HomeMy WebLinkAbout2021/06/28 - Special Meeting AgendaCITY OF RANCHO CUCAMONGA
SPECIAL MEETING
AGENDA
CITY COUNCIL/FIRE PROTECTION DISTRICT
June 28, 2021 – 5:00 PM
Council Chambers
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
A. CALL TO ORDER
Pledge of Allegiance
Roll Call: Mayor Michael
Mayor Pro Tem Kennedy
Council Members Hutchison, Scott and Spagnolo
B.PUBLIC COMMUNICATIONS
This is the time and place for the general public to address the City Council on any item listed
on the agenda. State law prohibits the City Council from addressing any issue not previously
included on the Agenda. The City Council may receive testimony and set the matter for a
subsequent meeting. Comments are to be limited to five minutes per individual or less, as
deemed necessary by the Mayor, depending upon the number of individuals desiring to
speak.
C. CONSENT CALENDAR
C1.Consideration to Approve and Adopt Revised Statements of Investment Policy for the City of
Rancho Cucamonga and the Rancho Cucamonga Fire Protection District. (CITY/FIRE)
C2.Consideration to Approve the Following to be in Compliance with Governmental Accounting
Standards Board (GASB) Statement No. 54: 1) Updated Fund Balance Policy; 2) a
Resolution Committing to the Level of Fiscal Reserves for the City of Rancho Cucamonga; and
3) a Resolution Committing to the Level of Fiscal Reserves for the Rancho Cucamonga Fire
Protection District. (RESOLUTION NO. 2021052) (RESOLUTION NO. FD2021018)
(CITY/FIRE)
C3.Consideration to Approve Updated City General Fund Reserve Funding Goals Policy. (CITY)
C4.Consideration of Approval of Revisions to Amended Fiscal Year 2020/21 Appropriations.
(CITY)
C5.Consideration to Approve the Temporary Roadside Memorials on Public Property and Right
ofWay Policy. (CITY)
C6.Consideration to Adopt the Capital Improvement Program for Fiscal Year 2021/22. (CITY)
D. CITY MANAGER'S STAFF REPORT(S)
D1.Consideration to Adopt the Fiscal Year 2021/22 Budget and the Article XIIIB Appropriations
Limit for Fiscal Year 2021/22. (RESOLUTION NO. 2021050, RESOLUTION NO. 2021051)
(CITY)
D2.Consideration to Adopt the General Fund Preliminary Budget, Approve a Resolution Adopting
the General Fund Appropriations Limit for Fiscal Year 2021/22, and set Approval of a Final
Budget for the July 21, 2021 Board Meeting. (RESOLUTION NO. FD 2021015) (FIRE)
D3.Consideration of a Resolution Adopting a Budget in the Amount of $2,594,050 and a
Resolution Approving an Appropriation Limit in the Amount of $4,456,979 for Fiscal Year
2021/22 in Community Facilities District (CFD) No. 881. (RESOLUTION NO. FD 2021016)
(RESOLUTION NO. FD 2021017) (FIRE)
D4.Consideration of a Resolution Adopting a Budget in the Amount of $7,000,470 and a
Resolution Approving the Appropriations Limit in the Amount of $17,149,398 for Fiscal Year
2021/22 in Communities Facilities District (CFD) No. 851. (RESOLUTION NO. FD 2021013)
(RESOLUTION NO. FD 2021014) (FIRE)
E. ADJOURNMENT
CERTIFICATION
I, Linda A. Troyan, MMC, City Clerk Services Director of the City of Rancho Cucamonga, or my
designee, hereby certify under penalty of perjury that a true, accurate copy of the foregoing agenda
was posted on at least twentyfour (24) hours prior to the meeting per Government Code 54954.2 at
10500 Civic Center Drive, Rancho Cucamonga, California and on the City's website.
LINDA A. TROYAN, MMC
CITY CLERK SERVICES DIRECTOR
If you need special assistance or accommodations to participate in this meeting,
please contact the City Clerk's office at (909) 4772700. Notification of 48 hours prior to
the meeting will enable the City to make reasonable arrangements to ensure
accessibility. Listening devices are available for the hearing impaired.
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CITY OF RANCHO CUCAMONGASPECIAL MEETINGAGENDACITY COUNCIL/FIRE PROTECTION DISTRICTJune 28, 2021 – 5:00 PMCouncil Chambers10500 Civic Center DriveRancho Cucamonga, CA 91730A. CALL TO ORDERPledge of AllegianceRoll Call: Mayor Michael Mayor Pro Tem Kennedy Council Members Hutchison, Scott and SpagnoloB.PUBLIC COMMUNICATIONSThis is the time and place for the general public to address the City Council on any item listedon the agenda. State law prohibits the City Council from addressing any issue not previouslyincluded on the Agenda. The City Council may receive testimony and set the matter for asubsequent meeting. Comments are to be limited to five minutes per individual or less, asdeemed necessary by the Mayor, depending upon the number of individuals desiring tospeak.C. CONSENT CALENDARC1.Consideration to Approve and Adopt Revised Statements of Investment Policy for the City ofRancho Cucamonga and the Rancho Cucamonga Fire Protection District. (CITY/FIRE)C2.Consideration to Approve the Following to be in Compliance with Governmental AccountingStandards Board (GASB) Statement No. 54: 1) Updated Fund Balance Policy; 2) aResolution Committing to the Level of Fiscal Reserves for the City of Rancho Cucamonga; and3) a Resolution Committing to the Level of Fiscal Reserves for the Rancho Cucamonga FireProtection District. (RESOLUTION NO. 2021052) (RESOLUTION NO. FD2021018)(CITY/FIRE)C3.Consideration to Approve Updated City General Fund Reserve Funding Goals Policy. (CITY)C4.Consideration of Approval of Revisions to Amended Fiscal Year 2020/21 Appropriations.
(CITY)
C5.Consideration to Approve the Temporary Roadside Memorials on Public Property and Right
ofWay Policy. (CITY)
C6.Consideration to Adopt the Capital Improvement Program for Fiscal Year 2021/22. (CITY)
D. CITY MANAGER'S STAFF REPORT(S)
D1.Consideration to Adopt the Fiscal Year 2021/22 Budget and the Article XIIIB Appropriations
Limit for Fiscal Year 2021/22. (RESOLUTION NO. 2021050, RESOLUTION NO. 2021051)
(CITY)
D2.Consideration to Adopt the General Fund Preliminary Budget, Approve a Resolution Adopting
the General Fund Appropriations Limit for Fiscal Year 2021/22, and set Approval of a Final
Budget for the July 21, 2021 Board Meeting. (RESOLUTION NO. FD 2021015) (FIRE)
D3.Consideration of a Resolution Adopting a Budget in the Amount of $2,594,050 and a
Resolution Approving an Appropriation Limit in the Amount of $4,456,979 for Fiscal Year
2021/22 in Community Facilities District (CFD) No. 881. (RESOLUTION NO. FD 2021016)
(RESOLUTION NO. FD 2021017) (FIRE)
D4.Consideration of a Resolution Adopting a Budget in the Amount of $7,000,470 and a
Resolution Approving the Appropriations Limit in the Amount of $17,149,398 for Fiscal Year
2021/22 in Communities Facilities District (CFD) No. 851. (RESOLUTION NO. FD 2021013)
(RESOLUTION NO. FD 2021014) (FIRE)
E. ADJOURNMENT
CERTIFICATION
I, Linda A. Troyan, MMC, City Clerk Services Director of the City of Rancho Cucamonga, or my
designee, hereby certify under penalty of perjury that a true, accurate copy of the foregoing agenda
was posted on at least twentyfour (24) hours prior to the meeting per Government Code 54954.2 at
10500 Civic Center Drive, Rancho Cucamonga, California and on the City's website.
LINDA A. TROYAN, MMC
CITY CLERK SERVICES DIRECTOR
If you need special assistance or accommodations to participate in this meeting,
please contact the City Clerk's office at (909) 4772700. Notification of 48 hours prior to
the meeting will enable the City to make reasonable arrangements to ensure
accessibility. Listening devices are available for the hearing impaired.
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CITY OF RANCHO CUCAMONGASPECIAL MEETINGAGENDACITY COUNCIL/FIRE PROTECTION DISTRICTJune 28, 2021 – 5:00 PMCouncil Chambers10500 Civic Center DriveRancho Cucamonga, CA 91730A. CALL TO ORDERPledge of AllegianceRoll Call: Mayor Michael Mayor Pro Tem Kennedy Council Members Hutchison, Scott and SpagnoloB.PUBLIC COMMUNICATIONSThis is the time and place for the general public to address the City Council on any item listedon the agenda. State law prohibits the City Council from addressing any issue not previouslyincluded on the Agenda. The City Council may receive testimony and set the matter for asubsequent meeting. Comments are to be limited to five minutes per individual or less, asdeemed necessary by the Mayor, depending upon the number of individuals desiring tospeak.C. CONSENT CALENDARC1.Consideration to Approve and Adopt Revised Statements of Investment Policy for the City ofRancho Cucamonga and the Rancho Cucamonga Fire Protection District. (CITY/FIRE)C2.Consideration to Approve the Following to be in Compliance with Governmental AccountingStandards Board (GASB) Statement No. 54: 1) Updated Fund Balance Policy; 2) aResolution Committing to the Level of Fiscal Reserves for the City of Rancho Cucamonga; and3) a Resolution Committing to the Level of Fiscal Reserves for the Rancho Cucamonga FireProtection District. (RESOLUTION NO. 2021052) (RESOLUTION NO. FD2021018)(CITY/FIRE)C3.Consideration to Approve Updated City General Fund Reserve Funding Goals Policy. (CITY)C4.Consideration of Approval of Revisions to Amended Fiscal Year 2020/21 Appropriations.(CITY)C5.Consideration to Approve the Temporary Roadside Memorials on Public Property and RightofWay Policy. (CITY)C6.Consideration to Adopt the Capital Improvement Program for Fiscal Year 2021/22. (CITY)D. CITY MANAGER'S STAFF REPORT(S)D1.Consideration to Adopt the Fiscal Year 2021/22 Budget and the Article XIIIB AppropriationsLimit for Fiscal Year 2021/22. (RESOLUTION NO. 2021050, RESOLUTION NO. 2021051)(CITY)D2.Consideration to Adopt the General Fund Preliminary Budget, Approve a Resolution Adoptingthe General Fund Appropriations Limit for Fiscal Year 2021/22, and set Approval of a FinalBudget for the July 21, 2021 Board Meeting. (RESOLUTION NO. FD 2021015) (FIRE)D3.Consideration of a Resolution Adopting a Budget in the Amount of $2,594,050 and aResolution Approving an Appropriation Limit in the Amount of $4,456,979 for Fiscal Year2021/22 in Community Facilities District (CFD) No. 881. (RESOLUTION NO. FD 2021016)(RESOLUTION NO. FD 2021017) (FIRE)D4.Consideration of a Resolution Adopting a Budget in the Amount of $7,000,470 and aResolution Approving the Appropriations Limit in the Amount of $17,149,398 for Fiscal Year2021/22 in Communities Facilities District (CFD) No. 851. (RESOLUTION NO. FD 2021013)(RESOLUTION NO. FD 2021014) (FIRE)
E. ADJOURNMENT
CERTIFICATION
I, Linda A. Troyan, MMC, City Clerk Services Director of the City of Rancho Cucamonga, or my
designee, hereby certify under penalty of perjury that a true, accurate copy of the foregoing agenda
was posted on at least twentyfour (24) hours prior to the meeting per Government Code 54954.2 at
10500 Civic Center Drive, Rancho Cucamonga, California and on the City's website.
LINDA A. TROYAN, MMC
CITY CLERK SERVICES DIRECTOR
If you need special assistance or accommodations to participate in this meeting,
please contact the City Clerk's office at (909) 4772700. Notification of 48 hours prior to
the meeting will enable the City to make reasonable arrangements to ensure
accessibility. Listening devices are available for the hearing impaired.
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DATE:June 28, 2021
TO:Mayor and Members of the City Council
President and Members of the Boards of Directors
FROM:John R. Gillison, City Manager
INITIATED BY:Lori E. Sassoon, Deputy City Manager/Administrative Services
Tamara L. Oatman, Finance Director
SUBJECT:Consideration to Approve and Adopt Revised Statements of Investment
Policy for the City of Rancho Cucamonga and the Rancho Cucamonga
Fire Protection District. (CITY/FIRE)
RECOMMENDATION:
Staff recommends that the City Council/Board of Directors approve and adopt the attached
revised Statements of Investment Policy for the City of Rancho Cucamonga (City) and the Rancho
Cucamonga Fire Protection District (District).
BACKGROUND:
California Government Code Section 53646(a)(2) requires that the City/District Treasurer or Chief
Fiscal Officer annually renders to the City Council/Board of Directors a Statement of Investment
Policy, which shall be considered at a public meeting. Further, the City Council/Fire Board shall
also consider any modifications to the investment policy at a public meeting.
On August 5, 2020, the City entered into a three-year contract with PFM Asset Management LLC
(“PFM”) for professional investment advisory services. As part of their contract, PFM annually
reviews the City’s and District’s investment policies for potential revisions to ensure the City’s and
District’s compliance with Government Code and to ensure that the policy accommodates the
investment strategies agreed to by the City/District and PFM.
On November 18, 2020, the City Council/Fire Board approved and adopted the City’s and
District’s revised 2020 Statements of Investment Policy.
ANALYSIS:
PFM recently completed their review of the City of Rancho Cucamonga’s and the Rancho
Cucamonga Fire Protection District’s Investment Policies (the “Policies”). As written, PFM stated
that the Policies are in compliance with California Government Code (the “Code”) statutes
regulating the investment of public funds. However, they recommended certain Policy updates
related to Senate Bill 998, which took effect on January 1, 2021. Following is a summary of the
Bill’s amendments to Code along with PFM’s recommendations that were implemented in the
2021 Policies:
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Code Amendment: Eliminates the 10% limit on the outstanding commercial paper of any
one issuer and establishes a combined 10% per issuer limit on commercial paper and
corporate notes.
Policy Impact: Eliminated the 10% limit on the outstanding commercial paper of any one
issuer as it is no longer in the Code. There is no need for the City/District to incorporate
the new 10% combined per issuer limit on commercial paper and corporate notes as the
City/District already have a more restrictive 5% per issuer limit that applies across all
corporate sectors.
Code Amendment: Allows local agencies that have more than $100 million of investment
assets under management to invest up to 40% in commercial paper (the prior limit was
25% for all agencies other than a county or a city and county).
Policy Impact: Although the City’s/District’s portfolios currently make limited use of
commercial paper, the Policy limit was increased to match the current Code limit to retain
the investment flexibility allowed by Code. As the District currently has less than $100
million of investments, the 40% commercial paper limit would not be applicable to the Fire
District at this time.
Code Amendment: Modified Government Code Section 53601.6 that prohibits certain
types of investments.
Policy Impact: As the Policies do not currently reference Code Section 53601.6, a section
was added to the Policies that addresses the requirements of this Code Section. Related
terms were added to each Policy’s Glossary to define listed prohibited investments.
The attached Policies for the City and District have been reviewed and approved by the City
Treasurer and the District Treasurer, respectively.
FISCAL IMPACT:
None.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
These policies support the City Council’s/Fire Board’s fiduciary roles as custodians of the public’s
resources by providing guidelines for the prudent investment of the City’s/District’s idle cash and
outlining policies essential to ensuring the safety and financial strength of the City’s/District’s
investment portfolios.
ATTACHMENTS:
Attachment 1 – Statement of Investment Policy 2021-City
Attachment 2 – Statement of Investment Policy 2021-Fire
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CITY OF RANCHO CUCAMONGA
STATEMENT OF INVESTMENT POLICY
TABLE OF CONTENTS
Introduction ........................................................................................................ 1
Scope .................................................................................................................. 1
Delegation of Authority ................................................................................... 1-2
Prudence ............................................................................................................ 2
Objective ......................................................................................................... 2-3
Ethics and Conflicts of Interest ......................................................................... 3-4
Authorized Financial Dealers and Institutions ..................................................... 4
Authorized and Suitable Investments .............................................................. 4-8
Prohibited Investments ....................................................................................... 8
Review of Investment Portfolio .......................................................................... 8
Investment Pools ............................................................................................. 8-9
Collateralization .................................................................................................. 9
Safekeeping and Custody .................................................................................... 9
Diversification ................................................................................................... 10
Maximum Maturities ........................................................................................ 10
Internal Control ................................................................................................ 10
Performance ................................................................................................ 10-11
Reporting .......................................................................................................... 11
Investment Policy Adoption .............................................................................. 12
Glossary ....................................................................................................... 13-19
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Statement of Investment Policy Page 1
CITY OF RANCHO CUCAMONGA
STATEMENT OF INVESTMENT POLICY
1.0 INTRODUCTION
This Statement of Investment Policy (“Policy”) provides guidelines for the prudent investment of
the City of Rancho Cucamonga’s (“City”) idle cash and outlines the policies essential to ensuring
the safety and financial strength of the City’s investment portfolio. This Policy is based on the
principles of prudent money management and conforms to all federal, state, and local laws
governing the investment of public funds. The goal of this Policy is to enhance the economic
status of the City by protecting its pooled cash and to invest public funds to:
1. Meet the daily cash flow needs of the City;
2. Comply with all laws of the State of California regarding investment of public funds; and
3. Achieve a reasonable rate of return while minimizing the potential for capital losses
arising from market changes or issuer default.
2.0 SCOPE
This Policy applies to the investment activities of all funds of the City. These funds are accounted
for in the City’s Comprehensive Annual Financial Report (CAFR) and include: General Fund,
Special Revenue Funds, Debt Service Funds, Capital Project Funds, Proprietary Funds, as well as
Agency Funds and a Private-Purpose Trust Fund.
Bond proceeds shall be invested in accordance with the requirements and restrictions outlined
in bond documents as approved by the City Council. If the bond documents are silent as to the
permitted investments, the bond proceeds will be invested in the securities permitted by this
Policy. Notwithstanding the other provisions of this Policy, the percentage limitations listed
elsewhere in this Policy do not apply to bond proceeds.
3.0 DELEGATION OF AUTHORITY
The City Council, as permitted under California Government Code §53607, delegates the
responsibility to manage the City’s investment portfolio to the City Treasurer for a period of one-
year, unless revoked. Subject to review, the City Council may renew the delegation of authority
each year. The City Treasurer shall be responsible for all transactions undertaken and shall
establish a system of controls to regulate the activities of subordinate officials, and their
procedures, in the absence of the City Treasurer. Pursuant to Government Code §1190, the City
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Statement of Investment Policy Page 2
Treasurer appoints the Deputy City Manager/Administrative Services to act as Deputy Treasurer
with responsibility to manage the City’s investment portfolio on a daily basis. The City
Treasurer/Deputy Treasurer will maintain on file a written authorization designating those
individuals to whom daily investment activities, such as carrying out the City Treasurer's/Deputy
Treasurer’s investment instructions, confirming treasury transactions, and other routine
activities, have been delegated.
As authorized by the City Council, the City may also utilize the services of an independent
investment advisor to assist with the investment program under the supervision of the City
Treasurer/Deputy Treasurer. The investment advisor shall follow this Policy and such other
written instructions as are provided by the City. The investment advisor shall never take
possession of the City’s funds or assets.
4.0 PRUDENCE
All persons authorized to make investment decisions on behalf of the City are trustees and
therefore fiduciaries subject to the prudent investor standard, as described in Government Code
section 53600.3 which states:
When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing
public funds, a trustee shall act with care, skill, prudence, and diligence under the
circumstances then prevailing, including, but not limited to, the general economic
conditions and the anticipated needs of the agency, that a prudent person acting in a like
capacity and familiarity with those matters would use in the conduct of funds of a like
character and with like aims, to safeguard the principal and maintain the liquidity needs
of the agency.
The City Treasurer/Deputy Treasurer and authorized persons acting in accordance with this Policy
and the “prudent investor” standard and exercising due diligence shall be relieved of personal
responsibility for an individual security’s credit risk or market price changes, provided deviations
from expectations are reported in a timely manner and appropriate action is taken to control
adverse developments, whenever possible.
