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HomeMy WebLinkAboutReso 223-06 Assess Review Invest Protfolio RESOLUTION NO. 223 - 06 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* AUTHORIZING CITY MANAGER TO EXECUTE AN AGREEMENT WITH PFM ASSET MANAGEMENT LLC FOR AN ASSESSMENT AND REVIEW OF THE CITY INVESTMENT PORTFOLIO AND PROCEDURES WHEREAS, the City of Dublin desires to obtain an independent assessment and review of its investment portfolio policy and procedures; and WHEREAS, the City Council approved funding for this project as a Higher Service Level in the Administrative Services Department, adopted budget for Fiscal Year 2006-2007; and WHEREAS, the City solicited proposals from qualified firms; and WHEREAS, three (3) firms submitted proposals to provide these services; and WHEREAS, PFM Asset Management LLC (PFM) has shown they have the ability to perform the services required; and WHEREAS, PFM will perform the work outlined in the Proposal/Scope of Services and according to the Fee Schedule and timeline therein, which is included the Consultant Services Agreement (Exhibit A to this Resolution); and WHEREAS, the agreement has been reviewed and approved by the City Attorney's Office. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does approve the agreement with PFM as attached hereto. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the agreement. PASSED, APPROVED AND ADOPTED this 5th day of December, 2006, by the following vote: AYES: Councilmembers Hildenbrand, Oravetz, Sbranti and Scholz, and Mayor Lockhart NOES: None ABSENT: None ATTEST: ( Mayor ABSTAIN: None " .\ ... . {}jS..J\ ',. .... I .... ""'-":"rr~ i\ !V-1i^-.' -'.~""' : . ," "",,~', "~. ' "Y' 1/ -~ \ " City Clerk Reso No. 223-06, Adopted 12/5/06, Item 4.3 Page 1 of 1 CONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF DUBLIN AND PFM ASSET MANAGEMENT LLC THIS AGREEMENT for consulting services is made by and between the City of Dublin ("City") and PFM Asset Management LLC '"Consultant") as of December 5, 2006. Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the services described in the Scope of Work attached as Exhibit A at the time and place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms of this Agreement and Exhibit A, the Agreement shall prevail. 1.1 Term of Services. The term of this Agreement shall begin on the date first noted above. The Agreement shall end on the earlier of: a) the date of completion and acceptance by the City of the final report specified in ExhibIt A; or, b) June 30, 2007. Consultant shall complete the work described in Exhibit A prior to that date. unless the term of the Agreement is othelWise terminated or extended, as provided for in Section 8. The time provided to Consultant to complete the services required by this Agreement shall not affect the City's right to terminate the Agreement, as provided for in Section 8. 1.2 Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices its profession. Consultant shall prepare all work products required by this Agreement in a substantial, first-class manner and shall conform to the standards of quality normally observed by a person practicing in Consultant's profession. 1.3 Assignment of Personnel. Consultant shall a~sign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the teon of this Agreement, desires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons. 1.4 Time. Consultant shall devote such time to the pertormance of services pursuant to this Agreement as may be reasonably necessary to meet the standard of pertormance provided in Section 1.1 above and to satisfy Consultant's obligations hereunder. Section 2. COMPENSATION. City ~ereby agrees to pay Consultant a sum not to exceed, $9j500 (- nine thousand five hundred dollars) including reimbursable costs incurred under this Agreement. Notwithstanding any contrary indications that may be contained in Consultant's proposal, for services to be performed. In the event of a conflict between this Agreement and Consultant's proposal, attached as Exhibit A, regarding the amount of compensation, the Agreement shall prevail. City shall pay Consultant for services rendered pursuant to this Agreement at the time and in the manner set forth herein. The payments specified below shall be the only payments from City to Consultant for services rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by more than one person. Consulting Services Agreement between City of Dublin and PFM Asset Management LLCPage 1 of 14 December 5, 2006 2.5 Hourlv Fees. Fees for work performed by Consultant on an hourly basis shall not exceed the amounts shown in Exhibit A. 2.6 Reimbursable Expenses. Reimbursable expenses are included in the total amount of compensation provided under this Agreement that shall not be exceeded. 