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AC 04-24-2023 Searchable PacketCITY OF CUPERTINO AUDIT COMMITTEE AGENDA 10300 Torre Avenue, City Hall Conference Room A / Teleconference Monday, April 24, 2023 4:00 PM Regular Meeting IN PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION Members of the public wishing comment on an item on the agenda may do so in the following ways: 1) Appear in person at Cupertino City Hall. Members of the audience who address the Committee must come to the lectern/microphone, and are requested to complete a Speaker Card and identify themselves. Completion of Speaker Cards and identifying yourself is voluntary and not required to attend the meeting or provide comments. 2) E-mail comments by 9:00 a.m. on Monday, April 24 to the Audit Committee at AuditCommittee@cupertino.org. These e-mail comments will be received by the Audit Committee members before the meeting and posted to the City’s website after the meeting. 3) Teleconferencing Instructions Members of the public may observe the teleconference meeting or provide oral public comments as follows: Oral public comments will be accepted during the teleconference meeting. Comments may be made during “oral communications” for matters not on the agenda, and during the public comment period for each agenda item . To address the Committee, click on the link below to register in advance and access the meeting: Online Register in advance for this webinar: https://cityofcupertino.zoom.us/webinar/register/WN_zMQ48XXhTgGF-r0T3EbwJg Phone Page 1 1 Audit Committee Agenda April 24, 2023 Dial: 669-900-6833 and enter Webinar ID: 982 7631 2198 (Type *9 to raise hand to speak, *6 to unmute yourself). Unregistered participants will be called on by the last four digits of their phone number. Or an H.323/SIP room system: H.323: 162.255.37.11 (US West) Meeting ID: 982 7631 2198 SIP: 98276312198@zoomcrc.com After registering, you will receive a confirmation email containing information about joining the webinar. Please read the following instructions carefully: 1. You can directly download the teleconference software or connect to the meeting in your internet browser. If you are using your browser, make sure you are using a current and up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers, including Internet Explorer . 2. You will be asked to enter an email address and a name, followed by an email with instructions on how to connect to the meeting. Your email address will not be disclosed to the public. If you wish to make an oral public comment but do not wish to provide your name, you may enter “Cupertino Resident” or similar designation. 3. When the Chair calls for the item on which you wish to speak, click on “raise hand.” Speakers will be notified shortly before they are called to speak. 4. When called, please limit your remarks to the time allotted and the specific agenda topic . 5. Members of the public that wish to share a document must email AuditCommittee@cupertino.org prior to speaking. ROLL CALL ORDERS OF THE DAY APPROVAL OF MINUTES 1.Subject: Approve Minutes of Regular Meeting on March 27, 2023 Recommended Action: Approve Minutes of Regular Meeting on March 27, 2023 A - Draft Minutes Page 2 2 Audit Committee Agenda April 24, 2023 POSTPONEMENTS ORAL COMMUNICATIONS This portion of the meeting is reserved for persons wishing to address the Committee on any matter within the jurisdiction of the Committee and not on the agenda. Speakers are limited to three (3) minutes. In most cases, State law will prohibit the Commission from making any decisions with respect to a matter not on the agenda. OLD BUSINESS NEW BUSINESS 2.Subject: INFORMATIONAL ITEM Consider receiving the OPEB & Pension Section 115 Trust Performance Report for the Quarter Ending March 31, 2023 Recommended Action: Receive the OPEB & Pension Section 115 Trust Performance Report for the Quarter Ending March 31, 2023 Presenter: PARS and US Bank 4:15(10) A - OPEB Pension Section 115 Trust Performance Report for Quarter Ending March 31 2023 3.Subject: ACTION ITEM Consider the Library Construction Audit Final Report Recommended Action: Receive the Library Construction Audit Final Report and forward to City Council Presenter: Moss Adams 4:25(20) A - City of Cupertino Library Construction Audit Final Report 4.Subject: INFORMATIONAL ITEM Consider the Internal Audit Status Report and Fraud, Waste, and Abuse Program Update Recommended Action: Receive the Internal Audit Status Report and Fraud, Waste, and Abuse Program Update Presenter: Moss Adams 4:45(10) A - City of Cupertino Internal Audit Status Report 04-10-2023 5.Subject: ACTION ITEM Consider the Treasurer's Investment Report for the Quarter Ending March 31, 2023 Recommended Action: Receive the Treasurer's Investment Report for the Quarter Ending March 31, 2023 and recommend filing with City Council Presenter: Thomas Leung, Budget Manager, and Chandler Asset Management 4:55(20) Page 3 3 Audit Committee Agenda April 24, 2023 Staff Report A - Chandler Investment Report March 31 2023 B - Chandler Custodial Report March 2023 C - PARS Pension and OPEB Account Statement March 2023 D - LAIF Account Statement March 2023 6.Subject: ACTION ITEM Consider the City's Investment Policy Recommended Action: Review and accept the City's Investment Policy Presenter: Thomas Leung, Budget Manager, and Chandler Asset Management 5:15(10) Staff Report A - Cupertino Investment Policy (redline) B - Cupertino Investment Policy Statement Review Memo 7.Subject: INFORMATIONAL ITEM Consider the Audit Committee 2023 Schedule and Work Plan Recommended Action: Receive the Audit Committee 2023 Schedule and Work Plan and provide direction to staff Presenter: Thomas Leung, Budget Manager 5:25(10) A - Proposed Audit Committee 2023 Schedule and Work Plan - 3.23.23 STAFF AND COMMITTEE REPORTS COMMITTEEMEMBER ATTENDANCE AT UPCOMING MEETINGS AND EVENTS FUTURE AGENDA SETTING ADJOURNMENT In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this meeting who is visually or hearing impaired or has any disability that needs special assistance should call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for assistance. In addition, upon request, in advance, by a person with a disability, meeting agendas and writings distributed for the meeting that are public records will be made available in the appropriate alternative format. Any writings or documents provided to a majority of the members after publication of the agenda will be made available for public inspection. Please contact the City Clerk’s Office in City Hall located at 10300 Torre Avenue, Cupertino, California 95014, during normal business hours. IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section 2.08.100 written communications sent to the Cupertino City Council, Commissioners or City staff concerning a matter on the agenda are included as supplemental material to the agendized item. These Page 4 4 Audit Committee Agenda April 24, 2023 written communications are accessible to the public through the City’s website and kept in packet archives. Do not include any personal or private information in written communications to the City that you do not wish to make public, as written communications are considered public records and will be made publicly available on the City website. Members of the public are entitled to address the members concerning any item that is described in the notice or agenda for this meeting, before or during consideration of that item. If you wish to address the members on any other item not on the agenda, you may do so during the public comment . Page 5 5 CITY OF CUPERTINO Agenda Item 23-12257 Agenda Date: 4/24/2023 Agenda #: 1. Subject: Approve Minutes of Regular Meeting on March 27, 2023 Approve Minutes of Regular Meeting on March 27, 2023 CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™6 Page 1 City of Cupertino Audit Committee Regular Meeting Minutes March 27, 2023 CALL TO ORDER At 4:00 p.m., Vice Chair Mohan called the regular meeting to order in the City of Cupertino Conference Room A, 10300 Torre Avenue and via teleconference. ROLL CALL Committee Members Present: Vice Chair Sheila Mohan, Committee member J.R. Fruen, Committee member Laura Hammer, Committee member Sophie Song City Staff Present: Kristina Alfaro, Matt Morley, Thomas Leung, Janet Liang Absent: Chair Angela Chen Guests: Carlos Oblites (Chandler), Kathy Lai (Crowe), Matt Geerdes (Crowe) ORDERS OF THE DAY 1. APPROVE MINUTES OF REGULAR MEETING ON FEBRUARY 27, 2023 Committee member Fruen motioned to approve the minutes; Committee member Hammer seconded. The motion carried 4-0 with Chair Chen absent. POSTPONEMENTS ORAL COMMUNICATIONS OLD BUSINESS Rhoda Fry and Peggy Griffin made comments. NEW BUSINESS 2. Receive the FY 2021-22 Annual Comprehensive Financial Report (ACFR) and Supplemental Reports Lai presented an overview of the report. Rhoda and Peggy made comments. Alfaro noted that updates will be made to the ACFR. Alfaro noted that there were several changes in the administration function, including the transfer of functions in the City Attorney's Office and City Manager's Office from contracts to in-house. Vice Chair Mohan inquired if this was related to the difference in administrative costs between last year and this year, and Alfaro agreed to look into it and provide further information. Committee member Hammer pointed out that the report showed a reallocation of spending, and asked staff to examine the journal entries and report back on the reasonableness of the allocations. Alfaro confirmed that staff would do so. 7 Page 2 Committee member Song asked about the adjustments and asked if there was a way that the committee could be presented with the exceptions that were found. Lai noted that it is included in the attachments of the agenda packet. She added that there is a large write-up pertaining to the material weakness related to the American Rescue Plan Act and the management letter articulates the deficiency related to information technology control. Vice Chair Mohan asked staff to address the deficiencies. Alfaro noted that our ERP system is deficient in its reporting on changes to user access. When staff discovered that the ERP system did not have sufficient reporting, staff came up with a quarterly review process to review security in the system. A supervisor in a department would email finance and cc IT to review and approve the request to access a module. Once finance approved the access, IT would provide the access. Alfaro noted that it would be beneficial to have a new ERP system with security reporting. Alfaro addressed the deficiency in the single audit. Due to staff turnover, staff missed items that were sent to emails of staff that was no longer working at the City. Staff remedied this by including the accountant and finance team on the contact list to ensure email notifications are received. Committee member Song commented on the segregation of duties as the Treasurer/Director of Administrative Services oversees finance and HR. Lai noted that there are cross functions between finance and HR that should be segregated, and they could look into it. Alfaro noted that the function is separated appropriately in terms of payroll and human resources. She added that an audit of our internal controls showed no findings. Lai noted that Crowe was made aware of the California Department of Tax and Fee Administration (CDTFA) audit. Lai noted that the City Attorney’s Office sent them an updated legal letter, but they have not had the opportunity to circle back. It is a pending matter. Committee member Hammer asked about the Clean Water and Storm Water Protection Fee AUP, which was a management request. Is it special for this year or is it covered every year? Alfaro noted that it is carried out every year. Vice Chair Mohan noted that the city has always received the certificate of achievement and asked if we would receive it again. Alfaro noted that staff will provide the ACFR to the Government Finance Officers Association (GFOA) once Council approves it. Committee member Fruen motioned to receive the report and forward it to City Council, Committee member Hammer seconded. The motion carried unanimously by all members present. 3. Consider the Monthly Treasurer's Investment Report for February 2023 Leung provided an overview of the report. Oblites provided an overview of the report. When Committee member Song inquired about the possibility of loss in case of selling the investments, Oblites stated that if the entire portfolio were sold, there would be a significant loss due to the declining value of the investments as interest rates continue to rise. He further added that if the 8 Page 3 City were to sell the entire $146 million portfolio today, it would result in a substantial loss of $9.4 million. Committee member Hammer sought Oblites' opinion on the dispositions. Oblites responded by stating that more than 95% of the portfolio is held until maturity, and only periodic sales are made before maturity to reposition the portfolio. He further added that Chandler, the investment manager, conducts a thorough analysis to determine whether to hold the investment for income or sell it at a loss and reinvest in a higher-yielding security. Oblites explained during the meeting that the auditors obtained or re-computed data for average yield, market value, purchase date, and duration by reviewing both Wells Fargo's and Chandler's statements. He also acknowledged that there might be slight discrepancies due to rounding. Furthermore, Oblites emphasized that unlike the stock market, bond markets operate differently, and the value of a bond depends on the buyer's willingness to pay for it. Different bond brokers may have varying prices, which could explain the differences between the market values reported by Wells Fargo and Chandler. He clarified that such discrepancies are normal, and the market values may differ by a few percentage points, usually within 3%. Committee member Fruen motioned to receive the report and recommend filing it with City Council, Vice Chair Mohan seconded. The motion passes unanimously by all members present. 4. Consider the Monthly Treasurer's Report for February 2023 Leung provided an overview of the report. Vice Chair Mohan inquired whether the CDTFA provides an advance in anticipation of the revenue staying the same in the next quarter. In response, Alfaro explained that the CDTFA gives an advance based on the revenue figures from the same quarter in the previous year, instead of making cities wait for the exact numbers. These advances are typically given in December and January, and in February, the CDTFA conducts a review to adjust for any over or underestimation. No check was written to the CDTFA during this process. Peggy and Rhonda made comments. Vice Chair Mohan inquired about whether the revenues had decreased since businesses began reopening. Leung confirmed that the revenues had dropped, explaining that there had been a spike in revenue during the pandemic due to increased online purchases. Alfaro added that at the beginning of the pandemic, many organizations rushed to purchase equipment to transition to virtual operations, which likely contributed to the increased revenue. Vice Chair Mohan motioned to receive and forward the report to City Council, Committee member Fruen seconded. The motion passed unanimously by all members present. 5. Consider a Budget Format Review Update Leung provided an overview of the report. Vice Chair Mohan inquired about the survey. Morley noted that staff will conduct an RFP to conduct the satisfaction survey. Committee member 9 Page 4 Hammer asked what the action plan is for the performance goals. Leung noted that staff will work with each department to have at least one goal tied to a financial outcome. Committee member Hammer motioned to receive the update; Committee member Fruen seconded. The motion passed unanimously by all members present. Peggy and Rhonda made comments. 6. Consider the Audit Committee 2023 Schedule and Work Plan Leung presented the committee's work plan. Committee member Hammer noted her unavailability for the April meeting. Vice Chair Mohan noted that Chair Chen is also unavailable. Staff noted that they will confirm availability for the next meeting. STAFF AND COMMITTEE REPORTS COMMITTEEMEMBER ATTENDANCE AT UPCOMING MEETINGS AND EVENTS FUTURE AGENDA SETTING ADJOURNMENT The meeting adjourned at 6:12 p.m. Recording Secretary: Janet Liang, Administrative Assistant 10 CITY OF CUPERTINO Agenda Item 23-12258 Agenda Date: 4/24/2023 Agenda #: 2. INFORMATIONAL ITEM Subject: Consider receiving the OPEB & Pension Section 115 Trust Performance Report for the Quarter Ending March 31, 2023 Receive the OPEB & Pension Section 115 Trust Performance Report for the Quarter Ending March 31, 2023 Presenter: PARS and US Bank 4:15(10) CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™11 City of Cupertino PARS 115 Trust –OPEB Prefunding Program & Pension Rate Stabilization Program Plan Client Review April 24, 2023 12 City of Cupertino ▎2 Pars Trust Team Trust Administrator & Consultant •Serves as record-keeper, consultant, and central-point of contact •Record-keeping/account valuations •Monitors contributions •Processes disbursements •Handles all agency/participant inquiries •Ongoing plan compliance Corporate Experience Dollars under Administration 39 years (1984-2023) Over $6.5 billion Investment Manager & Trustee •Safeguard and Oversight of Plan Assets •Investment Fiduciary •Manage Program Portfolios •Investment Policy Assistance •Open Architecture with Active and Index Investments Corporate Experience Dollars under Trust Custody 160 years (1863–2023) Over $9.0 trillion 13 City of Cupertino ▎3 Subaccounts OPEB and pension assets are individually sub-accounted, and can be divided by dept., bargaining group, or cost center. Assets in the PARS Section 115 Combination Trust can be used to address unfunded liabilities. Financial Stability Allows separate investment strategies for OPEB and pension subaccounts. Flexible Investing OPEB and pension assets aggregate and reach lower fees on tiered schedule sooner – saving money! Economies-of-ScaleAnytime Access Trust funds are available anytime; OPEB for OPEB and pension for pension. No set-up costs, no minimum annual contribution amounts, and no fees until assets are added. No Set Up Cost or Minimums Retiree Medical Benefits Prefund OPEB GASB 75 OPEB $33.3M Reimburse agency; or Pay benefits provider Pension Rate Stabilization Program Prefund Pension (PRSP)GASB 68 Pension $18.3M Reimburse agency; or Pay retirement system Assets can be used to:Assets can be used to: prefund either or both General Fund PARS IRS -Approved Section 115 Trust 14 U.S. Bank ConfidentialU.S. Bank Confidential Investment and insurance products and services including annuities are: NOT A DEPOSIT ●NOT FDIC INSURED ●MAY LOSE VALUE ●NOT BANK GUARANTEED ●NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY PARS/CITY OF CUPERTINO 115P OPEB & PENSION ACCOUNTS U.S. Bank Institutional Asset Management March 31, 2023 15 U.S. Bank Confidential Your U.S. Bank Team Ryan Maxey Vice President & Relationship Manager Institutional Trust & Custody 971.865.1407 ryan.maxey@usbank.com Rick Rosenthal Vice President & Senior Portfolio Manager Institutional Asset Management 213.359.7954 richard.rosenthal@usbank.com Mitch Barker Executive Vice President PARS (Public Agency Retirement Services) 949.310.4876 (cell) www.pars.org Jennifer Meza, CEBS Manager, Consulting PARS (Public Agency Retirement Services) 800.540.6369 Ext. 141 (office) 949.375.8239 (cell) www.pars.org Page 2 of 4016 U.S. Bank Confidential Table of Contents Section 1 – PORTFOLIO REVIEW PARS/CITY OF CUPERTINO 115P - OPEB (X9600) •Portfolio Overview •Equity Analysis •Performance (AGG460596) •Fixed Income Analysis •Holdings PARS/CITY OF CUPERTINO 115P – PENSION (X9601) •Portfolio Overview •Equity Analysis •Fixed Income Analysis •Performance •Holdings Section 2 – ECONOMIC OUTLOOK Section 3 – DISCLOSURES, DEFINITIONS, DESCRIPTIONS Page 3 of 4017 U.S. Bank Confidential PORTFOLIO REVIEW 18 PARS/CITY OF CUPERTINO 115P -OPEB Portfolio Overview Account: XXXXXX9600 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Portfolio Summary Inv. Objective Balanced/Nontaxable-1 Total Portfolio Value $33,301,233 Net Realized Cap Gains YTD $1,226,369 Annual Income Projected $691,688 Current Yield 2.08% Number of Securities 11 Portfolio Mgr.Rick Rosenthal Portfolio Asset Allocation Equity $21,976,882 65.99% Fixed Income $9,316,419 27.98% Real Assets $1,619,554 4.86% Cash $388,378 1.17% Invested Total $33,301,233 100.00% 66% 28% 5% 1% Equity Fixed Income Real Assets Cash Portfolio Model Allocation Cash Equivalents Investment Grade High Yield Large Cap U.S. Equity Mid Cap U.S. Equity Small Cap U.S. Equity Developed Markets Equity Emerging Markets Equity U.S. Listed Real Estate 0% 10% 20% 30% 40% 50% Portfolio Page 5 of 40 19 PARS/CITY OF CUPERTINO 115P -OPEB Equity Overview Account: XXXXXX9600 Holdings Method: Direct and Indirect Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Equity Summary Inv. Objective Balanced/Nontaxable-1 Total Equity Value $21,976,882 Current Yield 1.28% Annual Income Projected $282,140 Number of Securities 6 Portfolio Mgr.Rick Rosenthal Equity Asset Allocation Large Cap U.S.$10,303,802 46.88% Mid Cap U.S.$4,033,665 18.35% Developed Markets $4,018,809 18.29% Emerging Markets $1,954,425 8.89% Small Cap U.S.$1,666,181 7.58% 47% 18% 18% 9% 8% Large Cap U.S.Mid Cap U.S.Developed Markets Emerging Markets Small Cap U.S. Bottom 5/ Top 5 Contributors (Trailing 12 Months) BOSOXFPADXFSPSXJVLIXFSSNXBEXIXFSMDXHNACX -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% Equity Global Distribution North America Europe Asia Middle East South America Africa 71.18% 14.98% 12.43% 0.66% 0.46% 0.29% Equity Country Distribution United States Japan United Kingdom France Hong Kong 76.58% 3.01% 2.73% 2.70% 1.73% Page 6 of 40 20 PARS/CITY OF CUPERTINO 115P - OPEB Common Stock Detail Account: XXXXXX9600 Holdings Method: Direct and Indirect Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Top 10 Common Stock Holdings Equity (%) Port (%) Yield (%) YTD Return* (%) 52 Wk Return* (%) NVIDIA Corporation 1.65 1.12 0.06 90.1 1.9 Apple Inc.1.61 1.10 0.56 27.1 -5.0 Microsoft Corporation 1.55 1.05 0.93 20.5 -5.6 Alphabet Inc. Class A 1.30 0.89 0.00 17.6 -25.4 Amazon.com, Inc.1.24 0.84 0.00 23.0 -36.6 LVMH Moet Hennessy Louis V…1.06 0.72 1.45 24.2 32.4 Tesla, Inc.0.97 0.66 0.00 68.4 -42.2 UnitedHealth Group Incorporat…0.85 0.58 1.29 -10.5 -6.1 Visa Inc. Class A 0.85 0.58 0.80 8.7 2.5 Prologis, Inc.0.84 0.57 2.84 11.5 -20.6 Common Stock Characteristics Portfolio S&P 500 Market Cap - Wtd Avg $213.7B $542.5B Market Cap - Median $8.6B $30.3B Dividend Yield (%)2.04 1.66 P/E NTM 15.9 18.1 P/E LTM 17.1 20.2 ROE (%)19.8 25.2 1 Yr Beta vs. S&P Composite .83 1.02 Est 3-5 Yr EPS Growth (%)14.3 12.2 Hist 3 Yr EPS Growth (%)21.8 22.2 Number of Securities 3232 503 Common Stock Sector Exposures 5% 10% 15% 20% 25% 30% Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Portfolio S&P 500 Portfolio S&P 500 6.13 8.11 12.85 10.13 5.22 7.23 5.06 4.61 13.93 12.91 13.40 14.20 11.07 8.66 15.82 26.08 4.43 2.64 9.61 2.56 2.48 2.86 Common Stock Market Cap Distribution > 50B 10B to 50B 2B to 10B 250MM to 2B < 250MM 0% 10% 20% 30% 40% 50% 60% 70% 80% Portfolio S&P 500 *Specific to the security - does not represent performance in the portfolio. Page 7 of 40 21 PARS/CITY OF CUPERTINO 115P -OPEB Fixed Income Overview Account: XXXXXX9600 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Fixed Income Summary Inv. Objective Balanced/Nontaxable-1 Total Fixed Income Value $9,316,419 Current Yield 3.60% Annual Income Projected $335,269 Number of Securities 3 Portfolio Mgr.Rick Rosenthal Fixed Income Asset Allocation Investment Grade $7,690,076 82.54% High Yield $1,626,343 17.46% 83% 17% Investment Grade High Yield Fixed Income Sector Exposures Mutual Funds & ETFs $9,316,419 100.00%100% Mutual Funds & ETFs Fixed Income Market Value 12/3 1 / 2 0 1 9 12/3 1 / 2 0 2 0 12/3 1 / 2 0 2 1 12/3 0 / 2 0 2 2 Prev i o u s C l o s e 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 Page 8 of 40 22 U.S. Bank Confidential Custom Benchmark Asset Class Benchmark Range Target Actual Equities MSCI AC World  Free Index 50%‐70% 63%66% Fixed Income BBARC Global Aggregate Index 20%‐40% 29% 27.9% Real Estate S&P Global REIT TR USD 0%‐15% 5% 4.9% Commodities S&P GSCI Commodity Index 0%‐10% 2% 0% Cash FTSE 3‐Mo US T‐Bill Index 0%‐10% 1% 1.2% CITY OF CUPERTINO Page 9 of 4023 Selected Period Performance Period Ending: 03/31/2023PARS/CITY OF CUPERTINO OPEB AGG (****60596) Inception to Date Market Value 3 Months 1 Year 3 Years 5 Years 107 Months 07/01/2010 Total Portfolio Gross of Fees 33,337,059 5.46 -7.24 9.79 4.00 4.88 5.96 Total Portfolio Net of Fees 33,337,059 5.41 -7.42 9.59 3.81 4.66 City of Cupertino 5.55 -7.69 10.04 4.88 4.82 6.74 Total Equity 21,976,882 6.81 -7.93 15.92 6.71 8.00 10.64 MSCI ACWI (Net)7.31 -7.44 15.36 6.93 7.11 9.26 U.S. Equity 16,003,647 7.11 -8.99 16.55 7.77 9.38 S&P 500 Index (Total Return)7.50 -7.73 18.60 11.19 11.24 13.67 S&P MidCap 400 Index 3.81 -5.12 22.10 7.67 8.87 12.11 S&P SmallCap 600 Index 2.57 -8.82 21.71 6.30 8.46 12.10 Developed Markets Equity 4,018,809 8.59 -.19 19.03 7.85 6.49 MSCI EAFE Index (Net)8.47 -1.38 12.99 3.52 3.56 6.35 Emerging Markets Equity 1,954,425 1.78 -12.10 5.77 -3.29 .07 MSCI Emerging Markets Index (Net)3.96 -10.70 7.83 -.91 2.37 3.04 Total Fixed Income 9,350,160 2.99 -3.78 -1.00 -.60 .28 1.45 BBARC Global Aggregate Index 3.01 -8.07 -3.43 -1.34 -.26 1.10 BBARC US Aggregate Bond Index 2.96 -4.78 -2.77 .91 1.45 2.08 Total Real Assets 1,619,554 2.35 -19.48 9.59 4.07 Real Estate 1,619,554 2.35 -19.48 9.59 4.84 5.34 S&P Global REIT Index (Gross)1.65 -19.42 9.92 3.48 4.23 7.80 S&P GSCI Index -4.94 -10.04 30.52 4.93 -4.50 -1.49 Total Cash Equivalents 390,463 1.05 2.55 .87 1.24 .85 .60 ICE BofAML US 3-Month Treasury Bill Index 1.07 2.50 .89 1.41 .97 .71 Pending Cash 0 .00 .00 .00 .00 .00 .00 Page 10 of 4024 PARS/CITY OF CUPERTINO 115P -OPEB Portfolio Holdings Account: XXXXXX9600 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Symbol % of Port.Price Shares/ Units Portfolio Value Cost Basis Unrealized Gain/Loss Current Yield Projected Annual Income Total 100.0 33,301,233 31,147,412 2,153,820 2.08 691,688 Cash 1.17 388,378 388,378 .00 4.61 17,916 Cash Equivalents 1.17 388,378 388,378 .00 4.61 17,916 FIRST AM GOVT OB FD CL Z 31846V567 1.17 1.00 388,378 388,378 388,378 .00 4.61 17,916 Fixed Income 27.98 9,316,419 8,329,244 987,175 3.60 335,269 Investment Grade 23.09 7,690,076 6,490,612 1,199,464 2.93 225,030 Mutual Funds & ETFs 23.09 7,690,076 6,490,612 1,199,464 2.93 225,030 DoubleLine Total Return Bond Fund Class I DBLTX 7.66 8.97 284,494 2,551,911 2,496,939 54,973 3.89 99,288 Fidelity U.S. Bond Index Fund FXNAX 15.43 10.42 493,106 5,138,165 3,993,673 1,144,491 2.45 125,742 High Yield 4.88 1,626,343 1,838,632 -212,289 6.78 110,238 Mutual Funds & ETFs 4.88 1,626,343 1,838,632 -212,289 6.78 110,238 Artisan High Income Fund -Institutional Sh…APHFX 4.88 8.66 187,799 1,626,343 1,838,632 -212,289 6.78 110,238 Equity 65.99 21,976,882 20,454,546 1,522,336 1.28 282,140 Large Cap U.S. Equity 30.94 10,303,802 11,227,949 -924,147 0.68 69,871 Mutual Funds & ETFs 30.94 10,303,802 11,227,949 -924,147 0.68 69,871 Harbor Capital Appreciation Fund -Retire…HNACX 15.94 74.41 71,356 5,309,567 5,421,828 -112,261 0.00 0 John Hancock Fds III Disciplined Value Fu…JVLIX 15.00 20.80 240,107 4,994,235 5,806,121 -811,886 1.40 69,871 Mid Cap U.S. Equity 12.11 4,033,665 1,541,680 2,491,984 1.53 61,769 Mutual Funds & ETFs 12.11 4,033,665 1,541,680 2,491,984 1.53 61,769 Fidelity Mid Cap Index Fund FSMDX 12.11 26.97 149,561 4,033,665 1,541,680 2,491,984 1.53 61,769 Small Cap U.S. Equity 5.00 1,666,181 1,590,651 75,530 0.34 5,704 Mutual Funds & ETFs 5.00 1,666,181 1,590,651 75,530 0.34 5,704 Boston Trust Walden Small Cap Fund BOSOX 5.00 16.07 103,683 1,666,181 1,590,651 75,530 0.34 5,704 Developed Markets Equity 12.07 4,018,809 4,169,664 -150,855 2.45 98,471 Mutual Funds & ETFs 12.07 4,018,809 4,169,664 -150,855 2.45 98,471 Fidelity International Index Fund FSPSX 12.07 44.73 89,846 4,018,809 4,169,664 -150,855 2.45 98,471 Emerging Markets Equity 5.87 1,954,425 1,924,602 29,823 2.37 46,326 Mutual Funds & ETFs 5.87 1,954,425 1,924,602 29,823 2.37 46,326 Fidelity Emerging Markets Index Fund FPADX 5.87 9.83 198,823 1,954,425 1,924,602 29,823 2.37 46,326 Real Assets 4.86 1,619,554 1,975,244 -355,690 3.48 56,363 Page 11 of 40 25 PARS/CITY OF CUPERTINO 115P -OPEB Portfolio Holdings Account: XXXXXX9600 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Symbol % of Port.Price Shares/ Units Portfolio Value Cost Basis Unrealized Gain/Loss Current Yield Projected Annual Income U.S. Listed Real Estate 4.86 1,619,554 1,975,244 -355,690 3.48 56,363 iShares Core U.S. REIT ETF USRT 4.86 50.40 32,134 1,619,554 1,975,244 -355,690 3.48 56,363 Page 12 of 40 26 PARS/CITY OF CUPERTINO 115P-PENSION Portfolio Overview Account: XXXXXX9601 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Portfolio Summary Inv. Objective Balanced/Nontaxable-1 Total Portfolio Value $18,315,156 Net Realized Cap Gains YTD $420,534 Annual Income Projected $380,418 Current Yield 2.08% Number of Securities 11 Portfolio Mgr.Rick Rosenthal Portfolio Asset Allocation Equity $12,086,941 65.99% Fixed Income $5,123,884 27.98% Real Assets $890,719 4.86% Cash $213,611 1.17% Invested Total $18,315,156 100.00% 66% 28% 5% 1% Equity Fixed Income Real Assets Cash Portfolio Model Allocation Cash Equivalents Investment Grade High Yield Large Cap U.S. Equity Mid Cap U.S. Equity Small Cap U.S. Equity Developed Markets Equity Emerging Markets Equity U.S. Listed Real Estate 0% 10% 20% 30% 40% 50% Portfolio Page 13 of 40 27 PARS/CITY OF CUPERTINO 115P-PENSION Equity Overview Account: XXXXXX9601 Holdings Method: Direct and Indirect Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Equity Summary Inv. Objective Balanced/Nontaxable-1 Total Equity Value $12,086,941 Current Yield 1.28% Annual Income Projected $155,173 Number of Securities 6 Portfolio Mgr.Rick Rosenthal Equity Asset Allocation Large Cap U.S.$5,666,930 46.88% Mid Cap U.S.$2,218,452 18.35% Developed Markets $2,210,282 18.29% Emerging Markets $1,074,903 8.89% Small Cap U.S.$916,373 7.58% 47% 18% 18% 9% 8% Large Cap U.S.Mid Cap U.S.Developed Markets Emerging Markets Small Cap U.S. Bottom 5/ Top 5 Contributors (Trailing 12 Months) BOSOXFPADXFSPSXJVLIXFSSNXBEXIXFSMDXHNACX -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% Equity Global Distribution North America Europe Asia Middle East South America Africa 71.18% 14.98% 12.43% 0.66% 0.46% 0.29% Equity Country Distribution United States Japan United Kingdom France Hong Kong 76.58% 3.01% 2.73% 2.70% 1.73% Page 14 of 40 28 PARS/CITY OF CUPERTINO 115P- PENSION Common Stock Detail Account: XXXXXX9601 Holdings Method: Direct and Indirect Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Top 10 Common Stock Holdings Equity (%) Port (%) Yield (%) YTD Return* (%) 52 Wk Return* (%) NVIDIA Corporation 1.65 1.12 0.06 90.1 1.9 Apple Inc.1.61 1.10 0.56 27.1 -5.0 Microsoft Corporation 1.55 1.05 0.93 20.5 -5.6 Alphabet Inc. Class A 1.30 0.89 0.00 17.6 -25.4 Amazon.com, Inc.1.24 0.84 0.00 23.0 -36.6 LVMH Moet Hennessy Louis V…1.06 0.72 1.45 24.2 32.4 Tesla, Inc.0.97 0.66 0.00 68.4 -42.2 UnitedHealth Group Incorporat…0.85 0.58 1.29 -10.5 -6.1 Visa Inc. Class A 0.85 0.58 0.80 8.7 2.5 Prologis, Inc.0.84 0.57 2.84 11.5 -20.6 Common Stock Characteristics Portfolio S&P 500 Market Cap - Wtd Avg $213.7B $542.5B Market Cap - Median $8.6B $30.3B Dividend Yield (%)2.04 1.66 P/E NTM 15.9 18.1 P/E LTM 17.1 20.2 ROE (%)19.8 25.2 1 Yr Beta vs. S&P Composite .83 1.02 Est 3-5 Yr EPS Growth (%)14.3 12.2 Hist 3 Yr EPS Growth (%)21.8 22.2 Number of Securities 3232 503 Common Stock Sector Exposures 5% 10% 15% 20% 25% 30% Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Portfolio S&P 500 Portfolio S&P 500 6.13 8.11 12.85 10.13 5.22 7.23 5.06 4.61 13.93 12.91 13.40 14.20 11.07 8.66 15.82 26.08 4.43 2.64 9.61 2.56 2.48 2.86 Common Stock Market Cap Distribution > 50B 10B to 50B 2B to 10B 250MM to 2B < 250MM 0% 10% 20% 30% 40% 50% 60% 70% 80% Portfolio S&P 500 *Specific to the security - does not represent performance in the portfolio. Page 15 of 40 29 PARS/CITY OF CUPERTINO 115P-PENSION Fixed Income Overview Account: XXXXXX9601 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Fixed Income Summary Inv. Objective Balanced/Nontaxable-1 Total Fixed Income Value $5,123,884 Current Yield 3.60% Annual Income Projected $184,393 Number of Securities 3 Portfolio Mgr.Rick Rosenthal Fixed Income Asset Allocation Investment Grade $4,229,421 82.54% High Yield $894,463 17.46% 83% 17% Investment Grade High Yield Fixed Income Sector Exposures Mutual Funds & ETFs $5,123,884 100.00%100% Mutual Funds & ETFs Fixed Income Market Value 12/3 1 / 2 0 1 9 12/3 1 / 2 0 2 0 12/3 1 / 2 0 2 1 12/3 0 / 2 0 2 2 Prev i o u s C l o s e 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 Page 16 of 40 30 U.S. Bank Confidential Custom Benchmark Asset Class Benchmark Range Target Actual Equities MSCI AC World  Free Index 50%‐70% 63%66% Fixed Income BBARC Global Aggregate Index 20%‐40% 29% 27.9% Real Estate S&P Global REIT TR USD 0%‐15% 5% 4.9% Commodities S&P GSCI Commodity Index 0%‐10% 2% 0% Cash FTSE 3‐Mo US T‐Bill Index 0%‐10% 1% 1.2% CITY OF CUPERTINO Page 17 of 4031 Selected Period Performance Period Ending: 03/31/2023PARS/CITY OF CUPERTINO 115P- PENSION (****059601) Inception to Date Market Value 3 Months 1 Year 3 Years 05/01/2019 Total Portfolio Gross of Fees 18,334,860 5.46 -7.16 9.40 4.88 Total Portfolio Net of Fees 18,334,860 5.41 -7.33 9.21 4.69 City of Cupertino 5.55 -7.69 10.04 4.93 Total Equity 12,086,941 6.81 -7.92 15.94 7.42 MSCI ACWI (Net)7.31 -7.44 15.36 7.30 U.S. Equity 8,801,755 7.11 -8.99 16.54 7.78 S&P 500 Index (Total Return)7.50 -7.73 18.60 10.75 S&P MidCap 400 Index 3.81 -5.12 22.10 8.09 S&P SmallCap 600 Index 2.57 -8.82 21.71 6.64 Developed Markets Equity 2,210,282 8.59 -.19 19.03 10.46 MSCI EAFE Index (Net)8.47 -1.38 12.99 4.79 Emerging Markets Equity 1,074,903 1.78 -12.10 5.78 -1.43 MSCI Emerging Markets Index (Net)3.96 -10.70 7.83 .27 Total Fixed Income 5,142,442 2.99 -3.79 -1.02 -1.52 BBARC Global Aggregate Index 3.01 -8.07 -3.43 -1.53 BBARC US Aggregate Bond Index 2.96 -4.78 -2.77 .02 Total Real Assets 890,719 2.35 -19.39 9.66 2.38 Real Estate 890,719 2.35 -19.39 9.66 2.38 S&P Global REIT Index (Gross)1.65 -19.42 9.92 .83 S&P GSCI Index -4.94 -10.04 30.52 6.41 Total Cash Equivalents 214,758 1.05 2.40 .82 1.03 ICE BofAML US 3-Month Treasury Bill Index 1.07 2.50 .89 1.21 Pending Cash 0 .00 .00 .00 .00 Page 18 of 4032 PARS/CITY OF CUPERTINO 115P-PENSION Portfolio Holdings Account: XXXXXX9601 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Symbol % of Port.Price Shares/ Units Portfolio Value Cost Basis Unrealized Gain/Loss Current Yield Projected Annual Income Total 100.0 18,315,156 18,483,461 -168,306 2.08 380,418 Cash 1.17 213,611 213,611 .00 4.61 9,854 Cash Equivalents 1.17 213,611 213,611 .00 4.61 9,854 FIRST AM GOVT OB FD CL Z 31846V567 1.17 1.00 213,611 213,611 213,611 .00 4.61 9,854 Fixed Income 27.98 5,123,884 5,425,207 -301,322 3.60 184,393 Investment Grade 23.09 4,229,421 4,426,455 -197,033 2.93 123,763 Mutual Funds & ETFs 23.09 4,229,421 4,426,455 -197,033 2.93 123,763 DoubleLine Total Return Bond Fund Class I DBLTX 7.66 8.97 156,467 1,403,511 1,479,321 -75,810 3.89 54,607 Fidelity U.S. Bond Index Fund FXNAX 15.43 10.42 271,201 2,825,910 2,947,134 -121,224 2.45 69,156 High Yield 4.88 894,463 998,752 -104,289 6.78 60,629 Mutual Funds & ETFs 4.88 894,463 998,752 -104,289 6.78 60,629 Artisan High Income Fund -Institutional Sh…APHFX 4.88 8.66 103,287 894,463 998,752 -104,289 6.78 60,629 Equity 65.99 12,086,941 11,780,363 306,578 1.28 155,173 Large Cap U.S. Equity 30.94 5,666,930 6,256,317 -589,388 0.68 38,428 Mutual Funds & ETFs 30.94 5,666,930 6,256,317 -589,388 0.68 38,428 Harbor Capital Appreciation Fund -Retire…HNACX 15.94 74.41 39,244 2,920,179 3,114,299 -194,121 0.00 0 John Hancock Fds III Disciplined Value Fu…JVLIX 15.00 20.80 132,055 2,746,751 3,142,018 -395,267 1.40 38,428 Mid Cap U.S. Equity 12.11 2,218,452 1,346,982 871,471 1.53 33,972 Mutual Funds & ETFs 12.11 2,218,452 1,346,982 871,471 1.53 33,972 Fidelity Mid Cap Index Fund FSMDX 12.11 26.97 82,256 2,218,452 1,346,982 871,471 1.53 33,972 Small Cap U.S. Equity 5.00 916,373 874,783 41,590 0.34 3,137 Mutual Funds & ETFs 5.00 916,373 874,783 41,590 0.34 3,137 Boston Trust Walden Small Cap Fund BOSOX 5.00 16.07 57,024 916,373 874,783 41,590 0.34 3,137 Developed Markets Equity 12.07 2,210,282 2,243,780 -33,498 2.45 54,158 Mutual Funds & ETFs 12.07 2,210,282 2,243,780 -33,498 2.45 54,158 Fidelity International