specific Plan; (2) adopting findings required by Health and Safety Code Section 33445; and (3) authorizing the execution of a Public Improvement Agreement between the City of South San Francisco and the Redevelopment Agency of South San Francisco. Councilwoman Matsumoto noted when reading the staff report the finance department had identified $42 million as unencumbered but subtracting $8.8 million in unencumbered funds leaves a balance of $26.9 million. She sought clarification regarding these figures. Finance Director Jim Steele noted the numbers had been updated to reflect a more current report that what was included in the staff report. Attorney Mattas stated Director Steele had calculated debt service due through the end of the year and funds were available to pay tax under expenses already obligated. There was not general fund exposure. City Manager Nagel suggested proceeding through the projects without taking action until all the pieces were heard. Council /the Agency agreed. 7. City Council and Redevelopment Agency Resolutions making findings pursuant to Health and Safety Code Section 33445 and approving forgiving a loan made by the Redevelopment Agency to Downtown Parking Enterprise Fund for construction of the Downtown Parking Garage. Staff explained that a total of $10.7 million had been spent on the parking garage through loans made by the Agency to the Parking Enterprise Fund. Those loans would be forgiven by the RDA under separate action. Motion — Councilman Addiego /Second — Vice Mayor Garbarino: to approve Council Resolution No. 32 -2011. Unanimously approved by voice vote. SPECIAL CITY COUNCIL & REDEVELOPMENT AGENCY MEETING MARCH 2, 2011 MINUTES PAGE 3 Motion — Boardmember Gonzalez/Second Boardmember Addiego: to approve RDA Resolution 8 -2011. Unanimously approved by voice vote. 9. Redevelopment Agency Resolutions approving the appropriation of $2.5 million of the Merged Redevelopment. Project. Area Funds to the Low and Moderate Income Housing Fund for the development of affordable housing by Gifira Enterprises LLC, and (2) a resolution approving the appropriation of $9,989,000 of Merged Project Area Funds to the Low and Moderate Income Housing Fund for the development of affordable housing by affiliates of Mid - Peninsula Housing Corporation. Staff noted a change as there was not a committal of total funds. Instead of $9,989,000 the figure was $5,887,000. Motion — Vice Chairman Garbarino /Second — Boardmember Addiego: to approve RDA Resolution No. 9 -2011. Unanimously approved by voice vote. Motion — Boardmember Gonzalez/Second — Boardmember Addiego: to approve RDA Resolution No. 10 -2011. Unanimously approved by voice vote. 6. Resolutions of the City Council of the City of South San Francisco and the Redevelopment Agency of the City of South San Francisco authorizing (1) the expenditure of tax increment funds for specified public improvements associated with the Oak Avenue Extension Roadway project, the Miller Avenue Parking Garage and the Oyster Point Specific Plan; (2) adopting findings required by Health and Safety Code Section 33445; and (3) authorizing the execution of a Public Improvement Agreement between the City of South San Francisco and the Redevelopment Agency of South San Francisco. After hearing the above items, Council and the Agency returned to its vote on Item No. 6. Motion — Boardmember Addiego /Second — Vice Mayor Garbarino: to approve RDA Resolution No. 11 -2011. Unanimously approved by voice vote. Motion — Councilman Addiego /Second — Vice Mayor Garbarino: to approve Council Resolution No. 33 -2011. Unanimously approved by voice vote. Motion — Vice Chairman Garbarino /Second — Boardmember Addiego: to approve RDA Resolution No. 12 -2011. Unanimously approved by voice vote. Motion — Councilman Addiego /Second — Vice Mayor Garbarino: to approve Council Resolution No. 34 -2011. Unanimously approved by voice vote. SPECIAL CITY COUNCIL & REDEVELOPMENT AGENCY MEETING MARCH 2, 2011 MINUTES PAGE 4 Motion — Boardmember Addiego /Second — Boardmember Gonzalez: to approve RDA Resolution No. 13 -2011. Unanimously approved by voice vote. Motion —Vice Mayor Garbarino /Second — Councilman Gonzalez: to approve Council Resolution No. 35 -2011. Unanimously approved by voice vote. 8. Redevelopment Agency Resolution authorizing the Executive Director to make a payment to San Mateo County for the Share of the Redevelopment Agency's obligation to the County to reimburse Genentech, Inc for property taxes that were ordered refunded by the San Mateo County Superior Court. Mayor Mullin noted for the record his abstention on the item. Due to the pending action of the State toward the RDA, staff believed it would be expeditious to work with the County to get a final billing for the Agency's obligation for the Genentech refund over the next 30 days and issue payment. This would remove the obligation from the Agency's books and clarify its financial position, which would be a positive development if the Governor's proposal was successful. Director Steele noted $8.9 million had already been booked as a liability for the Genentech refund. The resolution gives the Executive Director authorization to make a payment to the County not to exceed $10 million. Staff believed the amount would be closer to $9.25 million. Vice Mayor Garbarino questioned the procedure to be followed if a larger amount was due. Attorney Mattas stated it could be brought as a proposal to pay the additional amount. Director Steele added that this was not negotiable but rather a matter of the final calculated amount. Motion — Boardmember Gonzalez/Second — Boardmember Addiego: to approve RDA Resolution 14 -2011. AYES: Boardmember members Addiego, Gonzalez and Matsumoto, Vice Chairman Garbarino. NOES: None. ABSTAIN: Mayor Mullin. ABSENT: None. 10. Adjourned. Being no further business, Mayor Mullin adjourned the meeting at 5 :38 p.m. Submitted: Approved: C----._. ) ------___ _, _Krista Ma",, City Clerk and Agency Clerk, Kevin Mullin, Mayor and Chairperson City of South;'1 . cisco and South City of South San Francisco and South San Francisco Redeye • • - • et Agency San Francisco Redevelopment Agency SPECIAL CITY COUNCIL & REDEVELOPMENT AGENCY MEETING MARCH 2, 2011 MINUTES PAGE 5 � I �K S MINUTES r „, � yo �� Ap f r 7 O� r, ! H . 1 77 A REGULAR MEETING o REDEVELOPMENT AGENCY gtJFOR0" CITY OF SOUTH SAN FRANCISCO MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, MAY 11, 2011 CALLED TO ORDER: 6:33 p.m. ROLL CALL: Present: Boardmembers: Addiego, Gonzalez and Matsumoto, Vice Chairman Garbarino and Chairman Mullin. Absent: None. AGENDA REVIEW None. PUBLIC COMMENTS None. CONSENT CALENDAR 2. Motion to approve the minutes of April 13, 2011 and April 27, 2011. 3. Motion to approve expense claims of May 11, 2011. Motion— Boardmember Addiego /Second— Vice Chairman Garbarino: to approve the Consent Calendar. Unanimously approved by voice vote. ADMINISTRATIVE BUISNESS 4. Resolution No. 20 -2011 authorizing the Executive Director to Execute an Agreement with the County of San Mateo to prepay the Redevelopment Agency of South San Francisco's Share of a Multi -Year property Tax Settlement between the County of San Mateo and Genentech Inc. Director of Finance Steele advised Genentech and the County of San Mateo had reached a multi -year settlement. Based on the settlement terms staff was recommending a prepayment of $7 million dollars. He explained approval from Genentech was outstanding, but a savings might accrue based upon prepayment irrespective of the approval. Motion— Boardmember Gonzalez /Second— Vice Chairman Garbarino: to approve Resolution No. 20 -2011. Unanimously approved by voice vote. CLOSED SESSION 5. Real Property Negotiations (Pursuant to Government Code Section 54956.8) Agency Negotiator: Marty Van Duyn related to: 315 -321 Airport Blvd. Owner: The Gonzalez Family Trust 401 Airport Blvd. Owner: The Gonzalez Family Trust 411 Airport Blvd. Owner: The Gonzalez Family Trust 421 Airport Blvd. Owner: The Gonzalez Family Trust 216 Miller Avenue Owner: The Gonzalez Family Trust 405 Cypress Avenue Owner: The Gonzalez Family Trust Time entered Closed Session: 6:40 p.m. Open Session resumed: 6:55 p.m. Report out of Closed Session by Chairman Mullin: Direction given. ADJOURNMENT Being no further business, Chairman Mullin adjourned the meeting at 6:55 p.m. ‘ �tted by Approved: ' 's.. Joy Martin - li, ' Jerk Kevin Mullin, Chairman City o :. th San Fr: cisco City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MAY 11, 2011 MINUTES PAGE 2 Listing of RDA Payments for Council Review C% o� S �x te, O . I Tii i _.r J � � C c'I LIFOIL I certify that the payments shown on this payment register are accurate and sufficient funds were available for payment.* DATED (0131 i 1 ;(0 i INANCE DIRECTOR *Note: Items below do not include payroll related payments Checks: Date Amount 05/10/11 60,208.33 05/13/11 925.90 05/16/11 142.14 05/18/11 8,119.61 05/23/11 7,274.34 05/25/11 77,260.70 05/27/11 6,089.47 06/01/11 2,980.00 Electronic Payments: Date Amount To Description 05/13/11 63,380.96 Union Bank Mid Pen Housing Construction Loan Total Payments $ 226,381.45 Printed on: 06/03/2011 Page 1 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/10/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT MEYERS, NAVE, RIBACK 9,579.50 SSF RDA CITY ATTY FEES - 738.011 2011030531 EFT 36,188.06 SSF RDA CITY ATTY FEES - 738.001 2011030529 EFT PRECISE PRINTING AND MAILING 1,321.47 PUBLIC HEARING NOTICE - ECR CHESTNUT EIR 6282 204149 Payments Issued for ECONOMIC & COMMUNITY $47,089.03 DEVELOPMENT DEPT Dept 99 CIP TECHNOLOGY, ENG CONST /ACCUTITE 13,119.30 ENVIR. CONSULT SVCS CALTRAIN STATION 177574 204173 Payments Issued for CIP $13,119.30 Payments Made on 5/10/2011 $60,208.33 Printed on: 06/03/2011 Page 2 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/13/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT DAILY JOURNAL CORPORATION 116.48 NEWSPAPER PUBLICATIONS B2069991 204209 GATEWAY PROPERTY OWNERS ASSOC 503.42 POA DUES FOR GATEWAY CHLDCARE CENTER RD 1666485 204219 Payments Issued for ECONOMIC & COMMUNITY $619.90 DEVELOPMENT DEPT Dept 99 CIP SAN MATEO COUNTY 306.00 SM HEALTH ENVIRONMENTAL FEES - TENNIS DR 202351 204257 Payments Issued for CIP $306.00 Payments Made on 5/13/2011 $925.90 Printed on: 06/03/2011 Page 3 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/16/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT NORMA FRAGOSO 71.42 MEETING STATEMENT OF EXP. NORMA FRAGOSO JUL10 -SEP10 204290 OFFICE DEPOT INC 18.33 OFFICE SUPPLIES 556991593001 204300 52.39 OFFICE SUPPLIES 534275643001 204300 Payments Issued for ECONOMIC & COMMUNITY $142.14 DEVELOPMENT DEPT Payments Made on 5/16/2011 $142.14 Printed on: 06/03/2011 Page 4 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/18/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT BLUE COLLAR LANDSCAPING 160.00 RENTAL PROP MONTHLY MAINTENANCE 79 204327 18.28 RENTAL PROP REPAIRS 77 204327 113.11 RENTAL PROP REPAIRS 78 204327 THE SWENSON GROUP, INC. 102.14 CITY WIDE COPIER SVC & MAINT - FEB 2011 89321 204420 Payments Issued for ECONOMIC & COMMUNITY $393.53 DEVELOPMENT DEPT Dept 99 CIP JMB CONSTRUCTION INC 7,680.00 JMB JOB 740 -04 636 EL CAMINO REAL 05/04/11 204365 THE SWENSON GROUP, INC. 46.08 CITY WIDE COPIER SVC & MAINT - FEB 2011 89321 