2024-29 US Bank - Custody Agreement General AssetsMEMORANDUM
DATE: February 22, 2024
TO: Jon McMillen, City Manager
FROM: Rosemary Hallick, Principal Management Analyst
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U]I ORN1.1
RE: U.S. Bank National Association — Custody Agreement for asset custody services
Please list the Contracting Party / Vendor Name, type of agreement to be executed, including any change orders or
amendments, and the type of services to be provided. Make sure to list any related Project No. and Project Name.
Authority to execute this agreement is based upon:
JVJ_ Approved by City Council on February 20, 2024
.a City Manager's signing authority provided under the City's Purchasing Policy
[Resolution No. 2019-021] for budget expenditures of $50,000 or less.
Department Director's or Manager's signing authority provided under the City's
Purchasing Policy [Resolution No. 2019-021] for budget expenditures of $15,000 and
$5,000, respectively, or less.
Procurement Method (one must apply):
✓Q Bid _❑ RFP 0 RFQ _❑. 3 written informal bids
QSole Source F] Select Source 1-1 Cooperative Procurement
Reauestina department shall check and attach the items below as auurouriate:
7 Agreement payment will be charged to Account No.: 101-1006-60102
March 1� 2024 February 28, 2029
✓ Agreement term: Start Date _ _ End Date
. ✓Q Amount of Agreement, Amendment, Change Order, etc.: $ 75,000
REMINDER: Signing authorities listed above are applicable on the aggregate Agreement amount,
not individual Amendments or Change Orders!
L�
MM
Insurance certificates as required by the Agreement for Risk Manager approval
Approved by: Laurie McGinley Date: 2/27/2024
Bonds (originals) as required by the Agreement (Performance, Payment, etc.)
Conflict of Interest Form 700 Statement of Economic Interests from Consultant(s)
NOTE: Review the "Form 700 Disclosure for Consultants" guidance to determine if a Form 700 is
required pursuant FPPC regulation 18701(2)
El
.a
Business License No.
Expires:
Requisition for a Purchase Order has been prepared (Agreements over $5,000)
CUSTODY AGREEMENT (GENERAL ASSETS)
This Custody Agreement (the "Agreement") is between the City of La Quinta (legal name of entity), a
Charter City (legal form of entity) organized under the laws of the State of California, ("Customer"), and U.S.
Bank National Association, a national banking association organized under the laws of the United States with
offices in Minneapolis, Minnesota ("Bank").
The parties hereby agree as follows:
SECTION 1
DEFINITIONS
1.1. "Account" means (i) the custody account established in the name of Customer and maintained under
this Agreement for the Assets (as defined below) and (ii) where the context requires, one or more Sub -accounts
(as defined below).
1.2. "Accounting Standards" means Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 820, Fair Value Measurement, or Governmental Accounting Standards Board (GASB)
Codification Statement No. 72, Fair Value Measurement and Application.
1.3. "Affiliated Investment" means a security or other property issued, offered, or serviced by Customer or
Customer's affiliate.
1.4. "Assets" means the securities, cash, and other property Customer contributes, or causes to be
contributed, from time to time under this Agreement; investments and reinvestments thereof; and income
thereon, as provided herein.
1.5. "Cash -flow Analysis" means a periodic written analysis of Customer's cash -flow history, short-term
financial needs, long-term financial needs, expected levels and timing of contributions, expected levels and
timing of distributions, liquidity needs (including but not limited to the anticipated liquidity required to make
distributions), ability to provide future funding, and other significant information which could affect cash -flow or
the exercise of discretion to manage the Assets.
1.6. "CFR" means the Code of Federal Regulations.
1.7. "Client -controlled Asset" means an asset that is neither registered in the name of Bank or Bank's
nominee nor maintained by Bank at a Depository (as defined below) or with a sub -custodian nor held by Bank
in unregistered or bearer form or in such form as will pass title by delivery.
1.8. "Code" means the Internal Revenue Code of 1986, as amended
1.9. "Depository" means any central securities depository (such as the DTC), international central securities
depository (such as Euroclear Bank SA/NV), or Federal Reserve Bank.
1.10. "DTC" means the Depository Trust Company.
1.11. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
1.12. "Guidelines" means the written investment objectives, policies, strategies, and restrictions for the
Account (or for any Sub -accounts therein), including but not limited to proxy -voting guidelines, as amended from
time to time
1.13. "Harm" means claims, costs, damages, delayed payment or non-payment on Assets sold, diminution of
Assets by reason of investment experience, expenses (including attorneys' and other professional fees), fines,
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interest, liabilities, losses, penalties, stockholders' assessments (asserted on account of asset registration), and
taxes.
1.14. "Indemnified Person" means Bank and its affiliates, and their officers, directors, employees, agents,
successors, and assigns.
1.15. "Investment Advice" means a recommendation, or a suggestion to engage in or refrain from taking a
particular course of action, as to (i) the advisability of acquiring, holding, disposing of, or exchanging any Asset
or any securities or other investment property or (ii) the Guidelines, the Cash -flow Analysis, the composition of
the Account's portfolio, or the selection of persons to provide investment advice or investment management
services with respect to the Assets.
1.16. "Investment Company Act" means the Investment Company Act of 1940, as amended.
1.17. "IRS" means the Internal Revenue Service.
1.18. "Messaging System" means any financial -messaging system, network, or service acceptable to Bank,
such as the Society for Worldwide Interbank Financial Telecommunication messaging system.
1.19. "National Securities Exchange" means a securities exchange that is registered with the SEC (as
defined below) under Section 6 of the Securities Exchange Act of 1934.
1.20. "Plan -assets Vehicle" means an investment contract, product, or entity that holds plan assets (as
determined pursuant to ERISA §§3(42) and 401 and 29 CFR §2510.3-101).
1.21. "Private Fund" means an issuer that would be an "investment company' as defined in the Investment
Company Act but for §3(c)(1) or (7) thereof.
1.22. "SEC" means the United States Securities and Exchange Commission.
1.23. "State" means the State of California, United States of America.
1.24. "Statement Recipient" means Customer and anyone else Customer so designates.
1.25. "Sub -account" means a separate portion of the Account.
SECTION 2
APPOINTMENT AND ACCEPTANCE
2.1. Appointment; Acceptance. Customer hereby appoints Bank as custodian of the Assets. Bank hereby
accepts such appointment and agrees to hold the Assets in the Account with due care in accordance with
reasonable commercial standards, upon the terms and conditions set forth below.
2.2. Establishment of Account.
2.2.1. Customer hereby contributes Assets, or causes Assets to be contributed, to the Account.
2.2.2. Customer hereby represents, warrants, and covenants as follows, and Bank may resign
immediately if Customer breaches any such representation, warranty, or covenant:
2.2.2.1. Customer holds good and valid legal title to all Assets.
2.2.2.2. None of the Assets is (i) an asset of any "plan" as defined in ERISA §3(3); any
"plan" as defined in Code §4975(e)(1); any Plan -assets Vehicle; or any plan or entity not otherwise within the
foregoing definitions that is subject to similar restrictions under federal, state, or local law; (ii) subject to the
requirements of a special reserve bank account under SEC Rule 15c3-3; a customer segregated account,
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cleared swaps customer account, or customer secured account under U.S. Commodity Futures Trading
Commission Rules 1.20, 22.5, or 30.7; or any similar rule or regulation; or (iii) subject to a public -deposits, public -
funds, or other State law that would require Bank to set aside any direct government obligations, government -
guaranteed obligations, surety bonds, letters of credit, or other assets as security, regardless of the type or
amount of capital of Bank, the amount of public deposits held by Bank, or the extent to which the Assets are not
insured by the Federal Deposit Insurance Corporation or exceed federal deposit insurance limits.
2.2.2.3. Customer is neither (i) a Private Fund, (ii) an investment pool or entity that is an
"investment company' as defined in Investment Company Act §3(a) or is excluded from such definition (or
exempted from regulation) by the Investment Company Act, (iii) an insurer, (iv) a reinsurer, nor (v) a natural
person.
2.2.2.4. Customer is not a trustee of, and has no duty to engage a trustee for, the Assets.
2.2.3. As directed by Customer, Bank will establish one (1) or more Sub -accounts and allocate Assets
among Sub -accounts. Customer hereby covenants not to direct Bank to establish any Sub -account for the
benefit of any entity having a different taxpayer identification number than Customer and acknowledges that
each Sub -Account will have the same taxpayer identification number as Customer.
2.2.4. Customer hereby covenants not to cause or permit the Account to acquire any Affiliated
Investment the price of which is not quoted on a National Securities Exchange.
Bank.
2.2.5. Bank will keep the Assets (other than deposits at Bank) separate and apart from the assets of
SECTION 3
BOOKS, RECORDS, AND ACCOUNTS
3.1. Accounting. Bank shall maintain proper books of account and complete records of Assets and
transactions in the Account.
SECTION 4
ASSET DELIVERY, TRANSFER, CUSTODY, AND SAFEKEEPING
4.1. Customer will from time to time deliver, or cause to be delivered, Assets to Bank. Bank shall receive and
accept such Assets for the Account upon directions from Customer.
4.2. Account Statements. Bank will furnish each Statement Recipient with (i) an Account statement with the
frequency designated below (or as subsequently agreed upon by Bank and Customer) within thirty (30) calendar
days after the end of the reporting period and (ii) a final Account statement within thirty (30) calendar days after
Bank has transferred all Assets from the Account as provided under this Agreement. (However, if Customer
directs Bank to hold an Account statement, then Bank may delay delivery thereof until thirty (30) calendar days
after the hold has expired.) Such Account statements will reflect Asset transactions during the reporting period
and ending Asset holdings. To the extent Customer has established an account in Bank's on-line portal and
granted access thereunder to Statement Recipients, Bank will furnish such Account statements by way of such
system. If no frequency is so designated or agreed upon, Customer shall be deemed to have designated
"Monthly".
(Check at least one):
®
Monthly
❑
Quarterly
❑
Semi-annually
❑
Annually
4.3. Confirmations; Notification by Agreement. Except to the extent that Customer and Bank have entered
into a separate written agreement that expressly makes Bank an investment manager of the Assets, the Account
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statements described above (including their timing and form) serve as the sole written notification of any
securities transactions effected by Bank for the Account. Even so, Customer has the right to demand that Bank
provide written notification of such transactions pursuant to 12 CFR §12.4(a) or (b) at no additional cost to
Customer.
4.4. Corporate Actions. Bank shall forward to any person authorized under this Agreement to direct the
purchase or sale of an Asset information Bank receives with respect to the Asset concerning corporate actions.
4.4.1. Notwithstanding anything herein to the contrary, Bank will, without forwarding such information or
providing notice, (i) cause Assets to participate in any mandatory exchange transaction that neither requires nor
permits approval by the owner of the Assets and (ii) file any proof of claim received by Bank during the term of
this Agreement regarding class-action litigation over a security held in the Account during the class-action period,
regardless of any waiver, release, discharge, satisfaction, or other condition that might result from such a filing.
4.5. Upon receipt of directions from Customer, Bank shall return Assets to Customer, or deliver Assets to
such location or third party as such directions may indicate, provided that in connection therewith it is the sole
responsibility of Customer to provide any transfer documentation as may be required by the applicable
Depository or third party recipient. Bank shall have no power or authority to assign, hypothecate, pledge or
otherwise dispose of any Assets, except as provided herein or pursuant to such directions.
SECTION 5
POWERS OF BANK
5.1. In the performance of its duties under this Agreement, Bank shall have the power to:
5.1.1. Sign Documents. Make, execute, acknowledge, and deliver any and all documents of transfer
and conveyance and any or all other instruments that may be necessary or appropriate to the proper discharge
of its duties under this Agreement.
5.1.2. Hire Service Providers. Hire service providers to assist Bank in exercising Bank's powers under
this Agreement, including any service provider that is affiliated with Bank, and provide them with information
about the Account as needed to that end.
5.1.3. Hold Assets Un-invested. Hold in a noninterest-bearing deposit account of Bank any cash
Assets (i) that are subject to pending investment or distribution directions received by Bank with respect to the
Account, (ii) that were received by Bank too late in the day to be invested into the Account's designated sweep
vehicle, (iii) as directed under this Agreement, or (iv) for other operational reasons.
5.1.4. Retain or Interplead Disputed Funds. With respect to Assets that are the subject of a dispute,
(i) withhold delivery or distribution thereof pending final adjudication of the dispute by a court or (ii) file an
interpleader action or petition a court for instructions at Account expense.
5.1.5. Distribute Assets. Distribute Assets as set forth herein.
5.1.6. Safe -keep Assets. Safe -keep Assets as set forth herein.
5.1.7. Register Assets. Register any Asset in the name of Bank or Bank's nominee or to hold any
Asset in unregistered or bearer form or in such form as will pass title by delivery, provided that Bank's records
at all times show that all such assets are part of the Account.
5.1.8. Maintain Assets at a Depository or with a Sub -custodian. Maintain Assets that are (i) book -
entry securities at any Depository or with any sub -custodian and to permit such Assets to be registered in the
name of Bank, Bank's nominee, the Depository, the Depository's nominee, the sub -custodian, or the sub -
custodian's nominee and (ii) physical securities at Bank's office in the United States and in a safe place.
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5.1.9. Maintain Assets at a Mutual Fund. Maintain Assets that are mutual -fund shares in Bank's
omnibus position at the fund.
5.1.10. Collect Income. Collect all income, principal, and other distributions due and payable on Assets.
If Customer directs Bank to search the DTC's Legal Notice System for notice that a particular Asset is in default
or has refused payment after due demand, then Bank will conduct such a search and notify Customer of any
such notice Bank finds therein.
5.1.11. Exchange Foreign Currency. Exchange foreign currency into and out of United States dollars
through customary channels, including Bank's foreign exchange department.
5.1.12. Advance Funds or Securities. Advance funds or securities in furtherance of settling securities
transactions and other financial -market transactions under this Agreement.
SECTION 6
PERMISSIBLE INVESTMENTS; SWEEP DIRECTION
6.1. Permissible investments for the Account include, but are not limited to, any securities or property
administered, advised, custodied, held, issued, offered, sponsored, supported by the credit of, underwritten, or
otherwise serviced by Bank or by Bank's affiliate.
6.2. Sweep Direction. To the extent Bank has received no investment direction as to cash Assets held in
the Account, Bank will use such Assets to purchase a position in the Account's designated sweep vehicle.
SECTION 7
SETTLEMENT
7.1. Upon receipt of directions from Customer, Bank will settle purchases made with Assets and sales of
Assets on a contractual basis according to Bank's instruction -deadline schedule and current securities -industry
practices, if Bank has all the information and the Account has all the Assets necessary for the purchase or sale.
With respect to purchases and redemptions of mutual -fund shares, Customer hereby acknowledges that meeting
Bank's internal trading cut-off on any business day does not guarantee (i) that Bank will settle the purchase or
redemption on the same business day or (ii) if the fund has a floating or variable net asset value ("NAW), the
use of the NAV then most recently determined.
7.2. Customer hereby covenants not to (i) direct the purchase of an asset, notify a third party that Bank will
settle the purchase, or cause or permit anyone else to provide such direction or notice, if the Account has
insufficient funds to settle the purchase; (ii) cause or permit proceeds from the sale of an Asset to be used to
pay for the earlier purchase of the same Asset; or (iii) cause or permit the sale of an Asset that the Account has
not fully paid for.
7.3. With respect to any sale of an Asset on a non -delivery -versus -payment basis, Bank hereby covenants to
use commercially reasonable efforts to obtain payment on the same business day that Bank delivered the Asset,
and the Account (and not Bank) assumes all risk that payment is delayed or not received.
SECTION 8
PRICE -REPORTING; CLIENT -CONTROLLED ASSETS
8.1. Price -reporting. For purposes of reporting the price of an Asset on an Account statement:
8.1.1. Pricing from Vendor or Exchange. If Bank receives a price from its third -party pricing vendor,
or if a price is quoted on a National Securities Exchange, then Bank will report such price.
8.1.2. Pricing from Other Sources. If Bank does not receive a price from its third -party pricing vendor,
and a price is not quoted on a National Securities Exchange, then Bank will report (i) the most recent price that
Bank received from Customer or Customer's agent (and Customer hereby covenants that Customer and
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Customer's agents will use a pricing form acceptable to Bank as the means of providing prices to Bank), (ii) the
most recent price that Bank received from the Asset's broker, fund accountant, general partner, issuer,
investment manager, transfer agent, or other service provider, (iii) the Asset's par value, or (iv) a nominal value
for the Asset.
8.1.3. Limitations. Customer hereby acknowledges that Bank is performing a routine, ministerial, non -
discretionary price -reporting function and that the reported price might be neither fair market value nor fair value
(under Accounting Standards or applicable law). Customer hereby covenants not to rely on the reported price
as a substitute for (i) determining the Asset's value in connection with a decision to acquire, hold, dispose of, or
exchange any securities or other investment property; (ii) obtaining and ensuring the reliability of an independent
third -party appraisal with respect to such a decision; or (iii) obtaining Investment Advice.
8.1.4. Pricing Sources; Methodology. Upon Customer's request, Bank will provide Customer with
information about Bank's pricing sources and methodologies.
8.2 Client -controlled Assets. Customer may direct Bank from time to time to include in the Account
statements specific Client -controlled Assets that are registered in the name of Customer. In such a case, Bank
has the right to exclude such assets from the Account statements or to include them with a notation about control.
To the extent Bank includes them, Customer hereby acknowledges that:
8.2.1. Customer is responsible for reviewing (i) the Account statements to ensure that they include
notations about the control of each such asset and (ii) any third -party reports made accessible by Bank to ensure
that they do not inaccurately identify the holder of any such assets.
8.2.2. Bank is not responsible for performing any duties under this Agreement (other than statement -
reporting duties, as limited herein) with respect to such assets, and Customer assumes all such duties.
8.2.3. When furnishing Account statements or making third -party reports accessible, Bank may rely on
information provided by Customer or by Customer's agents, affiliates, or representatives with respect to such
assets (including, but not limited to, information on the units, price, or marketability of such assets) without
questioning the information. To that end, Customer will cause each holder of such assets to provide Bank with
a copy of such holder's periodic Customer account statements with respect to such assets.
8.2.4. Such assets are subject to Exhibit A (Fee Schedule) hereto.
SECTION 9
LIMITATIONS ON DUTIES
9.1. Customer hereby acknowledges that Bank does not provide any services under this Agreement (i) in a
"fiduciary capacity" within the meaning of 12 CFR §9.2(e) or (ii) as a "fiduciary" as such term may be defined in
State law or otherwise.
9.2. The duties of Bank will be strictly limited to those set forth in this Agreement, and no implied covenants,
duties, responsibilities, representations, warranties, or obligations shall be read into this Agreement against
Bank. Without limiting the generality of the foregoing, Bank shall have no duty to:
9.2.1. Evaluate or to advise anyone of the prudence, suitability, or propriety of action or proposed action
of Customer in any particular transaction involving an Asset or the suitability or propriety of retaining any
particular investment as an Asset; review, question, approve, or make inquiries as to any investment directions
received under this Agreement; or review the securities or other property held in the Account with respect to
prudence or diversification.
9.2.2. Act as trustee of the Assets.
9.2.3. Act as custodian of any assets other than the Assets.
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9.2.4. Act as investment manager of the Assets, except to the extent the Assets are subject to Bank's
discretion to manage under a separate written investment -management agreement (if any).
9.2.5. Provide Investment Advice.
9.2.6. Determine, monitor, question, or collect any contributions to the Account or monitor compliance
with any applicable funding requirements.
9.2.7. Inspect, review, or examine any Client -controlled Asset or governing, offering, subscription, or
similar document with respect thereto, to determine or question whether the asset or document is authentic,
genuine, enforceable, properly signed, appropriate for the represented purpose, is what it purports to be on its
face, or for any other purpose, or to execute such document, regardless of whether Bank has physical
possession of such asset or document.
9.2.8. (i) Collect any income, principal, or other distribution due and payable on an Asset if the Asset is
in default or if payment is refused after due demand or (ii) except as expressly provided herein, to notify Customer
in the event of such default or refusal.
9.2.9. Provide notice of, or forward, mini -tenders (which are tender offers for less than 5% of an
outstanding equity or debt issue) for any equity or debt issue.
9.2.10. Determine or question whether any direction received under this Agreement is prudent or contrary
to applicable law; to solicit or confirm directions; or to take notice of facts not actually known by any Bank
employee with direct responsibility for providing services under this Agreement.
9.2.11. Calculate, withhold, prepare, sign, disclose, file, report, remit, or furnish to any taxing authority or
any taxpayer any federal, state, or local taxes, tax returns, or information returns that may be required to be
calculated, withheld, prepared, signed, disclosed, filed, reported, remitted, or furnished with respect to the Assets
or the Account, except to the extent such duties are required by law to be performed only by Bank in its capacity
as custodian under this Agreement or are expressly set forth herein.
9.2.12. Monitor service providers hired by Customer or guarantee their performance.
9.2.13. Advance funds or securities or otherwise expend or risk its own funds or incur its own liability in
the exercise of its powers or rights or performance of its duties under this Agreement.
SECTION 10
AUTHORIZED PERSONS; DELIVERY OF DIRECTIONS
10.1. Authorized Persons. With respect to this Agreement:
10.1.1. Customer will notify Bank of the identity of each (i) employee of Customer who is authorized to
act on Customer's behalf, (ii) third -party agent that is authorized to act on Customer's behalf, and (iii) employee
of each third -party agent who is authorized to act on such agent's behalf. In no event is any such agent
authorized to execute this Agreement or any amendment thereto or to terminate this Agreement.
10.1.2. Bank may assume that any such employee or agent continues to be so authorized, until Bank
receives notice to the contrary from Customer (or, with respect to any such employee of any such agent, from
such agent).
10.1.3. Customer hereby represents and warrants that any such employee or agent was duly appointed
and is appropriately monitored and covenants that Customer will furnish such employee or agent with a copy of
this Agreement, as amended from time to time. Customer hereby acknowledges that (i) such employee's or
agent's actions or omissions are binding upon Customer as if Customer had taken such actions or made such
omissions itself and (ii) Bank is indemnified, released, and held harmless accordingly.
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10.2. Delivery of Directions. Any direction, notice, or other communication under this Agreement will be given
in writing and (i) addressed as provided pursuant to this Agreement, (ii) entered into Customer's account in
Bank's on-line portal, or (iii) sent by Messaging System. If a direction, notice, or other communication to Bank
was so addressed, entered, or sent, then Customer hereby assumes all risk to the Account that the direction,
notice, or other communication was compromised by fraud. Furthermore, any direction under this Agreement to
Bank to distribute or transfer cash Assets will not be sent by email.
SECTION 11
FEES AND EXPENSES
11.1. Fees; Expenses. Customer shall pay Bank compensation for providing services under this Agreement.
A schedule of that compensation is attached as Exhibit A (Fee Schedule) hereto.
11.2. Outstanding Fees and Expenses. To the extent of any outstanding compensation, expenses, fees,
costs, or other charges incurred by Bank in providing services under this Agreement, Customer hereby grants
Bank a first -priority lien and security interest in, and right of set-off against, the Assets. Bank may execute that
lien and security interest, and exercise that right, at any time.
11.3. Advance of Funds or Securities. To the extent of any advance of funds or securities under this
Agreement, Customer hereby grants Bank a first -priority lien and security interest in, and right of set-off against,
the Assets. Bank may execute that lien and security interest, and exercise that right, at any time. Furthermore,
nothing in this Agreement constitutes a waiver of any of Bank's rights as a securities intermediary under Uniform
Commercial Code §9-206, and Customer hereby acknowledges that the obligation to pay a purchase price to
Bank arises at the time of the purchase.
SECTION 12
INDEMNIFICATION
12.1. Indemnification.
12.1.1. Customer hereby indemnifies and releases each Indemnified Person and holds each Indemnified
Person harmless from and against, and an Indemnified Person will incur no liability to any person or entity for,
any Harm that may be imposed on, incurred by, or asserted against an Indemnified Person by reason of the
Indemnified Person's action or omission in connection with this Agreement or the Account, except to the extent
that a court of competent jurisdiction has made a final, non -appealable judgment that the Harm resulted directly
from the Indemnified Person's willful misconduct, gross negligence, or bad faith.
12.1.2. The foregoing provisions shall survive the termination of this Agreement.
12.2. Force Majeure. No party is liable for any delay or failure in performing its obligations under this
Agreement caused by wars (whether declared or not and including existing wars and the invocation of war
powers), revolutions, insurrections, riots, civil commotion, acts of God, medical emergencies, disease outbreaks,
accidents, fires, explosions; stoppages of labor, strikes, or other differences with employees (other than Bank's
disputes with its employees); laws, regulations, orders, or other acts of any governmental authority; or any other
circumstances beyond its reasonable control, regardless of whether such was already in existence as of the date
of this Agreement. Nor will any such failure or delay give any party the right to terminate this Agreement.
