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CITY OF ARCADIA
PROFESSIONAL SERVICES AGREEMENT FOR
INVESTMENT ADVISORY SERVICES
1. PARTIES AND DATE.
This Agreement is made and entered into this `�c\ day of 4trtcuAtipr , 2021 by
and between the City of Arcadia, a charter city organized under the Constitution and laws
of the State of California with its principal place of business at 240 West Huntington Drive,
Arcadia, California 91066-6021 ("City") and PFM Asset Management LLC, a Delaware
Limited Liability Company with an office located at 555 W. 5th Street, Suite 3500, Los
Angeles, CA 90013 ("Consultant"). City and Consultant are sometimes individually
referred to as "Party" and collectively as "Parties."
2. RECITALS.
2.1 Consultant.
Consultant desires to perform and assume responsibility for the provision of certain
professional services required by the City on the terms and conditions set forth in this
Agreement. Consultant represents that it is experienced in providing Investment Advisory
services to public clients, is licensed in the State of California, and is familiar with the
plans of City.
2.2 Project.
City desires to engage Consultant to render such services for the City's investment
portfolio ("Project") as set forth in this Agreement.
3. TERMS.
3.1 Scope of Services and Term.
3.1 .1 General Scope of Services. Consultant promises and agrees to
furnish to the City all labor, materials, tools, equipment, services, and incidental and
customary work necessary to fully and adequately supply the professional Investment
Advisory services necessary for the Project ("Services"). The Services are more
particularly described in Exhibit"A" attached hereto and incorporated herein by reference.
All Services shall be subject to, and performed in accordance with, this Agreement, the
exhibits attached hereto and incorporated herein by reference, and all applicable local,
state and federal laws, rules and regulations.
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3.1.2 Term. The term of this Agreement shall be from September 1, 2021
to August 31, 2024 with the option of two one-year extensions unless earlier terminated
as provided herein. Consultant shall complete the Services within the term of this
Agreement, and shall meet any other established schedules and deadlines.
3.2 Responsibilities of Consultant.
3.2.1 Control and Payment of Subordinates; Independent Contractor. The
Services shall be performed by Consultant or under its supervision. Consultant will
determine the means, methods and details of performing the Services subject to the
requirements of this Agreement. City retains Consultant on an independent contractor
basis and not as an employee. Consultant retains the right to perform similar or different
services for others during the term of this Agreement. Any additional personnel
performing the Services under this Agreement on behalf of Consultant shall also not be
employees of City and shall at all times be under Consultant's exclusive direction and
control. Consultant shall pay all wages, salaries, and other amounts due such personnel
in connection with their performance of Services under this Agreement and as required
by law. Consultant shall be responsible for all reports and obligations respecting such
additional personnel, including, but not limited to: social security taxes, income tax
withholding, unemployment insurance, disability insurance, and workers' compensation
insurance.
3.2.2 Schedule of Services. Consultant shall perform the Services
expeditiously, within the term of this Agreement, and in accordance with the Schedule of
Services set forth in Exhibit "B" attached hereto and incorporated herein by reference.
Consultant represents that it has the professional and technical personnel required to
perform the Services in conformance with such conditions. In order to facilitate
Consultant's conformance with the Schedule, City shall respond to Consultant's
submittals in a timely manner. Upon request of City, Consultant shall provide a more
detailed schedule of anticipated performance to meet the Schedule of Services.
3.2.3 Conformance to Applicable Requirements. [INTENTIONALLY
OMITTED]
3.2.4 Substitution of Key Personnel. Consultant has represented to City
that certain key personnel will perform and coordinate the Services under this Agreement.
Should one or more of such personnel become unavailable, Consultant may substitute
other personnel of at least equal competence upon prior written notice to the City. In the
event that City and Consultant cannot agree as to the substitution of key personnel, City
shall be entitled to terminate this Agreement. As discussed below, any personnel who
fail or refuse to perform the Services in a manner acceptable to the City, or who are
determined by the City to be uncooperative, incompetent, a threat to the adequate or
timely completion of the Project or a threat to the safety of persons or property, shall be
promptly removed from the Project by the Consultant at the request of the City. The key
personnel for performance of this Agreement are as follows: Sarah Meacham, Managing
Director, as the City's Engagement Manager and Richard Babbe, Senior Managing
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Consultant, as the Day-to-Day Contact. The Portfolio Strategy and Management team
consists of Brian Raubenstine, CFA, and Bob Cheddar, CFA.
3.2.5 City's Representative. The City hereby designates Henry Chen, City
Treasurer, or his or her designee, to act as its representative for the performance of this
Agreement ("City's Representative"). City's Representative shall have the power to act
on behalf of the City for all purposes under this Contract. Consultant shall not accept
direction or orders from any person other than the City's Representative or his or her
designee.
3.2.6 Consultant's Representative. Consultant hereby designates Sarah
Meacham, Director, or his or her designees, to act as its representative for the
performance of this Agreement ("Consultant's Representative"). Consultant's
Representative shall have full authority to represent and act on behalf of the Consultant
for all purposes under this Agreement. The Consultant's Representative shall supervise
and direct the Services, using his best skill and attention, and shall be responsible for all
means, methods, techniques, sequences and procedures and for the satisfactory
coordination of all portions of the Services under this Agreement.
3.2.7 Coordination of Services. Consultant agrees to work closely with
City staff in the performance of Services and shall be available to City's staff, consultants
and other staff at all reasonable times.
3.2.8 Standard of Care; Performance of Employees. Consultant shall
perform all Services under this Agreement in a skillful and competent manner, consistent
with the standards generally recognized as being employed by professionals in the same
discipline in the State of California. Consultant represents and maintains that it is skilled
in the professional calling necessary to perform the Services. Finally, Consultant
represents that it, its employees and subcontractors have all licenses, permits,
qualifications and approvals of whatever nature that are legally required to perform the
Services, including a City Business License, and that such licenses and approvals shall
be maintained throughout the term of this Agreement. As provided for in the
indemnification provisions of this Agreement, Consultant shall perform, at its own cost
and expense and without reimbursement from the City, any services necessary to correct
errors or omissions which are caused by the Consultant's failure to comply with the
standard of care provided for herein. Any employee of the Consultant or its sub-
consultants who is determined by the City to be uncooperative, incompetent, a threat to
the adequate or timely completion of the Project, a threat to the safety of persons or
property, or any employee who fails or refuses to perform the Services in a manner
acceptable to the City, shall be promptly removed from the Project by the Consultant and
shall not be re-employed to perform any of the Services or to work on the Project.
3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of
and in compliance with all local, state and federal laws, rules and regulations in any
manner affecting the performance of the Project or the Services, including all Cal/OSHA
requirements, and shall give all notices required by law. Consultant shall be liable for all
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violations of such laws and regulations in connection with Services. If the Consultant
performs any work knowing it to be contrary to such laws, rules and regulations and
without giving written notice to the City, Consultant shall be solely responsible for all costs
arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors,
officers, and employees free and harmless, pursuant to the indemnification provisions of
this Agreement, from any claim or liability arising out of any failure or alleged failure to
comply with such laws, rules or regulations.
3.2.9.1 Immigration Reform and Control Act. Consultant
acknowledges that Consultant, and all subcontractors hired by Consultant to perform
services under this Agreement, are aware of and understand the Immigration Reform and
Control Act ("IRCA"). Consultant is and shall remain in compliance with the IRCA and
shall ensure that any subcontractors hired by Consultant to perform services under this
Agreement are in compliance with the IRCA. In addition, Consultant agrees to indemnify,
defend and hold harmless the City, its directors, officials, officers and employees, from
any liability, damages or causes of action arising out of or relating to any claims that
Consultant's employees, or the employees of any subcontractor hired by Consultant, are
not authorized to work in the United States for Consultant or its subcontractor and/or any
other claims based upon alleged IRCA violations committed by Consultant or Consultant's
subcontractor(s).
3.2.10 Insurance.
3.2.10.1 Time for Compliance. Consultant shall not commence
Work under this Agreement until it has provided evidence satisfactory to the City that it
has secured all insurance required under this section. In addition, Consultant shall not
allow any subcontractor to commence work on any subcontract until it has provided
evidence satisfactory to the City that the subcontractor has secured all insurance required
under this section; provided, however, that in lieu thereof, the Consultant may provide
evidence to the City that all subcontractors are additional insureds under the Consultant's
policies of insurance.
3.2.10.2 Minimum Requirements. Consultant shall, at its
expense, procure and maintain for the duration of the Agreement insurance against
claims for injuries to persons or damages to property which may arise from or in
connection with the performance of the Agreement by the Consultant, its agents,
representatives, employees, and volunteers. Consultant shall also name and obtain
insurer's consent to naming City, its directors, officials, officers, and employees as an
additional insured with proof of certificate of insurance that they are an additional insured,
except for professional liability insurance and workers compensation insurance. Such
insurance shall meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be when
commercially available (occurrence based) at least as broad as the latest version of the
following: (1) General Liability: Insurance Services Office Commercial General Liability
coverage for premises and operations, contractual liability, personal injury, bodily injury,
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broadform property damage; (2) Automobile Liability: Insurance Services Office Business
Auto coverage for any auto hired, and non-owned by Consultant or for which Consultant
is responsible; and (3) Workers' Compensation and Employer's Liability. Workers'
Compensation insurance as required by the State of California and Employer's Liability
Insurance.
The City, its directors, officials, officers, and employees shall be listed as additional
insured (except for the workers' compensation and employer's liability insurance). Any
deductibles or self-insured retentions must be declared to and approved by City and
conform to the requirements provided in Section 3.2.10.6 herein.
(B) Minimum Limits of Insurance. Consultant shall
maintain limits no less than: (1) General Liability: $1,000,000 combined single limit per
occurrence for bodily injury, personal injury and property damage, with an aggregate limit
of $2,000,000. If Commercial General Liability Insurance or other form with general
aggregate limit is used, either the general aggregate limit shall apply separately to this
Agreement/location or the general aggregate limit shall be twice the required occurrence
limit; (2) Automobile Liability: $1,000,000 combined single limit per accident for bodily
injury and property damage; and (3) Workers' Compensation and Employer's Liability:
Workers' Compensation limits as required by the Labor Code of the State of California.
Employer's Liability limits of$1,000,000 per accident for bodily injury or disease.
3.2.10.3 Professional Liability. Consultant shall procure and
maintain, and require its sub-consultants to procure and maintain, for a period of three (3)
years following completion of the Project, errors and omissions liability insurance
appropriate to their profession. Such insurance shall be in an amount not less than
$1,000,000 per claim and shall be endorsed to include contractual liability.
3.2.10.4 Insurance Endorsements. The insurance policies shall
contain the following provisions, or Consultant shall provide endorsements on forms
supplied or approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall be
endorsed to state that: (1) the City, its directors, officials, officers, and employees shall
be covered as additional insured with respect to liability arising out of Services operations
and for completed operations performed by or on behalf of the Consultant, including
materials, parts or equipment furnished in connection with such work; and (2) the
insurance coverage shall be primary insurance as respects the City, its directors, officials,
officers, and employees, or if excess, shall stand in an unbroken chain of coverage excess
of the Consultant's scheduled underlying coverage. Any insurance or self-insurance
maintained by the City, its directors, officials, officers, employees and volunteers shall be
excess of the Consultant's insurance and shall not be called upon to contribute with it in
any way.
(B) Automobile Liability. The automobile liability policy
shall be endorsed to state that: (1) the City, its directors, officials, officers, and employees
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shall be covered as additional insureds with respect to the operation, and use of any auto
hired or non-owned by the Consultant or for which the Consultant is responsible; and (2)
the insurance coverage shall be primary insurance as respects the City, its directors,
officials, officers, and employees, or if excess, shall stand in an unbroken chain of
coverage excess of the Consultant's scheduled underlying coverage. Any insurance or
self-insurance maintained by the City, its directors, officials, officers, and employees shall
be excess of the Consultant's insurance and shall not be called upon to contribute with it
in any way.
(C) Workers' Compensation and Employers Liability
Coverage. The insurer shall agree to waive all rights of subrogation against the City, its
directors, officials, officers, and employees for losses paid under the terms of the
insurance policy which arise from work performed by the Consultant.
(D) All Coverages. Each insurance policy required, except
for Professional Liability, by this Agreement shall be endorsed to state that: (A) coverage
shall not be canceled except after thirty (30) days prior written notice by certified mail,
return receipt requested of cancellation, of intended non-renewal or endorsement
reduction in limit or scope of coverage; provided, however, that in the event of cancellation
due solely to non-payment of premium, ten (10) days' notice of cancellation for non-
payment of premium may instead be given to the City.; and (B) any failure to comply with
reporting or other provisions of the policies, including breaches of warranties, shall not
affect coverage provided to the City, its directors, officials, officers, and employees.
Consultant agrees that during the term of this Agreement, it shall not reduce the amount
of any coverages relied upon by the City in executing and delivering this Agreement.
3.2.10.5 Separation of Insureds; No Special Limitations. All
insurance required by this Section shall contain standard separation of insureds
provisions. In addition, such insurance shall not contain any special limitations on the
scope of protection afforded to the City, its directors, officials, officers, and employees.
3.2.10.6 Deductibles and Self-Insurance Retentions. Any
deductibles or self-insured retentions must be declared to and approved by the City.
3.2.10.7 Acceptability of Insurers. Insurance is to be placed with
insurers with a current A.M. Best's rating no less than A:VII, admitted or approved to do
business in California, and satisfactory to the City.
3.2.10.8 Verification of Coverage. Consultant shall furnish City
with complete and accurate copies of current certificates of insurance and endorsements
effecting coverage required by this Agreement on forms satisfactory to the City. The
certificates and endorsements for each insurance policy shall be signed by a person
authorized by that insurer to bind coverage on its behalf, and shall be on forms provided
by the City if requested. Copies of all certificates and endorsements must be received
and approved by the City before work commences. The City reserves the right to require
complete, certified copies of all required insurance policies, at any time.
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3.2.10.9 Safety. Consultant shall execute and maintain its work
so as to avoid injury or damage to any person or property. In carrying out its Services,
the Consultant shall at all times be in compliance with all applicable local, state and
federal laws, rules and regulations, and shall exercise all necessary precautions for the
safety of employees appropriate to the nature of the work and the conditions under which
the work is to be performed. Safety precautions as applicable shall include, but shall not
be limited to: (A) adequate life protection and life saving equipment and procedures; (B)
instructions in accident prevention for all employees and subcontractors, such as safe
walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space
procedures, trenching and shoring, equipment and other safety devices, equipment and
wearing apparel as are necessary or lawfully required to prevent accidents or injuries;
and (C) adequate facilities for the proper inspection and maintenance of all safety
measures.
3.2.10.10 Material Breach. Lack of insurance does not negate
Consultant's obligations under this Agreement. Maintenance of proper insurance
coverage is a material element of this Agreement and failure to maintain or renew
coverage or to provide evidence of renewal may be treated by the City as a material
breach of the Agreement.
3.3 Fees and Payments.
3.3.1 Compensation. Consultant shall receive compensation, including
reimbursements which receive the City's prior written authorization, for all Services
rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and
incorporated herein by reference. The total compensation shall not exceed Forty Five
Thousand Dollars annually ($45,000) without written approval of the City Manager.
Extra Work may be authorized, as described below, and if authorized, will be
compensated at the rates and manner set forth in this Agreement.
3.3.2 Payment of Compensation. Consultant shall submit to City a monthly
itemized statement which indicates work completed by Consultant. The statement shall
describe the amount of Services and supplies provided since the initial commencement
date, or since the start of the subsequent billing periods, as appropriate, through the date
of the statement. City shall, within forty-five (45) days of receiving such statement, review
the statement and pay all approved charges thereon.
3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed
for any expenses unless prior written authorization is obtained from the City.
3.3.4 Extra Work. At any time during the term of this Agreement, City may
request that Consultant perform Extra Work. As used herein, "Extra Work" means any
work which is determined by City to be necessary for the proper completion of the Project,
but which the parties did not reasonably anticipate would be necessary at the execution
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of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work
without prior written authorization from City's Representative.
3.4 Accounting Records.
3.4.1 Maintenance and Inspection. Consultant shall maintain complete
and accurate records with respect to all costs and expenses incurred under this
Agreement. All such records shall be clearly identifiable. Consultant shall, upon
reasonable advance notice, allow a representative of City during normal business hours
to examine, audit, and make transcripts or copies of such records and any other
documents created pursuant to this Agreement. Consultant shall allow inspection of all
work, data, documents, proceedings, and activities related to the Agreement for a period
of three (3) years from the date of final payment under this Agreement.
3.5 General Provisions.
3.5.1 Termination of Agreement.
3.5.1.1 Grounds for Termination. Either party may, by written
notice to the other party, terminate the whole or any part of this Agreement at any time
and without cause by giving written notice of such termination, and specifying the effective
date thereof, at least seven (7) days before the effective date of such termination. Upon
termination, Consultant shall be compensated only for those services which have been
adequately rendered to City, and Consultant shall be entitled to no further compensation.
Consultant may not terminate this Agreement except for cause, and any termination for
cause shall specify the cause and shall not become effective until at least forty five (45)
days following delivery of notice to the City; provided that Consultant shall be
compensated for services adequately rendered to the City to the date of termination. A
termination without cause by City shall not act as or be deemed a waiver of any potential
known or unknown City claims associated with Consultant's performance prior to the date
of termination.
3.5.1.2 Effect of Termination. If this Agreement is terminated
as provided herein, City may require Consultant to provide all finished or unfinished
Documents and Data and other information of any kind prepared by Consultant in
connection with the performance of Services under this Agreement. Consultant shall be
required to provide such document and other information within fifteen (15) days of the
request.
3.5.1.3 Additional Services. In the event this Agreement is
terminated in whole or in part as provided herein, City may procure, upon such terms and
in such manner as it may determine appropriate, services similar to those terminated.
3.5.2 Delivery of Notices. All notices permitted or required under this
Agreement shall be given to the respective parties at the following address, or at such
other address as the respective parties may provide in writing for this purpose:
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Consultant:
Sarah Meacham
PFM Asset Management LLC
555 W. Fifth Street, Suite 3500
Los Angeles, CA 90013
With a copy to:
PFM Asset Management LLC
1735 Market Street, 43rd Floor
Philadelphia, PA 19103
Attn: Controller
City:
City of Arcadia
240 West Huntington drive
Arcadia, CA 91007
Attn: Henry Chen, City Treasurer
Such notice shall be deemed made when personally delivered or when mailed, forty-eight
(48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the
party at its applicable address. Actual notice shall be deemed adequate notice on the
date actual notice occurred, regardless of the method of service.
3.5.3 Ownership of Materials and Confidentiality.
3.5.3.1 Documents & Data; Licensing of Intellectual Property.
This Agreement creates a non-exclusive and perpetual license for City to copy, use,
modify, reuse, or sublicense any and all copyrights, designs, and other intellectual
property embodied in plans, specifications, studies, drawings, estimates, and other
documents or works of authorship fixed in any tangible medium of expression, including
but not limited to, physical drawings or data magnetically or otherwise recorded on
computer diskettes, which are prepared or caused to be prepared by Consultant under
this Agreement ("Documents & Data"). Consultant shall require all subcontractors to
agree in writing that City is granted a non-exclusive and perpetual license for any
Documents & Data the subcontractor prepares under this Agreement. Consultant
represents and warrants that Consultant has the legal right to license any and all
Documents & Data. Consultant makes no such representation and warranty in regard to
Documents & Data which were prepared by design professionals other than Consultant
or provided to Consultant by the City. City shall not be limited in any way in its use of the
Documents and Data at any time, provided that any such use not within the purposes
intended by this Agreement shall be at City's sole risk.
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3.5.3.2 Confidentiality. Except as otherwise required by
California law, all ideas, memoranda, specifications, plans, procedures, drawings,
descriptions, computer program data, input record data, written information, and other
Documents and Data either created by or provided to Consultant in connection with the
performance of this Agreement shall be held confidential by Consultant. Such materials
shall not, without the prior written consent of City, be used by Consultant for any purposes
other than the performance of the Services. Nor shall such materials be disclosed to any
person or entity not connected with the performance of the Services or the Project, unless
such disclosure is required by law or by regulatory or judicial process. Nothing furnished
to Consultant which is otherwise known to Consultant or is generally known, or has
become known, to the related industry shall be deemed confidential. Consultant shall not
use City's name or insignia, photographs of the Project, or any publicity pertaining to the
Services or the Project in any magazine, trade paper, newspaper, television or radio
production or other similar medium without the prior written consent of City.
3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be
necessary, appropriate or convenient to attain the purposes of this Agreement.
3.5.5 Indemnification.
3.5.5.1 To the fullest extent permitted by law, Consultant shall
defend, indemnify and hold the City, its officials, officers, and employees free and
harmless from any and all claims, demands, causes of action, costs, expenses, liability,
loss, damage or injury, in law or equity, to property or persons, including wrongful death,
in any manner arising out of or incident to any alleged wrongful acts or omissions,whether
negligent or intentional, or willful misconduct of Consultant, its officials, officers,
employees, agents, consultants and contractors arising out of or in connection with the
performance of the Services, the Project or this Agreement, including without limitation
the payment of attorney's fees and other related costs and expenses. Notwithstanding
the foregoing, to the extent Consultant's Services are subject to Civil Code Section
2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section
2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or
willful misconduct of the Consultant. Consultant shall defend with Legal Counsel of
Consultant's choosing, at Consultant's own cost, expense and risk, any and all such
aforesaid suits, actions or other legal proceedings of every kind that may be brought or
instituted against City, its directors, officials, officers, and employees, provided that
Consultant's liability shall only be to the extent of claims and liabilities arising from its
negligence. Consultant shall pay and satisfy any judgment, award or decree that may be
rendered against City or its directors, officials, officers, and employees, in any such suit,
action or other legal proceeding arising from Consultant's wrongful performance, whether
negligent or intentional, of the Services, the Project or this Agreement; except to the
extent that liability is caused by the active negligence or willful misconduct by the City or
its directors, officials, officers, and employees. Consultant shall reimburse City and its
directors, officials, officers, and employees, for any and all legal expenses and costs
incurred by each of them in connection therewith or in enforcing the indemnity herein
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provided. Consultant's obligation to indemnify shall not be restricted to insurance
proceeds, if any, received by the City, its directors, officials, officers, and employees, and
shall take effect immediately upon execution of this Agreement.
3.5.5.2 The duty to defend and to hold harmless, as set forth
above, shall include the duty to defend as established by Section 2778 of the California
Civil Code, and the duty to defend shall arise upon the making of any claim or demand
against the City, its respective officials, officers, agents, employees and representatives,
notwithstanding that no adjudication of the underlying facts has occurred, and whether or
not Consultant has been named in the claim or lawsuit.
3.5.6 Entire Agreement. This Agreement contains the entire Agreement
of the Parties with respect to the subject matter hereof, and supersedes all prior
negotiations, understandings or agreements. This Agreement may only be modified by
a writing signed by both Parties.
3.5.7 Attorney's Fees. If either party commences an action against the
other party, either legal, administrative or otherwise, arising out of or in connection with
this Agreement, the prevailing party in such litigation shall be entitled to have and recover
from the losing party reasonable attorneys' fees and all other costs of such action.
3.5.8 Governing Law. This Agreement shall be governed by the laws of
the State of California. Venue shall be in Los Angeles County.
3.5.9 Time of Essence. Time is of the essence for each and every
provision of this Agreement.
3.5.10 City's Right to Employ Other Consultants. City reserves right to
employ other consultants in connection with this Project.
3.5.11 Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the Parties.
3.5.12 Assignment or Transfer. Consultant shall not assign, hypothecate,
or transfer, either directly or by operation of law, this Agreement or any interest herein
without the prior written consent of the City. Any attempt to do so shall be null and void,
and any assignees, hypothecates or transferees shall acquire no right or interest by
reason of such attempted assignment, hypothecation or transfer.