204420 Payments Issued for CIP $7,726.08 Payments Made on 5/18/2011 $8,119.61 Printed on: 06/03/2011 Page 5 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/23/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT BAY AREA NEWS GROUP 109.19 NOTICE IN SM TIMES FOR GREEN HOUSE 0003752320 204450 ARMANDO SANCHEZ 4,802.50 CONSULTANT SERVICES FOR RDA HOUSING- 04/12- 04/22/11 EFT SDI INSULATION INC. 535.00 EMERGENCY REPAIRS 716 LINDEN 15413 204491 SSF SCAVENGER CO INC 73.89 04/11 -06/11 GARBAGE SERVICE -314 MILLER 2288082 204497 73.88 APR11 GARBAGE COLLECTION SVC -310 MILLER 2291810 204497 156.15 APR11 GARBAGE COLLECTION -714 LINDEN AVE 2291718 204497 351.22 APR11 GARBAGE COLLECTION SVC -306 SPRUCE 2292200 204497 98.50 APR11 GARBAGE COLLECTION -312 MILLER AVE 2291811 204497 49.25 APR11 GARBAGE COLLECTION- 339 COMMERCIAL 2291386 204497 49.25 APR11 GARBAGE FEE FOR 341 COMMERCIAL 2291387 204497 TERMINIX INTERNATIONAL 200.00 TREATMENT AT 109 LONGFORD DR. 304412249 204500 U S BANK CORP PAYMENT SYSTEM 238.76 ML- CONF LAX M LAPPEN AND S MCCUE CC207552 204503 26.94 ML- RDA LUNCH MEETING CC207554 204503 WESTERN EXTERMINATOR CO 91.50 APR11 BILL FOR 306 SPRUCE 008 - 01065148 -7 204507 Payments Issued for ECONOMIC & COMMUNITY $6,856.03 DEVELOPMENT DEPT Dept 99 CIP ALTA PLANNING + DESIGN 206.65 DESIGN SVC, BICYCLE MASTER PLAN 08- 89 -10A 204442 211.66 PROJECT COMPLETION, BICYCLE MASTER PLAN 08 -89 -12 204442 Payments Issued for CIP $418.31 Payments Made on 5/23/2011 $7,274.34 Printed on: 06/03/2011 Page 6 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/25/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT ALLIED SECURITY ALARMS 438.00 ALARM MONITORING SERVICE FOR 1 CHESTNUT 80458 204511 CITY MECHANICAL INC 1,309.65 REPAIR OF EXHAUST FANS - 306 SPRUCE 39390 204521 DYETT & BHATIA 15,449.84 EL CAMINO REAL /CHESTNUT PLAN 10- 433 -18 204530 FEDEX 17.90 OVER NIGHT TITLE REPORTS 7- 493 -39948 204533 NORMA FRAGOSO 64.19 STATEMENT OF EXPENSE N. FRAGOSO 6/6/10- 07/14/10 204535 GALLIS' SANITARY BAKERY 10.23 RDA MEETING PLAN MGMNT. 005276 204538 MILLER ENVIRONMENTAL 9,020.00 AIR QUALITY /GHG ANALYSIS - 418 LINDEN 2011 -08 204556 SAN MATEO COUNTY 2,885.25 NOTICE OF DETERMINATION - ECR/CHESTNUT P08- 0077:EIR11 -0001 204571 SAN MATEO COUNTY HARBOR DISTRI 31,173.17 PMT TO HARBOR DISTRICT OYSTER PT MARINA 05/02/11 204572 U S BANK CORP PAYMENT SYSTEM 59.36 IM- LUNCH FOR RDA MTG (PROPERTY TRS MTG) CC209904 204583 VAN METER WILLIAMS POLLACK 16,833.11 DESIGN SERVICES -3RD & 4TH LN /BREEZEWY PR 1007.1 INV #7 204587 Payments Issued for ECONOMIC & COMMUNITY $77,260.70 DEVELOPMENT DEPT Payments Made on 5/25/2011 $77,260.70 Printed on: 06/03/2011 Page 7 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 05/27/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT BANK OF NEW YORK MELLON 1,750.00 ADM FEES FOR PERIOD 5/1/11- 4/30/12 252- 1552224 204603 MAZE & ASSOCIATES 1,499.54 AUDIT SERVICES FOR YEAR END 6/30/2011 26632b 204639 120.55 AUDIT SERVICES YEAR END JUNE 30, 2011 26632a 204639 U S BANK CORP PAYMENT SYSTEM 19.21 NF- LUNCH MEETING FOR CDBG cc207460 204681 Payments Issued for ECONOMIC & COMMUNITY $6,089.47 DEVELOPMENT DEPT Payments Made on 5/27/2011 $6,089.47 Printed on: 06/03/2011 Page 8 of 74 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 5/5/2011 and 6/1/2011 06/01/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT SSF CONFERENCE CENTER 2,980.00 PERSONALIZED MEDICINE MEETING contract#1105020 204751 Payments Issued for ECONOMIC & COMMUNITY $2,980.00 DEVELOPMENT DEPT Payments Made on 6/1/2011 $2,980.00 Total REDEVELOPMENT AGENCY PAYMENTS $163,000.49 &ks Redevelopment Agency TT ti StaffReport Oq FOR DATE: June 8, 2011 TO: Redevelopment Agency Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: RESOLUTION APPROVING ADDITIONAL LOAN AMOUNT OF $75,000 FOR THE BUON GUSTO RISTORANTE EXPANSION AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LOAN DOCUMENTS RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt the attached Resolution authorizing an additional advance to the original loan to Buon Gusto Ristorante in the amount of $75,000 for a total of $725,000; and authorizing the Executive Director to execute all documents required for this loan. BACKGROUND/DISCUSSION On August 26, 2009, the Redevelopment Agency Board approved a $650,000 loan to Buon Gusto Ristorante for their proposed expansion into the available space next door. Since that time, the owner has bid out the scope of work several times, and negotiated with three different general contractors, none of whom could meet the City's onerous requirement of $6 million dollars in combined general liability insurance coverage, in addition to the $650,000 bond requirement. Additionally, all the bids received were in the range of $950,000, requiring the owner to eliminate many design elements, quality interior and exterior finishes and significant pieces of kitchen equipment. Staff has worked with the owner to reduce the scope of work as much as possible without reducing the design and construction standards required by the Agency for this remodel of a major downtown establishment. Essentially, the costs break down into several categories consisting of: $225,000 for fire safety improvements; $120,000 for general conditions; $180,000 for interior finishes (kitchens and restrooms); $150,000 for mechanical and electrical systems; $25,000 for facade improvements; and $50,000 for interior bar, counters and equipment. This year, the owner has been working with Oakstone Construction to streamline the budget and maintain the design quality expected by the Agency. Oakstone is a well known contractor with an excellent track record in