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Employer Investment Program Ivestment Advisory & Mgmt Serv Agmt ", .IOe9 — e7e .?lea9 _z-ro2y EMPLOYER INVESTMENT PROGRAM INVESTMENT ADVISORY& MANAGEMENT SERVICES AGREEMENT This Employer Investment Program Investment Advisory&Management Services Agreement ("Agreement") is made as of the q day of (' ,2011 ,by and between International City Management Association Retirement Corporation("ICMA-RC"),a Delaware corporation registered as an investment adviser with the United States Secunties and Exchange Commission("SEC"),and City of Miami Beach, a state or local governmental instrumentality ("Employer")organized and existing under the laws of the State of Florida,with an office at 1700 Convention Center Drive,Miami Beach; Florida 33139 RECITALS WHEREAS, Employer acts as a public employer and is seeking to provide retiree health benefits for its eligible employees and retirees, WHEREAS,Employer desires to maintain an investment account to fund post retirement healthcare for its employees and retirees, WHEREAS,the Employer intends to utilize ICMA-RC's Employer Investment Program("EIP"or "Program")to fund such healthcare benefits, including investment advice from ICMA-RC respecting third-party mutual funds and other third party investments with respect to such Program, and WHEREAS,Employer intends that the assets so invested ultimately shall be used to provide retiree health benefits for its eligible employees and retirees under the Program. NOW,THEREFORE,ICMA-RC and Employer(each,a"Party,"and, collectively,the"Parties"), agree to be bound by the terms contained herein. AGREEMENTS This Agreement sets forth the terms and conditions pursuant to which ICMA-RC shall make investment advisory services available to Employer ICMA-RC accepts its appointment as investment manager for the Account(s)pursuant to the terms and conditions set forth in this Agreement. The rights,powers, authorities and duties of ICMA-RC shall be solely and exclusively as provided in this Agreement and under applicable law To the extent the provisions of any agreement between ICMA-RC and Employer are inconsistent with this Agreement,this Agreement will govern. 1. Establishment of Account and Trust. Employer has established an EIP investment account ("Account")for the purpose of investing assets Employer intends to use to fund retiree health benefits under the Program. Account assets will be held in an"other post employment benefits"trust(an "OPEB Trust")and invested in accordance with the Declaration of Trust of the Integral Part Trust established by Employer ICMA-RC shall not provide custodial services for the EIP Account or be a trustee with respect to the OPEB Trust. 2. Advisory Services. ICMA-RC shall provide the following ongoing investment advisory and management services with respect to the EIP Account: a. ICMA-RC associates holding the Chartered Financial Analyst®designation will prepare investment recommendations for the Account. b ICMA-RC shall develop a select list of third-party mutual funds which it shall recommend to 1 c ICMA-RC's investment advice shall focus upon the following areas i Allocation of assets, u. Selection of investments, among third-party mutual funds, ui. Development of an investment policy statement; iv Identification of investment benchmarks, v Analysis of portfolio performance (including provision of performance reports); and vi. Reviews of the performance of the mutual fund investment manager(s). d. ICMA-RC shall provide i. Quarterly reports to Employer on its EIP Account portfolio performance; and u. Updates of investment advice and recommendations at least quarterly or as agreed to by the Parties,as each new actuarial valuation is completed or specified by the Employer e ICMA-RC shall employ customized asset allocation strategies, considenng various appropriate factors in formulating recommendations, including(by way of example and not limitation) i Suitability of a fund for the particular Employer; u. The fund's investment style and strategy; and in. Qualifications, expenence, and past performance of the managers of the recommended investments. 