HomeMy WebLinkAbout2025-12-02; City Council; 04; Annual Adoption of Pension Investment PolicyCA Review AZ
Meeting Date: Dec. 2, 2025
To: Mayor and City Council
From: Geoff Patnoe, City Manager
Staff Contact: Zach Korach, Finance Director
zach.korach@carlsbadca.gov or 442-339-2127
Subject: Annual Adoption of Pension Investment Policy
Districts: All
Recommended Action
Adopt a resolution approving the city’s Pension Investment Policy dated Dec. 2, 2025.
Executive Summary
Pension costs are a significant and hard-to-predict expense for the city. On Sept. 12, 2023, the
City Council approved the establishment of a what is known as a Section 115 trust, which
enables the city to stabilize pension costs despite their volatility, maintain local control over the
city’s assets and earn a potentially higher rate of return than if the assets were kept within the
General Fund.
The City Council also approved a Pension Investment Policy to govern the management of the
assets in the trust.
Since the trust was established, the City Council has authorized $25 million in city contributions
which have earned $3.8 million, or 21.8%.
The City Council is now being asked to consider the annual adoption of the Pension Investment
Policy. The policy maintains a “balanced” strategy, with a 60% investment in equity, essentially
meaning stocks, 35% in fixed income investments such as bonds and 5% in cash. This strategy
translates to a long-term rate of return of 6.25%, as called for in the Pension Trust Investment
Policy. There are no proposed changes to the policy.
Explanation & Analysis
California Public Employees' Retirement System
The city provides a defined benefit pension to its employees through the California Public
Employees' Retirement System, or CalPERS. CalPERS uses a formula to calculate retiree
pensions based on an employee’s age, earnings and years of service. It funds these pensions by
a combination of employer contributions, employee contributions and investment earnings.
Each year, CalPERS determines the employer’s contributions based on actual investment
Dec. 2, 2025 Item #4 Page 1 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
returns and actuarial assumptions including expected investment returns, inflation rates,
salaries, retirement ages and life expectancies.
In recent years, CalPERS has twice lowered its expected investment returns (known as discount
rates), thereby increasing the likelihood of achieving the target rate of return, but consequently
increasing the city’s pension costs.
• First, in 2016, the CalPERS Board of Administration voted to lower the CalPERS discount
rate assumption from 7.5% to 7% incrementally over three years. This was driven by
poor investment returns during the Great Recession and changes in actuarial
assumption that increased the gap between pension assets and liabilities, resulting in
CalPERS’ funded ratio falling below desired levels.
• Then, in 2021, CalPERS completed its quadrennial asset liability management process,
which reviewed investment strategies and actuarial assumptions. The fiscal year
2020-21 investment gain of 21.3% triggered CalPERS’ Funding Risk Mitigation Policy,
prompting the CalPERS Board to approve another discount rate reduction from
7% to 6.8%.
When CalPERS achieves certain levels of return in excess of its target rate, its policy directs
portions of its investment return to fund the additional costs associated with reducing its
discount rate. Again, while lowering the discount rate increases the likelihood of CalPERS
achieving its target rate of return, the city’s costs increase as a result.
City’s CalPERS plan
The actuarial liability represents the present value of the plan, the unfunded liability is the
difference between pension assets and liabilities and the funded status is the ratio of pension
assets to liabilities.
As of CalPERS’ June 30, 2023, actuarial valuation, the city’s plan had:
• A total actuarial liability of $919.4 million.
• An unfunded liability of $241.4 million
• A funded status of 73.7%
In fiscal year 2023-24, CalPERS experienced an investment return of 9.3%, which was 2.5
percentage points above its target of 6.8%. This positive performance increased the city’s
funded status. As of CalPERS’ June 30, 2024, actuarial valuation (released in August 2025), the
city’s plan, in total, had:
• An actuarial liability of $961.7 million
• An unfunded liability of $233.5 million
• A funded status of 75.7%
The city’s Section 115 Pension Trust holds approximately $28.8 million, which results in a
combined funded status of 78.7%. The trust is projected to receive an additional $15 million in
contributions from the General Fund over the next two fiscal years. Assuming an annual rate of
return of 6.25% and also considering CalPERS’ preliminary fiscal year 2024-25 investment return
of 11.6%, an 80% funded status is projected to be achieved by fiscal year 2027-28.
