SECOND AMENDMENT TO INVESTMENT
MANAGEMENT AGREEMENT
(Institutional Client, Non-ERISA)
THIS SECOND AMENDMENT TO AGREEMENT is made and entered
day of March_, 2023, by and between the City of Merced, a California Charter Municipal Corporation ("City"), and Chandler Asset Management, Inc., a California Corporation, whose address of record is 6225 Lusk Boulevard, San Diego, California 92121 ("Consultant").
WHEREAS, City and Consultant have previously entered into an Investment Management Agreement ("Agreement") dated March 5, 2018 and a First Amendment dated March 5, 2021 extending the termination date to March 4, 2023; and,
WHEREAS, City and Consultant desire to amend said Agreement for a second two-year extension of the term of the Agreemen.
NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants hereinafter recited, agree as follows:
1. Section 33, "SECOND EXTENSION OF AGREEMENT," is hereby added to the Agreement to read as follows:
"SECTION 33. SECOND EXTENSION OF
AGREEMENT. The Agreement shall be extended an
additional two (2) year term. Said Agreement terminates on March 4, 2025. This extension shall be at the same
price and conditions as set forth in the Agreement."
2. Except as herein amended, the Agreement dated March 5, 2018 and First Amendment dated March 5, 2021, shall remain in full force and effect. ///
X: \Agreements Finance\2023\2nd Amendment to Investment Management Agreement - Chandler Asset Management.docx 1 IN WITNESS WHEREOF, the parties have caused this Second Amendment to Agreement to be executed on the date first above written.
CITY OF MERCED
A California Charter Municipal
Corporation
BY: Stephanie MuR
City Manager
ATTEST:
STEPHANIE R. DIETZ, CITY CLERK
BY:_
APPROVED AS TO FORM:
BY: 212/23
City Attorney Date
258
ACCOUNT DATA:
BY: Vien
Verified by Finance Officer v - 219
Funds to be encumbered
as needed. UNC 6/15/2023
RL 6|15/23
X: \Agreements\Financel202312nd Amendment to Investment Management Agreement - Chandler Asset Management.docx 2 CONSULTANT
CHANDLER ASSET MANAGEMENT,
INC., a California Corporation
(Signature)
Nicole Dragoo
(Typed Name)
Its:_ CEO
(Title),
Martin Cassell
(Typed Name)
Its: QFO
(Title)
Taxpayer I.D. No. 33-0570869
ADDRESS: 6225 Lusk Blvd.
San Diego, CA 92121
TELEPHONE: 858-546-3737
FAX: 858-546-3741
E-MAIL: [email protected]
X: Agreements Finance\2023\2nd Amendment to Investment Management Agreement - Chandler Asset Management.docx 3 Client#: 62001 CHANDAST
DATE (MM/DD/YYYY)
ACORD. CERTIFICATE OF LIABILITY INSURANCE 8/02/2022
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.
If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer any rights to the certificate holder in lieu of such endorsements).
NANTACT Connie Roussel
Starkweather & Shepley No, Ext): 401 435-3600 (AC. No): 401-735-1059 (A/C,
PO Box 549 E-MAIL
ADDRESS: [email protected]
Providence, RI 02901-0549 INSURER(S) AFFORDING COVERAGE NAIC # 401 435-3600 INSURER A : Travelers Casualty Insurance 19046 INSURER B: Travelers Insurance Company 25674
INSURED
Chandler Asset Management Inc INSURER C: Hartford Fire Insurance Company 19682 6225 Lusk Boulevard INSURER D: Twin City Fire Insurance Company 29459 San Diego, CA 92121 INSURER E: Houston Casualty Co 42374 INSURER F: Scottsdale Insurance 41297
COVERAGES REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS.