3. Investment Management Services. If Employer elects to utilize a custodian designated by ICMA- RC to hold the investments of the Account,then ICMA-RC shall provide investment management services for the EIP Account,as directed by the Employer In this capacity,ICMA-RC will perform all the functions of an investment manager, including recordkeeping,administration or ordering buys and sells of securities on the Employer's behalf. Provided,however,that ICMA-RC will have no discretion with regard to investment of Employer's EIP Account, and all decisions regarding the investment of the EIP Account will be made by the Employer 4. Third Party Funds Requirement. ICMA-RC shall not advise Employer to invest in any mutual fund other than"third party mutual funds,"which means, for the purposes of this Agreement, a mutual fund other than one which is propnetary to ICMA-RC or its affiliates. Employer understands that ICMA-RC is not acting in any way as a broker-dealer with respect to the third party mutual funds,and such mutual funds shall be obtained through a broker-dealer or other entity which is unaffiliated with ICMA-RC 2 5. Fees; No Third-Party Compensation to ICMA-RC. ICMA-RC shall be paid according to the following schedule Assets Fee First$15 MM 65 bps Next$35 MM 35 bps Next$25 MM 20 bps Over$75 MM 10 bps ICMA-RC's fee(in basis points per annum)is payable in arrears on a monthly basis as of the last business day of each calendar month. In the event that the Account's balance goes to zero,the fee will be pro-rated based on the number of days the Account had a fund balance dunng the month. Employer hereby authonzes ICMA-RC to receive the fee from the assets of the Account and agrees to authorize any applicable custodian to remit the fees directly to ICMA-RC In the event that assets in the Account are insufficient to cover ICMA-RC's fee,Employer agrees to pay any outstanding fees directly to ICMA-RC ICMA-RC shall not accept any compensation in the form of 12b-1 fees,service fees,compensation for sub-accounting,and other services from the third-party mutual funds, or their service providers, with respect to the Account. 6. Employer Responsibility for Decisions and to Review Transaction Confirmations and Reports. Employer acknowledges and understands that Employer is responsible for the decision to authonze the implementation of any advice or fund specific recommendation. In addition,Employer shall be responsible for reviewing any information ICMA-RC provides to Employer in connection with the advice provided hereunder When ICMA-RC is acting as the investment manager pursuant to Section 3 (Investment Management Services),the following apply For transactions for which Employer receives confirmations and, if Employer notifies ICMA-RC within 30 days of the confirmation date,ICMA-RC will correct the transaction and the Account will be made 100%whole. For transactions for which Employer does not receive confirmations and only receives quarterly or annual statements,if Employer notifies ICMA-RC within 90 days following statement end date,ICMA-RC will correct the transaction and the Account will be made 100%whole ICMA-RC will have no responsibility with respect to possibly erroneous transactions if ICMA-RC is not acting in the capacity of the investment manager pursuant to Section 3 7. Duty to Provide Information. Employer agrees to provide any information reasonably requested by ICMA-RC in connection with its provision of investment advice hereunder Employer is responsible for the accuracy of such information and understands that it will be used by ICMA-RC in making its recommendations. ICMA-RC shall keep all such information in confidence and shall not use such information outside of its use in fulfillment of the terms of this Agreement. 8. Custody. Employer shall be responsible (unless Employer elects to utilize a custodian recommended by ICMA-RC) for selecting the custodian. Employer shall notify ICMA-RC in wnting of any material changes with respect to custodian,provide ICMA-RC with reasonable pnor notice of any 3 a. ICMA-RC will at no time have physical custody or control of the cash and assets in the Account(s); b ICMA-RC will not be liable for any act or omission of any custodian, and c Nothing in this Agreement shall prohibit ICMA-RC from directly billing the Account(s)for fees incurred under this Agreement in accordance with Advisers Act Rule 206(4)-2,or other applicable law 9. Purchase or Redemption Fees. Certain investment options may charge a purchase or redemption fee on specific transactions. Transactions suggested or initiated by ICMA-RC on Employer's behalf may result in such fees being charged against the Account. Employer acknowledges that any purchase or redemption fees shall be paid for from Account assets and under no circumstances shall ICMA-RC be liable for any such fees. 10. Risks of Investing. EIP Account investments are subject to the nsks associated with investing in mutual funds,and other secunties or investments,and will not always be profitable Although each investment option which ICMA-RC may propose hereunder is subject to a number of nsks that could affect their performance,certain investment options entail additional nsk specific to their asset class. For example,high yield bond investments are subject to increased risk of default,compared to higher rated securities. Foreign investments are subject to greater nsks of currency fluctuations and political uncertainty. Equity secunties of companies with relatively small