OF LAGUNA
BEACH
CALIFORNI
CITY OF LAGUNA BEACH
REQUEST FOR PROPOSAL ("RFP")
INVITATION NO. CM-23-1007
INVESTMENT MANAGEMENT AND ADVISORY SERVICES
RFP Issue Date: November 7, 2023
RFP Submission Due Date: December 8, 2023, 3:00 PM PST
Project Manager: Gavin Curran
Assistant City Manager/CFO
City Manager's Office
RFP Administrator: Gavin Curran
City Manager's Office
email: [email protected]
tel: 949-497-0754
CITY OF LAGUNA BEACH
Assistant City Manager
City Treasurer
505 Forest Avenue
Laguna Beach, CA 92651
Interested parties may obtain a copy of this RFP by accessing the City of Laguna Beach portal:
https://www.lagunabeachcity.net/do-business-here/rfps-bids RFP No. CM-23-1007
I. OBJECTIVE
The City of Laguna Beach (City") is seeking proposals from qualified proposers (hereinafter "Consultant" or "Consultants") interested in providing consulting services for Investment Management and Advisory Services. The objective of this Request for Proposal ("RFP") solicitation is to identify the highest-qualified Consultant whose proposal best complies with the requirements of this RFP and any attachments, including the Scope of Services specified in Attachment A ("Scope of Services" or "Services"), and provides the most comprehensive solution for the City's needs. This RFP and the attached Scope of Services collectively make up the "Project".
Il. BACKGROUND
The City of Laguna Beach was founded on June 29, 1927, and is a small town of picturesque beaches, hiking trails, a walkable downtown, and summer art festivals.
Located in southwest Orange County, Laguna Beach occupies 8.84 square miles, has a population of 23,000 and welcomes over six million visitors each year. The City provides a full range of services, including recreational activities, cultural arts events, public works maintenance of streets, beaches, and parks, transit operations, community development, administrative services, and police, fire, and marine safety protection and wastewater services. Laguna Beach operates under a council-manager form of government. Policy- making and legislative authority are vested in a five-person City Council. The City Manager carries out the policies and ordinances of the City Council, oversees the day-to-day operations of the City, and appoints department heads.
Laguna Beach employs a staff of approximately 345 full-time employees. The City's fiscal year commences on July 1 and concludes on June 30. For Fiscal Year 2023-24, Laguna Beach has set a total operating budget of roughly $137.4 million across all funds, with the accounting for approximately $89.5 million of that total. While City operations generate revenue from various public services, such as licensing, permitting, and building activity, the three primary sources of revenue for the General Fund are property tax, transient occupancy tax, and sales tax. The City also maintains an investment portfolio valued at around $157 million in operating and capital funds. You can find the City's investment policy in Attachment C ("City of Laguna Beach Investment Policy").
For the most up-to-date information on the City's Operating and Capital Improvement Program Budget and the Annual Comprehensive Financial Report (ACFR), please visit the City's official website at lagunabeachcity.net.
III. SUBMITTAL INFORMATION AND INSTRUCTIONS
A. TENTATIVE RFP SCHEDULE AND PROJECT TIMELINE
The following is a tentative schedule of the RFP key dates. While the City will attempt to maintain this schedule, the following dates are projections, and the City comes the rift priy this schedule as needed to accommodate this RFP No. CM-23-1007 2
Description Date
RFP Published Date: November 7, 2023
Non-Mandatory Pre-bid Meeting Date: November 15 2023, 3:00 - 5:00 PM PST City Hall
505 Forest Avenue
Laguna Beach, CA 92651
RFP Questions Due Date: November 17, 2023,1:00 PM PST
RFP City Responses Due Date: November 24, 2023
RFP Submission Due Date: December 8, 2023, 3:00PM PST
Interviews (as applicable): Week of December 11, 2023
Anticipated Contract Award: January 23 2024
B. PRE-BID MEETING
A non-mandatory pre-bid meeting is tentatively scheduled for November 15, 2023, from 3:00 PM to 5:00 PM PST, at City Hall, 505 Forest Avenue, Laguna Beach, CA 92651 (Non-Mandatory Pre-bid Meeting Date). The pre-bid meeting contact is the RFP Administrator. Please ensure all Consultants are identified upon first meeting with the RFP Administrator. All questions asked during the pre-bid meeting will be published in the Q&A section on PlanetBids, in accordance with the tentative RFP schedule listed above.
C. QUESTIONS, ANSWERS AND ADDENDUM TO RFP
Prior to the RFP Submission Due Date, questions may arise regarding any aspect of this RFP. Questions are due no later than 3:00 PM PST on November 17, 2023 (RFP Questions Due Date), and all questions pertaining to this RFP shall be submitted using the City of Laguna Beach PlanetBids portal, using the "Q&A" tab within this solicitation. Any technical matters related to the use and function of PlanetBids shall be directed to PlanetBids, and Consultants shall not contact any other City staff with questions. The RFP Administrator will draft, in consultation with other City staff, responses to all questions submitted by prospective Consultants. The responses will be posted on PlanetBids on or before the REF City Responses Due Date set forth above. Changes to the RFP itself shall only be made by the City via a formal written addendum published and distributed through the City's PlanetBids portal and shall become a part of the RFP document.
D. SUBMITTAL DEADLINE AND FORMAT
Proposals are due on or before December 8, 2023, 3:00 PM PST (RFP Submission Due Date). Proposals and any required attachments will only be accepted in Portable Document Format (PDF) via the City's PlanetBids portal no later than the RFP Proposal Due Date. Consultant's cost file shall be submitted separate and independent of the Proposal document. It is the responsibility of the Consultant to ensure its proposal and all attachments are loaded on PlanetBids before the stated deadline and in the required format stated herein. Proposals RFP No. CM-23-1007 3
submitted by any other method such as hard copy or email, or proposals that fail to completely upload, shall result in disqualification.
E. PROPOSAL CONTENT
All proposals shall include the following:
Consultant's Background and Organization
1. A cover letter summarizing key elements of Consultant's proposal, and a brief statement describing why Consultant has an interest in this RFP and why it would be the City's best choice.
2. Provide Consultant's business information, including primary contact name, title, and address for this specific RFP, and the name(s), title(s) and proof of signing authority for those person(s) authorized to bind the Consultant to a contract with the City, as set forth by the California Corporations Code.
3. Provide information concerning Consultant's experience and qualifications directly related to the Scope of Services. Describe the organization, date founded, and ownership of your firm, including whether your firm has experienced a material change in organizational structure, ownership, or management during the past five (5) years. If so, please describe. Provide the number and location of affiliated offices.
4. Consultant shall provide a detailed explanation on its approach and methodology to perform the Scope Services, including a proposed schedule, and demonstrate specific techniques that may be implemented to successfully achieve the provisions of the Project.
5. Identify the types of accounts primarily under contract with your firm.
6. Identify how your firm is compensated for the services it provides. Describe whether your firm acts as a broker/dealer, or receives any other form of additional compensation (including soft dollars) for the client transactions aside from the direct fee paid by clients.
7. Identify whether your firm is a registered investment advisor under the Investment Advisor's Act of 1940, as amended.
8. Describe any SEC, FINRA, or regulatory censure or litigation involving your firm or its employees at any time.
9. Identify whether you now, or will, pay a finder's fee to any third party for business related to this account? Specify the recipients of any fee.
10. Specify if your firm has a dual registration.
11. Describe any other business affiliations. Describe your firm's policy on soft dollars.
RFP No. CM-23-1007 4
12. Describe any potential conflicts of interest you may have working with the City, as further described under Section F below.
13. Outline the errors and omissions (professional liability) and fidelity bond coverage your firm carries.
14. If awarded a contract with the City, idenfity whether your firm will serve as a fiduciary in your role as an investment adviser to the City while providing the investment management services sought by the City. If not, describe your objections or limitations.
15. Describe the firm's sources of revenue (e.g., investment management, institutional research, etc.) and comment on your firm's financial condition.
Describe any major claims, settlements or other exposures pending against your company or finalized or otherwise resolved in the last five (5) years.
16. Provide a minimum of three (3) references for similar services Consultant has completed within the last five (5) years. Include a brief description of the services, the agency or firm names, and contact information for each reference. Preference will be placed on references that are local government entities. The City reserves the right to contact any reference provided.
17. Include any other information you consider relevant to the proposal.
Experience
1. Describe your firm's experience in managing fixed income portfolios for public funds and governmental entities.
2. Describe your firm's experience in developing policies and portfolio management guidelines for government portfolios.
3. Provide the number and types of accounts, total asset value, and composition of portfolios currently being managed by your firm.
4. Describe your firm's experience and or involvement, if any, in the Orange County Area.
Personnel
1. Identify and provide background information on the key person or personnel who take the most active role(s) in the administration and management of the firms).
2. Identify the investment professionals (portfolio managers, analysts, and researchers) employed by your firm, by classification, and specify the average number of accounts handled by portfolio managers. Identify any established limits on accounts or assets under management. Describe any regulatory investigations, action, censure, or litigation involving any of the specified professionals.
3. Describe whether portfolios are managed by teams or by one individual.
RFP No. CM-23-1007 5
4. Provide resumes and biographical information on key investment professionals that will be directly involved in the decision-making process for the portfolio.
Include the number of years at your firm, total years of experience, and professional licenses and designations.
5. Indicate which of your firm's professionals would be delegated as the primary client contacts).
6. Describe your firm's compensation policies for investment professionals.
7. Describe your firm's training and education efforts to keep portfolio managers informed of developments relevant to government investment managers.
Assets Under Management
1. Provide the number and types of accounts, total asset value and composition of portfolios currently being managed by your firm for government agencies.
Summarize your assets under management (institutional only) over the past five years and average assets per client.
2. Summarize your institutional investment assets under management by category as shown below for your latest reporting period.
3. Provide GIPS (Global Investment Performance Standards) compliant performance statistics on a comparable portfolio and compare with industry averages or benchmarks for the last one, three, five, ten years and/or since inception. If unable to provide GIPS statistics, please state reason.
4. In the past five (5) years, identify whether your firm has purchased and held any security that was subsequently downgraded below the minimum credit ratings required for purchase under the California Government Code. Explain the circumstances, and the actions that were taken.
Investment Management Approach and Discipline
1. Briefly describe your firm's investment management philosophy, including your approach to managing governmental portfolios.
2. Describe your credit review process.
3. Describe your firm's compliance review process.
4. Describe your firm's portfolio management decision making process.
5. Provide examples of the monthly reporting that your firm provides.
6. Explain whether your firm provides cash flow management services, and if so, describe them.
Exceptions.
Provide any proposed exceptions, additions, and/or deletions with any requirements or specifications of this RFP and/or Scope of Services. All exceptions shall be clearly identified in the proposal, and written explanations shall include the scope of the exceptions, the ramifications of the exceptions for RFP No. CM-23-1007 6
the City, and a description of the advantage to be gained or disadvantages to be incurred by the City as a result of these exceptions. City will not accept any substantive proposed changes to the Agreement, including the stipulated insurance requirements or other contractual terms therein. Proposals should only be submitted if there is a clear understanding that the Consultant can execute the City's Agreement without any substantial changes.
Proposals that do not include the above-listed Proposal Content may be considered incomplete and will be evaluated accordingly.
F. CONFLICTS OF INTEREST
All Consultants interested in conducting business with the City must disclose any potential conflicts of interest in the Consultant's proposal in order to be eligible to be awarded a contract. Failure to disclose potential conflicts of interest shall result in disqualification. Consultant must address the following in its proposal:
Identify all previous and current contracts with the City of Laguna Beach.
Include contact name(s), description of services, and dates of services performed.
List any current or retired City official or employee, or City official's or employee's immediate family member(s) that has/have ownership interest in Consultant's company or is deriving personal financial gain from this contract.
List any City official or employee that is contemporaneously employed or prospectively will be employed by the Consultant or Consultant's subconsultants at any time during the Project period known to Consultant at the time the proposal is submitted.
IV. EVALUATION, SELECTION, AND AWARD PROCEDURES
PROPOSAL EVALUATION CRITERIA
Proposals shall provide point-by-point response to all sections of this RFP in a clear and concise manner. The City intends to evaluate Consultants based upon the data presented in the proposals submitted in response to this specific RFP.
The City may use some or all the following criteria in its evaluation and comparison of proposals submitted. The criteria listed below are not necessarily all-inclusive, and the order in which they appear is not intended to indicate their relative importance. The City reserves the right to modify the evaluation criteria as deemed appropriate prior to the commencement of evaluation.
Qualifications and Experience: Demonstrated relevant experience and expertise of Consultant and Consultant's team and/or subconsultants conducting similar projects of comparable complexity and magnitude, particularly for government agencies.
Conformance/Responsiveness to the RFP: Demonstrated thorough understanding of the Project and the ability to deploy the Scope of Services on schedule.
RFP No. CM-23-1007 7
Project Scope/Methodology: A clear and concise description of Consultant's approach, methodology and techniques to successfully execute the requested Scope of Services. Identify any Services that may se excessive or unnecessary and provide suggestions for any additional services that may enhance the value, overall economy, and/or effectiveness of the Project.
4. References: Recent references from local clients with detailed descriptions of similar projects successfully completed by Consultant, with particular emphasis on local government.
Cost File: Fair, reasonable, and competitive pricing.
B. SELECTION PROCESS
Proposals received as specified will initially be evaluated by City staff, or staff designee(s). During the initial evaluation period, the City may generate a "most qualified" list of Consultant(s) determined in accordance with the above Proposal Evaluation Criteria. The "most qualified" Consultants) may be invited for interviews for further evaluation. The City reserves the right to determine whether a proposal meets the specifications and requirements of this RFP and reject any proposal that, in the City's sole and absolute discretion, fails to meet the detail or intent of the requirements. The City reserves the right to reject any or all proposals.
C. INTERVIEWS
The City reserves the right to conduct interviews with any Consultant. Should the City pursue scheduling interviews, they are targeted to be scheduled the week of December 11, 2023.
D. NOTICE OF AWARD; AGREEMENT
The contract award will be made to the Consultant selected from all proposals with implementation of services to follow the award ("Notice of Intent to Award").
However, this RFP does not indicate any obligation by the City to award a contract to any successful Consultant. The City, in the selection process and in general, reserves the right to make an award to the Consultant that meets the Scope of Services stated in this RFP, or to award multiple contracts for Services if is deemed most advantageous to the City.
Upon Notice of Intent to Award, the successful Consultant will be required to execute and deliver a signed Agreement to the City, including proof of all required insurance as set forth in the Agreement, within thirty (30) calendar days following the Notice of Intent to Award. If the successful Consultant is unwilling or unable to execute the Agreement as required by this RFP, the City has the right to request a subsequent Consultant to enter into the Agreement with the City.
RFP No. CM-23-1007 8
TERMS AND CONDITIONS
A. Acceptance of Terms and Conditions. Submission of a proposal indicates acceptance by the Consultant submitting the proposal of the terms, conditions and specifications contained in this RFP and Agreement.
B. Precedence of Terms and Conditions. All terms and conditions of the Agreement are hereby incorporated into the terms and conditions of this RFP. In the event of a conflict of terms and conditions between the RFP document and the Agreement, the terms and conditions expressed in the Agreement shall take precedence.
C. Public Record. Upon submission of a proposal and other materials for consideration by the City, such proposals and materials shall become the property of the City of Laguna Beach. Proposals may be subject to public inspection and disclosure pursuant to state and federal law after the award of a contract for this RFP. Prior to the RFP deadline, proposals may be modified or withdrawn by an authorized representative of Consultant by written notice to the RFP Administrator.
D. Late Proposals. Any proposal which is not received by the City prior to the deadline date and time set forth in this RFP shall not be considered. The City assumes no responsibility or liability for the transmission, delay, or delivery of a proposal.
Specificity of Information. No verbal or written information which is obtained other than through this RFP or its addendum shall be binding on the City. No employee of the City is authorized to interpret any portion of this RFP or give information as to the requirements of the RFP in addition to that contained in or amended to this written RFP document.
Non-Discrimination. Consultant agrees that in carrying out its responsibilities under this RFP or any Agreement, in particular with regard to the employment of persons and subconsultants working on the Services, it will not discriminate on the basis of race, color, creed, national origin, religion, sex, age, or handicap. In the event any of the Services performed by Consultant hereunder is subcontracted to subconsultant (with approval of the City as required herein), subconsultant shall contain a similar provision.
G. Errors and Omissions. This RFP cannot identify each specific, individual task required to successfully and completely to implement this Project. The City relies on the professionalism and competence of the Consultant to be knowledgeable of the general areas identified in the Scope of Work and to include in their proposals all materials, equipment, required tasks and subtasks, personnel commitments, man-hours, labor, direct and indirect costs, etc. Consultant shall not take advantage of any errors and/or omissions in this RFP document or in the Consultant's specifications submitted with their proposals. Where such errors or omissions are discovered by the City, full instructions will be given by the City in the form of an addendum.
RFP No. CM-23-1007 9
H. Proposal Validity. Unless otherwise noted by the Consultant, all proposals shall be held valid for a period of one hundred eighty (180) days.
I. Right of Rejection. The City reserves the right to:
• Accept or reject any and all proposals or any part of any proposal, and to waive any informality, minor defects, or technicalities in any proposal. • Award all or any portion of the Scope of Services described in this RFP to one or more Consultants.
• Request clarification of any information contained in a proposal. • Solicit new proposals on the same Scope of Services, or on a modified Scope of Services, which may include portions of the original RFP, as the City may deem necessary.
• Disregard all non-conforming, non-responsive, or conditional proposals. • Reject the response of any Consultant who does not pass the evaluation to the City's satisfaction.
• Allow for the correction of errors and/or omissions.
• Negotiate the Scope of Services and/or terms of the Agreement with the successful Consultants).
The City further reserves the right to negotiate final pricing with the most qualified Consultants). All submitted cost proposals will be reviewed and considered for the purpose of assisting the City in determining a fair and reasonable compensation with the most qualified Consultants). The City will attempt to negotiate an Agreement with the most qualified Consultants) at a compensation which the City determines is fair and reasonable. Should the City be unable to negotiate a satisfactory Agreement with the most qualified Consultants), negotiations may be terminated, and the City will undertake negotiations with the second qualified Consultants) and so on, until a Consultant or Consultants are selected, or the City rejects all proposals.
J. City Not Obligated to Complete Scope; No Obligation to Award. This RFP does not obligate the City to complete the Scope of Services or Project, or award or enter into a contract or Agreement on the basis of any proposal submitted in response to this RFP. The City reserves the right to cancel the solicitation or parts of the solicitation if it is in its best interest. City reserves the right to award multiple contracts for this RFP if is deemed most advantageous to the City.
K. Non-Compliance. Consultants and/or proposals that do not meet the stated requirements for this RFP may be considered noncompliant and may be disqualified, unless such noncompliance is waived by the City. During the evaluation process, the City reserves the right to request additional information or clarification from those submitting proposals, and to allow corrections of errors and/or omissions
Determination of Responsiveness and Responsibility. The City shall have sole authority in determining the responsiveness and responsibility of any and all RFP No. CM-23-1007 10
Proposals. For Proposals containing exceptions to specifications and/or requirements, the City shall have sole authority in determining the extent to which the Crystal a on exceptions affect the responsiveness and responsibility of any and all Proposals.
M. Work Product. All data, documents and other work product generated or developed during the term of the Agreement will become the property of the City.
