CITY OF SIMI VALLEY
MEMORANDUM
O
ctober 10, 2022
TO
: City Council
F
ROM: Department of Administrative Services
S
UBJECT: APPROVAL OF AN AMENDMENT TO THE AGREEMENT BETWEEN THE
CITY OF SIMI VALLEY AND INSIGHT NORTH AMERICA LLC FOR
INVESTMENT ADVISORY SERVICES
STAFF RECOMMENDATION
S
taff recommends the City Council approve a five-year amendment to the agreement with Insight North America LLC to provide investment advisory services for $67,000 per year, $335,000 for term of this extension, for a new total not-to-exceed amount of $670,000.
BACKGROUND AND OVERVIEW
The
City Council awarded a contract with Insight North America LLC (Insight), previously Cutwater Investor Services Corp , on October 16, 2017, for investment advisory services. The contract included option al one-year extensions with City Manager approval, which was exercised on November 1, 2020. A second amendment extended the contract for one additional year through October 31, 2022, for a total contract term of five years. This request extend s the contract for an additional five-years.
I
t has been financially beneficial for the City to receive recommendations from a professional public funds investment advisory firm to assist the City with investment decisions. Such a firm analyzes the City Council’s approved investment strategy with the goal of increasing the City’s yield opportunities while ensuring safety and appropriate liquidity of funds . The time, knowledge, and analytical tools applied in providing this service are crucial to the ultimate performance of the City’s investment portfolio and are not currently available to City staff.
T
he scope of services is outlined on Exhibit A of the contract and include , but are not limited to, ongoing cash flow/maturity analysis, evaluating market risk, executing trades, and investment consultation. The City has maintained an excellent relationship with Insight and their performance as an advisor meets expectations. Staff have been able to work effectively with Insight representatives and anticipates maintaining a high level of service for the additional years of the amendment term.
AGENDA ITEM NO.
Consent (4)
2 FINDINGS AND ALTERNATIVES
Staff recommends that investment advisory services be found incongruous with the City’s prescribed frequency of competitive solicitation of contracts. Investment advising involves longer timelines than other types of consultant services and frequent competitive processes may result in consultant turnover which could jeopardize the execution of investing strategies, leading to increased uncertainty in investment returns.
The contract extension as stated above is for five years commencing on November 1, 2022, and expiring on October 31, 2027. The amendment consideration for each year of services is $67,000, amounting to $335,000 for the five year term of the extension, for a new total not-to-exceed amount of $670,000 over the whole contract term.
The existing rates are unchanged, with fees charged to the City based on the value of the City’s portfolio under advisement. The annual limit of $67,000 is based on a high- end estimate of the growth of the portfolio over the life of the contract, roughly corresponding to a total of advisor managed assets of $95 million. As the advisor manager portfolio was valued at $66.5 million as of June 30, 2022, staff does not anticipate expending the full annual consideration of the contract in the next few years. If growth does exceed the more optimistic estimates then the consideration would need to be adjusted, staff would bring the associated amendment to the City Council at that time, if necessary.
Under the terms of the current agreement, either party may terminate the cont ract upon a minimum thirty-day (30) written notice. Furthermore, if Insight is not abiding by any term or condition of the contract, they will be notified and allowed ten-days (10) to work or cure the deficiency. If not resolved, the City may terminate the contract immediately.
Sufficient funding for investment advisory services has been included in the FY 2022-23 Adopted Budget. The costs are shared across three funds: General Fund ( 63%), Waterworks (26%), and Sanitation (11%) based on their share of the portfolio.
The following alternatives are available to the City Council:
1. Approve the contract amendment with Insight North America LLC to extend the term of services for an additional five (5) years.
2. Do not approve the contract amendment with Insight North America LLC; direct staff to prepare and issue a Request for Proposal for investing services.
3. Provide Staff with further direction.
Staff Recommends Alternative No. 1
3 SUGGESTED CITY COUNCIL MOTION
I mov
e to approve the attached amendment to extend the contract for investment advisory services with Insight North America LCC through October 31, 2027.
SUMMARY
S
taff recommends that the City Council approve an amendment with Insight North America LLC to continue providing investment advisory services through October 31, 2027 since investment advisory services are not well suited for frequent competitive solicitation, and Insight North America, LLC has been performing these services at a high level of quality and responsiveness to the City.
___
_________________________________
Carolyn Johnson
Administrative Services Director
P
repared by: Taylor Dacus, Senior Management Analyst
INDEX Page
C
ontract Amendment No. 3 .............................................................. 4 Exhibit 1: Original Agreement and Amendments Nos. 1-2 ............... 6
THIRD AMENDMENT TO CONTRACT BETWEEN THE CITY OF
SIMI VALLEY AND INSIGHT NORTH AMERICA LLC FOR
INVESTMENT ADVISORY SERVICES
THIS THIRD AMENDMENT TO CONTRACT is made and entered into in the City of Simi Valley on this 10th day of October 2022, by and between the CITY OF SIMI VALLEY, a municipal corporation, hereinafter referred to as CITY, and INSIGHT NORTH AMERICA LLC, hereinafter referred to as CONSULTANT.