town (Peet's Coffee on Airport Blvd) and the capacity to secure the insurance and bonding requirements. Oakstone is proposing a budget of $850,000 that would include the main construction elements required and maintain the look and feel of the facade improvements presented to the Agency Board in 2009. In addition to city funds, the owner has secured a commitment from both adjacent property owners (Giffra Family and Mid Peninsula Staff Report Subject: Additional Loan for Buon Gusto Ristorante Page 2 Housing) to contribute $50,000 each toward the revitalization of this historic building and fine dining establishment in our Historic Downtown District. It would be impossible to reduce the scope of work further and maintain the quality end product expected of this type of remodel/expansion. From the redevelopment perspective, this loan not only helps a successful business grow, it also eliminates a blighted and vacant commercial space in the heart of the downtown commercial area. Buon Gusto's expansion will enhance an unattractive, underutilized commercial space that would not be improved without the Agency's participation. The eastern end of Grand Avenue has become a vibrant restaurant district and this improvement will add to that success. Irrespective of tenant, the building and tenant improvements will provide attractive market value. FUNDING Redevelopment funds are available for this purpose and the additional loan amount of $75,000 will be secured by the same terms as the original note ($650,000) for a total loan of $725,000 payable over 25 years at 4% interest. The City Council will review a companion report this evening requesting a Community Development Block Grant (CDBG) loan in the amount of $25,000 to ensure that the facade improvements are completed as expected by the Agency to enhance the character of the district. CONCLUSION It is recommended that the Redevelopment Agency Board adopt the attached Resolution authorizing an additional advance to the original loan to Buon Gusto Ristorante in the amount of $75,000 for a total of $725,000; and authorizing the Executive Director to execute all documents required for this loan. By Approver` 16. Marty Van Duyn : M. Nagel Assistant Executive 1 • - ctor Executive Director Attachment: Resolution BMN:MVD:NF RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE PROVISION OF ADDITIONAL FINANCING TO RISTORANTE BUON GUSTO FOR THE REHABILITATION OF THE PROPERTY LOCATED AT 222 -224 GRAND AVENUE, AND AUTHORIZING THE EXECUTION OF DOCUMENTS IN CONNECTION WITH SUCH ADDITIONAL FINANCING WHEREAS, the Redevelopment Agency of the City of South San Francisco ( "Agency ") is a redevelopment agency existing pursuant to the Community Redevelopment Law, California Health and Safety Code Section 33000, et seq. (the "CRL "), and pursuant to the authority granted thereunder, has the responsibility to carry out the Redevelopment Plan (the "Redevelopment Plan ") for the Downtown/Central Redevelopment Project Area (the "Project Area "); WHEREAS, the Agency operates a commercial rehabilitation loan program pursuant to which the Agency provides financing for the rehabilitation of buildings located within the Project Area; WHEREAS, Ristorante Buon Gusto, a California corporation ( "Borrower ") leases the property located in the Project Area at 222 -224 Grand Avenue, and known as San Mateo County Assessor's Parcel No. 012- 315 -120 (the "Property "); WHEREAS, Borrower applied to Agency for financing in order to rehabilitate and improve the Property (the "Project "), and Agency previously approved a loan in the amount of Six Hundred Fifty Thousand Dollars ($650,000) (the "Original Agency Loan "); WHEREAS, the Project will be of benefit to the Project Area because it will improve the streetscape appearance of the Property, permit Borrower to expand Borrower's restaurant, and provide increased job and economic development opportunities; WHEREAS, the terms and conditions for the rehabilitation of the Property and the Original Agency Loan are more particularly described in an Owner Participation and Loan Agreement (the "OPA "), a Secured Promissory Note (the "Note "), and a Security Agreement (the "Security Agreement ") previously approved by the Agency (all of the foregoing, collectively, the "Loan Documents "); 1656490.1 1 WHEREAS, the Borrower has requested an increase in the Original Agency Loan amount in the amount of Seventy -Five Thousand Dollars ($75,000) ( "Additional Financing "); and WHEREAS, completion of the Project will be infeasible without the Additional Financing. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby: 1. Finds that the rehabilitation of the Property in accordance with the Loan Documents, and the provision of the Additional Financing for the Project will be of benefit to the Project Area, will further the goals of the Redevelopment Plan, and will be consistent with the implementation plan adopted in connection therewith. 2. Approves the provision of the Additional Financing consistent with the terms of the Original Loan. 3. Authorizes the Executive Director or his designee to execute and deliver amendments to the Loan Documents to reflect the Additional Financing, and to execute such other instruments and to take such other actions as necessary to carry out the intent of this Resolution, including without limitation the filing of instruments with the California Secretary of State in order to perfect the Agency's interest in Borrower's personal property. 