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HomeMy WebLinkAboutContract 42828+ M�1 SECRETARY CON RACT UO. —A 8 2- g INVESTMENT REPORTING AND ADVISORY AGREEMENT BETWEEN PATTERSON & ASSOCIATES and THE CITY OF FORT WORTH, TEXAS This Investment Advisory Agreement dated as of the 2- day of Fib , 2012 (the "Agreement ") is made and entered into by and between Patterson Capital Management, L.P., dba Patterson & Associates ( "P&A "), a registered investment advisor and funds management Texas limited partnership and the City of Fort Worth, Texas (the "Client "). PREAMBLE WHEREAS, the Client has determined to select and appoint P&A to act as its investment advisor for funds management and reporting purposes as determined by the Client on the Client's portfolio and to perform the advisory services described herein. NOW THEREFORE, for and in consideration of the mutual promises, covenants, and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows: ARTICLE I. Definitions "Authorized Investments" shall mean those investments authorized and defined in the Client's Investment Policy made a part of this Agreement and attached hereto as Exhibit A. "Authorized Representative(s) of the Client" shall mean the duly authorized investment officers or delegated representatives, empowered to execute instructions and take other necessary actions under this Agreement on behalf of the Client designated in writing, attached hereto as Exhibit D. "Authorized Representative(s) of P&A" shall mean any employee of P&A who is designated in writing by P&A as an authorized representative for purposes of this Agreement, attached hereto as Exhibit D. ARTICLE II. Creation of Portfolio and Account(s) Section 2.01. Creation of a Separate and Distinct Portfolio(s). P&A, on behalf of the Client, hereby creates and establishes for management and reporting purposes as determined by Client a separate and distinct portfolio(s) (individually and collectively referred to hereinafter as the "Portfolio ") to be managed by the Client, held in the Client's name at Client's safekeeping institution. Client will determine the number of Portfolios to be established and maintained in accordance with Client needs. All Portfolio records shall be segregated and held distinct from all other funds held or invested by P&A. Client will provide to P&A all trade tickets and required reporting information on a same day basis for reporting purposes if Client executes trades. P&A will provide to Client all trade tickets and required reporting information on a same day basis for reporting purposes if P&A executes trades for Client. ARTICLE III. Reserved OFFICIAL RECORD'' City of Fort Worth Patterson and Associates CITY SECRETARY Investment Advisory Agreement Page >I of I t FT. WORTH, TX ARTICLE IV. Investment Duties and Services Section 4.01. Prudence. P&A hereby agrees to perform with judgment and care, under circumstances then prevailing, which professionals of prudence, discretion and intelligence exercise in the management of all Client affairs, not for speculation, but for investment, considering the probable safety of their capital as well as probable income to be derived (the "Prudent Expert Standard "). Section 4.02. Investment Reporting Services. P&A shall provide reporting for the portfolio to include monthly and quarterly reporting and GASB investment annual reporting. P&A shall provide monthly and quarterly reports detailing and summarizing all investments and Portfolio transactions at a minimum. Client shall define all reporting needs for information needed on a daily, monthly or quarterly basis. P&A shall submit all reports to the Client of its transactions promptly after the end of each month. Such report shall indicate at a minimum the positions and balances in the Portfolio(s), the interest earned, all deposits and withdrawals, and a detailed inventory of all securities and positions for the period. All reports shall fulfill applicable statutory requirements. Reports will include information for GASB 31, and 40 reporting on an annual basis. P&A will rely on the Client to provide complete and timely information. Reporting which must be changed or re- created because of Client error or omissions after the reporting period will be charged at the additional hourly rate of $150. Section 4.03. Investment Advisory Services. Advisory services to include detailed market advice, portfolio structure advice, funds management, trade execution and settlement actions will be provided at an hourly rate of $150 if full management services are not required. All advisory services