I. Recitals
A. CITY and CONSULTANT entered into a written contract ("CONTRA CT") executed by the parties on October 16, 2017 for the performance of investment advisory services, which is incorporated herein by reference.
B. CITY and CONSULTANT amended the CONTRACT on November 1, 2020 for the performance of investment advisory services, which is incorporated herein by reference.
C. CITY and CONSULTANT amended t he CONTRACT on October 25, 2021 for the performance of investment advisory services, which is incorporated herein by reference.
D. WHEREAS, the parties desire to extend the term of the CONTRACT for five (5) years for the period November 1, 2022 to October 31, 2027.
NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
II. Amendment
1. Term. The term of the CONTRACT shall be extended until the 31st day of October 2027.
2. Compensation. The compensation to be paid by CITY to CONSULTANT for the services provided hereby shall be amended as follows: In no event shall the total amount paid for this CONTRACT AMENDMENT exceed $67,000 per year , for a total not to exceed amount of $670,000, unless otherwise agreed to by the pa rties in writing. The CONSULTANT shall keep a tally of the cost for the work ordered b y C I T Y . T h e CONSULTANT shall not accept work orders from the CITY if the cost for the work will exceed the amount indicated above unless otherwise agreed to by the parties in writing. 4 3. Mailing Address. The mailing address of each party to this CONTRACT AMENDMENT is as follows:
CITY Department of Administrative Services
2929 Tapo Canyon Road
S i m i V a l l e y , C A 93063
A t t n : Administrative Services Director
CONSULTANT Insight North America LLC
200 Park Avenue, 7
th Floor
N e w Y o r k , N Y 10166
A t t n : Client Services - (212) 365-3156
Except as herein amended, all other terms and conditions of the CONTRACT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrum ent to be executed the day and year first above written.
Attest: City of Simi Valley, A Municipal Corporation
B y :
Lucy Blanco, City Clerk Keith L. Mashburn, Mayor of the City of Simi Valley, California
Approved as to Form: Insight North America LLC
B y :
David L. Caceres, City Attorney
Name: Jenna Maguire
Approved as to Content: Title: Head of Client Services
B y :
Brian Paul Gabler, City Manager
Name: John Ariola
Title: Head of Financial Analysis
Carolyn Johnson,
Administrative Services Director
5 CONTRACT FOR PROFESSIONAL SERVICES BETWEEN
THE CITY OF SIMI VALLEY AND CUTWATER INVESTOR
SERVICES CORP. FOR INVESTMENT ADVISORY SERVICES
THIS CONTRACT is made and entered into in the City of Simi Valley on this 161h day of October 2017, by and between the CITY OF SIMI VALLEY, a municipal corporation, hereinafter referred to as CITY, and CUTWATER INVESTOR SERVICES CORP., a Delaware Corporation, hereinafter referred to as CONSULTANT.
RECITALS
WHEREAS, on June 14, 2017, CITY requested proposals for the provision of investment advisory services; and
WHEREAS, pursuant to such request, CONSUL TANT submitted a proposai which was accepted by CITY for the services.
NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
1. Recitals. The foregoing recitals are true and correct and are a part of this CONTRACT.
2. Term. The term of this CONTRACT shall be from the November 1, 2017 through October 31, 2020, with the option of one one-year renewal (to October 31, 2021) upon mutual written consent of the City Manager and CONSUL TANT, subject to the provisions set forth in Section 10, Termination further below.
3. Description of Services. The services to be performed by CONSUL TANT are as follows:
The CONSUL TANT shall devise an investment strategy for the CITY's surplus funds to be managed on a non-discretionary basis (meaning that all investment decisions will be pre-approved by the Director of Administrative Services/Deputy City Treasurer before any purchase), within the confines of the CITY's Statement of Investment Policy, adopted by the City Council, and make investment recommendations to the CITY's Director of Administrative Services/Deputy City Treasurer for the prudent investment of such surplus funds. CONSUL TANT agrees to perform the services specifically set forth in the "Scope of Work" attached hereto and incorporated herein as Exhibit "A".
The CITY agrees that the CONSULTANT assumes no responsibility or liability for any CITY investments for which the CONSULTANT has not been appointed as investment adviser. The CITY understands that this CONTRACT does not require or obligate the CONSUL TANT to provide legal or tax advice services to the CITY and that the CONSULTANT is not providing such services to the CITY.
EXHIBIT 1
6 The CONSULTANT will not, in the absence of CITY consent, provide any advice or take any action relating to any legal proceedings involving securities held in or formerly held in the advisory portfolio, including bankruptcies and class actions; provided however CITY acknowledges the CONSULTANT may participate from time to time on ad hoc or official committees related to the affairs of issuers whose securities or obligations may be held in the advisory portfolio, and further provided that CONSUL TANT does not believe that its participation in such ad hoc or official committees would constitute a conflict of interest, and that CONSUL TANT provide CITY notice of such participation.
4. Compensation and Payment.
A. The total compensation payable to CONSUL TANT by CITY for services under this CONTRACT shall not exceed $200,000 (the "Not-To-Exceed Amount"), and shall be earned as the work progresses. Payment will be made based on the rates contained in the "Schedule of Fees" as set forth in Exhibit "B" attached hereto and incorporated herein. CONSUL TANT acknowledges that CONSUL TANT is not guaranteed to receive the Not-To-Exceed Amount or any particular or minimum amount of compensation or work under this CONTRACT.
B. After CONSULTANT has performed the services as specified in this CONTRACT, CITY shall be obligated to pay CONSUL TANT based upon the actual CITY-authorized services received by CITY at the rates established as a part of this CONTRACT.
C. Payments to the CONSUL TANT shall be made within 30 days after receipt of an original invoice from the CONSUL TANT and acceptance of the services by CITY.
D. CONSULTANT shall provide CITY with written verification of the actual compensation earned, which written verification will be in a form satisfactory to CITY. Invoices shall include the work performed and fees charged based on this contract, including the size of the portfolio and the applicable fee schedule.
5. CONSULTANT's Representations and Obligations.
A. CONSUL TANT shall perform as required by this CONTRACT.
CONSUL TANT also warrants on behalf of itself and all subcontractors engaged for the performance of this CONTRACT that only persons authorized to work in the United States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder.
B. CONSUL TANT shall obey all Federal, State, local, and special district laws, ordinances, and regulations.
C. CONSULTANT agrees to abide by CITY's Business Tax
Ordinance, of which proof of payment must be obtained prior to performance of this CONTRACT.
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D. CONSULTANT acknowledges CITY may contract with other parties for the performance of services or supplemental services as they relate to the work during the term of this CONTRACT.
6. Audit.
A. At any time during normal business hours and as often as the CITY may deem necessary, CONSUL TANT shall make available to CITY for inspection its records pertaining to this CONTRACT. CONSULTANT shall permit CITY to audit, examine and/or reproduce such records. CONSUL TANT will retain such financial records, time sheets, work progress reports, invoices, bills and project records for at least (2) years after termination or final payment under this CONTRACT. This paragraph shall survive for two (2) years after termination of this CONTRACT.
B. CITY shall have the option of inspecting and/or auditing all records and other written materiais used by CONSUL TANT in preparing its statements to CITY as a condition precedent to any payment to CONSULTANT.
7. Hold Harmless and Indemnification. CONSULTANT shall defend, indemnify, and hold harmless CITY, its agents, officials, officers, representatives, and employees, from and against all claims, lawsuits, liabilities or damages of whatever nature arising out of or in connection with, or relating in any manner to any act or omission of CONSUL TANT, its agents, employees, and subcontractors, and employees thereof, relating to CONSUL TANT's negligence, willful misconduct, or reckless disregard/malfeasance of its duties and/or obligations under this CONTRACT, pursuant to the performance or non-performance of this CONTRACT. The CONSULTANT shall thoroughly investigate any and all claims and indemnify the CITY and do whatever is necessary to protect the CITY, its agents, officials, officers, representatives, and employees as to any such claims, lawsuits, liabilities, expenses, or damages arising out of this CONTRACT. The CONSULTANT must select an attorney acceptable to the CITY who will defend such proceeding and the CITY will control any litigation thereof. Such approval by the CITY will not be unreasonably withheld. This paragraph shall survive the termination of this CONTRACT.
8. Amendments. Any amendment, modification, or variation from the provisions of this CONTRACT shall be in writing and shall be effective only upon mutual written approval by the City Manager or his designee and CONSUL TANT.
9. Anti-Discrimination. In the performance of the terms of this CONTRACT, CONSUL TANT shall not engage in, nor permit subcontractors to engage in, discrimination in employment of persons because of the age, race, color, religious creed, sex, sexual orientation, national origin, ancestry, physical disability, mental disability, medical condition, or marital status of such persons. Violation of this provision may result in the imposition of penalties referred to in Labor Code Section 1735. 3 8
10. Termination. In addition to as otherwise provided herein, this CONTRACT may be terminated by the following means:
A. Either party may terminate this CONTRACT upon a minimum of thirty (30) days written notice of such termination, pursuant to the notice procedures outlined in paragraph 26 of this CONTRACT.