12.3. Damages. No party is liable for any indirect, incidental, special, punitive, or consequential damages
arising out of or in any way related to this Agreement or the performance of its obligations under this Agreement.
This limitation applies even if the party has been advised of, or is aware of, the possibility of such damages.
12.4. Statements. Bank is not liable with respect to the propriety of Bank's actions or omissions reflected in a
statement furnished under this Agreement, except to the extent a Statement Recipient objects to Bank within
thirty (30) calendar days after such statement is furnished.
SECTION 13
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TERMINATION OR SHUTDOWN
13.1 Term. Unless earlier terminated in accordance with the provisions in Section 13 of this Agreement, the
term of this agreement shall commence on March 1, 2024, and terminate on February 28, 2029 ("Initial Term").
This Agreement may be extended for two additional year(s) upon mutual agreement by both parties ("Extended
Term"), and executed in writing.
13.2. Termination of Agreement. This Agreement terminates upon the effective date of Bank's resignation
or removal under this Agreement.
13.3. Resignation; Removal.
13.3.1. Bank may resign under this Agreement by notice to Customer. Customer may remove Bank
under this Agreement by notice to Bank. The resignation or removal shall be effective thirty (30) calendar days
after delivery of the notice, except to the extent the parties agree in writing to a different effective date. By such
effective date, Customer shall appoint a new custodian and notify Bank of the appointment. If Customer fails to
do so, Bank shall have the right to petition a court at Account expense for appointment of a new custodian.
13.3.2. Upon receiving notice of such appointment, Bank will transfer Assets to the new custodian as
directed by Customer or the court, as the case may be. However, Bank shall not be required to transfer any
Assets until Bank has received payment or reimbursement for all (a) compensation, expenses, fees, costs, or
other charges incurred by Bank in providing services under this Agreement and (b) funds or securities advanced
under this Agreement.
13.4. Shutdown. Notwithstanding anything herein to the contrary, Bank shall have the power to segregate or
restrict an asset, delay processing a direction or transaction, refuse to process a direction or transaction, or
suspend the Account for one or more business days or close the Account or terminate this Agreement at any
time (i) to comply with Bank's economic sanctions or anti -money laundering policies or obligations, (ii) to
safeguard against fraud, or (iii) pursuant to a court order or direction of an authorized governmental agency or
as required by law, and Bank will incur no liability to any person or entity for any Harm in connection with any
such segregation, restriction, delay, refusal, suspension, closure, or termination.
SECTION 14
DATA PRIVACY, CONFIDENTIALITY, AND SECURITY
14.1. Definitions. For purposes of this Section:
14.1.1. "Applicable Privacy, Confidentiality, and Security Laws" means, with respect to a party, all
applicable federal, state, and local laws, rules, regulations, directives, and other binding requirements issued by
any Governmental Authority (as defined below) pertaining to the privacy, confidentiality, or security of
Confidential Information (as defined below), including, with respect to Bank, GLBA (as defined below).
14.1.2. "Confidential Information" means all information, data, documents, records, and other
materials one party receives in connection with this Agreement or the Account from another party that is labeled
"Confidential Information" or should reasonably be classified by the recipient as personal or confidential
information given the nature of the information or the circumstances of its receipt, other than Non -Confidential
Information (as defined below).
14.1.3. "GLBA" means the Gramm -Leach -Bliley Act, 15 U.S.C. §§6801 et seq., and its implementing
regulations, including Regulation P, 12 C.F.R. Part 1016.
14.1.4. "Governmental Authority" means, with respect to a party, a state or federal governmental entity
having jurisdiction over such party with respect to the activities that are the subject matter of this Agreement.
14.1.5. "Non -Confidential Information" means information (i) of the disclosing party that was known by
the receiving party without any obligation of confidentiality prior to the disclosing party's disclosure thereof; (ii) of
a party that was or becomes publicly available other than pursuant to a breach of this Agreement by the other
Page 9 of 17 01/2024
party; (iii) of a party that was received by the receiving party in good faith on a non -confidential basis from a third
party that is not actually known to the receiving party to have disclosed such information in violation of a
confidentiality agreement in favor of the other party; (iv) that is independently developed by one party without
use of Confidential Information; or (v) of a party that is approved for disclosure by that party.
14.1.6. "Services" means the services provided by Bank pursuant to this Agreement.
14.2. Compliance with Law. Bank hereby represents and warrants that it complies with all Applicable Privacy,
Confidentiality, and Security Laws.
14.3. Privacy.
14.3.1. Program. Bank hereby represents and warrants that it maintains an enterprise -wide privacy
program that (i) complies with federal banking law and regulations and (ii) is consistent with industry standards
for providers of services similar to the Services.
14.3.2. Use and Disclosure of Confidential Information. Bank will use and disclose Confidential
Information only as permitted by Applicable Privacy, Confidentiality, and Security Laws and this Agreement.
Upon Customer's request, Bank will provide a monthly written report to Customer regarding how Confidential
Information has been used.
14.3.3. Records Retention. Bank will maintain commercially -standard records of Confidential
Information for the period required by Applicable Privacy, Confidentiality, and Security Laws (or, if longer, the
period required by Bank's record -retention policy). Following the expiration of such period, Bank will, to the
extent practicable, promptly destroy all Confidential Information.
14.3.4. Aggregated, Anonymized, or De -Identified Data. Customer hereby authorizes Bank to use
Confidential Information in an aggregated, anonymized, or de -identified format (i) for the purpose of providing
reports and analytics to other customers of Bank and to develop new products and services and (ii) for internal
purposes that do not involve disclosure of such data to third parties.
14.3.5. Consents. If Customer is a "financial institution" as defined in GLBA [15 U.S.C. §6809(3)], then
Customer hereby represents and warrants that Customer has obtained all consents from its customers as
needed in order to permit Bank to provide the Services and to use Confidential Information as described in this
Agreement.
14.4. Information Security.
14.4.1. Program. Bank hereby represents and warrants that it maintains an enterprise -wide information -
security program that (i) complies with federal banking law and regulations and (ii) is consistent with industry
standards for providers of services similar to the Services.
14.4.2. Safeguards. Bank will maintain physical, electronic, and procedural safeguards that are
designed to (i) maintain the security and confidentiality of Confidential Information; (ii) protect Confidential
Information against anticipated threats or hazards to the security or integrity of Confidential Information; and (iii)
prevent unauthorized access to; unauthorized use, disclosure, or modification of; or misuse or loss of such
Confidential Information that could result in substantial harm or inconvenience to Customer.
14.4.3. Notification of Breach. Within seven (7) calendar days after Bank becomes aware that
Confidential Information has been compromised as a result of a breach of security at Bank, Bank will, to the
extent permitted by law, provide written notice thereof to Customer. Such notice will include Bank's estimate of
the number of Customer's records affected and the nature of the information exposed, together with the steps to
be taken by Bank to limit such exposure and avoid a recurrence thereof. Bank will cooperate in Customer's
investigation relating to the breach and address the cause of the breach.
14.5. Business Continuity.
Page 10 of 17 01/2024
14.5.1. Business -Continuity Plan. Bank hereby represents and warrants that it maintains a business -
continuity plan that (i) complies with federal banking law and regulations and (ii) is consistent with industry
standards for providers of services similar to the Services.
14.5.2. Transfer of Services. In the event of a force-majeure event or a bankruptcy or insolvency of
Bank that renders Bank unable to provide the Services, Bank will cooperate with Customer and the replacement
vendor selected by Customer to transition performance of the Services to such replacement vendor, including
through the delivery of any Account records to such replacement vendor. However, the foregoing will not require
Bank to provide any Confidential Information of Bank to any third party unless such third party has executed a
confidentiality agreement acceptable to Bank.
14.6. Audit.
14.6.1. Third -Party Audit. Bank hereby represents and warrants that it obtains an independent auditor's
System and Organization Controls (SOC) 2 Report or its equivalent annually. Upon Customer's request, Bank
will provide the most recent such report to Customer.
14.6.2. Assessment. No more than once per calendar year, Customer has the right to assess the
policies, standards, and practices of Bank with respect to the performance of this Agreement, to the extent
necessary to verify Bank's compliance with the terms of this Section. Customer hereby acknowledges that
information which Bank deems confidential or proprietary may not be considered necessary to verify Bank's
compliance. The assessment will be conducted during regular business hours upon not less than ninety (90)
calendar days written notice by Customer to Bank on a date agreed upon by them. Bank will make efforts to
resolve deficiencies noted as a result of such assessment in a manner commensurate to the risk those
deficiencies represent.