Index Fund FSPSX 12.07 44.73 49,414 2,210,282 2,243,780 -33,498 2.45 54,158 Emerging Markets Equity 5.87 1,074,903 1,058,501 16,402 2.37 25,478 Mutual Funds & ETFs 5.87 1,074,903 1,058,501 16,402 2.37 25,478 Fidelity Emerging Markets Index Fund FPADX 5.87 9.83 109,349 1,074,903 1,058,501 16,402 2.37 25,478 Real Assets 4.86 890,719 1,064,281 -173,562 3.48 30,998 Page 19 of 40 33 PARS/CITY OF CUPERTINO 115P-PENSION Portfolio Holdings Account: XXXXXX9601 Holdings Method: Direct Report Date: 03/31/2023 © 2019 FactSet Research Systems Inc. All rights reserved. Past Performance is no guarantee of future results. Not A Deposit | Not FDIC Insured | May Lose Value | Not Bank Guaranteed | Not Insured By Any Federal Government Agency Material is based on data from sources deemed to be reliable, accuracy/completeness is not guaranteed. Holdings Date: 3/31/2023 Symbol % of Port.Price Shares/ Units Portfolio Value Cost Basis Unrealized Gain/Loss Current Yield Projected Annual Income U.S. Listed Real Estate 4.86 890,719 1,064,281 -173,562 3.48 30,998 iShares Core U.S. REIT ETF USRT 4.86 50.40 17,673 890,719 1,064,281 -173,562 3.48 30,998 Page 20 of 40 34 U.S. Bank Confidential ECONOMIC OUTLOOK 35 [ 1 ] Important disclosures provided on page 4. Market analysis At a glance Markets continue to track concerns around inflation and consumer spending as the Federal Reserve continues its inflation battle. A solid labor market is moderated by slowing global manufacturing activity. Term of week Earnings reporting period – Public companies are required to file quarterly earnings reports that include revenue, profit, operational expenses and cash flow. The report also generally informs investors of challenges and opportunities from the viewpoint of management (guidance). April 10, 2023 This informational material is provided by U.S. Bank Asset Management Group who provides analysis and research to U.S. Bank and its affiliate U.S. Bancorp Investments. Contact your wealth professional for more details. Number of the week -6.8% The projected decrease in earnings of S&P 500 companies in the first quarter compared to last year. The first quarter reporting period begins this week. “The U.S. labor market remains healthy, with unemployment slipping to 3.5% and non-farm payrolls adding another 236,000 jobs in March. However, average hourly earnings grew just 4.2% for the year ending in March, 0.4% slower than February, a sign of slowing wage growth. Additionally, weekly jobless claims of 228,000 coupled with upward revisions to prior 2023 data indicate some layoffs are accumulating.” - Robert Haworth, Senior Vice President | Senior Investment Strategy Director, U.S. Bank usbank.com Investment products and services are: NOT A DEPOSIT • NOT FDIC INSURED • MAY LOSE VALUE • NOT BANK GUARANTEED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY Page 22 of 4036 [ 2 ] Important disclosures provided on page 4. Global economy Quick take: Global business surveys point to strength in services while manufacturing activity falters in the post-pandemic global economy. The U.S. labor market remains healthy, with the unemployment rate at just 3.5%. Our view: Our U.S. Health Check highlights positive but below-trend economic activity and decelerating momentum as the Federal Reserve (Fed) tightens monetary policy to combat elevated inflation. Outside the U.S., our foreign scores are below median and slowing. The U.S. labor market remains healthy, with unemployment slipping to 3.5% and non-farm payrolls adding another 236,000 jobs in March. However, average hourly earnings grew just 4.2% for the year ending in March, 0.4% slower than February, a sign of slowing wage growth. Additionally, weekly jobless claims of 228,000 coupled with upward revisions to prior 2023 data indicate some layoffs are accumulating. Job openings slipped below 10 million for the first time since June 2021, a sign companies are shrinking labor demand. However, openings still dwarf the unemployed population of 5.8 million. Surveys from the Institute of Supply Management pointed to slowing in activity across manufacturing and services businesses in March, though services grew for the third month in a row while manufacturing activity contracted for the fifth straight month. Most components slowed for both surveys, including prices, employment and new orders. Services businesses saw slower growth in these components while contractions deepened for manufacturing businesses. Foreign purchasing manager surveys from S&P Global indicate an ongoing expansion led by services; global manufacturing activity and trade remain lackluster. India remains a positive outlier for both segments, with China expanding in services but now flat for manufacturing activity. In the United Kingdom, Europe and Japan, services business continued their 2023 expansion while manufacturing activity continues to slow. The data indicate ongoing bifurcation of activity — consumers’ attention remains focused on services while demand for goods slows in the immediate post-pandemic world. Equity markets Quick take: Equity market volatility likely remains elevated ahead of the start to first quarter earnings season and amid key data on inflation and consumer spending. Our view: Persistent inflation, rising interest rates and uncertainty over the pace of earnings growth in 2023 remain headwinds to advancing equity prices. Each will be in focus this week. This week is set up for heightened volatility. Visibility into the persistence of inflation, direction of interest rates and pace of earnings growth should improve this week. Key data on inflation and consumer spending leads us into earnings season. The first quarter corporate reporting period begins on Friday with the release from several money center banks. The institutions’ balance sheets, including lending and deposit trends, will be of keen interest. First quarter earnings estimates reflect low expectations. Spurred by economic uncertainty, first quarter revenue is projected to increase a modest 2.2% year-over-over with earnings estimated to decline 6.8%, according to FactSet Research Systems. While economic uncertainty is expected to remain for the foreseeable future, year-over-year revenue and earnings comparisons begin to improve in the second half of 2023. Consensus earnings estimates for 2023 continue to have a downward bias, adding stress to broad-market valuations. Estimates for 2023 are approximately $219 per share, essentially in line with 2022 levels, but with downward bias even after being revised lower from roughly $250 in mid-2022, according to Bloomberg, FactSet and S&P Capital IQ. At current levels, the S&P 500 trades at a price/earnings multiple of roughly 18.5 times 2022 results and 2023 estimates, neither at high nor low extremes, based on data extending back to 1990. Visibility of 2023 earnings should begin to improve following first quarter results and forward guidance. Uncertainty surrounds several key items: Profit margins and the extent to which inflation is moderating; consumer and business spending trends, including length of sales cycles; durability of consumer spending on “experiences” versus durable goods; the degree to which supply chain inefficiencies are being resolved; and the health of the banking industry. Clarity around these items will likely result in improved sentiment and advancing equity prices. Page 23 of 4037 [ 3 ] Important disclosures provided on page 4. Bond markets Quick take: Riskier bond prices fell last week while high-quality bond prices rose. The incremental yield spreads of corporate bonds over Treasuries rose last week, suggesting investors remain wary of credit risk. Interest rates imply the Fed will raise rates at its May meeting, and economic data this week on consumer spending and inflation are key. Our view: We favor normal allocations to fixed income composed of primarily high-quality bonds. Traditionally viewed as safe havens, high-quality bonds typically perform well when restrictive monetary policy and slowing economic growth cause riskier assets to struggle. Rising market-implied odds the Fed will raise rates in May followed strong labor market data last week. The still-robust labor market could give the Fed confidence to raise rates by 0.25% in May, though three more weeks of economic releases remain before then. Interest rates currently assign around 70% odds the Fed will hike in May and are pricing in subsequent rate cuts to a funds rate of 4.25% to 4.5% by year-end. The prospect for another rate hike also hinges on stability of the financial system. Usage of the Fed’s Bank Term Funding Program continues to trickle higher while borrowing from the Fed’s discount window declined last week. In sum, the Fed’s lending programs are helping improve liquidity conditions. We prefer maintaining normal sensitivity to interest rates given the uncertain outlook for monetary policy. Riskier high yield corporate bond prices fell last week. Corporate bond yield spreads over Treasuries increased last week, indicating investors demanded higher compensation for credit risk. Valuations remain near long-term normal levels, supporting benchmark allocations to high yield debt, but limiting incentive to increase credit risk while earnings growth slows. We also favor primarily high-quality municipal bonds in portfolios subject to taxation, as a result of more attractive investment- grade valuations and less susceptibility to growth concerns than riskier bonds. Real assets Quick take: Real assets performed better than the broader market last week, due to declining interest rates and a rotation from cyclical to defensive stocks. The top beneficiary was infrastructure, which benefitted from a high allocation to Utilities. Real Estate was the worst-performing sector, but still traded positively. Our view: We continue to see value in real assets’ defensive sectors. We favor tangible assets with stable cash flows as the market moves into a year plagued by declines in economic growth and corporate earnings. Commodities remain vulnerable as expectations for falling inflation and decelerating economic growth come to fruition. Real Estate performed in line with the S&P 500 last week, with interest rates falling marginally. Cell towers were the best- performing property type, beating the S&P by 1.4%, while data centers were the biggest laggards. We see the public real estate market as trading cheap to underlying value, with property market fundamentals trending above long-term averages. However, we acknowledge that near term risk is quite elevated. Infrastructure beat the S&P 500 by 1.2% last week. Utilities and toll roads led performance, beating the broader market by 2.5% and 1.5%, respectively. Railroads were the main detractor, trailing the S&P 500 by 1%. Crude oil prices rose 6.6% last week, with domestic inventories of crude oil and refined products falling more than expected. Price are also adjusting to announced OPEC+ production cuts, as well (the Organization of the Petroleum Exporting Countries plus 10 oil-producing allies, including Russia). We see the crude market as undersupplied over a longer time horizon, which should be supportive for prices. However, we acknowledge downside exists if the global economy slows. Page 24 of 4038 [ 4 ] ©2023 U.S. Bank. This information represents the opinion of U.S. Bank Wealth Management. The views are subject to change at any time based on market or other conditions and are current as of the date indicated on the materials. This is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific advice or to be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation. The factual information provided has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. U.S. Bank is not affiliated or associated with any organizations mentioned. Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio. Diversification and asset allocation do not guarantee returns or protect against losses. Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy. Indexes shown are unmanaged and are not available for direct investment. The S&P 500 Index consists of 500 widely traded stocks that are considered to represent the performance of the U.S. stock market in general. The Institute of Supply Management Manufacturing Index, also called the Purchasing Manager's Index, measures manufacturing activity based on a monthly survey, conducted by the Institute for Supply Management, of purchasing managers at more than 300 manufacturing firms. The S&P Global Purchasing Managers' Index data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies. The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. Equity securities are subject to stock market fluctuations that occur in response to economic and business developments. International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards and other risks associated with future political and economic developments. Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility. Investing in fixed income securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Investment in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Investments in high yield bonds offer the potential for high current income and attractive total return but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a bond issuer's ability to make principal and interest payments. The municipal bond market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issues of municipal securities. Interest rate increases can cause the price of a bond to decrease. Income on municipal bonds is free from federal taxes but may be subject to the federal alternative minimum tax (AMT), state and local taxes. There are special risks associated with investments in real assets such as commodities and real estate securities. For commodities, risks may include market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic conditions on real estate values, changes in interest rates and risks related to renting properties (such as rental defaults). Page 25 of 4039 U.S. Bank | Public Important disclosures, definitions of terms and index descriptions If you have questions regarding  this information or wish to receive  definitions of any additional terms or indexes used in this report,  please contact your Portfolio Manager. 40 U.S. Bank | Public Important disclosures (page 1 of 4) The information provided here is not intended to replace your account statement. Your account statement is the official record of your account. Equal Housing Lender. Credit products are offered by U.S. Bank National Association and subject to normal credit approval. Deposit products offered by U.S. Bank National Association. Member FDIC. For use in one-on-one meetings/presentations. This information represents the opinion of U.S. Bank. The views are subject to change at any time based on market or other conditions and are current as of the date indicated on the materials. This is not intended to be a forecast of future events or guarantee of future results. The factual information provided has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation. Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy. Indexes shown are unmanaged and are not available for direct investment, nor are they subject to fees and expenses. Performance reports included may show performance results gross of fees and expenses. If fees and expenses were included, the performance would be lower. If you have any questions, please speak with your relationship manager for additional information. Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio. Diversification and asset allocation do not guarantee returns or protect against losses. Page 27 of 4041 U.S. Bank | Public Important disclosures (page 2 of 4) Equity securities are subject to stock market fluctuations that occur in response to economic and business developments. Stocks of small-capitalization companies involve substantial risk. These stocks historically have experienced greater price volatility than stocks of larger companies and may be expected to do so in the future. Stocks of mid-capitalization companies can be expected to be slightly less volatile than those of small-capitalization companies, but still involve substantial risk and may be subject tomore abrupt or erratic movements than large-capitalization companies. The value of large-capitalization stocks will rise and fall in response to the activities of the company that issued them, general market conditions and/or economic conditions. Growth investments focus on stocks of companies whose earnings/profitability are accelerating in the short term or have grown consistently over the long term. Such investments may provide minimal dividends, which could otherwise cushion stock prices in a market decline. Stock value may rise and fall significantly based, in part, on investors' perceptions of the company, rather than on fundamental analysis of the stocks. Investors should carefully consider the additional risks involved in growth investments. Value investments focus on stocks of income-producing companies whose price is low relative to one or more valuation factors, such as earnings or book value. Such investments are subject to risks that their intrinsic values may never be realized by the market, or such stocks may turn out not to have been undervalued. Investors should carefully consider the additional risks involved in value investments. International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards and other risks associated with future political and economic developments. Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic conditions on real estate values, changes in interest rates and risks related to renting properties (such as rental defaults). There are special risks associated with an investment in commodities, including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors. Investments in fixed income securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Investment in fixedincome securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Investments in high yield bonds offer the potential for high current income and attractive total return, but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a bond issuer's ability to make principal and interest payments. Page 28 of 4042 U.S. Bank | Public Important disclosures (page 3 of 4) The municipal bond market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issues of municipal securities. Interest rate increases can cause the price of a bond to decrease. Income on municipal bonds is free from federal taxes, but may be subject to the federal alternative minimum tax (AMT), state and local taxes. Treasury Inflation-Protected Securities (TIPS)offer a lower return compared to other similar investments and the principal value may increase or decrease with the rate of inflation. Gains in principal are taxable in that year, even though not paid out untilmaturity. Non-financial specialty assets, such as real estate, farm, ranch and timber properties, oil, gas and mineral interests or closely-held business interests are complex and involve unique risks specific to each asset type, including the total loss of value. Special risk considerations may include natural events or disasters, complex tax considerations and lack of liquidity. Specialty assets may not be suitable for all investors. Alternative investments very often use speculative investment and trading strategies. There is no guarantee that the investment program will be successful. Alternative investments are designed only for investors who are able to tolerate the full loss of an investment. These products are not suitable for every investor even if the investor does meet the financial requirements. It is important to consult with your investment professional to determine how these investments might fit your asset allocation, risk profile and tax situation. Hedge funds are speculative and involve a high degree of risk. An investment in a hedge fund involves a substantially more complicated set of risk factors than traditional investments in stocks or bonds, including the risks of using derivatives, leverage and short sales, which can magnify potential losses or gains. Restrictions exist on the ability to redeem or transfer interests in a fund. Exchange-traded funds (ETFs)are baskets of securities that are traded on an exchange like individual stocks at negotiated prices and are not individually redeemable. ETFs are designed to generally track a market index and shares may trade at a premium or a discount to the net asset value of the underlying securities. Private equity investments provide investors and funds the potential to invest directly into private companies or participate in buyouts of public companies that result in a delisting of the public equity. Investors considering an investment in private equity must be fully aware that these investments are illiquidby nature, typically represent a long-term binding commitment and are not readily marketable. The valuation procedures for these holdings are often subjective in nature. Private debt investments may be either direct or indirect and are subject to significant risks, including the possibility of default, limited liquidity and the infrequent availability of independent credit ratings for private companies. Structured products are subject to market risk and/or principal loss if sold prior to maturity or if the issuer defaults on the security. Investors should request and review copies of Structured Products Pricing Supplements and Prospectuses prior to approving or directing an investment in these securities. Page 29 of 4043 U.S. Bank | Public Important disclosures (page 4 of 4) Mutual fund investing involves risk and principal loss is possible. Investing in certain funds involves special risks, such as those related to investments in small- and mid-capitalization stocks, foreign, debt and high-yield securities and funds that focus their investments in a particular industry. Please refer to the fund prospectus for additional details pertaining to these risks. An investment in money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although these funds seek to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in these funds. Holdings of First American Funds: U.S. Bancorp Asset Management, Inc. is a registered investment advisor and subsidiary of U.S. Bank National Association. U.S. Bank National Association is a separate entity and wholly owned subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not guarantee the products, performance or services of U.S. Bancorp Asset Management. U.S. Bancorp Asset Management, Inc. serves as an investment advisor to First American Funds. Holdings of Nuveen mutual funds: Firstar Capital Corporation (Firstar Capital), an affiliate of U.S. Bancorp, holds a less-than-10 percent ownership interest in Windy City Investments Holdings, LLC which was formerly the parent of Windy City Investment Inc. and the indirect parent of Nuveen Fund Advisors, LLC which is the investment advisor to the Nuveen Mutual Funds. On October 1, 2014, Windy City Investments, Inc. was sold to Teachers Insurance and Annuity Association of America. As a result of the sale, U.S. Bancorp no longer has an indirect ownership interest in Nuveen Fund Advisors, LLC. Depending on the outcome of certain factors, Firstar Capital might in the future receive an earn-out payment in respect of its interest in Windy City Investment Holdings, LLC, under the terms of the sale. Non- proprietary mutual funds: U.S. Bank may enter into agreements with other non-proprietary mutual funds or their service providers whereby U.S. Bank provides shareholder services and/or sub-transfer agency, custodial and other administrative support services and receives compensation for these services. Compensation received by U.S. Bank directly or indirectly from mutual funds does not increase fund fees and expenses beyond what is disclosed in the fund prospectuses. For more information, review the fund prospectus. Page 30 of 4044 U.S. Bank | Public Definitions of report and statement terms (page 1 of 5) Accredited Investor: Private placement securities generally require that investors be accredited due to the additional risks and speculative nature of the securities. For natural persons, the criteria is met by a net worth of more than $1 million (excluding primary residence) or an income of more than $200,000 individually ($300,000 jointly) for the two most recent years and a reasonable expectation for the same in the current year. For other entities, such as corporations, partnerships, trusts and employee benefit plans, the criteria is met with at least $5 million in assets. See full definition in Rule 501 of Regulation D under the Securities Act of 1933. Alpha: A measure of risk-adjusted performance. A statistic measuring that portion of a stock, fund or composite's total return attributable to specific or non-market risk. Alpha measures non-market return and indicates how much value has been added or lost. A positive Alpha indicates the fund or composite has performed better than its Beta would predict (i.e., the manager has added value above the benchmark). A negative Alpha indicates a fund or composite has underperformed given the composite's Beta. Alternative Investments: As used by U.S. Bank, an investment considered to be outside of the traditional asset classes of long-only stocks, bonds and cash. Examples of alternative investments include hedge funds, private equity, options and financial derivatives. Annualized Excess Return: Shows the difference between the annualized linked returns of a portfolio and the model benchmark. Performance reports provided annualize only periods greater than one year. Annualized or Annual Rate of Return: Represents the average annual change in the value of an investment over the periods indicated. Batting Average: Shows how consistently the portfolio return met or beat the market. Beta: A measure of your portfolio's risk relative to a benchmark. A portfolio with a beta of 1.5, for example, would be expected to return roughly 1.5 times the benchmark's return. A high Beta indicates a riskier portfolio. Bond Credit Rating: A grade given to bonds by a private independent rating service that indicates their credit quality. Ratings are the opinion of Standard & Poor's or other agencies as noted and not the opinion of U.S. Bank. Consumer Price Index (CPI): A measure of the average change in prices over time in a market basket of goods and services and is one of the most frequently used statistics for identifying periods of inflation and deflation. Convexity to Stated Maturity: A measure of the curvature in the relationship between bond prices and bond yields that demonstrates how the duration of a bond changes as the interest rate changes. Convexity is used as a risk-management tool and helps to measure and manage the amount of market risk to which a portfolio of bonds is exposed. This version of convexity measures the rate change in duration of a bond as the yield to (stated) maturity changes. Page 31 of 4045 U.S. Bank | Public Definitions of report and statement terms (page 2 of 5) Cost basis/book value: The original value of an asset at the time it was acquired. This is normally the purchase price or appraised value at the time of acquisition. This data is for information purposes only. Cumulative Excess Return: Shows the difference between the annualized linked returns of a portfolio and the model benchmark. Performance reports provided use unannualized returns in periods up to one year, but annualized returns for periods exceeding one year. Downside Capture: The downside capture ratio reflects how a portfolio compares to a benchmark during periods when the benchmark is down. A downside capture ratio of 0.80 (or 80 percent) means the portfolio has historically declined only 80 percent as much as the benchmark during down markets. Downside Deviation: The deviation of returns that fall below a minimum acceptable return (MAR). Although the numerator includes only returns below the MAR, the denominator includes all returns in the performance period. This risk statistic is similar to the downside standard deviation except the sum is restricted to returns less than the MAR instead of the mean. Downside Standard Deviation: The deviation of returns that fall below the mean return. Although the numerator includes only returns below the mean, the denominator includes all returns in the performance period. This risk statistic is similar to the downside deviation except the sum is restricted to returns less than the mean instead of the minimum acceptable return (MAR). Effective Maturity: The date of a bond’s most likely redemption, given current market conditions, taking into consideration the optional and mandatory calls, the optional, mandatory and recurring puts, and the stated maturity. Estimated annual income: The amount of income a particular asset is anticipated to earn over the period indicted. The shares multiplied by the annual income rate. Gain/loss calculation: If an asset was sold, the difference between the proceeds received from the sale compared to the cost of acquiring the asset. If the value of the proceeds is the higher of the two numbers, then a gain was realized. If the value of the proceeds is the lower of the two numbers, a loss was incurred. This data is for information purposes only. Information Ratio: The information ratio compares the average excess return of the portfolio over its associated benchmark divided by the tracking error. M-Squared: The hypothetical return of the portfolio after its risk has been adjusted to match a benchmark. Page 32 of 4046 U.S. Bank | Public Definitions of report and statement terms (page 3 of 5) Market Value: Publicly traded assets are valued using market quotations or valuation methods from financial industry services believed by us to be reliable. Assets, that are not publicly traded, may be reflected at values from other external sources or special valuations prepared by us. Assets for which a current value is not available may be reflected as not valued, at par value, or at a nominal value. Values shown do not necessarily reflect prices at which assets could have been bought or sold. Values are updated based on internal policy and may be updated less frequently than statement generation. Market Value Over Time: Many factors can impact the portfolio value over time, such as contributions to the account, distributions from the account, the investment of dividends and interest, the deduction of fees and expenses, and market performance. Modified Duration to Effective Maturity: A formula that expresses the measurable change in the value of a security in response to a change in interest rates. This version of Modified Duration takes into consideration a “horizon date/price” that is, given current conditions, the most likely redemption date/price using the set of calls/puts, as well as stated maturity. Modified Duration to Stated Maturity: A formula that expresses the measurable change in the value of a security in response to a change in interest rates. This version of Modified Duration uses stated maturity as the “horizon date/price” and ignores any potential call/put/pre- refunding, even if they are mandatory. Price/Earnings Ratio (P/E): The P/E ratio of a company is calculated by dividing the price of the company’s stock by its trailing 12-month earnings per share. A high P/E usually indicates that the market is paying a premium for current earnings because it believes in the firm’s ability to grow its earnings. A low P/E indicates the market has less confidence that the company’s earnings will increase. Within a portfolio, P/E is the weighted average of the price/earnings ratios of the stocks in the portfolio. Qualified Purchaser: Some private placement securities require that investors be Qualified Purchasers in addition to being Accredited Investors. For natural persons, the criteria is generally met when the client (individually or jointly) owns at least $5 million in investments. For other entities, such as corporations, partnerships, trusts and employee benefit plans, the criteria is met with at least $25 million in investments though there are other eligibility tests that may apply. See full definition in Section 2(a)(51) of the Investment Company Act of 1940. R-Squared: Measures the portion of the risk in your portfolio that can be attributed to the risk in the benchmark. Realized and Unrealized Gains/Losses: Are calculated for individual tax lots based on the records we have available. Some data may be incomplete or differ from what you are required to report on your tax return. Some data used in these calculations may have beenobtained from outside sources and cannot be verified by U.S. Bank. The data is intended for informational purposes only and should not be used for tax reporting purposes. Please consult with your tax or legal advisor for questions concerning your personal tax or financial situation. Page 33 of 4047 U.S. Bank | Public Definitions of report and statement terms (page 4 of 5) Residual Risk: The amount of risk specific to the assets in a portfolio distinct from the market, represented by a benchmark. Return: An indication of the past performance of your portfolio. Sharpe Ratio: Measures of risk-adjusted return that calculates the return per unit of risk, where risk is the Standard Deviation of your portfolio. A high Sharpe ratio indicates that the portfolio is benefiting from taking risk. Sortino Ratio: Intended to differentiate between good and bad volatility. Similar to the Sharpe ratio, except it uses downside deviation for the denominator instead of standard deviation, the use of which doesn't discriminate between up and down volatility. Spread: The difference between the yields of two bonds with differing credit ratings (most often, a corporate bond with a certain amount of risk is compared to a standard traditionally lower risk Treasury bond). The bond spread will show the additional yield that could be earned from a bond which has a higher risk. Standard Deviation: A measure of the volatility and risk of your portfolio. A low standard deviation indicates a portfolio with less volatile returns and therefore less inherent risk. Time-weighted Return: The method used to calculate performance. Time-weighted return calculates period by period returns that negates the effect of external cash flows. Returns for periods of greater than one year are reported as an annualized (annual) rate of return. Returns of less than one year are reported on a cumulative return basis. Cumulative return is the aggregate amount an investment has gained or lost over time, independent of the period involved. Tracking Error: A divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark. This is often in the context of a hedge or mutual fund that did not work as effectively as intended, creating an unexpected profit or loss instead. Traditional Investments: As used by U.S. Bank, an investment made in equity, fixed income or cash securities, mutual funds or exchange- traded funds (ETFs) where the investor buys at a price with the goal that the investment will go up in value. Top 10 Holdings: The 10 assets with the highest market values in the account. Total Portfolio Gross of Fees: Represents all assets included in the calculation of the portfolio, before the deduction of trust and asset management fees, and is inclusive of all applicable third-party security fees and expenses. Details of those fees and expenses are provided in the security’s prospectus or offering documents. Page 34 of 4048 U.S. Bank | Public Definitions of report and statement terms (page 5 of 5) Total Return: The rate of return that includes the realized and unrealized gains and losses plus income for the measurement period. Treynor Ratio: Measures the performance of a sector relative to risk by dividing the return of the sector in excess of the risk-free return by the sector's Beta. The higher the Treynor ratio, the better the return relative to risk. Turnover Percent: Indicates how frequently asset are bought and sold within a portfolio. Turnover Ratio: The percentage of a mutual fund’s or other investment vehicle's holdings that have been "turned over" or replaced with other holdings in a given year. Unrealized gain (loss)— The difference between the current market value (at the end of the statement period) and the cost to acquire the asset. If the current market value is higher than the cost, a gain is reflected. If the current market value is lower than the cost paid, a loss is reflected. This data is for information purposes only. Upside Capture: The upside capture ratio reflects how a portfolio compares to the selected model benchmark during periods when the benchmark is up. An upside capture ratio of 1.15 (or 115 percent) means the portfolio has historically beat the benchmark by 15 percent during up markets. Yield: The annual rate of return on an investment, expressed as a percentage. For bonds, it is the coupon rate divided by the market price. For stocks, it is the annual dividend divided by the market price. Page 35 of 4049 U.S. Bank | Public Frequently used indexes (page 1 of 5) Bloomberg Barclays 1-3 year U.S. Treasury Index: Measures the performance of the U.S. government bond market and includes public obligations of the U.S. Treasury with a maturity between one year and up to (but not including) three years. Bloomberg Barclays 1-5 year U.S. Treasury Index: Includes all publicly issued, U.S. Treasury securities that have a remaining maturity of greater than or equal to one year and less than five years, are rated investment grade and have $250 million or more of outstanding face value. The Bloomberg Barclays 1-5 year Municipal Index: Measures the performance of municipal bonds with time to maturity of more than one year and less than five years. Bloomberg Barclays 7-year Municipal Index: Includes municipal bonds with a minimum credit rating of Baa that have been issued as part of a transaction of at least $50 million, have a maturity value of at least $5 million and a maturity range of four to six years. Bloomberg Barclays Global Aggregate Index ex-U.S. Index: Measure of global investment grade debt from 24 local currency markets. This multi-currency benchmark includes Treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. Bloomberg Barclays Global Treasury ex-U.S. Index: Includes government bonds issued by investment-grade counties outside the United States, in local currencies, that have a remaining maturity of one year or more and are rated investment grade. Bloomberg Barclays High Yield Municipal Bond Index: An unmanaged index made up of bonds that are non-investment grade, unrated or below Ba1 bonds. Bloomberg Barclays Intermediate Aggregate Index: Consists of one- to 10-year governments, one- to 10-year corporate bonds, all mortgages and all asset-backed securities within the Aggregate Index. Bloomberg Barclays Mortgage-Backed Securities Index: Covers agency mortgage-backed pass-through securities (both fixed-rate and hybrid adjustable-rate mortgages) issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). Bloomberg Barclays U.S. Aggregate Bond Index: Measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Bloomberg Barclays U.S. Corporate Bond Index: Measures the investment grade, fixed-rate, taxable corporate bond market and includes U.S. dollar-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers. Page 36 of 4050 U.S. Bank | Public Frequently used indexes (page 2 of 5) Bloomberg Barclays U.S. Corporate High Yield Bond Index: Measures the U.S. dollar denominated, high yield, fixed-rate corporate bond market. Bloomberg Barclays U.S. Municipal Bond Index: Measures the investment grade, U.S. dollar-denominated, fixed tax-exempt bond market. The index includes state and local general obligation, revenue, insured and pre-refunded bonds. Bloomberg Barclays U.S. Treasury Index: Measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury. Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) Index: An unmanaged index includes all publicly issued, U.S. TIPS that have at least one year remaining to maturity, are rated investment grade, and have $250 million or more of outstanding facevalue. Cambridge U.S. Private Equity Index: This index is based on returns data compiled for U.S. private equity funds (including buyout, growth equity and mezzanine funds) that represent the majority of institutional capital raised by private equity partnerships formed since 1986. Returns may be delayed by up to six months. Quarterly performance is prorated based on the cube root for the months of the quarter. Citigroup 3-Month Treasury Bills: An unmanaged index and represents monthly return equivalents of yield averages of the last three-month Treasury Bill issues. Citigroup 6-Month Treasury Bills: An unmanaged index and represents monthly return equivalents of yield averages of the last six-month Treasury Bill issues. Credit Suisse Leverage Loan Index: Represents tradable, senior-secured, U.S. dollar-denominated non-investment grade loans. Dow Jones Industrial Average (DJIA): The price-weighted average of 30 significant U.S. stocks traded on the New York Stock Exchange and NASDAQ. The DJIA is the oldest and single most watched index in the world. Dow Jones Select REIT Index: Measures the performance of publicly traded REITs and REIT-like securities in the U.S. and is a proxy for direct real estate investment, in part by excluding companies whose performance may be driven by factors other than the value of real estate. HFRI Indices: The Hedge Fund Research, Inc. (HFRI) indexes are a series of benchmarks designed to reflect hedge fund industry performance by constructing composites of constituent funds, as reported by the hedge fund managers listed within the HFR Database. Page 37 of 4051 U.S. Bank | Public Frequently used indexes (page 3 of 5) HFRI Equity Hedge Total Index: Uses the HFR (Hedge Fund Research) database and consists only of equity hedge funds with a minimum of $50 million assets under management or a 12-month track record and that reported assets in U.S. dollars. HFRI Relative Value Fixed Income Corporate Index: Uses the HFR (Hedge Fund Research) database and consists of only relative value fixed income corporate funds with a minimum of $50 million assets under management or a 12-month track record and that reported assets in U.S. dollars. ICE BofAML 1-3 Year Corporate Index: Tracks U.S. dollar-denominated investment grade public debt issued in the U.S. bond market with maturities of one to three years. ICE BofAML 1-5 Year Corporate and Government Index: Tracks the performance of short-term U.S. investment grade government and corporate securities with maturities between one and five years. ICE BofAML U.S. 7-10 Year Index: Tracks the performance of U.S. dollar denominated investment grade rated corporate debt publicly issued in the U.S. domestic market and includes all securities with a remaining term to maturity of greater than or equal to seven years and less than 10 years. ICE BofAML Global Broad Market Index: Tracks the performance of investment grade public debt issued in the major domestic and Eurobond markets, including global bonds. ICE BofAML U.S. High Yield Master II Index: Commonly used benchmark index for high yield corporate bonds and measures the broad high yield market. J.P. Morgan Emerging Markets Bond Index Global (EMBI Global): Tracks total returns for traded external debt instruments in the emerging markets. London Interbank Offered Rate (LIBOR)3-months: The interest rate offered by a specific group of London banks for U.S. dollar deposits with a three-month maturity. London Interbank Offered Rate (LIBOR) 9-months:The interest rate offered by a specific group of London banks for U.S. dollar deposits with a nine-month maturity. MSCI All Country World Index (ACWI): Designed to measure the equity market performance of developed and emerging markets. Page 38 of 4052 U.S. Bank | Public Frequently used indexes (page 4 of 5) Russell 2000 Value Index: Measures companies in the Russell 2000 Index having lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index includes the 2,000 firms from the Russell 3000 Index with the smallest market capitalizations. Russell 3000 Index: Measures the performance of the 3,000 largest U.S. securities based on total market capitalization. Russell Midcap Index: Measures the 800 smallest companies in the Russell 3000 Index. Russell Midcap Growth Index: Measures companies in the Russell Midcap Index having higher price-to-book ratios and higher forecasted growth values. Russell Midcap Value Index: Measures companies in the Russell Midcap Index having lower price-to-book ratios and lower forecasted growth values. MSCI All County World ex-U.S. Index (ACWI, excluding United States): Tracks the performance of stocks representing developed and emerging markets around the world that collectively comprise most foreign stock markets. U.S. stocks are excluded from the index. MSCI EAFE Index: Includes approximately 1,000 companies representing the stock markets of 21 countries in Europe, Australasia and the Far East. MSCI Emerging Markets (EM) Index: Designed to measure equity market performance in global emerging markets. MSCI World Index: Tracks equity market performance of developed markets through individual country indices. NAREIT Index: Includes REITs (Real Estate Investment Trusts) listed on the New York Stock Exchange, NASDAQ and American Stock Exchange. NASDAQ Composite Index: A market capitalization-weighted average of roughly 5,000 stocks that are electronically traded in the NASDAQ market. NCREIF Property Index (NPI): Measures the investment performance of a very large pool of individual commercial real estate properties acquired in the private market for investment purposes only. Russell 1000 Index: Measures the performance of the 1,000 largest companies in the Russell 3000 Index and is representative of the U.S. large capitalization securities market. Page 39 of 4053 U.S. Bank | Public Frequently used indexes (page 5 of 5) Russell 1000 Growth Index: Measures companies in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. It includes the largest 1,000 firms in the Russell 3000 Index. Russell 1000 Value Index: Measures companies in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. It includes the largest 1,000 firms in the Russell 3000 Index. Russell 2000 Index: Measures the performance of the 2,000 smallest companies in the Russell 3000 Index and is representative of the U.S. small capitalization securities market. Russell 2000 Growth Index: Measures companies in the Russell 2000 Index having higher price-to-book ratios and higher forecasted growth values. and is representative of U.S. securities exhibiting growth characteristics. The Russell 2000 Index includes the 2,000 firms from the Russell 3000 Index with the smallest market capitalizations. S&P 500 Index: Consists of 500 widely traded stocks that are considered to represent the performance of the U.S. stock market. S&P Global ex-U.S. Property Index: Measures the investable universe of publicly traded property companies domiciled in developed and emerging markets excluding the United States. The companies included are engaged in real estate related activities such as property ownership, management, development, rental and investment. S&P GSCI: A composite index of commodity sector returns, representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities. S&P/Case-Shiller Home Price Indexes: A group of indexes that track changes in home prices throughout the United States. Case- Shiller produces indexes representing certain metropolitan statistical areas (MSA) as well as a national index. Swiss Re Global Cat Bond Total Return Index: Tracks the aggregate performance of all U.S. dollar-denominated euros and Japanese yen-denominated catastrophe bonds, capturing all ratings, perils and triggers. U.S. Dollar Index: Indicates the general international value of the U.S. dollar by averaging the exchange rates between the U.S. dollar and six major world currencies. Wilshire 5000 Index: Composed of more than 6,700 publicly-traded U.S. companies and is designed to track the overall performance of the American stock markets. Page 40 of 4054 CITY OF CUPERTINO Agenda Item 23-12259 Agenda Date: 4/24/2023 Agenda #: 3. ACTION ITEM Subject: Consider the Library Construction Audit Final Report Receive the Library Construction Audit Final Report and forward to City Council Presenter: Moss Adams 4:25(20) CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™55 Proprietary & Confidential FINAL REPORT City of Cupertino CUPERTINO LIBRARY EXPANSION PROJECT CONSTRUCTION AUDIT April 20, 2023 Moss Adams LLP 101 Second Street, Suite 900 San Francisco, CA 94105 (415) 956-1500 56 April 20, 2023 Pamela Wu City Manager, City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Dear Pamela: Thank you for the opportunity to perform the construction close-out audit for the Cupertino Library Expansion project. This report summarizes the results of our close-out audit and project controls review. This engagement was performed in accordance with the Standards for Consulting Services established by the American Institute of Certified Public Accountants. The scope of this engagement is outlined in the body of our report. This report was developed based on information from our review of construction projects and records. This report is intended solely for the use of the City of Cupertino, and may not be provided to, used, or relied upon by any third parties. Moss Adams LLP does not accept any responsibility to any other party to whom this report may be shown or into whose hands it may come. We appreciate the opportunity to help you continuously improve your construction program performance. Please do not hesitate to contact us if you have any questions or need further assistance regarding this important matter. Sincerely, Moss Adams LLP San Francisco, CA 57 Cupertino Library Expansion Project Construction Audit Report FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY Table of Contents Executive Summary 1 Objective and Scope 3 Project Overview 4 Detailed Observations and Recommendations 5 Appendix A: Skilled and Trained Workforce Documentation Controls 15 Appendix C: Payment Application Controls 17 58 Cupertino Library Expansion Project Construction Audit Report | 1 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY EXECUTIVE SUMMARY During the construction close-out audit of the City of Cupertino’s (the City) Cupertino Library Expansion (the Project), Moss Adams LLP (Moss Adams, we, our) identified $327 in questioned costs, as well as project control opportunities. Questioned costs are charges that are not allowable per the construction contract (the Contract) between the City and Rodan Builders, Inc. (the DBE). Overall, the results of the audit are consistent with a positive audit, with eight of the nine observations relating to recommendations surrounding improvements and enhancements to the City’s existing procedures and control environment to supported continued consistency amongst City Project Management personnel. As part of this audit, we also identified several good practices relating to the capital project, including: • Project management teams consist of experienced construction professionals. • Contractor project expenditures documentation was effectively sourced, maintained, and managed. • Strong collaboration and good working relationship among City and Contractor project management personnel was observed. The table below summarizes the questioned and unsupported costs identified during our review. Summary observations and future improvement opportunities have also been provided below. OBSERVATION NO. QUESTIONED AND UNSUPPORTED COSTS COSTS CHARGED 1 Questioned Non-Compliant Change Order, Foreman Rate $327 Total Questioned and Unsupported Amounts $327 1. Questioned Non-Compliant Change Order, Foreman Rate - The DBE charged the City for Foreman labor rates in excess of actual costs as determined by DBE payroll reports, resulting in $326.83 of questioned labor costs (see Observation No. 1 in the report body for further information). 2. Contract Compliance -Excessive Change Order Markups - The methodology implemented to revise the scope included within PCO 19R2 may have led to $5,853.75 of unnecessary DBE fee markups (see Observation No. 2 in the report body for further information). 3. Contract Compliance – Inadequate Skilled Labor Documentation Control - The DBE did not adequately report compliance with Skilled and Trained Workforce documentation requirements (see Observation No. 3 in the report body for further information). 4. Contract Compliance – Payment Application Controls - Select payment applications reviewed were not fully executed (see Observation No. 4 in the report body for further information). 5. Contract Compliance – Inadequate Lien Waiver Controls - The DBE’s support did not include a conditional lien waiver for one payment application reviewed (see Observation No. 5 in the report body for further information). 6. Contract Compliance – Inadequate Flow Down Provisions - The DBE did not include the prime contract flow down clause in its subcontracts (see Observation No. 6 in the report body for further information). 59 Cupertino Library Expansion Project Construction Audit Report | 2 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY 7. Contract Compliance Design-Builder (DBE) Self-Performed Change Order Delivery Method - The DBE did not sufficiently substantiate it’s self-performed costs in its requests for extra work, resulting in $14,681.67 of unsupported costs (see Observation No. 7 in the report body for further information). 8. Contract Compliance – Inadequate Drawing Rights Secured Confirmation - The DBE did not provide the City with evidence of right of use for the Project’s design (see Observation No. 8 in the report body for further information). 9. Contract Compliance – Incorrect Payment Application Calculations - The DBE included a calculation error as part of Design Application No. 8D (see Observation No. 9 in the report body for further information). Contract Type and Cost of Work Definitions Process Improvement: On future projects of this size, or larger, the City should continue to evaluate the City’s ability to use a Guaranteed Maximum Price (GMP) contract type with a right-to-audit clauses with strong cost of work definitions for cost types such as labor, equipment, direct cost, materials, insurance markups and fees to support the City with budget management and cost control on major capital projects. Deductive Change Order Markups Process Improvement: The City’s prime contract does not appear to allow the City to recuperate the full cost benefit of deductive change orders. Contract Article 6.3 states, “Time and materials compensation for increased costs or Extra Work (but not decreased costs or deleted Work), will include allowed markup for overhead, profit, and other indirect costs.” Several instances were observed where deductive change orders did not include the associated deduction in fees and markups as stipulated in the Contract. However, allowing the City to recover markups on reduced scopes would be beneficial to the project and the City. Project Oversight Process Improvement: The City’s agreement with Griffin Structures, the City’s Representative, was executed in late October 2020, while the first application for payment from the DBE was submitted at the end of September 2020. The City should continue to evaluate adequate staffing levels on other projects and engaging representatives early enough to ensure appropriate levels of skills and expertise are available to successful guide a project during the critical early phases. 60 Cupertino Library Expansion Project Construction Audit Report | 3 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY OBJECTIVE AND SCOPE The primary focus of the close-out construction cost audit was to evaluate construction controls for the Project to determine their reasonableness and adherence to the terms of the construction contract. This report reflects practices observed and cost documentation reviewed through July 31, 2022. As part of the construction audit, we performed the following procedures: • Reviewed payment documentation and calculations to assess the adequacy of supporting documentation for the DBE • Assessed internal controls surrounding the DBE’s and City’s processes • Reviewed Contract terms and identified areas not properly implemented • Reviewed Contract terms and identified areas of potential improvements • Reviewed select subcontractor agreements for compliance with prime contract requirements • Analyzed change orders including markup testing • Reviewed lien release and insurance documentation • Reviewed skilled workforce requirement documentation • Performed other miscellaneous testing procedures as necessary • Conducted interviews as necessary • Reviewed the DBE’s and subcontractors’ Certificates of Insurance • Checked subcontractors’ state licenses 61 Cupertino Library Expansion Project Construction Audit Report | 4 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY PROJECT OVERVIEW We performed this review using the most current contractor payment application, which was Construction Phase Payment Application No. 15C through July 31, 2022. The following table provides a summary of the Project billing and costs reviewed as part of the audit: PAYMENT APPLICATION SERIES CONTRACT AMOUNT AMOUNT BILLED PERCENTAGE COMPLETE COST REVIEWED THROUGH Design Phase $648,014.55 $648,014.55 100% 6/30/2021 Construction Phase $6,314,069.67 $6,314,069.67 100% 7/31/2022 Total $6,962,084.22 $6,962,084.22 100% 7/31/2022 62 Cupertino Library Expansion Project Construction Audit Report | 5 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY DETAILED OBSERVATIONS AND RECOMMENDATIONS This section provides the details of our observations, risks, and recommendations as well as City responses. The following audit observations have been ranked as high, medium, or low priority based upon our analysis and experience with respect to probability and potential impact on the construction project costs, schedule, and scope goals. 1 Questioned Non-Compliant Change Order, Foreman Rate MEDIUM - HIGH RISK The DBE charged the City for Foreman labor rates in excess of actual costs as determined by DBE payroll reports, resulting in $326.83 of questioned labor costs. We reviewed change orders 01 through 08 totaling $485,916.22. Based on our review, we observed two instances where labor rates did not align with DBE payroll reports provided. Article 6.3.C.1 of the Contract states the allowable labor cost on change orders is, “15% for overhead and profit.” The table below summarizes the labor billings and excess charges: Potential Change Order (PCO)/ Owner Change Order (OCO) Description Labor Billing Rate Labor Cost Rate per Labor Reporting Labor Billing Rate vs Cost Rate Variance PCO 09/06 8 Foreman labor hours $119/hr $99/hr $20/hr PCO 10/07 6 Foreman labor hours $119/hr $99/hr $20/hr Subtotal $280.00 Self-Performed Mark-up at 15% $42.00 Bond Mark-up at 1.5% $4.83 Total 14 labor hours $326.83 Per additional inquiry with the contractor, “it appears our superintendent mis-labeled on of our employees as a foreman on the T&M tags.”; no additional documentation is available. Absent further clarification or documentation to support the excessive labor rate, we are unable to confirm the appropriateness of the overbilled amount, resulting in questioned billings in excess of actual costs incurred totaling $326.83. 63 Cupertino Library Expansion Project Construction Audit Report | 6 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY Recommendation The City should implement change order management controls to prevent charging change order labor rates in excess of contractually allowable amounts, as required by the Contract terms. The City should consider seeking credit for excess labor charges. Contractor Response I do not have any additional documentation to provide. It appears our superintendent mis-labeled one of our employees as a foreman on the T&M tags. City Response The City will consider change order cost management controls that align with the City’s assessment of risk. 2 Contract Compliance – Excessive Change Order Markups MEDIUM - HIGH RISK The methodology implemented by the DBE to revise the scope as included within PCO 19R2 may have led to unnecessary DBE fee markups. In summary, when calculating PCO 19R2, the DBE credited the original budget of $35,000 without returning DBE markups (as allowed by Article 6.3 for decreased costs or deleted work) and applied DBE markups on the full value of added scope, not the net difference, resulting in the DBE collecting a fee on both the original $35,000 budget as well as the added scope totaling $5,853.75 summarized in the table below: Original Budget for Donor Wall Markups $35,000.00 - Self-Performed Markup Rate of 15% - $5,250.00 Bond and Insurance Rate of 1.5% - $603.75 Total $5,853.75 The original project budget included $35,000 for the “Donor Wall,” which was increased as part of OCO No. 7 (PCO 20R1) to $81,283.37 of DBE self- performed work costs. Also included within OCO No. 7 (PCO 19R2) was an “Art Wall” in the amount of $66,559.65 (self-performed work costs only). In moving forward with both the “Art Wall” and the “Donor Wall” at the change order values, the DBE elected to no longer utilize the $35,000 initial budget for the “Donor Wall” and credited this amount within PCO 19R2. Due to contract Article 6.3, the DBE was able to keep all fee and all associated markups, though the initial $35,000 budget for the “Donor Wall” was fully credited within PCO 19R2. In addition to earning these markups on deleted work, the DBE was able to earn markups on the added change order budgets for both the new value of the “Donor Wall” ($81,283.37) and the “Art Wall” ($66,559.65). Implementing a methodology where deleted scopes of work do not proportionately affect the DBE’s markups has allowed them to decrease the budget and re-add the same scope at a higher value; affording them the opportunity to make fee and markups in both instances. 64 Cupertino Library Expansion Project Construction Audit Report | 7 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY In the future, the net effect of changes should be subject to fee. If that had been the case for this Project, the City would have avoided paying the DBE $5,853.75 in fees, bonds, and insurance markups. Recommendation The City should review change order management controls and associated contract language to prevent incurring excessive fee markups. The City should consider whether it is worthwhile to pursue cost recovery of markups associated with the PCOs identified. Contractor Response n/a City Response The contractor and the City provided consistent information on how the change order process worked. The City understands that the change order process was not clear to the auditor after the fact and will explore options for revision. The change orders expenses were in alignment with the agreement between the contractor and the City and thus no additional exchange of funds is warranted. 3 Contract Compliance – Skilled Labor Documentation Control MEDIUM RISK The DBE did not adequately report compliance with Skilled and Trained Workforce documentation requirements. Contract Article 8.3(A)2 states, “The application for payment for Construction Services must also include the monthly report documenting compliance with the Skilled and Trained Workforce requirements pursuant to Public Contract Code§ 2602, and as specified In Section 9.6.” Furthermore, Article 6.4 states, “Services on the Project that fall within an apprenticeable occupations in the building and construction trades, in accordance with Public Contract Code§ 2600 et seq. DBE, members of the Design-Build Team providing Construction Services, and Subcontractors of every tier will comply with these requirements. DBE will provide City with a monthly report while the Project is being constructed evidencing that the DBE, its Design-Build Team (as applicable).” The audit team requested the Skilled and Trained Workforce documentation from the DBE multiple times; the DBE provided two certificates. One certificate was associated with Payment Application No. 15C (July 2022) and another undated one was not directly associated with a payment application. Per inquiry with the DBE, no additional documentation was available. See Appendix A for a listing of payment application Skilled and Trained Workforce documentation received. Absent further documentation from the DBE, it is unclear if Skilled and Trained Workforce documentation was provided during the course of construction as required per state law. 65 Cupertino Library Expansion Project Construction Audit Report | 8 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY Recommendation The DBE should implement billing controls to ensure adequate skilled labor documentation, as required by the Contract terms. For example, the City should ensure that all Skilled and Trained Workforce documentation is consistently reported in the monthly application for payment with the appropriate level of detail required to ensure compliance with Public Contract Code. Compliance with this requirement should be tracked by the City and Project Management for compliance. Contractor Response I do not have any additional documentation to provide. City Response The CIP practice is that the City PM confirms that the certified payroll has been submitted to DIR; and they request/file the monthly certified payroll record throughout the life of the project. We will confirm that this practice is implemented consistently across the CIP construction projects. 4 Contract Compliance – Select payment applications reviewed were not fully executed MEDIUM RISK During our review of payment applications, we identified some payment applications were not fully executed. Contract Article 8.3 states, “DBE will submit to the Project Manager for approval, a monthly application for payment for Work performed.” Per inquiry with the DBE, no additional documentation is available. The following table summarizes the three instances where payment application approvals were deficient (see Appendix B for a listing of payment application execution statuses): Project Phase Payment Application Number DBE Signature Provided as Required? Griffin Structures’ Signature as Required? Design 1 N N [1] Design 2 N Y Design 3 N Y [1] It appears that the payment application was submitted prior to Griffin Structures’ agreement with the City being in place. Recommendation The DBE should implement billing controls to ensure adequate sign-offs, as required by the Contract terms. The City and its project managers should require the DBE to fully execute all payment applications prior to submission. Contractor Response I do not have any additional documentation to provide. 66 Cupertino Library Expansion Project Construction Audit Report | 9 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY City Response The City will ensure all future payment applications are fully executed. 5 Contract Compliance – Inadequate Conditional Waiver Controls MEDIUM RISK During our review of the DBE’s payment applications, we were unable to identify a conditional waiver for one payment application. Per inquiry with the DBE, no additional conditional waiver documentation is available. Contract Article 8.3(A)2 states, If requested by the Project Manager, each application for payment for Construction Services must also be accompanied by an executed Conditional Waiver and Release Upon Progress Payment, using the form specified in Civil Code 8132 for each Subcontractor that performed Work during the period covered by that application.” Conditional waivers from general contractors (or in this case, the DBE) can be an important tool because they provide proof that the contractor has been paid for their work on a construction project and can afford to pay their subcontractors and suppliers in a timely manner. By signing a conditional waiver, the contractor is releasing their right to file a mechanics lien against the property if they have not been fully compensated for their services. This helps to reduce the risk of financial disputes between the property owner and the contractor, and ensures that all parties involved are protected. While public capital projects may be subject to a different method of claim remedy, requiring conditional waivers with each payment application is a best practice even when the project is public works. Additionally, 32 of the 45 conditional waivers reviewed were executed by the Project Engineer while the balance was executed by either the Project Manager or the CFO. The contract does not state which persons have the responsibility to act on behalf on the DBE, and it is unclear if the Project Engineer would have the authority to act on behalf of the DBE. Recommendation As a best practice and consistent with contractual language, the DBE should obtain and provide to the City conditional waivers from each subcontractor and material supplier once payment is made to support the City ensuring all parties are being paid timely and there are payment issues which may be an indicator of performance issues. At the end of a subcontractor’s work, or at the Project’s completion, conditional waivers for all subcontractors should be obtained to validate full payment for performance of the Contract and mitigate potential exposures for the City. Additionally, the City should consider updating policies and procedures to develop a methodology with project management personnel to determine which subcontractors are required to provide conditional waivers based on initial subcontracting plan including attributes such as contract size and or scope complexity. Contractor Response I do not have any additional documentation to provide. City Response The City assumes that the auditor is using “lien waiver” as a shorthand for the conditional waiver and release upon payment which is authorized under Civil Code section 8132 (since mechanics liens do not apply to public property). Section 8.3(A)(2) of the General Conditions authorizes but does not require the project manager to request that each 67 Cupertino Library Expansion Project Construction Audit Report | 10 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY application for a progress payment be accompanied by a Conditional Waiver and Release Upon Progress Payment. Unconditional waiver and releases are similarly addressed in Section 8.3(B)(2). 6 Contract Compliance – Flow Down Contract Provisions Not Included in Subcontracts LOW - MEDIUM RISK Based on our review of the sample subcontracts, the DBE did not include the prime contract flow down clause in its subcontracts. Contract Article 2.5.B states, “Subcontractor to be bound to the provisions of the Contract Documents as they apply to the Subcontractor’s portion(s) of the Work, and to likewise bind their subcontractors or suppliers.” The audit team sampled the mechanical, electrical, and plumbing subcontracts and of the three subcontracts. None of the subcontracts appeared to have language tying vendors to these prime contract obligations. The following table summarizes the documents reviewed: Subcontractor Identified DBE Document Reviewed Flow Down Clause Identified? Auditor Methodology Notes Environmental Systems Inc. ‘20-1110 _Work Authorization_ESI_HVAC’ N Document appears to be the scope of work for the subcontract, but did not include the contractual flow down provision requirement. Atlas Pellizzari ‘20-1110 _Work Authorization_Atlas’ N Document appears to be the scope of work for the subcontract, but did not include the contractual flow down provision requirement. Environmental Systems Inc. ‘20-1110 _Work Authorization_ESI_Plumbing-_R 1’ N Document appears to be the scope of work for the subcontract, but did not include the contractual flow down provision requirement. ‘SubPack WITH EXHIBITS’ N Document appears to be the typical exhibits package to accompany a subcontractor’s scope of work, but did not include the contractual flow down provision requirement. Additionally, in its subcontracts, the DBE did not include the required language as mandated by Exhibit A-A, Shelter In Place and Social Distancing Requirements, which states, “Contractor shall include the terms of this Exhibit in all subcontracts and require any agents, subcontractors, or subconsultants to comply with its provisions.” However, our review of the DBE's typical subcontract exhibits and scope of work did not provide evidence of Covid-19 safety exhibits. It is important to confirm the inclusion of this exhibit to ensure that proper safety measures are being implemented on the Project site. 68 Cupertino Library Expansion Project Construction Audit Report | 11 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY In prime construction contracts, flow down clauses are crucial because they outline the duties and obligations of the parties participating in a project. These clauses ensure subcontractors and suppliers are subject to the terms and conditions of the prime contract. Flow down clauses frequently contain stipulations relating to payment terms, insurance conditions, special warranty requirements (Article 11.2.D page 73), special safety requirements, and dispute-resolution processes. These clauses make sure that suppliers and subcontractors are adhering to the requirements of the prime contract and are aware of their responsibilities not only to the contractor but also to the client. Though the DBE bears the risk by not including the flow down clause, in the event of a dispute, the responsible subcontractor party would be obligated to engage and bear the cost of their non- compliance, leading to better outcomes for the City and DBE. Recommendation The City should consider implementing contract administration controls to ensure flow down contract provisions, are included within contracts, as required by the Contract terms. For example, the City should request a copy of a typical subcontract agreement template ahead of the DBE’s buyout process to confirm compliance with flow down requirements. For subcontracts already executed, the DBE could issue subcontract change orders modifying the subcontract agreement terms and conditions. Contractor Response n/a City Response The City will consider the recommendation to request a subcontract agreement template. 