23-0701_CHANDLER ASSET MANAGEMENT, INC._Professional Services AgreementCITY OF SAN JUAN CAPISTRANO
PROFESSIONAL SERVICES AGREEMENT
This Agreement is made and entered into as of July 1, 2023 by and between the
City of San Juan Capistrano, a municipal corporation organized and operating under
the laws of the State of California with its principal place of business at 32400 Paseo
Adelanto, San Juan Capistrano, CA 92675 ("City"), and Chandler Asset Management,
Inc., a Corporation with its principal place of business at 6225 Lusk Boulevard, San
Diego, CA 92121 (hereinafter referred to as "Consultant"). City and Consultant are
sometimes individually referred to as a "Party" and collectively as the "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 Management Services,
(hereinafter referred to as "the Project").
B. Consultant is duly licensed and has the necessary qualifications to
provide City with 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:
Services
Consultant shall provide the City with the services described in the Scope of
Services attached hereto as Exhibit "A."
2. Compensation
The City shall pay for such services in accordance with the Schedule of
Charges set forth in Exhibit "B", which is based on the total amount of funds
under management by Consultant. Periodic payments shall be made within thirty
(30) days of receipt of a written invoice which includes a detailed description of the
work performed in connection with the Project. Payments to Consultant for work
performed will be made on a monthly billing basis.
Additional Work
If changes in the work seem merited by either 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 fees or time
schedule. An amendment to this Agreement shall be prepared by the City and
executed by both Parties prior to the performance of such services. If additional work
commences without an amendment to this Agreement executed by both Parties, the
City shall not be required to pay for the changes in the scope of work. Such amendment
however, 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 Agreement period and for four (4) years from the date of
final payment under the Agreement for inspection by City.
Time of Performance
Consultant shall perform its services in a prompt and timely manner and shall
commence performance on July 1, 2023. Consultant shall complete the services
required herein by June 30, 2028. Based on performance under this Agreement, City
staff is authorized to exercise up to two (2) additional one-year extensions if Consultant
holds its pricing constant.
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.
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.
Standard of Care
Consultant's services shall 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
or interests in this Agreement without the written consent of the City, which may be
withheld for any reason. Any attempt to assign or transfer this Agreement without the
City's 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 Consultant
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.
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
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX)
exclusion deleted
(7) Contractual Liability with respect to this Contract
(8) Broad Form 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.
(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.
(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 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.
Agreement:
e. Minimum Policy Limits Required
(i) The following insurance limits are required for the
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
Employer's Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors
and omissions)
(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.
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.
g. 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.
(ii) The Commercial General Liability Policy and Automobile
Policy shall each contain a provision stating that Consultant's policy is primary
insurance and that 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. Qualifyinq 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.
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.
(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.
j. 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. 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 reasonably approved by the City), indemnify and hold the City, its officials,
officers, employees, agents and volunteers free and harmless from any and all claims,
demands, causes of action, suits, actions, proceedings, costs, expenses, liability,
judgments, awards, decrees, settlements, loss, damage or injury of any kind, in
law or equity, to property or persons, including wrongful death, (collectively, "Claims')
in any manner arising out of, pertaining to, or incident to any alleged 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 consequential damages, expert witness fees and attorneys' 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's obligation to indemnify shall not be restricted to
insurance proceeds, if any, received by the City, its officials, officers, employees,
agents or volunteers .
b. Additional Indemnity Obligations. Consultant shall defend, with
counsel of City's choosing and at Consultant's own cost, expense and risk, any and
all Claims covered by this section that may be brought or instituted against the City,
its officials, officers, employees, agents or volunteers. Consultant shall pay and
satisfy any judgment, award or decree that may be rendered against the City, its
officials, officers, employees, agents or volunteers as part of any such claim, suit,
action or other proceeding. Consultant shall also reimburse City for the cost of any
settlement paid by the City, its officials, officers, employees, agents or volunteers as
part of any such claim, suit, action or other proceeding. Such reimbursement shall
include payment for the City's attorney's fees and costs, including expert witness fees.
Consultant shall reimburse the City, its officials, officers, employees, agents and
volunteers, for any and all legal expenses and costs incurred by each of them in
connection therewith or in enforcing the indemnity herein provided. Consultant's
obligation to indemnify shall not be restricted to insurance proceeds, if any, received
by the City, its officials, officers, employees, agents and volunteers.
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. 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 $1,000 or more, Consultant agrees to fully comply
with such Prevailing Wage Laws, if applicable. Consultant shall defend, indemnify and
hold the City, its elected 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, employment of
apprentices, hours of labor and debarment of contractors and subcontractors.
b. If the Services are being performed as part of an applicable "public
works" or "maintenance" project, 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.
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 Orange,
State of California.
16. 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.
C. 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.
19. Organization
Consultant shall assign as Project Manager, Nicole Dragoo. 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 San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn: Ken AI -Imam
and shall be effective upon receipt thereof.
22. Third Party Rights
CONSULTANT:
Chandler Asset Management, Inc.
