For City Clerk Use Only
Contract No._________
AGREEMENT FOR PROFESSIONAL SERVICES
WITH THE CITY OF MURRIETA (“CITY”)
Project Name/Description (“Project”): Investment Advisory Services Consultant Name (“Consultant”): Chandler Asset Management Inc.
Consultant Business Type: Corporation
Consultant Address: 9255 Towne Centre Drive #600, San Diego, CA. 92121 Consultant Representative Name and Title (“Consultant Representative ”): Mia Corral Brown, Regional Director
Consultant Representative Work Phone and Email: 858-226-1504, [email protected] Termination Date: December 16, 2028
Total Not-To-Exceed Contract Amount (“Contract Sum”): $260,000 City Department Contact (“Department Contact”): Javier Carcamo, Director of Finance Department Contact Work Phone: 951-461-6090
Department Contact Email: [email protected]
Is Federal Funding Being Used to Fund Any Part of The Project (Yes/No): No
RECITALS
The City desires to contract with a Consultant to provide professional services as more further set forth herein.
The City circulated a Request for Quotes or Proposals for the above-described professional services.
Consultant submitted a proposal to City to provide the above -described professional services.
City Staff has reviewed all the proposals and after considering the demonstrated competence of Consultant, the professional qualifications of Consultant, and the fairness and reasonableness of Consultant’s proposed cost, staff has determined that an agreement to provide the required services should be awarded to Consultant.
AGREEMENT FOR PROFESSIONAL SERVICES
WITH THE CITY OF MURRIETA (“CITY”)
THIS AGREEMENT FOR SERVICES (“Agreement”) is made and entered into as of the effective on the date executed by the City by and between CITY OF MURRIETA, a California municipal corporation (“ City”) and (“Consultant ”). City and Consultant may be referred to individually as “Party” or collectively as “Parties.” In consideration of the mutual promises and covenants made by the Parties and contained herein and other consideration, the value and adequacy of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1. SERVICES OF CONSULTANT
1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services specified in the “ Scope of Services ” attached hereto as Exhibit “A” and incorporated herein by this reference, which may be referred to herein as the “services ” or “ work” hereunder. As a material inducement to City entering into this Agreement, Consultant represents and warrants: a) it has the qualifications, experience, and facilities necessary to properly perform the Services required under this Agreement b) all services set forth in the Scope of Services will be performed in a competent and satisfactory manner; c) all materials used for services will be both of good quality as well as fit for the purpose intended; and, d) Consultant shall follow the highest professional standards and practices in performing the services required hereunder.
1.2 Consultant’s Proposal. The Scope of Services shall include the scope of services or work included in Consultant’s proposal or bid, which shall be incorporated herein by this reference as though fully set forth herein. In the event of any inconsistency between the terms of such proposal or bid, and this Agreement, the terms of this Agreement shall govern. No other terms and conditions from Consultant’s proposal or bid, other than description of scope of services or work, shall apply to this Agreement, unless specifically agreed to by City in writing.
1.3 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules and regulations of City and any federal, State or local governmental agency having jurisdiction in effect at the time services are rendered. City, and its officers, employees and agents, shall not be liable at law or in equity for failure of Consultant to comply with this Section.
1.4 Licenses, Permits, Fees and Assessments. Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for Consultant’s performance of the services required by this Agreement, and shall indemnify, defend and hold harmless City against any such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City hereunder.
1.5 Familiarity with Work. By executing this Agreement, Consultant represents and warrants Consultant: a) has thoroughly investigated and considered services to be performed, b) has carefully considered how services should be performed, and c) fully understands the facilities, difficulties and restrictions attending performance of services under this Agreement.
1.6 Software and Computer Services. If the Scope of Services includes the provision and/or installation of any software, computer system, or other computer technology, Consultant represents and warrants that it is familiar with and/or has inspected City’s current infrastructure, equipment, computer system and software and that the software, computer system, or other computer technology provided and/or installed by Consultant under this Agreement is compatible, and shall be fully functional, with such infrastructure, equipment, computer system and software of City . Consultant acknowledges that City is relying on this representation by Consultant as a material consideration in entering into this Agreement.
1.7 Prevailing Wages. If services include any “public work” or “maintenance work,” as those terms are defined in California Labor Code section 1720 et seq. and California Code of Regulations, Title 8, s ection 16000 et seq. , and if the total compensation is $1,000 or more, Consultant shall pay prevailing wages for such work and comply with the requirements in California Labor Code section 1770 et seq. and 1810 et seq., and all other applicable laws.
1.8 Contract Modifications. Additional terms and conditions of this Agreement, if any, or any modifications or revisions to the standard terms and conditions herein are made a part hereof as set forth in the “Contract Modifications” attached hereto as Exhibit “B” and incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit B and any other provisions of this Agreement, the provisions of Exhibit B shall govern.
ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT
2.1 Contract Sum. Subject to any limitations set forth in this Agreement, City agrees to pay Consultant the rates specified in the “Schedule of Compensation” attached hereto as Exhibit “C” and incorporated herein by this reference . The total compensation for all work, including reimbursement for actual expenses, shall not exceed the Contract Sum set forth above . Compensation may include reimbursement, for actual and necessary expenditures , if both are specified in the Schedule of Compensation, as well as approved by City in advance.
2.2 Invoices. Unless some other method of payment is specified in Exhibit C, Schedule of Compensation, in any month in which Consultant wishes to receive payment, no later than the first business day of such month, Consultant shall submit to City, in a form approved by City’s Finance Director, an invoice for services rendered prior to the date of the invoice. By submitting an invoice for payment under this
Agreement, Consultant is certifying compliance with all provisions of this Agreement. Except as provided in Sections 7.3, 7.4 and 7.5, City shall pay Consultant for all expenses stated thereon which are approved by City pursuant to this Agreement generally within thirty (30) days, and City will use its best efforts to make payment no later than forty- five (45) days, from the submission of an invoice in an approved form. In the event any charges or expenses are disputed by City, the original invoice shall be returned by City to Consultant for correction and resubmission. Review and payment by City for any invoice provided by Consultant shall not constitute a waiver of any rights or remedies provided herein or any applicable law. Each invoice is to include (unless otherwise specified by City) : 1) line items for all personnel describing the work performed, the number of hours worked, and the hourly rate; 2) line items for all materials and equipment properly charged to the Services; 3) line items for all other approved reimbursable expenses claimed, with supporting documentation; and 4) line items for all approved subcontractor labor, supplies, equipment, materials, and travel properly charged to the Services.
ARTICLE 3. PERFORMANCE SCHEDULE
3.0 Time of Essence. Time is of the essence in the performance of this Agreement.
3.1 Term. The Agreement shall commence and become effective upon the date executed by the City and will continue until the Termination Date. This Agreement may be extended for up to two, additional one -year periods upon the mutual agreement in writing of both parties.
Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement shall continue in full force and effect until completion of any ongoing services, which shall be no later than the Termination Date set forth above.
Notwithstanding the foregoing, the Indemnification and Insurance provisions set forth in Article 5 shall survive the termination of this Agreement.
3.2 Schedule of Performance. Consultant shall commence the services pursuant to this Agreement upon receipt of a written notice to proceed from City and shall perform all services within the time period(s) established in Exhibit A.
3.3 Force Majeure. The time period(s) specified in Exhibit A for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant , including, but not restricted to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including City, if Consultant shall within ten (10) days of the commencement of such delay notify City in writing of the causes of the delay.
City shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the enforced delay when and if in the judgment of City such delay is justified. City’s determination shall be final and conclusive upon the Parties to this Agreement. In no event shall Consultant be
entitled to recover damages against City for any delay in the performance of this Agreement, however caused, Consultant’s sole remedy being extension of this Agreement pursuant to this Section.
ARTICLE 4. COORDINATION OF WORK
4.1 Representative of Consultant. The Consultant Representative is authorized to act on Consultant’s behalf with respect to the work or services specified herein and to make all decisions in connection therewith. It is expressly understood that the experience, knowledge, capability and reputation of the representative was a substantial inducement for City to enter into this Agreement. Therefore, the representative shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder. For purposes of this Agreement, the representative may not be replaced nor may their responsibilities be substantially reduced by Consultant without the express written approval of City.
4.2 Department Contact for City . The Department Contact (or other person designated by the City Manager) shall be the primary person on behalf of City responsible for the administration of the Agreement. It shall be Consultant ’s responsibility to assure that the Department Contact is kept informed of both the progress of the performance of the services as well as any decisions which must be made by City.
4.3 Approvals from City. City approvals or actions, pursuant to the authority of this Agreement, are to be made (unless otherwise specified) either by the Department Contact, City Manager or by their delegate as provided for in writing.
4.4 Independent Co ntractor. Neither City , nor any of its officers, employees or agents, shall have any control over the manner or means by which Consultant , or its officers, employees, agents or subcontractors, perform the services required herein, except as otherwise set forth herein. Consultant shall perform all services required herein as an independent contractor of City and shall remain under only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it, or any of its officers, employees, agents or subcontractors, are officers, employees or agents of City. City shall not in any way or for any purpose become or be deemed to be a partner of Consultant in its business or otherwise or a joint venturer or a member of any joint enterprise with Consultant.
Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. Consultant represents and warrants that the personnel used to provide services to City pursuant to this Agreement shall at all times be under Consultant’s exclusive control and direction.
No City employee benefits shall be available to Consultant, its officers, employees, agents or subcontractors, in connection with the performance of this Agreement.
City shall not be liable for compensation or indemnification to Consultant , its officers, employees, agents or subcontractors, for injury or sickness arising out of performing services hereunder. In the event that Consultant or any officer, employee, agent, or subcontractor of Consultant providing services under this
Agreement claims or is determined by a federal or state agency, a court of competent jurisdiction, or the California Public Employees’ Retirement System, to be classified as other than an independent contractor for City, then Consultant shall indemnify, defend, and hold harmless City for the payment of any and all assessed fines, penalties, judgments, employee and/or employer contributions, and any other damages and costs assessed to City as a consequence of, or in any way attributable to, the assertion that Consultant , or any officer, employee, agent, or subcontractor Consultant used to provide services under this Agreement, is/are employees of City.
4.5 Subcontracting or Assignment. The experience, knowledge, capability and reputation of Consultant, its principals and employees were a substantial inducement for City to enter into this Agreement. Therefore, without express written approval of City, Consultant shall not contract with any other City to perform in whole or in part services required hereunder without express written approval of City, and neither this Agreement nor any interest herein may be transferred or assigned. No approved transfer shall release Consultant, or any surety or insured of Consultant, of any liability hereunder without express written consent of City.
ARTICLE 5. INSURANCE AND INDEMNIFICATION
5.1 Insurance Coverages. Prior to commencement of any services under this Agreement, and without limiting Consultant’s indemnification obligation to City, Consultant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City, for the duration of the Agreement, primary policies of insurance of the type and amounts set forth in the “Insurance Requirements” attached hereto as Exhibit “D” and incorporated herein by this reference.
5.2 Indemnification.
(a) General Obligations. Except as set forth for Design Professionals below, Consultant agrees, to the full extent permitted by law, to indemnify, defend and hold harmless City and its elected and appointed officers, employees and agents (each an “Indemnitee” and collectively, “Indemnitees”) against, and will hold and save them and each of them harmless from, whether actual or threatened, any and all actions, either judicial, administrative, arbitration or regulatory claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities (herein “Claims or Liabilities”) that may be asserted or claimed by any person, firm or City arising out of or in connection with the negligent performance of the work, operations or activities provided herein of Consultant, its officers, employees, agents, subcontractors, or invitees, or any individual or entity for which Consultant is legally liable (each an “ Indemnitor” and collectively, “Indemnitors”), or arising from Indemnitors’ reckless or willful misconduct, or arising from Indemnitors’ negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, and in connection therewith:
1) Consultant will defend any action or actions filed or threatened in connection with any such Claims or Liabilities, or at option of Indemnitee(s) will reimburse and pay for all costs and expenses, including legal costs and attorneys’ fees,
incurred by Indemnitee(s) in connection therewith; and, 2) Consultant will promptly pay any judgment rendered against Indemnitee(s) for any such Claims or Liabilities, and will save and hold Indemnitee(s) harmless therefrom. (b) Further Provisions. The indemnity obligation herein shall be binding on successors, assigns and heirs of Consultant and shall survive termination of this Agreement. Consultant shall incorporate similar indemnity agreements as provided herein with its subcontractors, and if Consultant fails to do so Consultant shall be fully responsible to indemnify City hereunder therefor. Failure of City and/or City Parties (collectively “City” for solely this Section 5. 2(b)) to monitor compliance with any of the indemnification provisions herein shall not be a waiver hereof. The indemnification provisions herein do not apply to claims or liabilities occurring as a result of City’s sole negligence or willful misconduct, but, to the fullest extent permitted by law, shall apply to claims and liabilities resulting in part from City’s negligence, except that design professionals’ indemnity hereunder shall be limited to claims and liabilities arising out of the negligence, recklessness or willful misconduct of the design professional. The indemnification provided herein includes Claims or Liabilities arising from any negligent or wrongful act, error or omission, or reckless or willful misconduct of Indemnitors in the performance of professional services hereunder. Payment of invoices by City is not a condition precedent to enforcement of the indemnity obligation herein. In the event of any dispute between Consultant and City, as to whether liability arises from the sole negligence or willful misconduct of City, Consultant will be obligated to pay for City’s defense until such time as a final judgment has been entered adjudicating City as solely negligent or responsible for willful misconduct. Consultant will not be entitled in the absence of such a determination to any reimbursement of defense costs including but not limited to attorney’s fees, expert fees and costs of litigation. (c) Pursuant to the full language of California Civil Code §2782, and only if Consultant qualifies as a D esign Professional , Consultant agrees to indemnify, including the cost to defend, City and its officers, officials, employees, and volunteers from and against any and all claims, demands, costs, or liability that arise out of, or pertain to, or relate to the negligence, recklessness, or willful misconduct of Consultant and its employees or agents in the performance of services under this contract, but this indemnity does not apply to liability for damages arising from the sole negligence, active negligence, or willful acts of the City; and does not apply to any passive negligence of the City unless caused at least in part by the Consultant. The City agrees that in no event shall the cost to defend charged to the Consultant exceed Consultant’s proportionate percentage of fault.
This duty to indemnify shall not be waived or modified by contractual agreement or acts of the parties.
5.3 Professional Liability. When the law establishes a professional standard of care for Consultant’s services, to the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless Indemnitees against, and will hold and save them and each of them harmless from , whether actual or threatened, any and all Claims and Liabilities, consistent with all obligations provided for in this Section
5.3, to the extent same are caused in whole or in part by any negligent or wrongful
act, error or omission, or reckless or willful misconduct of Indemnitors in the performance of professional services under this Agreement.
ARTICLE 6. RECORDS, REPORTS AND RELEASE OF INFORMATION
6.1 Records. Consultant shall keep, and require subcontractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the disbursements charged to City and services performed hereunder (“books and records ”) as shall be necessary to perform the services required by this Agreement and enable City to evaluate the performance of such services. Any and all such books and records shall be maintained in accordance with generally accepted accounting principles, shall be complete and detailed, and shall be readily a ccessible. City shall have full and free access to such books and records at all times during normal business hours of City, including the right to inspect, copy, audit and make records and transcripts. Such books and records shall be maintained for a period of three (3) years following completion of the services hereunder. City shall have access to such books and records in the event any audit is required. Consultant shall fully cooperate with City in providing access to any and all Consultant records and documents if a public records request is made and disclosure is required by law including but not limited to the California Public Records Act.
6.2 Ownership of Documents. All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes, computer files, reports, records, documents and other materials (“documents and materials ”) prepared by Consultant, its officers, employees, agents and subcontractors in the performance of this Agreement shall be the property of City and shall be delivered to City upon request of City and/or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership, use, reuse, or assignment of the documents and materials hereunder. Consultant may retain copies of such documents and materials for its own use. Consultant shall have the right to use the concepts embodied therein. All subcontractors shall provide for assignment to City of any documents and materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom. Moreover, with respect to any Consultant documents and materials that may qualify as “works made for hire” as defined in 17 U.S.C. § 101, such documents and materials are hereby deemed “works made for hire” for City.
6.3 Confidentiality and Release of Information. All information gained or work product produced by Consultant in its performance of this Agreement shall be considered confidential, unless such information is in the public domain or already known to Consultant. Consultant shall not release or disclose any such information or work product to persons or entities other than City without prior written authorization from City . Consultant, its officers, employees, agents or subcontractors, shall not, without prior written authorization from City or unless requested by the City Attorney, voluntarily provide documents, declarations, letters of support, testimony at depositions, response to interrogatories or other
information concerning the work performed under this Agreement. Response to a subpoena or court order shall not be considered “voluntary” provided Consultant immediately gives City notice of such court order or subpoena. If Consultant, or any officer, employee, agent or subcontractor of Consultant, provides any information or work product in violation of this Agreement, then City shall have the right to reimbursement and indemnity from Consultant for any damages, costs and fees, including attorney’s fees, caused by or incurred as a result of Consultant’s conduct. As concerning, r egarding or related to, in any way, this Agreement and the work performed thereunder: a) Consultant shall immediately notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party; b) City retains the right, but has no obligation, to represent Consultant or be present at any deposition, hearing or similar proceeding; and, c) Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant , however, this right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response.
ARTICLE 7. ENFORCEMENT OF AGREEMENT AND TERMINATION
7.1 California Law. This Agreement shall be interpreted, construed and governed both as to validity and to performance of the Parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant agrees to submit to the personal jurisdiction of such court in the event of such action. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Central District of California, in the County of Riverside, State of California.
7.2 Suspension, or Termination, Prior to Expiration of Term. This Section shall govern any termination of this Agreement except as specifically provided in Section
7.4 for termination for cause. City reserves the right to terminate or suspend this Agreement, or any portion hereof, at any time, for any reason, with or without cause, upon ten (10) days’ notice to Consultant, except that where termination or suspension is due to the fault of Consultant, the period of notice may be such shorter time as determined by City . Upon receipt of any notice of termination or suspension, Consultant shall immediately cease all services hereunder , unless the notice provides otherwise, or except such as specifically approved by City . Upon submittal of an invoice consistent with Section 2. 2, Consultant shall be entitled to compensation for all services rendered prior to the effective date of the notice of termination or suspension and for any services authorized by City thereafter in accordance with the Schedule of Compensation, or such a s may be approved by City, except as provided in Section 7.5. In event of termination, or suspension,
without cause pursuant to this Section, there is no need to provide opportunity to cure pursuant to Section 7.3.
7.3 Default of Consultant and Opportunity to Cure. In the event that Consultant is in default under the terms of this Agreement, City shall not have any obligation or duty to continue compensating Consultant for any work performed after the date of default. Instead, City may give notice to Consultant of the default and the reasons for the default. The notice shall include the timeframe in which Consultant may cure the default. This timeframe is presumptively ten (10) days, but may be extended, or reduced, if circumstances warrant, as determined by City. During the period of time that Consultant is in default, City shall hold all invoices and shall, when the default is cured, proceed with payment on the invoices , without liability for interest. In the alternative, City may, in its sole discretion, elect to pay some or all of the outstanding invoices during the period of default. If Consultant does not cure the default by conclusion of noticed timeframe , City may immediately both terminate this Agreement with notice to Consultant as well as pursue the remedy in Section 7.4, without prejudice to any other remedy to which City may be entitled at law, in equity or under this Agreement . Any failure on the part of City to give notice of Consultant ’s default shall not be deemed to result in a waiver of City ’s legal rights or any rights arising out of any provision of this Agreement.
7.4 Termination for Default of Consultant. If termination is due to the failure of Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 7.3, take over the work and prosecute the same to completion by contract or otherwise, and Consultant shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that City shall use reasonable efforts to mitigate such dama ges), and City may withhold any payments to Consultant for the purpose of set-off or partial payment of the amounts owed City therefor.
7.5 Retention of Funds. Consultant hereby authorizes City to deduct from any amount payable to Consultant (whether or not arising out of this Agreement) (i) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or damages suffered by City, and (ii) all amounts for which City may be liable to third parties, by reason of Consultant’s acts or omissions in performing or failing to perform Consultant’s obligation under this Agreement. In the event that any claim is made by a third party, the amount or validity of which is disputed by Consultant, or any indebtedness shall exist which shall appear to be the basis for a claim of lien, City may withhold from any payment due, without liability for interest because of such withholding, an amount sufficient to cover such claim. The failure of City to exercise such right to deduct or to withhold shall not, however, affect the obligations of Consultant to insure, indemnify, and protect City as elsewhere provided herein.
7.6 Waiver. Waiver by any Party to this Agreement of any term, condition, or covenant of this Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by any Party of any breach of the provisions of this Agreement shall not constitute a waiver of any other provision or a waiver of any subsequent breach or violation of any provision of this Agreement. Acceptance by City of any work or services by Consultant shall not constitute a waiver of any of the provisions of this Agreement. No delay or omission in the exercise of any right or remedy by a non-defaulting Party on any default shall impair such right or remedy or be construed as a waiver. Any waiver by either Party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform Consultant of non- compliance with any requirement of this Agreement imposes no additional obligations on City nor does it waive any rights hereunder. Payment to Consultant for work performed pursuant to this Agreement shall not be deemed to waive any defects in work performed by Consultant.
7.7 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
7.8 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. Notwithstanding any contrary provision herein, Consultant shall file a statutory claim pursuant to Government Code s ections 905 et seq. and 910 et seq., in order to pursue a legal action under this Agreement.
7.9 Attorneys’ Fees. If either Party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys ’ fees. Attorneys’ fees shall include attorneys ’ fees on any appeal, and a Party entitled to attorneys’ fees shall be entitled to all other reasonable costs for investigating such action, consultants’ fees, taking depositions and discovery and all other necessary costs the court allows which are incurred in such
litigation. Such fees and costs shall be enforceable whether or not such action is prosecuted to judgment.
ARTICLE 8. INDIVIDUAL LIABILITY, CONFLICTS AND NON-DISCRIMINATION
8.1 Non-liability of City Officers and Employees. No officer or employee of City shall be personally liable to Consultant, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement.
8.2 Conflict of Interest. Consultant covenants that neither it, nor any officer or principal of its firm, has or shall acquire any interest, directly or indirectly, which would conflict in any manner with the interests of City or which would in any way hinder Consultant’s performance of services under this Agreement. Consultant further covenants that in the performance of this Agreement, no person having any such interest shall be employed by it as an officer, employee, agent or subcontractor without the express written consent of City. Consultant agrees to at all times avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City in the performance of this Agreement. City, in its sole discretion, shall determine the existence of a conflict of interest and may terminate this Agreement in the event such a conflict of interest exists upon sending Consultant written notice describing the conflict. No officer or employee of City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to this Agreement which affects their financial interest or the financial interest of any corporation, partnership or association in which they are, directly or indirectly, interested, in violation of any State statute or regulation. Consultant warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement.
8.3 Covenant Against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class in the performance of this Agreement. Consultant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class.
ARTICLE 9. MISCELLANEOUS PROVISIONS
9.1 Notices. Any notice or other communication either Party desires or is required to give to the other Party or any other person in regards to this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, which provides a receipt showing date and time of delivery, or (iii) mailing in the Uni ted States Mail, certified mail, postage prepaid, return receipt requested, in the case of
City addressed to City Clerk at City of Murrieta, 1 Town Square, Murrieta California 92562, and in the case of Consultant, to the person(s) at the address designated on the cover page of this Agreement. Either Party may change its address by notifying the other Party of the change of address in writing. Notice shall be deemed communicated at the time personally delivered or in seventy- two (72) hours from the time of mailing if mailed as provided in this Section.
9.2 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of this Agreement, headings used, or any other rule of construction which might otherwise apply.
9.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and such counterparts shall constitute one and the same instrument.
9.4 Integration; Amendment. This Agreement including the attachments hereto is the entire, complete and exclusive expression of the understanding of the P arties as to the Agreement . It is understood that there are no oral agreements between the Parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all prior and contemporaneous negotiations, arrangements, agreements and understandings, if any, between the Parties , concerning this Agreement, and none shall be used to interpret this Agreement. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by Consultant and by City.
9.5 Severability. Should a portion of this Agreement be declared invalid or unenforceable by a judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining portions of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the Parties unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.
9.6 No Undue Influence. Consultant declares and warrants that no undue influence or pressure was used against or in concert with any officer or employee of City in connection with the award, terms or implementation of this Agreement, including any method of coercion, confidential financial arrangement, or financial inducement. No officer or employee of City has or will receive compensation, directly or indirectly, from Consultant, or from any officer, employee or agent of Consultant, in connection with the award of this Agreement or any work to be conducted as a result of this Agreement. Violation of this Section shall be a material breach of this Agreement entitling City to remedies in Section 7.4 and any and all remedies at law or equity.
9.7 Corporate Authority. The persons executing this Agreement on behalf of the Parties hereto warrant that (i) such Party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said Party ,
(iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement, and (iv) entering into this Agreement does not violate any provision of any other agreement to which said Party is bound. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the Parties.
9.8 Federal Funding. If federal funding is being utilized to fund any part of the Project, as indicated on the Cover Page of this Agreement, the terms of Exhibit “E” are hereby incorporated herein by this reference. If no federal funding is being utilized, Exhibit F may be omitted.
[SIGNATURES ON FOLLOWING PAGE]
01375.0001 2066581.1 -15-
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.
CITY OF MURRIETA ATTEST:
By:_____________________________ By:_____________________________ , Mayor Cristal McDonald, City Clerk
Date: ___________________________ Date: ___________________________
APPROVED AS TO FORM
ALESHIRE & WYNDER, LLP
By: ____________________________
Tiffany Israel, City Attorney
CONSULTANT:
By:_____________________________ By:_____________________________ Name: Name:
Title: Title:
Date: ___________________________ Date: ___________________________
Two corporate officer signatures required when Contractor is a corporation, with one signature required from each of the following groups: 1) Chair person of the Board, President or any Vice President; and 2) Secretary, any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. (Cal. Corp. Code § 313.) Appropriate attestations shall be included as may be required by the bylaws, articles of incorporation or other rules or regulations applicable to Contractor’s business City.
01375.0001 2066581.1
EXHIBIT A
SCOPE OF SERVICES
I. Consultant will perform the following Services:
As outlined in Exhibit A -1 in accordance with the City of Murrieta Investment Policy and California Government Code and pursuant to billing rates as outlined in Exhibit A-2.
II. All work product is subject to review and acceptance by the City, and must be revised by the Consultant without additional charge to the City until found satisfactory and accepted by City.
4.1 SCOPE OF WORK
The City of Murrieta is seeking proposals from a qualified firm to provide comprehensive investment advisory services scope of services on a routine and as-needed basis. The scope of services may include, but are not limited to:
• Assist the City with cash flow / maturity analysis
• Provide management and advisory services for the City’s investment portfolio
• Develop and implement sound investment strategies , maximizing the portfolio’s performance in accordance with the investment policy and the respective California Government Code Sections
• Provide technical and fundamental market research, including yield curve analysis
• Provide credit analysis of investment instruments in the portfolio • Provide monthly / quarterly / annually reporting on all City funds, detailing securities holdings (including balances in local government investment pools), portfolio composition and sector analyses, portfolio return and weighted average maturity, and daily transaction activity • Attend quarterly / as needed meetings with government entity staff / officials
• Evaluate market risk and develop strategies to minimize portfolio impact • Provide assurance of portfolio compliance with applicable policies and demonstrate understanding of public funds investment statutes and permissible investments
• Review safekeeping and custodial procedures and agreements • Establish an appropriate performance benchmark as part of reporting requirements
• Periodically, but no less than annually, review the City’s investment policy and recommend appropriate amendments
• Ensure portfolio structure matches the City’s policy objectives • Assist with trade settlements
• Monitor the creditworthiness of financial institutions and investments in the portfolio
• Perform due diligence reviews of current and proposed broker / dealers • Provide authorized City Staff with online access to the City’s current investment account(s)
• Provide periodic training to staff on investment-related topics • Be available on a regular, sometimes same- day basis for consultations with City staff.
• Provide other investment advisory services as requested
Investment practices and procedures must comply with state law and the City of Murrieta's investment policy. The selected firm will be expected to perform to the Prudent Expert Standard.
Exhibit A-1
Exhibit A-2
01375.0001 2066581.1 145610
EXHIBIT B
CONTRACT MODIFICATIONS
(Superseding Contract Boilerplate)
As outlined in Exhibit B-1.
1 PROPOSED ADDITIONAL TERMS
SPECIFIC TO INVESTMENT MANAGEMENT RELATIONSHIP
1. 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 ________________ (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 Exhibit A.
3. Authority of Chandler. Chandler is hereby granted full discretion to invest and reinvest all assets under its management in any type of security it deems appropriate, subject to the instructions given or guidelines set by Representative.
4. N otices. All reports and other communications required hereunder to be in writing shall be delivered in person, or sent by first -class mail postage prep aid, 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.
Client Rep
resentative
_____________________
_____________________
Chandler Asset Management Attn:
Nicole Dragoo
9255 Towne Centre Blvd. Ste 600
San Diego, CA 92121
_____________________
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 ad
dress(s):______________________________________________________________
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 [email protected].
Javier Carcamo
1 Town Square
Murrieta, CA. 92562
[email protected]
[email protected]
Exhibit B-1
Javier Carcamo
B-2
2 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 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.
City of Murrieta Investment Policy Page 1
I - INTRODUCTION
The City Council of the City of Murrieta (City) has adopted this Investment Policy (Policy) in order to establish the investment scope, objectives, delegation of authority, standards of prudence, reporting require ments, internal controls, eligible investments and transactions, diversification requirements, risk tolerance, and safekeeping and custodial procedures for the investment of the funds of the City. All su ch funds will be invested in accordance with this Policy and with applicabl e sections of the California Government Code. This Policy was endorsed and adopted by t he City and is effective as of the 2 nd day of December 2025, and replaces any previous versions.
II - SCOPE
This Policy applies to all operating funds of the City. Non-operating funds may be subject to other prevailing documents, such as a governing bond indenture. This policy excludes Employee Retirement and Deferred Compensation Funds. Additional funds that may be created from time to time shall be added to t he City’s investment portfolio (portfolio) and managed in accordance with the provisions of this Policy.
All cash shall be pooled for investment purpos es. The investment income derived from the pooled investment account shall be alloca ted to the contributing funds based upon the proportion of the respective average balances relative to the total pooled balance in the portfolio. Investment income shall be dist ributed to the individual funds not less than annually.
III - OBJECTIVES
The City’s funds shall be invested in accordance with the City’s Municipal Code and all applicable State statutes and Federal r egulations, and in a manner designed to accomplish the following objectives, which are listed in priority order:
1. Preservation of capital and prot ection of investment principal.
2. Maintenance of sufficient liquidi ty to meet anticipated cash flows.
3. Attainment of a market value rate of return.
4. Diversification to avoid in curring unreasonable market risks.
IV - DELEGATION OF AUTHORITY
The management responsibility for the City’s investment program is delegated by the City Council to the Treasurer pursuant to Ca lifornia Government Code Section 53607 and Section 2.20.030 of the City’s Municipal Code. The City Manager serves as the Treasurer.
The Treasurer has delegated the authority to conduct investment transactions
CITY OF MURRIETA
INVESTMENT POLICY
City of Murrieta Investment Policy Page 2
and to manage the operation of the portfolio to the Finance Director. These officers shall meet regularly to discuss economic and market conditions, and to plan investment strategy to meet the City’s fiscal objecti ves. No person may engage in an investment transaction except as expressly provided under the terms of this Policy.
V - PRUDENCE
The standard of prudence to be used for m anaging the City’s investments shall be California Government Code Section 53600. 3, the prudent invest or standard, which states that “When investing, reinvesting, purchasing, acqui ring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then preva iling, including, but not limit ed to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters w ould use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.”
The City’s overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that no investment is totally without risk and that the investment ac tivities of the City are a matter of public record. Accordingly, the City recognizes that occasional measured losses may occur in a diversified portfolio and shall be considered wit hin the context of the overall portfolio’s return, provided that adequate diversification has been implemented and that the sale of a security is in the best long-term interest of the City.
If, due to market changes or fluctuations in the size of the City’s portfolio, a percentage of portfolio limitation is exceeded, the affected securities may be held to their maturity if the Treasurer believes it is prudent to do so.
The Treasurer and authorized in vestment personnel exercisi ng due diligence shall be relieved of personal responsibility for an indivi dual security’s credit risk or market price changes, provided that the deviations from expec tations are reported in a timely fashion to the City Council and appropriate action is taken to control adverse developments.
VI - ETHICS AND CONFLICTS OF INTEREST
Elected officials and employees involved in the City’s investment program shall refrain from personal business activity that could conflict with proper execution of the investment program or that could impair or create the appearance of an impairment of their ability to make impartial investment decisions. These individuals shall disclose to the City Manager any material interests they have in financial institutions that conduct business with the City and they shall subordinate their personal investment transactions to those of the City.
The Treasurer and the Finance Director shall file a Statement of Economic Interests each year pursuant to California Government Code Section 87203 and regulations of the Fair Political Practices Commission.
City of Murrieta Investment Policy Page 3
VII - AUTHORIZED SECURITIES AND TRANSACTIONS
All investments and deposits of the City shall be made in accordance with California Government Code Sections 16429.1, 53600-53609 and 53630-53686, except that, pursuant to California Government Code Se ction 5903(e), proceeds of bonds and any moneys set aside or pledged to secure paym ent of the bonds may be invested in securities or obligations described in the ordinance, resolution, indenture, agreement, or other instrument providing for the issuance of the bonds. Any revisions or extensions of the above referenced code sections will be assumed to be part of this Policy immediately upon being enacted. However, in the event that amendments to these sections conflict with this Policy and past City investment prac tices, the City may delay adherence to the new requirements when it is deemed in the bes t interest of the Cit y to do so. In such instances, after consultation with the City’ s attorney, the Treasurer will present a recommended course of action to the City Council for approval. Percentage holding limits and credit quality minimums listed in this sect ion apply at the time the security is purchased.
The City has further restricted the eligible types of securities and transactions as follows:
A. United States Treasury bills, bonds, and notes with a final maturity not exceeding five years from the date of trade settlement. There is no limitation as to the percentage of the portfolio that can be invested in this category.
B. Federal Agency Obligations for which the faith and credit of the United States are pledged for the payment of principal and interest, and which have a final maturity not exceeding five years from the date of trade settlement. There is no limitation as to the percentage of the portfolio that can be invested in this category.
C. Federal Instrumentality (government sponsored enterprise) debentures, discount notes, callable securities and step- up securities with a final maturity not exceeding five years from the date of trade settlement. No more than 30% of the portfolio may be invested in any single Federal In strumentality/GSE issuer. The maximum percentage of callable agency securities in the portfolio is 20%.
D. Mortgage-backed Securities, Collateralized Mortgage Ob ligations and Asset- backed Securities limited to mortgage-backed pass-through securities issued by a US government agency or consumer receivable pa ss-through certificates or bonds with a final maturity not exceeding fi ve years from the date of tr ade settlement. The securities are rated in a rating categor y of “AA” or its equivalent or higher by a NRSRO. The aggregate investment in mortgage-backed and asset-backed securities described in this section shall not exceed 20% of the portfolio with no more than 5% held in any one issuer that is not a US government agency.
E. Repurchase Agreements with a final termination date not exceeding one year collateralized with securities authorized un der California Government Code. For the purpose of this section, the term collatera l shall mean purchased securities under the terms of the City’s approved Master Repurchase Agreement. The purchased securities shall have a minimum market value including accrued interest of 102% of the dollar value City of Murrieta Investment Policy Page 4
of the funds borrowed. Coll ateral shall be hel d in the City’s cu stodian bank, as safekeeping agent, and the market value of the collateral securities shall be marked-to- the-market daily.
Repurchase Agreements shall be entered in to only with broker/dealers who are recognized as Primary Dealers by the Federal Reserve Bank of New York or with firms that have a primary dealer wit hin their holding company structure. The Treasurer shall maintain a copy of the City's approved Master Repurchase Agreement along with a list of the broker/dealers who have executed same.
The aggregate investment in Repurchase Ag reements shall not exceed 20% of the portfolio.
F. Prime Commercial Paper with a maturity not exc eeding 270 days from the date of trade settlement with the highest ranking or of the highest le tter and number rating assigned by a NRSRO. The entity that issues the commercial paper shall meet all of the conditions in either sub-paragraph 1) or sub-paragraph 2) below:
1) The entity shall (a) be organized and operat ing in the United St ates as a general corporation, (b) have total assets in excess of $500,000,000, and (c) have debt other than commercial paper, if an y, that is rated in a ra ting category of “A” or its equivalent or higher by a NRSRO.
2) The entity shall (a) be organized withi n the United States as a special purpose corporation, trust, or lim ited liability company, (b) have program-wide credit enhancements, including, but not limited to, over collateralization, letters of credit or surety bond and (c) have commercial paper that is rated in a rating category of “A-1” or its equivalent or higher by a NRSRO.
Not more than 5% of the portfolio may be invested in the commercial paper and medium- term notes of any issuer and the aggregate in vestment in commercial paper shall not exceed 25% of the portfolio. Under a provis ion sunsetting on January 1, 2026, no more than 40% of the portfolio may be invested in Commercial Paper if the Agency’s investment assets under management are greater than $100,000,000.
G. Eligible Bankers Acceptances issued by Federal Deposit Insurance Corporation (FDIC) insured commercial banks, rated at least “A-1” or the equivalent by a NRSRO with maturities not exceeding 180 days from the date of trade settlement. If issuers have senior debt outstanding, it shall be rated in a rating category of “A” or its equivalent or higher by a NRSRO. No more than 5% of th e portfolio shall be invested in bankers acceptances of any one commercial bank, and the aggregate investment in bankers acceptances shall not exceed 30% of the portfolio.
H. Medium-Term Notes issued by corporations organi zed and operating within the United States or by depository institutions licensed by the United States or any state and operating within the Unit ed States. Medium-Term Notes shall have a final maturity not exceeding five years from t he date of trade settlement and must be rated in a rating category of “A” or its equivalent or higher by a NRSRO at the time of purchase. Not more than 5% of the City’s total portfolio shall be invested in the Medium-Term Notes and City of Murrieta Investment Policy Page 5
commercial paper of any one issuer and the aggregate investment in Medium-Term Notes may not exceed 30% of the portfolio.
I. Supranational Securities that are United States dollar denominated senior unsecured unsubordinated obli gations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale withi n the United States.
Investments under this subdivision shall be ra ted in a rating categor y of “AA” or its equivalent or higher by a NRSRO and shall not exceed 30% of the portfolio with no more than 10% invested in any one issuer.
J. State of California’s Local Agency Investment Fund (LAIF), The City may invest up to the maximum amount permitted by LAIF, pursuant to California Government Code Section 16429.1. LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the Treasurer to adequately judge the risk inherent in LAIF’s portfolio.
K. Municipal Bonds , State of California registered warrants or treasury notes or bonds, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state.
Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of t he revenues from a rev enue producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California.
Bonds, notes, warrants, or other evidences of indebtedness of a local agency within California including bonds payable solely out of the revenues fr om a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency.
In addition, these securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO with maturities not exc eeding five years from the date of trade settlement. No more than 5% of the portfolio shall be invested in any one municipal issuer and the aggregate investment in municipal bonds shall not exceed 30% of the portfolio.
L. Money Market Funds registered under the Investment Company Act of 1940 that are (1) “no-load” (meaning no commission or fee shall be charged on purchases or sales of shares); (2) have a constant net asset value per share of $1.00; (3) invest only in the securities and obligations aut horized in the applicable Califo rnia statute; and (4) have a rating in a rating category of “AAA” or its equivalent by at least two NRSROs. Investment in any individual fund may not exceed 10% of the fund, and the aggregate investment in any combination of Money Market Funds and Mutual Funds shall not exceed 20% of the portfolio.
City of Murrieta Investment Policy Page 6
M. Mutual Funds registered under the Investment Company Act of 1940 that are (1) “no-load” (meaning no commission or fee s hall be charged on purchases or sales of shares); (2) invest only in the securities and obligations authorized in the applicable California statute; and (3) have a rating in a ra ting category of “AAA” or its equivalent by at least two NRSROs. The investment in an y individual Mutual Fund shall not exceed 10% of the portfolio. In addition, investment in any individual fund may not exceed 10% of the fund, and the aggregate investment in any combination of Mutual Funds and money market funds shall not exceed 20% of the portfolio.
N. Negotiable Certificates of Deposit (NCDs) , issued by a nationally or state- chartered bank, a savings associ ation or a federal associati on, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
The amount of the NCD insured up to the FDIC limit does not require any credit ratings; Any amount above the FDIC insured limit must be issued by institutions which have short- term debt obligations rated “A-1” or its equiva lent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or higher by at least one NRSRO; No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS); No more than 5% of the portfolio may be invested in any single issuer; The maximum maturity does not exceed five (5) years.
O. Federally Insured Time Deposits (Non- Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that: (1) The amount per institution is limited to the maximum covered under federal insurance; (2) No more than 20% of the portf olio will be invested in a combi nation of federally insured and collateralized time deposits; and (3) The maximum maturity does not exceed five (5) years.
P. Collateralized Time Deposits (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with se curities in accordance with California law, provided that: No more than 20% of the por tfolio will be invested in a combination of federally insured and collateralized time deposits; The maximum maturity does not exceed five (5) years.
Q. Placement Service Deposits provided that: No more than 30% of the total portfolio may be invested in a combination of qualify ing placement service deposits, including CDARS; Under a provision sunsetting on J anuary 1, 2031, no more than 50% of the portfolio may be invested in deposits through a pl acement service, including Certificates of Deposit, if the Agency is a city, district or local agency that does not pool money with other local agencies. The maximum maturity does not exceed five (5) years.
R. Collateralized Bank Deposits. The City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.
There are no limits on the dol lar amount or percentage that the City may invest in collateralized bank deposits.
S. Shares of Beneficial Inte rest Issued by A Joint Powers Authority (JPA) , provided that: The JPA is organized pursuant to California Government Code Section 6509.7 and invests in the securi ties and obligations authorized in subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool City of Murrieta Investment Policy Page 7
of securities owned by the JPA. The JPA has retained an investment advisor who is registered with the SEC (or exempt from registration), has assets under management in excess of $500 million, and has at least five years’ experience investing in instruments authorized by Section 53601, subdivisions (a) to (q).
Summary of Allowable Investments
State Code CGC 53601 City of Murrieta Policy
Max % Required Max % Required
Investment Type Maturity Limit Rating Maturity Limit Rating
US Treasury
5 years
None
None
5 years
None
None
US Agency 5 years None None 5 years None None
US Instrumentality 5 years N one None 5 years None None Mortgage and Asset Backed 5 years 20% “AA” 5 years 20% “AA” Securities2
Repurchase Agreement4 1 year None None 1 year 20% None
Commercial Paper1 270 days 25% 7 A-1/P-1 270 days 25% 7 A-1/P-1 Bankers Acceptances1 180 days 40% A-1/P-1 180 days 30% A-1/P-1 Corporate Notes1 5 years 30% “A” 5 years 30% “A”
Supranational1 5 years 30% “AA” 5 years 30% “AA”
LAIF N/A LAIF None N/A LAIF None
Max Max
Cal. Local Agency1 5 years None None 5 years 30% “A”
State Bonds1 5 years None None 5 years 30% ”A”
Money Market Fund3 N/A 20% Multiple N/A 20% “AAA”
Mutual Fund3 N/A 20% Multiple N/A 20% Multiple
Negotiable CDs5 5 years 30% None 5 years 30% A-1/P-1
FDIC Insured TD6 5 years None None 5 years 20% None
Time Deposits (TD)6 5 years None None 5 years 20% “A”
Placement Deposit Services5 5 years 50% None 5 years 50% None Joint Powers Authority (JPA) N/A None None
N/A None None
1) All non-federal governmental securities are limited to no more than 5% per issuer, with the exception of money market funds, mutual funds, supranationals, LAIF, or unless otherwise specified in this investment policy. 2) Total of all asset backed and mortgage backed securities may not exceed 20% of the portfolio. 3) Money Market Funds must be rated “AAA” by two NRSROs, no fund can have more than 10% of the portfolio and the total of all money market and mutual funds cannot exceed 20% of the portfolio. 4) Securities held as collateral must have a value that is more than 102% of the funds invested in the repo. 5) No more than 30% of the total portfolio may be invested in NCDs (combined with Placement Deposit Services) 6) No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits 7) Under a provision sunsetting on January 1, 2026, no more than 40% of the portfolio may be invested in Commercial Paper if the Agency’s investment assets under management are greater than $100,000,000.
City of Murrieta Investment Policy Page 8
VIII – MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a por tfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
The diversification requirements include d in the “Authorized Securities and Transactions” section of this policy ar e designed to mitigate credit risk in the portfolio.
The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
If a security owned by the City is downgr aded to a level below the requirements of this policy, making the security ineligib le for additional purchases, the following steps will be taken:
o Any actions taken related to the do wngrade by the investment manager will be communicated to the Treasurer in a timely manner.
o If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.
The foregoing list of authorized securities a nd transactions shall be strictly interpreted.
Any deviation from the list must be preapproved by the City Council.
IX – PROHIBITED INVESTMENT VEHICLES AND TRANSACTIONS
State law notwithst anding, any investments not s pecifically described herein are prohibited, including, but not limited to futures and options. In accordance with California Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage-derived interest-only strips is prohibited. Investment in any security that could resu lt in a zero interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2026, securities backed by the U.S. Government that could result in a zero- or negative-interest accrual if held to maturity are permitted.
Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
Purchasing or selling securities on margin is prohibited. The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
The purchase of foreign currency denom inated securities is prohibited. Securities with forward settlement date exceeding 45 days from the time of the investment is prohibited.
City of Murrieta Investment Policy Page 9
X - INVESTMENT DIVERSIFICATION
The City shall diversify the portfolio to avoid incurring unreasonable risks inherent in over investing in specific instruments, individual financial institutions or maturities. The asset allocation in the portfolio should, however, be flexible depending upon the outlook for the economy, the securities market, and the City’s anticipated cash flow needs.
XI - PORTFOLIO MATURITIES AND LIQUIDITY
To the extent possible, investments s hall be matched with anticipated cash flow requirements and known future liabilities. The Cit y will not invest in securities maturing more than five years from t he date of trade settlement, unl ess the City Council has by resolution granted authority to make such an investment at least three months prior to the date of the investment.
XII - SELECTION OF BROKERS/DEALERS
The Treasurer shall maintain a list of broker/dealers approv ed for investment purposes, and it shall be the policy of the City to purc hase securities only from those brokers and the firms they represent. Each approved br oker/dealer must possess an authorizing certificate from the California Commissioner of Corpor ations as required by Section 25210 of the California Corporations Code. The firms they represent must:
1. be recognized as Primary Dealers by the Federal Rese rve Bank of New York or have a primary dealer within their holding company structure, or
2. report voluntarily to the Federal Reserve Bank of New York, or
3. qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (Uniform Net Capital Rule).
The City may engage the services of invest ment advisory firms to assist in the management of the portfolio and investment advisors may utilize their own list of approved Broker/Dealers. Such Broker/Dealers will comply with the selection criteria above and the list of approved firms shall be provided to the City on an annual basis or upon request.
In the event that an exter nal investment advisor is not used in the process of recommending a particular transaction in the City’s portfolio each authorized broker/dealer shall be required to s ubmit and annually update a City approved Broker/Dealer Information Reque st form that includes the firm's most recent financial statements.
The City may purchase Commercial Paper from direct issuers even though they are not on the approved broker/dealer list as long as t hey meet the criteria outlined in Item F of the Authorized Securities and Transactions section of this Policy.