5.0 OBJECTIVE
The objective of the investment portfolio is to meet the short- and long-term cash flow demands
of the City. To achieve this objective, the portfolio will be structured to provide safety of principal
and liquidity, while then providing a reasonable return on investments.
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Statement of Investment Policy Page 3
The authority governing investments for municipal governments is set forth in Government Code
Sections 53600 et seq. City strategy has been to limit investments more stringently than required
under state law. The primary objectives of investment activities, in order of priority are:
1. Safety - Safety and risk associated with an investment refers to the potential loss of
principal, interest, or combination thereof. The City only invests in those instruments that
are considered safe. Each investment transaction shall be undertaken in a manner that
seeks to ensure, whenever possible, that all capital losses are avoided, whether from
securities default, broker/dealer default, or erosion of market value. The City shall seek
to preserve principal by mitigating two types of risk: credit risk and market risk.
• Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be
mitigated by investing in only very safe securities and by diversifying the investment
portfolio so that the failure of any one issuer would not unduly harm the City’s cash
flow.
• Market risk, defined as the risk of market value fluctuations due to overall changes in
the general level of interest rates, shall be mitigated by structuring the portfolio to
align with the City’s anticipated cash flow needs. It is explicitly recognized, however,
that in a diversified portfolio, occasional measured losses may occur and must be
considered within the context of overall investment return and liquidity needs.
2. Liquidity - Liquidity is an important investment quality especially when the need for
unexpected funds occasionally occurs. The City’s investment portfolio will remain
sufficiently liquid to enable the City to meet operating requirements that might be
reasonably anticipated.
3. Yield - The City’s investment portfolio shall be designed with the objective of attaining a
reasonable market rate of return throughout budgetary and economic cycles,
commensurate with the City’s investment risk constraints as long as it does not diminish
the objectives of Safety and Liquidity.
6.0 ETHICS AND CONFLICTS OF INTEREST
The City Treasurer/Deputy Treasurer and employees involved in the investment process shall
refrain from personal business activity that could conflict with proper execution of the
investment program, or which could impair their ability to make impartial investment decisions.
Employees and investment officers shall disclose any material financial interest in financial
institutions that conduct business with the City, and they shall further disclose any personal
financial/investment positions that could be affected by the performance of the City’s operations
and functions or by the management of the City’s investment program. The Treasurer/Deputy
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Statement of Investment Policy Page 4
Treasurer and investment employees are required to file annual disclosure statements as
required by the Fair Political Practices Commission (FPPC).
7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Treasurer/Deputy Treasurer shall only execute investment transactions with those direct
issuers authorized by this Policy (LAIF, LGIPs, money market funds, and banks). All other
investment transactions will be conducted through the City’s investment advisor who will
maintain their own list of approved issuers, brokers/dealers, and financial institutions with which
to conduct transactions on the City’s behalf.
8.0 AUTHORIZED AND SUITABLE INVESTMENTS
The City is further governed by California Government Code Sections 53600 et. seq. to invest in
specific types of securities. The City has further limited the types of securities in which it may
invest. In the event an apparent discrepancy is found between this Policy and the Government
Code, the more restrictive parameters will take precedence. Percentage holding limits listed in
this Policy apply at the time the security is purchased. Credit ratings, where shown, specify the
minimum credit rating category required at purchase. In the event a security held by the City is
subject to a credit rating change that brings it below the minimum credit ratings specified in this
Policy, the City Treasurer/Deputy Treasurer should notify the City Council of the change in the
next monthly investment report. The course of action to be followed will then be decided on a
case-by-case basis, considering such factors as the reason for the change, prognosis for recovery
or further rate drops, and the market price of the security. Any security not listed in Section 8.0
is not a valid investment for the City. The concise list of approved securities is as follows:
• United States Treasury Securities: United States Treasury Bills, Bonds, and Notes or those
instruments for which the full faith and credit of the United States are pledged for payment
of principal and interest.
There is no limit on the percentage of the portfolio that can be invested in this category.
• United States Federal Agencies: Obligations issued by Federal Agencies or United States
government-sponsored enterprise obligations, participations, or other instruments, including
those issued by or fully guaranteed as to principal and interest by federal agencies or United
States government-sponsored enterprises.
There is no limit on the percentage of the portfolio that can be invested in this category.
• Supranational Securities: United States dollar denominated senior unsecured
unsubordinated obligations issued or unconditionally guaranteed by the International Bank
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Statement of Investment Policy Page 5
for Reconstruction and Development, International Finance Corporation, or Inter-American
Development Bank. The maximum remaining maturity for supranational obligations must be
five years or less, and they must be eligible for purchase and sale within the United States.
These investments must be rated in a rating category of “AA” or better by a NRSRO.
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
The maximum remaining maturity of any investment in this category shall not exceed five-
years.
• Municipals Notes or Bonds: Registered state warrants or treasury notes or bonds of this
state, including bonds payable solely out of the revenues from a revenue-producing property
owned, controlled, or operated by the state or by a department, board, agency, or authority
of the state.
Registered treasury notes or bonds of any of the other 49 states in addition to California,
including bonds payable solely out of the revenues from a revenue-producing property
owned, controlled, or operated by a state or by a department, board, agency, or authority of
any of the other 49 states, in addition to California.
Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state,
including bonds payable solely out of the revenues from a revenue-producing property
owned, controlled, or operated by the local agency, or by a department, board, agency, or
authority of the local agency.
Purchases are limited to securities rated in a rating category of “A” (long-term) or “A-1”
(short-term) or their equivalents or better by a Nationally Recognized Statistical Rating
Organization (“NRSRO”). (The minimum rating shall apply to any issuer, irrespective of any
credit enhancement).
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
• Negotiable Certificates of Deposit: Negotiable certificates of deposit issued by a nationally
or state-chartered bank, a savings association or a federal association, a state or federal credit
union, or by a federally licensed or state-licensed branch of a foreign bank. Purchases are
limited to securities rated in a rating category of “A” (long-term) or “A-1” (short-term) or their
equivalents or better by an NRSRO.
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
• Asset-Backed Securities: A mortgage passthrough security, collateralized mortgage
obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate,
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Statement of Investment Policy Page 6
consumer receivable passthrough certificate, or consumer receivable-backed bond.
Securities shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO.
There is a 20% limit on the percentage of the portfolio that can be invested in this category.
The maximum remaining maturity of any investment in this category shall not exceed five-
years.
• Medium-Term Notes: Medium-Term Notes are defined as all corporate and depository
institution debt securities. They must be issued by corporations organized and operating
within the United States. Notes eligible for investment shall be rated in a rating category of
“A” or its equivalent or better by an NRSRO.
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
The maximum remaining maturity of any investment in this category shall not exceed five-
years.
• Bankers’ Acceptances: Bankers’ acceptances, otherwise known as bills of exchange or time
drafts, that are drawn on and accepted by a commercial bank. Purchases are limited to issuers
that have short-term debt rated in a rating category of “A-1” or its equivalent or higher by an
NRSRO.
There is a 40% limit on the percentage of the portfolio that can be invested in this category.
The maximum maturity shall not exceed 180 days.
• Commercial Paper: Must be of “prime” quality of the highest ranking or of the highest letter
and number rating as provided for by an NRSRO.
The entity that issues the commercial paper shall meet all the following conditions: (i) is
organized and operating in the United States as a general corporation, (ii) has total assets in
excess of five hundred million dollars ($500,000,000), and (iii) has debt other than
commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher
by an NRSRO.
There is a 40% limit on the percentage of the portfolio that can be invested in this category
(the limit is 25% for agencies that have less than $100 million of investment assets). The
maximum maturity shall not exceed 270 days.
• Repurchase Agreements (Repos): An executed Master Repurchase Agreement is required
between the City and the broker dealer or financial Institution. The market value of securities
that underlies a repurchase agreement shall be valued at 102 percent or greater of the funds
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Statement of Investment Policy Page 7
borrowed against those securities and the value shall be adjusted no less than quarterly.
Collateral is restricted to U.S. Treasury and Federal Agency securities.
There is a 20% limit on the percentage of the portfolio that can be invested in this category.
The maximum maturity of any investment in this category shall not exceed one year.
• State of California Local Agency Investment Fund (LAIF): The Local Agency Investment Fund
(LAIF) is a State of California managed investment pool established by the State Treasurer for
the benefit of local agencies.
There is no limit on the percentage of the portfolio that can be invested in this category. The
maximum investment in LAIF accounts is dependent upon limits established under the Local
Agency Investment Fund guidelines and not Government Code.
• Joint Powers Authority (JPA) Investment Pool: Shares of beneficial interest issued by a joint
powers authority organized pursuant to Section 6509.7 that invests in the securities and
obligations authorized in Government Code. Whenever the City has any funds invested in a
LGIP, the City Treasurer/Deputy Treasurer shall maintain on file a copy of the LGIP’s current
information statement and periodically review the LGIP’s investments.
There is no limit on the percentage of the portfolio that can be invested in this category.
• Money Market Funds (“MMF”): Government Money Market Funds meeting either of the
following criteria: (A) Attained the highest ranking or the highest letter and numerical rating
provided by not less than two NRSROs, or (B) Retained an investment advisor with not less
than five years’ experience and registered or exempt from registration with the SEC, with
assets under management in excess of five hundred million dollars ($500,000,000).
Whenever the City has any funds invested in an MMF, the City Treasurer/Deputy Treasurer
shall maintain on file a copy of the MMF’s current information statement. A maximum of 20%
of the City’s portfolio may be invested in this category.
There is a 20% limit on the percentage of the portfolio that can be invested in this category.
• Bank Deposits: FDIC insured or collateralized demand deposit accounts, savings accounts,
market rate accounts, certificates of deposits and other types of bank deposits in financial
institutions located in California. The amount on deposit in any financial institution shall not
exceed the shareholder's equity. To be eligible to receive City deposits, the financial
institution must have received a minimum overall satisfactory rating, under the Community
Redevelopment Act, for meeting the credit needs of California Communities in its most recent
evaluation. Bank deposits are required to be collateralized as specified under Government
Code Section 53630 et seq. The City Treasurer/Deputy Treasurer, at his/her discretion, may
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Statement of Investment Policy Page 8
waive the collateralization requirements for any portion that is covered by federal deposit
insurance. The City shall have a signed agreement with any depository accepting City funds
per Government Code Section 53649. There is no limit on the percentage of the portfolio that
may be invested in this category.
There is no limit on the percentage of the portfolio that can be invested in this category.
However, a maximum of 10 percent of the portfolio may be invested in time deposits.
9.0 PROHIBITED INVESTMENTS
Any security type or structure not specifically approved by this policy is hereby specifically
prohibited. Security types which are thereby prohibited include, but are not limited to, inverse
floaters, derivatives, range notes, interest only strips that are derived from a pool of mortgages,
or in any investment that could result in zero interest accrual if held to maturity.
10.0 REVIEW OF INVESTMENT PORTFOLIO
The securities held by the City must be in compliance with Section 8.0 “Authorized and Suitable
Investments” at the time of purchase. If, subsequent to the date of purchase, a security is
determined to be no longer in compliance with Section 8.0, the City Treasurer/Deputy Treasurer
shall report the non-compliant security to the City Council and shall include a disclosure in the
monthly Investment Report if the security is held at the date the report is prepared.
The City’s external, independent auditors perform an annual review of the City’s Investment
Policy, investment process, and related internal controls. The annual review process is
performed as part of the City’s annual external financial audit.
11.0 INVESTMENT POOLS
The Local Agency Investment Fund (LAIF) is a voluntary investment alternative for California’s
local governments and special districts authorized by the California Government Code. LAIF is a
State of California managed investment pool established by the State Treasurer for the benefit
of local agencies.
The City’s participation in LAIF was approved by the City Council with other authorized
investments in July 1987. It is a permitted investment with the knowledge that the fund may
invest in some vehicles allowed by statute but not otherwise authorized under the City’s
authorized investments. All securities in LAIF are purchased under the authority of Government
Code Sections 16430 and 16480. All investments are purchased at market value, and market
valuation is conducted monthly.
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Statement of Investment Policy Page 9
The City may also invest in shares of beneficial interest issued by a joint powers authority (“JPA”)
organized pursuant to Section 6509.7 of the California Government Code that invests in the
securities and obligations specified in the code and which shall retain an investment advisor that
meets the following criteria:
1. Be registered or exempt from registration with the Securities and Exchange Commission;
2. Have assets under management in excess of five hundred million dollars ($500,000,000),
and
3. Have not less than five (5) years of experience investing in the securities and obligations
authorized herein.
12.0 COLLATERALIZATION
All bank deposits must be FDIC insured or collateralized in accordance with Government Code
Section 53630 et seq.
13.0 SAFEKEEPING AND CUSTODY
To protect against potential losses by the collapse of individual securities dealers, all trades will
be transacted on a delivery-versus-payment (DVP) basis. This means that the securities shall be
delivered to the City’s designated custodian upon receipt of the payment by the City. The
securities shall be held 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 City. The third-party
custodian shall be required to issue a monthly safekeeping report to the City that lists the specific
investment, rate, maturity and other pertinent information.
The only exception to the foregoing shall be depository accounts and security purchases made
with investment pools and certificates of deposit since the purchased securities are not
deliverable. Evidence of these investments will be held in the City’s vault. No outside
broker/dealer or advisor may have access to City funds, accounts or investments, and any
transfer of funds to or through an outside broker/dealer must be approved by the City
Treasurer/Deputy Treasurer.
The City strives to maintain the level of investment of all funds as near 100% as possible, through
daily and projected cash flow determinations. Idle cash management and investment
transactions are the responsibility of the City Treasurer/Deputy Treasurer.
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Statement of Investment Policy Page 10
14.0 DIVERSIFICATION
It is the policy of the City to diversify its investment portfolio. Assets shall be diversified to
eliminate the risk of loss resulting from over-concentration of assets in a specific issuer, security
type, and maturities. Diversification strategies shall be determined and revised periodically. The
purpose of diversifying is to reduce overall portfolio risks while attaining an average market rate
of return; therefore, it needs to be conceptualized in terms of maturity, instrument types and
issuer. To promote diversification, no more than 5% of the portfolio may be invested in the
securities of any one issuer, regardless of security type; excluding U.S. Treasuries, federal
agencies, supranationals, and pooled investments such as LAIF, money market funds, or local
government investment pools.
15.0 MAXIMUM MATURITIES
To the extent possible, the City will attempt to match security maturities to anticipated cash flow
requirements. Where this Policy does not list a specific maturity limit, the maximum maturity of
individual investments shall not exceed a maturity of five years from the trade date unless the
City Council has granted authority to make that investment either specifically or as a part of an
investment program approved by the City Council no less than three months prior to the
investment.
16.0 INTERNAL CONTROL
The City Treasurer/Deputy Treasurer is responsible for establishing and maintaining an internal
control structure designed to ensure that the assets of the City are protected from loss, theft or
misuse. The procedures should include references to individuals authorized to execute
transactions or transfers, safekeeping agreements, repurchase agreements, wire transfer
agreements, collateral/depository agreements and banking services contracts, as appropriate.
The internal control structure shall be designed to provide reasonable assurance that these
objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits
requires estimates and judgement by management. The City Treasurer/Deputy Treasurer shall
establish an annual process of independent review by an external auditor. This review will
provide internal control by assuring compliance with policies and procedures set forth in this
Policy. Also, see Section 9.0 of this Policy.
17.0 PERFORMANCE
The investment performance of the City’s operating portfolio shall be evaluated and compared
to an appropriate benchmark in order to assess the success of the investment program relative
to the City’s Safety, Liquidity, and Yield objectives. This review will be conducted annually with
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Statement of Investment Policy Page 11
the City Treasurer, City Manager, Deputy City Manager/Administrative Services, and Finance
Director, and, if necessary, consideration will be given to making adjustments to future
investment strategies as market conditions permit.
18.0 REPORTING
The City Treasurer shall prepare and submit a monthly investment report to the City Council and
City Manager, which shall include all securities, excluding those held by and invested through
trustees. The report shall include the following:
• A monthly report of transactions.
• The type of investment, name of the issuer, date of purchase, date of maturity, par and dollar
amount invested in all securities.
• The weighted average maturity of the investments.
• Any funds, investments, or programs including loans that are under the management of
contracted parties.
• A description of the compliance with this Policy.
• A statement of the City’s ability to meet its pooled expenditure requirements for the next six
months or provide an explanation as to why sufficient money shall or may not be available.
• The investment portfolio report shall include current market value information for all
investments. A monthly market value will be obtained for each security owned by the City.
For purposes of reporting, the market value of each security may be obtained from the City’s
custodian bank or other pricing source(s) utilized by the City’s investment advisor.
The City Treasurer shall be responsible for reviewing and modifying investment guidelines as
conditions warrant and is required to submit same for re-approval to the City Council on an
annual basis with or without changes. However, the City Treasurer may, at any time, further
restrict the items approved for purchase as deemed appropriate.
The basic premise underlying the City’s investment philosophy is, and will continue to be, to
ensure that money is always safe and available when needed.
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19.0 INVESTMENT POLICY ADOPTION
The City's Investment Policy shall be reviewed and approved annually by the City Council. Any
modifications made to the Investment Policy must be approved by the City Council.
Jim Harrington
City Treasurer
City of Rancho Cucamonga
Statement of Investment Policy
Date
Page 12
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Statement of Investment Policy Page 13
GLOSSARY OF TERMS
The glossary is provided for general information only. It is not to be consider a part of the Policy
for determining Policy requirements or terms.
AGENCIES: Agencies of or sponsored by the Federal government set up to supply credit to various
classes of institutions. Examples include Federal Home Loan Banks (FHLB), Federal Farm Credit
Bank (FFCB), Federal Home Loan Mortgage Corporation (FHLMC), and Federal National Mortgage
Association (FNMA).
ASKED: The price at which securities are offered by a selling party to a buying party.
ASSET-BACKED SECURITIES (ABS): Securities whose income payments and hence value is
derived from and collateralized (or "backed") by a specified pool of underlying assets which are
receivables. The pools of underlying assets can comprise common payments credit cards, auto
loans, mortgage loans, and other types of assets. Interest and principal are paid to investors
from borrowers who are paying down their debt.
BANKERS’ ACCEPTANCE (BA): A draft, bill, or exchange accepted by a bank or trust company.
The accepting institution guarantees payment of the bill, as well as the issuer.
BASIS POINT: One basis point is one-hundredth of a percent (i.e., 0.01%).
BEAR MARKET: A period of generally pessimistic attitudes and declining market prices.
BENCHMARK: A comparative base for measuring the performance or risk tolerance of the
investment portfolio. A benchmark should represent a close correlation to the level of risk and
the average duration of the portfolio’s investments.
BID: The price offered by a buyer of securities. (When selling securities, you ask for a bid.)
BOND EQUIVALENT YIELD: The basis on which yields on notes and bonds are quoted.
BOOK VALUE (COST VALUE): The value at which a debt security is shown on the holder’s balance
sheet. Book value is acquisition cost less amortization of premium or accretion of discount.
BROKER/DEALER: An individual or firm that brings buyers and sellers together in a securities
transaction.
BULL MARKET: A period of generally optimistic attitudes and increasing market prices.
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Statement of Investment Policy Page 14
CALLABLE SECURITIES: A security that is redeemable by the issuer before the scheduled maturity.
Bonds are usually called when the interest rates fall so significantly that the issuer can save
money by floating new bonds at lower rates.
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a Certificate.
Large denomination CD’s are typically negotiable.
COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to
secure repayment of a loan. Also, refers to securities pledged by a bank to secure deposits of
public monies.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report of the City of
Rancho Cucamonga. It includes five combined statements for each individual fund and account
group prepared in conformity with Generally Accepted Accounting Principles (GAAP). It also
includes supporting schedules necessary to demonstrate compliance with GAAP, finance-related
legal and contractual provisions, extensive introductory material, and a detailed Statistical
Section.