6225 Lusk Boulevard
San Diego, CA 92121
Attn: Nicole Dragoo
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
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. 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]
SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN JUAN CAPISTRANO
AND CHANDLER ASSET MANAGEMENT, INC.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date indicated herein.
CITY OF SAN JUAN CAPISTRANO
CHANDLER ASSET MANAGEMENT,
INC.
By. — - — By. ' t�
Benjami� i, City I�,�arn ger
Its: CEO
Printed Name. Nicole Dragoo
A'
10
Maria Morris, Cit Clerk
APPROVED AS TO FORM:
By:
Jeffrey Ballinger, City Attorney
SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN JUAN CAPISTRANO
AND CHANDLER ASSET MANAGEMENT, INC.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date indicated herein.
CITY OF SAN JUAN CAPISTRANO CHANDLER ASSET MANAGEMENT,
INC.
1A
Benjamin Siegel, City Manager
Its:
Printed Name.
ATTEST:
M
Maria Morris, City Clerk
APPROVED AS TO FORM:
By: _ }-
Jeffy Ballinger, Ci[y Attorney
EXHIBIT A
Scope of Services
Specific responsibilities of the investment manager will include, but not be limited to the
following:
A. Manage on a daily basis the City's separate investment portfolios pursuant to the
.specific, stated investment objectives. Place all ,orders for the purchase and sale
of securities, communicate settlement information to City's staff and coordinate
security settlement. Currently, pre -trade approval by authorized City personnel is
required before executing any trades. For each trade, justification must be
provided as to the reason for the trade. When proposed sales of securities will
create an estimated realized loss in excess of $10,000, such amounts shall be so
communicated at the time that the proposed sale is communicated.
B. Serve as a general resource to City's staff for information, advice and training
regarding fixed-income investments.
C. Work with City staff to understand cash flow projections to ensure that the
investment strategy is consistent with the City's liquidity requirements.
D. Provide monthly statements with all the information indicated for investment
reporting by the California Government Code and GASB pronouncements. A
separate monthly financial report must be provided for the City portfolio and the
Housing Authority portfolio. Each such monthly report must include both the
securities management by the firm, as well as those managed directly by City staff.
These reports must include the following:
Summary of Portfolio Holdings. A summary and a detailed listing of all
securities held at the end of the month categorized by type of security,
maturity and institution, including those investments managed directly by
the City.
2. Investment Performance Report. For the portion of the portfolio managed
by the investment manager, provide the following monthly and fiscal year-
to-date data: yield (amount and rate), amount of realized gains/losses,
amount of unrealized gains/losses, and total return (amount and rate). The
report must also provide accrued interest as of month end.
3. Maturity/Duration Indicators. The monthly report should include portfolio
duration and average maturity statistics to help monitor interest -rate risk.
4. Transaction Summary. A summary of completed transactions for the month.
5. Mark -to -Market Report. The monthly report should show the cost and
market value for each security in the portfolio.
E. The selected investment manager must maintain accurate records on behalf of the
City that allow the investment manager to monitor an appropriate diversification of
investments and compliance with applicable investment policies of the City of San
EXHIBIT A - Page 1 of 4
Juan Capistrano and State of California statutes. The monthly reports are required
to be completed no later than the 15th of the following month in order to meet the
timeline needed for presentation to the City Council at their next available meeting.
F. Upon request (but not more than once a year), provide a portfolio status report to
the City Council including a description of market conditions, investment strategies
employed, portfolio performance, and suggested changes to investment strategy.
The performance numbers shall be presented as required by the CFA Institute's
GIPS. Typically such reported has not been required on a regular annual basis,
but may be requested from time to time, as needed.
G. The investment advisors WILL NOT provide custodial services or security
safekeeping.
H. Include in the monthly reports of investments a reconciliation of the investment
report ending cost balance to the independent custodian statement ending cost
balance and provide an explanation of any differences. This should be explicitly
addressed in the proposal.
I. Annually review and provide recommendations regarding the City's investment
policy.
Additional terms specific to investment management relationship (non -
discretionary):
Client Representative. In its capacity as investment manager, Chandler
shall receive all instructions, directions and other communications on
Client's behalf respecting Client's account from Ken AI -Imam
(Representative). Chandler 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 Client's assets, Chandler
shall comply with Client's Investment Policy, which is attached hereto as
Attachment 1.
3. Authority of Chandler. Chandler is hereby granted authority to invest and
reinvest all assets under its management in securities permitted by the
Investment Policy, subject to the prior approval of Representative. Such
approval may be granted orally, by facsimile, or by email.
4. Notices. All reports and other communications required hereunder to be in
writing shall be delivered in person, or sent by first-class mail postage
prepaid, by overnight courier, by confirmed facsimile with original to follow
or by confirmed electronic mail with proof of receipt to the addresses set
forth below. Either party to this Agreement may, by written notice given at
any time, designate a different address for the receipt of reports and other
communications due hereunder.
