1 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
CITY OF CHULA VISTA
CONSULTANT SERVICES AGREEMENT
WITH CHANDLER ASSET MANAGEMENT, INC
TO PROVIDE NON-DISCRETIONARY INVESTMENT MANAGEMENT SERVICES
This Agreement is entered into effective as of May 23, 2023 (“Effective Date”) by and between the City of Chula Vista, a chartered municipal corporation (“City”) and Chandler Asset Management , Inc ., a California Corporation) (“Consultant”) (collectively, the “Parties” and, individually, a “Party”) with reference to the following facts:
RECITALS
WHEREAS, the Finance Department currently manages the City’s investment portfolio of $519 million, as of December 31, 2022, and
WHEREAS, City requires an experienced and qualified consultant to provide non -discretionary investment management services to manage the City’s investment portfolio, and
WHEREAS,in order to procure these services City solicited proposals in accordance with Chula Vista Municipal Code Section 2.56.080 for contracts exceeding $100,000, received four (4) proposals, and
WHEREAS, after the selection committee reviewed each response, they selected the Consultant as the most qualified amongst those submitting and recommended the non-discretionary investment management services aggreement be awarded to Consultant; and
WHEREAS, Consultant warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Con sultant to City in accordance with the time frames and the terms and conditions of this Agreement.
[End of Recitals. Next Page Starts Obligatory Provisions.]
2 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
OBLIGATORY PROVISIONS
NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and Consultant hereby agree as follows:
1. SERVICES
1.1 Required Services . Consultant agrees to perform the services described in the attached Exhibit A, incorporated into the Agreement by this reference, within the time frames set forth therein, time being of the essence for this Agreement. The services described in Exhibit A shall be referred to herein as the “Required Services.”
1.2 Reductions in Scope of Work. City may independently, or upon request from Consultant, from time to time, reduce the Required Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agree to meet and confer in good faith for the purpose of negotiating a corresponding reduction in the compensation associated with the reduction.
1.3 Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and ordinances governing procurement and purchasing authority, City may request Consultant provide additional services related to the Required Services (“Additional Services”). If so, City and Consultant agree to meet and confer in good faith for the purpose of negotiating an amendment to Exhibit A, to add the Additio nal Services. Unless otherwise agreed, compensation for the Additional Services shall be charged and paid consistent with the rates and terms already provided therein. Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this Agreement.
1.4 Standard of Care. Consultant expres sly warrants and agrees that any and all Required Services hereunder shall be performed in accordance with the highest standard of care exercised by members of the profession currently practicing under similar conditions and in similar locations.
1.5 No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Consultant of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Consultant or its subcontractors.
1.6 Security for Performance. In the event that Exhibit A Section 5 indicates the need for Consultant to provide additional security for performance of its duties under this Agreement, Consultant shall provide such additional security prior to commencement of its Required Services in the fo rm and on the terms prescribed on Exhibit A, or as otherwise prescribed by the City Attorney.
1.7 Compliance with Laws. In its performance of the Required Services, Consultant shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal Code.
1.8 Business License. Prior to commencement of work, Consultant shall obtain a business license from City.
1.9 Subcontractors. Prior to commencement of any work, Consultant shall submit for City’s information and approval a list of any and all subcontractors to be used by Consultant in the performance of the Required 3 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
Services. Consultant agrees to take appropriate measures nece ssary to ensure that all subcontractors and personnel utilized by the Consultant to complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any responsibilities of the Consultant under this Agreement, Consultant shall ensure that each and every subcontractor carries out the Consultant’s responsibilities as set forth in this Agreement.
1.10 Term. This Agreement shall commence on the earlier to occur of the Effective Date or Consultant’s commencement of the Required Services hereunder, and shall terminate , subject to Sections 6 .1 and 6 .2 of this Agreement, when the Parties have complied with all their oblig ations hereunder; provided, however, provisions which expressly survive termination shall remain in effect.
2. COMPENSATION
2.1 General. For satisfactory performance of the Required Services, City agrees to compensate Consultant in the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard terms for billing and payment are set forth in this Section 2.
2.2 Detailed Invoicing. Consultant agrees to provide City with a detailed invoice for services performed each month, within thirty (30) days of the end of the month in which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following the Effective Date of the Agreement. All charges must be presented in a line-item format with each task separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed, the a mount invoiced to date, and the remaining amount available under any approved budget. Consultant must obtain prior written authorization from City for any fees or expenses that exceed the estimated budget.
