HomeMy WebLinkAboutReso 140-16 Agreement with Chandler Asset Management RESOLUTION NO. 140 — 16
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING AN AGREEMENT WITH CHANDLER ASSET MANGEMENT TO PROVIDE
INVESTMENT MANAGEMENT SERVICES
WHEREAS, the City desires to continue to engage a professional investment
management firm with the technical expertise to develop and implement a sophisticated
investment strategy; and
WHEREAS, Chandler Asset Management specializes in and has extensive experience in
public agency investing, including the past three years with the City; and
WHEREAS, the City desires to continue to utilize Chandler Asset Management services
to safeguard City assets and maximize interest earning; and
WHEREAS, a three-year contract with a tiered fee schedule based on the total asset
valuation under Chandler's direct management has been proposed; and
WHEREAS, the estimated annual contract costs is $120,000.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby authorize the City Manager to execute the agreement, attached hereto as Exhibit A,
with Chandler Asset Management to provide comprehensive investment management services
in an annual contract amount estimated at $120,000.
PASSED, APPROVED AND ADOPTED this 16th day of August, 2016, by the following
vote:
AYES: Councilmembers Biddle, Gupta, Hart, Wehrenberg, and Mayor Haubert
NOES:
ABSENT:
ABSTAIN:
14 Al � �r
Mayor
ATTEST:
aA44
City Clerk
Reso No. 140-16, Adopted 8/16/2016, Item 4.14 Page 1 of 1
Exhibit A to Resolution
SERVICES AGREEMENT BETWEEN
THE CITY OF DUBLIN AND
CHANDLER ASSET MANAGEMENT
This Agreement is made and entered into between the City of Dublin("City") and
Chandler Asset Management("Consultant") as of August 16, 2016 (the"Effective
Date"). In consideration of their mutual covenants,the parties hereto agree as follows:
1. Scope of Work. Subject to the terms and conditions of this Agreement,
Consultant shall provide those services described in Exhibit A.
2. Payment Terms. For the services described in Exhibit A,the City agrees
to pay Consultant a total amount as specified in the Compensation Schedule(Exhibit B),
which amount shall include all expenses. Consultant shall submit progress billings on a
monthly basis, if applicable. Except as specifically authorized by City, Consultant shall
not bill City for duplicate services performed by more than one person(reasonable
quality control and assurance work as generally recognized as an acceptable practice in
this field is accepted). Consultant's bill shall include the following information for the
project: a brief description of services performed, the date the services were performed,
the number of hours spent and by whom, a brief description of any costs incurred,percent
completion to date of each task and subtask, total of prior billings, amount for billing
period, total billing to date, and the Consultant's signature. In no event shall Consultant
submit any billing for an amount in excess of the maximum amount of compensation
provided for in this section. Consultant is solely responsible for the payment of
employment taxes incurred under this Agreement and any similar federal or state taxes.
3. Ownership of Work. All reports, designs, drawings,plans, specifications,
schedules,work product, and other materials prepared, or in the process of being prepared, for
the services to be performed by Consultant shall be and are the property of City, and City shall
be entitled to full access thereto, and copies thereof, during the progress of the work. Any such
items remaining in the hands of Consultant or in the hands of any subcontractor upon completion
or termination of the work shall be forthwith delivered to City. If any materials are lost,
damaged, or destroyed before final delivery to City, Consultant shall replace them at its own
expense, and Consultant hereby assumes all risks of loss, damage, or destruction of or to such
materials. Consultant may retain a copy of all material produced under this Agreement for its
internal use not in conflict in terms of this agreement. Any and all copyrightable subject in all
reports, designs, drawings, plans, specifications, schedules, work product and other materials is
hereby assigned to City by Consultant. Consultant shall execute any additional documents that
may be necessary to evidence such assignment at no additional cost to City.
4. Term of Performance. Consultant shall begin performing the services
set forth in Exhibit A as of the Effective Date of this Agreement. Consultant shall
thereafter perform and complete all services by June 30, 2019.
Services Agreement between City of Dublin and Chandler Asset Management Page 1 of 6
5. Independent Contractor. At all times during the term of this Agreement,
Consultant, his/her employees and agents shall be independent contractors and not
employees or agents of the City. Consultant and his/her employees and agents shall have
no authority, express or implied,to bind the City to any obligation whatsoever.