N. No Bidder Reimbursement. The City recognizes that significant effort is expended in the preparation of a thorough and responsible proposal. However, a proposal is a voluntary response on the part of the Consultant, and this RFP does not commit the City to pay any costs incurred in its preparation. The City will not be liable for any costs incurred by any Consultants prior to an award of a contract.
The City may require the final Consultants) to provide on-site presentations and demonstrations of the products)/service(s) proposed by the Consultants). All costs associated with the demonstrations or follow-up interviews are the sole obligation of the Consultants).
o. Gratuity Prohibition. Consultants) shall not offer any gratuities, favors, or anything of monetary value to any official, employee, or agent of the City for any purpose as it may be perceived as an attempt to influence consideration of the proposal. Submission of a Proposal indicates Consultant certifies that they have not paid nor agreed to pay any person, other than a bona fide employee of the Consultant, a fee or a brokerage resulting from the award of the contract.
P. Contact with City Personnel or Entities. During the RFP procurement process, evaluation process and proposal selection process, the RFP Administrator is to serve as the primary point of contact for all matters pertaining to this RFP. Consultant shall not contact any City Councilmembers, City Treasurer, Committee Members, personnel or entities other than the RFP Administrator for matters regarding this Project until conclusion of the entire procurement process.
Unauthorized contact may result in disqualification of proposals.
Q. Contract Administrator. The City Manager's Office will be the administrator of the Agreement.
R. Insurance Requirements. The selected Consultants) for this Project shall be required, prior to the execution of an Agreement, to furnish proof of insurance. The specific insurance types and limits depend on the Project and can be found in the Template Consultant Services Agreement attached to this RFP (Attachment B).
Consultant(s) shall be considered ineligible for the contract award if they are unable to provide the required insurance.
S. Compliance with All Applicable Laws. Consultant declares that it shall comply with all licenses, statutes, ordinances, regulations, and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted, including, but not limited to, appropriate contractor licensing and business licensing, as may be required.
T. Inclusive Cost Proposal. Consultant's Cost Proposal shall include any and all applicable licenses, insurance coverage, endorsements, bonding and if necessary, any wage compliance deemed necessary to perform the Scope of Services as part RFP No. CM-23-1007 11
of the Project described in this RFP. City will not be responsible for reimbursing Consultant for any charges not included in the cost proposal that are incurred in securing these requirements.
U. Subconsultants). The selected Consultant shall be the primary consultant performing the primary functions of the Agreement. If any portion of the Agreement is to be performed by a subconsultant, this must be clearly set forth in the Proposal submittal as to what parts) is/are to be delegated. City reserves the right to reject any proposal wherein use of subconsultants significantly affects the ability of the Consultant to function as the primary consultant on the awarded Agreement. The Consultant will be at all times responsible for the acts and errors or omissions of its subconsultants or joint participants and persons directly or indirectly employed by them. Acceptance or rejection of a Consultant's request to use subconsultants is at the sole discretion of City.
Attachments): Attachment A: Scope of Services
Attachment B: Template Consultant Services Agreement
Attachment C: City of Laguna Beach Investment Policy
RFP No. CM-23-1007 12
ATTACHMENT A
SCOPE OF SERVICES
The objective of this RFP is to receive proposals for investment management and advisory services. Services to be performed shall include, but are not necessarily limited to, the following described below.
The scope of this RFP is exclusive of custodial services, funds held in Trust, security safekeeping, and Successor Agency funds. Successor Agency funds may be added to the scope at a future date. The firm(s) selected will be required to provide the following services:
• Prepare a maturity analysis.
• Provide credit analysis of investment instruments in portfolio. • Evaluate market risk and develop strategies that minimize the impact on the portfolio.
• Provide assurance of portfolio compliance with applicable policies and laws and the City's Investment Policy.
• Assist the City to define and establish an appropriate performance benchmark. • Provide monthly/quarterly annual reporting on all City funds under management. • Attend quarterly and other ad hoc meetings with City Budget Committees as requested.
• Present quarterly update at City Council meetings, if requested. • Indicate full understanding of compliance with the City's Investment Policy and California laws.
• Ensure the portfolio structure matches City objectives. • Cooperate with the independent outside audit firm.
• Provide schedules and analysis requested by the outside auditors for ACFR preparation.
Investment of Funds The firm(s) must effectively invest the City's funds, provide discretionary full-time portfolio management, and effectively invest the portfolio pursuant to the approved investment policy, the City's cash flow needs and the City's direction.
Written and Oral Reports The firm(s) must provide a written report on a monthly and quarterly basis demonstrating the portfolio performance including information about the portfolio as described in the investment policy. The firm must also be available to make periodic written and oral reports to the City Council.
Evaluation of Investment Policy The firm(s) must annually assist in the review of the City's investment policy. The proposed changes to the investment policy will be presented in final draft form to the City prior to submission to the City Council.
RFP No. CM-23-1007 13
Expectations
Investment practices and procedures must comply with Federal and California state law and the City's written investment policy. This includes Sections 53600-53683 of the California Government Code. Investments shall be made consistent with Government Code Sections 16429.1 and/or 53601. The investment advisory firm must adhere to the Prudent Expert Standard.
RFP No. CM-23-1007 14
ATTACHMENT B
TEMPLATE CONSULTANT SERVICES AGREEMENT
FOR
CITY MANAGER EXECUTIVE RECRUITMENT SERVICES
THIS AGREEMENT is made and entered into this _ day of, 2 —by and between the City of Laguna Beach, a Municipal Corporation, hereinafter referred to as the "CITY," and, , hereinafter referred to as "CONSULTANT."
RECITALS
WHEREAS, the CITY desires to engage CONSULTANT to render certain professional services as more fully identified in Appendix A, Scope of Services, attached hereto and included WHEREAS, CONSULTANT is qualified and agreeable to render the professional services desired by the CITY;
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises hereinafter expressed and intending to be bound hereby, the parties hereto do mutually agree as PART I
FUNDAMENTAL TERMS
Article 1. Engagement of CONSULTANT
The CITY hereby agrees to engage CONSULTANT to perform the professional services as hereinafter set forth, and CONSULTANT agrees to perform those services in accordance with the terms and conditions of this Agreement.
Article 2. Scope of Services
In compliance with all terms and conditions of this Agreement, CONSULTANT shall perform all work necessary to complete, in a manner satisfactory to the CITY, the services described and set forth in Appendix A, Scope of Services, attached hereto and by reference incorporated herein and made a part hereof.
Article 3. Time of Performance
The services of CONSULTANT are to commence within _() days after this Agreement has been approved by the CITY and the CITY has authorized work to start by the written issuance of a Notice to Proceed. The services of CONSULTANT shall be completed by As modified 10/16 Agreement No.
Article 4. Payment and Limitation of Cost
The CITY shall compensate CONSULTANT for services performed under Article 2, as further defined in Appendix A, in accordance with the following schedule:
In order to receive payments, CONSULTANT shall submit to the CITY an invoice. The invoice will delineate the services performed with specificity, the amount invoiced to date, and such other documentation as may be necessary or requested by the CITY to demonstrate that appropriate progress has been made toward completion of the services.
Adjustments of total cost of services by up to 10% of the original contract amount will be permitted when CONSULTANT establishes, and the CITY agrees in writing, that there has been, or is to be, a significant change in:
a. The scope, complexity or character of the services to be performed; the conditions under which the work is required to be performed; or c. the duration of work if the change from the time period specified in this Agreement for completion of the work warrants such adjustment in accordance with Part II, Section 3, Paragraph 3.13, Extension of Time for Delay.
Article 5. Attachments
The provision set forth in Part Il, General Provisions, and Appendix A, "Scope of Services," are by reference incorporated herein and made a part hereof.
Article 6. Integration
This Agreement represents the entire understanding of the CITY and CONSULTANT as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with regard to those matters covered by this Agreement. This Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the parties, and none shall be used to interpret this Agreement.
As modified 1.2021 -2- Agreement No._
IN WITNESS WHEREOF, persons executing this Agreement warrant and represent that they are authorized to do the same on behalf of the parties hereto and are authorized to bind those parties to the terms and conditions of this Agreement.
CITY OF LAGUNA BEACH
By.
Shohreh Dupuis, City Manager
ATTEST:
Ann Marie McKay, City Clerk
CONSULTANT
By -
Title_
Address
-
-
-
modified 1.2021 -3- Agreement No.
As
GENERAL PROVISIONS
SECTION ONE: SERVICES OF CONSULTANT
1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, CONSULTANT shall perform all work necessary covered by this Agreement in a manner satisfactory to the CITY. This Agreement includes the services described and set forth in Appendix A, Scope of Services, attached hereto and by reterence incorporated herein and made a part hereot, which may be referred to as "services."
1.2 Changes and Additions to Scope of Services. The CITY shall have the right at any time during the performance of the services, without invalidating this Agreement, to order extra services beyond that specified in the Scope of Services or make changes by altering, adding to, or deducting from said services. No payment for extra services caused by a change in scope or complexity of work shall be made, unless and until such extra services and a price therefore have been authorized in writing and approved by the CITY. Such written approval shall set forth the changes of work, extension of time for preparation, and adjustment of the fee to be paid by the CITY to CONSULTANT. No claim for said additional work shall be made unless such additional work has been specifically authorized in writing by the CITY.
1.3 Specifications. All specifications, manuals, or standards, either attached to this Agreement or incorporated herein by reference, are deemed to be the version in effect as of the date of this Agreement and are binding as to the performance of the work in this Agreement unless they are changed by written amendment and this Agreement is modified in writing to incorporate such changes. Any changes are subject to CITY approval.