to include detailed market advice, portfolio structure advice, funds management, trade execution and settlement actions will be provided by P&A for a set annual fee as described in Schedule B if determined by the Client. All investment advice will be in accordance with applicable laws, ordinances, rules and regulations and Client's Investment Policy, attached hereto and made a part hereof as Exhibit A (collectively, "Client Authorized Investments'). Section 4.031. Investment Advisory Committee Participation. Advisory services to include participation in the Client's Investment Advisory Committee scheduled for quarterly meetings or as called by the Client. P&A is to be compensated for travel and reasonable expenses incurred for Committee meetings at Client's per mile rate or, if required and approved by Client, airfare if only reporting services are utilized by the Client. Advisory services provided as part of the Committee work will not be charged at the hourly rate defined in Section 4.03. Section 4.032. Client Designation of Funds. Client has full discretion to designate the amount of funds to be placed in Portfolio(s) or in separate investments in accordance with cash flow needs. Client has full discretion to designate the amount of funds to be placed in Portfolio(s) or in a local government investment pool or money fund as authorized by the Client's governing body for liquidity. Section 4.033. Client Directives. Client reserves the right to make all decisions on trades and approve settlement of those trades. Section 4.04. Confirmations. Client will establish all necessary procedures for P&A to receive independent trade confirmations from all broker /dealers for each transaction in the Portfolio if trades are executed by Client. P&A will establish all necessary procedures for Client to receive independent trade confirmations from all broker /dealers for each transaction in the Portfolio if trades are executed by P&A. Independent confirmations will be sent directly to the Client and P&A for reporting and audit trail purposes. Section 4.05. Presentations. An Authorized Representative of P&A will be available to present reports or attend presentations to the Client or the Client's governing body as required by the Client. OtN of Fort Worth _Patterson and Associates Investment Advisory Agreement Page 2 of I 1 Section 4.06. Earnings and Losses from Investments. The Client and P&A agree that all funds in the Portfolio shall be invested only in Client Authorized Investments. All earnings and profits from the investment of funds in any Portfolio(s) shall be credited to and deposited in the Portfolio(s) unless designated by Client. All losses resulting from the investment of funds in any Portfolio(s) shall be charged to such Portfolio or account. Section 4.07. Liabili . P&A, or any P&A employee, shall not be held liable for any act or omission to act on behalf of herself, her agents, employees or other persons EXCEPT FOR ACTS OR OMISSIONS ARISING FROM THE NEGLIGENCE OR MALFEASANCE, OR VIOLATION OF APPLICABLE LAW, ORDINANCE, RULE OR REGULATION, BY P&A, INCLUDING, BUT NOT LIMITED TO, P&A AUTHORIZED REPRESENTATIVES AND ANY OTHER P&A EMPLOYEES. Common law and the federal securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights which the Client may have under common law or any federal securities laws. This Section 4.07 shall survive termination or expiration of this Agreement. Section 4.08. Dispute Resolution; Venue. The parties hereto shall attempt to resolve any controversy or claim arising out of or relating to this Agreement, or the breach thereof, through consultation and negotiation in good faith and a spirit of mutual cooperation. However, if those attempts fail, the parties agree to attempt to resolve any misunderstandings or disputes arising from this Agreement through non - binding mediation at a location in Fort Worth, Tarrant County, Texas. Such mediation shall be conducted by a mediator that is mutually selected by the parties, acting reasonably and in good faith, for a duration not to exceed thirty (30) hours collectively, unless the parties mutually agree to extend that duration. Costs of the mediation shall be borne equally between the parties. If any controversy or claim arising out of or relating to this Agreement is not resolved through mediation, the parties may mutually agree to have the matter decided by arbitration which shall be conducted in Fort Worth, Tarrant County, Texas before three (3) arbitrators (unless both parties agree on one (1) arbitrator) designated by the American Arbitration