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 , 2011 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1656490.1 2 0 o�RB �.,� t J e 41LIFOO City Treasurer's Re ort p DATE: June 8, 2011 TO: The Honorable Mayor and City Council and Redevelopment Agency Board FROM: Richard Battaglia, City Treasurer SUBJECT: RESOLUTIONS CONFIRMING THE CITY TREASURER'S APPOINTMENT OF DEPUTY CITY TREASURERS AND CERTIFYING THE CITY'S INVESTMENT POLICY FOR FISCAL YEAR 2011 -2012 RECOMMENDATION It is recommended that the City Council and Redevelopment Agency Board approve the two attached resolutions. The first resolution: 1) Authorizes the appointment of a new Deputy City Treasurer and confirms the existing Deputy Treasurers; and 2) Acknowledges the long and continued contribution that Gloria Taormina has provided the City as a Deputy Treasurer and as Assistant Deputy Treasurer; and 3) Authorizes the City Manager or the Finance Director to sign documents with banks and investment institutions the City does business with to facilitate the changing of authorized investment authority for the City. The second resolution certifies the City's Investment Policy for fiscal year 2011 -2012. BACKGROUND /DISCUSSION To ensure continuity in the functions of the elected Treasurer functions, the City Treasurer appoints Deputy Treasurers from time to time to carry out investment transactions on behalf of the City and Redevelopment Agency in the event the Treasurer is not available. It would be advantageous for the City to have one more Deputy Treasurer to fill in if need be. I have met and discussed these needs with Frank Risso, whom I have met in my work with the South San Francisco Historical Society. Mr. Risso has provided tax filing services for the Historical Society's books for a number of years on a volunteer basis. He also works for Future US in South San Francisco as the Assistant Controller. (Future US is a leading publisher of special- interest magazines and digital media properties, with an office on Shoreline Ct. in South San Francisco. Future US's website is http: / /www.futureus.com). Mr. Risso has also met with members of the City Council Budget Subcommittee (Councilmembers Addiego and Garbarino), the City Manager and the Finance Director. His appointment has all of their support. Staff Report Subject: Resolutions Confirming City Treasurer's Appointment of Deputy City Treasurers and Recertifying the Investment Policy for 2011 -12 Date: June 8, 2011 Page: 2 of 2 Attached for Council's approval are two resolutions. The first confirms the appointment of Frank Risso as Deputy Treasurer, along with current Deputy Treasurers, Finance Director, Jim Steele, and Budget Manager, Colleen Tribby. Both Mr. Risso and Ms. Tribby are South San Francisco residents. The current Assistant Deputy Treasurer, Gloria Taormina, is also a South San Francisco resident. Her appointment is also confirmed, and Ms. Taormina is recognized in the attached resolution for her long and continued service to the City of South San Francisco. Also attached for Council and the Redevelopment Agency Board's approval is a resolution to recertify the City's Investment Policy for fiscal year 2011 -2012. The policy has no changes from the current (2010 -11) policy. The California Government Code requires this policy to be reviewed and approved annually. CONCLUSION Approval of the attached resolutions will confirm the appointment of a new Deputy City Treasurer and recertify the City's Investment Policy for fiscal year 2011 -12. Prepared by: Z a ¢ A roved ;her, p Y PP by: ■ Richard Battaglia `Barry M. Nagel City Treasurer City Manager Attachments: Resolutions Exhibit A - Investment Policy Attachment 1: Background on Frank Risso JSBN:ed RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION CONFIRMING THE APPOINTMENT OF DEPUTY CITY TREASURERS WHEREAS, the City of South San Francisco ( "City ") has an elected City Treasurer whose election has been certified by the City Clerk; and WHEREAS, the City Treasurer is an elected position, and that position has the authority to appoint Deputy Treasurers at his or her discretion; and WHEREAS, it is in the best interests of the City and prudent to have additional Deputy Treasurers available to assist the Treasurer and to assume Investment Management functions in compliance with the City's Investment Policy in the event the City Treasurer is not available. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby confirms and certifies the City Treasurer's appointments for: Frank Risso, Deputy Treasurer; Jim Steele, City Finance Director and Deputy Treasurer; Colleen Tribby, City Budget Manager, and Deputy Treasurer; Gloria Taormina, Assistant Deputy Treasurer. BE IT FURTHER RESOLVED, by the City Council of the City of South San Francisco that the Deputy Treasurers are authorized to carry out investment transactions on behalf of the City, which includes, but is not limited to the authority to deposit and withdraw funds of the City of South San Francisco monies in the Local Agency Investment Fund (LAIF) in the State Treasury in accordance with the provisions of Section 16429.1 of the Government Code for the purpose of investment as stated therein; and BE IT FURTHER RESOLVED, by the City Council of the City of South San Francisco that a special acknowledgement is hereby granted to Assistant Deputy Treasurer, Gloria Taormina, for her long and continued service to the City of South San Francisco; and BE IT FURTHER RESOLVED, by the City Council of the City of South San Francisco that the City Manager and Finance Director are hereby authorized to execute forms and agreements to carry out the intent of this Resolution, including, but not limited to forms and agreements with the City's banking and investment institutions in order to add the Deputy Treasurers as authorized