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HomeMy WebLinkAbout20211206_Agreement PFM Asset Management LLC and City of San Luis ObispoAgreement Page 1 AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on ____________, by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and PFM Asset Management LLC, hereinafter referred to as Consultant. W I T N E S S E T H: WHEREAS, the City has been contracting for investment advisor service for its pooled, longer-term investments to maximize yield and implement special considerations for its investments; and WHEREAS, the City’s current contract is expiring in November 2021 and a Request for Proposal was approved by the City Council on September 21, 2021; and WHEREAS, Consultant is qualified to perform this type of service and has submitted a proposal in writing by the required deadline which has been accepted by City as responsive to all requirements. NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows: 1.TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, for three years. Upon mutual agreement between the parties, the contract can be extended for an additional three years at the end of the original term. 2.INCORPORATION BY REFERENCE The City’s Request for Proposal for Investment Advisor Services as approved by the City Council on September 21, 2021, and Consultant's proposal dated October 13, 2021, are hereby incorporated in and made a part of this Agreement and attached as Exhibit A. The City’s terms and conditions are hereby incorporated in a made a part of this Agreement as Exhibit B. To the extent that there are any conflicts between the Consultant’s fees and scope of work and the City’s terms and conditions, the City’s terms and conditions shall prevail, unless specifically agreed otherwise in writing signed by both parties. 3.CITY'S OBLIGATIONS. For providing services as specified in this Agreement, City will pay and Consultant shall receive therefor compensation in accordance with the following fee schedule: DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 12/6/2021 | 5:07 PM PST Agreement Page 2 Assets under Management Annual Fee First $100 million 8 basis points (0.08%) Next $100 million 7 basis points (0.07%) Assets over $200 million 6 basis points (0.06%) 4.CONSULTANT'S OBLIGATIONS. For and in consideration of the payments and Agreements herein before mentioned to be made and performed by City, Consultant agrees with City to provide services as set forth in Attachment A to this Agreement. 5.AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Department Head or City Manager of the City. 6.COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete Agreement between the parties hereto. No oral Agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral Agreement, understanding, or representation be binding upon the parties hereto. 7.NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City of San Luis Obispo Finance Department 990 Palm Street San Luis Obispo, CA 93401 Attn: Brigitte Elke Consultant PFM Asset Management, LLC 44 Montgomery Street, 3rd Floor San Francisco, CA 94104 Attn: Monique Spyke 8.AUTHORITY TO EXECUTE AGREEMENT. Both City and Consultant do covenant that each individual executing this Agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Agreement Page 3 9. CONSULTANT PROVISIONS. (a) Services of Consultant. City hereby engages Consultant to serve as Consultant under the terms of this Agreement with respect to the funds described in this Agreement and such other funds as City may from time to time assign by written notice to Consultant (collectively the "Managed Funds"), and Consultant accepts such appointment. In connection therewith, Consultant will provide investment research and supervision of the Managed Funds investments and conduct a continuous program of investment, evaluation and, when appropriate, sale and reinvestment of the Managed Funds assets. Consultant shall continuously monitor investment opportunities and evaluate investments of the Managed Funds. Consultant shall furnish City with statistical information and reports with respect to investments of the Managed Funds. Consultant shall place all orders for the purchase, sale, loan or exchange of portfolio securities for City's account with brokers or dealers recommended by Consultant and/or City, and to that end Consultant is authorized as agent of City to give instructions to the custodian designated by City (the “Custodian’) as to deliveries of securities and payments of cash for the account of City. In connection with the selection of such brokers and dealers and the placing of such orders, Consultant is directed to seek for City the most favorable execution and price, the determination of which may take into account, subject to any applicable laws, rules and regulations, whether statistical, research and other information or services have been or will be furnished to Consultant by such brokers and dealers. The Custodian shall have custody of cash, assets and securities of City. Consultant shall not take possession of or act as custodian for the cash, securities or other assets of City and shall have no responsibility in connection therewith. Authorized investments shall include only those investments which are currently authorized by the state investment statutes, and City’s investment policy, and as supplemented by such other written instructions as may from time to time be provided by City to Consultant. Consultant shall be entitled to rely upon City's written advice with respect to anticipated drawdowns of Managed Funds. Consultant will observe the instructions of City with respect to broker/dealers who are approved to execute transactions involving the Managed Funds and in the absence of such instructions will engage broker/dealers which Consultant reasonably believes to be reputable, qualified and financially sound. (b)Pool Compensation. Assets invested by Consultant under the terms of this Agreement may from time to time be invested in (i) a money market mutual fund managed by Consultant or (ii) a local government investment pool managed by Consultant (either, a “Pool”) or in individual securities. Average daily net assets subject to the fees described in this Agreement shall not take into account any funds invested in the Pool. Expenses of the Pool, including compensation for Consultant and the Pool custodian, are described in the relevant prospectus or information statement and are paid from the Pool. (c)Other Compensation. If and to the extent that City shall request Consultant to render services other than those to be rendered by Consultant under this Agreement, such additional services shall be compensated separately on terms to be agreed upon between Consultant and City. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Agreement Page 4 (d)Expenses. Consultant shall furnish at its own expense all necessary administrative services, office space, equipment, clerical personnel, telephone and other communication facilities, advisory facilities, and executive and supervisory personnel for managing the Managed Funds. Except as expressly provided otherwise herein, City shall pay all of its own expenses including, without limitation, taxes, commissions, fees and expenses of City's independent auditors and legal counsel, if any, brokerage and other expenses connected with the execution of portfolio security transactions, insurance premiums, and fees and expenses of the Custodian. (e)Registered Advisor; Duty of Care. Consultant hereby represents it is a registered investment advisor under 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. The federal securities laws impose liabilities under certain circumstances on persons who act in good faith. Nothing herein shall in any way constitute a waiver or limitation of any rights which City may have under any federal securities laws. City hereby authorizes Consultant to sign I.R.S. Form W-9 on behalf of City and to deliver such form to broker-dealers or others from time to time as required in connection with securities transactions pursuant to this Agreement. (f)Consultant’s Other Clients. City understands that Consultant performs investment advisory services for various other clients which may include investment companies, commingled trust funds and/or individual portfolios. City agrees that Consultant, in the exercise of its professional judgment, may give advice or take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Managed Funds. Consultant shall not have any obligation to purchase, sell or exchange any security for the Managed Funds solely by reason of the fact that Consultant, its principals, affiliates, or employees may purchase, sell or exchange such security for the account of any other client or for itself or its own accounts. (g)Force Majeure. Consultant shall have no liability for any losses arising out of the delays in performing or inability to perform the services which it renders under this Agreement which result from events beyond its control, including interruption of the business activities of Consultant or other financial institutions due to acts of God, acts of governmental authority, acts of war, terrorism, civil insurrection, riots, labor difficulties, or any action or inaction of any carrier or utility, or mechanical or other malfunction. (h)Disciplinary Actions. Consultant shall promptly give notice to City if Consultant shall have been found to have violated any state or federal securities law or regulation in any final and unappealable judgment in any criminal action or civil suit in any state or federal court or in any disciplinary proceeding before the Securities and Exchange Commission (“SEC”) or any other agency or department of the United States, any registered securities exchange, FINRA, or any regulatory authority of any State based upon the performance of services as an investment advisor. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Agreement Page 5 (i)Independent Contractor. Consultant, its employees, officers and representatives, shall not be deemed to be employees, agents (except as to the purchases or sale of securities described in subparagraph (a) above), partners, servants, and/or joint ventures of City by virtue of this Agreement or any actions or services rendered under this Agreement. (j)Books. Consultant shall maintain records of all transactions in the Managed Funds. Consultant shall provide City with a monthly statement showing deposits, withdrawals, purchases and sales (or maturities) of investments, earnings received, and the value of assets held on the last business day of the month. The statement shall be in the format and manner that is mutually agreed upon by Consultant and City. (k)Brochure and Brochure Supplement. Consultant warrants that it has delivered to City prior to the execution of this Agreement Consultant's current Securities and Exchange Commission Form ADV, Part 2A (brochure) and Part 2B (brochure supplement). City acknowledges receipt of such brochure and brochure supplement prior to the execution of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. CITY OF SAN LUIS OBISPO, A Municipal Corporation By:_____________________________________ City Manager APPROVED AS TO FORM: CONSULTANT ________________________________ By: _____________________________________ City Attorney DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services Bid 2109-001 October 13, 2021 PFM Asset Management LLC 44 Montgomery Street 3rd Floor San Francisco, CA 94104 415.982.5544 pfm.com Exhibit A DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 ABOUT PFM PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. Investment advisory services are provided by PFM Asset Management LLC which is registered with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940. Financial advisory services are provided by PFM Financial Advisors LLC and Public Financial Management, Inc. Both are registered municipal advisors with the SEC and the Municipal Securities Rulemaking Board (“MSRB”) under the Dodd-Frank Act of 2010. Swap advisory services are provided by PFM Swap Advisors LLC which is registered as a municipal advisor with both the MSRB and SEC under the Dodd-Frank Act of 2010, and as a commodity trading advisor with the Commodity Futures Trading Commission. Additional applicable regulatory information is available upon request. Consulting services are provided through PFM Group Consulting LLC. Institutional purchasing card services are provided through PFM Financial Services LLC. PFM’s financial modeling platform for strategic forecasting is provided through PFM Solutions LLC. A web-based platform for municipal bond information is provided through Munite LLC. For more information regarding PFM’s services or entities, please visit www.pfm.com. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 October 13, 2021 Table of Contents Cover Letter .................................................................................................................. 1 I.Proposal Content .................................................................................................... 3 Submittal Forms ...................................................................................................... 3 Qualifications ........................................................................................................... 5 Work Program ....................................................................................................... 14 Requested Changes to Terms and Conditions ..................................................... 27 II.Appendices U.S. Bank/PFMAM Press Release Certificates of Insurance and Statement of Coverage Resumes Monthly and Quarterly Reports Client Communications Requested Changes to Terms and Conditions Statement of Past Disqualifications Form PFM Asset Management LLC 415.982.5544 pfm.com 44 Montgomery Street 3rd Floor San Francisco, CA 94104 City of San Luis Obispo Proposal for Investment Adviser Services Solicitation 2109-001 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 October 13, 2021 44 Montgomery Street 3rd Floor San Francisco, CA 94104 415.982.5544 pfm.com City of San Luis Obispo Brigitte Elke Finance Director 990 Palm Street San Luis Obispo, CA 93401 RE: Solicitation 2109-001 Notice Requesting Proposals for Investment Adviser Services Transmittal Letter Dear Brigitte: PFM Asset Management LLC (“PFMAM”) appreciates the opportunity to submit our proposal to continue providing investment advisory services for the City of San Luis Obispo (the “City”). We have had the privilege of collaborating with the City for the past seven years. Together, we successfully adapted to a new economic environment and navigated a challenging financial marketplace, strengthening the City’s investment program in the process. We are confident we can continue to successfully partner with the City as its operational needs continue to evolve, all while striving to meet the City’s long-term investment objectives. Since the inception of our relationship, PFMAM has delivered:  exemplary performance despite a variety of market stressors, generating over $1.16 million dollars of additional incremental earnings above the City’s benchmark;1  an auditable and transparent environmental, social and governance (“ESG”) investing plan that engages the City’s Investment Oversight Committee, mayor, and other stakeholders; and  extensive resources in portfolio management and credit analysis, accounting, client service, and compliance to support the City’s scope and needs. As the City moves forward, we believe your investment program is best served by a partner that understands your priorities. PFMAM is committed to continuing the progress we’ve made together, and to leveraging the following capabilities we believe are specific to our expertise and resources:  Our ESG Approach Extends Beyond an Internal Process. ESG investing has highlighted the longstanding importance of due diligence when selecting securities. Investment managers like PFMAM already practiced ESG-like analysis by giving equal consideration to non-financial factors as well as traditional financial criteria. The difference at PFMAM is that we have elevated and translated this internal practice to a well-documented and client-centered process. We also extend beyond 1 Source: PFMAM internal data as of June 30, 2021. The City’s benchmark is the ICE BofAML 0-5 Year U.S. Treasury Index. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo October 13, 2021 Page 2 Bloomberg metrics and employ Sustainalytics, a leading independent ESG and corporate governance research, ratings, and analytics firm. The City was an early adopter of PFMAM’s ESG approach and has been able to hold us accountable through accessible and clear reporting. We also value the Investment Oversight Committee’s ability to understand and communicate all aspects of its Investment Policy and Management Plan. We have worked diligently to earn your confidence in our ESG approach through education and objective discussions, and it has been our pleasure to incorporate ESG sessions with our meetings as often as needed.  Adaptive Portfolio Management. PFMAM is a relative value-based, active manager, continuously looking for opportunities to enhance return. Throughout our seven-year relationship, the City and PFMAM have been together through an up cycle, as the economy recovered from the July 2009 recession and credit crisis, and a down cycle and recession brought on by the coronavirus pandemic. The City’s strategy resulted in a stable portfolio that outperformed its benchmark.  Strong Performance, Full Cost Recovery. Since the inception of our relationship, the City’s portfolio has delivered an average annual return of 1.92%, which is 0.21% higher than the average return of the City’s market-based benchmark for the same period. The return on the City’s portfolio equates to $9.10 million of total investment earnings over that period, approximately $1.16 million of which is incremental investment earnings over and above the benchmark.2 We believe in full cost recovery, striving to produce enhanced earnings, superior performance, and excellent client service.  California Municipal Experience. Since 1989, PFMAM has been a partner to California cities and their treasury operations. In California alone, we manage $7.3 billion in assets for 64 cities (as of June 30, 2021), and we are well versed in the sections of California Government Code (the “Code”) that relate to public funds investing. Our team understands how to support California municipalities in each area of its operations, from investment management to stakeholder transparency. We are proud of the good work we have achieved together and hope to continue our progress forward. Thank you again for the opportunity to respond. We look forward to hearing from you soon and continuing our partnership with the City. Please contact me if you have questions at 415.265.3760. Sincerely, Monique Spyke Managing Director spykem@pfmam.com 415.265.3760 2 Source: PFMAM internal data as of June 30, 2021. The City’s portfolio performance is compared to the ICE BofAML 0-5 Year U.S. Treasury Index. The performance inception date is December 31, 2014. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 3 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 I. Proposal Content Submittal Forms a. Proposal submittal summary. The undersigned declares that she or he has carefully examined the RFP which is hereby made a part of this proposal; is thoroughly familiar with its contents; is authorized to represent the proposing firm; and agrees to perform the specified work for the following cost quoted in full: Solicitation 2109-001 for Investment Adviser Services Certificates of insurance and a statement of insurance coverage, including each insurance company’s A.M. Best rating, are provided in the Appendices. Firm Name and Address PFM Asset Management LLC 44 Montgomery Street, 3rd Floor San Francisco, CA 94104 Contact: Monique Spyke Phone: 415-982-5544 Authorized Representative Monique Spyke Date: 10/13/2021 b. Certificate of insurance. Please see our certificates of insurance in the Appendices. c. References from at least three firms whom you have provided similar services. Number of years engaged in providing the services included within the scope of specifications under the present business name: The firm began providing investment advisory services to public entities in 1989. In 2001, PFM Asset Management LLC was created as the entity through which we provide investment advisory services. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 4 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 Reference No. 1: Agency Name City of Santa Maria Contact Name Mary Harvey, Director of Finance Telephone & Email 805-925-0951 ext. 2214 | mharvey@ci.santa-maria.ca.us Street Address 110 E. Cook Street, Room 6 City State, Zip Code Santa Maria, CA 93454 Description of services provided including contract amount, when provided, and project outcome • Client since 2012 (to present) • Management of operating funds • PFMAM’s services include: ▪ Cash flow analysis ▪ Investment policy development ▪ Strategy development ▪ Benchmark selection and review ▪ Regular meetings with comprehensive reports Reference No. 2: Agency Name East Bay Regional Park District Contact Name Debra Auker, Assistant General Manager/Chief Financial Officer Telephone & Email 510-544-2401 | DAuker@ebparks.org Street Address 2950 Peralta Oaks Court City State, Zip Code Oakland, CA 94605 Description of services provided including contract amount, when provided, and project outcome • Client since 2010 (to present) • Management of operating funds • Implementation and reporting of ESG strategy ▪ In 2019, PFMAM helped the District begin assessing how its portfolio scored from an ESG risk perspective. The District uses this data to critically consider which companies the District invests its mission- minded funds. • PFMAM’s services include: ▪ Cash flow analysis ▪ Investment policy development ▪ Strategy development ▪ Benchmark selection and review ▪ Regular meetings with comprehensive reports DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 5 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 Reference No. 3: Agency Name City of Paso Robles Contact Name Ryan Cornell, Finance Manager Telephone & Email 805-237-3999 | rcornell@prcity.com Street Address 246 Ginger Lane City State, Zip Code Paso Robles, CA 93446 Description of services provided including contract amount, when provided, and project outcome • Client since 2015 (to present) • Management of operating funds and Section 115 trust • PFMAM’s services include: ▪ Cash flow analysis ▪ Investment policy development ▪ Strategy development ▪ Benchmark selection and review ▪ Regular meetings with comprehensive reports Qualifications d. Experience of your firm and those of sub-consultants in performing work and projects relevant to the Scope of Services outlined and described in the request. The City’s Scope of Work requires a fiduciary investment manager that understands all aspects of public sector investing. We have been providing investment advisory services to local governments for 41 years. PFMAM is a leading provider of independent investment advisory services3 to public entities and other institutional investors with $170.3 billion in total assets, including $125.9 billion in discretionary assets under management and $44.4 billion in non-discretionary assets under advisement, as of June 30, 2021. In California alone, we manage $31.4 billion in assets and advise on $23.2 billion in non- discretionary assets. Of that amount, we manage $7.3 billion for 64 cities in California. Since 1989, we have also served as the investment adviser to the California Asset Management Program 3 Source: Largest Money Managers: 2019.” Pensions & Investments, May 27, 2019. Accessed June 5, 2019. https://www.pionline.com/specialreports/money-managers/20190527. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 6 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 (“CAMP®”),4 a California joint powers authority that operates a local government investment pool (“LGIP”) for California public entities, with fund assets of approximately $6.5 billion as of June 30, 2021. We manage operating funds, capital funds, reserve funds, and bond proceeds for governmental and other public entities across the country, and we believe that our professionals’ successful management of high-quality assets is evidenced by a number of major accomplishments, including:  Pioneering the nation’s first grassroots LGIP in 1981  Successfully protecting our client assets during the 2007-2008 financial crisis without a loss of principal due to default or bankruptcy  Adopting the CFA Institute’s Global Investment Performance Standards (“GIPS®”) in 2003  Surpassing $100 billion of public funds under management and advisement in 2014  Actively participating in government organizations like the Government Finance Officers Association (“GFOA”), California Society of Municipal Finance Officers (“CSMFO”), the California Municipal Treasurers Association (“CMTA”), and the California Association of County Treasurers and Tax Collectors (“CACTTC”)  Helping develop GFOA’s Best Practices related to investing public funds through membership on the GFOA’s Committee on Treasury and Investment Management  Maintaining an unblemished record of ethics and integrity PFMAM also has the experience of helping public agencies craft and update their investment policies. We know and understand all applicable sections of the California Government Code (“Code”) that regulate the investment of funds by California local governments. As active members of the Association of Public Treasurers of the U.S. and Canada (“APT US&C”), CMTA, and GFOA, we incorporate best practices from each of these public sector organizations when developing and reviewing investment policies with our clients. Sarah Meacham, co-leader of our California practice, serves as a member of CMTA’s Investment Policy Certification Committee. Our team is also an active participant in statewide educational workshops and is often called upon to educate attendees on investment concepts, including investment policy development. We closely monitor changes to Code that may affect our clients and communicate these changes through formal memos or as a part of our investment policy review process. 4 CAMP® is a registered trademark and the CAMP logos and designs are trademarks owned by the California Asset Management Trust (Trust). This information is for institutional investor use only, not for further distribution to retail investors, and does not represent an offer to sell or a solicitation of an offer to buy or sell any fund or other security. Investors should consider the Trust’s investment objectives, risks, charges and expenses before investing in the Trust. This and other information about the Trust is available in the Trust’s current Information Statement, which should be read carefully before investing. A copy of the Trust’s Information Statement may be obtained by calling 1-800-729-7665 or is available on the Trust’s website at www.camponline.com. While the Trust seeks to maintain a stable net asset value of $1.00 per share, it is possible to lose money investing in the Trust. An investment in the Trust is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Shares of the Trust are distributed by PFM Fund Distributors, Inc., member Financial Industry Regulatory Authority (“FINRA”) (www.finra.org) and Securities Investor Protection Corporation (“SIPC”) (www.sipc.org). PFM Fund Distributors, Inc. is a wholly owned subsidiary of PFM Asset Management LLC. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 7 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 The City’s Investment Policy and Management Plan One of the items in the City’s Scope of Work is, “Indicate full understanding of Investment Policy and Management Plan and recommend changes as appropriate.” In addition to the policy development expertise we have in the State, PFMAM has been committed to understanding the City’s goals and objectives for the past seven years. We believe this collaboration has led to successful outcomes and progress for the City, especially as the City ventured into environmental, social, and governance (“ESG”) investing. Highlights of our accomplishments in partnership with the City include:  Enhancements to the City’s Investment Policy and Management Plan that helped the City better incorporate Code language and allowed the City to increase its investment opportunities  Attentiveness to the City’s liquidity position and cash flow needs, conducting analysis to help the City invest excess cash to optimize earnings  Implementation of a customized ESG strategy aligned to the City’s mission, with results made transparent and accessible through clear reporting and educational insight  Quarterly strategy discussions with the City’s mayor and council, Investment Oversight Committee, and finance staff regarding market and portfolio updates  Performance that has consistently outperformed the market benchmark and with lower volatility, as measured by duration  Proactive and responsive, timely, and reliable communication with City staff regarding reporting, cash needs, and market updates Our Enhanced Approach to ESG Investment managers like PFMAM already practiced ESG-like analysis by giving equal consideration to non-financial factors as traditional financial criteria. The difference at PFMAM is that we have elevated and translated this internal practice to a well-documented and client-centered process. We also extend beyond Bloomberg metrics and employ Sustainalytics, a leading independent ESG and corporate governance research, ratings and analytics firm. The City’s Quarterly Investment Report dated June 30, 2021 shows our enhanced ability to report on ESG for clients. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 8 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 As of June 30, 2021, we managed $587 million in ESG strategies, and these strategies represent various public agency desires, from aligning investment strategy with organizational values and objectives, to risk management, to potentially seeking a performance advantage. For the City, our formal discussions about ESG started in May 2020 and objectively looked at three different approaches: 1) policy restrictions, 2) policy restrictions + additional issuer exclusions, and 3) policy restrictions + additional issuer exclusions + additional ESG objectives. We quantified how each approach would impact the number of eligible issuers available to the portfolio as well as credit quality. By August 2020, we helped the City document and adopt an updated Investment Policy and Management Plan that outlined its ESG investment criteria: Part of our efforts to help the City develop and implement its Plan has been building comfort around ESG. As recently as September 9, 2021, Monique Spyke provided a follow-up session on ESG investing to the City Council and the Investment Oversight Committee. As your advisor, our goal is to give you the information you need to make informed decisions. In this case related to ESG, that means understanding the applied criteria and the resulting analysis. We know there are a lot of metrics associated with ESG investing. Monique and the team are committed to helping the City understand what those metrics mean and how to think about their implications for the portfolio. e. Resumes of the individuals who would be assigned to this project, including any sub- consultants, with their corollary experience highlighted and specific roles in the project clearly described. We will not be working with any sub-consultants. The City will continue to be a highly regarded and valued client at PFMAM, serviced primarily from our San Francisco office with additional support from our centralized operations in Harrisburg, Pennsylvania. The same key professionals who have been serving the City since the start of our relationship remain committed to this engagement. You will The City’s Investment Policy and Management Plan dated August 18, 2020. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 9 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 continue to see Monique at quarterly performance review meetings and, while she has been the primary face of PFMAM to the City, we want to highlight that she is supported by more than 250 professionals, including:  California Government Code sector specialists on PFMAM’s trading desk;  in-house credit analysts and our Fixed Income Credit Committee;  fixed income researchers from our Portfolio Strategies Group;  accounting staff specializing in GASB-compliant reporting;  a responsive Client Services Group; and  groups dedicated to trade execution, settlement, and compliance systems (such as our Trading Desk, Investment Services Group, and Compliance Group). Next, we provide short biographies of the City’s primary contacts, as well as the investment professionals who will continue to be directly involved in the decision-making process for the portfolio. Complete resumes for our proposed team members are included in the Appendices. Relationship Management Team Monique Spyke, Managing Director 18 Years of Experience | 18 Years with PFMAM • Has worked with the City since the inception of our partnership • Engagement Manager – Monique will leverage the knowledge garnered from years of serving the City to help ensure we continue to meet the City’s needs and goals • Develops and implements investment strategy in collaboration with the portfolio management team • Works with City of Santa Clara, City and County of San Francisco, City of Fremont, and City of Hayward, among others • B.A. in Economics and African-American Studies, Smith College Allison Kaune, Senior Managing Consultant 15 Years of Experience | 15 Years with PFMAM • Day-to-day client service • Investment performance analysis, cash flow modeling, optimized portfolio structuring, economic research, and investment policy evaluation • Allison works with the City of Manteca, City of Concord, City of Santa Rosa, and City of Stockton, among others • B.A. in American History, University of Iowa DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 10 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 ESG Program Insight David Reeser, CTP, EA, Managing Director 26 Years of Experience | 25 Years with PFMAM • Leads PFMAM’s fixed income ESG investment services • Oversees ESG reporting and other ESG-related initiatives • Works with relationship managers like Monique to design and implement customized ESG investment programs for clients • MBA, Pennsylvania State University • B.A. in Economics, Swarthmore College Portfolio Strategy and Management Illustrated below, we have one of the largest public sector portfolio management teams in the nation, by volume, helping to ensure that the City has access to market opportunities and expertise in investment sectors permitted by the California Government Code. This includes credit sectors, supported by dedicated specialists. On the following page, we have highlighted key members of our portfolio strategy and management team. Monique confers with our strategists and managers frequently in serving the City. Together with Monique, DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 11 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 the following members of our Portfolio Strategies Group present a market update webinar specifically for PFMAM’s California clients on a monthly basis. Ken Schiebel, CFA, Managing Director and Co-Manager of Portfolio Strategies Group 41 Years of Experience | 28 Years with PFMAM • Oversees the development of innovative client investment strategies • Has extensive experience managing portfolios comprising high-quality fixed-income assets • Has worked with many California public agencies over the years, including San Bernardino County and Orange County Transportation Authority5 • Executive Education in Investment Decisions and Behavioral Finance, Harvard University John F. Kennedy School of Government • B.A. in Mathematics and Computer Science, University of Michigan Kyle Jones, Managing Director and Co-Manager of Portfolio Strategies Group 19 Years of Experience | 9 Years with PFMAM • Assists in the creation and delivery of PFMAM’s view and strategies to clients • Frequently presents PFMAM’s strategies to our California public agency clients such as San Francisco Airport and the Metropolitan Water District of Southern California5 • MBA in Finance and Accounting, University of Chicago Booth School of Business • B.A. in Business Management, Dillard University Gray Lepley, Portfolio Strategist 7 Years of Experience | 7 Years with PFMAM • Provides strategy analysis for clients’ portfolios and prepares research for custom reporting • Supports client engagements in California and across the country, regularly presenting market and strategy updates • Provides technical and performance analysis and economic research • Works with the City and County of San Francisco and Tulare County5 • B.A. in Hispanic Studies, Hamilton College 5 All client references in this response are partial client lists as of June 30, 2021. Clients included on the list above were selected based on client type and/or other non-performance based criteria to show a list of PFM’s representative clients. A full list is available upon request. This list does not represent an endorsement or testimonial of the services of PFM. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 12 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 Bob Cheddar, CFA, Managing Director and Chief Credit Officer 23 Years of Experience | 17 Years with PFMAM • Oversees PFM’s separately managed accounts and internal credit research • Specializes in high-quality fixed income investments permitted by Code • Provides analysis and oversight of our clients’ credit exposure • MBA, Pennsylvania State University • B.S. in Business Administration, Susquehanna University Joseph Creason, CFA, Director and Senior Portfolio Manager 22 Years of Experience | 22 Years with PFMAM • Has managed the City’s portfolio since start of our partnership • Specializes in high-quality fixed income investments • B.A. in Finance, Shippensburg University Accounting Karen Jones, CPA Australia, Managing Director 31 Years of Experience | 3 Years with PFMAM • Oversees reporting and accounting • Responsible for accounting and administration for PFM Asset Management LLC, including portfolio accounting and client billing • Has extensive experience as a senior accounting and finance executive, most recently with Bank of America in Charlotte, North Carolina, serving as a Director for Centralized Regulatory Reporting • MBA Monash University, Victoria, Australia • B.Bus Swinburne University of Technology, Victoria, Australia Compliance Leo Karwejna, Managing Director and Chief Compliance Officer 22 Years of Experience | 10 Years with PFMAM • Provides compliance oversight • Assists our professionals with specific compliance advisory guidance and leads the firm’s efforts to develop, maintain, and monitor firm-wide compliance with policies, procedures, and regulatory requirements • J.D., Temple University School of Law • B.S. in Finance, St. Joseph's University f. Standard hourly billing rates for the assigned staff, including any sub-consultants. As a discretionary manager and fiduciary, we charge an asset-based fee for our services. The City is a valued client of PFMAM, and the fee schedule we are proposing (on the next page) offers the City a 10.4% reduction from our current arrangement. We believe the City has seen firsthand the value of DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 13 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 PFMAM’s ESG approach, which expands our research and reporting capabilities to support your sustainability initiatives in a meaningful and auditable way. We are open to discussing our fees with the City as part of any new engagement. Assets Under Management Annual Fee ESG Program First $100 million 7.5 basis points (0.075%) One additional basis point (0.01%) on assets under management Assets in excess of $100 million 6 basis points (0.06%) We will fix the proposed fee schedule for three years. We would like to retain the option to negotiate a fee adjustment, in line with CPI, after the third year. Fees are charged monthly in arrears based on the daily net assets under management on an amortized cost basis, including accrued interest, for the month. The fee schedule does not apply to assets held in any LGIP that PFMAM administers. No fees would be charged for funds invested in the Local Agency Investment Fund (“LAIF”). PFMAM acknowledges that we are not the low-cost provider. We understand that fee differences among advisors are not insignificant to public sector investors like the City. However, we believe in full cost recovery. We strive to produce enhanced earnings, superior performance, and excellent client service. Since the inception of our relationship, the City’s portfolio has delivered an average annual return of 1.92%, which is 0.21% higher than the average return of the City’s market-based benchmark for the same period. The return on the City’s portfolio equates to $9.10 million of total investment earnings over that period, approximately $1.16 million of which is incremental investment earnings over and above the benchmark.6 We believe that our difference in cost will be more than offset by what we view as a superior strategy and ability to execute. While our fees may be higher compared to other managers, we believe we may offer greater potential for net return on investments and encourage the City to consider cost in this context. g. Statement and explanation of any instances where your firm has been removed from a project or disqualified from proposing on a project. PFMAM manages funds for many public and other institutional entities and has a strong record of client satisfaction. We believe our growth in assets under management is testament to our success in managing and growing our client base. However, each year, there are a handful of clients that choose to 6 Source: PFMAM internal data as of June 30, 2021. The City’s portfolio performance is compared to the ICE BofAML 0-5 Year U.S. Treasury Index. The performance inception date is December 31, 2014. Minimum annual fee of $25,000 applies to all accounts. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 14 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 change their investment manager or consultant. Reasons vary by organization from a desire to manage funds internally to a change in leadership. Work Program h. Detailed description of your approach to completing the work. We believe one of our greatest differentiators as an investment advisor is our client-centered approach. Instead of recommending a “one size fits all” approach or pre-set strategy, we recognize that each agency is different, and we spend the time to understand their needs first. We carefully consider our clients’ objectives, investment policy guidelines, and the types of funds being invested along with their specific purpose, among other factors. The approach we have implemented over the years for the City is visualized below. PFMAM developed this process to provide the exact services public agencies like the City need. The details as they pertain to the City’s Scope of Work are described next and on the following pages. 1. Manage the City’s portfolio in a fiduciary capacity with discretionary authority. We are an independent, SEC-registered investment advisor. We will continue to have a direct fiduciary responsibility to the City, providing unbiased advice. We do not take custody or possession of the funds or securities that the City has placed under our management. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 15 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 2. Execute trades in accordance with the City’s investment policy and upon authorization from the City Treasurer or their designee regarding the timing and identification of investments to be redeemed and purchased. We will continue to execute trades in accordance with the City’s Investment Policy and Management Plan. Our portfolio management team currently does this on a discretionary basis for the City; however, clients can be involved in the trading process to the level they desire. If the City would like us to obtain authorization from the City Treasurer or their designee prior to each trade, we are happy to do so. We use Bloomberg Asset and Investment Manager (“Bloomberg AIM”) to house, monitor, and automate investment policy and the Code compliance. When there are changes to the City’s investment policy, the investment policy is reviewed and investment restrictions of any applicable bond documents, are entered into Bloomberg AIM, and independently verified by PFMAM’s Compliance Group. All trades are processed through Bloomberg AIM, which applies the City’s investment policy guidelines and limits to pending trades and verifies compliance. Compliance is also verified on a post-trade basis after trade execution. At the end of each day, every one of our firm’s managed portfolios is run through an additional compliance check. All exceptions are reported to and addressed by PFMAM’s Compliance Group. In addition, post-trade compliance is also confirmed by the following audit procedures: portfolio managers and traders review daily holdings reports for each portfolio, trading activity is reviewed by the CIO, and monthly and quarterly client reports can be used to affirm compliance with client guidelines. All transactions are executed through unaffiliated third-party broker-dealers. On every trade, we solicit bids/offers (or pricing comparables) from a minimum of three to five broker-dealers, and select the firm offering the price most advantageous to our client. Our rigorous competitive bidding process adds value by seeking the best execution, which saves the City money on every trade. Even small savings per trade can add up to significant additional earnings over time. We maintain an approved broker list of approximately 60 firms, including primary dealers, large regional or specialty firms, and selected minority or woman-owned business enterprises. The selection of which broker-dealers to include in the competitive process for each trade is dependent on the security type, trade type (buy or sell), size, and historical performance of that firm in providing competitive quotes. Broker-dealers on our approved list are reviewed semi- annually and scored on the basis of product availability, pricing, execution, efficiency of trade execution and settlement, and quality of ideas and research. PFMAM does not participate in any soft dollar or any other commission or cost sharing arrangement. 3. Assist the City with maturity analysis As part of our consistent strategic analysis, we verify that the portfolio’s maturity structure continues to emphasize the most relatively attractive areas of the yield curve. Any changes to portfolio maturity/duration are shared with the City as needed, and on at least a quarterly basis, through our scheduled quarterly reviews. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 16 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 4. Assist with cashflow analysis PFMAM has worked with many entities to track and forecast cash flows and has developed a sophisticated cash flow model that analyzes the historical cash flow patterns of the portfolio to determine the optimal allocation. The model identifies the portion of the portfolio needed for liquidity and the “core” that could be invested longer-term. Based on seasonal trends and a selected growth rate, the model projects future liquidity needs and the change in the core balance. In addition, the model builds in a liquidity cushion to account for unforeseen changes in cash flow patterns or to be prepared if emergency cash flow needs arise. As we have done in the past, PFMAM will continue to evaluate the City’s ratio of short-term liquidity to longer-term investments and the appropriateness and risks of such, given cash flow models and investment policy limitations. Last year, PFMAM performed a cashflow analysis to help the City seek additional earning potential. The model allowed PFMAM to identify allocation options for the City depending how much of a liquidity cushion the City was comfortable having. As a result of the analysis, the City allocated additional funds to its core portfolio for longer-term, higher-yielding investing. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 17 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 5. Provide credit analysis of investment instruments of portfolio. PFMAM monitors all approved issuers on a daily basis. Once an issuer is approved, it is added to a database that notifies investment personnel of significant news events or rating changes involving that issuer. Because our credit process is fully integrated into the investment process, portfolio managers can respond quickly to significant news events to reduce exposure or capture an opportunity for our clients. In addition to news headlines and rating events, we also monitor the trading and pricing of equity, fixed income, and derivatives related to an issuer. In many cases, warning signs appear in these markets before they impact spreads in the fixed income market. Quarterly operating and financial results are monitored and reviewed as they are released. If there is sufficient cause, the Credit Committee may remove an issuer from the approved list, suspend purchases of an issuer, or recommend a sale of holdings. The extent of the action would be dependent on the individual circumstances surrounding an issuer. Under certain extreme circumstances, our Credit Committee will decide to stop buying/put a hold on an issuer or an entire industry that we feel may or has come under pressure. For instance, in light of Saudi Arabia and Russia’s oil price war at the beginning of March 2020, we temporarily halted purchases of securities and issuers that were likely to be affected. We have made similar moves due to the COVID-19 pandemic, erring on the side of caution on behalf of our governmental clients and holding multiple Credit Committee meetings per week to discuss the evolving conditions. As situations have changed, we have released some names from these “holds” while also affirming our view of other issuers’ negative credit outlooks; the latter have been taken off of our approved list as we are no longer comfortable with their inherent risk. We believe this proactive focus on credit monitoring is essential in our role as fiduciary to our clients. Identifying Issuers with Strong ESG Practices Incorporated into our credit review process, PFMAM will continue to evaluate and identify issuers with strong ESG practices based on the ESG investment parameters set by the City, the Investment Policy and Management Plan, PFMAM’s approved credit list, and the data and tools provided by Sustainalytics. Our process includes the following steps:  Determine ESG Investment Parameters. As an initial step, PFMAM worked with the City to determine its ESG Investment Parameters for purposes of identifying strong ESG practices.  Identify the List of Potential Permitted Issuers. The next step was to identify the universe of potential issuers based on PFMAM’s approved credit list (including corporates, federal agencies/GSEs, and supranationals) and gather the ESG Risk Ratings and industry and subindustry percentile rankings for each issuer.  Periodically Re-examine and Adjust ESG Investment Parameters. Our methodology provides the flexibility to adjust and reapply the ESG investment parameters periodically, as needed. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 18 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001  Monitor the Approved Issuer List for Compliance with ESG Investment Parameters. PFMAM regularly reviews updates to the ESG Risk Ratings, monitors Controversy Reporting, and (if applicable) evaluates an organization’s Product Involvement to ensure the approved issuer list conforms to the City’s ESG investment parameters. PFMAM also includes information on changes to ESG Risk Ratings, Controversy Reporting updates, and any Product Involvement changes in the City’s quarterly investment reports for review and discussion. We believe this level of customization and reporting differentiates a relationship with PFMAM. The City receives quantifiable results along with insights and talking points that can be communicated to shareholders. 6. Provide monthly/quarterly/annual reporting on all government entity funds including market values and a detailed listing of investments held in the portfolio at each reporting interval. Summarized in the table on the next page, our comprehensive reports are designed to support the City’s needs and therefore contain all information needed for state reporting standards. Our reports follow GAAP and comply with GASB requirements. At any time, authorized personnel from the City can log in through PFMAM’s portfolio reporting website, eon.pfm.com, to view past monthly portfolio statements, holdings as of the prior trading day, and the current month’s transactions through the prior trading day. Examples of monthly and quarterly reports we provide to the City are included in the Appendices. The City’s Quarterly Investment Report dated June 30, 2021 shows our enhanced ability to report on ESG for clients. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 19 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 Report Frequency/ Delivery Content/Features Daily Holdings Daily  Holdings report showing securities, par, cost, duration, purchase yields and discounts as of the prior business day. Month-to-Date Transactions Daily  Description of any security transactions month-to-date as of the prior business day. Portfolio Holdings and Activity Report Monthly  This report includes a detailed description of all securities in the portfolio; summary of realized and unrealized earnings for the month; report of all purchases, sales, maturities, interest deposits, and withdrawals for each separate account; and all the information required by GASB 31, and provides the month-end credit quality ratings to comply with the Credit Risk Disclosure requirement and duration by investment type to facilitate compliance with the Interest Rate Disclosure requirement of GASB 40. Market Update Monthly  Summary of recent market events and the outlook for investment opportunities moving forward. Performance Reports Quarterly/ Annually  The City receives a highly customized quarterly investment report within the City’s branding and format which contains a dedicated section to its ESG profile. Quarterly and annual reports typically include an aggregate portfolio sector, maturity, and credit-quality distribution; an aggregate view of performance portfolios by investment strategy; a portfolio strategy recap and market outlook, including recommended changes to strategy; individual portfolio sector, maturity, and credit quality distribution; performance statistics compared to a market benchmark; and a high level economic and investment-sector performance synopsis. Key:  Online access,  mailed,  emailed DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 20 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 As a fiduciary, we believe it is important for our clients to hold us accountable through clear, transparent performance reporting. Since 2003, PFMAM has prepared and presented performance in accordance with GIPS®. Our composites have been independently verified and complied with all the composite construction requirements of the GIPS® standards on a firm- wide basis for the periods from January 1, 2006 through December 31, 2017. Performance composites for subsequent years will be reviewed for verification later this year and will become an annual occurrence thereafter. A copy of the verification report is available upon request. 7. Attend quarterly meetings with City staff, the Investment Oversight Committee, and occasionally the City Council during public session. Monique will continue to attend meetings to review investment activity and portfolio performance and to provide insight on current strategy and economic and market events. In addition, members of the City’s portfolio management team will be available to participate in periodic in- person and virtual meetings about the investment strategy and market conditions or to answer any questions about the management of the portfolio. It is our pleasure to continue offering follow-up ESG session to the City Council and Investment Oversight Committee, as needed. 8. Evaluate market risk and develop strategies that minimize the impact on the portfolio. We strive to implement an investment program for the City that is safe, diversified, and has lower volatility relative to comparable market benchmarks. Our investment approach is based on relative value — the thorough analysis of the relative merits and risks of various investment types, maturities, issue characteristics, and credit quality. We have consistently sought to broadly diversify away risk, emphasizing those sectors that offered the best opportunities in the respective market environment while being mindful of the City’s risk tolerances and cash flows. The strategies we have utilized to minimize the impact of market risk on the portfolio include, but are not limited to: Duration Management. Throughout our relationship, we have actively managed the duration of the portfolio in the context of interest rate expectations and the agreed-upon strategy. Going forward, we will continue to stay within a reasonable band around the target duration so the portfolio does not drift too far from its mandate. Sector Emphasis and Relative Value Analysis. As one of the foremost public sector investment managers, we constantly monitor the yield relationships between all permitted investment sectors (e.g., Treasuries, federal agencies, municipals, negotiable CDs, and corporates), and we select the investments that we believe offer the best relative value. This means we emphasize those investments whose yield best compensates the City for the inherent risks of the investment. Through time, the City’s portfolio has emphasized different sectors at DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 21 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 different times, capitalizing on the investment opportunities specific to that period of time. This is illustrated below. Issue Selection. Yields can vary significantly among issuers or, within the same issuer, among securities with similar maturities. Sometimes this is due to perceived quality differences that need to be carefully analyzed. Other times, it is due to supply differences, pricing inefficiencies, or other market anomalies. We seek securities that are both safe and offer high return potential. Our internal trading tools help us quickly identify and capitalize on pricing inefficiencies, which may result in higher portfolio yields for the City. However, quality always trumps yield in the efforts to seek higher returns. Credit Analysis. We employ a rigorous, market-driven approach to credit analysis that evaluates both the quantitative and qualitative aspects of issuers that we recommend for investments. Our credit research seeks to identify issuers that meet our credit quality standards and that offer incremental value with minimal credit risk, allowing us to safely increase yield. Our robust internal credit review and monitoring procedures are critical elements of the security selection process, and allocations to individual issuers are limited to ensure broad diversification. 9. Provide assurances of portfolio compliance with applicable policies and laws and the City’s Investment Policy. In addition to our deep understanding of all applicable sections of the Code and the use of Bloomberg AIM to verify compliance with the City’s Investment Policy and Management Plan and the Code, we will continue to provide the City with a compliance attestation as part of our quarterly performance reports. 10. Establish an appropriate performance benchmark when necessary. It is our philosophy that a performance benchmark should reflect the City’s tolerance for risk. Monique and team worked with the City to select a performance benchmark that accurately DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 22 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 reflects the City’s investment objectives and risk-return preferences procedures. We continue to recommend that the City use a total return benchmark that serves as an appropriate guide to achieving the overall growth expectations of the portfolio. Based on the targeted maturity range of the portfolio and the types of securities permitted by the City’s Investment Policy and Management Plan, the City uses the ICE BofAML 0-5 Year U.S. Treasury Index. The selection of a performance benchmark will continue to be an iterative discussion with City decision-makers and will include an in-depth discussion of various potential benchmarks and the risks and rewards associated with each. Ultimately, our goal is that the City feels confident in its selection of a benchmark to provide the appropriate balance between risk and return, and to provide an accurate comparison of the performance of the City’s portfolios versus the performance of the larger high-quality fixed income investment markets. 11. Indicate full understanding of Investment Policy and Management Plan and recommend changes as appropriate. As we review the City’s Investment’s Policy and Management plan, any recommendations will continue to draw on our knowledge of CMTA’s and APT US&C’s guidelines for investment policy certification. Two of our managing directors serve on the investment policy certification committees for one or both of these organizations. Together, we will revisit the City’s policy annually to help ensure it continues to reflect the City’s risk tolerances and program objectives. 12. Ensure portfolio structure matches City objectives. In coordination with the City, we have implemented a diversified portfolio strategy designed to help protect the City’s assets and weather a multitude of market conditions and interest rate cycles, while safely growing the City’s portfolio value. We dynamically and proactively manage the portfolio to capture relative value among the various allowable sectors, incorporating the City’s risk tolerances and objectives while helping to ensure that safety of principal has always been at the forefront. We have developed a long-term investment program that has enabled the City to meet its liquidity needs while enhancing the long-term returns of the portfolio. In addition, the portfolio has always maintained a high level of credit quality. Shifts in sector weightings over time represent our assessment of value and opportunity, resulting in a high-quality, high-performing, broadly- diversified portfolio for the City. 13. Forecast annual earnings from the portfolio for the City’s use in a budget planning. PFMAM is here to support the City’s financial picture overall, and can prepare annual earnings estimates to assist in the City’s budgeting process. i. Detailed schedule by task and sub-task for competing the work. We have not established a specific schedule or work plan timeline for the investment management services since by their nature they are ongoing. We demonstrate the achievement of the City’s investment objectives on a quarterly basis within our quarterly performance reports. We are continuously DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 23 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 monitoring the portfolio’s performance and looking for opportunities to enhance the portfolio’s safety, liquidity, and return. Since we serve as the City’s current investment manager, no transition time is needed to continue managing the City’s portfolio. j. Estimated hours for your staff in performing each phase and task of the work, including sub- consultants, so we can clearly see who will be doing what work, and how much time it will take. The following table outlines the various tasks in our engagement with the City and the team members involved. Since we have an existing relationship with the City, the sequential tasks for establishing a new engagement do not apply. Instead, these tasks represent ongoing services in our well-established relationship with the City, many of them happening in tandem. Since we charge an asset-based fee for our investment management services, we do not track hours to perform each task. Monique will continue to be responsible for overseeing the quality of services provided to the City, helping to ensure that the City receives the necessary resources and support from our firm. Task Responsible Party 1. Manage the City’s portfolio in a fiduciary capacity with discretionary authority • Bob Cheddar, CFA, Head of Portfolio Management and Chief Credit Officer • Joe Creason, CFA, Portfolio Management • Meredith LaBuda Sullivan, Portfolio Management • Investment Services Group 2. Execute trades in accordance with the City’s investment policy and upon authorization from the City Treasurer or their designee regarding the timing and identification of investments to be redeemed and purchased • Bob Cheddar, CFA, Head of Portfolio Management and Chief Credit Officer • Joe Creason, CFA, Portfolio Management • Meredith LaBuda Sullivan, Portfolio Management • Investment Services Group 3. Assist the City with maturity analysis • Monique Spyke, Engagement Manager • Allison Kaune, Client Service 4. Assist with cashflow analysis • Monique Spyke, Engagement Manager • Allison Kaune, Client Service 5. Provide credit analysis of investment instruments of portfolio • Bob Cheddar, CFA, Head of Portfolio Management and Chief Credit Officer • Fixed Income Credit Committee 6. Provide monthly/quarterly/annual reporting on all government entity funds including market values and a detailed listing of investments held in the portfolio at each reporting interval • Monique Spyke, Engagement Manager • Allison Kaune, Client Service DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 24 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 Task Responsible Party 7. Attend quarterly meetings with City staff, the Investment Oversight Committee, and occasionally the City Council during public session. • Monique Spyke, Engagement Manager • Allison Kaune, Client Service • David Reeser, ESG Program Insight (as needed) 8. Evaluate market risk and develop strategies that minimize the impact on the portfolio • Monique Spyke, Engagement Manager • Kyle Jones, Portfolio Strategist 9. Provide assurances of portfolio compliance with applicable policies and laws and the City’s Investment Policy • Monique Spyke, Engagement Manager • Leo Karwejna, Chief Compliance Officer • Bob Cheddar, CFA, Head of Portfolio Management and Chief Credit Officer • Joe Creason, CFA, Portfolio Management • Meredith LaBuda Sullivan, Portfolio Management • Investment Services Group 10. Establish an appropriate performance benchmark when necessary • Monique Spyke, Engagement Manager • Kyle Jones, Portfolio Strategist 11. Indicate full understanding of Investment Policy and Management Plan and recommend changes as appropriate • Monique Spyke, Engagement Manager • Allison Kaune, Client Service • David Reeser, ESG Program Insight 12. Ensure portfolio structure matches City objectives • Monique Spyke, Engagement Manager • Kyle Jones, Portfolio Strategist • David Reeser, ESG Program Insight 13. Forecast annual earnings from the portfolio for the City’s use in a budget planning • Monique Spyke, Engagement Manager • Allison Kaune, Client Service • Karen Jones, CPA Australia, Reporting and Accounting k. Detailed budget by task and sub-task for completing the work. For investment management services, fees are charged as a stated percentage of the assets under management throughout the engagement and services are provided continuously for the duration of the contract. l. Services or data to be provided by the City. Services to be provided by the City are overseeing the investment portfolio to help ensure it is meeting the objectives of safety, liquidity, and return on investment, as well as maintaining policies, practices, and procedures as documented in its Investment Policy and Management Plan. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 25 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 m. Services and deliverables provided by the Consultant(s). Please see our response detailed in question h. It is our privilege to also offer the City deliverables as it relates to ESG investing. PFMAM has employed the following process to assist the City with the development, implementation, and ongoing management of its ESG Investment Strategy. • Identified Sustainable Investment Priorities & Objectives. In 2020, we worked directly with the City to understand their sustainable objectives. These initiatives included aligning the City’s investment approach with their sustainable priorities, considering ESG risks in the investment process, incorporating socially responsible investment objectives, and employing an ESG approach that is objective and transparent. • Reviewed ESG Investment Approach Options. After developing a better understanding of the City’s sustainable investment priorities, PFMAM developed potential approaches designed to achieve the City’s goals. The City determined that a holistic ESG approach combined with Socially Responsible Investing (“SRI”) principles would best meet their needs. • Developed & Defined ESG Investment Parameters. Next, PFMAM worked with the City to develop potential ESG investment parameters. ESG investment parameters are the criteria or “rules” that are applied for purposes of determining if an investment is eligible for inclusion in the portfolio. The transparent strategy we developed with the City utilizes ESG metrics to evaluate ESG risk exposure and industry exclusions to achieve the City’s SRI objectives. • Evaluated ESG Integration Impact. A critical step in the process is to analyze the impact of potential ESG investment parameters on the portfolio. We analyzed the strategy’s impact on the City’s universe of approved credit issuers and ensured that appropriate diversification could still be satisfied. • Updated the Investment Policy. After finalizing the ESG investment parameters, PFMAM worked with the City to update their Investment Policy to document the approach that was adopted. • Integrated ESG into the Investment Process. Once the updated Investment Policy language was approved, PFMAM successfully integrated the ESG strategy into the investment process for the City’s portfolio. • Continually Monitor Results and Revise Approach as Needed. PFMAM provides the City with detailed quarterly ESG reports to facilitate effective monitoring. Monitoring results is an important part of the process to ensure that the ESG approach is being executed in accordance with the applicable ESG investment parameters. Monitoring also allows the City to determine if changes to ESG investment parameters are needed to better align the approach with their evolving sustainable investment objectives. This process and approach enabled the City to develop and implement an ESG investment solution that is customized to their sustainable investment objectives. This dynamic approach also provides the City with the flexibility to modify their ESG strategy as their sustainable investment objectives evolve. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 26 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 In addition to scope-related items, one of PFMAM’s hallmarks is our focus on informing and educating our clients. We offer a comprehensive variety of educational services to our public agency clients, with frequency and content determined by both client needs and new research or market conditions. As part of our regular meetings with the City staff, we can provide training on a broad range of topics relevant to the City’s portfolio. Examples of topics for our training sessions include: • Asset/liability management • Cash management techniques • Getting the most out of your banking relationships • Understanding and analyzing callable securities • Managing credit and duration risk • Selecting and using performance benchmarks We focus on informing and educating our clients using both formal and informal approaches. We continue to expand the mediums of communication to our clients, and we pride ourselves on being responsive to clients’ needs and suggestions. As summarized below, our forums to educate our clients include PFMAM-sponsored seminars, written reports, and highly organized training events. The City will continue to have access to all of these educational channels. • Market Update Webinars. We offer our investment advisory clients a monthly webinar featuring economic and market updates from senior portfolio strategists. Additionally, we typically conclude each year with an annual economic and financial markets webinar presented by our Chief Investment Officer and other senior strategists. • Webinars Offering CPE Credit. Throughout the year we also offer a variety of webinars on relevant topics, such as pension funding to cybersecurity, and these webinars often provide CPE credits. The City is invited to our next cybersecurity webinar, planned for Monday, October 18, at 11:00 am Pacific. You should have received the invitation email, sent Thursday, September 23. • Custom Education. As the City knows, we can incorporate training sessions as a part of each quarterly meeting on different topics. These can be 10-minute trainings or “soup to nuts” training on every aspect of public investing. We also provide written publications and informative podcasts for clients that are timely to the events of the markets, including: • Fixed Income Monthly Market Review. Our team provides a monthly recap of the economy and market information and the expectations of what economic information may affect the market in the coming weeks. Please see “Communications” under the Appendices. • Thought Leadership. At least quarterly, we publish a series called PFM InvestEd, which are white papers that describe our current thoughts on developments in the financial markets and how they relate to our clients’ portfolios. Please see “Communications” under the Appendices DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 27 City of San Luis Obispo Proposal for Investment Adviser Services | Solicitation 2109-001 • Special Reports. We publish pieces that cover current events topics relevant to our clients. For example, in July 2021 we covered “What You Should Consider About Benefit Bonds.” Please see “Communications” under the Appendices. n. Any other information that would assist us in making this contract award decision. We believe we provide investment advice to more California local governments than any other investment advisor. The City’s engagement team has extensive expertise providing investment management and consulting services to more than 150 local governments and public entities in the state. We are very familiar with the California Government Code, and we understand the opportunities and challenges facing municipalities in the current environment. While we have developed technical resources that set us apart from other firms, our most significant resource is our professional staff who are experienced in providing the many investment advisory services public agencies need. As shown on page 10, each portfolio manager has the resources of numerous people so that each decision made on behalf of a client has the input of investment professionals who have expertise in market analysis, comparative relative value, and credit analysis. Our resources also include Fixed Income Investment and Credit Committees, research analysts, accountants, compliance professionals, and client service staff to meet the City’s ongoing and evolving investment program needs. o. Description of assumptions critical to development of the response which may impact cost or scope. There are no critical assumptions we have to disclose. Requested Changes to Terms and Conditions p. The City desires to begin work soon after selecting the preferred Consultant Team. To expedite the contracting process, each submittal shall include requested redlined changes to terms and conditions, if necessary. Please see our requested changes to the terms and conditions in the Appendices. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 II. Appendices DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 U.S. Bank/ PFMAM Press Release DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 U.S. Bank Acquires PFM’s Asset Management Business MINNEAPOLIS (July 8, 2021) – U.S. Bank announced today that it has entered into a definitive agreement to purchase PFM Asset Management LLC under its subsidiary, U.S. Bancorp Asset Management. PFM Asset Management will continue to operate as a separate entity. PFM Asset Management and U.S. Bancorp Asset Management had combined assets under management and assets under administration of more than $325 billion on March 31, 2021. “PFM Asset Management brings a wide array of client relationships and product offerings, including local government investment pools, outsourced chief investment officer services and separately managed accounts in both fixed income and multi-asset class strategies,” said Eric Thole, head of U.S. Bancorp Asset Management. “These services complement U.S. Bank’s current book of business and we’re thrilled to have the opportunity to increase our presence nationally and solidify U.S. Bank’s position as a leading provider of investment solutions.” Thole added, “PFM Asset Management has a great reputation in the public space, and that’s a testament to its talent. U.S. Bank is known for working with clients one-on-one to understand their unique needs and delivering customized, proactive solutions to help them meet their objectives. We’re excited to put the variety of resources offered by U.S. Bank to work for our new colleagues and clients.” Marty Margolis, head of PFM Asset Management, said, “This sale combines the resources of two organizations who recognize the importance of providing clients with exemplary customer service; our commitment to clients will remain a priority throughout the transition. We’re also very pleased that U.S. Bank aligns with our fundamental belief in creating a diverse, inclusive and ethical culture.” PFM’s financial advisory business is not part of this acquisition and will continue to operate independently as the nation’s leading independent financial advisor in terms of transactions and par amount. For the year ended December 31, 2020, PFM advised on 995 overall transactions totaling more than $69.7 billion in par amount, according to Ipreo. “PFM will continue to provide outstanding financial advisory and consulting services to state and local governments and the non-profit sector,” said Dan Hartman, who currently leads PFM’s financial advisory practice and will lead PFM as its president and CEO after closing. U.S. Bancorp Asset Management is part of U.S. Bank’s Wealth Management and Investment Services division, which has more than $8.6 trillion in assets under custody and administration and $244 billion in assets under management, globally. In addition to offering asset management products and services, it also offers global corporate trust and custody services, alternative investment, fund custody and administration services, and wealth management services. The deal was signed on July 7, 2021 and is expected to close in fourth quarter 2021, subject to regulatory approval and satisfaction of customary closing conditions. Financial terms were not disclosed. Piper Sandler & Co. served as strategic and financial advisor, and Dechert LLP served as legal counsel to PFM. McCarter & English served as legal counsel to PFM’s financial advisory business. Jones Day served as legal counsel to U.S. Bank. # # # DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 2 Contacts: Kimberly Mikrot, U.S. Bank Public Affairs & Communications kimberly.mikrot@usbank.com | 612.206.2553 Michael Harris, PFM Asset Management LLC harrism@pfm.com | 717.231.6240 David Eichenthal, PFM eichenthald@pfm.com | 423.637.8085 About U.S. Bancorp Asset Management U.S. Bancorp Asset Management’s core strength and focus is managing investment grade fixed income strategies for institutional clients. A registered investment adviser, it has been providing investment grade fixed income investment solutions since 1982. With more than $160 billion in assets under management as of March 31, 2021, U.S. Bancorp Asset Management is a resource for institutional clients including corporations, healthcare organizations, higher education, public entities and nonprofits. For more information, visit usbancorpassetmanagement.com. About U.S. Bank U.S. Bancorp, with nearly 70,000 employees and $553 billion in assets as of March 31, 2021, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. The company has been recognized for its approach to digital innovation, social responsibility and customer service, including being named one of the 2021 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at usbank.com/about. About PFM At PFM, over 600 employees – asset managers (with $123 billion in assets under management and $41.2 billion in assets under administration as of March 31, 2021), financial advisors and consultants – partner with clients in every region of the country to transform their world. PFM combines superior financial advice, disciplined management and ingenuity to build, power, move and educate. PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. For more information regarding PFM’s services or entities, please visit pfm.com. U.S. Bancorp Asset Management, Inc. is a registered investment adviser and subsidiary of U.S. Bank National Association. U.S. Bank National Association is a separate entity and wholly owned subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not guarantee the products, services, or performance of U.S. Bancorp Asset Management, Inc. NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 Certificates of Insurance and Statement of Coverage DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Insurance Statement PFM Asset Management LLC (“PFM”) has a complete insurance program, including property, casualty, general liability, automobile liability and workers compensation. PFM maintains professional liability and fidelity bond coverages which total $40 million and $25 million single loss/ $50 million aggregate, respectively. PFM also carries a $10 million cyber liability policy. Our Professional Liability policy is a “claims made” policy and our General Liability policy claims would be made by occurrence. Deductibles/SIR: Automobile $250 comprehensive & $250 collision Cyber Liability $25,000 General Liability $0 Professional Liability (E&O) $1,000,000 Financial Institution Bond $75,000 Insurance Company & AM Best Rating Professional Liability (E&O). .............. Endurance American Insurance Company; (A+; XV) ............................................................Argonaut Insurance Company; (A-: XIV) ............................................................Everest National Insurance Company; (A+; XV) ............................................................XL Specialty Insurance Company; (A+; XV) ............................................................Starr Indemnity & Liability Company; (A; XV) ............................................................QBE Insurance Corporation; (A; XV) ............................................................ACE American Insurance Company; (A++;XV) Financial Institution Bond. .................. Federal Insurance Company; (A++; XV) ............................................................Great American Insurance Company; (A+; XV) ............................................................U.S. Fire Insurance Company; (A; XV) Cyber Liability. ................................... Greenwich Insurance Company (A+; XV) ............................................................Arch Insurance Company; (A+; XV) General Liability. ................................ Great Northern Insurance Company; (A++; XV) Automobile Liability. ............................Great Northern Insurance Company; (A++; XV) Excess /Umbrella Liability. ..................Federal Insurance Company; (A++; XV) Workers Compensation. .................... Vigilant Insurance Company; (A++; XV) & Employers Liability DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 INSR ADDL SUBR LTR INSR WVD DATE (MM/DD/YYYY) PRODUCER CONTACT NAME: FAXPHONE (A/C, No):(A/C, No, Ext): E-MAIL ADDRESS: INSURER A : INSURED INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : POLICY NUMBER POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY)(MM/DD/YYYY) COMMERCIAL GENERAL LIABILITY AUTOMOBILE LIABILITY UMBRELLA LIAB EXCESS LIAB WORKERS COMPENSATION AND EMPLOYERS' LIABILITY DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) AUTHORIZED REPRESENTATIVE INSURER(S) AFFORDING COVERAGE NAIC # Y / N N / A (Mandatory in NH) ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? EACH OCCURRENCE $ DAMAGE TO RENTED $PREMISES (Ea occurrence)CLAIMS-MADE OCCUR MED EXP (Any one person)$ PERSONAL & ADV INJURY $ GENERAL AGGREGATE $GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS - COMP/OP AGG $ $ PRO- OTHER: LOCJECT COMBINED SINGLE LIMIT $(Ea accident) BODILY INJURY (Per person)$ANY AUTO OWNED SCHEDULED BODILY INJURY (Per accident)$AUTOS ONLY AUTOS AUTOS ONLY HIRED PROPERTY DAMAGE $AUTOS ONLY (Per accident) $ OCCUR EACH OCCURRENCE $ CLAIMS-MADE AGGREGATE $ DED RETENTION $$ PER OTH- STATUTE ER E.L. EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE $ If yes, describe under E.L. DISEASE - POLICY LIMIT $DESCRIPTION OF OPERATIONS below POLICY NON-OWNED SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer any rights to the certificate holder in lieu of such endorsement(s). COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: CERTIFICATE HOLDER CANCELLATION © 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03) ACORDTM CERTIFICATE OF LIABILITY INSURANCE Great Northern Insurance Company Federal Insurance Company Vigilant Insurance Company 11/16/2020 Conner Strong & Buckelew PO Box 99106 Camden, NJ 08101 877 861-3220 PFM Asset Management LLC 1735 Market Street 43rd Floor Philadelphia, PA 19103-2770 20303 20281 20397 A X X X X COMBINED TOTAL AGGREGATE $10M 11/30/2020 11/30/2021 1,000,000 1,000,000 10,000 1,000,000 2,000,000 INCL IN GENERAL AGGR. A X X 11/30/2020 11/30/2021 1,000,000 B X X 11/30/2020 11/30/2021 10,000,000 10,000,000 C N 01/01/2021 01/01/2022 X 1,000,000 1,000,000 1,000,000 EVIDENCE OF COVERAGE 1 of 1 #S2673102/M2672960 PUBLIFINANClient#: 203700 MME 1 of 1 #S2673102/M2672960 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. OTHER: (Per accident) (Ea accident) $ $ N / A SUBR WVD ADDL INSD THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED? (Mandatory in NH) DESCRIPTION OF OPERATIONS below If yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIRED AUTOS ONLY 11/23/2020 New York-Crystal 32 Old Slip New York NY 10005 Brian Rozynski 212-504-1882 212-504-1899 brian.rozynski@alliant.com Endurance American Insurance C 10641 VariousPFM Asset Management LLC 1735 Market Street 43rd Floor Philadelphia PA 19103 A B Professional Liability Various 11/30/2020 11/30/2020 11/30/2021 11/30/2021 Limit of Liability:$40,000,000 Aggregate Limit Evidence of Coverage only. THE PROFESSIONAL LIABILITY POLICY IS NON-CANCELABLE BY THE INSURER EXCEPT FOR NON-PAYMENT OF PREMIUM. EVIDENCE OF COVERAGE DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 Resumes DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Monique Spyke Managing Director PFM Asset Management LLC Monique Spyke joined PFM in 2003 and serves as a client liaison for Western region clients, where her primary focus is the development and implementation of investment strategies for operating funds and bond proceeds related accounts. Monique has substantial experience drafting investment policies and indenture and resolution provisions governing permitted investments. She has served as a client manager for billions of assets under management and advisement. Her clients include municipalities, non-profit corporations, hospitals, universities and colleges. Monique has conducted numerous training workshops for clients and is a frequent lecturer on bond proceeds reinvestment- related matters. Contact 44 Montgomery Street 3rd Floor San Francisco, CA 94104 spykem@pfm.com 415.982.5544 office Specialties Asset Management State & Local Governments, Higher Education Education B.A. in Economics and African- American Studies Smith College Professional Designations or Licenses FINRA Series 6 and 63 Licenses Started with PFM: 2003 Started in the Field: 2003 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Allison Kaune Senior Analyst PFM Asset Management LLC Allison Kaune joined PFM in 2006 and works with public agency clients located throughout the western United States. Her responsibilities include serving as a liaison between clients and the portfolio management team, coordinating information about liquidity needs, and addressing general client needs. She also works with clients to develop and implement investment strategies for operating funds and bond proceeds, cash flow modeling, and investment policy evaluation. Allison has spoken at municipal conferences and seminars for clients and board members, covering topics such as bond proceeds investment, building an investment program, permitted investments, and development of investment policies. Contact 44 Montgomery Street 3rd Floor San Francisco, CA 94104 kaunea@pfm.com 415.982.5544 office Specialties Asset Management State & Local Governments Education B.A. in American History University of Iowa Professional Designations or Licenses FINRA Series 6 and 63 Licenses Started with PFM: 2006 Started in the Field: 2006 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 David Reeser, CTP, EA Managing Director PFM Asset Management LLC Dave Reeser leads PFM’s fixed income ESG investment service. In this role, Dave works with public sector and non-profit clients to design and implement customized fixed income ESG investment programs. He also spearheads ESG business development, education, and service enhancement efforts, and oversees ESG reporting, and other ESG related initiatives. Dave is also a co-leader of PFM’s investment advisory team in the Northeastern U.S. He is responsible for developing and managing investment programs for public sector and non-profit clients. Dave provides organizations with a broad range services designed to enhance their investment programs, including updating their investment policies and indentures, evaluating cash flow requirements, and developing and implementing customized investment strategies. In addition, Dave developed and built PFM’s Arbitrage Rebate Compliance practice. In this capacity, Dave led business development and client management efforts, provided training and quality control, and developed the methodology and approach utilized by the team. He also identified and employed solutions to reduce liabilities and assisted organizations with responding to IRS audits. Dave was previously responsible for organizing and leading the training provided to PFM’s asset management analysts. Dave holds the Financial Industry Regulatory Authority (FINRA) Series 6 and 63 licenses, and he is a Certified Treasury Professional (CTP). Dave is also an Enrolled Agent (EA) and a candidate in the CFA Program. Contact 213 Market Street Harrisburg, PA 17101 reeserd@pfm.com 717.231.6258 office Specialties Asset Management, Specialized Services State & Local Governments, Charitable Institutions Education B.A. in Economics Swarthmore College MBA Pennsylvania State University Professional Designations or Licenses Certified Treasury Professional (CTP) IRS Enrolled Agent (EA) FINRA Series 6 and 63 Licenses Started with PFM: 1996 Started in the Field: 1995 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Kenneth Schiebel, CFA Managing Director PFM Asset Management LLC Ken Schiebel is a managing director and co-head of PFM’s Portfolio Strategies Group. He previously led a team of portfolio managers, traders, and research staff, responsible for the management of the fixed-income separate account business. Ken’s background in actuarial analysis helped establish the asset management practice as a market leader in managing assets in the insurance and self-insurance industry. Prior to joining PFM in 1994, Ken spent 13 years at Aetna Life & Casualty. As senior portfolio manager, he managed $5 billion of corporate operating funds, insurance reserves, and pension fund assets for Aetna and its investment advisory clients. He also was responsible for managing Aetna’s short-term debt issuance. Ken holds the Chartered Financial Analyst (CFA) designation, is a member of the CFA Institute, and is a General Securities Registered Representative holding the Financial Industry Regulatory Authority (FINRA) Series 7 and 63 licenses. He has been a guest lecturer in the University of Connecticut’s MBA program, provided expert testimony to the GASB Deposit and Investment Risk Disclosure Task Force, and has spoken at numerous industry conferences, workshops, and seminars. He is a member of the Fixed-Income Investment Committee and Fixed- Income Credit Committee. Contact 213 Market Street Harrisburg, PA 17101 schiebelk@pfm.com 717.231.6215 office Specialties Asset Management Insurance & Self-Insurance, State & Local Governments Education B.A. in Mathematics and Computer Science University of Michigan Post-Graduate Behavioral Finance Harvard University John F. Kennedy School of Government Professional Designations or Licenses FINRA Series 7 and 63 Licenses Chartered Financial Analyst (CFA) Started with PFM: 1994 Started in the Field: 1981 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Kyle Jones Managing Director PFM Asset Management LLC Kyle joined PFM in 2012 and is the co-head of the Portfolio Strategies Group (PSG). He leads PSG’s efforts in the investment strategy development process for many large and strategically important PFM client relationships. Kyle works primarily with clients of the separate account business by helping to devise customized portfolio strategies designed to meet their specific investment needs. In addition, he assists in the creation and delivery of our views and strategies to clients, prospects and third- party consultants. Kyle is a Fixed Income Investment Committee Member, Credit Committee Member, as well as a member of the firm’s Board of Directors and Office of Diversity, Equity, and Inclusion. Prior to joining PFM, Kyle spent 10 years at JPMorgan Chase in a variety of capacities, most recently as an investment specialist for their Institutional Sales business. Kyle serves on several community related boards and is active in his respective alumni associations. He is a frequent speaker at industry conferences and educational seminars. Contact 213 Market Street Harrisburg, PA 17101 jonesk@pfm.com 717.231.6222 office Specialties Asset Management State & Local Governments, Higher Education Education B.A. in Business Management Dillard University MBA in Finance and Accounting University of Chicago Booth School of Business Professional Designations or Licenses FINRA Series 7 and 63 Licenses Started with PFM: 2012 Started in the Field: 2002 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Gray Lepley Portfolio Strategist PFM Asset Management LLC Gray joined PFM in 2015 and is currently a member of the Portfolio Strategies Group. In this role, Gray provides support for client engagements across the country, regularly presenting market and strategy updates. She also speaks at industry conferences and client seminars, presenting strategy and investment considerations for fixed-income portfolios. In addition, she provides technical and analytical support including performance analysis and economic research. Gray originally started at PFM as an analyst in the Structured Products Group. In this capacity, she provided technical and quantitative support for various clients, as well as services such as investment analysis, strategy development and implementation of bond proceeds portfolios, such as project funds, debt service funds, debt service reserve funds and surplus funds. She also provided quantitative support on a variety of projects including structured investment terminations/valuations and open-market escrow optimization and procurement. Gray is a member of PFM’s Reserve Fund Committee. She is active in the recruiting process and also conducts training sessions on fixed income portfolio investment strategies, bond proceeds and structured investments for new hires. She has passed Level I of the Chartered Financial Analyst exam. Contact 213 Market Street Harrisburg, PA 17101 lepleyg@pfm.com 717.232.2723 office Specialties Asset Management Education B.A. in Hispanic Studies Hamilton College Started with PFM: 2015 Started in the Field: 2015 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Robert Cheddar, CFA Managing Director PFM Asset Management LLC Bob joined PFM in 2004 as a senior portfolio manager and was promoted to managing director in 2011. He manages client accounts across the country, specializing in high-quality fixed- income assets. He is responsible for the management of client assets in separate portfolios for cities, counties, insurance and self-insurance organizations, school districts, state and local government agencies, public finance authorities, and universities. Assets under management include operating funds, capital reserves, bond proceeds, and other post-employment benefits (OPEB) obligation funds. In addition to being a managing director, Bob serves as chief credit officer and chair of the Fixed-Income Credit Committee, leading a team responsible for independent credit research and strategy. This team conducts all internal credit research for both local government investment pools and separately managed accounts and is responsible for the analysis and oversight of all of the PFM’s asset management clients’ credit exposure. Contact 213 Market Street Harrisburg, PA 17101 cheddarr@pfm.com 717.231.6202 office Specialties Asset Management Education B.S. in Business Administration Susquehanna University MBA Pennsylvania State University Professional Designations or Licenses Chartered Financial Analyst (CFA) Started with PFM: 2004 Started in the Field: 1998 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Joseph Creason, CFA Director/Senior Portfolio Manager PFM Asset Management LLC Joseph Creason, CFA, joined PFM in 2000 and is based out of the Harrisburg office. He supports the firm’s trading desk. His responsibilities involve managing fixed-income assets and developing customized strategies for client operating funds and bond proceeds accounts. He focuses on the firm’s total return clients and has expertise in the government investment codes for various states. Joe is the firm’s director and senior portfolio manager for callable federal agency securities and is on the Fixed-Income Credit Committee. He is also actively involved in developing and implementing portfolio strategies across the firm’s actively managed separate accounts. In addition to his work managing separate accounts, Joe develops and executes escrow transactions for PFM’s Structured Products Group. Contact 213 Market Street Harrisburg, PA 17101 creasonj@pfm.com 717.231.6217 office Specialties Asset Management State & Local Governments Education B.A. in Finance Shippensburg University Professional Designations or Licenses Chartered Financial Analyst (CFA) Started with PFM: 2000 Started in the Field: 2000 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Karen Jones, CPA Australia Managing Director PFM Asset Management LLC Karen has management responsibilities for accounting and administration for PFM, including portfolio accounting, and client billing. She supervises a staff that annually processes over 100,000 security transactions with an average daily trade volume of nearly $2 billion. Karen has extensive experience as a senior accounting and finance executive, most recently with Bank of America in Charlotte, NC, where she was a Director for Centralized Regulatory Reporting. Prior to that she was Global Controller for General Electric Capital in Norwalk, CT, and served tours with ABN AMRO, the World Bank Group in Washington DC, and with several global banks in London and Australia. Contact 213 Market Street Harrisburg, PA 17101 joneska@pfm.com Specialties Asset Management Education B.Bus Swinburne University of Technology, Victoria, Australia MBA Monash University, Victoria, Australia Executive Development Program (World Bank) Harvard University Kennedy School of Government Professional Designations or Licenses CPA Australia Chartered Accountant Institute of Chartered Accountants England and Wales Started with PFM: 2018 Started in the Field: 1990 KJ RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Leo Karwejna Managing Director PFM Asset Management LLC Leo Karwejna joined PFM to head the Compliance Group in 2011 as chief compliance officer and managing director. He has over 15 years of experience providing compliance support to firms in the investment advisory and securities-trading businesses including equity, fixed income, real estate (direct property and REIT securities) and additional alternative investment strategies. Leo is responsible for all regulatory compliance program efforts related to PFM’s business activities and personnel. He assists PFM professionals with specific compliance advisory guidance and leads the PFM Compliance team’s efforts to develop, maintain and monitor firm-wide compliance with appropriate policies, procedures and regulatory requirements. Leo’s prior experience includes compliance management positions at Prudential Financial Inc., Deutsche Asset Management, and RREEF Alternative Investments. He is a member of the National Society of Compliance Professionals and the Securities Industry and Financial Markets Association – Compliance and Legal Society and also regularly serves as an Arbitrator for securities- related issues among the investing public and/or industry participants. Contact 213 Market Street Harrisburg, PA 17101 karwejnal@pfm.com 717.213.3847 office Education B.S. in Finance St. Joseph's University J.D. Temple University School of Law Professional Designations or Licenses FINRA Series 7 and 66 Licenses National Association of Municipal Advisors MSRB Compliance Advisory Group Started with PFM: 2011 Started in the Field: 1999 RESUMES OF KEY PROFESSIONALS DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 Monthly and Quarterly Reports DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 CITY OF SAN LUIS OBISPO ACCOUNT STATEMENT For the Month Ending March 31, 2021 Customer Service PO Box 11813 Harrisburg, PA 17108-1813 Contents Cover/Disclosures Summary Statement Individual Accounts CITY OF SAN LUIS OBISPO RICO PARDO 990 PALM STREET SAN LUIS OBISPO, CA 93401 Client Management Team Accounts included in Statement CITY OF SAN LUIS OBISPO OPERATING FUNDS www.pfm.comOnline Access 1-717-232-2723Customer Service Monique Spyke Managing Director 44 Montgomery Street, 3rd Floor San Francisco, CA 94104 415-982-5544 spykem@pfm.com DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021 Account Statement Important Disclosures Important Disclosures 365 and dividing the result by 7. The yields quoted should not be considered a representation of the yield of the fund in the future, since the yield is not fixed. Average maturity represents the average maturity of all securities and investments of a portfolio, determined by multiplying the par or principal value of each security or investment by its maturity (days or years), summing the products, and dividing the sum by the total principal value of the portfolio. The stated maturity date of mortgage backed or callable securities are used in this statement. However the actual maturity of these securities could vary depending on the level or prepayments on the underlying mortgages or whether a callable security has or is still able to be called. Monthly distribution yield represents the net change in the value of one share (normally $1.00 per share) resulting from all dividends declared during the month by a fund expressed as a percentage of the value of one share at the beginning of the month. This resulting net change is then annualized by multiplying it by 365 and dividing it by the number of calendar days in the month. YTM at Cost The yield to maturity at cost is the expected rate of return, based on the original cost, the annual interest receipts, maturity value and the time period from purchase date to maturity, stated as a percentage, on an annualized basis. YTM at Market The yield to maturity at market is the rate of return, based on the current market value, the annual interest receipts, maturity value and the time period remaining until maturity, stated as a percentage, on an annualized basis. Managed Account A portfolio of investments managed discretely by PFM according to the client’s specific investment policy and requirements. The investments are directly owned by the client and held by the client’s custodian. Unsettled Trade A trade which has been executed however the final consummation of the security transaction and payment has not yet taken place. Please review the detail pages of this statement carefully. If you think your statement is wrong, missing account information, or if you need more information about a transaction, please contact PFM within 60 days of receipt. If you have other concerns or questions regarding your account you should contact a member of your client management team or PFM Service Operations at the address below. PFM Asset Management LLC Attn: Service Operations 213 Market Street Harrisburg, PA 17101 This statement is for general information purposes only and is not intended to provide specific advice or recommendations. PFM Asset Management LLC (“PFM”) is an investment advisor registered with the Securities and Exchange Commission, and is required to maintain a written disclosure statement of our background and business experience. If you would like to receive a copy of our current disclosure statement, please contact Service Operations at the address below. Proxy Voting PFM does not normally receive proxies to vote on behalf of its clients. However, it does on occasion receive consent requests. In the event a consent request is received the portfolio manager contacts the client and then proceeds according to their instructions. PFM’s Proxy Voting Policy is available upon request by contacting Service Operations at the address below. Questions About an Account PFM’s monthly statement is intended to detail our investment advisory activity as well as the activity of any accounts held by clients in pools that are managed by PFM. The custodian bank maintains the control of assets and executes (i.e., settles) all investment transactions. The custodian statement is the official record of security and cash holdings and transactions. PFM recognizes that clients may use these reports to facilitate record keeping and that the custodian bank statement and the PFM statement should be reconciled and differences resolved. Many custodians use a settlement date basis which may result in the need to reconcile due to a timing difference. Account Control PFM does not have the authority to withdraw funds from or deposit funds to the custodian. Our clients retain responsibility for their internal accounting policies; implementing and enforcing internal controls and generating ledger entries or otherwise recording transactions. Market Value Generally, PFM’s market prices are derived from closing bid prices as of the last business day of the month as supplied by Refinitiv or Bloomberg. Where prices are not available from generally recognized sources the securities are priced using a yield-based matrix system to arrive at an estimated market value. Prices that fall between data points are interpolated. Non-negotiable FDIC-insured bank certificates of deposit are priced at par. Although PFM believes the prices to be reliable, the values of the securities do not always represent the prices at which the securities could have been bought or sold. Explanation of the valuation methods for a registered investment company, local government investment program,or TERM funds is contained in the appropriate fund offering documentation or information statement. Amortized Cost The original cost of the principal of the security is adjusted for the amount of the periodic reduction of any discount or premium from the purchase date until the date of the report. Discount or premium with respect to short term securities (those with less than one year to maturity at time of issuance) is amortized on a straightline basis. Such discount or premium with respect to longer term securities is amortized using the constant yield basis. Tax Reporting Cost data and realized gains / losses are provided for informational purposes only. Please review for accuracy and consult your tax advisor to determine the tax consequences of your security transactions. PFM does not report such information to the IRS or other taxing authorities and is not responsible for the accuracy of such information that may be required to be reported to federal, state or other taxing authorities. Financial Situation In order to better serve you, PFM should be promptly notified of any material change in your investment objective or financial situation. Callable Securities Securities subject to redemption prior to maturity may be redeemed in whole or in part before maturity, which could affect the yield represented. Portfolio The securities in this portfolio, including shares of mutual funds, are not guaranteed or otherwise protected by PFM, the FDIC (except for certain non-negotiable certificates of deposit) or any government agency. Investment in securities involves risks, including the possible loss of the amount invested. Actual settlement values, accrued interest, and amortized cost amounts may vary for securities subject to an adjustable interest rate or subject to principal paydowns. Any changes to the values shown may be reflected within the next monthly statement’s beginning values. Rating Information provided for ratings is based upon a good faith inquiry of selected sources, but its accuracy and completeness cannot be guaranteed. Shares of some money market and TERM funds are