6. Assignment and Subcontracting. Consultant shall not subcontract,
assign or transfer any portion of the performance contemplated and provided for in this
Agreement without the approval of the City Manager. Consultant shall not subcontract
any portion of the performance contemplated and provided for herein without prior
written approval of the City. Consultant shall be solely responsible for reimbursing any
subcontractors, and City shall have no obligation to them.
7. Indemnification. To the maximum extent allowed by law, Consultant shall
indemnify and hold City, its elected and appointed officials, and its employees, agents and
representatives harmless against any and all suits, claims or actions arising out of any injury to
persons or property including,but not limited to, death that may occur, or that may be alleged to
have occurred, in the course of the performance of this Agreement to the extent caused by a
negligent act or omission(active or passive negligence) or wrongful misconduct of Consultant or
any of its employees, subcontractors, agents, or representatives. Consultant shall defend any and
all such actions, suits, or claims and pay all attorneys' fees and all other costs and expenses
arising therefrom or incurred in connection therewith. Consultant 's responsibility for such
defense and indemnity obligations shall survive the termination or completion of this Agreement
for the full period of time allowed by law. The defense and indemnification obligations of this
Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance
obligations contained in this Agreement. If any judgment is rendered against City or any of its
elected or appointed officials or any of its employees, agents, and representatives in any such
action, suit, or claim, Consultant shall, at its expense, satisfy and discharge the judgment.
In the event that Consultant or any employee, agent, or subcontractor of Consultant providing
services under this Agreement is determined by a court of competent jurisdiction or the
California Public Employees Retirement System (PERS)to be eligible for enrollment in PERS as
an employee of City, Consultant shall indemnify, defend, and hold harmless City for the
payment of any employee and/or employer contributions for PERS benefits on behalf of
Consultant or its employees, agents, or subcontractors, as well as for the payment of any
penalties and interest on such contributions,which would otherwise be the responsibility of City.
8. Insurance.
a. If Consultant employs any person to perform work in connection with this
Agreement, Consultant shall procure and maintain at all times during the performance of the
work Workers' Compensation Insurance in conformance with the laws of the State of California
and Federal laws, where applicable. Employers' Liability Insurance shall not be less than One
Million Dollars ($1,000,000)per accident or disease. Consultant shall also procure and maintain
at all times during the term of this Agreement General Liability Insurance(including automobile
operation) covering Consultant and City for liability arising out of the operations of Consultant
and any subcontractors. Each policy shall include coverage for all vehicles, licensed or
unlicensed, on or off City's premises,used by or on behalf of Consultant for the performance of
work under this Agreement. Each policy shall provide coverage of not less than Two Million
Services Agreement between City of Dublin and Chandler Asset Management Page 2 of 6
Dollars ($2,000,000)per claim,naming as an additional insured, in connection with Consultant's
activities, City, its elected and appointed officials, and its employees, agents, and
representatives.
b. Each insurer shall agree that its policy is primary insurance and that it
shall be liable for the full amount of any loss up to and including the total limit of liability
without right of contribution from any other insurance covering City.
c. Prior to commencement of work hereunder, Consultant shall deliver to
City a certificate of insurance which shall indicate compliance with the insurance requirements
of this paragraph 8. City reserves the right to obtain a full certified copy of any insurance policy
and endorsements during this time. Failure to exercise this right shall not constitute a waiver of
right to exercise later.
d. It shall be a requirement under this Agreement that any available
insurance proceeds broader than or in excess of the specified minimum insurance coverage
requirements and/or limits shall be available to City as an additional insured. Furthermore,the
requirements for coverage and limits shall be (1)the minimum coverage and limits specified in
this Agreement; or(2)the broader coverage and maximum limits of coverage of any insurance
policy or proceeds available to the named insured; whichever is greater. The additional insured
coverage under the Consultant's policy shall be "primary and non-contributory"and will not
seek contribution from City's insurance or self-insurance and shall be at least as broad as CG 20
01 04 12. In the event Consultant fails to obtain or maintain coverage as required by this
Agreement,the City at its sole discretion may purchase the coverage required and the cost will
be paid by Consultant. Each policy shall include an endorsement providing that it shall not be
cancelled, changed, or allowed to lapse without at least thirty(30) days' prior written notice to
City of such cancellation, change, or lapse.