market capitalization may be more volatile then secunties of larger,more established companies. Specialty funds invest in a limited number of companies and are generally non-diversified. ICMA-RC does not guarantee the results or timing of any recommendations,or that the objectives of the funds or Employer EIP Account will be met. Except as otherwise required by law, ICMA-RC will not be liable for a. Any loss resulting from following Employer instructions or using inaccurate, outdated or incomplete information which Employer may provide, b Any act or failure to act by a fund or any of its agents or any other third party; and c Any loss in the market value of the EIP Account,except for losses resulting from our breach of this contract or of our fiduciary duty,bad faith, or gross negligence However,nothing in this Agreement shall constitute a waiver of,or limitation on, any nghts Employer may have under federal and state laws to the extent such nghts may not be waived or limited. 11. Termination. Either Party may terminate this Agreement at any time by giving thirty(30)days pnor written notice to the other,except that either Party reserves the nght to terminate with no pnor notice to the other Party,written or otherwise, if either Party determines in its sole discretion that extraordinary circumstances so warrant. Upon effectiveness of termination by either Party, ICMA- RC will work with Employer to(a)complete any outstanding work, (b) implement any final instructions from Employer, and(c)transition information and records belonging to the Employer back to the Employer's custody Provided,however,that ICMA-RC Advisor shall have no responsibility to monitor Employer's EIP Accounts after the effective date of termination. 12. Shareholder and Other Rights. Employer shall be responsible for exercising shareholder and other rights with respect to investment options in the EIP Account. ICMA-RC will not exercise any shareholder nghts on Employer behalf. In addition,ICMA-RC will not advise Employer on legal 4 13. Non-Solicitation. No part of the investment advice provided hereunder should be construed as an offer to sell or buy the securities mentioned. It is not intended to provide legal, accounting or tax advice and should not be relied upon in that regard. 14. Personal Information.The use and storage of any information including,without limitation, Employer's account number,password,identification,portfolio information, account balances and any other information available on Employer's computer hardware is at Employer's sole risk and responsibility 15. Agreement to Arbitrate.The Parties acknowledge and agree that any controversy or claim arising out of or relating to this Agreement or the breach thereof,or relating to ICMA-RC's investment advisory business,as described herein, shall be submitted to arbitration,final and binding, administered by the American Arbitration Association. Arbitration is final and binding on the Parties and judgment on the award rendered by the arbitrator(s)may be entered in any court having jurisdiction thereof. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a wntten notice of intention to arbitrate By agreeing to this arbitration agreement,Employer does not waive any rights Employer may have under any applicable state and federal securities laws. 16. Governing Law. This Agreement shall be governed by the laws of the State of Florida without giving effect to the choice of law provisions contained therein.Venue for any action under this Agreement(including Arbitration)shall be Miami-Dade County,Florida. 17. Contact and Communications. All notices required to be delivered under this Agreement shall be in writing and shall be delivered,mailed,e-mailed or faxed to the location of the relevant party set forth below or to such other address or to the attention of such other persons as such party may hereafter specify by notice to the other party ICMA-RC Legal Department,ICMA Retirement Corporation, 777 North Capitol Street,N.E., Suite 600,Washington,D C ,20002-4240;Facsimile, (202)962-4601 Employer: at the office set forth in the first paragraph hereof and more specifically, James Sutter,City of Miami Beach OPEB Trust, 1700 Convention Center Drive,Miami Beach,Florida 33139 as designated by the Employer to receive the same by written notice similarly given. 18. Extraordinary Events. ICMA-RC shall not be liable for loss caused directly or indirectly by government restrictions,exchange or market rulings,suspension of trading,war,strikes,pandemic flu or other conditions beyond its control. ICMA-RC shall not be responsible for damages caused by equipment failure,communications line failure,unauthorized access,theft, systems failure,and other occurrences beyond its control. 