1.4 Standard of Performance. CONSULTANT hereby represents and warrants that it has the experience necessary to undertake the services to be provided herein. In light of such status and experience, CONSULTANT hereby covenants that it shall follow customary good professional standards in performing all services required hereunder and shall perform all work in a manner reasonably satisfactory to the CITY. CONSULTANT shall be responsible to ensure that all work performed, including by its employees if any, is performed to the standards set forth in this Agreement and that such work complies with the requirements of appropriate governmental agencies and applicable laws ordinances, codes and regulations of the federal, state and local governments in effect at the time such services are performed.
Notwithstanding any other provision herein, CONSULTANT agrees to perform all work to the satisfaction of the CITY within the time specified. If the CITY reasonably determines that the work is not satisfactory, the CITY shall have the right to take appropriate action, including but not limited to: (i) meeting with CONSULTANT to review the quality of the work and resolve matters of concern; (ii) requiring CONSULTANT to repeat unsatisfactory work at no additional charge until it is satisfactory; (iii) suspending the delivery of work to CONSULTANT for an indefinite time; (iv) withholding payment; and (v) terminating this Agreement as hereinafter set forth.
1.5 Licenses, Permits, Fees and Assessments. CONSULTANT shall obtain at its sole cost and expense all licenses, permits, and approvals that may be required by law for the performance of the services required by this Agreement. CONSULTANT shall have the sole obligation to pay any fees, assessments, and taxes, plus applicable penalties and interest, which may be imposed As modified 1.2021 -4- Agreement No._
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 the CITY against any such fees, assessments, taxes, penalties, or interest levied, assessed, or imposed against the CITY thereunder.
1.6 Personnel. CONSULTANT represents that it employs, or will employ, at its own expense, personnel required in performing the services required under this Agreement. All of the services required hereunder will be performed by CONSULTANT and all personnel engaged in the work shall be fully qualified and be authorized or permitted under state and local law to perform such services. This Agreement contemplates the personal services of CONSULTANT and CONSULTANT's employees, and it is recognized by the parties hereto that a substantial inducement to the CITY for entering into this Agreement was, and is, the professional reputation and competence of CONSULTANT and CONSULTANT's employees. Neither this Agreement nor any interest therein may be assigned by CONSULTANT, except upon written consent of the CITY.
1.7 Prohibition Against Subcontracting or Assignment. CONSULTANT shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the CITY, and excepting any services identified in Appendix A, Scope of Services, and excepting minor incidental services including, but not limited to couriers and reprographics services. In addition, neither the Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated, or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written approval of the CITY.
In the event of any unapproved transfer, the CITY may void the Agreement at the CITY's option in its sole and absolute discretion.
SECTION TWO: INSURANCE
2.1 Insurance. Without limiting CONSULTANT's indemnification obligations, CONSULTANT shall procure and maintain, at its sole cost and for the duration of this Agreement, insurance coverage as provided below, against all claims for injuries against persons or damages to property which may arise from or in connection with the performance of the work hereunder by CONSULTANT, its agents, representatives, employees, and/or subconsultants. In the event that CONSULTANT subcontracts any portion of the work in compliance with this Agreement, the contract between CONSULTANT and such subconsultant shall require the subconsultant to maintain the same policies of insurance that CONSULTANT is required to maintain pursuant to this Section 2.1. If the existing policies do not meet the Insurance Requirements set forth herein, CONSULTANT agrees to amend, supplement or endorse the policies to do so.
2.1.1 Insurance Coverage Required. The policies and amounts of insurance required hereunder shall be as follows:
(1) General Liability Insurance. Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01 including completed operations, with limits of liability of not less than $1,000,000 per occurrence and $2,000,000 annual aggregate for liability arising out of CONSULTANT's performance of this Agreement. The limits shall be provided by either a single primary policy or combination of As modified 1.2021 -5- Agreement No._
policies. If limits are provided with excess and/or umbrella coverage, then the limits combined with the primary will equal the minimum limits set forth above. If written with an aggregate, then the aggregate shall be double the each occurrence limit. (2) Automobile Liability Insurance. Automobile Liability Insurance with a limit of liability of not less than $1,000,000 each occurrence and $1,000,000 annual aggregate. The limits shall be provided by either a single primary policy or combination of policies. If limits are provided with excess and/or umbrella coverage, then the limits combined with the primary will equal the minimum limits set above. Such insurance shall include coverage for all "owned," "hired" and "non-owned" vehicles, or coverage for "any auto." (3) Workers' Compensation Insurance. Workers' Compensation Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 each accident for bodily injury and $1,000,000 each employee for bodily injury by disease. Said insurance shall cover all employees of CONSULTANT providing any service in the performance of this agreement. A statement on an insurance certificate will not be accepted in lieu of the actual endorsement unless CONSULTANT's insurance carrier is the State of California Insurance Fund (SCIF) and the endorsement numbers 2570 and 2065 are referenced on the certificate of insurance.
Workers' Compensation is not required for sole proprietors or a partnership with no employees.
However, for sole proprietors or a partnership, CONSULTANT must complete a "Workers' Compensation Declaration." This form may be obtained from the CITY staff. (4) Professional Liability Insurance. Professional Liability Insurance with minimum limits of $1,000,000 each claim. Covered professional services shall include all work performed under this Agreement and delete any exclusion that may potentially affect the work to be performed.
2.1.2 Evidence of Insurance. CONSULTANT, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates and endorsements on forms approved by the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the CITY. If such coverage is cancelled or reduced, CONSULTANT shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the CITY evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.
Original, signed insurance certificates and endorsements must be sent via email from CONSULTANT's insurance broker/agent to the CITY.
The CITY project title or description MUST be included in the "Description of Operations" box on the certificate.
Certificate Holder:
As modified 1.2021 -6- Agreement No._
City of Laguna Beach, California
2.2 Endorsements.
Insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been approved by the City in writing.
2.2.1 The insurance coverage required by Section 2.1.1 Commercial General Liability shall contain the following provisions or be endorsed to provide the following:
Additional Insured: The CITY, its elected officials, officers, employees, volunteers, boards, agents and representatives shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement.
Additional Insured Endorsements shall not:
1. Exclude "Contractual Liability;"
2. Restrict coverage to the "Sole" liability of CONSULTANT;
3. Exclude "Third-Party-Over-Actions;" and
4. Contain any other exclusions contrary to the Agreement.
Primary Insurance: This insurance shall be primary and any other insurance whether primary, excess, umbrella or contingent insurance, including deductible, or self-insurance available to the insureds added by endorsement shall be in excess of and shall not contribute with this insurance.
A statement on an insurance certificate will not be accepted in lieu of the actual endorsement.
2.2.2 The policy or policies of insurance required by Section 2.1.3 Workers' Compensation shall be endorsed as follows:
Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the indemnified parties.
2.2.3 Any deductible in excess of $50,000 and/or Self-Insured Retentions must be approved in writing by the CITY.
2.2.4 Acceptable Insurance. Each policy shall be from a company with current A.M. rating of A VII or higher and authorized to do business in the State of California, or otherwise allowed to place insurance through surplus lines brokers under applicable provisions of the California Insurance Code or any federal law. Any other rating must be approved in writing by the CITY.
2.2.5 Insurance of Subconsultants. CONSULTANT shall be responsible for causing subconsultants to maintain the same types and limits of coverage in compliance with this Agreement, including naming the CITY as an additional insured to the subconsultants' policies.
As modified 1.2021 -7- Agreement No._
2.3 Notice of Cancellation. Required insurance policies shall not be cancelled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the CITY; except twelve (12) days written notice of cancellation shall be provided for non-payment of premium.
2.4 Other Insurance. Such other policies of insurance as may be required in the Special Provisions attached hereto.
2.5 Contractual Liability. Notwithstanding any other provision herein, the coverage provided shall also apply to the obligations assumed by CONSULTANT under the indemnity provisions of this Agreement.
2.6 Claims Made Policies "aka: Tail Coverage." If coverage is written on a claims-made basis, the retroactive date on such insurance and all subsequent insurance shall coincide or precede the effective date of the initial Agreement with the CITY and continuous coverage shall be maintained or an extended reporting period shall be exercised for a period of at least three (3) years from termination or expiration of this Agreement. Upon expiration or termination of coverage of required insurance, CONSULTANT shall procure and submit to the CITY evidence of "tail" coverage or an extended reporting coverage period endorsement for the period of at least three (3) years from the time that all work under this Agreement is completed.
2.7 Waiver of Subrogation. Required insurance coverages shall not prohibit CONSULTANT from waiving the right of subrogation prior to a loss. CONSULTANT shall waive all rights of subrogation against the indemnified parties and policies required under this Agreement shall contain or be endorsed to contain such a provision.
2.8 Failure to Maintain Coverage. CONSULTANT agrees to suspend and cease all operations hereunder during such period of time as the required insurance coverage is not in effect and evidence of insurance has not been furnished to the CITY and provide the CITY written notice of the same within 24 hours of suspending and ceasing all operations. The CITY shall have the right to withhold any payment due CONSULTANT until CONSULTANT has fully complied with the insurance provisions of this Agreement.
In the event that CONSULTANT'S operations are suspended for failure to maintain required insurance coverage, CONSULTANT shall not be entitled to an extension of time for completion of the Work because of production lost during suspension. Failure to maintain the required insurance coverage shall constitute good cause for termination.
SECTION THREE: INDEMNIFICATION
3.1 Indemnification. To the full extent allowed by law, CONSULTANT shall indemnify, defend with counsel acceptable to the CITY, and hold harmless the CITY and its officers, officials, employees, agents and volunteers ("Indemnitees") from and against any and all liability, loss, damage, claims, suits, actions, arbitrations proceedings, administrative proceedings, regulatory proceedings, civil penalties and fines, expenses and costs (including, without limitation, attorney's fees and costs and fees of litigation) (collectively, "Liability") of every nature, whether actual, alleged or threatened, arising out of or in connection with CONSULTANT's performance of the As modified 1.2021 -8- Agreement No._
services provided under this Agreement or its failure to comply with any of its obligations contained in this Agreement, except such Liability caused by the sole negligence or willful misconduct of the CITY.
3.1.1 CONSULTANT's obligation to defend and indemnify shall not be excused because of CONSULTANT's inability to evaluate Liability or because CONSULTANT evaluates Liability and determines that CONSULTANT is not liable to the claimant. CONSULTANT must respond within 30 days to the tender of any claim for defense and indemnity by the CITY, unless this time has been extended by the CITY. If CONSULTANT fails to accept or reject a tender of defense and indemnity within 30 days, in addition to any other remedy authorized by law, so much of the money due CONSULTANT under and by virtue of this Agreement as shall reasonably be considered necessary by the CITY, may be retained by the CITY until disposition has been made of the claim or suit for damages, or until CONSULTANT accepts or rejects the tender of defense, whichever occurs first.
3.1.2 With respect to third party claims against CONSULTANT, CONSULTANT waives any and all rights of any type to express or implied indemnity against the Indemnitees.
3.1.3 Notwithstanding the forgoing, to the extent this Agreement is a "construction contract" as defined by California Civil Code Section 2783, as may be amended from time to time, such duties of CONSULTANT to indemnify shall not apply when to do so would be prohibited by California Civil Code Section 2782.
3.1.4 Notwithstanding the foregoing, to the extent that this Agreement includes design professional services under Civil Code Section 2782.8, as may be amended from time to time, such duties of CONSULTANT to indemnify shall only be to the full extent permitted by Civil Code Section 2782.8.
3.1.5 If any term of portion of this Section 2.9 is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, said section shall be interpreted to allow the broadest indemnity permitted by law.
SECTION FOUR: LEGAL RELATIONS AND RESPONSIBILITIES
4.1 Independent Consultant. It is expressly understood that in the performance of the services under the Agreement, CONSULTANT shall be, and is, an independent CONSULTANT, and is not an agent or employee of the CITY. The 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 at any time or in any manner represent that it or any of its agents or employees are agents or employees of the CITY. CONSULTANT has and shall retain the right to exercise full control and supervision of the my of is agents or employ, services, and full control over the employment, direction, compensation and discharge of all persons assisting CONSULTANT in the performance of required services. CONSULTANT shall be solely responsible and hold the CITY harmless for all matters relating to the payment of CONSULTANT's employees, including compliance with Social Security withholdings and all other regulations governing such matters. Neither CONSULTANT nor any of CONSULTANT's employees shall, at any time, or in any way, be entitled to any sick leave, vacation, retirement or other fringe benefits from the CITY; and neither the CITY nor any of its employees shall be paid As modified 1.2021 -9- Agreement No._
by the CITY time and one-half for working in excess of forty (40) hours in any one week. Neither CONSULTANT nor any of CONSULTANT's employees shall be included in the competitive service, have any property right to any position, or any of the rights an employee may have in the event of termination of this Agreement.
4.2 Non-Discrimination and Equal Employment Opportunity. During its performance under this Agreement, CONSULTANT agrees as follows:
4.2.1 Equal Employment Opportunity. In connection with its performance under this Agreement, CONSULTANT shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, marital status, sexual orientation, AIDS or AIDS-related symptoms (including HIV positive findings), physical disability, mental disability, mental condition, family care leave, sexual orientation, ancestry or national origin. Actions encompassed by this prohibition shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment, or recruitment advertising; layoff or termination; rate of pay, or other forms of compensation; and selection for training, including apprenticeship.
4.2.2 Sanctions for Noncompliance. In the event of CONSULTANT's noncompliance with the non-discrimination provisions of this Agreement, CONSULTANI agrees that the CITY shall be authorized to impose such sanctions or penalties as the CITY may determine to be appropriate, including, but not limited to 1) withholding of payments to CONSULTANT hereunder until CONSULTANT complies with all applicable requirements and obligations, and/or 2) cancellation, termination or suspension of the Agreement, in whole or in part.
4.3 Proprietary Information. No reports, maps or other documents produced in whole or in part under this Agreement shall be the subject of an application for copyright by or on behalf of CONSULTANT. All proprietary information developed specifically for the CITY by CONSULTANT in connection with, or resulting from, this Agreement, including but not limited to inventions, discoveries, improvements, copyrights, patents, maps, reports, textual material or software programs, but not including CONSULTANT's underlying materials, software, or know- how, shall be the sole and exclusive property of the CITY, and are confidential and shall not be made available to any person or entity without the prior written approval of the CITY.
CONSULTANT agrees that the compensation to be paid pursuant to this Agreement includes adequate and sufficient compensation for any proprietary information developed in connection with or resulting from the performance of CONSULTANT's services under this Agreement.
CONSULTANT further understands and agrees that full disclosure of all proprietary information developed in connection with, or resulting from, the performances of services by CONSULTANT under this Agreement shall be made to the CITY, and that CONSULTANT shall do all things necessary and proper to perfect and maintain ownership of such proprietary information by the CITY.
4.4 Use of Patented Materials. CONSULTANT shall assume all costs arising from the use of patented or copyrighted materials, including but not limited to equipment, devices, processes, and software programs, used or incorporated in the services or work performed by CONSULTANT under this Agreement. CONSULTANT shall indemnify, defend, and save the CITY harmless from any and all suits, actions, or proceedings of every nature for or on account of the use of any patented or copyrighted materials.
As modified 1.2021 -10- Agreement No._
4.5 Retention of Funds. CONSULTANT hereby authorizes the CITY to deduct from any amount payable to CONSULTANT (where arising out of the Agreement or otherwise) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate the CITY for any losses, costs, liabilities or damages suffered by the CITY, and all amounts for which the CITY may be liable to third parties, by reason of CONSULTANT's negligent acts, errors, or omissions, or willful misconduct in performing or failing to perform CONSULTANT's obligations under this Agreement. The CITY in its sole and absolute discretion, may withhold from any payment due to CONSULTANT, without liability for interest, an amount sufficient to cover such claim or any lien. The failure of the CITY to exercise such right to deduct or withhold shall not act as a waiver of CONSULTANT's obligation to pay the CITY any sums CONSULTANT owes the CITY.
4.6 Termination for Convenience of the CITY. The CITY may terminate this Agreement at any time by giving written notice of CONSULTANT of such termination. In that event, all finished or unfinished documents and other materials shall, at the option of the CITY, become the CITY's property. If this Agreement is terminated by the CITY as provided herein, then CONSULTANT will be paid an amount which bears the same ratio to the total compensation as the services actually performed bear to the total services of CONSULTANT covered by this Agreement, less payments of compensation previously made.
4.7 Termination of Agreement for Cause. In addition to the CITY's rights under Section 4.6, the CITY may, subject to the provisions of Paragraph 4.7.2, by written notice to CONSULTANT, terminate the whole or any part of this Agreement in any of the following circumstances: (1) if CONSULTANT fails to perform the services called for by this Agreement within the times) specified herein or any extension thereof; or (2) if CONSULTANT fails to perform the services called for by this Agreement or so fails to make progress as to endanger performance of this Agreement in accordance with its terms, and in either of these two circumstances does not correct such failure within a period of ten (10) days (or such longer period as the CITY may authorize in writing) after receipt of notice from the CITY specifying such failure.
4.7.1 In the event the CITY terminates this Agreement in whole or in part as provided in this section, the CITY may procure, upon such terms and such manner as it may determine appropriate, services similar to those described in this Agreement.
4.7.2 Except with respect to defaults of subconsultants, CONSULTANT shall not be liable for any excess costs if the failure to perform this Agreement arises out of causes beyond the control and without the fault or negligence of CONSULTANT. Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes and unusually severe weather; but in every case, the failure to perform must be beyond the control of, and without the fault or negligence of CONSULTANT.
4.7.3 Upon receipt of notice of termination from the CITY, CONSULTANT shall immediately stop its services, unless otherwise directed, and deliver to the CITY all data, drawing, reports, estimates, summaries and such other information and materials as may have been accumulated by CONSULTANT in the performance of this Agreement, whether completed or in process. Upon termination, CONSULTANT shall be paid the value of the work performed, less payments of compensation previously made.
As modified 1.2021 -11- Agreement No._
4.8 Waiver. 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. A party's consent to or approval of any act by the other party requiring the party's consent or approval shall not be deemed to waive or render unnecessary the other party's consent to or approval of any subsequent act. Any waiver by either party of any default must be in writing.
4.9 Legal Actions. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted or maintained in the Municipal and Superior Courts of the State of California in the County of Orange, or in any other appropriate court with jurisdiction in such County, and CONSULTANT agrees to submit to the personal jurisdiction of the court. If any claims related to the performance hereunder be asserted against either party hereto, then the party claimed against shall receive reasonable assistance from the other.
4.10 Rights and Remedies are Cumulative. 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 rights or remedies for the same default or any other default by the other party.
4.11 Attornevs' Fees. In any action between the parties hereto seeking enforcement of any of the terms of provisions of this Agreement or in connection with the performance of the work hereunder, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to have and recover from the other party its reasonable costs and expenses, including, but not limited to, reasonable attorneys' fees, expert witness fees and courts costs. If either party to this Agreement is required to initiate or defend litigation with a third party because of the violation of any term or provision of this Agreement by the other party, then the party so litigating shall be entitled to its reasonable attorneys' fees and costs from the other party to this Agreement.
4.12 Jurisdiction. This Agreement shall be interpreted in accordance with the statutes and laws of the State of California, the City of Laguna Beach and any other government agency applicable to the subject of this Agreement and the performance hereunder.
4.13 Non-liability of City Officers and Employees. No officer, official, employee, agent, representative, or volunteer of the CITY shall be personally liable to CONSULTANT, or any successor in interest, in the event of any default or breach by the CITY, or for any amount which may become due to the CITY or its successor, or for breach of any obligation of terms of this Agreement.
