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6.A. - Page 3 of 40 <br />to maintain the portfolio's current level of diversification and safety. However, they also recommend the <br />City edit the Policy's paragraphs on commercial paper and corporate notes to conform to new Code <br />language, but with the 5% issuer limit. Finally, the change regarding JPA participation does not require a <br />change to the City's Policy. <br />In addition to the changes described above resulting from the passage of SB 998, staff is recommending <br />one other administrative edit. Assembly Bill No. 857, which took effect on January 1, 2020, provides for <br />the establishment of public banks by local agencies, and also added subsection (r) to Code section 53601, <br />which permits local agencies to invest in the commercial paper, debt securities, or other obligations of <br />such public banks. At the time of this change, PFM recommended and now still continues to recommend <br />that the City NOT add this investment type as a permitted investment to its Policy. However, the addition <br />of subsection (r) to Code 53601 impacted the language in Code Section 53601 (q), Shares of beneficial <br />interest issued by a joint powers authority (also referred to as Local Government Investment Pools), an <br />investment type currently allowed by the City's Policy. Therefore, staff is recommending an update to this <br />section of Policy to align with the Code. <br />FISCAL IMPACT <br />There is no direct fiscal impact to adopting the policy updates. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA <br />Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />PUBLIC NOTICE <br />Public notification was achieved by posting the agenda, with the agenda items being listed, at least 72 <br />hours prior to the meeting. <br />ALTERNATIVES <br />Annual review and adoption of the Investment Policy is a best practice and required by the current Policy. <br />The City Council could direct staff to make further changes, other than those currently recommended, <br />and staff would return with updates at a later date. <br />Page 3 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />