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HomeMy WebLinkAboutItem 8e - Investment Advisory Services STAFF REPORT ADMINISTRATIVE SERVICES DEPARTMENT DATE: August 18, 2026 TO: Honorable Mayor and City Council FROM: Henry Chen, Administrative Services Director SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH PFM ASSET MANAGEMENT LLC FOR INVESTMENT ADVISORY SERVICES IN AN AMOUNT NOT TO EXCEED $45,000 CEQA: Not a Project Recommendation: Approve SUMMARY In July 2026, a Request for Proposals (“RFP”) for investment advisory services was issued, and five (5) responses were received. Following a comprehensive review and evaluation of the proposals by City staff, PFM Asset Management LLC (“PFMAM”) is recommended for selection for a five-year contract, with the option for two (2) additional one-year extensions. The annual cost for management of up to $70 million of the City’s investment portfolio is estimated to be up to $45,000. DISCUSSION The City currently contracts with PFM Asset Management LLC to provide investment advisory services for the management of up to $70 million of the City’s investment portfolio. PFMAM has provided investment advisory services to the City since 2016, and the services provided have been excellent. Although the City has been satisfied with the services provided by PFMAM, it was determined that it would be prudent to solicit proposals from other qualified firms offering similar investment advisory services. This process was undertaken to evaluate available service providers and ensure that the City continues to receive high-quality, effective, and cost-competitive investment advisory services. Investment Advisory Services August 18, 2026 Page 2 of 6 Thus, a request for proposal was sent to qualified firms and published on the California Society of Municipal Finance Officers Association’s and City’s websites. The scope of investment advisory services includes: • Review of the City’s current investment program and provide recommendations for its Investment Policy, best practices to liquidity management, means to achieving the City’s investment objectives, and the selection of an appropriate performance benchmark measurement, based on the City’s investment policy. • Manage, on a daily basis, the City’s investment portfolio(s) in accordance with the parameters of the California Government Code and the City Investment Policy. • Place all orders for the purchase and sale of securities, communicate settlement information to City staff and coordinate security settlement with the City’s custodian. The investment advisor WILL NOT provide custodial services or security safekeeping. • Provide the City with investment reports that shall include, but not be limited to, the following: o Monthly statements with all the information required by the California Government Code and Governmental Accounting Standards Board. These reports must include detailed portfolio holdings including accrued interest, amortized cost, market values, security ratings transaction details, principal and interest payments, yield to costs, and portfolio summary statistics. o Provide quarterly investment reports including a description of market conditions, investment strategies employed, performance, and suggested changes to investment strategy. The performance numbers shall be presented as required by Global Investment Performance Standards. • On an annual basis, review the City’s Investment Policy and recommend changes in compliance with governing California Government Code as well as incorporating best practices that are followed by local, state, and national organizations. Investment Advisory Services August 18, 2026 Page 3 of 6 • Serve as investment advisor to City staff for strategic information, analysis, and training relating to fixed-income investments. Investment Advisory Proposals Five (5) proposals were received from investment advisory firms. Three (3) of the proposals were submitted by firms with extensive experience providing investment advisory services to local municipal governments throughout California. A fourth proposal was submitted by Garcia Hamilton, a firm with substantial experience managing investments for public sector clients; however, its client base is primarily located outside of California. The fifth proposal was submitted by Gaard Capital, which was established in 2025. Because the firm did not have the minimum five (5) years of performance information, the proposal was determined to be non- responsive and was not included in the evaluation of qualified firms. Each proposer’s qualifications were reviewed and evaluated based on relevant experience, qualifications of key personnel, experience providing investment advisory services to public agencies, understanding of California municipal investment requirements, proposed approach to portfolio management, and overall value to the City. Consideration was also given to each firm’s demonstrated ability to provide the services outlined in the Request for Proposals and to effectively manage public funds in accordance with applicable laws and the City’s Investment Policy. The RFP required performance comparisons to a 3- or 5-year U.S. Treasury or comparable index. Several benchmark indexes were provided among the proposals. Both Chandler and PFMAM provided performance results measured against both 3- and 5-year US Treasury indexes. In this case, we evaluated based on the performance of the 3-year index, which was consistent with the City’s current investment benchmark. Meeder provided performance results only for a 5-year Treasury index. Garcia Hamilton’s provided performance index was the Bloomberg