3.5.13 Construction; References; Captions. Since the Parties or their
agents have participated fully in the preparation of this Agreement, the language of this
Agreement shall be construed simply, according to its fair meaning, and not strictly for or
against any Party. Any term referencing time, days or period for performance shall be
deemed calendar days and not work days. All references to Consultant include all
personnel, employees, agents, and subcontractors of Consultant, except as otherwise
specified in this Agreement. All references to City include its elected officials, officers,
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and employees except as otherwise specified in this Agreement. The captions of the
various articles and paragraphs are for convenience and ease of reference only, and do
not define, limit, augment, or describe the scope, content, or intent of this Agreement.
3.5.14 Amendment; Modification. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing and signed by
both Parties.
3.5.15 Waiver. No waiver of any default shall constitute a waiver of any
other default or breach, whether of the same or other covenant or condition. No waiver,
benefit, privilege, or service voluntarily given or performed by a Party shall give the other
Party any contractual rights by custom, estoppel, or otherwise.
3.5.16 No Third Party Beneficiaries. There are no intended third party
beneficiaries of any right or obligation assumed by the Parties.
3.5.17 Invalidity; Severability. If any portion of this Agreement is declared
invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the
remaining provisions shall continue in full force and effect.
3.5.18 Prohibited Interests. Consultant maintains and warrants that it has
not employed nor retained any company or person, other than a bona fide employee
working solely for Consultant, to solicit or secure this Agreement. Further, Consultant
warrants that it has not paid nor has it agreed to pay any company or person, other than
a bona fide employee working solely for Consultant, any fee, commission, percentage,
brokerage fee, gift or other consideration contingent upon or resulting from the award or
making of this Agreement. For breach or violation of this warranty, City shall have the
right to rescind this Agreement without liability. For the term of this Agreement, no
member, officer or employee of City, during the term of his or her service with City, shall
have any direct interest in this Agreement, or obtain any present or anticipated material
benefit arising therefrom.
3.5.19 Equal Opportunity Employment. Consultant represents that it is an
equal opportunity employer and it shall not discriminate against any subcontractor,
employee or applicant for employment because of race, religion, color, national origin,
handicap, ancestry, sex, sexual orientation or age. Such non-discrimination shall include,
but not be limited to, all activities related to initial employment, upgrading, demotion,
transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall
also comply with all relevant provisions of City's Minority Business Enterprise program,
Affirmative Action Plan or other related programs or guidelines currently in effect or
hereinafter enacted.
3.5.20 Labor Certification. By its signature hereunder, Consultant certifies
that it is aware of the provisions of Section 3700 of the California Labor Code which
require every employer to be insured against liability for Worker's Compensation or to
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undertake self-insurance in accordance with the provisions of that Code, and agrees to
comply with such provisions before commencing the performance of the Services.
3.5.21 Authority to Enter Agreement. Consultant has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement.
Each Party warrants that the individuals who have signed this Agreement have the legal
power, right, and authority to make this Agreement and bind each respective Party.
3.5.22 Counterparts. This Agreement may be signed in counterparts, each
of which shall constitute an original.
3.5.23 Exhibits and Recitals. All Exhibits and Recitals contained herein are
hereby incorporated into this Agreement by this reference.
3.6 Subcontracting.
3.6.1 Prior Approval Required. Consultant shall not subcontract any
portion of the work required by this Agreement, except as expressly stated herein, without
prior written approval of City. Subcontracts, if any, shall contain a provision making them
subject to all provisions stipulated in this Agreement.
3.7 Investment Advisor Provisions.
3.7.1 Pool Compensation. Assets invested by the Consultant under the
terms of this Agreement may from time to time be invested in a money market mutual
fund managed by the Consultant or local government investment pool managed by the
Consultant (either, a "Pool") or in individual securities. Average daily net assets subject
to the fees described in this Agreement shall not take into account any funds invested in
the Pool. Expenses of the Pool, including compensation for the Consultant and the Pool
custodian, are described in the relevant prospectus or information statement and are paid
from the Pool.
3.7.2 Expenses. The Consultant shall furnish at its own expense all
necessary administrative services, office space, equipment, clerical personnel, telephone
and other communication facilities, investment advisory facilities, and executive and
supervisory personnel for managing the Managed Funds. Except as expressly provided
otherwise herein, the City shall pay all of its own expenses including, without limitation,
taxes, commissions, fees and expenses of the City's independent auditors and legal
counsel, if any, brokerage and other expenses connected with the execution of portfolio
security transactions, insurance premiums, and fees and expenses of the Custodian.
3.7.3 Registered Advisor; Duty of Care. The Consultant hereby represents
it is a registered investment advisor under the Investment Advisers Act of 1940. The
Consultant shall immediately notify the City if at any time during the term of this
Agreement it is not so registered or if its registration is suspended. The Consultant agrees
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to perform its duties and responsibilities under this Agreement with reasonable care. The
federal securities laws impose liabilities under certain circumstances on persons who act
in good faith. Nothing herein shall in any way constitute a waiver or limitation of any rights
which the City may have under any federal securities laws. The City hereby authorizes
the Consultant to sign I.R.S. Form W-9 on behalf of the City and to deliver such form to
broker-dealers or others from time to time as required in connection with securities
transactions pursuant to this Agreement.