4.14 Extension of Time for Delay.
4.14.1 If the work is delayed at any time by reason of a suspension ordered by the CITY or because of any other act of the CITY, or because of neglect by the CITY without contributory fault or neglect on the part of CONSULTANT, or if the work should be delayed at any time by reason of strikes, acts of God, the public enemy, acts of the CITY, fire, floods, epidemics, As modified 1.2021 -12- Agreement No._
quarantine restrictions, freight embargoes, abnormal force, violence of the elements, or for any other unforeseen cause beyond the control and without the fault or negligence of CONSULTANT, or for any other reason which in the opinion of CONSULTANT is proper justification for such delay, then CONSULTANT shall be entitled to an extension of time equivalent to the time actually lost by such delay.
4.14.2 CONSULTANT shall file a written request with the CITY for extension of time within ten (10) days following the beginning of such delay, and failure to do so shall constitute a waiver thereof, provided that in case of a continuing cause of delay, only one claim will be necessary. The 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 the CITY such delay is justified. The CITY's determination shall be in writing and be final and conclusive upon the parties to this Agreement.
4.14.3 A request for an extension of time or the granting of an extension of time shall not constitute a basis for any claim against the CITY for additional compensation. CONSULTANT shall be deemed to have waived any claims for additional compensation and does hereby so waive any such claims unless he shall, at the time of filing a request for an extension of time, likewise file a claim for additional compensation on account of such delay.
4.15 Interests of Members of the CITY and Others. To the extent prohibited by applicable law, no officer, member or employee of the CITY and no member of its governing body nor other public official of the governing body of the locality or localities in which the work pursuant to this Agreement is being carried out, who exercises any functions or responsibilities in the review or approval of the undertaking or carrying out of the aforesaid work, shall (1) participate in any decision relating to this Agreement which affects his or her personal interest or the interest of any corporation, partnership, or association in which he or she has, directly or indirectly, any interest; or (2) have any interest, direct or indirect, in this Agreement or the proceeds thereof during his or her tenure or for one year thereafter.
4.16 Interest of CONSULTANT. CONSULTANT hereby covenants that it has, at the time of the execution of this Agreement, no interest, and that it shall not acquire any interest in the future, direct or indirect which would conflict in any manner or degree or be inconsistent with the performance of services required to be performed pursuant to this Agreement. CONSULTANT further covenants that in the performance of this work no person having any such interest shall be employed.
4.17 Covenant Against Contingent Fees. CONSULTANT warrants that it has not employed or retained any company or person to solicit or secure this Agreement, and that it has not paid or agreed to pay any company or person any fee, commission, percentage, brokerage fee, gifts or any other consideration contingent upon or resulting from the making of this Agreement. In the event of a breach or violation of this warranty, the CITY shall have the right to annul this Agreement without liability or, in its discretion, to deduct from the compensation or consideration due CONSULTANT, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gifts or contingent fee.
4.18 Compliance with California Unemployment Insurance Code Section 1088.8. If CONSULTANT is a Sole Proprietor, then prior to signing the Agreement, CONSULTANT shall As modified 1.2021 -13- Agreement No._
provide to the CITY a completed and signed form W-9, Request for Taxpayer Identification Number and Certification. CONSULTANT understands that pursuant to California Unemployment Insurance Code Section 1088.8, the CITY will report the information from Form W-9 to the State of California Unemployment Development Department, and that the information may be used for the purposes of establishing, modifying, or enforcing child support obligations, including collections, or reported to the Franchise Tax Board for tax enforcement purposes.
SECTION FIVE: MISCELLANEOUS PROVISIONS
5.1 Records and Audits. CONSULTANT shall maintain complete and accurate records with respect to services performed (including, but not limited to, the identity of the person doing the work, a description by date and person of the work performed, and the amount of time expended on such work) and costs incurred under this Agreement. CONSULTANT shall also maintain its records supporting its cost proposals used and relied on to enter into this Agreement.
CONSULTANT shall maintain records to show actual time and allowable costs with respect to each task set forth in the "Scopes of Services." All such records shall be maintained on a generally accepted accounting basis and shall be clearly identifiable. CONSULTANT shall submit to the CITY such progress reports and final reports in the manner and time set forth in Appendix B attached hereto and by reference incorporated herein. The final report and CONSULTANT's work product shall become the property of the CITY. All records required to be maintained hereunder shall be maintained by CONSULTANT for a period of five (5) years.
5.2 Access to Records. The CITY shall have access, upon reasonable notice, to the books and records of CONSULTANT related to CONSULTANT's performance of this Agreement in the event any audit is required. CONSULTANT shall allow inspection of all work data, documents, proceedings and activities related to the Agreement, and CONSULTANT's performance hereunder, for a period of one (1) year from the date of final payment under this Agreement.
5.3 Ownership of Records. All drawings, original documents, methodological explanations, computer programs, designs and reports and other materials prepared by CONSULTANT in this performance of this Agreement (1) shall be the property of the CITY and shall be delivered at no cost to the CITY upon request of the CITY or upon the termination of this Agreement in accordance with accepted standards relating to public contracts, and (ii) are confidential and shall not be made available to any individual or entity without prior written approval of the CITY. Any additional copies will be the responsibility of the CITY.
5.4 Notices. Unless otherwise provided herein, any notices required to be given under the Agreement shall be in writing with copies as directed herein and shall be personally delivered, or delivered by United States mail, prepaid, certified, return receipt requested, or by reputable document delivery service that provides a receipt showing date and time of delivery. Notices personally delivered or delivered by a mail document delivery service shall be effective upon receipt. Any notice given by mail shall be deemed to have been given when deposited in the United States mails certified and postage prepaid, addressed to the party to be served as follows:
To CITY: City of Laguna Beach
Attn:
As modified 1.2021 -14- Agreement No._
505 Forest Avenue
Laguna Beach, CA 92651
Notices to CONSULTANT shall be delivered to the address set forth below CONSULTANT's signature on Part I of this Agreement. Changes in the address to be used for receipt of notices shall be effected in accordance with this Section 4.4.
5.5 Severability. Each provision of this Agreement shall be severable from the whole. If any provision of this Agreement shall be found contrary to law, then the remainder of this Agreement shall continue in full force.
Authority. The person(s) 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, (ii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which said party is bound.
5.7 Construction and Amendment. 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 or any other rule of construction which might otherwise apply. The headings of sections and paragraphs of this Agreement are for convenience or reference only, and shall not be construed to limit or extend the meaning of the terms, covenants and conditions of this Agreement. This Agreement may only be amended by the mutual consent of the parties by an instrument in writing.
5.8 Extent of Agreement. This Agreement represents the entire integrated agreement between the CITY and CONSULTANT and supersedes all prior negotiations, representations of agreements, either written or oral. This Agreement may not be modified or amended except by a writing signed by both the CITY and CONSULTANT.
5.9 Special Provisions. Any additional or supplementary provisions or modifications or alterations of these General Provisions shall be set forth in Part III of this Agreement ("Special Provisions").
5.10 Precedence. In the event of any discrepancy between Part I ("Fundamental Terms") and Part II ("General Provisions"), Part II shall take precedence and prevail over Part I. Part III shall take precedence and prevail over Part I and Part II.
5.11 Compliance with Laws. CONSULTANT warrants and represents to CITY that it shall omply with all applicable statutes, standards, rules, and regulation required by Federal, State, an cal agencies. including compliance with CAL/OSHA requirements as may be applicabl As modified 1.2021 -15- Agreement No._
ATTACHMENT C
CALIFORNIA
City of Laguna Beach
Investment Policy
Calendar Year 2022
Approved by the City Council December 14, 2021
Office of the City Treasurer
Laura Parisi, CPA, CCT
City Treasurer
City of Laguna Beach Investment Policy
City of Laguna Beach
Investment Policy
January 1, 2022 through December 31, 2022
Table of Contents
1.0 Policy Statement
2.0 Scope
3.0 Investment Philosophy
4.0 Objective
5.0 Investment Authority
6.0 Ethics and Conflicts of Interest
7.0 Authorized Financial Dealers and Institutions
8.0 Authorized and Suitable Investments
9.0 Review of Investment Portfolio
10.0 Investment Pools
11.0 Unauthorized Investments
12.0 Collateralization
Safekeeping and Custody
Diversification
Maximum Maturities
Internal Controls
Performance Standards
Socially Responsible Investing
19.0 Investment of Debt Proceeds
20.0 Reporting 11
21.0 Investment Policy Adoption 11
Glossary 12
Broker/Dealer Questionnaire 17
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1 City of Laguna Beach Investment Policy
City of Laguna Beach
Investment Policy
January 1, 2022 through December 31, 2022
1.0 POLICY STATEMENT:
It is the policy of the City to invest public funds based on compliance with state law and prudent investment practices. The primary goal of the City's Investment Policy is to invest in a manner that will provide the maximum security of the principal invested with a secondary emphasis on providing adequate liquidity and finally to achieve a rate i return within the parameters ot prudent risk management while conforming to al tate statutes and local regulations governing the investment of public funds
2.0 SCOPE:
This investment policy applies to all financial assets of the City. These funds are accounted for in the City's Annual Comprehensive Financial Report and include:
General Fund,
••. Measure LL,
Open Space,
• Capital Improvement,
Parking Authority,
• Parking in Lieu,
• Park in Lieu,
• Art in Lieu,
• Drainage Fund,
Housing in Lieu,
Gas Tax,
••.. Street Lighting,
Sewer Service,
Disaster Contingency,
• Transportation Infrastructure,
Transit,
• Internal Service Funds - Insurance,
: Internal Service Funds - Vehicle Replacement,
Assessment District Construction and Debt Service Funds (see section 18.0 "Investment of Debt Proceeds"). Debt issuance proceeds shall be invested in accordance with related debt service agreements rather than this policy.