2.3 Payment to Consultant . Upon receipt of a properly prepared invoice and confirmation that the Required Services detailed in the invoice have been satisfactorily performed , City shall pay Consultant for the invoice amount within thirty (30) days. Payment shall be made in accordance with the terms and conditions set forth in Exhibit A and section 2.4, below . At City’s discretion, invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced.
2.4 Intentionally Omitted.
2.5 Intentionally Omitted.
2.6 Exclusions. City shall not be responsible for payment to Consultant for any fees or costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A. City shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of Consultant, its agents, employees, or subcontractors.
2.7 Payment Not Final Approval. Consultant understands and agrees that payment to the Consultant does not constitute a City final decision regarding whether such payment or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a waiver o f any violation by Consultant of the terms of this Agreement. If City determines that Consultant is not entitled to receive any amount of compensation already paid, City will notify Consultant in writing and Consultant shall promptly return such amount.
4 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
3. INSURANCE
3.1 Required Insurance . Consultant must procure and maintain, during the period of performance of Required Services under this Agreement, and for twelve months after completion of Required Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreement by this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of this Section.
3.2 Deductibles and Self -Insured Retentions. Any deductibles or self -insured retentions relating to the Required Insurance must be disclosed to and approved by City in advance of the commencement of work.
3.3 Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best’s rating of A V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI ) with a current A.M. Best’s rating of no less than A X. For Workers ’ Compensation Insurance, insurance issued by the State Compensation Fund is also acceptable.
3.4 Subcontractors. Consultant must include all sub -consultants/sub-contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating separate coverage for those not under its policies. Any separate coverage for sub -consultants must also comply with the terms of this Agreement.
3.5 Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified as required in Exhibit B or as may otherwise be specified by City’s Risk Manager. The general liability additional insured coverage must be provided in the form of an endorsement to the Consultant’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude Products/Comp leted Operations coverage.
3.6 General Liability Coverage to be “Primary.” Consultant’s general liability coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance provided by Consultant and in no way relieves Consultant from its responsibility to provide insurance.
3.7 No Cancellation. No Required Insurance policy may be canceled by either Party during the required insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail, return receipt requested. Prior to the effective date of any such cancellation Consultant must procure and put into effect equivalent coverage(s).
3.8 Waiver of Subrogation. Consultant’s insurer(s) will provide a Waiver of Subrogation in favor of the City for each Required Insurance policy under this Agreement. In ad dition, Consultant waives any right it may have or may obtain to subrogation for a claim against City.
3.9 Verification of Coverage . Prior to commencement of any work, Consultant shall furnish City with original certificates of insurance and any amendatory endorsements necessary to demonstrate to City that Consultant has obtained the Required Insurance in compliance with the terms of this Agreement. The words “will endeavor” and “but failure to mail such notice shall impose no obligation or liab ility of any kind upon the company, its agents, or representatives” or any similar language must be deleted from all certificates. The required certificates and endorsements should otherwise be on industry standard forms. The City reserves the 5 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
right to r equire, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications.
3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are required and are provided on a claims -made form, the following requirements also apply:
a. The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning of the work required by this Agreement.
b. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the work required by this Agreement.
c. If coverage is canceled or non -renewed, and not replaced wi th another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required by this Agreement.
d. A copy of the claims reporting requirements must be submitted to the City for review.
3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Consultant’s obligations under this Agreement, including Indemnity.
3.12 Additional Coverage. To the extent that insurance coverage provided by Consultant maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained.
4. INDEMNIFICATION
4.1. General. To the maximum extent allowed by law, Consultant shall timely and fully protect, defend, reimburse, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers (collectively, “I ndemnified Parties”), from and against any and all claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Require d Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising f rom the sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party.
4.2. Modified Indemnity Where Agreement Involves Design Professional Services . Notwithstanding the forgoing, if the services provided under this Agreement are design professional services, as defin ed by California Civil Code section 2782. 8, as may be amended from time to time, the defense and indemnity obligation under Section 1, above, shall be limited to the extent required by California Civil Code section 2782.8.