2.7 Payment of Taxes. Consultant is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes. 2.8 Payment upon Termination. In the event that the City or Consultant terminates this Agreement pursuant to Section. 8, the City shall compensate the Consultant for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written notice of termination. Consultant shall maintain adequate logs and timesheets in order to verify costs incurred to that date. 2.9 Authorization to Perform Services. The Consultant is not authorized to perform any services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator. Section 3. FACILITIES AND EQUIPMENT. Except as set forth herein, Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perfonn the services required by this Agreement. City shall make available to Consultant only the facilities and equipment listed in this section, and only under the terms and conditions set forth herein. City shall furnish physical facillties such as desks, filing cabinets, and conference space, as may be reasonably necessary for Consultant's use while consulting with City employees and reviewing records and the information in possession of the City. The location, quantity, and time of furnishing those facilities shall be in the sole discretion of City. in no event shall City be obligated to furnish any facility that may involve incurring any direct expense, including but not limited to computer, long.distance telephone or other communication charges, vehicles, and reproduction facilities. Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, shall procure "occurrence coverage" insurance against claims for injuries to persons or damages to property that may arise from or in connection with the petiormance of the work hereunder by the Consultant and its agents, representatives, employees, and subcontractors. Consultant shall provide proof satisfactory to City of such insurance that meets the requirements of this section and under forms of insurance satisfactory in all respects to the City. Consultant shall maintain the insurance policies required by this section throughout the term of this Agreement. The cost of such insurance shall be included in the Consultant's bid. Consultant shall not allow any subcontractor to commence work on any subcontract until Consultant has obtained all insurance required herein for the subcontractor(s) and provided evidence thereof to City. Verification of the required insurance shall be submitted and made part of this Agreement prior to execution. 4.1 Workerst Com~nsation. Consultant shall, at its sole cost and expense, maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any Consulting Services Agreement between City of Dublin and PFM Asset Management LLCPage 3 of 14 December 5, 2006 activities performed by or on behalf of Consultant. includIng the insured's general supervision of Consultant; products and completed operations of Consultant; premises owned, occupied, or used by Consultant; and automobiles owned, leased, or used by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to City or its officers, employees. agents, or volunteers. b. The insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis. c. An endorsement must state that coverage is primary insurance with respect to the City and its officers, officials, employees and volunteers, and that no insurance or self-insurance maintained by the City shall be called upon to contribute to a loss under the coverage. d. Any failure of CONSULTANT to comply with reporting provisions of the policy shall not affect coverage provided to CITY and its officers, employees, agents. and volunteers. e. An endorsement shall state that coverage shall not be suspended. voided, canceled by either party, reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. 4.3 Professional Liability Insurance. Consultant, at its own cost and expense, shall maintain for the period covered by this Agreement professional liability insurance for licensed professionals perfonning work pursuant to this Agreement in an amount not less than FIFTEEN MilLION DOLLARS ($15,000,000) covering the licensed professionals' errors and omissions. 