Dec. 2, 2025 Item #4 Page 2 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
The chart below shows the volatility of CalPERS’ investment returns over the last 20 fiscal years,
highlighting the need for a mechanism like the city’s pension trust to provide more stability for
the city’s pension costs.
The city took proactive steps over the last eight years to address pension contribution volatility
and manage the unfunded liability. Since fiscal year 2016-17, the city made $56.4 million in
additional discretionary payments to CalPERS, which helped to significantly increase the plan’s
funded status.
While contributing additional funds to CalPERS saved the city future interest costs, there is still
the higher risk of pension rate volatility during periods of poor investment performance by
CalPERS. To mitigate this risk as well as the potential for CalPERS to further reduce its discount
rate, the city, like many government agencies in California, established a Section 115 pension
trusts as a solution.
Section 115 trust – A pension rate stabilization program
A Section 115 trust is a tax-exempt investment tool that allows local governments to pre-fund
pension and retiree health costs. Once contributions are placed into the trust, assets from the
trust can only be used for retirement plan purposes. Withdrawals may be made to either
reimburse the city for retirement system contributions or to pay CalPERS directly.
The Section 115 trust provides the city with:
• Local control over assets: The city controls the contributions, withdrawals, investment
strategy and risk level of assets in the trust.
• Pension rate stabilization: Assets can be transferred to CalPERS at the city’s discretion to
pay for normal cost or unfunded actuarial liability contributions and can be used to
reduce or eliminate large fluctuations in the city’s pension costs.
• Potential for higher investment return than General Fund: Investment requirements
that apply to the city’s General Fund assets under California Government Code Section
53601 are not applicable to trust assets.
• Diversification: Trust assets will be diversified from CalPERS’ investments.
Dec. 2, 2025 Item #4 Page 3 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
The Section 115 trust is available to help offset future increases in pension costs while
minimizing the impact on the city’s operating budget. It provides the city with an alternative to
sending funds directly to CalPERS while giving the city flexibility to make additional payments to
CalPERS to reduce its unfunded actuarial liability at the city’s discretion.
Varying risk tolerance levels, or investment strategies, can be selected for the trust’s
investments. The composition level of fixed income investments (bonds) versus equity
investments (stocks) drives the level of risk tolerance. Generally, there are “conservative”
strategies that invest more heavily in fixed-income investments compared to equities.
Conversely, more aggressive growth and appreciation strategies invest more heavily in equities
compared to fixed incomes.
While the capital appreciation investment strategy has proven to perform better historically
compared to more conservative portfolios, there is a higher level of inherent risk and volatility.
Along with maintaining local control over the city's assets, the city’s Section 115 trust is
intended to preserve the assets, particularly by investing more conservatively than CalPERS.
The city’s investment manager, PFM Asset Management, has implemented a “balanced”
investment strategy. As noted above, this strategy places 60% of the trust’s funds in equity,
35% in fixed-income investments and 5% in cash. A “balanced” investment strategy translates
to a 6.25% annual target rate of return, as called for in the proposed Pension Trust Investment
Policy (Attachment A to Exhibit 1).
Funding strategy
CalPERS’ poor investment performance in fiscal year 2021-22 resulted in the city’s funded
status being reduced to 74.6%. To achieve an 80% funded status, the city could consider making
a significant, one-time contribution to CalPERS. However, given the volatility of CalPERS’
investment performance, and to maintain local control over city assets, the City Council
amended City Council Policy No. 86 to allow assets in the Section 115 trust to count toward the
city’s calculation of its funded status and 80% target.