14.6.3. Regulatory Audit. Bank hereby authorizes Customer to provide information regarding the
performance of this Agreement to a Governmental Authority with authority to review Customer's service
arrangements, but only when the Governmental Authority specifically requests such information.
Notwithstanding anything in this Agreement to the contrary, Bank may disclose Confidential Information to a
governmental agency that regulates Bank, whether in routine disclosures or in connection with such agency's
inquiry about or examination of Bank records or otherwise, without notice to Customer.
14.7. Insurance. Bank hereby represents and warrants that (i) Bank maintains General Liability Insurance,
Cyber Liability Insurance, Bankers Professional Liability Insurance, a Financial Institution Bond (Crime and
Dishonesty Policy), and Workers Compensation Insurance as applicable and (ii) such insurance complies with
federal banking law and regulations and is consistent with industry standards for providers of services similar to
the Services. Upon Customer's request, Bank will provide Customer with copies of a certificate of insurance for
each form of insurance stated above, and shall name the City of La Quinta as an Additional Insured on the
General Liability Insurance. Insurance requirements are attached as Exhibit B hereto.
14.8. Customer. Customer hereby represents and warrants that it (i) complies with all Applicable Privacy,
Confidentiality, and Security Laws, (ii) maintains an enterprise -wide information -security program that is
consistent with its own industry's standards, and (iii) obtains an annual independent risk -assessment of its
information -security program. Customer will (i) use and disclose Confidential Information only as permitted by
Applicable Privacy, Confidentiality, and Security Laws and this Agreement; maintain commercially -standard
records of Confidential Information for the period required by Applicable Privacy, Confidentiality, and Security
Laws; and, following the expiration of such period, to the extent practicable, promptly destroy all Confidential
Information; and (ii) notify Bank within seven (7) calendar days after becoming aware that Confidential
Information has been compromised as a result of a breach of security at Customer, cooperate in Bank's
investigation of the breach, and address the cause of the breach.
14.9. Third Party/Subcontractor. Each party hereby acknowledges that it is responsible for the actions of its
officers, directors, employees, and agents with respect to the privacy, confidentiality, and security of Confidential
Information. Customer will not, and will not ask Bank to, disclose Bank's Confidential Information to any online
Page 11 of 17 01/2024
portal or platform maintained by any third party that Customer has hired to manage or assess Customer's vendor
due -diligence and monitoring activities, unless (i) Customer has identified the third party (and the portal or
platform) to Bank, (ii) the third party has provided information about its information -security processes and
procedures to Bank, in a form acceptable to Bank, (iii) Bank has assessed those processes and procedures, and
(iv) Bank has notified Customer that such disclosure to the portal or platform is permitted under this Agreement.
SECTION 15
MISCELLANEOUS
15.1. Services Not Exclusive. Bank is free to render services to others, whether similar to those services
rendered under this Agreement or of a different nature.
15.2. Binding Obligations. Customer and Bank each represent and warrant that (i) it has the power and
authority to transact the business in which it is engaged and to execute, deliver, and perform this Agreement and
has taken all action necessary to execute, deliver, and perform this Agreement and (ii) this Agreement constitutes
its legal, valid, and binding obligation enforceable according to the terms hereof.
15.3. Complete Agreement; Amendment.
15.3.1. Complete Agreement. This Agreement contains a complete statement of all the arrangements
between the parties with respect to its subject matter and supersedes any existing agreements between them
concerning the subject.
15.3.2. Amendment. This Agreement may be amended at any time, in whole or in part, by a written
instrument signed by Customer and Bank. Notwithstanding the foregoing, the terms of Exhibit A (Fee
Schedule) hereto alone govern amendments thereto.
15.3.3. Control Agreement. Customer has the power to direct Bank to enter into a separate written
control agreement with respect to the Account or any Asset. Any such control agreement prevails over this
Agreement to the extent such agreements are inconsistent with each other.
15.4. Governing Law; Venue. This Agreement will be governed, enforced, and interpreted according to the
laws of the State without regard to conflicts of laws, except where pre-empted by federal law. All legal actions
or other proceedings directly or indirectly relating to this Agreement will be brought in federal court (or, if
unavailable, state court) sitting in the State. The parties submit to the jurisdiction of any such court in any such
action or proceeding and waive any immunity from suit in such court or execution, attachment (whether before
or after judgment), or other legal process in or by such court.
15.5. Successors and Assigns.
15.5.1. This Agreement binds, and inures to the benefit of, Customer, Bank, and their respective
successors and assigns.
15.5.2. No party may assign any of its rights under this Agreement without the consent of each other
party, which consent will not be unreasonably withheld. Customer hereby acknowledges that Bank will withhold
consent unless and until Bank verifies an assignee's identity according to Bank's Customer Identification
Program and, to that end, Customer hereby agrees to notify Bank of such assignment and provide Bank with the
assignee's name, physical address, EIN, organizational documents, certificate of good standing, and license to
do business, as well as other information that Bank may request. No consent is required if a party merges with,
consolidates with, or sells substantially all of its assets to another entity, provided that such other entity assumes
without delay, qualification, or limitation all obligations of that party under this Agreement by operation of law or
by contract.
15.6. Severability. The provisions of this Agreement are severable. The invalidity of a provision herein will
not affect the validity of any other provision.
Page 12 of 17 01/2024
15.7. No Third -Party Beneficiaries. This Agreement is made solely for the benefit of the parties. No person
other than such parties has any rights or remedies under this Agreement.
15.8. Solvency. Customer hereby represents and warrants that Customer is neither insolvent nor subject to
any pending bankruptcy proceeding. Customer will promptly notify Bank of any such insolvency or proceeding.
15.9. Tax -Lot Selection -Method. For the purpose of complying with IRS regulations requiring cost basis
reporting, Customer hereby designates the tax -lot selection -method for the Account:
❑ Minimize Gain — Shares are sold from tax lots having the highest per unit federal tax cost with a
holding period of more than one year.
® First In First Out (FIFO) — Shares are sold from tax lots having the earliest federal tax acquisition
date.
❑ Last In First Out (LIFO) — Shares are sold from tax lots having the most recent federal tax
acquisition date.
❑ Highest Federal Cost First Out (HIFO)— Shares are sold from tax lots having the highest federal
tax cost per share.
❑ Lowest Federal Cost First Out (LOFO) — Shares are sold from tax lots having the lowest federal
tax cost per share.
❑ Specify Tax Lot — Shares are sold from tax lots that you specify.
❑ Average Federal Tax Cost — Shares are sold across all tax lots using the average cost. If the
Account holds investments for which this method is not permitted, the FIFO default method will
be used, unless Customer directs otherwise.
❑ Maximize Gain — Shares are sold from tax lots having the lowest per unit federal tax cost.
If the foregoing does not designate one and only one tax -lot selection -method, then Customer is
deemed to have designated FIFO method. If Customer wishes to use a tax -lot selection -method
that is different from what is selected above for an individual trade, then Customer may designate
such other selection -method when executing the trade.
15.10. Shareholder Communications Act Election. Under the Shareholder Communications Act of 1985, as
amended, Bank must try to permit direct communications between a company that issues a security held in the
Account (the "Securities -Issuer") and any person who has or shares the power to vote, or the power to direct the
voting of, that security (the "Voter"). Unless the Voter registers its objection with Bank, Bank must disclose the
Voter's name, address, and securities positions held in the Account to the Securities -Issuer upon the Securities -
Issuer's request ("Disclosure"). To the extent that Customer is the Voter, Customer hereby (i) acknowledges
that failing to check one and only one box below will cause Customer to be deemed to have consented to
Disclosure and (ii) registers its (check only one):
❑ Consent to Disclosure.
DObjection to Disclosure.
15.11. Tax Reclaims. To the extent Bank provides the Account with a service to minimize foreign withholding
or reclaim foreign taxes withheld with respect to an Asset, Customer hereby directs Bank to disclose Customer's
name, address, and taxpayer identification number, as well as the Account's position in the Asset, to Bank's sub -
custodians and other service providers, to the Asset's issuer and the issuer's agents, and to local (foreign) tax
authorities as needed in order to provide such service.