Association (the "AAA's, in accordance with the terms of the Commercial Arbitration Rules of the AAA, and, to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code), or if such Act is not applicable, any substantially equivalent state law. The parties further agree that the arbitrator(s) will decide which party must bear the expenses of the arbitration proceedings. Notwithstanding anything provided herein to the contrary, this section does not constitute a waiver of any right provided by the federal securities laws, including the right to choose the forum, whether by arbitration or adjudication, in which to seek resolution of the dispute. Venue for any action, whether real or asserted, at law or in equity, shall lie exclusively in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. ARTICLE V. Expenses and Reports Section 5.01. Fee and Expenses. The Client agrees to pay to P&A on a monthly basis, in arrears, an amount sufficient to reimburse P&A for the cost of performing the duties contemplated under this Agreement in accordance with the Fee Schedule, attached hereto and made a part hereof as Exhibit B. P&A shall advise the Client monthly in writing of the amount of such costs. This itemized invoice shall set forth the services provided for the Portfolio(s) and the cost incurred. The invoice will be provided to the Client by the fifth (5) business day of the succeeding month. Payment on the charges shall be made within fifteen (15) business days after receipt of invoice. Section 5.03. Records. P&A shall keep a book of records in which complete and correct entries shall be made of all transactions relating to the holdings, balances and values in the Portfolios) in City of Fort Worth—Patterson and Associates Investment Advisory Agreement Page 3 of 11 accordance with generally accepted accounting principles. Such records shall be available for inspection at all reasonable hours of the business day and under reasonable conditions by the Client. Section 5.04. Client Confidentiality. All records and information regarding the Client will be held as confidential by P&A. ARTICLE VI. Miscellaneous Section 6.01. Notices. Any notices, Letters of Instruction, requests or demands required or permitted to be given hereunder shall be given in writing and shall be deemed duly given when mailed by registered or certified mail, postage pre -paid, addressed or telefaxed as follows (or as subsequently directed in writing by the applicable party): To the Client: James Mauldin, City Treasurer City of Fort Worth 1000 Throckmorton Street Fort Worth, TX 76102 Telephone: 817 - 392 -2438 Telefax: (817) 392 -8181 E -mail: James. Mauldin(d)fortworthQov org To P&A: Linda T. Patterson Patterson & Associates 301 Congress Avenue Suite 570 Austin, Texas 78701 Telephone: (512) 320 -5042 Telefax: (512) 320 -5041 E -mail: linda @patterson.net Section 6.02. Severability. If any provision of this Agreement shall be held or deemed to be or in fact shall be illegal, inoperative, or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent whatsoever. Section 6.03. Limitation of Rights. With the exception of the rights herein expressly conferred, nothing in or to be implied from this Agreement is intended or shall be construed to give any person other than the parties hereto any legal or equitable right, remedy or claim under or in respect to this Agreement or any of the covenants, conditions and provisions herein contained; this Agreement and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and herein provided. The Client further agrees that P&A's responsibilities hereunder are limited to the management of the Portfolio(s) as herein described and the providing of reports and information herein required; P&A shall not be liable for any losses from investments made and transfers made in accordance with the procedures set forth in this Agreement. Notwithstanding anything to the contrary herein, Client has not waived and does not waive any governmental powers or immunities that may be afforded to Client by applicable law. Section 6.04. Execution of Counterparts. This Agreement may be simultaneously executed in several separate counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. C'it,, of Fort worth Patterson and Associates Investment Advisory Agreement Page 4 of 11 Section 6.05. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas and is performable in Tarrant County, Texas. Section 6.06. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit, or describe the scope or intent of any provisions, articles, or sections of this Agreement. Section 6.07. Amendment. The Client and P&A may supplement or amend this Agreement only if evidenced in a writing signed by both parties. Section 6.08. Termination. This Agreement may be terminated by either party hereto, with or without cause, by tendering ninety (90) days prior written notice in the manner set forth in Section 6.01 hereof. In addition, the Client may terminate this Agreement within five (5) business days of the date hereof, with or without cause and without penalty, by notifying P&A in the manner set forth in Section 6.01 hereof of its decision to terminate the Agreement. Section 6.09. Term. This Agreement shall be effective on the last date signed by both parties. Unless terminated earlier in accordance with Section 6.08 or 6.10 hereof, this Agreement shall expire Y 21 2014 but may be renewed by Client on a six month basis without limit at Client request. Section 6.10. Assignment. This Agreement shall not be assignable by either party hereto, by operation of law or otherwise, without the prior written consent of the other party hereto. Any assignment in violation of this Section 6.10 shall result in the termination of this Agreement upon provision of written notice by the non - defaulting party. Section 6.11. Ownership Change. P&A shall notify the Client in writing of any change in its partnership ownership within a reasonable time after such change, not to exceed thirty (30) calendar days. Section 6.12. SEC Document Disclosure. The Client, by execution of this document, acknowledges the receipt of P&A's most current ADV Part II disclosure document as required by the SEC. Section 6.13. Insurance. P&A shall provide the Client with certificate(s) of insurance documenting policies of the following minimum coverage limits that are to be in effect prior to commencement of any work pursuant to this Agreement: 6.13.1. Commercial General Liability (CGL) $1,000,000 each occurrence $2,000,000 aggregate limit Coverage shall include but not be limited to the following: premises /operations, independent contractors, products /completed operations, personal injury, and contractual liability. Insurance shall be provided on an occurrence basis, and as comprehensive as the current Insurance Services Office (ISO) policy. The City of Fort Worth shall be named as Additional Insured. 6.13.2. Workers' Compensation Statutory limits Employer's liability $100,000 Each accident /occurrence $100,000 Disease - each employee $500,000 Disease - policy limit City of Fort Worth Patterson and Associates Investment Advisory Agreement Page 5 of 11 Workers' Compensation and Employers' Liability coverage with limits consistent with statutory benefits outlined in the Texas Workers' Compensation Act (Art. 8308 — 1.01 et seq. Tex. Rev. Civ. Stat.) and minimum policy limits for Employers' Liability as stated. The policy shall contain a Waiver of Subrogation in favor of the City of Fort Worth. 6.13.3. Errors & Omissions (Professional Liability) $5,000,000 each claim $5,000,000 aggregate limit The policy's retroactive date shall be coincident with or prior to the date of the contractual agreement. The certificate of insurance shall state that the coverage is claims -made and include the retroactive date. The insurance shall be maintained for the duration of the contractual agreement and for five (5) years following completion of the service provided under the contract. An annual certificate of insurance submitted to the City shall evidence coverage. 6.13.4 Automobile Minimum automobile coverage as required by state law on all vehicles operated by P&A, owned or non - owned, while engaged in services pursuant to this Agreement. 6.13.5 Applicable to all policies. The required insurance shall not be canceled, limited in scope or coverage, or non - renewed, until after thirty (30) days prior written notice has been given to the City of Fort Worth. Any deductible in excess of $25,000.00 must be acceptable to and approved by the City's Risk Management Division. The insurers for all policies must be licensed and /or approved to do business in the State of Texas. All insurers must have a minimum rating of A VII in the current A.M. Best Key Rating Guide. If the rating is below that required, written approval of Risk Management is required. Section 6.14. Right to Audit. P&A agrees that Client shall, until the expiration of three (3) years after final payment under this Agreement, have access to and the right to examine at reasonable times any directly pertinent books, documents, papers and records of the P&A involving transactions relating to this Agreement. P&A agrees