4.3.1 Any deductible or selfrlnsured retention shall not exceed $500,000 per claim. 4.3.2 An endorsement shall state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. 4.3.3 The policy must contain a cross liability or severability of interest clause. 4.3.4 The following provisions shall apply if the professional liability coverages are written on a claims-made form: a. The retroactive date af the policy must be shown and must be before the date of the Agreement. Consulting Services Agreement between City of Dublin and PFM Asset Management lLCPage 5 of 14 December 5, 2006 deductible or self-insured retention levels with a requirement that Consultant procure a bond, guaranteeing payment of losses and related investigations, claim administration, and defense expenses that is satisfactory in all respects to each of them. 4.4.6 Notice of Reduction in Coverage. In the event that any coverage required by this section is reduced, limited, or materially affected in any other manner, Consultant shall provide written notice to City at Consultant's earliest possible opportunity and in no case later than five days after Consultant is notified of the change in coverage. 4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Consultant's breach: · Obtain such insurance and deduct and retain ttie amount of the premiums for such insurance from any sums due under the Agreement; · Order Consultant to stop work under this Agreement or withhold any payment that becomes due to Consultant hereunder, or both stop work and withhold any payment, until Consultant demonstrates compliance with the requirements hereof; and/or · Terminate this Agreement. Section 5. INDEMNIFICATION AND CONSULTANT'S RESPONSIBILITIES. Consultant shall indemnify, defend with counsel selected by the City, and hold harmless the City and its officials, officers, employees. agentst and volunteers from and against any and all losses, liability, claims, suits, actions, damages, and causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property. or any violation of any federal, state, or municipal law or ordinance, to the extent caused. in whole or in part. by the willful misconduct or negligent acts or omissions of Consultant or its employees, subcontractors. or agents, by acts for which they could be held strictly liable, or by the quality or character of their work. The foregoing obligation of Consultant shall not apply when (1) the injury, loss of life, damage to property, or violation of law arises wholly from the negligence or willful misconduct of the City or its officers, employees, agents, or volunteers and (2) the actions of Consultant or its employees, subcontractor, IX agents have contributed in no part to the injury, loss of life, damage to property, or violation of law. It is understood that the duty of Consultant to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance certificates and endorsements required under this Agreement does not relieve Consultant from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply to any damages or claims for damages whether or not such insurance policies shall have been determined to apply. By execution of this Agreement, Consultant acknowledges and agrees to the provisions of this Section and that it is a material element of consideration, Consulting Services Agreement between. City of Dublin and PFM Asset Management LLCPage 7 of 14 December 5,2006 employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintain during the term of this Agreement valid Bu~iness Licenses from City. 7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person's race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, mantal status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract. or participant in, recipient of, or applicant for any services or programs provided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimrnation in employment, contracting, and the provision of any services that are the subject of thIs Agreement, including but not limited to the satisfaction of any positive obligations required of Consultant thereby. Consultant shall include the provisions of this Subsection in any subcontract approved by the Contract Administrator or this Agreement. Section 8. TERMINATION AND MODIFICATION. 