marketed through representatives of PFM's wholly owned subsidiary, PFM Fund Distributors, Inc. PFM Fund Distributors, Inc. is registered with the SEC as a broker/dealer and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Municipal Securities Rulemaking Board (“MSRB”). You may reach the FINRA by calling the FINRA Regulator Public Disclosure Hotline at 1-888-289-9999 or at the FINRA Regulation Internet website address www.nasd.com. A brochure describing the FINRA Regulation Public Disclosure Program is also available from the FINRA upon request. Key Terms and Definitions Dividends on money market funds consist of interest earned, plus any discount ratably amortized to the date of maturity, plus all realized gains and losses on the sale of securities prior to maturity, less ratable amortization of any premium and all accrued expenses to the fund. Dividends are accrued daily and may be paid either monthly or quarterly. The monthly earnings on this statement represent the estimated dividend accrued for the month for any program that distributes earnings on a quarterly basis. There is no guarantee that the estimated amount will be paid on the actual distribution date. Current Yield is the net change, exclusive of capital changes and income other than investment income, in the value of a hypothetical fund account with a balance of one share over the seven-day base period including the statement date, expressed as a percentage of the value of one share (normally $1.00 per share) at the beginning of the seven-day period. This resulting net change in account value is then annualized by multiplying it by DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Summary Statement CITY OF SAN LUIS OBISPO OPERATING FUNDS - Total Cash Basis Earnings Plus Net Realized Gains/Losses Less Purchased Interest Related to Interest/Coupons Interest/Dividends/Coupons Received Earnings Reconciliation (Cash Basis) - Managed Account Less Beginning Accrued Interest Less Beginning Amortized Value of Securities Less Cost of New Purchases Plus Coupons/Dividends Received Plus Proceeds of Maturities/Calls/Principal Payments Plus Proceeds from Sales Ending Accrued Interest Ending Amortized Value of Securities Earnings Reconciliation (Accrual Basis) $103,393,079.60 (1,980,307.66) 0.00 1,917,398.44 0.00 (261,775.21) $103,068,395.17 131,644.33 (317.93) 500.54 $131,826.94 Total 101,806,885.21 311,042.26 0.00 1,980,307.66 131,644.33 (1,917,716.37) (101,881,591.34) (321,421.01) Total Accrual Basis Earnings $109,150.74 Closing Market Value Change in Current Value Unsettled Trades Principal Acquisitions Principal Dispositions Maturities/Calls Opening Market Value Transaction Summary - Managed Account _________________ _________________ ______________________________________________________________________________________________Reconciling Transactions Net Cash Contribution Security Purchases Principal Payments Coupon/Interest/Dividend Income Sale Proceeds Maturities/Calls Cash Transactions Summary - Managed Account 1,835,000.00 0.00 131,644.33 145,307.66 (1,917,716.37) 0.00 0.00 Cash Balance $313,657.26 Closing Cash Balance Account Page 1 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Portfolio Summary and Statistics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Account Summary Percent Par Value Market ValueDescription U.S. Treasury Bond / Note 45,930,000.00 46,689,761.87 45.29 Municipal Bond / Note 2,165,000.00 2,212,479.95 2.15 Federal Agency Bond / Note 31,035,000.00 31,204,064.87 30.28 Corporate Note 12,175,000.00 12,665,890.82 12.29 Certificate of Deposit 5,930,000.00 6,016,673.18 5.84 Asset-Backed Security 4,220,284.90 4,279,524.48 4.15 Managed Account Sub-Total 101,455,284.90 103,068,395.17 100.00% Accrued Interest 311,042.26 Total Portfolio 101,455,284.90 103,379,437.43 Unsettled Trades 0.00 0.00 Sector Allocation 4.15% ABS 5.84% Cert of Deposit 12.29% Corporate Note 30.28% Fed Agy Bond / Note 2.15% Muni Bond / Note 45.29% US TSY Bond / Note 0 - 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Over 5 Years 4.00% 19.74%18.61% 27.69% 13.27% 16.69% 0.00% Maturity Distribution Characteristics Yield to Maturity at Cost Yield to Maturity at Market Weighted Average Days to Maturity 870 1.30% 0.43% Account Page 2 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Issuer Summary CITY OF SAN LUIS OBISPO OPERATING FUNDS - Credit Quality (S&P Ratings) 3.04% A 4.66% A+ 1.46% A- 2.31% A-1 3.03% AA 76.91% AA+ 3.32% AA- 2.73% AAA 0.53% BBB+ 2.01% NR Issuer Summary Percentof HoldingsIssuer Market Value 619,387.80 0.60 ADOBE INC 23,558.05 0.02 ALLY AUTO RECEIVABLES TRUST 804,106.68 0.78 AMAZON.COM INC 402,508.00 0.39 AMERICAN HONDA FINANCE 1,068,245.85 1.04 APPLE INC 619,791.06 0.60 BANK OF AMERICA CO 287,822.60 0.28 BRISTOL-MYERS SQUIBB CO 169,258.65 0.16 CALIFORNIA EARTHQUAKE AUTHORITY 188,112.60 0.18 CAPITAL ONE PRIME AUTO REC TRUST 718,496.95 0.70 CARMAX AUTO OWNER TRUST 631,469.79 0.61 CREDIT SUISSE GROUP RK 612,824.42 0.59 DNB ASA 16,670,542.23 16.17 FANNIE MAE 798,654.40 0.77 FEDERAL FARM CREDIT BANKS 2,631,652.89 2.55 FEDERAL HOME LOAN BANKS 11,103,215.35 10.77 FREDDIE MAC 311,001.30 0.30 HERSHEY COMPANY 806,530.88 0.78 HOME DEPOT INC 1,240,043.79 1.20 HONDA AUTO RECEIVABLES 255,965.87 0.25 HYUNDAI AUTO RECEIVABLES 763,904.25 0.74 IBM CORP 607,965.12 0.59 INTEL CORPORATION 480,280.32 0.47 JP MORGAN CHASE & CO 311,333.40 0.30 LOS ANGELES COMMUNITY COLLEGE DISTRICT 623,977.80 0.61 MASTERCARD INC 934,983.82 0.91 MIZUHO FINANCIAL GROUP INC. 212,880.10 0.21 NEW JERSEY TURNPIKE AUTHORITY 798,115.71 0.77 NISSAN AUTO RECEIVABLES 1,171,549.12 1.14 NORDEA BANK ABP 1,180,726.80 1.15 PFIZER INC 233,169.75 0.23 SAN DIEGO COMMUNITY COLLEGE DISTRICT 1,227,992.40 1.19 SKANDINAVISKA ENSKILDA BANKEN AB Account Page 3 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Issuer Summary CITY OF SAN LUIS OBISPO OPERATING FUNDS - Percentof HoldingsIssuer Market Value 809,368.00 0.79 SOCIETE GENERALE 832,154.40 0.81 STATE OF CALIFORNIA 208,960.50 0.20 STATE OF MARYLAND 628,485.63 0.61 SUMITOMO MITSUI FINANCIAL GROUP INC 541,597.88 0.53 THE WALT DISNEY CORPORATION 1,721,293.59 1.67 TOYOTA MOTOR CORP 46,689,761.87 45.30 UNITED STATES TREASURY 244,723.15 0.24 UNIVERSITY OF CALIFORNIA 2,881,982.40 2.80 WAL-MART STORES INC $103,068,395.17 Total 100.00% Account Page 4 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par U.S. Treasury Bond / Note US TREASURY NOTES DTD 09/02/2014 2.000% 08/31/2021 262,112.50 260,080.31 452.17 260,914.06 12/05/1612/01/16AaaAA+ 260,000.00 912828D72 1.92 US TREASURY NOTES DTD 08/31/2019 1.500% 08/31/2021 1,458,609.38 1,458,281.40 1,891.30 1,467,162.11 10/20/2010/19/20AaaAA+ 1,450,000.00 912828YC8 0.13 US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 748,325.00 740,199.40 6,214.36 741,647.65 01/05/1701/03/17AaaAA+ 740,000.00 912828F96 1.95 US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 1,157,881.25 1,145,907.04 9,615.47 1,152,111.52 04/05/1704/03/17AaaAA+ 1,145,000.00 912828F96 1.86 US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 1,415,750.00 1,396,311.91 11,756.91 1,376,867.19 03/05/1803/01/18AaaAA+ 1,400,000.00 912828F96 2.48 US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 3,473,643.75 3,472,818.34 28,846.41 3,487,732.62 01/07/2101/06/21AaaAA+ 3,435,000.00 912828F96 0.11 US TREASURY NOTES DTD 11/30/2016 1.750% 11/30/2021 758,437.50 749,201.01 4,399.04 745,107.42 11/03/1711/01/17AaaAA+ 750,000.00 912828U65 1.92 US TREASURY NOTES DTD 01/31/2017 1.875% 01/31/2022 1,568,175.00 1,544,701.50 4,801.45 1,543,370.51 07/11/1707/06/17AaaAA+ 1,545,000.00 912828V72 1.90 US TREASURY NOTES DTD 03/02/2015 1.750% 02/28/2022 370,532.01 363,761.20 555.43 358,270.31 03/17/1703/15/17AaaAA+ 365,000.00 912828J43 2.14 US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 727,735.94 712,943.06 36.63 706,258.01 01/04/1801/03/18AaaAA+ 715,000.00 912828W89 2.18 US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 1,893,131.25 1,843,371.73 95.29 1,798,968.75 08/03/1808/01/18AaaAA+ 1,860,000.00 912828W89 2.82 US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 2,122,139.06 2,067,808.91 106.81 2,023,508.79 09/06/1809/04/18AaaAA+ 2,085,000.00 912828W89 2.75 US TREASURY NOTES DTD 07/31/2017 1.875% 07/31/2022 813,632.81 793,622.40 2,470.65 790,093.36 11/03/1711/01/17AaaAA+ 795,000.00 9128282P4 2.01 US TREASURY NOTES DTD 07/31/2015 2.000% 07/31/2022 2,152,828.02 2,107,044.54 6,961.33 2,126,003.91 09/01/1708/30/17AaaAA+ 2,100,000.00 912828XQ8 1.74 Account Page 5 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par U.S. Treasury Bond / Note US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 225,328.14 219,436.94 10.52 218,126.56 10/06/1710/03/17AaaAA+ 220,000.00 912828L57 1.93 US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 1,270,031.31 1,222,442.86 59.29 1,189,382.81 06/06/1806/04/18AaaAA+ 1,240,000.00 912828L57 2.76 US TREASURY NOTES DTD 10/31/2017 2.000% 10/31/2022 617,625.00 592,950.01 5,038.67 579,984.38 05/04/1805/02/18AaaAA+ 600,000.00 9128283C2 2.80 US TREASURY NOTES DTD 10/31/2020 0.125% 10/31/2022 3,499,453.30 3,499,045.03 1,837.02 3,498,906.25 01/07/2101/06/21AaaAA+ 3,500,000.00 91282CAR2 0.14 US TREASURY NOTES DTD 03/31/2016 1.500% 03/31/2023 205,312.50 196,438.54 8.20 192,632.81 02/12/1902/08/19AaaAA+ 200,000.00 912828Q29 2.44 US TREASURY NOTES DTD 08/01/2016 1.250% 07/31/2023 184,331.25 175,297.56 372.93 170,992.97 02/12/1902/08/19AaaAA+ 180,000.00 912828S92 2.44 US TREASURY NOTES DTD 11/15/2013 2.750% 11/15/2023 1,629,450.00 1,538,656.84 15,923.41 1,545,479.30 03/08/1903/06/19AaaAA+ 1,530,000.00 912828WE6 2.52 US TREASURY NOTES DTD 11/30/2016 2.125% 11/30/2023 1,820,665.63 1,718,089.50 12,357.11 1,703,959.76 01/09/1901/07/19AaaAA+ 1,735,000.00 912828U57 2.52 US TREASURY NOTES DTD 12/15/2020 0.125% 12/15/2023 3,484,687.50 3,492,061.64 1,286.06 3,491,386.72 01/07/2101/06/21AaaAA+ 3,500,000.00 91282CBA8 0.21 US TREASURY NOTES DTD 12/31/2018 2.625% 12/31/2023 79,781.25 75,124.54 494.91 75,222.66 01/31/1901/30/19AaaAA+ 75,000.00 9128285U0 2.56 US TREASURY NOTES DTD 01/31/2019 2.500% 01/31/2024 1,125,256.25 1,092,884.29 4,392.27 1,106,292.19 02/04/2002/03/20AaaAA+ 1,060,000.00 9128285Z9 1.37 US TREASURY NOTES DTD 05/01/2017 2.000% 04/30/2024 1,091,675.00 1,042,960.11 8,733.70 1,044,712.50 06/05/1906/03/19AaaAA+ 1,040,000.00 912828X70 1.90 US TREASURY NOTES DTD 06/30/2017 2.000% 06/30/2024 514,806.25 493,285.64 2,463.54 495,053.13 07/03/1907/01/19AaaAA+ 490,000.00 912828XX3 1.78 US TREASURY NOTES DTD 07/31/2017 2.125% 07/31/2024 390,523.46 373,450.43 1,303.18 375,174.22 08/02/1908/01/19AaaAA+ 370,000.00 9128282N9 1.83 Account Page 6 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par U.S. Treasury Bond / Note US TREASURY NOTES DTD 07/31/2017 2.125% 07/31/2024 622,726.59 601,377.10 2,078.04 606,939.45 08/15/1908/14/19AaaAA+ 590,000.00 9128282N9 1.52 US TREASURY NOTES DTD 10/02/2017 2.125% 09/30/2024 205,999.21 198,811.81 11.32 200,446.29 10/01/1910/01/19AaaAA+ 195,000.00 9128282Y5 1.54 US TREASURY NOTES DTD 10/31/2017 2.250% 10/31/2024 366,023.44 353,103.93 3,259.39 356,279.88 11/05/1911/01/19AaaAA+ 345,000.00 9128283D0 1.57 US TREASURY NOTES DTD 12/31/2019 1.750% 12/31/2024 3,442,312.50 3,476,601.56 14,517.27 3,487,429.69 01/07/2101/06/21AaaAA+ 3,300,000.00 912828YY0 0.31 US TREASURY NOTES DTD 12/31/2020 0.375% 12/31/2025 449,218.75 458,302.31 433.63 458,221.09 01/08/2101/07/21AaaAA+ 460,000.00 91282CBC4 0.45 US TREASURY NOTES DTD 12/31/2020 0.375% 12/31/2025 3,417,968.75 3,489,958.80 3,299.38 3,489,472.66 01/07/2101/06/21AaaAA+ 3,500,000.00 91282CBC4 0.44 US TREASURY NOTES DTD 01/31/2019 2.625% 01/31/2026 373,408.61 379,666.65 1,501.04 380,510.74 02/17/2102/16/21AaaAA+ 345,000.00 9128286A3 0.52 US TREASURY NOTES DTD 01/31/2021 0.375% 01/31/2026 838,634.33 842,531.62 534.53 842,195.31 02/26/2102/26/21AaaAA+ 860,000.00 91282CBH3 0.80 US TREASURY NOTES DTD 02/28/2021 0.500% 02/28/2026 1,911,609.38 1,917,757.88 847.83 1,917,398.44 03/12/2103/12/21AaaAA+ 1,950,000.00 91282CBQ3 0.84 158,966.49 46,689,761.87 46,106,288.34 1.30 46,004,216.02 45,930,000.00 Security Type Sub-Total Municipal Bond / Note CA ST EARTHQUAKE AUTH TXBL REV BONDS DTD 11/24/2020 1.477% 07/01/2023 169,258.65 165,000.00 609.26 165,000.00 11/24/2011/13/20NRNR 165,000.00 13017HAK2 1.48 SAN DIEGO CCD, CA TXBL GO BONDS DTD 10/16/2019 1.996% 08/01/2023 233,169.75 225,000.00 748.50 225,000.00 10/16/1909/18/19AaaAAA 225,000.00 797272QN4 2.00 CA ST TXBL GO BONDS DTD 10/24/2019 2.400% 10/01/2023 832,154.40 800,036.59 9,480.00 805,807.90 10/24/1910/16/19Aa2AA- 790,000.00 13063DRJ9 1.87 Account Page 7 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par Municipal Bond / Note MD ST TXBL GO BONDS DTD 08/05/2020 0.510% 08/01/2024 208,960.50 209,950.85 178.50 209,941.20 08/05/2007/23/20AaaAAA 210,000.00 574193TQ1 0.52 UNIV OF CAL TXBL REV BONDS DTD 07/16/2020 0.883% 05/15/2025 74,915.25 75,230.95 250.18 75,271.50 07/16/2007/14/20Aa2AA 75,000.00 91412HGE7 0.81 UNIV OF CAL TXBL REV BONDS DTD 07/16/2020 0.883% 05/15/2025 169,807.90 170,000.00 567.09 170,000.00 07/16/2007/10/20Aa2AA 170,000.00 91412HGE7 0.88 LOS ANGELES CCD, CA TXBL GO BONDS DTD 11/10/2020 0.773% 08/01/2025 311,333.40 315,000.00 405.83 315,000.00 11/10/2010/30/20AaaAA+ 315,000.00 54438CYK2 0.77 NJ TURNPIKE AUTHORITY TXBL REV BONDS DTD 02/04/2021 1.047% 01/01/2026 212,880.10 215,000.00 356.42 215,000.00 02/04/2101/22/21A2A+ 215,000.00 646140DP5 1.05 12,595.78 2,212,479.95 2,175,218.39 1.38 2,181,020.60 2,165,000.00 Security Type Sub-Total Federal Agency Bond / Note FANNIE MAE NOTES DTD 04/13/2018 2.500% 04/13/2021 750,618.75 749,987.76 8,750.00 748,882.50 04/13/1804/12/18AaaAA+ 750,000.00 3135G0U27 2.55 FANNIE MAE NOTES DTD 01/09/2017 2.000% 01/05/2022 2,267,932.73 2,237,413.43 10,678.33 2,249,281.65 06/29/1706/27/17AaaAA+ 2,235,000.00 3135G0S38 1.85 FANNIE MAE NOTES DTD 01/11/2019 2.625% 01/11/2022 566,053.94 554,896.09 3,237.50 554,600.40 01/11/1901/09/19AaaAA+ 555,000.00 3135G0U92 2.65 FREDDIE MAC NOTES (CALLABLE) DTD 07/20/2020 0.320% 10/20/2022 1,000,731.00 1,000,000.00 631.11 1,000,000.00 07/20/2007/17/20AaaAA+ 1,000,000.00 3134GV6H6 0.32 FREDDIE MAC NOTES (CALLABLE) DTD 08/06/2020 0.300% 02/06/2023 2,486,734.53 2,485,000.00 1,138.96 2,485,000.00 08/06/2008/03/20AaaAA+ 2,485,000.00 3134GWLD6 0.30 FEDERAL HOME LOAN BANKS NOTES DTD 02/21/2020 1.375% 02/17/2023 1,099,144.50 1,073,755.60 1,806.60 1,073,022.00 02/21/2002/20/20AaaAA+ 1,075,000.00 3130AJ7E3 1.44 FREDDIE MAC NOTES DTD 04/20/2020 0.375% 04/20/2023 1,174,519.71 1,167,999.25 1,962.19 1,167,075.00 04/20/2004/17/20AaaAA+ 1,170,000.00 3137EAEQ8 0.46 FANNIE MAE NOTES DTD 05/22/2020 0.250% 05/22/2023 1,246,426.77 1,242,327.16 1,115.31 1,241,252.55 05/22/2005/20/20AaaAA+ 1,245,000.00 3135G04Q3 0.35 Account Page 8 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par Federal Agency Bond / Note FREDDIE MAC NOTES DTD 06/26/2020 0.250% 06/26/2023 1,126,094.63 1,122,552.00 742.19 1,121,715.00 06/26/2006/24/20AaaAA+ 1,125,000.00 3137EAES4 0.35 FANNIE MAE NOTES DTD 07/10/2020 0.250% 07/10/2023 1,585,342.36 1,582,416.96 891.56 1,581,592.25 07/10/2007/08/20AaaAA+ 1,585,000.00 3135G05G4 0.32 FREDDIE MAC NOTES DTD 08/21/2020 0.250% 08/24/2023 744,991.81 744,394.43 191.42 744,240.10 08/21/2008/19/20AaaAA+ 745,000.00 3137EAEV7 0.28 FANNIE MAE NOTES DTD 09/14/2018 2.875% 09/12/2023 1,669,671.45 1,566,199.81 2,382.26 1,562,573.90 11/30/1811/29/18AaaAA+ 1,570,000.00 3135G0U43 2.98 FEDERAL FARM CREDIT BANK (CALLABLE) DTD 09/21/2020 0.250% 09/21/2023 798,654.40 798,859.72 55.56 798,640.00 10/09/2010/07/20AaaAA+ 800,000.00 3133EMAM4 0.31 FANNIE MAE NOTES (CALLABLE) DTD 11/16/2020 0.310% 11/16/2023 2,096,411.10 2,099,813.18 2,441.25 2,099,790.00 12/03/2012/03/20AaaAA+ 2,100,000.00 3135G06F5 0.31 FREDDIE MAC NOTES DTD 12/04/2020 0.250% 12/04/2023 684,262.26 684,394.93 556.56 684,321.85 12/04/2012/02/20AaaAA+ 685,000.00 3137EAFA2 0.28 FEDERAL HOME LOAN BANKS NOTES DTD 12/09/2013 3.375% 12/08/2023 605,869.04 569,269.67 5,932.50 576,744.00 01/31/1901/30/19AaaAA+ 560,000.00 3130A0F70 2.71 FANNIE MAE NOTES (CALLABLE) DTD 10/26/2020 0.310% 01/26/2024 867,776.28 869,697.77 486.96 869,652.00 10/27/2010/23/20AaaAA+ 870,000.00 3136G46V0 0.32 FANNIE MAE NOTES DTD 02/08/2019 2.500% 02/05/2024 466,873.88 439,066.22 1,711.11 438,363.20 02/08/1902/07/19AaaAA+ 440,000.00 3135G0V34 2.58 FHLB BONDS DTD 02/15/2019 2.500% 02/13/2024 127,386.24 119,755.93 400.00 119,575.20 02/15/1902/14/19AaaAA+ 120,000.00 3130AFW94 2.58 FREDDIE MAC NOTES DTD 02/14/2020 1.500% 02/12/2025 1,125,310.55 1,101,770.27 2,225.42 1,105,085.60 02/28/2002/26/20AaaAA+ 1,090,000.00 3137EAEP0 1.21 FEDERAL HOME LOAN BANK NOTES DTD 04/16/2020 0.500% 04/14/2025 799,253.11 801,773.36 1,867.15 801,007.20 04/16/2004/15/20AaaAA+ 805,000.00 3130AJHU6 0.60 FANNIE MAE NOTES DTD 04/24/2020 0.625% 04/22/2025 998,217.00 998,326.25 2,760.42 997,940.00 04/24/2004/22/20AaaAA+ 1,000,000.00 3135G03U5 0.67 Account Page 9 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par Federal Agency Bond / Note FANNIE MAE NOTES DTD 06/19/2020 0.500% 06/17/2025 346,529.05 349,929.02 505.56 349,916.00 06/23/2006/22/20AaaAA+ 350,000.00 3135G04Z3 0.50 FANNIE MAE NOTES DTD 06/19/2020 0.500% 06/17/2025 1,237,603.75 1,247,818.22 1,805.55 1,247,412.50 06/19/2006/17/20AaaAA+ 1,250,000.00 3135G04Z3 0.54 FREDDIE MAC NOTES DTD 07/23/2020 0.375% 07/21/2025 742,090.26 751,759.56 550.52 751,240.10 07/23/2007/21/20AaaAA+ 755,000.00 3137EAEU9 0.48 FANNIE MAE NOTES DTD 08/27/2020 0.375% 08/25/2025 786,368.00 796,701.42 300.00 796,256.00 08/27/2008/25/20AaaAA+ 800,000.00 3135G05X7 0.47 FANNIE MAE NOTES DTD 08/27/2020 0.375% 08/25/2025 1,041,937.60 1,054,787.61 397.50 1,054,265.40 10/22/2010/21/20AaaAA+ 1,060,000.00 3135G05X7 0.49 FREDDIE MAC NOTES DTD 09/25/2020 0.375% 09/23/2025 884,006.10 896,878.58 75.00 896,787.00 02/12/2102/11/21AaaAA+ 900,000.00 3137EAEX3 0.45 FREDDIE MAC NOTES DTD 09/25/2020 0.375% 09/23/2025 1,134,474.50 1,151,881.78 96.25 1,151,523.45 09/25/2009/23/20AaaAA+ 1,155,000.00 3137EAEX3 0.44 FANNIE MAE NOTES DTD 11/12/2020 0.500% 11/07/2025 742,779.57 752,504.90 1,457.57 752,297.10 11/12/2011/09/20AaaAA+ 755,000.00 3135G06G3 0.57 57,152.31 31,204,064.87 31,011,930.88 0.89 31,020,051.95 31,035,000.00 Security Type Sub-Total Corporate Note HERSHEY COMPANY CORP NOTES DTD 05/10/2018 3.100% 05/15/2021 311,001.30 309,991.45 3,630.44 309,786.10 05/10/1805/03/18A1A 310,000.00 427866BA5 3.12 AMERICAN HONDA FINANCE CORP NOTES DTD 09/09/2016 1.700% 09/09/2021 402,508.00 397,844.30 415.56 387,588.00 02/25/1902/21/19A3A- 400,000.00 02665WBG5 2.98 IBM CORP BONDS DTD 01/27/2017 2.500% 01/27/2022 763,904.25 750,260.62 3,333.33 751,575.00 02/03/1702/01/17A2A 750,000.00 459200JQ5 2.45 APPLE INC CORP NOTES DTD 02/09/2017 2.500% 02/09/2022 1,068,245.85 1,045,658.61 3,791.67 1,034,418.00 01/09/1901/07/19Aa1AA+ 1,050,000.00 037833CM0 3.01 WALT DISNEY COMPANY/THE CORP NOTES DTD 11/30/2012 2.350% 12/01/2022 541,597.88 519,128.04 4,112.50 508,599.00 04/05/1804/03/18A2BBB+ 525,000.00 25468PCW4 3.07 Account Page 10 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par Corporate Note TOYOTA MOTOR CREDIT CORP DTD 01/11/2018 2.700% 01/11/2023 666,062.08 644,510.76 3,840.00 648,806.40 07/22/1907/18/19A1A+ 640,000.00 89236TEL5 2.29 AMAZON.COM INC BONDS DTD 06/06/2018 2.400% 02/22/2023 804,106.68 771,002.20 2,015.00 767,079.50 05/23/1905/21/19A2AA- 775,000.00 023135AW6 2.69 HOME DEPOT INC CORP NOTES DTD 04/05/2013 2.700% 04/01/2023 806,530.88 769,100.30 10,462.50 760,275.00 04/05/1804/03/18A2A 775,000.00 437076AZ5 3.11 WAL MART STORES INC GLOBAL NT (CALLABLE) DTD 04/11/2013 2.550% 04/11/2023 1,433,999.40 1,429,092.06 16,617.50 1,452,505.20 05/26/2005/21/20Aa2AA 1,380,000.00 931142DH3 0.70 PFIZER INC CORP NOTES DTD 03/11/2019 2.950% 03/15/2024 1,180,726.80 1,107,944.69 1,442.22 1,113,453.00 04/04/1904/02/19A2A+ 1,100,000.00 717081ES8 2.68 WALMART INC CORPORATE NOTES DTD 04/23/2019 2.850% 07/08/2024 1,447,983.00 1,372,033.89 8,870.63 1,390,662.00 07/12/1907/10/19Aa2AA 1,350,000.00 931142EL3 2.21 JPMORGAN CHASE & CO CORPORATE NOTES DTD 09/16/2020 0.653% 09/16/2024 480,280.32 480,000.00 130.60 480,000.00 09/16/2009/09/20A2A- 480,000.00 46647PBS4 0.65 BANK OF AMERICA CORP CORPORATE NOTES DTD 10/21/2020 0.810% 10/24/2024 619,791.06 620,000.00 2,232.00 620,000.00 10/21/2010/16/20A2A- 620,000.00 06051GJH3 0.81 ADOBE INC CORP NOTE DTD 02/03/2020 1.900% 02/01/2025 619,387.80 623,035.86 1,900.00 628,458.00 05/06/2005/04/20A2A 600,000.00 00724PAB5 0.88 MASTERCARD INC CORPORATE NOTES DTD 12/03/2019 2.000% 03/03/2025 623,977.80 621,119.16 933.33 625,986.00 05/06/2005/04/20A1A+ 600,000.00 57636QAN4 1.08 INTEL CORP CORPORATE NOTES DTD 03/25/2020 3.400% 03/25/2025 607,965.12 609,695.77 317.33 620,530.40 05/19/2005/15/20A1A+ 560,000.00 458140BP4 1.10 BRISTOL-MYERS SQUIBB CO CORPORATE NOTES DTD 07/15/2020 3.875% 08/15/2025 287,822.60 293,075.05 1,287.36 297,096.80 09/30/2009/29/20A2A+ 260,000.00 110122DC9 0.88 65,331.97 12,665,890.82 12,363,492.76 2.01 12,396,818.40 12,175,000.00 Security Type Sub-Total Account Page 11 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par Certificate of Deposit MIZUHO BANK LTD/NY CERT DEPOS DTD 01/29/2021 0.170% 06/01/2021 934,983.82 934,999.83 273.75 934,999.69 02/12/2102/11/21P-1A-1 935,000.00 60710AX56 0.17 CREDIT SUISSE NEW YORK CERT DEPOS DTD 08/07/2020 0.520% 02/01/2022 631,469.79 630,000.00 2,156.70 630,000.00 08/07/2008/05/20P-1A-1 630,000.00 22549L6F7 0.52 SOCIETE GENERALE NY CERT DEPOS DTD 02/19/2020 1.800% 02/14/2022 809,368.00 800,000.00 1,880.00 800,000.00 02/19/2002/14/20P-1A-1 800,000.00 83369XDL9 1.80 SUMITOMO MITSUI BANK NY CERT DEPOS DTD 07/14/2020 0.700% 07/08/2022 628,485.63 625,000.00 1,008.68 625,000.00 07/14/2007/10/20A1A 625,000.00 86565CKU2 0.70 NORDEA BANK ABP NEW YORK CERT DEPOS DTD 08/29/2019 1.850% 08/26/2022 1,171,549.12 1,145,000.00 2,000.57 1,145,000.00 08/29/1908/27/19Aa3AA- 1,145,000.00 65558TLL7 1.84 SKANDINAV ENSKILDA BANK LT CD DTD 09/03/2019 1.860% 08/26/2022 1,227,992.40 1,200,000.00 2,108.00 1,200,000.00 09/03/1908/29/19Aa2A+ 1,200,000.00 83050PDR7 1.85 DNB BANK ASA/NY LT CD DTD 12/06/2019 2.040% 12/02/2022 612,824.42 595,000.00 4,046.00 595,000.00 12/06/1912/05/19Aa2AA- 595,000.00 23341VZT1 2.03 13,473.70 6,016,673.18 5,929,999.83 1.34 5,929,999.69 5,930,000.00 Security Type Sub-Total Asset-Backed Security HAROT 2019-1 A3 DTD 02/27/2019 2.830% 03/20/2023 157,383.56 155,209.75 158.62 155,207.61 02/27/1902/19/19NRAAA 155,211.77 43814WAC9 2.83 HYUNDAI AUTO RECEIVABLES TRUST DTD 04/10/2019 2.660% 06/15/2023 255,965.87 252,749.64 298.83 252,733.91 04/10/1904/03/19NRAAA 252,767.18 44932NAD2 2.66 HAROT 2019-2 A3 DTD 05/29/2019 2.520% 06/21/2023 375,841.03 370,319.46 259.23 370,313.20 05/29/1905/21/19AaaNR 370,327.01 43815MAC0 2.52 TAOT 2019-A A3 DTD 02/13/2019 2.910% 07/15/2023 60,575.25 59,626.83 77.12 59,621.59 02/13/1902/05/19AaaAAA 59,632.45 89239AAD5 2.91 ALLYA 2019-1 A3 DTD 02/13/2019 2.910% 09/15/2023 23,558.05 23,226.82 30.04 23,225.51 02/13/1902/05/19AaaNR 23,228.32 02004WAC5 2.91 Account Page 12 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Detail of Securities Held CITY OF SAN LUIS OBISPO OPERATING FUNDS - Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTradeSettle Par Asset-Backed Security TAOT 2019-C A3 DTD 08/14/2019 1.910% 09/15/2023 399,657.21 394,998.05 335.31 394,996.76 08/14/1908/06/19AaaAAA 395,000.00 89238UAD2 1.91 NAROT 2019-A A3 DTD 02/13/2019 2.900% 10/15/2023 384,793.95 378,682.40 488.12 378,656.22 02/13/1902/05/19AaaNR 378,713.59 65479KAD2 2.90 COPAR 2019-1 A3 DTD 05/30/2019 2.510% 11/15/2023 188,112.60 185,506.43 206.97 185,490.93 05/30/1905/21/19AaaAAA 185,528.52 14042WAC4 2.51 NAROT 2019-B A3 DTD 05/28/2019 2.500% 11/15/2023 413,321.76 406,939.60 452.22 406,901.60 05/28/1905/21/19AaaNR 406,993.62 65479HAC1 2.51 CARMX 2019-2 A3 DTD 04/17/2019 2.680% 03/15/2024 267,784.30 262,866.29 313.12 262,855.58 04/17/1904/09/19NRAAA 262,882.44 14316LAC7 2.68 HAROT 2020-1 A3 DTD 02/26/2020 1.610% 04/22/2024 432,349.10 424,938.66 190.07 424,916.70 02/26/2002/19/20AaaNR 425,000.00 43813RAC1 1.61 TAOT 2020-A A3 DTD 02/12/2020 1.660% 05/15/2024 594,999.05 584,969.01 431.60 584,957.76 02/12/2002/04/20AaaAAA 585,000.00 89232HAC9 1.66 CARMX 2020-1 A3 DTD 01/22/2020 1.890% 12/16/2024 286,295.55 279,958.41 235.20 279,945.06 01/22/2001/14/20NRAAA 280,000.00 14315XAC2 1.89 HAROT 2021-1 A3 DTD 02/24/2021 0.270% 04/21/2025 274,470.10 274,995.09 20.63 274,994.97 02/24/2102/17/21AaaNR 275,000.00 43813GAC5 0.27 CARMX 2021-1 A3 DTD 01/27/2021 0.340% 12/15/2025 164,417.10 164,968.57 24.93 164,967.40 01/27/2101/20/21NRAAA 165,000.00 14316NAC3 0.34 3,522.01 4,279,524.48 4,219,955.01 2.05 4,219,784.80 4,220,284.90 Security Type Sub-Total 101,455,284.90 101,751,891.46 1.30 311,042.26 101,806,885.21 103,068,395.17 Managed Account Sub-Total $101,455,284.90 $101,751,891.46 $311,042.26 $101,806,885.21 $103,068,395.17 1.30% $103,379,437.43 $311,042.26 Total Investments Accrued Interest Securities Sub-Total Account Page 13 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration U.S. Treasury Bond / Note 2,032.19 1,198.44 262,112.50 100.81 MORGANST 260,000.00 912828D72US TREASURY NOTES DTD 09/02/2014 2.000% 08/31/2021 0.05 0.42 327.98 (8,552.73) 1,458,609.38 100.59 MORGAN_ 1,450,000.00 912828YC8US TREASURY NOTES DTD 08/31/2019 1.500% 08/31/2021 0.07 0.42 8,125.60 6,677.35 748,325.00 101.13 CITIGRP 740,000.00 912828F96US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 0.07 0.58 11,974.21 5,769.73 1,157,881.25 101.13 RBC 1,145,000.00 912828F96US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 0.07 0.58 19,438.09 38,882.81 1,415,750.00 101.13 GOLDMAN 1,400,000.00 912828F96US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 0.07 0.58 825.41 (14,088.87) 3,473,643.75 101.13 NOMURA 3,435,000.00 912828F96US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 0.07 0.58 9,236.49 13,330.08 758,437.50 101.13 MERRILL 750,000.00 912828U65US TREASURY NOTES DTD 11/30/2016 1.750% 11/30/2021 0.06 0.66 23,473.50 24,804.49 1,568,175.00 101.50 MORGAN_S 1,545,000.00 912828V72US TREASURY NOTES DTD 01/31/2017 1.875% 01/31/2022 0.08 0.83 6,770.81 12,261.70 370,532.01 101.52 CITIGRP 365,000.00 912828J43US TREASURY NOTES DTD 03/02/2015 1.750% 02/28/2022 0.09 0.91 14,792.88 21,477.93 727,735.94 101.78 GOLDMAN 715,000.00 912828W89US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 0.09 1.00 49,759.52 94,162.50 1,893,131.25 101.78 MORGAN_S 1,860,000.00 912828W89US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 0.09 1.00 54,330.15 98,630.27 2,122,139.06 101.78 BNP_PARI 2,085,000.00 912828W89US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 0.09 1.00 20,010.41 23,539.45 813,632.81 102.34 GOLDMAN 795,000.00 9128282P4US TREASURY NOTES DTD 07/31/2017 1.875% 07/31/2022 0.12 1.32 45,783.48 26,824.11 2,152,828.02 102.52 MORGAN_S 2,100,000.00 912828XQ8US TREASURY NOTES DTD 07/31/2015 2.000% 07/31/2022 0.12 1.32 5,891.20 7,201.58 225,328.14 102.42 HSBC 220,000.00 912828L57US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 0.13 1.49 47,588.45 80,648.50 1,270,031.31 102.42 RBS 1,240,000.00 912828L57US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 0.13 1.49 24,674.99 37,640.62 617,625.00 102.94 MERRILL 600,000.00 9128283C2US TREASURY NOTES DTD 10/31/2017 2.000% 10/31/2022 0.14 1.55 Account Page 14 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration U.S. Treasury Bond / Note 408.27 547.05 3,499,453.30 99.98 JPM_CHA 3,500,000.00 91282CAR2US TREASURY NOTES DTD 10/31/2020 0.125% 10/31/2022 0.13 1.58 8,873.96 12,679.69 205,312.50 102.66 TD 200,000.00 912828Q29US TREASURY NOTES DTD 03/31/2016 1.500% 03/31/2023 0.17 1.98 9,033.69 13,338.28 184,331.25 102.41 RBC 180,000.00 912828S92US TREASURY NOTES DTD 08/01/2016 1.250% 07/31/2023 0.22 2.31 90,793.16 83,970.70 1,629,450.00 106.50 TD 1,530,000.00 912828WE6US TREASURY NOTES DTD 11/15/2013 2.750% 11/15/2023 0.26 2.53 102,576.13 116,705.87 1,820,665.63 104.94 BNP_PARI 1,735,000.00 912828U57US TREASURY NOTES DTD 11/30/2016 2.125% 11/30/2023 0.27 2.59 (7,374.14)(6,699.22) 3,484,687.50 99.56 RBC 3,500,000.00 91282CBA8US TREASURY NOTES DTD 12/15/2020 0.125% 12/15/2023 0.29 2.70 4,656.71 4,558.59 79,781.25 106.38 MERRILL 75,000.00 9128285U0US TREASURY NOTES DTD 12/31/2018 2.625% 12/31/2023 0.30 2.66 32,371.96 18,964.06 1,125,256.25 106.16 HSBC 1,060,000.00 9128285Z9US TREASURY NOTES DTD 01/31/2019 2.500% 01/31/2024 0.32 2.75 48,714.89 46,962.50 1,091,675.00 104.97 MORGAN_S 1,040,000.00 912828X70US TREASURY NOTES DTD 05/01/2017 2.000% 04/30/2024 0.38 2.98 21,520.61 19,753.12 514,806.25 105.06 RBC 490,000.00 912828XX3US TREASURY NOTES DTD 06/30/2017 2.000% 06/30/2024 0.43 3.15 17,073.03 15,349.24 390,523.46 105.55 BNP_PARI 370,000.00 9128282N9US TREASURY NOTES DTD 07/31/2017 2.125% 07/31/2024 0.45 3.23 21,349.49 15,787.14 622,726.59 105.55 HSBC 590,000.00 9128282N9US TREASURY NOTES DTD 07/31/2017 2.125% 07/31/2024 0.45 3.23 7,187.40 5,552.92 205,999.21 105.64 GOLDMAN 195,000.00 9128282Y5US TREASURY NOTES DTD 10/02/2017 2.125% 09/30/2024 0.50 3.39 12,919.51 9,743.56 366,023.44 106.09 MORGAN_S 345,000.00 9128283D0US TREASURY NOTES DTD 10/31/2017 2.250% 10/31/2024 0.53 3.44 (34,289.06)(45,117.19) 3,442,312.50 104.31 JPM_CHA 3,300,000.00 912828YY0US TREASURY NOTES DTD 12/31/2019 1.750% 12/31/2024 0.59 3.63 (9,083.56)(9,002.34) 449,218.75 97.66 CITIGRP 460,000.00 91282CBC4US TREASURY NOTES DTD 12/31/2020 0.375% 12/31/2025 0.88 4.71 (71,990.05)(71,503.91) 3,417,968.75 97.66 CITIGRP 3,500,000.00 91282CBC4US TREASURY NOTES DTD 12/31/2020 0.375% 12/31/2025 0.88 4.71 Account Page 15 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration U.S. Treasury Bond / Note (6,258.04)(7,102.13) 373,408.61 108.23 HSBC 345,000.00 9128286A3US TREASURY NOTES DTD 01/31/2019 2.625% 01/31/2026 0.88 4.57 (3,897.29)(3,560.98) 838,634.33 97.52 MERRILL 860,000.00 91282CBH3US TREASURY NOTES DTD 01/31/2021 0.375% 01/31/2026 0.90 4.79 (6,148.50)(5,789.06) 1,911,609.38 98.03 NOMURA 1,950,000.00 91282CBQ3US TREASURY NOTES DTD 02/28/2021 0.500% 02/28/2026 0.91 4.86 685,545.85 0.31 583,473.53 46,689,761.87 45,930,000.00 Security Type Sub-Total 2.19 Municipal Bond / Note 4,258.65 4,258.65 169,258.65 102.58 CITIGRP 165,000.00 13017HAK2CA ST EARTHQUAKE AUTH TXBL REV BONDS DTD 11/24/2020 1.477% 07/01/2023 0.33 2.22 8,169.75 8,169.75 233,169.75 103.63 RBC 225,000.00 797272QN4SAN DIEGO CCD, CA TXBL GO BONDS DTD 10/16/2019 1.996% 08/01/2023 0.43 2.29 32,117.81 26,346.50 832,154.40 105.34 MORGAN_S 790,000.00 13063DRJ9CA ST TXBL GO BONDS DTD 10/24/2019 2.400% 10/01/2023 0.26 2.42 (990.35)(980.70) 208,960.50 99.51 JPM_CHA 210,000.00 574193TQ1MD ST TXBL GO BONDS DTD 08/05/2020 0.510% 08/01/2024 0.66 3.31 (315.70)(356.25) 74,915.25 99.89 04/15/25JPM_CHA 75,000.00 91412HGE7UNIV OF CAL TXBL REV BONDS DTD 07/16/2020 0.883% 05/15/2025 0.91 3.97 (192.10)(192.10) 169,807.90 99.89 04/15/25JPM_CHA 170,000.00 91412HGE7UNIV OF CAL TXBL REV BONDS DTD 07/16/2020 0.883% 05/15/2025 0.91 3.97 (3,666.60)(3,666.60) 311,333.40 98.84 MERRILL 315,000.00 54438CYK2LOS ANGELES CCD, CA TXBL GO BONDS DTD 11/10/2020 0.773% 08/01/2025 1.05 4.27 (2,119.90)(2,119.90) 212,880.10 99.01 CITIGRP 215,000.00 646140DP5NJ TURNPIKE AUTHORITY TXBL REV BONDS DTD 02/04/2021 1.047% 01/01/2026 1.26 4.64 31,459.35 0.60 37,261.56 2,212,479.95 2,165,000.00 Security Type Sub-Total 3.12 Federal Agency Bond / Note 630.99 1,736.25 750,618.75 100.08 NOMURA 750,000.00 3135G0U27FANNIE MAE NOTES DTD 04/13/2018 2.500% 04/13/2021 0.21 0.04 Account Page 16 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration Federal Agency Bond / Note 30,519.30 18,651.08 2,267,932.73 101.47 MORGAN_S 2,235,000.00 3135G0S38FANNIE MAE NOTES DTD 01/09/2017 2.000% 01/05/2022 0.07 0.76 11,157.85 11,453.54 566,053.94 101.99 NOMURA 555,000.00 3135G0U92FANNIE MAE NOTES DTD 01/11/2019 2.625% 01/11/2022 0.07 0.77 731.00 731.00 1,000,731.00 100.07 07/20/21BARCLAY 1,000,000.00 3134GV6H6FREDDIE MAC NOTES (CALLABLE) DTD 07/20/2020 0.320% 10/20/2022 0.27 0.31 1,734.53 1,734.53 2,486,734.53 100.07 08/06/21NOMURA 2,485,000.00 3134GWLD6FREDDIE MAC NOTES (CALLABLE) DTD 08/06/2020 0.300% 02/06/2023 0.26 0.35 25,388.90 26,122.50 1,099,144.50 102.25 WELLS_FA 1,075,000.00 3130AJ7E3FEDERAL HOME LOAN BANKS NOTES DTD 02/21/2020 1.375% 02/17/2023 0.18 1.86 6,520.46 7,444.71 1,174,519.71 100.39 CITIGRP 1,170,000.00 3137EAEQ8FREDDIE MAC NOTES DTD 04/20/2020 0.375% 04/20/2023 0.19 2.05 4,099.61 5,174.22 1,246,426.77 100.11 CITIGRP 1,245,000.00 3135G04Q3FANNIE MAE NOTES DTD 05/22/2020 0.250% 05/22/2023 0.20 2.14 3,542.63 4,379.63 1,126,094.63 100.10 TD 1,125,000.00 3137EAES4FREDDIE MAC NOTES DTD 06/26/2020 0.250% 06/26/2023 0.21 2.23 2,925.40 3,750.11 1,585,342.36 100.02 CITIGRP 1,585,000.00 3135G05G4FANNIE MAE NOTES DTD 07/10/2020 0.250% 07/10/2023 0.24 2.27 597.38 751.71 744,991.81 100.00 CITIGRP 745,000.00 3137EAEV7FREDDIE MAC NOTES DTD 08/21/2020 0.250% 08/24/2023 0.25 2.39 103,471.64 107,097.55 1,669,671.45 106.35 BMO 1,570,000.00 3135G0U43FANNIE MAE NOTES DTD 09/14/2018 2.875% 09/12/2023 0.27 2.38 (205.32) 14.40 798,654.40 99.83 09/21/22TD 800,000.00 3133EMAM4FEDERAL FARM CREDIT BANK (CALLABLE) DTD 09/21/2020 0.250% 09/21/2023 0.32 1.47 (3,402.08)(3,378.90) 2,096,411.10 99.83 11/16/22CITIGRP 2,100,000.00 3135G06F5FANNIE MAE NOTES (CALLABLE) DTD 11/16/2020 0.310% 11/16/2023 0.38 1.62 (132.67)(59.59) 684,262.26 99.89 CITIGRP 685,000.00 3137EAFA2FREDDIE MAC NOTES DTD 12/04/2020 0.250% 12/04/2023 0.29 2.67 36,599.37 29,125.04 605,869.04 108.19 DAIWA 560,000.00 3130A0F70FEDERAL HOME LOAN BANKS NOTES DTD 12/09/2013 3.375% 12/08/2023 0.31 2.57 (1,921.49)(1,875.72) 867,776.28 99.74 10/26/22WELLS_F 870,000.00 3136G46V0FANNIE MAE NOTES (CALLABLE) DTD 10/26/2020 0.310% 01/26/2024 0.40 1.57 27,807.66 28,510.68 466,873.88 106.11 NOMURA 440,000.00 3135G0V34FANNIE MAE NOTES DTD 02/08/2019 2.500% 02/05/2024 0.34 2.76 Account Page 17 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration Federal Agency Bond / Note 7,630.31 7,811.04 127,386.24 106.16 BARCLAYS 120,000.00 3130AFW94FHLB BONDS DTD 02/15/2019 2.500% 02/13/2024 0.34 2.78 23,540.28 20,224.95 1,125,310.55 103.24 WELLS_FA 1,090,000.00 3137EAEP0FREDDIE MAC NOTES DTD 02/14/2020 1.500% 02/12/2025 0.65 3.77 (2,520.25)(1,754.09) 799,253.11 99.29 CITIGRP 805,000.00 3130AJHU6FEDERAL HOME LOAN BANK NOTES DTD 04/16/2020 0.500% 04/14/2025 0.68 3.99 (109.25) 277.00 998,217.00 99.82 CITIGRP 1,000,000.00 3135G03U5FANNIE MAE NOTES DTD 04/24/2020 0.625% 04/22/2025 0.67 4.01 (3,399.97)(3,386.95) 346,529.05 99.01 WELLS_F 350,000.00 3135G04Z3FANNIE MAE NOTES DTD 06/19/2020 0.500% 06/17/2025 0.74 4.17 (10,214.47)(9,808.75) 1,237,603.75 99.01 NOMURA 1,250,000.00 3135G04Z3FANNIE MAE NOTES DTD 06/19/2020 0.500% 06/17/2025 0.74 4.17 (9,669.30)(9,149.84) 742,090.26 98.29 WELLS_F 755,000.00 3137EAEU9FREDDIE MAC NOTES DTD 07/23/2020 0.375% 07/21/2025 0.78 4.27 (10,333.42)(9,888.00) 786,368.00 98.30 BARCLAY 800,000.00 3135G05X7FANNIE MAE NOTES DTD 08/27/2020 0.375% 08/25/2025 0.77 4.37 (12,850.01)(12,327.80) 1,041,937.60 98.30 NOMURA 1,060,000.00 3135G05X7FANNIE MAE NOTES DTD 08/27/2020 0.375% 08/25/2025 0.77 4.37 (12,872.48)(12,780.90) 884,006.10 98.22 MORGAN_ 900,000.00 3137EAEX3FREDDIE MAC NOTES DTD 09/25/2020 0.375% 09/23/2025 0.78 4.45 (17,407.28)(17,048.95) 1,134,474.50 98.22 CITIGRP 1,155,000.00 3137EAEX3FREDDIE MAC NOTES DTD 09/25/2020 0.375% 09/23/2025 0.78 4.45 (9,725.33)(9,517.53) 742,779.57 98.38 BARCLAY 755,000.00 3135G06G3FANNIE MAE NOTES DTD 11/12/2020 0.500% 11/07/2025 0.86 4.55 184,012.92 0.40 192,133.99 31,204,064.87 31,035,000.00 Security Type Sub-Total 2.40 Corporate Note 1,009.85 1,215.20 311,001.30 100.32 MERRILL 310,000.00 427866BA5HERSHEY COMPANY CORP NOTES DTD 05/10/2018 3.100% 05/15/2021 0.51 0.13 4,663.70 14,920.00 402,508.00 100.63 GOLDMAN 400,000.00 02665WBG5AMERICAN HONDA FINANCE CORP NOTES DTD 09/09/2016 1.700% 09/09/2021 0.28 0.44 13,643.63 12,329.25 763,904.25 101.85 MERRILL 750,000.00 459200JQ5IBM CORP BONDS DTD 01/27/2017 2.500% 01/27/2022 0.25 0.82 Account Page 18 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration Corporate Note 22,587.24 33,827.85 1,068,245.85 101.74 WELLS_FA 1,050,000.00 037833CM0APPLE INC CORP NOTES DTD 02/09/2017 2.500% 02/09/2022 0.47 0.85 22,469.84 32,998.88 541,597.88 103.16 TD 525,000.00 25468PCW4WALT DISNEY COMPANY/THE CORP NOTES DTD 11/30/2012 2.350% 12/01/2022 0.45 1.64 21,551.32 17,255.68 666,062.08 104.07 MORGAN_S 640,000.00 89236TEL5TOYOTA MOTOR CREDIT CORP DTD 01/11/2018 2.700% 01/11/2023 0.40 1.74 33,104.48 37,027.18 804,106.68 103.76 GOLDMAN 775,000.00 023135AW6AMAZON.COM INC BONDS DTD 06/06/2018 2.400% 02/22/2023 0.41 1.86 37,430.58 46,255.88 806,530.88 104.07 WELLS_FA 775,000.00 437076AZ5HOME DEPOT INC CORP NOTES DTD 04/05/2013 2.700% 04/01/2023 0.65 1.94 4,907.34 (18,505.80) 1,433,999.40 103.91 01/11/23MITSU 1,380,000.00 931142DH3WAL MART STORES INC GLOBAL NT (CALLABLE) DTD 04/11/2013 2.550% 04/11/2023 0.61 1.73 72,782.11 67,273.80 1,180,726.80 107.34 02/15/24CSFB 1,100,000.00 717081ES8PFIZER INC CORP NOTES DTD 03/11/2019 2.950% 03/15/2024 0.45 2.78 75,949.11 57,321.00 1,447,983.00 107.26 04/15/23MKTX 1,350,000.00 931142EL3WALMART INC CORPORATE NOTES DTD 04/23/2019 2.850% 07/08/2024 0.61 1.99 280.32 280.32 480,280.32 100.06 JPM_CHA 