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55414.00000\40152681.1
CITY OF STANTON CHANDLER ASSET MANAGEMENT
INC.
By:
Hannah Shin-Heydorn
City Manager
By:
Nicole Dragoo, JD, IACCP
President
ATTEST:
By:
Patricia Vazquez
City Clerk
APPROVED AS TO FORM:
By:
HongDao Nguyen
Best Best & Krieger LLP
City Attorney
ATTACHMENT A
CITY OF STANTON
PROFESSIONAL SERVICES AGREEMENT
FOR
INVESTMENT MANAGEMENT AND ADVISORY SERVICES
1. PARTIES AND DATE.
This Agreement is made and entered into this 14th day of June, 2022, by and between the City of Stanton, a municipal organization organized under the laws ofthe State of California with its principal place of business at 7800 Katella Avenue, Stanton, California 90680 (" City") and Chandler Asset Management, Inc., a corporation, with its principal place of business at 6225 Lusk Boulevard, San Diego, California 9212 1 (" Consultant"). City and Consultant are sometimes individually referred to herein as " Party" and collectively as " Parties."
2. RECITALS.
2. 1 Consultant.
Consultant desires to perforin and assume responsibility for the provision of professional investment management and advisory consultant services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing professional investment management and advisory consultant services to public clients, is licensed in the State of California, and is familiar with the plans of City.
3. TERMS.
3. 1 Scope of Services and Term.
3. 1. 1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional investment management and advisory consultant services. The Services are more particularly described in Exhibits " A" and " D" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement as well as the additional terns provided in Exhibit `B", the exhibits attached hereto and incorporated herein by reference, and all applicable local, state, and federal laws, rules, and regulations.
3. 1. 2 Term. The term of this Agreement shall be from [ June 14, 2022, to June 30, 2024, unless earlier terminated as provided herein. The City Manager shall have the unilateral option, at its sole discretion, to renew this Agreement annually. Consultant shall complete the Services within the tern of this Agreement, and shall meet any other established schedules and deadlines.
3. 2 Responsibilities of Consultant.
3. 2. 1 Independent Contractors. Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision.
Consultant will determine the means, methods, and details of performing the Services subject to 1-
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the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant shall complete, execute, and submit to City a Request for Taxpayer Identification Number and Certification ( IRS FormW- 9) prior to commencement of any Services under this Agreement. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant' s exclusive direction and control. Neither City, nor any of its officials, officers, directors, employees, or agents shall have control over the conduct of Consultant or any of Consultant' s officers, employees, or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.
3. 2. 2 Schedule of Services. Consultant shall perform the Services within the term of this Agreement. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions.
3. 2. 3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.
3. 2. 4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the services or a threat to the safety of persons or property, shall be promptly removed by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Genny Lynkiewicz, CFA ( Senior Portfolio Manager); Scott Prickett, CTP ( Portfolio Manager and Key Investment Contact); Mia Corral Brown ( Senior Relationship Manager); and Kara Raynor Sanchez ( Client Service Contact).
3. 2. 5 City' s Representative. The City hereby designates the City Manager, or his or her designee, to act as its representative for the performance of this Agreement (" City' s Representative"). City' s Representative shall have the power to act on behalf of the City for all purposes under this Contract. The City Manager hereby designates the City' s Finance Director, or his or her designee, as the City' s contact for the implementation of the Services hereunder.
Consultant shall not accept direction or orders from any person other than the City' s Representative or his or her designee.
3. 2. 6 Consultant' s Representative. Consultant hereby designates Nicole Dragoo, President, or his or her designee, to act as its representative for the performance of this Agreement Consultant' s Representative"). Consultant' s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant' s 2-
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Representative shall supervise and direct the Services, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.
3. 2. 7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City' s staff, consultants, and other staff at all reasonable times.
3. 2. 8 Standard of Care: Performance of Emnlovees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services and that such licenses and approvals shall be maintained throughout the term ofthis Agreement.
As provided for in the indemnification provisions ofthis Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant' s failure to comply with the standard of care provided for herein. Any employee ofthe Consultant or its sub -consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the services, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from providing services to the City by the Consultant and shall not be re- employed to perform any of the Services for the City.
3. 2. 9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules and regulations in any manner affecting the performance of the Services, including all Cal/ OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations , Consultant shall be solely responsible for all costs arising therefrom.
Consultant shall defend, indemnify, and hold City, its officials, directors, officers, employees, agents, and volunteers free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules, or regulations.
3. 2. 10 Insurance.
3. 2. 10. 1 Time for Compliance. Consultant shall not commence Work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section. 3-
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3. 2. 10. 2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder and without limiting the indemnity provisions of the Agreement, the Consultant in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement, the following policies of insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of work hereunder by the Consultant, its agents, representatives, or employees. 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. If the Consultant maintains broader coverage and/ or higher limits than the minimums shown below, the City requires and shall be entitled to the broader coverage and/ or higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. a) Commercial General Liability ( CGL): Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office " occurrence" form CG 0001, with minimum limits of at least $ 1, 000,000 per occurrence, and ifwritten with an aggregate, the aggregate shall be double the per occurrence limit. Defense costs shall be paid in addition to the limits.
The policy shall contain no endorsements or provisions limiting coverage for ( 1) contractual liability; ( 2) cross liability exclusion for claims or suits by one insured against another; or ( 3) contain any other exclusion contrary to the Agreement.
b) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 0001 covering " Any Auto' ( Symbol 1) with minimum limits of 1, 000, 000 each accident.
c) Professional Liability: Professional Liability insurance with minimum limits of $2, 000, 000 per occurrence or claim, $ 2, 000, 000 aggregate. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed ( for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.).
If coverage is written on a claims -made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least five ( 5) years after completion of the contract of work. If coverage is canceled or non - renewed, and not replaced with another claims -made policy form with a Retroactive Date prior to the contract effective date, the Consultant mush purchase " extended reporting" coverage for a minimum of five ( 5) years after completion of contact work. A copy 4-
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of the claims reporting requirements must be submitted to the City for review.
d) Workers' Compensation: 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 per accident for bodily injury and disease.
3. 2. 10. 3 Endorsements. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval.
a) The policy of insurance required by Section 3. 2. 10. 2 ( a) Commercial General Liability shall be endorsed to provide the following:
1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers 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) be restricted to " ongoing operations'; ( 2) exclude " contractual liability"; 3) restrict coverage to " sole" liability of Consultant; or ( 4) contain any other exclusions contrary to the Agreement. 2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty ( 30) day written notice of cancellation has been served upon the City except ten ( 10) days shall be allowed for non- payment of premium.
b) The policy or policies of insurance required by Section 3. 2. 10.2 ( b) Automobile Liability and ( c) Professional Liability shall be endorsed to provide the following:
1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty ( 30) day written notice of cancellation has been served upon the City except ten ( 10) days shall be allowed for non- payment of premium.
c) The policy or policies of insurance required by Section 3. 2. 10. 2 ( d) Workers' Compensation shall be endorsed to provide the following:
1) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the indemnified parties.
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2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty ( 30) day written notice of cancellation has been served upon the City except ten ( 10) days shall be allowed for non-payment of premium.
3. 2. 10. 4 Primary and Non -Contributing Insurance. All insurance coverages by the Consultant shall be primary and any other insurance, deductible, or self-insurance maintained by the indemnified parties shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.
3. 2. 10. 5 Waiver of Subrogation. Required insurance coverages shall not prohibit Consultant from waiving the right of subrogation prior to a loss. Consultant shall waive all subrogation rights against the indemnified parties. Policies shall contain or be endorsed to contain such provisions.
3. 2. 10. 6 Deductible. Any deductible or self-insured retention must be approved in writing by the City and shall protect the indemnified parties in the same manner and to the same extent as they would have been protected had the policy or policies did not contain a deductible or self-insured retention.
3. 2. 10. 7 Evidence of Insurance. The 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.
3. 2. 10. 8 Failure to Maintain Coverage. Consultant agrees to suspend and cease all operations hereunder during such period oftime as the required insurance coverage is not in effect and evidence of insurance has not been furnished to the City. 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 the Consultant' s operations are suspended for failure to maintain required insurance coverage, the Consultant shall not be entitled to an extension oftime for completion of the Services because of production lost during suspension.
3. 2. 10. 9 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best' s rating of no less than ANII and authorized to do business in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law. 6-
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3. 2. 10. 10 Insurance for Subconsultants. All Subconsultants shall be included as additional insureds under the Consultant' s policies, or the Consultant shall be responsible for causing Subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City as an Additional Insured to the Subconsultant' s policies.
3. 2. 11 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state, and federal laws, rules, and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature ofthe work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: ( A) adequate life protection and lifesaving equipment and procedures; ( B) instructions in accident prevention for all employees and Subconsultants, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and ( C) adequate facilities for the proper inspection and maintenance of all safety measures.
3. 3 Fees and Payments.
3. 3. 1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rate schedule set forth in Exhibit " C" attached hereto and incorporated herein by reference. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.
3. 3. 2 Payment of Compensation.
Consultant shall submit to City a monthly itemized invoice which illustrates how the monthly fee was computed for the Services rendered by Consultant. City shall, within 45 days of receiving such statement, review the statement and pay all approved charges thereon.
3. 3. 3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City.
3. 3. 4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, ` Extra Work" means any work which is determined by City to be necessary for the proper completion of the services, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.
Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.
3. 4 Accounting Records.
3. 4. 1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other 7-
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documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three ( 3) years from the date of final payment under this Agreement.
3. 5 General Provisions.
3. 5. 1 Termination ofAgreement.
3. 5. 1. 1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven ( 7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.
3. 5. 1. 2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any ]rind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen ( 15) days of the request.
3. 5. 1. 3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.
3. 5. 2 Delivery ofNotices. Notices shall be as provided in in the additional terms as provided in Exhibit `B".
3. 5. 3 Ownership of Materials and Confidentiality.
3. 5. 3. 1 Documents & Data: Licensing of Intellectual Property. This Agreement creates a non- exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (" Documents & Data"). Consultant shall require all subconsultants to agree in writing that City is granted a non- exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data.
Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City' s sole risk.
3. 5. 3. 2 Confidentiality. All ideas, memoranda, specifications, plans, procedures,
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and other Documents and Data either created by or provided to Consultant in connection with the performance ofthis Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City' s name or insignia, photographs of the services, or any publicity pertaining to the Services in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.
3. 5. 3. 3 Confidential Information. The City shall refrain from releasing Consultant' s proprietary information (" Proprietary Information") unless the City' s legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information.
Consultant shall have five ( 5) working days after receipt ofthe Release Notice to give City written notice of Consultant' s objection to the City' s release of Proprietary Information. Consultant shall indemnify, defend, and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost, or expense ( including attorney' s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of the Objection Notice unless either: ( 1) Consultant fails to fully indemnify, defend ( with City' s choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/ or ( 2) a final and non -appealable order by a court of competent jurisdiction requires that City release such information.
3. 5. 4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement.
3. 5. 5 Attorney' s Fees. If either party commences an action against the other party, either legal, administrative, or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney' s fees and all other costs of such action.
3. 5. 6 Indemnification.
To the fullest extent permitted by law, Consultant shall defend ( with counsel of City' s choosing), indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant' s Services or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney' s fees and other related costs and expenses. Consultant' s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the Consultant or the City, its officials, officers, employees, agents, or volunteers. 9-
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If Consultant' s obligation to defend, indemnify, and/ or hold harmless arises out of Consultant' s performance as a " design professional" ( as that term is defined under Civil Code section 2782. 8), then, and only to the extent required by Civil Code section 2782. 8, which is fully incorporated herein, Consultant' s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant' s liability for such claim, including the cost to defend, shall not exceed the Consultant' s proportionate percentage of fault.
3. 5. 7 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. This Agreement may only be modified by a writing signed by both parties.
3. 5. 8 Governing Law. This Agreement shall be governed by the laws ofthe State of California. Venue shall be in Orange County.
3. 5. 9 Time of Essence. Time is of the essence for each and every provision of this Agreement.
3. 6 City' s Right to Employ Other Consultants. City reserves right to employ other consultants in connection with these services.
3. 7 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties.
3. 8 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement, or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation, or transfer.
3. 9 Construction: References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not workdays.
All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions ofthe various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
3. 10 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.
3. 11 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or 10-
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service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.
3. 12 No Third -Party Beneficiaries. There are no intended third -party beneficiaries of any right or obligation assumed by the Parties.
3. 13 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
3. 14 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid, nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift, or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation ofthis warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer, or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
3. 15 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer, and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or termination. Consultant shall also comply with all relevant provisions of City' s Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.
3. 16 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker' s Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance ofthe Services.
3. 17 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.
3. 18 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
3. 19 Declaration of Political Contributions. Consultant shall, throughout the term of this Agreement, submit to City an annual statement in writing declaring any political contributions of money, in- kind services, or loan made to any member of the City Council within the previous 55414. 00000132996936. 2
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twelve- month period by the Consultant and all of Consultant' s employees, including any employee( s) that Consultant intends to assign to perform the Services described in this Agreement.
3. 20 Subcontracting.
3. 20. 1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
Signatures on following page.]
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IN WITNESS WHEREOF, the parties have executed this Professional Services Agreement on this 14t1i day of June, 2022.
CITY OF STANTON
By:
ZXia BgKdilla
Interim City Manager
CHANDLER ASSET MANAGEMENT, INC.
By:
Nicole Dragoo, JD, IACCP
President
By: kmHoi?gDVo Nguyen
Best Best & Krieger LLP
City Attorney
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EXHIBIT " A"
SCOPE OF SERVICES
Specific services, although not all- inclusive, are to be performed as follows:
Annually review ( and when applicable, provide recommendations for changes) to the City' s Investment Policy by May I" of each year;
Assist the City with maturity analysis;
Provide credit analysis of investment instruments in portfolio; Provide monthly reporting on the City' s investment portfolio; Attend quarterly meetings with City staff or City Council ( subject to the Finance Director' s preference);
Evaluate market risk and develop strategies that minimize the impact on the portfolio; Provide assurance ofportfolio compliance with applicable policies and laws and the City' s Investment Policy;
Establish an appropriate performance benchmark;
Indicate full understanding of the City' s Investment Policy; and Ensure the portfolio structure matches the City' s objectives.
Under this contract the City' s objectives are:
To adhere to the objectives set forth in the City' s Investment Policy; To provide for operational efficiency, including the information flow on the City' s investment portfolio;
To improve the City' s investment capabilities; and
To improve the overall yield on the City' s investment portfolio.
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EXHIBIT " B"
ADDITIONAL TERMS SPECIFIC TO INVESTMENT MANAGEMENT RELATIONSHIP
1. Client Representative. In its capacity as investment manager, Chandler shall receive all instructions, directions and other communications on Client' s behalf respecting Client' s account from the City' s Finance Director/ City Treasurer (Representative). Chandler is hereby authorized to rely and act upon all such instructions, directions and communications from such Representative or any agent of such Representative.
2. Investment Policy. In investing and reinvesting Client' s assets, Chandler shall comply with Client' s Investment Policy, which is attached hereto as Exhibit A.
3. Authority of Chandler. Chandler is hereby granted full discretion to invest and reinvest all assets under its management in any type of security it deems appropriate, subject to the instructions given or guidelines set by Representative.
4. Notices. All reports and other communications required hereunder to be in writing shall be delivered in person, or sent by first-class mail postage prepaid, by overnight courier, by confirmed facsimile with original to follow or by confirmed electronic mail with proof of receipt to the addresses set forth below. Either party to this Agreement may, by written notice given at any time, designate a different address for the receipt of reports and other communications due hereunder.
Chandler Asset Management
Attn: Nicole Dragon, President
6225 Lusk Boulevard
San Diego, CA 92121
nd ragoogchandlerasset. com
City of Stanton
Attn: Finance Director/City Treasurer
7800 Katella Ave
Stanton, CA 90680
Electronic Delivery. From time to time, Chandler may be required to deliver certain documents to Client such as account information, notices and required disclosures. Client hereby consents to Chandler' s use of electronic means, such as email, to make such delivery. This delivery may include notification of the availability of such document( s) on a website, and Client agrees that such notification will constitute " delivery". Client further agrees to provide Chandler with Client' s email address( s) and to keep this information current at all times by promptly notifying Chandler of any change in email address( s).
Client email address( s):_
Siamlu Cox, Accounting Manager scox@stantonea. gov;
ATTACHMENT B- Page 15 of 66
Zenia Bobadilla, Interim City Manager zbobadilla@stantonca. gov
6. ProxyVg. Chandler will vote proxies on behalf of Client unless otherwise instructed. Chandler has adopted and implemented written policies and procedures and will provide Client with a description of the proxy voting procedures upon request. Chandler will provide information regarding how Clients' proxies were voted upon request. To request proxy policies or other information, please contact us by mail at the address provided, by calling 800- 317- 4747 or by emailing your request to info@chandlerasset. com.
7. Custody of Securities and Funds. Chandler shall not have custody or possession of the funds or securities that Client has placed under its management. Client shall appoint a custodian to take and have possession of its assets. Client recognizes the importance of comparing statements received from the appointed custodian to statements received from Chandler. Client recognizes that the fees expressed above do not include fees Client will incur for custodial services,
8. Valuation. Chandler will value securities held in portfolios managed by Chandler no less than monthly. Securities or investments in the portfolio will be valued in a manner determined in good faith by Chandler to reflect fair market value.
9. Investment Advice. Client recognizes that the opinions, recommendations and actions of Chandler will be based on information deemed by it to be reliable, but not guaranteed to or by it. Provided that Chandler acts in good faith, Client agrees that Chandler will not in any way be liable for any error in judgment or for any act or omission, except as may otherwise be provided for under the Federal Securities laws or other applicable laws.
10. Payment of Commissions. Chandler may place buy and sell orders with or through such brokers or dealers as it may select. It is the policy and practice of Chandler to strive for the best price and execution and for commission and discounts which are competitive in relation to the value of the transaction and which comply with Section 28( e) of the Securities and Exchange Act. Nevertheless, it is understood that Chandler may pay a commission on transactions in excess of the amount another broker or dealer may charge, and that Chandler makes no warranty or representation regarding commissions paid on transactions hereunder.
11. Other Clients. It is further understood that Chandler may be acting in a similar capacity for other institutional and individual clients, and that investments and reinvestments for Client' s portfolio may differ from those made or recommended with respect to other accounts and clients even though the investment objectives may be the same or similar. Accordingly, it is agreed that Chandler will have no obligation to purchase or sell for Client' s account any securities which it may purchase or sell for other clients.
12. Confidential Relationship. The terms and conditions of this Agreement, and all information and advice furnished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except ( i) as required by law, rule, or regulation, ( ii) as requested by a regulatory authority, ( iii) for disclosures by either party of information that has become public by means other than wrongful conduct by such party or its officers, employees, or other personnel, ( iv) for disclosures by either party to its legal counsel, accountants, or other professional advisers, ( v) as necessary for ATTACHMENT B- Page 16 of 66
Chandler to carry out its responsibilities hereunder, or (vi) as otherwise expressly agreed by the parties.
13. Receipt of Brochure and Privacy Policy. Client hereby acknowledges receipt ofthe disclosure statement or " brochure" and " brochure supplement" also known as Part 2A and Part 2B of Form ADV, required to be delivered pursuant to Rule 204-3 ofthe Investment Advisers Act of 1940 (Brochure).
Client further acknowledges receipt of Chandler' s Privacy Policy, as required by Regulation S -P.
ATTACHMENT B- Page 17 of 66
EXHIBIT C Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT
CITY OF STANTON, CALIFORNIA
8. FEES
a) Provide the complete fee schedule that would apply to this account. Are fees charged in arrears? Chandler is pleased to provide comprehensive, full-time discretionary investment advisory services to the City as described herein Chandler' s proposal and in the City' s Scope of Services in accordance with the following fee schedule:
Proposed Fee Schedule for the City of Stanton
Assets Under Management Annual Asset Management Fee
First $ 25 million 0. 10 of 1% ( 10 basis points)
Next $ 25 million
Next $ 50 million
Assets over $ 100 million
0. 08 of 1% ( 8 basis points)
0.06 of 1% ( 6 basis points)
0. 04 of 1% ( 4 basis points)
Our proposed fee schedule is all-inclusive for the services that Chandler provides, including full time investment advisory and portfolio management services, technological resources, onboarding and implementation, online access to the Chandler Client Portal, comprehensive reporting, meetings, personal visits, educational offerings for your staff, as well as the additional treasury support services described herein in Chandler' s proposal. Chandler does not charge fees on funds held in Local Government Investment Pools LGIPs). Fees are firm for the entire initial contract term and the City will not be subject to any increases during this period.
Our fee schedule does not include charges that the City would incur for third party custodial services, which, as an important control in the investment process, is not provided by Chandler.
Examples of the fees assessed to the City at different asset levels according to the above proposed tiered fee schedule are as follows:
Total Assets Under Management Annual Fee in Basis Points Annual Fee in $ dollars 30 million 9.67 bps $ 29, 000
35 million 9.43 bps 533. 000
Fees are based on the amount of assets under management and are not based on transaction volume.
Management fees will accrue as long as there are assets in the portfolio, even if there is no activity during the period. Since the firm calculates fees based on the average balance of assets under our direct management ( market value including accrued interest), they will fluctuate based on portfolio value. The examples above are based on sample account sizes and should not be considered a " not to exceed" fee. Fees are charged monthly in arrears and can be debited directly from your third -party custody account. b) What additional expenses not covered through the fee structure will be expected in order to implement your investment advisory services?
Our proposed fee schedule is all- inclusive forthe services that Chandler provides, including meetings, personal visits, and educational offerings for your staff, as well as investment management services described in the City' s Scope of Services. Our fee schedule does not include charges that the City would incur for third party custodial services.
371 PagecE`a' 3:a a
j*
0 e,
ATTACHMENT B- Page 18 of 66
EXHIBIT D - Page 1 of 48
Request for Proposals ( RFP) for:
Stanton California
INVESTMENT MANAGEMENT AND
ADVISORY SERVICES
DUE: APRIL 11, 2022, S: OOPM
CHANDLER ASSET MANAGEMENT, INC.
6225 Lusk Boulevard
San Diego, California 92121
Direct: 858- 546- 3737, Toll free: 800- 317- 4747
info@chandlerasset. com I chandlerasset. com
ATTACHMENT B- Page 19 of 66
EXHIBIT D - Page 2 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
TABLE OF CONTENTS
1. COVER LETTER
2. FIRM BACKGROUND AND ORGANIZATION........................................................................................ 1
3. EXPERIENCE...................................................................................................................................... 5
4. PERSONNEL...................................................................................................................................... 9 S. ASSETS UNDER MANAGEMENT....................................................................................................... 14
6. INVESTMENT MANAGEMENT APPROACH AND DISCIPLINE............................................................... 17
7. REPORTING.................................................................................................................................... 33
8. FEES............................................................................................................................................... 37
9. REFERENCES................................................................................................................................... 38
10. ADDITIONAL INFORMATION........................................................................................................... 39
REQUIRED FORMS
2021 Compliance Annual Review of Chandler Asset Management Memorandum
CHANDLER APPENDICES
Form ADV, Parts 1 and 2 Appendix A
Professional Biographies Appendix 8
ACORD Certificate of Liability Insurance Appendix C
Global Investment Performance Standards ( GIPS°) and Verification Letter Appendix D Important Disclosures Appendix E
Sample Client Monthly Account Statement, Quarterly Investment Report and Appendix F GASB 40 and 72 Reports
Proposed Additional Terms Appendix G
ATTACHMENT B- Page 20 of 66
EXHIBIT D - Page 3 of 48
CHANDLER
ASSET ASSET MANAGEMENT
April 11, 2022
Ms. Michelle Bannigan, Finance Director
City of Stanton
7800 Katella Avenue
Stanton, CA 90680
Sent via: mbannigan@stantonca. gov
RE: Request for Proposal; Investment Management and Advisory Services; Chandler Asset Management, Inc.
