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Section 115 Trust Fund In June 2018 the City council approved the investment of $28 Million of various 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 which is available to pay the annual unfunded liabilities if necessary. We anticipate this investment to remain in place for a minimum of three years before being used if required. As of September 30, 2019, this portfolio was fully funded with PARS the investment manager selected by the City. The second portfolio (Capital Growth) addresses the longer-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 September 30, 2019, the Conservative portfolio's balance was $7.1 Million and a quarterly investment return of 0.82%. The Capital Growth portfolio's September 30, 2019 balance was $22.4 Million and had a quarterly investment return of 0.92%. SAFEKEEPING OF SECURITIES: As of September 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.