3.7.4 Consultant's Other Clients. The City understands that the
Consultant performs investment advisory services for various other clients which may
include investment companies, commingled trust funds and/or individual portfolios. The
City agrees that the Consultant, in the exercise of its professional judgment, may give
advice or take action with respect to any of its other clients which may differ from advice
given or the timing or nature of action taken with respect to the Managed Funds. The
Consultant shall not have any obligation to purchase, sell or exchange any security for
the Managed Funds solely by reason of the fact that the Consultant, its principals,
affiliates, or employees may purchase, sell or exchange such security for the account of
any other client or for itself or its own accounts.
3.7.5 Force Majeure. The Consultant shall have no liability for any losses
arising out of the delays in performing or inability to perform the services which it renders
under this Agreement which result from events beyond its control, including interruption
of the business activities of the Consultant or other financial institutions due to acts of
God, acts of governmental authority, acts of war, terrorism, civil insurrection, riots, labor
difficulties, or any action or inaction of any carrier or utility, or mechanical or other
malfunction.
3.7.6 Disciplinary Actions. The Consultant shall promptly give notice to the
City if the Consultant shall have been found to have violated any state or federal securities
law or regulation in any final and unappealable judgment in any criminal action or civil suit
in any state or federal court or in any disciplinary proceeding before the Securities and
Exchange Commission or any other agency or department of the United States, any
registered securities exchange, FINRA, or any regulatory authority of any State based
upon the performance of services as an investment advisor.
3.7.7 Books. The Consultant shall maintain records of all transactions in
the Managed Funds. The Consultant shall provide the City with a monthly statement
showing deposits, withdrawals, purchases and sales (or maturities) of investments,
earnings received, and the value of assets held on the last business day of the month.
The statement shall be in the format and manner that is mutually agreed upon by the
Consultant and the City.
3.7.8 Brochure and Brochure Supplement. The Consultant warrants that
it has delivered to the City prior to the execution of this Agreement the Consultant's
current Securities and Exchange Commission Form ADV, Part 2A (brochure) and Part 2B
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(brochure supplement). The City acknowledges receipt of such brochure and brochure
supplement prior to the execution of this Agreement.
[SIGNATURES ON THE NEXT PAGE]
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In witness whereof the Parties have executed this Professional Services
Agreement on the date set forth below.
CITY OF ARCADIA PFM ASSET MANAGEMENT LLC
By ,iw By SaLdA-' -.
ao.. is L./ aretto Signature
City Manager ag/
Date: `�! /6' if Sarah Meacham, Managing Director
Print Name and Title
ATTEST: Date: 9/2/2021
City Clerk 0 Signature
APPROVED AS TO FORM:
Print Name and Title
diti, ,. Ecr Date:
Stephen P. eitsch
City Attorney CONCUR:
Hue Quach
Administrative Services Director
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EXHIBIT"A"
SCOPE OF SERVICES
The Consultant shall perform the following tasks:
Investment Program Review and Strategy Development:
Consultant will review the City's Investment Policy to confirm that it meets the
requirements of the California Government Code, and to ensure the City's Investment
Policy is an effective tool for managing the investment program, regardless of market
conditions, and incorporates best practices.
Consultant will also make recommendations regarding allowable investments, maximum
maturities, credit requirements and procedures to ensure portfolio diversification. This
review shall be performed at the beginning of the engagement and annually thereafter.
The review shall focus on the following policy factors:
• Statement of Objectives — documents the goals and objectives of the City's
investment program.
• Permitted Investments— describes the security types permitted in the portfolio.
• Investment Guidelines — establishes the maximum maturity and sector and
issuer percentage limits to promote diversification.
• Credit Quality — establishes minimum credit quality allowed and specifies
actions to handle downgraded securities.
• Safekeeping of Assets — prescribes the manner in which the assets are held in
custody.
• Reporting of Investment Activity and Results — states the procedure and
frequency for reviewing investment objectives, investment performance, and
execution of security transactions.
Consultant will analyze and produce a cash flow forecast by modeling the City's historical
use of cash.
Consultant will work with the City to develop a long term investment strategy that will form
the framework for all the investment decisions. The strategy will incorporate the City's
Investment Policy, expected cash flow requirements and risk tolerance, and provide
enough flexibility to allow the City to meet realistic performance objectives. The
Consultant will also implement the investment strategy and execute transactions on
behalf of the City.
Consultant will work with the City to select a benchmark that reflects the City's investment
objectives and risk-return preferences.