U.S. Government 1–3 Year Index. This index is slightly different from a Treasury only index because it includes U.S. government agency securities in addition to Treasury securities. Based on the five-year historical performance evaluated, PFMAM demonstrated the highest performance, with a five-year return of 2.38%, and consistently Investment Advisory Services August 18, 2026 Page 4 of 6 outperformed its applicable benchmark. The results of the evaluation are presented below. Following a thorough review and evaluation of the proposals received, PFM Asset Management LLC was determined to be the most qualified firm and is recommended for selection. Consideration was given to PFMAM’s extensive experience providing investment advisory services to California cities, demonstrated understanding of public agency investment requirements, proposed approach to portfolio management, and overall value provided for the services. PFMAM 1 Year 3 Years 5 Years PFM 1-3 Year Fixed Income Composite 3.92%4.58%2.38% ICE BAML 1-3 Year US Treasury Index 3.75%4.04%1.86% Outperform/(Underperform)0.17%0.54%0.52% Performance results are as of March 31, 2026 Chandler 1 Year 3 Years 5 Years Limited Maturity 4.07%4.51%2.25% ICE BAML 1-3 Year US Treasury Index 3.75%4.04%1.86% Outperform/(Underperform)0.32%0.47%0.39% Performance results are as of March 31, 2026 Meeder 1 Year 3 Years 5 Years Meeder 0-5 Year Fixed Income Composite 2.54%4.75%2.03% ICE BAML 0-5 Year US Treasury Index 2.97%4.40%1.94% Outperform/(Underperform)-0.43%0.35%0.09% Performance results are as of June 30, 2026 Garcia Hamilton 1 Year 3 Years 5 Years GH&A Fixed Income Composite 5.98%4.50%2.36% Bloomberg US Government 1-3 Year Index 5.17%4.51%1.76% Outperform/(Underperform)0.81%-0.01%0.60% Performance results are as of December 31, 2025 Investment Advisory Services August 18, 2026 Page 5 of 6 Over the past 10 years, a strong working relationship has been established between the City and PFMAM. During this period, PFMAM’s investment performance, diligence, responsiveness, and customer service have been consistently strong. The proactive investment management approach utilized by PFMAM has contributed to strong investment returns for the City, particularly during a period characterized by significant interest rate volatility, rapid monetary policy tightening, and elevated interest rates, which presented both challenges and opportunities for fixed-income portfolio management. Throughout the engagement, the City’s investment portfolio has been closely monitored for opportunities among various sectors and maturities. Market conditions and interest rate trends have been regularly evaluated to identify opportunities through which incremental value could be achieved while maintaining compliance with the City’s Investment Policy. Through this approach, enhanced investment performance has been pursued while unnecessary exposure to investment risk has been minimized. Investment Advisory Fees Here are the estimated annual advisory fees, which are calculated based on a $70 million portfolio. Proposer Estimated Annual Fees PFMAM 45,000$ Chandler 57,000$ Meeder 57,000$ Garcia Hamilton 71,000$ ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), under Section 15061(b)(3) of the CEQA Guidelines, as it can be seen with certainty that it will have no impact on the environment. Investment Advisory Services August 18, 2026 Page 6 of 6 FISCAL IMPACT PFMAM’s fees are based on the amount of assets under management. The annual contract cost is not expected to exceed $45,000, which has been included in the Fiscal Year 2026-27 Operating Budget. RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project under the California Environmental Quality Act (“CEQA”); and approve, direct, and authorize the City Manager to execute a Professional Services Agreement with PFM Asset Management LLC for investment advisory services in an amount not to exceed $45,000 annually for five years, with the option of two one- year extensions. Attachment: Proposed Professional Services Agreement 1 Updated Feb. 2020 CITY OF ARCADIA PROFESSIONAL SERVICES AGREEMENT REGARDING INVESTMENT ADVISORY SERVICES This Agreement is made and entered into as of August 30, 2026, by and between the City of Arcadia, a municipal corporation organized and operating under the laws of the State of California with its principal place of business at 240 West Huntington Drive, Arcadia, California 91066 (“City”), and PFM Asset Management (”PFMAM”), a division of US Bancorp Asset Management, Inc. (USBAM”), a Delaware Limited Liability Corporation with its principal place of business at [***INSERT ADDRESS***] (hereinafter referred to as “Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement. RECITALS A. City is a public agency of the State of California and is in need of professional services for the following project: Investment Advisory Services (hereinafter referred to as “the Project”). B. Consultant is duly licensed and has the necessary qualifications to provide such services. C. The Parties desire by this Agreement to establish the terms for City to retain Consultant to provide the services described herein. AGREEMENT NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Services. Consultant shall provide the City with the services described in the Scope of Services attached hereto as Exhibit “A.” 2. Compensation. a. Subject to paragraph 2(b) below, the City shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit “B.” b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum set forth in Exhibit “B”. This amount is to cover all printing and related costs, and the City will not pay any additional fees for printing expenses. Periodic payments shall be made within 30 days of receipt of an invoice which 2 Updated Feb. 2020 includes a detailed description of the work performed. Payments to Consultant for work performed will be made on a monthly billing basis. 