Specific Investment Accounts - From time to time, the City Council may authorize an investment in other specific investments or the management of bond Page
2 City of Laguna Beach Investment Policy
proceeds issued by the City of Laguna Beach. This may include deposits that are set aside for future needs of a long-term nature and may be invested in longer-term securities as allowed by the Government Code.
No investment will be made in any security with a remaining maturity in excess of five years at the time of purchase or a below market rate of return, unless the City Council has granted express authority to make such an investment. Inter-fund transfers are not covered by this policy.
3.0 INVESTMENT PHILOSOPHY:
The City's investment philosophy is to invest conservatively to minimize risk.
Investments shall be made in a manner consistent with the Prudent Investor Standard for trustees of local government monies, as described in Government Code section 53600.3, which states as follows:
When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence and diligence under the circumstances then prevailing, including, but not limited 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 would 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.
4.0 • OBJECTIVE:
The authority governing investments for municipal governments is set forth in Government Code sections 53600 et seq. The primary objectives of investment activities, in order of priority, are:
4.1 SAFETY:
Safety of principal is the foremost objective of the investment program. The investment of City funds shall be undertaken to seek to ensure the preservation of capital in the overall portfolio. To attain this objective, the City shall diversify its investments by investing funds among a variety of securities offering independent returns and from various financial institutions.
4.2 LIQUIDITY:
The investment portfolio will remain sufficiently liquid to enable the City to meet the operating requirements that are reasonably anticipated.
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4.3 YIELD:
The City's investment porttolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City's investment risk constraints and the cash flow characteristics of the portfolio. The benchmark rate of return is defined in paragraph 17.1.
5.0 INVESTMENT AUTHORITY:
The authority to manage the City's investment program is derived from Government Code, Section 53600 et seq. The City Council has delegated the management responsibility for the investment program to the City Treasurer. The City Treasurer shall be responsible for investment management decisions and all transactions undertaken and shall establish a system of controls. The City Treasurer shall designate one or more persons, subject to approval by the City Council, to serve as Deputy Treasurer, in the event circumstances require timely action and the City Treasurer is not present.
No deputy may engage in an investment transaction except as provided under this Investment Policy and the procedures established by the City Treasurer and approved by the City Council.
6.0 ETHICS AND CONFLICTS OF INTEREST:
All participants in the investment process shall act as fiduciaries of the public trust. The City Treasurer and Deputy Treasurer(s) shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. The City Treasurer and Deputy Treasurer(s) shall disclose any material financial interests in financial institutions that conduct business with the City and they shall further disclose any personal financial/investment positions that could be affected by the performance of the City's operations and functions or by the management of the City's investment program.
7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS:
The City Treasurer shall maintain a list of broker/dealers and financial institutions authorized to provide investment services to the City of Laguna Beach.
These may include primary dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule).
Annually, the City Treasurer shall review each approved broker/dealer's financial condition and registrations to determine whether he/she should remain on the approved list. Additional broker/dealers may be added to the approved list as needed.
The questionnaire used for these processes is attached to this Investment Policy.
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8.0 AUTHORIZED AND SUITABLE INVESTMENTS:
Investment alternatives are governed by California statute and are further limited by the provisions of this Investment Policy. The following investment types are authorized and may be selected for investment given the liquidity needs and economic circumstances of the City, at the discretion of the City Treasurer.
8.1 U.S. Treasury Securities
United States Treasury bills, notes and bonds or certificates of indebtedness, for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no limit on the percentage of a portfolio that can be invested in this category.
8.2 U.S. Government Agency Securities
Obligations, participations or other instruments of or issued by a federal agency or a United States government-sponsored enterprise. There is no limit on the percentage of a portfolio that can be invested in this category.
8.3 Certificates of Deposit
Certificates of deposit include the traditionally known form, negotiable certificates of deposit or the investment commonly known as CARS. All certificates of deposit must be collateralized or fully insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). The Certificates of Deposit must comply with Government Code section 53601(i). There is 25% limit on the percentage of a portfolio that can be invested in this category.
8.4 Bankers' Acceptances
Bankers' Acceptances, also known as time drafts (bills of exchange) are drawn on and accepted by a commercial bank. Purchases of bankers' acceptances shall not exceed 180 days maturity and must be issued by one of the 10 largest domestic banks or one of the 20 largest international banks. There is 25% limit on the percentage of a portfolio that can be invested in this category.
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8.5 Commercial Paper
At the time of purchase, commercial paper must be rated either A-1/P-1/F1 or better by at least two Nationally Recognized Statistical Rating Organizations or have an A rating or better when applicable. No more than 3% of the total assets of the portfolio may be invested in any one issuer's commercial paper and corporate notes when combined. There is 25% limit on the percentage of a portfolio that can be invested in this category.
8.6 Bank Deposits
Funds in banks or other depository institutions may be in demand accounts (checking) or investments in accounts that have a fixed term and negotiated rate of interest. California law requires that public deposits in banks be insured by the Federal Deposit Insurance Corporation (FDIC), or, to the extent not insured, collateralized with certain types of securities. There is 25% limit on the percentage of a portfolio that can be invested in this category.
8.7 Medium-term Corporate Notes
Medium-term notes are defined as all corporate and depository institution debt securities with a maximum remaining maturity of not more than five years. They must be issued by corporations organized and operating within the United States.
Notes eligible for investment shall be rated in the A category by a Nationally Recognized Statistical Rating organization. No more than 3% of the total assets of the portfolio may be invested in any one issuer's medium-term corporate notes and commercial paper when combined. There is 25% limit on the percentage of a portfolio that can be invested in this category.
8.8 Municipal Notes or Bonds
Obligations of a political subdivision of the United States are investments authorized by this policy. At the time of purchase, long-term investments must have a rating in the A category, or better, by at least two Nationally Recognized Statistical Rating Organizations. Short-term investments must have a rating of A-1/P-1/F1 or better by a Nationally Recognized Statistical Rating Organization.
Municipal debt issued by the City of Laguna Beach is exempt from the credit rating requirement.
No more than 5% of the total assets of the portfolio may be invested in any one issuer's municipal notes or bonds. There is 25% limit on the percentage of a portfolio that can be invested in this category.
8.9 Investment Pools
Investment pools are organized and operated by a treasurer, investment officer, or external investment advisory firm. The Local Agency Investment Fund (LAIF) Page
6 City of Laguna Beach Investment Policy
is the only Investment Pool authorized as of the date this policy was adopted.
LAIF is a State of California managed investment pool established by the State Treasurer for the benefit of local agencies. There is no limit on the percentage of a portfolio that can be invested in this category.
8.91 Supranational Securities
Supranational securities are defined as United States dollar denominated senior unsecured, unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC) or Inter-American Development Bank (IADB), with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Supranational securities eligible for investment shall be in the rating category "AA" or better from at least two Nationally Recognized Statistical Rating Organizations. There is a 5% limit on the percentage of a portfolio that can be invested in this category.
Any State of California legislative action that further restricts allowable maturities, investment type or percentage allocations, shall be incorporated into this Investment Policy and supersede any and all previous applicable provisions inconsistent with such legislative action.
9.0 REVIEW OF INVESTMENT PORTFOLIO:
The securities shall be purchased in conformity with Section 5, "Investment Authority" and must comply with Section 8.o "Authorized and Suitable Investments" at the time of purchase. If at a later date, a security is no longer in compliance with Section
8.0 the City Treasurer shall report the non-compliant security to the City Council and the City Manager and shall include a disclosure in the monthly Investment Report if the security is held at the date the report is prepared.
10.0 INVESTMENT POOLS:
A thorough investigation of the pool is required prior to recommending authorization for investment. A questionnaire shall be developed that will provide the following information;
• A description of eligible investment securities, and a written statement of investment policy and objectives;
• A description of interest calculations and how they are distributed, and how gains and losses are treated;
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• A description of how the securities are safeguarded (including the settlement processes) and how often the securities are priced and the program audited;
• A description of who may invest in the program, how often, and what size deposits and withdrawals are allowed;
• A schedule for receiving statements and portfolio listings; • A description of the utilization and level of reserves, retained earnings or other collateral and how they are used by the fund;
• A fee schedule, and when and how is it assessed; and
• Whether the fund is eligible for bond proceeds and/or whether it will accept such proceeds.
11.0 UNAUTHORIZED INVESTMENTS:
Certain investments are prohibited by Government Code
section 53601.6, including inverse floaters, range notes, mortgage-derived interest-only STRIPS and securities that results in zero interest accrual if held to maturity unless the agency holds the security to maturity (except for money market funds). Besides investments prohibited by statute, this policy disallows investment in the following due to a higher perceived risk:
• Asset -backed securities (ABS) are supported by pools of installment loans or leases or by pools of revolving lines of credit; • Investment agreements are contracts regarding funds deposited by an investor often separated into those offered by banks and those offered by insurance companies commonly known as GICs;
• Mortgage-backed securities are created when a mortgagee or purchaser of residential real estate mortgages creates a pool of mortgages and markets undivided interests or participations in the pool; • Repurchase agreements are a short-term purchase of securities with a simultaneous agreement to sell the securities back on a specified date at an agreed upon price;
• Reverse-repurchase agreements involve an investor borrowing cash from a financial institution for securities;
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• Securities lending agreements allow local agencies to earn incremental income on their investment portfolio by loaning securities in their portfolio to financial services companies for a limited time; • Mutual funds are various forms of beneficial interests, issued by diversified management companies that may strive to maintain a stable Net Asset Value of $1.00.