CORPORATE MEDIUM-TERM NOTE: Corporate and depository institution debt securities with a
maximum remaining maturity of five years or less, issued by corporations organized and
operating within the United States or by depository institutions licensed by the United States or
any state and operating within the United States.
COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on
the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling
for his own account.
DEBENTURE: A bond secured only by the general credit of the issuer.
DELIVERY VERSUS PAYMENT (DVP): Delivery of securities with a simultaneous exchange of
money for the securities.
DERIVATIVES: Financial products dependent for their value on (or derived from) an underlying
financial instrument, a commodity, or an index.
DISCOUNT: The difference between the cost price of a security and its maturity when quoted at
lower than face value. A security selling below original offering price shortly after sale also is at
a discount.
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Statement of Investment Policy Page 15
DISCOUNT SECURITIES: Non-interest bearing, money market instruments that are issued at a
discount and redeemed at maturity for full face value, e.g. U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent
returns.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank
deposits up to $250,000 per deposit.
FEDERAL FUNDS RATE: The interest rate charged by one institution lending federal funds to
another.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12
regional banks), which lend funds and provide correspondent banking services to member
commercial banks, thrift institutions, credit unions and insurance companies. The mission of the
FHLBs is to liquefy the housing related assets of its members who must purchase stock in their
district bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA was chartered under
the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working
under the auspices of the Department of Housing and Urban Development (HUD). It is the largest
single provider of residential mortgage funds in the United States. Fannie Mae, as the
corporation is called, is a private stockholder-owned corporation. The corporation’s purchases
include a variety of adjustable mortgages, second loans, and fixed-rate mortgages. FNMA’s
securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all
security holders will receive timely payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal
Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New
York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating
basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases
and sales of Government Securities in the open market to influence the volume of bank credit
and money.
FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and
comprising a seven-member Board of Governors in Washington, D.C., 12 regional banks and
about 5,700 commercial banks that are members of the system.
GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB): The independent organization
that establishes and improves standards of accounting and financial reporting for the United
States, state and local governments.
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Statement of Investment Policy Page 16
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations, and other institutions. Security holder is
protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by
the FHA, VA, or FMHM mortgages. The term “pass-through” is often used to describe Ginnie
Maes.
INTEREST ONLY STRIP: Investments created by separating the principal and interest portions of
a debt security or pool of securities into separate investments. Interest only strips are most
common with mortgage-backed securities. The investor benefits if interest rates rise and
principal repayments slow, but if interest rates fall and principal repayments accelerate, the
investor will receive less interest. Once the principal amount has been repaid, interest payments
stop, and the value of an interest only strip falls to zero.
INVERSE FLOATER: Debt securities that have a floating coupon rate that adjusts inversely to
movements in a benchmark interest rate. They can offer a hedge against falling interest
rates. However, the structure of these investments can magnify changes in the security’s market
value. Furthermore, if interest rates rise, the investor may end up with a security that pays little
to no interest with a diminished security value.
INVESTMENT AGREEMENTS: An agreement with a financial institution to borrow public funds
subject to certain negotiated terms and conditions concerning collateral, liquidity and interest
rates.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a
substantial loss.
LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from political subdivisions
that are placed in the custody of the State Treasurer for investment and reinvestment.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP): A type of pooled investment program formed
by a joint powers authority in which funds from its local agency investors are aggregated together
for investment purposes.
MARKET VALUE: The price at which a security is trading and could presumably be purchased or
sold.
MARKET RATE OF RETURN: A rate of return commensurate with the market for similar securities
(maturity, credit rating, duration and liquidity) would be considered a market rate of return.
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Statement of Investment Policy Page 17
MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between
the parties to repurchase–reverse, repurchase agreements that establishes each party’s rights in
the transactions. A master agreement will often specify, among other things, the right of the
buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower.
MATURITY: The date upon which the principal or stated value of an investment becomes due
and payable.
MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper,
bankers’ acceptances, etc.) are issued and traded.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO): A credit rating
agency approved by the U.S. Securities and Exchange Commission (SEC) that provides credit
ratings that are used by the U.S. government and investors as benchmarks. Examples include
Standard & Poor’s Corporation, Moody’s Investor Services, Inc. and Fitch, Inc.
OFFER: The price asked by a seller of securities. (When buying securities, you ask for an offer.)
OPEN MARKET OPERATIONS: Federal Reserve activity. Under the Federal Reserve Act, the Fed
uses purchases and sales of Government and Federal Agency securities to add to or subtract from
commercial bank reserves. Goals are to sustain economic growth, high employment and
reasonable price stability.
PAPER GAIN OR LOSS: Term used for unrealized gain or loss on securities being held in a portfolio
based on comparison of current market quotes and their original cost. This situation exists if the
security is held while there is a difference between cost value (book value) and the market value.
PORTFOLIO: Collection of securities held by an investor.
PRIMARY DEALER: A group of government securities dealers who submit daily reports of market
activity, positions and monthly financial statements to the Federal Reserve Bank of New York and
are subject to its informal oversight. Primary dealers include Securities and Exchange
Commission (SEC) registered securities broker/dealers, banks and a few unregulated firms.
PRUDENT INVESTOR STANDARD: An investment standard to be followed by those authorized to
make investment decisions on behalf of a local agency. Those authorized shall act with care, skill,
prudence, and diligence under the circumstances then prevailing, including, but not limited to,
the general economic conditions and the anticipated needs of that agency.
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Statement of Investment Policy Page 18
RANGE NOTE: A structured investment that pays interest as long as a benchmark interest rate is
within a specified interest rate range. These securities provide higher than market interest rates,
but the investor will not receive any interest if the benchmark interest rate moves outside the
specified range. The investor is betting interest rates will remain relatively stable.
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current
market price. This may be the amortized yield to maturity on a bond; the current income return.
SAFEKEEPING: The service to customers by banks and trust companies when the bank or trust
company stores the securities for protection, receives coupon payments and redeems issues at
maturity.
SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following
the initial distribution of securities.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in
securities transactions by administering securities legislation.
SEC RULE 15(C) 3-1: See Uniform Net Capital Rule.
SUPRANATIONALS: Development banks that share the same goal of providing an improved
standard of living in their member countries, but each having different mandates. There are
three banks (supranationals) in which California local agencies can invest in their debt
obligations; the International Bank for Reconstruction and Development (IBRD), International
Finance Corporation (IFC) and Inter-American Development Bank (IADB).
TREASURY BILLS: A non-interest-bearing discount security issued by the U.S. Treasury to finance
the national debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct
obligations of the U.S. Government and having initial maturities of over 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct
obligations of the U.S. Government and having initial maturities from one to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member
firms as well as nonmember broker-dealers in securities maintain a maximum ratio of
indebtedness to liquid capital of 15-1; also, called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm, including margin loans and commitments to
purchase securities. Liquid capital includes cash and assets easily converted to cash without
penalty.
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Statement of Investment Policy Page 19
YIELD: The rate of annual income return on an investment, expressed as a percentage.
YIELD TO MATURITY: The current income yield on an investment, minus any premium above
par, or plus any discount from par in the purchase price with the adjustment spread over the
period from date of purchase to maturity of the bond.
Page 26
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ATTACHMENT 2Page27
RANCHO CUCAMONGA FIRE PROTECTION DISTRICT
STATEMENT OF INVESTMENT POLICY
TABLE OF CONTENTS
Introduction ........................................................................................................ 1
Scope .................................................................................................................. 1
Delegation of Authority ................................................................................... 1-2
Prudence ............................................................................................................ 2
Objective ......................................................................................................... 2-3
Ethics and Conflicts of Interest ......................................................................... 3-4
Authorized Financial Dealers and Institutions ..................................................... 4
Authorized and Suitable Investments .............................................................. 4-8
Prohibited Investments ....................................................................................... 8
Review of Investment Portfolio .......................................................................... 8
Investment Pools ............................................................................................. 8-9
Collateralization .................................................................................................. 9
Safekeeping and Custody .................................................................................... 9
Diversification ................................................................................................... 10
Maximum Maturities ........................................................................................ 10
Internal Control ................................................................................................ 10
Performance ................................................................................................ 10-11
Reporting .......................................................................................................... 11
Investment Policy Adoption .............................................................................. 12
Glossary ....................................................................................................... 13-19
Page 28
Statement of Investment Policy Page 1
RANCHO CUCAMONGA FIRE PROTECTION DISTRICT
STATEMENT OF INVESTMENT POLICY
1.0 INTRODUCTION
This Statement of Investment Policy (“Policy”) provides guidelines for the prudent investment of
the Rancho Cucamonga Fire Protection District’s (“District”) idle cash and outlines the policies
essential to ensuring the safety and financial strength of the District’s investment portfolio. This
Policy is based on the principles of prudent money management and conforms to all federal,
state, and local laws governing the investment of public funds. The goal of this Policy is to
enhance the economic status of the District by protecting its pooled cash and to invest public
funds to:
1. Meet the daily cash flow needs of the District;
2. Comply with all laws of the State of California regarding investment of public funds; and
3. Achieve a reasonable rate of return while minimizing the potential for capital losses
arising from market changes or issuer default.
2.0 SCOPE
This Policy applies to the investment activities of all funds of the Rancho Cucamonga Fire
Protection District. These funds are accounted for in the City’s Comprehensive Annual Financial
Report (CAFR) and include: General Fund, Special Revenue Funds, Debt Service Funds, Capital
Project Funds, Proprietary Funds, as well as Agency Funds and a Private-Purpose Trust Fund.
Bond proceeds shall be invested in accordance with the requirements and restrictions outlined
in bond documents as approved by the President and Members of the Board of Directors. If the
bond documents are silent as to the permitted investments, the bond proceeds will be invested
in the securities permitted by this Policy. Notwithstanding the other provisions of this Policy, the
percentage limitations listed elsewhere in this Policy do not apply to bond proceeds.
3.0 DELEGATION OF AUTHORITY
The President and Members of the Board of Directors, as permitted under California Government
Code §53607, delegate the responsibility to manage the District’s investment portfolio to the
District Treasurer for a period of one-year, unless revoked. Subject to review, the President and
Members of the Board of Directors may renew the delegation of authority each year. The District
Treasurer shall be responsible for all transactions undertaken and shall establish a system of
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Statement of Investment Policy Page 2
controls to regulate the activities of subordinate officials, and their procedures, in the absence
of the District Treasurer. Pursuant to Government Code §1190, the District Treasurer appoints
the Finance Director to act as Deputy Treasurer with responsibility to manage the District’s
investment portfolio on a daily basis. The District Treasurer/Deputy Treasurer will maintain on
file a written authorization designating those individuals to whom daily investment activities,
such as carrying out the District Treasurer's/Deputy Treasurer’s investment instructions,
confirming treasury transactions, and other routine activities, have been delegated.
As authorized by the President and Members of the Board of Directors, the District may also
utilize the services of an independent investment advisor to assist with the investment program
under the supervision of the District Treasurer/Deputy Treasurer. The investment advisor shall
follow this Policy and such other written instructions as are provided by the District. The
investment advisor shall never take possession of the District’s funds or assets.
4.0 PRUDENCE
All persons authorized to make investment decisions on behalf of the District are trustees and
therefore fiduciaries subject to the prudent investor standard, as described in Government Code
section 53600.3 which states:
When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing
public funds, a trustee shall act with care, skill, prudence, and diligence under the
circumstances then prevailing, including, but not limited to, the general economic
conditions and the anticipated needs of the agency, that a prudent person acting in a like
capacity and familiarity with those matters would use in the conduct of funds of a like
character and with like aims, to safeguard the principal and maintain the liquidity needs
of the agency.
The District Treasurer/Deputy Treasurer and authorized persons acting in accordance with this
Policy and the “prudent investor” standard and exercising due diligence shall be relieved of
personal responsibility for an individual security’s credit risk or market price changes, provided
deviations from expectations are reported in a timely manner and appropriate action is taken to
control adverse developments, whenever possible.
5.0 OBJECTIVE
The objective of the investment portfolio is to meet the short- and long-term cash flow demands
of the District. To achieve this objective, the portfolio will be structured to provide safety of
principal and liquidity, while then providing a reasonable return on investments.
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The authority governing investments for municipal governments is set forth in Government Code
Sections 53600 et seq. District strategy has been to limit investments more stringently than
required under state law. The primary objectives of investment activities, in order of priority are:
1. Safety - Safety and risk associated with an investment refers to the potential loss of
principal, interest, or combination thereof. The District only invests in those instruments
that are considered safe. Each investment transaction shall be undertaken in a manner
that seeks to ensure, whenever possible, that all capital losses are avoided, whether from
securities default, broker/dealer default, or erosion of market value. The District shall
seek to preserve principal by mitigating two types of risk: credit risk and market risk.
• Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be
mitigated by investing in only very safe securities and by diversifying the investment
portfolio so that the failure of any one issuer would not unduly harm the District’s
cash flow.
• Market risk, defined as the risk of market value fluctuations due to overall changes in
the general level of interest rates, shall be mitigated by structuring the portfolio to
align with the District’s anticipated cash flow needs. It is explicitly recognized,
however, that in a diversified portfolio, occasional measured losses may occur and
must be considered within the context of overall investment return and liquidity
needs.
2. Liquidity - Liquidity is an important investment quality especially when the need for
unexpected funds occasionally occurs. The District’s investment portfolio will remain
sufficiently liquid to enable the District to meet operating requirements that might be
reasonably anticipated.
3. Yield - The District’s investment portfolio shall be designed with the objective of attaining
a reasonable market rate of return throughout budgetary and economic cycles,
commensurate with the District’s investment risk constraints as long as it does not
diminish the objectives of Safety and Liquidity.
6.0 ETHICS AND CONFLICTS OF INTEREST
The District Treasurer/Deputy Treasurer and employees involved in the investment process shall
refrain from personal business activity that could conflict with proper execution of the
investment program, or which could impair their ability to make impartial investment decisions.
Employees and investment officers shall disclose any material financial interest in financial
institutions that conduct business with the District, and they shall further disclose any personal
financial/investment positions that could be affected by the performance of the District’s
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operations and functions or by the management of the District’s investment program. The
District Treasurer/Deputy Treasurer and investment employees are required to file annual
disclosure statements as required by the Fair Political Practices Commission (FPPC).
7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The District Treasurer/Deputy Treasurer shall only execute investment transactions with those
direct issuers authorized by this Policy (LAIF, LGIPs, money market funds, and banks). All other
investment transactions will be conducted through the District’s investment advisor who will
maintain their own list of approved issuers, brokers/dealers, and financial institutions with which
to conduct transactions on the District’s behalf.
8.0 AUTHORIZED AND SUITABLE INVESTMENTS
In the event an apparent discrepancy is found between this Policy and the Government Code,
the more restrictive parameters will take precedence. Percentage holding limits listed in this
Policy apply at the time the security is purchased. Credit ratings, where shown, specify the
minimum credit rating category required at purchase. In the event a security held by the District
is subject to a credit rating change that brings it below the minimum credit ratings specified in
this Policy, the District Treasurer/Deputy Treasurer should notify the President and Members of
the Board of Directors of the change in the next monthly investment report. The course of action
to be followed will then be decided on a case-by-case basis, considering such factors as the
reason for the change, prognosis for recovery or further rate drops, and the market price of the
security. Any security not listed in Section 8.0 is not a valid investment for the District. The concise
list of approved securities is as follows:
• United States Treasury Securities: United States Treasury Bills, Bonds, and Notes or those
instruments for which the full faith and credit of the United States are pledged for payment
of principal and interest.
There is no limit on the percentage of the portfolio that can be invested in this category.
• United States Federal Agencies: Obligations issued by Federal Agencies or United States
government-sponsored enterprise obligations, participations, or other instruments, including
those issued by or fully guaranteed as to principal and interest by federal agencies or United
States government-sponsored enterprises.
There is no limit on the percentage of the portfolio that can be invested in this category.
• Supranational Securities: United States dollar denominated senior unsecured
unsubordinated obligations issued or unconditionally guaranteed by the International Bank
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for Reconstruction and Development, International Finance Corporation, or Inter-American
Development Bank. The maximum remaining maturity for supranational obligations must be
five years or less, and they must be eligible for purchase and sale within the United States.
These investments must be rated in a rating category of “AA” or better by a NRSRO.
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
The maximum remaining maturity of any investment in this category shall not exceed five-
years.
• Municipals Notes or Bonds: Registered state warrants or treasury notes or bonds of this
state, including bonds payable solely out of the revenues from a revenue-producing property
owned, controlled, or operated by the state or by a department, board, agency, or authority
of the state.
Registered treasury notes or bonds of any of the other 49 states in addition to California,
including bonds payable solely out of the revenues from a revenue-producing property
owned, controlled, or operated by a state or by a department, board, agency, or authority of
any of the other 49 states, in addition to California.
Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state,
including bonds payable solely out of the revenues from a revenue-producing property
owned, controlled, or operated by the local agency, or by a department, board, agency, or
authority of the local agency.
Purchases are limited to securities rated in a rating category of “A” (long-term) or “A-1”
(short-term) or their equivalents or better by a Nationally Recognized Statistical Rating
Organization (“NRSRO”). (The minimum rating shall apply to any issuer, irrespective of any
credit enhancement).
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
• Negotiable Certificates of Deposit: Negotiable certificates of deposit issued by a nationally
or state-chartered bank, a savings association or a federal association, a state or federal credit
union, or by a federally licensed or state-licensed branch of a foreign bank. Purchases are
limited to securities rated in a rating category of “A” (long-term) or “A-1” (short-term) or their
equivalents or better by an NRSRO.
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
• Asset-Backed Securities: A mortgage passthrough security, collateralized mortgage
obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate,
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consumer receivable passthrough certificate, or consumer receivable-backed bond.
Securities shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO.
There is a 20% limit on the percentage of the portfolio that can be invested in this category.
The maximum remaining maturity of any investment in this category shall not exceed five-
years.
• Medium-Term Notes: Medium-Term Notes are defined as all corporate and depository
institution debt securities. They must be issued by corporations organized and operating
within the United States. Notes eligible for investment shall be rated in a rating category of
“A” or its equivalent or better by an NRSRO.
There is a 30% limit on the percentage of the portfolio that can be invested in this category.
The maximum remaining maturity of any investment in this category shall not exceed five-
years.
• Bankers’ Acceptances: Bankers’ acceptances, otherwise known as bills of exchange or time
drafts, that are drawn on and accepted by a commercial bank. Purchases are limited to issuers
that have short-term debt rated in a rating category of “A-1” or its equivalent or higher by an
NRSRO.
There is a 40% limit on the percentage of the portfolio that can be invested in this category.
The maximum maturity shall not exceed 180 days.
• Commercial Paper: Must be of “prime” quality of the highest ranking or of the highest letter
and number rating as provided for by an NRSRO.
The entity that issues the commercial paper shall meet all the following conditions: (i) is
organized and operating in the United States as a general corporation, (ii) has total assets in
excess of five hundred million dollars ($500,000,000), and (iii) has debt other than
commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher
by an NRSRO.
There is a 25% limit on the percentage of the portfolio that can be invested in this category.
The maximum maturity shall not exceed 270 days.
• Repurchase Agreements (Repos): An executed Master Repurchase Agreement is required
between the Rancho Cucamonga Fire Protection District and the broker dealer or financial
Institution. The market value of securities that underlies a repurchase agreement shall be
valued at 102 percent or greater of the funds borrowed against those securities and the value
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shall be adjusted no less than quarterly. Collateral is restricted to U.S. Treasury and Federal
Agency securities.
There is a 20% limit on the percentage of the portfolio that can be invested in this category.
The maximum maturity of any investment in this category shall not exceed one year.
• State of California Local Agency Investment Fund (LAIF): The Local Agency Investment Fund
(LAIF) is a State of California managed investment pool established by the State Treasurer for
the benefit of local agencies.
There is no limit on the percentage of the portfolio that can be invested in this category. The
maximum investment in LAIF accounts is dependent upon limits established under the Local
Agency Investment Fund guidelines and not Government Code.