Dear Ms. Bannigan,
On behalf of Chandler Asset Management, Inc. (" Chandler"), we are pleased to submit our firm' s proposal and present our qualifications to provide investment management and advisory services for the City of Stanton (" City"). Chandler is a Southern California headquartered firm that has been providing investment advisory and management services for local governments in our home state of California for over three decades. As a Southern California- based investment adviser with offices in San Diego and Ventura County, Chandler serves one hundred twenty-nine ( 129) public agencies within the State of California, including over fifty ( 50) in Southern California and seventeen ( 17) in Orange County.
Since 1988, Chandler has assisted public agencies in fulfilling their fiduciary duty to their constituents by providing high quality fixed income portfolios in a prudent investment framework. We utilize investment strategies that conform to all applicable federal laws and California Government Codes regarding qualified investments for public entities. The City will benefit from direct access to their assigned team members that are fully committed to not only meeting but exceeding your expectations for investment management of the City' s funds as a fiduciary as well as for client service during the engagement. We will be proactive in our communication with you and your staff and look forward to attending frequent, in- person meetings with the City' s finance staff, Council, and additional stakeholders.
Our commitment to providing personalized client service is equal to our commitment to meeting investment objectives, and is reflected in the following:
We understand your investment perspective. Since its inception, Chandler' s foundations have been rooted in the public sector. The firm' s founder and Chief Executive Officer served as investment officers of large California public agencies with the same objectives for their investment programs that guide our firm today.
We understand that the investment program must support the City' s financial goals while enhancing safety and liquidity within a framework of legal conformity. Chandler' s significant expertise in safeguarding our clients' funds while generating compelling risk- adjusted returns over many market cycles highly qualifies us to meet the needs of this engagement.
We are experts in California public agency investing. Chandler' s investment professionals are experts in all applicable federal laws and California Government Code as they pertain to the investment of public funds.
The City' s proposed investment team, Scott Prickett, CTP, and William Dennehy, II, CFA, have decades of public sector investment experience and are active in organizations relevant to public fund investment best practices, including the Government Finance Officers Association ( GFOA), the California Society of Municipal Finance Officers ( CSMFO), the California Debt and Investment Advisory Commission ( CDIAC), and the California Municipal Treasurers Association ( CMTA). Our staff members are highly regarded industry experts and frequent participants, speakers, and sponsors at industry conferences and events across California as well as nationwide.
6225 Lusk Boulevard I San Diego, CA 92121 1 Toll free 800. 317.4747 1 chandlerasset. com ATTACHMENT B- Page 21 of 66
EXHIBIT D - Page 4 of 48
CARCHANDLER
ASSET MANAGEMENT
We are committed to clientsuccess. We are dedicated to our duty as fiduciaries to our clients and understand the public role that your investment staff has in the stewardship of taxpayer funds. The firm invests in best - in -class technology and resources that assist our investment professionals to develop both long-term and short-term strategies that are significant to the overall financial program. Our reports provide transparency of the entire investment program, and we commit the full resources of the firm to ensure your success. We are immensely proud of our client retention record, which we attribute to our belief that " if we do what is right for our clients, our own success will follow."
We had the privilege to provide investment management services to the City of Stanton from September 2013 through June 2017 and developed an actively managed investment program for the City during our time of service. Our experience in working with the City provides framework and knowledge to further assist the City in the range of investment services it seeks.
As the firm' s President, I am authorized to bind the firm and to act in this capacity, as well as to confirm our intent to bid on all sections of the City' s Scope of Work. I certify that the information provided in our proposal is accurate, firm, and irrevocable, and shall be valid for a period of 90 days from April 11th, 2022. After reviewing the Professional Services Agreement ( PSA), I have no exceptions, however, we request that our standard provisions be included. Chandler can comply with the City' s insurance requirements.
We look forward to discussing our qualifications with you in person. If you have any questions during the proposal evaluation period, please do not hesitate to contact Mia Corral Brown, Senior Relationship Manager, directly at (858) 768- 5970, toll free (800) 317- 4747, or via email at mcorral@chandlerasset. com.
Sincerely,
CHANDLER ASSET MANAGEMENT, INC.
Nicole Dragoo, JL), IACCP
Presid en t
6225 Lusk Boulevard I San Diego, CA 92121 1 Toll free 800. 317.4747 1 chandlerasset. com ATTACHMENT B- Page 22 of 66
EXHIBIT D - Page 5 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
2. FIRM BACKGROUND AND ORGANIZATION
a) Describe the organization, date founded, and ownership of your Firm. Has your Firm experienced a material change in organizational structure, ownership, or management during the past three years? if so, please describe.
Chandler Asset ManagementInc.' s (" Chandler") core expertise is providing fully customized, high qualityfixedincome investment solutions for public agency clients. We are experts in managing public funds, providing excellent stewardship over the investment activities entrusted to us, and have, for over three decades, performed our fiduciary duty with discipline and care. Our firm provides comprehensive investment solutions for local governments who are guided by the objectives of preservation of principal, access to liquid funds, and maximization of investment returns within established risk parameters and legal requirements. From our over three decades of experience and client -focused approach, we understand firsthand the challenges of investing public funds in a world with dynamic financial markets and economic conditions.
History
Chandler was founded in 1988 by Kay Chandler as a result of her experience serving as Investment Officer for the County of San Diego for eight years, and for the City of San Diego for another two years. With many responsibilities for treasury management and finance functions within these departments, Ms. Chandler recognized that public entities with limited time and resources could benefit from external professional expertise and technological resources to help manage their investment programs. In 1991, Martin Cassell, Ms.
Chandler' s successor on the investment staff of the City of San Diego, joined the firm. Mr. Cassell now serves as Chandler' s CEO.
Over the years, Ms. Chandler and Mr. Cassell carefully assembled a team of professionals with the specialized professional expertise and technological skills necessary to structure highly effective, fixed income cash and core investment programs for cities, counties, and other local government entities. The firm manages $ 25. 8 billion as of December 31, 2021, including $ 20 billion in separately managed accounts for 175 public agencies.
All of the firm' s Portfolio Managers are CFA charter holders and are committed to strengthening and sharing their knowledge of prudent standards of investment management for public funds. The comprehensive services we offer including portfolio management, regulatory guidance and increased transparency through comprehensive reporting are designed to meet the specific needs of public agencies.
Chandler remains committed to our principles of conservative fixed income management as the firm continues to evolve in response to our clients' needs and to the public investment climate. As a result of our significant growth and in support of our objectives, we serve our clients from six other offices besides our San Diego headquarters, located in Denver, Colorado; Orlando, Florida; Ventura, California; Walnut Creek, California; Marin County, California; and Seattle, Washington. The firm' s professional staff currently totals thirty- seven ( 37) individuals and includes twelve ( 12) investment team members.
Firm Structure and Ownership
Chandler is an independent and 100% employee -owned California corporation. In 2017, Chandler' s key shareholders and Executive Management Team introduced an Employee Stock Ownership Plan (" ESOP") that aligns with the firm' s values and culture of shared success. Every employee is an owner through the ESOP Trust, which owns 68% of the firm and is the primary shareholder. Key employees from the Executive Management Team remain as individual owners. We believe that this structure contributes to our ability to attract and retain the highest quality investment professionals as well as to sustain growth, promote accountability, and best serve current and prospective clients well into the future.
One of the firm' s guiding principles is participation in the development of best practices in the management of public funds. Our investment and client service professionals serve as committee members and are active participants and sponsors of national and regional associations that develop recommended best practices and ATTACHMENT B- Page 23 of 66
EXHIBIT D - Page 6 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
training curricula, including the Government Finance Officers Association ( GFOA), the California Society of Municipal Finance Officers ( CSMFO), the California Municipal Treasurers Association ( CMTA), the California Debt and Investment Advisory Commission ( CDIAC), and the Chartered Financial Analyst ( CFA) Institute. We are often involved in drafting investment legislation and recommending best practices on a state and national level and providing guidance on safe and effective practices for the management of public funds. In addition, Martin Cassell, CFA, CEO, sat on the GFOA' s Committee on Treasury and Investment Management. This committee tracks new developments in cash management and develops best practices for government officials at all levels. Chandler qualifies as a Small Business in California through the Department of General Services, with certification ID 1747894, expiring September 30, 2023. b) Describe any other business affiliations. Describe your Firm' s policy on soft dollars.
As an independent firm, we have no other business affiliations, subsidiaries, or joint ventures, thereby avoiding any related potential conflicts of interest that could interfere with our ability to provide independent and unbiased advice to our clients. We do not have any competing lines of business such as financial advisory, brokerage, or underwriting services. 100% of our resources are committed to management of our clients' portfolios in separately managed accounts, and we do not manage any investment pools which may have embedded fees. As a matter of policy and practice, Chandler does not engage in any soft dollar arrangements with broker- dealers or third parties. We recognize our duty to seek best execution and ensure the quality of our services as a fiduciary.
c) Describe the Firm' s sources of revenue, categorized by retail and institutional accounts.
The firm' s revenue is derived entirely from fees received from our clients for the investment management and/ or advisory services we provide. Chandler does not act as a broker or dealer in securities or receive any other form of additional compensation from third party sales arrangements, investment pool management, research exchanges or transaction fees. As of our most recent fiscal year end, approximately 90% of the firm' s revenue is derived from institutional accounts. The remaining revenue is derived from Chandler' s strategies that are offered to select Registered Investment Advisers on platforms for sub -advised services. d) Is your Firm a registered investment advisory under the Investment Advisor' s Act of 1940 as amended? Chandler Asset Management is registered with the U. S. Securities and Exchange Commission under the Investment Adviser' s Act of 1940. The firm acknowledges its fiduciary duty to its clients and makes investment recommendations as a " Prudent Expert". We have provided our most recently filed Form ADV Parts 1 and 2 in the Appendix as part of our submission.
107287 801- 44378
Chandler is a California corporation in good standing.
e) Describe any SEC, FINRA, or regulatory censure or litigation involving your Firm or its employees within the past three years. The proposal should explicitly affirm whether or not any such situations occurred.
Neither Chandler nor any of its officers or employees has ever been subject to any regulatory censure or litigation by the SEC, NASD, or other regulatory agency in relation to the investment management and advisory services it provides.
21 ATTACHMENT B- Page 24 of 66
EXHIBIT D - Page 7 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
f) Did you, or will you, pay a finder' s fee to any third party for business related to this account? Specify the recipients of any fee.
No, Chandler will not pay a finder' s fee to any third party for business related to this account, or any other client account.
g) Outline the errors and omissions ( professional liability) and fidelity bond coverage your Firm carries.
Provide a valid, current Certificate of Insurance.
Chandler maintains a comprehensive, full -coverage insurance program with the relevant coverages provided by firms rated " Excellent" or better by AM Best Rating, including the following:
EO/ DO ( professional liabilit
Fidelity Bond/ Employee Dishonesty
Commercial General Liability:
Umbrella Liability:
Cybersecu rite:
Automobile Liability:
30 million ($ 200, 000 retention)
10 million/$ 100, 000 deductible
2, 000, 000 per occurrence/$ 4, 000, 000 aggregate
10, 000, 000 per occurrence/$ 10, 000, 000 aggregate
4, 000, 000
1, 000, 000 combined single limit
In addition, each ERISA plan is insured to 10% of the plan' s asset values, not to exceed $ 500, 000 per insured plan. We have included a copy of our ACORD Certificate of Liability in the Appendix. h) Identify the types of accounts primarily sought by your Firm.
Chandler' s focus is on the management of high- quality fixed income securities in strategies that span the yield curve for public entities and other risk -conscious institutions. Our clients share common objectives for their investment programs that prioritize safety of principal, appropriate liquidity, and risk-adjusted total return over a market cycle and comply with federal laws and state legal requirements. All of Chandler' s public agency clients' funds are structured as separately managed accounts. We customize portfolios to comply with individual clients' investment directives for operating funds, debt service, capital improvement, and any other funds that may have specific constraints. Our clients include cities, counties, water and wastewater districts, transportation authorities, school districts, higher education, healthcare districts, insurance funds, foundations/ endowments, not-for-profit organizations, and corporations. We provide complete investment services and treasury management support for a public entity investment program, including:
Investment Management Post -Employment Benefit Trusts/ OPEB General Revenue Funds Portfolio Review
Bond Proceeds Investment Policy Development and Review
Capital Project Funds Portfolio Accounting
Debt Service Funds Compliance Monitoring and Reporting
Reserve Funds Fixed Income Education and Training
Chandler manages portfolios that are comprised of asset classes in the U. S. fixed income universe that align with our clients' objectives of safety, liquidity, and return. In California, these are assets that are permitted by California Government Code 53601 and 53635. The composition of Chandler' s portfolios includes high quality, short-term investment- grade, U. S. dollar denominated securities including but not limited to: U.S.
Treasuries, Federal Agencies, municipal bonds, negotiable CDs, Corporate notes, Supranational securities, asset- backed securities, mortgage- backed securities, and commercial paper. 31 ATTACHMENT B- Page 25 of 66
EXHIBIT D - Page 8 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
i) If you are hired, will your Firm serve as a fiduciary in your role as an investment advisor to the City while providing the investment management services, we are seeking? If no, describe your objections or limitations.
Yes. As an SEC registered investment adviser and in accordance with California Government Code 53600. 3, Chandler shares your fiduciary duty and holds itself to the highest standards, aiming to safeguard principal and maintain the liquidity needs of the City as primary objectives. Chandler acts in accordance with prudent investor standards, avoiding conflicts of interest and putting clients' needs first in all matters and responsibilities related to the investment management services we provide. Further, we will monitor your portfolio to ensure compliance with your investment policy, state law, and any additional directives. Chandler excels at comprehensive reporting which includes a compliance report, trade tickets, and other statements, providing effective communication and transparency of your portfolio. 41 ATTACHMENT B- Page 26 of 66
EXHIBIT D - Page 9 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
3. EXPERIENCE
a) Describe your Firm' s experience in managing fixed income portfolios for public funds and governmental entities.
Chandler Asset Management was founded in 1988, by Kay Chandler in response to the pressing need she observed within the public sector, based on her own experiences serving as the Investment Officer for the County of San Diego for eight years, and for the City of San Diego for another two years. Kay recognized that public agencies with limited time and resources could benefit from external professional expertise and technological resources to help manage their investment programs. In 1991, Marty Cassell, Kay' s successor on the investment staff of the City of San Diego, joined the firm. Marty now serves as the firm' s CEO.
Their experience as investment officers within large public agencies shaped their perspectives in leading a firm whose sole purpose is to manage public funds and assist in fulfilling their fiduciary duty. Kay and Marty have carefully assembled a team of professionals well versed in portfolio management, regulatory guidelines, and reporting requirements to meet the specialized needs of public agencies.
As a co -fiduciary, we work with clients on every aspect of their investment program, including cash flow analysis and forecasting; investment policy development and review; and analysis of risk and return. We recommend market benchmarks for performance analysis that mirror each client' s profile, provide regular performance reporting, and offer education and training of each client' s staff when requested. Not only investment management, but also investment operations, reporting, client service, and compliance are implemented in a team environment to integrate all aspects of your investment program efficiently and effectively. The result is an investment approach grounded in the management of risk that is customizable for each of our client' s specific objectives and constraints and has resulted in successful investment programs for entities similar in size and scope to the City.
One of the firm' s guiding principles is participation in the development of best practices in the management of public funds. Chandler participates in programs and seminars provided by the Government Finance Officers Association ( GFOA), the California Society of Municipal Finance Officers ( CSMFO) and the CFA Institute. b) What is your Firm' s experience in developing policies and portfolio management guidelines for government portfolios?
We understand that an investment policy is crucial to the development and maintenance of a public agency' s investment program. We begin each relationship with a thorough review of each client' s investment policy, during which we make recommendations and use it to formalize the investment mandate for each client' s portfolio( s). Suggestions are meant to provide clarification, increase return potential, and improve risk management. We have written or revised investment policies for almost all of our government clients, and we customize each policy to mirror the client' s specific objectives and tolerances.
We will customize your policy to reflect:
California Government Codes
The City' s Investment Policy
Specific Client Directives
Chandler' s Best Practices
With over three decades of experience serving California public agencies, we are well -versed in the California Government Code as it applies to public agency investing and are actively involved with associations that develop recommended best investment practices, including the California Society of Municipal Finance Officers ( CSMFO), the California Municipal Treasurers Association ( CMTA) and the Government Finance 51 ATTACHMENT B- Page 27 of 66
EXHIBIT D - Page 10 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Officers Association ( GFOA). In reviewing investment policies, we look for clearly defined portfolio objectives and constraints.
At the start of the engagement, we will consult with you to understand and quantify your investment objectives, risk profile, and expected outcomes. We will then document what we have learned. In that way, our strategy and your policy complement each other. Once the investment policy is approved, it becomes the operating guideline for the portfolio. In addition, we will review your investment policy annually to ensure that your policy is updated as your objectives and cash flow requirements change over time. The policies we draft state in clear, unambiguous language the risks that are acceptable to a client and the investment strategies that we may undertake to achieve the client' s goals.
Our policy review includes, at a minimum, the following areas:
Scope of the policy that defines which funds are covered by the policy Investment objectives that clearly define how safety, liquidity, and return will be attained Standard of care ( Prudent Expert)
Delegation of authority
Ethics and conflicts of interest
Authorized investments
Management of market and credit risk
Safekeeping and custody of securities
Reporting requirements
Performance standards
c) How is your Firm compensated for the services it provides? Does your Firm act as a broker/ dealer, or receive any other form of additional compensation ( Including soft dollars) for the client transactions aside from the direct fee paid by clients?
The firm' s revenue is derived entirely from fees for investment management and advisory services received from our clients. As of our most recent fiscal year end, approximately 90% of the firm' s revenue is from institutional accounts. Chandler does not act as a broker or dealer in securities or receive any other form of additional compensation. As an independent firm, Chandler maintains no other business affiliations, thereby avoiding any potential conflicts of interest that could interfere with our ability to provide independent and unbiased advice to our clients. This structure best serves our clients, as there are no conflicts or competing demands on best execution or upselling of services. As a matter of policy and practice, Chandler does not engage in any soft dollar arrangements with broker- dealers or third parties. We recognize our duty to seek best execution and ensure the quality of our services as a fiduciary. d) Provide the number and types of accounts, total asset value, and composition of portfolios currently being managed by your Firm.
As of December 31, 2021, Chandler' s firm wide assets under management total $ 25. 8 billion. Public agency funds total almost $ 21 billion and comprise 81% of the firm' s assets. Our public sector clients include 172 public agencies, comprised of cities, counties, special districts, and States.
MR
ATTACHMENT B- Page 28 of 66
EXHIBIT D - Page 11 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Chandler Client Types and Total Firm Assets Under Management As of December 31, 2021
Other includes DC Plan, Church, and Higher Education
assets. Chandler assets under management as of
12/ 31/ 2021.
Public
81%
A representative list of the public agency clients we serve includes:
tion
n - profit
1%
Healthcare
17%
Sub - advised
2%
Agoura Hills, CA Indio, CA Riverside, CA
Alameda, CA
Public Sector 347 20, 794
Corporate 13 51
Healthcare 34 4, 350
Non- profit 33 127
Sub -advised 697 400
Other 6 35
fTotall E" 25, 776
Other includes DC Plan, Church, and Higher Education
assets. Chandler assets under management as of
12/ 31/ 2021.
Public
81%
A representative list of the public agency clients we serve includes:
tion
n - profit
1%
Healthcare
17%
Sub - advised
2%
Agoura Hills, CA Indio, CA Riverside, CA
Alameda, CA La Habra, CA San Jacinto, CA
American Canyon, CA La Mirada, CA Salinas, CA
Arcata, CA Long Beach, CA San Clemente, CA
Atwater, CA Menifee, CA San Juan Capistrano, CA
Brea, CA Merced, CA San Leandro, CA
Buena Park, CA Milpitas, CA San Marcos, CA
Camarillo, CA Monterey, CA San Mateo, CA
Corona, CA Moreno Valley, CA So. San Francisco, CA
Costa Mesa, CA Mountain View, CA Sunnyvale, CA
Cupertino, CA Murrieta, CA Tacoma, WA
Danville, CA National City, CA Tracy, CA
Dublin, CA Newport Beach, CA Truckee, CA
Elk Grove, CA Palm Springs, CA Tustin, CA
Fairfield, CA Pittsburg, CA Vallejo, CA
Fountain Valley, CA Perris, CA Westminster, CA
Imperial Beach, CA Pomona, CA W. Sacramento, CA
Alpine, CA Lake County, CA San Diego County, CA*
Calaveras County, CA Mendocino, CA Santa Clara, CA
First 5 Alameda, CA Modoc, CA Sierra, CA
First 5 Santa Clara, CA San Benito County, CA Ventura County, CA* special vistricts
Co
ana utner ciovernment Entities
Health,
71 Page
ATTACHMENT B- Page 29 of 66
CHANDLER
ASSET MANAGEMENT
EXHIBIT D - Page 12 of 48 Request for Proposals for
Investment Management and Advisory Services
Alameda County Water District, CA
Authority for CA Cities Excess Liability, CA
Big Independent Cities Excess Pool, CA
California Earthquake Authority, CA
California Insurance Pool Authority, CA
California Joint Powers RMA, CA
California Western School of Law, CA
Coachella Valley Water District, CA
CSAC EIA, CA
Elsinore Valley Municipal Water District, CA
Fontana POA Retiree Benefit Trust, CA
LA County Metro. Transportation Authority, CA
Moulton Niguel Water District, CA
Orange County Sanitation District, CA
Orange County Transportation Authority, CA
Palomar Health, CA
CITY OF STANTON, CALIFORNIA
PRISM, CA
Petaluma Healthcare District, CA
Rancho California Water District, CA
Redwood Empire Muni. Insurance Fund, CA
San Bernardino Municipal Water District, CA
San Diego County Water Authority, CA
San Diego County Regional Airport, CA
South Coast Water District, CA
Transportation Corridor Agencies, CA
Three Valleys Municipal Water District, CA
Vallecitos Water District, CA
Walnut Valley Water District, CA
WestEd, CA
Western Municipal Water District, CA
Whittier Area Schools Ins. Authority, CA
Yolo County Public Agency RMIA, CA
Sample listing of the firm' s public agency clients as of 12/ 31/ 2021, shown in alphabetical order. This list includes discretionary and non -discretionary clients that have given permission to be listed. It is not known whether the listed clients approve or disapprove of Chandler Asset Management or the services provided.
The above accounts include operating cash and reserves, risk pool reserves, bond funds, and capital improvement funds, each separately managed to fulfill the specific objectives within their own risk profile.
We propose to manage the City of Stanton' s investment program in a manner that is customized to meet your specific financial and investment goals and would provide your staff with the same level of diligence, client service and investment expertise that we provide to all our clients.
MR
ATTACHMENT B- Page 30 of 66
EXHIBIT D - Page 13 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
4. PERSONNEL
a) Identify and provide resumes for the team that will be assigned to work on the City of Stanton' s investment portfolio. Describe each person' s role on the team.
Chandler believes in a customized approach with direct, in person, access to the professionals responsible for the investment program. The City will have direct face-to-face, phone and email interactions with the portfolio managers in addition to the rest of the Investment Management team. Our investment professionals work closely with our client service, operations, and compliance professionals to ensure you receive world- class service in all aspects of the relationship, not limited to investment management.
Chandler Asset Management Professionals for City of Stanton a
Investment Management
Senior Portfolio Manager B. B. A., Finance, Investment
Implements portfolio Banking and Certificate in
Genny Lynkiewicz, CFA strategies
23 years 8 years
International Business,
Senior Portfolio Manager Research and analysis University of Wisconsin, Co -Chair of Sector Chartered Financial Analyst
Committee CFA°)
Portfolio Manager & Key B. A. Business
Scott Prickett, CTP Investment Contact Administration, University Co -Chief Investment Implements portfolio 36 years 9 years of Northern Colorado, Officer strategies Certified Treasury
Research and Analysis Professional ( CTP°)
Engagement Management & Client Service
Senior Relationship Manager
Primary client contact
Mia Corral Brown Conducts onboarding process
B. A Speech
Senior Relationship Oversees client 25 years 18 years
Communications, San
Manager communication
Diego State
University
Ensures and coordinates
project deliverables
Client Service Contact
B. A. Communication,
University of the
Kara Raynor Sanchez Reporting requirements and Pacific; M. A.
Client Service Director
Client Portal 10 years 10 years
Communication, San
Schedules training and Diego State
educational presentations
University
Compliance & Oversight
B. A. Business Economics &
Head of Firm Compliance, Juris Doctorate ( J. D.),
Operations, Administration
University of San Diego;
Nicole Dragoo, JD, IACCP Responsible for regulatory
22 Years 21 years Investment Adviser
President compliance
Certified Compliance
Oversees firm' s operations
Professional ( IACCP)
and administrative functions
designation
a
ATTACHMENT B- Page 31 of 66
CHANDLER
ASSET MANAGEMENT
EXHIBIT D - Page 14 of 48 Request for Proposals for
Investment Management and Advisory Services
CITY OF STANTON, CALIFORNIA
Leads Firm Compliance
Joseph Kolinsky .
Oversees firm' s compliance 30 years 2 years
B. A. Economics, Iona
Chief Compliance Officer College
program
Genny Lynkiewicz, Senior Portfolio Manager, at Chandler Asset Management. She is responsible for implementing portfolio strategy and securities trading in client accounts, and currently serves as Co - Chair of the firm' s Sector Committee. Prior to joining Chandler in 2015, Genny worked at BMO Asset Management in Chicago where she managed over $8 billion in taxable money market funds, securities lending portfolios and separately managed accounts.
Genny earned a B. B. A. in Finance, Investment & Banking and a Certificate in International Business from the University of Wisconsin, Madison. She holds the designation of Chartered Financial Analyst.
Scott Prickett ( CTP), Co -Chief Investment Officer, is responsible for building and maintaining client relationships with a focus upon developing and enhancing client investment programs. Scott actively participates in the portfolio management process and meets with clients on a regular basis to review their accounts, portfolio activity, portfolio strategy and financial markets. Scott has over 30 years of investment industry experience focused largely on managing short-term fixed income strategies for governmental and institutional non- profit clients. Scott serves as Co -Chair of the firm' s Economic and Market Analysis Committee.
Mia Corral Brown, Senior Relationship Manager, will be the engagement manager and day-to- day contact for the County. Mia joined the firm in 2004 and has eighteen years of experience providing client service to public sector clients in Southern California. Mia has significant experience working with local neighboring agencies in Orange County and understands the local climate and constituency that you serve. She is a regular participant at California public agency conferences and has served on several associations' committees that determine the curriculum for these events each year. She is also a founding Board Member and Advisor for Women in Public Finance' s San Diego chapter. Mia will coordinate the firm' s resources from all departments throughout the engagement to ensure all needs are met, and will meet with your staff in person, along with your investment team contacts.
Chandler' s Client Service Team is led by Kara Raynor -Sanchez ( MA), Client Service Director. She provides responsive service for any pressing or immediate needs of the City or its staff. Client service professionals are adept at handling the non -investment needs of the engagement ( e. g., client portal access and training, statement requests, and meetings), and will escalate any issues and route them through the correct channels, if necessary.
The firm' s President, Nicole Dragoo, JD ( IACCP), is responsible for the firm' s strategy and administration and oversees the compliance and operations departments. She also leads the onboarding process of new client accounts and heads a team that communicates effectively with accountants, custodians, and administrators during the transition period and for the duration of the relationship. Joseph Kolinsky, Chief Compliance Officer, leads the day-to- day compliance requirements, regulatory filings for the firm, and Code of Ethics implementation and training.
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ATTACHMENT B- Page 32 of 66
EXHIBIT D - Page 15 of 48 Request for Proposals for
CAtCHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
In addition to the firm' s SEC registration, the below members of Chandler' s Investment Management Team are registered representatives:
Chandler Registered Representatives
Martin D. Cassell, CFA 4330905
Kay Chandler, CFA 2276868
Daniel Delaney, CFA 7378402
William Dennehy II, CFA 2397527
Julie K. Hughes 5397196
Genevieve C. Lynkiewicz, CFA 4462193
Christopher McCarry, AIF 4472441
Carlos Oblites 5350645
Ted J. Piorkowski, CFA 1857510
Scott D. Prickett, CTP 1901448
Jayson Schmitt, CFA 4892847
Stephen Church 6878939
For detailed resumes of all team members, please see the Professional Biographies in the Appendix. b) 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. Are there any established limits on accounts or assets under management? As of December 31, 2021, the firm' s six CFA -level investment team members and three portfolio strategists managed 196 institutional client relationships totaling $25. 3 billion, for an average under 30 relationships per investment professional.
While there are no established limits on accounts or assets under management, we have a comprehensive plan in place to maintain our bandwidth around servicing our clients to our desired level of excellence, as well as to maintain the high level of performance and service that is one of the hallmarks of our firm. We believe our level of communication with our clients is unmatched by our larger peers who service much larger client bases with comparable size investment teams.
Chandler Investment Professionals by Classification
CEO 1
Portfolio Managers/ Analysts 6
Portfolio Strategists 3
Assistant Portfolio Manager 1
Associate Portfolio Manager 1
Total: 12
ATTACHMENT B- Page 33 of 66
EXHIBIT D - Page 16 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
c) Describe your Firm' s training and education efforts to keep portfolio managers informed of developments relevant to government investment managers.
We ensure portfolio managers are trained and up to date on changes to the financial markets as well as evolving practices that impact our local government clients. Many of our investment professionals have demonstrated their understanding of and commitment to portfolio management by earning industry credentials, such as the Chartered Financial Analyst ( CFA) the Certified Treasury Professionals ( CTP), and a number of FINRA licenses which require continuing education. Other team members are working to achieve these designations, and all employees are encouraged and supported to achieve these and other industry certifications or training that will assist them in their careers and ensure our clients have access to best -in - class professionals.
Chandler is deeply involved with the GFOA. Our investment professionals as well as members of our compliance and operations teams are guided by the GFOA' s publications and best practices regarding investment management, compliance, and GASB reporting for public agencies. Our investment and client service professionals serve as committee members and are active participants, sponsors, and speakers at national and regional associations that develop recommended best practices and training curricula. Through our involvement and participation with these organizations, Chandler' s professionals stay informed about current themes and relevant topics affecting the constituents of the member entities. Martin Cassell, CFA, CEO, previously sat on the GFOA' s Committee on Treasury and Investment Management. This committee tracks new developments in cash management and develops best practices for government officials at all levels. Other senior investment team members participate on the Committee on Retirement and Benefits Administration ( CORBA), which tracks new industry practices, regulatory and legislative developments, and issues best practices to assist public pension and personnel officers effectively manage state and local retirement funds and employee benefits.
On a local level, individuals from Chandler' s investment management team support the San Diego CFA Society' s Board of Directors in serving its over 500 members. Chandler' s professionals assist the program' s Chair by planning the calendar of industry -focused events and sourcing speakers from academia, government, and consultants to present at events during the year. Additionally, members of our team serve on the Advocacy Committee which has initiatives and events such as " Putting Investors First'; " Diversity and Inclusion", and " Women in Investment Management".
As a firm comprised of nearly fifty percent women, a significant portion of Chandler' s staff is involved with Women in Public Finance, a non- profit, educational, and professional networking organization. Chandler' s client service and investment professionals participate in educational activities and forums and foster WPF' s mission to advance women' s leadership opportunities in the public finance industry. 12 1
ATTACHMENT B- Page 34 of 66
EXHIBIT D - Page 17 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
d) Has there been any turnover of professional staff in the Firm in the last three years who were assigned to public sector clients?
Chandler' s professional turnover for the last three years is documented in the table below.
Chandler Staff Turnover from 2019- 2022 Year to Date
Total
Staff
29 31 32 37
Staff
2 3 7 5
Added
Staff
3* 1 6 1
Lost
3% 7% 10% 14%
Change
Staff lost in 2019 includes two retirements ( Kay Chandler, who remains as Chair of the Board and a Relationship Manager).
Throughout the firm' s history, the turnover of professional staff has been significantly low. In addition, our Employee Stock Ownership Plan (" ESOP") structure ensures the firm remains independent and employee owned as well as controlled by the Executive Management Committee.
In 2022, William Dennehy II, CFA, Scott Prickett, CTP, and Jayson Schmitt, CFA were promoted to Co -Chief Investment Officers. Martin Cassell, CFA, CEO transitioned all CIO responsibilities to the three new CO -CIOs as of January 1, 2022. Nicole Dragoo, Chandler' s COO and Chief Compliance Officer was promoted to President in April 2021. Joseph Kolinsky, hired as Compliance Manager in January 2020 now serves as Chief Compliance Officer. Other additions to staff include Ryan Tauber, MBA, Managing Director of Business Development, who oversees the firm' s sales, marketing, and client service efforts. Chandler continues to create new positions to accommodate growing business demands. 131 Page
ATTACHMENT B- Page 35 of 66
CHANDLER
ASSET MANAGEMENT
EXHIBIT D - Page 18 of 48 Request for Proposals for
Investment Management and Advisory Services
CITY OF STANTON, CALIFORNIA
5. ASSETS UNDER MANAGEMENT
a) Summarize your institutional investment assets under management by category as shown below for your latest reporting period:
The table below summarizes our institutional assets under management by category as of December 31, 2021.
Chandler' s Institutional AUM
December 31. 2021
b) Summarize your assets under management ( institutional only) over the past five years and average assets per client.
The tables below summarize our institutional assets under management over the past five years and average assets per client.
30 Chandler' s Institutional AUM ($ billions)
25. 3
25 21. 8
20 $
19. 1
16. 1
15 $ 13. 3 _
10 5
2017 2018 2019 2020 2021
Chandler' s assets under management for the past five years and the current year ( 1/ 01/ 2016- 12/ 31/ 2021). Includes both discretionary and non - discretionary assets. Advised assets are excluded. 14 1
Operating/ Bond Funds 20, 597, 421, 147 2, 116, 111, 368 Pension Funds
Foundations/ Endowments 143, 363, 362
Equity Funds 80, 135, 341 2, 296, 405, 515
Other ( specify) 143, 595, 169
Total 20, 821, 151, 657 4, 555, 880, 244
b) Summarize your assets under management ( institutional only) over the past five years and average assets per client.
The tables below summarize our institutional assets under management over the past five years and average assets per client.
30 Chandler' s Institutional AUM ($ billions)
25. 3
25 21. 8
20 $
19. 1
16. 1
15 $ 13. 3 _
10 5
2017 2018 2019 2020 2021
Chandler' s assets under management for the past five years and the current year ( 1/ 01/ 2016- 12/ 31/ 2021). Includes both discretionary and non - discretionary assets. Advised assets are excluded. 14 1
ATTACHMENT B- Page 36 of 66
EXHIBIT D - Page 19 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Average Assets Under Management Per Client
2021 $ 25, 281 M $ 120 M ( 211)
2020 $ 21, 765 M $ 123 M ( 177)
2019 $ 19, 057 M $ 114 M ( 167)
2018 $ 16, 080 M $ 101 M ( 159)
2017 $ 13, 291 M $ 92 M ( 144)
c) Provide relevant performance statistics on a comparable portfolio and compare with industry averages or benchmarks for the last one, three, five, ten- year periods and/ or since inception. Note whether these performance statistics are reported based on GIPS ( Global Investment Performance Standards) formerly known as AIMR ( Association for Investment Management and Research).
Chandler manages portfolios that are comprised of asset classes in the U. S. fixed income universe that align with our clients' objectives of safety, liquidity, and return. In California, these are assets that are permitted by California Government Code 53601 and 53635. The composition of Chandler' s portfolios includes high quality, short- term investment- grade, U. S. dollar denominated securities including but not limited to U. S. Treasuries, Federal Agencies, municipal bonds, negotiable CDs, Corporate notes, Supranational securities, asset- backed securities, mortgagebacked securities, and commercial paper.
We have included performance and characteristics below through December 31, 2021, for Chandler' s Limited Maturity Strategy, a 1 - 3 -year strategy and for the Short -Term Bond Strategy, a 1 - 5 -year strategy. Chandler' s Limited Maturity and Short -Term Bond strategy composites are comprised of individually managed accounts with an average modified duration approximately equal to the modified duration of the ICE B of A 1- 3 Year US Treasury Index and the ICE B ofA 1- 5 Year US Treasury & Agency Index', respectively, and a final stated maturity of individual securities of five years.
Chandler Composite Performance — Gross and Net of Fees
Chandler Limited Maturity (gross)
inception: 9/ 30/ 88)
0. 48% 2. 20% 1. 83% 1. 33% 4. 39%
Chandler Limited Maturity (net) 0. 58% 2. 10% 1. 73% 1. 23% 4. 29% ICE BofA 1- 3 Year US Treasury Index 0.55% 2. 02% 1. 61% 1. 09% 4. 10% Chandler Short Term Bond ( gross)
inception: 9/ 30/ 95)
0. 93% 2. 65% 2. 11% 1. 62% 3. 89%
Chandler Short Term Bond ( net) 1. 03% 2. 55% 2. 01% 1. 52% 3. 70% ICE BofA 1- 5 Year US Treasury -
1. 09% 2. 41% 1. 89% 1. 35% 3. 62%
Agency Index
Based on Chandler' s Limited Maturity, and Short - Term Bond composites as of 12/ 31/ 2021. Performance results are presented gross and net offees. Net returns are fora sample 8 basis points (0. 10 of 1%) proposedfora $30 million account and are hypothetical and not based on an actual client' s account. The performance has been calculated using historical composite performance. Gross performance does not reflect payment of advisoryfees and other expenses which will reduce performance. Past performance is not a guarantee offuture results. All investment strategies have the potential for profit or loss. Market conditions or economic factors may alter the performance and results of a portfolio. Investment advisory Please see important disclosures in the Appendix
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ATTACHMENT B- Page 37 of 66
EXHIBIT D - Page 20 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
fees are disclosed in the firm' s form ADV Part 2A. Performance for periods greater than one year is annualized. Please see GIPS Composite Reports and important disclosures in the Appendix. For one- on- one presentation only.
Chandler develops and implements portfolio strategies that we tailor to meet the exact needs of each client. We group portfolios with similar characteristics into composites for the purpose of computing and reporting GIPS° - compliant performance results. GIPS° represent an industry wide standard for performance calculation and reporting which facilitates comparison among investment firms. Chandler Asset Management claims compliance with the Global Investment Performance Standards ( GIPS°) and prepares and presents its performance in compliance with these standards. Chandler is independently verified by ACA Performance Services for firm -wide GIPS° compliance. A copy of the firm' s most recent GIPS° Verification Letter is included in the Appendix. d) How many accounts have you gained in the last 12 months? How many accounts have been lost in the last 12 months and why?
For the most recent 12 -month period ending June 30, 2018, Chandler gained fourteen ( 14) institutional clients totaling approximately $ 1. 9 billion. During the same period, Chandler lost six ( 6) institutional clients. Clients have discontinued services provided by Chandler for various reasons, including budgetary constraints, spending down investable assets, or internal changes in finance administration/ staff. Notably, Chandler has never had a client discontinue service for convenience or for cause. 16 1
ATTACHMENT B- Page 38 of 66
EXHIBIT D - Page 21 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
6. INVESTMENT MANAGEMENT APPROACH AND DISCIPLINE
a) Briefly describe your Firm' s investment management philosophy, including your approach to managing governmental portfolios.
Investment Process
For each strategy, we will execute the investment program through our rigorous, quantitatively based investment process, comprised of three stages: portfolio construction, security selection and periodic rebalancing. Our process is custom- tailored for each client portfolio. For the City, as for all our clients, we believe the development and maintenance of a strong investment program should focus on the following elements:
Investment Approach
Our process for establishing the investment objectives and constraints for the City is customized after an extensive review and thorough understanding of both the investment policy, as well as the current and expected needs of the City and its financial staff. We believe that a successful investment program focuses on the following elements:
Maturity — We believe the average maturity of each separate portfolio, as well as the longest permitted maturity, should reflect the client' s goals, return objectives, and risk tolerances. That is why we see our first task with a client as understanding that client' s specific objectives regarding current yield, book yield and total return. When that understanding is achieved, we establish a target maturity and duration for each account under our management.
Duration — We strive to maintain duration (the portfolio' s price sensitivity to changes in interest rates) within a defined range that reflects the City' s return requirements and acceptable volatility. We will work with City staff to identify an optimal target duration range in order to limit relative market risk.
Investment Type — Chandler will develop a well -diversified portfolio based on the City' s Investment Policy. Our sector allocation strategy provides broad diversification by sector and by issuer and works to minimize exposure to credit risk. We are able to add considerable value through rotating sectors, thus identifying best relative value at time of purchase. Additionally, if the City were to take advantage of all sectors allowed by California Government Code, we would be able bring our extensive credit and investment analytic capabilities to further diversify the portfolio and increase potential return.
Credit Quality — We are proud of our record in keeping our clients' assets safe. We employ a robust credit analysis process that helps us identify investment opportunities in securities that are appropriate for the prudent investment of public funds. Moreover, we believe that each client should establish credit quality constraints that reflect the community' s risk preference, and these constraints may be more conservative than Code. Within that framework, we will purchase securities that our credit and value analyses have identified as being appropriate for the City' s portfolio and having relative value. We will limit our investment in corporate securities to highly rated companies, subject to the City' s restrictions.
Yield/ Return — We search diligently to add value at every stage in our process. We manage the portfolio to enhance return and long-term growth within the constraints of the City' s risk profile and return objectives. Finally, we strive to find the best execution for each transaction, seeking multiple price quotations on all purchases and sales.
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ATTACHMENT B- Page 39 of 66
EXHIBIT D - Page 22 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Security Selection
Chandler employs a proprietary credit analysis process designed for identification of stable and improving credits, as well as early detection of weak and deteriorating credits. It includes both qualitative and quantitative aspects. The decision to purchase a specific security on our Approved List is based on Chandler' s analysis of its relative value.
Periodic Rebalancing
With the passage of time, portfolio characteristics may tend to drift away from the desired structure. For that reason, the team reruns the Horizon Analysis Model monthly, and rebalances as market conditions and portfolio characteristics change.
b) How frequently do you formulate and review fixed income strategy? How is that carried out and who is involved?
The firm employs a sub -committee system for effective analysis, decision- making, and communication.
Individuals may generate and develop investment themes through their independent research to bring to the entire Investment Management Team ortheir committee meetings, or one of the committees may collectively source an idea or theme through discussion. Additionally, the entire Investment Committee participates in regular off-site meetings for short, intermediate, and long- range planning. These meetings provide a forum in which every member of the team has input on the formulation and implementation of our strategies.
Chandler' s Investment Management Committee
William Dennehy II, CFA Scott Prickett, CTP
Co - Chief Investment Officer Co -Chief Investment Officer Martin Cassell, CFA Dan Delaney, CFA
Chief Executive Officer Senior Portfolio Manager
Ted Piorkowski, CFA Julie Hughes
Senior Portfolio Manager Senior Portfolio Strategist
Carlos Oblites Charlotte Powell
Senior Portfolio Strategist Associate Portfolio Manager Economic Outlook Fundamental Credit Reviews Committee
Market Anal sits Analysis Data
Deve ops Interest Fate Se rarity Relative Produces HAM
Scenario Inputs for Value Analysis Analysis
Horizon Analysis Maintains Approved Improves Model
Model ( HAM) List Methodology
Jayson Schmitt, CFA
Co - Chief Investment Officer
Gentry Lynkiewicz, CFA
Senior Portfolio Manager
Christopher McCarty, AIF
Senior Portfolio Strategist
Stephen Church
Assistant Portfolio Manager
Sector Valuation
New Sector Analysis
Develop Valuation
Inputs
Reviews Global
Markets and outlook
Sets Caprtal Market
Expectations
Reviews and Enhances
Investment Vehicles
Members of the Investment Management Committee meet weekly to review the findings and recommendations of the committees, market conditions, and client portfolio characteristics to determine short term strategies and any need for portfolio rebalancing. In addition, team members meet off-site on a semi- annual basis and discuss economic, market, and credit conditions using committee research to establish the firm' s investment outlook, portfolio target characteristics, and sector strategy for the ensuing six months.
These meetings provide a forum in which every member of the team has input on the formulation and implementation of our strategies.
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ATTACHMENT B- Page 40 of 66
EXHIBIT D - Page 23 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Chandler' s sub committees contributing to the investment themes and strategies implemented on behalf of our clients include:
The Economic and Market Analysis Committee focuses on the development of economic inputs and interest rate scenarios for the Horizon Analysis Model, the proprietary tool we employ to assist in developing portfolio structure. It also sets the macro -economic tone and investment strategy for our fixed- income investments and structuring of client portfolios given the current market climate.
The Sector Committee is tasked with sector valuation methodology, analysis of option -adjusted spreads and opportunities both among sectors and between issuers, and evaluation of new instruments and sectors for suitability.
The Credit Committee is responsible for evaluating issuers for inclusion, monitoring and possible removal from the firm' s Approved Issuer List. The entire Portfolio Management Team and Chief Investment Officer Martin Cassell will review the committee' s recommendations, including additions to and deletions from the firm' s Approved List. Ultimate approval of credits is the responsibility of Martin Cassell. The committee' s output ensures that the securities purchased for client portfolios are consistent with their risk profile.
The Quantitative Analysis Committee develops and sets the structure for the Horizon Analysis Model HAM) and evaluates the model' s process for improved technology and methods. The results of the HAM output are used to develop general characteristics of the strategies.
The Multi -Asset Class Committee prepares the firm' s Capital Market Assumptions, basing them on the firm' s analysis of the global markets and our forward- looking outlook of the market environment.