15.12. Abandoned Property. Bank will escheat Assets pursuant to the applicable state's abandoned property,
escheat, or similar law, and Bank shall be held harmless therefrom. The provisions of this Section shall survive
the termination of this Agreement.
15.13. Legal Advice. Customer hereby acknowledges that it (i) did not receive legal advice from Bank
concerning this Agreement, (ii) had an adequate opportunity to consult an attorney of its choice before executing
this Agreement, and (iii) executed this Agreement upon its own judgment and, if sought, the advice of such
attorney.
Page 13 of 17 01/2024
15.14. Waiver of Jury Trial. Each party hereby irrevocably waives all right to a trial by jury in any action,
proceeding, claim, or counterclaim (whether based on contract, tort, or otherwise) directly or indirectly arising
out of or relating to this Agreement.
15.15. Legal Action. If Bank is served with any freeze order, garnishment, levy, restraining order, search
warrant, subpoena, writ of attachment or execution, bankruptcy -court order, receivership order, or similar order
relating to the Account (each, a "Legal Action"), then Bank will, to the extent permitted by law, use commercially
reasonable efforts to notify Customer of such service. Customer will reimburse Bank for any expenses, fees,
costs, or other charges incurred by Bank in responding to the Legal Action, including, but not limited to, any fees
charged by an attorney of Bank's choice. If Customer notifies Bank that Customer is seeking a protective order
to resist the Legal Action, then Bank will provide reasonable cooperation at Customer's request and sole cost
and expense. In any event, Bank may comply with the Legal Action at any time, except to the extent Bank has
received a protective order that prevents Bank from complying.
15.16. Representations and Warranties. Customer hereby covenants that, if any of the representations or
warranties that it provides in this Agreement becomes inaccurate or incomplete, it will promptly notify Bank
thereof and of any fact, omission, event, or change of circumstances related thereto.
15.17. Publicity. No party will disclose the existence of this Agreement or any terms thereof in advertising,
promotional, or marketing materials without obtaining, in each case, the prior written consent of each other party.
15.18. Counterparts and Duplicates. This Agreement may be executed in any number of counterparts, each
of which shall be considered an original, but all of which together shall constitute the same instrument. This
Agreement and any administrative form under this Agreement may be proved either by a signed original or by a
reproduced copy thereof (including, not by way of limitation, a microfiche copy or an electronic file copy).
15.19. E-signature. Each party hereby (i) consents to electronically sign this Agreement, amendments thereto,
and Account forms requiring its signature, but may, by notice to each other party, withdraw such consent or opt -
out of electronic signing and (ii) covenants to rely on DocuSign (or another a -sign vendor as subsequently agreed
upon by all parties) to facilitate any such e-signatures. The party creating the e-signed document through its
account with the a -sign vendor hereby covenants to retain the authoritative copy and provide a copy to each
other party. No party hereby forfeits any power to use a conventional handwritten signature as a means of
signing this Agreement, amendments thereto, and Account forms.
15.20. Foreign Customer. If Customer is organized outside the U.S., then Customer hereby acknowledges
that (i) Bank has not obtained a license under the laws of Customer's domicile to provide the services described
in this Agreement and (ii) Bank has no duty to determine or question whether this Agreement or any Account
transaction complies with the laws of Customer's domicile.
15.21. Effective Date. This Agreement will become effective when all parties have signed it. The date of this
Agreement will be the date this Agreement is signed by the last party to sign it (as indicated by the date
associated with that party's signature).
IN WITNESS WHEREOF, an authorized officer of each party hereby executes this Agreement on the
date stated beneath that party's signature.
CUST(UEB-LAS DEFINED IN THIS AGREEMENT)
In
of Customer's authorized officer)
Jon McMillen
(Printed name of Customer's authorized officer)
Its: City Manager
Page 14 of 17 01 /2024
(Title of Customer's authorized officer)
Dated: Z12 �5120Zy
U.S. Mail Address:
78-495 Calle Tampico
La Quinta, CA 92253
Email Address:
jmcmillen@laquintaca.gov
ATTEST:
MONIKA RAD VA, Cit Clerk
City of La Quinta, California
APPROVED AS TO FORM:
WILLIAM H. IHRKE, City Attorney
City of La Quinta, California
Page 15 of 17 01 /2024
U.S. BANK
TIONAL ASSOCIATION
M
(Signature)
April Beauchamp
(Printed name)
Its: Vice President and Relationship Manager
Dated: 2/29/20024
U.S. Mail Address:
1 California Street, Suite 1000
San Francisco, CA 94111
Email Address:
april.beauchampC@usbank.com
Page 16 of 17 01/2024
CUSTODY AGREEMENT
Exhibit A (Fee Schedule)
Page 17 of 17 01 /2024
FEE SCHEDULE
This Fee Schedule relates to the U.S. Bank National Association ("USBNA') Institutional Trust & Custody division ("IT&C')
account identified below (such account, including any sub -accounts therein, the `Account') and is effective as of March 1,
2024 (date) (or, if no date is entered there, then the effective date of the Account's governing trust or custody agreement)
(the "Fee Schedule's Effective Date').
Account Name: City of La Quinta Custody Account
Account Number: 5002533-000
USBNA; Ela von Financial Services DAC ("Elavon ); PFM Asset Management LLC ("PFMAM'); PFM Fund Distributors, Inc.
(`PFMFD'); U.S. Bancorp Asset Management, Inc. ("USBAM'); U.S. Bancorp Fund Services, LLC ("USBFS'); and U.S.
Bank Global Fund Services (Cayman), (Guernsey), and (Ireland) Limited and (Luxembourg) S.a.r.l. ("USBGFS') are
affiliates of U.S. Bancorp (collectively with U.S. Bancorp, "U.S. Bank'). This Fee Schedule, together with the service
contract(s) between the Customer (as defined below) and USBNA regarding the Account (Account's Governing USBNA
Service Contract(s)'), describes services that U.S. Bank expects to provide to the Account pursuant thereto and
compensation that U.S. Bank expects to receive therefor -
Account Profile (Part A): Describes the Account and U.S. Bank's role with respect to the Account.
Account -level Fees (Part B): Describes fees U.S. Bank receives directly from the Account (the `Account Fees').
Fund -level Fees (Part C): Describes fees the Account pays on the investment of Account assets in open-end
investment companies registered under the Investment Company Act of 1940
("Mutual Funds'), 3(c)(1) or (7) funds ("Private Funds'), Undertakings for Collective
Investment in Transferable Securities funds ("UCITS'), and Alternative Investment
Fund Managers Directive funds (AIFs') (each of the foregoing, a "Fund') (the
"Fund Fees') and fees U.S. Bank receives from those investments or their agents
("U.S. Bank Revenue Share').
Other Compensation (Part D): Describes compensation that U.S. Bank receives other than Account Fees or U.S.
Bank Revenue Share ("Other Compensation').
Changes (Part E): Describes circumstances under which this Fee Schedule may be changed.
Approval (Part F): Provides the customer's approval of the fees described herein.
ACCOUNT PROFILE (PART A)
If the Account is a USBNA trust account, then the undersigned is the trust's grantor; if the Account is a USBNA custody
account, then the undersigned is the Account's owner (such undersigned, the "Customer"). USBNA has no discretion to
invest Account assets (a "Directed Account").
ACCOUNT -LEVEL FEES (PART B)
The Account Fees, which are in addition to Fund Fees and are paid directly to USBNA, are as follows. For a complete
description of services that U.S. Bank expects to provide to the Account, see the Account's Governing USBNA Service
Contract(s).
Administration fee Provide account administration. The administration fee is calculated in tiers:
(FOR A 0.5 bps on the balance of Account assets
USBNA CUSTODY ACCOUNT):
Foreign Securities. For Account assets invested in foreign securities other
than Euroclear-eligible securities, U.S. Bank provides account administration
by way of a sub -contract (the "Foreign -securities Custody Agreement")
between USBNA and a foreign -securities custodian (the "Foreign -securities
Custodian"). The name, address, and principal place of business of the
Foreign -securities Custodian (and the name and address of the regulatory
authority that supervises or regulates it) can be obtained upon request from
the Customer's Relationship Manager at USBNA. Account assets invested in
any foreign securities are excluded from the fee -tiers above, the fee -rates on
Page 1 of 5 08/2023
such assets are instead set forth in the U.S. Bank Institutional Trust & Custody
Global Fee Schedule (the "Global Fee Schedule"), and the fee for such assets
is based on Account assets invested in the applicable country. (U.S. Bank
compensates the Foreign -securities Custodian from U.S. Bank's own fees; the
Account does not pay fees in addition to the fees stated herein in connection
with services provided by the Foreign -securities Custodian.)