8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Consultant. Consultant may cancel this Agreement upon 30 days' written notice to City and shall include in such notice the reasons for cancellation. In the event of termination, Consultant shall be entitled to compensation for services performed to the effective date of termination; City, however, may condition payment of such compensation upon Consultant delivering to City any or all documents. photographs, computer software, video and audio tapes, and other materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement. 8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of this Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a written amendment to this Agreement, as provided for herein. Consultant understands and agrees that, if City grants such an extension, City shall have no obligation to provide Consultant with compensation beyond the maximum amount provided for in this Agreement. Similarly, unless ~uthorized by the Contract Administrator, City shall have no obligation to reimburse Consultant for any otherwise reimbursable expenses incurred during the extension period, 8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties. Consulting Services Agreement between City of Dublin and PFM Asset Management LLCPage 9 of 14 December 5, 2006 9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this Agreement requires Consultant to maintain shall be made available for inspection. audit, and/or copying at any time during regular busIness hours, upon oral or written request of the City. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds TEN THOUSAND DOLLARS ($10,OOO.OO), the Agreement shall be subject to the examination and audit of the State Auditor, at the . request of City or as part of any audit of the City~ for a periOd of three (3) years after final payment under the Agreement. Section 10 MISCELLANEOUS PROVISIONS. 10.1 Attornevs' Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attomeys' fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose. 10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Alameda or in the United States District Court for the Northern District of California. . 10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the proviSions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. 10.4 No Implied Waiver of Breach. The waiver of any breach of a speCific prOVision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement. 10.5 Successors and Assians. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties. 10.6 Use 0' Recycled Products. Consultant shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper. 10.7 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Consultant in a "conflict of interest," as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq, Consulting Services Agreement between City of Dublin and PFM Asset Management LLCPage 11 of 14 December 5, 2006 10,11 Professional Seal. Where applicable in the determination of the contract administrator, the first page of a technical report, first page of design specifications, and each page of construction drawings shaH be stamped/sealed and signed by the licensed professional responsible for the reporUdesign preparation. The stamp/seal shall be in a block entitled WSeal and Signature of Registered Professional with report/design responsibility,. as in the following example. Seat and Signature of Registered Professional with reportJdesign responsibility, . 10.12 Intearation. This Agreement, including the scope of work and work plan schedule attached hereto and incorporated herein as Exhibit A, represents the entire and integrated agreement between CIty and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral. CITY OF DUBLIN CONSU L T ANT: PFM Asset Management LLC 0~c.~ Richard C. Ambrose, City ager ~? / /7/ ./ Carurnn-Brant,1Y1anaging Director CONSULT A. NT]'. FM Ass.et Management LLC Q . II II . \ ~\ L. r\v-' David Unkovic, Managing Director Attest: City Clerk Approved as to Form: City Attorney Consulting Services Agreement between City of Dublin and PFM Asset Management LLCPage 13 of 14 December 5, 2006 EXHIBIT A SCOPE OF SERVICES Consulting SeNices Agreement between City of Dublin and ClientFirst Consulting Group, LLC November 7,2006 Page 14 of 14 Exhibit A (Page 2 of 4) Investment Advisors to the Publi.c Sector. with our unde!;'(;ltanding of the client's obicctive~. Thi~ review cmujde.rs asset llilocation., retum:!l Oil allowable investmenlS, ,iod implementation approach. In thi!l tWaluation m: focus on $ccurity limitations reg::ardiog: (1) specific a8~cl das$cs, (2) divcis\fkatior'l, (3) mat\,lnty limitations, lIDU (4) 1.1~e of illif.luid !lecuciticl'l. If appr(:)pmr.c, Wt. will suggest chan~s to the policy to redl,lGC risk and/or enhance rerum within legallUld 5tatut0%1r constnints,. In Put initial re'iJ1ew of the City of Dublin'll inVtlltment p(~liCYJ we f<>u.nd it tel be thnt()ugh nod compr(':lH~nsivc. After meeting with the City'J; staff and more thomur;hly ascertaining the Gty':; objectives llnd proce4utes, 'PII'M will work w1th the City to c:n.