The Committee then develops the Efficient Frontier, and reviews and recommends initial and ongoing portfolio asset allocations and fund vehicles for our clients. c) What are the primary strategies for adding value to portfolios ( e. g., market timing, credit research, trading)? Chandler' s pro -active portfolio management, diligent security analysis, and prudent attention to cash flow needs add value to client portfolios and enhance the consistent returns generated over time. Our approach to structuring the portfolios is designed to fulfill the City' s requirements in a way that addresses specific investment needs, and focuses on the following key elements:
Duration Management — We strive to maintain duration ( the portfolio' s price sensitivity to changes in interest rates) within a defined range that reflects the City' s return requirements and acceptable volatility as indicated by a benchmark that reflects the risk parameters and expected return. Duration is the largest determinant of risk and return. We attempt to minimize the impact of the duration decision on return volatility by limiting duration to within a +/- 20% duration band around the target ( benchmark) duration.
We have observed that longer -duration portfolios have historically outperformed shorter duration portfolios over long-term investment horizons. We will work with the City to identify an appropriate duration target that takes advantage of longer maturity investments with higher yields, while limiting volatility, and providing for needed liquidity.
Chandler' s investment management team does not tryto time interest rates and keeps the overall interest rate risk sensitivity of our clients' portfolios close to that of the benchmark. An optimal term structure is based on our proprietary analysis and a probability -weighted forward- looking forecast of various interest rate scenarios that may occur at the six- to twelve- month horizon date.
Sector Allocation— Our sector allocation process is based on the belief that portfolios are more robust and prepared for unforeseen events if they have a well -diversified exposure to high quality fixed income securities. Using the output of the Sector Committee, we will determine the allocation to asset classes 19 1
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EXHIBIT D - Page 24 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
that we believe will provide the best economic opportunities and protection for the portfolio. We are able to add considerable value through rotating sectors as market conditions evolve and our outlook changes, thus identifying best relative value at time of purchase in order to capitalize on current market opportunities.
Term Structure— Utilizing the output from the Economic and Market Analysis Committee in conjunction with the Horizon Analysis Model, the term structure for the portfolio is determined with the objective of finding a structure that prioritizes the protection of the portfolio and performs well under both anticipated and unanticipated yield curve shifts over a six- month horizon. Given the constantly evolving market dynamics and changing interest rates, the portfolio may have a " laddered" structure, with equal allocations across permitted maturities; a " barbell" structure, with maturities concentrated in short and long maturities; a " bullet" structure, with maturities concentrated around the target duration; or some combination of all three. As interest rates evolve, the Chandler team alters the maturity distribution of the portfolio based on the prevailing market conditions.
Security Selection— Once the team has determined the percentage of the portfolio in any duration range or security type, individual securities are purchased to complete the portfolio structure. Chandler' s investment team closely follows trends in the new issue market to take advantage of the cyclical swings in issuance in order to obtain attractive spreads over the risk-free Treasury rate. The seasoned professionals at Chandler are also well versed in the technical differences between various names in the investment universe, and frequently adjust the underlying name and sector exposure to take advantage of market anomalies only a skilled investor can consistently identify. Securities are subjected to a rigorous review process, including fundamental credit analysis, as well as quantitative analysis using proprietary tools. Our investment professionals recommend securities from an Approved Issuer List based on relative value considerations. In addition, our Credit Committee seeks to identify both improving and deteriorating credits so we can work to reposition client portfolios by seeking favorable and avoiding detrimental factors not yet understood by the majority of market participants. Analyzing the credit worthiness of individual issuers to enhance portfolio yields while minimizing exposure to credit and downgrade risk is a key element in mitigating risk and adding value in our clients' portfolios.
Active Management of Individual Securities - To maintain the optimal structure and the objective of safety of principal and risk- adjusted returns over a market cycle, Chandler utilizes active management of the investment portfolio. With this approach, a security may be sold or replaced prior to maturity to take advantage of market conditions, generate liquidity, mitigate risk, or to enhance the return of the portfolio.
We are also able to take advantage of the repricing into the current higher interest rate environment. The net economic benefit to the City is the sole consideration for purchasing/ swapping/ selling securities for the portfolio.
Competitive Execution. We recognize our duty to provide value to our clients and ensure the quality of our services as a fiduciary. The City' s staff is assured that through Chandler' s best execution practices, it is receiving competitive, institutional pricing on transactions, as the firm seeks a minimum of three quotes per trade. The practice of competitively bidding for transactions results in an incremental net financial advantage for our clients over time and is an additional source of value in retaining Chandler as investment manager. This competitive process can be evidenced on daily trade tickets viewable on the Chandler Client Portal.
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CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
d) How are portfolios managed ( e. g., by team, individual manager)? What is the back- up when the manager is away?
Chandler manages portfolios in a team environment ensuring that all investment team members and client service personnel are familiar with your portfolio. This team approach ensures that there will always be professionals available who are knowledgeable about your portfolio management needs and provide continuity of the investment program. The City will have direct face- to-face, phone and email interactions with the portfolio managers in addition to the rest of the investment management team. Successful implementation of the firm' s investment process is not dependent upon any one individual, as all of our portfolio managers have research, trading, and management responsibilities, which benefit all of our client accounts. In addition, our client service personnel are adept at handling the non -investment needs of the engagement and will escalate any issues and route them through the correct channels, if necessary.
e) What oversight is provided to portfolio managers?
Client portfolios are checked for compliance daily and subjected to a multi- level process. Portfolio managers use robust order management (" OMS") and portfolio compliance software from Bloomberg AIM for monitoring compliance with client objectives, investment policies, trust indentures, and state legal requirements on a pre -trade, post -trade, and end -of -day basis. At the inception of the relationship, a compliance officer codes each element of the investment policy and guidelines into the Bloomberg system.
Since each trade originates in the system, pre -trade compliance testing is generated each time a portfolio manager prepares to execute a transaction. The system prohibits execution of the trade if it does not comply with the imputed guidelines. If an issue of non- compliance is identified through the system, it cannot be overridden by an investment team member and is escalated for review by a member of the Compliance Team.
The City' s staff may be informed as to the situation and presented with recommendations for returning to full compliance.
Investment Guidelines Bloomberg AIM Multi -Level Checks Define Your Parameters Code Rules intoBloomberg
State Legal Requirements Concentration Limits Pre - Trade Your Investment Policy Credit Quality
Post -Trade
L3Management Directives 13Issuer Exposure
End -of --Day
Chandler GuidelinesAwarnings/ Alerts— Various Levels Prohibited Transactions • System Warning ( needs further review)
ComplionceAlerts ( compliance clearance required)
10 Actions Violation Status
Rule Id 24001495 Name Max 10% MMKT/ Cash ( Per fu d)
Rule Group - MULTIPLE- Severity TRADE - OVERRIDE
ACoount GROUP / Currency USo
lolation Status
Processed 09/ 25/ 2017 00: 04: 27 Priority lam' As Of 09/ 25/ 2017 Status - Follow Up Day Count
Viol Fln9 Suppress in ERA Report x Copy Note & Status
Attachments 0 file( s) attached III
Date Viol Fla
NORAGOO 09/ 08/ 2017 17: 59: 41 passive
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EXHIBIT D - Page 26 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
This sample report is being provided for illustrative purposes to demonstrate Chandler' s compliance procedures. References to specific securities and their characteristics are examples of securities held in a portfolio and are not intended to be and should not be interpreted as an offer, solicitation, or recommendation to purchase or sell any financial instrument an indication that the purchase of such securities was or will be profitable, or representative of the composition or performance of the portfolio.
As a part of our regular process of policy and guideline monitoring, we provide clients with a monthly detailed Statement of Compliance, based on our complete review of investments. This report details adherence to requirements such as permitted investments, asset class exposure, minimum credit quality, maximum maturities, issuer size and concentration limits, as well as compliance with the City' s investment guidelines and legal requirements. This Statement also serves as an effective means of reporting compliance to oversight committees and other stakeholders and demonstrates that the City and its investment adviser take seriously their fiduciary duty to protect taxpayer funds.
Chandler' s Compliance Team is responsible for ensuring the firm complies with all regulatory requirements, client guidelines and firm policies and procedures. As part of our multi- level compliance process, further procedures to ensure compliance with state laws, your investment policy, and objectives include:
A daily reconciliation of transactions and cash balances with custodian information; A month- end review of the portfolio to confirm compliance with the Investment Policy; A continuous review process by the firm' s Credit Committee to ensure credit quality meets policy standards as well as our strict quality requirements;
A portfolio structure that satisfies liquidity objectives with short -maturity securities and return objectives with higher duration investments;
Frequent communication between our team and yours to help us stay informed of any new developments that may modify your objectives, and;
Meetings with your staff as frequently as you choose to provide additional opportunities to review portfolio composition and performance at a high level.
The firm' s Chief Compliance Officer provides oversight of portfolio compliance and trade order management as well as implementation and monitoring of the firm' s compliance policies and procedures. These duties are conducted separately from the portfolio management team under the appropriate segregation of duties.
Chandler' s Risk Committee is made up of the Chief Compliance Officer as well as seven of the firm' s senior executives responsible for the firm' s risk management practices and policies. In addition, Chandler maintains a comprehensive Compliance Manual that covers all subjects relating to our investment activities and responsibility for client assets and safety of information. The firm' s Compliance Manual includes policies and procedures for internal controls, code of ethics, privacy and information safeguarding, cybersecurity, e- mail communications and social media, insider trading, and all matters related to our investment processes and record keeping.
All employees are required to provide quarterly disclosures of conflicts of interest/ brokerage activities on the Schwab Compliance Technologies platform, in accordance with our Code of Ethics. Furthermore, Chandler Asset Management conforms to the Code of Ethics and Standards of Professional Conduct as put forth by the CFA Institute. All Chandler employees abide by these standards, placing our clients' interests and the integrity of the investment management profession above our own and pledging to act with integrity, competence and respect in all matters related to our advisory and investment management business. We have a comprehensive compliance program in place that is reviewed and tested annually by our Chief Compliance Officer and overseen by the Risk Committee.
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CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
f) Describe how your Firm selects broker/ dealers with which to trade and how their performance is evaluated.
The Investment Management Team maintains an active, productive relationship with the broker/ dealer community to promote an ongoing flow of market information and to execute trades for our clients at competitive prices. On a given day, various factors may combine to generate the best price for a given transaction, including current dealer inventories, dealer profit/ loss positions, and individual dealer sentiments about the market. No one dealer will consistently provide best execution. For that reason, we consistently place several dealers in competition and continuously monitor and compare inventories and prices.
Given that all of our transactions are executed using " delivery -versus -payment" ( DVP) procedures, the firm' s broker/ dealer selection and retention process centers primarily on transactional risk. Thus, our internal criteria for reviewing and monitoring broker/ dealers for approval and retention include:
Competitive pricing
Trade execution efficiency
Consistency of coverage
Quality and breadth of product inventory
Willingness to make a two- way market
We monitor financial news for any indication of financial weakness or diminishing participation in our markets.
In addition, we are concerned with broker/ dealer integrity and capitalization. The Financial Industry Regulatory Authority ( FINRA) provides an on- line BrokerCheck System, which we use to review the credentials and regulatory background of each broker/ dealer firm and their employees with whom we trade. g) Describe your Firm' s in- house technical and research capabilities. Are outside sources used by the Firm on a regular basis? Describe your credit review process.
Chandler conducts credit research in a team environment comprised of investment professionals as part of the firm' s Credit Committee. William Dennehy, CFA, Co -CIO is the chair of the Credit Committee which also includes additional members of the investment team. The firm' s proprietary credit research process identifies stable and improving credits to include in client portfolios. Although the Nationally Recognized Statistical Rating Organizations (" NRSROs") typically determine the initial eligibility of a security, Chandler does not rely on these ratings to determine whether a security is suitable for a Chandler portfolio. Chandler' s Credit Committee, with input from the entire investment team further evaluates the suitability of an investment based on our own internal research and a thorough understanding of each client' s investment objectives and risk tolerances. This combination of qualitative and quantitative analysis enables the team to identify and invest in securities consistent with our clients' objectives of safety, liquidity, and return.
The dynamic nature of the process also provides the team with the ability to detect weak and deteriorating credits, which may be removed from client portfolios and Chandler' s Approved Issuer List. In determining the suitability of a security, the Credit Committee analyzes company fundamentals with a focus on relative balance sheet strength and the overall earnings outlook of the issuer, paired with Chandler' s view of the forwardlooking macro -economic environment. After the fundamental outlook of an issuer has been ascertained, the Credit Committee focuses on the relative value of current and historical spreads of both the issuer and its industry sector. Chandler' s internal credit process is designed to identify and evaluate changing fundamentals and the current relative value of issuers versus sector peers.
The Credit Committee meets weekly to rank corporate issuers into three tiers based on their characteristics and credit profile — top tier, middle tier, and bottom tier— and categorizes those securities based on individual client risk tolerance and policy guidelines. Each sector and issuer is reviewed at a minimum of once per 231 Page
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EXHIBIT D - Page 28 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
quarter, or four times per year. The goal is to be proactive in identifying and investing in stable and improving credits, and in avoiding deteriorating credits.
Chandler' s Credit Review Process
CREDIT
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In addition to the formal weekly Credit Committee meetings, all credits are monitored on a continuous basis.
The Credit Committee monitors the overall news flow on each issuer on our approved list ( i. e. earnings, press releases, management presentations or conferences, ratings changes, etc.). The gathered information is distributed to the entire investment management team daily. In the event the fundamentals of the underlying security change, the Credit Committee may act to add or remove the issuer from our approved credit list or move it within the appropriate tier.
h) What percentage of your research is conducted in- house? Chandler conducts 100% of its research in- house. Our research capabilities include the Horizon Analysis Model as the quantitative foundation for the portfolio construction process, and our credit review/ security selection process, described in the response below.
i) Describe your research capability.
Chandler devotes considerable resources to enhancing our own in- house capabilities and evaluating research from outside sources, which we incorporate into our own proprietary processes. Aided by inputs from the different investment committees, decisions are made by the investment team regarding duration positioning, sector allocation, term structure, and issue selection within the firm' s macro view of the economic environment and broad- based view on interest rates and leading economic indicators. The investment team then incorporates these decisions as they apply to each individual portfolio. As our primary focus is on the management of fixed income securities for public agencies, the firm' s analytical rigor is dedicated to the investment types we purchase on behalf of our clients — US Treasuries, Federal Agencies, corporate bonds, commercial paper, negotiable CDs, and asset- backed/ mortgage- backed securities, as well as the value identified between sectors and individual issuers.
Chandler conducts 100% of its research in- house. Internally developed, proprietary tools such as our Horizon Analysis Model and credit review/ security selection provide a quantitative foundation for Chandler' s portfolio construction process. In addition, the investment management team subscribes to a variety of private research providers including BCA Research, Oxford Economics, Egan Jones, and CreditSights to augment the overall research efforts of the firm. The team keeps abreast of sell - side research from a broad group of domestic and international investment banks. These tools not only provide data for our investment processes but ensure that our clients have access to the most current and relevant market information.
Chandler' s professionals also conduct research projects on an ad hoc basis on issues concerning our industry 24 1
Issuer - specific
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INVESTMENT
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In addition to the formal weekly Credit Committee meetings, all credits are monitored on a continuous basis.
The Credit Committee monitors the overall news flow on each issuer on our approved list ( i. e. earnings, press releases, management presentations or conferences, ratings changes, etc.). The gathered information is distributed to the entire investment management team daily. In the event the fundamentals of the underlying security change, the Credit Committee may act to add or remove the issuer from our approved credit list or move it within the appropriate tier.
h) What percentage of your research is conducted in- house? Chandler conducts 100% of its research in- house. Our research capabilities include the Horizon Analysis Model as the quantitative foundation for the portfolio construction process, and our credit review/ security selection process, described in the response below.
i) Describe your research capability.
Chandler devotes considerable resources to enhancing our own in- house capabilities and evaluating research from outside sources, which we incorporate into our own proprietary processes. Aided by inputs from the different investment committees, decisions are made by the investment team regarding duration positioning, sector allocation, term structure, and issue selection within the firm' s macro view of the economic environment and broad- based view on interest rates and leading economic indicators. The investment team then incorporates these decisions as they apply to each individual portfolio. As our primary focus is on the management of fixed income securities for public agencies, the firm' s analytical rigor is dedicated to the investment types we purchase on behalf of our clients — US Treasuries, Federal Agencies, corporate bonds, commercial paper, negotiable CDs, and asset- backed/ mortgage- backed securities, as well as the value identified between sectors and individual issuers.
Chandler conducts 100% of its research in- house. Internally developed, proprietary tools such as our Horizon Analysis Model and credit review/ security selection provide a quantitative foundation for Chandler' s portfolio construction process. In addition, the investment management team subscribes to a variety of private research providers including BCA Research, Oxford Economics, Egan Jones, and CreditSights to augment the overall research efforts of the firm. The team keeps abreast of sell - side research from a broad group of domestic and international investment banks. These tools not only provide data for our investment processes but ensure that our clients have access to the most current and relevant market information.
Chandler' s professionals also conduct research projects on an ad hoc basis on issues concerning our industry 24 1
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EXHIBIT D - Page 29 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
and our clients, such as changes in the brokerage world, studies on how legislative changes impact our clients, and research on new sectors or investment structures as appropriate for our clients' portfolios.
Proprietary Tools and Best -in -Class Resources for Portfolio Constructions Chandler' s proprietary Horizon Analysis Model is the quantitative foundation for the portfolio construction process. The model enables our portfolio management team to integrate their research into the portfolio management process in a disciplined and repeatable way. Inputs to the model include:
current yields on Treasury, agency, and corporate securities; specific client constraints, such as maturity restrictions and maximum sector exposure; and nine different probability -weighted forecasted interest rate scenarios that may occur at the six- month horizon date. Our analysis of current macroeconomic conditions is one of the factors we consider as we develop the nine scenarios that comprise the third input to the model.
Chandler' s Investment Process
OUR INVESTMENT PROCESS
OUR PROPRIETARY QUANTITATIVE PROCESS SUGGESTS OPTIMAL PORTFOLIO STRUCTURES
INPUT AND CLIENT
CONSTRAINTS
Yield Curves
4r$ Constraints
YJ Scenarios
Through an iterative process, the model generates the " optimal portfolio structure" ( duration, maturity distribution, and sector allocation), which we define as the portfolio that achieves a return greater than the benchmark in each of the nine scenarios. That is, the model generates a portfolio structure that we expect will outperform the portfolio' s benchmark over a wide range of possible future interest rate movements. The Investment Team then evaluates the optimal portfolio structure and using their expertise and judgement, may adjust as they begin the construction of the portfolio. This combination of a rigorous quantitative structure and experienced qualitative oversight is a hallmark of all Chandler' s portfolio management activities.
Periodic Rebalancing
With the passage of time, portfolio characteristics tend to drift away from the desired structure. For that reason, the team reruns the Horizon Analysis Model monthly, reevaluates the optimal portfolio structure and rebalances to obtain the desired sector allocation and duration target as market conditions change. In addition, the benchmarks used by our clients for performance measurement are reconstituted monthly; therefore, we realign our portfolios with these benchmarks. As part of our active management approach, we will also rebalance when we find securities of superior value in terms of expected return or reduced risk or to adjust the credit quality of a holding for the portfolio.
Credit Analysis and Security Selection
Chandler conducts credit research in a team environment comprised of investment professionals as part of the firm' s Credit Committee. William Dennehy, CFA, Co - CIO is the chair of the Credit Committee which also includes additional members of the investment team. The firm' s proprietary credit research process identifies stable and improving credits to include in client portfolios. Although the Nationally Recognized Statistical 25 1
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Through an iterative process, the model generates the " optimal portfolio structure" ( duration, maturity distribution, and sector allocation), which we define as the portfolio that achieves a return greater than the benchmark in each of the nine scenarios. That is, the model generates a portfolio structure that we expect will outperform the portfolio' s benchmark over a wide range of possible future interest rate movements. The Investment Team then evaluates the optimal portfolio structure and using their expertise and judgement, may adjust as they begin the construction of the portfolio. This combination of a rigorous quantitative structure and experienced qualitative oversight is a hallmark of all Chandler' s portfolio management activities.
Periodic Rebalancing
With the passage of time, portfolio characteristics tend to drift away from the desired structure. For that reason, the team reruns the Horizon Analysis Model monthly, reevaluates the optimal portfolio structure and rebalances to obtain the desired sector allocation and duration target as market conditions change. In addition, the benchmarks used by our clients for performance measurement are reconstituted monthly; therefore, we realign our portfolios with these benchmarks. As part of our active management approach, we will also rebalance when we find securities of superior value in terms of expected return or reduced risk or to adjust the credit quality of a holding for the portfolio.
Credit Analysis and Security Selection
Chandler conducts credit research in a team environment comprised of investment professionals as part of the firm' s Credit Committee. William Dennehy, CFA, Co - CIO is the chair of the Credit Committee which also includes additional members of the investment team. The firm' s proprietary credit research process identifies stable and improving credits to include in client portfolios. Although the Nationally Recognized Statistical 25 1
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EXHIBIT D - Page 30 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Rating Organizations (" NRSROs") typically determine the initial eligibility of a security, Chandler does not rely on these ratings to determine whether a security is suitable for a Chandler portfolio. Chandler' s Credit Committee, with input from the entire investment team further vets the suitability of an investment based on our own internal research and a thorough understanding of each client' s investment objectives and risk tolerances. This combination of qualitative and quantitative analysis enables the team to identify and invest in securities consistent with our clients' objectives of safety, liquidity, and return.
The dynamic nature of the process also provides the team with the ability to detect weak and deteriorating credits, which may be removed from client portfolios and Chandler' s Approved Issuer List. In determining the suitability of a security, the Credit Committee analyzes company fundamentals with a focus on relative balance sheet strength and the overall earnings outlook of the issuer, paired with Chandler' s view of the forwardlooking macro -economic environment. After the fundamental outlook of an issuer has been ascertained, the Credit Committee focuses on the relative value of current and historical spreads of both the issuer and its industry sector. Chandler' s internal credit process is designed to identify and evaluate changing fundamentals and the current relative value of issuers versus sector peers.
In addition to our internal research tools and capabilities, the following external systems and software support our trading, portfolio accounting and client reporting:
PAM for Securities Accounting system ( Princeton Financial Systems)- Main source of record where all portfolio transactions are stored. Holdings information are based on the transactions entered.
Also stores SMF records, pricing, ratings, performance calculations, and other supporting data.
SQL Database- Stores enterprise operational data such as account information, reporting/ configuration, credit/ index information, etc. Also stores copies of PAM data. Main source of information for 95% of our reporting. Remaining information comes from PAM, Access, or Bloomberg AIM reports.
SQL Reporting/ Report Manager- Main application that creates, automates reports, and displays reports.
Bloomberg AIM - Order Management System. Imports holdings information from PAM and sends trading transactions to PAM. Also gets trade ticketing information, allocations, OASYS, settlement instructions enrichment. Compliance system used for pre -trade, post -trade, and end -of -day compliance testing and straight -through processing of investment transactions.