Securities -transfer fees: Transfer DTC-eligible securities (including ETFs), Fed book -entry securities,
or domestic open-end mutual funds:
Free receipts (per security) Included
Free deliveries (per security) Included
Trade -processing fees: Process purchases, sales, or other transactions with respect to Account
assets:
DTC-eligible securities, including ETFs (per transaction) Included
Fed book -entry securities (per transaction) Included
Domestic open-end mutual funds (per transaction) Included
Foreign securities (per transaction) See the Global Fee Schedule.
Certificates of deposit (per set-up, deposit, or withdrawal) Included
Derivatives: Forwards, futures, options, or swaps (per transaction)
$ 15
Non-marketable/physical not otherwise listed here (per transaction)
$ 25
Distribution fees: Distribute Account cash:
ACH payment to DDA at USBNA (per ACH payment) Included
ACH payment to non-USBNA DDA (per ACH payment) $ 10
Check (per check) $ 10
Wire to domestic location (per wire) $ 10
Wire to international location (per wire) $ 25
Foreign-exchange fees: Execute foreign -currency exchange ("FX") transactions related to Account
assets invested in foreign securities. A spread -fee is built into the exchange
rate for each FX transaction; reduces the amount of foreign securities
purchased, the amount of proceeds from the sale thereof, or the amount of
entitlement payments received with respect thereto, as the case may be; and
varies from FX transaction to FX transaction, based on current market
conditions. In addition, each FX transaction is subject to trade -processing fees
at the applicable rate set forth in the Global Fee Schedule.
Class -actions fees: File proofs of claim regarding class-action litigation over the Account's
securities:
Filing fee (per filing) $ 25
Recovery fee (per recovery) 2 % of recovery
Maximum recovery fee (per recovery) $2,000
Asset -holding fee: Hold assets (per year):
Commingled funds (CITs/CTFs), LPs, or hedge funds (per holding)
$ 1,020
Private equity/debt or other commitment -based funds (per holding)
$ 1,200
Securities -intermediary fee: Serve as securities intermediary with respect to the Account under a
control agreement (per control agreement per year): $2,500
For a complete description of services that U.S. Bank expects to
provide to the Account, see the governing control agreement(s).
ADR tax services: Provide the Account with a service to minimize foreign tax withholding or to
reclaim foreign taxes withheld with respect to ADRs (per year) $250
Page 2 of 5 08/2023
Contract -negotiation fee: Consider the Customer's proposed edits to USBNA's standard service
contract(s) (per contract) $ 2,500
Other fees: Minimum relationship fees (per year) $15,000
Extraordinary -services fee: Provide services described in neither this Fee Schedule nor the Account's
Governing USBNA Service Contract(s). The extraordinary -services fee will be
calculated at an hourly rate or be a flat fee. USBNA will obtain the Customer's
consent to the fee.
Minimum Relationship Fees. The Account is subject to minimum relationship fees. For each billing period, they apply
as follows. Start with the minimum annual relationship fees stated above. Prorate that amount to reflect the length of
the billing period elected below (the "Minimum Relationship Fees"). Find the sum of the Account Fees (other than the
Minimum Relationship Fees) and the account fees owed with respect to the Customer's other Institutional Trust &
Custody division accounts (excluding accounts that hold plan assets) for the billing period (the "Actual Relationship
Fees"). If the Actual Relationship Fees are less than the Minimum Relationship Fees, then the Account Fees for the
billing period are the Account's proportionate share of the Minimum Relationship Fees (rather than the Account Fees
otherwise disclosed under this Fee Schedule). That proportionate share is based on relative account balances as of
the end of the billing period or over the billing period, as applicable based on the balance method elected below.
Manner of Receipt. Account Fees will be calculated (check one and only one):
❑ Monthly.
® Quarterly.
Any asset -based Account Fees will be based on (check one and only one): ® the applicable Account balance (or
portion thereof) as of the end of the billing period / ❑ the average applicable Account balance (or portion thereof) over
the billing period. (The asset values used in such calculation may vary from the asset values reported on an asset
statement because of timing issues, such as the posting of accruals or the late -pricing of securities.) Account Fees will
then be (check one and only one):
® Billed and invoiced to the Customer with instructions on how to remit payment. The Customer hereby
acknowledges that U.S. Bank may charge such fees to the Account if the Customer has not paid the invoice
within sixty (60) calendar days of receiving it.
❑ Charged to the Account, with a subsequent advice to the Customer about the charges. (This option is
unavailable if the Account is a USBNA trust account and the trust's beneficiary intends to seek credit for
reinsurance in respect of the trust.)
FUND -LEVEL FEES (PART C)
Fund Fees. Fund Fees, and U.S. Bank Revenue Share, are based on investment in a Fund and may vary by Fund and by
class of shares or units issued by the Fund. Fund Fees are charged against the Fund's assets and reduce the Funds'
average daily balance and investment yields. U.S. Bank Revenue Share is paid indirectly from the Fund Fees and is not in
addition to the Fund Fees.
Additional Investment -Related Information. See a Mutual Fund's or UCITS's prospectus; a Private Fund's or AIF's
governing documents (such as a limited liability company agreement, limited partnership agreement, trust agreement, or
declaration of trust), offering documents (such as an offering circular, offering memorandum, private placement
memorandum, prospectus, or summary description), and subscription documents (such as an adoption agreement or
subscription agreement); and any Fund's fund -fact sheet (collectively, as applicable, the "Fund -Issuer's Disclosure") for
Fund details not reflected in this Fee Schedule. See, especially, sections thereof regarding fees, expenses, additional
compensation, and payments to financial intermediaries.
First American Funds. USBAM is the investment advisor to the Mutual Funds in the First American Funds, Inc. family (the
"First American Funds"). First American Funds issue shares in multiple classes, and their fees may vary by class. U.S.
Bank may enter into agreements with First American Funds or with First American Funds' service providers (including
investment advisers, administrators, transfer agents, or distributors) whereby U.S. Bank provides services to the First
American Funds, including, as applicable, services provided by USBAM (investment advisory, shareholder services), by
USBNA (custody, securities -lending), and by USBFS (accounting, administration, transfer agency), and receives fees for
Page 3 of 5 08/2023
these services from the Fund or the Fund's sponsor or agent. Prospectuses for First American Funds are available at
https://www.firstamericanfunds.com/index/FundPerformance/Shareholderpocuments.html.
PFMAM Funds. PFMAM is the investment advisor to the Mutual Funds in the PFM Multi -Manager Series Trust (the
"PFMAM Funds"). U.S. Bank may enter into agreements with PFMAM Funds or with PFMAM Funds' service providers
(including investment advisers, administrators, transfer agents, or distributors) whereby U.S. Bank provides services to the
PFMAM Funds, including, as applicable, services provided by PFMAM (investment advisory), by USBNA (shareholder
services), and by PFMFD (distribution), and receives fees for these services from the Fund or the Fund's sponsor or agent.
Prospectuses for PFMAM Funds are available at https://mmst.pfmam.com/forms-documents.
Other Mutual Funds. U.S. Bank may enter into agreements with Mutual Funds other than First American Funds or PFMAM
Funds ("Other Mutual Funds") or with Other Mutual Funds' service providers (including investment advisers, administrators,
transfer agents, or distributors) whereby U.S. Bank provides services to the Other Mutual Funds, including, as applicable,
services provided by USBNA (custody, securities lending, shareholder services, National Securities Clearing Corporation
(NSCC) networking) and by USBFS (accounting, administration, transfer agency), and receives fees for these services from
the Fund or the Fund's sponsor or agent. Prospectuses for Other Mutual Funds are available at
https://www.sec.gov/edgar/searchedgar/prospectus.
Private Funds. U.S. Bank may enter into agreements with Private Funds or with their service providers, whereby U.S.
Bank provides services to such Funds, including, as applicable, services provided by USBNA (custody) and by USBFS
(accounting, administration, shareholder services, transfer agency), and receives fees for these services from the Fund or
the Fund's sponsor or agent.
UCITS and AIFs. U.S. Bank may enter into agreements with UCITS or AIFs or with their service providers, whereby U.S.
Bank provides services to such Funds, including, as applicable, services provided by Elavon (depositary) and USBGFS
(accounting, administration, shareholder services) and receives fees for these services from the Fund or the Fund's sponsor
or agent.
