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Section 115 Trust Fund The City council approved the investment of$28 Million of reserves into a Section 115 trust fund to help smooth the pension liabilities which are expected to grow considerably due to the reduction in the CALPERS discount rate from 7.5% to 7%. The investment is made into two separate portfolios, the first one for $6.7 Million into a Conservative portfolio to pay the annual unfunded liabilities, as the city currently has a heathy cash flow. We anticipate this investment to remain in place for a minimum of three years before being used if required. As of June 30, 2019, this portfolio was fully funded with PARS the investment manager selected by the City. The second portfolio (Capital Growth) addresses the long-term pension liabilities and is currently designed to have an initial investment of $21.3 Million. The focus of this portfolio is to earn a higher rate of return over the next ten years or so before we would need to draw upon it. As of June 30, 2019, we have invested $21.3 Million into this portfolio. Since the capital growth portfolio is intended to consist of 70% in equities and 30% bonds, we have agreed a strategy of periodical funding of this portfolio to smooth out any market volatility and average in the investment over a three to six-month time horizon. Further holdings and performance details are presented on the next page. SAFEKEEPING OF SECURITIES: As of June 30, 2019, the two portfolios are held in third party safekeeping for the benefit of the City of Pleasanton at US Bank where US Bank is the contractual agent for PARS trust investments that are managed by Highmark capital Management.