7 Contract Compliance Self-Performed Work Change Order Delivery Method LOW - MEDIUM RISK During our review of self-performed work change orders, we were unable to identify the change order delivery method (i.e. lump sum, T&M, etc.). Per Article 6.3 of the contract, adjustments to contract price, “The amount of any increase or decrease in the Contract Price will be determined based on one of the following methods, listed below in eh order listed with unit pricing taking precedence over the other methods… (A) Unit Pricing… (B) Lump Sum… (C) Time and Materials…” Upon enquiry with the DBE, they responded that change orders were intended to be lump sum and not T&M, meaning costs were not specifically tracked in a method to easily provide itemized cost documentation. The change order forms observed on the project did not explicitly make reference to the change order delivery method (T&M, Lump Sum, or other). It has been observed that self-performed labor scopes were not identified as lump sum values, and some of the charges lack the necessary level of substantiation. Within each extra work detail breakdown provided, we often observed lines identified as Lump Sum (LS) as well as lines indicating Time and Material (T&M) charges. These charges may be reasonable and warranted for the proper completion of the scope, but do not meet the Contract requirements for supporting documentation. Based on several requests throughout the audit, we were unable to obtain the requested substantiation documentation. Recommendation The City should evaluate the T&M and allowance use within the change orders identified for cost substantiation and reasonableness as required by the Contract. The City should consider developing change order forms and update as needed to include information such as change type (e.g., cost plus not to exceed, T&M, lump sum, unit price, etc.), 69 Cupertino Library Expansion Project Construction Audit Report | 12 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY itemized change amounts, percentages, descriptions, change responsibilities, schedule impacts, dates of approval, subtotals, and totals to enhance internal change order controls and to support contract compliance. Contractor Response In general, I’m not going to be able to provide the backup you’re looking for in regards to small tools. Our superintendents order tools as needed, and as you can see from the attached invoice for example it’s extremely difficult, if not impossible, to allocate those costs perfectly per Change Order. Because of this, we use a percentage of labor costs to cover small tools expense. PCO 10 – see invoices for rented excavator & rented chipping hammer. All other equipment was Rodan owned, not rentals. PCO 19 – this was a lump sum PCO, so I do not have the invoice off hand. Attached is an invoice example of our cost for boom lift rental. PCO 20 – this was a lump sum PCO, so I do not have the invoice off hand. PCO 23 – this was a lump sum PCO, so I do not have the invoice off hand. Attached s an invoice example of our cost for concrete disposal (not including trucking to/from dump). I’m not sure if the attached concrete invoice is for this scope, but it has similar yardage to what was estimated. PCO 25 – this was a lump sum PCO. No plants were ever specified or purchased, so no backup available. PCO 27 – this was a lump sum PCO. No plants were ever specified or purchased, so no backup available. PCO 29 – this was a lump sum PCO, so I do not have the invoice off hand. PCO 30 – this was a lump sum PCO, so I do not have the invoice off hand. PCO 32 – this was a lump sum PCO, so I do not have the invoice off hand. City Response The City will consider this recommendation; the City’s current Change Order form contains many of these items. 70 Cupertino Library Expansion Project Construction Audit Report | 13 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY 8 Contract Compliance – Drawing Rights Secured Confirmation LOW - MEDIUM RISK The DBE did not provide the City with evidence of right of use for the Project’s design. Contract Article 2.3.D.4 states, regarding the Ownership of Design Documents, “DBE will obtain from its Subcontractors and Subconsultants rights and rights of use that correspond to the rights given by DBE to City in this Contract and DBE must provide evidence that such rights have been secured.” In a construction project, the right of use is typically granted to the owner or contractor, who has the legal right to access and use and reproduce the design drawings, specifications, and other documents related to the project. The right of use agreement typically outlines the responsibilities and obligations of the parties involved and specifies the conditions under which the design documents can be used. The right of use helps to protect the intellectual property rights of the designers and engineers who created the design documents. Without clear definitions of the right of use, disputes over ownership and control of the design documents could arise. Having the right to use the drawings also allows the City to freely use plans and renderings for marketing purposes without infringing on the intellectual property rights of the architect or other parties who created the drawings. Upon request, the DBE provided correspondence between itself and the Project’s architect stating that such rights would have been implied with the executed design agreements; however, there was no proof that the City was provided with such confirmation as required by the contract. Recommendation The City should consider including more specific contract language regarding the right of use and ensuring that all parties involved in the Project’s design understand their responsibilities regarding their design documents. If deemed necessary at this point in the Project, the City should request that the DBE obtain the necessary documentation from its subcontractors and subconsultants to secure the rights of use for the City. Contractor Response n/a City Response Section 2.3(D) of the General Conditions broadly confers that all ownership rights, including copyrights and possessory rights, in the Design Documents (as defined) as well as additional documents accrue to the City: “DBE is deemed to have conveyed the copyright in any Design Documents (at any stage of development), Shop Drawings, as-builts, or other documents (in paper or electronic form) developed by DBE for the Project, and City will retain all rights to such works, including the right to possession.” Section 2.5(B) of the General Conditions further provides that all Subcontractors (as defined) must be bound to all applicable provisions in the Contract Documents (as defined). Provided that each subcontract includes a provision to that effect, it is not necessary to itemize each provision in order to legally bind the Subcontractors to the provisions of Section 2.3(D) (or other provisions of the Contract Documents), particularly if the Contract Documents are incorporated by reference into the subcontracts. 71 Cupertino Library Expansion Project Construction Audit Report | 14 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY 9 Contract Compliance – Incorrect Payment Application Calculations LOW RISK The DBE included a calculation error as part of Design Phase Application No. 8D. The DBE modified the G702 Original Contract Sum to include the original contract value plus the value of contract change order (CCO) #01. The CCO #01 value was also appropriately included on the “net by change orders” line of the G702, which resulted in duplicated contract sum/budget on the payment application. This appears to have been noted by the City as part of its review process but the payment application was not revised before the City finalized and processed. The error does not appear to have led to an overbilling of the Contract. The following table summarizes the variance in Design Phase Application No. 8D: G703 Line Value Note 1. ORIGINAL CONTRACT SUM $648,014.55 Value for CCO #01 is inaccurately included here. The original contract amount per the Contract is $645,000. 2. Net change by Change Orders $3,014.55 The accurate value for CCO#01. 3. CONTRACT SUM TO DATE (LINE 1 + 2) $651,029.10 The contract sum is inaccurate due to the double-counting of CCO #01 in both lines 1 and 2 above. 4. TOTAL COMPLETED & STORED TO DATE $648,014.55 Correct value Recommendation Billing controls should be implemented to ensure accurate calculations within payment application submissions, as required by the Contract terms payment applications with material calculation errors should be revised prior to finalization and processing to avoid overbillings and overpayment. Contractor Response n/a City Response The City will consider the recommendation. 72 Cupertino Library Expansion Project Construction Audit Report | 15 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY APPENDIX A: SKILLED AND TRAINED WORKFORCE DOCUMENTATION CONTROLS The following table indicates the Skilled and Trained Workforce documentation received (Y) and missing (N) (see Observation No. 3 for more detail): PHASE PAYMENT APPLICATION NUMBER SKILLED AND TRAINED WORKFORCE DOCUMENTATION Design 1 N Design 2 N Design 3 N Design 4 N Design 5 N Design 6 N Design 7 N Design 8 N Construction 1 N Construction 2 N Construction 3 N Construction 4 N Construction 5 N 73 Cupertino Library Expansion Project Construction Audit Report | 16 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY PHASE PAYMENT APPLICATION NUMBER SKILLED AND TRAINED WORKFORCE DOCUMENTATION Construction 6 N Construction 7 N Construction 8 N Construction 9 N Construction 10 N Construction 11 N Construction 12 N Construction 13 N Construction 14 N Construction 15 Y 74 Cupertino Library Expansion Project Construction Audit Report | 17 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY APPENDIX C: PAYMENT APPLICATION CONTROLS The following table summarizes the payment application approval statuses per Project phase (see Observation No. 4 for additional detail). PROJECT PHASE PAYMENT APPLICATION NUMBER DBE SIGNATURE PROVIDED AS REQUIRED? GRIFFIN STRUCTURES SIGNATURE AS REQUIRED? Design 1 N N [1] Design 2 N Y Design 3 N Y Design 4 Y Y Design 5 Y Y Design 6 Y Y Design 7 Y Y Design 8 Y Y Construction 1 Y Y Construction 2 Y Y Construction 3 Y Y Construction 4 Y Y Construction 5 Y Y Construction 6 Y Y Construction 7 Y Y 75 Cupertino Library Expansion Project Construction Audit Report | 18 FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY PROJECT PHASE PAYMENT APPLICATION NUMBER DBE SIGNATURE PROVIDED AS REQUIRED? GRIFFIN STRUCTURES SIGNATURE AS REQUIRED? Construction 8 Y Y Construction 9 Y Y Construction 10 Y Y Construction 11 Y Y Construction 12 Y Y Construction 13 Y Y Construction 14 Y Y [1] It appears that the payment application was submitted prior to Griffin Structures’ agreement with the City being in place and executed. 76 77 CITY OF CUPERTINO Agenda Item 23-12260 Agenda Date: 4/24/2023 Agenda #: 4. INFORMATIONAL ITEM Subject: Consider the Internal Audit Status Report and Fraud, Waste, and Abuse Program Update Receive the Internal Audit Status Report and Fraud, Waste, and Abuse Program Update Presenter: Moss Adams 4:45(10) CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™78 April 17, 2023 To: City of Cupertino Audit Subcommittee From: Moss Adams LLP Subject: Internal Audit Status Report February 21 through April 17, 2023 _____ FY22 -23 INTERNAL AUDIT PROGRAM LIBRARY CONSTRUCTION AUDIT ENTERPRISE LEADERSHIP EFFECTIVENESS STUDY POLICY REVIEW ONGOING SUPPORT ONGOING INTERNAL AUDIT SERVICES Objective Perform audit of library construction to review reporting, project accounting consistency controls, and related construction controls; identify non-compliant project charges and change orders and control improvement opportunities. Assess the effectiveness of the City’s management and governance collaboration framework and provide recommendations to strengthen and streamline procedures to align with best practices for municipal leadership. As the City updates and develops draft financial policies based on the prioritized inventory, review drafts and provide recommendations to align policies with best practice. Link to May 2022 Audit Committee agenda and report containing prioritized fiscal policy inventory. Attend Audit Committee and Council meetings; prepare status reports, manage internal audit program, and prepare FY 23-24 internal audit plan. Schedule November 2022 through February 2023 April through July 2023 July 2022 through June 2023 July 2022 through June 2023 Activities for This Period Completed analysis, developed draft and final reports. Kicked off product, submitted document request, received and reviewed documents, began interview scheduling. The City has re-updated the following drafts after we provided our initial questions and comments. We re- reviewed the following policies and sent back the following to the City: ● Accounts Payable ● Revenue and Accounts Receivable ● Budgeting ● Capital Assets ● Cash Handling ● Credit Cards ● Grants Management Received 4 FWA hotline reports, see information below. Activities for Next Period None Conduct fieldwork, conduct interviews and best practice research, perform analysis, and develop draft report. Continue to review draft policies and procedures at the request of the City. Continue to monitor FWA hotline and provide ongoing support to City. Issues None None None None FRAUD, WASTE, AND ABUSE HOTLINE STATISTICS Complaint Type Complaints Received This Quarter Under Review Referred to Appropriate City Official(s) Closed Compliance & Ethics 2 0 1 1 Fraud 0 0 0 0 Employment Matters 2 0 0 2 79 CITY OF CUPERTINO Agenda Item 23-12261 Agenda Date: 4/24/2023 Agenda #: 5. ACTION ITEM Subject: Consider the Treasurer's Investment Report for the Quarter Ending March 31, 2023 Receive the Treasurer's Investment Report for the Quarter Ending March 31, 2023 and recommend filing with City Council Presenter: Thomas Leung, Budget Manager, and Chandler Asset Management 4:55(20) CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™80 AUDIT COMMITTEE STAFF REPORT Meeting: April 24, 2023 Subject Consider the Treasurer's Investment Report for the Quarter Ending March 31, 2023 Recommended Action Receive the Treasurer's Investment Report for the Quarter Ending March 31, 2023 and recommend filing with City Council Reasons for Recommendation Background On May 19, 2022, the City Council approved the City Investment Policy. Per the City's Investment Policy, the Treasurer shall submit a quarterly investment report to the City Council approximately 45 days following the end of the quarter. In addition to the quarterly investment reports, monthly transaction reports are submitted to the City Council within 30 days of the end of the reporting period per California Government Code Section 53607. The quarterly investment report offers a more extensive discussion of the City's economy, cash flow, and investments. The City's Municipal Code Section 2.24.050 Investment Authority states that the Treasurer shall make a monthly report of all investment transactions to the City Council. Lastly, the City's Municipal Code Section 2.88.100 Duties–Powers–Responsibilities lists one of the powers and functions of the Audit Committee is "to review the monthly Treasurer's report." Per the referenced code provisions, a Treasurer's Investment Report shall be submitted to the Audit Committee and City Council every month. Treasurer's Investment Report The report provides an update on the City's investment portfolio for the month ending March 31, 2023. The report is as of April 19, 2023. The attached statements include balances and transactions of the City's investments with the Local Agency Investment Fund (LAIF) and Chandler Asset Management. The Chandler investment report provides information on the investment type, issuer, 81 2 purchase date, maturity date, cost value, par value, and market value for each security, as well as the weighted average maturity and weighted average yield of all investments. While not governed by the City's Investment Policy, statements for the Public Agency Retirement Services (PARS) Section 115 Trusts are also attached per a request from the Treasurer's Report sub-committee. The City's General Ledger cash and investments balance was $227.6 million, a $7.5 million increase from the prior quarter. Cash and Investments – General Ledger Balance Fund Type Quarter Ending December 31, 2022 Quarter Ending March 31, 2023 General Fund 115,442,515 122,552,380 Special Revenue 42,733,978 43,420,733 Debt Service 2,322,250 2,322,250 Capital Projects 39,211,578 38,602,793 Enterprise 11,711,735 11,700,833 Internal Service 9,609,945 8,979,838 Total $221,031,999 $227,578,827 82 3 The $227.6 million in cash and investments includes $39.4 million in cash, $21.2 million in cash equivalents, $149.7 million in investments, and $17.2 million restricted for funding pension costs. The City pools cash for all funds except restricted funds. However, the City accounts for interest earnings, revenues, and expenditures separately for each fund to adequately meet the purpose and restrictions of each funding source. Pooling funds is a common and appropriate practice used in public agencies. By pooling funds, the City can benefit from economies of scale, diversification, liquidity, and ease of administration. 83 4 Cash and Investments – General Ledger Balance Quarter Ending December 31, 2022 Quarter Ending March 31, 2023 % of Portfolio Cash in banks and on hand Operating Checking (Wells Fargo) 32,900,568 39,338,553 17% Workers' Compensation Checking (Wells Fargo) 31,453 29,999 0% Payroll Checking (Wells Fargo) - - 0% Restricted for Bond Repayments1 (BNY Mellon) - - 0% Petty Cash and Change 5,000 4,700 0% Cash Equivalents Local Agency Investment Fund 21,131,545 21,242,141 9% Investments Investments (Chandler) 149,723,383 149,723,383 66% Restricted for Pension2 (PARS) 17,240,051 17,240,051 8% Total Cash and Investments3 $221,031,999 $227,578,827 100% 1 Cash held by fiscal agent for bond repayments 2 In accordance with GASB 67/68, the assets in the Section 115 Pension Trust are reported as restricted cash and investments in the General Fund. The assets can only be used to fund CalPERS costs. 3 Assets in the Section 115 OPEB Trust are excluded as the City cannot use these assets to fund its own operations. The assets are held in trust for retirees' post-employment health benefits. The table below shows the bank balances for the City's cash and investments. Bank and General Ledger balances differ due to timing. Bank balances do not include outstanding checks and deposits in transit. The General Ledger is updated quarterly with interest earnings and annually with the year-end investment market values. Cash and Investments – Bank Balance Quarter Ending December 31, 2022 Quarter Ending March 31, 2023 % of Portfolio Cash in banks and on hand Operating Checking (Wells Fargo) 33,821,218 39,553,713 17% Workers' Compensation Checking (Wells Fargo) 33,538 31,312 0% Payroll Checking (Wells Fargo) - - 0% Restricted for Bond Repayments1 (BNY Mellon) 8,333 - 0% Cash Equivalents Local Agency Investment Fund 21,170,973 21,281,569 9% Investments Investments (Chandler) 147,282,846 149,670,106 65% Restricted for Pension2 (PARS) 17,395,501 18,329,961 8% Total Cash and Investments3 $219,712,409 $228,866,661 100% 84 5 1 Cash held by fiscal agent for bond repayments 2 In accordance with GASB 67/68, the assets in the Section 115 Pension Trust are reported as restricted cash and investments in the General Fund. The assets can only be used to fund CalPERS costs. 3 Assets in the Section 115 OPEB Trust are excluded as the City cannot use these assets to fund its own operations. The assets are held in trust for retirees' post-employment health benefits. Local Agency Investment Fund (LAIF) LAIF is an investment pool administered by the State of California Treasurer and governed by California Government Code. The City can withdraw funds from LAIF at any time. As a result, the City uses LAIF for short-term investment, liquidity, and yield. The City's LAIF account had a balance of $21.3 million. The quarterly interest rate was 2.74%. The City did not make any deposits or withdrawals in the quarter ending March 2023. Investment Portfolio In FY 2018-19, the City conducted a Request for Proposal (RFP) for investment management services and selected Chandler Asset Management. Under the City's Treasurer's direction, Chandler Asset Management manages the City's investment portfolio in accordance with the City's investment objectives. The City's investment objectives, in order of priority, are to provide: • Safety to ensure the preservation of capital in the overall portfolio • Sufficient liquidity for cash needs • A market rate of return consistent with the investment program The performance objective is to earn a total rate of return through a market cycle equal to or above the return on the benchmark index. Chandler Asset Management invests in high- quality fixed-income securities consistent with the City's Investment Policy and California Government Code to achieve the objective. The portfolio's market value was $149.7 million, compared to $147.3 million at the end of the previous quarter. The table below includes historical comparisons of the City's portfolio: 85 6 December 31, 2022 January 31, 2023 February 28, 2023 March 31, 2023 Market Value 147,282,846 148,742,480 147,258,241 149,670,106 Par Value 156,155,965 156,310,484 156,479,011 156,579,547 Book Value 155,929,700 156,105,058 156,193,550 156,313,174 Average Maturity 2.62 years 2.66 years 2.71 years 2.69 years Average Modified Duration 2.28 2.28 2.32 2.31 Average Purchase Yield 1.70% 1.73% 1.81% 1.88% Average Market Yield 4.63% 4.39% 4.89% 4.41% Average Quality1 AA/Aa1 AA/Aa1 AA/Aa1 AA/Aa1 1 S&P and Moody's respectively The portfolio's market value fluctuates depending on interest rates. When interest rates decrease after an investment is purchased, the market value of the investment increases. In contrast, when interest rates increase after an investment is purchased, the market value of the investment decreases. At the time of purchase, the City intends to hold all investments until maturity, meaning that changes in market value will not impact the City's investment principal. If the market value decreases, the City will incur an unrealized loss. However, the loss will only be realized if the City sells its investments before their maturity. The market values for the portfolio were provided by Chandler Asset Management. Section 115 Trust Investment Portfolio The City established Section 115 Trusts to reduce pension rate volatility and pre-fund Other Post-Employment Benefits (OPEB) costs. These trusts are a tax-exempt investment tool that local governments can use to set aside funds for pension and retiree health costs. Contributions made to the trust can only be used to fund retirement plans. Investments in the Section 115 Trusts are governed by separate investment policies, which are distinct from the City's Investment Policy. On December 6, 2022, City Council approved the Pension Trust Investment Policy and OPEB Trust Investment Policy. Public Agency Retirement Services (PARS) administers the trust, while US Bank manages the investments in accordance with the approved investment policies. Both Section 115 Trusts are invested in "balanced" portfolios. The investment objective is designed to provide a moderate amount of current income with moderate growth of capital. This type of investment strategy is generally recommended for investors with a long-term time horizon. The strategic asset allocation ranges for this investment objective are: 86 7 Asset Class Range Target Equities 50-70% 63% Fixed Income 20-40% 29% Real Estate 0-15% 5% Commodities 0-10% 2% Cash 0-10% 1% The Section 115 Pension Trust had a balance of $18.3 million, an increase of $0.9 million from the prior quarter due to investment gains. The Section 115 OPEB Trust had a balance of $33.3 million, an increase of $1.7 million from the prior month due to investment gains. The quarterly investment returns were 5.46% for both the Pension Trust and OPEB Trust. Analysis The City compares its portfolio to LAIF and one-year and two-year Treasury yields. Yield comparisons for the one-year Treasury, two-year Treasury, LAIF, and City average are presented below: In March, one-year and two-year Treasury yields dropped. The yield curve remained inverted and the spread between the two-year and 10-year Treasury yield became more inverted. The one-year and two-year Treasury yields were 4.64% and 4.06%, respectively. The one-year Treasury yield decreased by 9 basis points, and the two-year Treasury yield decreased by 35 basis points from December 31, 2022. The yield of the City's investment portfolio was 4.41%, lower than the one-year Treasury yield but higher than LAIF and two-year Treasury yield. 87 8 Cash Flow History Historical revenues, expenditures, and liquidity ratios are presented below: As the City's portfolio becomes more or less liquid over time, the ratio of cash and cash equivalents to revenues and expenditures will increase or decrease, respectively. The 88 9 portfolio's investment structure is complete, so the City anticipates the ratio of cash and cash equivalents to revenues and expenditures to continue to flatten out moving forward. While a formal liquidity level has not been established, significant and consistent fluctuations in the ratio may indicate that additional funds should be invested or, conversely, that investments should be liquidated. In recent years, sufficient liquidity levels for operating revenues and expenditures have approximated a ratio of 1.0. In March 2022, the City transferred $15.0 million from the operating account to the investment portfolio, which reduced the March 2022 liquidity ratios. As of March 31, 2023, the liquidity ratio was 3.3 and 2.0 for revenues and expenditures, respectively. The City will monitor inflows and outflows during the fourth quarter of FY 2022-23 and bring recommendations for the City's investment portfolio as necessary and applicable. As of March 31, 2023, the City had $60.6 million in cash and cash equivalents in the bank and on hand. Based on the cash flow forecast, the City maintains the ability to meet its expenditure requirements for the next six months. Cash Flow Forecast Applying three-year historical trend data for each of the City's revenue and expenditure line items to the FY 2022-23 Adopted Budget, the City estimated the following cash flow forecast for FY 2022-23: 89 10 The purpose of this cash flow and liquidity forecast is to illustrate the timing of the City's revenues and expenditures throughout a fiscal year using historical trend data. The first quarter of the fiscal year experiences expenditures exceeding revenues since the City begins receiving its property tax distributions in November and April of the respective fiscal year. In January and April, the City receives additional property tax revenues due to the Vehicle License Fee (VLF) swap. In June, the City tends to experience higher 90 11 activities, particularly expenditures, due to the year-end close and accrual process. From one fiscal year to the next, the City typically incurs one-time special project or capital expenditure costs. The timing of these costs is more difficult to pinpoint in a particular month. From a cash flow analysis perspective, the Adopted and Amended Budgets are efficient planning tools for determining cash flow needs for a single fiscal year. If a budget is adopted at a position in which revenues and expenditures are balanced, then it is reasonable to conclude cash flow is unlikely to be of concern. Beyond one fiscal year, a City prepares a twenty-year forward-looking forecast using historical and prospective assumptions. This forecast model is incorporated and presented to the City Council as part of the City's Adopted Budget. Compliance All of the City's investments comply with state law and the City's Investment Policy. In compliance with California Government Code 53646 (b)(3), the City maintains the ability to meet its expenditure requirements for the next six months. Sustainability Impact No sustainability impact. Fiscal Impact No fiscal impact. California Environmental Quality Act Not applicable. _____________________________________ Prepared by: __________________ Thomas Leung Budget Manager Reviewed by: __________________ Kristina Alfaro Director of Administrative Services and City Treasurer Approved for Submission by: __________________ Matt Morley Assistant City Manager Attachments: A – Chandler Investment Report March 2023 B – Chandler Custodial Statement March 2023 91 12 C – PARS Pension and OPEB Account Statement March 2023 D – LAIF Account Statement March 2023 92 CHANDLER ASSET MANAGEMENT, INC. | 800.317.4747 | www.chandlerasset.com INVESTMENT REPORT Period Ending March 31, 2023 City of Cupertino 93 SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Portfolio Holdings SECTION 4 Transactions Table of Contents As of March 31, 2023 1 94 SECTION |Section 1 |Economic Update 2 95 Economic Update    Economic trends have been decelerating along with tighter financial conditions and restrictive monetary policy. Recent data suggests positive but below trend growth this year.Although the pace of job growth is moderating,labor markets remain solid, and the U.S. consumer has demonstrated resiliency. Market participants and the Federal Reserve are maintaining very divergent views regarding the future trajectory of monetary policy.Given the cumulative effects of tighter monetary policy and stress in the banking sector,we believe the Federal Reserve is likely near a pause in their rate hiking campaign.If moderate growth continues,we believe the Fed will likely maintain the Federal Funds rate in restrictive territory until inflationary pressures subside. At the March meeting,the Federal Open Market Committee voted unanimously to raise the target federal funds rate by 0.25%to a range of 4.75 –5.00%.Fed Chair Powell reiterated the committee’s focus on bringing down inflation to their 2% target;however,the committee softened language about "ongoing increases"in rates in the prior statement to "some additional policy firming may be appropriate".The statement also emphasized that the U.S.banking system is “sound and resilient”and acknowledged the tightening of financial conditions.The Chandler team believes the FOMC is likely near a pause in their rate hiking cycle. In March,the yield curve inversion narrowed.The 2-year Treasury yield plummeted 79 basis points to 4.03%,the 5-year Treasury yield plunged 61 basis points to 3.58%,and the 10-year Treasury yield fell 45 basis points to 3.47%.The inversion between the 2-year Treasury yield and 10-year Treasury yield declined to -56 basis points at March month-end versus -90 basis points at February month-end.There was no spread between the 2-year Treasury and 10-year Treasury yield one year ago –the yields were approximately equal.The inversion between 3-month and 10-year Treasuries widened to -128 in March from -89 basis points in February.The shape of the yield curve indicates that the probability of recession is increasing. 3 96 Source: US Department of Labor Source: US Department of Labor Employment The U.S.economy added 236,000 jobs in March,and the prior two months were revised downward by 17,000.Although the pace of job growth is moderating,employment remains strong,with the three-month moving average payrolls at 345,000 and the six-month moving average at 315,000.The private sector reported broad gains,led by leisure and hospitality.The unemployment rate fell to 3.5%due to a sharp rise in the number of people employed,and the participation rate increased to 62.6%from 62.5%in February.The U-6 underemployment rate,which includes those who are marginally attached to the labor force and employed part time for economic reasons,declined to 6.7%from the prior month at 6.8%.Average hourly earnings rose 4.2%year-over-year in March,down from a 4.6%increase in February.Job Openings dipped to 9.9 million, the first drop below 10 million since May of 2021. While the overall pace of hiring is slowing, levels remain consistent with a solid labor market. 0 100 200 300 400 500 600 700 800 900 1,000 M O M C h a n g e I n ( 0 0 0 ' s ) Nonfarm Payroll (000's) Non-farm Payroll (000's) 3 month average (000's)0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Unemployment Rate Underemployment Rate (U6) Unemployment Rate (U3) Ra t e ( % ) 4 97 Source: US Department of Labor Source: US Department of Commerce Inflation The Consumer Price Index (CPI)increased in March 0.1%month-over-month and 5.0%year-over-year,down from 6.0%in February.The Core CPI,which excludes volatile food and energy components,rose 0.4%month-over-month and 5.6%year-over-year,accelerating from 5.5%in February.Housing remained the largest factor in headline CPI representing 60%of the increase.The Personal Consumption Expenditures (PCE) index rose 5.0%year-over-year in February,improving from a 5.3%year-over-year gain in January.Core PCE,the Federal Reserve’s preferred inflation gauge,increased 4.6%year-over-year in February,the smallest increase since October 2021.Inflationary trends are declining but remain above the Fed's 2% target. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Personal Consumption Expenditures (PCE) PCE Price Deflator YOY % Change PCE Core Deflator YOY % Change YO Y ( % ) C h a n g e 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Consumer Price Index (CPI) CPI YOY % Change Core CPI YOY % Change Y O Y ( % ) C h a n g e 5 98 Advance Retail Sales fell more than expected month-over-month at -1.0%in March,which translated to a year-over-yeardeceleration to 2.9% from 5.9%in February.The report indicated a broad-based cooling in discretionary spending as consumers are becoming more cautious about the outlook for the US economy.The Conference Board’s ConsumerConfidence Index unexpectedly increased to 104.2 in March from 103.4 in February.While high inflation and recession concerns remain top of mind for many consumers,the strong labor market and low unemployment continue to support the strength in Consumer Confidence. Source: US Department of Commerce Source: The Conference Board 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Retail Sales YOY % Change Y O Y ( % ) C h a n g e 80 90 100 110 120 130 140 In d e x L e v e l Consumer Confidence Consumer 6 99 Source: The Conference Board Source: Federal Reserve Bank of Chicago Economic Activity The Conference Board’s Leading Economic Index (LEI)remained in negative territory for the eleventh consecutive month at -0.3%in February, unchanged from -0.3%in January.The LEI was down 6.5%year-over-year in February versus down 5.9%year-over-year in January.The consistent decline month-over-month continues to signal future contraction in the economy.The Chicago Fed National Activity Index (CFNAI) declined to -0.19 in February from +0.23 in January.On a 3-month moving average basis,the CFNAI increased to -0.13 in February from -0.27 in January, indicating a rate of growth below the historical average trend. -0.50 -0.25 0.00 0.25 0.50 0.75 1.00 Chicago Fed National Activity Index (CFNAI) 3 M o n t h A v e r a g e -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% Leading Economic Indicators (LEI) M O M ( % ) C h a n g e 7 100 Source: US Department of Commerce Source: S&P Housing 0 200 400 600 800 1000 1200 1400 1600 1800 2000 M O M C h a n g e ( I n T h o u s a n d s o f U n i t s ) Housing Starts Multi Family Housing Starts Single Family Housing Starts 0.0% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 21.0% 24.0% S&P/Case -Shiller 20 City Composite Home Price Index YO Y ( % ) C h a n g e Total housing starts rose 9.8%month-over-month in February to 1,450,000 units and were down 18.4%compared to February 2022.Starts for both single-family and multi-family homes increased as mortgage rates declined from recent peaks.The 30-year fixed rate mortgage fell to an average of 6.24%according to Freddie Mac,down from a peak of 7.08%in October,but up from 4.67%a yearago.According to the Case-Shiller 20-City Home Price Index,the year-over-year increase continued its declining rate of gain to +2.55%in January from +4.62%in December, clearly displaying the impact of higher mortgage rates year-over-year,which have reduced demand for homebuying as affordability has declined. This is the lowest rate of annual appreciation since December 2019. 