6 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
4.3 Costs of Defense and Award. Included in Consultant’s obligations under this Section 4 is Consultant’s obligation to defend, at Consultant’s own cost, expense and risk, and with counsel approved in writing by City, any and all suits, actions or other legal proceedings that may be brought or instituted against one or more of the Indemnified Parties. Subject to the limitations in this Section 4, Consultant shall pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified Parties for any a nd all related legal expenses and costs incurred by any of them.
4.4. Consultant’s Obligations Not Limited or Modified. Consultant’s obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration by the Consultant. Furthermore, Consultant’s obligations under this Section 4 shall in no way limit, modify or excuse any of Consultant’s other obligations or duties under this Agreement.
4.5. Enforcement Cos ts. Consultant agrees to pay any and all costs and fees City incurs in enforcing Consultant’s obligations under this Section 4.
4.6 Survival. Consultant’s obligations under this Section 4 shall survive the termination of this Agreement.
5. FINANCIAL INTERESTS OF CONSULTANT.
5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and consultants performing work for government agencies to publicly disclose certain of their personal assets and income using a Statement of Economic Interests form (Form 700).
In order to assure compliance with these requirements, Consultant shall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement by this reference.
5.2 Disclosures; Prohibited Interests. Independent of whether Consultant is required to file a Form 700, Consultant warrants and represents that it has disclosed to City any economic interests held by Consultant, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is the subject of this Agreement. Consultant warrants and represents that it has not employed or retained any company or person, o ther than a bona fide employee or approved subcontractor working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants and represents that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved subcontractor 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. Consultant further warrants and represents that no officer or employee of City, has any interest, whether contractual, non -contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Consultant or Consultant’s subcontractors. Consultant further agrees to notify City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties, City shall have the right to rescind this Agreement without liability.
6. REMEDIES
6.1 Termination for Cause . If for any reason whatsoever Consultant shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Consultant shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Defaul t”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to terminate this Agreement by giving five (5) days written notice to Consultant. Such notice shall identify the Default and the Agreement termination date. If Consultant notifies City of its intent to cure such Default prior to City’s specified termination date, and City agrees that the specified Default is capable of being cured, City 7 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
may grant Consultant up to ten (10) additional days after the designated termination date to effectuate such cure. In the event of a termination under this Section 6.1, Consultant shall immediately provide City any and all ”Work Product” (defined in Section 7 below) prepared by Consul tant as part of the Required Services.
Such Work Product shall be City’s sole and exclusive property as provided in Section 7 hereof. Consultant may be entitled to compensation for work satisfactorily performed prior to Consultant’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default.
6.2 Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Consultant of such termination or suspension at least fifteen (15) days pr ior to the effective date thereof. Upon receipt of such notice, Consultant shall immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City. Such Work Product shall be City's sole and exclu sive property as provided in Section 7 hereof. Consultant shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requested or approved by City in advance that would maximize City’s value under the Agreement.
6.3 Waiver of Claims . In the event City terminates the Agreemen t in accordance with the terms of this Section, Consultant hereby expressly waives any and all claims for damages or compensation as a result of such termination except as expressly provided in this Section 6.
6.4 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by City in the implementation of same, are incorporated herein by this reference. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement.
6.5 Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising u nder or relating to this Agreement shall be brought only in San Diego County, State of California.
6.6 Service of Process. Consultant agrees that it is subject to personal jurisdiction in California. If Consultant is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Consultant irrevocably consents t o service of process on Consultant by first class mail directed to the individual and address listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five days after mailing.
7. OWNERSHIP AND USE OF WORK PRODUCT
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance of the Required Services (collectively “Work Product”) shall be the sole and exclusive property of City. No such Work Product shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express, prior written consent of City. City shall have unrestricted 8 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Consultant, except as may be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generated as Work Product, Consultant shall make available to City, upon reasonable written request by City, the necessary functional computer software and hardware for purposes of accessing, compiling, transferring and printing computer files.
8. GENERAL PROVISIONS
8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties.
8.2 Assignment. City would not have entered into this Agreement but for Consultant’s unique qualifications and traits. Consultant shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion.
8.3 Authority. The person(s) executing this Agreement for Consultant warrants and represents that they have the authority to execute same on behalf of Consultant and to bind Consultant to its obligations hereunder without any further action or direction from Consultant or any board, principle or officer thereof.
8.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed such a counterpart.
8.5 Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded.