signatories to banking and investment arrangements. * * * * * 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 , 2011 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 1647567.1 RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION CERTIFYING THE INVESTMENT POLICY FOR FISCAL YEAR 2011 -2012 WHEREAS, the City of South San Francisco ( "City ") has an elected City Treasurer ( "Treasurer ") whose election has been certified by the City Clerk; and WHEREAS, California Government Code Section 53646 provides that the Treasurer of a city may annually render to the legislative body of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting; and WHEREAS, the City Council reviewed a draft Investment Policy for Fiscal Year 2011 -2012 ( "Investment Policy ")on June 8, 2011; and WHEREAS, annual certification of the Investment Policy provides prudent financial oversight. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco, at a duly noticed public meeting has received, reviewed and adopts the Investment Policy for Fiscal Year 2011 -2012, set forth in Exhibit A, attached hereto and incorporated herein by this reference.. * * * * * 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 , 2011 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 1647649.1 RESOLUTION NO. REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION CONFIRMING THE APPOINTMENT OF DEPUTY TREASURERS WHEREAS, the Redevelopment Agency of the City of South San Francisco ( "Agency ") has an elected Treasurer ( "Treasurer ") whose election has been certified by the Agency Secretary; and WHEREAS, the Treasurer is an elected position, and that position has the authority to appoint Deputy Treasurers at his or her discretion; and WHEREAS, it is in the best interests of the Agency and prudent to have additional Deputy Treasurers available to assist the Treasurer and to assume Investment Management functions in compliance with the City's Investment Policy in the event the City Treasurer is not available. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency Board of the City of South San Francisco that the Redevelopment Agency Board hereby confirms and certifies the City Treasurer's appointments for: Frank Risso, Deputy Treasurer; Jim Steele, Agency Finance Officer and Deputy Treasurer; Colleen Tribby, Agency Budget Manager, and Deputy Treasurer; Gloria Taormina, Assistant Deputy Treasurer. BE IT FURTHER RESOLVED, by the Redevelopment Agency of the City of South San Francisco that the Deputy Treasurers are authorized to carry out investment transactions on behalf of the Agency, which includes, but is not limited to the authority to deposit and withdraw funds of the Agency in the Local Agency Investment Fund ( "LAIF ") in the State Treasury in accordance with the provisions of Section 16429.1 of the Government Code for the purpose of investment as stated therein; and BE IT FURTHER RESOLVED, by the Redevelopment Agency Board of the City of South San Francisco that a special acknowledgement is hereby granted to Assistant Deputy Treasurer, Gloria Taormina, for her long and continued service to the City of South San Francisco; and BE IT FURTHER RESOLVED, by the Redevelopment Agency of the City of South San Francisco that the Agency Executive Director and Agency Finance Officer are hereby authorized to execute forms and agreements to carry out the intent of this Resolution, including but not limited to forms and agreements with the Agency's banking and investment institutions in order to add the Deputy Treasurers as authorized signatories to banking and investment arrangements. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Board of the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of , 2011 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary RESOLUTION NO. REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION CERTIFYING THE INVESTMENT POLICY FOR FISCAL YEAR 2011 -2012 WHEREAS, the Redevelopment Agency of the City of South San Francisco ( "Agency ") has an elected Treasurer ( "Treasurer ") whose election has been certified by the Agency Secretary; and WHEREAS, California Government Code Section 53646 provides that the Treasurer may annually render to the legislative body of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting; and WHEREAS, the Agency Board reviewed a draft Investment Policy for Fiscal Year 2011 -2012 ( "Investment Policy ") on June 8, 2011; and WHEREAS, annual certification of the Investment Policy provides prudent financial oversight. NOW, THEREFORE, BE IT RESOLVED that the Board of the Redevelopment Agency of the City of South San Francisco, at a duly noticed public meeting has received, reviewed and adopts the Investment Policy for Fiscal Year 2011 -2012, set forth in Exhibit A, attached hereto and incorporated herein by this reference. * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Board of the Redevelopment Agency of South San Francisco at a meeting held on the day of , 2011 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1647569.1 City of South San Francisco Investment Policy — Exhibit A July 1, 2011 PURPOSE: 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, liquidity, as well as probable income to be derived. The City's cash management system's goal is to accurately monitor and forecast 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 to all City funds except retirement, pension, or bond proceeds or bond reserves, which have their own constraining requirements. 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: 1. 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. 