Bloomberg AIM - Investment Manager. The Bloomberg AIM system provides seamless data integration that compliance, as well as post -trade automation such as trade and security master file SMF) data automatically sent to our accounting system. Its compliance monitoring features will calculate and monitor asset class exposure, as well as issuer size and concentration limits, as well as compliance with the City' s investment guidelines and legal requirements.
Effects of Security Purchases/ Sales. Bloomberg AIM also allows the portfolio manager to test the effects that new securities will have on an existing portfolio. For example, the team can propose a trade in Bloomberg AIM, and determine what impact the position will have on the portfolio' s overall duration. In addition, we can perform an analysis on how a portfolio will be affected given a specified change in interest rates to ensure the portfolio will continue to meet the objectives of the portfolio.
We also can see the impact of security transactions on the portfolio not only from a portfolio management standpoint but also the implications to the accounting such as the gain/ loss of a security sale.
Electra Reconciliation System and Data Retrieval Services — Custodian to PAM reconciliation system.
Gathers and consolidates bank and manager data each night/ morning, as it becomes available. 26 1
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CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
OASYS- Product by OMGEO that communicates trade allocations to other participating OASYS brokers
Confirm/ Affirm- Product by OMGEO where the details of trades are communicated between the broker and Chandler to achieve settlement. This helps streamline settlements and notifies parties when trades details do not match.
Salesforce CRM— Contact management, portfolio settings, report distribution settings.
The City is not required to purchase any additional programs or software that is utilized for services under this engagement, relieving the need for to allocate capital for portfolio optimization, policy compliance, financial reporting, and other crucial aspects of managing your funds. j) What technical analysis ( if any) do you use?
We do not use a pure technical analysis process. We use quantitative measures to support our qualitative beliefs. The Investment Management Team occasionally uses technical methods to determine timing of purchases on an intraday basis, striving to execute transactions at the lower end of the daily trading range. k) What role does interest - rate forecasting play in your portfolio management strategy? Interest rate forecasting plays a limited role in our investment process. We believe that it is not possible to add value to a portfolio consistently over time through speculation on future interest rates. In order to do so, a portfolio manager would have to accurately predict three variables—the direction of the interest rate change, the amount of the change, and its timing. For that reason, we limit the impact of changing rates on our portfolios by maintaining portfolio duration within a band around the benchmark duration to avoid speculation on interest rate forecasting.
The Chandler team incorporates forward looking macroeconomic assumptions into our forecasts throughout our committee structure. One example is the probability -weighted interest rate scenarios on a forwardlooking six- month horizon embedded within our Horizon Analysis Model. The probabilities are adjusted multiple times a year, while the actual scenarios are also occasionally adjusted to best reflect the range of probable outcomes for interest rates based on the macroeconomic outlook of the Committee. Scenarios typically include parallel up and down yield curve changes, as well as non -parallel shifts, and the " unchanged" case. We then structure portfolios that we expect will outperform the portfolio' s benchmark over a wide range of possible future interest rate movements.
1) How will you handle fluctuating cash?
We acknowledge that recent events have impacted the economy and has left local governments with a greater deal of uncertainty than they have experienced in the past. Combined with the prolonged low -yield environment most affecting short-term interest rates, current challenges make a cash flow analysis and tactical investing in the cash markets of paramount importance. We intend to optimally structure the City' s portfolio to put its cash to work, make cash available as needed, and at the same time reduce the costly effect of maintaining too much liquidity in shorter -maturity investments with lower yields and lower return potential.
We utilize proprietary methods to conduct cash flow analysis and forecast of cash expenditures as an initial step and on an ongoing basis to effectively structure a portfolio that ensures liquidity and provides the City with opportunities for enhanced returns. Our process encompasses a statistical balance analysis informed by budgetary events. Our approach models the City' s historical use of cash, which is then fine-tuned with input from staff regarding budget progress, challenges, and expectations. We consider this process key to our approach and an important part of our comprehensive services. We will communicate with you about the City' s changing cash needs in order to update cash flow forecasts, manage liquidity, and structure securities 27 1
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CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
in the portfolio to mature on known cash flow dates. To ensure liquidity, we will present a structure that may include using LAIF or involve segregating a portfolio of short -duration securities where funds are invested to a short -duration target or to a known cash flow date. Funds not needed for liquidity purposes are identified and can be structured to safely enhance earnings and long-term capital appreciation through investments in high quality longer -maturity investments. Funds not needed for immediate liquidity are then identified as available for investment in the City' s longer -duration total -return strategy that is designed to enhance both interest income and fair value appreciation.
We will assist the City with analysis such as the following chart as a starting point to project balances into the future to handle fluctuating cash flows. We will maintain ongoing dialogue with the City to understand all issues that may impact future liquidity needs. This way, securities can be structured in advance by maturing concurrently with cash needs and avoiding the sale of securities to raise cash when needed. 0 Sample Cash Flaw Analysis
Amount available for
Minimum needed to longer- term investments
cover Pool outflows
10% Cushion I
Excess
Liquidity
That Can
be
Invested in
Securities
This sample illustration is provided to demonstrate the tools in how we analyze cash balances. Please see important disclosures in the Appendix.
We will work closely with staff to review and assess current cashflow models and make revisions where needed. While we have observed the cyclical flow of many cities' cash flows and cash activity, other cash profiles have a more variable nature and may change as often as monthly. Because cash flow projections are estimates and subject to unforeseen circumstances, we recommend a portfolio structure that includes an additional layer of short-term investments such as a portfolio of short-term securities or liquidity vehicles designed to be available for unanticipated cash expenditures.
As the City continues to grow and cycle through its cash needs, we will revisit our cash flow analysis and forecasts frequently to confirm that the portfolio is structured optimally to both provide for cash needs and enhance returns. Communication is essential in the management of cash and optimal structuring of a portfolio designed to meet cash obligations, and the investment team will regularly check in with the City' s staff to inquire about both cash needs, as well as advise on funds that are identified for investment in the longer- term strategy.
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ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
m) Describe the ongoing daily investment procedures proposed for the, including procedures for trades, security choice, controls, etc., and how you will provide liquidity.
Chandler' s Investment Management Team reviews portfolios daily for compliance with investment policies and consistency with the recommended portfolio structure. The firm' s investment procedures also incorporate the following:
Trading
Chandler will execute approved securities transactions on a transparent and highly competitive basis, in accordance with our commitment to best execution. The main consideration for broker selection is best execution, including best price and reliability of delivery. As part of this process, we seek a broad range of security trading partners that provide a high level of market liquidity and product inventory. A minimum of three quotations is sought and documented on trade tickets and are reported to clients at the time of execution. The winning seller delivers securities directly to your custodian bank, using standard delivery - versus -payment procedures.
In seeking best execution, we " block" trades for a number of clients, where possible, and then allocate the trades to individual portfolios, using an allocation process designed to treat all clients fairly in the transaction.
We execute transactions through online trading platforms, such as TradeWeb and MarketAxess, or directly through individual brokers with the goal of seeking competitive executions.
Security Selection
Once the team has determined the percentage of the portfolio in any duration range or security type, the team seeks individual securities to complete the portfolio structure. Corporate and agency securities are subject to our rigorous credit analysis process, which results in an Approved Issuer List. Our investment professionals recommend securities from the Approved Issuer List based on relative value considerations.
Managing Portfolio Liquidity
The primary control in the portfolio management process is third party bank custody of client cash and securities, with all transactions occurring on a delivery -versus -payment basis.
Chandler has a robust process for ensuring portfolio compliance with client objectives, policies and directives.
The firm utilizes the Bloomberg AIM trade order management and portfolio compliance system to monitor compliance with client investment guidelines. Each element of a client' s investment policy and guidelines are hard coded into the system by a compliance professional of the firm. Pre -trade compliance testing is activated each time a Portfolio Manager prepares to execute a transaction. The system prohibits execution of the trade if it does not comply with the policy. If an " alert" is triggered for non- compliance, it cannot be lifted by a portfolio manager.
As a part of our regular process of policy and guideline monitoring, we provide clients with a monthly detailed Statement of Compliance, where we detail adherence to requirements such as permitted investments, minimum credit quality, maximum maturities, and concentration limits. This Statement also serves as an effective means of reporting compliance to the governing body.
In addition to providing pre -trade compliance, Bloomberg AIM integrates seamlessly with Chandler' s accounting system. Our investment professionals electronically send executed transaction information to Chandler' s investment operations professionals for settlement processing and broker/ custodian notification.
Transactions are then electronically imported into the portfolio accounting/ reporting system. We designed these controls to provide appropriate separation of duties and to reduce the possibility of human error in the process.
Ensuring Liquidity
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We recognize that liquidity is second only to safety on our clients' list of objectives. We actively assist our clients to develop and maintain cash flow forecasts and to manage liquidity. We will review historical balances and assist your staff in developing and maintaining cash flow forecasts to both manage liquidity, as well as mark the funds available to be invested in longer- term strategies to capture additional yield opportunities.
One of the primary tasks at the beginning of the engagement will be to understand the pattern of your cash flows. A straightforward historical analysis of cash balances is a simple but effective method for determining liquidity needs. Future liquidity needs will be accommodated in advance so that cash is available on the date you need it. Generally, all securities in the portfolio are liquid, and available for sale in case of any unforeseen or emergency cash distribution. We encourage our clients to maintain balances in money market funds and other short-term investments.
Chandler' s approach to structuring portfolios is designed to be scalable to changes in your investment program or cash flow needs.
n) Describe your Firm' s electronic and manual controls surrounding compliance with the City' s investment policy.
Chandler uses robust order management (" OMS") and portfolio compliance software from Bloomberg AIM for ensuring compliance with client objectives, policies and legal requirements on a pre -trade, post -trade and end -of - day basis. At the inception of an engagement, a compliance officer codes each element of the investment policy and guidelines into the Bloomberg system. Since each trade originates in the system, pre -trade compliance testing is generated each time a portfolio manager prepares to execute a transaction. The system prohibits execution of the trade if it does not comply with your investment policy. If an " alert" is triggered for non- compliance, it cannot be overridden by an investment manager, and is escalated for review by compliance professionals.
Oversight of portfolio compliance and trade order management is conducted by Chandler' s dedicated Compliance Department, headed by Chief Compliance Officer Joseph Kolinsky, and which functions separately from the portfolio management team under the appropriate segregation of duties. As a part of our regular process of policy and guideline monitoring, we provide clients with a monthly detailed Statement of Compliance, based on our complete review of our clients' investments. This report details adherence to requirements such as permitted investments, minimum credit quality, maximum maturities, and concentration limits. This Statement also serves as an effective means of reporting compliance to the governing body.
In the event of a compliance violation, the details and actions taken to correct the violation would be detailed in this report. Further procedures to ensure compliance with state laws, your investment policy, objectives, and directives include:
A daily reconciliation of transactions and cash balances with custodian information.
A month- end review of the portfolio to confirm compliance with the Investment Policy.
A comprehensive weekly process to ensure credit quality meets your policy standards as well as our strict quality requirements.
A portfolio structure that satisfies liquidity objectives with short -maturity securities and return objectives with higher duration investments.
Frequent communication between our team and yours to help us stay informed of any new developments that may modify your objectives.
Meetings with your staff as frequently as you choose to provide additional opportunities to review portfolio composition and performance at a high level.
Through Bloomberg AIM' s integration, Chandler optimizes its workflow automation and improves synchronicity with our clients' internal accounting and portfolio management systems for more centralized and efficient 30 1
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CHANDLER
ASSET MANAGEMENT
EXHIBIT D - Page 35 of 48 Request for Proposals for
Investment Management and Advisory Services
CITY OF STANTON, CALIFORNIA
operations. The Bloomberg AIM system provides seamless data integration that improves trading and compliance, as well as post -trade automation such as trade and security master file ( SMF) data automatically sent to our accounting system. Its compliance monitoring features calculates and monitors asset class exposure, as well as issuer size and concentration limits, as well as compliance with the City' s investment guidelines and legal requirements.
o) Given the City' s current investment portfolio inventory, describe your Firm' s work plan for the first 60 days of the contract. What changes would you make to the City' s investment policy or portfolio holdings and why?
Chandler will work with the City of Stanton staff to ensure a seamless transition. We will develop an investment plan that considers your specific needs. The following describes the typical tasks necessary for implementation. Our process is flexible and can accommodate your timeline. It is our experience that most investment programs are ready to invest within four to eight weeks from notification of award. Below are a table of implementation tasks that you can except to start during the first 60 days of the contract. Delays can occur due to a change in existing custody provider, the establishment of a new custody provider, or a client' s ability to obtain signatures and return documents in a timely manner.
Implementation Tasks
31 1
Execute
Pro
investment management agreement
Complete opening documentation
Establish or review custodial relationship
Determine
Dev
sources of funding
Review Investment Policy
Analyze cash needs
Discuss investment objectives
Assess risk parameters
Create customized investment strategy
Preparing
Draft management directive
to lnvest
Develop funding strategy
Set up read- only access to custodial account
Build assets in Chandler trading and accounting systems Assign Chandler Client Portal credentials and conduct Portal demonstration Review Chandler reporting solution with staff
investment
Establish trading rules with Chandler Compliance Team
of Funds
Execute funding strategy for initial purchases
Carry out active investment to maintain target portfolio structure Inform staff on investment progress through regular communication and formal portfolio reviews
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Chandler' s Suggestions and Feedback
Chandler' s investment team reviewed the City of Stanton' s investment policy statement and holdings. There were suggestions and ideas resulting from the review.
Investment Policy Recommendations
The City' s investment policy is robust and well- written. Chandler has recommendations for consideration based on recent changes to California Government Code ( CGC) involving Authorized and Suitable Investments and Asset Backed Securities ( ABS).
AB 1770 — Recommend removing the issuer rating requirement of " A" category or higher by at least one Nationally Recognized Statistical Ratings Organization ( NRSRO) to be consistent with AB 1770, legislation that became effective 1/ 1/ 19 eliminating this requirement. ABS are still required to be rated " AA" or higher by a NRSRO at the security level per CGC Section 53601( o).
Prohibited Investments
SB 998— Update to CGCthat became effective 1/ 1/ 21 and remains in effect until 1/ 1/ 26 allows California public agencies to purchase securities that could result in a zero or negative interest accrual if they are issued or backed by the US Government.
Chandler would like to explore the following points if awarded the contract.
Increasing diversification to issuers and sectors;
Utilizing a duration target;
Implementing a dynamic maturity structure.
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ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
7. REPORTING
a) Describe the investment accounting and reporting system used by your Firm.
Chandler utilizes a third -party accounting software called PAM for Investments. It is a State Street product that performs investment accounting and reporting including performance measurement. We have been using PAM since 1995 and over the years have been able to identify areas for improvement within the product and have seen said improvements incorporated into later releases.
Using PAM as the investment book of record for our clients, we generate comprehensive monthly statements and performance reports, which clients receive no later than the third business day following month end.
Our standard reports currently include:
Portfolio total rate of return compared to the benchmark return for periods of one month, the most recent quarter, year to date, one year, three years, five years, ten years, and since inception; Purchase yields.
To ensure integrity, we receive daily pricing of securities from Interactive Data Corporation, Inc. ( IDC). In the rare instance that a security is not priced by IDC, we use an alternative pricing source, such as TRACE, Bloomberg, custodian valuation, etc., to determine reasonable fair market value. Our operations team also performs daily reconciliation of transactions and cash balances with our clients' custodians.
We are able to provide comprehensive reporting that will be tailored to meet the City' s unique needs, as well as meet the demand of the marketplace. While our performance measurement software and data sources are from outside vendors, our reporting capabilities are based on a proprietary reporting tool, and so we are able to customize reports for our clients.
Is a client portal available? If so, what kind of information is available in the client portal and for how long? Access to the Chandler Client Portal is available to individual contacts selected by the client, and is accessible to clients 24 hours a day, 7 days a week. Chandler' s Client Portal is a secure and robust portal that includes read only data such as monthly statements, quarterly reports, trade tickets and annual reports for three years.
Any information regarding your Chandler Managed portfolio will be housed on our systems and can be furnished to you via an email or by phone request. In addition to reports and trade tickets, you will have access to Chandler' s weekly economic updates and monthly bond market review. We also offer customizable holdings reports in excel. We offer each client secure credentials and portal training as part of our onboarding process. Online Client Portal: Chandler' s Client Portal is the custom computer- based analytical tool that provides clients with secure access to a variety of digital files, including customized reports, trade tickets and documents, as well as the ability to download daily transactions and holdings, historical monthly statements, and quarterly reports. The Portal offers online access and is also designed to be viewed on mobile devices.
Reports can be downloaded in Excel format and easily mapped and integrated into your internal reporting requirements, aggregating your data for effective analysis, and improving your operational efficiencies. Access to the Chandler Client Portal is available to individual contacts selected by the client, and is accessible 24 hours a day, 7 days a week.
b) Describe your Firm' s trade settlement and account reconciliation process.
Chandler uses daily automated reconciliation software, Electra Information Systems (" Electra") for post -trade processing as well as electronic collection of asset and transaction data from the custodians of our clients who chose to provide this data to us electronically. This allows us to perform timely daily reconciliations to ensure that all transactions, coupon payments and maturities are recorded correctly at the custodian and enhances 33 1
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operational efficiency. All other functions relating to our operations/ back-office functions are performed inhouse.
The following software systems are used to support Chandler' s in- house functions:
PAM Accounting system ( A State Street Corporation product)- Investment book of record where all portfolio transactions are stored. Holdings information is based on the transactions entered. Also stores SMF records, pricing, ratings, performance calculations, and other supporting data.
SQL Database- Stores enterprise operational data such as account information, reporting/ configuration, credit/ index information, etc. Also stores copies of PAM data. Main source of information for 95% or our reporting. Remaining information comes from PAM, Access, or Bloomberg AIM reports.
SQL Reporting/ Report Manager- Main application that creates, automates reports, and displays reports.
Bloomberg AIM — Trade order management system (" OMS") and portfolio compliance system. Data integration, as well as post -trade automation such as trade and security master file ( SMF) data automatically sent to our accounting system. Its compliance monitoring feature calculates and monitors asset class exposure, as well as issuer size and concentration limits, as well as compliance with client investment guidelines and legal requirements.
CTM - Product by OMGEO that communicates trade allocations to other participating OASYS brokers Salesforce CRM — Contact management, portfolio settings, report distribution settings, etc. c) Specify whether our Firm' s reports are reconciled with the City' s safekeeping account and how.
Reports will be prepared in accordance with state law and the Governmental Accounting Standards Board GASB) and are compiled to meet your specific needs. Chandler Asset Management claims compliance with the Global Investment Performance Standards ( GIPS') and prepares and presents its performance in compliance with these standards. Chandler is independently verified by ACA Performance Services for firm - wide GIPS° compliance. Chandler provides monthly portfolio accounting and performance statements as well as mark -to -market fair value pricing for securities in accordance with GASB 31. We provide a GASB 40 report to all governmental clients, which provides the information needed to prepare the required fiscal year- end portfolio risk assessment, and we will be able to assist the City in drafting the narratives for GASB notes. We have developed a GASB 72 report which is available by fiscal yearend. The GASB 72, Fair Value Measurement and Application, issued in February of 2015, requires government investments to be measured at fair market value. It also requires disclosures regarding how fair value was measured, what hierarchy the investment fits into and any special valuation processes used. Chandler' s investment and operations professionals remain dedicated to staying in front of all GASB pronouncements, interpretations, and implementation guidelines as they affect our government clients from a reporting and compliance perspective. Please see Chandler' s Sample Monthly Statement and Quarterly Report in the Appendix. d) The City expects a monthly report on the City' s investment portfolio that can be included in the Monthly Treasurer' s Report to the City Council. Describe the format of reports that you would provide to the City and when. How many days after the end of the month will the City be provided its reports? ( For example, when could the City expect to receive its reports for the month ended March 31, 2022?) Attach a sample.
Monthly Statements: We provide monthly portfolio accounting and performance statements as part of our regular services. Each monthly statement begins with a one- page management summary of portfolio characteristics that provides a thorough overview of the portfolio, including performance relative to the selected benchmark( s), followed by a statement of compliance. A detailed asset listing, including cost, book, 34 1
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and market values, a transaction ledger, an earned interest report, and a cash flow report follow the summary page.
Monthly statements are accessible on the Chandler Client Portal. Clients receive an email notification stating that the statement is available for download no later than the third business day following month- end.
A client statement for the City of Stanton as of March 31, 2022, would be available on the Chandler client portal by the end of business on April 51n
Reports will be prepared in accordance with state law and the Governmental Accounting Standards Board GASB) and are compiled to meet your specific needs. Chandler Asset Management claims compliance with the Global Investment Performance Standards ( GIPS') and prepares and presents its performance in compliance with these standards. Chandler is independently verified by ACA Performance Services for firm - wide GIPS° compliance.
Chandler utilizes the software of PAM for Investments, a State Street Company to perform investment accounting and reporting. Using PAM as the investment book of record for our clients, we generate comprehensive monthly statements and performance reports, which clients receive no later than the third business day following month end.
Chandler measures portfolio performance monthly and quarterly on a total return basis, providing a complete snapshot of the outcomes resulting from investment decisions since total return measures the percent change in the value of a portfolio over a defined historical period. The total return of the portfolio is compared to carefully selected benchmarks which have been selected in collaboration with clients as the appropriate metric for assessing performance relative to their risk tolerances and investment objectives.
Our standard reports currently include purchase yields and portfolio total rate of return compared to the benchmark return for periods of one month, the most recent quarter, year to date, one year, three years, five years, ten years and since inception.
To ensure integrity, we receive daily pricing of securities from Interactive Data Corporation, Inc. ( IDC). In the rare instance that a security is not priced by IDC, we use an alternative pricing source, such as TRACE, Bloomberg, custodian valuation, etc., to determine reasonable fair market value. Our operations team also performs daily reconciliation of transactions and cash balances with our clients' custodians.
The reports that Chandler provides to you will provide transparency of your portfolio, and will assist your staff with their accounting duties, alleviating and even eliminating intermediary steps required to compile internal reports. We are able to provide comprehensive reporting that is tailored to meet the City' s unique needs, as well as meet the competitive demand of the marketplace.
Quarterly Reports: We also provide quarterly investment reports in a format designed to facilitate discussion between Chandler investment professionals and the City' s staff. The report presents portfolio characteristics, return, compliance, and a summary of accounts under management using graphs, charts, and illustrations in a format that is effective for management, elected officials and interested members of the public. We provide this report for our regular meetings with the City.
Reports will be prepared in accordance with state law and the Governmental Accounting Standards Board GASB) and are compiled to meet your specific needs. Chandler Asset Management claims compliance with the Global Investment Performance Standards ( GIPS') and prepares and presents its performance in compliance with these standards. Chandler is independently verified by ACA Performance Services for firm - wide GIPS° compliance.
Chandler provides monthly portfolio accounting and performance statements as well as mark -to -market fair value pricing for securities in accordance with GASB 31. We provide a GASB 40 report to all governmental 35 1
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ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
clients, which provides the information needed to prepare the required fiscal year- end portfolio risk assessment, and we will be able to assist the City in drafting the narratives for GASB notes.
We have developed a GASB 72 report which is available by fiscal year end. The GASB 72, Fair Value Measurement and Application, issued in February of 2015, requires government investments to be measured at fair market value. It also requires disclosures regarding how fair value was measured, what hierarchy the investment fits into and any special valuation processes used.