e. All self-insured retentions (SIR) and/or deductibles must be disclosed to
City for approval and shall not reduce the limits of liability. Policies containing any self-insured
retention(SIR)provision or deductibles shall provide or be endorsed to provide that the SIR
and/or deductibles may be satisfied by either the named insured or City.
f. Consultant shall also procure and maintain at all times during the
performance of the work Professional Liability Insurance covering Consultant's performance
under this Agreement. The policy shall provide coverage of not less than One Million Dollars
($1,000,000)per claim.
g. Inclusion of City as additional insured shall not in any way affect its rights
with respect to any claim, demand, suit, or judgment made,brought or recovered against
Consultant . Such policy shall protect Consultant and City in the same manner as though a
separate policy had been issued to each,but nothing in the policy shall operate to increase the
insurer's liability as set forth in the policy beyond the amount or amounts shown or to which the
insurer would have been liable if only one interest had been named as an insured.
h. City reserves the right to obtain a full certified copy of any insurance
policy and endorsements. Failure to exercise this right shall not constitute a waiver of right to
exercise later.
i. If the policies of insurance obtained and maintained by Consultant under
this Paragraph 8 provide coverage on a claims-made rather than occurrence-based basis,
Consultant shall maintain such coverage, or obtain comparable tail coverage, for the period
following termination of this Agreement until the expiration of all applicable statutes of
limitations.
Services Agreement between City of Dublin and Chandler Asset Management Page 3 of 6
j. City and its officers, employees, agents, and volunteers shall be covered as
additional insureds with respect to liability arising out of activities performed by or on behalf of
Consultant, including the insured's general supervision of Consultant, as well as products and
completed operations of Consultant.
9. Nondiscrimination and Equal Opportunity. During the performance of
this Agreement, Consultant shall not discriminate against any employee or applicant for
employment because of race, religion, creed, color, national origin, sex, sexual
orientation or age.
10. Documents. During the term of this Agreement, Consultant shall permit
representatives of City, at all reasonable times,to have access to, examine, and make
copies, at City's expense, of Consultant's books,records, and documents relating to this
Agreement.
11. Licenses. If a license of any kind, which term is intended to include
evidence of registration, is required of Consultant its employees, agents or subcontractors
by federal or state law, Consultant warrants that such license has been obtained, is valid
and in good standing, and Consultant shall keep it in effect at all times during the term of
this Agreement, and that any applicable bond has been posted in accordance with all
applicable laws and regulations.
12. Time is of the Essence. Consultant agrees to diligently prosecute the
services to be provided under this Agreement to completion and in accordance with the
schedule specified in Exhibit A. In the performance of this agreement,time is of the
essence.
13. Termination. At any time City shall have the right to terminate this
Agreement immediately by giving written notice to Consultant. For termination not
based on default of Consultant, Consultant shall be compensated in accordance with the
provisions of Paragraph 2, Compensation, for the services performed and expenses
incurred to the date of termination,plus any reasonable costs and expenses which are
reasonably and necessarily incurred by Consultant to effect termination. For termination
by reason of default of Consultant, City's maximum obligation shall be to remit final
payment to Consultant in an amount to cover only those services performed and expenses
incurred in accordance with this Agreement up to the effective date of termination. City
shall be entitled to exercise all available remedies arising from said default. Regardless
of the cause of termination, City may condition payment of such compensation upon
Consultant delivering to City any or all documents,photographs, computer software,
video and audio tapes, and other materials provided to Consultant or prepared by or for
Consultant or the City in connection with this Agreement.
14. Severability. If any term or portion of this Agreement is held to be
invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction,the
remaining provisions of this Agreement shall continue in full force and effect.
Services Agreement between City of Dublin and Chandler Asset Management Page 4 of 6
15. Contract Administration and Notice. This Agreement shall be
administered on behalf of the City by the City Manager. Any written notice between the
parties shall be sent to:
The City of Dublin
100 Civic Plaza
Dublin,CA 94568
16. Integration. This Agreement, together with attached Exhibits_, contains
the entire understanding between the parties concerning the subject matter contained
herein. There are no representations, agreements, arrangements, or understands, oral or
written,between the parties relating to the subject matter of this Agreement that are not
fully expressed herein.