• Joint Powers Authority (JPA) Investment Pool: Shares of beneficial interest issued by a joint
powers authority organized pursuant to Section 6509.7 that invests in the securities and
obligations authorized in Government Code. Whenever the District has any funds invested in
a LGIP, the District Treasurer/Deputy Treasurer shall maintain on file a copy of the LGIP’s
current information statement and periodically review the LGIP’s investments.
There is no limit on the percentage of the portfolio that can be invested in this category.
• Money Market Funds (“MMF”): Government Money Market Funds meeting either of the
following criteria: (A) Attained the highest ranking or the highest letter and numerical rating
provided by not less than two NRSROs, or (B) Retained an investment advisor with not less
than five years’ experience and registered or exempt from registration with the SEC, with
assets under management in excess of five hundred million dollars ($500,000,000).
Whenever the District has any funds invested in an MMF, the District Treasurer/Deputy
Treasurer shall maintain on file a copy of the MMF’s current information statement. A
maximum of 20% of the District’s portfolio may be invested in this category.
There is a 20% limit on the percentage of the portfolio that can be invested in this category.
• Bank Deposits: FDIC insured or collateralized demand deposit accounts, savings accounts,
market rate accounts, certificates of deposits and other types of bank deposits in financial
institutions located in California. The amount on deposit in any financial institution shall not
exceed the shareholder's equity. To be eligible to receive District deposits, the financial
institution must have received a minimum overall satisfactory rating, under the Community
Redevelopment Act, for meeting the credit needs of California Communities in its most recent
evaluation. Bank deposits are required to be collateralized as specified under Government
Code Section 53630 et seq. The District Treasurer/Deputy Treasurer, at his/her discretion,
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may waive the collateralization requirements for any portion that is covered by federal
deposit insurance. The District shall have a signed agreement with any depository accepting
District funds per Government Code Section 53649. There is no limit on the percentage of the
portfolio that may be invested in this category.
There is no limit on the percentage of the portfolio that can be invested in this category.
However, a maximum of 10 percent of the portfolio may be invested in time deposits.
9.0 PROHIBITED INVESTMENTS
Any security type or structure not specifically approved by this policy is hereby specifically
prohibited. Security types which are thereby prohibited include, but are not limited to, inverse
floaters, derivatives, range notes, interest only strips that are derived from a pool of mortgages,
or in any investment that could result in zero interest accrual if held to maturity.
10.0 REVIEW OF INVESTMENT PORTFOLIO
The securities held by the District must be in compliance with Section 8.0 “Authorized and
Suitable Investments” at the time of purchase. If, subsequent to the date of purchase, a security
is determined to be no longer in compliance with Section 8.0, the District’s Treasurer/Deputy
Treasurer shall report the non-compliant security to the President and Members of the Board of
Directors and shall include a disclosure in the monthly Investment Report if the security is held
at the date the report is prepared.
The City’s external, independent auditors perform an annual review of the District’s Investment
Policy, investment process, and related internal controls. The annual review process is
performed as part of the City’s annual external financial audit.
11.0 INVESTMENT POOLS
The Local Agency Investment Fund (LAIF) is a voluntary investment alternative for California’s
local governments and special districts authorized by the California Government Code. LAIF is a
State of California managed investment pool established by the State Treasurer for the benefit
of local agencies.
The District’s participation in LAIF was approved by the President and Members of the Board of
Directors with other authorized investments in July 1987. It is a permitted investment with the
knowledge that the fund may invest in some vehicles allowed by statute but not otherwise
authorized under the District’s authorized investments. All securities in LAIF are purchased under
the authority of Government Code Sections 16430 and 16480. All investments are purchased at
market value, and market valuation is conducted monthly.
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The District may also invest in shares of beneficial interest issued by a joint powers authority
(“JPA”) organized pursuant to Section 6509.7 of the California Government Code that invests in
the securities and obligations specified in the code and which shall retain an investment advisor
that meets the following criteria:
1. Be registered or exempt from registration with the Securities and Exchange Commission;
2. Have assets under management in excess of five hundred million dollars ($500,000,000),
and
3. Have not less than five (5) years of experience investing in the securities and obligations
authorized herein.
12.0 COLLATERALIZATION
All bank deposits must be FDIC insured or collateralized in accordance with Government Code
Section 53630 et seq.
13.0 SAFEKEEPING AND CUSTODY
To protect against potential losses by the collapse of individual securities dealers, all trades will
be transacted on a delivery-versus-payment (DVP) basis. This means that the securities shall be
delivered to the District’s designated custodian upon receipt of the payment by the District. The
securities shall be held in safekeeping by a third-party custodian, acting as agent for the District
under the terms of a custody agreement executed by the bank and District. The third-party
custodian shall be required to issue a monthly safekeeping report to the District that lists the
specific investment, rate, maturity and other pertinent information.
The only exception to the foregoing shall be depository accounts and security purchases made
with investment pools and certificates of deposit since the purchased securities are not
deliverable. Evidence of these investments will be held in the City’s vault. No outside
broker/dealer or advisor may have access to District funds, accounts or investments, and any
transfer of funds to or through an outside broker/dealer must be approved by the District
Treasurer/Deputy Treasurer.
The City strives to maintain the level of investment of all funds as near 100% as possible, through
daily and projected cash flow determinations. Idle cash management and investment
transactions are the responsibility of the District Treasurer/Deputy Treasurer.
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14.0 DIVERSIFICATION
It is the policy of the District to diversify its investment portfolio. Assets shall be diversified to
eliminate the risk of loss resulting from over-concentration of assets in a specific issuer, security
type, and maturities. Diversification strategies shall be determined and revised periodically. The
purpose of diversifying is to reduce overall portfolio risks while attaining an average market rate
of return; therefore, it needs to be conceptualized in terms of maturity, instrument types and
issuer. To promote diversification, no more than 5% of the portfolio may be invested in the
securities of any one issuer, regardless of security type; excluding U.S. Treasuries, federal
agencies, supranationals, and pooled investments such as LAIF, money market funds, or local
government investment pools.
15.0 MAXIMUM MATURITIES
To the extent possible, the District will attempt to match security maturities to anticipated cash
flow requirements. Where this Policy does not list a specific maturity limit, the maximum
maturity of individual investments shall not exceed a maturity of five years from the trade date
unless the President and Members of the Board of Directors has granted authority to make that
investment either specifically or as a part of an investment program approved by the Board no
less than three months prior to the investment.
16.0 INTERNAL CONTROL
The District Treasurer/Deputy Treasurer is responsible for establishing and maintaining an
internal control structure designed to ensure that the assets of the District are protected from
loss, theft or misuse. The procedures should include references to individuals authorized to
execute transactions or transfers, safekeeping agreements, repurchase agreements, wire
transfer agreements, collateral/depository agreements and banking services contracts, as
appropriate. The internal control structure shall be designed to provide reasonable assurance
that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost
of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and
benefits requires estimates and judgement by management. The District Treasurer/Deputy
Treasurer shall establish an annual process of independent review by an external auditor. This
review will provide internal control by assuring compliance with policies and procedures set forth
in this Policy. Also, see Section 9.0 of this Policy.
17.0 PERFORMANCE
The investment performance of the District’s operating portfolio shall be evaluated and
compared to an appropriate benchmark in order to assess the success of the investment program
relative to the City’s Safety, Liquidity, and Yield objectives. This review will be conducted annually
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with the District’s Treasurer, and Finance Director, and, if necessary, consideration will be given
to making adjustments to future investment strategies as market conditions permit.
18.0 REPORTING
The District Treasurer shall prepare and submit a monthly investment report to the President and
Members of the Board of Directors and City Manager, which shall include all securities, excluding
those held by and invested through trustees. The report shall include the following:
• A monthly report of transactions.
• The type of investment, name of the issuer, date of purchase, date of maturity, par and dollar
amount invested in all securities.
• The weighted average maturity of the investments.
• Any funds, investments, or programs including loans that are under the management of
contracted parties.
• A description of the compliance with this Policy.
• A statement of the District’s ability to meet its pooled expenditure requirements for the next
six months or provide an explanation as to why sufficient money shall or may not be available.
• The investment portfolio report shall include current market value information for all
investments. A monthly market value will be obtained for each security owned by the District.
For purposes of reporting, the market value of each security may be obtained from the
District’s custodian bank or other pricing source(s) utilized by the District’s investment
advisor.
The District Treasurer shall be responsible for reviewing and modifying investment guidelines as
conditions warrant and is required to submit same for re-approval to the President and Members
of the Board of Directors on an annual basis with or without changes. However, the District
Treasurer may, at any time, further restrict the items approved for purchase as deemed
appropriate.
The basic premise underlying the District’s investment philosophy is, and will continue to be, to
ensure that money is always safe and available when needed.
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GLOSSARY OF TERMS
The glossary is provided for general information only. It is not to be consider a part of the Policy
for determining Policy requirements or terms.
AGENCIES: Agencies of or sponsored by the Federal government set up to supply credit to various
classes of institutions. Examples include Federal Home Loan Banks (FHLB), Federal Farm Credit
Bank (FFCB), Federal Home Loan Mortgage Corporation (FHLMC), and Federal National Mortgage
Association (FNMA).
ASKED: The price at which securities are offered by a selling party to a buying party.
ASSET-BACKED SECURITIES (ABS): Securities whose income payments and hence value is
derived from and collateralized (or "backed") by a specified pool of underlying assets which are
receivables. The pools of underlying assets can comprise common payments credit cards, auto
loans, mortgage loans, and other types of assets. Interest and principal are paid to investors
from borrowers who are paying down their debt.
BANKERS’ ACCEPTANCE (BA): A draft, bill, or exchange accepted by a bank or trust company.
The accepting institution guarantees payment of the bill, as well as the issuer.
BASIS POINT: One basis point is one-hundredth of a percent (i.e., 0.01%).
BEAR MARKET: A period of generally pessimistic attitudes and declining market prices.
BENCHMARK: A comparative base for measuring the performance or risk tolerance of the
investment portfolio. A benchmark should represent a close correlation to the level of risk and
the average duration of the portfolio’s investments.
BID: The price offered by a buyer of securities. (When selling securities, you ask for a bid.)
BOND EQUIVALENT YIELD: The basis on which yields on notes and bonds are quoted.
BOOK VALUE (COST VALUE): The value at which a debt security is shown on the holder’s balance
sheet. Book value is acquisition cost less amortization of premium or accretion of discount.
BROKER/DEALER: An individual or firm that brings buyers and sellers together in a securities
transaction.
BULL MARKET: A period of generally optimistic attitudes and increasing market prices.
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CALLABLE SECURITIES: A security that is redeemable by the issuer before the scheduled maturity.
Bonds are usually called when the interest rates fall so significantly that the issuer can save
money by floating new bonds at lower rates.
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a Certificate.
Large denomination CD’s are typically negotiable.
COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to
secure repayment of a loan. Also, refers to securities pledged by a bank to secure deposits of
public monies.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report of the City of
Rancho Cucamonga. It includes five combined statements for each individual fund and account
group prepared in conformity with Generally Accepted Accounting Principles (GAAP). It also
includes supporting schedules necessary to demonstrate compliance with GAAP, finance-related
legal and contractual provisions, extensive introductory material, and a detailed Statistical
Section.
CORPORATE MEDIUM-TERM NOTE: Corporate and depository institution debt securities with a
maximum remaining maturity of five years or less, issued by corporations organized and
operating within the United States or by depository institutions licensed by the United States or
any state and operating within the United States.
COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on
the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling
for his own account.
DEBENTURE: A bond secured only by the general credit of the issuer.
DELIVERY VERSUS PAYMENT (DVP): Delivery of securities with a simultaneous exchange of
money for the securities.
DERIVATIVES: Financial products dependent for their value on (or derived from) an underlying
financial instrument, a commodity, or an index.
DISCOUNT: The difference between the cost price of a security and its maturity when quoted at
lower than face value. A security selling below original offering price shortly after sale also is at
a discount.
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DISCOUNT SECURITIES: Non-interest bearing, money market instruments that are issued at a
discount and redeemed at maturity for full face value, e.g. U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent
returns.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank
deposits up to $250,000 per deposit.
FEDERAL FUNDS RATE: The interest rate charged by one institution lending federal funds to
another.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12
regional banks), which lend funds and provide correspondent banking services to member
commercial banks, thrift institutions, credit unions and insurance companies. The mission of the
FHLBs is to liquefy the housing related assets of its members who must purchase stock in their
district bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA was chartered under
the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working
under the auspices of the Department of Housing and Urban Development (HUD). It is the largest
single provider of residential mortgage funds in the United States. Fannie Mae, as the
corporation is called, is a private stockholder-owned corporation. The corporation’s purchases
include a variety of adjustable mortgages, second loans, and fixed-rate mortgages. FNMA’s
securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all
security holders will receive timely payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal
Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New
York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating
basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases
and sales of Government Securities in the open market to influence the volume of bank credit
and money.
FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and
comprising a seven-member Board of Governors in Washington, D.C., 12 regional banks and
about 5,700 commercial banks that are members of the system.
GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB): The independent organization
that establishes and improves standards of accounting and financial reporting for the United
States, state and local governments.
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GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations, and other institutions. Security holder is
protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by
the FHA, VA, or FMHM mortgages. The term “pass-through” is often used to describe Ginnie
Maes.
INTEREST ONLY STRIP: Investments created by separating the principal and interest portions of
a debt security or pool of securities into separate investments. Interest only strips are most
common with mortgage-backed securities. The investor benefits if interest rates rise and
principal repayments slow, but if interest rates fall and principal repayments accelerate, the
investor will receive less interest. Once the principal amount has been repaid, interest payments
stop, and the value of an interest only strip falls to zero.
INVERSE FLOATER: Debt securities that have a floating coupon rate that adjusts inversely to
movements in a benchmark interest rate. They can offer a hedge against falling interest
rates. However, the structure of these investments can magnify changes in the security’s market
value. Furthermore, if interest rates rise, the investor may end up with a security that pays little
to no interest with a diminished security value.
INVESTMENT AGREEMENTS: An agreement with a financial institution to borrow public funds
subject to certain negotiated terms and conditions concerning collateral, liquidity, and interest
rates.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a
substantial loss.
LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from political subdivisions
that are placed in the custody of the State Treasurer for investment and reinvestment.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP): A type of pooled investment program formed
by a joint powers authority in which funds from its local agency investors are aggregated together
for investment purposes.
MARKET VALUE: The price at which a security is trading and could presumably be purchased or
sold.
MARKET RATE OF RETURN: A rate of return commensurate with the market for similar securities
(maturity, credit rating, duration and liquidity) would be considered a market rate of return.
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MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between
the parties to repurchase–reverse, repurchase agreements that establishes each party’s rights in
the transactions. A master agreement will often specify, among other things, the right of the
buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower.
MATURITY: The date upon which the principal or stated value of an investment becomes due
and payable.
MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper,
bankers’ acceptances, etc.) are issued and traded.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO): A credit rating
agency approved by the U.S. Securities and Exchange Commission (SEC) that provides credit
ratings that are used by the U.S. government and investors as benchmarks. Examples include
Standard & Poor’s Corporation, Moody’s Investor Services, Inc. and Fitch, Inc.
OFFER: The price asked by a seller of securities. (When buying securities, you ask for an offer.)
OPEN MARKET OPERATIONS: Federal Reserve activity. Under the Federal Reserve Act, the Fed
uses purchases and sales of Government and Federal Agency securities to add to or subtract from
commercial bank reserves. Goals are to sustain economic growth, high employment and
reasonable price stability.
PAPER GAIN OR LOSS: Term used for unrealized gain or loss on securities being held in a portfolio
based on comparison of current market quotes and their original cost. This situation exists if the
security is held while there is a difference between cost value (book value) and the market value.
PORTFOLIO: Collection of securities held by an investor.
PRIMARY DEALER: A group of government securities dealers who submit daily reports of market
activity, positions and monthly financial statements to the Federal Reserve Bank of New York and
are subject to its informal oversight. Primary dealers include Securities and Exchange
Commission (SEC) registered securities broker/dealers, banks and a few unregulated firms.
PRUDENT INVESTOR STANDARD: An investment standard to be followed by those authorized to
make investment decisions on behalf of a local agency. Those authorized shall act with care, skill,
prudence, and diligence under the circumstances then prevailing, including, but not limited to,
the general economic conditions and the anticipated needs of that agency.
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RANGE NOTE: A structured investment that pays interest as long as a benchmark interest rate is
within a specified interest rate range. These securities provide higher than market interest rates,
but the investor will not receive any interest if the benchmark interest rate moves outside the
specified range. The investor is betting interest rates will remain relatively stable.
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current
market price. This may be the amortized yield to maturity on a bond; the current income return.
SAFEKEEPING: The service to customers by banks and trust companies when the bank or trust
company stores the securities for protection, receives coupon payments and redeems issues at
maturity.
SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following
the initial distribution of securities.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in
securities transactions by administering securities legislation.
SEC RULE 15(C) 3-1: See Uniform Net Capital Rule.
SUPRANATIONALS: Development banks that share the same goal of providing an improved
standard of living in their member countries, but each having different mandates. There are
three banks (supranationals) in which California local agencies can invest in their debt
obligations; the International Bank for Reconstruction and Development (IBRD), International
Finance Corporation (IFC) and Inter-American Development Bank (IADB).
TREASURY BILLS: A non-interest-bearing discount security issued by the U.S. Treasury to finance
the national debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct
obligations of the U.S. Government and having initial maturities of over 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct
obligations of the U.S. Government and having initial maturities from one to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member
firms as well as nonmember broker-dealers in securities maintain a maximum ratio of
indebtedness to liquid capital of 15-1; also, called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm, including margin loans and commitments to
purchase securities. Liquid capital includes cash and assets easily converted to cash without
penalty.
Page 46
Statement of Investment Policy Page 19
YIELD: The rate of annual income return on an investment, expressed as a percentage.
YIELD TO MATURITY: The current income yield on an investment, minus any premium above
par, or plus any discount from par in the purchase price with the adjustment spread over the
period from date of purchase to maturity of the bond.
Page 47
DATE:June 28, 2021
TO:Mayor and Members of the City Council
President and Members of the Boards of Directors
FROM:John R. Gillison, City Manager
INITIATED BY:Tamara L. Oatman, Finance Director
SUBJECT:Consideration to Approve the Following to be in Compliance with
Governmental Accounting Standards Board (GASB) Statement No.
54: 1) Updated Fund Balance Policy; 2) a Resolution Committing to the
Level of Fiscal Reserves for the City of Rancho Cucamonga; and 3) a
Resolution Committing to the Level of Fiscal Reserves for the Rancho
Cucamonga Fire Protection District. (RESOLUTION NO. 2021-052)
(RESOLUTION NO. FD2021-018) (CITY/FIRE)
RECOMMENDATION:
It is recommended that the City Council/Board of Directors approve the following to be in
compliance with Governmental Accounting Standards Board (GASB) Statement No. 54: 1)
updated Fund Balance Policy; 2) a Resolution committing to the level of fiscal reserves for the
City of Rancho Cucamonga (City); and 3) a Resolution committing to the level of fiscal reserves
for the Rancho Cucamonga Fire Protection District (District).
BACKGROUND:
On a regular basis, the Governmental Accounting Standards Board (GASB) adopts new policies
and procedures that apply to public entities. In February 2009, GASB issued Statement No. 54,
which applies to Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54).
Since 2011, in order to be in compliance with GASB 54, the City Council/Board of Directors has
approved a Fund Balance Policy and a resolution committing to the level of reserves for the City
of Rancho Cucamonga and for the Rancho Cucamonga Fire Protection District.
ANALYSIS:
In order to accommodate any changes to these commitments that may become necessary due
to changes in operations or changes in City Council goals, staff will annually bring this policy and
resolution before the City Council/Board of Directors for approval at the end of each fiscal year.
The following updates (City- and District-related) have been made to the policy:
A new committed fund balance was created for Economic Development Strategic
Reserve for the acquisition and development of key properties to promote economic
development that will benefit the City as a whole and, potentially, generate ongoing
revenues to the City whenever feasible through negotiated agreements with third parties
(including but not limited to land leases or public-private partnerships). Establishment of
this reserve is a City Council goal, established in the spring of 2021. The funding goal
Page 48
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8
3
for this reserve is the equivalent of the current value of a 10-acre mixed-use site on
Foothill Boulevard as of January 1 of each year.