In addition to the above specific investments, it can be generalized that investments with the following characteristics are unauthorized by this City Investment Policy:
• Options are contracts that give the buyer the right to buy or sell an obligation at a specified price for a specified time;
• Derivatives have a principal and/or interest payment subject to uncertainty as to timing and/or amount;
• Financial futures are exchange traded contracts to buy or sell a financial instrument at a specific price and on a specific future date.
12.0 COLLATERALIZATION:
All demand deposits, time deposits and certificates of deposits that are not insured by the Federal Deposit Insurance Corporation "FDIC" must be fully collateralized under the Government Code.
13.0 SAFEKEEPING AND CUSTODY:
All security transactions entered into by the City of Laguna Beach shall be onducted on a delivery-versus-payment (DVP) basis. An independent, third part ustodian designated by the City Treasurer shall hold all securities. The third part custodian shall be required to issue a safekeeping receipt to the City that lists the specific instrument, rate, maturity and other pertinent information.
14.0 DIVERSIFICATION:
Consistent with the City's investment philosophy described in Section 3.0 above, it is the policy to diversify the investment portfolio to minimize the risk of loss resulting from over concentration of assets in a specific maturity, specific issuer, or specific class of securities. Diversification strategies shall be established and periodically reviewed.
Diversification standards by security type and issuer shall be:
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0% to 100%
• U.S. Treasury securities;
• U.S. Government Agency securities;
• Local Agency Investment Fund
0% to 25%
• Certificates of Deposit;
• Bankers' Acceptances;
• Commercial Paper *;
• Bank deposits;
• Medium-term corporate notes *;
• Municipal notes or bonds **
0% to 5%
• Supranational securities.
*No more than 3% of the total assets of the portfolio may be invested in the securities issued by a single entity.
**No more than 5% of the total assets of the portfolio may be invested in the securities issued by a single entity.
15.0 MAXIMUM MATURITIES:
To the extent possible, the City of Laguna Beach will match security maturities to cash flow requirements during the remaining budgeted period. Investments will have a maximum remaining maturity of only the limitations imposed by state law or five (5) years from purchase, whichever is shorter.
16.0 INTERNAL CONTROL:
The City Treasurer shall establish a process of independent review with the cooperation of the City Manager every year. The independent auditor to perform the review shall be selected by the City Council. This review shall include procedures that test the compliance with the policies and procedures set forth in this Investment Policy.
17.0 PERFORMANCE STANDARDS:
The investment portfolio shall be designed with the objective of obtaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs.
17.1 Benchmark Rate of Return
The City's investment strategy is passive. Given this strategy, the City Treasurer shall determine whether market yields are being achieved by comparing the Page
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average City portfolio yield to the 2-year U.S. Treasury Note or the treasury security that most closely matches the duration of the portfolio, whichever is shorter. The market yield (benchmark rate of return) is an objective of this Investment Policy, as referenced above in paragraph 4.3.
18.0 SOCIALLY RESPONSIBLE INVESTING:
In addition to the philosophy and objectives established in paragraphs 3.0 and
4.0, direct investments should not be made in the securities of companies in the following industries;
• Drilling and production of fossil fuels.
• Manufacture of tobacco products.
19.0 INVESTMENT OF DEBT PROCEEDS:
Proceeds of debt issuances shall be invested under the requirements of related debt agreements, rather than the requirements of this Investment Policy.
20.0 REPORTING:
The City Treasurer shall provide monthly investment reports that provide a clear, accurate and complete depiction of the investment portfolio. The monthly report shall be provided to the City Council at a public meeting and shall be available for public viewing on the City of Laguna Beach website. The report shall also be provided to the City Manager and his/her designees. Schedules in the monthly investment report shall include the following;
• A listing of individual securities held at the end of the reporting period by authorized investment category,
• Average life and final maturity of all investments listed, • Coupon, discount or earnings rate,
• The benchmark 2-year U.S. Treasury note,
Par value and fair value and
Percentage of the portfolio represented by each investment category.
21.0 INVESTMENT POLICY ADOPTION:
The City's Investment Policy shall be adopted by resolution of the City Council.
The Investment Policy shall be reviewed annually by the City Council. Any modifications made to the Investment Policy must be approved by the City Council.
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GLOSSARY
AGENCY SECURITIES (AGENCIES): Sponsored by the Federal government set up to supply credit to various classes of institutions. Examples include Federal Home Loan Banks (FHLB), Federal Farm Credit Bank (FFCB), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and Sallie Mae.
BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill and the issuer.
BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio's investments.
BROKER/DEALER: An individual or firm that brings buyers and sellers together in a securities transaction.
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a Certificate. Large-denomination CD's are typically negotiable.
COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.
ANNUAL COMPREHENSIVE FINANCIAL REPORT: The official annual report for the City of Laguna Beach (formerly known as the CAFR). It includes five combined statements for each individual fund and account group prepared in conformity with Generally Accepted Accounting Principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with GAAP, finance-related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section.
CORPORATE MEDIUM-TERM NOTE - Corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date.
DEALER: A dealer acts as a principal in all transactions, buying and selling for his own account.
DELIVERY VERSUS PAYMENT (DVP): Delivery of securities with a simultaneous exchange of money.
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DEPUTY: Deputy Treasurer that is appointed by the City Treasurer and for whose acts she or her bondsmen are responsible. The Deputy Treasurer(s) eligible to work in the area of investment of excess funds are subject to City Council approval.
DERIVATIVES: Financial products dependent for their value on (or derived from) an underlying financial instrument, a commodity, or an index.
DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is at a discount.
DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns.
FAIR VALUE: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date as determined by the custodial bank.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits up to $250,000 per deposit.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie
Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages, second loans and fixed- rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market to influence the volume of bank credit and money.
GOVERNMENT CODE - The Government Code of the State of California.
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GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) - The
independent organization that establishes and improves standards of accounting and financial reporting for the United States, state and local governments.
INTERFUND TRANSFER - The transfer or loan from another fund within the City of Laguna Beach.
LIQUIDITY: An asset that could be converted easily and rapidly into cash without a substantial loss.
LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from political subdivisions placed in the custody of the State Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.
MARKET RATE OF RETURN: A rate of return commensurate with the market for similar securities (maturity, credit rating, duration and liquidity) would be considered a market rate of return.
MATURITY: The date upon which the principal or stated value of an investment becomes due.
MONEY MARKET MUTUAL FUNDS: Open-ended mutual fund that invests in commercial paper, banker's acceptances, repurchase agreements, government securities, certificates of deposit and other highly liquid securities and pays money market rates of interest.
MUNICIPAL ADVISOR RULE: A regulation of non-dealer "municipal advisors" such as financial advisors. In addition, the rule pertains to banks and broker dealers acting as municipal advisors. Municipal advisors have a fiduciary responsibility to the government agency receiving their services and they must register with the SEC. Municipal finance professionals that do not have a fiduciary duty to issuers cannot provide advice to governments unless certain exemptions are met. The SEC has published a list of frequently asked questions: http://www.sec.gov/info/municipal/mun-advisors-faqs.pdf.
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION
(NRSRO): Firms that review the creditworthiness of the issuers of debt securities and express their opinions in the form of letter rating categories (e.g. AAA, AA, A, BBB, etc.
The rating agencies include but are not limited to; Standard & Poor's Corporation, Moody's Investor Services, Inc.; Fitch, Inc. and Dominion Bond Rating Service, Ltd.
OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool.
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PORTFOLIO: Collection of securities held by an investor.
PRIMARY DEALER: A group of government securities dealers that serve as trading counterparties of the New York Federal Bank in implementing monetary policy. This role includes the obligations to (1) participate consistently in open market operations to carry out U.S. monetary policy under the direction of the Federal Open Market Committee (FOMC) and (ii) provide the New York Federal Banks's trading desk with market information and analysis helpful in the formation and implementation of monetary policy. Primary dealers are also required to participate in all auctions of U.S. government debt and to make reasonable markets for the New York Federal Bank when it transacts for its foreign official account-holders.
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond. The City of Laguna Beach calculates the rate of return based on the purchase price and the interest rate paid by the security when the Investment Report was prepared.
SAFEKEEPING: A service provided by banks and trust companies when the bank or trust company stores the securities, receives interest payments and redeems issues at maturity.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
SUPRANATIONAL SECURITIES: Development banks that share the same goal of providing an improved standard of living in their member countries, but each having different mandates. There are three banks (supranationals) in which California local agencies can invest in their debt obligations: the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC) and Inter-American Development Bank (IADB).
TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of one to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.
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YIELD: The rate of annual income return on an investment, expressed as a percentage.
There are nine methods of calculating yield identified by the California Debt and Investment Advisory Commission. The Treasurer shall select the method he or she thinks would be most informative to the reader of the report.
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CALIFORNIA
City of Laguna Beach
Office of the City Treasurer
Laura Parisi, CPA, CCMT
Broker/Dealer Questionnaire and Certification
1. Name of Firm:
2. Address:_
3. Telephone: ( ).
4. E-mail and website:
5. Primary Representative:
Title:
Telephone: ( )_
E-mail:
6. Are you or have you been a broker or dealer approved by the City Treasurer? If so, how many years?
7. What type of investments authorized by the California investment code and the City of Laguna Beach Investment Policy does your firm offer? Page
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8. Please identify three California governmental agencies with a contact name, phone number and the number of years you have been doing business with that agency that we may contact for a reference.
9. Does your firm currently and during the prior seven years comply with the net capital requirements of SEC rule 15c3-1?
10. Has your firm ever been subject to a regulatory, state or federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities? Have any of your employees been investigated? If so, please explain.
11. Please provide the audited financial statement for your firm and proof of FINRA report and California registration with this questionnaire and certification.
CERTIFICATION
I certify under penalty of perjury under the laws of the State of California that I have read the City of Laguna Beach's Investment Policy and the laws of the State of California related to authorized and suitable investments and that I will only offer such authorized and suitable investments for sale to the City.
Signed:
Dated:
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