480,000.00 46647PBS4JPMORGAN CHASE & CO CORPORATE NOTES DTD 09/16/2020 0.653% 09/16/2024 0.64 3.43 (208.94)(208.94) 619,791.06 99.97 MERRILL 620,000.00 06051GJH3BANK OF AMERICA CORP CORPORATE NOTES DTD 10/21/2020 0.810% 10/24/2024 0.82 3.51 (3,648.06)(9,070.20) 619,387.80 103.23 TD 600,000.00 00724PAB5ADOBE INC CORP NOTE DTD 02/03/2020 1.900% 02/01/2025 1.04 3.71 2,858.64 (2,008.20) 623,977.80 104.00 JSEB 600,000.00 57636QAN4MASTERCARD INC CORPORATE NOTES DTD 12/03/2019 2.000% 03/03/2025 0.96 3.79 (1,730.65)(12,565.28) 607,965.12 108.57 US_BANC 560,000.00 458140BP4INTEL CORP CORPORATE NOTES DTD 03/25/2020 3.400% 03/25/2025 1.19 3.77 (5,252.45)(9,274.20) 287,822.60 110.70 05/15/25WELLS_F 260,000.00 110122DC9BRISTOL-MYERS SQUIBB CO CORPORATE NOTES DTD 07/15/2020 3.875% 08/15/2025 1.35 3.85 269,072.42 0.61 302,398.06 12,665,890.82 12,175,000.00 Security Type Sub-Total 2.16 Account Page 19 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration Certificate of Deposit (16.01)(15.87) 934,983.82 100.00 RBC 935,000.00 60710AX56MIZUHO BANK LTD/NY CERT DEPOS DTD 01/29/2021 0.170% 06/01/2021 0.18 0.17 1,469.79 1,469.79 631,469.79 100.23 CSFB 630,000.00 22549L6F7CREDIT SUISSE NEW YORK CERT DEPOS DTD 08/07/2020 0.520% 02/01/2022 0.25 0.85 9,368.00 9,368.00 809,368.00 101.17 MERRILL 800,000.00 83369XDL9SOCIETE GENERALE NY CERT DEPOS DTD 02/19/2020 1.800% 02/14/2022 0.45 0.87 3,485.63 3,485.63 628,485.63 100.56 SMBC 625,000.00 86565CKU2SUMITOMO MITSUI BANK NY CERT DEPOS DTD 07/14/2020 0.700% 07/08/2022 0.26 1.27 26,549.12 26,549.12 1,171,549.12 102.32 MERRILL 1,145,000.00 65558TLL7NORDEA BANK ABP NEW YORK CERT DEPOS DTD 08/29/2019 1.850% 08/26/2022 0.20 1.40 27,992.40 27,992.40 1,227,992.40 102.33 BARCLAYS 1,200,000.00 83050PDR7SKANDINAV ENSKILDA BANK LT CD DTD 09/03/2019 1.860% 08/26/2022 0.20 1.40 17,824.42 17,824.42 612,824.42 103.00 GOLDMAN 595,000.00 23341VZT1DNB BANK ASA/NY LT CD DTD 12/06/2019 2.040% 12/02/2022 0.24 1.65 86,673.49 0.25 86,673.35 6,016,673.18 5,930,000.00 Security Type Sub-Total 1.09 Asset-Backed Security 2,173.81 2,175.95 157,383.56 101.40 MERRILL 155,211.77 43814WAC9HAROT 2019-1 A3 DTD 02/27/2019 2.830% 03/20/2023 2.11 0.54 3,216.23 3,231.96 255,965.87 101.27 SOCGEN 252,767.18 44932NAD2HYUNDAI AUTO RECEIVABLES TRUST DTD 04/10/2019 2.660% 06/15/2023 2.07 0.53 5,521.57 5,527.83 375,841.03 101.49 JPM_CHAS 370,327.01 43815MAC0HAROT 2019-2 A3 DTD 05/29/2019 2.520% 06/21/2023 1.84 0.67 948.42 953.66 60,575.25 101.58 MITSU 59,632.45 89239AAD5TAOT 2019-A A3 DTD 02/13/2019 2.910% 07/15/2023 2.20 0.60 331.23 332.54 23,558.05 101.42 JPM_CHAS 23,228.32 02004WAC5ALLYA 2019-1 A3 DTD 02/13/2019 2.910% 09/15/2023 2.32 0.53 4,659.16 4,660.45 399,657.21 101.18 JPM_CHAS 395,000.00 89238UAD2TAOT 2019-C A3 DTD 08/14/2019 1.910% 09/15/2023 1.42 0.72 6,111.55 6,137.73 384,793.95 101.61 MITSU 378,713.59 65479KAD2NAROT 2019-A A3 DTD 02/13/2019 2.900% 10/15/2023 2.25 0.61 Account Page 20 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Fair Market Value & Analytics CITY OF SAN LUIS OBISPO OPERATING FUNDS - Value On Cost Amort CostCUSIPBrokerDatePriceDated Date/Coupon/Maturity Par at Mkt Market Unreal G/L Unreal G/LNext Call MarketSecurity Type/Description YTMEffective Duration Asset-Backed Security 2,606.17 2,621.67 188,112.60 101.39 JPM_CHAS 185,528.52 14042WAC4COPAR 2019-1 A3 DTD 05/30/2019 2.510% 11/15/2023 1.97 0.61 6,382.16 6,420.16 413,321.76 101.55 WELLS_FA 406,993.62 65479HAC1NAROT 2019-B A3 DTD 05/28/2019 2.500% 11/15/2023 1.89 0.69 4,918.01 4,928.72 267,784.30 101.86 RBC 262,882.44 14316LAC7CARMX 2019-2 A3 DTD 04/17/2019 2.680% 03/15/2024 2.03 0.76 7,410.44 7,432.40 432,349.10 101.73 JPM_CHAS 425,000.00 43813RAC1HAROT 2020-1 A3 DTD 02/26/2020 1.610% 04/22/2024 1.04 1.42 10,030.04 10,041.29 594,999.05 101.71 MITSU 585,000.00 89232HAC9TAOT 2020-A A3 DTD 02/12/2020 1.660% 05/15/2024 1.10 1.22 6,337.14 6,350.49 286,295.55 102.25 MERRILL 280,000.00 14315XAC2CARMX 2020-1 A3 DTD 01/22/2020 1.890% 12/16/2024 1.27 1.39 (524.99)(524.87) 274,470.10 99.81 JPM_CHA 275,000.00 43813GAC5HAROT 2021-1 A3 DTD 02/24/2021 0.270% 04/21/2025 0.32 2.06 (551.47)(550.30) 164,417.10 99.65 MITSU 165,000.00 14316NAC3CARMX 2021-1 A3 DTD 01/27/2021 0.340% 12/15/2025 0.42 2.35 59,739.68 1.52 59,569.47 4,279,524.48 4,220,284.90 Security Type Sub-Total 1.01 101,455,284.90 103,068,395.17 1,316,503.71 1,261,509.96 0.43 Managed Account Sub-Total 2.16 Total Investments $103,379,437.43 $311,042.26 $103,068,395.17 Accrued Interest Securities Sub-Total $101,455,284.90 $1,316,503.71 $1,261,509.96 0.43% 2.16 Account Page 21 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Security Transactions & Interest CITY OF SAN LUIS OBISPO OPERATING FUNDS - Transaction Type Trade CUSIPSecurity DescriptionSettle Par Proceeds Principal Accrued Interest Total Cost Realized G/L Realized G/L Sale Amort Cost Method BUY 03/12/21 US TREASURY NOTES DTD 02/28/2021 0.500% 02/28/2026 91282CBQ3 (1,917,398.44)(317.93)(1,917,716.37) 1,950,000.00 03/12/21 (317.93)(1,917,716.37)(1,917,398.44) 1,950,000.00 Transaction Type Sub-Total INTEREST 03/02/21 MONEY MARKET FUND MONEY0002 0.00 0.96 0.96 0.00 03/02/21 03/03/21 MASTERCARD INC CORPORATE NOTES DTD 12/03/2019 2.000% 03/03/2025 57636QAN4 0.00 6,000.00 6,000.00 600,000.00 03/03/21 03/09/21 AMERICAN HONDA FINANCE CORP NOTES DTD 09/09/2016 1.700% 09/09/2021 02665WBG5 0.00 3,400.00 3,400.00 400,000.00 03/09/21 03/12/21 FANNIE MAE NOTES DTD 09/14/2018 2.875% 09/12/2023 3135G0U43 0.00 22,568.75 22,568.75 1,570,000.00 03/12/21 03/15/21 TAOT 2019-A A3 DTD 02/13/2019 2.910% 07/15/2023 89239AAD5 0.00 154.80 154.80 63,834.79 03/15/21 03/15/21 CARMX 2021-1 A3 DTD 01/27/2021 0.340% 12/15/2025 14316NAC3 0.00 46.75 46.75 165,000.00 03/15/21 03/15/21 CARMX 2019-2 A3 DTD 04/17/2019 2.680% 03/15/2024 14316LAC7 0.00 614.17 614.17 275,000.00 03/15/21 03/15/21 NAROT 2019-A A3 DTD 02/13/2019 2.900% 10/15/2023 65479KAD2 0.00 981.65 981.65 406,199.36 03/15/21 03/15/21 ALLYA 2019-1 A3 DTD 02/13/2019 2.910% 09/15/2023 02004WAC5 0.00 60.79 60.79 25,066.41 03/15/21 03/15/21 TAOT 2020-A A3 DTD 02/12/2020 1.660% 05/15/2024 89232HAC9 0.00 809.25 809.25 585,000.00 03/15/21 03/15/21 TAOT 2019-C A3 DTD 08/14/2019 1.910% 09/15/2023 89238UAD2 0.00 628.71 628.71 395,000.00 03/15/21 03/15/21 COPAR 2019-1 A3 DTD 05/30/2019 2.510% 11/15/2023 14042WAC4 0.00 416.36 416.36 199,058.00 03/15/21 03/15/21 NAROT 2019-B A3 DTD 05/28/2019 2.500% 11/15/2023 65479HAC1 0.00 899.52 899.52 431,771.13 03/15/21 03/15/21 CARMX 2020-1 A3 DTD 01/22/2020 1.890% 12/16/2024 14315XAC2 0.00 441.00 441.00 280,000.00 03/15/21 Account Page 22 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Security Transactions & Interest CITY OF SAN LUIS OBISPO OPERATING FUNDS - Transaction Type Trade CUSIPSecurity DescriptionSettle Par Proceeds Principal Accrued Interest Total Cost Realized G/L Realized G/L Sale Amort Cost Method INTEREST 03/15/21 HYUNDAI AUTO RECEIVABLES TRUST DTD 04/10/2019 2.660% 06/15/2023 44932NAD2 0.00 606.38 606.38 273,552.69 03/15/21 03/15/21 PFIZER INC CORP NOTES DTD 03/11/2019 2.950% 03/15/2024 717081ES8 0.00 16,225.00 16,225.00 1,100,000.00 03/15/21 03/16/21 JPMORGAN CHASE & CO CORPORATE NOTES DTD 09/16/2020 0.653% 09/16/2024 46647PBS4 0.00 1,567.20 1,567.20 480,000.00 03/16/21 03/18/21 HAROT 2019-1 A3 DTD 02/27/2019 2.830% 03/20/2023 43814WAC9 0.00 398.16 398.16 168,830.45 03/18/21 03/21/21 HAROT 2020-1 A3 DTD 02/26/2020 1.610% 04/22/2024 43813RAC1 0.00 570.21 570.21 425,000.00 03/21/21 03/21/21 FEDERAL FARM CREDIT BANK (CALLABLE) DTD 09/21/2020 0.250% 09/21/2023 3133EMAM4 0.00 1,000.00 1,000.00 800,000.00 03/21/21 03/21/21 HAROT 2019-2 A3 DTD 05/29/2019 2.520% 06/21/2023 43815MAC0 0.00 834.29 834.29 397,279.73 03/21/21 03/21/21 HAROT 2021-1 A3 DTD 02/24/2021 0.270% 04/21/2025 43813GAC5 0.00 55.69 55.69 275,000.00 03/21/21 03/23/21 FREDDIE MAC NOTES DTD 09/25/2020 0.375% 09/23/2025 3137EAEX3 0.00 3,810.31 3,810.31 2,055,000.00 03/23/21 03/25/21 INTEL CORP CORPORATE NOTES DTD 03/25/2020 3.400% 03/25/2025 458140BP4 0.00 9,520.00 9,520.00 560,000.00 03/25/21 03/31/21 US TREASURY NOTES DTD 03/31/2016 1.500% 03/31/2023 912828Q29 0.00 1,500.00 1,500.00 200,000.00 03/31/21 03/31/21 US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 0.00 43,687.50 43,687.50 4,660,000.00 03/31/21 03/31/21 US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 912828L57 0.00 12,775.00 12,775.00 1,460,000.00 03/31/21 03/31/21 US TREASURY NOTES DTD 10/02/2017 2.125% 09/30/2024 9128282Y5 0.00 2,071.88 2,071.88 195,000.00 03/31/21 131,644.33 131,644.33 0.00 18,445,592.56 Transaction Type Sub-Total MATURITY Account Page 23 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 For the Month Ending March 31, 2021Managed Account Security Transactions & Interest CITY OF SAN LUIS OBISPO OPERATING FUNDS - Transaction Type Trade CUSIPSecurity DescriptionSettle Par Proceeds Principal Accrued Interest Total Cost Realized G/L Realized G/L Sale Amort Cost Method MATURITY 03/12/21 MUFG BANK LTD/NY COMM PAPER DTD 07/16/2020 0.000% 03/12/2021 62479LQC2 1,835,000.00 0.00 1,835,000.00 481.69 0.00 1,835,000.00 03/12/21 0.00 0.00 481.69 1,835,000.00 1,835,000.00 1,835,000.00 Transaction Type Sub-Total PAYDOWNS 03/15/21 HYUNDAI AUTO RECEIVABLES TRUST DTD 04/10/2019 2.660% 06/15/2023 44932NAD2 20,785.51 0.00 20,785.51 2.74 0.00 20,785.51 03/15/21 03/15/21 TAOT 2019-A A3 DTD 02/13/2019 2.910% 07/15/2023 89239AAD5 4,202.34 0.00 4,202.34 0.77 0.00 4,202.34 03/15/21 03/15/21 NAROT 2019-A A3 DTD 02/13/2019 2.900% 10/15/2023 65479KAD2 27,485.77 0.00 27,485.77 4.16 0.00 27,485.77 03/15/21 03/15/21 NAROT 2019-B A3 DTD 05/28/2019 2.500% 11/15/2023 65479HAC1 24,777.51 0.00 24,777.51 5.60 0.00 24,777.51 03/15/21 03/15/21 CARMX 2019-2 A3 DTD 04/17/2019 2.680% 03/15/2024 14316LAC7 12,117.56 0.00 12,117.56 1.24 0.00 12,117.56 03/15/21 03/15/21 ALLYA 2019-1 A3 DTD 02/13/2019 2.910% 09/15/2023 02004WAC5 1,838.09 0.00 1,838.09 0.22 0.00 1,838.09 03/15/21 03/15/21 COPAR 2019-1 A3 DTD 05/30/2019 2.510% 11/15/2023 14042WAC4 13,529.48 0.00 13,529.48 2.74 0.00 13,529.48 03/15/21 03/18/21 HAROT 2019-1 A3 DTD 02/27/2019 2.830% 03/20/2023 43814WAC9 13,618.68 0.00 13,618.68 0.37 0.00 13,618.68 03/18/21 03/21/21 HAROT 2019-2 A3 DTD 05/29/2019 2.520% 06/21/2023 43815MAC0 26,952.72 0.00 26,952.72 1.01 0.00 26,952.72 03/21/21 0.00 0.00 18.85 145,307.66 145,307.66 145,307.66 Transaction Type Sub-Total 62,909.22 131,326.40 194,235.62 500.54 0.00 Managed Account Sub-Total Total Security Transactions $500.54 $194,235.62 $131,326.40 $62,909.22 $0.00 Account Page 24 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Quarterly Investment Report AS OF MARCH 31, 2021 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 May 13, 2021 This report presents the City’s investment portfolio for the quarter ending March 31,2021.It has been prepared to comply with regulations contained in California Government Code Section 53646 .The report includes all investments managed by the City on its own behalf as well as for other third-party agencies on a fiduciary basis such as the Whale Rock Commission. It also includes all City-related investments held by trustees for bond debt service obligations .As required, the report provides information on the investment type, issuer, maturity date,cost,and current market value for each security. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Market Themes The Fight Against the COVID -19 Pandemic Continues Enactment Date Congressional Actions March 6, 2020 $7.8 billion Coronavirus Preparedness and Response Supplemental Appropriations Act March 18 $15.4 billion Families First Coronavirus Response Act (FFCRA) March 27 $2.1 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act April 24 $483 billion Paycheck Protection Program and Health Care Enhancement Act Dec 27 $900 billion Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act March 11, 2021 $1.9 trillion American Rescue Plan (ARP) Act of 2021 ?$2 trillion proposed “American Jobs Plan” COVID -19 cases fell by 66% in the U.S. during the first quarter. Approximately 95 million Americans received at least one vaccination by quarter-end. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Market Considerations •The Fed reaffirmed its commitment to keep short-term rates near zero and continued their asset purchase program. Increasing inflation expectations were fueled by a combination of stronger recovery and additional stimulus. •The U.S. Treasury yield curve steepened dramatically during the quarter. Yields on very short-term maturities under a year remained anchored to the Fed’s near-zero rate policy. Yields on 2- to 3-year maturities hovered near record lows, while yields on maturities five years and longer increased by 50 to 90 basis points (0.50% to 0.90%). Source: Bloomberg as of April 5, 2021. Source: Bloomberg as of March 31, 2021. 0.02% 0.94% 1.74% 2.41% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3 M 1 Y 2 Y 3 Y 4 Y 5 Y 10 Y 30 YYield Maturity U.S. Treasury Yield Curve March 31, 2021 December 31, 2020 Fed’s average inflation target 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 2017 2018 2019 2020 2021 Inflation Indicators Core CPI YoY Core PCE YoY DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Market Considerations •The federal agency sector offered record low yield spreads and posted modest positive excess returns for the quarter. On balance, diversification remained a net positive to performance relative to Treasuries, but by a much smaller amount than in recent periods. •Investment grade corporates eked out muted excess returns as higher income offset modestly wider yield spreads. Supply was strong and rising rates put natural upward pressure on yields spreads. Source: Bloomberg as of March 31, 2021. 1-5 Year Indices -0.52%-0.44% -0.03% -0.61%-0.45% -1.0% -0.5% 0.0% 0.5% 1.0%U.S. TreasuryAgencyABSCorp A-AAACorp BBBFirst Quarter 2021 4.25% 3.35%3.22% 5.41%6.00% 0% 2% 4% 6% 8%U.S. TreasuryAgencyABSCorp A-AAACorp BBBFull Year 2020 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 What we are watching… •The vaccine rollout, accommodative monetary policy, and the new $1.9 trillion of fiscal stimulus all point to continued improvement in U.S. economic fundamentals. •GDP projections for 2021 have been revised up several times, with current forecasts pointing to growth of 6% or more this year. That optimism, however, has also translated into increased inflation expectations, which is likely to continue to put upward pressure on longer-term rates. Source: Federal Reserve, economic projections as of December 2020 and March 2021. 6.5% 3.3% 2.2%1.8% 0% 2% 4% 6% 8% 2021 2022 2023 Longer Run U.S. Real GDP December Projections March Projections 4.5% 3.9%3.5% 4.0% 0% 2% 4% 6% 2021 2022 2023 Longer Run Une mployment Rate December Projections March Projections DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Current Cash & Investment Summary The following is a summary of the City’s cash and investments based on market value, as of March 31, 2021, compared to the prior quarter. Investment Entity March 31, 2021 December 31, 2020 Percent of Total** City Held Cash & Investments $34,415,093 $23,330,369 21% LAIF Held Investments $23,950,630 $23,912,821 15% PFM Managed Investments*$103,382,052 $103,665,721 64% Trustee Held Investments $72,644 $72,529 <1% TOTAL $161,820,420 $150,981,441 100% *Figures shown exclude accrued interest. **Details may not add up to total due to rounding. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Current Cash & Investment Summary There are several factors which result in changes in cash and investment balances from month-to-month and quarter-to- quarter, dependent on the receipt of revenues or a large disbursement. •Some major City revenues are received on a periodic rather than a monthly basis. Property Tax is received in December, January, April, and May of each year. Transient Occupancy Tax is received monthly but varies considerably due to seasonality. •Payments for bonded indebtedness or large capital projects can reduce the portfolio substantially in the quarter in which they occur. •The City pays its CalPERS obligation in a lump sum at the beginning of the fiscal year to achieve interest savings. Factors DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Securities Security Type Market Value % of Portfolio % Change vs. 12/31/20 Permitted by Policy In Compliance U.S. Treasury $46,689,762 45.2%+18.9%100% Federal Agency $31,204,065 30.2%-0.1%100% Municipal Obligations $2,212,480 2.1%+0.2%30% Negotiable CDs $6,016,673 5.8%+0.9%30% Corporate Notes $12,665,891 12.3%-0.8%30% Asset-Backed Securities $4,279,524 4.1%-15% Securities Sub -Total $103,068,395 Money Market Fund $313,657 0.3%-19.1%20% Accrued Interest $311,042 Securities Total $103,693,095 Securities in the City’s portfolio are priced by Refinitiv, an independent pricing service at the end of every month. In some cases, the City may have investments with a current market value that is greater or less than the recorded value. These changes in market value are due to fluctuations in the marketplace having no effect on yield, as the City does not intend to sell securities prior to maturity. Nevertheless, these market changes can impact the total value of the portfolio. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Total Return Total return is calculated based on interest and both realized and unrealized changes in market value; this is expressed as a rate of return over a specified period of time based on cost and is backward -looking. •Focused on long-t erm p erformance and growth •Affected by both yield an d m arket valu e fluctuations •Reflects “true value” of the portfolio •Recommended ap p roach by th e Government Finance Officers Association PFM Managed 03/31/2021 12/31/2020 Average Maturity (Years)2.38 2.38 Effective Duration1 2.16 2.11 Average Market Yield 0.43%0.34% Total Rate of Return 3 Months 1 Year 3 Years Since Inception City of SLO -0.32%1.26%3.23%1.98% 0–5 Treasury Index -0.39%-0.04%2.95%1.77% Variance +0.07%+1.30%+0.28%+0.21% 1Effective duration is the approximate percentage change in price for each 1% change in interest rates. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Summary of Activity for the Quarter & Future Liquidity As of March 31, 2021, the investment portfolio was in compliance with all State laws, the City's Statement of Investment Policy, and the City’s Investment Management Plan. Cash receipts and disbursements are consistent with past trends for the quarter. The cash management program contains enough liquidity to meet at least the next three months of expected expenditures by the City as well as by related parties. If you have any questions concerning this report, or require additional information, contact Brigitte Elke, Finance Director at (805) 781-7510. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 I nvestment Portfolio Benefits All Funds The City’s cash and i nvestment portfolio r epresents money fr om all City fund s, i ncluding the General Fund, enterprise funds (Water, S ewer, Parking, T ransit), special r evenue funds (T ouri sm, D owntown Assessments), capital projects funds, and other funds which are restricted to s pecific p urposes. In general, monies held b y the City ar e either allocated by the City C ouncil for spending or are p urp osefully retained in r eserve. F or ex ample, the money i n the Capital O utlay F und has been i dentified to p rovide particular capital p rojects f or the community, and there is a plan for s pending d own the cash b alance as the projects p rogress. B alances held i n r eserve per the City’s financial policies equate to 20% of the operating budget. For the fiscal year 2020-21, they are listed in the chart to the left. Fund FY 2020–21 General $ 10,251,000 Water $ 4,377,000 Sewer $ 2,311,000 Parking $548,000 Transit $734,000 Tourism $100,000 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Investment Objectives The investment objectives of the City of San Luis Obispo are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. The City follows the practice of pooling cash and investments for all funds under its direct control. Funds held by outside fiscal agents under provisions of bond indentures are maintained separately. Interest earned on pooled cash and investments is allocated quarterly to the various Quarterly Investment Report funds based on the respective fund’s average quarterly cash balance. Interest earned from cash and investments with fiscal agents is credited directly to the related accounts. It is common for governments to pool the cash and investments of various funds to improve investment performance. By pooling funds, the City can benefit from economies of scale, diversification, liquidity, and ease of administration. The City uses the services of an investment advisor, PFM Asset Management, to manage a portion of the City’s portfolio. The City’s strategy is to retain approximately 25% of the portfolio to manage its day - to -day cash flow needs, while PFM’s focus is on longer -term investment management. In addition, the City has retained direct control of several investments that had been acquired before the City began to use investment advisors. All investments are held by the City in a safekeeping account with Bank of New York Mellon, except for investments held by trustees related to bond financings, which are held by either US Bank or Bank of New York Mellon. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Environmental, Social, and Governance (ESG) Investment Objectives ESG investing is the process of incorporating the analysis of non- financial environmental, social, and governance factors into investment decisions alongside traditional financial criteria. As set forth in the City’s Investment Management Plan dated August 18, 2020, it is City’s objective to integrate environmental, social, and governance (“ESG”) factors into investment decisions for its investment portfolio to the extent practical and possible. In order to achieve this objective, the City will apply the ESG Investment Criteria to the following Investments: Asset -Backed Securities, Bankers’ Acceptances, Commercial Paper, Corporate, Medium-Term & Bank Notes, and Negotiable Bank Deposit Obligations. The ESG investment criteria is based on ESG Risk Ratings, industry and subindustry definitions, and subindustry rankings as provided by Sustainalytics. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 1. Market Value includes accrued interest as of March 31, 2021. Source: Sustainalytics. Please see important disclosures at the end of this presentation. ESG Performance SummaryQ1 2021 ESG Rated Portfolio 30/40 issuers with a MV of $103.4 million1 $50,865,264 (49%) Non-ESG Rated Issuers: U.S. Treasuries, Municipal Bonds, Federal Home Loan Banks, and Federal Farm Credit Banks Sector Allocation U.S. Treasury Municipal Non ESG-Rated Federal Agency & Agency MBS Fannie Mae Freddie Mac Corporate Notes Certificates of Deposit ABS Green shades are ESG-rated sectors DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 1Characterizations of ESG performance. Source: Sustainalytics: Data as of March 31,2021 and December 31, 2020, as indicated. Please see important disclosures at the end of this presentation. ESG Quarter - Over -Quarter Summary Comparison 0 20 40 60 80 100 Management Exposur e ESGRiskRating 0%13% 81% 7%0%0%12% 77% 10%0% ESG Risk Rating1 22.7 Negligible Low Medium High Severe 23.0 3/31/21 12/31/20 Exposure1 Management1 Low Medium High Weak Average Strong 42.0 44.9 48.848.2 •On average, the portfolio maintained medium ESG risk as of March 31, 2021. •The Portfolio’s ESG risk exposure score remained within the medium range. A lower ESG exposure score g enerally decreases ESG risk. •The Portfolio’s ESG Management rating also remained within the averag e range quarter-over-quarter. Higher management scores generally reduce ESG risk. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 9.0 (39%) 2.0 (9%) 0.1 (1%) 6.2 (27%) 3.7 (16%) 0.3 (<1%) 0.1 (<1%) 0.1 (1%)1.3 (6%) SLO as of 3/31/21 Carbon Output & Energy Use Waste & Pollution Resource Use & Biodiversity Community Impact (Environmental) Human Capital Management Product Governance Community Impact (Social) ESG Financial Integration & Resilience* Corporate Goverance Source: Sustainalytics. ESG Themes were created by PFM based on the material ESG issues (“MEIs”) and ESG indicators developed and defined by Sustainalytics. Issuers with no MEIs rating are excluded from the calculation. Please see the ESG Themes Glossary provided in the Appendix for additional information and details. *Only applies to financial service industries. Material ESG Issues Exposure Portfolio ESG Risk Rating: 22.7 Environmental 8% Social 53% Governance 39% Risk Contribution by ESG Pillar 1.7 9.012.0 E S G Risk Contribution by ESG Themes DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Portfolio holdings and Sustainalytics data as of March 31, 2021. “ESG Risk Rating by Industry” represents the market value-w eighted average ESG risk rating for each industry, as classified by Sustainalytics. “Industry Distribution” charts show the total number of issuers per industry and the allocation as percentage of portfolio market value. Industry Diversification 30.6 22.4 23.1 25.0 27.5 16.2 24.7 17.5 16.9 15.3 16.70 10 20 30 40 ESG Risk Rating by Industry Average ESG Risk Rating = 22.7 4 11 2 1 1 1 2 3 1 3 1 Industry Distribution (# of Issuers) 8.7%68.7% 0.4% 0.6% 5.7% 1.1% 2.9% 4.6% 1.2% 4.0% 2.1% (Allocation % of Market Value ) DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 0 10 20 30 40 Federal Agency Certificates of Deposit Corporate Notes ABS ESG Risk Rating Source: Sustainalytics. Data as of March 31, 2021. Bars represent the range of held issuers’ ESG risk rating that fall under each sector, and lines indicate the sectors market value-weighted average ESG risk rating. Please see important disclosures at the end of this presentation. ESG Risk Rating by Sector Maximum Medium ESG Risk Score Maximum Permitted ESG Risk Score (Top Subindustry Performer) 22.4 27.5 23.6 21.9 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Source: Sustainalytics and the Investment Policy Statement as of March 31, 2021. Changes in approved list shown reflect issuers eligible for purchase in the portfolio based on ESG criteria and IPS limitations but may not be held by the client. Top Changes in ESG Risk Ratings in Q1 Largest Decreases in ESG Risk Rating Pfizer Inc Nissan Motor Co Ltd CarMax Inc. ↓4.8 ↓1.0 ↓0.4 25.3 33.1 13.1 •Improvement in ESG management – increase in management score •Improvement in ESG management –increase in management score •Improvement in ESG management – increase in management score Largest Increases in ESG Risk Rating Intel Corp Mizuho Financial Group Inc Toyota Motor Corporation 16.9 20.9 30.6 •Decrease in ESG management score •Involvement in negative news headline surrounding default risks •Decrease in ESG management score ↑1.1 ↑1.1 ↑0.3 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Holdings as of March 31, 2021 –Sorted By ESG Risk Rating Source: Sustainalytics. Holdings as of March 31, 2021. Quarter-over-quarter (“QoQ”) change in ESG risk rating reflects the overall change in risk rating for each issuer, as defined by Sustainalytics, from December 31, 2020 to March 31, 2021. Under QoQ Change, reductions in green indicate rating improvements, increases in red indicate higher risk rating. "-" represents 0 or no data available. Issuer % Weight Subindustry Subindustry Percentile ESG Risk Rating 3/31/21 QoQ Change in ESG Rating Contributions E S G Adobe Systems Inc 0.6% Enterprise and Infrastructure Software 1 10.9 -7%49%44% The Home Depot Inc 0.8% Home Improvement Retail 6 11.6 0.2 28%39%33% CarMax Inc.0.7%Automotive Retail 22 13.1 -0.4 -67%33% DNB ASA 0.6%Diversified Banks 3 15.7 -3%47%50% Walt Disney Co 0.5%Movies and Entertainment 41 16.2 --48%52% Mastercard Incorporated 0.6%Data Processing 16 16.3 --47%53% Apple Inc 1.0%Technology Hardware 12 16.7 0.2 5%40%55% Intel Corp 0.6% Semiconductor Design and Manufacturing 3 16.9 1.1 29%30%41% International Business Machines Corp 0.7%IT Consulting 15 18.0 0.1 2%56%42% Federal National Mortgage Association 16.2%Thrifts and Mortgages 7 20.2 --61%39% Mizuho Financial Group Inc 0.9%Diversified Banks 11 20.9 1.1 5%46%49% Nordea Bank AB 1.1%Diversified Banks 12 21.6 -0.3 2%45%53% Bristol-Myers Squibb Company 0.3%Biotechnology 3 22.6 --69%31% DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Holdings as of March 31, 2021 –Sorted By ESG Risk Rating Source: Sustainalytics. Holdings as of March 31, 2021. Quarter-over-quarter (“QoQ”) change in ESG risk rating reflects the overall change in risk rating for each issuer, as defined by Sustainalytics, from December 31, 2020 to March 31, 2021. Under QoQ Change, reductions in green indicate rating improvements, increases in red indicate higher risk rating. "-" represents 0 or no data available. Issuer % Weight Subindustry Subindustry Percentile ESG Risk Rating 3/31/21 QoQ Change in ESG Rating Contributions E S G Capital One Financial Corporation 0.2%Consumer Finance 14 23.1 -0.1 -59%41% Ally Financial Inc.0.0%Consumer Finance 19 23.7 -0.2 -58%42% Skandinaviska Enskilda Banken AB 1.2%Diversified Banks 19 23.8 -0.1 3%46%51% Federal Home Loan Mortgage Corp 10.7%Thrifts and Mortgages 21 24.5 -0.3 7%55%38% The Hershey Company 0.3%Packaged Foods 5 25.0 -0.3 38%40%21% Pfizer Inc 1.1%Pharmaceuticals 4 25.3 -4.8 6%55%40% Societe Generale SA 0.8%Diversified Banks 26 25.9 -5%33%62% Bank of America Corporation 0.6%Diversified Banks 28 26.4 0.1 5%43%51% Sumitomo Mitsui Financial Group Inc 0.6%Diversified Banks 29 26.9 -7%40%53% Amazon.com Inc 0.8%Online and Direct Marketing Retail 94 27.4 -23%41%36% Walmart Inc.2.8%Food Retail 56 27.5 0.3 14%61%25% JPMorgan Chase & Co.0.5%Diversified Banks 34 27.9 -3%48%49% Honda Motor Co Ltd 1.6%Automobiles 39 28.5 -24%44%32% DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Holdings as of March 31, 2021 –Sorted By ESG Risk Rating Source: Sustainalytics. Holdings as of March 31, 2021. Quarter-over-quarter (“QoQ”) change in ESG risk rating reflects the overall change in risk rating for each issuer, as defined by Sustainalytics, from December 31, 2020 to March 31, 2021. Under QoQ Change, reductions in green indicate rating improvements, increases in red indicate higher risk rating. "-" represents 0 or no data available. Issuer % Weight Subindustry Subindustry Percentile ESG Risk Rating 3/31/21 QoQ Change in ESG Rating Contributions E S G Toyota Motor Corporation 1.7%Automobiles 59 30.6 0.3 22%44%34% Credit Suisse Group AG 0.6%Diversified Banks 49 31.8 -4%39%57% Nissan Motor Co Ltd 0.8%Automobiles 74 33.1 -1.0 29%43%29% Hyundai Motor Company 0.2%Automobiles 90 36.2 -26%43%31% DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Socially Responsible Investment Policy In addition to the ESG criteria, the City’s Socially Responsible Investment (SRI) Policy restricts from the portfolio issuers who generate revenue from casinos, gambling, racetracks, brewery, wine/spirits, tobacco, electronic cigarette, or tobacco -related products, or who support the direct production or drilling of fossil fuels. The City’s portfolio is in compliance with SRI restrictions. The tables to the right show the Bloomberg Industry Classifications (“BICS”) for all the portfolio’s holdings. Issuer Sector (BICS) Ally Auto Receivables Trust Automobiles Manufacturing American Honda Finance Automobiles Manufacturing Carmax Auto Owner Trust Automobiles Manufacturing Copart, Inc.Automobiles Manufacturing Honda Auto Receivables Automobiles Manufacturing Hyundai Auto Receivables Automobiles Manufacturing Nissan Auto Receivables Automobiles Manufacturing Toyota Motor Credit Corp Automobiles Manufacturing Credit Suisse Group Banks Mizuho Financial Group Inc.Banks Nordea Bank Ab Banks Skandinaviska Enskilda Banken Ab Banks Societe Generale Banks Sumitomo Mitsui Financial Group Inc Banks Apple Inc Communications Equipment Mastercard Inc Consumer Finance Bank Of America Co Diversified Banks JPMorgan Chase & Co Diversified Banks LA Community College District Education San Diego Community College District Education University Of California Education Issuer Sector (BICS) The Walt Disney Corporation Entertainment Content Dnb Asa Financial Services California State Earthquake Authority Financing & Development Hershey Company Food & Beverage California State General Government Maryland State General Government FHLB Government Agencies FFCB Government Agencies FHLMC Government Agencies FNMA Government Agencies Wal -Mart Stores Inc Mass Merchants Bristol -Myers Squibb Co Pharmaceuticals Pfizer Inc Pharmaceuticals Amazon.Com Inc Retail -Consumer Discretionary Home Depot Inc Retail -Consumer Discretionary Intel Corporation Semiconductors Adobe Inc Software & Services IBM Corp Software & Services United States Treasury Sovereigns New Jersey Turnpike Authority Transportation DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 ESG Themes Glossary ESG Themes listed w ere created by PFM for educational purposes based on the material ESG issues (“MEIs”) and ESG indicators developed and defined by Sustainalytics. ESG Theme Theme Description Key Indicators Environment Carbon Output & Energy Use Refers to a company’s management of risks related to its energy efficiency and greenhouse gas emissions in its operation as well as its products and services in the production phase and during the product use phase Waste & Pollution Evaluates the management of emissions and releases from a company’s own operations to air, water, and land, excluding greenhouse gas emissions •Carbon intensity •Renewable energy use •Env. Mgt. System certification •GHG reporting / risk management •Hazardous products •Sustainable products & services •Emergency response program •Solid waste management •Effluent management •Radioactive waste management •Hazardous waste management •Non -GHG air emissions programs •Oil spill disclosure & performance •Recycled material use Resource Use & Biodiversity Analyzes how efficiently and effectively a company uses its raw material inputs and water in production. It also encompasses how a company manages the impact of its operations on land, ecosystems, and wildlife •Biodiversity programs •Deforestation programs / polices Community Impact (Environmental) Evaluates the community impact from an environmental risk perspective based on an assessment of Community Relations, Products & Services, Occupational Health and Safety, and Product Governance •Site closure & rehabilitation •Water intensity & risk management •Forest certifications •Supplier environmental programs / certifications •Sustainable agriculture programs •Env Impact –Community Relations •Env Impact –Products & Services •Env Impact –Occupational Health and Safety •Env Impact –Product Governance DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 ESG Themes Glossary * Only applies to financial service industries ESG Themes listed w ere created by PFM for educational purposes based on the material ESG issues (“MEIs”) and ESG indicators developed and defined by Sustainalytics. ESG Theme Theme Description Key Indicators Social Human Capital Management Evaluates the management of risks related to human rights, labor rights, equality, talent development, employee retention, and labor health and safety Product Governance Focuses on the management of risks related to product quality, safety, wellness, and nutrition, as well as customer data privacy & cybersecurity •Discrimination policy •Diversity programs •Gender pay equality / disclosures •Employee development •Supply chain management / standards •Human rights policies & programs •Employee health & safety •Product & service safety programs / certifications •Data privacy management •Media & advertising ethics policy •Organic products / GMO policy •Product health statement Community Relations Assesses how companies engage with local communities and their management of access to essential products or services to disadvantaged communities or groups •Equitable pricing and availability •Access to health care •Price transparency ESG Financial Integration & Resilience* Analyzes financial stability and issues that pose systemic risks and potential external costs to society in the financial services industry. Also measures ESG activities by financial institutions •Human rights / indigenous policy •Community involvement programs •Noise management •Systemic risk management / reporting •Tier 1 capital •Leverage ratio •Responsible investment / asset management •Underwriting standards •Financial inclusion •Credit & loan standards •Green buildings investments DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 ESG Themes Glossary ESG Theme Theme Description Key Indicators Governance Corporate Governance Evaluates a company’s rules, policies, and practices with a focus on how a company's board of directors manages and oversees the operations of a company. Also assesses the management of general professional ethics and lobbying activities •Board/management quality & integrity •Board structure •Ownership & shareholder rights •Remuneration •Audit & financial reporting •Stakeholder governance •Bribery & corruption policies / programs •Money laundering policy •Whistleblower programs •Business ethics programs •Political involvement policy •Lobbying and political expenses * Only applies to financial service industries ESG Themes listed w ere created by PFM for educational purposes based on the material ESG issues (“MEIs”) and ESG indicators developed and defined by Sustainalytics. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Disclosures This material is based on information obtained from sources generally believed to be reliable and available to the public, however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation.All statements as to what will or may happen under certain circumstances are based on assumptions, some but not all of which are noted in the presentation. Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in this presentation is not an offer to purchase or sell any securities. There is no guarantee the investment objectives will be achieved as the investment portfolio will only include holdings consistent with the applicable Environmental, Social, and Governance (ESG) guidelines. As a result, the universe of investments available will be more limited. ESG criteria risk is the risk that because the investment portfolio ESG criteria excludes securities of certain issuers for nonfinancial reasons, the investment portfolio may forgo some market opportunities that would be available to investment portfolios that do not apply ESG criteria. PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. Investment advisory services are provided by PFM Asset Management LLC, which is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The information contained is not an offer to purchase or sell any securities. The material contained herein is for informational purposes only. This content is not intended to provide financial, legal, regulatory or other professional advice. Applicable regulatory information is available upon request. For more information regarding PFM’s services or entities, please visit www.pfm.com. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Distribution List City Council Heidi Harmon Mayor Andy Pease Vice Mayor Aaron Gomez Council Member Erica A. Stewart Council Member Carlyn Christianson Council Member Investment Oversight Committee Heidi Harmon Mayor Daniel Humphrey Public Member Derek Johnson City Manager Brigitte Elke Director of Finance Debbie Malicoat Accounting Manager/Controller Natalie Harnett Principal Financial Analyst—Budget Independent Auditor Badawi & Associates PFM Asset Management LLC Monique Spyke Managing Director DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 Client Communications DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Monthly Market Review “Economic clouds thicken as markets remain resilient.” Economic Highlights •The rising summer tide of coronavirus infections seems to have drowned out optimism about the economic recovery. Daily cases have risen to levels not seen since the beginning of the year, and vaccination rates have slowed at a time when relief from the Federal government is subsiding. As the summer ends, a COVID- weary country may face a distressing reality check. •Consumers tightened their purse strings as COVID-19 Delta variant concerns and renewed public health restrictions clouded financial prospects. Headline retail sales fell 1.1% in July. •The economy added only 235,000 jobs in August, falling far short of economists’ estimates of 735,000 jobs and the weakest posting since January. It appears that potential workers have pulled back from the labor force because of renewed COVID-19 concerns. Although the unemployment rate fell to 5.2% from 5.4%, the labor force participation rate remained 1.6% below pre-pandemic levels. The number of persons unable to work because their employer closed or lost business due to the pandemic rose. A bright spot in the labor market reports is that average hourly earnings rose 4.3% over the past year. •Supply-chain challenges, rising commodity costs, and materials and labor shortages are now weighing on business conditions. Surveys of purchasing managers for August signaled slowing manufacturing and services activity, albeit both still expansionary. •At the annual Jackson Hole symposium on monetary policy, Federal Reserve (Fed) Chair Jerome Powell said the tapering of asset purchases could begin this year as the U.S. economy recovers from the pandemic, but the central bank will not be in a hurry to raise interest rates. He also reiterated the Fed’s belief that the current spike in inflation is likely to be transitory. Bond Markets •Treasury yields generally rose during August, with those on maturities between five and 10 years jumping by six to nine basis points (bps). However, the 10-year Treasury note yield ended August 44 bps below its spring peak, reflecting a more sanguine view about inflation, longer-term economic growth prospects, and a patient Fed. •The U.S. Treasury continued to issue new bonds to fund the deficit, but monthly volume has been steady through the year. Reductions are likely later this year as Federal fiscal stimulus costs wane. Issuance may also be disrupted by the expiration of the debt limit suspension, which will prevent increased issuance until the limit is extended, and then likely result in a flood to make up for lost capacity. •Indicative of the surfeit of cash in the short-term markets, usage of the Fed’s Reverse Repo Facility has remained above $1 trillion per day since mid-August. In fact, it may become necessary for the Fed to raise its per-counterparty limit to add capacity and keep overnight rates above true zero. •Returns on Treasury indices were generally negative for the month as yields rose across most maturities. The 5- and 10-year Treasury indices returned -0.2% and -0.3%, respectively. Equity Markets •U.S. equity markets marched to new record highs – August 30, 2021 marked the 53rd new high this year for the S&P 500 – despite growing risks to the outlook. Equities shrugged off concerns about rising coronavirus infections, supply-chain challenges, materials shortages, Fed tapering uncertainty and a messy pullout from Afghanistan. The S&P 500 rose 3.0% in August, which marked the seventh consecutive month of gains. The Nasdaq returned 4.1%, while the Dow Jones Industrial Average returned 1.5%. •Developed market equities (represented by the MSCI ACWI ex- USA Index) continued to lag U.S. equity indices, posting a return of 1.9% for August. The U.S. Dollar Index (DXY) appreciated 0.5% in August. The movement of the U.S. dollar against a basket of currencies has rebounded from near multi-year lows since May, putting a drag on non-U.S. economies that export goods and services to the U.S. PFM Strategy Recap •The economic outlook has gotten a bit more cloudy as rising COVID-19 cases and increased public health restrictions may slow consumer spending and ultimately economic growth. Meanwhile, the Fed is on track to begin tapering in the next several months, but any rate increases are far off into the future. Given this balance of factors, we plan to maintain a generally neutral duration stance relative to market benchmarks. •No surprise, federal agency spreads remain tight. Issuance has been light and opportunities are limited. •Investment-grade (IG) corporate spreads are ever-so-slightly elevated compared to mid-year tights. Trends in corporate fundamentals are encouraging, but overall valuations remain very rich. New issues continue to be the best avenue for sourcing opportunities. •AAA-rated asset-backed securities (ABS) spreads are stable near- record tights. The sector offers fair value relative to corporates, with shorter structures (one-year average life) offering the best relative value. •Mortgage-backed securities (MBS) spreads are slightly wider from second quarter rock bottoms. However, with spreads still well below long-term averages and Fed tapering looming, the sector remains at risk for underperformance. •Holding excess cash is costly as short-term yields remain very low. Commercial paper and bank CDs offer some value, especially in longer (9-12 month) maturities. Fixed Income | September 2021 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC Spot Prices and Benchmark Rates Index Aug 31, 2020 Jul 31, 2021 Aug 31, 2021 Monthly Change 1-Month LIBOR 0.16%0.09%0.08%-0.01% 3-Month LIBOR 0.24%0.12%0.12%0.00% Effective Fed Funds Rate 0.09%0.07%0.06%-0.01% Fed Funds Target Rate 0.25%0.25%0.25%0.00% Gold ($/oz)$1,971 $1,813 $1,816 $3 Crude Oil ($/Barrel)$42.61 $73.95 $68.50 -$5.45 U.S. Dollars per Euro $1.19 $1.19 $1.18 -$0.01 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% U.S. Treasury Yield Curve 8/31/2020 7/31/2021 8/31/2021 3-mo 2-yr 5-yr 10-yr 30-yr Source: Bloomberg. Data as of August 31, 2021, unless otherwise noted. The views expressed constitute the perspective of PFM Asset Management LLC at the time of distribution and are subject to change. The content is based on sources generally believed to be reliable and available to the public; however, PFM cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. Investment advisory services are provided by PFM Asset Management LLC, which is registered with the SEC under the Investment Advisers Act of 1940. For more information regarding PFM’s services or entities, please visit www.pfm.com. U.S. Treasury Yields Duration Aug 31, 2020 Jul 31, 2021 Aug 31, 2021 Monthly Change 3-Month 0.10%0.04%0.04%0.00% 6-Month 0.11%0.05%0.05%0.00% 2-Year 0.13%0.19%0.21%0.02% 5-Year 0.27%0.69%0.78%0.09% 10-Year 0.71%1.22%1.31%0.09% 30-Year 1.48%1.89%1.93%0.04% Yields by Sector and Maturity as of August 31, 2021 Maturity U.S. Treasury Federal Agency Corporates- A Industrials AAA Municipals 3-Month 0.04%0.03%0.15%-- 6-Month 0.05%0.03%0.17%-- 2-Year 0.21%0.20%0.34%0.09% 5-Year 0.78%0.79%1.10%0.41% 10-Year 1.31%1.41%1.94%1.16% 30-Year 1.93%1.91%2.80%1.72% Economic Indicators Indicator Release Date Period Actual Survey (Median) Retail Sales Advance MoM 17-Aug Jul -1.1%-0.3% GDP Annualized QoQ 26-Aug 2Q S 6.6%6.7% PCE Core Deflator YoY 27-Aug Jul 3.6%3.6% Consumer Confidence 31-Aug Aug 113.8 123.0 ISM Manufacturing 1-Sep Aug 59.9 58.5 Change in Non-Farm Payrolls 3-Sep Aug 235k 733k Unemployment Rate 3-Sep Aug 5.2%5.4% -0.06%-0.02%-0.02%-0.06%-0.06%-0.09% 0.28% 0.88% 1.01% -0.49% 1-5 Year Treasury 1-5 Year Agency 1-5 Year AAA-A Corp 1-5 Year Municipals 0-5 Year MBS ICE BofAML Fixed Income Index Returns August Prior 12 Months For the period ended August 31, 2021 -0.2% 3.0%2.2%1.8% -2.2% 31.1% 47.1% 26.1% ICE BofAML U.S. Treasury Master Index S&P 500 Russell 2000 (Small Cap) MSCI EAFE (Developed Europe/Asia) Total Return of Major Indices August Prior 12 Months For the period ended August 31, 2021 -0.2% -0.1% -0.1% 0.0% 0.1% 0.1% 0.2% 0.2% 0.3% Aug '20 Nov '20 Feb '21 May '21 Aug '21 30-Day Money Market Yields Commercial Paper (A1/P1)Federal Agency U.S. T-Bill DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 1 Fixed Income Investing: ESG Strategies & Key Considerations for Implementing an ESG Approach InvestEd | March 2021 In the United States, sustainable investing continues to grow at a healthy pace. According to the 2020 Forum for Sustainable and Responsible Investment (U.S. SIF) report on U.S. Sustainable and Impact Investing Trends, domestic assets that incorporate sustainability into the investment process totaled $17.1 trillion in 2020, which is a 42% increase since 2018. Incorporating Environmental, Social and Governance (ESG) is the primary sustainable investment approach with $16.6 trillion of U.S. assets using this strategy to help achieve their sustainable investment objectives. The public sector is leading the way, representing 54% of institutional investor ESG assets.1 There are several factors driving this substantial growth in ESG investing, including: 1 U.S. SIF 2020 Report on Sustainable and Impact Investing Trends. $0 $4,000 $8,000 $12,000 $16,000 $20,000 2005 2007 2010 2012 2014 2016 2018 2020Total Assets (in Billions)ESG Incorporation Overlapping Strategies Shareholder Advocacy 42% (2018-2020) 54%36% 6% 2% 1%1% Public Insurance Companies Education Foundations Labor Other* Sustainable Investing in the United States 2005-20201 Institutional Investor ESG Assets, by Investor Type, 20201 *Other consists of family offices, healthcare institutions, faith-based institutions and other nonprofits that collectively represent about 1% of ESG assets in 2020. •The alignment of investment objectives with investor values •A reduction in the investor impact on the environment, such as climate change and carbon output, pollution, and resource use •Concerns about investor impact on social issues, such as community relations, human rights, and labor standards •An increased focus on corporate governance •Leveraging ESG to evaluate and help mitigate investment risk •Addressing concerns raised by stakeholders •Seeking to increase investment returns DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 2 While more common in equity portfolios, ESG strategies may also be incorporated into fixed income portfolios using investments in corporate debt by leveraging a variety of approaches, including: Top Performers Approach — This broad-based approach is generally referred to as “positive screening.” With this method, investment eligibility is typically based on an issuer’s ESG risk metrics, relative ESG performance within their industry or subindustry group and/or other criteria that the investor deems appropriate. This approach may also incorporate exclusions. Industry Tilts — This approach is typically more appropriate for a portfolio that seeks to reduce ESG risk while also investing in accordance with an index. The investor adjusts issuer and industry weightings relative to index weightings based on issuer ESG risk metrics. For example, issuers with lower ESG risk would receive higher weightings, while issuers with higher ESG risk would receive lower weightings than the index weightings. E, S or G Focused — This is a more narrowly focused ESG risk management approach. Implementation typically involves strategies designed to reduce exposure to environmental, social, or governance risks or specific ESG risk drivers, such as carbon output or human capital management. It may also incorporate exclusions. Hybrid Approach — This is a combination of two or more of the above approaches, with adjustments based upon an investor’s preferences and objectives. Selecting an Approach: Key Considerations The appropriate ESG approach will vary by organization and depend on preferences, ESG objectives and other organizational goals. But how does one ultimately choose? PFM has developed the following process to assist in identifying, developing, and implementing the approach that seeks to meet your organization’s sustainable investment objectives. Identify Sustainable Investment Priorities & Objectives. An important first step is to determine your organization’s sustainable investment objectives. Questions to consider include: •Is the goal exclusionary in nature? e.g., Is the primary objective to avoid investing in certain types of issuers or industries? •Is the interest in sustainable investing driven by the desire to reduce ESG risk exposure? If so, is your organization interested in an inclusionary approach based on an issuer’s management of its material ESG risks? •How important is it to align investment objectives with organizational values? •Would an approach that combines exclusions and ESG strategies work best? Review ESG Investment Approach Options. Once sustainable investment priorities and objectives are determined, we suggest identifying potential approaches to help your organization achieve its ESG objectives. Define ESG Investment Parameters. Next, an investor should develop potential ESG investment parameters, which are the criteria or “rules” that will be applied to determine if an investment is eligible for inclusion in the portfolio. Examples of ESG criteria include ESG risk metric thresholds (e.g., limiting eligibility to issuers with medium or lower ESG risk), relative peer group rankings and industry exclusions. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 3 The views expressed constitute the perspective of PFM Asset Management LLC at the time of distribution and are subject to change. The content is based on sources generally believed to be reliable and available to the public; however, PFM cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. Investment advisory services are provided by PFM Asset Management LLC, which is registered with the SEC under the Investment Advisers Act of 1940. For more information regarding PFM’s services or entities, please visit www.pfm.com. To learn more or discuss in greater detail, please contact us: Dave Reeser, CTP, EA | Managing Director reeserd@pfm.com | 717.231.6258 Evaluate ESG Integration Impact. A critical step involves analyzing the impact of potential ESG investment parameters on the portfolio. For example, it is important to assess how potential ESG investment parameters may impact the universe of permitted investments and the ability to achieve appropriate diversification. Update the Investment Policy. After finalizing the ESG investment parameters, the Investment Policy should be updated to document ESG investment goals and the approach applied to help achieve these goals. This may be accomplished by incorporating ESG specific language in the Policy or an addendum to the existing Policy. Integrate ESG into the Investment Process. Once the updated Investment Policy language is approved, the ESG strategy may then be integrated into the investment process. Monitor Results and Revise Approach as Needed. Monitoring results is important to help ensure that the ESG approach is being executed in accordance with the applicable ESG investment parameters. Monitoring also enables investors to determine if changes to ESG investment parameters are needed to better achieve goals or align the approacth with their evolving sustainable investment objectives. Conclusion PFM works hand in hand with clients throughout this process and helps them develop and implement ESG investment solutions customized to their sustainable investment objectives. This dynamic approach provides our clients with the flexibility to modify their ESG strategy as their sustainable investment objectives evolve. For more information about how we can help you incorporate your ESG goals into your investment program, please contact us or your PFM representative. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 1 Pulling Back the Curtain on Investing Bond Proceeds Q&A | August 2021 In an effort to better understand PFM Asset Management’s strategy and views when it comes to investing bond proceeds, we conducted the following Q&A session with Christopher Harris, CFA, CAIA. Chris is a director in PFM Asset Management’s Structured Products Group. He manages bond proceeds projects for a wide variety of accounts for clients throughout the nation. He is also the firm’s primary liaison to the structured investment community. Where do you start when developing an investment strategy for bond proceeds? Harris: The investment strategy development process for bond proceeds is similar in many ways to the process used for other funds, including short-term reserves and operating cash. In general, when we design an investment strategy, the process involves first understanding the client’s objectives, then determining what vehicles the client may invest in (based upon state code and the client’s Investment Policy), and lastly, determining what strategy fulfills these objectives within the client’s risk tolerances and preferences. For bond proceeds accounts, there are typically two types of accounts: cash flow driven ones and reserves. The cash flow driven accounts include project funds, debt service funds and capitalized interest funds. Debt service and capitalized interest funds tend to be a bit more straightforward because the cash needs are usually known in advance and not subject to much change. On the other hand, project funds have cash flows that are dependent upon things such as contractors and the weather — neither of which can be predicted with great certainty. Reserves are designed to be accessible if there is a revenue shortfall on the underlying project. For example, if tuition revenues fall below the amounts necessary to pay principal and interest, the reserve can be tapped to prevent a default. For these accounts, preservation of principal is a primary focus, so these strategies tend to be a bit more conservative from a duration perspective and more selective from a credit perspective. Once the objectives are outlined, the next step is to determine what the universe of eligible investments is. This is determined not only by state code but also by the governing bond documents. Certain clients may also have bond proceeds covered under their broader investment policy. One of the first things we typically do when working on a bond proceeds engagement is to review the permitted investments language to make it as broad as possible. Our view is that it is better to have flexibility so that the advisor and client can determine what is prudent and most appropriate for each type of account. From there, the optimal strategy can be chosen based on conversations with the client regarding things such as the potential for draws to change, a client’s interest rate views, how important certainty of earnings is, and the client’s comfort level with various security types and risk tolerance (among other things). DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 2 What are some of the common strategies used to invest bond proceeds? Harris: Common strategies include local government investment pools (LGIPs); money market funds; portfolios of fixed-income securities such as Treasuries, federal agencies, commercial paper, and corporate notes; and structured investment agreements such as guaranteed investment contracts and repurchase agreements. Each of these strategies have applications that make sense. Our job as an advisor is to run a thoughtful and comprehensive analysis and facilitate conversations with our clients and think through the unique circumstances of each transaction in order to determine which approach is the most appropriate. What are some of the applications for different investment strategies? For example, when might it be appropriate to use an LGIP or money market fund for bond proceeds accounts? Harris: An LGIP or money market fund may be appropriate when a high degree of liquidity is required due to either highly uncertain draws or very short construction periods. They can also be a part of a broader strategy that includes fixed-rate investments as the liquidity buffer for unforeseen changes in cash flow needs. The majority of strategies for bond proceeds accounts that we work on do have some allocation to a liquidity vehicle regardless of the underlying cash needs. If there is some portion of the proceeds that are not immediately needed, we can then have conversations regarding current and future market conditions and how they align with our clients’ interest rate views and biases. We can subsequently determine how much of the proceeds should be invested in an LGIP or money market fund and how much might reasonably be invested in a different manner, such as fixed-income investments. How does a client’s interest rate views impact the investment strategy? Harris: The yield of an LGIP or money market fund will tend to follow interest rates on the short end of the curve with a lag, so it’s important to understand if our client has any interest rate biases. If a client believes that interest rates are going to increase, then a higher allocation to an LGIP or money market fund might be appropriate in anticipation of rising yields. On the other hand, if a client believes that interest rates are going to remain stable or potentially decline, then a higher allocation to a fixed-rate investment such as a portfolio of fixed-income securities might be more appropriate. Either way, sensitivity and scenario analyses can be used to quantify the impact of changing interest rates and reinvestment assumptions, which can then be reviewed and discussed with the client to think through the potential range of outcomes. Are there other times when fixed-income securities might be appropriate? Harris: One of the benefits of fixed-income securities is that the yield at which the security is purchased is the return that an investor will realize if the security is held to maturity. In an environment where the yield curve is upward sloping and intermediate yields are higher than overnight rates, there tends to an initial outright yield advantage from the purchase of a portfolio of fixed- income securities relative to an LGIP or money market fund. If cash flows can be identified outside of the money market fund space — meaning six to nine months and beyond — then an asset-liability matching approach where individual securities are chosen to fund defined liabilities may produce a higher initial yield than an LGIP or a money market fund. Ultimately, the performance of these investment alternatives will depend on future market conditions because the LGIP or money market fund yield will likely change over time as market conditions vary. Any changes to liquidity needs will also be a driver of performance for these accounts. More excess liquidity in a rising interest rate environment may mean that cash is reinvested at higher yields, which could increase the portfolio return, while excess liquidity in a falling interest rate environment tends to be a drag on performance. Alternatively, if an issuer chooses an active management strategy, the portfolio manager may utilize different techniques based on feedback from the client regarding expected cash flow needs, which could also be positive for portfolio performance. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 3 What is the difference between active management and passive strategies? Harris: Passive strategies are ones where we assist clients with the initial investment or structuring, but then do not monitor or trade on the account afterward. For example, a one-time structuring of a portfolio may be more cost-effective for accounts that have well-defined liquidity needs, such as a refunding or defeasance escrow, because the advisor’s ability to add incremental value in excess of fees may be limited. LGIPs or money market funds are also passive strategies because the client or advisor does not trade on the account, and this is instead done by the manager of the LGIP or money market fund itself. Structured investments are also a type of passive strategy, but the applications may be more limited. These strategies have unique credit, tax, and rebate implications that need to be reviewed with tax and legal counsel in addition to the investment advisor. Active strategies are ones where the manager constantly monitors the portfolio from both a portfolio composition perspective and a liquidity perspective. Typically, management fees are charged because the advisor is trading on the account more frequently, monitoring holdings, providing additional accounting records and statements, and conducting research. The idea is that the advisor is able to add incremental value in excess of the active management fee. When might active management for bond proceeds make sense? Harris: In general, active management is beneficial if the permitted investments are expansive and/or the liquidity needs of the account are likely to change. Active management allows the portfolio manager to add value over time by swapping between sectors—for example, buying federal agencies when spreads widen relative to Treasuries — and by managing changes to the draw schedule. If draws are expected to lag their projections, an active management strategy can prevent too much cash from being reinvested at potentially lower money market fund yields and can instead be redeployed further out the curve in higher-yielding fixed-income securities. Active management may also allow the use of credit instruments because the portfolio manager will be tasked with monitoring the creditworthiness of the underlying issuers held in the portfolio. Do you believe it is appropriate to use credit instruments in bond proceeds portfolios? Harris: It can be, but ultimately decisions are based on the client’s risk tolerance as well as broader conditions in credit markets. When we use credit instruments in actively managed bond proceeds portfolios, we do so in a way that limits exposure to any one issuer to manage concentration risk. This might mean that for any given issuer, we limit the exposure to 1-3% of the portfolio. This also means that the approved list of issuers needs to be broad and robust enough so that there are enough issuers to allow a meaningful portion of the portfolio to be invested in credit instruments. There also needs to be enough supply to actually go out and purchase these investments, meaning issuers on the approved list need to either have enough supply trading in secondary markets or be active participants in the primary markets. For these reasons, we often find that it takes some time – days, weeks even – to piece together the supply necessary to fully fund the credit piece. Once the portfolio is structured, monitoring the creditworthiness of the underlying issuers becomes a main focus. Our credit team conducts periodic reviews of all issuers, discusses developments in credit markets, attends earnings calls, reads research reports, and is generally very involved in analyzing not only the current creditworthiness of issuers, but also understanding what developments in the economy and markets could lead to a change in the creditworthiness of issuers (both positive and negative). We typically only use credit instruments in portfolios that we are actively managing because of this monitoring component. On the other hand, there are some situations where a structured investment for the entirety of the fund may make sense. For example, if it’s possible to lock in positive arbitrage, then it might make sense to use a structured investment. Or, if a fund has unique liquidity DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 4 or cash flow considerations that cannot be met by a traditional portfolio, then a structured investment might be an appropriate solution. A good example is for a debt service fund that has forward-starting deposits. It’s not possible to lock in a rate of return for a deposit that occurs in the future without using a derivative of some sort. A structured investment might help clients that seek budgetary certainty by allowing them to lock in a yield on all deposits for a predetermined period of time. However, at that point, it becomes a question of risk- versus-return: is the incremental credit risk you are taking commensurate with the additional return that is received? It is important that this is viewed within the lens of the permitted investments. If a fund has a very narrow, limited subset of permitted investments, such as government obligations only, then a structured investment might make sense from a yield perspective. If credit instruments such as commercial paper and corporate notes can be used, then what we often find is that a well-diversified portfolio of credit produces a return that tends to be substantially similar to that of an undiversified, highly concentrated structured investment. We frequently have these conversations with clients and find that the majority of the time, the structured investment may not be the right way to go. What are some of the other types of risks to be aware of when it comes to bond proceeds investments, and how do you go about managing them? Harris: The other two main types of risks that we typically consider are liquidity risk and reinvestment risk. Liquidity risk refers to how quickly and easily the investments can be turned into cash, and reinvestment risk refers to how the portfolio’s return may change as interest rates change. Some of the things we think about when managing liquidity risk include if there are redemption fees, gates, or notification requirements. This is most important for money market funds and structured investments, and we typically ask questions related to same-day liquidity and notice periods. For portfolios of fixed- income securities, it becomes more a question of the existence and depth of the secondary market, which can be accessed in the event proceeds need to be received early. For example, it is typically much easier to sell Treasury notes than corporate notes because the Treasury market is much more liquid. To manage through this, we typically make sure we have a large base of Treasuries that can be liquidated instead of corporates. Additionally, frequent communication with the client helps us react and make changes to the portfolio composition in real-time. Reinvestment risk is ultimately driven by the underlying investment strategy and cash flow changes. For example, a money market fund has the most reinvestment risk because the rate will change over time. A structured investment has the least reinvestment risk if it is held to maturity because the rate of return on the contract is fixed. A portfolio of fixed-income securities tends to be in between the two. The portfolio can be structured to have a majority of investments in fixed-rate fixed-income securities, which eliminates reinvestment risk. However, as draw schedules and/or liquidity needs change, reinvestments or liquidations will occur at whatever the then-current market rates are. This introduces reinvestment risk because the total return on the portfolio will change with market conditions. Either way, we typically have lengthy conversations with clients to determine their interest rate biases (if any), and we look to execute an investment strategy that takes these views into consideration. What is the typical timeline for bond proceeds investment strategies? When should issuers start thinking about how to reinvest the proceeds of bond issuances? Harris: We typically recommend thinking about reinvestment early on in the process as documents are being drafted. Having an advisor review the official statement and/or trust indenture language to make sure permitted investments are as broad as possible is an important first step. From there, the advisor can help the financing team with earnings assumptions on funds, which is important from a sizing perspective. Additionally, depending on the strategy chosen, it may take several weeks of onboarding and legal document DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 © PFM Asset Management LLC | pfm.com 5 The views expressed constitute the perspective of PFM Asset Management LLC at the time of distribution and are subject to change. The content is based on sources generally believed to be reliable and available to the public, however, PFM cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. Investment advisory services are provided by PFM Asset Management LLC, which is registered with the SEC under the Investment Advisers Act of 1940. For more information regarding PFM’s services or entities, please visit www.pfm.com. To learn more or discuss in greater detail, please contact us: Christopher Harris, CFA, CAIA | Director harrisc@pfm.com | 717.213.3810 review and drafting before the advisor can execute on the chosen strategy. Therefore, starting early will help ensure that the strategy can be executed on or shortly after the settlement date of the bond issue. What are some of the biggest pitfalls to avoid when investing bond proceeds? Harris: It is not uncommon for issuers to wait until after the settlement date of the transaction to think about the investment of bond proceeds. Problems can arise due to procurement rules, onboarding, and other administrative details that can result in proceeds being uninvested for some time after the settlement date. We advocate for thinking about investments in tandem with the pricing of the bonds – your advisor should be able to focus the conversation, so it does not become a detractor from your ability to dedicate time to the bond issue itself. Additionally, by focusing on the investments in tandem with pricing, the permitted investments language in the bond documents can be refined to reflect current industry best practices. Another costly pitfall is having too much liquidity, especially in a near-zero interest rate environment with an upward-sloping yield curve. Most LGIPs and money market funds are yielding at or near 0%, and portfolios of fixed-income securities can generate meaningful incremental earnings depending on the investment horizon. This also illustrates the importance of good communication with architects, engineers, and contractors for expenditure estimates so that liquidity needs can be defined as precisely as possible. If it is not possible to have a well-defined estimate of liquidity needs, then identifying buckets of money that are not expected to be used for a certain period of time (defined in years, for example) can help with the strategy development. One of the other major pitfalls is not changing the strategy through time as market conditions change and/or more information becomes available regarding cash flow needs. This is particularly important because changes to cash flow needs tend to be uncontrollable: it is not possible to prepare for construction delays, supply shortages, and dramatic changes in market conditions. Active management of portfolios allows you to react to all of these things and ensure the portfolio is properly structured and diversified to reflect liquidity needs and risk tolerance. Having an open dialogue with your advisor, including frequent and proactive communication, can be beneficial in this regard. For more information, please reach out to your PFM relationship manager or Christopher Harris, CFA, CAIA at harrisc@pfm.com. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 Requested Changes to Terms and Conditions DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 1 Requested Changes to the Terms and Conditions RFP Page 10 of PDF – Contract Performance 22. Work Delays. Should the Consultant be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City’s sole option, be extended for such periods as may be agreed upon by the City and the Consultant. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. Explanation: PFM Asset Management LLC respectfully requests the opportunity to negotiate this language in any resulting agreement. As a matter of firm policy, the firm does not agree to liquidated damages provisions. RFP Page 11 of PDF – Contract Performance 27. Hold Harmless and Indemnification. (a) Non-design, non-construction Professional Services: To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s negligent or intentionally wrongful performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s negligent or intentionally wrongful performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. Explanation: PFM Asset Management LLC respectfully requests the opportunity to negotiate the indemnification language in any resulting agreement so that PFM Asset Management’s obligation to indemnify is limited to circumstances in which its performance has been wrongful, which would include negligent or intentionally wrongful acts. In addition, as a matter of firm policy, we do not agree to liability for indirect damages. RFP Page 12 of PDF – Proposal Requirements 29. Termination for Convenience. The City Either party may terminate all or part of this Agreement for any or no reason at any time by giving 30 days written notice to Consultant the other party. Should the City terminate this Agreement for convenience, the City shall be liable as follows: (a) for standard or off-the- shelf products, a reasonable restocking charge not to exceed ten (10) percent of the total purchase price; (b) for custom products, the less of a reasonable price for the raw materials, components work in progress and any finished units on hand or the price per unit reflected on this Agreement. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 2 Explanation: PFM Financial Advisors LLC respectfully requests the opportunity to negotiate the termination language to allow for mutual termination rights. RFP Page 25 of PDF: Section H: Insurance Requirements Consultants Consultants shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees or subcontractors. General Liability, and Errors and Omissions and Pollution and/or Asbestos Pollution Liability coverages should be maintained for a minimum of five (5) years after contract completion. Explanation: PFM’s policies do not allow for coverage of independent contractors and subcontractors. ICs and Subs must provide separate, current, and sufficient proof of coverage. (However, please note that PFM will not be using independent contractors or subcontractors for this project.) Explanation: PFM does not carry coverage for Pollution Liability. RFP Page 25 of PDF: Section H: Insurance Requirements Minimum Scope of Insurance. Coverage shall be at least as broad as: 1.Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001 or Claims Made Form CG 0002). 2.Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto), or code 8, 9 if no owned autos. 3.Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4.Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions. 5.Cyber-Liability Insurance Explanation :PFM does not carry coverage for Pollution Liability. RFP Page 25 of PDF: Section H: Insurance Requirements Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1.General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2.Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3.Employer's Liability: $1,000,000 each accident, $1,000,000 policy limit bodily injury by disease, $1,000,000 each employee bodily injury by disease. 4.Pollution and/or Asbestos Pollution Liability and/or Errors and Omissions: $1,000,000 each claim occurrence/$2,000,000 policy aggregate. 5.Consultant/Consultant shall procure and maintain Cyber Liability insurance with limits of $1,000,000 per occurrence claim/loss which shall include the following coverage… DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 3 Explanation :PFM does not carry coverage for Pollution Liability. Explanation: PFM's Professional Liability/E&O and Cyber Liability are on a claims-made basis RFP Page 26 of PDF: Section H: Insurance Requirements Other Insurance Provisions. The following insurance provisions shall also apply: 1.The general liability, automobile liability, pollution and/or asbestos pollution and/or errors & omissions policies are to contain, or be endorsed to contain, the following provisions: a.The City, its officers, officials, employees, agents and volunteers are to be covered as additional insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; pollution and/or asbestos pollution and/or errors or omissions, or automobiles owned, leased, hired or non-owned borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the Entity, its officers, officials, employees, agents or volunteers. Note: Automobile, Pollution, Asbestos Pollution and/or Errors and Omissions insurance carriers may not name the City as Additional Insured. If the City cannot be named as Additional Insured, a letter from the insurance company confirming their position required. Explanation: PFM does not carry coverage for Pollution Liability. Explanation: PFM does not own autos. Auto liability coverage will be provided for hired and non-owned autos only. Explanation: Industry standards prohibit the inclusion of additional insureds on workers compensation, professional liability E/O, and Cyber Liability. RFP Page 26 of PDF: Section H: Insurance Requirements Other Insurance Provisions. The following insurance provisions shall also apply: 1… d.Each insurance policy, except for Professional and Cyber Liability, required by this clause shall be endorsed to state that coverage shall not be canceled by either party except after thirty (30) days prior written notice has been given to the City. Explanation: PFM's Professional E/O and Cyber Liability insurers will not agree to that endorsement. In case of reduction in coverage, material changes, or cancellation, contractor will provide 30 days prior of written notice to the City. RFP Page 26 of PDF: Section H: Insurance Requirements Other Insurance Provisions. The following insurance provisions shall also apply: … 2.The automobile liability policy shall be endorsed to delete the pollution and/or the asbestos exclusion and add the Motor Carrier Act endorsement (MCS-90). DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 4 3.If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverages are written on a Claims Made Form… Explanation: PFM does not carry coverage for Pollution Liability. RFP Page 27 of PDF: Section H: Insurance Requirements Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A A-:VII. Since Pollution and/or Asbestos Pollution coverages may not be available from an "Admitted" insurer, the coverage may be written by a Non-Admitted insurance company. A Non-admitted company should have an A.M. Best's rating of A:X or higher. Pollution and/or Asbestos coverages may also be written by a Captive Insurance Company or Risk Retention Group or Captive Insurance Company, the City will check with its Insurance Advisor for further information before approval. Explanation: Full list of insurers along with rating included in certificates of insurance. Argonaut Insurance Company; (A-: XIV) is the only insurer that PFM carries with a rating below A. Explanation: PFM does not carry coverage for Pollution Liability. RFP Page 27 of PDF: Section H: Insurance Requirements Subcontractors. Consultant shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. Explanation: PFM will not be using subcontractors for this engagement. RFP Page 28 of PDF: Section H: Insurance Requirements Consultant Services The Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees or subcontractors. Explanation: PFM will not be using subcontractors for this engagement. RFP Page 28 of PDF: Section H: Insurance Requirements Minimum Scope of Insurance. Coverage shall be at least as broad as: 1.Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2.Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto) code 8 (hired) and code 9 (non-owned). Explanation: PFM does not own autos. Auto liability coverage will be provided for hired and non-owned autos only. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 5 RFP Page 28 of PDF: Section H: Insurance Requirements Minimum Limits of Insurance. Consultant shall maintain limits no less than: … 4. Errors and Omissions Liability: $1,000,000 per occurrence claim. Explanation: PFM’s professional liability policy is written on a claims-made basis rather than per occurrence. RFP Page 28 of PDF: Section H: Insurance Requirements Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1.The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed non-owned by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. Explanation: PFM does not own autos. Auto liability coverage will be provided for hired and non-owned autos only. RFP Page 29 of PDF: Section H: Insurance Requirements Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: … 4.Each insurance policy required by this clause shall be endorsed to 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 provided by the Consultant. Explanation: PFM General Liability and Auto insurers will only provide such notices to the certificate holder in the case of cancellation and non- renewal only. In case of reduction in coverage, material changes, non-renewal or cancellation, contractor will provide 30 days prior of written notice to the City. RFP Page 29 of PDF: Section H: Insurance Requirements Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A A-:VII. Explanation: Full list of insurers along with rating included in certificates of insurance. Argonaut Insurance Company; (A-: XIV) is the only insurer that PFM carries with a rating below A. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 6 If PFM Asset Management LLC is awarded the engagement, we respectfully request the inclusion of certain provisions in the resulting contract that are driven by our status as an investment advisor registered under the Investment Advisers Act of 1940 (e.g., registered advisor description; conflict of interest provision; our maintenance of books and records; and our disclosure statement [Form ADV, Parts 2A and 2B]). DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Proposal for Investment Adviser Services | Bid 2109-001 Statement of Past Disqualifications Form DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 Statement of Past Disqualifications The proposer shall state whether it or any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality, and if so to explain the circumstances. ▪Do you have any disqualification as described in the above paragraph to declare? Yes No X ▪If yes, explain the circumstances. Neither the firm nor, to its knowledge, any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality. Executed on 10/12/21 at 9 am Pacific Time under penalty of perjury of the laws of the State of California, that the foregoing is true and correct. ___________________________________ Signature of Authorized Proposer Representative DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 The City of San Luis Obispo is committed to including disabled persons in all of our services, programs and activities. Telecommunications Device for the Deaf (805) 781-7410. Notice Requesting Proposals for Investment Adviser Services The City of San Luis Obispo is requesting sealed proposals for services associated with the Investment Adviser Services. All firms interested in receiving further correspondence regarding this Request for Proposals (RFP) will be required to complete a free registration using BidSync (https://www.bidsync.com/bidsync-app- web/vendor/register/Login.xhtml). All proposals must be received via BidSync by the Department of Finance at or before October 13, 2021, when they will be opened publicly in the City Hall Conference Hearing Room, 990 Palm Street, San Luis Obispo, CA 93401. All firms interested in receiving further correspondence regarding this Request for Qualifications will be required to complete a free registration using BidSync (https://www.bidsync.com/bidsync-app- web/vendor/register/Login.xhtml). All qualifications must be received via BidSync by the Department of Finance at or before October 13, 2021, when they will be opened electronically in BidSync. Project packages and additional information may be obtained at the City’s BidSync website at www.BidSync.com. Please contact Daniel Clancy with any questions. For technical help with BidSync please contact BidSync tech support at 800-990-9339. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 TABLE OF CONTENTS A. INTRODUCTION ......................................................................................................................................... 1 B. SCOPE OF WORK ....................................................................................................................................... 1 C. PROJECT SCHEDULE .................................................................................................................................. 2 D. PROJECT BUDGET ..................................................................................................................................... 2 E. GENERAL TERMS AND CONDITIONS ......................................................................................................... 2 F. SPECIAL TERMS AND CONDITIONS .................................................... G. FORM OF AGREEMENT ........................................................................................................................... 18 H. INSURANCE REQUIREMENTS .................................................................................................................. 23 I. PROPOSAL SUBMITTAL FORMS ................................................................................................................ 25 DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -1- A.INTRODUCTION The City is requesting proposals for investment advisor services for a five-year term, with an option to renew for an additional two years. It is the City’s policy to establish a long-term, ongoing relationship with its investment advisor, under which advice is available whenever needed. At the end of the contract’s term, it is the City’s policy to seek formal proposals to ensure that it continues to receive quality professional services at the best competitive price. The City’s current investment advisor is PFM Asset Management, LLC and they have been invited to submit a proposal. About the City’s Portfolio The City’s primary investment objective is to achieve a reasonable rate of return on public funds while minimizing the potential for capital losses arising from market changes or issuer default. Although the generation of revenues through interest earnings on investment is an appropriate City goal, the primary consideration in the investment of City funds is capital preservation in the overall portfolio. As such, the City’s yield objective is to achieve a reasonable rate of return on City investments rather than the maximum generation of income, which would expose the City to unacceptable levels of risk. In determining individual investment placements, the following factors shall be considered in priority order: 1.Safety 2.Liquidity 3.Yield The City’s current portfolio under outside management is valued at approximately $103 million and consists of a combination of U.S. Treasury, Agency, and corporate debt. Further guidance regarding eligible financial institutions can be found in the City’s investment policy under Section IV. The Investment Policy and Management Plan was updated in August 2020 to incorporate an ESG Investing approach to enhance previous RSI considerations. The City uses Bank of New York Mellon as the custodial trustee to maintain custody of certain investments and to provide valuation services for the portfolio, independent of the asset manager. B.SCOPE OF WORK Oversight of the City’s investment activities is provided by the City Treasurer, who also serves as the Finance Director. The City maintains an Investment Oversight Committee that meets quarterly to review the transactions that have occurred within the portfolio and to confirm that the portfolio has been managed in accordance with the requirements of the City’s investment policy. The committee also develops recommendations regarding the City’s investments for consideration by the City Council. City Finances Detailed information about the City’s finances and key policies are also available on the City’s website at www.slocity.org. The 2021-2023 Financial Plan along with the 2019-20 fiscal year Annual Comprehensive Financial Report are the key source documents for this information. Investment Advisor Services The investment advisor services requested include but are not limited to the following: DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -2- 1.Manage the City’s portfolio in a fiduciary capacity with discretionary authority 2.Execute trades in accordance with the City’s investment policy and upon authorization from the City Treasurer or their designee regarding the timing and identification of investments to be redeemed and purchased 3.Assist the City with maturity analysis 4.Assist with cashflow analysis 5.Provide credit analysis of investment instruments of portfolio 6.Provide monthly/quarterly/annual reporting on all government entity funds including market values and a detailed listing of investments held in the portfolio at each reporting interval 7.Attend quarterly meetings with City staff, the Investment Oversight Committee, and occasionally the City Council during public session. 8.Evaluate market risk and develop strategies that minimize the impact on the portfolio 9.Provide assurances of portfolio compliance with applicable policies and laws and the City’s Investment Policy 10.Establish an appropriate performance benchmark when necessary 11.Indicate full understanding of Investment Policy and Management Plan and recommend changes as appropriate 12.Ensure portfolio structure matches City objectives 13.Forecast annual earnings from the portfolio for the City’s use in a budget planning firm shall not have custody or possession of the funds or securities that the City has placed under its management. C. PROJECT SCHEDULE 1.Issue RFP 9/27/2021 2.Receive proposals 10/13/2021 3.Complete proposal evaluations 10/20/2021 4.Conduct finalist interviews and finalize recommendation 10/21– 29/2021 5.Execute contract 11/1 – 5/2021 6.Start work 11/20/2021 D.PROJECT BUDGET The City has no pre-determined budget for its investment advisor services. Pricing and related terms and conditions will be evaluated as part of the proposal consideration. E. GENERAL TERMS AND CONDITIONS PROPOSAL REQUIREMENTS 1.Requirement to Meet All Provisions. Each individual or firm submitting a proposal (bidder) shall meet all the terms, and conditions of the Request for Proposals (RFP) project package. By virtue of its proposal submittal, the bidder acknowledges agreement with and acceptance of all provisions of the RFP specifications. 2.Proposal Submittal. Each proposal must be submitted on the form(s) provided in the specifications and accompanied by any other required submittals or supplemental materials. Proposal documents shall be submitted electronically via BidSync. However, if you can’t submit DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -3- electronic, please send your bid copy in a sealed envelope to the Department of Finance, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA, 93401. To guard against premature opening, the proposal should be clearly labeled with the proposal title, project number, name of bidder, and date and time of proposal opening. No FAX submittals will be accepted. 3.Insurance Certificate. Each proposal must include a certificate of insurance showing: a.The insurance carrier and its A.M. best rating. b.Scope of coverage and limits. c.Deductibles and self-insured retention. The purpose of this submittal is to generally assess the adequacy of the bidder’s insurance coverage during proposal evaluation; as further discussed under paragraph 11, endorsements are not required until contract award. The City’s insurance requirements are detailed in Section H. 4.Proposal Quotes and Unit Price Extension. The extension of unit prices for the quantities indicated and the lump sum prices quoted by the bidder must be entered in figures in the spaces provided on the Proposal Submittal Form(s). Any lump sum bid shall be stated in figures. The Proposal Submittal Form(s) must be totally completed. If the unit price and the total amount stated by any bidder for any item are not in agreement, the unit price alone will be considered as representing the bidder’s intention and the proposal total will be corrected to conform to the specified unit price. 5.Proposal Withdrawal and Opening. A bidder may withdraw its proposal, without prejudice prior to the time specified for the proposal opening, by submitting a written request to the Director of Finance for its withdrawal, in which event the proposal will be returned to the bidder unopened. No proposal received after the time specified or at any place other than that stated in the “Notice Inviting Bids/Requesting Proposals” will be considered. All proposals will be opened and declared publicly. Bidders or their representatives are invited to be present at the opening of the proposals. 6.Submittal of One Proposal Only. No individual or business entity of any kind shall be allowed to make or file, or to be interested as the primary submitter in more than one proposal, except an alternative proposal when specifically requested; however, an individual or business entity that has submitted a sub-proposal to a bidder submitting a proposal, or who has quoted prices on materials to such bidder, is not thereby disqualified from submitting a sub-proposal or from quoting prices to other bidders submitting proposals. 7.Communications. All timely requests for information submitted in writing will receive a written response from the City. Telephone communications with City staff are not encouraged but will be permitted. However, any such oral communication shall not be binding on the City. CONTRACT AWARD AND EXECUTION 8.Proposal Retention and Award. The City reserves the right to retain all proposals for a period of 60 days for examination and comparison. The City also reserves the right to waive non-substantial irregularities in any proposal, to reject any or all proposals, to reject or delete one part of a proposal and accept the other, except to the extent that proposals are qualified by specific DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -4- limitations. See the “special terms and conditions” in Section F of these specifications for proposal evaluation and contract award criteria. 9.Competency and Responsibility of Bidder. The City reserves full discretion to determine the competence and responsibility, professionally and/or financially, of bidders. Bidders will provide, in a timely manner, all information that the City deems necessary to make such a decision. 10.Contract Requirement. The bidder to whom award is made (Consultant) shall execute a written contract with the City within ten (10) calendar days after notice of the award has been sent by mail to it at the address given in its proposal. The contract shall be made in the form adopted by the City and incorporated in these specifications. CONTRACT PERFORMANCE 11.Insurance Requirements. The Consultant shall provide proof of insurance in the form, coverages and amounts specified in Section H of these specifications within 10 (ten) calendar days after notice of contract award as a precondition to contract execution. 12.Business License & Tax. The Consultant must have a valid City of San Luis Obispo business license & tax certificate before execution of the contract. Additional information regarding the City’s business tax program may be obtained by calling (805) 781-7134. 13.Ability to Perform. The Consultant warrants that they possess, or have arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to carry out and complete the work hereunder in compliance with all federal, state, county, city, and special district laws, ordinances, and regulations. 14.Laws to be Observed. The Consultant shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work. 15.Payment of Taxes. The contract prices shall include full compensation for all taxes that the Consultant is required to pay. 16.Permits and Licenses. The Consultant shall procure all permits and licenses, pay all charges and fees, and give all notices necessary. 17.Safety Provisions. The Consultant shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety. 18.Public and Employee Safety. Whenever the Consultant’s operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees. 19.Preservation of City Property. The Consultant shall provide and install suitable safeguards, approved by the City, to protect City property from injury or damage. If City property is injured DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -5- or damaged resulting from the Consultant’s operations, it shall be replaced or restored at the Consultant’s expense. The facilities shall be replaced or restored to a condition as good as when the Consultant began work. 20.Immigration Act of 1986. The Consultant warrants on behalf of themselves and all subcontractors engaged for the performance of this work that only persons authorized to work in the United State pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. 21.Consultant Non-Discrimination. In the performance of this work, the Consultant agrees that they will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 22.Work Delays. Should the Consultant be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City’s sole option, be extended for such periods as may be agreed upon by the City and the Consultant. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. 23.Payment Terms. The City’s payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the materials, supplies, equipment, or services provided by the Consultant (Net 30). 24.Inspection. The Consultant shall furnish City with every reasonable opportunity for City to ascertain that the services of the Consultant are being performed in accordance with the requirements and intentions of this contract. All work done, and all materials furnished, if any, shall be subject to the City’s inspection and approval. The inspection of such work shall not relieve Consultant of any of its obligations to fulfill its contract requirements. 25.Audit. The City shall have the option of inspecting and/or auditing all records and other written materials used by Consultant in preparing its invoices to City as a condition precedent to any payment to Consultant. 26.Interests of Consultant. The Consultant covenants that they presently have no interest, and shall not acquire any interest—direct, indirect or otherwise—that would conflict in any manner or degree with the performance of the work hereunder. The Consultant further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed. The Consultant certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, the Consultant shall at all times be deemed an independent Consultant and not an agent or employee of the City. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -6- 27.Hold Harmless and Indemnification. (a)Non-design, non-construction Professional Services: To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s f ailure to perform its obligations under this Agreement or out of the operations conducted by Consultant, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (b)Non-design, construction Professional Services: To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (c) Design Professional Services: In the event Consultant is a “design professional”, and the Scope of Services require Consultant to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) Consultant shall indemnify, defend and hold harmless the City and its elected officials, officers, employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of Consultant, except to the extent caused by the sole negligence, active negligence or willful misconduct of the City. Negligence, recklessness or willful misconduct of any subcontractor employed by Consultant shall be conclusively deemed to be the negligence, recklessness or willful misconduct of Consultant unless adequately corrected by Consultant. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to Consultant under this paragraph exceed Consultant’s DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -7- proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs. (d) The review, acceptance or approval of the Consultant’s work or work product by any indemnified party shall not affect, relieve or reduce the Consultant’s indemnification or defense obligations. This Section survives completion of the services or the termination of this contract. The provisions of this Section are not limited by and do not affect the provisions of this contract relating to insurance. 28.Contract Assignment. The Consultant shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 29.Termination for Convenience. The City may terminate all or part of this Agreement for any or no reason at any time by giving 30 days written notice to Consultant. Should the City terminate this Agreement for convenience, the City shall be liable as follows: (a) for standard or off-the-shelf products, a reasonable restocking charge not to exceed ten (10) percent of the total purchase price; (b) for custom products, the less of a reasonable price for the raw materials, components work in progress and any finished units on hand or the price per unit reflected on this Agreement. For termination of any services pursuant to this Agreement, the City’s liability will be the lesser of a reasonable price for the services rendered prior to termination, or the pri ce for the services reflected on this Agreement. Upon termination notice from the City, Consultant must, unless otherwise directed, cease work and follow the City’s directions as to work in progress and finished goods. 30.Termination. If, during the term of the contract, the City determines that the Consultant is not faithfully abiding by any term or condition contained herein, the City may notify the Consultant in writing of such defect or failure to perform. This notice must give the Consultant a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency. If the Consultant has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to the Consultant to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of the Consultant’s surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the terminations thereof. In said event, the Consultant shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City’s Notice of Termination, minus any offset from such payment representing the City’s damages from such breach. “Reasonable value” includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by the Consultant as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the Consultant shall be based solely on the City’s assessment of the value of the work- in-progress in completing the overall work scope. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -8- The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City’s sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall the Consultant be entitled to receive in excess of the compensation quoted in its proposal. SPECIAL TERMS AND CONDITIONS 1.Contract Award. Subject to the reservations set forth in Paragraph 9 of Section B (General Terms and Conditions) of these specifications, the contract will be awarded to the lowest responsible, responsive proposer. 2.Sales Tax Reimbursement. For sales occurring within the City of San Luis Obispo, the City receives sales tax revenues. Therefore, for bids from retail firms located in the City at the time of proposal closing for which sales tax is allocated to the City, 1% of the taxable amount of the bid will be deducted from the proposal by the City in calculating and determining the lowest responsible, responsive proposer. 3.Labor Actions. In the event that the successful proposer is experiencing a labor action at the time of contract award (or if its suppliers or subcontractors are experiencing such a labor action), the City reserves the right to declare said proposer is no longer the lowest responsible, responsive proposer and to accept the next acceptable low proposal from a proposer that is not experiencing a labor action, and to declare it to be the lowest responsible, responsive proposer. 4.Failure to Accept Contract. The following will occur if the proposer to whom the award is made (Consultant) fails to enter into the contract: the award will be annulled; any bid security will be forfeited in accordance with the special terms and conditions if a proposer's bond or security is required; and an award may be made to the next lowest responsible, responsive proposer who shall fulfill every stipulation as if it were the party to whom the first award was made. 5.Contract Term. The supplies or services identified in this specification will be used by the City for one year. The prices quoted for these items must be valid for the entire period indicated above unless otherwise conditioned by the proposer in its proposal. 6.Contract Extension. The term of the contract may be extended by mutual consent for an additional one-year, and annually thereafter, for a total of four years. 7.Supplemental Purchases Supplemental Purchases. Supplemental purchases may be made from the successful proposer during the contract term in addition to the items listed in the Detail Proposal Submittal Form. For these supplemental purchases, the proposer shall not offer prices to the City in excess of the amounts offered to other similar customers for the same item. If the proposer is willing to offer the City a standard discount on all supplemental purchases from its generally prevailing or published price structure during the contract term, this offer and the amount of discount on a percentage basis should be provided with the proposal submittal. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -9- 8.Consultant Invoices. The Consultant may deliver either a monthly invoice to the City with attached copies of detail invoices as supporting detail, or in one lump-sum upon completion. 9 Non-Exclusive Contract. The City reserves the right to purchase the items listed in the Detail Proposal Submittal Form, as well as any supplemental items, from other vendors during the contract term. 10.Unrestrictive Brand Names. Any manufacturer's names, trade names, brand names or catalog numbers used in the specifications are for the purpose of describing and establishing general quality levels. Such references are not intended to be restrictive. Proposals will be considered for any brand that meets or exceeds the quality of the specifications given for any item. In the event an alternate brand name is proposed, supplemental documentation shall be provided demonstrating that the alternate brand name meets or exceeds the requirements specified herein. The burden of proof as to the suitability of any proposed alternatives is upon the proposer, and the City shall be the sole judge in making this determination. 