8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services , Consultant agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the performance of the Agreement, including accounting for costs and expenses charged to City, including s uch records in the possession of sub - contractors/sub-consultants.
8.7 Further Assurances. The Parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement and the intentions of the Parties.
8.8 Independent Contractor. Consultant is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agents or volu nteers shall have control over the conduct of Consultant or any of Consultant’s officers, employees, or agents (“Consultant Related Individuals”), except as set forth in this Agreement. No Consultant Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or any other payroll tax with respect to any Consultant Related Individuals; instead, Consultant shall be solely responsible for the payment of same and shall hold the City harmless with respect to same. Co nsultant shall not at any time or in any manner represent that it or any of its Consultant Related Individuals are employees. 9 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
Consultant shall act as an agent of City in accordance with Exhibit D. Except as permitted herein, Consultant shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner.
8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to have been properly given or served if personally served o r deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement a t the places of business for each of the designated Parties as indicated in Exhibit A, or otherwise provided in writing.
8.10 Electronic Signatures. Each Party agrees that the electronic signatures, whether digital or encrypted, of the Parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic Signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record, including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code §§ 1633.1 to 1633.17) as amended from time to time.
(End of page. Next page is signature page.)
10 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
SIGNATURE PAGE
CONSULTANT SERVICES AGREEMENT
IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Consultant agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the Effective Date.
CHANDLER ASSET MANAGEMENT, INC. CITY OF CHULA VISTA
BY:________________________________ BY: ________________________________ Nicole Dragoo JOHN MCCANN
CHIEF EXECUTIVE OFFICER MAYOR
ATTEST
BY: ________________________________
Kerry K. Bigelow, MMC
City Clerk
APPROVED AS TO FORM
CITY ATTORNEY
BY: ________________________________
Jill D.S. Maland
Lounsbery, Ferguson, Altona & Peak
Acting City Attorney
11 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
EXHIBIT A
SCOPE OF WORK AND PAYMENT TERMS
1. Contact People for Contract Administration and Legal Notice
A. City Contract Administration:
Adrian Del Rio
276 Fourth Avenue, Chula Vista, CA 91910
619-409-3820
[email protected]
For Legal Notice Copy to:
City of Chula Vista
City Attorney
276 Fourth Avenue, Chula Vista, CA 91910
619-691-5037
[email protected]
B. Consultant Contract Administration:
CHANDLER ASSET MANAGEMENT, INC.
6225 Lusk Boulevard, San Diego, CA 92121
858-546-3737
[email protected]
For Legal Notice Copy to:
Michael Rasmussen
6225 Lusk Boulevard, San Diego, CA 92121
858-546-3737
[email protected]
2. Required Services
A. General Description:
Consultant will provide and perform non-discretionary investment services to manage the City’s investment portfolio.
B. Detailed Description:
The Consultant will provide, at a minimum, the following non-discretionary investment services:
1. Manage on a daily basis the City’s investment portfolio housed with its safekeeping financial institution pursuant to the specific, stated investment objectives. Place all orders for the purchase and sale of securities, communicate settlement information to City staff and coordinate security settlement. 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.
2. Serve as a general resource to City staff for information, advice, and training regarding fixed-income investments.
12 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
3. Work with staff to understand cash flow projections to ensure the investment strategy is consistent with the City’s financial obligations.
4. Provide quarterly financial reports to include both the investments under management and the City’s holdings in state and local investment pools and any other accounts the City deems appropriate. The City will provide Consultant with all necessary associated statements. The quarterly financial report must include at least the following:
a. Type of investment
b. Institutional issuer
c. Purchase date
d. Date of maturity
e. Book value of the investment
f. Face value of the investment
g. Current market value of securities and source of valuation h. Coupon rate and yield
i. Interest earnings (differentiate between received and accrued interest) j. Amount of realized gains/losses
k. Percentage of portfolio by investment type
l. Portfolio duration and average maturity statistics
m. Portfolio total return
n. Monthly transactions
o. Comparative report on interest yields
p. Provide a commentary on capital markets and economic conditions
5. Include in the quarterly report 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.
6. Upon request, provide status reports 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. Upon request, present these status reports at City Council meetings.
7. Annually review the City’s Investment Policy and make recommendations for change as appropriate.
8. Prepare reports in accordance with generally accepted accounting principals (GAAP) and in compliance with Governmental Accounting Standards Board (GASB) pronouncements.