8 101 Source: Institute for Supply Management Source: Federal Reserve Manufacturing The Institute for Suppl y Management (ISM)manufacturingindex fell to 46.3 in March from 47.7 in February.This is the fifth consecutive month of readings below 50.0,which isindicative of contraction in the manufacturing sector.All components weakened,including the headline, new orders,employment,and prices.Industrial production rose 0.4%in March due to an 8.4%increase inutilities production,as demand increased for heating.This equates to a +0.5%increase in industrial production from the prioryear.Capacity utilization increased to 79.8%in March from an upwardly revised 79.6% in February, inching above its 1972-2021 average of 79.6%. 40 42 44 46 48 50 52 54 56 58 60 62 64 66 Institute of Supply Management Purchasing Manager Index EXPANDING CONTRACTING -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Industrial Production Y O Y ( % ) C h a n g e 9 102 Source: US Department of Commerce Source: US Department of Commerce 3/22 6/22 9/22 12/22 0.9% 1.4% 1.5% 0.7% 1.0% -2.8% -1.8% 0.8% -3.1% 1.2% 2.9% 0.4% -0.4% -0.2% 0.2% 0.4% 0.0% -0.1% 0.4% 0.3% -1.6% -0.6% 3.3% 2.6% Net Exports and Imports Total Gross Private Domestic Investment Personal Consumption Expenditures Components of GDP Federal Government Expenditures State and Local (Consumption and Gross Investment)-35.0%-30.0%-25.0%-20.0%-15.0%-10.0%-5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0% Gross Domestic Product (GDP) GDP QOQ % Change GDP YOY % Change Gross Domestic Product (GDP) According to the third estimate,fourth quarter 2022 GDP growth was revised downward to 2.6%from 2.7%.The revision lower was primarily due to weaker growth in personal consumption expenditures and a wider trade gap in net exports.The consensus estimate calls for 1.6% growth in the first quarter and 1.0% growth for the full year 2023. 10 103 Federal Reserve Source: Federal Reserve Source: Bloomberg At the March meeting,the Federal Open Market Committee voted unanimously to raise the target federal funds rate by 0.25%to a range of 4.75 –5.00%.Fed Chair Powell reiterated the committee’s focus on bringing down inflation to their 2%target;however,the committee softened language about "ongoing increases"in rates in the prior statement to "some additional policy firming may be appropriate".The statement also emphasized that the U.S.banking system is “sound and resilient”and acknowledged the tightening in financial conditions. Powell indicated that the extent of these effects is uncertain butspeculated that tighter credit conditions could be equivalent to a rate hike or more.The Summary of EconomicProjections was little changed,with the consensus target federal funds rate rising to 5.1%by the end of 2023 (implying one more quarter point hike),falling to 4.3%in 2024 (up from 4.1%previously),and declining to 3.1%by the end of 2025.No rate cuts were in the Fed’s base case for this year, contrary to the market consensus. Although projections imply policymakers are winding down interest rate hikes,the statement clearly reflected optionality for the Fed to remain data dependent.The Chandler team believes the Fed is likely near a pause in their rate hiking cycle. 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% Effective Federal Funds Rate Yi e l d ( % ) 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 Federal Reserve Balance Sheet Assets In $ m i l l i o n s 11 104 Source: Bloomberg Source: Bloomberg 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% US Treasury Note Yields 2-Year 5-Year 10-Year Y i e l d ( % ) 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% US Treasury Yield Curve Mar-23 Dec-22 Mar-22 Y i e l d ( % ) Bond Yields At the end of March,the 2-year Treasury yield was 169 basis points higher,and the 10-Year Treasury yield was about 113 basis points higher, year-over-year.The inversion between the 2-year Treasury yield and 10-year Treasury yield narrowed to -56 basis points at March month-end versus -90 basis points at February month-end.The average historical spread (since 2003)is about +130 basis points.The inversion between 3- month and 10-year Treasuries widened to -128 in March from -89 basis points in February.The shape of the yield curve indicates that the probability of recession is increasing. 12 105 Section 2|SECTION |Section 2 |Account Profile 13 106 Objectives Chandler Asset Management Performance Objective The performance objective for the portfolio is to earn a total rate of return through a market cycle that is equal to or above the return on the benchmark index. Investment Objectives The City of Cupertino’s investment objectives,in order of priority,are to provide safety to ensure the preservation of capital in the overall portfolio,provide sufficient liquidity for cash needs and a market rate of return consistent with the investment program. Strategy In order to achieve these objectives,the portfolio invests in high quality fixed incomes securities consistent with the investment policy and California Government Code. As of March 31, 2023 14 107 Compliance As of March 31, 2023 Category Standard Comment Treasury Issues No Limitation Complies Agency Issues 25% per Agency/GSE issuer; 20% max agency callable securities; Issued by Federal Agencies or U.S. Government Sponsored Enterprise obligations.Complies Supranational "AA" rating category or better by a NRSRO; 30% maximum; 10% max per issuer; USD denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, or IADB.Complies Municipal Securities "A" rating category or better by a NRSRO; 30% maximum; 5% max per issuer; Obligations of the City, State of California, and any local agency within the State of California; Obligations 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. Complies Corporate Medium Term Notes "A" rating category or better by a NRSRO; 30% maximum; 5% max per issuer; Issued by corporations organized and operating within the U.S. or by depository institutions licensed by the U.S. or any state and operating within the U.S.Complies Asset Backed/ Mortgage Backed/ Collateralized Mortgage Obligation "AA" rating category or better by a NRSRO; 20% maximum; 5% max per issuer on Asset-Backed or Commercial Mortgage security; There is no issuer limitation on any Mortgage security where the issuer is the U.S. Treasury or a Federal Agency/GSE . Complies Negotiable Certificates of Deposit (NCDs) No rating required if amount of the NCD is insured up to the FDIC limit; If above FDIC insured limit, requires "A-1" short- term rated or "A" long-term rating category or better by a NRSRO; 30% maximum; 5% max per issuer; Issued by nationally or state chartered banks, state or federal savings associations, or state or federal credit unions, or by a federally licensed or state-licensed branch of a foreign bank. Complies Certificates of Deposit (CDs)/Time Deposit (TDs) 30% maximum; 5% max per issuer; Certificates of Deposit, Time Deposit, non-negotiable, and collateralized in accordance with California Government Code.Complies Banker’s Acceptances "A-1" short-term rated or better by a NRSRO; or "A" long-term rating category or better by a NRSRO; 40% maximum; 5% max per issuer; 180 days max maturity Complies Commercial Paper "A-1" short term rated or better a NRSRO; "A" long-term issuer rating category or better by a NRSRO; 25% maximum; 5% max per issuer; 270 days max maturity; Issued by corporations organized and operating in the U.S. with assets > $500 million; 10% max outstanding paper of the issuing corporation. Complies Money Market Funds 20% maximum; Daily money market funds administered for or by trustees, paying agents and custodian banks contracted by a City of Cupertino as allowed under California Government Code; Only funds holding U.S. Treasury obligations, Government agency obligations or repurchase agreements collateralized by U.S. Treasury or Government agency obligations can be utilized. Complies Local Agency Investment Fund (LAIF) Maximum amount permitted by LAIF; Not used by investment adviser Complies City of Cupertino Assets managed by Chandler Asset Management are in full compliance with state law and with the City's investment policy. 15 108 Compliance As of March 31, 2023 Category Standard Comment Repurchase Agreements 1 year max maturity; 102% collateralized; A PSA Master Repurchase Agreement is required between City of Cupertino and the broke/dealer or financial institution for all repurchase agreements; Not used by investment adviser Complies Prohibited Securities Reverse Repurchase Agreement; Common stocks; Long-term (> 5 years maturity) notes and bonds; Special circumstances arise that necessitate purchase of securities beyond the 5-year limitation. On such occasions, request must be approved by City Council prior to purchase; Futures/Options; Inverse floaters; Ranges notes, Mortgage-derived, Interest-only strips; Zero interest accrual securities; Purchasing/selling securities on margin; Foreign currency denominated securities. Complies Minimum Budgeted Operating Expenditures in Short Term Investments Minimum 6 months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements Complies Max Per Issuer 5% per issuer, unless otherwise specified in the policy Complies Maximum maturity 5 years Complies City of Cupertino Assets managed by Chandler Asset Management are in full compliance with state law and with the City's investment policy. 16 109 Portfolio Summary As of March 31, 2023 17 110 Portfolio Characteristics City of Cupertino 03/31/23 12/31/22 Benchmark*Portfolio Portfolio Average Maturity (yrs)2.62 2.69 2.67 Average Modified Duration 2.50 2.31 2.28 Average Purchase Yield n/a 1.88%1.70% Average Market Yield 4.02%4.41%4.63% Average Quality**AAA AA/Aa1 AA/Aa1 Total Market Value 149,670,106 147,282,846 *ICE BofA 1-5 Yr US Treasury & Agency Index **Benchmark is a blended rating of S&P, Moody’s, and Fitch. Portfolio is S&P and Moody’s respectively. As of March 31, 2023 18 111 City of Cupertino Sector Distribution ABS 12.2% Agency 15.5% CMO 3.8% Corporate 27.1% Money Market Fund 0.5% Municipal Bonds 0.5% Supranational 6.3% US Treasury 34.1% March 31, 2023 December 31, 2022 ABS 13.4% Agency 17.2% CMO 3.9% Corporate 27.2% Money Market Fund 0.5% Municipal Bonds 0.5% Supranational 6.3% US Treasury 31.0% As of March 31, 2023 19 112 Duration Allocation As of March 31, 2023 City of Cupertino 0 -0.25 0.25 -0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ 03/31/23 1.3%1.5%6.1%36.9%30.8%10.2%13.2%0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 - 0.25 Years 0.25 - 0.5 Years 0.5 - 1 Years 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years 5+ Years ABS Agency CMO Corporate Money Market Fund Municipal Bonds Supranational US Treasury 20 113 Portfolio Allocation & Duration Changes City of Cupertino As of March 31, 2023 Benchmark: ICE BofA 1-5 Yr US Treasury & Agency Index 92.5%92.2% 96.2%95.6% 98.6%100.8%99.3% 96.2% 80.0% 85.0% 90.0% 95.0% 100.0% 105.0% 110.0% 03/31/2312/31/2209/30/2206/30/2203/31/2212/31/2109/30/2106/30/21 Duration as a % of the Benchmark 0.5% 0.5% 3.9% 6.3% 13.4% 17.2% 27.2% 31.0% 0.5% 0.5% 3.8% 6.3% 12.2% 15.5% 27.1% 34.1% Money Market Fund Municipal Bonds CMO Supranational ABS Agency Corporate US Treasury Portfolio Allocation 03/31/23 12/31/22 21 114 Issue Name Investment Type % Portfolio Government of United States US Treasury 34.06% Federal National Mortgage Association Agency 8.85% Federal Home Loan Mortgage Corp Agency 4.36% Federal Home Loan Mortgage Corp CMO 3.83% Inter-American Dev Bank Supranational 3.33% Federal Home Loan Bank Agency 2.30% American Express ABS ABS 1.88% John Deere ABS ABS 1.86% Hyundai Auto Receivables ABS 1.75% Royal Bank of Canada Corporate 1.67% Toyota Motor Corp Corporate 1.61% Bank of New York Corporate 1.55% Bank of America Corp Corporate 1.55% International Finance Corp Supranational 1.54% JP Morgan Chase & Co Corporate 1.54% Intl Bank Recon and Development Supranational 1.47% Toronto Dominion Holdings Corporate 1.42% Northwestern Mutual Glbl Corporate 1.29% Paccar Financial Corporate 1.25% GM Financial Automobile Leasing Trust ABS 1.19% Bank of Montreal Chicago Corporate 1.16% Amazon.com Inc Corporate 1.14% Metlife Inc Corporate 1.13% Salesforce.com Inc Corporate 1.12% Prudential Financial Inc Corporate 1.11% Air Products & Chemicals Corporate 1.11% United Health Group Inc Corporate 1.08% New York Life Global Funding Corporate 1.06% Honda ABS ABS 1.03% Berkshire Hathaway Corporate 1.02% Toyota Lease Owner Trust ABS 0.97% Guardian Life Global Funding Corporate 0.85% US Bancorp Corporate 0.81% Toyota ABS ABS 0.76% Caterpillar Inc Corporate 0.71% Hyundai Auto Lease Securitization ABS 0.71% GM Financial Securitized Term Auto Trust ABS 0.66% MasterCard Inc Corporate 0.65% Issuers City of Cupertino –Account #10659 As of March 31, 2023 22 115 Issue Name Investment Type % Portfolio Mass Mutual Insurance Corporate 0.60% Charles Schwab Corp/The Corporate 0.58% State of California Municipal Bonds 0.50% BMW Vehicle Lease Trust ABS 0.49% Wells Fargo 100% Treasury MMKT Fund Money Market Fund 0.48% Northern Trust Corp Corporate 0.45% Morgan Stanley Corporate 0.41% Verizon Master Trust ABS 0.38% BMW ABS ABS 0.35% Wal-Mart Stores Corporate 0.21% Verizon Owner Trust ABS 0.17% Nissan ABS ABS 0.02% TOTAL 100.00% Issuers City of Cupertino –Account #10659 As of March 31, 2023 23 116 AAA AA A <A NR 03/31/23 15.3%58.5%18.7%0.0%7.6% 12/31/22 16.0%57.1%18.8%0.0%8.0% Source: S&P Ratings March 31, 2023 vs. December 31, 2022 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% AAA AA A <A NR 03/31/23 12/31/22 Quality Distribution City of Cupertino As of March 31, 2023 24 117 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ City of Cupertino ICE BofA 1-5 Yr US Treasury & Agency Index Portfolio Compared to the Benchmark 0 -0.25 0.25 -0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ Portfolio 1.3% 1.5% 6.1% 36.9% 30.8% 10.2% 13.2% 0.0% Benchmark*0.0% 0.0% 1.7% 35.8% 27.9% 20.2% 14.4% 0.0% *ICE BofA 1-5 Yr US Treasury & Agency Index Duration Distribution City of Cupertino As of March 31, 2023 25 118 Total Rate of Return Annualized Since Inception January 31, 2019 Total rate of return: A measure of a portfolio’s performance over time.It is the internal rate of return,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. Investment Performance City of Cupertino -2.50% -2.00% -1.50% -1.00% -0.50% 0.00% 0.50% 1.00% 1.50% 12 months 2 years 3 years 5 years 10 years Since Inception City of Cupertino ICE BofA 1-5 Yr US Treasury & Agency Index Annualized TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years Since Inception City of Cupertino 1.64%-0.26%-1.95%-0.71%N/A N/A 0.86% ICE BofA 1-5 Yr US Treasury & Agency Index 1.81%-0.38%-2.06%-1.40%N/A N/A 0.78% As of March 31, 2023 26 119 Purchase Yield as of 03/31/23 = 1.88% 0.00 0.50 1.00 1.50 2.00 2.50 Pe r c e n t ( % ) Historical Average Purchase Yield City of Cupertino As of March 31, 2023 27 120 SECTION |Section 3 |Portfolio Holdings 28 121 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration ABS 89238EAC0 Toyota Lease Owner Trust 2021-A A3 0.390% Due 04/22/2024 332,089.16 03/23/2022 2.16% 325,447.37 329,989.18 99.05 5.58% 328,936.97 39.57 0.22% (1,052.21) Aaa / AAA NR 1.06 0.18 44891VAC5 Hyundai Auto Lease Trust 2021-B A3 0.330% Due 06/17/2024 541,121.52 06/08/2021 0.34% 541,040.35 541,105.01 98.80 5.96% 534,628.60 79.36 0.36% (6,476.41) Aaa / AAA NR 1.22 0.21 65479JAD5 Nissan Auto Receivables Owner 2019-C A3 1.930% Due 07/15/2024 33,753.24 Various 1.70% 33,920.69 33,804.32 99.86 6.61% 33,706.05 28.96 0.02% (98.27) Aaa / AAA NR 1.29 0.03 43813DAC2 Honda Auto Receivables 2020-2 A3 0.820% Due 07/15/2024 34,769.09 05/18/2020 0.83% 34,766.36 34,768.24 99.00 5.34% 34,421.72 12.67 0.02% (346.52) Aaa / AAA NR 1.29 0.22 47789KAC7 John Deere Owner Trust 2020-A A3 1.100% Due 08/15/2024 29,181.72 03/04/2020 1.11% 29,179.94 29,181.17 99.57 5.28% 29,054.98 14.27 0.02% (126.19) Aaa / NR AAA 1.38 0.10 43813KAC6 Honda Auto Receivables Trust 2020-3 A3 0.370% Due 10/18/2024 206,120.78 09/22/2020 0.38% 206,090.50 206,114.67 98.22 5.37% 202,451.00 27.54 0.14% (3,663.67) NR / AAA AAA 1.55 0.35 36262XAC8 GM Financial Auto Lease Trust 2021-3 A2 0.390% Due 10/21/2024 879,250.27 08/10/2021 0.39% 879,238.32 879,246.30 97.98 5.51% 861,501.72 104.78 0.58% (17,744.58) NR / AAA AAA 1.56 0.39 47787NAC3 John Deere Owner Trust 2020-B A3 0.510% Due 11/15/2024 59,352.21 07/14/2020 0.52% 59,343.16 59,350.15 99.01 4.91% 58,761.71 13.45 0.04% (588.44) Aaa / NR AAA 1.63 0.22 09690AAC7 BMW Vehicle Lease Trust 2021-2 A3 0.330% Due 12/26/2024 303,787.63 09/08/2021 0.34% 303,756.27 303,777.52 98.01 5.83% 297,734.66 16.71 0.20% (6,042.86) Aaa / NR AAA 1.74 0.36 89236XAC0 Toyota Auto Receivables 2020-D A3 0.350% Due 01/15/2025 151,883.81 10/06/2020 0.36% 151,855.52 151,871.89 98.39 5.80% 149,444.25 23.63 0.10% (2,427.64) NR / AAA AAA 1.80 0.29 44891WAC3 Hyundai Auto Lease Trust 2022-A A3 1.160% Due 01/15/2025 540,000.00 01/11/2022 1.16% 539,988.07 539,994.45 97.25 5.60% 525,140.82 278.40 0.35% (14,853.63) Aaa / AAA NR 1.80 0.62 92290BAA9 Verizon Owner Trust 2020-B A 0.470% Due 02/20/2025 263,143.40 08/04/2020 0.48% 263,088.13 263,120.30 98.86 5.33% 260,140.41 37.79 0.17% (2,979.89) Aaa / NR AAA 1.90 0.23 89238LAC4 Toyota Lease Owner Trust 2022-A A3 1.960% Due 02/20/2025 1,150,000.00 02/23/2022 1.98% 1,149,818.99 1,149,904.23 97.04 5.54% 1,115,918.60 688.72 0.75% (33,985.63) NR / AAA AAA 1.90 0.83 36265MAC9 GM Financial Auto Lease Trust 2022-1 A3 1.900% Due 03/20/2025 945,000.00 02/15/2022 1.91% 944,991.87 944,996.02 97.34 5.41% 919,870.56 548.63 0.61% (25,125.46) Aaa / NR AAA 1.97 0.76 05601XAC3 BMW Vehicle Lease Trust 2022-1 A3 1.100% Due 03/25/2025 450,000.00 01/11/2022 1.11% 449,932.73 449,969.66 97.50 5.66% 438,764.85 82.50 0.29% (11,204.81) NR / AAA AAA 1.99 0.55 43813GAC5 Honda Auto Receivables Trust 2021-1 A3 0.270% Due 04/21/2025 162,041.83 02/17/2021 0.27% 162,038.87 162,040.89 97.27 5.87% 157,620.03 12.15 0.11% (4,420.86) Aaa / NR AAA 2.06 0.48 89240BAC2 Toyota Auto Receivables Owners 2021-A A3 0.260% Due 05/15/2025 590,848.46 02/02/2021 0.27% 590,738.80 590,814.62 97.46 5.57% 575,832.05 68.28 0.38% (14,982.57) Aaa / NR AAA 2.13 0.48 As of March 31, 2023 29 122 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 44933LAC7 Hyundai Auto Receivables Trust 2021-A A3 0.380% Due 09/15/2025 392,283.30 04/20/2021 0.38% 392,242.03 392,268.10 97.24 5.26% 381,457.85 66.25 0.25% (10,810.25) NR / AAA AAA 2.46 0.56 43815GAC3 Honda Auto Receivables Trust 2021-4 A3 0.880% Due 01/21/2026 460,000.00 11/16/2021 0.89% 459,903.03 459,943.37 95.51 5.26% 439,345.08 112.44 0.29% (20,598.29) Aaa / NR AAA 2.81 1.03 47789QAC4 John Deere Owner Trust 2021-B A3 0.520% Due 03/16/2026 580,000.00 07/13/2021 0.52% 579,948.26 579,972.29 95.67 5.59% 554,865.70 134.04 0.37% (25,106.59) Aaa / NR AAA 2.96 0.86 89238JAC9 Toyota Auto Receivables Trust 2021-D A3 0.710% Due 04/15/2026 430,000.00 11/09/2021 0.71% 429,990.84 429,994.71 95.33 5.42% 409,919.43 135.69 0.27% (20,075.28) NR / AAA AAA 3.04 1.00 43815BAC4 Honda Auto Receivables Trust 2022-1 A3 1.880% Due 05/15/2026 740,000.00 02/15/2022 1.89% 739,888.70 739,926.71 95.88 4.95% 709,483.88 618.31 0.47% (30,442.83) Aaa / AAA NR 3.13 1.36 44935FAD6 Hyundai Auto Receivables Trust 2021-C A3 0.740% Due 05/15/2026 1,330,000.00 Various 2.03% 1,296,371.65 1,308,620.05 95.40 5.49% 1,268,845.28 437.42 0.85% (39,774.77) NR / AAA AAA 3.13 0.97 05602RAD3 BMW Vehicle Owner Trust 2022-A A3 3.210% Due 08/25/2026 530,000.00 05/10/2022 3.23% 529,972.44 529,980.17 97.71 4.90% 517,885.79 283.55 0.35% (12,094.38) Aaa / AAA NR 3.41 1.38 362554AC1 GM Financial Securitized Term 2021-4 A3 0.680% Due 09/16/2026 350,000.00 10/13/2021 0.68% 349,991.08 349,994.86 94.86 5.77% 332,024.70 99.17 0.22% (17,970.16) Aaa / AAA NR 3.47 1.02 47787JAC2 John Deere Owner Trust 2022-A A3 2.320% Due 09/16/2026 450,000.00 03/10/2022 2.34% 449,900.46 449,930.11 96.65 5.05% 434,938.95 464.00 0.29% (14,991.16) Aaa / NR AAA 3.47 1.24 448977AD0 Hyundai Auto Receivables Trust 2022-A A3 2.220% Due 10/15/2026 1,010,000.00 03/09/2022 2.23% 1,009,961.12 1,009,973.60 96.14 5.00% 970,973.60 996.53 0.65% (39,000.00) NR / AAA AAA 3.55 1.41 380146AC4 GM Financial Auto Receivables 2022-1 A3 1.260% Due 11/16/2026 295,000.00 01/11/2022 1.27% 294,974.36 294,983.60 95.01 5.68% 280,288.35 154.88 0.19% (14,695.25) NR / AAA AAA 3.63 1.14 362585AC5 GM Financial Securitized ART 2022-2 A3 3.100% Due 02/16/2027 390,000.00 04/05/2022 3.13% 389,918.49 389,941.47 96.84 5.16% 377,662.35 503.75 0.25% (12,279.12) Aaa / AAA NR 3.88 1.56 47800AAC4 John Deere Owner Trust 2022-B A3 3.740% Due 02/16/2027 655,000.00 07/12/2022 3.77% 654,937.45 654,949.66 98.07 4.89% 642,376.84 1,088.76 0.43% (12,572.82) Aaa / NR AAA 3.88 1.72 02589BAA8 American Express Credit Accoun 22-1 A 2.210% Due 03/15/2027 1,545,000.00 03/21/2022 2.69% 1,524,359.77 1,531,454.85 95.46 4.70% 1,474,798.29 1,517.53 0.99% (56,656.56) Aaa / NR AAA 3.96 1.86 02582JJT8 American Express Credit Trust 2022-2 A 3.390% Due 05/17/2027 1,375,000.00 05/17/2022 3.42% 1,374,695.85 1,374,783.15 97.66 4.60% 1,342,783.75 2,071.67 0.90% (31,999.40) NR / AAA AAA 4.13 1.99 47800BAC2 John Deere Owner Trust 2022-C A3 5.090% Due 06/15/2027 1,050,000.00 10/12/2022 5.15% 1,049,918.52 1,049,928.53 100.81 4.74% 1,058,522.85 2,375.33 0.71% 8,594.32 Aaa / NR AAA 4.21 1.98 As of March 31, 2023 30 123 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 92348KAV5 Verizon Master Trust 2022-5 A1A 3.720% Due 07/20/2027 570,000.00 08/02/2022 3.75% 569,974.92 569,980.69 98.64 5.10% 562,220.64 647.90 0.38% (7,760.05) NR / AAA AAA 4.31 1.32 TOTAL ABS 18,824,626.42 2.03% 18,762,184.91 18,786,674.54 5.23% 18,282,322.31 13,784.63 12.22% (504,352.23) Aaa / AAA AAA 2.94 1.11 Agency 3137EAFA2 FHLMC Note 0.250% Due 12/04/2023 855,000.00 12/02/2020 0.28% 854,153.55 854,809.07 96.98 4.85% 829,173.87 694.69 0.55% (25,635.20) Aaa / AA+ AAA 0.68 0.66 3130A1XJ2 FHLB Note 2.875% Due 06/14/2024 1,500,000.00 06/18/2019 1.96% 1,564,890.20 1,515,670.52 98.11 4.50% 1,471,660.50 12,817.70 0.99% (44,010.02) Aaa / AA+ NR 1.21 1.16 3135G0V75 FNMA Note 1.750% Due 07/02/2024 1,500,000.00 07/16/2019 1.96% 1,484,895.00 1,496,182.07 96.48 4.67% 1,447,206.00 6,489.58 0.97% (48,976.07) Aaa / AA+ AAA 1.26 1.21 3130A2UW4 FHLB Note 2.875% Due 09/13/2024 2,000,000.00 09/13/2019 1.79% 2,103,380.00 2,030,095.82 98.07 4.26% 1,961,428.00 2,875.00 1.31% (68,667.82) Aaa / AA+ AAA 1.46 1.40 3135G0W66 FNMA Note 1.625% Due 10/15/2024 1,975,000.00 Various 1.73% 1,965,802.75 1,972,084.20 96.09 4.28% 1,897,771.58 14,798.79 1.28% (74,312.62) Aaa / AA+ AAA 1.55 1.48 3135G0X24 FNMA Note 1.625% Due 01/07/2025 1,295,000.00 Various 1.38% 1,309,953.95 1,300,500.90 95.59 4.24% 1,237,934.53 4,910.21 0.83% (62,566.37) Aaa / AA+ AAA 1.78 1.71 3137EAEP0 FHLMC Note 1.500% Due 02/12/2025 2,365,000.00 02/13/2020 1.52% 2,363,178.95 2,364,318.48 95.19 4.21% 2,251,236.41 4,828.54 1.51% (113,082.07) Aaa / AA+ AAA 1.87 1.80 3135G03U5 FNMA Note 0.625% Due 04/22/2025 1,860,000.00 04/22/2020 0.67% 1,856,168.40 1,858,420.31 92.98 4.22% 1,729,349.88 5,134.38 1.16% (129,070.43) Aaa / AA+ AAA 2.06 2.00 3135G04Z3 FNMA Note 0.500% Due 06/17/2025 2,500,000.00 Various 0.50% 2,499,227.30 2,499,751.23 92.41 4.13% 2,310,277.50 3,611.11 1.55% (189,473.73) Aaa / AA+ AAA 2.22 2.15 3137EAEU9 FHLMC Note 0.375% Due 07/21/2025 1,250,000.00 07/21/2020 0.48% 1,243,775.00 1,247,126.40 92.00 4.04% 1,150,037.50 911.46 0.77% (97,088.90) Aaa / AA+ AAA 2.31 2.25 3135G05X7 FNMA Note 0.375% Due 08/25/2025 2,500,000.00 Various 0.48% 2,487,983.75 2,494,055.94 91.55 4.11% 2,288,837.51 937.51 1.53% (205,218.43) Aaa / AA+ AAA 2.41 2.34 3137EAEX3 FHLMC Note 0.375% Due 09/23/2025 2,500,000.00 Various 0.46% 2,489,362.80 2,494,605.84 91.36 4.08% 2,284,012.50 208.33 1.53% (210,593.34) Aaa / AA+ AAA 2.48 2.42 3135G06G3 FNMA Note 0.500% Due 11/07/2025 2,500,000.00 Various 0.56% 2,492,700.00 2,496,186.54 91.49 3.98% 2,287,272.50 5,000.00 1.53% (208,914.04) Aaa / AA+ AAA 2.61 2.53 TOTAL Agency 24,600,000.00 1.03% 24,715,471.65 24,623,807.32 4.23% 23,146,198.28 63,217.30 15.51% (1,477,609.04) Aaa / AA+ AAA 1.94 1.88 As of March 31, 2023 31 124 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration CMO 3137BFE98 FHLMC K041 A2 3.171% Due 10/25/2024 1,300,000.00 07/01/2021 0.72% 1,398,414.06 1,345,710.08 97.50 4.85% 1,267,458.40 3,435.25 0.85% (78,251.68) Aaa / AAA AAA 1.57 1.40 3137BLMZ8 FHLMC K049 A2 3.010% Due 07/25/2025 1,000,000.00 07/01/2021 0.87% 1,079,687.50 1,045,019.33 96.78 4.50% 967,814.00 2,508.33 0.65% (77,205.33) NR / NR AAA 2.32 2.08 3137BLW95 FHLMC K050 A2 3.334% Due 08/25/2025 950,000.00 11/16/2021 1.17% 1,018,132.81 993,017.98 97.39 4.50% 925,178.40 2,639.42 0.62% (67,839.58) NR / NR AAA 2.41 2.12 3137BM7C4 FHLMC K051 A2 3.308% Due 09/25/2025 440,000.00 03/15/2022 2.21% 453,079.69 449,154.75 97.29 4.48% 428,072.48 1,212.93 0.29% (21,082.27) NR / NR AAA 2.49 2.20 3137BN6G4 FHLMC KO53 2.995% Due 12/25/2025 570,000.00 03/15/2022 2.29% 582,001.17 578,700.41 96.45 4.42% 549,750.18 1,422.63 0.37% (28,950.23) NR / NR AAA 2.74 2.42 3137BSP72 FHLMC K058 A2 2.653% Due 08/25/2026 650,000.00 11/12/2021 1.35% 687,451.17 676,551.53 94.81 4.30% 616,276.70 1,437.04 0.41% (60,274.83) NR / NR AAA 3.41 3.14 3137FBBX3 FHLMC K068 A2 3.244% Due 08/25/2027 1,000,000.00 09/28/2022 4.41% 950,664.06 955,701.20 96.10 4.22% 961,006.00 2,703.33 0.64% 5,304.80 Aaa / NR NR 4.41 3.95 TOTAL CMO 5,910,000.00 1.74% 6,169,430.46 6,043,855.28 4.50% 5,715,556.16 15,358.93 3.83% (328,299.12) Aaa / AAA AAA 2.69 2.40 Corporate 89114QCA4 Toronto Dominion Bank Note 2.650% Due 06/12/2024 1,500,000.00 09/11/2019 2.24% 1,527,255.00 1,506,884.48 97.21 5.08% 1,458,156.00 12,035.42 0.98% (48,728.48) A1 / A AA- 1.20 1.15 06367TQW3 Bank of Montreal Note 0.625% Due 07/09/2024 600,000.00 02/09/2022 1.89% 582,216.00 590,592.08 94.55 5.10% 567,309.60 854.17 0.38% (23,282.48) A2 / A- AA- 1.28 1.24 79466LAG9 Salesforce.com Inc Callable Note Cont 7/15/2022 0.625% Due 07/15/2024 1,760,000.00 Various 0.87% 1,748,937.40 1,754,558.20 94.98 4.68% 1,671,626.88 2,322.23 1.12% (82,931.32) A2 / A+ NR 1.29 1.25 78013XZU5 Royal Bank of Canada Note 2.550% Due 07/16/2024 1,500,000.00 Various 1.98% 1,533,359.18 1,510,478.41 96.74 5.18% 1,451,172.00 7,968.76 0.97% (59,306.41) A1 / A AA- 1.30 1.24 91159HHX1 US Bancorp Callable Note Cont 6/28/2024 2.400% Due 07/30/2024 1,250,000.00 10/10/2019 2.07% 1,268,262.50 1,254,826.06 96.13 5.45% 1,201,583.75 5,083.33 0.81% (53,242.31) A2 / A+ A+ 1.33 1.28 009158AV8 Air Products & Chemicals Callable Note Cont 4/30/2024 3.350% Due 07/31/2024 1,675,000.00 08/07/2019 2.07% 1,771,212.00 1,697,018.39 98.38 4.61% 1,647,880.08 9,507.95 1.11% (49,138.31) A2 / A NR 1.34 1.28 69371RR40 Paccar Financial Corp Note 0.500% Due 08/09/2024 680,000.00 08/03/2021 0.52% 679,632.80 679,833.82 94.35 4.85% 641,605.84 491.11 0.43% (38,227.98) A1 / A+ NR 1.36 1.32 As of March 31, 2023 32 125 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 69371RQ25 Paccar Financial Corp Note 2.150% Due 08/15/2024 370,000.00 08/08/2019 2.20% 369,182.30 369,775.32 96.45 4.85% 356,872.40 1,016.47 0.24% (12,902.92) A1 / A+ NR 1.38 1.32 14913Q3B3 Caterpillar Finl Service Note 2.150% Due 11/08/2024 1,100,000.00 01/28/2020 1.92% 1,111,517.00 1,103,876.42 96.35 4.54% 1,059,841.20 9,394.31 0.71% (44,035.22) A2 / A A 1.61 1.54 74153WCQ0 Pricoa Global Funding Note 1.150% Due 12/06/2024 885,000.00 12/01/2021 1.19% 884,088.45 884,487.57 94.30 4.72% 834,537.30 3,251.15 0.56% (49,950.27) Aa3 / AA- AA- 1.69 1.62 89114TZL9 Toronto-Dominion Bank Note 1.450% Due 01/10/2025 700,000.00 03/15/2022 2.79% 674,737.00 684,057.33 94.09 4.97% 658,662.20 2,283.75 0.44% (25,395.13) A1 / A NR 1.78 1.71 89236TJT3 Toyota Motor Credit Corp Note 1.450% Due 01/13/2025 1,215,000.00 01/10/2022 1.50% 1,213,371.90 1,214,029.97 94.67 4.60% 1,150,210.13 3,817.13 0.77% (63,819.84) A1 / A+ A+ 1.79 1.72 64952WEK5 New York Life Global Note 1.450% Due 01/14/2025 1,680,000.00 01/11/2022 1.49% 1,678,185.60 1,678,917.32 94.47 4.71% 1,587,114.48 5,210.33 1.06% (91,802.84) Aaa / AA+ AAA 1.79 1.72 69371RR73 Paccar Financial Corp Note 2.850% Due 04/07/2025 885,000.00 03/31/2022 2.86% 884,769.90 884,845.27 96.54 4.67% 854,389.62 12,190.88 0.58% (30,455.65) A1 / A+ NR 2.02 1.90 78016EZ59 Royal Bank of Canada Note 3.375% Due 04/14/2025 1,050,000.00 04/07/2022 3.39% 1,049,611.50 1,049,736.27 97.04 4.92% 1,018,959.90 16,439.06 0.69% (30,776.37) A1 / A AA- 2.04 1.91 06406RBC0 Bank of NY Mellon Corp Callable Note Cont 3/25/2025 3.350% Due 04/25/2025 1,370,000.00 04/19/2022 3.35% 1,369,808.20 1,369,867.75 96.30 5.26% 1,319,346.99 19,887.83 0.89% (50,520.76) A1 / A AA- 2.07 1.93 06367WB85 Bank of Montreal Note 1.850% Due 05/01/2025 1,240,000.00 07/23/2021 0.85% 1,285,656.80 1,265,287.35 93.66 5.10% 1,161,369.12 9,558.33 0.78% (103,918.23) A2 / A- AA- 2.09 1.99 46647PCH7 JP Morgan Chase & Co Callable Note Cont 6/1/2024 0.824% Due 06/01/2025 1,370,000.00 05/24/2021 0.78% 1,371,773.90 1,370,691.11 94.76 5.37% 1,298,227.08 3,762.93 0.87% (72,464.03) A1 / A- AA- 2.17 2.08 46647PCK0 JP Morgan Chase & Co Callable Note Cont 6/23/2024 0.969% Due 06/23/2025 655,000.00 Various 0.95% 655,406.85 655,166.83 94.73 5.36% 620,483.47 1,727.78 0.42% (34,683.36) A1 / A- AA- 2.23 2.13 66815L2J7 Northwestern Mutual Glbl Note 4.000% Due 07/01/2025 1,170,000.00 06/27/2022 4.01% 1,169,602.20 1,169,701.65 98.53 4.69% 1,152,855.99 11,700.00 0.78% (16,845.66) Aaa / AA+ AAA 2.25 2.10 74153WCM9 Pricoa Global Funding Note 0.800% Due 09/01/2025 904,000.00 04/06/2022 3.26% 832,972.72 853,445.96 90.72 4.92% 820,140.44 602.67 0.55% (33,305.52) Aa3 / AA- AA- 2.42 2.34 06406HCQ0 Bank of New York Callable Note Cont 10/18/2025 3.950% Due 11/18/2025 1,000,000.00 04/05/2022 3.20% 1,024,910.00 1,017,977.68 96.71 5.30% 967,124.00 14,593.06 0.66% (50,853.68) A1 / A AA- 2.64 2.42 40139LBC6 Guardian Life Glob Fun Note 0.875% Due 12/10/2025 1,400,000.00 Various 1.12% 1,385,860.00 1,390,889.78 90.19 4.80% 1,262,657.20 3,777.08 0.85% (128,232.58) Aa1 / AA+ NR 2.70 2.59 As of March 31, 2023 33 126 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 66815L2A6 Northwestern Mutual Glbl Note 0.800% Due 01/14/2026 850,000.00 12/06/2021 1.47% 827,449.50 834,660.24 89.92 4.70% 764,347.20 1,454.44 0.51% (70,313.04) Aaa / AA+ AAA 2.79 2.69 06051GHY8 Bank of America Corp Callable Note Cont 2/13/2025 2.015% Due 02/13/2026 600,000.00 05/24/2021 1.05% 620,988.00 610,563.50 93.69 5.61% 562,140.60 1,612.00 0.38% (48,422.90) A2 / A- AA- 2.88 1.79 46647PBK1 JP Morgan Chase & Co Callable Note Cont 4/22/2025 2.083% Due 04/22/2026 401,000.00 05/20/2021 1.11% 415,969.33 408,877.49 93.57 5.42% 375,228.53 3,689.17 0.25% (33,648.96) A1 / A- AA- 3.06 1.95 6174468Q5 Morgan Stanley Callable Note Cont 4/28/2025 2.188% Due 04/28/2026 650,000.00 05/23/2022 4.82% 615,699.50 623,138.45 93.83 5.36% 609,868.35 6,044.35 0.41% (13,270.10) A1 / A- A+ 3.08 1.97 023135BX3 Amazon.com Inc Callable Note Cont 4/12/2026 1.000% Due 05/12/2026 1,875,000.00 05/10/2021 1.09% 1,866,900.00 1,869,956.35 90.66 4.23% 1,699,951.88 7,239.58 1.14% (170,004.47) A1 / AA AA- 3.12 3.00 91324PEC2 United Health Group Inc Callable Note Cont 4/15/2026 1.150% Due 05/15/2026 1,035,000.00 Various 1.37% 1,025,051.35 1,027,947.22 90.93 4.29% 941,073.75 4,496.50 0.63% (86,873.47) A3 / A+ A 3.13 2.99 89236TJK2 Toyota Motor Credit Corp Note 1.125% Due 06/18/2026 1,385,000.00 06/15/2021 1.13% 1,384,390.60 1,384,608.20 90.18 4.44% 1,248,936.22 4,457.97 0.84% (135,671.98) A1 / A+ A+ 3.22 3.08 06051GJD2 Bank of America Corp Callable Note Cont 6/19/2025 1.319% Due 06/19/2026 700,000.00 07/16/2021 1.27% 701,274.00 700,721.64 91.41 5.48% 639,877.00 2,616.02 0.43% (60,844.64) A2 / A- AA- 3.22 2.13 57629WDE7 Mass Mutual Global funding Note 1.200% Due 07/16/2026 1,000,000.00 08/19/2021 1.15% 1,002,230.00 1,001,499.14 88.88 4.90% 888,756.00 2,500.00 0.60% (112,743.14) Aa3 / AA+ AA+ 3.30 3.15 58989V2D5 Met Tower Global Funding Note 1.250% Due 09/14/2026 770,000.00 09/07/2021 1.27% 769,291.60 769,510.40 88.74 4.83% 683,288.76 454.51 0.46% (86,221.64) Aa3 / AA- AA- 3.46 3.30 931142ER0 Wal-Mart Stores Callable Note Cont 08/17/2026 1.050% Due 09/17/2026 350,000.00 09/08/2021 1.09% 349,338.50 349,541.73 90.15 4.13% 315,512.40 142.92 0.21% (34,029.33) Aa2 / AA AA 3.47 3.33 59217GER6 Metlife Note 1.875% Due 01/11/2027 1,115,000.00 01/03/2022 1.90% 1,113,728.90 1,114,038.67 89.36 5.00% 996,336.13 4,645.83 0.67% (117,702.54) Aa3 / AA- AA- 3.79 3.55 808513BY0 Charles Schwab Corp Callable Note Cont 2/3/2027 2.450% Due 03/03/2027 960,000.00 03/01/2022 2.46% 959,729.90 959,787.09 89.57 5.44% 859,878.72 1,829.34 0.58% (99,908.37) A2 / A A 3.93 3.65 084664CZ2 Berkshire Hathaway Callable Note Cont 2/15/2027 2.300% Due 03/15/2027 1,615,000.00 03/07/2022 2.30% 1,614,693.15 1,614,757.34 94.68 3.76% 1,529,046.47 1,650.89 1.02% (85,710.87) Aa2 / AA A+ 3.96 3.72 As of March 31, 2023 34 127 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 06051GHT9 Bank of America Corp Callable Note 1X 4/23/2026 3.559% Due 04/23/2027 1,150,000.00 Various 4.85% 1,114,222.54 1,119,155.62 94.98 5.35% 1,092,272.30 17,963.07 0.74% (26,883.32) A2 / A- AA- 4.07 2.80 665859AW4 Northern Trust Company Callable Note Cont 4/10/2027 4.000% Due 05/10/2027 670,000.00 05/05/2022 4.04% 668,914.60 669,108.38 97.97 4.55% 656,368.18 10,496.67 0.45% (12,740.20) A2 / A+ A+ 4.11 3.68 91324PEG3 United Health Group Inc Callable Note Cont 4/15/2027 3.700% Due 05/15/2027 675,000.00 05/17/2022 3.69% 675,316.70 675,261.74 97.81 4.28% 660,241.13 9,435.00 0.45% (15,020.61) A3 / A+ A 4.13 3.72 57636QAW4 MasterCard Inc Callable Note Cont 2/9/28 4.875% Due 03/09/2028 945,000.00 03/06/2023 4.90% 944,083.35 944,094.89 102.92 4.20% 972,633.69 2,815.31 0.65% 28,538.80 Aa3 / A+ NR 4.95 4.29 TOTAL Corporate 42,705,000.00 2.08% 42,741,600.72 42,634,173.11 4.84% 40,257,882.98 241,019.30 27.06% (2,376,290.13) A1 / A+ AA- 2.48 2.26 Money Market Fund 94975H270 Wells Fargo 100% Treasury Money Mkt Fund 724,920.33 Various 4.15% 724,920.33 724,920.33 1.00 4.15% 724,920.33 0.00 0.48% 0.00 Aaa / AAA NR 0.00 0.00 TOTAL Money Market Fund 724,920.33 4.15% 724,920.33 724,920.33 4.15% 724,920.33 0.00 0.48% 0.00 Aaa / AAA NR 0.00 0.00 Municipal Bonds 13063DRK6 California State Taxable GO 2.400% Due 10/01/2024 755,000.00 10/16/2019 1.91% 772,342.35 760,277.69 96.96 4.52% 732,070.65 9,060.00 0.50% (28,207.04) Aa2 / AA- AA 1.51 1.43 TOTAL Municipal Bonds 755,000.00 1.91% 772,342.35 760,277.69 4.52% 732,070.65 9,060.00 0.50% (28,207.04) Aa2 / AA- AA 1.51 1.43 Supranational 4581X0DP0 Inter-American Dev Bank Note 0.250% Due 11/15/2023 2,800,000.00 07/01/2021 0.37% 2,792,300.00 2,797,963.34 97.17 4.92% 2,720,830.00 2,644.44 1.82% (77,133.34) Aaa / AAA NR 0.63 0.61 45950KCT5 International Finance Corp Note 0.375% Due 07/16/2025 2,500,000.00 05/27/2021 0.66% 2,471,150.00 2,483,965.84 92.19 3.98% 2,304,650.00 1,953.13 1.54% (179,315.84) Aaa / AAA NR 2.30 2.24 459058JL8 Intl. Bank Recon & Development Note 0.500% Due 10/28/2025 2,400,000.00 Various 0.60% 2,388,859.25 2,393,893.71 91.64 3.95% 2,199,264.00 5,100.01 1.47% (194,629.71) Aaa / AAA AAA 2.58 2.51 As of March 31, 2023 35 128 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 4581X0DV7 Inter-American Dev Bank Note 0.875% Due 04/20/2026 2,460,000.00 04/13/2021 0.97% 2,448,733.20 2,453,120.22 91.35 3.91% 2,247,180.48 9,626.46 1.51% (205,939.74) Aaa / AAA AAA 3.06 2.95 TOTAL Supranational 10,160,000.00 0.64% 10,101,042.45 10,128,943.11 4.22% 9,471,924.48 19,324.04 6.34% (657,018.63) Aaa / AAA AAA 2.06 2.00 US Treasury 912828X70 US Treasury Note 2.000% Due 04/30/2024 1,700,000.00 06/10/2019 1.92% 1,705,976.56 1,701,322.54 97.25 4.63% 1,653,316.30 14,276.24 1.11% (48,006.24) Aaa / AA+ AAA 1.08 1.04 912828XX3 US Treasury Note 2.000% Due 06/30/2024 2,000,000.00 Various 1.80% 2,018,574.22 2,004,797.55 97.03 4.46% 1,940,626.00 10,055.25 1.30% (64,171.55) Aaa / AA+ AAA 1.25 1.21 912828D56 US Treasury Note 2.375% Due 08/15/2024 1,700,000.00 09/18/2019 1.71% 1,753,191.41 1,714,900.72 97.34 4.39% 1,654,710.30 5,018.99 1.11% (60,190.42) Aaa / AA+ AAA 1.38 1.33 912828YY0 US Treasury Note 1.750% Due 12/31/2024 2,100,000.00 03/15/2022 1.97% 2,087,203.13 2,091,978.46 95.94 4.18% 2,014,687.50 9,238.26 1.35% (77,290.96) Aaa / AA+ AAA 1.76 1.69 912828ZC7 US Treasury Note 1.125% Due 02/28/2025 1,500,000.00 03/18/2020 0.81% 1,523,144.53 1,508,952.98 