17. Attorneys' Fees. If any legal proceeding is instituted by either party to
enforce the terms of this Agreement or to determine the rights of the parties thereunder,
the prevailing party in the proceeding shall recover, in addition to all court costs,
reasonable attorneys' fees (including,without limitation, post judgment attorneys' fees
incurred in collecting a judgment or otherwise enforcing the terms thereof).
18. Applicable Law. This Agreement shall be subject to and governed by the
law of the State of California.
19. Binding on Successors. Subject to the provisions of Paragraph 6,Assignment
and Subcontracting,this Agreement shall inure to the benefit of and be binding upon the parties,
their legal representatives, successors, and assigns.
20. Conflict of Interest. Depending on the nature of the work performed, a
consultant of City is subject to the same conflict of interest prohibitions that govern City
employees and officials(such as The Political Reform Act of 1974 (Government Code Sections
81000 et seq.) and Government Code Section 1090). During the proposal process or the term of
this Agreement, Consultant may be required to disclose financial interests.
21. AMENDMENT
This Agreement may be modified or amended only by a writing signed by both
parties.
Services Agreement between City of Dublin and Chandler Asset Management Page 5 of 6
IN WITNESS HEREOF, the parties have caused their authorized representatives
to execute this Agreement on the 16th day of August, 2016.
CITY: Consultant:
l-
By: Christopher L.Foss, City Manager By Nicole Dragoo, CO i,
ATTEST:
Caroline P. Soto,City Clerk
APPROVED AS TO FORM:
John D.Bakker,City Attorney
Services Agreement between City of Dublin and Chandler Asset Management Page 6 of 6
EXHIBIT A
Scope of Work.
Consultant shall provide the following services:
Consultant shall provide investment management and advisory services for the City on all funds,
as authorized by the City Council and directed by Staff to be managed by Consultant. The
Consultant shall provide the additional related services, which shall include but not be limited to
the following:
a) Assisting the City, as the City deems necessary, in analyzing its cash flow requirements
to determine the amount of funds to be invested with Consultant.
b) Assisting the City, as the City deems necessary, in determining its investment risk
tolerance and appropriate portfolio benchmark.
c) Meeting with City staff, from time to time as reasonably requested by City, to review the
investment portfolio and performance.
d) On an annual basis,reviewing and recommending changes to the City's Investment
Policy based on legislative changes and other relevant market conditions.
e) Providing the City with on-line access to real-time information on the City's investment
positions and providing monthly investment reports for the City.
f) Providing other investment-related services as agreed upon.
Additional Provisions
1. City Representative. In its capacity as investment manager, Consultant shall receive all
instructions, directions and other communications on City's behalf respecting City's
account from the Representative designated from time to time by the City Manager. The
City Manager has designated Colleen Tribby, Administrative Services Director as the
Representative. Consultant is hereby authorized to rely and act upon all such instructions,
directions and communications from such Representative or any agent of such
Representative.
2. Investment Policy. In investing and reinvesting City's assets, Consultant shall comply
with City's Investment Policy.
3. Authority of Consultant. Consultant is hereby granted full discretion to invest and
reinvest all assets under its management in any type of security it deems appropriate,
subject to compliance with the Investment Policy and instructions given or guidelines set
by the Representative.
4. Electronic Delivery. From time to time, Consultant may be required to deliver certain
documents to City such as account information,notices and required disclosures. City
hereby consents to Consultant's use of electronic means, such as email, to make such
delivery. This delivery may include notification of the availability of such document(s)
on a website, and City agrees that such notification will constitute"delivery". City further
Services Agreement between City of Dublin and Chandler Asset Management EXHIBIT A
agrees to provide Consultant with City's email address(s) and to keep this information
current at all times by promptly notifying Consultant of any change in email address(s).