~UJ:"('~ thC pulicy n, I>ufficicntly comp.rehemive in C$tabHshing conttols and objectives, while allowing the City the propcr f1~bility to dynamically ft:!l,pond r.o market coodidcJI\s. Step 3: Comprehensive Portfolio Review We win t;ondlJl:::t ~tl in-depth arilllysi~ of th~ pol"tfolio'R cU1't'eflt structure. The primary objective or rhis ar'lllY!li~ 'Will be to dete.mllne if, by 1llitit1m.ining it~cl1rrent pOf\:fo]lo, the City 15 optimi?ing irs portfolio performance~ while continuing to comply with the safj,!ty !\tanda:r~., and liquidity reql.lire:mCtllS ~t forth:in the in'V~gtmt!nt policy, Out a:nal).!ti.'1 ~11 f()ru.~ on the points listed below. . · Compliance: with Applicable Statutes and Policies: We will :review the City's investment portfolio for compliance with both the Califom~ Govcmm!!l:O.t Code and the City'15 current policy, . . · Liquidity: PFM hliR d~t!I(}t'ed an ~ffectiv~ mct.hCldology for rl,,~icwing and atJaly:dng the liquiility of our cliems' portfolios, For the C:ity. PFM will aMCe8 the CMC wi.th which individual securities could be sold in the =u:kt."tpkct:. PFM uses a liquidity scale., which ranks securities [rom 0, the most 1iqui~ to 10) the least liquid. Each security is aRlIi~d a fac\or based on (,;crt-.unch\ml.ct~ticl!, l;ucl1 :HI ~ec.tc)!, cCJUp<'Jn, i~l'lue size, mting and !i0 on. PFl.VI will utiljz~ mi~ scale to l\SSesS the liquidity of individual &:Cl.uitie$ CUtraltly held in tb~ Citis portfolio, convert those ,CSI,l!ts toa u.tCaSUx:c uf over:allliquidity and then ev21uate the p()rtfoHo'll (~pO!!ure to liquidity risk and make recomtnend1.tions to reduce exposure or enhance yield. · . Credit Quality: PFM will assess the credit quality of t.h~ Chy's ll1V~'UfM11t!l. The imporlllncc. of monit~ring Ii pmi:f()lio'!l credir quality has taken on additiotul significance J.,>1'11ei1 the CUrrent uncertainty surrounding the U.S, ec:qnomy. The impOrtlmce we place UP c:cedir. quality is dcmonst:r.at~~d by the fact that for fuel portfolios we tnarulge, PFM has never purchased or t)'ttned any corporate 5Cdlrity. that hM been downgraded below the lc~1 limit in Califonm.. Our review will indude C01llments on the credi~ qWllhy of the CitiS current portir>]io and any r'Ccornmcndcd dumgc:;, · DivclSification: PFM will M!ie!i5 the divertlification of (he CiLy~s investments by evaluilting th!'; perfcm:n-ancc, risk R1"lU market vvatuc of current holdings against a variety of l!lllrketdf6recasts, Tn addiLiou, we will provide lI. table of rehltive yield 5preaw; between app:roved invc:stment !'lectors, including U.s. Trensury billli! and notes, Fcdc:l:lu Agencies, commercial pRp~, BA.s, CD!;, corporl1te llot('~ :md repurchase: agreemCDt!!. Portfolio Duration: On Ii rcgUhlf lm~is, PFMs portfolio IDlal1agers lU)alyze interest rate trenol~ in the market to determine the [:;.ptim,tl portfulio dumtion. This allilly~i8 l.'"O.taih calculating the risks and rewll.rd~ of various duration!; in the past. We will prC5(:nt several . ULy of Dublm ..' Pmp6ullN AJRU1TIl!litt& Ra'fe'W of 1 nWI;T'fI'l,ffll' 'Prmnlio Pttiiq "'lii Ptot".t.d:umlto . I IIil T LU Exhibit A (Page 4 of 4) ~: . p. F,.. M" :~ Investment Achi:~ol'K tl.l the Public Sector Step 7: Invenment'Strategy Identification and Recommendatio:i1$ Using the info!'l'TlQciort cqllected from Steps 1-6 above, we will be able to ~1I$CI.li:l the City's current lflvcst:merit stta.tegy llnd makl~ rccor.umcndation!:i on hClW to besr positioh the portfolio to perform well in the future, . · Cu~nt Markr::tCondirlonN - PF1\.i clo!'l~y ffiOhih)t$ economic datil to evaluate: probable effect on the market ~nd. more jtnPQrbntly~ on our clients' portfolio!;. We look at such nu.:tois all employment (unemployment tate, mcmthly p9.