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Home My WebLink AboutPFM Individual Portfolios of the California Asset Management ProgramLetter Agreement This Letter Agreement, entered into as of WN . ?_% , 2005 sets forth our agreement for the investment of certain funds (the "Initial Funds") by the Town of Los Altos Hills (the "Participant") in Individual Portfolios (as the term is herein defined) of the California Asset Management Program. The Program consists of the California Asset Management Trust (the "Trust") designed to provide Participants with a convenient method of pooling operating funds and proceeds of bonds, notes, and certificates of participation for temporary investment pending their disbursement. The Program also offers Participants the option of establishing individual, professionally -managed investment accounts ("Individual Portfolios") by separate agreement with the Trust's Investment Adviser to meet specific investment objectives. Collectively the Trust and the Individual Portfolios are referred to as the Program. All securities in the Trust are held by the Program's Custodian, BNY Western Trust Company (the "Custodian"), in the name of the Trust, and all assets in each Individual Portfolio are held by the Custodian in the name of the appropriate Participant. A complete description of the Program is provided in the Program Guide dated February 28, 2005 and the Declaration of Trust dated December 15, 1989 and as subsequently amended, to which reference should be made for details. Certain of the Initial Funds and such other funds as the Participant may from time to time assign to the Trust's Investment Adviser, PFM Asset Management LLC ("PFM") for management under this Agreement (collectively the "Managed Funds") will be invested by PFM in one or more Individual Portfolios while other funds will be invested in the Trust. PFM will provide investment research and supervision and conduct a continuous program of investment, evaluation, and when appropriate, sale and reinvestment of the Participant's funds invested in Individual Portfolios. PFM shall place all orders for the purchase, sale, loan, or exchange of portfolio securities for the Participant's account with brokers or dealers, and to that end PFM is authorized as agent of the Participant to give instructions to the Custodian as to deliveries of securities and payments of cash for the account of the Participant. PFM shall ensure that orders are placed with reputable, qualified, and financially sound brokers/dealers. PFM shall, in a manner consistent with ensuring safety of principal, exercise due diligence in establishing and maintaining brokers/dealers qualifications and in conducting credit reviews and reviews on broker/dealer execution capabilities. In connection with the selection of such brokers and dealers and the placing of such orders, PFM is directed to seek for the Participant the most favorable execution and price. Compensation For services provided by PFM for the management of funds in an Individual Portfolio, the Participant shall pay PFM an annual fee, in monthly installments, based on the average daily net assets of the funds in the Individual Portfolios, equal to 0.10% of the first $25 million of such assets and 0.08% of amounts in excess of $25 million. For purposes of calculating the fee payable to PFM, funds in all Participant Individual Portfolios shall be aggregated. For custodial services provided by Custodian, the Participant shall pay the Custodian the applicable asset based or transaction fees. PFM shall prepare a bill for the investment management fee monthly and forward it and the monthly Custodian invoice to the Participant for approval. Unless instructed otherwise within 15 calendar days of the postmark on that invoice, PFM is herein authorized to charge the Participant's associated Trust account and instruct the Custodian to disburse funds from that account. If sufficient funds are not available, the Participant agrees to compensate PFM from other sources within 30 calendar days of the postmark date. If either PFM or the Custodian shall serve for less than the whole month, the compensation shall be pro -rated. Although expenses associated with the management of an Individual Portfolio may be paid directly from the Participant's Trust account, where proceeds of tax exempt debt are invested in an Individual Portfolio these expenses may not be deducted from investment income for purposes of calculating arbitrage rebate. Other Expenses Except as expressly provided otherwise herein or in the Declaration of Trust or Information Statement, the Participant shall pay all of its own expenses, if any, with regard to the investment of funds in an Individual Portfolio including, without limitation, taxes, commissions, brokerage and other expenses connected with the execution of portfolio security transactions, insurance premiums, fees and expenses of the Custodian for safekeeping of funds and securities. Responsibility of PFM PFM hereby represents it is a registered investment adviser under the Investment Advisers Act of 1940. PFM shall immediately notify the Participant if at any time during the term of the Agreement it is not so registered or if its registration is suspended. PFM agrees to perform its duties and responsibilities under the Agreement with reasonable care. PFM shall promptly notify the Participant in writing of any complaints or disciplinary actions filed against it, or any investment professional employed by it, who has performed any service with respect to the Participant's account in the 24 preceding months, by the Securities and Exchange Commission of the United States, the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, any Attorney General or any regulatory agency or authority of any state of the United States, any department or agency or authority of the Government of the United States, or any governmental agency or authority regulating securities of any country in which PFM is doing business. PFM warrants that it has delivered to the Participant, at least five business days prior to the execution of this letter agreement, PFM's current Securities and Exchange Commission Form ADV, Part H (PFM's disclosure statement). The Participant acknowledges receipt of such disclosure statement at least five business days prior to the execution of the letter agreement. Assignment . PFM's obligations and responsibilities as described in this letter are not assignable without the written consent of the Participant. Maintenance of Records PFM shall provide the Participant 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 for assets held in the Individual Portfolios. For proceeds of tax-exempt debt issues invested under this Agreement, PFM shall maintain appropriate records of all of its activities hereunder as may be required by the Internal Revenue Code of 1986 as amended or related U.S. Treasury Regulations, and shall provide to the Program Rebate Calculation Agent all of those records of investment activity as may be necessary to prepare calculations of a Participant's rebate liability. Term This Agreement shall remain in effect so long as PFM is the Investment Adviser and BNY Western Trust Company is the Custodian for the Trust, unless canceled by the Participant upon no less than thirty (30) days' prior written notice to PFM. This Agreement may be terminated by the Participant in the event of any material breach of its terms immediately upon notice by certified mail, return receipt requested. Sincerely, PFM ASSET MANAGEMENT LLC R � Marty Margolis President/Managing Director Accepte By Maureen Cassingham City Manager Town of Los Altos Hills