Chandler' s investment and operations professionals remain dedicated to staying in front of all GASB pronouncements, interpretations, and implementation guidelines as they affect our government clients from a reporting and compliance perspective.
Please see Chandler' s Sample Monthly Statement and Quarterly Report in the Appendix. e) What performance benchmarks would you suggest for this portfolio? Provide recommendations regarding performance benchmarks for a portfolio similar to that of the City of Stanton. What experience has the Firm had in developing benchmarks for public operating portfolios? Chandler has deep expertise in analyzing and selecting effective benchmarks for performance measurement and will undergo a collaborative process with the City' s staff to select appropriate benchmarks for each of its portfolios. Fixed income investors generally choose their total return benchmarks from either the Barclay' s Capital or the ICE Bank of America (" ICE BofA") families of indexes. We prefer the ICE BofA indexes because they offer us the ability to identify, observe, and integrate security data into our models. We import all the constituents of a specific benchmark into our system and perform detailed analysis designed to optimize the performance of each client' s portfolio relative to that benchmark.
We have worked with numerous clients to create custom benchmarks that are blended from two or more readily available benchmarks to reflect the client' s investment objectives and risk tolerances more accurately. 36 1
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ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
9. REFERENCES
a) List the name, address, telephone number, and email of references from at least three ( 3) current clients similar in size and scope to the City. Include a brief description of the work provided for each reference and the size of the entity' s investment portfolio that your Firm manages ( or managed). California municipal or county projects are preferred. You may offer more than the recent similar projects if desired. The references should include the start date of the project and the date of completion for each project.
Chandler is pleased to provide the following references for the City:
Chandler Current Client References
Operating
City of Brea
Williams Gallardo
1996
funds; 3- 5
City Manager
present $
94 M year strategy; 1 Civic Center Cir.
ph.: ( 714) 671- 4418 1 - 5 - ear
Brea, CA 92821 y
billga@ci. brea. ca. us
strategy
City of La Habra James Sadro Operating
110 E. La Habra City Manager
1999
35 M funds; 1- 5
Boulevard Ph.: ( 562) 905- 9783 present
year strategy
La Habra, CA 90631 mshannon@lahabraca. gov
Operating
City of San Juan funds; custom
Ca p istrano
Ken AI - Imam
2018 cash
Director of Finance/ City Treasurer 40 M
32400 Paseo Adelanto
Ph.: ( 949) 443- 6301 present management
San Juan Capistrano, CA
kal- imam@sanivancapistrano. org and 1- 3
92675
strategy
Chandler Asset Management Assets Under Management as of 12/ 31/ 21. This list includes clients that have given permission to be listed. It is not known whether or not the listed clients approve or disapprove of Chandler, or the services provided. 38 1
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10. ADDITIONAL INFORMATION
a) Provide a copy of your Firm' s most recent ADV Parts land 2 on file with the SEC.
Please see our most recent ADV Parts I and II as on file with the SEC in our attached appendices. Chandler' s ADV is attached as Appendix A.
b) Provide a copy of your Firm' s most recent Annual Compliance Report ( completed in accordance with Rule 206( 4)- 7 of the Investment Advisers Act).
Chandler Asset Management Inc. completes an Annual Compliance Report in accordance with Rule 206( 4)-
7. Our annual compliance review consists of the following key processes:
Throughout the year, Chandler' s Compliance Team performs detailed monitoring and testing over key corporate functions and processes. Results of this monitoring and testing are centrally documented, and any opportunities for process enhancement identified by Compliance are immediately communicated to the applicable business unit( s) for evaluation and possible implementation.
In addition to our own ongoing internal testing performed by our Compliance department, Chandler contracts with an independent third party ( Core Compliance & Legal Services — " CCLS") to perform detailed testing of our key controls throughout the year, to ensure that these controls continue to be effective.
o We have provided a copy of this report for your review. As Chandler is a private firm, we ask that this report be kept confidential and not for further distribution.
Annually during the fourth quarter, the firm' s Management Team reviews our Risk & Control Matrix. Any changes in residual risk ratings are discussed by the team.
Once our annual risk assessment review is completed, Compliance reviews our Code of Ethics and Policies & Procedures Manual. This review ensures that the key processes and corresponding controls are accurately reflected.
Each March, the Chandler CCO summarizes our internal monitoring and testing results, adjustments made to our risk & control assessment, any observations provided by CCLS, and any changes made to our policies & procedures within Chandler' s Annual Compliance Report. This report is presented to the firm' s Executive Committee by the CCO. Since Chandler utilizes the contents of this annual report for strategic purposes, it is our policy not to disseminate it outside of the firm; however, we can schedule a meeting with your team ( in person or virtual) to walk you through our process as well as the report itself.
c) Provide a copy of your Firm' s most recent GIPS Composite Report and Verification Letter.
Please see our most recent GIPS Composite Report and Verification Letter in our attached appendices.
Chandler' s GIPS report is attached as Appendix D.
d) Describe your Firm' s business continuity plan, how often it is updated, and what assistance would be available to the government.
As part of its fiduciary duty to its clients, and as required under the Federal Compliance Program Rule, Chandler has adopted a Disaster Recovery/ Business Continuity Plan to provide for the firm' s recovery from an emergency or disaster and for the resumption of business operations in as short a period of time as possible.
These policies and procedures address our primary responsibility for establishing and maintaining communication with our clients and for our mission critical functions. Chandler' s Disaster Recovery/ Business Continuity Team consists of senior members of the firm' s administration and includes IT professionals as well as outsourced consultants.
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Chandler' s policy addresses our response to both internal and external significant business disruptions and includes procedures for data back- up and recovery, client access to funds and securities, phone, internet and email disruptions, and mission critical functions such as order entry, execution, and client reporting. In the unlikely event that Chandler' s corporate headquarters in San Diego were damaged and inaccessible, we have the ability to operate from any of our regional offices in Marin County, Walnut Creek, Ventura, Denver, Seattle, or Orlando. If we determine we are unable to continue our business, we assure clients prompt access to their funds and securities.
COVID Related Measures
Chandler' s Business Continuity Plan has been effective during the current pandemic which commenced with all of Chandler' s employees working remotely beginning on March 16th. The plan is structured to enable us to continue to safely service our clients and effectively manage portfolios, and we have been operating at full capacity since sheltering in place. The following are some steps we took during this unprecedented time:
We implemented our BCP and client communication plan when infections began climbing, before the California - mandated shelter - in- place;
We experienced zero disruptions to our business operations; We maintained constant communication with all our clients from the early days of the shelter -in- place through today;
None of our clients experienced any sort of disruption to their investment programs; and We continue to function at full capacity, including maintaining full trading operations, compliance, statement production, and communication.
Data Backup and Recovery
Chandler has hired AppliedSense, an outsourced IT firm, to administer and monitor the back- up and recovery of our electronic records. Applied Sense is also responsible for monitoring, maintaining, and managing our network and overall IT infrastructure, and administers and maintains the Data Backup and Recovery System which is a comprehensive backup solution for our mission -critical servers. AppliedSense is available for support on 24 hour / 7 days a week basis.
All records maintained electronically are backed up hourly to a storage device on site. On a daily basis, mission - critical files are sent to offsite backup devices maintained in two separate geographical locations in secure collocation facilities. Our data backup and recovery procedures allow us to retrieve data within minutes, if needed. The firm reviews its policy on a quarterly basis, and updates and revises it whenever a significant event or regulation determines its inclusion. Chandler, with the assistance of AppliedSense, conducts semiannual tests of our backup services. All employees of Chandler are required to attest that they have reviewed the procedures described within the policy.
Cybersecurity/ Data Security
Chandler recognizes the critical importance of safeguarding clients' personal information as well as the confidential and proprietary information of the firm and its employees. While recognizing that the very nature of cybercrime is constantly evolving, Chandler conducts periodic assessments based on our firm' s use of technology, third -party vendor relationships, reported changes in cybercrime methodologies, and in response to any attempted cyber incident, among other circumstances.
Chandler' s comprehensive Cybersecurity Policy includes procedures that cover acceptable use by employees of Chandler' s network resources, as well as data backup, data destruction, data encryption, security monitoring, vendor access and incident management. The firm has addressed several components of cybersecurity that our processes monitor including:
websites and domains
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firewalls
antivirus
patch management
employee access/ privileges
VPN/ encryption
mobile device management ( MDM)
intrusion prevention
IDS and security alert
multi -factor authentication requirements
the physical security of our office, servers, and individual workstations On a quarterly basis, Chandler, with the assistance of AppliedSense conducts cyber -hygiene and resilience tests to include third -party penetration testing including but not limited to websites, on -premise workstations, wireless access points, servers, routers, etc. In addition, social engineering tests are conducted such as email phishing, CEO spear phishing, domain spoofing, pretexting, baiting, and quid pro quo. Each of these tests result in a post- mortem with any resolutions put in place immediately and prior to the next quarter' s testing. e) Describe your Firm' s technological controls, including:
Physical access;
Logical access;
Change controls; and
Remote access, including use of mobile devices.
Include a description of how the Firm is prepared to defend its systems from a cyberattack.
Below is a comprehensive description of Chandler' s technological controls.
Data Backup and Recovery
Chandler has hired Applied Sense, an outsourced IT firm, to administer and monitor the back- up and recovery of our electronic records. Applied Sense is also responsible for monitoring, maintaining and managing our network and overall IT infrastructure, and administers and maintains the Backup Data and Recovery System which is a comprehensive backup solution for our mission critical servers. All records maintained electronically are backed up hourly to a storage device on site. On a daily basis, mission critical files are sent to offsite backup devices maintained in two separate geographical locations in secure collocation facilities. The firm reviews its policy on a quarterly basis, and updates and revises it whenever a significant event or regulation determines its inclusion. Chandler, with the assistance of Applied Sense, conducts annual tests of our backup services.
Additionally, all employees of Chandler are required to attest that they have reviewed the procedures described within the policy.
Backup and Data Recovery
On premise BDR
o All critical business data and files are replicated and backup nightly via our on -premise Backup and Data Recovery server (BDR) with data retrieval, if needed, within minutes.
Off premise BDR
o All data replication services are hosted via Amazon S3, a SSAE16 SOC1 Type II certified nondescript data center with physical, video, electronic, biometric authentication, and other intrusion 41 1
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detection measures located in Oregon and Texas, meeting CJIS, CSA, FERPA, HIPPA, and MPAA standards with data retrieval, if needed, within minutes.
Cybersecurity/ Data Security
Chandler recognizes the critical importance of safeguarding clients' personal information as well as the confidential and proprietary information of the firm and its employees. While recognizing that the very nature of cybercrime is constantly evolving, Chandler conducts periodic assessments based on our firm' s use of technology, third -party vendor relationships, reported changes in cybercrime methodologies, and in response to any attempted cyber incident, among other circumstances.
Chandler' s comprehensive Cybersecurity Policy includes procedures that cover acceptable use by employees of Chandler' s network resources, as well as data backup, data destruction, data encryption, security monitoring, vendor access and incident management. These policies and procedures are distributed to employees and appropriate employee training is conducted to ensure employee adherence to these policies and procedures. Chandler also appoints an outsourced Chief Information Officer to support oversight of IT and cybersecurity management and monitoring.
Digital Security
Websites and Domains
o All company websites and domains use HTTPS and redirect all HTTP traffic to HTTPS. Preventative cross -site scripting protocols, enabled public key pins, TLS 1. 1 and TLS 1. 2 where applicable, and strong password requirements for individualized access and content.
Firewall
o Network devices routinely monitoring and reviewed for concerns such as privilege creep o Active breach monitoring is performed 24 hours a day with alerts sent to key staff and IT personnel when certain criteria is met.
Antivirus
o Customized scripts and policies in place for 24- hour administrator alerts and security events. o Cloud -managed antivirus with daily definition updates and 0 -day technologies.
Patch Management
o Regulated and monitored patch implementation with updates applied through centralized services and controllers.
o Digitally signed updates to verify sender authenticity.
Employee Access/ Privileges
o Regular review of employee accounts and associated permissions. o Password management is enforced via a strong password policy with 90 -day expiration times. o Automatic screen -lock prompting user for a password after 15 minutes of inactivity.
VPN/ Encryption
o Encrypted 256 -bit remote communications utilizing SSTP, IPsec, and DNSsec. o Single sign -on services with verbose logging for remote sessions.
Mobile Device Management ( MDM)
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CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
o MDM routinely checks for malware, rooted or "jailbroken" operating systems, pin or passcodes and data encryption are in place and no unsigned applications are installed. o MDM allows for remote wipe if lost/ stolen.
o MDM provides instant notifications all users or to one specific individual.
Intrusion Prevention System ( IPS)
o We employ several IPS solutions from regularly updated DNS filtering, additional spam filtering, and universal password management applications capable of one -click sign -off, deletion, and recredentialing, if needed.
o Data loss prevention technologies are deployed on edge routers and email gateways. o Comprehensive logging/ reporting for all network -wide operations with network administrator review.
IDS and Security Alerting
o Any questionable emails and or attachments are caught by our regularly updated IDS solution that alerts our IT team for immediate review and feedback. All reviews are conducted outside of the network and released if no issues are found.
o Active network security monitoring utilizing technologies such as machine learning for a complete security alerting policy and notifying key staff regarding but not limited to intrusions, excessive heat, hard drive capacity, bandwidth bottlenecks, failed login attempts, etc.
Multi -factor authentication requirements
Physical Security
Office building
o Key, keypad, restricted access only to authorized members to the on -premise server room.
USB port blocking
o Scheduled for implementation in 4Q2018, all USB ports on company workstations will be blocked via a Universal Group Policy from user access thereby preventing unauthorized data replication.
Server Security
o Network -wide enforced hard drive encryption using AES256- bit encryption prevents anyone with physical access to the hard drives from accessing any data.
Real- time analysis and security of out -of -scope activities specific to applications and network hardware via a SIEM ( Security Information and Event Management) engine.
Off premise Server Security
o All data replication services are hosted via Amazon S3, a SSAE16 SOC1 Type II certified nondescript data center with physical, video, electronic, biometric authentication, and other intrusion detection measures located in Oregon and Texas, meeting CJIS, CSA, FERPA, HIPPA, and MPAA standards. Physical access is logged, monitored, and retained. 43 1
ATTACHMENT B- Page 64 of 66
EXHIBIT D - Page 47 of 48 Request for Proposals for
C3% CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
Cyber-Hygiene/ Resilience Testing
Third - party penetration testing
o Our third -party cybersecurity team conducts quarterly network penetrations testing including but not limited to, websites, on -premise workstations, wireless access points, servers, routers, network attached storage devices, etc.
o From these quarterly penetration tests, a postmortem is conducted with any resolutions put in place immediately and prior to the next quarter' s testing. Only key management is aware of when these penetration tests will occur.
Third -party social engineering testing
o Our third -party cybersecurity team conducts bi- annually social engineering tests including but not limited to email phishing, CEO spear phishing, domain spoofing, pretexting, baiting, and quid pro quo.
o From these quarterly penetration tests, a postmortem is conducted with any resolutions put in place immediately and prior to the next quarter' s testing. Only key management is aware of when these penetration tests will occur.
Training
o Derived from the social engineering tests, we conduct a mandatory instructor -led annual cybersecurity awareness training.
o Cumulatively, we also create and deploy cybersecurity quizzes and follow- on resources for self - paced learning.
Vendor Security Management
We conduct annual re -certifications in the form of a Vendor Due Diligence Questionnaire ( DDQ) of all vendors and service provides associated to data security.
This 70 -point Diagnostic DDQ, once completed, is scrutinized, and validated for completeness and accuracy by our IT and Cybersecurity team, AppliedSense. f) Briefly describe any additional features, attributes, or conditions which the City should consider in selecting your Firm. Describe any other services your Firm can provide.
Leveraging resources from across the firm, we provide advice and investment manager analysis while bringing clients a personalized and local perspective. We are an investment management firm founded by former investment officers of large public agencies, providing our clients with a depth and context in our ability to understand your unique needs and how a successful investment program adds value to your entity' s bottom line. In addition, Chandler distinguishes itself from its competition in several ways, and in all aspects of the relationship with its clients, not limited to its investment management capabilities.
Deep history and experience. Chandler' s founder, CEO, and other key investment professionals have worked as investment officers and finance directors of public agencies and have in- depth experience and knowledge of the issues these entities face in managing their assets effectively.
Since 1988, Chandler has assisted public agency clients fulfill their fiduciary duty to their constituents by providing high quality fixed income portfolios in a risk -conscious framework that conform to all state laws and directives. Chandler has both the depth ( experience) and breadth service capabilities) as an investment manager and is particularly qualified to meet the City' s 44 1
ATTACHMENT B- Page 65 of 66
EXHIBIT D - Page 48 of 48 Request for Proposals for
CHANDLER Investment Management and Advisory Services
ASSET MANAGEMENT CITY OF STANTON, CALIFORNIA
investment needs because of our decades of experience in safeguarding our clients' funds and structuring them optimally to meet all objectives.
Access to portfolio managers. Chandler offers its clients direct access to its lead portfolio managers and the back- up investment management team who are responsible for making the decisions for your portfolio, allowing for customization and flexibility to changes in your program. Your key investment contacts as well as the rest of the investment management team will have a significant understanding of not only your investment portfolio, but also of where it fits in the overall program and its future objectives.
Corporate Heodquorters in California. Chandler has been headquartered in San Diego since its inception and has regional offices in Marin County and Walnut Creek to serve Northern California clients. Our investment professionals are experts in California' s investment landscape and possess significant expertise in structuring portfolios that adhere to California Government Code.
Investment professionals are in the same time zone as the City and will provide timely updates to changes in legislature and best investment practices for California public agencies. We also invite your staff to Chandler' s San Diego office for onsite visits, department training, educational sessions, and for the purpose of conducting due diligence at times most convenient for your finance staff.
Resources. Chandler' s clients count on our extensive research and analytical capabilities used to identify opportunities and minimize risk. Our access to market information in conjunction with our proprietary credit review process makes our services of significant value. Additionally, our independent compliance team will ensure that all trades conform to California Government Code, the City investment policy, and the customized investment strategy that we will co -develop with the City' s staff.
Commitment to client success. We are dedicated to our role as fiduciaries to our clients and strive to ease the responsibility and operational requirements needed to effectively invest the City' s assets. Our comprehensive services provide transparency, excellent client service, and successful investment program outcomes. We commit the full resources of the firm to ensure your success.
Chandler can provide additional services that will add value to the City' s investment program including:
Strategy development or customization of strategies suitable to the City' s investment program; Other Post - Employment Benefit (" OPEB)" Management. Chandler has been managing post - employee benefit accounts such as pension trusts and medical benefit trusts for clients since 2003.
We use a multi -asset class strategy ( Chandler' s " MAC" Strategy) to achieve the objectives and target return of the plan;
Management of the City' s cash in strategies including short- term securities as an alternative to LGIPs/ other overnight investment pools;
Targeted educational sessions on fixed income and financial topics and issuance of Continuing Professional Education ( CPE) credits;
Management of bond reserves and/ or bond proceeds;
Custodial bank/ safekeeping review and selection, and;
Broker/ dealer selection and monitoring.
We look forward to discussing the full suite of service offerings Chandler can provide as investment adviser. 45 1
ATTACHMENT B- Page 66 of 66
1 CITY OF STANTON
REPORT TO THE CITY COUNCIL
TO: Honorable Mayor and Members of the City Council
DATE: June 25, 2024
SUBJECT: FOURTH AMENDMENT TO THE AGREEMENT FOR PROFESSIONAL
CONSULTING SERVICES WITH WILLDAN FINANCIAL SERVICES FOR
THE PREPARATION OF AN OVERHEAD COST ALLOCATION PLAN
AND COMPREHENSIVE USER FEE STUDY
REPORT IN BRIEF:
On January 12, 2021, the City entered into an agreement with Willdan Financial Services for the preparation of an overhead cost allocation plan and comprehensive user fee study.
On June 28, 2022, the City Council approved the first amendment to the agreement to extend the term of the agreement to June 30, 2023. On June 27, 2023, the City Council approved the second amendment to the agreement to extend the term of the agreement to June 30, 2024. On November 28, 2023, the City Council approved the third amendment to the agreement to modify the total compensation of this agreement to $39,880. The project is in its final review stages but will not be completed prior to the expiration of the current agreement. Therefore, staff requests that the City Council approve the proposed fourth amendment to extend the term of the agreement to allow sufficient time for the study to be completed (Attachment A).
RECOMMENDED ACTIONS:
1. City Council find that this item is not subject to California Environmental Quality Act (“CEQA”) pursuant to Section 15378(b)(5) (Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment); and
2. Authorize the City Manager to execute the fourth amendment to the agreement with Willdan Financial Services to extend the term for the preparation of an overhead cost allocation plan and a comprehensive user fee study.
BACKGROUND:
On January 12, 2021 the City Council approved a professional services agreement with Willdan Financial Services (“Willdan”) for the preparation of an overhead cost allocation plan and comprehensive user fee study for an amount not-to-exceed $34,680, which was later amended to a not-to-exceed amount of $39,880 (Attachment B). Although the Item: 9J
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2 overhead cost allocation plan is complete, the consultant is still working with the Community & Economic Development Department to complete the comprehensive user fee study.
FISCAL IMPACT:
None.
ENVIRONMENTAL IMPACT:
None.
LEGAL REVIEW:
The City Attorney reviewed the amendment as to form.
PUBLIC NOTIFICATION:
None.
STRATEGIC PLAN OBJECTIVE ADDRESSED:
Obj. No. 4: Ensure fiscal stability and efficiency in governance.
Prepared by: Amy Massey, Accounting Manager
Reviewed by: Michelle Bannigan, Finance Director
Approved by: Hannah Shin-Heydorn, City Manager
Attachments:
A. Fourth Amendment to Agreement for Professional Consultant Services B. Professional Services Agreement (including the First, Second and Third Amendments)
55414.00000\40152681.1
CITY OF STANTON
FOURTH AMENDMENT TO
AGREEMENT FOR PROFESSIONAL CONSULTANT SERVICES
1. PARTIES AND DATE.
This Fourth Amendment to the Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study (“Fourth Amendment”), is made and entered into on this 25
th day of June, 2024, by and between the City of Stanton (hereinafter referred to as the “City”) and Willdan Financial Services, a California Corporation, with its principal place of business at 27368 Via Industria, Suite 200, Temecula, California 92590 (hereinafter referred to as the “Consultant”). City and Consultant are sometimes collectively referred to herein as the “Parties.”
2. RECITALS.
2.1 Agreement. The Parties entered into that certain Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study dated January 12, 2021 (“Agreement”).
2.2 First Amendment. The Parties entered into a First Amendment to Agreement on June 28, 2022, in order to extend the term of the Agreement to June 30, 2023.
2.3 Second Amendment. The Parties entered into a Second Amendment to the Agreement on June 27, 2023, in order to extend the term of the Agreement to June 30, 2024.
2.4 Third Amendment. The Parties entered into a Third Amendment to the Agreement on November 28, 2023, in order to modify the total compensation of the Agreement to a not to exceed amount of thirty-nine thousand eight hundred eighty dollars ($39,880).