A new committed fund balance was created for Seasonal Weather Emergency Reserve
for unanticipated costs incurred due to damage resulting from severe weather
emergencies such as wind, flood, fire, extreme heat, extreme cold, and other forces of
nature. The reserve will provide funding for these costs without impacting the City’s
operating budget and will be appropriated by the City Council on an as needed basis
when extreme seasonal weather emergencies occur.
No updates were required for District-related reserves.
The Fund Balance Policy, in conjunction with the City General Fund Reserve Funding Goals
Policy, provides guidelines for building City/District reserves in support of future needs for capital
replacement, resiliency in the event of an economic downturn, and planned enhancements to the
services and facilities available to the citizens of Rancho Cucamonga.
The Fund Balance Policy is presented to the City Council/Board of Directors for review and
approval. The attached Resolutions formally establish the City of Rancho Cucamonga’s and the
Rancho Cucamonga Fire Protection District’s fund balance commitments for the fiscal year ending
June 30, 2021.
FISCAL IMPACT:
None.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
Not applicable.
ATTACHMENTS:
Attachment 1 – Fund Balance Policy
Attachment 2 – Resolution (City)
Attachment 3 – Resolution (Fire)
Page 49
PURPOSE
This Fund Balance Policy establishes the procedures for the reporting of unrestricted fund
balance in the City General Fund and Fire District financial statements. Certain commitments
and assignments of fund balance will help ensure that there will be adequate financial resources
to protect the City against unforeseen circumstances and events such as revenue shortfalls and
unanticipated expenditures. The policy also authorizes and directs the Finance Director to
prepare financial reports which accurately categorize fund balance as per Governmental
Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions.
GENERAL POLICY
Fund balance is essentially the difference between the assets and liabilities reported in a
governmental fund. There are five separate components of fund balance, each of which identifies
the extent to which the City/Fire District is bound to honor constraints on the specific purposes for
which amounts can be spent.
•Nonspendable fund balance (inherently nonspendable)
•Restricted fund balance (externally enforceable limitations on use)
•Committed fund balance (self-imposed limitations on use)
•Assigned fund balance (limitation resulting from intended use)
•Unassigned fund balance (residual net resources)
The first two components listed above are not addressed in this policy due to the nature of their
restrictions. An example of nonspendable fund balance is inventory. Restricted fund balance is
either imposed by law or constrained by grantors, contributors, or laws or regulations of other
governments. This policy is focused on financial reporting of unrestricted fund balance, or the
last three components listed above. These three components are further defined below.
Committed Fund Balance
The City Council (which also acts as the Board of Directors for the Rancho Cucamonga Fire
Protection District), as the City’s highest level of decision-making authority, may commit fund
CITY OF RANCHO CUCAMONGA
RANCHO CUCAMONGA FIRE
PROTECTION DISTRICT
FUND BALANCE POLICY
POLICY NO.: ___-__
EFFECTIVE: June 15, 2011
REVISED: June 28, 2021
APPROVED:
ATTACHMENT 1Page50
FUND BALANCE POLICY
PAGE 2 OF 5
balance for specific purposes pursuant to constraints imposed by formal actions taken, such as
an ordinance or resolution. These committed amounts cannot be used for any other purpose
unless the City Council/Fire Board removes or changes the specified use through the same type
of formal action taken to establish the commitment. City Council/Fire Board action to commit fund
balance needs to occur within the fiscal reporting period; however, the amount can be determined
subsequently.
• Changes in Economic Circumstances
The City’s General Fund balance committed for changes in economic circumstances is
established at a goal of a nine month reserve, or 75% of the City General Fund operating
budget for the upcoming fiscal year. The Fire District’s fund balance committed for
changes in economic circumstances is established at a goal of a nine month reserve, or
75% of the Fire District’s operating budget for the upcoming fiscal year. The specific uses
of this commitment include: 1) the declaration of a state or federal state of emergency or
a local emergency as defined in Rancho Cucamonga Municipal Code Section 2.36.020;
or 2) a change in economic circumstances in a given fiscal year that results in revenues
to the City/Fire District being insufficient to cover expenditures for one or more fiscal years.
The City Council/Fire Board may, by the affirming vote of four members, change the
amount of this commitment and/or the specific uses of these monies.
• City Facilities Capital Repair
The City’s General Fund balance committed for City facilities capital repair and property
acquisition is established at a minimum goal of 50% of capital assets value comprised of
construction in progress (excluding infrastructure), building improvements, and
improvements other than building for governmental activities, excluding assets owned by
the Rancho Cucamonga Fire Protection District.
• Fire District Facilities Capital Repair
The Fire District’s fund balance committed for the Fire District facilities capital repair is
hereby committed to a minimum goal of 50% of capital assets value comprised of
construction in progress (excluding infrastructure), building improvements, and
improvements other than building for public safety-fire activities.
• Working Capital
The City’s General Fund balance committed for Working Capital is established at a goal
of a minimum of 5% of the City's General Fund operating budget for the upcoming fiscal
year. The Fire District’s fund balance committed for Working Capital is established at a
goal of a minimum of 50% of the District’s operating budget for the upcoming fiscal year.
• Self-Insurance
The City’s General Fund balance and the Fire District’s fund balance committed for
payment of Workers’ Compensation, General Liability, and Employment Practices Liability
claims is established at a minimum goal of eight times the City’s and the District’s total
yearly SIRs for all types of insurance coverage.
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FUND BALANCE POLICY
PAGE 3 OF 5
• PASIS Workers’ Compensation Tail Claims
The Fire District’s fund balance committed for payment of outstanding Workers’
Compensation claims remaining after the District’s withdrawal from PASIS is established
at a goal equal to the most recent fiscal year end Claims Cost Detail Report from the
District’s third-party administrator plus 15%.
• Employee Leave Payouts
The City’s General Fund balance and the Fire District’s fund balance committed for
employee leave payouts as valued in accordance with the City’s labor contracts as of the
last day of the fiscal year.
• Vehicle and Equipment Replacement
The Fire District’s fund balance committed for the replacement of fire safety vehicles and
equipment as determined based on the District’s replacement criteria is established at a
minimum goal of 50% of District vehicle and equipment replacement value.
• Law Enforcement
The City’s General Fund balance committed for public safety purposes, including
operations, equipment, capital outlay, capital facilities, personnel, and booking fees. The
funding goal for this reserve is the equivalent of 100% of the most recently approved
Schedule A from the San Bernardino County Sheriff’s Department.
• Economic Development Strategic Reserve
The City’s General Fund balance committed for the acquisition and development of key
properties to promote economic development that will benefit the City as a whole and,
potentially, generate ongoing revenues to the City whenever feasible through negotiated
agreements with third parties (including but not limited to land leases or public-private
partnerships). Establishment of this reserve is a City Council goal, established in the
spring of 2021. The funding goal for this reserve is the equivalent of the current value of a
10-acre mixed-use site on Foothill Boulevard as of January 1 of each year.
• Seasonal Weather Emergency Reserve
The City’s General Fund balance committed for unanticipated costs incurred due to
damage resulting from severe weather emergencies such as wind, flood, fire, extreme
heat, extreme cold, and other forces of nature. The reserve will provide funding for these
costs without impacting the City’s operating budget and will be appropriated by the City
Council on an as needed basis when extreme seasonal weather emergencies occur.
Assigned Fund Balance
Amounts that are constrained by the City/Fire District’s intent to be used for specific purposes,
but are neither restricted nor committed, should be reported as assigned fund balance. This policy
hereby delegates the authority to assign amounts to be used for specific purposes to the City
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FUND BALANCE POLICY
PAGE 4 OF 5
Manager and/or Finance Director for the purpose of reporting these amounts in the annual
financial statements. The following are a few non-exclusive examples of assigned fund balance.
• Economic and Community Development Special Services
The City’s General Fund balance assigned for contracts, special services, or projects
associated with Economic and Community Development (ECD) special projects or ECD
initiatives/Council goals (such as economic strategy and Development Code contract
services) as well as a one-year value of staffing costs for Planning, Building and Safety,
and Engineering (not including capital and project management).
• Habitat Mitigation and Sphere of Influence Issues
This reserve provides for ancillary costs related to annexation of the sphere area, including
mitigation issues and legal challenges. Another area covered by this reserve is the
creation of a multi-species habitat conservation plan as well as acquisition of habitat
conservation land.
• Community Services Programs-Recreation
The City’s General Fund balance assigned for non-recurring costs to support community
services programs, including a wide variety of classes, special events, and recreational
activities sponsored by the Community Services Department. The initial funding of this
reserve resulted from the combining of the Department’s recreational and community
activities that were accounted for in a separate Special Fund into the General Fund
effective with the Fiscal Year 2020/21 Budget. The fund balance remaining in the
Recreation Services Fund as of June 30, 2020 was closed out to the City’s General Fund.
• Community Services Programs-Cultural Arts
The City’s General Fund balance assigned for non-recurring costs to support community
services programs, including a wide variety of classes, theatrical performances, and
cultural activities sponsored by the Community Services Department. The initial funding
of this reserve resulted from the combining of the Department’s cultural and theatrical
activities that were accounted for in a separate Special Fund into the General Fund
effective with the Fiscal Year 2020/21 Budget. The fund balance remaining in the Victoria
Gardens Cultural Center Fund as of June 30, 2020 was closed out to the City’s General
Fund.
Unassigned Fund Balance
These are residual positive net resources of the General Fund and Fire District funds in excess
of what can properly be classified in one of the other four categories.
Fund Balance Classification
The accounting policies of the City/Fire District consider restricted fund balance to have been
spent first when an expenditure is incurred for purposes for which both restricted and unrestricted
fund balance is available. Similarly, when an expenditure is incurred for purposes for which
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FUND BALANCE POLICY
PAGE 5 OF 5
amounts in any of the unrestricted classifications of fund balance could be used, the City/Fire
District considers committed amounts to be reduced first, followed by assigned amounts and then
unassigned amounts.
This policy is in place to provide a measure of protection for the City/Fire District against
unforeseen circumstances and to comply with GASB Statement No. 54. No other policy or
procedure supersedes the authority and provisions of this policy.
Page 54
RESOLUTION NO. 21-XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO CUCAMONGA, CALIFORNIA COMMITTING TO THE
LEVEL OF FISCAL RESERVES FOR THE CITY OF RANCHO
CUCAMONGA
WHEREAS, the Rancho Cucamonga City Council desires to protect existing services; and
WHEREAS, the Rancho Cucamonga City Council desires to be prepared for
emergencies; and
WHEREAS, the Rancho Cucamonga City Council desires to maintain good fiscal
management and fiscal structure to operate a municipal corporation; and
WHEREAS, the Rancho Cucamonga City Council desires to maintain the financial
strength required to obtain beneficial bond ratings for the City.
NOW, THEREFORE, the City Council of the City of Rancho Cucamonga, California does
hereby resolve on this 28th day of June 2021 that the level of fiscal reserves maintained by the
City of Rancho Cucamonga as of fiscal year end are committed to the goals as outlined in the
City’s Fund Balance Policy, attached to this resolution as Exhibit A.
PASSED, APPROVED, AND ADOPTED this 28th day of June 2021.
ATTACHMENT 2Page55
Resolution No. FD 21-XXX
RESOLUTION NO. FD 21-XXX
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, SAN
BERNARDINO COUNTY, CALIFORNIA COMMITTING TO THE
LEVEL OF FISCAL RESERVES FOR THE RANCHO
CUCAMONGA FIRE PROTECTION DISTRICT
WHEREAS, the Rancho Cucamonga Fire Protection District Board desires to protect
existing services; and
WHEREAS, the Rancho Cucamonga Fire Protection District Board desires to be prepared
for emergencies; and
WHEREAS, the Rancho Cucamonga Fire Protection District Board desires to maintain
good fiscal management and fiscal structure to operate a municipal corporation.
NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection
District, San Bernardino, California does hereby resolve on this 28th day of June 2021 that the
level of fiscal reserves maintained by the Rancho Cucamonga Fire Protection District as of fiscal
year end are committed to the goals as outlined in the District’s Fund Balance policy, attached to
this resolution as Exhibit A.
PASSED, APPROVED, AND ADOPTED this 28th day of June 2021.
ATTACHMENT 3Page56
DATE:June 28, 2021
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY:Tamara L. Oatman, Finance Director
SUBJECT:Consideration to Approve Updated City General Fund Reserve Funding
Goals Policy. (CITY)
RECOMMENDATION:
It is recommended that the City Council approve the updated City General Fund Reserve Funding
Goals Policy.
BACKGROUND:
This City General Fund Reserve Funding Goals Policy establishes the methodology for the
funding goals for each of the City General Fund reserves, including the replacement of vehicles,
equipment, and computer equipment/technology. This policy, which was initially approved by the
City Council in June 2012, formalizes the City General Fund reserves, establishes some new
ones, and sets quantifiable goals for each reserve. The following updates were made to the
policy:
The funding goal for “Habitat Mitigation and Sphere of Influence issues” was reduced from
$10,000,000 to $8,000,000 due to the recent annexation of property in the northeastern
section of the City which reduced the remaining sphere for the City.
The funding goal for “City computer equipment/technology replacement” reserve was
increased from 105% of applicable capital assets value to 110%.
The “Economic Development Strategic Reserve” funding goal has been added to the
policy to establish a funding goal for the acquisition and development of key properties to
promote economic development that will benefit the City as a whole and, potentially,
generate ongoing revenues to the City whenever feasible through negotiated agreements
with third parties (including but not limited to land leases or public-private partnerships).
The funding goal for this reserve is established at $10,000,000, which is the equivalent of
the current value of a 10-acre mixed-use site on Foothill Boulevard. The funding goal will
be adjusted annually based on the current value as of January 1 of each year.
The “Seasonal Weather Emergency Reserve” funding goal has been added to the policy
to establish a funding goal for unanticipated costs incurred due to damage resulting from
severe weather emergencies such as wind, flood, fire, extreme heat, extreme cold, and
other forces of nature. The funding goal is established at $405,000, which is equal to
75% of the highest cost severe weather event in the three most recent fiscal years.
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8
4
ANALYSIS:
In accordance with the policy, upon the completion of the City’s annual audit, the Finance Director
prepares a schedule summarizing the funding status of each reserve for use by the City Manager
in future budgetary planning.
This policy does not apply to reserves determined to be non-spendable in accordance with the
City’s Fund Balance Policy nor does it apply to reserves that pertain to outstanding encumbrances
(i.e., purchase orders) or unrealized gain on investments (GASB31) as of fiscal year end.
FISCAL IMPACT:
None.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
Not applicable.
ATTACHMENTS:
Attachment 1 – Policy
Page 58
PURPOSE
This City General Fund Reserve Funding Goals Policy establishes the methodology for the
funding goals for each of the City General Fund reserves, including the replacement of vehicles,
equipment, and computer equipment/technology. This policy does not apply to reserves
determined to be nonspendable in accordance with the City’s Fund Balance Policy nor does it
apply to reserves that pertain to outstanding encumbrances (i.e., purchase orders) or unrealized
gain on investments (GASB31) as of fiscal year end. Upon the completion of the City’s annual
audit, this policy directs the Finance Director to prepare a schedule summarizing the funding
status of each reserve as of the audit date. This schedule will serve as a tool for budgetary
planning for the funding of each reserve.
GENERAL POLICY
Following is a detailed description of the methodology for the funding goals for each of the City
General Fund reserves referred to above.
Self-insurance
The funding goal for this reserve is established at nine times the Self-Insured Retention (SIR) in
each program (Workers’ Compensation, General Liability, and Employment Practices Liability) to
allow for nine full limit claims in any one year. The SIR is essentially the City’s deductible in each
program. Those numbers are calculated as follows: Workers’ Compensation ($250,000 SIR) is
$2,250,000; General Liability ($500,000 SIR) is $4,500,000; and Employment Practices
($250,000 SIR) is $2,250,000. The total proposed reserve is $9,000,000. This level of reserves
protects the City’s assets by ensuring adequate funding in the event of multiple large claims
against the City.
Employee leave payouts
The funding goal for this reserve is established at 100% of the current value of vacation, sick
leave, and comp time payouts per the respective City MOUs.
CITY OF RANCHO CUCAMONGA
CITY GENERAL FUND
RESERVE FUNDING GOALS POLICY
POLICY NO.: ___-__
EFFECTIVE: June 13, 2013
REVISED: June 28, 2021
APPROVED:
ATTACHMENT 1Page59
CITY GENERAL FUND
RESERVE FUNDING GOALS POLICY
PAGE 2 OF 4
PERS rate stabilization
The funding goal for this reserve is established at a level equal to the value of projected rate
increases identified in the respective annual CalPERS actuarial valuation for five fiscal years after
the year of financial reporting. The related reserve is restricted as the funds have been placed in
the PARS Post-Employment Benefits Trust, which is a restricted asset on the City’s balance
sheet.
City facilities capital repairs
The funding goal for City facilities capital repair is established at a minimum goal of 50% of capital
assets value comprised of construction in progress (excluding infrastructure), building
improvements, and improvements other than buildings for governmental activities, excluding
assets owned by the Rancho Cucamonga Fire Protection District.
Changes in economic circumstances
The funding goal for changes in economic circumstances is established at a nine-month reserve,
or 75% of the City General Fund operating budget for the upcoming fiscal year.
Law enforcement
The funding goal for this reserve is the equivalent of 100% of the most recently approved
Schedule A from the San Bernardino County Sheriff’s Department.
Economic and community development special services
The funding goal for this reserve is $5,000,000 to pay for contract services, special services, or
projects associated with Economic and Community Development (ECD) special projects or ECD
initiatives/Council goals (such as economic strategy and Development Code contract services)
as well as a one-year value of staffing costs for Planning, Building and Safety, and Engineering
(not including capital and project management). Funding for this reserve would be provided by
unspent revenue from Planning, Building and Safety, and Engineering (not including capital and
project management) on an annual basis.
Habitat Mitigation and Sphere of Influence issues
The funding goal for this reserve is established at $8,000,000. This reserve provides for ancillary
costs related to annexation of the sphere area, including mitigation issues and legal challenges.
Another area covered by this reserve is the creation of a multi-species habitat conservation plan
as well as acquisition of habitat conservation land. The overall funding goal will be increased
each fiscal year based on the increase in the City’s assessed valuation for the upcoming fiscal
year per the City’s property tax consultant.
Page 60
CITY GENERAL FUND
RESERVE FUNDING GOALS POLICY
PAGE 3 OF 4
Working capital
The funding goal for the City’s General Fund working capital reserve is established at a goal of a
minimum of 5% of the City's General Fund operating budget for the upcoming fiscal year.
Animal Center facility replacement
This reserve is established to fund the future replacement of the Animal Center facility. The
funding goal for this reserve is equivalent to the estimated construction cost of the future Center.
General Plan update
The funding goal is equal to the cost to update the City’s General Plan based on the most recent
contract awarded, increased annually for the CPI as of each fiscal year end. The funding source
for this reserve is a 10% General Plan Maintenance Fee collected on all applicable Building and
Safety Services Department and Planning Department services.
City infrastructure
The funding goal for City infrastructure is established at a minimum goal of 50% of infrastructure
assets value comprised of road system (excluding right of way), monuments, storm drain system,
and off-road trails system for governmental activities.
800 MHz radio system replacement
This reserve is established to fund the future acquisition or replacement of the City’s 800 MHz
radios, as well as the City’s proportionate share of the Countywide radio infrastructure. The
funding goal is established at 100% of the replacement cost of the radios and 100% of the
proportionate cost of the Countywide radio infrastructure.
Mobile Home Park Program
The Building and Safety Department is responsible for enforcing the State mobile home laws and
has adopted the State’s related schedule of fees. One of the fees collected is retained by the City
to cover the cost of mandatory inspections performed by the Building and Safety Department in
accordance with Title 25. The fee also covers the cost of educational materials and related
printing services. The funding goal for this reserve is equal to the cost of a contract inspector for
the mobile home park inspections for eight parks within the City.