Policy No. 86 states that “in the event the city is unable to meet the minimum combined
pension funded ratio of 80% with current resources (i.e., without borrowing or using reserves),
the Finance Director or Deputy City Manager of Administrative Services will identify a
reasonable period to return to a minimum 80% funded ratio status.”
Rather than making a significant one-time payment to CalPERS, the city will contribute the
difference between the funded status of 74.6% as of June 2022 and the 80% target to the
Section 115 trust over a five-year period.
The city made an initial contribution of $10 million in 2023, followed by two annual
contributions of $7.5 million and is expected to make two additional annual contributions of
$7.5 million from the city’s General Fund. Over the five-year period and beyond, assets in the
trust would be invested, in accordance with the proposed City Council Policy No. 98 - Pension
Trust Investment Policy, with a “balanced” investment strategy.
Staff project that at the end of fiscal year 2027-28, assets in the trust will meet the 80% funded
status target, assuming CalPERS meets or exceeds its annual target rate of return and does not
Dec. 2, 2025 Item #4 Page 4 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
implement adverse actuarial assumption changes. Any deposits or withdrawals from the trust
requires the City Council’s approval.
The city’s funded status, or the percentage of the city’s pension liability that is set aside for
pension costs, changes every year based on CalPERS’ investment performance. In the event the
city’s combined funded status meets or exceeds the 80% target level, it is essential the Section
115 trust continues to serve the city as a pension rate stabilization tool. Staff evaluate the asset
balance in the trust to ensure it is on track to accumulate sufficient funds to cover the
additional costs associated with a potential future reduction in CalPERS’ discount rate.
While the trust would help ensure an 80% combined funded ratio is maintained, the ultimate
funding goal would be for the city to have sufficient assets in the trust to be prepared for
further discount rate reductions by CalPERS.
With total contributions to the trust of $40 million, and assuming an annual rate of return of
6.25%, not only would the city’s funded status reach 80% over a five-year period, but over a 20-
year period there would be sufficient assets in the trust to fund a potential reduction in
CalPERS’ discount rate from the current 6.8% to 6.25%.
When the Section 115 Pension Trust was established in 2023, the potential reduction in
CalPERS’ discount rate meant the city faced an additional $118 million in unfunded pension
costs.
Fiscal Analysis
Staff are not proposing any changes to the Pension Trust Investment Policy. The city’s current
funded ratio with CalPERS is 75.7%, which is $57.5 million below the city’s 80% policy target.
Including the $28.8 million of assets in the city’s Section 115 Pension Trust, the city’s combined
funded status is 78.7%.
The trust is projected to receive an additional $15 million in contributions from the General
Fund over the next two fiscal years. Assuming an annual rate of return of 6.25% and also
Dec. 2, 2025 Item #4 Page 5 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
considering CalPERS’ preliminary fiscal year 2024-25 investment return of 11.6%, staff project
an 80% funded status will be achieved by fiscal year 2027-28, if not sooner.
Next Steps
The Pension Trust Investment Policy will be in effect until the City Council’s next annual review
in fiscal year 2026-27.
Environmental Evaluation
The proposed action to adopt the city’s Pension Investment Policy dated Dec. 2, 2025, is
exempt from environmental review under California Environmental Quality Act, or CEQA,
Guidelines Section 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no
possibility the proposed action may have a significant effect on the environment.
Exhibits
1. City Council resolution
Dec. 2, 2025 Item #4 Page 6 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Exhibit 1
RESOLUTION NO. 2025-256 .