}"1"oll gll-lns) , inflation (PPT. CPL. F/:'f, average hourly ea.m.ings), the ronllumer (retail sale::;; C011l'iumer spending. con~U1ne.l; cQnfidcncc/~(.:I1tim.ent\ manufaciUring (NAPM~ dUCilble goods' ord~.tl\) and houllingfconatruction (new home slllej;, C()t1.f,ttUcuon apending). W(; w.ill U!lC t:b.is economic information to 2...'1!te.o:;, me-likely impact elf CUl:tt:m market: trends ol1the.city's portfolio. · Investment Strategy - PFM "ill .wI'i.ew r.hl! GtiS CurtCrU portfolio to a.na1y:z;c if variou~ investment strategics. such 3.::! "rolling-doWll-the-C\lrve~; on v~dous matwiticli, sectur re-, aUQcatir.>Q and rich/cheap analysis cOl~Jd be lltled to improve the pnrtfolio'!I r~m. We would illdud~ concise cxplamttion::l of t:ach iltrategy and charts and tables to illustrate Our I;~lanations. Step &: Identify ImpactofPotential Supplemental Resources Once ~e analysis [tom Steps 1-6 is complete, we will be able to a.SS~5 whe-cher or noc the City co\.k~ benefit ft(:>in addition~l rellour:ccs t{) CIlhwcc it:l' investment pmgram. Tf additional rcdourCC5 are identified, we will present an jinalysis nf rhe pOlcnlial8, c.mt~ MtI expected impacts. Step 9: ~P[)rt and Presentation Upon completion of OUr a.nalygili, PFM will prm.ide the City with a writ~n rcpm:t covering ow: fintlingl> liud any'recommenditions ,n:llulting from OUl: review. La.uren Brill'll and/Qr Ni?>csa ~z~di will be ilvailablc to pre!lent a. !lumm,'lry report tCl the City. ,&~.. t.J:.~. .~~ . ,""._','.i ", ,', I .: "".:':. \ . ':.:', ::,..;~ :,. J"',:' '/~~: . ....!,'. . ..... r \'",' " . . ',' . . ...'~..i.::...it~" <,t-\~~;:~;' . :' ~:-: -;'::. '~,~ ( '~,\,:,:~-':':~I~~~~": Schedule for Completion The table 011 the followitlg page outlln.t:s Out timetable to complete the laSks described above_ PFM Timetable fur Completion ofInitiat Review Stefl1! ld~l1tify City's Investment Obje..'<;;ttvt:9 unci C.Ol"lJltfll1f1t$ SRj) 2~' Review QfIpvet!t:l:D.t.:JJ..t Policy 2nd Pmced1J,re~ SU.p .3~. Compre~Itivc Pmuolio R~it.W Str!p 4. CMh Flow Ft)tcca:iOng Su..j) G: HiModcal Pt:rfo=anec Review Step 7: Invc.!nment Sl'I'l\tegy Idetuificll.unnll.nd Rcctlffim(.:llda.tjon$ StLp 8: Idendl1lmpacl Qf Pot:f:ntial Su.pplCffi(.,'Oml Resources St~p 9, rQ.l:n'ltl} Pl;(.\scnt;u:irm of J:lindi11~ T out time line 1 week. 3..4 d:aYII 2 \VCd;H 2-3 days 3.4 days 2-3 days 1 day I d~y 4-6 week>> Cil, .,fD"bJK, - l'ztlp<>..J fur "...nrnom & I"""""" "fl......'...""" P-lWw l'<>lli.'f ..K1l'rOcodurt. 50 California Street 982." 5544 Suite 2300 4'15982-4513 San Francisco, CA 94'11 i _____-r--- -- - - ,,- -i;- " j The PFM Group --. Pub!IC r:lnanc!8i 1Vi8naqe-ment, !nc PFf\/1 Asset Managernent LLC PFM Advisors Mr. Richard C. Ambrose City Manager City of Dublin 100 Civic Plaza Dublin, California 94568 RE: SUPPLEMENTAL DISCLOSURES ASSOCIATED WITH THE AGREEMENT DATED DECEMBER 5, 2006 BETWEEN CITY OF DUBLIN AND PFM ASSET MANAGEMENT LLC Scope: Investment Advisor - One-time Review of: Investment Policy; Procedures; Portfolio Holdings; Strategies; and Performance Results (As More Precisely Defined In Exhibit A of the Agreement) Dear Mr. Ambrose: The purpose of this letter is to supplement the agreement referenced above between PFM and the City. Due to the unique nature and regulation of Investment Advisory Services, we would request that you execute, on behalf of the City of Dublin, a copy of this letter acknowledging that the following supplemental disclosures have been made: DISCLOSURES a. Consultant Is An Investment Advisor. Consultant hereby represents it is a registered investment advisor under the Investment Advisers Act of 1940. Consultant shall immediately notify City if at any time during the term of this Agreement it is not so registered or if its registration is suspended. Consultant agrees to perform its duties and responsibilities under this Agreement with reasonable care. b. Suspensions: Complaints. Consultant shall promptly notify City in writing of any complaints or disciplinary actions filed against it, or any investment professional employed by it, who has performed any service with respect to City's account in the 24 preceding months, by the Securities and Exchange Commission of the United States, the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, any Attorney General or any regulatory agency or authority of any state of the United States, any department or agency or authority of the Government of the United States, or any governmental agency or authority regulating securities of any country in which Consultant is doing business.