B. If, during the term of this CONTRACT, CITY determines that CONSUL TANT is not faithfully abiding by any term or condition contained herein, CITY may notify CONSULTANT in writing of such defect or failure to perform. The notice must give to the CONSUL TANT a ten (10) day period of time thereafter in which to perform the work or cure the deficiency. If CONSUL TANT has not performed the work or cured the deficiency within the ten (10) days specified in the notice, such failure shall constitute a breach of this CONTRACT, and CITY may terminate this CONTRACT immediately by written notice to CONSUL TANT. In addition, CITY, if it terminates this CONTRACT for cause, may withhold as an offset from payments due CONSULTANT damages occasioned by such breach, including liquidated damages, if so provided herein. The CITY shall be liable to the CONSULTANT only for those fees accrued by the CONSUL TANT to the date CONSULTANT receives the notice of termination. In such event, CONSUL TANT shall be entitled to the reasonable value of its services. In no event, however, shall CONSUL TANT be entitled to receive in excess of the CONTRACT amount.
11. Delivery of Reports in Cases of Termination. If this CONTRACT is terminated pursuant to any of the provisions contained hereinabove, and if requested to do so in writing by the CITY, the CONSULTANT shall, within fourteen (14) calendar days after receipt of such written request, deliver and turn over to the CITY all of its preparation and work on the project which were done to the date of the receipt of the notice of termination.
The terms "preparation" and "work" as used in this paragraph, shall refer to and include all data and materials of whatever type that have been gathered by the CONSUL TANT, and contemplated to be used or actually used, in the provision of the services as specified in this CONTRACT. The terms "preparation" and "work" shall not include materials in which the CONSUL TANT maintains a proprietary ownership interest.
12. Complete CONTRACT. This CONTRACT and its accompanying exhibits shall constitute the complete CONTRACT between the parties hereto. No verbal agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such verbal agreement, understanding, or representation be binding upon the parties hereto.
13. Independent Contractor. It is expressly understood between the parties to this CONTRACT that no employee/employer relationship is intended.
CONSUL TANT is not an agent or employee of the CITY and it is not entitled to participate in any pension plan, insurance or other benefits CITY provides for its employees.
CONSULTANT is an independent contractor in performing the Services required under this CONTRACT and will have control of all work and the manner in which it is performed. Any provision of this CONTRACT that may appear to give CITY the right to direct CONSUL TANT as to the details of doing the work required herein or to exercise a measure of control over the work means that the CONSUL TANT will follow the direction of the CITY as to the results of the work only.
14. Time of Performance. Time is of the essence in this CONTRACT. 4 9
15. Insurance. CONSULTANT shall, at CONSULTANT'S sole cost and expense, provide insurance as contained in Exhibit "C", incorporated herein.
CONSUL TANT shall not commence work on the Services to be performed, until it submits proof of all insurance coverage as required.
16. Ownership of Reports and Data. The originals of all studies, reports, exhibits, documents, data and other work or materials prepared for, or used to comply with any term of this CONTRACT, plus any copies of same required by this CONTRACT to be furnished to the CITY by any of the other party(ies) with whom the CONSULTANT may have contract(s) pertaining to this project, shall be deemed to be public records open to inspection by the public and, as such, to be and remain the property of the CITY.
17. Conflict of Interest. Neither CONSULTANT nor any employees, agents, or subcontractors of CONSUL TANT who will be assigned to this project, to the best of CONSULTANT'S knowledge, own any property or interest in properties, business relationships, or sources of income which may be affected by the performance of this CONTRACT. Should one party hereto learn of any such interest, income source, or business relationship, such fact ·shall immediately be brought to the attention of the other party hereto. If the parties thereupon cannot mutually agree upon a means to eliminate the conflict, CITY may terminate the CONTRACT immediately for non-performance pursuant to Section 10 herein.
In accordance with California Government Code Section 87306, CONSULTANT shall provide, if requested by CITY, a Conflict of Interest Statement, Form 700 no later than 30 days after execution of this CONTRACT, and annually thereafter prior to April 1st of each year for the duration of the CONTRACT. Failure to file any of the required statements will result in withholding payment for services rendered.
18. Successors and Assigns. The terms hereof shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that no party hereto shall assign any of the benefits and burdens hereunder, whether voluntarily or by operation of law, without the prior written consent of the other party, and any such assignment without said consent shall be void.
19. Authority to Execute CONTRACT. Both CITY and CONSULTANT do covenant that each individual executing this CONTRACT on behalf of each party is a person duly authorized and empowered to execute contracts for such party.
20. Jurisdiction and Venue. Jurisdiction is in an appropriate court in the State of California and venue lies in Ventura County, and the parties do not consent to arbitration. In the event of any dispute, each party shall bear its own fees and costs (including attorneys' fees). This CONTRACT shall be governed by California law, without regard to conflict of law principles.