11.Delivery. Prices quoted for all supplies or equipment to be provided under the terms and conditions of this RFP package shall include delivery charges, to be delivered F.O.B. San Luis Obispo by the successful proposer and received by the City within 90 days after authorization to proceed by the City. 12.Start and Completion of Work. Work on this project shall begin immediately after contract execution and shall be completed within 90 calendar days thereafter, unless otherwise negotiated with City by mutual agreement. 13.Change in Work. The City reserves the right to change quantities of any item after contract award. If the total quantity of any changed item varies by 25% or less, there shall be no change in the agreed upon unit price for that item. Unit pricing for any quantity changes per item in excess of 25% shall be subject to negotiation with the Consultant. 14.Submittal of References. Each proposer shall submit a statement of qualifications and references on the form provided in the RFP package. 15.Statement of Contract Disqualifications. Each proposer shall submit a statement regarding any past governmental agency bidding or contract disqualifications on the form provided in the RFP package. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -10- PROPOSAL CONTENT FOR MOST RFP’s EXCEPT FOR ENGINEERING, ARCHITECTURAL AND ENVIRONMENTAL SERVICES 1. Proposal Content. Your proposal must include the following information: Submittal Forms a. Proposal submittal summary. b. Certificate of insurance. c. References from at least three firms for whom you have provided similar services. Qualifications d. Experience of your firm and those of sub-consultants in performing work and projects relevant to the Scope of Services outlined and described in the request. e. Resumes of the individuals who would be assigned to this project, including any sub- consultants, with their corollary experience highlighted and specific roles in this project clearly described. f. Standard hourly billing rates for the assigned staff, including any sub-consultants. g. Statement and explanation of any instances where your firm or sub-consultant has been removed from a project or disqualified from proposing on a project. Work Program h. Detailed description of your approach to completing the work. i. Detailed schedule by task and sub-task for completing the work. j. Estimated hours for your staff in performing each phase and task of the work, including sub-consultants, so we can clearly see who will be doing what work, and how much time it will take. k. Detailed budget by task and sub-task for completing the work. l. Services or data to be provided by the City. m. Services and deliverables provided by the Consultant(s). n. Any other information that would assist us in making this contract award decision. o. Description of assumptions critical to development of the response which may impact cost or scope. Requested Changes to Terms and Conditions p. The City desires to begin work soon after selecting the preferred Consultant Team. To expedite the contracting process, each submittal shall include requested redlined changes to terms and conditions, if necessary. Proposal Length q. Proposal length should only be as long as required to be responsive to the RFP, including attachments and supplemental materials. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -11- 2. Proposal Evaluation and Selection. Proposals will be evaluated by a review committee and evaluated on the following criteria: a. Understanding of the work required by the City. b. Quality, clarity and responsiveness of the proposal. c. Demonstrated competence and professional qualifications necessary for successfully performing the work required by the City. d. Recent team experience in successfully performing similar services. e. Creativity of the proposed approach in completing the work. f. Value g. Writing skills. h. References. i. Background and experience of the specific individuals managing and assigned to this project. As reflected above, contract award will not be based solely on price, but on a combination of factors as determined to be in the best interest of the City. After evaluating the proposals and discussing them further with the finalists or the tentatively selected Consultant, the City reserves the right to further negotiate the proposed work and/or method and amount of compensation. 3. Proposal Review and Award Schedule. The following is an outline of the anticipated schedule for proposal review and contract award: a. Issue RFP 9/22/2021 b. Receive proposals 10/13/2021 c. Complete proposal evaluations 10/20/2021 d. Conduct finalist interviews and finalize recommendation 10/21– 29/2021 e. Execute contract 11/1 – 5/2021 f. Start work 11/20/2021 4. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of the Consultant as part of the work or services under these specifications shall become the permanent property of the City and shall be delivered to the City upon demand. 5. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by or assembled by the Consultant as part of the work or services under these specifications shall be the property of the City and shall not be made available to any individual or organization by the Consultant without the prior written approval of the City. 6. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what the Consultant is required to furnish in limited quantities as part of the work or services under these specifications, the Consultant shall provide such additional copies as are requested, and City shall compensate the Consultant for the costs of duplicating of such copies at the Consultant's direct expense. 7. Required Deliverable Products. The Consultant will be required to provide: DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -12- a. One electronic submission - digital-ready original .pdf of all final documents. If you wish to file a paper copy, please submit in sealed envelope to the address provided in the RFP. b. Corresponding computer files compatible with the following programs whenever possible unless otherwise directed by the project manager: Word Processing: MS Word Spreadsheets: MS Excel Desktop Publishing: InDesign Virtual Models: Sketch Up Digital Maps: Geodatabase shape files in State Plan Coordinate System as specified by City GIS staff c. City staff will review any documents or materials provided by the Consultant and, where necessary, the Consultant will be required to respond to staff comments and make such changes as deemed appropriate. ALTERNATIVE PROPOSALS 8. Alternative Proposals. The proposer may submit an alternative proposal (or proposals) that it believes will also meet the City's project objectives but in a different way. In this case, the proposer must provide an analysis of the advantages and disadvantages of each of the alternative and discuss under what circumstances the City would prefer one alternative to the other(s). 9. Attendance at Meetings and Hearings. As part of the workscope and included in the contract price is attendance by the Consultant at up to [number] public meetings to present and discuss its findings and recommendations. Consultant shall attend as many "working" meetings with staff as necessary in performing work-scope tasks. 10. Accuracy of Specifications. The specifications for this project are believed by the City to be accurate and to contain no affirmative misrepresentation or any concealment of fact. Bidders are cautioned to undertake an independent analysis of any test results in the specifications, as City does not guaranty the accuracy of its interpretation of test results contained in the specifications package. In preparing its proposal, the bidder and all subcontractors named in its proposal shall bear sole responsibility for proposal preparation errors resulting from any misstatements or omissions in the plans and specifications that could easily have been ascertained by examining either the project site or accurate test data in the City's possession. Although the effect of ambiguities or defects in the plans and specifications will be as determined by law, any patent ambiguity or defect shall give rise to a duty of bidder to inquire prior to proposal submittal. Failure to so inquire shall cause any such ambiguity or defect to be construed against the bidder. An ambiguity or defect shall be considered patent if it is of such a nature that the bidder, assuming reasonable skill, ability and diligence on its part, knew or should have known of the existence of the ambiguity or defect. Furthermore, failure of the bidder or subcontractors to notify City in writing of specification or plan defects or ambiguities prior to proposal submittal shall waive any right to assert said defects or ambiguities subsequent to submittal of the proposal. To the extent that these specifications constitute performance specifications, the City shall not be DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -13- liable for costs incurred by the successful bidder to achieve the project’s objective or standard beyond the amounts provided there for in the proposal. In the event that, after awarding the contract, any dispute arises as a result of any actual or alleged ambiguity or defect in the plans and/or specifications, or any other matter whatsoever, Consultant shall immediately notify the City in writing, and the Consultant and all subcontractors shall continue to perform, irrespective of whether or not the ambiguity or defect is major, material, minor or trivial, and irrespective of whether or not a change order, time extension, or additional compensation has been granted by City. Failure to provide the hereinbefore described written notice within one (1) working day of Consultant's becoming aware of the facts giving rise to the dispute shall constitute a waiver of the right to assert the causative role of the defect or ambiguity in the plans or specifications concerning the dispute. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -14- Proposal Content and Selection Process ONLY FOR ENGINEERING, ARCHITECTURAL AND ENVIRONMENTAL SERVICES For All Other Services, Use the Process Proceeding This One 1. Proposal Content. Your proposal must include the following information: Submittal Forms a. Proposal submittal summary. b. Certificate of insurance. c. References from at least three firms for whom you have provided similar services. Qualifications d. Experience of your firm in performing similar services. e. Resumes of the individuals who would be assigned to this project, including any sub- consultants. f. Standard hourly billing rates for the assigned staff, including any sub-consultants. g. Statement and explanation of any instances where your firm has been removed from a project or disqualified from proposing on a project. Work Program h. Description of your approach to completing the work. i. Tentative schedule by phase and task for completing the work. j. Estimated hours for your staff in performing each major phase of the work, including sub- consultants. k. Services or data to be provided by the City. l. Any other information that would assist us in making this contract award decision. Proposal Length and Copies m. Proposals should not exceed 20 pages, including attachments and supplemental materials. n. 5 copies of the proposal must be submitted. 2. Proposal Evaluation and Consultant Selection. Proposals will be evaluated by a review committee using a two-phase selection and contract award process as follows: Phase 1 – Written Proposal Review/Finalist Candidate Selection A group of finalist candidates (generally the top 3 to 5 five proposers) will be selected for follow- up interviews and presentations based on the following criteria as evidenced in their written proposals: a. Understanding of the work required by the City. b. Quality, clarity and responsiveness of the proposal. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -15- c. Demonstrated competence and professional qualifications necessary for successfully performing the work required by the City. d. Recent experience in successfully performing similar services. e. Proposed approach in completing the work. f. References. g. Background and experience of the specific individuals to be assigned to this project. Phase 2 – Oral Presentations/Interviews and Consultant Selection Finalist candidates will make an oral presentation to the review committee and answer questions about their proposal. The purpose of this second phase is two -fold: to clarify and resolve any outstanding questions or issues about the proposal; and to evaluate the proposer’s ability to clearly and concisely present information orally. As part of this second phase of the selection process, finalist candidates will submit proposed compensation costs for the work, including a proposed payment schedule tied to accomplishing key project milestones or tasks. After evaluating the proposals and discussing them further with the finalists or the tentatively selected Consultant, the City reserves the right to further negotiate the proposed workscope and/or method and amount of compensation. Contract award will be based on a combination of factors that represent the best overall value for completing the workscope as determined by the City, including: the written proposal criteria described above; results of background and reference checks; results from the interviews and presentations phase; and proposed compensation. 3. Pre-Proposal Conference. An optional pre-proposal conference will be held at the following location, date, and time to answer any questions that prospective bidders may have regarding this RFP: [Day, Date, Time] [LOCATION] 4. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of the Consultant as part of the work or services under these specifications shall become the permanent property of the City and shall be delivered to the City upon demand. 5. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by or assembled by the Consultant as part of the work or services under these specifications shall be the property of the City and shall not be made available to any individual or organization by the Consultant without the prior written approval of the City. 6. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what the Consultant is required to furnish in limited quantities as part of the work or services under these specifications, the Consultant shall provide such additional copies as are requested, and City shall compensate the Consultant for the costs of duplicating of such copies at the Consultant's direct expense. 7. Required Deliverable Products. The Consultant will be required to provide: DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -16- a. One electronic submission - digital-ready original .pdf of all final documents. If Consultant wishes to file a paper copy, it must be submitted in a sealed envelope to the address provided in the RFP. b. Corresponding computer files compatible with the following programs whenever possible unless otherwise directed by the project manager: Word Processing: MS Word Spreadsheets: MS Excel Desktop Publishing: InDesign Virtual Models: Sketch Up Digital Maps: Geodatabase shape files in State Plan Coordinate System as specified by City GIS staff c. City staff will review any documents or materials provided by the Consultant and, where necessary, the Consultant will be required to respond to staff comments and make such changes as deemed appropriate. ALTERNATIVE PROPOSALS 8. Alternative Proposals. The proposer may submit an alternative proposal (or proposals) that it believes will also meet the City's project objectives but in a different way. In this case, the proposer must provide an analysis of the advantages and disadvantages of each of the alternative and discuss under what circumstances the City would prefer one alternative to the other(s). 9. Attendance at Meetings and Hearings. As part of the workscope and included in the contract price is attendance by the Consultant at up to [number] public meetings to present and discuss its findings and recommendations. Consultant shall attend as many "working" meetings with staff as necessary in performing workscope tasks. 10. Accuracy of Specifications. The specifications for this project are believed by the City to be accurate and to contain no affirmative misrepresentation or any concealment of fact. Bidders are cautioned to undertake an independent analysis of any test results in the specifications, as City does not guaranty the accuracy of its interpretation of test results contained in the specifications package. In preparing its proposal, the bidder and all sub contractors named in its proposal shall bear sole responsibility for proposal preparation errors resulting from any misstatements or omissions in the plans and specifications that could easily have been ascertained by examining either the project site or accurate test data in the City's possession. Although the effect of ambiguities or defects in the plans and specifications will be as determined by law, any patent ambiguity or defect shall give rise to a duty of bidder to inquire prior to proposal submittal. Failure to so inquire shall cause any such ambiguity or defect to be construed against the bidder. An ambiguity or defect shall be considered patent if it is of such a nature that the bidder, assuming reasonable skill, ability and diligence on its part, knew or should hav e known of the existence of the ambiguity or defect. Furthermore, failure of the bidder or subcontractors to notify City in writing of specification or plan defects or ambiguities prior to proposal submittal shall waive any right to assert said defects or ambiguities subsequent to submittal of the proposal. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -17- To the extent that these specifications constitute performance specifications, the City shall not be liable for costs incurred by the successful bidder to achieve the project’s objective or standard beyond the amounts provided there for in the proposal. In the event that, after awarding the contract, any dispute arises as a result of any actual or alleged ambiguity or defect in the plans and/or specifications, or any other matter whatsoever, Consultant shall immediately notify the City in writing, and the Consultant and all subcontractors shall continue to perform, irrespective of whether or not the ambiguity or defect is major, material, minor or trivial, and irrespective of whether or not a change order, time extension, or additional compensation has been granted by City. Failure to provide the hereinbefore described written notice within one (1) working day of Consultant's becoming aware of the facts giving rise to the dispute shall constitute a waiver of the right to assert the causative role of the defect or ambiguity in the plans or specifications concerning the dispute. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -18- SECTION G: FORM OF AGREEMENT AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on [day, date, year] by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and [CONSULTANT’S NAME IN CAPITAL LETTERS], hereinafter referred to as Consultant. W I T N E S S E T H: WHEREAS, on [date], City requested proposals for ________________________ WHEREAS, pursuant to said request, Consultant submitted a proposal that was accepted by City for said project; NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, until acceptance or completion of said project. 2. INCORPORATION BY REFERENCE. City Specification No. ______ and Consultant's proposal dated [date] is hereby incorporated in and made a part of this Agreement and attached as Exhibit A. The City’s terms and conditions are hereby incorporated in an made a part of this Agreement as Exhibit B. To the extent that there are any conflicts between the Consultant’s fees and scope of work and the City’s terms and conditions, the City’s terms and conditions shall prevail, unless specifically agreed otherwise in writing signed by both parties. 3. CITY'S OBLIGATIONS. For providing the services as specified in this Agreement, City will pay, and Consultant shall receive therefore compensation [xxxxxxx]. If there are installment payments? Consultant shall be eligible for compensation installments after completion of milestone Tasks -E as shown in the attached project schedule. 4. CONSULTANT/CONSULTANT’S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Consultant agrees with City to do everything required by this Agreement and the said specifications. 5. AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Manager. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -19- 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or representation be binding upon the parties hereto. 7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City Name Dept. Address Consultant Name Title Address Address 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Consultant do covenant that everyone executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. CITY OF SAN LUIS OBISPO: By:_____________________________________ City Manager APPROVED AS TO FORM: CONSULTANT: ________________________________ By: _____________________________________ City Attorney Name of CAO / President Its: CAO / President DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -20- SECTION H: INSURANCE REQUIREMENTS Consultants Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or subcontractors. General Liability, Errors and Omissions and Pollution and/or Asbestos Pollution Liability coverages should be maintained for a minimum of five (5) years after contract completion. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001 or Claims Made Form CG 0002). 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto), or code 8, 9 if no owned autos. 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions. 5. Cyber-Liability Insurance Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 each accident, $1,000,000 policy limit bodily injury by disease, $1,000,000 each employee bodily injury by disease. 4. Pollution and/or Asbestos Pollution Liability and/or Errors and Omissions: $1,000,000 each occurrence/$2,000,000 policy aggregate. 5. Consultant/Consultant shall procure and maintain Cyber Liability insurance with limits of $1,000,000 per occurrence/loss which shall include the following coverage: a. Liability arising from the theft, dissemination and/or use of confidential or personally identifiable information; including credit monitoring and regulatory fines arising from such theft, dissemination or use of the confidential information. b. Network security liability arising from the unauthorized use of, access to, or tampering with computer systems. c. Liability arising from the failure of technology products (software) required under the contract for Consultant to properly perform the services intended. d. Electronic Media Liability arising from personal injury, plagiarism or misappropriation of ideas, domain name infringement or improper deep-linking or framing, and infringement or violation of intellectual property rights. e. Liability arising from the failure to render professional services DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -21- f. If coverage is maintained on a claims-made basis, Consultant/Contractor shall maintain such coverage for an additional period of three (3) years following termination of the contract. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the Entity. Other Insurance Provisions. The following insurance provisions shall also apply: 1. The general liability, automobile liability, pollution and/or asbestos pollution and/or errors & omissions policies are to contain, or be endorsed to contain, the following provisions: a. The City, its officers, officials, employees, agents and volunteers are to be covered as additional insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; pollution and/or asbestos pollution and/or errors or omissions, or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the Entity, its officers, officials, employees, agents or volunteers. Note: Automobile, Pollution, Asbestos Pollution and/or Errors and Omissions insurance carriers may not name the City as Additional Insured. If the City cannot be named as Additional Insured, a letter from the insurance company confirming their position required. b. For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. c. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. d. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party except after thirty (30) days prior written notice has been given to the City. 2. The automobile liability policy shall be endorsed to delete the pollution and/or the asbestos exclusion and add the Motor Carrier Act endorsement (MCS-90). 3. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverages are written on a Claims Made Form: a. The "Retro Date" must be shown, and must be before the date of the contra ct or the beginning of contract work. b. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract or work. c. If the coverage is canceled or non-renewed, and not replaced with another claims made policy form with a "Retro Date" prior to the contract effective date, the Consultant must purchase "extended reporting" coverage for a minimum of five years after completion of the contract or work. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -22- d. A copy of the claims reporting requirements must be submitted to the City for review. 4. The workers compensation policy shall be endorsed with a waiver of subrogation in favor of the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Since Pollution and/or Asbestos Pollution coverages may not be available from an "Admitted" insurer, the coverage may be written by a Non-Admitted insurance company. A Non-admitted company should have an A.M. Best's rating of A:X or higher. Pollution and/or Asbestos coverages may also be written by a Captive Insurance Company or Risk Retention Group or Captive Insurance Company, the City will check with its Insurance Advisor for further information before approval. Verification of Coverage. Consultant shall furnish the City with certified copies of endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City, unless the insurance company will not use the City's form. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Consultant's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. Subcontractors. Consultant shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -23- SECTION H: INSURANCE REQUIREMENTS Consultant Services The Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -24- 3. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 4. Each insurance policy required by this clause shall be endorsed to 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. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage. Consultant shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 -25- SECTION I: PROPOSAL SUBMITTAL FORM - SAMPLE The undersigned declares that she or he has carefully examined the RFP which is hereby made a part of this proposal; is thoroughly familiar with its contents; is authorized to represent the proposing firm; and agrees to perform the specified work for the following cost quoted in full: BID ITEM: [ITEM] q Certificate of insurance attached; insurance company’s A.M. Best rating: __________________. Firm Name and Address Contact Phone Signature of Authorized Representative Date DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Specification No. 9xxxx -26- REFERENCES Number of years engaged in providing the services included within the scope of the specifications under the present business name: . Describe fully the last three contracts performed by your firm that demonstrate your ability to provide the services included with the scope of the specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications. Reference No. 1: Agency Name Contact Name Telephone & Email Street Address City, State, Zip Code Description of services provided including contract amount, when provided and project outcome Reference No. 2: Agency Name Contact Name Telephone & Email Street Address City, State, Zip Code Description of services provided including contract amount, when provided and project outcome DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Specification No. 9xxxx -27- Reference No. 3 Agency Name Contact Name Telephone & Email Street Address City, State, Zip Code Description of services provided including contract amount, when provided and project outcome DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 City of San Luis Obispo Specification No. 9xxxx -28- STATEMENT OF PAST CONTRACT DISQUALIFICATIONS The proposer shall state whether it or any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality, and if so to explain the circumstances. ◼ Do you have any disqualification as described in the above paragraph to declare? Yes q No q ◼ If yes, explain the circumstances. Executed on at _______________________________________ under penalty of perjury of the laws of the State of California, that the foregoing is true and correct. ______________________________________ Signature of Authorized Proposer Representative DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 EXHIBIT B GENERAL TERMS AND CONDITIONS 1. Insurance Requirements. The Contractor shall provide proof of insurance in the form, coverages and amounts specified in Section E of the City’s Request for Proposal referenced in paragraph 2 of the Agreement, unless changes are otherwise approved and agreed to in writing between the parties. 2. Business License & Tax. The Contractor must have a valid City of San Luis Obispo business license & tax certificate before execution of the contract. Additional information regarding the City’s business tax program may be obtained by calling (805) 781-7134. 3. Ability to Perform. The Contractor warrants that it possesses, or has arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to carry out and complete the work hereunder in compliance with all federal, state, county, city, and special district laws, ordinances, and regulations. 4. Laws to be Observed. The Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work. 5. Payment of Taxes. The contract prices shall include full compensation for all taxes that the Contractor is required to pay. 6. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges and fees, and give all notices necessary. 7. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety. 8. Public and Employee Safety. Whenever the Contractor’s operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees. 9. Preservation of City Property. The Contractor shall provide and install suitable safeguards, approved by the City, to protect City property from injury or damage. If City property is injured or damaged resulting from the Contractor’s operations, it shall be replaced or restored at the Contractor’s expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work. 10. Immigration Act of 1986. The Contractor warrants on behalf of itself and all DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 subcontractors engaged for the performance of this work that only persons authorized to work in the United State pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. 11. Contractor Non-Discrimination. In the performance of this work, the Contractor agrees that it will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 12. Work Delays. Should the Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City’s sole option, be extended for such periods as may be agreed upon by the City and the Contractor. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. 13. Payment Terms. The City’s payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the materials, supplies, equipment, or services provided by the Contractor (Net 30). 14. Inspection. The Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of the Contractor are being performed in accordance with the requirements and intentions of this contract. All work done, and all materials furnished, if any, shall be subject to the City’s inspection and approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements. 15. Audit. The City shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its invoices to City as a condition precedent to any payment to Contractor. 16. Interests of Contractor. The Contractor covenants that it presently has no interest, and shall not acquire any interest—direct, indirect or otherwise—that would conflict in any manner or degree with the performance of the work hereunder. The Contractor further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed. The Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, the Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City. 17. Hold Harmless and Indemnification. (a) Non-design, non-construction Professional Services: To the fullest extent permitted by DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s wrongful failure, whether negligent or intentional to perform its obligations under this Agreement or out of the operations conducted by Consultant, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (b) Non-design, construction Professional Services: To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (c) Design Professional Services: In the event Consultant is a “design professional”, and the Scope of Services require Consultant to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) Consultant shall indemnify, defend and hold harmless the City and its elected officials, officers, employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of Consultant, except to the extent caused by the sole negligence, active negligence or willful misconduct of the City. Negligence, recklessness or willful misconduct of any subcontractor employed by Consultant shall be conclusively deemed to be the negligence, recklessness or willful misconduct of Consultant unless adequately corrected by Consultant. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to Consultant DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 under this paragraph exceed Consultant’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs. (d)The review, acceptance or approval of the Consultant’s work or work product by any indemnified party shall not affect, relieve or reduce the Consultant’s indemnification or defense obligations. This Section survives completion of the services or the termination of this contract. The provisions of this Section are not limited by and do not affect the provisions of this contract relating to insurance. 18.Contract Assignment. The Contractor shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 19.Termination for Convenience. The City may terminate all or part of this Agreement for any or no reason at any time by giving 30 days written notice to Contractor. Should the City terminate this Agreement for convenience, the City shall be liable as follows: (a) for standard or off-the-shelf products, a reasonable restocking charge not to exceed ten (10) percent of the total purchase price; (b) for custom products, the less of a reasonable price for the raw materials, components work in progress and any finished units on hand or the price per unit reflected on this Agreement. For termination of any services pursuant to this Agreement, the City’s liability will be the lesser of a reasonable price for the services rendered prior to termination, or the price for the services reflected on this Agreement. Upon termination notice from the City, Contractor must, unless otherwise directed, cease work and follow the City’s directions as to work in progress and finished goods. 20.Termination. If, during the term of the contract, a party determines that the other party is not faithfully abiding by any term or condition contained herein, the non-defaulting party may notify the defaulting party or in writing of such defect or failure to perform. This notice must give the defaulting party 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency. If the defaulting party has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the non-defaulting party may terminate the contract immediately by written notice to the defaulting party to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of the Contractor’s surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the terminations thereof. In said event, the Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City’s Notice of Termination, minus any offset from such payment representing the City’s damages from such breach. “Reasonable value” includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by the Contractor as may be set forth in DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475 the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the Contractor shall be based solely on the City’s assessment of the value of the work-in-progress in completing the overall work scope. The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City’s sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall the Contractor be entitled to receive in excess of the compensation quoted in its proposal. DocuSign Envelope ID: A54992E6-E333-4323-B76D-EBA794555475