City vehicle and equipment replacement
The funding goal is established at 105% of capital assets value comprised of vehicles and
equipment for governmental activities, excluding assets owned by the Rancho Cucamonga Fire
Protection District. The reserve is accounted for in the City’s Equipment and Vehicle
Replacement Internal Service Fund (Fund 712).
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CITY GENERAL FUND
RESERVE FUNDING GOALS POLICY
PAGE 4 OF 4
City computer equipment/technology replacement
The funding goal is established at 110% of capital assets value comprised of computer
equipment/technology for governmental activities, excluding assets owned by the Rancho
Cucamonga Fire Protection District. The reserve is accounted for in the City’s Computer
Equipment and Technology Replacement Internal Service Fund (Fund 714).
Community Development information technology
The funding goal of this reserve is equal to the implementation costs to replace and/or upgrade
the City’s land management software (Accela) combined with three years’ worth of the City’s Cost
Allocation Plan (CAP) allocations to support the annual costs associated with Department of
Innovation and Technology staff time, maintenance contracts, and general administrative
allocations for the City’s land management software. The funding source for this reserve is a 7%
Technology Fee collected on all applicable Building and Safety Services Department, Engineering
Department, and Planning Department services. The reserve is accounted for in the City
Technology Fee Fund (Fund 020).
Economic Development Strategic Reserve
This reserve is established to fund the acquisition and development of key properties to promote
economic development that will benefit the City as a whole and, potentially, generate revenue to
the City on an ongoing basis whenever feasible through negotiated agreements with third parties
(including but not limited to public-private partnerships and land leases). The funding goal is
established at $10,000,000, which is the equivalent of the current value of a 10-acre mixed-use
site on Foothill Boulevard. The funding goal will be adjusted annually based on the current value
as of January 1 of each year. After initial funding, the reserve balance may fluctuate when
properties are sold or acquired.
Seasonal Weather Emergency Reserve
This reserve is established to provide a dedicated funding source for unanticipated costs incurred
due to damage resulting from severe weather emergencies such as wind, flood, fire, extreme
heat, extreme cold, and other forces of nature. The funding goal is established at 75% of the
highest cost severe weather event in the three most recent fiscal years.
Page 62
DATE:June 28, 2021
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY:Tamara L. Oatman, Finance Director
SUBJECT:Consideration of Approval of Revisions to Amended Fiscal Year 2020/21
Appropriations. (CITY)
RECOMMENDATION:
It is recommended that the City Council approve the revisions to the Amended Fiscal Year
2020/21 Appropriations as submitted.
BACKGROUND:
On May 5, 2021, the City Council approved the Amended Fiscal Year (FY) 2020/21
Appropriations. Subsequent to the approval of the amended appropriations, it was
determined that certain line items within the amended appropriations would be insufficient
to fund the remainder of the fiscal year or required an adjustment based on information that
became available subsequent to the approval. Consequently, it is necessary for staff to
submit revisions to certain line items included in the amended appropriations. The reasons
for the revisions are noted in the table below.
ANALYSIS:
In order to ensure that sufficient funding is available for all known expenditures, staff is
requesting the City Council approve the revisions to the Amended FY 2020/21
Appropriations as detailed in the following table:
Page 63
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7
8
5
FISCAL IMPACT:
The net impact across all funds requiring revisions is a decrease of $12,227,270 in
expenditures and a decrease of $12,184,230 in revenues.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
Not applicable.
ATTACHMENTS:
None.
Page 64
DATE:June 28, 2021
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY:Matthew Burris, Deputy City Manager
William Wittkopf, Public Works Services Director
SUBJECT:Consideration to Approve the Temporary Roadside Memorials on Public
Property and Right-of-Way Policy. (CITY)
RECOMMENDATION:
Staff recommends that the City Council approve and adopt the Temporary Roadside Memorials
on Public Property and Right-of-Way Policy.
BACKGROUND:
Roadside Memorials are typically installed by grieving friends and family members who have lost
someone along a specific segment of road or an intersection within the City. Public Works
Services is usually made aware of the placement of Roadside Memorials by direct observation
by field staff, when a phone call is received from the public, or an RC2GO request is submitted.
Roadside Memorials can pose a liability for the City when placed in the public right-of-way for
extended periods of time. These memorials also present a concern for road users as they may
cause a distraction which can lead to an accident. These Roadside Memorials may consist of
items blocking the path of travel for pedestrians, items interfering with traffic control devices, or
items found on City streets creating a potential problem for motorists. Other items such as lighted
candles in glass containers are a fire and safety issue.
On April 12, 2012 Public Works Services implemented the Work Practice Directive for Temporary
Roadside Memorials on Public Property and Right-of-Ways. The Directive was intended to
provide Public Works staff with direction when managing Roadside Memorials in the public right-
of-way. The proposed policy will update and supersede this work practice and create a policy for
Public Works Services and the RC-CAN team to follow.
ANALYSIS:
Public Works Services tries to balance the need for families and loved ones to grieve while
ensuring the public right-of-way remains safe. Public Works staff are responsible for reporting
these Roadside Memorials to their supervisor prior to taking any action. The Streets
Superintendent or Supervisor will inspect the site, determine whether the Roadside Memorial is
within the public right-of-way, document with photographs, and determine if any immediate action
is required.
As part of the proposed policy, once the site is inspected and the information is reviewed by the
Streets Superintendent, the following steps will be taken:
Page 65
Page 2
8
1
2
A RC2GO request will be generated for each Roadside Memorial with photographs attached.
Any immediate action taken will be noted.
All subsequent actions taken will be noted on the RC2GO request, including attachment of
additional photographs as necessary.
The original RC2GO request will be set for follow-up in 30 days by the Public Works Services
Director.
The RC-CAN Team will attempt to contact the family or other responsible person(s) to coordinate
the removal of the memorial before any action is taken.
The Director will review all Roadside Memorials after 30 days to approve the removal by Public
Works.
All items removed by Public Works Services from the site of a Roadside Memorial shall be
handled with the utmost care and respect. Items shall be carefully removed, small items boxed
together, labeled as to the location and date of removal, and all items transported to the Public
Works Service Center (PWSC). Perishable items, such as flowers and plants, will not be stored
but will be carefully disposed of at the PWSC. Items will be stored for a period of 60 to 90 days.
Items collected will be released to family members or responsible person(s) of the Roadside
Memorial honoree upon request.
Items which cause hazardous conditions, or have the potential to be a hazard to the public, are
subject to immediate removal, and include, but are not limited to:
Items blocking or interfering with the view or travel of pedestrians or traffic
Items blocking or interfering with traffic control devices
Items located on the roadway surface
Lighted candles
Glass candle holders and other glass containers
Large glass or ceramic figurines, pots, or similar items
Large signs or banners
Public Works staff shall not move or relocate these specific items placed at a Roadside Memorial
to restore pedestrian or vehicular visibility or access. Such items shall be removed and stored.
Staff recommends approval of the proposed policy originally derived from the Work Practice
Directive for Temporary Roadside Memorials on Public Property and Right-of-Ways.
FISCAL IMPACT:
The typical cost to remove a Roadside Memorial from the public right-of-way is $166. This cost
includes the vehicle and a Public Works staff member to perform the work. This amount is minimal
when compared to the potential cost the City could be faced with if the Roadside Memorial is
found to be the cause of a collision due to the items in the public right-of-way.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
This policy encompasses the City Council’s core values of promoting a safe and healthy
community for all, as well as working together cooperatively and respectfully with each other,
staff, and all stakeholders.
ATTACHMENTS:
Attachment I – Memorandum Policy
Page 66
ATTACHMENT 1
PURPOSE: To establish a policy for the acceptable duration of ad hoc memorials on public
property and rights-of-way (hereinafter “Roadside Memorials”) and provide direction for staff in
maintaining City property and the public right-of-way when Roadside Memorials are present.
BACKGROUND: The Public Works Department is usually made aware of the placement of
Roadside Memorials by direct observation by field staff, when a phone call is received from the
public, or an RC2GO request is submitted. These Roadside Memorials may consist of items
blocking the path of travel for pedestrians, items interfering with traffic control devices, or items
found on City streets creating a potential problem for motorists. These objects can present a
concern for road users as they may cause a distraction which can lead to an accident. Other items
such as lighted candles in glass containers are a fire and safety issue. These Roadside Memorials
pose a liability for the City being placed in the public right-of-way for extended periods of time.
POLICY: The Public Works Department tries to balance the need for families and loved ones to
grieve while not allowing a safety hazard in the public right-of-way. Public Works crews are
responsible for reporting these Roadside Memorials to their supervisor prior to taking any action.
The Streets Superintendent or Supervisor will inspect the site, determine whether the Roadside
Memorial is within the public right-of-way, document with photographs, and determine if any
immediate action is required.
Once the site is inspected and the information is reviewed by the Streets Superintendent, the
following steps will be taken:
1. A RC2GO request will be generated for each Roadside Memorial with photographs
attached. Any immediate action taken will be noted.
2. All subsequent actions taken will be noted on the RC2GO request, including attachment of
additional photographs as necessary.
3. The original RC2GO request will be set for follow-up in 30 days by the Public Works Services
Director.
4. The RC-CAN Team will attempt to contact the family or other responsible person(s) to
coordinate the removal of the memorial before any action is taken.
5. The Director will review all Roadside Memorials after 30 days to approve the removal by
Public Works is required.
DATE:June 28, 2021
TO:Matthew Burris, Deputy City Manager
William Wittkopf, Public Works Services Director
FROM:John R. Gillison, City Manager
SUBJECT:TEMPORARY ROADSIDE MEMORIALS ON PUBLIC PROPERTY AND
RIGHT-OF-WAY POLICY
MEMORANDUM
(Public Works Department)
Page 67
TEMPORARY ROADSIDE MEMORIALS ON PUBLIC PROPERTY AND RIGHT-OF-WAY POLICY
JUNE 28, 2021
PAGE 2
Removal and Storage of Property
All items removed by Public Works Services from the site of a Roadside Memorial shall be
handled with the utmost care and respect. Items shall be carefully removed, small items boxed
together, labeled as to the location and date of removal, and all items transported to the Public
Works Service Center (PWSC). Perishable items, such as flowers and plants, will not be stored
but will be carefully disposed of at the PWSC. Items will be stored for a period of 60 to 90 days.
Items collected will be released to family members or responsible person(s) of the Roadside
Memorial honoree upon request.
Hazardous Items
Items causing hazardous conditions, or have the potential to be a hazard to the public, are subject
to immediate removal, and include, but are not limited to:
• Items blocking or interfering with the view or travel of pedestrians or traffic
• Items blocking or interfering with traffic control devices
• Items located on the roadway surface
• Lighted candles
• Glass candle holders and other glass containers
• Large glass or ceramic figurines, pots, or similar items
• Large signs or banners
Public Works staff shall not move or relocate items placed at a Roadside Memorial to restore
pedestrian or vehicular visibility or access. Such items shall be removed and stored.
cc Albert Espinoza, Deputy Public Works Director
Ernest Ruiz, Streets Superintendent
Richard Favela, Maintenance Supervisor
Page 68
DATE:June 28, 2021
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY:Jason C. Welday, Director of Engineering Services/City Engineer
Justine Garcia, Deputy Director of Engineering Services
SUBJECT:Consideration to Adopt the Capital Improvement Program for Fiscal Year
2021/22. (CITY)
RECOMMENDATION:
Staff recommends that the City Council Adopt the Fiscal Year 2021/22 Capital Improvement
Program.
BACKGROUND:
Each fiscal year, a Capital Improvement Program (CIP) is required to be adopted by the City
Council per Government Code 65401. The CIP consists of a multi-year plan for the planning,
designing and construction of citywide infrastructure improvements. A copy of Government Code
65401 has been included as Attachment 1.
The CIP is a vital piece of the City’s Annual Operating Budget as it dictates major capital
expenditures obligated in any given year. The CIP consists of a multi-year plan for citywide
infrastructure improvements. Each year, the City budgets for funded projects which will occur
during said fiscal year. The list of projects contained in the CIP addresses both the City’s long
and short-term capital goals and reflect the desires of the community, as well as projects that
serve operational and maintenance needs.
ANALYSIS:
The CIP Summary Index has been categorized by corresponding Departments and project names
are in alphabetical order within each section. Individual project sheets include a short summary,
cost, and year funded and can be viewed on the City’s CIP Viewer online at:
https://regis.maps.arcgis.com/apps/webappviewer/index.html?id=8c4e09a7fc5e450eb262d95be
71e8b6e
Prior to the recommendation of approval of the CIP to City Council each year, staff presents the
CIP to the Planning Commission to ensure conformity with the adopted General Plan. It should
be noted that since the approval of Planning Commission Resolution 21-35, two projects listed
under Engineering Services, “Hellman Avenue Sidewalk Improvements” and “School Crosswalk
Improvements”, have been deleted from the 2021/22 CIP. These projects are funded by
Community Development Block Grant (CDBG) funds and due to the need to utilize funds in a
timely manner, project timelines have been shifted and contract awards have been appropriated
Page 69
Page 2
8
2
6
in the fiscal year 2020/21 budget year. No other changes to the CIP have been made or are
anticipated.
FISCAL IMPACT:
Projects are funded from a variety of sources including Development Impact Fees, Measure I,
Gas Tax, and miscellaneous grants. The CIP for Fiscal Year 2021-22 proposes 59 projects
totaling just over $62,000,000 to be executed in the upcoming fiscal year. In addition, there are
29 projects totaling just over $126,000,000 identified as future and unfunded.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
The City’s Engineering staff works with all Departments within the City to develop and implement
an economically feasible CIP that embodies the City’s public infrastructure needs. This item
addresses the City Council’s vision for the City by ensuring the construction of high-quality public
improvements that promote a world class community and also supports the City Council’s Core
Value of promoting and enhancing a safe and healthy community for all.
ATTACHMENTS:
Attachment 1 - Government Code 65401
Attachment 2 - Fiscal Year 2021/2022 Capital Improvement Program Summary Index
Page 70
Government Code
65401. If a general plan or part thereof has been adopted, within such time as may be
fixed by the legislative body, each county or city officer, department, board, or
commission, and each governmental body, commission, or board, including the
governing body of any special district or school district, whose jurisdiction lies wholly or
partially within the county or city, whose functions include recommending, preparing
plans for, or constructing, major public works, shall submit to the official agency, as
designated by the respective county board of supervisors or city council, a list of the
proposed public works recommended for planning, initiation or construction during the
ensuing fiscal year. The official agency receiving the list of proposed public works shall
list and classify all such recommendations and shall prepare a coordinated program of
proposed public works for the ensuing fiscal year. Such coordinated program shall be
submitted to the county or city planning agency for review and report to said official
agency as to conformity with the adopted general plan or part thereof.