9. Maintain accurate records on behalf of the City that allow the City to monitor an appropriate diversification of investments and compliance with applicable investment policies of the City of Chula Vista and State of California statutes.
10. Provide credit analysis of investment instruments in the managed investment portfolio.
11. Ensure that the portfolio structure matches the City’s objectives.
12. Provide assurance of portfolio compliance with applicable policies and laws.
13. Evaluate market risk and develop strategies that minimize the impact on the managed investment portfolio.
14. Provide proof of investment purchase at Consultant’s cost basis. Bloomberg generated trade tickets and supplemental pages are preferred.
15. Performance and Benchmarks: Consultant will seek returns that match or outperform the 12 -month moving average of the 2-year U.S. Treasury Note.
13 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin May 23, 2023 and end on June 30, 2026 for completion of all Required Services.
4. Compensation:
A. Form of Compensation
☒ Fixed Fee Paid Arrangement. For the completion of the Required Services, as identified in section 2.B., above, 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 $200 million 0.05 of 1% (5 basis points)
Next $100 million 0.04 of 1% (4 basis points)
Assets in excess of $300 million 0.03 of 1% (3 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.
Fees shall be prorated to the effective date of termination on the basis of actual days elapsed, and any unearned portion of prepaid fees shall be refunded. City is not required to pay any start up or closing fees; there are no penalty fees.
Fees shall be invoiced monthly in arrears in accordance with sections 2.2 and 2.3.
B. Reimbursement of Costs
☒ None, the compensation includes all costs
5. Special Provisions:
☐ Permitted Sub-Consultants: List Permitted Sub-Consultants or Indicate “None”
☐ Security for Performance: See City Attorney or Indicate “None” if Not Applicable
☒ Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement for two (2) additional terms, upon written notice by City. A “term” is defined as one fiscal year. The City Manager or Director of Finance/Treasurer shall be authorized to exercise the extensions on behalf of the City. If the City exercises an option to extend, each extension shall be on the same terms and conditions contained herein for each extension.
☒ Other: The City and Consultant hereby agree to the terms set forth in Exhibit D
☐ None
14 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
EXHIBIT B
INSURANCE REQUIREMENTS
Consultant shall adhere to all terms and conditions of Section 3 of the Agreement and agrees to provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x).
Type of Insurance Minimum Amount Form
☒ General Liability:
Including products and
completed operations,
personal and
advertising injury
$2,000,000 per occurrence for
bodily injury, personal injury
(including death), and property
damage. If Commercial General
Liability insurance with a general
aggregate limit is used, either the
general aggregate limit must apply
separately to this Agreement or the
general aggregate limit must be
twice the required occurrence limit
Additional Insured Endorsement
or Blanket AI Endorsement for
City*
Waiver of Recovery Endorsement
Insurance Services Office Form
CG 00 01
*Must be primary and must not
exclude Products/Completed
Operations
☒ Automobile Liability $1,000,000 per accident for bodily injury, including death, and
property damage
Insurance Services Office Form
CA 00 01
Code 1-Any Auto
Code 8-Hired
Code 9-Non Owned
☒ Workers’
Compensation
Employer’s Liability
$1,000,000 each accident
$1,000,000 disease policy limit
$1,000,000 disease each employee
Waiver of Recovery Endorsement
☒ Professional Liability
(Errors & Omissions)
$1,000,000 each occurrence
$2,000,000 aggregate
Other Negotiated Insurance Terms: NONE
15 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
EXHIBIT C
CONSULTANT CONFLICT OF INTEREST DESIGNATION
The Political Reform Act 1 and the Chula Vista Conflict of Interest Code 2 (“Code”) require designated state and local government officials, including some consultants, to make certain public disclosures using a Statement of Economic Interests form (Form 700). Once filed, a Form 700 is a public document, accessible to any member of the public. In addition, consultants designated to file the Form 700 are also required to comply with certain ethics training requirements.3
☒ A. Consultant IS a corporation or limited liability company and is therefore EXCLUDED4 from disclosure. ☐ B. Consultant NOT a corporation or limited liability company and disclosure designation is as follows:
APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES (Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.)