21. Non-Appropriation of Funds. Payments due and payable to CONSUL TANT for current services are within the current budget and within an available, unexhausted and unencumbered appropriation of CITY. In the event CITY has not appropriated sufficient funds for payment of CONSULTANT services beyond the current fiscal year, this CONTRACT shall cover only those costs incurred up to the conclusion of the current fiscal year.
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22. Taxpayer Identification Number. CONSULTANT shall provide CITY with a complete Request for Taxpayer Identification Number and Certification, form W-9 (latest revision), as issued by the Internal Revenue Service.
23. Permits and Licenses. CONSULTANT, at its sole cost and expense, shall obtain and maintain during the term of this CONTRACT, all appropriate permits, licenses, and certificates that may be required in connection with the performance of this CONTRACT.
24. Waivers. The waiver by one party of any term or condition of this CONTRACT, or any breach thereof, shall not be construed to be a general waiver by the party or as a waiver of any other term or breach.
25. Statement of Experience. CONSULTANT warrants that it will perform its Services with at least the due care, diligence and expertise generally accepted in its industry. CONSUL TANT also understands and agrees that it is being employed to perform the Services provided foi by this CONTRACT because of CONSULTANT'S professed expertise and experience in performing such Services. In addition, CONSUL TANT understands and agrees that while CITY or CITY'S officers, employees, agents or volunteers may elect to do so, they have no duty to review, inspect, monitor, or supervise the work performed by CONSUL TANT pursuant to this CONTRACT. As a consequence, CONSULTANT waives any right of contribution against CITY or any of CITY'S officers, employees, agents, or volunteers arising out of such failure to inspect, review, monitor, or supervise the work performed by CONSULTANT pursuant to this CONTRACT.
26. Notices. All written notices required by, or related to this CONTRACT shall be sent by Certified Mail, Return Receipt Requested, postage prepaid and addressed as listed below. Neither party to this CONTRACT shall refuse to accept such mail; the parties to this CONTRACT shall promptly inform the other party of any change of address.
All notices required by this CONTRACT are effective on the day of receipt, unless otherwise indicated herein. The mailing address of each party to this CONTRACT is as follows:
CITY
CONSULTANT
City of Simi Valley
2929 Tapo Canyon Road
Simi Valley, CA 93063
Attn: Director of Administrative Services
Cutwater Investor Services Corp.
c/o Insight Investment
Attn: Client Service
200 Park Avenue, 7th Floor
New York, NY 10166
(212) 365-3156
27. Other Provisions Relating to Advisory Services. The CITY agrees to provide the CONSULTANT and the CONSULTANT's service provider with read-only electronic access to the CITY's custodian account records and it will authorize its custodian(s) to provide such access. CONSUL TANT represents that such CITY authorization is required in order to permit the aggregation of data necessary to compile and generate accurate client portfolio reports. All Information in such client portfolio reports will be reconciled with the CITY's custodian(s) account records. 6 11
When placing orders for the execution of transactions for the advisory account, the CONSULTANT will take into consideration available prices and other relevant factors such as, without limitation, execution and settlement capabilities. The CONSUL TANT will exercise good faith in obtaining the best price and execution for each transaction for the advisory account. The CONSUL TANT shall not be liable to the CITY for any act or omission of any broker or dealer selected by the CONSULTANT in good faith and approved by the CITY (and due to no negligence, willful misconduct or reckless disregard/malfeasance of CONSUL TANT).
The CONSUL TANT will not have custody or possession of the assets of the advisory portfolio of the CITY. The CITY shall select and authorize a custodian bank or brokerage firm to hold the assets of the advisory portfolio in safekeeping for the CITY. The CITY shall be solely responsible for all fees involved with any custodial arrangements.
The CONSUL TANT will not be liable for any error in judgment or any acts or omissions to act except those resulting from the CONSULTANT's negligence, willful misconduct or reckless disregard/malfeasance of its duties and obligations under this CONTRACT. Nothing herein shall in any way constitute a waiver or limitation of any right of any person under the federal and state securities laws.
It is understood that the CONSUL TANT performs investment advisory services for other clients, including certain of its affiliates. The CITY agrees that the CONSUL TANT may give advice and take action with respect to any of its other clients, including proprietary accounts, which may differ from advice given, or the timing, or nature of action taken, with respect to the advisory portfolio.