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE CITY’S PENSION INVESTMENT POLICY DATED
DEC. 2, 2025
WHEREAS, the City Council of the City of Carlsbad, California, has determined that financial
policies are central to a strategic, long-term approach to financial management; and
WHEREAS, on Sept. 12, 2023, the City Council approved the establishment of a Section 115
trust, or the city’s Pension Trust, to assist in stabilizing the potential impact of pension cost volatility
on the city’s operating budget; and
WHEREAS, the City Council adopted a Pension Trust Investment Policy dated Sept. 12, 2023, to
govern the management of the assets in the Pension Trust; and
WHEREAS, the city’s Pension Trust, established for the sole purpose of benefiting the general
public, has available funds to invest in accordance with principles of sound treasury management; and
WHEREAS, the city invests funds in accordance with provisions of California Government Code
Section 53600 et seq.; and
WHEREAS, the City Council will review and adopt the Pension Trust Investment Policy at least
annually to determine whether stated investment objectives are still relevant and the continued
feasibility of achieving the same; and
WHEREAS, the City Council shall review and adopt this investment policy at a public meeting.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.The proposed action to adopt the city’s Pension Investment Policy dated Dec. 2, 2025,
is exempt from environmental review under California Environmental Quality Act, or
CEQA, Guidelines Section 15061(b)(3) and 15378(b)(5) as it can be seen with certainty
that there is no possibility the proposed action may have a significant effect on the
environment.
3.That the City Council accepts the Investment Policy dated Dec. 2, 2025, for the Pension
Trust (Attachment A).
Dec. 2, 2025 Item #4 Page 7 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the 2nd day of December, 2025, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
____________________________________
KEITH BLACKBURN, Mayor
_____________________________________
SHERRY FREISINGER, City Clerk
(SEAL)
Dec. 2, 2025 Item #4 Page 8 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Policy No. 98
Date Issued Dec. 2, 2025
Resolution No. 2025-256
Subject: Pension Trust Investment Policy
Purpose
The city established a Section 115 Trust with Public Agency Retirement Services (PARS) to assist
in stabilizing the potential impact of pension cost volatility on the city’s operating budget. The
city intends to use the trust to pre-fund pension costs and proactively address any unfunded
liability. The city’s goal is to have sufficient assets in the trust to maintain an 80% funded ratio
or status and to fund the additional costs associated with a potential future reduction in
CalPERS discount rate from 6.8% and 6.25%.
Account Name: City of Carlsbad Pension Trust
Investment Authority: Full Investment Authority
Current Assets: $28.8 million
Time Horizon: Long-Term
Target Rate of Return: 6.25%
Communication Schedule: Meetings will be conducted at least once per year
Investment Manager: PFM Asset Management
Investment Objective: “Balanced”
This investment objective is designed to provide a moderate amount of current income with
moderate growth of capital. Investors should have sufficient tolerance for price and return
volatility and substantial periodic declines in investment value. This objective is recommended
for investors with a long-term time horizon.
The strategic asset allocation ranges and tactical targets for this objective are listed below:
Asset Class Range
Benchmark
Target
Fixed Income 35-45%40%
Equities 49-59%54%
Real Estate 4-8%6%
Commodities n/a 0%
Cash n/a 0%
Attachment A
Dec. 2, 2025 Item #4 Page 9 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Pension Trust Investment Policy
Dec. 2, 2025
Page 2
Background
The city provides a defined benefit pension to its employees through the California Public
Employees' Retirement System (CalPERS). CalPERS uses a formula to calculate retiree pensions
based on an employee’s age, earnings, and years of service. It funds these pensions by a
combination of employer contributions, employee contributions and investment earnings. Each
year, CalPERS determines the employer’s contributions based on actual investment returns and
actuarial assumptions including expected investment returns (known as discount rates),
inflation rates, salaries, retirement ages and life expectancies.