94.55 4.11% 1,418,320.50 1,467.39 0.95% (90,632.48) Aaa / AA+ AAA 1.92 1.86 91282CED9 US Treasury Note 1.750% Due 03/15/2025 3,100,000.00 Various 2.23% 3,057,617.20 3,071,931.63 95.65 4.09% 2,965,100.40 2,506.11 1.98% (106,831.23) Aaa / AA+ AAA 1.96 1.89 912828ZL7 US Treasury Note 0.375% Due 04/30/2025 2,500,000.00 03/21/2022 2.24% 2,360,839.85 2,406,817.87 92.75 4.04% 2,318,750.00 3,936.46 1.55% (88,067.87) Aaa / AA+ AAA 2.08 2.03 91282CAB7 US Treasury Note 0.250% Due 07/31/2025 1,500,000.00 03/12/2021 0.72% 1,469,765.63 1,483,890.13 91.83 3.94% 1,377,480.00 621.55 0.92% (106,410.13) Aaa / AA+ AAA 2.34 2.29 91282CAM3 US Treasury Note 0.250% Due 09/30/2025 2,400,000.00 Various 0.56% 2,366,140.63 2,381,498.42 91.51 3.84% 2,196,280.80 16.39 1.47% (185,217.62) Aaa / AA+ AAA 2.50 2.45 91282CAT8 US Treasury Note 0.250% Due 10/31/2025 2,450,000.00 Various 0.49% 2,422,492.19 2,435,115.43 91.18 3.87% 2,233,807.10 2,571.82 1.49% (201,308.33) Aaa / AA+ AAA 2.59 2.52 91282CAZ4 US Treasury Note 0.375% Due 11/30/2025 2,250,000.00 03/26/2021 0.77% 2,209,658.20 2,226,981.30 91.22 3.87% 2,052,423.00 2,827.95 1.37% (174,558.30) Aaa / AA+ AAA 2.67 2.60 91282CBH3 US Treasury Note 0.375% Due 01/31/2026 2,500,000.00 05/27/2021 0.75% 2,456,445.31 2,473,597.04 90.78 3.84% 2,269,432.50 1,553.87 1.52% (204,164.54) Aaa / AA+ AAA 2.84 2.77 91282CBW0 US Treasury Note 0.750% Due 04/30/2026 2,500,000.00 05/27/2021 0.80% 2,493,652.34 2,496,028.30 91.16 3.82% 2,279,102.50 7,872.93 1.53% (216,925.80) Aaa / AA+ AAA 3.08 2.98 91282CCZ2 US Treasury Note 0.875% Due 09/30/2026 1,400,000.00 10/18/2021 1.19% 1,379,054.68 1,385,186.43 90.56 3.78% 1,267,875.00 33.47 0.85% (117,311.43) Aaa / AA+ AAA 3.50 3.39 91282CDG3 US Treasury Note 1.125% Due 10/31/2026 1,400,000.00 11/15/2021 1.25% 1,391,468.75 1,393,826.75 91.21 3.77% 1,276,898.00 6,613.26 0.86% (116,928.75) Aaa / AA+ AAA 3.59 3.44 As of March 31, 2023 36 129 Holdings Report City of Cupertino -Account #10659 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 91282CEW7 US Treasury Note 3.250% Due 06/30/2027 3,250,000.00 Various 3.18% 3,260,312.50 3,258,536.10 98.27 3.69% 3,193,885.50 26,552.13 2.15% (64,650.60) Aaa / AA+ AAA 4.25 3.90 91282CFB2 US Treasury Note 2.750% Due 07/31/2027 400,000.00 08/22/2022 3.12% 393,218.75 394,049.95 96.30 3.68% 385,218.80 1,823.20 0.26% (8,831.15) Aaa / AA+ AAA 4.34 4.02 91282CFH9 US Treasury Note 3.125% Due 08/31/2027 4,500,000.00 Various 3.28% 4,468,902.34 4,472,383.65 97.81 3.67% 4,401,562.50 12,228.26 2.95% (70,821.15) Aaa / AA+ AAA 4.42 4.07 91282CFM8 US Treasury Note 4.125% Due 09/30/2027 3,450,000.00 Various 4.31% 3,421,152.34 3,423,620.62 101.88 3.67% 3,514,956.60 388.83 2.35% 91,335.98 Aaa / AA+ AAA 4.50 4.08 91282CFZ9 US Treasury Note 3.875% Due 11/30/2027 850,000.00 12/05/2022 3.81% 852,656.25 852,486.95 101.04 3.63% 858,832.35 11,039.49 0.58% 6,345.40 Aaa / AA+ AAA 4.67 4.19 91282CGC9 US Treasury Note 3.875% Due 12/31/2027 2,750,000.00 Various 3.67% 2,775,107.42 2,774,227.76 101.05 3.63% 2,778,897.00 26,787.81 1.87% 4,669.24 Aaa / AA+ AAA 4.76 4.27 91282CGH8 US Treasury Note 3.500% Due 01/31/2028 3,000,000.00 02/07/2023 3.81% 2,957,929.69 2,959,133.02 99.48 3.62% 2,984,298.00 17,403.31 2.01% 25,164.98 Aaa / AA+ AAA 4.84 4.39 91282CGP0 US Treasury Note 4.000% Due 02/29/2028 3,700,000.00 Various 4.00% 3,699,113.28 3,699,259.15 101.71 3.62% 3,763,303.30 12,869.57 2.52% 64,044.15 Aaa / AA+ AAA 4.92 4.42 TOTAL US Treasury 52,900,000.00 2.29% 52,523,617.20 52,610,522.75 3.87% 50,799,763.95 177,702.54 34.06% (1,810,758.80) Aaa / AA+ AAA 3.28 3.06 TOTAL PORTFOLIO 156,579,546.75 1.88% 156,510,610.07 156,313,174.13 4.41% 149,130,639.14 539,466.74 100.00% (7,182,534.99) Aa1 / AA AAA 2.69 2.31 TOTAL MARKET VALUE PLUS ACCRUALS 149,670,105.88 As of March 31, 2023 37 130 SECTION |Section 4 |Transactions 38 131 Transaction Ledger City of Cupertino -Account #10659 Transaction Type Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/Sold Total Amount Gain/Loss ACQUISITIONS Purchase 01/06/2023 91282CGC9 750,000.00 US Treasury Note 3.875% Due: 12/31/2027 99.660 3.95%747,451.17 481.70 747,932.87 0.00 Purchase 01/26/2023 91282CGC9 2,000,000.00 US Treasury Note 3.875% Due: 12/31/2027 101.383 3.57%2,027,656.25 5,566.30 2,033,222.55 0.00 Purchase 02/08/2023 91282CGH8 3,000,000.00 US Treasury Note 3.5% Due: 01/31/2028 98.598 3.81%2,957,929.69 2,320.44 2,960,250.13 0.00 Purchase 02/28/2023 91282CGP0 2,100,000.00 US Treasury Note 4% Due: 02/29/2028 99.285 4.16%2,084,988.28 0.00 2,084,988.28 0.00 Purchase 03/09/2023 57636QAW4 945,000.00 MasterCard Inc Callable Note Cont 2/9/28 4.875% Due: 03/09/2028 99.903 4.90%944,083.35 0.00 944,083.35 0.00 Purchase 03/17/2023 91282CGP0 1,600,000.00 US Treasury Note 4% Due: 02/29/2028 100.883 3.80%1,614,125.00 2,956.52 1,617,081.52 0.00 Subtotal 10,395,000.00 10,376,233.74 11,324.96 10,387,558.70 0.00 TOTAL ACQUISITIONS 10,395,000.00 10,376,233.74 11,324.96 10,387,558.70 0.00 DISPOSITIONS Sale 01/26/2023 912828V23 1,500,000.00 US Treasury Note 2.25% Due: 12/31/2023 97.762 1.80%1,466,425.78 2,424.03 1,468,849.81 -39,625.84 Sale 02/08/2023 3137EAFA2 900,000.00 FHLMC Note 0.25% Due: 12/04/2023 96.198 0.28%865,782.00 400.00 866,182.00 -33,974.70 Sale 02/08/2023 912828B66 2,000,000.00 US Treasury Note 2.75% Due: 02/15/2024 97.910 1.96%1,958,203.13 26,453.80 1,984,656.93 -53,653.49 Sale 02/24/2023 3130A0XE5 1,500,000.00 FHLB Note 3.25% Due: 03/08/2024 98.041 2.27%1,470,615.00 22,479.17 1,493,094.17 -43,641.63 Sale 03/09/2023 24422EVN6 830,000.00 John Deere Capital Corp Note 0.45% Due: 01/17/2024 95.959 0.47%796,459.70 539.50 796,999.20 -33,363.90 December 31, 2022 through March 31, 2023 As of March 31, 2023 39 132 Transaction Ledger City of Cupertino -Account #10659 Transaction Type Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/Sold Total Amount Gain/Loss Sale 03/15/2023 91282CBR1 1,450,000.00 US Treasury Note 0.25% Due: 03/15/2024 95.648 0.33%1,386,902.34 0.00 1,386,902.34 -61,907.58 Sale 03/16/2023 24422EVN6 200,000.00 John Deere Capital Corp Note 0.45% Due: 01/17/2024 96.120 0.47%192,240.00 147.50 192,387.50 -7,718.44 Subtotal 8,380,000.00 8,136,627.95 52,444.00 8,189,071.95 -273,885.58 TOTAL DISPOSITIONS 8,380,000.00 8,136,627.95 52,444.00 8,189,071.95 -273,885.58 December 31, 2022 through March 31, 2023 As of March 31, 2023 40 133 Important Disclosures 2023 Chandler Asset Management,Inc, An Independent Registered Investment Adviser. Information contained herein is confidential.Prices are provided by ICE Data Services Inc (“IDS”),an independent pricing source.In the event IDS does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures.Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. Performance results are presented gross-of-advisory fees and represent the client’s Total Return.The deduction of advisory fees lowers performance results.These results include the reinvestment of dividends and other earnings.Past performance may not be indicative of future results.Therefore,clients should not assume that future performance of any specific investment or investment strategy will be profitable or equal to past performance levels.All investment strategies have the potential for profit or loss.Economic factors,market conditions or changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Index returns assume reinvestment of all distributions.Historical performance results for investment indexes generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee,the incurrence of which would have the effect of decreasing historical performance results.It is not possible to invest directly in an index. Source ICE Data Indices,LLC ("ICE"),used with permission. ICE permits use of the ICE indices and related data on an "as is"basis; ICE,its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied,including any warranties of merchantability or fitness for a particular purpose or use,including the indices,index data and any data included in,related to,or derived therefrom.Neither ICE data,its affiliates or their respective third party providers guarantee the quality,adequacy,accuracy,timeliness or completeness of the indices or the index data or any component thereof,and the indices and index data and all components thereof are provided on an "as is"basis and licensee's use it at licensee's own risk. ICE data,its affiliates and their respective third party do not sponsor,endorse,or recommend chandler asset management,or any of its products or services. This report is provided for informational purposes only and should not be construed as a specific investment or legal advice.The information contained herein was obtained from sources believed to be reliable as of the date of publication,but may become outdated or superseded at any time without notice.Any opinions or views expressed are based on current market conditions and are subject to change.This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as indicator of future results.Past performance is not indicative of future results.This report is not intended to constitute an offer,solicitation,recommendation or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit and market risk.Interest rate risk:the value of fixed income investments will decline as interest rates rise.Credit risk:the possibility that the borrower may not be able to repay interest and principal.Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk.Market risk:the bond market in general could decline due to economic conditions,especially during periods of rising interest rates. Ratings information have been provided by Moody’s,S&P and Fitch through data feeds we believe to be reliable as of the date of this statement, however we cannot guarantee its accuracy. Security level ratings for U.S.Agency issued mortgage-backed securities (“MBS”)reflect the issuer rating because the securities themselves are not rated.The issuing U.S.Agency guarantees the full and timely payment of both principal and interest and carries a AA+/Aaa/AAA by S&P,Moody’s and Fitch respectively. Your qualified custodian bank maintains control of all assets reflected in this statement and we urge you to compare this statement to the one you receive from your qualified custodian.Chandler does not have any authority to withdraw or deposit funds from/to the custodian account. As of March 31, 2023 41 134 Benchmark Disclosures ICE BofA 1-5 Yr US Treasury & Agency Index The ICE BofA 1-5 Year US Treasury &Agency Index tracks the performance of US dollar denominated US Treasury and nonsubordinated US agency debt issued in the US domestic market.Qualifying securities must have an investment grade rating (based on an average of Moody’s,S&P and Fitch).Qualifying securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity,at least 18 months to maturity at time of issuance,a fixed coupon schedule,and a minimum amount outstanding of $1 billion for sovereigns and $250 million for agencies. As of March 31, 2023 42 135 INVESTMENT AND INSURANCE PRODUCTS ARE: ·NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY FEDERAL GOVERNMENT AGENCY ·NOT A DEPOSIT, OBLIGATION OF, OR GUARANTEED BY ANY BANK OR BANKING AFFILIATE ·SUBJECT TO INVESTMENT RISKS AND MAY LOSE VALUE, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED PCS - SAN FRANCISCO CA 510 N VALLEY MILLS DRIVE, SUITE 400 WACO, TX 76710-6075 CITY OF CUPERTINO -CHANDLER ASSET MANAGEMENT MONTHLY STATEMENT MARCH 1, 2023 THROUGH MARCH 31, 2023 ACCOUNT MANAGER: MICHAEL J WADE TELEPHONE NUMBER: 515-878-6110 PFGEDD INVESTMENT CONTACT: IMR/RYLIE HAY TELEPHONE NUMBER: ADMINISTRATOR: BELINDA CONWAY TELEPHONE NUMBER: 254-265-6137 09123 SE 136 Custody and trust services are provided by Principal Bank ®, Member FDIC, and/or Principal Trust Company ®. These services are provided under the trade name Principal ®Custody Solutions. Principal Trust Company is a trade name of Delaware Charter Guarantee & T nk and Principal Trust Company are members of the Principal Financial Group ®, Des Moines, IA 50392. ASSET VALUATION PRACTICES VALUES REFLECTED FOR PUBLICLY TRADED ASSETS ARE OBTAINED FROM UNAFFILIATED SOURCES. IN SITUATIONS WHERE AN ASSET VALUE CANNOT BE PROVIDED BY OUR UNAFFILIATED PRICING SOURCES, SUCH AS BUT NOT LIMITED TO NON-PUBLICLY TRADED ASSETS, THE CUSTOMER OR THEIR DESIGNATED REPRESENTATIVE MUST PROVIDE THE UPDATED VALUE. IF PRINCIPAL CUSTODY SOLUTIONS DOES NOT RECEIVE AN UPDATED VALUE, OR IS UNABLE TO USE THE VALUE PROVIDED, THE LAST REPORTED VALUE WILL CONTINUE TO BE REPORTED. VALUES OBTAINED FROM THE CUSTOMER OR THEIR DESIGNATED REPRESENTATIVE SHOULD NOT BE CONSIDERED TO BE CERTIFIED BY PRINCIPAL BANK/PRINCIPAL TRUST COMPANY, AS APPLICABLE. SPECIAL INVESTMENTS "SPECIAL INVESTMENTS" ARE ASSETS NOT HELD IN CUSTODY BY PRINCIPAL BANK/PRINCIPAL TRUST COMPANY BUT WHOSE VALUE MAY BE SHOWN ON ACCOUNT STATEMENTS. EXAMPLES OF SPECIAL INVESTMENTS INCLUDE, BUT ARE NOT LIMITED TO, COMMON OR COLLECTIVE FUNDS NOT ADMINISTERED BY PRINCIPAL BANK/PRINCIPAL TRUST COMPANY (OR THEIR AFFILIATES), HEDGE FUNDS, LIMITED PARTNERSHIPS, AND OTHER UNREGISTERED SECURITIES. AT THE DIRECTION OF AND AS A MATTER OF CONVENIENCE TO ITS CLIENTS, PRINCIPAL BANK/PRINCIPAL TRUST COMPANY MAY BE REPORT SPECIAL INVESTMENTS AS A RECORDKEEPING ITEM ON ACCOUNT STATEMENTS, AT NOMINAL VALUE OR SUCH OTHER VALUE PROVIDED BY CLIENTS/EXTERNAL SOURCES. NEITHER PRINCIPAL BANK NOR PRINCIPAL TRUST COMPANY IS RESPONSIBLE FOR THE ACCURACY OF INFORMATION PROVIDED BY EXTERNAL SOURCES, AND DOES NOT CERTIFY THAT INFORMATION PROVIDED BY THESE EXTERNAL SOURCES IS TRUE OR CORRECT FOR THE SPECIAL INVESTMENTS REFLECTED IN YOUR ACCOUNT. TRADE CONFIRMS PURSUANT TO FEDERAL REGULATION, MONTHLY OR QUARTERLY ACCOUNT STATEMENTS THAT INCLUDE INVESTMENT TRANSACTION DETAILS MAY BE PROVIDED IN LIEU OF SEPARATE TRADE CONFIRMATIONS. SEPARATE TRADE CONFIRMS MAY BE OBTAINED AT NO ADDITIONAL COST UPON WRITTEN REQUEST TO THE ACCOUNT MANAGER. UNCLAIMED PROPERTY DESIGNATED REPRESENTATIVE NOTIFICATION YOUR PROPERTY MAY BE TRANSFERRED TO THE APPROPRIATE STATE IF NO ACTIVITY OCCURS IN THE ACCOUNT WITHIN THE TIME PERIOD SPECIFIED BY STATE LAW. IF YOUR STATE OF RESIDENCE ALLOWS, YOU MAY DESIGNATE A REPRESENTATIVE FOR THE PURPOSE OF RECEIVING NOTICE OF ACCOUNT INACTIVITY BY PROVIDING THE NAME AND MAILING OR EMAIL ADDRESS OF A REPRESENTATIVE. THE DESIGNATED REPRESENTATIVE DOES NOT HAVE ANY RIGHTS TO YOUR ACCOUNT. PLEASE REFER TO YOUR STATE'S UNCLAIMED PROPERTY WEBSITE FOR MORE INFORMATION AND INSTRUCTIONS ON HOW TO DESIGNATE A REPRESENTATIVE FOR NOTICE. 137 TABLE OF CONTENTS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ PAGE REPORT NAME NUMBER ASSET SUMMARY .................................................................................. 1 STATEMENT OF ASSETS AND LIABILITIES ............................................................ 2 CASH SUMMARY ................................................................................... 20 STATEMENT OF TRANSACTIONS ...................................................................... 21 138 PAGE 1 ASSET SUMMARY CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ASSET SUMMARY % TOTAL UNREALIZED ESTIMATED CURRENT ACCRUED INVESTMENT CATEGORY COST VALUE MARKET VALUE MARKET GAIN/LOSS ANNUAL INCOME YIELD INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ CASH 0.00 0.00 0.00 CASH EQUIVALENTS 724,920.33 724,920.33 0.49 0.00 29,214 4.03 1,523.96 BONDS AND NOTES 155,785,689.74 148,410,822.34 99.51 7,374,867.40- 2,853,941 1.92 539,438.77 TOTAL INVESTMENTS 156,510,610.07 149,135,742.67 100.00 7,374,867.40- 2,883,155 1.93 540,962.73 TOTAL ACCRUALS 540,962.73 540,962.73 ===================================================================================================================================== TOTAL ACCRUALS AND INVESTMENTS 157,051,572.80 149,676,705.40 7,374,867.40- 2,883,155 1.93 540,962.73 139 PAGE 2 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ CASH EQUIVALENTS 675,492.47 ALLSPRING 100% TREASURY 675,492.47 675,492.47 0.45 0.00 1,506.20 MONEY MARKET FUND - #008 1.0000 1.0000 49,427.86 PRINCIPAL PUBLIC DEPOSIT SWEEP 49,427.86 49,427.86 0.03 0.00 17.76 PROGRAM 1.0000 1.0000 TOTAL CASH EQUIVALENTS 724,920.33 724,920.33 0.49 0.00 1,523.96 BOND & NOTES 1,675,000 AIR PRODUCTS & CHEMICALS 1,771,212.00 1,647,881.75 1.10 123,330.25- 9,507.95 DTD 07/31/14 3.350 07/31/2024 105.7440 98.3810 MOODY'S RATING A2 CUSIP 009158AV8 1,875,000 AMAZON.COM INC 1,866,900.00 1,699,950.00 1.14 166,950.00- 7,239.58 DTD 05/12/21 1.000 05/12/2026 99.5680 90.6640 MOODY'S RATING A1 CUSIP 023135BX3 1,375,000 AMERICAN EXPRESS CREDIT ACCOUNT 1,374,695.85 1,342,783.75 0.90 31,912.10- 2,071.67 ASSET BCKD SEC SER 2022-2 CL A 99.9779 97.6570 DTD 05/24/2022 3.390% 05/17/2027 NON CALLABLE CUSIP 02582JJT8 1,545,000 AMERICAN EXPRESS CREDIT ACCOUNT 1,524,359.77 1,474,795.20 0.99 49,564.57- 1,517.53 ASSET BCKD SEC SER 2022-1 CL A 98.6641 95.4560 DTD 03/18/2022 2.210% 03/15/2027 NON CALLABLE MOODY'S RATING AAA CUSIP 02589BAA8 1,150,000 BANK OF AMERICA CORP 1,114,222.54 1,092,270.00 0.73 21,952.54- 17,963.06 MED TERM NOTE 96.8889 94.9800 DTD 04/23/19 04/23/2027 MOODY'S RATING A2 CUSIP 06051GHT9 140 PAGE 3 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 600,000 BANK OF AMERICA CORP 620,988.00 562,140.00 0.38 58,848.00- 1,612.00 MED TERM NOTE 103.4980 93.6900 DTD 02/13/20 02/13/2026 MOODY'S RATING A2 CUSIP 06051GHY8 700,000 BANK OF AMERICA CORP 701,274.00 639,877.00 0.43 61,397.00- 2,616.02 MED TERM NOTE 100.1820 91.4110 DTD 06/19/20 06/19/2026 MOODY'S RATING A2 CUSIP 06051GJD2 600,000 BANK OF MONTREAL 582,216.00 567,312.00 0.38 14,904.00-854.17 MED TERM NOTE 97.0360 94.5520 DTD 07/09/21 0.625 07/09/2024 MOODY'S RATING A2 CUSIP 06367TQW3 1,240,000 BANK OF MONTREAL 1,285,656.80 1,161,371.60 0.78 124,285.20- 9,558.33 MED TERM NOTE 103.6820 93.6590 DTD 04/27/20 1.850 05/01/2025 MOODY'S RATING A2 CUSIP 06367WB85 1,000,000 BANK OF NEW YORK MELLON 1,024,910.00 967,120.00 0.65 57,790.00- 14,593.06 MED TERM NOTE 102.4910 96.7120 DTD 11/18/13 3.950 11/18/2025 MOODY'S RATING A1 CUSIP 06406HCQ0 1,370,000 BANK OF NY MELLON CORP 1,369,808.20 1,319,351.10 0.88 50,457.10- 19,887.83 DTD 04/26/2022 3.350% 04/25/2025 99.9860 96.3030 CALLABLE MOODY'S RATING A1 CUSIP 06406RBC0 1,615,000 BERKSHIRE HATHAWAY FIN 1,614,693.15 1,529,049.70 1.03 85,643.45- 1,650.89 DTD 03/15/2022 2.300% 03/15/2027 99.9810 94.6780 CALLABLE MOODY'S RATING AA2 CUSIP 084664CZ2 141 PAGE 4 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 450,000 BMW VEHICLE LEASE TRUST 449,932.73 438,763.50 0.29 11,169.23-82.50 SER 2022-1 CL A3 *0 DAY DELAY*99.9851 97.5030 DTD 01/19/22 1.100 03/25/2025 CUSIP 05601XAC3 303,787.63 BMW VEHICLE LEASE TRUST 303,756.27 297,736.18 0.20 6,020.09-13.92 SER 2021-2 CL A3 *0 DAY DELAY*99.9897 98.0080 DTD 09/15/21 0.330 12/26/2024 MOODY'S RATING AAA CUSIP 09690AAC7 530,000 BMW VEHICLE OWNER TRUST 529,972.44 517,884.20 0.35 12,088.24-283.55 ASSET BCKD SEC SER 2022-A CL A3 99.9948 97.7140 DTD 05/18/2022 3.210% 08/25/2026 CALLABLE MOODY'S RATING AAA CUSIP 05602RAD3 755,000 CALIFORNIA ST 772,342.35 732,070.65 0.49 40,271.70- 9,060.00 TXBL-REF 102.2970 96.9630 DTD 10/24/19 2.400 10/01/2024 MOODY'S RATING AA2 CUSIP 13063DRK6 1,100,000 CATERPILLAR FINL SERVICE 1,111,517.00 1,059,839.00 0.71 51,678.00- 9,394.31 MED TERM NOTE 101.0470 96.3490 DTD 11/08/19 2.150 11/08/2024 MOODY'S RATING A2 CUSIP 14913Q3B3 960,000 CHARLES SCHWAB CORP 959,729.90 859,881.60 0.58 99,848.30- 1,829.33 DTD 03/03/2022 2.450% 03/03/2027 99.9719 89.5710 CALLABLE MOODY'S RATING A2 CUSIP 808513BY0 1,500,000 FED HOME LN BK 1,564,890.20 1,471,665.00 0.99 93,225.20- 12,817.71 DTD 05/08/14 2.875 06/14/2024 104.3260 98.1110 MOODY'S RATING AAA CUSIP 3130A1XJ2 142 PAGE 5 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 2,000,000 FED HOME LN BK 2,103,380.00 1,961,420.00 1.32 141,960.00- 2,875.00 DTD 08/15/14 2.875 09/13/2024 105.1690 98.0710 MOODY'S RATING AAA CUSIP 3130A2UW4 1,300,000 FED HOME LN MTG CORP 1,398,414.06 1,267,461.00 0.85 130,953.06- 3,435.25 SER KO41 CL A2 *24 DAY DELAY*107.5703 97.4970 DTD 12/01/14 3.171 10/25/2024 CUSIP 3137BFE98 2,365,000 FED HOME LN MTG CORP 2,363,178.95 2,251,243.50 1.51 111,935.45- 4,828.54 DTD 02/14/20 1.500 02/12/2025 99.9230 95.1900 MOODY'S RATING AAA CUSIP 3137EAEP0 1,250,000 FED HOME LN MTG CORP 1,243,775.00 1,150,037.50 0.77 93,737.50-911.46 SER USD 99.5020 92.0030 DTD 07/23/20 0.375 07/21/2025 MOODY'S RATING AAA CUSIP 3137EAEU9 2,500,000 FED HOME LN MTG CORP 2,489,362.80 2,284,025.00 1.53 205,337.80-208.33 DTD 09/25/20 0.375 09/23/2025 99.5745 91.3610 MOODY'S RATING AAA CUSIP 3137EAEX3 855,000 FED HOME LN MTG CORP 854,153.55 829,170.45 0.56 24,983.10-694.69 DTD 12/04/20 0.250 12/04/2023 99.9010 96.9790 MOODY'S RATING AAA CUSIP 3137EAFA2 1,500,000 FED NATL MTG ASSN 1,484,895.00 1,447,200.00 0.97 37,695.00- 6,489.58 DTD 07/08/19 1.750 07/02/2024 98.9930 96.4800 MOODY'S RATING AAA CUSIP 3135G0V75 1,975,000 FED NATL MTG ASSN 1,965,802.75 1,897,777.50 1.27 68,025.25- 14,798.78 DTD 10/18/19 1.625 10/15/2024 99.5343 96.0900 MOODY'S RATING AAA CUSIP 3135G0W66 143 PAGE 6 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,295,000 FED NATL MTG ASSN 1,309,953.95 1,237,929.35 0.83 72,024.60- 4,910.21 DTD 01/10/20 1.625 01/07/2025 101.1548 95.5930 MOODY'S RATING AAA CUSIP 3135G0X24 1,860,000 FED NATL MTG ASSN 1,856,168.40 1,729,353.60 1.16 126,814.80- 5,134.38 DTD 04/24/20 0.625 04/22/2025 99.7940 92.9760 MOODY'S RATING AAA CUSIP 3135G03U5 2,500,000 FED NATL MTG ASSN 2,499,227.30 2,310,275.00 1.55 188,952.30- 3,611.11 DTD 06/19/20 0.500 06/17/2025 99.9691 92.4110 MOODY'S RATING AAA CUSIP 3135G04Z3 2,500,000 FED NATL MTG ASSN 2,487,983.75 2,288,850.00 1.53 199,133.75-937.50 DTD 08/27/20 0.375 08/25/2025 99.5194 91.5540 MOODY'S RATING AAA CUSIP 3135G05X7 2,500,000 FED NATL MTG ASSN 2,492,700.00 2,287,275.00 1.53 205,425.00- 5,000.00 DTD 11/12/20 0.500 11/07/2025 99.7080 91.4910 MOODY'S RATING AAA CUSIP 3135G06G3 1,000,000 FHLMC MULTIFAMILY STRUCTURED P 1,079,687.50 967,810.00 0.65 111,877.50- 2,508.33 SER K049 CL A2 *24 DAY DELAY*107.9688 96.7810 DTD 10/01/15 3.010 08/25/2025 CUSIP 3137BLMZ8 950,000 FHLMC MULTIFAMILY STRUCTURED P 1,018,132.81 925,176.50 0.62 92,956.31- 2,639.42 SER K050 CL A2 *24 DAY DELAY*107.1719 97.3870 DTD 11/01/15 08/25/2025 CUSIP 3137BLW95 440,000 FHLMC MULTIFAMILY STRUCTURED P 453,079.69 428,071.60 0.29 25,008.09- 1,212.93 SER K051 CL A2 *24 DAY DELAY*102.9727 97.2890 DTD 12/01/15 3.308 09/25/2025 CUSIP 3137BM7C4 144 PAGE 7 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 570,000 FHLMC MULTIFAMILY STRUCTURED P 582,001.17 549,747.90 0.37 32,253.27- 1,422.63 SER K053 CL A2 *24 DAY DELAY*102.1055 96.4470 DTD 03/01/16 2.995 12/25/2025 CUSIP 3137BN6G4 650,000 FHLMC MULTIFAMILY STRUCTURED P 687,451.17 616,278.00 0.41 71,173.17- 1,437.04 SER K058 CL A2 *24 DAY DELAY*105.7617 94.8120 DTD 11/01/16 2.653 08/25/2026 CUSIP 3137BSP72 1,000,000 FHLMC MULTIFAMILY STRUCTURED P 950,664.06 961,010.00 0.64 10,345.94 2,703.33 SER K068 CL A2 *24 DAY DELAY*95.0664 96.1010 DTD 10/01/17 3.244 08/25/2027 MOODY'S RATING AAA CUSIP 3137FBBX3 879,250.27 GM FINANCIAL AUTOMOBILE LEASIN 879,238.32 861,498.21 0.58 17,740.11-95.25 SER 2021-3 CL A3 *0 DAY DELAY*99.9987 97.9810 DTD 08/18/21 0.390 10/21/2024 CUSIP 36262XAC8 945,000 GM FINANCIAL AUTOMOBILE LEASIN 944,991.87 919,872.45 0.62 25,119.42-534.19 SER 2022-1 CL A3 *0 DAY DELAY*99.9992 97.3410 DTD 02/23/22 1.850 03/20/2025 MOODY'S RATING AAA CUSIP 36265MAC9 350,000 GM FINANCIAL SECURITIZED TERM 349,991.08 332,024.00 0.22 17,967.08-99.17 SER 2021-4 CL A3 *0 DAY DELAY*99.9975 94.8640 DTD 10/21/21 0.680 09/16/2026 MOODY'S RATING AAA CUSIP 362554AC1 390,000 GM FINANCIAL SECURITIZED TERM 389,918.49 377,664.30 0.25 12,254.19-503.75 ASSET BCKD SEC SER 2022-2 CL A3 99.9791 96.8370 DTD 04/13/2022 3.100% 02/16/2027 CALLABLE MOODY'S RATING AAA CUSIP 362585AC5 145 PAGE 8 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 295,000 GM FINANCIAL SECURITIZED TERM 294,974.36 280,288.35 0.19 14,686.01-154.88 SER 2022-1 CL A3 *0 DAY DELAY*99.9913 95.0130 DTD 01/19/22 1.260 11/16/2026 CUSIP 380146AC4 1,400,000 GUARDIAN LIFE GLOB FUND 1,385,860.00 1,262,660.00 0.85 123,200.00- 3,777.08 144A PRIV PLCMT 0.875 12/10/2025 98.9900 90.1900 MOODY'S RATING AA1 CUSIP 40139LBC6 34,769.09 HONDA AUTO RECEIVABLES OWNER T 34,766.36 34,421.75 0.02 344.61-12.67 SER 2020-2 CL A3 *0 DAY DELAY*99.9922 99.0010 DTD 05/27/20 0.820 07/15/2024 MOODY'S RATING AAA CUSIP 43813DAC2 162,041.83 HONDA AUTO RECEIVABLES OWNER T 162,038.87 157,619.71 0.11 4,419.16-12.15 SER 2021-1 CL A3 *0 DAY DELAY*99.9982 97.2710 DTD 02/24/21 0.270 04/21/2025 MOODY'S RATING AAA CUSIP 43813GAC5 206,120.78 HONDA AUTO RECEIVABLES OWNER T 206,090.50 202,451.83 0.14 3,638.67-27.54 SER 2020-3 CL A3 *0 DAY DELAY*99.9853 98.2200 DTD 09/29/20 0.370 10/18/2024 CUSIP 43813KAC6 740,000 HONDA AUTO RECEIVABLES OWNER T 739,888.70 709,482.40 0.48 30,406.30-618.31 SER 2022-1 CL A3 *0 DAY DELAY*99.9850 95.8760 DTD 02/23/22 1.000 05/15/2026 MOODY'S RATING AAA CUSIP 43815BAC4 460,000 HONDA AUTO RECEIVABLES OWNER T 459,903.03 439,346.00 0.29 20,557.03-112.44 SER 2021-4 CL A3 *0 DAY DELAY*99.9789 95.5100 DTD 11/24/21 0.880 01/21/2026 MOODY'S RATING AAA CUSIP 43815GAC3 146 PAGE 9 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 541,121.52 HYUNDAI AUTO LEASE SECURITIZAT 541,040.35 534,628.06 0.36 6,412.29-69.44 SER 2021-B CL A3 *0 DAY DELAY*99.9850 98.8000 144A PRIV PLCMT 0.330 06/17/2024 MOODY'S RATING AAA CUSIP 44891VAC5 540,000 HYUNDAI AUTO LEASE SECURITIZAT 539,988.07 525,139.20 0.35 14,848.87-278.40 SER 2022-A CL A3 *0 DAY DELAY*99.9978 97.2480 144A PRIV PLCMT 1.160 01/15/2025 MOODY'S RATING AAA CUSIP 44891WAC3 1,010,000 HYUNDAI AUTO RECEIVABLES TRUST 1,009,961.12 970,973.60 0.65 38,987.52-996.53 ASSET BCKD SEC SER 2022-A CL A3 99.9962 96.1360 DTD 03/16/2022 2.220% 10/15/2026 CALLABLE CUSIP 448977AD0 392,283.3 HYUNDAI AUTO RECEIVABLES TRUST 392,242.03 381,456.28 0.26 10,785.75-66.25 SER 2021-A CL A3 *0 DAY DELAY*99.9895 97.2400 DTD 04/28/21 0.380 09/15/2025 CUSIP 44933LAC7 1,330,000 HYUNDAI AUTO RECEIVABLES TRUST 1,296,371.65 1,268,846.60 0.85 27,525.05-437.42 SER 2021-C CL A3 *0 DAY DELAY*97.4716 95.4020 DTD 11/17/21 0.740 05/15/2026 CUSIP 44935FAD6 2,800,000 INTER-AMERICAN DEVEL BK 2,792,300.00 2,720,844.00 1.82 71,456.00- 2,644.44 DTD 09/02/20 0.250 11/15/2023 99.7250 97.1730 MOODY'S RATING AAA CUSIP 4581X0DP0 2,460,000 INTER-AMERICAN DEVEL BK 2,448,733.20 2,247,185.40 1.51 201,547.80- 9,626.46 DTD 04/20/21 0.875 04/20/2026 99.5420 91.3490 MOODY'S RATING AAA CUSIP 4581X0DV7 147 PAGE 10 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 2,400,000 INTL BK RECON & DEVELOP 2,388,859.25 2,199,264.00 1.47 189,595.25- 5,100.00 DTD 10/28/20 0.500 10/28/2025 99.5358 91.6360 MOODY'S RATING AAA CUSIP 459058JL8 2,500,000 INTL FINANCE CORP 2,471,150.00 2,304,650.00 1.55 166,500.00- 1,953.13 DTD 07/16/20 0.375 07/16/2025 98.8460 92.1860 MOODY'S RATING AAA CUSIP 45950KCT5 450,000 JOHN DEERE OWNER TRUST 449,900.46 434,938.50 0.29 14,961.96-464.00 ASSET BCKD SEC SER 2022-A CL A3 99.9779 96.6530 DTD 03/16/2022 2.320% 09/16/2026 NON CALLABLE MOODY'S RATING AAA CUSIP 47787JAC2 59,352.21 JOHN DEERE OWNER TRUST 59,343.16 58,761.66 0.04 581.50-13.45 SER 2020-B CL A3 *0 DAY DELAY*99.9848 99.0050 DTD 07/22/20 0.510 11/15/2024 MOODY'S RATING AAA CUSIP 47787NAC3 29,181.72 JOHN DEERE OWNER TRUST 29,179.94 29,055.07 0.02 124.87-14.27 SER 2020-A CL A3 *0 DAY DELAY*99.9939 99.5660 DTD 03/11/20 1.100 08/15/2024 MOODY'S RATING AAA CUSIP 47789KAC7 580,000 JOHN DEERE OWNER TRUST 579,948.26 554,862.80 0.37 25,085.46-125.67 SER 2021-B CL A3 *0 DAY DELAY*99.9911 95.6660 DTD 07/21/21 0.520 03/16/2026 MOODY'S RATING AAA CUSIP 47789QAC4 655,000 JOHN DEERE OWNER TRUST 654,937.45 642,378.15 0.43 12,559.30- 1,088.76 ASSET BCKD SEC SER 2022-B CL A3 99.9905 98.0730 DTD 07/20/2022 3.740% 02/16/2027 NON CALLABLE MOODY'S RATING AAA CUSIP 47800AAC4 148 PAGE 11 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,050,000 JOHN DEERE OWNER TRUST 1,049,918.52 1,058,526.00 0.71 8,607.48 2,375.33 ASSET BCKD SEC SER 2022-C CL A3 99.9923 100.8120 DTD 10/19/2022 5.090% 06/15/2027 CALLABLE MOODY'S RATING AAA CUSIP 47800BAC2 655,000 JPMORGAN CHASE &655,406.85 620,481.50 0.42 34,925.35- 1,727.78 SER F2F 100.0621 94.7300 DTD 06/23/21 06/23/2025 MOODY'S RATING A1 CUSIP 46647PCK0 401,000 JPMORGAN CHASE & CO 415,969.33 375,227.73 0.25 40,741.60- 3,689.17 DTD 04/22/20 04/22/2026 103.7330 93.5730 MOODY'S RATING A1 CUSIP 46647PBK1 1,370,000 JPMORGAN CHASE & CO 1,371,773.90 1,298,225.70 0.87 73,548.20- 3,762.93 DTD 06/01/21 06/01/2025 100.1295 94.7610 MOODY'S RATING A1 CUSIP 46647PCH7 1,000,000 MASSMUTUAL GLOBAL FUNDIN 1,002,230.00 888,760.00 0.60 113,470.00- 2,500.00 144A PRIV PLCMT 1.200 07/16/2026 100.2230 88.8760 MOODY'S RATING AA3 CUSIP 57629WDE7 945,000 MASTERCARD INC 944,083.35 974,143.80 0.65 30,060.45 2,815.31 DTD 03/09/2023 4.875% 03/09/2028 99.9030 103.0840 CALLABLE MOODY'S RATING AA3 CUSIP 57636QAW4 1,115,000 MET LIFE GLOB FUNDING I 1,113,728.90 996,341.70 0.67 117,387.20- 4,645.83 144A PRIV PLCMT 1.875 01/11/2027 99.8860 89.3580 MOODY'S RATING AA3 CUSIP 59217GER6 149 PAGE 12 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 770,000 MET TOWER GLOBAL FUNDING 769,291.60 683,290.30 0.46 86,001.30-454.51 144A PRIV PLCMT 1.250 09/14/2026 99.9080 88.7390 MOODY'S RATING AA3 CUSIP 58989V2D5 650,000 MORGAN STANLEY 615,699.50 609,869.00 0.41 5,830.50- 6,044.35 DTD 04/28/20 04/28/2026 94.7230 93.8260 MOODY'S RATING A1 CUSIP 6174468Q5 1,680,000 NEW YORK LIFE GLOBAL FDG 1,678,185.60 1,587,112.80 1.06 91,072.80- 5,210.33 144A PRIV PLCMT 1.450 01/14/2025 99.8920 94.4710 MOODY'S RATING AAA CUSIP 64952WEK5 33,753.24 NISSAN AUTO RECEIVABLES OWNER 33,920.69 33,705.99 0.02 214.70-28.95 SER 2019-C CL A3 *0 DAY DELAY*100.4961 99.8600 DTD 10/23/19 1.930 07/15/2024 MOODY'S RATING AAA CUSIP 65479JAD5 670,000 NORTHERN TRUST CORP 668,914.60 656,365.50 0.44 12,549.10- 10,496.67 DTD 05/10/2022 4.000% 05/10/2027 99.8380 97.9650 CALLABLE MOODY'S RATING A2 CUSIP 665859AW4 850,000 NORTHWESTERN MUTUAL GLBL 827,449.50 764,345.50 0.51 63,104.00- 1,454.44 144A PRIV PLCMT 0.800 01/14/2026 97.3470 89.9230 MOODY'S RATING AAA CUSIP 66815L2A6 1,170,000 NORTHWESTERN MUTUAL GLBL 1,169,602.20 1,152,859.50 0.77 16,742.70- 11,700.00 DTD 07/01/2022 4.000% 07/01/2025 99.9660 98.5350 NON CALLABLE 144A PRIVATE PLACEMENT MOODY'S RATING AAA CUSIP 66815L2J7 150 PAGE 13 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 370,000 PACCAR FINANCIAL CORP 369,182.30 356,872.40 0.24 12,309.90- 1,016.47 MED TERM NOTE 99.7790 96.4520 DTD 08/15/19 2.150 08/15/2024 MOODY'S RATING A1 CUSIP 69371RQ25 680,000 PACCAR FINANCIAL CORP 679,632.80 641,607.20 0.43 38,025.60-491.11 MED TERM NOTE 99.9460 94.3540 DTD 08/09/21 0.500 08/09/2024 MOODY'S RATING A1 CUSIP 69371RR40 885,000 PACCAR FINANCIAL CORP 884,769.90 854,387.85 0.57 30,382.05- 12,190.88 DTD 04/07/2022 2.850% 04/07/2025 99.9740 96.5410 NON CALLABLE MOODY'S RATING A1 CUSIP 69371RR73 904,000 PRICOA GLOBAL FUNDING 1 832,972.72 820,144.96 0.55 12,827.76-602.67 144A PRIV PLCMT 0.800 09/01/2025 92.1430 90.7240 MOODY'S RATING AA3 CUSIP 74153WCM9 885,000 PRICOA GLOBAL FUNDING 1 884,088.45 834,537.30 0.56 49,551.15- 3,251.15 144A PRIV PLCMT 1.150 12/06/2024 99.8970 94.2980 MOODY'S RATING AA3 CUSIP 74153WCQ0 1,500,000 ROYAL BANK OF CANADA 1,533,359.18 1,451,175.00 0.97 82,184.18- 7,968.75 DTD 07/16/19 2.550 07/16/2024 102.2240 96.7450 MOODY'S RATING A1 CUSIP 78013XZU5 1,050,000 ROYAL BANK OF CANADA 1,049,611.50 1,018,962.00 0.68 30,649.50- 16,439.06 MEDIUM TERM NOTE 99.9630 97.0440 CONVERTIBLE DTD 04/14/2022 3.375% 04/14/2025 NON CALLABLE MOODY'S RATING A1 CUSIP 78016EZ59 151 PAGE 14 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,760,000 SALESFORCE.COM INC 1,748,937.40 1,671,630.40 1.12 77,307.00- 2,322.22 DTD 07/12/21 0.625 07/15/2024 99.3715 94.9790 MOODY'S RATING A2 CUSIP 79466LAG9 1,500,000 TORONTO-DOMINION BANK 1,527,255.00 1,458,150.00 0.98 69,105.00- 12,035.42 MED TERM NOTE 101.8170 97.2100 DTD 06/12/19 2.650 06/12/2024 MOODY'S RATING A1 CUSIP 89114QCA4 700,000 TORONTO-DOMINION BANK 674,737.00 658,665.00 0.44 16,072.00- 2,283.75 MED TERM NOTE SER FXD 96.3910 94.0950 DTD 01/12/22 1.450 01/10/2025 MOODY'S RATING A1 CUSIP 89114TZL9 151,883.81 TOYOTA AUTO RECEIVABLES OWNER 151,855.52 149,444.56 0.10 2,410.96-23.63 SER 2020-D CL A3 *0 DAY DELAY*99.9814 98.3940 DTD 10/13/20 0.350 01/15/2025 CUSIP 89236XAC0 430,000 TOYOTA AUTO RECEIVABLES OWNER 429,990.84 409,919.00 0.27 20,071.84-135.69 SER 2021-D CL A3 *0 DAY DELAY*99.9979 95.3300 DTD 11/15/21 0.710 04/15/2026 CUSIP 89238JAC9 590,848.46 TOYOTA AUTO RECEIVABLES OWNER 590,738.80 575,829.09 0.39 14,909.71-68.28 SER 2021-A CL A3 *0 DAY DELAY*99.9815 97.4580 DTD 02/08/21 0.260 05/15/2025 MOODY'S RATING AAA CUSIP 89240BAC2 332,089.16 TOYOTA LEASE OWNER TRUST 325,447.37 328,937.63 0.22 3,490.26 32.38 SER 2021-A CL A3 *0 DAY DELAY*98.0000 99.0510 144A PRIV PLCMT 0.390 04/22/2024 MOODY'S RATING AAA CUSIP 89238EAC0 152 PAGE 15 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,150,000 TOYOTA LEASE OWNER TRUST 1,149,818.99 1,115,914.00 0.75 33,904.99-688.72 ASSET BCKD SEC SER 2022-A CL A3 99.9843 97.0360 DTD 02/28/2022 1.960% 02/20/2025 CALLABLE 144A PRIVATE PLACEMENT CUSIP 89238LAC4 1,385,000 TOYOTA MOTOR CREDIT CORP 1,384,390.60 1,248,937.60 0.84 135,453.00- 4,457.97 MED TERM NOTE 99.9560 90.1760 DTD 06/18/21 1.125 06/18/2026 MOODY'S RATING A1 CUSIP 89236TJK2 1,215,000 TOYOTA MOTOR CREDIT CORP 1,213,371.90 1,150,216.20 0.77 63,155.70- 3,817.13 DTD 01/13/22 1.450 01/13/2025 99.8660 94.6680 MOODY'S RATING A1 CUSIP 89236TJT3 3,100,000 UNITED STATES TREASURY NOTES 3,057,617.20 2,965,088.00 1.99 92,529.20- 2,506.11 DTD 03/15/2022 1.750% 03/15/2025 98.6328 95.6480 MOODY'S RATING AAA CUSIP 91282CED9 3,250,000 UNITED STATES TREASURY NOTES 3,260,312.50 3,193,872.50 2.14 66,440.00- 26,552.14 DTD 06/30/2022 3.250% 06/30/2027 100.3173 98.2730 MOODY'S RATING AAA CUSIP 91282CEW7 400,000 UNITED STATES TREASURY NOTES 393,218.75 385,220.00 0.26 7,998.75- 1,823.20 DTD 07/31/2022 2.750% 07/31/2027 98.3047 96.3050 MOODY'S RATING AAA CUSIP 91282CFB2 4,500,000 UNITED STATES TREASURY NOTES 4,468,902.34 4,401,585.00 2.95 67,317.34- 12,228.26 DTD 08/31/2022 3.125% 08/31/2027 99.3090 97.8130 MOODY'S RATING AAA CUSIP 91282CFH9 153 PAGE 16 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 3,450,000 UNITED STATES TREASURY NOTES 3,421,152.34 3,514,963.50 2.36 93,811.16 388.83 DTD 09/30/2022 4.125% 09/30/2027 99.1639 101.8830 MOODY'S RATING AAA CUSIP 91282CFM8 850,000 UNITED STATES TREASURY NOTES 852,656.25 858,831.50 0.58 6,175.25 11,039.49 DTD 11/30/2022 3.875% 11/30/2027 100.3125 101.0390 MOODY'S RATING AAA CUSIP 91282CFZ9 2,750,000 UNITED STATES TREASURY NOTES 2,775,107.42 2,778,902.50 1.86 3,795.08 26,787.81 DTD 12/31/2022 3.875% 12/31/2027 100.9130 101.0510 MOODY'S RATING AAA CUSIP 91282CGC9 3,000,000 UNITED STATES TREASURY NOTES 2,957,929.69 2,984,310.00 2.00 26,380.31 17,403.32 DTD 01/31/2023 3.500% 01/31/2028 98.5977 99.4770 MOODY'S RATING AAA CUSIP 91282CGH8 3,700,000 UNITED STATES TREASURY NOTES 3,699,113.28 3,766,785.00 2.53 67,671.72 12,869.57 DTD 02/28/2023 4.000% 02/29/2028 99.9760 101.8050 MOODY'S RATING AAA CUSIP 91282CGP0 1,035,000 UNITEDHEALTH GROUP INC 1,025,051.35 941,073.75 0.63 83,977.60- 4,496.50 DTD 05/19/21 1.150 05/15/2026 99.0388 90.9250 MOODY'S RATING A3 CUSIP 91324PEC2 675,000 UNITEDHEALTH GROUP INC 675,316.70 660,244.50 0.44 15,072.20- 9,435.00 DTD 05/20/2022 3.700% 05/15/2027 100.0469 97.8140 CALLABLE MOODY'S RATING A3 CUSIP 91324PEG3 1,250,000 US BANCORP 1,268,262.50 1,201,587.50 0.81 66,675.00- 5,083.33 DTD 07/29/19 2.400 07/30/2024 101.4610 96.1270 MOODY'S RATING A2 CUSIP 91159HHX1 154 PAGE 17 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,500,000 US TREASURY NOTE 1,469,765.63 1,377,480.00 0.92 92,285.63-621.55 DTD 07/31/20 0.250 07/31/2025 97.9844 91.8320 MOODY'S RATING AAA CUSIP 91282CAB7 2,400,000 US TREASURY NOTE 2,366,140.63 2,196,288.00 1.47 169,852.63-16.39 DTD 09/30/20 0.250 09/30/2025 98.5892 91.5120 MOODY'S RATING AAA CUSIP 91282CAM3 2,450,000 US TREASURY NOTE 2,422,492.19 2,233,812.00 1.50 188,680.19- 2,571.82 DTD 10/31/20 0.250 10/31/2025 98.8772 91.1760 MOODY'S RATING AAA CUSIP 91282CAT8 2,250,000 US TREASURY NOTE 2,209,658.20 2,052,427.50 1.38 157,230.70- 2,827.95 DTD 11/30/20 0.375 11/30/2025 98.2070 91.2190 MOODY'S RATING AAA CUSIP 91282CAZ4 2,500,000 US TREASURY NOTE 2,456,445.31 2,269,425.00 1.52 187,020.31- 1,553.87 DTD 02/01/21 0.375 01/31/2026 98.2578 90.7770 MOODY'S RATING AAA CUSIP 91282CBH3 2,500,000 US TREASURY NOTE 2,493,652.34 2,279,100.00 1.53 214,552.34- 7,872.93 DTD 04/30/21 0.750 04/30/2026 99.7461 91.1640 MOODY'S RATING AAA CUSIP 91282CBW0 1,400,000 US TREASURY NOTE 1,379,054.68 1,267,882.00 0.85 111,172.68-33.47 DTD 09/30/21 0.875 09/30/2026 98.5039 90.5630 MOODY'S RATING AAA CUSIP 91282CCZ2 1,400,000 US TREASURY NOTE 1,391,468.75 1,276,898.00 0.86 114,570.75- 6,613.26 DTD 11/01/21 1.125 10/31/2026 99.3906 91.2070 CUSIP 91282CDG3 155 PAGE 18 