that Client shall have access during normal working hours to all necessary P&A facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this section. Client shall give P&A reasonable advance notice of intended audits. P&A further agrees to include in all its subcontractor agreements hereunder a provision to the effect that the subcontractor agrees that Client shall, until expiration of three (3) years after final payment of the subcontract, have access to and the right to examine at reasonable times any directly pertinent books, documents, papers and records of such subcontractor involving transactions related to the subcontract, and further that Client shall have access during normal working hours to all subcontractor facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this paragraph. Client shall give subcontractor reasonable notice of intended audits. This Section 6.14 shall survive termination or expiration of this Agreement. [Signature Page Follows] Cite of Fort Worth Patterson and Associates Investment Advisory Agreement Page 6 of 11 IN WITNESS WHEREOF the parties hereto have cause this Agreement to be executed in multiple counterparts as of the date first set forth above. CITY OF FORT WORTH, TEXAS By: '— Nam S an Alanis Assis City Manager Date: d Attest: By Ma . Ka ser City Secretary o Patterson Capital Management, L.P. dba PATTERSON & ASSOCIATES By: Patterson & Associates, Inc. General Partner By N Linda T. Patterson President Date: /— If- Attest: By: oobu� � Jt 'ti�kk, k -Vy)�rrz_ Q Of f17li o Prv�alys% joop0000 -00 i' ,cy�'�o° %01 Approved to F m and Legality: �..n 0% o By o o r Maleshia B. rmer ao v *A Assistant City Attorney 0a x.0.000000 -Zr ACI S 47 City of Fort Worth Patterson and Associates Investment Advisory Agreement Page 7 of 11 OFFICIAL RECORD! CITY SECRETARY FT. WORTH, TX I EXHIBIT A CLIENT'S INVESTMENT POLICY Client Investment Policy is made part of this Investment Advisory Agreement in order to assure that all investment decisions conform to the Client Policy and parameters established by the Client and its governing body. As the Policy changes with Council action the Client will provide the amended Policy to P&A and the most recent amended and adopted Policy will control the Client's investments. Should Client require that P&A manage the funds all broker certifications will be sent and re -sent as necessary to all required parties and maintained in a separate file for the Client by P&A. FI CitN of Fort Worth Patterson and Associates Investment Advisory Agreement Page 8 of 11 EXHIBIT B FEE SCHEDULE The investment advisory services described under the terms of this Agreement are being provided in accordance with the following fee schedule. Reporting services alone are provided for a monthly fee of: $ 1,250.00 Full advisory services as described are provided for a monthly fee of: $ Additional travel reimbursement for Investment Advisory Committee meetings as set forth in Section 4.031. Fees can be paid on a quarterly basis if required by the Client. Fees are calculated by P&A on services rendered in the preceding month and the invoice provided to the Client by the fifth (5) business day of the succeeding month. Fees are due and payable within fifteen (15) business days after receipt of invoice. Cite of Fort Worth Patterson and Associates Investment Advisory Agreement Page 9 of 11 EXHIBIT C Securities and Exchange Commission ADV FORM, PART II This form is being provided the Client in accordance with SEC Regulations 204 -3 for Registered Investment Advisors. This disclosure document must be provided the Client not less than 48 hours prior to entering any investment advisory contract. Failure to do so can result in a voidable contract. P&A shall provide to Client an updated ADV Form on an annual basis in accordance with SEC Regulations. Cit} of Fort Worth Patterson and Associates Investment Advisory Agreement Page 10 of 11 ,4 EXHIBIT D AUTHORIZED REPRESENTATIVES Authorized Representatives of the Client Name/Title Phone Fax James Mauldin City Treasurer 817- 392 -2438 Jenny Kerzman Asst Treasurer 817 - 392 -6030 Authorized Representatives of P&A Name/Title Phone Linda T. Patterson President /Ptf. Manager 512 - 320 -5042 Howard Herring Portfolio Manager 512 - 320 -5042 Rikki Ramirez Portfolio Assistant 512 - 320 -5042 City of Fort worth Patterson and Associates Investment Advisory Agreement Page 11 of 11 e -mail James. Mau ldin0fortworthaov org Jenny.Kerzman(stfortworthgov org Fax e-mail 512- 320 -5041 linda @patterson.net 512 - 320 -5041 howie @patterson.net 512 - 320 -5041 rikki @patterson.net