2.5 Fourth Amendment. The Parties now desire to amend the Agreement in order to extend the term of the Agreement.
3. TERMS
3.1 Term. Section 3.1.2 of the Agreement is hereby amended in its entirety to read as follows:
“The term of this Agreement shall be from January 12, 2021 to June 30, 2025, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines.”
3.2 Remaining Provisions of Agreement. Except as otherwise specifically set forth in this Fourth Amendment, the remaining provisions of the Agreement shall remain in full force and effect.
ATTACHMENT A
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55414.00000\40152681.1
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to Agreement for Consultant Services on this 25
th day of June, 2024.
CITY OF STANTON WILLDAN FINANCIAL SERVICES
By:
Hannah Shin-Heydorn
City Manager
By:
Chris Fisher
Vice President
By:
Rebekah Smith
Assistant Secretary
ATTEST:
By:
Patricia Vazquez
City Clerk
APPROVED AS TO FORM:
By:
HongDao Nguyen
Best Best & Krieger LLP
City Attorney
ATTACHMENT A
CITY OF STANTON
THIRD AMENDMENT TO
AGREEMENT FOR PROFESSIONAL CONSULTANT SERVICES
c
1. PARTIES AND DATE.
This Third Amendment to the Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study (" Third Amendment"), is made and entered into on this 28th day of November, 2023, by and between the City of Stanton ( hereinafter referred to as the " City") and Willdan Financial Services, a Califomia Corporation, with its principal place of business at 27368 Via Industria, Suite 200, Temecula, California 92590 ( hereinafter referred to as the " Consultant"). City and Consultant are sometimes collectively referred to herein as the Parties."
2. RECITALS.
2. 1 Agreement. The Parties entered into that certain Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study dated January 12, 2021 Agreement").
2. First Amendment. The Parties entered into a First Amendment to Agreement on June 28, 2022, in order to extend the term of the Agreement to June 30, 2023.
2. 3 Second Amendment. The Parties entered into a Second Amendment to the Agreement on June 27, 2023, in order to extend the term of the Agreement to June 30, 2024.
2. 4 Third Amendment. The Parties now desire to amend the Agreement in order to modify the total compensation ofthe Agreement.
3. TERMS
3. 1 Compensation. Section 3.1of the Agreement is hereby amended in its entirety to read as follows:
Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in " Exhibit C" attached hereto and incorporated herein for reference. The total compensation shall not exceed THIRTYNINE THOUSAND EIGHT HUNDRED EIGHTY DOLLARS ($ 39, 880) ("Total Compensation") without written approval of the City Manager. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement."
3. 2 Remaining Provisions of Agreement. Except as otherwise specifically set forth in this Third Amendment, the remaining provisions of the Agreement shall remain in full force and effect.
55414. 00000\ 4152681. 1
ATTACHMENT B
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IN WITNESS WHEREOF, the parties have executed this Third Amendment to Agreement for Consultant Services on this 28th day of November, 2023.
CITY OF STANTON
By: a"—c.-hAPPROVED AS TO FORM:
By:
Hannah Shin- dom
City Manager
HongDao Nguyen
Best Best & Krieger LLP
City Attorney
55414. 00000\ 4152681. 1
WILLDAN FINANCIAL SERVICES
By:
Chris Fisher
Vice President
Rebekah Smith
Assistant Secretary
ATTACHMENT B
CITY OF STANTON
SECOND AMENDMENT TO
AGREEMENT FOR PROFESSIONAL CONSULTANT SERVICES
1. PARTIES AND DATE.
This Second Amendment to the Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study (" Second Amendment"), is made and entered into on this atilday of June, 2023, by and between the City of Stanton (hereinafter referred to as the City") and Willdan Financial Services, a California Corporation, with its principal place of business at 27368 Via Industria, Suite 200, Temecula, California 92590 ( hereinafter referred to as the " Consultant"). City and Consultant are sometimes collectively referred to herein as the Parties."
2. RECITALS.
2. 1 Agreement. The Parties entered into that certain Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study dated January 12, 2021 Agreement").
2. First Amendment. The Parties entered into a First Amendment to Agreement on June 28, 2022, in order to extend the term of the Agreement to June 30, 2023.
2. 3 Second Amendment. The Parties now desire to amend the Agreement in order to extend the term of the Agreement.
3. TERMS.
3. 1 Term. Section 3. 1. 2 of the Agreement is hereby amended in its entirety to read as follows:
The term ofthis Agreement shall be from January 12, 2021 to June 30, 2024, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines."
3. 2 Remaining Provisions ofAgreement. Except as otherwise specifically set forth in this Second Amendment, the remaining provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Second Amendment to Agreement for Consultant Services on this - 25441 day of June, 2023. 55414. 00000\ 4152681. 1
ATTACHMENT B
SIGNATURES ON FOLLOWING PAGE
CITY OF STANTON
By: a . k
H ah Shin- He` y' dom
City Manager
is
City Clerk
APPROVED A" TO FORM:
By:
HongDao Nguyen
Best Best & Krieger LLP
City Attorney
55414. 00000\ 4152681. 1
WILLDAN FINANCIAL SERVICES
By:
Chris Fisher
Vice President
By( j»Q9L -10t
Rebekah Smith
Assistant Secretary
ivrott
ATTACHMENT B
CITY OF STANTON
FIRST AMENDMENT TO
AGREEMENT FOR PROFESSIONAL CONSULTANT SERVICES
PARTIES AND DATE.
This First Amendment to Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study (" First Amendment'), is made and entered into on this 281 day of June, 2022, by and between the City of Stanton ( hereinafter referred to as the " City") and Willdan Financial Services, a California Corporation, with its principal place ofbusiness at 27368 Via Industria, Suite 200, Temecula, California 92590 (hereinafter referred to as the " Consultant').
City and Consultant are sometimes collectively referred to herein as the " Parties."
2. RECITALS.
2. 1 Agreement. The Parties entered into that certain Professional Services Agreement for Overhead Cost Allocation Plan and Comprehensive Fee Study dated January 12, 2021 Agreement').
2.2 First Amendment. The Parties now desire to arnend the Agreement in order to extend the term of the Agreement, and assign the Agreement to Consultant.
3. TERMS.
3. 1 Term. Section 3. 1. 2 of the Agreement is hereby amended in its entirety to read as follows:
The term of this Agreement shall be from January 12, 2021 to June 30, 2023, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines."
3. 2 Remaining Provisions of Agreement. Except as otherwise specifically set forth in this First Amendment, the remaining provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment to Agreement for Consultant Services on this 28th day of June, 2022.
SIGNATURES ON FOLLOWING PAGE
3y
55414. 00000\ 40152681. 1 ` na
1 ATTACHMENT B
CITY OF STANTON
By:
6 (/
Zenia Boba-difTa
Interim City Manager
11F
n
NgT4FO
L-2
APPROVED AS TO
By:
HongDao Nguyen
Best Best & Krieger LLP
City Attorney
55414. 00000\ 40152681. 1
WILLDAN FINANCIAL SERVICES
By:
Chris Fisher
Vice President
By:
Rebekah
lk"
Smith
N-4
Assistant Secretary
ATTACHMENT B
CITY OF STANTON
PROFESSIONAL SERVICES AGREEMENT
FOR
OVERHEAD COST ALLOCATION PLAN AND COMPREHENSIVE FEE STUDY
1. PARTIES AND DATE.
This Agreement is made and entered into this / lAday of January, 2021, by and between the City of Stanton, a municipal organization organized under the laws of the State of California with its principal place of business at 7800 Katella Avenue, Stanton, California 90680 (" City") and Willdan Financial Services], a California Corporation, with its principal place of business at 27368 Via Industria, Suite 200, Temecula, California 92590 (" Consultant'). City and Consultant are sometimes individually referred to herein as " Party" and collectively as " Parties."
2. RECITALS.
2. 1 Consultant.
Consultant desires to perform and assume responsibility for the provision of professional consultant services related to the preparation of an overhead cost allocation plan and comprehensive fee study required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing professional consultant services related to the preparation of an overhead cost allocation plan and comprehensive fee study to public clients, is licensed in the State of California, and is familiar with the plans of City.
2.2 Project.
City desires to engage Consultant to render such services for the preparation of an overhead cost allocation plan and comprehensive fee study project (" Project') as set forth in this Agreement. ( Refer to Exhibit A for the scope of work.)
3. TERMS.
3. 1 Scope of Services and Term.
3. 1. 1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional consultant services necessary for the Project (" Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.
3. 1. 2 Term. The term of this Agreement shall be from the date of the agreement to September 30, 2021, unless earlier terminated as provided herein. Consultant shall complete the Services within the term ofthis Agreement, and shall meet any other established schedules and deadlines.
1 -
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55414. 00000\ 32996936. 2
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Orifi
ATTACHMENT B
3. 2 Responsibilities of Consultant.
3. 2. 1 Independent Contractors, Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision.
Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant shall complete, execute, and submit to City a Request for Taxpayer Identification Number and Certification (IRS FormW-9) prior to commencement of any Services under this Agreement. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant' s exclusive direction and control. Neither City, nor any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.
3. 2. 2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit ` B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant' s conformance with the Schedule, City shall respond to Consultant' s submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.
3. 2. 3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.
3. 2. 4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the City.
The key personnel for performance of this Agreement are as follows: Chris Fisher, Tony Thrasher, Carlos Villarreal, Priti Patel, and Robert Quaid.
3. 2. 5 City' s Representative. The City hereby designates the City Manager, or his or her designee, to act as its representative for the performance of this Agreement (" City' s Representative"). City' s Representative shall have the power to act on behalf of the City for all purposes under this Contract. The City Manager hereby designates Michelle Bannigan, Finance 2-
5 5414. 000W3 2996936. 2
2-
55414. 0000032996936. 2 J.
ATTACHMENT B
Director, or her designee, as the City' s contact for the implementation of the Services hereunder.
Consultant shall not accept direction or orders from any person other than the City' s Representative or his or her designee.
3. 2. 6 Consultant' s Representative. Consultant hereby designates Chris Fisher, Vice President, or his designee, to act as its representative for the performance of this Agreement Consultant' s Representative"). Consultant' s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant' s Representative shall supervise and direct the Services, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.
3. 2. 7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City' s staff, consultants and other staff at all reasonable times.
3. 2. 8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services and that such licenses and approvals shall be maintained throughout the term of this Agreement.
As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant' s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub -consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re- employed to perform any ofthe Services or to work on the Project.
3. 2. 9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/ OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees, agents and volunteers free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.
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ATTACHMENT B
3. 2. 10 Insurance.
3. 2. 10. 1 Time for Compliance. Consultant shall not commence Work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section.
3. 2. 10. 2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder and without limiting the indemnity provisions of the Agreement, the Consultant in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement, the following policies of insurance. 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.
a) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office " occurrence" form CG 0001, with minimum limits of at least $ 1, 000, 000 per occurrence, and if written with an aggregate, the aggregate shall be double the per occurrence limit.
Defense costs shall be paid in addition to the limits.
The policy shall contain no endorsements or provisions limiting coverage for ( 1) contractual liability; ( 2) cross liability exclusion for claims or suits by one insured against another; or ( 3) contain any other exclusion contrary to the Agreement.
b) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 0001 covering " Any Auto' ( Symbol 1) with minimum limits of 1, 000, 000 each accident.
c) Professional Liability: Professional Liability insurance with minimum limits of $1, 000, 000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed ( for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.).
If coverage is written on a claims -made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least three ( 3) years from termination or expiration of this Agreement.
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a' 1
ATTACHMENT B
d) Workers' Compensation: 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 per accident for bodily injury and disease.
3. 2. 10. 3 Endorsements. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval.
a) The policy or policies of insurance required by Section 3. 2. 10. 2 ( a) Commercial General Liability and ( c) Contractor' s Pollution Liability shall be endorsed to provide the following:
1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers 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) be restricted to " ongoing operations'; ( 2) exclude " contractual liability"; 3) restrict coverage to " sole" liability of Consultant; or ( 4) contain any other exclusions contrary to the Agreement. 2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty ( 30) day written notice of cancellation has been served upon the City except ten ( 10) days shall be allowed for non-payment of premium.
b) The policy or policies of insurance required by Section 3. 2. 10. 2 ( b) Automobile Liability and ( d) Professional Liability shall be endorsed to provide the following:
1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty ( 30) day written notice of cancellation has been served upon the City except ten ( 10) days shall be allowed for non- payment of premium.
c) The policy or policies of insurance required by Section 3. 2. 10. 2 ( e) Workers' Compensation shall be endorsed to provide the following:
1) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the indemnified parties.
2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty ( 30) day 4\
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written notice of cancellation has been served upon the City except ten ( 10) days shall be allowed for non- payment of premium.
3. 2. 10. 4 Primary and Non -Contributing Insurance. All insurance coverages shall be primary and any other insurance, deductible, or self-insurance maintained by the indemnified parties shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.
3. 2. 10. 5 Waiver of Subrogation. Required insurance coverages shall not prohibit Consultant from waiving the right of subrogation prior to a loss. Consultant shall waive all subrogation rights against the indemnified parties. Policies shall contain or be endorsed to contain such provisions.
3. 2. 10. 6 Deductible. Any deductible or self-insured retention must be approved in writing by the City and shall protect the indemnified parties in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.
3. 2. 10. 7 Evidence of Insurance. The Consultant, concurrently with the execution ofthe 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.
3. 2. 10. 8 Failure to Maintain Coverage. Consultant agrees to suspend and cease all operations hereunder during such period oftime as the required insurance coverage is not in effect and evidence of insurance has not been furnished to the City. 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 the Consultant' s operations are suspended for failure to maintain required insurance coverage, the Consultant shall not be entitled to an extension of time for completion of the Services because of production lost during suspension.
3. 2. 10. 9 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best' s rating of no less than A:VII and authorized to do business in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
3. 2. 10. 10 Insurance for Subconsultants. All Subconsultants shall be included as additional insureds under the Consultant' s policies, or the Consultant shall be 6 00000132996936. 2 n
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responsible for causing Subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City as an Additional Insured to the Subconsultant' s policies.
3. 2. 11 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature ofthe work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: ( A) adequate life protection and lifesaving equipment and procedures; (B) instructions in accident prevention for all employees and subconsultants, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and ( C) adequate facilities for the proper inspection and maintenance of all safety measures.
3.3 Fees and Payments.
3. 3. 1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit " C" attached hereto and incorporated herein by reference. The total compensation shall not exceed THIRTY- FOUR THOUSAND SIX HUNDRED EIGHTY DOLLARS ($ 34, 680) Total Compensation") without written approval of City' s City Manager. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.
3. 3. 2 Payment of Compensation.
Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. City shall, within 45 days of receiving such statement, review the statement and pay all approved charges thereon.
3. 3. 3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City.
3. 3. 4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, " Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.
Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.
3. 3. 5 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (" Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on " public works" and " maintenance" 7 sta
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projects. If the Services are being performed as part of an applicable " public works" or maintenance" project, as defined by the Prevailing Wage Laws, and ifthe total compensation is 1, 000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type ofworker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant' s principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777. 5, 1813, and 1815 ofthe Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees, agents and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.
3. 4 Accounting Records.
3. 4. 1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three ( 3) years from the date of final payment under this Agreement.
3. 5 General Provisions.
3. 5. 1 Termination of Agreement.
3. 5. 1. 1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.
3. 5. 1. 2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen ( 15) days ofthe request.
3. 5. 1. 3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 8-
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3. 5. 2 Delivery ofNotices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:
Consultant:
City:
Willdan Financial Services
27368 Via Industria, Suite 200
Temecula, CA 92590
Atm.: Chris Fisher, Vice President
City of Stanton
7800 Katella Avenue
Stanton, CA 90680
Attn: Michelle Bannigan, Finance Director
Such notice shall be deemed made when personally delivered or when mailed, forty- eight 48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.
3. 5. 3 Ownership of Materials and Confidentiality.
3. 5. 3. 1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (" Documents & Data"). Consultant shall require all subconsultants to agree in writing that City is granted a non- exclusive and perpetual license for any Documents & Data the subconsultam prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data.
Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City' s sole risk.
3. 5. 3. 2 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related 9-
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industry shall be deemed confidential. Consultant shall not use City' s name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.
3. 5. 3. 3 Confidential Information. The City shall refrain from releasing Consultant' s proprietary information (" Proprietary Information") unless the City' s legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information.
Consultant shall have five ( 5) working days after receipt ofthe Release Notice to give City written notice of Consultant' s objection to the City' s release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense ( including attorney' s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of the Objection Notice unless either: ( 1) Consultant fails to fully indemnify, defend ( with City' s choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/ or (2) a final and non -appealable order by a court of competent jurisdiction requires that City release such information.
3. 5. 4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.
3. 5. 5 Attorney' s Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out ofor in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney' s fees and all other costs of such action.
3. 5. 6 Indemnification.
To the fullest extent permitted by law, Consultant shall defend (with counsel of City' s choosing), indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney' s fees and other related costs and expenses. Consultant' s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the Consultant or the City, its officials, officers, employees, agents or volunteers.
If Consultant' s obligation to defend, indemnify, and/ or hold harmless arises out of Consultant' s performance as a " design professional" ( as that term is defined under Civil Code section 2782. 8), then, and only to the extent required by Civil Code section 2782. 8, which is fully incorporated herein, Consultant' s indemnification obligation shall be limited to claims that lo- otsl
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arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant' s liability for such claim, including the cost to defend, shall not exceed the Consultant' s proportionate percentage of fault.
3. 5. 7 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties.
3. 5. 8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Orange County.
3. 5. 9 Time of Essence. Time is of the essence for each and every provision of this Agreement.
3. 6 City' s Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project.
3. 7 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties.
3. 8 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.
3. 9 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not workdays.
All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
3. 10 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.
3. 11 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.
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3. 12 No Third -Party Beneficiaries. There are no intended third -party beneficiaries of any right or obligation assumed by the Parties.
3. 13 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
3. 14 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation ofthis warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
3. 15 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City' s Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.
3. 16 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker' s Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.
3. 17 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.
3. 18 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
3. 19 Declaration of Political Contributions. Consultant shall, throughout the term of this Agreement, submit to City an annual statement in writing declaring any political contributions of money, in-kind services, or loan made to any member of the City Council within the previous twelve- month period by the Consultant and all of Consultant' s employees, including any employee(s) that Consultant intends to assign to perform the Services described in this Agreement.
3. 20 Subcontracting.
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3. 20. 1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
Signatures on following page.]
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IN ITNESS WHEREOF, the parties have executed this Professional Services Agreement on this day of January, 2021.
CITY OF STANTON
By:
Jarad & Werr5iand
City Manager
ATTEST:
y OFS
APPROVED' AS TO FORM
By: zv
I-IongDao Nguyen
Best Best & Krieger LLP
City Attorney
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WILLDAN FINANCIAL SSEERRV- ICES
By: /
Chris Fisher
Vice President
ByjWaS/r, ) YWU
Rebekah Smith
Assistant Secretary
ATTACHMENT B
D. Questions Response to the Scope of Services
Willdan Financial Services (" Willdan") is confident that we can meet the City of Stanton' s request for services for an Overhead Cost Allocation Plan and Comprehensive User Fee Study. The overall objective of this project will be to develop an updated schedule of fees for City services, that accounts for the true costs of providing those services.
The end products will include user- friendly Excel -based models, which City staff will retain, and which can be easily updated to add or remove services and/ or costs, update budgets in future years, determine the proper allocation of expenditures, and on-going full cost of services provided by the City. Most importantly, we will ensure that the results and recommendations are clear and understandable, defensible, and easily implementable.
For these studies, we will meet directly with departmental representatives at the City at the beginning of the project, to discuss the approach and process for the studies. Discussions will include ways to combine tasks and efforts among the cost allocation plan and user fee study components to maximize efficiencies and ensure adherence to specified timelines.
A key building block of the calculation of updated fees is the development of defensible indirect overhead rates that reflect the cost of support services provided by the City' s central service departments to the operating groups that provide end- user services to the public and customers of the City.
The completion of a CAP is a key component and first step in the analysis necessary to calculate the cost of providing services. A well thought out CAP ensures that indirect costs associated with central overhead services, such as finance or city clerk, are appropriately allocated to operating departments, and ultimately included as a cost component of fees for services. We will work collaboratively with City staff to identify the overhead support services that are provided to operating departments in Stanton and develop a fair and defensible means of allocating these costs. Our unique model allows us to provide a CAP that will also be compliant with 2 CFR Part 200 Federal regulations related to cost reimbursement and grant funding, formerly known as OMB A-87 and 2 CFR Part 225 guidelines, which have now been superseded by the Omni Circular. The new circular did not completely overhaul the guidelines, and the intent is still the same, but it did add new limitations to consider and incorporate into a compliant CAP.
Rather than a costly and
inflexible proprietary software,
which can require expensive
licensing fees, Willdan builds
models utilizing Excel, from the
ground up, employing the City' s
budget as the gauge. This
model, which is then the City' s
to retain, gives City Staff the
control to make on -the -fly
adjustments and updates.
For the Comprehensive Fee Study, we will work directly with personnel at the City who provide services and interact directly with residents and customers, to understand the personnel and procedures involved. By carefully examining these processes, we will be able to identify associated costs such as direct staff costs ( salaries and benefits) associated with personnel involved in the activities, and appropriate overhead allocations from both the department and city levels.
For a successful and effective engagement, it is important to have a thorough understanding of specific City policies and objectives, the structure and organization of the City, and the relationships between the central and operating departments. We bring years of successful experience working directly with hundreds of cities throughout California.
Willdan possesses the resources, practical experience, creative thinking, and collaborative consulting skills necessary to complete this important project. Key distinct advantages that Willdan brings to the City include the following:
On-site Data Gathering
Our experience has taught us that working together, via face- to- face discussions, is the most efficient and thorough way to ensure that results are accurate, and that studies are completed in a timely manner, which again, is critical in this proposed engagement.
Consequently, through on- site interviews with your staff, Willdan will collect the majority of required data for studies.
This method is better than the typical " time and motion surveys" that are provided to agency staff when studies like these are conducted. This process ensures that we gather the data we need in one coordinated step, rather than having to go through repeated follow- up and clarification.
This approach and the dedication of our staff will help ensure we meet the City's timeline and objectives and provide important information to City staff and the Council as soon as possible. of St ° 6
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Public Engagement
Our models and project approach are geared toward delivering our work on schedule and presenting our analysis results at public meetings and Council workshops. While we understand that the City Council and local business community may be generally supportive of increasing fees where necessary, it will be important to present recommendations to them in a way that clearly demonstrates the rationale and supporting analysis.
The Willdan Team is experienced at communicating complex analytical results in a manner that is easy to understand by non -finance - oriented individuals and facilitates discussion. Our proposed principal - in -charge for this engagement has coordinated or participated in numerous public and staff workshops regarding fees and cost of service -based charges. As previously mentioned, our objective is to provide useful, detailed information, and present recommendations to the City Council and public in a way that clearly demonstrates the rationale and supporting analysis. Our experience ensures that we can meet this objective.