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,700,000 US TREASURY NOTE 1,753,191.41 1,654,712.00 1.11 98,479.41- 5,018.99 DTD 08/15/14 2.375 08/15/2024 103.1289 97.3360 MOODY'S RATING AAA CUSIP 912828D56 2,000,000 US TREASURY NOTE 2,018,574.22 1,940,620.00 1.30 77,954.22- 10,055.25 DTD 06/30/17 2.000 06/30/2024 100.9287 97.0310 MOODY'S RATING AAA CUSIP 912828XX3 1,700,000 US TREASURY NOTE 1,705,976.56 1,653,318.00 1.11 52,658.56- 14,276.24 DTD 05/01/17 2.000 04/30/2024 100.3516 97.2540 MOODY'S RATING AAA CUSIP 912828X70 2,100,000 US TREASURY NOTE 2,087,203.13 2,014,698.00 1.35 72,505.13- 9,238.26 DTD 12/31/19 1.750 12/31/2024 99.3906 95.9380 CUSIP 912828YY0 1,500,000 US TREASURY NOTE 1,523,144.53 1,418,325.00 0.95 104,819.53- 1,491.71 DTD 03/02/20 1.125 02/28/2025 101.5430 94.5550 MOODY'S RATING AAA CUSIP 912828ZC7 2,500,000 US TREASURY NOTE 2,360,839.85 2,318,750.00 1.55 42,089.85- 3,936.46 DTD 04/30/20 0.375 04/30/2025 94.4336 92.7500 MOODY'S RATING AAA CUSIP 912828ZL7 570,000 VERIZON MASTER TRUST 569,974.92 562,219.50 0.38 7,755.42-647.90 ASSET BCKD SEC SER 2022-5 CL A1A 99.9956 98.6350 DTD 08/11/2022 VAR CPN 07/20/2027 CALLABLE CUSIP 92348KAV5 263,143.4 VERIZON OWNER TRUST 263,088.13 260,140.93 0.17 2,947.20-37.79 SER 2020-B CL A *0 DAY DELAY*99.9790 98.8590 DTD 08/12/20 0.470 02/20/2025 MOODY'S RATING AAA CUSIP 92290BAA9 156 PAGE 19 STATEMENT OF ASSETS AND LIABILITIES CITY OF CUPERTINO AS OF MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF ASSETS AND LIABILITIES COST VALUE MARKET VALUE % TOTAL UNREALIZED PAR VALUE/SHARES DESCRIPTION / UNIT COST / UNIT PRICE MARKET GAIN/LOSS ACCRUED INCOME ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 350,000 WALMART INC 349,338.50 315,511.00 0.21 33,827.50-142.92 DTD 09/17/21 1.050 09/17/2026 99.8110 90.1460 MOODY'S RATING AA2 CUSIP 931142ER0 TOTAL BOND & NOTES 155,785,689.74 148,410,822.34 99.51 7,374,867.40- 539,438.77 ====================================================================================================================================== TOTAL INVESTMENTS 156,510,610.07 149,135,742.67 100.00 7,374,867.40- 540,962.73 TOTAL ACCRUALS 540,962.73 540,962.73 ====================================================================================================================================== TOTAL ACCRUALS AND INVESTMENTS 157,051,572.80 149,676,705.40 157 PAGE 20 CASH SUMMARY CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ CASH SUMMARY DESCRIPTION PRINCIPAL CASH INCOME CASH ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ BEGINNING BALANCE 0.00 0.00 RECEIPTS NET INTEREST COLLECTED 0.00 227,208.96 TRANSFER RECEIPTS 227,208.96 0.00 SALES 2,909,398.19 0.00 CASH MANAGEMENT SALES 1,814,925.23 0.00 TOTAL CASH RECEIPTS 4,951,532.38 227,208.96 DISBURSEMENTS INVESTMENT MANAGEMENT EXPENSES 9,066.69-0.00 TRANSFER DISBURSEMENTS 0.00 227,208.96- PURCHASES 2,558,208.35-0.00 CASH MANAGEMENT PURCHASES 2,384,257.34-0.00 TOTAL CASH DISBURSEMENTS 4,951,532.38-227,208.96- ENDING BALANCE 0.00 0.00 ________________________________________________________________________________________________________________________________________ 158 PAGE 21 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ BEGINNING BALANCE 0.00 156,391,276.44 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ CASH EQUIVALENTS 03/01/23 INTEREST RECEIVED 1,579.31 AS 100% TREAS MM FD-SVC CL #008 INTEREST FROM 2/1/23 TO 2/28/23 03/01/23 INTEREST RECEIVED 10.56 PRINCIPAL PUBLIC DEPOSIT SWEEP PRGRM INTEREST FROM 2/1/23 TO 2/28/23 03/31/23 2,340,726.97 CASH SWEEP PURCHASES FOR STMT PERIOD 2,340,726.97- 2,340,726.97 AS 100% TREAS MM FD-SVC CL #008 11 TRANSACTIONS 03/31/23 43,530.37 CASH SWEEP PURCHASES FOR STMT PERIOD 43,530.37-43,530.37 PRINCIPAL PUBLIC DEPOSIT SWEEP PRGRM 2 TRANSACTIONS 03/31/23 1,814,925.23- CASH SWEEP SALES FOR STMT PERIOD 1,814,925.23 1,814,925.23- AS 100% TREAS MM FD-SVC CL #008 5 TRANSACTIONS BONDS & NOTES 03/15/23 INTEREST RECEIVED 2,845.38 AMERICAN EXPRES ABS 2.210% 3/15/27 CUSIP 02589BAA8 $0.00184/PV ON 1,545,000.00 PV DUE 3/15/23 03/15/23 INTEREST RECEIVED 3,884.38 AMERICAN EXPRESS ABS 3.390% 5/17/27 CUSIP 02582JJT8 $0.00283/PV ON 1,375,000.00 PV DUE 3/15/23 159 PAGE 22 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/15/23 INTEREST RECEIVED 18,572.50 BERKSHIRE HATH 2.300% 3/15/27 CUSIP 084664CZ2 INTEREST ON 1,615,000.000 UNITS 03/27/23 INTEREST RECEIVED 93.36 BMW VEHICLE LEASE TR 0.330% 12/26/24 CUSIP 09690AAC7 $0.00027/PV ON 339,486.60 PV DUE 3/25/23 03/27/23 35,698.97- PAID DOWN 35,698.97 35,695.29-3.68 BMW VEHICLE LEASE TR 0.330% 12/26/24 CUSIP 09690AAC7 TO SETTLE ON 03/27/2023 03/27/23 INTEREST RECEIVED 412.50 BMW VEHICLE LEASE TR 1.100% 3/25/25 CUSIP 05601XAC3 $0.00092/PV ON 450,000.00 PV DUE 3/25/23 03/27/23 INTEREST RECEIVED 1,417.75 BMW VEHICLE OWN ABS 3.210% 8/25/26 CUSIP 05602RAD3 $0.00268/PV ON 530,000.00 PV DUE 3/25/23 03/03/23 INTEREST RECEIVED 11,760.00 CHARLES SCHWAB CORP 2.450% 3/03/27 CUSIP 808513BY0 INTEREST ON 960,000.000 UNITS 03/13/23 INTEREST RECEIVED 28,750.00 FED HOME LN BK 2.875% 9/13/24 CUSIP 3130A2UW4 INTEREST ON 2,000,000.000 UNITS 160 PAGE 23 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/23/23 INTEREST RECEIVED 4,687.50 FED HOME LN MTG CORP 0.375% 9/23/25 CUSIP 3137EAEX3 INTEREST ON 2,500,000.000 UNITS 03/27/23 INTEREST RECEIVED 3,435.25 FED HOME LN MTG CORP 3.171% 10/25/24 CUSIP 3137BFE98 $0.00264/PV ON 1,300,000.00 PV DUE 3/25/23 03/27/23 INTEREST RECEIVED 1,437.04 FHLMC MULTIFAMILY ST 2.653% 8/25/26 CUSIP 3137BSP72 $0.00221/PV ON 650,000.00 PV DUE 3/25/23 03/27/23 INTEREST RECEIVED 1,422.62 FHLMC MULTIFAMILY ST 2.995% 12/25/25 CUSIP 3137BN6G4 $0.00250/PV ON 570,000.00 PV DUE 3/25/23 03/27/23 INTEREST RECEIVED 2,508.33 FHLMC MULTIFAMILY ST 3.010% 8/25/25 CUSIP 3137BLMZ8 $0.00251/PV ON 1,000,000.00 PV DUE 3/25/23 03/27/23 INTEREST RECEIVED 2,703.33 FHLMC MULTIFAMILY ST 3.244% 8/25/27 CUSIP 3137FBBX3 $0.00270/PV ON 1,000,000.00 PV DUE 3/25/23 161 PAGE 24 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/27/23 INTEREST RECEIVED 1,212.93 FHLMC MULTIFAMILY ST 3.308% 9/25/25 CUSIP 3137BM7C4 $0.00276/PV ON 440,000.00 PV DUE 3/25/23 03/16/23 INTEREST RECEIVED 1,007.50 GM FINANCIAL ABS 3.100% 2/16/27 CUSIP 362585AC5 $0.00258/PV ON 390,000.00 PV DUE 3/16/23 03/20/23 INTEREST RECEIVED 310.37 GM FINANCIAL AUTOMOB 0.390% 10/21/24 CUSIP 36262XAC8 $0.00033/PV ON 954,985.74 PV DUE 3/20/23 03/20/23 75,735.47- PAID DOWN 75,735.47 75,734.44-1.03 GM FINANCIAL AUTOMOB 0.390% 10/21/24 CUSIP 36262XAC8 03/20/23 INTEREST RECEIVED 1,496.25 GM FINANCIAL AUTOMOB 1.850% 3/20/25 CUSIP 36265MAC9 $0.00158/PV ON 945,000.00 PV DUE 3/20/23 03/16/23 INTEREST RECEIVED 198.33 GM FINANCIAL SECURIT 0.680% 9/16/26 CUSIP 362554AC1 $0.00057/PV ON 350,000.00 PV DUE 3/16/23 03/16/23 INTEREST RECEIVED 309.75 GM FINANCIAL SECURIT 1.260% 11/16/26 CUSIP 380146AC4 $0.00105/PV ON 295,000.00 PV DUE 3/16/23 162 PAGE 25 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/21/23 INTEREST RECEIVED 39.67 HONDA AUTO RECEIVABL 0.270% 4/21/25 CUSIP 43813GAC5 $0.00022/PV ON 176,319.93 PV DUE 3/21/23 03/21/23 14,278.1- PAID DOWN 14,278.10 14,277.84-0.26 HONDA AUTO RECEIVABL 0.270% 4/21/25 CUSIP 43813GAC5 03/20/23 INTEREST RECEIVED 71.67 HONDA AUTO RECEIVABL 0.370% 10/18/24 CUSIP 43813KAC6 $0.00031/PV ON 232,437.33 PV DUE 3/18/23 03/20/23 26,316.55- PAID DOWN 26,316.55 26,312.68-3.87 HONDA AUTO RECEIVABL 0.370% 10/18/24 CUSIP 43813KAC6 AT $16,544.8838 ON TRADE DATE 03/18/2023 TO SETTLE ON 03/20/2023 03/15/23 INTEREST RECEIVED 28.23 HONDA AUTO RECEIVABL 0.820% 7/15/24 CUSIP 43813DAC2 $0.00068/PV ON 41,317.49 PV DUE 3/15/23 03/15/23 6,548.4- PAID DOWN 6,548.40 6,547.88-0.52 HONDA AUTO RECEIVABL 0.820% 7/15/24 CUSIP 43813DAC2 03/21/23 INTEREST RECEIVED 337.33 HONDA AUTO RECEIVABL 0.880% 1/21/26 CUSIP 43815GAC3 $0.00073/PV ON 460,000.00 PV DUE 3/21/23 163 PAGE 26 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/15/23 INTEREST RECEIVED 1,159.33 HONDA AUTO RECEIVABL 1.000% 5/15/26 CUSIP 43815BAC4 $0.00157/PV ON 740,000.00 PV DUE 3/15/23 03/15/23 INTEREST RECEIVED 172.28 HYUNDAI AUTO LEASE 0.330% 6/17/24 CUSIP 44891VAC5 $0.00027/PV ON 626,456.51 PV DUE 3/15/23 03/15/23 85,334.99- PAID DOWN 85,334.99 85,322.19-12.80 HYUNDAI AUTO LEASE 0.330% 6/17/24 CUSIP 44891VAC5 AT $3.6765 ON TRADE DATE 03/15/2023 03/15/23 INTEREST RECEIVED 522.00 HYUNDAI AUTO LEASE 1.160% 1/15/25 CUSIP 44891WAC3 03/15/23 INTEREST RECEIVED 1,868.50 HYUNDAI AUTO REC ABS 2.220% 10/15/26 CUSIP 448977AD0 $0.00185/PV ON 1,010,000.00 PV DUE 3/15/23 03/15/23 INTEREST RECEIVED 133.36 HYUNDAI AUTO RECEIVA 0.380% 9/15/25 CUSIP 44933LAC7 $0.00032/PV ON 421,138.95 PV DUE 3/15/23 03/15/23 28,855.65- PAID DOWN 28,855.65 28,852.61-3.04 HYUNDAI AUTO RECEIVA 0.380% 9/15/25 CUSIP 44933LAC7 164 PAGE 27 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/15/23 INTEREST RECEIVED 820.17 HYUNDAI AUTO RECEIVA 0.740% 5/15/26 CUSIP 44935FAD6 $0.00062/PV ON 1,330,000.00 PV DUE 3/15/23 03/09/23 830,000- SOLD 796,459.70 829,410.70-32,951.00- JOHN DEERE CAPITAL 0.450% 1/17/24 CUSIP 24422EVN6 AT $95.9590 ON TRADE DATE 03/07/2023 TO SETTLE ON 03/09/2023 PERSHING LLC 03/09/23 ACCRUED INTEREST ON SALE 539.50 JOHN DEERE CAPITAL 0.450% 1/17/24 CUSIP 24422EVN6 03/16/23 200,000- SOLD 192,240.00 199,858.00-7,618.00- JOHN DEERE CAPITAL 0.450% 1/17/24 CUSIP 24422EVN6 AT $96.1200 ON TRADE DATE 03/14/2023 TO SETTLE ON 03/16/2023 TORONTO DOMINION BANK 03/16/23 ACCRUED INTEREST ON SALE 147.50 JOHN DEERE CAPITAL 0.450% 1/17/24 CUSIP 24422EVN6 03/15/23 INTEREST RECEIVED 4,453.75 JOHN DEERE OWNE ABS 5.090% 6/15/27 CUSIP 47800BAC2 $0.00424/PV ON 1,050,000.00 PV DUE 3/15/23 03/15/23 INTEREST RECEIVED 870.00 JOHN DEERE OWNER ABS 2.320% 9/16/26 CUSIP 47787JAC2 $0.00193/PV ON 450,000.00 PV DUE 3/15/23 165 PAGE 28 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/15/23 INTEREST RECEIVED 2,041.42 JOHN DEERE OWNER ABS 3.740% 2/16/27 CUSIP 47800AAC4 $0.00312/PV ON 655,000.00 PV DUE 3/15/23 03/15/23 INTEREST RECEIVED 29.82 JOHN DEERE OWNER TRU 0.510% 11/15/24 CUSIP 47787NAC3 $0.00042/PV ON 70,156.18 PV DUE 3/15/23 03/15/23 10,803.97- PAID DOWN 10,803.97 10,802.32-1.65 JOHN DEERE OWNER TRU 0.510% 11/15/24 CUSIP 47787NAC3 03/15/23 INTEREST RECEIVED 251.33 JOHN DEERE OWNER TRU 0.520% 3/16/26 CUSIP 47789QAC4 $0.00043/PV ON 580,000.00 PV DUE 3/15/23 03/15/23 INTEREST RECEIVED 34.47 JOHN DEERE OWNER TRU 1.100% 8/15/24 CUSIP 47789KAC7 $0.00092/PV ON 37,608.01 PV DUE 3/15/23 03/15/23 8,426.29- PAID DOWN 8,426.29 8,425.77-0.52 JOHN DEERE OWNER TRU 1.100% 8/15/24 CUSIP 47789KAC7 03/13/23 0.01- DELIVERED JOHN DEERE OWNER TRU 2.210% 12/15/23 CUSIP 477870AC3 DELETION OF WORTHLESS 166 PAGE 29 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/09/23 945,000 PURCHASED 944,083.35-944,083.35 MASTERCARD INC 4.875% 3/09/28 CUSIP 57636QAW4 AT $99.9030 ON TRADE DATE 03/06/2023 TO SETTLE ON 03/09/2023 J.P. MORGAN SECURITIES INC., - 03/15/23 INTEREST RECEIVED 120.27 NISSAN AUTO RECEIVAB 1.930% 7/15/24 CUSIP 65479JAD5 $0.00161/PV ON 74,774.12 PV DUE 3/15/23 03/15/23 41,020.88- PAID DOWN 41,020.88 41,224.38-203.50- NISSAN AUTO RECEIVAB 1.930% 7/15/24 CUSIP 65479JAD5 03/14/23 INTEREST RECEIVED 4,812.50 P/P MET TOWER GLOBAL 1.250% 9/14/26 CUSIP 58989V2D5 INTEREST ON 770,000.000 UNITS 03/01/23 INTEREST RECEIVED 3,616.00 P/P PRICOA GLOBAL FU 0.800% 9/01/25 CUSIP 74153WCM9 INTEREST ON 904,000.000 UNITS 03/15/23 INTEREST RECEIVED 139.03 TOYOTA AUTO RECEIVAB 0.260% 5/15/25 CUSIP 89240BAC2 $0.00022/PV ON 641,680.32 PV DUE 3/15/23 03/15/23 50,831.86- PAID DOWN 50,831.86 50,822.43-9.43 TOYOTA AUTO RECEIVAB 0.260% 5/15/25 CUSIP 89240BAC2 167 PAGE 30 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/15/23 INTEREST RECEIVED 50.24 TOYOTA AUTO RECEIVAB 0.350% 1/15/25 CUSIP 89236XAC0 $0.00029/PV ON 172,260.09 PV DUE 3/15/23 03/15/23 20,376.28- PAID DOWN 20,376.28 20,372.48-3.80 TOYOTA AUTO RECEIVAB 0.350% 1/15/25 CUSIP 89236XAC0 03/15/23 INTEREST RECEIVED 254.42 TOYOTA AUTO RECEIVAB 0.710% 4/15/26 CUSIP 89238JAC9 $0.00059/PV ON 430,000.00 PV DUE 3/15/23 03/20/23 INTEREST RECEIVED 1,878.33 TOYOTA LEASE OWN ABS 1.960% 2/20/25 CUSIP 89238LAC4 $0.00163/PV ON 1,150,000.00 PV DUE 3/20/23 03/20/23 INTEREST RECEIVED 132.27 TOYOTA LEASE OWNER 0.390% 4/22/24 CUSIP 89238EAC0 $0.00032/PV ON 406,975.24 PV DUE 3/20/23 03/20/23 74,886.08- PAID DOWN 74,886.08 73,388.36-1,497.72 TOYOTA LEASE OWNER 0.390% 4/22/24 CUSIP 89238EAC0 03/15/23 INTEREST RECEIVED 27,125.00 U.S. TREASURY NOTES 1.750% 3/15/25 CUSIP 91282CED9 INTEREST ON 3,100,000.000 UNITS 168 PAGE 31 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/17/23 1,600,000 PURCHASED 1,614,125.00- 1,614,125.00 U.S. TREASURY NOTES 4.000% 2/29/28 CUSIP 91282CGP0 AT $100.8828 ON TRADE DATE 03/14/2023 TO SETTLE ON 03/17/2023 CITADEL DERIVATIVES GROUP LLC 03/17/23 ACCRUED INTEREST ON PURCHASE 2,956.52- U.S. TREASURY NOTES 4.000% 2/29/28 CUSIP 91282CGP0 03/31/23 INTEREST RECEIVED 71,156.25 U.S. TREASURY NOTES 4.125% 9/30/27 CUSIP 91282CFM8 INTEREST ON 3,450,000.000 UNITS 03/15/23 INTEREST RECEIVED 1,812.50 US TREASURY NOTE 0.250% 3/15/24 SEDOL BMDB780 INTEREST ON 1,450,000.000 UNITS 03/15/23 1,450,000- SOLD 1,386,902.34 1,446,488.28-59,585.94- US TREASURY NOTE 0.250% 3/15/24 SEDOL BMDB780 AT $95.6484 ON TRADE DATE 03/14/2023 TO SETTLE ON 03/15/2023 BMOCM/BONDS 03/31/23 INTEREST RECEIVED 3,000.00 US TREASURY NOTE 0.250% 9/30/25 CUSIP 91282CAM3 INTEREST ON 2,400,000.000 UNITS 03/31/23 INTEREST RECEIVED 6,125.00 US TREASURY NOTE 0.875% 9/30/26 CUSIP 91282CCZ2 INTEREST ON 1,400,000.000 UNITS 169 PAGE 32 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/20/23 INTEREST RECEIVED 1,767.00 VERIZON MAST ABS V-M 3.720% 7/20/27 CUSIP 92348KAV5 $0.00310/PV ON 570,000.00 PV DUE 3/20/23 03/20/23 INTEREST RECEIVED 124.48 VERIZON OWNER TRUST 0.470% 2/20/25 CUSIP 92290BAA9 $0.00039/PV ON 317,826.06 PV DUE 3/20/23 03/20/23 54,682.66- PAID DOWN 54,682.66 54,671.18-11.48 VERIZON OWNER TRUST 0.470% 2/20/25 CUSIP 92290BAA9 03/27/23 INTEREST RECEIVED 2,639.42 VR FHLMC MULTIFAMI 3.334% 8/25/25 CUSIP 3137BLW95 $0.00278/PV ON 950,000.00 PV DUE 3/25/23 03/17/23 INTEREST RECEIVED 1,837.50 WALMART INC 1.050% 9/17/26 CUSIP 931142ER0 INTEREST ON 350,000.000 UNITS TRANSFER RECEIPTS 03/01/23 ADDITION TO ACCOUNT 5,205.87 TRANSFER FROM INCOME 03/03/23 ADDITION TO ACCOUNT 11,760.00 TRANSFER FROM INCOME 170 PAGE 33 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 03/09/23 ADDITION TO ACCOUNT 539.50 TRANSFER FROM INCOME 03/13/23 ADDITION TO ACCOUNT 28,750.00 TRANSFER FROM INCOME 03/14/23 ADDITION TO ACCOUNT 4,812.50 TRANSFER FROM INCOME 03/15/23 ADDITION TO ACCOUNT 65,203.60 TRANSFER FROM INCOME 03/16/23 ADDITION TO ACCOUNT 3,647.86 TRANSFER FROM INCOME 03/20/23 ADDITION TO ACCOUNT 4,661.35 TRANSFER FROM INCOME 03/21/23 ADDITION TO ACCOUNT 377.00 TRANSFER FROM INCOME 03/23/23 ADDITION TO ACCOUNT 4,687.50 TRANSFER FROM INCOME 03/27/23 ADDITION TO ACCOUNT 17,282.53 TRANSFER FROM INCOME 03/31/23 ADDITION TO ACCOUNT 80,281.25 TRANSFER FROM INCOME INVESTMENT MANAGEMENT EXPENSES 03/06/23 INVESTMENT MGMT FEE 9,066.69- PAID TO CHANDLER ASSET MANAGEMENT INC INV 2302CUPERTIN CHANDLER ASSET MGMT FEE 171 INVESTMENT AND INSURANCE PRODUCTS ARE: ·NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY FEDERAL GOVERNMENT AGENCY ·NOT A DEPOSIT, OBLIGATION OF, OR GUARANTEED BY ANY BANK OR BANKING AFFILIATE ·SUBJECT TO INVESTMENT RISKS AND MAY LOSE VALUE, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED PAGE 34 STATEMENT OF TRANSACTIONS CITY OF CUPERTINO FOR THE PERIOD MARCH 1, 2023 THROUGH MARCH 31, 2023 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ STATEMENT OF TRANSACTIONS REALIZED DATE PAR VALUE/SHARES DESCRIPTION CASH COST VALUE GAIN/LOSS ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ TRANSFER DISBURSEMENTS 03/01/23 TRANSFER TO PRINCIPAL 5,205.87- 03/03/23 TRANSFER TO PRINCIPAL 11,760.00- 03/09/23 TRANSFER TO PRINCIPAL 539.50- 03/13/23 TRANSFER TO PRINCIPAL 28,750.00- 03/14/23 TRANSFER TO PRINCIPAL 4,812.50- 03/15/23 TRANSFER TO PRINCIPAL 65,203.60- 03/16/23 TRANSFER TO PRINCIPAL 3,647.86- 03/20/23 TRANSFER TO PRINCIPAL 4,661.35- 03/21/23 TRANSFER TO PRINCIPAL 377.00- 03/23/23 TRANSFER TO PRINCIPAL 4,687.50- 03/27/23 TRANSFER TO PRINCIPAL 17,282.53- 03/31/23 TRANSFER TO PRINCIPAL 80,281.25- ================================================================================================================= ENDING BALANCE 0.00 156,510,610.07 ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 172 CITY OF CUPERTINO PARS Post-Employment Benefits Trust 3/1/2023 to 3/31/2023 Kristina Alfaro Director of Administrative Services City of Cupertino 10300 Torre Ave. Cupertino, CA 95014 Account Summary Source 3/1/2023 Contributions Earnings Expenses Distributions Transfers 3/31/2023 OPEB 1001 $32,793,001.99 $0.00 $544,884.96 $9,735.30 $0.00 $0.00 $33,328,151.65 PENSION 1002 $18,035,635.06 $0.00 $299,680.39 $5,354.25 $0.00 $0.00 $18,329,961.20 Totals $50,828,637.05 $0.00 $844,565.35 $15,089.55 $0.00 $0.00 $51,658,112.85 Investment Selection Source OPEB PENSION Investment Objective Source OPEB PENSION Investment Return Source 1-Month 3-Months 1-Year 3-Years 5-Years 10-Years OPEB 1.66%5.46%-7.26%9.78%4.07%5.29%6/21/2010 PENSION 1.66%5.46%-7.25%9.42%--3/26/2019 Information as provided by US Bank, Trustee for PARS; Not FDIC Insured; No Bank Guarantee; May Lose Value Headquarters - 4350 Von Karman Ave., Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org Balance as of Individual account based on US Bank Balanced MM. Dual goals are to provide a moderate amount of current income with moderate capital growth. Income production and longer term growth of capital. City of Cupertino - PEN Plan's Inception Date Account balances are inclusive of Trust Administration, Trustee and Investment Management fees Annualized Return Investment Return: Annualized rate of return is the return on an investment over a period other than one year multiplied or divided to give a comparable one-year return. Past performance does not guarantee future results. Performance returns may not reflect the deduction of applicable fees, which could reduce returns. Information is deemed reliable but may be subject to change. Individual account based on US Bank Balanced MM. Dual goals are to provide a moderate amount of current income with moderate capital growth. Income production and longer term growth of capital. Account Report for the Period Balance as of City of Cupertino - OPEB 173 4/3/23, 8:45 AM LAIF Regular Monthly Statement https://laifms.treasurer.ca.gov/RegularStatement.aspx 1/1 Local Agency Investment Fund P.O. Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 April 03, 2023 LAIF Home PMIA Average Monthly Yields CITY OF CUPERTINO FINANCE MANAGER 10300 TORRE AVENUE CUPERTINO, CA 95014 Account Number: March 2023 Statement Tran Type Definitions Account Summary Total Deposit:0.00 Beginning Balance:21,281,569.38 Total Withdrawal 0 00 Ending Balance 21,281,569.38 174 CITY OF CUPERTINO Agenda Item 23-12262 Agenda Date: 4/24/2023 Agenda #: 6. ACTION ITEM Subject: Consider the City's Investment Policy Review and accept the City's Investment Policy Presenter: Thomas Leung, Budget Manager, and Chandler Asset Management 5:15(10) CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™175 AUDIT COMMITTEE STAFF REPORT Meeting: April 24, 2023 Subject Consider the City's Investment Policy Recommended Action Review and accept the City's Investment Policy Reasons for Recommendation Background To ensure the City's investment policy is up-to-date and aligned with its investment objectives, the Audit Committee conducts an annual review before presenting it to the City Council. The most recent review and acceptance of the investment policy by the Audit Committee occurred on April 25, 2022, followed by approval from the City Council on May 19, 2022. The investment policy is the foundation of the City's investment goals and priorities. It can help protect the City's assets if it is carefully researched, effectively drafted, and regularly reviewed to assure that it continues to meet the City's investment objectives. The existence of an approved investment policy demonstrates that the City is performing its fiduciary responsibilities, thereby inspiring trust and confidence among the public that it serves. The policy also provides guidance on the proper management of the City's temporary idle cash, outlining protocols to maximize cash efficiency. California Government Code (Code) section 53646(a)(2) states: [T]he treasurer or chief fiscal officer of the local agency may annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting. Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting. 176 Assembly Bill 2853 (Chapter 889, Statutes of 2004) amended section 53646(a)(2) to make presentation of the investment policy to the City Council optional. While no longer required by Code, the City annually presents the investment policy to the Audit Committee before submitting it to City Council for approval. Chandler Asset Management In FY 2018-19, the City conducted a Request for Proposal (RFP) for investment management services and selected Chandler Asset Management. Under the City's Treasurer's direction, Chandler Asset Management manages the City's investment portfolio in accordance with the City's investment objectives. The City's investment objectives, in order of priority, are to provide: • Safety to ensure the preservation of capital in the overall portfolio • Sufficient liquidity for cash needs • A market rate of return consistent with the investment program The performance objective is to earn a total rate of return through a market cycle equal to or above the return on the benchmark index. To achieve the objective, Chandler Asset Management invests in high-quality fixed-income securities consistent with the City's investment policy and Code. Investment Policy Review Chandler Asset Management reviewed the City's investment policy. The review of the policy focused on compliance with the statutes of Code that govern the investment of public funds, as well as on the inclusion of current best practices. There was a change to Code Section 53601 for 2023 that Chandler Asset Management recommends the City adopt. Pursuant to Senate Bill 1489, effective January 1, 2023, the Code specified that an investment’s term or remaining maturity shall be measured from the settlement date to final maturity rather than from the trade date. Chandler Asset Management has added the change in the Maximum Maturities and Mitigating Market Risk in the Portfolio sections. The City’s policy continues to be effective as written. Sustainability Impact No sustainability impact. Fiscal Impact No fiscal impact. _____________________________________ Prepared by: Thomas Leung, Budget Manager Reviewed by: Kristina Alfaro, Director of Administrative Services and City Treasurer Approved for Submission by: Matt Morley, Assistant City Manager 177 Attachments: A – Investment Policy B – Chandler Investment Policy Statement Review Memo 178 1 | Page City Investment Policy Citywide Policy Manual Attachments: N/A Effective Date: May 16, 2023May 19, 2022 Responsible Department: Administrative Services Related Policies & Notes: Pension Investment Policy, OPEB Investment Policy     POLICY    Under authority granted by the City Council, the City Treasurer and Deputy Treasurer are  responsible for investing the surplus funds of the City.    The investment of the funds of the City of Cupertino is directed to the goals of safety, liquidity  and yield. The authority governing investments for municipal governments is set forth in the  California Government Code, Sections 53600 et seq.    The primary objective of the investment policy of the City of Cupertino is SAFETY OF  PRINCIPAL. Investments shall be placed in those securities as outlined by type and maturity  sector in this document. Effective cash flow management and resulting cash investment practices  are recognized as essential to good fiscal management and control. The City’s portfolio shall be  designed and managed in a manner responsive to the public trust and consistent with state and  local law. Portfolio management requires continual analysis and as a result the balance between  the various investments and maturities may change in order to give the City of Cupertino the  optimum combination of necessary liquidity and optimal yield based on cash flow projections.    SCOPE    The investment policy applies to all financial assets of the City of Cupertino as accounted for in  the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this  document focus on the City of Cupertino’s pooled, surplus funds, but will also apply to all other  funds under the City Treasurer’s span of control unless specifically exempted by statute or  ordinance. This policy is applicable, but not limited to all funds listed below:     General Fund   Special Revenue Funds   Capital Project Funds   Enterprise Funds   Internal Service Funds   Trust and Agency Funds  179 2 | Page  Any new fund unless specifically exempted    Investments of bond proceeds shall be governed by the provisions of the related bond indentures  and/or cash flow requirements and therefore may extend beyond the maturity limitations as  outlined in this document. Other post‐employment benefit (OPEB) and Pension trust investments  are governed by California Government Code Sections 53620 through 53622 and trust documents.  The trusts are governed by separate investment policies entitled Investment Policy Statement City  of Cupertino Investment Trust that were reviewed by the City of Cupertino Audit Committee on  September 27, 2021 and October 245, 20221 and City Council on December 67, 20221.     PRUDENCE    Pursuant to California Government Code, Section 53600.3, all persons authorized to make  investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the  Prudent Investor Standard:    “…all governing bodies of local agencies or persons authorized to make investment  decisions on behalf of those local agencies investing public funds pursuant to this  chapter are trustees and therefore fiduciaries subject to the prudent investor standard.  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. Within the limitations of this section and considering  individual investments as part of an overall strategy, investments may be acquired as  authorized by law.”    It is the City’s intent, at the time of purchase, to hold all investments until maturity to ensure the  return of all invested principal dollars. However, it is realized that market prices of securities will  vary depending on economic and interest rate conditions at any point in time. It is further  recognized that in a well‐diversified investment portfolio, occasional measured losses are  inevitable due to economic, bond market, or individual security valuation fluctuations. These  occasional losses must be considered within the context of the overall investment program  objectives and the resultant long‐term rate of return. The City Treasurer and Deputy Treasurer,  acting within the intent and scope of the investment policy and other written procedures and  exercising due diligence, shall be relieved of personal responsibility and liability 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.    OBJECTIVES    The primary objectives, in order of priority, of the City of Cupertino’s investment activities shall  be:   180 3 | Page A. Safety of Principal  Safety of principal is the foremost objective of the City of Cupertino. Investments will be  undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.  To attain this objective, the City will diversify its investments by investing funds among a  variety of securities with independent returns.    B. Liquidity  The City’s investment portfolio will remain sufficiently liquid to meet all operating  requirements which might be reasonably anticipated and provide the City with adequate cash  flows to pay its obligations over the next six months. Additionally, the portfolio should consist  largely of securities with active secondary resale markets.    C. Return  The City’s investment portfolio shall be designed with the objective of attaining a rate of  return throughout budgetary and economic cycles, commensurate with Cupertino’s  investment risk constraints and cash flow characteristics of the portfolio.    MAXIMUM MATURITIES    Maturities of investments will be selected based on liquidity requirements to minimize interest  rate risk and maximize earnings. Investment of surplus funds shall comply with the maturity  limits as set forth in the California Government Code 53600, et seq. Where this section does not  specify a limitation on the term or remaining maturity at the time of the investment, no  investment shall be made in any security that at the time of the investment has a term remaining  to maturity in excess of five years from date of trade settlement, unless the Council has granted  express authority to make that investment either specifically or as a part of an investment  program approved by the Council no less than three months prior to the investment. Reserve  funds may be invested in securities exceeding five years if the maturity of such investments is  made to coincide as nearly as practicable with the expected use of the funds.    PERFORMANCE EVALUATION    Investment performance is continually monitored and evaluated by the City Treasurer.  Investment performance statistics and activity reports are generated on a quarterly basis for  presentation to the oversight (audit) committee, City Manager and City Council. Yield on the  City’s investment portfolio is of secondary importance compared to the safety and liquidity  objectives described above. The City’s investment portfolio shall be designed to attain a market  average rate of return through economic cycles. The Treasurer shall monitor and evaluate the  portfolio’s performance relative to the chosen market benchmark(s), which will be included in  the Treasurer’s quarterly report. The Treasurer shall select an appropriate, readily available index  to use as a market benchmark.  Whenever possible, and consistent with risk limitations as defined  herein and prudent investment principles, the Treasurer shall seek to augment return above the  market average rate of return. The City may select alternative benchmarks for identified pools of  City funds that have different objectives.     181 4 | Page DELEGATION OF AUTHORITY    Authority to manage the City’s investment program is derived from California Government  Code, Sections 41006 and 53600 et seq. The Treasurer is responsible for investment management  decisions and activities per City Council Resolution.    The Treasurer shall designate a staff person as a liaison/deputy in the event circumstances require  timely action and the Treasurer is not present.     No officer or designee may engage in an investment transaction except as provided under terms  of this policy and the procedures by the Treasurer and approved by the City Manager/Council.  The Treasurer shall be responsible for all transactions undertaken and shall establish a system of  controls to regulate the activities of subordinate officials.    If an investment adviser is retained by the City, the investment adviser, registered under the  Investment Advisers Act of 1940, must have at least five yearsʹ experience investing in the  securities and obligations authorized by California Government Code 53601 subdivisions (a) to  (k), inclusive, and subdivisions (m) to (q), inclusive, and with assets under management in excess  of five hundred million dollars ($500,000,000). External investment advisers may be granted  discretion to purchase and sell investment securities in accordance with this investment policy.    The City’s overall investment program shall be designed and managed with a degree of  professionalism that is worthy of the public trust. The City recognizes that in a diversified  portfolio, occasional measured losses may be inevitable and must be considered within the  context of the overall portfolio’s return and the cash flow requirements of the City.    OVERSIGHT COMMITTEE    An audit committee consisting of appropriate internal and external members, appointed by the  City Council, shall be established to provide general oversight and direction concerning the  policies related to management of the City’s investment pool, OPEB trust, and Pension Rate  Stabilization Program trust. The City Treasurer shall serve in a staff and advisory capacity. The  committee shall meet at least quarterly to review policy changes, new legislation and portfolio  status.     ETHICS AND CONFLICTS OF INTEREST    Officers and employees involved in the investment process shall refrain from personal business  activity that conflicts with proper execution of the investment program, or impairs their ability  to make impartial investment decisions. Additionally the City Treasurer and the Deputy  Treasurer are required to annually file applicable financial disclosures as required by the Fair  Political Practices Commission (FPPC).       182 5 | Page SAFEKEEPING OF SECURITIES    To protect against fraud or embezzlement or losses caused by collapse of an individual securities  dealer, all securities owned by the City shall be held in safekeeping by a third party custodian  acting as agent for the City under the terms of a custody agreement. All trades executed by a  dealer will settle delivery versus payment (DVP) through the City’s safekeeping agent. In order  to verify investment holdings, an external auditor, on an annual basis, shall independently verify  securities held in custody for the City. Additionally, the City Treasurer shall include a listing of  holdings provided by the City’s custodian to the quarterly investment report as verification  between annual reviews by the external auditor.    The only exceptions to the foregoing shall be depository accounts and securities purchases made  with: (i) local government investment pools; (ii) time certificates of deposit, and, (iii) money  mutual funds, since the purchased securities are not deliverable. All other exceptions to this  safekeeping policy must be approved by the City Treasurer in written form and included in the  quarterly report to City Council.    INTERNAL CONTROL    Separation of duties between the Treasurer’s function and Finance is designed to provide proper  internal controls to prevent the potential for converting assets or concealing transactions. Dual  transaction controls, separate and independent notifications, and reports provided by financial  institutions shall be used to help implement these controls.    Wire transfers shall be approved prior to being submitted to the financial institution. Wire  transfers initiated by Treasury staff must be reconfirmed by the appropriate financial institution  to Finance staff. Proper documentation is required for each investment transaction and must  include a broker trade confirmation and a cash disbursement wire transfer confirmation. Timely  bank reconciliation is conducted to ensure proper handling of all transactions. The investment  portfolio and all related transactions are reviewed and balanced to appropriate general ledger  accounts by Finance staff on a monthly basis.    An annual agreed‐upon procedures engagement in accordance with the attestation standards  established by the American Institute of Certified Public Accountants shall be conducted by an  auditor solely to assist management in determining the City’s compliance with this investment  policy. At the conclusion of such engagement, the agreed‐upon procedures report detailing all  procedures performed and findings noted (if applicable) shall be provided to the Audit  Committee of the City.    REPORTING    Monthly transaction reports will be submitted by the Treasurer to the City Council within 30 days  of the end of the reporting period in accordance with California Government Code Section 53607.     183 6 | Page The City Treasurer shall also prepare a quarterly investment report, including a succinct  management summary that provides a clear picture of the status of the current investment  portfolio. The report will be prepared in a manner that will report all information required under  this policy and as recommended by California Government Code. The Treasurer will submit the  report to Council no later than the second regular council meeting, or approximately 45 days  following the end of the quarter covered by the report.    AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND QUALIFIED  BROKER/DEALERS    To the extent practicable, the Treasurer shall endeavor to complete investment transactions using  a competitive bid process whenever possible. The City’s Treasurer will determine which financial  institutions are authorized to provide investment services to the City. It shall be the City’s policy  to purchase securities only from authorized institutions and firms.     