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XIII – COMPETITIVE TRANSACTIONS
All investment transactions shall be conducted competitively with authorized broker/dealers. At least thre e broker/dealers shall be contacted for each transaction and their bid or offering prices shall be recor ded. When purchasing original issue securities, no competitive offerings will be required as a ll dealers in the selling group offer at the same new issue price.
If the City is offered a security for which t here is no other readily available competitive offering, then the Treasurer will document quot ations for comparable or alternative securities.
XIV - SAFEKEEPING AND CUSTODY
To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest paym ents and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third party custodian, acting as agent for the Cit y under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.
The only exceptions to the foregoing sha ll be depository accounts and securities purchases made with: (i) local government investment pools; ( ii) time certificates of deposit, and (iii) mutual funds and money market mutual funds, since these securities are not deliverable.
The purchase and sale of securities and repurchase agreement transactions shall be settled on a delivery-versus-payment basis.
XV - PORTFOLIO PERFORMANCE
The portfolio shall be designed to attain a market rate of return throughout budgetary and economic cycles, taking into account prevaili ng market conditions, risk constraints for eligible securities, and cash flow requirements. The performance of the portfolio shall be compared to the performance of the ICE BofAML 1-3 year Treasury Index. The duration of the portfolio will be approximately equal (+/- 20%) of the benchmark.
XVI - REPORTING
Monthly transaction reports wil l be submitted by the Treasur er to the City Council in accordance with California Government Code Section 53607.
Quarterly, the Treasurer sha ll submit to the City Council a report of the investment earnings and performance results of the po rtfolio within 45 days after the end of the quarter. The report shall include the following information:
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1. Investment type, issuer, date of maturi ty, par value and dollar amount invested in all securities, and investments and monies held by the City;
2. A description of the f unds, investments or progr ams under the management of contracted parties, including securities lending programs;
3. A market value as of the dat e of the report (or the most recent valuation as to assets not valued monthly) and the source of the valuation;
4. Overall portfolio yield based on historical cost;
5. Weighted average maturity;
6. A statement of the portfolio’s compliance with this Investment Policy or an explanation for non-compliance; and
7. A statement of the ability or inability to meet expenditure requirements for six months, as well as an explanation of why money will not be available if that is the case.
XVII - POLICY REVIEW
This Investment Policy shall be adopted by resolution of the City Council annually. It shall be reviewed at least annually to ensure its consistency with the ov erall objectives of preservation of principal, liquidity, yield and diversification and its relevance to current law and economic trends. Any amendments to this In vestment Policy shall be forwarded to the City Council for approval.
GLOSSARY OF INVESTMENT TERMS
AGENCIES. Shorthand market terminology for any obligation issued by a government- sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the fu ll faith and credit of the US government. Examples are:
FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.
FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds.
FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “Freddie Mac”, issues discount notes, bonds and mortgage pass-through securities.
FNMA. Like FHLB and Freddie Mac, the Feder al National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “Fannie Mae,” issues discount notes, bonds and mortgage pass- through securities.
GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.
PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.
TVA. The Tennessee Valley Authority prov ides flood control and power and promotes development in portions of the Tennessee, Oh io, and Mississippi River valleys. TVA currently issues discount notes and bonds.
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ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.
BANKER’S ACCEPTANCE. A money market instrument creat ed to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.
BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.
BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from his own position.
CALLABLE. A callable security gives the issuer the opt ion to call it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its cu rrent securities and reissue them at a lower rate of interest.
CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.
COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.
COLLATERALIZED BANK DEPOSIT. A bank deposit that is coll ateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury secu rities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.
COLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER. The short-term unsecured debt of corporations.
COUPON. The rate of return at which interest is paid on a bond.
CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.
DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position.
DELIVERY VS . PAYMENT (DVP). A securities industry proc edure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.
DERIVATIVE. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of whic h is totally or partially derived from the value of another instrument, interest rate, or index.
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DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securi ties. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.
DIVERSIFICATION. Dividing investment funds among a va riety of investments to avoid excessive exposure to any one source of risk.
DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency in suring deposits in U.S. banks and thrifts in the event of bank failu res. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.
FEDERALLY INSURED TIME DEPOSIT. A time deposit is an inte rest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD).
These deposits are limited to funds insu red in accordance with FDIC insurance deposit limits.
FIDUCIARY. A person or organization that acts on behalf of another person(s) or organization that puts their clients’ interest ahead of their own, as they are bound both legally and ethically to act in the best interests of their clients.
LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.
LIQUIDITY. The speed and ease with which an asset can be converted to cash.
LOCAL AGENCY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.
LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.
MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole."
MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.
MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.
MARKET VALUE. The price at which a security can be traded.
MATURITY. The final date upon which the principal of a security becomes due and payable.
The investment’s term or remaining maturity is measured from the settlement date to final maturity.
MEDIUM TERM NOTES. Unsecured, investment-grade seni or debt securities of major corporations which are sold in relative ly small amounts on eith er a continuous or an intermittent basis. MTNs are highly fl exible debt instruments that can be structured to respond to market opportunities or to investor preferences.
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MODIFIED DURATION. The percent change in price for a 100-basis point change in yields.
Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.
MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.
MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short-term securities. Examples of investments in money market funds ar e certificates of deposit and U.S. Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.
MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specif ied pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.
MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.
MUTUAL FUND. An entity which pools the funds of in vestors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of dom estic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional in vestors, the costs associated with investing in mutual funds are higher than the investor c an obtain through an individually managed portfolio.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO).
A credit rating agency that the Securities and Exchange Commission in the United States uses for regulatory purposes. Cr edit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.
NEGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. N egotiable CDs are traded in a secondary market.
OFFER (ASK). An indicated price at which market participants are willing to sell a security.
Also referred to as the “ask price”.
PLACEMENT SERVICE DEPOSITS. A private service that allows local agencies to invest in FDIC-insured deposits with one or more banks, savings and loans, and credit unions located in the United States. In traFi (formerly known as CDARS) is an example of an entity that provides this service.
PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operat ions to carry out U. S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market.
PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
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REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.
SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.
SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes fu ll public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.
SECURITIES AND EXCHANGE COMMISSION SEC) RULE 15C3-1. An SEC rule setting capital requirements for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cove r the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.
STRUCTURED NOTE. Notes issued by Government Sponsored Enterprises (FHLB, FNMA, etc.) and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure.
Their market performance is impacted by t he fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.
SUPRANATIONAL. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.
TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginn ing value of the portfolio with the ending value; it includes interest earnings, rea lized and unrealized gains, and losses in the portfolio.
U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of t he United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both di scounted securities and fixed coupon notes and bonds.
TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.
TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.
TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.
YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.
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EXHIBIT C
SCHEDULE OF COMPENSATION
I. The Scope of Work set forth herein shall be compensated for in the following manner:
☐ A single flat rate for all services as set forth in Exhibit “A.” ☒ Multiple flat rates for different specified services as set forth in Exhibit “A.” ☒ An hourly rate for some or all of the proposed services as set forth in Exhibit “A.” II. The total compensation for all Services shall not exceed the Contract Sum as provided in the Cover Page of this Agreement.
III. Consultant’s billing rates for any hourly Services are set forth in Exhibit “A .” In connection with the services provided pursuant to the terms of this Agreement, City will pay Consultant upon City’s receipt of a written invoice provided by Consultant no more than monthly. City will pay Consultant for work completed, billed in increments of six minutes (0.1 hours), not to exceed the Contract Sum. The City will reimburse the Consultant for reasonable out-of-pocket expenses related to performing services set forth in Exhibit “A” that are approved in advance in writing by the City such as mileage, copies, binding costs, postage, parking, travel, and lodging expenses as part of the not to exceed Contract Sum. To receive reimbursements, the Consultant must provide the City with a receipt and a description of the expense incurred along with the invoice. No mark up on expenses may be added.
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EXHIBIT D
INSURANCE REQUIREMENTS
Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees.
MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and 9 (non-owned), with limit no less than $1,000,000 per accident for bodily injury and property damage.
3. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. (Not required if consultant provides written verification it has no employees)
4. Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate.