The CITY agrees that the CONSUL TANT may add CITY'S name to the CONSULTANT'S Representative Client List and may provide the CITY's name and contact details in response to certain RFP requests for client contact information; provided that CITY will not be liable for any responses given in response to such information requests. 7 12
CONSUL TANT states that it has provided CONSULTANT'S Brochure (Form ADV Part 2A) to the CITY, and the CITY hereby acknowledges receipt of the CONSUL TANT's Brochure (Form ADV Part 2A) at least 48 hours prior to the date of execution of this CONTRACT in compliance with Rule 204-3 of the Act. The CITY hereby consents to the CONSULTANT'S use of electronic mail to satisfy its disclosure delivery requirements under the federal securities laws (including the CONSULTANT'S obligation to deliver its Form ADV). Such consent shall be effective for the duration of this CONTRACT, unless the CITY revokes such consent in writing.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.
Attest:
Approved as to Form:
Lonnie J. Eldridge, City Attorney
Connie Henes-Baird
Deputy Director/Support Services
8 City of Simi Valley, A Municipal Corporation
Mu, /J j ,.f/ ,;:t,l.l / l~/J A /
s~W.mf~ be 0. Hu er,iyor of the City
of Simi Valley, California
CONSULTANT
c~~ By:
John Ariola
Title: -------------
By: ~ Gerard Berrigan
Title: -------------
Head of US Fixed Income
13 EXHIBIT "A"
SCOPE OF WORK
CONTRACT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF
SIMI VALLEY AND CUTWATER INVESTOR SERVICES CORP. FOR
INVESTMENT ADVISORY SERVICES
Cutwater Investment Services Corp. (Cutwater) will work closely with City staff to design and implement a customized investment management program for the City's funds. The goal is to maximize return on the portfolio recognizing the City's investment policy constraints, risk tolerance and cash flow needs. This will be accomplished by frequent and direct communication between the portfolio manager and City staff.
Discussions on strategy and individual security recommendations will be conducted to explain the rationale for each and every portfolio transaction. Research and credit analysis will continue daily in order to monitor the City's portfolio holdings and develop additional strategies to enhance returns. The City's portfolio is subject to a monthly compliance review by Cutwater's corporate compliance officer. The compliance officer is charged with verifying that the portfolio manager is investing the City's assets in accordance with the City's adopted Statement of Investment Policy. The City agrees to notify the Consultant promptly in writing of any modifications to the Investment Policy including changes or other actions that are required to be put in place in order to comply with applicable statutory or regulatory provisions. Cutwater's team will stay in regular contact with City staff to ensure that they fully understand the investment strategy developed and are thoroughly familiar with the holdings in the portfolio.
The investment program includes, at a minimum, the following services for the investment portfolio under management:
• Assist City staff to develop and maintain ongoing cash flow/maturity analysis practices • Evaluate market risk and develop strategies that minimize impact on the portfolio • Establish an appropriate performance benchmark for the portfolio • Assist with trade settlements
• Provide assurance of portfolio compliance with the Investment Policy including trends and restrictions specific to California governmental agencies • Provide ongoing credit analysis of investment instruments in the City's portfolio • Provide monthly/quarterly/annual reporting on all government entity invested funds detailing securities holdings (including balances in local government investment pools), portfolio composition and sector analyses, portfolio return and weighted average maturity, and daily transaction activity
• Attend face-to-face meetings with City staff and officials when requested • Provide an annual review of the City's adopted Statement of Investment Policy, and recommend appropriate amendments for consideration by the City Council • Perform due
diligence reviews of current and proposed brokers/dealers • Monitor the creditworthiness of investments in the portfolio. • Upon request, provide periodic training to City staff on general investment theory, strategies, and how market forces affect portfolios
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EXHIBIT "B"
SCHEDULE OF FEES
CONTRACT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF
SIMI VALLEY AND CUTWATER INVESTOR SERVICES CORP. FOR
INVESTMENT ADVISORY SERVICES
Average Assets Under Management
Initial $25 million
Next $75 million
Over $100 million
Net Assets Under Management
First $5 miiiion
Over $5 million
Total Estimated Monthly Price
Percentage of Portfolio
Fees
10 bp pa
6 bp pa
5 bp pa
Fees
NiA
Other (provide detail below) (Annual Total)
@ 36 months= Total Contract Price
Portfolio Value
$62.8M $95M
$ 3,975
.076%
$47,700
$5,583
.070%
$66,700
$200,000
The fees for investment advisory services will be charged monthly based on the average market value of the cash and securities in the portfolio excluding balances in local government investment pools (an average of last month's ending market value and the current month's ending market value). A pro rata portion of the annual fee (1 /12) is billed each month for which this Agreement is in effect.
Monthly fees are based on the schedule outlined above, but at no time shall the monthly fee be less than $2,000.
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EXHIBIT "C"
INSURANCE REQUIREMENTS
CONTRACT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF
SIMI VALLEY AND CUTWATER INVESTMENT SERVICES CORP. FOR
INVESTMENT ADVISORY SERVICES
Insurance -The Consultant shall meet the following provisions (Sections 1 through 7) relating to insurance coverages.