The Treasurer shall maintain procedures for establishing a list of authorized broker/dealers and  financial institutions which are approved for investment purposes that are selected through a  process of due diligence as determined by the City. Due inquiry shall determine whether such  authorized broker/dealers, and the individuals covering the City are reputable and trustworthy,  knowledgeable and experienced in Public Agency investing and able to meet all of their financial  obligations. These institutions may include ʺprimaryʺ dealers or regional dealers that qualify  under Securities and Exchange Commission (SEC) Rule 15c3‐1 (uniform net capital rule).    In accordance with Section 53601.5, institutions eligible to transact investment business with the  City include:   Primary government dealers as designated by the Federal Reserve Bank and non‐primary  government dealers.   Nationally or state‐chartered banks.   The Federal Reserve Bank.   Direct issuers of securities eligible for purchase.    Selection of financial institutions and broker/dealers authorized to engage in transactions will be  at the sole discretion of the City, except where the City utilizes an external investment adviser in  which case the City may rely on the adviser for selection.     All financial institutions which desire to become qualified bidders for investment transactions  (and which are not dealing only with the investment adviser) must supply the Treasurer with  audited financials and a statement certifying that the institution has reviewed the California  Government Code, Section 53600 et seq. and the City’s investment policy. The Treasurer will  conduct an annual review of the financial condition and registrations of such qualified bidders.     Public deposits will be made only in qualified public depositories as established by State law.  Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the  amount exceeds the insured maximum, will be collateralized in accordance with State law.    184 7 | Page Selection of broker/dealers used by an external investment adviser retained by the City will be at  the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be  selected on a competitive basis and their bid or offering prices shall be recorded. If there is no  other readily available competitive offering, best efforts will be made to document quotations for  comparable or alternative securities. When purchasing original issue instrumentality securities,  no competitive offerings will be required as all dealers in the selling group offer those securities  at the same original issue price.    COLLATERAL REQUIREMENTS    CERTIFICATES OF DEPOSIT (CDS). The City shall require any commercial bank or savings and  loan association to deposit eligible securities with an agency of a depository approved by the  State Banking Department to secure any uninsured portion of a Non‐Negotiable Certificate of  Deposit. The value of eligible securities as defined pursuant to California Government Code,  Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of  the CD if the securities are classified as mortgages and 110% of the face value of the CD for all  other classes of security.    COLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial  institution pledges securities, or other deposits for the purpose of securing repayment of  deposited funds.  The City shall require any bank or financial institution to comply with the  collateralization criteria defined in California Government Code, Section 53651.    REPURCHASE AGREEMENTS. The City requires that Repurchase Agreements be collateralized  only by securities authorized in accordance with California Government Code:   The securities which collateralize the repurchase agreement shall be priced at Market  Value, including any Accrued Interest plus a margin. The Market Value of the securities  that underlie a repurchase agreement shall be valued at 102% or greater of the funds  borrowed against those securities.   Financial institutions shall mark the value of the collateral to market at least monthly and  increase or decrease the collateral to satisfy the ratio requirement described above.   The City shall receive monthly statements of collateral.    AUTHORIZED INVESTMENTS    Investment of City funds is governed by the California Government Code Sections 53600 et  seq. Within the context of the limitations, the following investments are authorized, subject  to the restrictions below. In the event a discrepancy is found between this policy and the  Code, the more restrictive parameters will take precedence. Percentage holding limits listed  in this section apply at the time the security is purchased.     Any investment currently held at the time the policy is adopted which does not meet the new  policy guidelines can be held until maturity and shall be exempt from the current policy. At  the time of the investment’s maturity or liquidation, such funds shall be reinvested only as  provided in the current policy.  185 8 | Page   An appropriate risk level shall be maintained by primarily purchasing securities that are of  high quality, liquid, and marketable. The portfolio shall be diversified by security type and  institution to avoid incurring unreasonable and avoidable risks regarding specific security  types or individual issuers.    1. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit  of the United States are pledged for payment of principal and interest. There is no  percentage limitation of the portfolio that can be invested in this category, although a five‐ year maturity limitation is applicable.    2. 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 are no limits on the dollar amount or  percentage that the City may invest in Federal Agency or Government‐Sponsored  Enterprises (GSEs), provided that:   No more than 25% of the portfolio may be invested in any single Agency/GSE  issuer.   The maximum maturity does not exceed five (5) years.   The maximum percent of agency callable securities in the portfolio will be 20%.    3. Banker’s Acceptances (bills of exchange or time drafts drawn on and accepted by  commercial banks) may not exceed 180 days to maturity or 40% of the portfolio.     They are issued by institutions which have short‐term debt obligations  rated “A‐1” or its equivalent or better by at least one NRSRO; or long‐term  debt obligations which are rated in a rating category of “A” or its  equivalent or better by at least one NRSRO.   No more than 5% of the portfolio may be invested in any single issuer.    4. Local Agency Investment Fund (LAIF), which is a State of California managed  investment pool, may be used up to the maximum permitted by California state law.  LAIF’s investments in instruments prohibited by or not specified in the City’s policy  do not exclude the investment in LAIF itself from the City’s list of allowable  investments, provided LAIF’s reports allow the Treasurer to adequately judge the risk  inherent in LAIF’s portfolio..    5. Commercial paper issued by corporations organized and operating in the  United States having assets in excess of $500,000,000, ranked “A‐1” or its  equivalent or better by at least one Nationally Ranked Statistical Rating  Organization (NRSRO), issued by corporations which have long‐term obligations  rated in a rating category of “A” or its equivalent or better by one NRSRO.  Purchases of eligible commercial paper may not exceed 270 days to maturity nor  186 9 | Page represent more than 10% of the outstanding paper of the issuing corporation.  Purchases of commercial paper may not exceed 25% of the portfolio.  Under a  provision sunsetting on January 1, 2026, no more than 40% of the City’s portfolio  may be invested in Commercial Paper if the City’s investment assets under  management are greater than $100,000,000. No more than 10% of the total  investments may be invested the in commercial paper and medium term notes of  any single issuer.    6. Negotiable Certificates of Deposits issued by nationally or state‐chartered banks, state  or federal savings associations, or state or federal credit unions, or by a federally  licensed or state‐licensed branch of a foreign bank. Purchases of Negotiable  Certificates of Deposit may not exceed 30% of the portfolio. No more than 5% of the  portfolio may be invested in any single issuer. A maturity limitation of five years is  applicable. The amount of the NCD insured up to the FDIC limit does not require any  credit ratings. Any amount above the FDIC insured limit must be issued by  institutions which have short‐term debt obligations rated “A‐1” or its equivalent or  better by at least one NRSRO; or long‐term obligations rated in a rating category of  “A” or its equivalent or better by at least one NRSRO.     7. Repurchase agreements that specify terms and conditions may be transacted with banks  and broker dealers. The maturity of the repurchase agreements shall not exceed one year.  The market value of the securities used as collateral for the repurchase agreements shall  be monitored by the investment staff and shall not be allowed to fall below 102% of the  value of the repurchase agreement. A PSA Master Repurchase Agreement is required  between the City of Cupertino and the broker/dealer or financial institution for all  repurchase agreements transacted.    8. Reverse repurchase agreements are not authorized.    9. Certificates of Deposit (time deposits), non‐negotiable and collateralized in accordance  with the California Government Code, may be purchased through banks, savings and  loan associations, or credit unions. Within a limit of 30% of the portfolio, these institutions  may use a private sector entity to assist in the placement of the time deposits under the  conditions specified by the Government Code.    10. Medium Term Corporate Notes issued by corporations organized and operating in  the United States or by depository institutions licensed by the United States or any  state and operating within the United States, with a maximum maturity of five years  may be purchased. Securities eligible for investment shall be rated in the rating  category of “A” or better by at least one NRSRO. Purchase of medium term note s  may not exceed 30% of the portfolio. No more than 10% of the total investments may  be invested in the commercial paper and medium term notes of any single issuer.    11. Municipal securities, including obligations of the City, the State of California, and any  187 10 | Page local agency within the State of California, provided that:   The securities are rated in a rating category of “A” or its equivalent or better  by at least one NRSRO.   No more than 5% of the portfolio may be invested in any single issuer.   No more than 30% of the portfolio may be in Municipal Securities.   The maximum maturity does not exceed five (5) years.    12. Municipal securities (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.   The securities are rated in a rating category of “A” or its equivalent or better  by at least one nationally recognized statistical rating organization  (“NRSRO”).   No more than 5% of the portfolio may be invested in any single issuer.   No more than 30% of the portfolio may be in Municipal Securities.   The maximum maturity does not exceed five (5) years.    13. Asset‐backed, mortgage‐backed, mortgage pass‐through securities, and collateralized  mortgage obligations, provided that:   The securities are rated in a rating category of “AA” or its equivalent or better by  a NRSRO.   No more than 20% of the total portfolio may be invested in these securities.   No more than 5% of the portfolio may be invested in any single Asset‐Backed or  Commercial Mortgage security issuer. There is no issuer limitation on any  Mortgage security where the issuer is the US Treasury or a Federal Agency/GSE.   The maximum legal final maturity does not exceed five (5) years.    14. Supranationals, provided that:   Issues are US dollar denominated senior unsecured unsubordinated obligations  issued or unconditionally guaranteed by the International Bank for Reconstruction  and Development, International Finance Corporation, or Inter‐American  Development Bank.   The securities are rated in a rating category of “AA” or its equivalent or better by  a NRSRO.   No more than 30% of the total portfolio may be invested in these securities.   No more than 10% of the portfolio may be invested in any single issuer.   The maximum maturity does not exceed five (5) years.  188 11 | Page 15. Various daily money market funds administered for or by trustees, paying agents and  custodian banks contracted by the City of Cupertino may be purchased as allowed under  State of California Government Code. Only funds holding U.S. Treasury obligations,  Government agency obligations, or repurchase agreements collateralized by U.S.  Treasury or Government agency obligations can be utilized and may not exceed 20% of  the cost value of the portfolio.    16. Ineligible investments are those that are not described herein, including but not limited  to, common stocks and long‐term (over five years in maturity) notes and bonds are  prohibited from use in this portfolio. It is noted that special circumstances arise that  necessitate the purchase of securities beyond the five‐year limitation. On such occasions,  requests must be approved by City Council prior to purchase. Additionally:     State law notwithstanding, any investments not specifically described  herein are prohibited, including, but not limited to futures and options.   In accordance with Government Code, Section 53601.6, investment in  inverse floaters, range notes, or mortgage derived interest‐only strips is  prohibited.   Investment in any security that could result in a zero‐interest accrual if held  to maturity is prohibited. Under a provision sunsetting on January 1, 2026,  securities backed by the U.S. Government that could result zero‐ or  negative‐interest accrual if held to maturity are permitted.   Trading securities for the sole purpose of speculating on the future  direction of interest rates is prohibited.   Purchasing or selling securities on margin is prohibited.   The use of reverse repurchase agreements, securities lending or any other  form of borrowing or leverage is prohibited.   The purchase of foreign currency denominated securities is prohibited.    RISK MANAGEMENT AND DIVERSIFICATION    Mitigating Credit Risk in the Portfolio    Credit risk is the risk that a security or a portfolio will lose some or all its value due to a  real or perceived change in the ability of the issuer to repay its debt. The City will  mitigate credit risk by adopting the following strategies:    The diversification requirements included in the “Authorized Investments” section of  this policy are designed to mitigate credit risk in the portfolio.     No more than 5% of the total portfolio may be deposited with or invested in  securities issued by any single issuer unless otherwise specified in this policy.   The City may elect to sell a security prior to its maturity and record a capital gain  or loss in order to manage the quality, liquidity or yield of the portfolio in  189 12 | Page response to market conditions or City’s risk preferences.   If the credit ratings of any security owned by the City are downgraded to a level  below the quality required by this investment policy, it will be the City’s policy  to review the credit situation and make a determination as to whether to sell or  retain such securities in the portfolio.   If a security is downgraded, the Treasurer will use discretion in determining  whether to sell or hold the security based on its current maturity, the economic  outlook for the issuer, and other relevant factors.   If a decision is made to retain a downgraded security in the portfolio, its presence  in the portfolio will be monitored and reported monthly to the City Council.    Mitigating Market Risk in the Portfolio    Market risk is the risk that the portfolio value will fluctuate due to changes in the general  level of interest rates. The City recognizes that, over time, longer‐term portfolios have  the potential to achieve higher returns. On the other hand, longer‐term portfolios have  higher volatility of return. The City will mitigate market risk by providing adequate  liquidity for short‐term cash needs, and by making longer‐term investments only with  funds that are not needed for current cash flow purposes.  The City further recognizes that certain types of securities, including variable rate  securities, securities with principal paydowns prior to maturity, and securities with  embedded options, will affect the market risk profile of the portfolio differently in  different interest rate environments. The City, therefore, adopts the following strategies  to control and mitigate its exposure to market risk:   The City will maintain a minimum of six months of budgeted operating  expenditures in short term investments to provide sufficient liquidity for  expected disbursements.   The maximum stated final maturity of individual securities in the portfolio will  be five (5) years as measured from trade settlement date, except as otherwise  stated in this policy.   The duration of the portfolio will generally be approximately equal to the  duration (typically, plus or minus 20%) of a Market Benchmark, an index selected  by the City based on the City’s investment objectives, constraints and risk  tolerances.    DEPOSITS    To be eligible to receive local agency money, a bank, savings association, federal association, or  federally insured industrial loan company shall have received an overall rating of not less than  “satisfactory” in its most recent evaluation by the appropriate federal financial supervisorial  agency of its record of meeting the credit needs of California’s communities.          190 13 | Page   INTEREST EARNINGS    All moneys earned and collected from investments authorized in this policy shall be allocated  monthly to various fund accounts based on the cash balance in each fund as a percentage of the  entire pooled portfolio.    REVIEW OF INVESTMENT PORTFOLIO    The Treasurer shall periodically, but no less than quarterly, review the portfolio to identify  investments that do not comply with this investment policy and establish protocols for reporting  major and critical incidences of noncompliance to the City Council.    POLICY REVIEW    The City of Cupertino’s investment policy shall be adopted by resolution of the City Council on  an annual basis. This investment policy shall be reviewed at least annually to ensure its  consistency with the overall objectives of preservation of principal, liquidity, and yield, and its  relevance to current law and financial and economic trends.       191 14 | Page GLOSSARY OF INVESTMENT TERMS    AGENCIES. Shorthand market terminology for any obligation issued by a government‐ sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not  guaranteed by the full faith and credit of the US government. Examples are:   FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural  industry. FFCB issues discount notes and bonds.   FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB  issues discount notes and bonds.   FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity  in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and  mortgage pass‐through securities.   FNMA. Like FHLB and Freddie Mac, the Federal National Mortgage Association was established  to provide credit and liquidity in the housing market. FNMA, also known as “Fannie Mae,” issues  discount notes, bonds and mortgage pass‐through securities.  GNMA. The Government National Mortgage Association, known as “Ginnie Mae,” issues  mortgage pass‐through securities, which are guaranteed by the full faith and credit of the US  Government.   PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not  guaranteed by the full faith and credit of the US government.   TVA. The Tennessee Valley Authority provides flood control and power and promotes  development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently  issues discount notes and bonds.   ASKED. The price at which a seller offers to sell a security.   ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by  pools of revolving lines of credit.   AVERAGE LIFE. In mortgage‐related investments, including CMOs, the average time to expected  receipt of principal payments, weighted by the amount of principal expected.   BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade  transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to  the bank which “accepts” the obligation to pay the investor.   BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market  index, which reflects the mix of securities allowed under a specific investment policy.  BID. The price at which a buyer offers to buy a security.   192 15 | Page BROKER. A broker brings buyers and sellers together for a transaction for which the broker  receives a commission. A broker does not sell securities from his own position.   CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its  maturity. The main cause of a call is a decline in interest rates. If interest rates decline since an  issuer issues securities, it will likely call its current securities and reissue them at a lower rate of  interest. Callable securities have reinvestment risk as the investor may receive its principal back  when interest rates are lower than when the investment was initially made.  CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a  certificate. Large denomination CDs may be marketable.   CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS).  A private placement  service that allows local agencies to purchase more than $250,000 in CDs from a single financial  institution (must be a participating institution of CDARS) while still maintaining FDIC insurance  coverage. CDARS is currently the only entity providing this service. CDARS facilitates the trading  of deposits between the California institution and other participating institutions in amounts that  are less than $250,000 each, so that FDIC coverage is maintained.  COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or  repurchase agreement. Also, securities pledged by a financial institution to secure deposits of  public monies.   COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the  cash flows of mortgage securities (and whole loans) to create securities that have different levels  of prepayment risk, as compared to the underlying mortgage securities.  COMMERCIAL PAPER. The short‐term unsecured debt of corporations.   COST YIELD. The annual income from an investment divided by the purchase cost. Because it  does not give effect to premiums and discounts which may have been included in the purchase  cost, it is an incomplete measure of return.   COUPON. The rate of return at which interest is paid on a bond.  CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely  manner due to changes in the condition of the issuer.   CURRENT YIELD. The annual income from an investment divided by the current market value.  Since the mathematical calculation relies on the current market value rather than the investor’s  cost, current yield is unrelated to the actual return the investor will earn if the security is held to  maturity.   DEALER. A dealer acts as a principal in security transactions, selling securities from and buying  securities for his own position.   DEBENTURE. A bond secured only by the general credit of the issuer.   193 16 | Page DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a  security must be made at the time the security is delivered to the purchaser’s agent.   DERIVATIVE. Any security that has principal and/or interest payments which are subject to  uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any  security which represents a component of another security which has been separated from other  components (“Stripped” coupons and principal). A derivative is also defined as a financial  instrument the value of which is totally or partially derived from the value of another instrument,  interest rate, or index.   DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the  cost is below par. Some short‐term securities, such as T‐bills and banker’s acceptances, are known  as discount securities. They sell at a discount from par, and return the par value to the investor at  maturity without additional interest. Other securities, which have fixed coupons, trade at a  discount when the coupon rate is lower than the current market rate for securities of that maturity  and/or quality.   DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid  excessive exposure to any one source of risk.   DURATION. The weighted average time to maturity of a bond where the weights are the present  values of the future cash flows. Duration measures the price sensitivity of a bond to changes in  interest rates. (See modified duration).   FEDERAL FUNDS RATE. The rate of interest charged by banks for short‐term loans to other  banks. The Federal Reserve Bank through open‐market operations establishes it.   FEDERAL OPEN MARKET COMMITTEE. A committee of the Federal Reserve Board that  establishes monetary policy and executes it through temporary and permanent changes to the  supply of bank reserves.   LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay  earnings at a rate higher than the cost of borrowing.  LIQUIDITY. The speed and ease with which an asset can be converted to cash.   LOCAL AGENCY INVESTMENT FUND (LAIF). A voluntary investment fund open to  government entities and certain non‐profit organizations in California that is managed by the  State Treasurer’s Office.  LOCAL GOVERNMENT INVESTMENT POOL.  Investment pools that range from the State  Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers  Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market  mutual funds.  MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the  remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a  194 17 | Page lump sum payment that equals the net present value (NPV) of future coupon payments that will  not be paid because of the call. With this type of call, an investor is compensated, or ʺmade whole.ʺ  MARGIN. The difference between the market value of a security and the loan a broker makes  using that security as collateral.  MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market  conditions or interest rates.  MARKET VALUE. The price at which a security can be traded.   MARKING TO MARKET. The process of posting current market values for securities in a  portfolio.   MATURITY. The final date upon which the principal of a security becomes due and payable.   MEDIUM TERM NOTES. Unsecured, investment‐grade senior debt securities of major  corporations which are sold in relatively small amounts on either a continuous or an intermittent  basis. MTNs are highly flexible debt instruments that can be structured to respond to market  opportunities or to investor preferences.   MODIFIED DURATION. The percent change in price for a 100 basis point change in yields.  Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.   MONEY MARKET. The market in which short‐term debt instruments (T‐bills, discount notes,  commercial paper, and banker’s acceptances) are issued and traded.   MORTGAGE PASS‐THROUGH SECURITIES. A securitized participation in the interest and  principal cash flows from a specified pool of mortgages. Principal and interest payments made  on the mortgages are passed through to the holder of the security.   MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and  operating expenses.  MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set  of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested  in various types of domestic and/or international stocks, bonds, and money market instruments,  as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs  associated with investing in mutual funds are higher than the investor can obtain through an  individually managed portfolio.   NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO).    A credit rating agency that the Securities and Exchange Commission in the United States uses for  regulatory purposes. Credit rating agencies provide assessments of an investmentʹs risk. The  issuers of investments, especially debt securities, pay credit rating agencies to provide them with  ratings. The three most prominent NRSROs are Fitch, S&P, and Moodyʹs.  195 18 | Page NEGOTIABLE CD.  A short‐term debt instrument that pays interest and is issued by a bank,  savings or federal association, state or federal credit union, or state‐licensed branch of a foreign  bank.  Negotiable CDs are traded in a secondary market and are payable upon order to the bearer  or initial depositor (investor).  PREMIUM. The difference between the par value of a bond and the cost of the bond, when the  cost is above par.  PREPAYMENT SPEED. A measure of how quickly principal is repaid to investors in mortgage  securities.  PREPAYMENT WINDOW. The time period over which principal repayments will be received on  mortgage securities at a specified prepayment speed.  PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal  Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that  participates for statistical reporting purposes in compiling data on activity in the U.S.  Government securities market.  PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies  to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care,  skill, prudence and diligence, under the circumstances then prevailing, that a prudent person,  acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise  of like character and with like aims to accomplish similar purposes.”   REALIZED YIELD. The change in value of the portfolio due to interest received and interest  earned and realized gains and losses. It does not give effect to changes in market value on  securities, which have not been sold from the portfolio.   REGIONAL DEALER. A financial intermediary that buys and sells securities for the benefit of its  customers without maintaining substantial inventories of securities and that is not a primary  dealer.   REPURCHASE AGREEMENT. Short‐term purchases of securities with a simultaneous  agreement to sell the securities back at a higher price. From the seller’s point of view, the same  transaction is a reverse repurchase agreement.   SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the  customer’s name.   STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a  formula tied to other interest rates, commodities or indices. Examples include inverse floating  rate notes which have coupons that increase when other interest rates are falling, and which fall  when other interest rates are rising, and ʺdual index floaters,ʺ which pay interest based on the  relationship between two other interest rates ‐ for example, the yield on the ten‐year Treasury  note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing  interest rate swap agreements.   196 19 | Page SUPRANATIONAL.  A Supranational is a multi‐national organization whereby member states  transcend national boundaries or interests to share in the decision making to promote economic  development in the member countries.  TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal  rate of return, which equates the beginning value of the portfolio with the ending value; it  includes interest earnings, realized and unrealized gains, and losses in the portfolio.  U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full  faith and credit of the United States. Treasuries are considered to have no credit risk, and are the  benchmark for interest rates on all other securities in the US and overseas. The Treasury issues  both discounted securities and fixed coupon notes and bonds.   TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as  discounted instruments, and are called Treasury bills. The Treasury currently issues three‐ and  six‐month T‐bills at regular weekly auctions. It also issues “cash management” bills as needed to  smooth out cash flows.   TREASURY NOTES. All securities issued with initial maturities of two to ten years are called  Treasury notes, and pay interest semi‐annually.   TREASURY BONDS. All securities issued with initial maturities greater than ten years are called  Treasury bonds. Like Treasury notes, they pay interest semi‐annually.   VOLATILITY. The rate at which security prices change with changes in general economic  conditions or the general level of interest rates.   YIELD TO MATURITY. The annualized internal rate of return on an investment which equates  the expected cash flows from the investment to its cost.                          Director of Administrative Services’ signature: _______________________________                          Date: _______________________________  City Manager’s signature: _______________________________                Date: _______________________________  197 20 | Page Revisions:             198 6225 Lusk Boulevard | San Diego, CA 92121 | Phone 800.317.4747 | chandlerasset.com April 20th, 2023 Ms. Kristina Alfaro Director of Administrative Services City of Cupertino Dear Kristina, The Chandler Team has completed our review of City of Cupertino’s investment policy. Our review of the policy focused on compliance with the statutes of California Government Code (Code) that govern the investment of public funds, as well as on inclusion of current best practices. There was a change to Code Section 53601 for 2023 that we recommend the City adopt. Pursuant to Senate Bill 1489, effective January 1, 2023, the Code specified that an investment’s term or remaining maturity shall be measured from settlement date to final maturity rather than from trade date. We have added the change in the Maximum Maturities and Mitigating Market Risk in the Portfolio sections. The City’s policy continues to be effective as written. Please do not hesitate to contact us with any questions you may have, or if further review is needed. Sincerely, Carlos Oblites Senior Portfolio Strategist Chandler Asset Management 199 CITY OF CUPERTINO Agenda Item 23-12263 Agenda Date: 4/24/2023 Agenda #: 7. INFORMATIONAL ITEM Subject: Consider the Audit Committee 2023 Schedule and Work Plan Receive the Audit Committee 2023 Schedule and Work Plan and provide direction to staff Presenter: Thomas Leung, Budget Manager 5:25(10) CITY OF CUPERTINO Printed on 4/21/2023Page 1 of 1 powered by Legistar™200 January 23, 2023 February 27, 2023 March 27, 2023 April 24, 2023 July 24, 2023 October 23, 2023 Approve Prior Meeting Minutes Approve Prior Meeting Minutes Approve Prior Meeting Minutes Approve Prior Meeting Minutes Approve Prior Meeting Minutes Approve Prior Meeting Minutes Monthly Treasurerʹs Report for  December 2022 Monthly Treasurerʹs Report for  January 2022 Monthly Treasurerʹs Report for  February 2023  Quarterly Treasurerʹs Investment  Report Quarterly Treasurerʹs Investment  Report Quarterly Treasurerʹs Investment  Report Monthly Treasurerʹs Investment  Report for December 2022 Monthly Treasurerʹs Investment  Report for January 2022 Monthly Treasurerʹs Investment  Report for February 2023 OPEB & Pension Trust  Performance Report for Quarter  Ending March 31, 2023 OPEB & Pension Trust  Performance Report for Quarter  Ending June 30, 2023 OPEB & Pension Trust  Performance Report for Quarter  Ending September 30, 2023 OPEB & Pension Trust  Performance Report for Quarter  Ending December 31, 2022 Internal Audit and Fraud, Waste,  and Abuse Program Update Budget Format Review Internal Audit and Fraud, Waste,  and Abuse Program Update Internal Audit and Fraud, Waste,  and Abuse Program Update Internal Audit and Fraud, Waste,  and Abuse Program Update Update on Status of Draft ACFR  and AUP Reports Review of FY 2021‐22 ACFR and  Supplemental Reports Annual Review of City Investment  Policy Interim Audit and AUP  Engagements Annual Review of OPEB and  Pension Trust Investment Policies External Auditor Selection  (tentative) Follow‐up on Previous Fiscal Year  Management Letter Items and  Management Responses Budget Format Review Source: Cupertino, CA Municipal Code, Chapter 2.88.100: Audit Committee The powers and functions of the Audit Committee shall be as follows: A: To review the annual audit report and management letter; B: To recommend appointment of auditors; C. To review the quarterly Treasurer’s Investment report; D. To recommend a budget format; E. To review City investment policies and internal controls of such policies. F. To recommend appointment of internal auditors; G. To review internal audit reports. H. To review quarterly Fraud, Waste, and Abuse Program reports. (Ord. 22-2243 § 1, 2023; Ord. 20-2208, § 1, 2020; Ord. 1679, § 1 (part), 1995) CITY OF CUPERTINO ‐ AUDIT COMMITTEE 2023 SCHEDULE AND WORK PLAN Summary of Duties – Powers – Responsibilities of Cupertino Audit Committee 20 1