4. After safety and liquidity are assured, to generate the maximum amount of investment income within the parameters of this statement of investment policy. INVESTMENT OBJECTIVES: 1. 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 risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt) and interest rate risk (the market value of the security in the portfolio will fall due to changes in general interest rates). 2. 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 funds are readily available to meet all reasonably anticipated operating expenses. 6/08/11 City Council Meeting 1 3. YIELD is the return earned by the City Treasurer on monies invested. The City's funds shall be designed to attain a rate of return throughout budgetary and economic cycles which is approximately equal to the return on a Market Benchmark Index which will be reported to the City Council on a periodic basis. The current index that is consistent with this policy, the market, and the cash flow needs of the City is the 1- 5 year Government Index. Yield will be considered only after the basic requirements of safety, liquidity, and credit quality have been met. INVESTMENT POLICY: 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 full faith and credit of the U.S. are pledged for the payment of principal and interest. There is no limit to the percentage of the portfolio that can be invested in U.S. Treasuries. However, their maturities shall be limited to 5 years or less. However, their maturities shall be limited to 5 years or less. OBLIGATIONS ISSUED BY AGENCIES OF THE UNITED STATES GOVERNMENT (AGENCIES), including the Government National Mortgage Association (GNMA), the Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank Board (FHLB), the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), Tennessee Valley Authority (TVA). The amount of any one issuer shall not exceed 25 percent of the portfolio, with the maturity not to exceed 5 years. FDIC Insured CORPORATE NOTES, issued by a corporation under the Federal Deposit Insurance Corporation's (FDIC) Temporary Liquidity Guarantee Program (TLGP). These notes are backed by the full faith and credit of the United States Government. The amount of any one issuer shall not exceed 25 percent of the portfolio. COMMERCIAL PAPER must be of prime quality of the highest rating by both Moody's and Standard and Poor's (P1 by Moody's and Al by Standard and Poor's). 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 (10 %) of the portfolio, the time of investment (270 days) and the amount of any one issuer shall not exceed 5 percent of the portfolio. 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 security shall have a market value of at least: 102% for U.S. Treasuries or 105% for U.S. Agencies of the funds borrowed. Pledged securities must be held by a third party custodian. The issuing counter party shall be rated in a rating category of "AA" or its equivalent or better by nationally recognized rating services (Standard and Poor's and Moody's). 6/08/11 City Council Meeting 2 THE LOCAL AGENCY INVESTMENT FUND is a pooled fund managed by the State Treasurer whose permitted investments are identified in the Government Code Section 164291. LAIF 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 maximum limit for LAIF 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. The Treasurer shall attempt to minimize balances in this fund to less than $1 million of the portfolio, recognizing that it may take several days to obtain up to date information from the County on new deposits and /or transfer the excess funds out. This means that for several days, the $1 million limitation may be exceeded. 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 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. PROHIBITED INVESTMENTS: Instruments not expressly authorized are prohibited. In accordance with Government Code Section 53601.6, investment in inverse floaters, range notes or mortgage derived interest -only strips is prohibited, as are derivatives. Investment in any security that could result in a zero interest accrual if held to maturity is also prohibited. 6/08/11 City Council Meeting 3 SUMMARY OF AUTHORIZED INVESTMENTS: Instrument Limitations Minimum % of % in Rating Portfolio any single Maximum Minimum Issuer Maturity Collateral U.S. Treasuries 100% 100% 5 years U.S. Agencies 100% 25% 5 years FDIC Corporate Notes 100% 25% 5 years Commercial Paper Pl /Al 10% 5% 270 days Repurchase Agreements Issuing Counter Party AA Collateral: If U.S. Treasuries 102% If U.S. Agencies 105% Local Agency Investment Fund (LAIF) 100% San Mateo County Pool <$1.0 million * Mutual Funds Aaa Moody's/ AAAm S &P 20% 10% * Except for brief periods after the County deposits tax proceeds in the City's account in the County Pool. AUTHORIZED INVESTMENTS PERSONNEL: The City Treasurer and any Deputy Treasurers he or she appoints are authorized to approve investment transactions. Deputy Treasurers shall include at a minimum the City Finance Director. MITIGATING CREDIT RISK: Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The City shall mitigate credit risk by adopting the following strategies: 1. No more than 5% of the total portfolio may be invested in securities of any single issuer, other than: a. U.S. Treasuries and LAIF, which have no limit; and b. U.S. Agencies, which shall be limited to no more than 25% of the portfolio in any one issuing Agency. 