User- friendly Models and Reports
Willdan prides itself on creating user- friendly Excel -based models that the City can The model will be retain and conducting our analysis and developing the models collaboratively with City staff. With City staffs immediate input and collaboration, Willdan will developed to allow the design extremely flexible, intuitive Excel -based models. In the future, as the City City to run " what -if" assumes new responsibilities, modifies existing processes, and/ or eliminates " scenarios to address unnecessary services or programs, the models will be capable of adding or deleting possible changes in funds, objects, departments, programs, staff positions, and activities. Willdan ! i staffing levels, understands that issues facing the City are unique; consequently, we design our ! working hours, etc. models to match your immediate and desired needs to ensure that end -results exceed staff expectations rather than using an inflexible proprietary software.
These models are then the City's to retain, after our services are completed, and allows for the creation of revenue projections, highlighting potential new revenues, and levels of subsidy.
A key element of these studies is presenting results and recommendations in a straightforward manner, that allows Council and staff to confidently make fee setting policy decisions and understand the impacts of those decisions.
Rather than using an inflexible proprietary software program, we construct our models from the ground up, as previously discussed, mirroring the City' s budget format wherever possible. As a result, the information contained in our models are easy for City staff to interpret, and the familiar software ensures ease of navigation. As the models are being designed and constructed, we will work together with City staff to determine the best and most effective features to include. After the project is completed, we will provide training, so that staff can independently and efficiently evaluate the effects of changes in certain factors. Created directly from the models, our reports clearly and graphically illustrate the full cost recovery level of fee programs and provide projections of revenue from fee programs.
The following describes our proposed approach, and work plan to prepare an Cost Allocation Plan and Comprehensive User Fee Study.
The purpose of this cost allocation plan engagement is to ensure that the City of Stanton is maximizing the recovery of indirect costs from identified operating departments, as well as enterprise and other chargeable funds and capital projects. Furthermore, a sound cost allocation plan is a foundational element of a user fee study, and the development of internal hourly rates, including CIP billing rates. We will work closely with staff in identifying the proper balance of allocation factors appropriate for the City.
To achieve the maximum cost recovery objective, the City must have a method of identifying and distributing administrative costs that is fair, comprehensive, well documented, and fully defensible. A cost allocation plan coupled with comprehensive overhead rates will enable the City to achieve this goal.
The allocation models utilize an iterative method which is the most accurate allocation methodology. Unlike a direct or step- down" methodology, an iterative method uses the chosen distribution bases and allocates central service costs iteratively until all allocable costs have been distributed.
Using this method, the model can detail the allocation for each central function individually for complete transparency and accountability, while removing bias that might result from the order in which allocations occur in a step-down approach. A direct methodology is essentially a one -iteration methodology, while a step- down method is typically only two iterations and is less precise and unable to accurately track the allocations from start to finish. - St nfoo
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ATTACHMENT B
Approach for Managing the Project
Willder' s " hands- on" supervision of Cost Allocation Plan studies, include the following methods:
Effective Project Management — Principal -in -Charge Chris Fisher will manage the entire project with an eye toward high responsiveness, while ensuring that all stakeholders are " on board" with the direction of the project, as well as with the final results. Mr. Fisher will ensure that regular status updates are provided to City staff, conference calls are scheduled, and that in- person meetings are conducted (as necessary).
Adherence to Time Schedule — Willdan recognizes that the use of " timelines" is highly effective in meeting all required deadlines. To keep the project on schedule, there are several tasks that must be completed in a timely manner. Therefore, we will present a project timeline at the kick- off meeting that should be closely followed.
Although the establishment of an experienced project team and a detailed project timeline work extremely well in general, Willdan understands that outside influences can create uncontainable situations for everyone involved in the project. In rare circumstances like these, our team quickly adapts to changes, and communicates our recommended schedule adjustments to the City.
Approach in Communicating with the City
Willdan staff is accustomed to interfacing with local government councils, boards, staff, community organizations, and the public in general in a friendly and helpful manner; we are always mindful that we represent the public agency.
We are sensitive to the need of delivering a quality product, with the highest level of service and professionalism.
Therefore, as the work on the project progresses, we understand that it will be necessary for our staff to work closely with you and City personnel. To accomplish this, we employ a variety of tools, including monitoring project status and budget costs; and ensuring effective communication through several options that are based on the City' s preferences.
Experience with Development Service Processes
A unique aspect of our firm is our relationship with our Engineering Division. For many agencies throughout California and other Western states, this division provides contracted services in planning, engineering, and building and safety.
When conducting cost recovery studies, we regularly consult with our engineering and land -development staff of experts on development -related issues. By working with our planners, engineers, and building officials, we understand development -related agency service procedures and workflow functions, which often make the entire user fee study process smoother for your staff.
Comprehensive User Fee Study Methodology
To comprehensively update fees, the City should develop a comprehensive user fee schedule that accurately accounts for the true cost of providing services. Once the study is complete, the fee study model must be flexible so that the City can add, delete, and revise fees in the future. To meet this goal, we will bring our expertise and unique perspectives to your fee study by approaching the project with these three principles:
1) Defensibility
Our user fee projects have not been legally challenged since the inception of this practice area in our firm. We have accomplished this by closely working with legal counsel familiar with user fee studies, our engineering division and with agency staff. In this way, we can tailor the correct approach to ensure full cost recovery combined with a sound and reasonable basis for each user fee you implement.
While Proposition 218 does not directly apply to non - property - related fees, we employ principles from this important constitutional article to make certain that your user fee and rate schedule is developed with fairness, equity, and proportionate cost recovery principles in mind. With the addition of Proposition 26, Willdan will review each analyzed user fee for compliance and appropriateness to ensure continued defensibility. 2) Project and Staff Time
The City must have a sound and technically defensible fee schedule to ensure costs are appropriately recovered, as applicants approach the City for its services. Our standards and approaches serve to get to the issues of your fee study quickly.
Starting with the project kick- off, we will make certain that your staff understands the purpose and scope of the study and its corresponding on- site departmental interview. As Willdan is able to communicate directly with the service providers, this face-to- face interaction provides valuable time estimates. 3) Responsiveness
We take great pride in providing responsive service to our client agencies. Frequent communication is critical to a successful user fee study experience. We will provide a list of data requirements in advance of the project kick- off. of St fo
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Due to this simple step, the introductory meeting can focus on the survey input process, answering questions, determining policy goals, and defining next steps in the project. We will follow up weekly with you at each step in the fee study process to make sure that staff " buys in" to the fee study approach and results.
Approach
Our approach to preparing the user fee study and documentation for Stanton includes:
Close coordination with your staff to devise a consensus approach. Different programs and/ or different service delivery methods will necessitate different approaches. We will discuss specific pros and cons with City staff as we determine which methods work best for each fee category; Strict adherence to key legal and policy issues with regard to user fees, including the percent of cost recovery that the City seeks to achieve. A user fee shall not be set higher than the reasonable cost of providing a fee -generating service. Our approach provides you with a fee schedule that achieves maximum legal cost recovery while ensuring that each fee is supported by technically defensible documentation; and Technical analysis necessary to ensure State compliance, and to anticipate and resolve potential policy issues using a combination of industry standards as well as City specific methods.
As described below, there are two basic approaches to calculating user fees:
Approach 1: Case Study Method
This is also sometimes referred to as a cost build- up
approach. Using a time and materials approach, the
Case Study Method" examines the tasks, steps and City
staff involved in providing a particular ` unit' of service, such as a permit review, and then uses that information to develop estimates of the actual labor and material
costs associated with providing a unit of service to a
single user. It is often used when a service is provided on a regular basis, and staff and other costs associated with the service can be segregated from available budget data.
A typical case study fee model should comprise the
following three general cost layers:
1) Central Services Overhead: This category may
involve such costs as labor, services, and supplies that benefit more than one department, division, or project.
The exact benefits to specific areas are impossible to
ascribe to a single activity.
Examples are purchasing, human resources, and liability insurance. As part of the user fee study, these costs are calculated in the overhead cost review.
Central
Services
Overhead
Departmental
Overhead
2) Department Overhead: This category may include
expenses related to such items as office supplies,
outside consultants, and membership dues. It may
include management, supervision, and administrative support that are not provided to a direct fee -generating service.
Typically, these items are charged, on an item -by -item basis, directly to the department, division, or project. 3) Personnel Costs: This category refers to direct salary and benefit costs of staff hours spent on providing a fee - generating service ( e. g., on- site building inspector).
Approach 2: Average Cost Method
This is also sometimes referred to as a programmatic approach, because it looks at costs at a program level, and then allocates them to participants on an occurrence basis. By taking total service costs across a substantial sample period a year) and dividing by the total number of service units delivered over that same period, costs per unit of service is estimated.
This approach is useful when services or programs are provided in a more aggregate manner, where it might be difficult to identify a specific sequence of steps associated with one user or participant; or where it is not feasible to costeffectively segregate costs associated with specific activities. of sta Y1t WILLDAN EXHIBIT A - Page 4 of 11 ig` a
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Work Plans
Our proposed work plans, described in detail by task, are provided below. We propose to maximize efficiency and cost- effectiveness by combining meetings and data gathering efforts between the cost allocation plan and user fee study wherever possible.
We explain how each task will be accomplished and identify associated meetings and deliverables. We want to ensure our scope provides quality and clarity and is responsive to the City' s needs and specific local circumstances. We will work in concert with the City to adjust scopes as needed during the course of the studies.
Overhead and OMB Compliant Cost Allocation plan
This proposed scope of services addresses the completion of both the full and OMB compliant versions of the Cost Allocation Plan ( CAP). We have noted where activities specific to the OMB compliant plan occur.
Task 1: Initial Document Request
Objective: Initial due diligence.
Description: Prior to the kick- off call, relevant documentation will be obtained and reviewed in order to enhance our understanding of the City' s current cost allocation plan and internal structure of the agency. A written request for specific data will be sent to the City. The data provided in this task will provide the building blocks for later model development.
Our request may include ( but is not limited to):
Detailed budget and accounting data;
Prior year' s financial data, salary, position and staffing data; Organizational structure;
Prior cost allocation plan and/ or user fee documentation and models; and Data related to various allocation bases that may be incorporated as part of the methodology, i. e.
City Council agenda frequencies by department, AP/ AR transactions by department, IT equipment distribution by department, etc.
Deliverables: Willdan: Submit information request to City.
City: Provide requested data to Willdan ( prior to Task 2, Kick- off Call/ Refine Scope). We will follow up with the City to confirm in writing the data that we have received, or which is still outstanding.
Task 2: Kick- off Conference Call / Refine Scope
Objective: Confirm project goals and objectives. Identify and discuss policy issues related to the study and determine appropriate fee categories.
Description: Willdan will identify and discuss policy issues typically raised in conjunction with these studies and address data gaps in order to gain a full understanding of the City' s goals for the cost allocation plan.
We will establish effective lines of communication and processes for information gathering and review.
We will also discuss costs that may not be allocable for OMB purposes, and the potential impact on the OMB version of the CAP.
During this call, we will ask that the City assign a project manager to serve as its primary contact. The selected City project manager will ensure that available data is provided to Willdan in a timely manner, thereby maintaining adherence to the project' s schedule.
We will obtain and review the current cost allocation methodology and discuss with City staff. The objective of this review is to determine specific areas of focus as they relate to the City' s objectives, and to discuss and evaluate current and potential allocation factors.
Meetings: One ( 1) project kick- off conference call to initiate the project, discuss data needs and methodologies and to address policy issues. We would propose to conduct the user fee study kick- off during this same call, to maximize efficiency and cost effectiveness of staff and Willdan time.
Deliverables: Willdan: If needed, a revised project scope and schedule.
City: Provide further data requirements and select/ introduce City's project manager. otSfr
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Task 3: Gather Staffing Information and Develop Cost Allocation Plan Model Description: This task involves the gathering of specific information, directly from City staff, through interviews and discussion, related to the functions served by indirect staff and the departments served by their activities. This task also focuses on the development of, and/ or adjustment of existing, allocation bases, and the development and testing of a model that will ultimately be used to calculate the proper cost allocations derived from data gathered in prior tasks.
The model will be developed to incorporate any recent changes in the provision of City services, and fully allocate central service costs.
The model will also be developed to allocate only those costs eligible under 2 CFR Part 200. This is accomplished by loading relevant data into the model, identifying which costs are not allocable under the OMB guidelines. The OMB Super Circular compliant model is valuable as the City may receive Federal or State grant funding that mandates compliance with Federal OMB regulations.
We will utilize budget and organizational information, and other required information gathered from City staff to complete the work in this task. Specific discussions will be held to discuss bases, how central overhead services are provided to and utilized by other departments, cost categories and allocation criteria, and how these will factor into the overall cost allocation methodology.
The model and methodology will also produce indirect cost rates. These rates will be suitable for a variety of uses, including incorporation into the User Fee Study' s personnel rates, billing to CIP projects, and in the OMB Super Circular compliant CAP, to Federal grants.
Meetings: Online meetings with staff to understand structure and operations as model and allocation bases are developed. Key staff will be interviewed to best understand central overhead staffing and functions and the departments served.
Deliverables: Willdan: One ( 1) user- friendly model in Microsoft Excel format that provides both a full cost allocation plan and an OMB Super Circular compliant cost allocation plan.
Task k: Test and Review CostAllocation Methodology
Objective: Test and review model and results with City.
Description: The draft cost allocation plan model will be reviewed with City staff, and adjusted as necessary, to ensure that preliminary allocations provide an accurate depiction of how the central overhead costs should be borne by the operating programs and funds. Over the past several years, we have successfully integrated online meetings by using WebExTm as an element to our approach. This allows us to remotely guide staff through the model review and allows you the opportunity to interactively change inputs and test approaches.
Meetings: One ( 1) online meeting and demonstration with City Staff to review the model Deliverables: Willdan and City: Draft cost allocation plan model review.
Task 5: Prepare and Present Draft Report
Objective: Prepare the draft cost allocation report.
Description: This task involves the draft report preparation. The cost allocation plan' s background, model methodologies, and results will be discussed; calculations and supporting data will be presented textually and in easily understood tables and provided to the City.
Meetings: One ( 1) online meeting to present the draft report to City Staff, Deliverables: Willdan: Draft report for City review and input.
City: Review of draft report, with comments, and edits.
Task 6: Discuss and Revise Report
Objective: Review of draft report, cost distribution methods, and model.
Description: An in- depth review of the draft report and model will be conducted to arrive at an optimum allocation method for each expenditure type.
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Often, through the course of an engagement, comments usually revolve around issues of understandability; appropriate levels of enterprise funds' cost recovery, etc.; ease of calculation; and overhead costs' distribution methods.
Our reports are structured to include both the full and OMB compliant plan, but in the course of review if a separate report is desired for each or just one of the plans, they will be split.
Following a round of comments from City staff concerning the draft report, the final report will be prepared for presentation to the Council.
Meetings: One ( 1) conference call with City staff to review the report with changes and revisions.
Deliverables: Draft report, and revised draft/final report.
Task 7: Prepare and Present Final Report and Model
Objective: Prepare and present the final report to City Council. Educate City staff on the operation and use of the model for future modifications.
Description: This task is the culmination of the cost allocation plan project. Based on staff comments on the draft report, Willdan will prepare the final report for presentation to City Council.
Meetings: One ( 1) meeting with the City Council to present the final plan if necessary. This meeting would be held in conjunction with the presentation of the user rate study results.
We will also provide staff training on the operation and use of the model.
Deliverables: Willdan: Provide one ( 1) electronic PDF file copy of the final report and models (full and OMB Super Circular compliant); and five (5) bound copies, and one ( 1) unbound copy to the City. Using Microsoft Word and Excel, an updateable electronic copy of the study and models, as well as related schedules, will also be provided on CD/ ROM.
Comprehensive User F= ee Shady
Task 1: Initial Document Request
Objective: Initial due diligence; obtain study -related data.
Description: Prior to the kick-off meeting, we will obtain and review relevant documentation to further enhance our understanding of the services, fees, and rates to be studied. A written request for data will be sent to the City. Please note that Time Survey data is not part of this request and will be gathered during the on- site interviews described in Task 5.
We will request information and documentation on current fees and fee programs, activity levels, and budget and staffing information ( to the extent not already available) related specifically to programs and activities which have associated fees, and for which the City has this level of detail.
Deliverables: Willdan: Submit information request to City.
City: Provide requested data to Willdan ( prior to Task 3, Kick-off Meeting/ Refine Scope). As with the cost allocation plan, we will follow up with the City to confirm receipt of requested data and information and highlight data elements that are outstanding.
Task 2: Compile Inventory of Current and Potential Fees Objective: Willdan will identify a schedule of fees and methodology for calculating the fees.
Description: Based on the results of the initial document request and independent research, incorporate into our model the existing fees, provided by the City, to comprise the parameters of the fee study.
Meetings: It is possible that a conference call with the City may be necessary to discuss new fees to implement or existing fees that may no longer be required.
Deliverables: Willdan: One ( 1) draft list of current fees based on initial data provided ( to be discussed and finalized during the kick- off call).
City: Review completed fee schedule with comments/ revisions to be discussed during the kick- off meeting.
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Task 3: Kick- off Conference Call / Refine Scope
Objective: Confirm goals and objectives for the User Fee Study. Identify and resolve policy issues typically raised by a User Fee Study, address gaps in data, and refine appropriate existing or new fee categories ( based on Task 2).
Description: Verify our understanding of the City' s goals, the City' s cost -recovery policy for user fees, and to fill any gaps in data/ information necessary for the project. It is important for the City and Willdan to identify and address any foreseeable problems and maintain open communication throughout the process.
During this call, we will ask that the City identify a project manager who will serve as the primary contact for the project. The project manager shall have responsibility for ensuring that all available data is provided in a timely manner, thereby maintaining adherence to the project' s schedule.
Meetings: One ( 1) project kick- off call to initiate the entire project, discuss data needs, and address policy issues.
This will be held in conjunction with the kick- off for the cost allocation plan. As mentioned in the cost allocation plan work plan, we suggest combining the kick- off calls to increase efficiency.
Deliverables: Willdan: 1) Revised project scope and schedule ( if needed); and 2) brief summary of policy decisions if needed).
City: 1) Provide further data needs; and 2) determine/ introduce City' s project manager.
Task k: Develop User Fee Model
Objective: Develop and test model.
Description: This task involves the development of the model ultimately used to calculate the departmental fees, based on data and information gathered in previous tasks and in the Time Survey Interviews described in Task 5. To ensure that City policies are met through the imposition of the calculated fees, the model will be formatted to include appropriate costs.
Key model inputs will include staff and allocated overhead costs per position, and relevant budget data on salaries and benefits. Most of this information will be developed during the cost allocation plan phase of this project and will be incorporated directly into the user fee model. We will request clarification and/or additional data if necessary.
The model will build upon the cost allocation plan results, to provide an allocation of administrative and overhead costs to fee related activities and departments providing services to customers, so that fees and billable rate schedules incorporate applicable costs. Furthermore, the fees and rates charged to customers will also reflect the cost of the services being provided, to the extent possible given policy and/ or political considerations.
Deliverables: Willdan: One ( 1) user-friendly model in Microsoft Excel format, which, when finalized, City staff can use to calculate fee changes annually, or as often as deemed appropriate by the City Council.
Task 5: Time Survey. interviews and On- site information Gathering Objective: Meet with City staff to complete Time Surveys and understand service delivery processes.
Description: In order to assist staff with the completion of the survey worksheets, we will schedule one ( 1) full day of on- site meetings with staff; however, the number of meetings needed may vary depending on the number of staff and departments involved.
The Willdan Team will conduct interviews with supervisors/ managers, as well as other staff, as deemed appropriate and/ or necessary, from each department involved in the user fee study to determine the average time required by City staff to provide each of the services for which a fee is collected.
The fee model is designed so that full cost recovery fees are calculated immediately upon input of staff time. These full costs are also compared to current cost recovery levels. This will allow Willdan and City staff to conclude with a final meeting to review the draft full cost recovery fees, and adjust any times as necessary, once all information has been compiled and input into the fee model. We will schedule the interviews with staff to minimize any disruption to their normal workflow.
Meetings: One ( 1) full business day of on- site meetings/ staff interviews. In light of ongoing public health mandates associated with COVID- 19, we will discuss with the City whether these meetings need to be conducted via WebEx or Zoom. We have been using these tools during the course of the shutdowns and they have proven effective and successful.
Deliverables: Willdan and City: Time surveys and draft full cost recovery fees. r.
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Task 6: Common Fees Comparison
Objective: Examine selected user fees charged by up to five ( 5) comparable cities in Orange County, or jurisdictions that are similar to the City of Stanton.
Description: We will access and use our knowledge of other jurisdictions to benchmark the City' s five ( 5) most common fees or highest yielding fees with comparable jurisdictions agreed.
Fee schedules are rarely readily or directly comparable from agency to agency due to definitional and operational differences. For example, a grading permit in one jurisdiction may include the plan check service, while the same permit in another jurisdiction may not, resulting in similar sounding services with widely varying costs. For this reason, Willdan takes a selection of the City' s most commonly used and/ or highest yielding fees.
The survey will contain the following, a comparison of common or similar fees and charges used by the City and other jurisdictions; current and proposed fees and charges unique to the City of Stanton; fees and charges used by other public entities not currently used in the City; and If possible, identify characteristics and processes unique to the City that account for significant variances in fees and charges used by other jurisdictions.
Deliverables: Willdan: Recommendations provided in Task 8 will incorporate the data gathered during our examination.
Task 7: Data Analysis and Final User Fee Schedule
Objective: Incorporate information obtained from on- site surveys to fully develop model.
Description: We will update the model, based on information received during the on- site surveys, to generate a comprehensive user fee schedule. In addition, it is very common that a supplemental data request may be necessary, based on new fees identified that the City is not currently collecting. Where appropriate, we will suggest and discuss with staff alternate approaches to existing fee programs ( i. e. building fees) and suggest potential areas where fees could be collected where they are not currently.
We will present the full cost recovery level for fees, both current and projected under the new calculated fees, and revenue projections, given certain assumptions about the levels of subsidy for different fees. Current levels of cost recovery will be compared to actual full costs calculated during the course of this study. Cost will be calculated at reasonable activity levels and include all appropriate direct and indirect costs and overhead. We will review fee programs for compliance with Propositions 218 and 26.
in developing the fee schedule, we will make recommendations for new fees where appropriate, based on our experience with other cities. Some areas for new fees may be due to changes in law ( legalized cannabis), or for activities that the City finds itself performing regularly, but for which no fee is collected.
Where possible, we will incorporate discussion of the City' s economic development policies, and where these may intersect with fee programs, for instance setting fees in a manner that encourages certain activities.
The user fee data analysis and model development may take three ( 3) to four (4) weeks with frequent correspondence with City staff to discuss current cost recovery amounts, necessary to recover full cost and frequency activity.
Meetings: One ( 1) meeting, as necessary, to gather additional input, complete analysis and finalize fee schedule.
Please see the note in Task 5 regarding in- person meetings.
Deliverables: Final user fee model for City Council presentation and discussion.
Task 8: Prepare and Present Draft Report
Objective: Prepare draft report.
Description: This task involves the preparation of the draft report that discusses the study' s background, the methodologies utilized in the study, and the results and presentation to various stakeholder groups.
As noted below, meetings may occur during this or the next task as appropriate. The calculations used to generate the user fee study will be included textually, as well as in easy to understand tables.
Individual fee summaries by department and a comprehensive fee schedule will be included. The draft report will include the following:
Key results and findings;
Basic descriptions of each service;
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