Attachment 1
096 Page 71
General Plan
Reference(s)No.Project
Account Amount Account Amount Account Amount
Community Services
CS-1.3 1 Central Park - Amphitheatre Grant Opportunity 0 Grant Opportunity 0 Grant Opportunity 8,500,000 11,000,000
11204015650/2058120-0 0 11204015650/2058120-0 0 11204015650/2058120-0 1,500,000
Unknown 0 Unknown 0 Unknown 1,000,000
CS-1.3 2 Central Park - Dog Park 12744015650/2022274-0 223,240 12744015650/2022274-0 2,686,760 12744015650/2022274-0 0 3,737,450
11743035650/2022174-0 0 11743035650/2022174-0 201,760 11743035650/2022174-0 0
11204015650/2022120-0 0 11204015650/2022120-0 625,690 11204015650/2022120-0 0
CS-1.3 3 Central Park - Trailhead and Gardens 11204015650/1871120-0 14,030 11204015650/1871120-0 0 11204015650/1871120-0 0 6,014,030
Grant Opportunity 0 Grant Opportuntiy 0 Grant Opportunity 6,000,000
CS-1.1, CS-1.2, PF-1.3 4 Citywide Parks Master Plan 11204015650/2042120-0 29,000 11204015650/2042120-0 250,000 11204015650/2042120-0 0 279,000
PF-1.1, PF-1.2, PF-1.4 5 Cultural Center - Courtyard Redesign 10250015650/1894025-0 424,580 10250015650/1894025-0 190,000 10250015650/1894025-0 2,935,000 3,549,580
CS-1.2 6 Etiwanda Creek Park Phase II 11204015650/1664120-0 295,210 11204015650/1664120-0 0 11204015650/1664120-0 5,035,000 5,330,210
CS-1.8, CS-1.9 7 Garcia Park - Ball Field Lights 11393035650/1981139-0 20,000 11393035650/1981139-0 0 11393035650/1981139-0 460,000 480,000
PF-1.4, CM-4.4 8 Hermosa Street Beautification 11103165650/2060110-0 0 11103165650/2060110-0 15,000 11103165650/2060110-0 150,000 165,000
CS-6.5 9 Pacific Electric Trail Improvements 11204015650/2059120-0 0 11204015650/2059120-0 25,000 11204015650/2059120-0 47,000 360,000
12744015650/2059274-0 0 12744015650/2059274-0 0 12744015650/2059274-0 288,000
CS-1.8 10 Quakes Scoreboard Replacement 1025001-5607 0 1025001-5607 0 1025001-5607 650,000 650,000
Total
Community Services Totals: 31,565,270$
General Plan
Reference(s)No.Project
Total Project
Cost
Account Amount Account Amount Account Amount
Engineering Services
CM-4.4 1
5th Street: Lucas Ranch Road to Hermosa
Avenue Pavmenet Rehabilitation 11773035650/2077177-0 0 11773035650/2077177-0 67,500 11773035650/2077177-0 0 67,500
CM-5.1 2
6th Street at BNSF Spur Crossing West of
Etiwanda 11243035650/1839124-0 74,360 11243035650/1839124-0 150,000 11243035650/1839124-0 1,250,000 3,000,000
Unknown 0 Unknown 0 Unknown 1,525,640
CM-4.4 3
6th Street- Charles Smith Avenue-Hyssop
Dr: Pavement Rehab 11743035650/2071174-0 0 11743035650/2071174-0 74,250 11743035650/2071174-0 0 74,250
CM-1.4, CM-3.10 4 ADA Ramps at Various Locations 11773035650/1150177-0 890,000 11773035650/1150177-0 250,000 11773035650/1150177-0 0 1,140,000
CM-4.1, CM-4.3 5
Advance Traffic Management System-
Phase 2 11243035650/2004124-0 0 11243035650/2004124-0 6,382,000 11243035650/2004124-0 0 7,472,000
10250015650/2004025-0 0 10250015650/2004025-0 90,000 10250015650/2004025-0 0
Grant Opportunity 0 Grant Opportunity 1,000,000 Grant Opportunity 0
CM-4.1 6
Archibald Avenue @ Victoria Street-Traffic
Sig Install 11243035650/1510124-0 0 11243035650/1510124-0 0 11243035650/1510124-0 715,000 715,000
1,006,060$
2021/22 Funded Future/Unfunded
3,994,210$ 26,565,000$
CITY OF RANCHO CUCAMONGA - CAPITAL IMPROVEMENT PROGRAM - FISCAL YEAR 2021/22
Prior Yr Funding
Prior Yr Funding 2021/22 Funded Future/Unfunded Total Project Cost
Prior Yr Funding 2021/22 Funded Future/Unfunded
Page 1 of 5Attachment 2Page72
CITY OF RANCHO CUCAMONGA - CAPITAL IMPROVEMENT PROGRAM - FISCAL YEAR 2021/22
CM-4.4 7
Archibald Avenue: 210 Freeway to 19th St-
Pavement Rehabilitation 11763035650/2074176-0 0 11763035650/2074176-0 101,250 11763035650/2074176-0 0 101,250
CM-1.1, CM4.4 8
Banyan from Milliken Ave to Rochester
Ave-Pavement Rehab 11773035650/2033177-0 0 11773035650/2033177-0 60,000 11773035650/2033177-0 520,000 580,000
CM-4.4 9
Banyan Street: Garnet Street-Beryl St
Pavement Rehabilitation 11743035650/2073174-0 0 11743035650/2073174-0 87,750 11743035650/2073174-0 0 87,750
CM-4.4 10
Center Ave Pavement Rehabilitation
Project 11743035650/2008174-0 0 11743035650/2008174-0 475,000 11743035650/2008174-0 0 475,000
CM-4.4 11
Cherry Avenue-Wilson to City Limit-
Pavement Rehabilitation 11743035650/2070174-0 0 11743035650/2070174-0 222,750 11743035650/2070174-0 0 222,750
PS-7.2 12
Cucamonga Storm Drain Ph3-CLOMR-
FEMA 11123035650/1928112-0 3,208,683 11123035650/1928112-0 175,000 11123035650/1928112-0 0 3,383,683
CM-2.1 13 Day Creek Channel Bike Trail 11052085650/2014105-0 8,260 11052085650/2014105-0 208,740 11052085650/2014105-0 0 620,000
12143035650/2014214-0 4,450 12143035650/2014214-0 398,550 12143035650/2014214-0 0
CM-1.1, CM-4.1 14
East Ave at Highland Avenue-Traffic
Control Device 11243035650/1958124-0 42,000 11243035650/1958124-0 540,000 11243035650/1958124-0 0 582,000
CM-1.6 15 Etiwanda Avenue Grade Separation 11813035650/1922181-0 10,500,000 11813035650/1922181-0 12,500,000 11813035650/1922181-0 52,150,000 75,150,000
RC-4.1 16
Etiwanda Ave from Arrow Rte to Whittram
Ave-Electric and Fiber Line Extension 17053035650/1999705-0 0 17053035650/1999705-0 311,000 17053035650/1999705-0 0 311,000
CM-1.1, CM-1.2 17 Etiwanda Ave-East Side Widening 11773035650/2002177-0 5,000 11773035650/2002177-0 0 11773035650/2002177-0 0 850,000
11243035650/2002124-0 20,000 11243035650/2002124-0 825,000 11243035650/2002124-0 0
CM-1.1 CM-4.4 18
Etiwanda Avenue: Foothill Blvd to Wilson
Ave-Pavement Rehab 11773035650/2007177-0 50,000 11773035650/2007177-0 0 11773035650/2007177-0 2,550,000 2,600,000
PF-8.1, PF-8.2 19 Fiber Optic Interconnect 11243035650/2061124-0 15,000 11243035650/2061124-0 660,000 11243035650/2061124-0 0 675,000
CM-1.1 CM-4.4 20
Foothill Blvd: Grove Ave to San Bernardino
Rd 1001xxx5650/1964001-0 12,500 1001xxx5650/1964001-0 0 1001xxx5650/1964001-0 0 1,489,500
11983035650/1964198-0 37,000 11983035650/1964198-0 120,000 11983035650/1964198-0 600,000
12744015650/1964124-0 0 12744015650/1964124-0 0 12744015650/1964124-0 720,000
CM-1.1 CM-4.4 21 Foothill Boulevard-Pavement Rehabilitation 11793035650/2055179-0 0 11793035650/2055179-0 2,565,000 11793035650/2055179-0 0 2,565,000
CM-4.4 22
Haven Avenue: Lemon- Wilson: Pavement
Rehabilitation 11743035650/2072174-0 0 11743035650/2072174-0 479,250 11743035650/2072174-0 0 479,250
CS-6.4 23 Heritage Park Bridge Replacements 18473035650/1963847-0 150,240 18473035650/1963847-0 500,000 18473035650/1963847-0 0 1,398,405
32885015650/1963288-0 148,165 32885015650/1963288-0 600,000 32885015650/1963288-0 0
CM-4.4 24 Hermosa Ave- Pavement Rehabilitation 11773035650/2076177-0 0 11773035650/2076177-0 101,250 11773035650/2076177-0 0 101,250
CM-1.1, CM-1.2 25
Hermosa Ave- Foothill Blvd to Church St-
Pavement Rehab 11743035650/2075174-0 0 11743035650/2075174-0 607,500 11743035650/2075174-0 0 607,500
CM-1.1 CM-4.4 26 Local Overlay at Various Locations 11773035650/1022177-0 490,000 11773035650/1022177-0 0 11773035650/1022177-0 0 2,860,000
11793035650/1022179-0 550,000 11793035650/1022179-0 0 11793035650/1022179-0 0
11743035650/1022174-0 0 11743035650/1022174-0 1,820,000 11743035650/1022174-0 0
Page 2 of 5Page73
CITY OF RANCHO CUCAMONGA - CAPITAL IMPROVEMENT PROGRAM - FISCAL YEAR 2021/22
CM-1.1 CM-4.4 27
Local Slurry Seal Pavement Rehabilitation
@ Various Locations 11743035650/1022174-0 277,000 11743035650/1022174-0 280,000 11743035650/1022174-0 0 557,000
HE-4.3.1 28
Pecan Avenue: Whittram Ave to Arrow Rte-
Street Improvements 12043145650/2038204-0 10,000 12043145650/2038204-0 0 12043145650/2038204-0 469,000 685,000
Unknown 0 Unknown 0 Unknown 206,000
PF-1.4, RC-4.2 29 RCMU Electric Substation #2 17053035650/2063705-0 0 17053035650/2063705-0 0 17053035650/2063705-0 3,070,000 3,070,000
PF-1.4, RC-4.2 30
RCMU Line Extension Design to Etiwanda
Heights 17053035650/2064705-0 0 17053035650/2064705-0 0 17053035650/2064705-0 2,010,000 2,010,000
CM-1.1 CM-4.4 31
Rochester Avenue: 6th St to Arrow Rte-
Pavement Rehab 11773035650/2000177-0 0 11773035650/2000177-0 700,000 11773035650/2000177-0 0 700,000
CM-1.1 CM-4.4 32
Rochester Avenue: Base Line Rd-Highland
Ave: Pavement Rehab 11793035650/1935179-0 0 11793035650/1935179-0 1,917,000 11793035650/1935179-0 0 1,917,000
RC-4.1, RC-4.2 33
The Resort Parkway (North) RCMU
Distribution 17053035650/2037705-0 0 17053035650/2037705-0 5,000 17053035650/2037705-0 30,000 35,000
CM-4.1 34 Upgrade LT Phases at Multiple Locations 11243035650/2079124-0 18,000 11243035650/2079124-0 90,350 11243035650/2079124-0 0 343,150
Grant Opportunity 0 Grant Opportunity 162,600 Grant Opportunity 0
11743035650/2079174-0 0 11743035650/2079174-0 72,200 11743035650/2079174-0 0
CM-1.1 CM-4.4 35
Whittram Avenue from Etiwanda Creek to
Hickory Avenue 12043145650/2032204-0 13,000 12043145650/2032204-0 0 12043145650/2032204-0 240,000 253,000
CM-1.2, CM-1.3 36
Youngs Canyon Road-Extension from
Koch Place to Cherry Avenue 18132035650/1601813-0 856,000 18132035650/1601813-0 0 18132035650/1601813-0 2,644,000 13,816,000
Unknown 0 Unknown 0 Unknown 10,316,000
Total
Engineering Services Totals:130,926,738$
General Plan
Reference(s)No.Project
Account Amount Account Amount Account Amount
Fire District
PS-1.1, PS-2.1, PS-2.3,
PS-2.4 1 Fire District-8th Street Station 179 32885015650/2057288-0 716,770 32885015650/2057288-0 0 32885015650/2057288-0 11,728,500 12,445,270
PS-1.1, PS-2.1, PS-2.3,
PS-2.4 2 Fire District-Town Center Station 178 32885015650/1645288-0 575,000 32885015650/1645288-0 14,800,000 32885015650/1645288-0 0 15,375,000
Total
Fire District Totals: 27,820,270$
General Plan
Reference(s)No.Project
Account Amount Account Amount Account Amount
Library
PF-3.1, PF-3.2 1
Paul A. Biane Library-Second Story and
Beyond Project 13296015650/1867329-0 3,375,660 13296015650/1867329-0 1,225,000 13296015650/1867329-0 899,340 6,900,000
10250015650/1867025-0 0 10250015650/1867025-0 725,000 10250015650/1867025-0 675,000
Total
Library Totals:6,900,000$
Prior Yr Funding 2021/22 Funded Future/Unfunded
17,379,658$ 34,598,940$ 79,015,640$
Prior Yr Funding 2021/22 Funded Future/Unfunded
Prior Yr Funding 2021/22 Funded Future/Unfunded
3,375,660$ 1,950,000$ 1,574,340$
1,291,770$
Total Project Cost
Prior Yr Funding 2021/22 Funded Future/Unfunded Total Project Cost
14,800,000$ 11,728,500$
Prior Yr Funding 2021/22 Funded Future/Unfunded
Page 3 of 5Page74
CITY OF RANCHO CUCAMONGA - CAPITAL IMPROVEMENT PROGRAM - FISCAL YEAR 2021/22
General Plan
Reference(s)No.Project
Account Amount Account Amount Account Amount
Police Department
PF-1.1, PS-4.3 1
Police Station Operational and COVID-
Related Lobby Improvements 1127701-5602 0 1127701-5602 170,000 1127701-5602 0 170,000
Total
Police Department Totals:170,000$
General Plan
Reference(s)No.Project
Account Amount Account Amount Account Amount
Public Works
PF-1.4 1
Beryl Park East - All Inclusive Playground
Replacement 1141303-5607 0 1141303-5607 40,000 1141303-5607 0 40,000
PF-1.1, PF-1.4 2
Beryl Park East-Tennis Court LED Light
Replacements 1141303-5607 0 1141303-5607 50,000 1141303-5607 0 50,000
PF-1.1 3 Citywide HVAC & Lighting Controls 10250015650/1978025-0 0 10250015650/1978025-0 50,000 10250015650/1978025-0 0 50,000
CM-2.1 4 Citywide Concrete Repair 10013185650/1991001-0 1,175,000 10013185650/1991001-0 200,000 10013185650/1991001-0 800,000 2,975,000
11773035650/1991177-0 300,000 11773035650/1991177-0 100,000 11773035650/1991177-0 400,000
PF-1.4 5 Civic Center ADA & Covid Improvements 1025001-5602 82,230 1025001-5602 1,302,400 1025001-5602 0 1,384,630
PF-1.1 6 Civic Center HVAC-Plant Replacement 10250015650/2029025-0 173,000 10250015650/2029025-0 1,500,000 10250015650/2029025-0 0 1,673,000
PF-1.4 7
Council Chamber-Carpet & Seating
Replacement 1025001-5602 0 1025001-5602 10,000 1025001-5602 0 10,000
PF-1.1, PF-1.4 8
Etiwanda Creek Park-LED Lighting
Replacement 1137303-5607 0 1137303-5607 100,000 1137303-5607 0 100,000
CS-2.5 9 Fleet Shop-Rental Space 1025001-5602 70,000 1025001-5602 150,000 1025001-5602 0 220,000
PF-1.4 10
Heritage Park-Equestrian Center Roof
Replacement 1848303-5607 0 1848303-5607 150,000 1848303-5607 0 150,000
PF-1.4 11
Heritage Park-Pedestrian Trail
Replacement 1848303-5607 0 1848303-5607 150,000 1848303-5607 0 150,000
PF-1.1, PF-1.4 12
Heritage Park-Senior Baseball Field LED
Light Replacement 1848303-5607 0 1848303-5607 100,000 1848303-5607 0 100,000
PF-1.1, PF-1.4 13 Heritage Park-Solar Pathway Lighting 1848303-5607 0 1848303-5607 90,000 1848303-5607 0 90,000
PF-1.1, PF-1.4 14 LMD 1-Drought Tolerant Landscaping 11413035650/2056130-0 0 11413035650/2056130-0 50,000 11413035650/2056130-0 0 50,000
PF-1.4 15 LMD 10-Landscape Renovation 1140303-5607 0 1140303-5607 150,000 1140303-5607 0 150,000
PF-1.1, PF-1.4 16 LMD 2-Paseo Lighting Retrofits 11313035650/1716131-0 567,550 11313035650/1716131-0 300,000 11313035650/1716131-0 364,890 1,232,440
LU-10.3, LU-10.6 17
LMD 2-Water Conservation/Landscape
Renovation 11313035650/1787131-0 863,030 11313035650/1787131-0 700,000 11313035650/1787131-0 2,100,000 3,663,030
2021/22 Funded Future/Unfunded
-$ 170,000$ -$
Prior Yr Funding 2021/22 Funded Future/Unfunded
Prior Yr Funding 2021/22 Funded Future/Unfunded Total Project Cost
Total Project Cost
Prior Yr Funding
Page 4 of 5Page75
CITY OF RANCHO CUCAMONGA - CAPITAL IMPROVEMENT PROGRAM - FISCAL YEAR 2021/22
LU-10.3, LU-10.6 18
LMD 4R-Water Conservation/Landscape
Renovation 11343035650/1787134-0 617,960 11343035650/1787134-0 700,000 11343035650/1787134-0 2,100,000 3,417,960
PF-1.1, PF-1.4 19 LMD 6-Drought Tolerant Landscaping 11363035650/2056136-0 0 11363035650/2056136-0 50,000 11363035650/2056136-0 0 50,000
PF-1.1, PF-1.4 20 Red Hill Park-Solar Pathway Lighting 1848303-5607 0 1848303-5607 90,000 1848303-5607 0 90,000
PF-1.1, PF-1.4 21
Traffic Signal Battery Backup System
Replacement 11743035650/1980174-0 247,500 11743035650/1980174-0 127,500 11743035650/1980174-0 255,000 1,380,000
17120015650/1980712-0 300,000 17120015650/1980712-0 150,000 17120015650/1980712-0 300,000
CM-4.1 22 Traffic Signal Modification 11743035650/2035174-0 176,000 11743035650/2035174-0 200,000 11743035650/2035174-0 800,000 1,176,000
LU-3.4 23 Urban Forest Master Plan Unknown 0 Unknown 0 Unknown 200,000 200,000
Total
Public Works Totals: 18,362,060$ 4,572,270$ 6,509,900$ 7,319,890$
Prior Yr Funding 2021/22 Funded Future/Unfunded
Page 5 of 5Page76
DATE:June 28, 2021
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY:Tamara L. Oatman, Finance Director
SUBJECT:Consideration to Adopt the Fiscal Year 2021/22 Budget and the Article
XIIIB Appropriations Limit for Fiscal Year 2021/22. (RESOLUTION NO.
2021-050, RESOLUTION NO. 2021-051) (CITY)
RECOMMENDATION:
It is recommended that the City Council approve the resolutions adopting the Fiscal Year 2021/22
Budget and the Article XIIIB Appropriations Limit for Fiscal Year 2021/22.
BACKGROUND:
Each year, the City of Rancho Cucamonga proposes a one-year program of service through the
adoption of the annual budget. In conjunction with the adoption of the annual budget, the State
of California Constitution, Article XIIIB, requires that an appropriations limit be established
annually by the City Council. The factor used to develop the appropriations limit is the C.P.I.
change and the change in the City’s population per the State of California Department of Finance.
ANALYSIS:
On June 18, 2021, the City Council held a workshop to review the appropriation requests for
Fiscal Year 2021/22. The attached resolution adopts that one-year budget following the Council’s
deliberations at the publicly held budget study session. The budget is summarized as follows:
FISCAL YEAR 2021/22 BUDGET
General Fund $ 95,160,410
Library Services $ 5,604,780
Special Funds $100,445,100
Total $201,210,290
Based on the factors of the Gann Limit (a C.P.I. change of 5.73% and a population change of
0.05%), the City’s Fiscal Year 2021/22 appropriations limit is $96,566,482. The City’s Fiscal Year
2021/22 appropriations subject to this limit total $71,964,130. It is anticipated that the City will be
at 74.52% of its Gann Limit at June 30, 2022. The additional resolution adopts the annual
appropriations limit as required by Article XIIIB of the State Constitution.
FISCAL IMPACT:
The proposed resolutions establish the City of Rancho Cucamonga’s spending plan for Fiscal
Year 2021/22 and ensure the City’s compliance with Article XIIIB of the State Constitution.
Page 77
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COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
The adoption of the Fiscal Year 2021/22 Budget supports the City Council’s core value of
providing and nurturing a high quality of life for all by demonstrating the active, prudent fiscal
management of the City’s financial resources in order to support the various services the City
provides to all Rancho Cucamonga stakeholders.
ATTACHMENTS:
Attachment 1 – Resolution (Budget Adoption)
Attachment 2 – Resolution (Appropriations Limit)
Page 78
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1
ATTACHMENT 1
RESOLUTION NO. 21-XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO CUCAMONGA, CALIFORNIA ADOPTING THE CITY’S
FISCAL YEAR 2021/22 BUDGET
WHEREAS, the Rancho Cucamonga City Council held one workshop to review the
appropriation requests for Fiscal Year 2021/22 on June 18, 2021; and
WHEREAS, the Rancho Cucamonga City Council held a public meeting on the General
City Budget; and
WHEREAS, this public meeting was noticed in accordance with applicable laws and held
on June 28, 2021.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Rancho
Cucamonga, California does hereby resolve on this 28th day of June 2021, as follows:
SECTION 1: Adoption of Fiscal Year 2021/22 Budget. The City of Rancho Cucamonga
budget for Fiscal Year 2021/22, on file in the office of the Finance Director,
is hereby adopted in the amount of $201,210,290. This budget total
includes appropriations for both the general and other special purpose
funds.
SECTION 2: Transfers of Funds Between and/or Within Appropriations. The City
Council of the City of Rancho Cucamonga may transfer funds between
funds or activities set forth in the budget. The City Manager may transfer
funds between appropriations within any fund as set forth in the budget and
may transfer appropriations between activities within any cost center in the
same fund.
SECTION 3: Transfers of Funds Between Funds. Transfers of funds between funds as
shown throughout the fund transfer sections of the budget shall be made
as expenditures warrant such transfers.
SECTION 4: Disbursements. The City Manager and the Finance Director, or the duly
designated representative, are hereby empowered and authorized to
disburse funds pursuant to appropriations provided for in the Fiscal Year
2021/22 Budget and have the responsibility to establish procedures and to
administratively implement and control the budget on all matters, except
direct expenditures by Councilmembers which require Council approval.
The City Manager, or the duly designated representative, is hereby
empowered and authorized to make an annual contribution to the PARS
Public Agencies Post-Employment Benefits Trust for the City in an amount
not to exceed $300,000 and for the Fire District in an amount not to exceed
$1,000,000. The contribution is at the discretion of the City Manager based
on the results of operations for each fiscal year and is not mandatory.
SECTION 5: Additional Appropriations. The City Council may amend this budget to add
or delete appropriations.
Page 79
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SECTION 6: Personnel. The City Manager is hereby empowered and authorized to
develop and fill additional positions as deemed necessary to conduct City
operations provided funding is available in the budget.
PASSED, APPROVED, AND ADOPTED this 28th day of June 2021.
Page 80
RESOLUTION NO. 21-XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO CUCAMONGA, CALIFORNIA ESTABLISHING AN
APPROPRIATIONS LIMIT PURSUANT TO ARTICLE XIIIB OF
THE CALIFORNIA STATE CONSTITUTION FOR FISCAL YEAR
2021/22
WHEREAS, Article XIIIB of the State of California provides that the total annual
appropriations subject to limitation of the State and of each local government shall not exceed the
appropriations limit of such entity of government for the prior year adjusted for changes in the cost
of living and population except as otherwise provided in said Article XIIIB; and
WHEREAS, pursuant to said Article XIIIB of the Constitution of the State of California, the
City Council of the City of Rancho Cucamonga deems it to be in the best interests of the City of
Rancho Cucamonga to establish an appropriations limit for Fiscal Year 2021/22; and
WHEREAS, the Finance Director of the City of Rancho Cucamonga has determined that
said appropriations limit for Fiscal Year 2021/22 be established in the amount of $96,566,482.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Rancho
Cucamonga, California does hereby resolve that an appropriations limit for Fiscal Year 2021/22
pursuant to Article XIIIB of the Constitution of the State of California be established in the amount
of $96,566,482 and the same is hereby established.