1. 2.
General Conditions -Without limiting the Consultant indemnification of City, Consultant shall provide and maintain at its own expense the insurance listed under Section 7 (Evidence of Coverages) covering its operations, subject to the following conditions:
a)
b)
c)
d)
The Citv. its Boards, Officers. Aqents, and Employees shall be included as addition.al insureds on all liability insurance certificates thereto except for Workers' Compensation and Professional Errors and Omissions. Extract from the relevant policies evidencing same shall be submitted to the City on request.
Such insurance shall be primary with respect to any insurance maintained by City and shall not call on City's insurance for contributions.
With respect to the interests of the City, the Consultant's insurance shall not be canceled nor reduced in coverage or limits until after thirty (30) days written notice shall have been sent by certified mail (return receipt requested) to the City of Simi Valley, Department of Administrative Services 2929 Tapo Canyon Road, Simi Valley, California 93063, and shall contain an unequivocal clause so stating.
A City approved certificate of insurance and an extract from the relevant policies evidencing same, providing coverage shall be submitted to and approved by the City's Risk Manager prior to commencement of any work or tenancy.
Workers' Compensation -The Consultant shall procure and maintain, during the life of the Contract, workers' compensation insurance or a valid certificate of consent to self-insure for all its employees engaged on or at the site of the project. In case any of the work is sublet, the Consultant shall require all subcontractors to similarly provide workers' compensation insurance for all the latter's employees unless such employees are covered by protection afforded by workers' compensation insurance carried by the Consultant.
By submitting a proposal pursuant to these specifications, Consultant hereby certifies that it is aware of the provisions of Section 3700 et seq., of the Labor Code which require every employer to be insured against liability for Workers' Compensation.
3. Failure to Procure or Maintain Insurance -Consultant's failure to procure or maintain required insurance program shall constitute a material breach of Contract under which the City may immediately terminate the Contract or, at its discretion, procure or renew such insurance to protect the City's interests and pay any and all premiums in connection therewith, and recover all monies so paid from Consultant, or deduct all monies so paid from payments due Consultant.
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4. Evidence of Coverages -Evidence of coverages (as checked below) having as a minimum the limits shown must be submitted and approved prior to commencement of work or any tenancy. Amounts shown are Combined Single Limit (CSL). Split limits may be substituted if the total per occurrence equals or exceeds the CSL amount.
Description
_x_ Workers' Compensation
(x) Employer's Liability
(x) Waiver of Subrogation
_x_ General
Liability (must be written on an Occurrence Form)
(x) Premises and Operations
(x) Contractual Liability
(x) Independent Contractors
(x) Products/Completed Operations
(x) Broad Form Property Damage
(x) Personal Injury
(
) Broad Form Liability Endorsement
( ) Explosion Hazard
( ) Collapse/Underground Hazard
Statutory
$1 million
$2 million
_x_ Automobile Liability (must be written on an Occurrence Form) (x) Owned Automobiles
$1 million
(x) Nonowned/Hired Automobiles
( ) Garagekeeper's Legal Liability
_x_ Professional Liability (Errors and Omissions)
(to be in continuous force as long as Consultant
remains in the investment advisory business)
Property Insurance
( ) All Risk Coverage
( ) Fire & Extended Coverage
( ) Sprinkler Leakage
() Flood
( ) Earthquake
( ) Fire Legal Liability
( ) Boiler & Machinery
( ) Vandalism & Malicious Mischief
Fidelity Bond
12 $1 million /occurrence
$2 million aggregate
$0
$0
17 18
19 20
21 22
23 24
25 lnsight
INVESTMENT
May 16,2018
Jody Kershberg
Director of Administrative Services
City of Simi Valley
2929Tapo Canyon Road
SimiValley, CA
Dear Jody Kershberg
ln April of last year we notified you that The Bank of New York Mellon Corporation was undertaking a series of internal corporate reorganizations to better organize its asset management businesses. We are pleased to inform you that these actions are nearing completion and effective on or about June 1, 2018, Cutwater Holdings, LLC ('CHLLC"), the ultimate parent of Cutwater Asset Management Corp. ('CAMC') and Cutwater lnvestor Services Corp. ("ClSC") will be a direct subsidiary of lnsight North America LLC ('lNA').
We also want to take this opportunity to notify you that lnsight is now embarking on the next phase of its internal reorganization by merging CHLLC, CAMC, and CISC into lNA, so that INA will become lnsight lnvestment's sole US-based investment advisory entity. The Bank of New York Mellon Corporation will remain INA's ultimate parent company. lt is important to note that this merger will have no impact on the day-to-day management of your account. As you know, CISC and CAMC have been operating under the brand name of lnsight lnvestment for some time now, and this merger is solely meant to be a corporate "housekeeping" measure. The terms of your existing investment management agreement and the services we provide to you will remain unaffected.