6/08/11 City Council Meeting 4 2. The City Treasurer may elect to sell a security prior to its maturity and record a capital gain or loss in order to improve the quality, liquidity or yield of the portfolio in response to market conditions or City's risk preferences; and, 3. If securities owned by City are downgraded by either Moody's or Standard and Poor's to a level below the quality required by this Investment Policy, it shall be the City Treasurer's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. a. If a security is downgraded, the Treasurer will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors. b. If a decision is made to retain a downgraded security in the portfolio, its presence in the portfolio will be monitored and reported monthly to the City Council. 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. Funds held in a bank should be limited to weekly cash flow needs, and excess funds should be either invested in LAIF or a money market mutual fund. Any depository institution used by the City should provide overnight sweep vehicles that comply with this Investment Policy and the State Government Code. 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 purchased directly from the issuer, shall be purchased either from an institution licensed by the state as a broker - dealer, as defined in Section 25004 of the Corporations Code, or from a member of a federally regulated securities exchange, from a national or state - chartered bank, from a federal or state association (as defined by Section 5102 of the Financial Code) or from a brokerage firm designated as a primary government dealer by the Federal Reserve bank." 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: 6/08/11 City Council Meeting 5 The Treasurer shall establish a list of qualified securities dealers, and shall obtain a certification 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 will: • 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 experience operating with California municipalities; b) An inventory of trading securities of at least $10 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 as authorized in this Policy shall be kept in safekeeping by a third party custodian 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 safe keeper prior to release of the City's funds to the broker, for a purchase, and ensures that cash is deposited with the safe keeper prior to release of the City's security for a sale. COMPETITIVE PURCHASE AND SALE OF ALLOWED SECURITIES: Except for purchases in LAIF, 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 best executable price for the security. 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. ETHICS AND CONFLICTS OF INTEREST: The City Treasurer and Deputy City Treasurers shall file a State Form 700 annually, wherein they 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. 6/08/11 City Council Meeting 6 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 other such data as may be required by the City Council. INVESTMENT OVERSIGHT COMMITTEE: The City shall establish an Investment Oversight Committee that shall meet at least quarterly. The committee shall consist of, at a minimum, the City Treasurer, the City Manager, and the Finance Director. 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. The City Treasurer will report on any recommendations and/or actions taken by the Investment Oversight Committee in his/her quarterly investment reports to the full City Council. The Investment Oversight Committee shall meet and report at least semi - annually with the Finance /Budget /Investment Committee of the City Council. 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. 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(s), appointed by the City Treasurer, acts at the discretion and direction of the City Treasurer. 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 Treasurer shall be confirmed by the bank with a second person, either a Deputy Treasurer or an authorized person 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 from a second confirmation requirement, provided 6/08/11 City Council Meeting 7 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 at least 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 economic trends, and should meet the needs of the City of South San Francisco. 6/08/11 City Council Meeting 8 Attachment 1 Background Information on Frank Risso Frank Risso is the Assistant Controller at Future US, Inc., a leading publisher of special - interest magazines and digital media properties. Future US is a subsidiary of Future plc (LSE:FUTR), the UK's 3rd biggest special- interest publisher. Frank has been with Future since June 2000 first as a Financial Analyst, then Financial Reporting Manager and now as Assistant Controller. He is responsible for overseeing accounting procedures, internal controls (implementing, monitoring, enhancing), and database management, as well as, issuing monthly financials. He supervises a staff of eight covering G /L, A/R, A/P, P/R and their related transactions. He also manages the yearly audit and tax filing preparation. Prior to joining Future, Frank was a Senior Auditor at Deloitte LLP (formerly Deloitte & Touche LLP) from December 1997 through June 2000. While there he was responsible for supervising field audit engagements, work on the design of the approach to audits, supervise staff, perform accounting of complex areas of a clients' balance sheet and income statements, oversee the completion of clients' annual reports and interact with clients to discuss field audit issues. At Deloitte he worked in the following industries: Energy, Retail, Government, Nonprofits and Manufacturing. He has also worked at RGL Forensics (formerly RGL Gallagher) a forensic accounting firm specializing in business valuation from 1995 to 1997. Frank graduated from San Francisco State University in 1995 Magna Cum Laude with a degree in Business Administration.