In recent years, CalPERS has twice lowered its discount rate, thereby increasing the likelihood of
achieving the target rate of return, but consequently increasing the city’s pension costs. First, at
their Dec. 21, 2016, meeting, the CalPERS Board of Administration voted to lower the CalPERS
discount rate assumption from 7.5% to 7.0% incrementally over three years. This was driven by
poor investment returns during the Great Recession and actuarial assumption changes
increasing the gap between pension assets and liabilities, resulting in the CalPERS funded ratio
falling below desired levels. Then in November 2021, CalPERS completed its quadrennial Asset
Liability Management process, which reviewed investment strategies and actuarial
assumptions. The fiscal year 2020-21 investment gain of 21.3% triggered CalPERS’ Funding Risk
Mitigation Policy, prompting the CalPERS Board to approve another discount rate reduction
from 7.0% to 6.8% at the November 15-17, 2021, meetings. When CalPERS achieves certain
levels of return in excess of their target rate, their policy directs portions of the return to be
used to relieve pressure on the target rate in future periods. Again, while lowering the discount
rate increases the likelihood of CalPERS achieving their target rate of return, the city’s costs
increase as a result.
Over the last eight years, the city has taken proactive steps to address pension contribution
volatility and manage the unfunded liability. Since fiscal year 2016-17, the city has contributed
$56.4 million in additional discretionary payments to CalPERS, which has significantly helped
increase the plan’s funded status. While contributing additional funds to CalPERS saves the city
future interest costs, there is also a higher risk of pension rate volatility during periods of poor
investment performance by CalPERS. To mitigate this risk as well as the potential for CalPERS to
further reduce its discount rate, the city has established a Section 115 Trust.
Statement of policy
SECTION 1: OVERVIEW
This document defines the investment policy, guidelines and performance objectives applicable
to the assets of the City of Carlsbad’s Section 115 Trust. The goal of this Policy is to create an
investment framework within which the assets can be actively yet prudently managed.
Dec. 2, 2025 Item #4 Page 10 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Pension Trust Investment Policy
Dec. 2, 2025
Page 3
The purpose of this document is threefold:
• First, it will set forth an investment structure for managing the Portfolio assets. This
structure is expected to produce an appropriate level of overall diversification and total
investment return over the investment time horizon.
• Second, it will serve to encourage effective communications between the organization
and parties involved with investment management decisions.
• Third, it will provide a framework to measure ongoing investment performance.
Within the constraints imposed by this Policy, Investment Managers are expected to comply
with all applicable fiduciary and due diligence requirements under the “prudent investor” rules,
which state: “Investments shall be made with judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and intelligence exercise in the management
of their own affairs, not for speculation, but for investment, considering the probable safety of
their capital as well as the probable income to be derived.” All applicable laws, rules and
regulations from various local, state, federal and international political entities that may impact
the Portfolio are to be adhered to.
SECTION 2: DIVERSIFICATION
The Investment Manager is responsible for maintaining the balance between the various asset
classes based on the investment objective’s strategic asset allocation. As a general policy, the
Investment Manager will maintain reasonable diversification at all times by asset class, credit
quality, issuer, sector, industry, and country.
The following parameters shall be adhered to in managing the portfolio:
Fixed Income Assets
• The fixed income investments are to maintain intermediate-term average weighted
duration, between three and seven years.
• At the time of purchase, no single fixed-income issuer shall exceed 2% of the total market
value of the Portfolio, except for U.S. Treasury or Agency obligations.
• The direct high-yield portion shall constitute no more than 10% of the total market value
of the Portfolio.
• Hedged fixed-income positions shall constitute no more than 10% of the total market
value of the Portfolio.
Equity & Growth Assets
• The domestic equity investments are expected to be diversified at all times by size,
industry, sector, and style (Large Cap, Mid Cap, and Small Cap).
Dec. 2, 2025 Item #4 Page 11 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Pension Trust Investment Policy
Dec. 2, 2025
Page 4
• At the time of purchase, no individual equity security shall exceed 3% of the total market
value of the Portfolio.
• The international equity investments (including emerging markets) shall constitute no
more than 25% of the total market value of the Portfolio.
• The real estate investments shall be captured through the use of diversified mutual funds
or ETFs investing in REITs; and shall constitute no more than 15% of the total market value
of the Portfolio.
• The commodities investments shall be captured through the use of diversified mutual
funds or ETFs; and shall constitute no more than 10% of the total market value of the
Portfolio.