5. Cyber: Vendor/Consultant shall procure and maintain for the duration of the contract insurance against claims for security breaches, system failures, injuries to persons, damages to software, or damages to property (including computer equipment) which may arise from or in connection with the performance of the work hereunder by the Vendor, its agents, representatives, or employees. Vendor shall procure and maintain for the duration of the contract insurance claims arising out of their services and including, but not limited to loss, damage, theft or other misuse of data, infringement of intellectual property, invasion of privacy and breach of data.
Cyber Liability Insurance, with limits not less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. Coverage shall be sufficiently broad to respond to the duties and obligations as is undertaken by Vendor in this agreement and shall include, but not be
01375.0001 2066581.1
limited to, claims involving security breach, system failure, data recovery, business interruption, cyber extortion, social engineering, infringement of intellectual property, including but not limited to infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, and alteration of electronic information. The policy shall provide coverage for breach response costs, regulatory fines and penalties as well as credit monitoring expenses.
6. Technology Professional Liability Errors & Omissions (Only if vendor is providing a technology service (data storage, website designers, etc.,) or product (software providers)
Technology Professional Liability Errors and Omissions Insurance appropriate to the Consultant’s profession and work hereunder, with limits not less than $2,000,000 per occurrence. Coverage shall be sufficiently broad to respond to the duties and obligations as is undertaken by the Vendor in this agreement and shall include, but not be limited to, claims involving security breach, system failure, data recovery, business interruption, cyber extortion, social engineering, infringement of intellectual property, including but not limited to infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, and alteration of electronic information. The policy shall provide coverage for breach response costs, regulatory fines and penalties as well as credit monitoring expenses.
a. The Policy shall include, or be endorsed to include, property damage liability coverage for damage to, alteration of, loss of, or destruction of electronic data and/or information “property” of the Agency in the care, custody, or control of the Vendor.
If the Consultant maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.
Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Status
The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Consultant's insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).
Primary Coverage
For any claims related to this contract, the Consultant ’s insurance coverage shall be primary and non- contributory and at least as broad as ISO CG 20 01 04 13 as respects the City , its officers, officials, employees, and volunteers. Any insurance or self -insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Consultant’s insurance
01375.0001 2066581.1
and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.
Umbrella or Excess Policy
The Consultant may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non- contributory, additional insured, Self -Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the C onsultant’s primary and excess liability policies are exhausted.
Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.
Waiver of Subrogation
Consultant hereby grants to City a waiver of any right to subrogation which any insurer of said Consultant may acquire against the City by virtue of the payment of any loss under such insurance.
Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City . The City may require the Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self -insured retention may be satisfied by either the named insured or City. The CGL and any policies, including Excess liability policies, may not be subje ct to a self -insured retention (SIR) or deductible that exceeds $25,000 [fill in the amount for your comfort level for the specific Consultant and job – it could be much higher, or in the case of a very small Consultant , you might want it lower] unless approved in writing by City. Any and all deductibles and SIRs shall be the sole responsibility of Consultant or subcontractor who procured such insurance and shall not apply to the Indemnified Additional Insured Parties. City may deduct from any amounts other wise due Consultant to fund the SIR/deductible. Policies shall NOT contain any self -insured retention (SIR) provision that limits the satisfaction of the SIR to the Named. The policy must also provide that Defense costs, including the Allocated Loss Adjustment Expenses, will satisfy the SIR or deductible. City reserves the right to obtain a copy of any policies and endorsements for verification.
Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.
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Claims Made Policies (note – should be applicable only to professional liability, see below) If any of the required policies provide claims-made coverage:
1. The Retroactive Date must be shown, and must be before the date of the contract or the beginning of contract work.
2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.
3. If coverage is canceled or non -renewed, and not replaced with another claims -made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work.
Verification of Coverage
Consultant shall furnish the City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements and copies of the Declarations & Endorsements pages are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant ’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
Subcontractors
Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that City is an additional insured on insurance required from subcontractors.
Duration of Coverage
CGL & Excess liability policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 5 years for Completed Operations liability coverage. Such Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.
Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
INSR ADDL SUBR
LTR INSR WVD
DATE (MM/DD/YYYY)
PRODUCER CONTACT
NAME:
FAXPHONE
(A/C, No):(A/C, No, Ext):
E-MAIL
ADDRESS:
INSURER A :
INSURED INSURER B :
INSURER C :
INSURER D :
INSURER E :
INSURER F :
POLICY NUMBER
POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY) (MM/DD/YYYY)
COMMERCIAL GENERAL LIABILITY
AUTOMOBILE LIABILITY
UMBRELLA LIAB
EXCESS LIAB
WORKERS COMPENSATION
AND EMPLOYERS' LIABILITY
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)
AUTHORIZED REPRESENTATIVE
INSURER(S) AFFORDING COVERAGE NAIC #
Y / N
N / A
(Mandatory in NH)
ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?
EACH OCCURRENCE $
DAMAGE TO RENTED $PREMISES (Ea occurrence)CLAIMS-MADE OCCUR MED EXP (Any one person) $
PERSONAL & ADV INJURY $
GENERAL AGGREGATE $GEN'L AGGREGATE LIMIT APPLIES PER:
PRODUCTS - COMP/OP AGG $
$
PRO-
OTHER:
LOCJECT
COMBINED SINGLE LIMIT
$(Ea accident)
BODILY INJURY (Per person) $ANY AUTO
OWNED SCHEDULED BODILY INJURY (Per accident) $AUTOS ONLY AUTOS
AUTOS ONLY
HIRED PROPERTY DAMAGE $AUTOS ONLY (Per accident)
$
OCCUR EACH OCCURRENCE $
CLAIMS-MADE AGGREGATE $
DED RETENTION $ $
PER OTH-
STATUTE ER
E.L. EACH ACCIDENT $
E.L. DISEASE - EA EMPLOYEE $
If yes, describe under
E.L. DISEASE - POLICY LIMIT $DESCRIPTION OF OPERATIONS below POLICY
NON-OWNED
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.
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.
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 endorsement(s).
COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:
CERTIFICATE HOLDER CANCELLATION
© 1988-2015 ACORD CORPORATION. All rights reserved.
The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03) ACORD
TM CERTIFICATE OF LIABILITY INSURANCE
Travelers Casualty Insurance
Travelers Insurance Company
Hartford Fire Insurance Company
Twin City Fire Insurance Company
Houston Casualty Co
7/30/2025
Starkweather & Shepley
P.O. Box 549
Providence, RI 02901 - 0549
401-435-3600
Linda Vecoli
781-234-0085 401-735-1059
[email protected]
Chandler Asset Management Inc
9255 Towne Centre Drive
Suite 600
San Diego, CA 92121
19046
25674
19682
29459
42374
A X
X
X Per written contract
X
X 6802C0796052342 09/01/25 09/01/26 $2,000,000
$1,000,000
5,000
2,000,000
4,000,000
4,000,000
A
X
X X
Y BA4N1159572442G 09/01/25 09/01/26 1,000,000
B X X
X $0
Y CUP2C0850222442 09/01/25 09/01/26 10,000,000
10,000,000
C
N
02WECCR2756 09/01/25 09/01/26 X
1,00,000
$1,000,000
1,000,000
D
E
C
Professional Liab
Cyber Liability
Crime
08DC021984525
H25NGP20973102
08FA024546724
08/02/25
08/02/25
08/02/25
08/02/26
08/02/26
08/02/26
10,000,000
4,000,000
10,000,000
Endurance Risk Solutions #43630 1st Excess Professional Liability F1X30001867805 Eff. 8-02-2025 Exp. 8-02-2026 Limit $10,000,000
ACE American Insurance Company #22667 2ns Excess Professional Liability G71853354001 Eff. 8-02-2025 Exp. 8-02-2026 Limit $10,000,000
Total Professional (E&O) Limits $30,000,000
(See Attached Descriptions)
City of Murrieta
Attn:Admin Services Director
One Town Square
24601 Jefferson Avenue
Murrieta, CA 92562
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#S2665265/M2663319
CHANDASTClient#: 62001
GAS
1 of 2
#S2665265/M2663319
SAGITTA 25.3 (2016/03)
DESCRIPTIONS (Continued from Page 1)
The City of Murrieta and its respective officers and employees are additional insured on a primary and non contributory basis as required by written contract or agreement. Notice of cancellation shall be provided as per the policy provisions.
2 of 2
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