Name Email Address Applicable Designation
Enter Name of Each Individual
Who Will Be Providing Service
Under the Contract – If
individuals have different
disclosure requirements,
duplicate this row and
complete separately for each
individual
Enter email address(es) ☐ A. Full Disclosure
☐ B. Limited Disclosure (select one or more of
the categories under which the consultant shall file):
☐ 1. ☐ 2. ☐ 3. ☐ 4. ☐ 5. ☐ 6. ☐ 7.
Justification:
☐ C. Excluded from Disclosure
1. Required Filers
Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition of “Consultant,” pursuant to FPPC Regulation 18700.3, must file a Form 700.
2. Required Filing Deadlines
Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement.
3. Filing Designation
The City Department Director will designate each individual who will be providing services to the City pursuant to the Agreement as full disclosure, limited disclosure, or excluded from disclosure, based on an analysis of the services the Consultant will provide. Notwithstanding this designation or anything in the Agreement, the Consultant is ultimately responsible for complying with FPPC r egulations and filing requirements. If you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2.
Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written determination of the consultant’s requirement to comply with the disclosure requirements set forth in the Code
Completed by: Victor De La Cruz
1 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 2 Chula Vista Municipal Code §§2.02.010-2.02.040.
3 Cal. Gov. Code §§53234, et seq.
4 CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not incl ude corporation or limited liability company).
16 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
EXHIBIT D
PROPOSED ADDITIONAL TERMS
SPECIFIC TO NON-DISCRETIONARY INVESTMENT MANAGEMENT SERVICES RELATIONSHIP
1. City Representative. In its capacity as investment manager, C onsultant shall receive all instructions, directions and other communications on the City’s behalf respecting the City's account from City’s Director of Finance or Assistant Finance Director (City Representative). Consultant is hereby authorized to rely and act upon all such instructions, directions and communications from such City Representative or any agent of such City Representative.
2. Investment Policy. In investing and reinvesting the City’s assets, Consultant shall comply with the City’s Investment Policy, which is incorporated herein by this reference and may be updated from time to time .
3. Authority of Consultant. Consultant is hereby granted full discretion to invest and reinvest all assets under its management in securities permitted by the Investment Policy, subject to the prior approval of the City Representative.
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 rece ipt 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 City Representative
Attn: Nicole Dragoo City of Chula Vista
6225 Lusk Boulevard Adrian Del Rio
San Diego, CA 92121 276 Fourth Avenue
Chula Vista, CA 91910
5. Electronic Delivery. From time to time, Consultant may be required to deliver certain documents to City such as account information, notices and required disclosures. The City hereby consents to Consultant’s use of electronic means, such as email, to make such delivery. This delivery may include notific ation of the availability of such document(s) on a website, and the City agrees that such notification will constitute “delivery”. The City further agrees to provide Consultant with the City’s email address(s) and to keep this information current at all t imes by promptly notifying Consultant of any change in email address(s).
The City email address(s): [email protected], [email protected]
6. Proxy Voting. Consultant will vote proxies on behalf of the City unless otherwise instructed. Consultant has adopted and implemented written policies and procedures and will provide the City with a description of the proxy voting procedures upon request. Consultant will provide information regarding how The 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 [email protected].
17 City of Chula Vista Agreement No.: 2023-104
Consultant Name: Chandler Asset Management, Inc. Rev. 1/17/23
7. Custody of Securities and Funds . Consultant shall not have custody or possession of the funds or securities that the City has placed under its management. The City shall appoint a custodian to take and have possession of its assets. The City recognizes the importance of comparing statements received from the appointed custodian to statements received from Consultant. The City recognizes that the fees expressed above do not include fees the City will incur for custodial services.
8. Valuation. Consultant will value securities held in portfolios managed by the 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.
9. Investment Advice. The 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 good faith, the 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.
10. 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 executio n 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.
11. Other Clients. It is further understood that Consultant may be acting in a simila r capacity for other institutional and individual clients, and that investments and reinvestments for C ity’s portfolio may differ from those made or recommended with respect to other accounts and clients even though the investment objectives may be the sam e or similar. Accordingly, it is agreed that Consultant will have no obligation to purchase or sell for City'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 professiona l advisers, (v) as necessary for Consultant to carry out its responsibilities hereunder, or (vi) as otherwise expressly agreed by the parties.
13. Receipt of Brochure and Privacy Policy. The City 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). The City further acknowledges receipt of Consultant’s Privacy Policy, as required by Regulation S-P.