19. Additional Provisions. The Parties agree not to assign this Agreement(within the meaning of the Advisers Act)without the other Party's consent. If any provision or condition of this Agreement shall be held to be invalid or unenforceable by any court or regulatory or self-regulatory agency or body, such invalidity or unenforceability shall attach only to such provision or condition. The validity of the remaining provisions and conditions shall not be affected thereby and this Agreement shall be carried out as if any such invalid or unenforceable provision or condition were not contained herein. 5 20. Form ADV Part II. Part II of ICMA-RC's Form ADV("Brochure"),a portion of ICMA-RC's SEC adviser registration statement,contains additional information about ICMA-RC and its advisory services and is available on the Web site at www icmarc org or by contacting ICMA-RC Investor Services staff at 1-800-669-7400 By entering into this Agreement,Employer represents that Employer has received and reviewed a copy of the Brochure. 21. Definition of Nonpublic Personal Information. Nonpublic personal information of customers or consumers ("NPI")includes,but is not limited to,names,addresses, account balances,account numbers,account activity, Social Secunty numbers,taxpayer identification numbers,and sensitive financial and health information. NPI includes information on our forms or in a database of any kind, information created by us, information collected by or on behalf of us and personally identifiable information derived from NPI. 22. Disclosure and Use of NPI. All NPI that ICMA-RC obtains as a result of offering these services to Employer shall not be used,disclosed,reused, or re-disclosed to any unaffiliated third party,except to carry out the purposes for which the information was disclosed. ICMA-RC shall be permitted to disclose relevant aspects of the NPI to its officers,agents, subcontractors,employees,and IFE only to the extent that such disclosure is reasonably necessary for the performance of its duties and obligations under the Agreement. The obligations of this Section shall not restnct any disclosure by ICMA-RC pursuant to any applicable state or federal laws or regulations,or by request or order of any court or government agency 23. Security of NPI. ICMA-RC further agrees that it has established and maintains policies and procedures designed to ensure the confidentiality and security of NPI. This shall include procedures to protect against anticipated threats or hazards to the secunty or integrity of the information and unauthonzed access to or use of the information. The remainder of this page has been intentionally left blank 6 The Parties certify that they have caused this Agreement to be executed by an authonzed signatory in the manner and as of the date described below CITY OF MIAMI BEACH Authorize Signature ____—_—_---_—_ Matti Herrera Bower Mayor Printed Name and Title ATTEST - Ji ICMA RETIREMENT CORPORATION c. biti/uqj_ C. ,11'i t By. Angela Montez Assistant Corporate Secretary APPROVED AS TO FORM &LANGUAGE &FOR EXECUTION Cr- torn j,11 Date I Cardillo, Lilia • From: Parcher, Robert Sent: Tuesday, December 06, 2011 1 43 PM To: Cardillo, Lilia Subject: FW. ICMA Employer Investment Program and Management Services Agreement MIAMIESEACH Robert Parcher, City Clerk CITY CLERK'S OFFICE 1700 Convention Center Drive,Miami Beach, FL 33139 Tel: 305-673-7411 / Fax:305-673-7254/ www.miamibeachfl.gov We are committed to providing excellent public service and safety to all who live,work and play in our vibrant,tropical,historic community From: Echert, Georgie Sent: Tuesday, December 06, 2011 1:23 PM To: Parcher, Robert Cc: Sutter, James; Radig, Sue; Williams, Allison Subject: ICMA Employer Investment Program and Management Services Agreement Bob, As you had discussed with Sue and Raul,the ICMA Employer Investment Program and Management Services Agreement is related to the OPEB Trust Agreement(the Master Agreement) provided for by Resolution Number 2009-27024 in March 2009. This agreement with ICMA should be included as an Exhibit to this Master Agreement and provides the Trust with an investment vehicle for the funds assigned to the OPEB Trust. Under the GASB 45 rules, all funds assigned to the OPEB Trust must be segregated from the City's funds and managed independently This agreement with ICMA provides the investment vehicle for the segregation and management of the funds assigned to the City's Other Post Retirement Benefits. Should you have any additional questions, please feel free to contact me,Jim or Sue. Thank you. Georgie MIAMI BEACH Georgina P. Echert,Assistant Finance Director FINANCE DEPARTMENT 1700 Convention Center Drive,Miami Beach,FL 33139 Tel:305-673-7451 /Fax: 305-673-7795/ www.miamibeachfl.gov We are committed to providing excellent public service and safety to all who live,work and play in our vibrant,tropical,historic community 1