3. Additional Work. If changes in the work seem merited by Consultant or the City, and informal consultations with the other party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the City by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall be prepared by the City and executed by both Parties before performance of such services, or the City will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement. 4. Maintenance of Records. Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years from the date of final payment under the contract for inspection by City. 5. Terms. The term of this Agreement shall be for investment advisory services from September 1, 2026, through August 30, 2031, unless earlier terminated as provided herein. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Project. Consultant shall perform its services in a prompt and timely manner within the term of this Agreement and shall commence performance upon receipt of written notice from the City to proceed (“Notice to Proceed”). The Notice to Proceed shall set forth the date of commencement of work. Consultant shall perform its services in a prompt and timely manner and shall commence performance upon receipt of written notice from the City to proceed (“Notice to Proceed”). Consultant shall complete the services required within time period agreed to between the parties. The Notice to Proceed shall set forth the date of commencement of work. 6. Delays in Performance. a. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing party. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint. 3 Updated Feb. 2020 b. Should such circumstances occur, the non-performing party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. 7. Compliance with Law. a. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government, including Cal/OSHA requirements. b. If required, Consultant shall assist the City, as requested, in obtaining and maintaining all permits required of Consultant by federal, state and local regulatory agencies. c. If applicable, Consultant is responsible for all costs of clean up and/ or removal of hazardous and toxic substances spilled as a result of his or her services or operations performed under this Agreement. 8. Standard of Care Consultant’s services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions. 9. Assignment and Subconsultant Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. Nothing contained herein shall prevent Consultant from employing independent associates, and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder. 10. Independent Contractor Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant shall become an employee of City. The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from City as herein provided. 4 Updated Feb. 2020 11. Insurance. Consultant shall not commence work for the City until it has provided evidence satisfactory to the City 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 secured all insurance required under this section. a. Commercial General Liability (i) The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the City. (ii) Coverage for Commercial General Liability insurance shall be at least as broad as the following: (1) Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent. (iii) Commercial General Liability Insurance must include coverage for the following: (1) Bodily Injury and Property Damage (2) Personal Injury/Advertising Injury (3) Premises/Operations Liability (4) Products/Completed Operations Liability Consultant shall procure and submit evidence of insurance for at least five (5) years from the time that all work under this Agreement is completed. (5) Aggregate Limits that Apply per Project (6) Explosion, Collapse and Underground (UCX) exclusion deleted (7) Contractual Liability with respect to this Agreement (8) Property Damage (9) Independent Consultants Coverage (iv) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement. (v) The policy shall give City, its officials, officers, employees, agents and City designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage. Consultant may provide blanket endorsements to meet the Additional Insured requirement in this written contract. However, all subcontractors’ endorsements shall specifically name 5 Updated Feb. 2020 the City, its elected officials, officers, employees, volunteers, boards, agents, and representatives as additional insureds and blanket endorsements are not acceptable. (vi) The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured. b. Automobile Liability (i) At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City. (ii) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto). (iii) The policy shall give City, its officials, officers, employees, agents and City designated volunteers additional insured status. Consultant may provide blanket endorsements to meet the Additional Insured requirement in this written contract. However, all subcontractors’ endorsements shall specifically name the City, its elected officials, officers, employees, volunteers, boards, agents, and representatives as additional insureds and blanket endorsements are not acceptable. (iv) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self-insured retention. c. Workers’ Compensation/Employer’s Liability (i) Consultant certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement. (ii) To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain 6 Updated Feb. 2020 and maintain, for the period required by this Agreement, workers’ compensation coverage of the same type and limits as specified in this section. d. Professional Liability (Errors and Omissions) At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend. e. Cyber Liability Insurance. Cyber Liability Insurance covering (1) all acts, errors, omissions, negligence, infringement of intellectual property; (2) network security and privacy risks, including but not limited to unauthorized access, failure of security, breach of privacy perils, wrongful disclosure, collection, or negligence in the handling of confidential information, privacy perils, including coverage for related regulatory defense and penalties; (3) system failure, damage to or destruction of electronic information, data recovery, business interruption, cyber extortion, and information theft; (4) data breach expenses payable whether incurred by City or Consultant, including but not limited to consumer notification, whether or not required by law, computer forensic investigations, public relations and crisis management firm fees, credit file or identity monitoring or remediation services in the performance of services for City or on behalf of City hereunder. If a sub-limit applies to any elements of coverage, the certificate of insurance evidencing the coverage above must specify the coverage section and the amount of the sub-limit. f. Minimum Policy Limits Required (i) The following insurance limits are required for the Agreement: Combined Single Limit Commercial General Liability $1,000,000 per occurrence/$2,000,000 aggregate for bodily injury, personal injury, and property damage Automobile Liability $1,000,000 per occurrence for bodily injury and property damage 7 Updated Feb. 2020 Employer’s Liability $1,000,000 per occurrence Professional Liability $1,000,000 per claim and aggregate (errors and omissions) Cyber Liability $5,000,000 per claim and annual aggregate (ii) Defense costs shall be payable in addition to the limits. (iii) Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement. g. Evidence Required Prior to execution of the Agreement, the Consultant shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25-S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance. h. Policy Provisions Required (i) Consultant shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration. Consultant may provide blanket endorsements to meet the Additional Insured requirement in this written contract. However, all subcontractors’ endorsements shall specifically name the City, its elected officials, officers, employees, volunteers, boards, agents, and representatives as additional insureds and blanket endorsements are not acceptable. (ii) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant’s policy is primary insurance and that 8 Updated Feb. 2020 any insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss. (iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement. (iv) All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants. (v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law. h. Qualifying Insurers (i) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements: (1) Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law. i. Additional Insurance Provisions (i) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification. 9 Updated Feb. 2020 (ii) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement. (iii) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (iv) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement. k. Subconsultant Insurance Requirements. Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the City that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the City as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. All subcontractors’ endorsements shall specifically name the City, its elected officials, officers, employees, volunteers, boards, agents, and representatives as additional insureds and blanket endorsements are not acceptable. If requested by Consultant, City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants. 12. Indemnification. a. To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers. b. To the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s obligations under the above indemnity shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, but shall not otherwise be reduced. If Consultant’s obligations 10 Updated Feb. 2020 to defend, indemnify, and/or hold harmless arise out of Consultant’s performance of “design professional services” (as that term is defined under Civil Code section 2782.8), then upon Consultant obtaining a final adjudication that liability under a claim is caused by the comparative active negligence or willful misconduct of the City, Consultant’s obligations shall be reduced in proportion to the established comparative liability of the City and shall not exceed the Consultant’s proportionate percentage of fault. 13. California Labor Code Requirements. a. Consultant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $15,000 or more for maintenance or $25,000 or more for construction, alteration, demolition, installation, or repair, Consultant agrees to fully comply with such Prevailing Wage Laws. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1). b. If the services are being performed as part of an applicable “public works” or “maintenance” project and if the total compensation is $15,000 or more for maintenance or $25,000 or more for construction, alteration, demolition, installation, or repair, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. This Project may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements. c. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. 11 Updated Feb. 2020 Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor. 14. Verification of Employment Eligibility. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub- subconsultants to comply with the same. 15. Laws and Venue. This Agreement shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of Los Angeles, State of California. 17 Termination or Abandonment a. City has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, City shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. City shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by City and Consultant of the portion of such task completed but not paid prior to said termination. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work. b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days’ written notice to City only in the event of substantial failure by City to perform in accordance with the terms of this Agreement through no fault of Consultant. 18 Documents. Except as otherwise provided in “Termination or Abandonment,” above, all original field notes, written reports, Drawings and Specifications and other documents, produced or developed for the Project shall, upon payment in full for the services described in this Agreement, be furnished to and become the property of the City. 12 Updated Feb. 2020 19. Organization Consultant shall assign Tiffany Tint as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the City. 20. Limitation of Agreement. This Agreement is limited to and includes only the work included in the Project described above. 21. Notice Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, return receipt requested, postage prepaid, addressed to: CITY: City of Arcadia 240 West Huntington Drive Arcadia, CA 91066 Attn: Henry Chen, Administrative Services Director CONSULTANT: PFM Asset Management [***INSERT ADDRESS & CONTACT PERSON***] Attn: Tiffany Tine, Director and shall be effective upon receipt thereof. 22. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant. 23. Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. 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. 24. Entire Agreement 13 Updated Feb. 2020 This Agreement, with its exhibits, represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This Agreement may not be modified or altered except in writing signed by both Parties hereto. This is an integrated Agreement. 25. Severability The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the provisions unenforceable, invalid or illegal. 26. Successors and Assigns This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each party to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void. 27. Non-Waiver None of the provisions of this Agreement shall be considered waived by either party, unless such waiver is specifically specified in writing. 28. Time of Essence Time is of the essence for each and every provision of this Agreement. 29. City’s Right to Employ Other Consultants City reserves its right to employ other consultants, including engineers, in connection with this Project or other projects. 30. 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. 14 Updated Feb. 2020 For the term of this Agreement, no director, official, 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. [SIGNATURES ON FOLLOWING PAGE] 15 Updated Feb. 2020 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF ARCADIA AND PFM ASSET MANAGEMENT IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CITY OF ARCADIA PFM Asset Management By: By: Dominic Lazzaretto Signature City Manager Date: Its: ATTEST: Printed Name By: Date: City Clerk APPROVED AS TO FORM By: Signature By: Its: Michael J. Maurer City Attorney Printed Name 16 Updated Feb. 2020 EXHIBIT A Scope of Services A. Review the City’s current investment program and provide recommendations regarding its Investment Policy, liquidity management, how to achieve the City’s investment objectives, and the selection of an appropriate performance benchmark. B. Manage part of the City’s investment portfolio(s) pursuant to the California Government Code, the Investment Policy and stated investment objectives. Place all orders for the purchase and sale of securities, communicate settlement information to the City’s staff and coordinate security settlement with the City’s custodian. The investment advisor WILL NOT provide custodial services or security safekeeping. C. Provide the City with investment reports that shall include, but not be limited to the following: 1. Monthly statements with all the information required by the California Government Code and GASB. These reports must include detailed portfolio holdings including accrued interest, amortized cost, market values, security ratings transaction details, principal and interest payments, yield to costs, and portfolio summary statistics. 2. Provide quarterly investment reports including a description of market conditions, investment strategies employed, performance, and suggested changes to investment strategy. The performance numbers shall be presented as required by the CFA Institute’s Global Investment Performance Standards (GIPS®). D. Annually, review the City’s Investment Policy and provide written comments and recommend changes as needed per California Government Code or to incorporate best practices as provided by relevant statewide and national organizations. E. Serve as a general resource to the City’s staff for information, advice, and training regarding fixed-income investments. 17 Updated Feb. 2020 EXHIBIT B Schedule of Charges/Payments