City email address(s):admin.service @dublin.ca.gov
5. Proxy Voting. Consultant will vote proxies on behalf of City unless otherwise instructed.
Consultant has adopted and implemented written policies and procedures and will
provide City with a description of the proxy voting procedures upon request. Consultant
will provide information regarding how City's proxies were voted upon request. To
request proxy policies or other information,please contact us by mail at the address
provided,by calling 800-317-4747, or by emailing your request to
compliance@chandlerasset.com.
6. Custody of Securities and Funds. Consultant shall not have custody or possession of the
funds or securities that City has placed under its management. City shall appoint a
custodian to take and have possession of its assets. City recognizes the importance of
comparing statements received from the appointed custodian to statements received from
Consultant. City recognizes that the fees expressed above do not include fees City will
incur for custodial services.
7. Valuation. Consultant will value securities held in portfolios managed by Consultant no
less than monthly. Securities or investments in the portfolio will be valued in a manner
determined in good faith by Consultant to reflect fair market value.
8. Investment Advice. City recognizes that the opinions,recommendations and actions of
Consultant will be based on information deemed by it to be reliable,but not guaranteed to
or by it. Provided that Consultant acts in accordance with the standards set out in Section
1.2 of the Agreement, City agrees that Consultant will not in any way be liable for any
error in judgment or for any act or omission, except as may otherwise be provided for
under the Federal Securities laws or other applicable laws.
9. Payment of Commissions. Consultant may place buy and sell orders with or through such
brokers or dealers as it may select. It is the policy and practice of Consultant to strive for
the best price and execution and for commission and discounts which are competitive in
relation to the value of the transaction and which comply with Section 28(e) of the
Securities and Exchange Act. Nevertheless, it is understood that Consultant may pay a
commission on transactions in excess of the amount another broker or dealer may charge,
and that Consultant makes no warranty or representation regarding commissions paid on
transactions hereunder.
10. Other Clients. It is further understood that Consultant may be acting in a similar capacity
for other institutional and individual clients, and that investments and reinvestments for
City's portfolio may differ from those made or recommended with respect to other
accounts and clients even though the investment objectives may be the same or similar.
Accordingly, it is agreed that Consultant will have no obligation to purchase or sell for
Services Agreement between City of Dublin and Chandler Asset Management EXHIBIT A
City's account any securities which it may purchase or sell for other clients.
11. Confidential Relationship. The terms and conditions of this Agreement, and all
information and advice furnished by either party to the other shall be treated as
confidential and shall not be disclosed to third parties except(i) as required by law, rule,
or regulation, (ii) as requested by a regulatory authority, (iii) for disclosures by either
party of information that has become public by means other than wrongful conduct by
such party or its officers, employees, or other personnel, (iv) for disclosures by either
party to its legal counsel, accountants, or other professional advisers, (v) as necessary for
Consultant to carry out its responsibilities hereunder, or(vi) as otherwise expressly
agreed by the parties.
12. Receipt of Brochure and Privacy Policy. City has received the disclosure statement or
"brochure" and"brochure supplement"also known as Part 2A and Part 2B of Form
ADV,required to be delivered pursuant to Rule 204-3 of the Investment Advisers Act of
1940 (Brochure). City has received a copy of Consultant's Privacy Policy.
Services Agreement between City of Dublin and Chandler Asset Management EXHIBIT A
EXHIBIT B
Payment Terms.
City shall compensate Consultant monthly an amount calculated on the average market value of
City's portfolio, including accrued interest, in accordance with the following schedule:
Assets Under Management Annual Investment Management Fee
First$25 million 0.10 of 1% (10 basis points)
Next$25 million 0.08 of 1% (8 basis points)
Assets in excess of$50 million 0.07 of 1% (7 basis points)
The fees expressed above do not include any custody fees that may be charged by City's bank or
other third party custodian. The City is not required to pay any start-up or closing fees; there are
no penalty fees. There are no additional costs associated with the sale and purchase of securities,
other than those that may be imposed by the custodian.
Fees shall be prorated to the effective date of termination of the agreement on the basis of actual
days elapsed, and any unearned portion of prepaid fees shall be refunded.
The fee schedule is all-inclusive for the services that the Consultant will provide the City,
including personal visits and education offerings for staff
Fees shall be deducted monthly in arrears from City's custody account. There is no annual
minimum required.
Services Agreement between City of Dublin and Chandler Asset Management EXHIBIT B