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Ongoing Management of Investments:
The Consultant shall serve as investment advisor under the terms of this Agreement with
respect to the funds described in this Agreement and such other funds as the City may
from time to time assign by written notice to Consultant (collectively the "Managed
Funds"), and Consultant accepts such appointment. In connection therewith, Consultant
will provide investment research and supervision of the Managed Funds investments and
conduct a continuous program of investment, evaluation and, when appropriate, sale and
reinvestment of the Managed Funds assets. Consultant shall continuously monitor
investment opportunities and evaluate investments of the Managed Funds. Consultant
shall furnish the City with statistical information and reports with respect to investments
of the Managed Funds. Consultant shall place all orders for the purchase, sale, loan or
exchange of portfolio securities for the City's account with brokers or dealers
recommended by Consultant and/or the City, and to that end Consultant is authorized as
agent of the City to give instructions to the custodian designated by the City (the
"Custodian") as to deliveries of securities and payments of cash for the account of the
City. In connection with the selection of such brokers and dealers and the placing of such
orders, Consultant is directed to seek for the City the most favorable execution and price,
the determination of which may take into account, subject to any applicable laws, rules
and regulations, whether statistical, research and other information or services have been
or will be furnished to Consultant by such brokers and dealers. The Custodian shall have
custody of cash, assets and securities of the City. Consultant shall not take possession
of or act as custodian for the cash, securities or other assets of the City and shall have
no responsibility in connection therewith. Authorized investments shall include only those
investments which are currently authorized by the state investment statutes and the
applicable covenants and as supplemented by such other written instructions as may from
time to time be provided by the City to Consultant. Consultant shall be entitled to rely
upon the City's written advice with respect to anticipated drawdowns of Managed Funds.
Consultant will observe the instructions of the City with respect to broker/dealers who are
approved to execute transactions involving the Managed Funds and in the absence of
such instructions will engage broker/dealers which Consultant reasonably believes to be
reputable, qualified and financially sound.
Consultant's portfolio management team will assess and monitor the market and the
performance of City's investment portfolio through a disciplined, analytical approach
utilizing the strategies listed below.
• Consultant will regularly monitor the yield relationships between all permitted
investment sectors (e.g., U.S. Treasury, Federal Agency, and credit
instruments) and select investments that offer the best relative value. The
Consultant will select individual investments to enable the overall portfolio to
capitalize the opportunities that exist at each market environment.
• Consultant will recommend a target duration for the portfolio based on the City's
cash flow expectations, risk tolerance, and Policy limitations. Then, a long-term
portfolio strategy will be developed to improve the return of the portfolio. The
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strategy will create the framework for managing the portfolio's duration and re-
balancing the portfolio's duration to take advantage of opportunities for greater
potential portfolio earnings presented by rising interest rates and the shape of
the yield curve. Disciplined duration management will help to enhance the
portfolio's long-term performance and reduce the portfolio's volatility.
• Consultant will work to optimize the City's portfolio yield through a series of
analytical models where we identify those maturities that offer the greatest
value with limited risk. This assessment takes into account the steepness of
the yield curve as well as any fundamental, technical, or macroeconomic
factors that may influence future yield trends.
• Consultant will select securities that are both of high quality and offer high
return potential.
• Consultant will monitor the markets on an ongoing basis, looking for
opportunities to rebalance the City's portfolio among sectors and/or maturities
that could safely add value and enhance investment performance. When
opportunities arise, the Consultant will sell a security in one sector for a security
in another sector or between maturity ranges to capture incremental value in
the market without exposing the portfolio to unnecessary risks.
Consultant pursues an aggressive and intensive effort to obtain the best bid/offer
available for the particular security by soliciting bids/offers from several financial
institutions. The Consultant will only transact business with firms whose financial
conditions have been assessed and are on its list of approved firms.
Consultant will monitor the creditworthiness of all investments held in the City's portfolio,
utilizing its own proprietary credit research as well as on the research of Nationally-
Recognized Statistical Rating Organizations (NRSROs).
Communication and Reporting:
Consultant will provide the City with comprehensive monthly and quarterly reports to keep
staff and policy makers informed of the status of the City's investments and strategy. The
reports detail holdings, transactions, market and amortized values, interest earnings, and
performance. It is also designed to be Council-ready, and help City staff easily book
earnings and track portfolio activity.
Consultant shall provide excellent client service through a dedicated client service team,
including Sarah Meacham, Managing Director, as the City's Engagement Manager and
day-to-day contact, Richard Babbe, CCM. Brian Raubenstine and Bob Cheddar, CFA,
will be the portfolio strategy and management team.
City staff will be available as a general resource to provide advice and training on a wide
variety of investment and other public finance topics.
.A-I
Exhibit "B"
SCHEDULE OF SERVICES
Consultant shall perform those services described in Exhibit "A" (Scope of Services)
from September 1, 2021 through to August 31, 2024.
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Exhibit "C"
COMPENSATION
Asset Under Annual Fee
Management
First $25 million 0.10%
Next $25 million 0.08%
Next $50 million 0.07%
Assets over $100 million 0.06%
"Assets Under Management" is defined to include the amortized value of securities and
accrued interest, cash, or any money market fund balance. The minimum annual fee is
$25,000, and such minimum annual fee shall be applied in equal monthly installments.
The Consultant retains the right to negotiate a fee adjustment, in line with CPI, after three
years.
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