BE IT FURTHER RESOLVED that said appropriations limit herein established may be
changed as deemed necessary by resolution of the City Council.
PASSED, APPROVED, AND ADOPTED this 28th day of June 2021.
ATTACHMENT 2Page81
DATE:June 28, 2021
TO:President and Members of the Board of Directors
FROM:John R. Gillison, City Manager
INITIATED BY:Ivan Rojer, Fire Chief
Tamara L. Oatman, Finance Director
Darci Vogel, Fire Business Manager
Michelle Cowles, Management Analyst II
SUBJECT:Consideration to Adopt the General Fund Preliminary Budget, Approve a
Resolution Adopting the General Fund Appropriations Limit for Fiscal
Year 2021/22, and set Approval of a Final Budget for the July 21, 2021
Board Meeting. (RESOLUTION NO. FD 2021-015) (FIRE)
RECOMMENDATION:
Staff recommends that the Fire Board:
1. Adopt the Rancho Cucamonga Fire Protection District General Fund Preliminary Budget
in the amount of $57,169,640, which is a combination of $38,050,430 General Fund
operational expenditures, $210 Fire Technology Fee Fund expenditures, and $19,119,000
Capital Reserve expenditures;
2. Approve a Resolution adopting the General Fund's Article XIIIB Appropriations Limit in the
amount of $45,019,980 for Fiscal Year 2021/22; and
3. Set approval of a final budget for the July 21, 2021 Board Meeting.
BACKGROUND:
The Fire Protection District Law (Health & Safety Code Section 13800, et seq.), Chapter 7,
requires the Fire Board on or before June 30 of each year to adopt a preliminary budget. On or
after July 1 of each year, the amounts set forth in the preliminary budget, except obligations for
fixed assets and new permanent employee positions, are deemed appropriated until the Board
adopts the final budget. On or before October 1 of each year, after making any changes in the
preliminary budget, the Board shall adopt a final budget. The final budget shall establish its
appropriation limit pursuant to the State of California Constitution, Article XIIIB (Gann Limit).
Additionally, a copy of the final budget must be forwarded to the auditor of each county in which
the District is located.
As noted above, the Government Code requires that an appropriations limit be established
annually by the Fire Board based on the final budget. Historically, the District's final budget has
mirrored the preliminary budget. As such, the District's appropriations limit is calculated in
conjunction with the adoption of the preliminary budget. The factor used to develop the
appropriations limit is the C.P.I. change and the change in the City's population per the State of
California Department of Finance.
Page 82
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ANALYSIS:
On June 18, 2021, the Fire Board held a workshop to review the appropriation requests for Fiscal
Year 2021/22, which included specific discussion regarding the preliminary budget. The proposed
budget continues to meet the Council/Fire Board's direction of operating independently. The Fire
District was able to achieve a proposed, balanced operational budget through a combination of
moderate revenue growth and continued improvements of operational and administrative
efficiencies.
Based on the factors of the Gann Limit (a C.P.I. change of 5.73% and a population change of
0.05%) per the State of California Department of Finance, the District's Fiscal Year 2021/22
General Fund's appropriations limit is $45,019,980. The District's Fiscal Year 2021/22 General
Fund appropriations subject to this limit total $27,629,780. It is anticipated that the District will be
at 61.37% of its Gann Limit at June 30, 2022. The attached Resolution adopts the annual
appropriations limit as required by Article XIIIB of the State Constitution.
Please refer to the City Manager's Executive Summary for specific details regarding the Fire
District's General Fund Preliminary Budget. The advertised public hearing for adoption of the Fire
District General Fund Final Budget is set for July 21, 2021.
FISCAL IMPACT:
The actions taken by the Fire Board will establish the Rancho Cucamonga Fire Protection
District's preliminary spending plan for Fiscal Year 2021/22 and ensure the District's compliance
with the Gann Limit.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
This item brings together portions of the Council's vision and core values. The delivery of vital fire
and life safety services to residents, visitors, and businesses, through an innovative combination
of risk reduction and emergency response programs, promotes and enhances a safe and healthy
community for all.
ATTACHMENTS:
Attachment 1 – Resolution No. FD 2021-015
Page 83
Resolution No. FD 21-xxx – Page 1 of 1
ATTACHMENT 1
RESOLUTION NO. FD 21-XXX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO
CUCAMONGA FIRE PROTECTION DISTRICT, SAN BERNARDINO
COUNTY, CALIFORNIA, ADOPTING A GENERAL FUND
APPROPRIATIONS LIMIT FOR FISCAL YEAR 2021/22 PURSUANT TO
ARTICLE XIIIB OF THE CALIFORNIA CONSTITUTION
WHEREAS, Article XIIIB of the Constitution of the State of California provides that the total annual
appropriations subject to limitation of the State and of each local government for the prior year be adjusted
for change in the cost of living and population except as otherwise provided in Sections (5), (7) and (8) of
said Article XIII-B. These exclusions are: Debt Service Funds, Revenue Bonds, Federal Funds and Grants,
Contingencies, Emergencies, Enterprise Funds, Capital Improvement Carry-Overs, Capital Equipment,
Intra-Governmental Service Funds, Reserves for Workers Compensation, Long-Term Disability,
Retirement, Unemployment and other reserve funds that are deemed reasonable and proper per the
aforementioned sections; and
WHEREAS, pursuant to said Article XIIIB of the Constitution of the State of California, the Board
of Directors of the Rancho Cucamonga Fire Protection District deems it to be in the best interest of the
Rancho Cucamonga Fire Protection District to establish a General Fund appropriations limit for Fiscal Year
2021/22; and
WHEREAS, the Rancho Cucamonga Fire Protection District has determined that said General
Fund’s appropriations limit for Fiscal Year 2021/22 be established in the amount of $45,019,980.
NOW, THEREFORE, the BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE
PROTECTION DISTRICT HEREBY RESOLVES, that a General Fund appropriations limit for Fiscal
Year 2021/22 pursuant to Article XIII-B of the Constitution of the State of California be established in the
amount of $45,019,980 and the same is hereby established.
BE IT FURTHER RESOLVED that said appropriations limit herein established may be changed
as deemed necessary by resolution of the Board of Directors.
PASSED, APPROVED, AND ADOPTED this 28th day of June 2021.
Page 84
DATE:June 28, 2021
TO:President and Members of the Board of Directors
FROM:John R. Gillison, City Manager
INITIATED BY:Ivan Rojer, Fire Chief
Tamara L. Oatman, Finance Director
Darci Vogel, Fire Business Manager
Michelle Cowles, Management Analyst II
SUBJECT:Consideration of a Resolution Adopting a Budget in the Amount of
$2,594,050 and a Resolution Approving an Appropriation Limit in the
Amount of $4,456,979 for Fiscal Year 2021/22 in Community Facilities
District (CFD) No. 88-1. (RESOLUTION NO. FD 2021-016)
(RESOLUTION NO. FD 2021-017) (FIRE)
RECOMMENDATION:
Staff recommends that the Fire Board adopt resolutions approving the budget in the amount of
$2,594,050 and approving the appropriations limit for $4,456,979, which is an amount equal to
the maximum authorized special taxes, which could be levied in Fiscal Year 2021/22 in Mello-
Roos Community Facilities District No. 88-1.
BACKGROUND:
On April 4, 1989, the qualified voters approved the formation of Mello-Roos Community Facilities
District No. 88-1 and authorized the District to annually levy a special tax to provide for fire
protection services within northeast Etiwanda. On May 19, 1989, the Board adopted an ordinance
authorizing the levy of a special tax in CFD 88-1. The ordinance authorizes the District, by
resolution, to annually levy the special tax for purposes of land acquisition, fire station
construction, purchase of equipment and operations, and maintenance costs (which includes
personnel) to provide fire protection services within CFD 88-1.
Fiscal Year 2021/22 is the thirty-third (33) consecutive year the District has levied a special tax to
provide required revenues for capital improvements (land, fire station facility, equipment) and fire
protection services (personnel, operations, and maintenance) within this CFD. Because CFD 88-
1 does not currently generate sufficient funds to support the total annual staffing costs,
supplemental funding is necessary through the Fire District's General Fund budget.
ANALYSIS:
On June 18, 2021, the Fire Board held a workshop to review the appropriation requests for Fiscal
Year 2021/22. The attached resolution adopts that one-year budget following the Board’s
deliberations at the publicly held budget study session.
Based on the factors of the Gann Limit (a C.P.I. change of 5.73% and a population change of
0.05%) per the State of California Department of Finance, the District’s CFD No. 88-1 Fiscal Year
Page 85
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2021/22 appropriations limit is $4,456,979. The attached resolution adopts the annual
appropriations limit as required by Article XIIIB of the State Constitution.
FISCAL IMPACT:
The proposed resolutions establish CFD 88-1’s spending plan for Fiscal 2021/22 and ensure the
CFD’s compliance with Article XIIIB of the State Constitution.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
This item brings together portions of the Council's vision and core values. The delivery of vital fire
and life safety services to residents, visitors, and businesses, through an innovative combination
of risk reduction and emergency response programs, promotes and enhances a safe and healthy
community for all.
ATTACHMENTS:
Attachment 1 – Resolution No. FD 2021-016
Attachment 2 – Resolution No. FD 2021-017
Page 86
Resolution No. FD 21-xxx – Page 1 of 1
ATTACHMENT - 1
RESOLUTION NO. FD 21-xxx
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO
CUCAMONGA FIRE PROTECTION DISTRICT, CITY OF RANCHO
CUCAMONGA, COUNTY OF SAN BERNARDINO, STATE OF
CALIFORNIA, APPROVING AND ADOPTING A BUDGET FOR
COMMUNITY FACILITIES DISTRICT NO. 88-1 FOR FISCAL YEAR
2021/22
WHEREAS, the Board of Directors of the Rancho Cucamonga Fire Protection District (formerly
Foothill Fire Protection District, hereinafter referred to as the "legislative body") has initiated proceedings,
held a public hearing, conducted an election and received a favorable vote from the qualified electors
relating to the levy of a special tax in a community facilities district, all as authorized pursuant to the terms
and provisions of the "Mello-Roos Community Facilities Act of 1982", as amended, being Chapter 2.5,
Part 1, Division 2, Title 5 of the Government Code of the State of California. This Community Facilities is
designated as COMMUNITY FACILITIES DISTRICT NO. 88-1 (hereinafter referred to as the "District");
and
WHEREAS, this legislative body has received and reviewed a budget for Fiscal Year 2021/22 for
the District.
NOW, THEREFORE, the BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE
PROTECTION DISTRICT HEREBY RESOLVES, determines, and orders as follows:
SECTION 1: Adoption of Budget. The Board of Directors hereby approves and adopts the budget
designated: "Mello-Roos Community Facilities District No. 88-1 Annual Budget for
Fiscal Year 2021/22" and is on file in the office of the District and available for public
inspection.
PASSED, APPROVED, and ADOPTED this 28th day of June 2021.
Page 87
Resolution No. FD 21-xxx – Page 1 of 1
ATTACHMENT - 2
RESOLUTION NO. FD 21-XXX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO
CUCAMONGA FIRE PROTECTION DISTRICT, SAN BERNARDINO
COUNTY, CALIFORNIA, ADOPTING AN APPROPRIATIONS LIMIT FOR
COMMUNITY FACILITIES DISTRICT NO. 88-1 FOR FISCAL YEAR
2021/22 PURSUANT TO ARTICLE XIIIB OF THE CALIFORNIA
CONSTITUTION
WHEREAS, the Board of Directors of the Rancho Cucamonga Fire Protection District (formerly
Foothill Fire Protection District, hereinafter referred to as the "legislative body") has initiated proceedings,
held a public hearing, conducted an election and received a favorable vote from the qualified electors
relating to the levy of a special tax in a community facilities district, all as authorized pursuant to the terms
and provisions of the "Mello-Roos Community Facilities Act of 1982", as amended, being Chapter 2.5,
Part 1, Division 2, Title 5 of the Government Code of the State of California. This Community Facilities
District is designated as COMMUNITY FACILITIES DISTRICT NO. 88-1 (hereinafter referred to as the
"District"); and
WHEREAS, as a result of such election, the qualified electors of the District authorized the
establishment of an Article XIII-B appropriations limit for the District equal to the maximum authorized
special taxes which may be levied in any fiscal year; and
WHEREAS, this legislative body desires to establish the appropriations limit for the District for
Fiscal Year 2021/22.
NOW, THEREFORE, the BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE
PROTECTION DISTRICT HEREBY RESOLVES, determines and orders as follows:
SECTION 1. Appropriations Limit. This legislative body hereby establishes the appropriations
limit for Community Facilities District No. 88-1 for Fiscal Year 2021/22 in an amount
equal to $4,456,979.
SECTION 2. Approval by Electorate. This legislative body hereby finds and determines that the
foregoing appropriations limit has been authorized by the qualified electors of the
District at a special election held on April 4, 1989, in the manner provided by law.
PASSED, APPROVED, and ADOPTED this 28th day of June 2021.
Page 88
DATE:June 28, 2021
TO:President and Members of the Board of Directors
FROM:John R. Gillison, City Manager
INITIATED BY:Ivan Rojer, Fire Chief
Tamara L. Oatman, Finance Director
Darci Vogel, Fire Business Manager
Michelle Cowles, Management Analyst II
SUBJECT:Consideration of a Resolution Adopting a Budget in the Amount of
$7,000,470 and a Resolution Approving the Appropriations Limit in the
Amount of $17,149,398 for Fiscal Year 2021/22 in Communities Facilities
District (CFD) No. 85-1. (RESOLUTION NO. FD 2021-013)
(RESOLUTION NO. FD 2021-014) (FIRE)
RECOMMENDATION:
Staff recommends the Fire Board adopt the proposed Resolutions approving the Mello-Roos CFD
No. 85-1 annual budget for Fiscal Year 2021/22 for $7,000,470 and the Appropriations Limit for
$17,149,398.
BACKGROUND:
Since Fiscal Year 1986/87, the Board has annually adopted a CFD budget to provide for
operations and maintenance costs attributable to providing fire protection services within CFD No.
85-1. The proposed budget for Fiscal Year 2021/22 provides funding for a portion of the personnel
and operational costs necessary to maintain existing fire and life safety services within CFD
boundaries. The remaining operational and maintenance costs within the CFD are provided
through the Fire District’s General Fund budget.
When the Fire District’s CFD No. 85-1 was approved by the voters in 1985, an appropriations limit
was established at $1,775,000 (1985 costs for operations and maintenance). To adjust the
maximum spending authority (appropriations limit) to meet increased costs for operations and
maintenance, the voters authorized the District to adjust the limit annually. This adjustment is
based on the same methodology used in calculating public agency Prop. 4 spending limits under
Article XIIIB of the State of California Constitution. The factors used to develop the appropriations
limit are the C.P.I. change and the change in the City’s population.
ANALYSIS:
On June 18, 2021, the Fire Board held a workshop to review the appropriation requests for Fiscal
Year 2020/21. The attached Resolution adopts that one-year budget following the Board’s
deliberations at the publicly held budget study session.
Based on the factors of the Gann Limit (a C.P.I. change of 5.73% and a population change of
0.05%) per the State of California Department of Finance, the District’s CFD No. 85-1 Fiscal Year
Page 89
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2021/22 appropriations limit is $17,149,398. The District’s CFD No. 85-1 Fiscal Year 2021/22
appropriations subject to this limit total $6,340,660. It is anticipated that the District will be at
36.97% of its Gann Limit at June 30, 2022. The attached Resolution adopts the annual
appropriations limit as required by Article XIIIB of the State Constitution.
FISCAL IMPACT:
The proposed Resolutions establish CFD 85-1’s spending plan for Fiscal Year 2021/22 and
ensures the CFD’s compliance with Article XIIIB of the State Constitution.
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:
This item brings together portions of the Council's vision and core values. The delivery of vital fire
and life safety services to residents, visitors, and businesses, through an innovative combination
of risk reduction and emergency response programs, promotes and enhances a safe and healthy
community for all.
ATTACHMENTS:
Attachment 1 - Resolution No. FD 2021-013
Attachment 2 - Resolution No. FD 2021-014
Page 90
Resolution No. FD 21-xxx – Page 1 of 1
ATTACHMENT - 1
RESOLUTION NO. FD 21-xxx
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO
CUCAMONGA FIRE PROTECTION DISTRICT, SAN BERNARDINO
COUNTY, CALIFORNIA, APPROVING AND ADOPTING A BUDGET
FOR MELLO-ROOS COMMUNITY FACILITIES DISTRICT NO. 85-1 FOR
FISCAL YEAR 2021/22
WHEREAS, a special election was held in the Mello-Roos Community Facilities District No. 85-1
(the "Community Facilities District") of the Rancho Cucamonga Fire Protection District (formerly Foothill
Fire Protection District, the "District"), on Tuesday, December 10, 1985; and
WHEREAS, because of the election, more than two-thirds (2/3) of the qualified electors voted in
favor of a proposition to authorize the levy of a special tax for fire suppression services and facilities, to
establish an appropriations limit based upon changes in cost of living and changes in population; and
WHEREAS, the Board of Directors has received and reviewed a budget for Fiscal Year 2021/22
for the Community Facilities District.
NOW, THEREFORE, the BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE
PROTECTION DISTRICT HEREBY RESOLVES, determines and orders as follows:
SECTION 1. Adoption of Budget. The Board of Directors hereby approves and adopts the budget
designated:
Mello-Roos Community Facilities
District No. 85-1
Annual Budget
for
Fiscal Year 2021/22
A copy of said budget is on file in the office of the District and available for public
inspection.
SECTION 2. Filing of Budget. The Secretary is hereby authorized and directed to forward a
certified copy of this resolution and a copy of the budget to the Office of the Auditor-
Controller for the County of San Bernardino.
PASSED, APPROVED, and ADOPTED this 28th day of June 2021.
Page 91
Resolution No. FD 21-xxx – Page 1 of 1
ATTACHMENT - 2
RESOLUTION NO. FD 21-xxx
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO
CUCAMONGA FIRE PROTECTION DISTRICT, SAN BERNARDINO
COUNTY, CALIFORNIA, ADOPTING AN APPROPRIATIONS LIMIT FOR
MELLO-ROOS COMMUNITY FACILITIES DISTRICT NO. 85-1 FOR
FISCAL YEAR 2021/22 PURSUANT TO ARTICLE XIIIB OF THE
CALIFORNIA CONSTITUTION
WHEREAS, a special election was held in the Mello-Roos Community Facilities District No. 85-1
(the "Community Facilities District") of the Rancho Cucamonga Fire Protection District (formerly Foothill
Fire Protection District, the "District"), on Tuesday, December 10, 1985; and
WHEREAS, as a result of the election, more than two-thirds (2/3) of the qualified electors voted
in favor of a proposition to authorize the levy of a special tax for fire suppression services and facilities, to
establish an appropriations limit and to annually adjust the special tax and appropriations limit based upon
changes in cost of living and changes in population; and
WHEREAS, the Board of Directors desires to establish the appropriations limit for the Community
Facilities District 85-1 for Fiscal Year 2021/22;
NOW, THEREFORE, the BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE
PROTECTION DISTRICT HEREBY RESOLVES, determines and orders as follows:
SECTION 1. Appropriations Limit. This Board of Directors hereby establishes the Fiscal Year
2021/22 appropriations limit for the Community Facilities District No. 85-1 at
$17,149,398 based on the factors of the Gann limit (a C.P.I. change of 5.73% and
a population change of 0.05%) per the State of California Department of Finance.
SECTION 2. Approval of Electorate. This Board of Directors hereby finds and determines that
the foregoing appropriations limit has been established by the qualified electorate
at a special election held on December 10, 1985, in the manner provided by law.
SECTION 3. Filing. The Secretary is hereby authorized and directed to file a certified copy of this
resolution with the Board of Supervisors for San Bernardino County and with the
office of the Auditor-Controller for the State of California.
PASSED, APPROVED and ADOPTED this 28th day of June 2021.
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