Chandler Asset Management Client Representative
Attn: Nicole Dragoo City of San Juan Capistrano
EXHIBIT A - Page 2 of 4
6225 Lusk Boulevard Attn: Ken AI -Imam
San Diego, CA 92121 32400 Paseo Adelanto
San Juan Capistrano, CA 92675
5. Electronic Delivery. From time to time, Chandler may be required to deliver
certain documents to Client such as account information, notices and
required disclosures. Client hereby consents to Chandler'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 Client
agrees that such notification will constitute "delivery". Client further agrees
to provide Chandler with Client's email address(s) and to keep this
information current at all times by promptly notifying Chandler of any change
in email address(s).
Client email addresses: kalimarna-sanivancapistrano.orq
mda.qgettshort@sanguancaQistrano.org
amasseV(cb,sanivancapistrano. orq
6. Proxy Voting. Chandler will vote proxies on behalf of Client unless
otherwise instructed. Chandler has adopted and implemented written
policies and procedures and will provide Client with a description of the
proxy voting procedures upon request. Chandler will provide information
regarding how Clients' 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
info(d)chandlerasset.com.
7. Custody of Securities and Funds. Chandler shall not have custody or
possession of the funds or securities that Client has placed under its
management. Client shall appoint a custodian to take and have possession
of its assets. Client recognizes the importance of comparing statements
received from the appointed custodian to statements received from
Chandler. Client recognizes that the fees expressed above do not include
fees Client will incur for custodial services.
8. Valuation. Chandler will value securities held in portfolios managed by
Chandler no less than monthly. Securities or investments in the portfolio
will be valued in a manner determined in good faith by Chandler to reflect
fair market value.
9. Investment Advice. Client recognizes that the opinions, recommendations
and actions of Chandler will be based on information deemed by it to be
reliable, but not guaranteed to or by it. Provided that Chandler acts in good
faith, Client agrees that Chandler 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.
10. Payment of Commissions. Chandler may place buy and sell orders with or
through such brokers or dealers as it may select. It is the policy and practice
of Chandler to strive for the best price and execution and for commission
EXHIBIT A - Page 3 of 4
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 Chandler may pay a
commission on transactions in excess of the amount another broker or
dealer may charge, and that Chandler makes no warranty or representation
regarding commissions paid on transactions hereunder.
11. Other Clients. It is further understood that Chandler may be acting in a
similar capacity for other institutional and individual clients, and that
investments and reinvestments for Client'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 Chandler will have no obligation to purchase or sell for
Client's account any securities which it may purchase or sell for other
clients.
12. 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
Chandler to carry out its responsibilities hereunder, or (vi) as otherwise
expressly agreed by the parties.
13. Receipt of Brochure and Privacy Policy. Client hereby acknowledges
receipt of 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).
Client further acknowledges receipt of Chandler's Privacy Policy, as
required by Regulation S -P.
EXHIBIT A - Page 4 of 4
EXHIBIT B
Schedule of Charges
CHANDLER
A, SET MA.NAGFMFN1
Request for Proposal for
Investment Management Services
THE CITY OF SAN JUAN CAPISTRANO
Terms, which we have provided in the Appendix. This document contains additional provisions that relate specifically to our
status as an SEC -registered investment adviser.
1. FEES
1. Please include a copy of your firm's fee schedule. State your fee in basis points for assets under management. It is
understood that this fee will cover the cost of all services provided to the City by the proposing firm.
Chandler Asset Management is pleased to provide comprehensive investment management services in accordance with the
following fee schedule:
Proposed Fee Schedule for the City of San Juan Capistrano
First $25 million 0.10 of 1% (10 basis points)
Next $25 million 0.08 of 1% (8 basis points)
Over $50 million 0.06 of 1% (6 basis points)*
*Chandler is offering a one (1) basis point fee reduction on assets over $50 million.
Since the firm calculates fees based on the average balance of assets under our direct management (market value including
accrued interest), fees in dollars will fluctuate (higher or lower) based on the actual portfolio value. Fees are charged monthly
in arrears and can be debited directly from your third -party custody account. Chandler does not charge fees on including Local
Government Investment Pools.
Our proposed fee schedule is all-inclusive for the services that Chandler provides, including technological resources,
onboarding and implementation, online access to the Chandler Client Portal, comprehensive reporting, meetings, and
educational offerings for your staff, as well as the investment management and treasury management support services
described herein in Chandler's proposal.
a. Please indicate whether they include custodial fees.
No. Our fee schedule does not include charges that the City would incur for third party custodial services, as we are not a
provider of those services.
b. Is there a minimum annual fee?
No, there is no minimum annual fee required.
c. Are fees charged when there is no activity in the account?
Yes. Fees are based on the average balance of assets under our direct management (market value including accrued interest),
fees in dollars will fluctuate (higher or lower) based on the actual portfolio value.
d. To illustrate your fee schedule, what would the annual fee be for $45 million ($40 million for the City and $5 million for
the Housing Authority) under management based on your proposed fee schedule? We understand the actual fee will vary
based on assets under management.
An example of the fees assessed to the City at $45 million according to the above proposed tiered fee schedule are as follows:
Total Assets Under ManMement
$45 million
Annual Fee in Basis Points
9.11
Annual Fee in $ dollars
$41,000 T
f
EXHIBIT B Page 1 of 1