We anticipate that this merger will occur on or around July 1, 2018 (the "Transaction Date"). Because this change represents an internal reorganization among lnsight affiliates, we do not believe it would technically result in an "assignment" (as that term is defìned under the lnvestment Advisers Act of 1940) of your investment management agreement to lNA, but, neveftheless, we believe it is prudent to provide you with notice and seek your consent to replacing the contracting party in your investment management agreement with lNA.
Accordingly, we would be grateful if you could please complete, sign and date the attached Consent form and return it to us by June 16, 2018. Unless you notify us to the contrary in writing by such date, you will be deemed to have consented to replacing CAMC/CISC with lnsight.
Of course, please do not hesitate to contact one of the lnsight team members if you have any questions or concerns.
Yours sincerely,
lnsight North America LLC
26
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27 Consent
The undersigned hereby acknowledges receipt of the letter dated May 16, 2018 (the "Lette/'), describing the proposed merger of Cutwater Holdings LLC, Cutwater Asset Management Corp. and Cutwater lnvestor Services Corp. into lnsight North America LLC and hereby consents to the transfer described in the Letter.
Signature
Name: Jo
Title:Å2, c
DatetIlëà,0
Please return the signed Consent by email to Client Services at [email protected] and Rachelle McKinney at [email protected] or by facsimile at212 527 1818. You may also mail a hard copy to the attention of Rachelle McKinney at the address listed below. lnsÌght lnvestment, 200 Park Avenue, 7th Floor, New York, NY 10166 f :212 527 1BO0 F.212 527 1B1B www.insiqhtinvestment.com lnsight North America LLC a01480059 v3
l'.¡r,,,i ._.: ltNY Mlil-t()N
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29 SECOND AMENDMENT TO CONTRACT BETWEEN THE CITY
OF SIMI VALLEY AND INSIGHT NORTH AMERICA LLC FOR
INVESTMENT ADVISORY SERVICES
THIS SECOND AMENDMENT TO CONTRACT is made and entered into in the City of Simi Valley on this 25
th day of October 2021, by and between the CITY OF SIMI VALLEY, a municipal corporation, hereinafter referred to as CIT Y, and INSIGHT NORTH AMERICA, hereinafter referred to as CONSULTANT.
I. Recitals
A. CITY and CONSULTANT entered in to a written contract ("CONTRACT") executed by the parties on October 16, 2017, for the performance of investment advisory services, which is incorporated herein by reference.
B. CITY and CONSULTANT amended t he CONTRACT on November 1, 2020 , for the performance of investment advisory services, which is incorporated herein by reference.
C. WHEREAS, the parties desire to extend the term of the CONTRACT for one year for the period November 1, 2021, to October 31, 2022.
NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
II. Amendment
1. Term. The term of the CONTRACT shall be extended until the 31 st day
of October 2022.
2. Compensation. The compensation to be paid by CITY to CONSULTANT for the services provided hereby shall be amended as follows: In no event shall the total amount paid for this CONTRACT AMENDMENT exceed $67,000, for a total not to exceed amount of $334,000, unless otherwise agreed to by the parties in writing. The CONSULTANT shall keep a tally of the cost for the work ordered b y C I T Y . T h e CONSULTANT shall not accept work orders from the CITY if the cost for the work will exceed the amount indicated above unless otherwise agreed to by the parties in writing.
3. Mailing Address. The mailing address of each party to this CONTRACT AMENDMENT is as follows:
CITY Department of Administrative Services
2929 Tapo Canyon Road
Simi Valley, CA 93063
Staff Contact: Joseph D. Toney, Director
(805) 583-6725
DocuSign Envelope ID: BAE7F63F-0EC8-4941-ABBD-39E9C3CCAC67 30 CONSULTANT Insight North America LLC
A t t n : Client Service
200 Park Avenue, 7 th Floor
N e w Y o r k , N Y 10166
( 212) 365-3156
Except as herein amended, all other terms and conditions of the CONTRACT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrum ent to be executed the day and year first above written.
Attest: City of Simi Valley, A Municipal Corporation
B y :
Lucy Blanco, City Clerk Keith L . Mashburn, Mayor of the City of Simi Valley, California
Approved as to Form: Insight North America LLC
B y :
David L. Caceres, Interim City Attorney
Print Name: Jenna Rivers
Approved as to Content: Title: Head of Client Service
B y :
Brian Paul Gabler, City Manager
Print Name: John Ariola
Title: Head of Financial Analysis
Alison M. Phagan,
Deputy Administrative Services Director
(Support Services)
Joseph D. Toney,
Administrative Services Director
DocuSign Envelope ID: BAE7F63F-0EC8-4941-ABBD-39E9C3CCAC67 31