OTHER COMPENSATION (PART D)
Float Income. USBNA may hold (i) cash awaiting either investment or distribution to proper recipients or (ii) funds held for
other purposes (for example, pending investment following a trade fail, because funds were received too late to be posted
the same day, or pursuant to an investment direction) in a noninterest-bearing deposit account at USBNA and, thereby,
earn and retain income on the float as part of its fees for servicing the Account.
Expenses. Expenses, fees, costs, and other charges incurred by USBNA in providing services under the Account's
Governing USBNA Service Contract(s) are expenses of the Account.
Advance of Funds. If USBNA advances funds in furtherance of settling the redemption of Fund shares or units, then the
yield, if any, paid on the shares or units that were treated as redeemed is retained by USBNA as part of its fees for servicing
the Account.
Foreign Securities or Deposits. In connection with the Account's global activity, USBNA may hold cash in the form of
U.S. dollars or foreign currency in a deposit account at a bank other than USBNA. For example, cash may be held pending
settlement of an FX transaction or a foreign -securities purchase. Interest, if any, earned on such deposits is retained by
USBNA as part of its fees for servicing the Account.
External Insured Deposit Program. If the Account participates in an insured deposit program offered by an external cash
manager (the "Program Manager"), then USBNA transfers Account assets as directed under the program to and from
deposit accounts at banks other than USBNA and receives fees from the Program Manager for making the transfers. The
Program Manager and fee are as follows:
Program Manager's full legal name:
Program Manager's employer identification number:
bps on Account assets held by USBNA in such deposit accounts
Furthermore, the Program Manager receives a portion of any interest earned on such deposits, thereby reducing the amount
of interest credited to the Account. For a complete description of the Account's participation in the program, see the Program
Manager's agreement with respect to the Account.
CHANGES (PART E)
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USBNA may amend this Fee Schedule by delivering to the Customer an amended and restated Fee Schedule (or another
written notice of the change). If the Customer does not deliver a written objection to USBNA within thirty (30) calendar days
thereafter, USBNA will treat the Customer's silence as approval.
APPROVAL (PART F)
The Customer hereby acknowledges that it:
• is independent of U.S. Bank and has authority to enter into, extend, and renew contracts for the services
described herein and to select the investments and approve the fees described herein.
• received, read, understands, and executed the Account's Governing USBNA Service Contract(s).
• will obtain, read, and understand the Fund -Issuer's Disclosure for a Fund before selecting the Fund, including,
but not limited to, the sections thereof describing fees, expenses, and compensation, and acknowledges that
the purchase or sale of Fund shares or units is subject to the terms of the Fund -Issuer's Disclosure.
• expects to (check one and only one) ❑ cause or permit the Account to acquire foreign securities and received,
read, and understands the Global Fee Schedule / ® neither cause nor permit the Account to acquire any
foreign securities.
• understands and approves the services and fees described herein, including the Account Fees, the Fund Fees
for each Fund, U.S. Bank Revenue Share for each Fund, and the Other Compensation.
• agrees to the process described herein for amending this Fee Schedule.
• may contact its Relationship Manager at USBNA regarding this Fee Schedule.
• FOR AN ACCOUNT WHERE A U.S. BANK -AFFILIATED REGISTERED INVESTMENT ADVISER IS THE
ACCOUNT'S INVESTMENT MANAGER, understands that USBNA waives any securities -transfer, trade -
processing, foreign-exchange, corporate -actions, class -actions, asset -holding, ADR-tax-services, foreign -
securities -or -deposits, or external -insured -deposit -program fees described herein.
The Customer hereby executes this Fee Schedule.
Customer: City of La Quinta
Dated:
By:
(Signature of Customer's authorized officer)
Jon McMillen
(Printed name of Customer's authorized officer)
Its: City Manager
(Title of Customer's authorized officer)
Shares of registered investment companies, and units of private funds, are not deposits or obligations of, or endorsed or guaranteed in any way by, any
bank, including any bank affiliated with U.S. Bancorp. Nor does the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
governmental agency insure such products. An investment in such products involves investment risks, including the possible loss of principal, due to
fluctuations in each product's net asset value. Deposit products are offered by U.S. Bank National Association, member FDIC.
Page 5 of 5 08/2023
Exhibit B
Insurance Requirements
Insurance. Prior to the beginning of and throughout the duration of this Agreement, the following policies
shall be maintained and kept in full force and effect providing insurance with minimum limits as indicated below
and issued by insurers with A.M. Best ratings of no less than A -VI:
Commercial General Liability (at least as broad as ISO CG 0001)
$1,000,000 (per occurrence)
$2,000,000 (general aggregate)
Errors and Omissions Liability
$1,000,000 (per claim and aggregate)
Workers' Compensation
(per statutory requirements)
Must include the following endorsements:
Workers Compensation with Waiver of Subrogation
Cyber Liability
$1,000,000 (per occurrence)
$2,000,000 (general aggregate)
Custodian shall maintain, at its cost, and submit concurrently with its execution of this Agreement,
Commercial General Liability insurance against all claims for injuries against persons or damages to property
resulting from Custodian's acts or omissions rising out of or related to Custodian's performance under this
Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall
be primary for losses arising out of Custodian's performance hereunder and neither Customer nor its insurers
shall be required to contribute to any such loss.
Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy
form coverage specifically designed to protect against acts, errors or omissions of the Custodian and "Covered
Professional Services" as designated in the policy must specifically include work performed under this
agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. The policy must
"pay on behalf of the insured. The policy retroactive date shall be on or before the effective date of this
agreement.
CONSENT CALENDAR ITEM NO. 2
City of La Quinta
CITY COUNCIL MEETING: February 20, 2024
STAFF REPORT
AGENDA TITL : APPROVE CUSTODY AGREEMENT WITH U.S. BANK, NATIONAL
ASSOCIATION FOR ASSET CUSTODY SERVICES
RECOMMENDATION
Approve Custody Agreement with U.S. Bank, National Association, for asset custody
services; and authorize the City Manager to finalize any insubstantial modifications and
execute the agreement.
EXECUTIVE SUMMARY
• The City utilizes three approved investment brokers and one custody bank
independent from those brokers.
The City obtained three quotes for asset custody services. Staff recommends U.S.
Bank, National Association (U.S. Bank) as the City's custody bank.
FISCAL IMPACT
Based on its current custody holdings, the City's annual minimum account fee is $15,000
per year. The total amount for the initial five-year term, and optional two-year extension
is $105,000. Funds are available in Finance - Administration account no. 101-1006-60102
for fiscal year 2023/24 and would be budgeted accordingly for future fiscal years.
bA ;KGROUND/AN,►L_YSIS
The City utilizes three approved investment broker/dealers; Stifel, Nicholas & Company,
Inc., Higgins Capital Management, and Great Pacific Securities. As a matter of best
practice and financial due diligence, it is in the City's best interest to utilize multiple
broker/dealers. To execute investment trades securely and efficiently with the three
brokers, the City maintains one custody service account to record transactions, safeguard
funds and securities, control the receipt and delivery of funds and securities, and issue
statements. The custody account operates under a delivery versus payment (DVP)
settlement system, which guarantees the transfer of securities happens once payment is
made; this process is meant to reduce the risk that securities could be delivered without
payment or that payments could be made without the delivery of securities.
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There are few banking institutions that solely provide trust and custody services, and
many banks are divesting their custody business. The City received quotes from three
institutions; BNY Mellon, U.S. Bank, and BMO, which were evaluated for account service
fees, as well as online reporting, ongoing administration, accessibility, and customer
services provided. Based on this evaluation, staff recommends U.S. Bank, as their online
PIVOT system meets the City's reporting needs and provides efficiencies regarding
creation of the treasurer reports.
U.S. Bank has an over 125-year history of providing trust, custody, and investment
services with over $2 trillion in assets under custody and 6,000 institutional clients. The
Bank has experienced staff members and transitional expertise with a dedicated
corporate trust client service team working exclusively with municipalities and not -for -
profit organizations.
The City's current investments are held in a BNY Mellon trust and custody account and if
approved, these assets would be transferred to U.S. Bank.
ALTERNATIVES
Council may not approve the recommendation and request Staff reevaluate alternative
trust and custody services.
Prepared by: Rosemary Hallick, Principal Management Analyst
Approved by: Claudia Martinez, Finance Director
Attachment: 1. Custody Agreement
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