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Page 4 of 5 <br /> <br />Section 115 Trust Fund <br />In December 2018, the City Council approved investing $28.0 million into a Section 115 Trust <br />Fund to help smooth the City's growing pension liabilities. The investment is held in two <br />separate portfolios: $6.7 million in a Conservative portfolio, to pay the annual unfunded <br />liabilities if necessary, and $21.3 million in a long-term Capital Growth portfolio. In March and <br />December 2020, two additional $5.0 million contributions were deposited into the <br />Conservative portfolio, increasing the total invested to $16.7 million. <br /> <br />As illustrated in Table 4, the Conservative portfolio balance was $22.2 million at the end of <br />June 30, 2026, an increase of $0.6 million from the prior quarter. The investment return for the <br />quarter ended June 30, 2026, was 2.69 percent, and the five-year annualized return was 3.96 <br />percent. <br /> <br /> Table 4. Conservative PARS Plan Account Balance <br /> <br /> <br />The Capital Growth portfolio addresses the longer-term pension liabilities with an initial <br />investment of $21.3 million. The focus of this portfolio is on achieving higher earnings over the <br />next 10 years or so before the City needs to draw upon it to help meet pension obligations. As <br />illustrated in Table 5, the Capital Growth portfolio balance was $41.9 million at the end of June <br />30, 2026, an increase of $3.9 million from the prior quarter. The investment return for the <br />quarter was 10.39 percent, and the five-year annualized return was 7.76 percent. <br /> <br />Combined, the two portfolios total $64.1 million. These funds are held by a third party for the <br />benefit of the City of Pleasanton at US Bank. US Bank is the contractual agent for PARS trust <br />investments that are managed by PFM Asset Management (formerly Highmark Capital <br />Management). <br /> <br />Table 5. Capital Growth PARS Plan Account Balance <br />Page 167 of 373