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS NSR
A X COMMERCIAL GENERAL LIABILITY Y Y 6802C07960542 09/01/2022 09/01/2023 EACH OCCURRENCE $2,000,000 CLAIMS-MADE X OCCUR Ea occurrence $1,000,000
X Per Written Contract MED EXP (Any one person) $5,000
PERSONAL & ADV INJURY $2,000,000
GEN'L AGGREGATE LIMIT APPLIES PER GENERAL AGGREGATE $4,000,000 PRO- PRODUCTS - COMP/OP AGG $4,000,000
POLICY X JECT LOC
$
OTHER:
Y BA4N11595742 09/01/2022 09/01/2023 Co acciden SINGLE LIMIT $1,000,000 A ; AUTOMOBILE LIABILITY (Ea accident)
BODILY INJURY (Por person)
X ANY AUTO
OWNED SCHEDULED BODILY INJURY (Per accident) $
AUTOS ONLY AUTOS PROPERTY DAMAGE
X NON-OWNED (Per accident)
X HITOS ONLY AUTOS ONLY
X Drive Oth Car
X: UMBRELLA LIAB X OCCUR Y Y CUP2C08502242 09/01/2022 09/01/2023 EACH OCCURRENCE $10,000,000 EXCESS LIAB CLAIMS-MADE AGGREGATE $10,000,000
X RETENTION SO
OTH
WORKERS COMPENSATION Y 02WECCR2756 09/01/2022 09/01/2023 X STATUTE ER
AND EMPLOYERS' LIABILITY
TEN EAT NEEXECUTVE TIM E.L. EACH ACCIDENT $1,000,000
E.L. DISEASE - EA EMPLOYEE $1,000,000
(Mandatory in NH)
HES RIPT OPERATIONS below EL. DISEASE - POLICY LIMIT $1,000,000 D Professional Liab 08DC021984522 08/02/2022 08/02/2023 10,000,000 E Cyber Liab H21NGP20973101 08/02/2022 08/02/20234,000,000 C Crime 08FA024546722 08/02/2022 08/02/202310,000,000
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) F. Employment Practices Liab EKS3440466 Eff Date: 8-02-2022 Exp Date: 8-02-2023 Limit $1,000,000 Endurance Risk Solutions # 43630 1st Excess Professional Liab FIX30001867802 Eff Date: 8-02-2022 Exp Date: 8-02-2023
Limit $10,000,000
(See Attached Descriptions)
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Merced EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN Venus Rodriguez or Julie Trujillo ACCORDANCE WITH THE POLICY PROVISIONS. 678 W. 18th Street
AUTHORIZED REPRESENTATIVE
Merced, CA 95340
© 1988-2015 ACORD CORPORATION. All rights reserved
4 The ACORD name and loan are reaistered marks of ACORD CITY OF MERCED Merced Civic Center
678 W. 18th Street
Merced, CA 95340
MERCED ADMINISTRATIVE REPORT
File #: 23-151 Meeting Date: 2/21/2023
Report Prepared by: Julie Trujillo, Deputy Finance Officer SUBJECT: Approval of Second Amendment to Agreement for Consultant Services with Chandler Asset Management to Provide Investment Portfolio Management Services for an Additional Two Years
REPORT IN BRIEF
Considers approval of the Second Amendment to Agreement with Chandler Asset Management to provide investment portfolio management services for an additional two years.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Second Amendment to Agreement with Chandler Asset Management for Investment Advisory Services; and,
B. Authorizing the City Manager to execute all necessary documents.
ALTERNATIVES
1. Adopt the motion as recommended by staff; or
2. Modify the action (specify in motion); or
3. Deny the action.
AUTHORITY
Section 1118 of Article Xl of the Charter of the City of Merced.
CITY COUNCIL PRIORITIES
As provided for in the 2022-23 Adopted Budget.
DISCUSSION
The Finance Officer is designated as the city's investment officer and is responsible for all investment decisions. The Finance Officer also has responsibility for developing and maintaining administrative procedures for the operation of the investment program to be consistent with the city's investment policy.
The city's investment policy objectives are the safety of principal, maintaining a sufficient liquidity level to meet operating needs and to secure an average rate of return equal to or greater than three- CITY OF MERCED Page 1 of 2 Printed on 2/16/2023
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File #: 23-151 Meeting Date: 2/21/2023
month U.S. Treasury bills or the average rate on Federal funds.
After a request for proposal process, the City Council on March 5, 2018, awarded Chandler Asset Management a three (3) year agreement with a two (2) one (1) year options for renewal to provide investment portfolio management services. On March 5, 2021, the City and Chandler agreed to a first amendment to extend the agreement to March 4, 2023. The contract also required 30-day written notice of intent to extend the agreement to consultant not less than 30 days prior to the expiration of the previous term. Finance provided written notice on February 1, 2023 and would like to continue the business relationship and contract with Chandler Asset Management for an additional two years. Since the inception of the original agreement in 2018, staff has maintained a great working relationship with Chandler and the City has seen investment earnings more than triple from prior years. Investment earnings under Chandler since inception of the management agreement through December 2022 are over $23.3 million. Investment earnings for the five years prior to their contract when investments were managed by the City were $7.3 million. This request is to approve a second amendment to the agreement for two additional years. There are no other changes from the original agreement.
Chandler Asset Management is based out of San Diego, California with seven offices and representatives located in Novato, California to service the City's needs. They have been fixed income specialists since 1988 who serve 180 public agency clients with over $25 billion in assets under management.
The cost of the services per the proposed fee schedule will be determined by the value of the assets under management. Based upon city's current investment portfolio and additional investments, the estimated annual cost for fiscal year 2023-24 is $200,000 and 2024-25 is $215,000. The actual fees will vary depending upon the city's holdings. Investment earnings are earned on pooled investments, which would be allocated to all funds.
IMPACT ON CITY RESOURCES
The cost of the services is included in the annual budget process. There is sufficient funding within the Fiscal Year 2022-23 budget to cover the cost of the agreement for the remainder of the current fiscal year.
ATTACHMENTS
1. Second Amendment to Agreement
2. First Amendment to Agreement
3. Original Agreement
CITY OF MERCED Page 2 of 2 Printed on 2/16/2023
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