• Hedged equity positions shall constitute no more than 10% of the total market value of
the Portfolio.
SECTION 3: PERMITTED ASSET CLASSES AND SECURITY TYPES
Fixed Income & Cash Equivalent Investments:
• Domestic Certificates of Deposit (rated A-1/P-1 or better)
• Domestic Commercial Paper (rated A-1/P-1 or better)
• Floating Rate Notes
• Money Market Mutual Funds
• U.S. Treasury Bonds, Bills and Notes
• U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds
• Treasury Inflation-Protected Securities (TIPS)
• Municipal Bonds and Notes
• Corporate Bonds
• Mortgage-Backed Bonds (MBS)
• Asset-Backed Bonds (ABS)
• High-Yield Bonds (rated B-/B3 or better)
• Dollar denominated Foreign Bonds and Notes
• Bond Mutual Funds
Equity Investments:
• Common & Preferred Stocks
• American Depository Receipts (ADRs)
• Domestic and International Equity Mutual Funds (Open and Closed)
• Emerging Market Equity Funds or Exchange Traded Funds (ETFs)
Alternative Investments:
• Commodities Mutual Funds or Exchange Traded Notes (ETNs)
• REIT Investment or Pooled Strategy or Fund of REITs
• Registered Hedge Funds or Hedge Fund of Funds
Dec. 2, 2025 Item #4 Page 12 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Pension Trust Investment Policy
Dec. 2, 2025
Page 5
SECTION 4: PROHIBITED ASSET CLASSES AND TRANSACTIONS
The Investment Manager is prohibited from purchasing or holding any of the following types of
investments:
• Partnerships unless investing in Master Limited Partnerships invested in a mutual fund
and limited in scope and allocation of Portfolio based on asset class limitations of table
above
• Letter stock and other unregistered securities; physical commodities or other commodity
contracts; and short sales or margin transactions
• Investments in the equity securities of any company with a record of less than three years
of continuous operation, including the operation of any predecessor
• Investments for the purpose of exercising control of management
• Direct or indirect exposure to cryptocurrencies
• Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income
positions
SECTION 5: DUTIES AND RESPONSIBILITIES
1) CITY OF CARLSBAD CITY COUNCIL
a) Establish, approve, and maintain investment objectives, guidelines, and policies.
b) Appoint Investment Managers who can be reasonably expected to adhere to the
investment guidelines and meet the investment objectives as established.
c) Monitor the investment performance of the Portfolio and compare actual investment
performance relative to an appropriate benchmark index given the stated investment
guidelines and objectives set forth in this Policy.
d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and
performance annually or more frequently as the need arises.
e) Periodically review the Portfolio performance against objectives.
2) INVESTMENT MANAGER
The Investment Manager will be responsible for carrying out the activities related to the
Portfolio in accordance with the Policy including:
a) Manage the day-to-day investment of Portfolio assets in accordance with the Policy
guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification
of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that
is subsequently downgraded and fails to meet the quality guidelines, along with a
recommendation of retention or disposal.
Dec. 2, 2025 Item #4 Page 13 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647
Pension Trust Investment Policy
Dec. 2, 2025
Page 6
d) Provide on a quarterly basis the following investment reporting:
(i) Year-to-date rate of return
(ii) Annualized one, three, five, etc. rates of return
SECTION 6: INVESTMENT POLICY STATEMENT REVIEW
The City Council will review and adopt this Investment Policy Statement at least annually to
determine whether stated investment objectives are still relevant and the continued feasibility
of achieving the same. It is not expected that the Policy will change frequently. In particular,
short-term changes in the financial markets should not require adjustments to the Policy.
If at any time the Investment Manager finds the above guidelines too restrictive or possibly
injurious to investment returns, they should communicate that information immediately to the
City Council.
Dec. 2, 2025 Item #4 Page 14 of 14
Docusign Envelope ID: 25DA47D9-179D-46BA-8FDA-BF0C48D4F647