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HomeMy WebLinkAboutContract No. 2015-2630EHLERS Managing- Investments for your Cownunitys Future City of Columbia Heights 590 40'h Ave NE Columbia Heights, MN 55421 Wam The City of Columbia Heights ( "Client ") hereby employs Ehlers Investment Partners, LLC (Vk/a BBE Community Investment Partners, LLC) ( "Advisor "), a subsidiary of Ehlers Companies as investment advisor for the investment account described below on the following terms and conditions: 1. Appointment of Advisor. Client hereby retains Advisor as an investment advisor to provide services in accordance with the terms and conditions set forth in this Agreement, and Adviser agrees to perform the services as specified in the Agreement. This Agreement shall remain in effect unless it is terminated in writing by either party in accordance with the terms of this Agreement or it is replaced by a new agreement, whichever comes first. 2. Services. Advisor agrees to assist Client in establishing an investment account comprised of investments defined as permissible investments under Minnesota statutes and Client's Investment Policy. If Client does not have an Investment Policy prior to the execution of this Agreement, Advisor will assist Client in preparing one. After the account is opened, the Advisor representative assigned to the account shall regularly monitor the account and make investment strategy recommendations based on the specific needs and investment goals of Client, in accordance with the Client's Investment Policy. This shall generally include: • Assisting Client in establishing investment objectives, consistent with Client's risk tolerance, financial needs and goals, and the Client's Investment Policy. • Assisting Client in establishing asset allocation mix based on Client's financial position, cash flow, risk preference, time horizon, and the attached Investment Policy. • Setting up a Client safekeeping account ( "Account "), as defined below, with a qualified bank, brokerage firm or other financial institution ( "Custodian'). • Transfer of assets to and from Custodian Account, as directed by Client, for safekeeping. • Implementation of trades and account management, subject to the limitations described in paragraph 4. • As requested by Client, Advisor will prepare periodic performance reports on the Account. • Schedule review meetings as needed to update Client's ongoing financial planning and investment progress. • Advisor may contract with a third — party, at the direction of Client, to provide money market mutual funds, certificates of deposit (collateralized or uncollateralized) and other securities, as applicable. • Advisor may, with direction from Client, prepare a cash flow forecast to aid in determining funds available for investment. 3. Nature of the Relationship. Advisor is a Registered Investment Advisor ( "RIA) ") with the Securities and Exchange Commission ( "SEC ") and Financial Industry Regulatory Authority ( "FINRA "). Advisor is regulated by and required to follow rules set forth by the SEC and FINRA. Accordingly, this Agreement sets forth the terms of the relationship between Advisor and Client. It also identifies and imposes certain rights and obligations on both parties. Advisor is a fiduciary which requires a duty of loyalty to Client by Advisor. Such duty requires the Advisor to disclose any conflicts of interest that might impair Advisor's ability to satisfy the duty of loyalty to Client. Advisor is not aware of any conflicts of interest at this time. In the event any potential conflicts arise, Advisor agrees to promptly disclose them. Client agrees that it will carefully consider any such conflicts, will seek independent advice if it determines it is appropriate, and will, in a writing executed by an official of Client with authority to bind Client by contract, specifically acknowledge the conflict(s) and authorize Advisor to proceed if Client deems it appropriate and the conflict is manageable. Advisor also has a proposed duty to exercise due care in providing any Services. To do that, Advisor will require certain information from Client. Client agrees that it will make information that is in its control available to Advisor and will authorize where necessary third parties to provide information without cost to Advisor. Client will also be informed whether an affiliate Company of Advisor will provide advice, service or a product related to the Agreement. Advisor hereby informs client that Ehlers Companies solely owns Advisor and two other subsidiaries, Bond Trust Service Corporation providing paying agent services as well as Ehlers, a registered municipal Advisor providing financial Advisory services to municipalities. It is not anticipated that either affiliate will be used for this Agreement. If either were needed, Client will be asked to determine whether or not they wish to retain either of these affiliates to provide service. If either were to be retained, they would be retained under a separate agreement. Advisor, Bond Trust Service Corporation or Ehlers do not share fees. Authority. Advisor shall direct, with Client's oral or written approval, the investment and reinvestment of the assets in the Account in securities and cash or cash equivalents. Client understands that neither Advisor nor its representatives shall exercise any discretionary authority with respect to the Account or transactions. Client may at any time deposit additional funds and /or securities with Custodian so as to increase the Account of Client. Client may also withdraw funds and /or securities from the Account by giving notice to Advisor and/or Custodian. Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188- 262. 796. 6164- EhlerslnvestmentPartners.com Page 2 5. Definition of Account and Custody of Account Assets. The Account shall consist of securities and cash or cash equivalents and other assets of the Client which are; • Held in a separately designated management account by Custodian at the effective date of this Agreement, and any proceeds there from or additions thereto, and less any losses thereon or withdrawals there from. • Any other securities, cash, cash equivalents or other assets so designated by Client as belonging to the Account. Advisor shall not act as custodian for the Account or any portion thereof. All transactions shall be consummated by payment to, or delivery by, Custodian or Client of all cash, securities and other assets due to or from the Account. Custodian or Client, and not Advisor, shall be responsible for investing any daily cash balances in the account. Advisor shall notify Custodian and Client in writing as to those persons authorized to act on behalf of Advisor and may issue such instructions to Custodian and Client as may be appropriate in connection with the settlement of the transactions initiated by Advisor pursuant to paragraphs 2 and 4 of this Agreement. 6. Information and Responsibilities of Client. Client agrees to notify Advisor promptly of any significant change in the information provided by Client and/or Client's Investment Policy or any other significant change in Client's financial circumstances or investment objectives that might affect the manner in which Client's account should be invested. Client also agrees to provide Advisor with such additional information as Advisor may request from time to time to assist it in advising Client. Client acknowledges that Advisor cannot adequately provide the services requested by Client unless Client provides such information completely and candidly, and that the value of Advisor's analyses and recommendations depends entirely upon the adequacy and accuracy of the information provided by the Client. Client agrees to permit the Advisor to consult with and obtain information about Client from Client's accountant, attorney and such Advisors (subject to paragraph 21 of this Agreement) and to rely upon such information without verification. 7. Investment Objectives and Restrictions. Client has specified, as outlined in their Investment Policy, the investment objectives and any specific investment restrictions and limitations which govern the Account. It shall be Client's responsibility to inform Advisor in writing of any changes or modifications in the investment objectives of the Account as set forth in the Investment Policy as well as any additional investment restrictions and limitations applicable thereto and to give Advisor prompt written notice if Client deems any investment made for the Account to be in violation of such objectives or restrictions and limitations. Advisor agrees to communicate its investment strategy for the Account and any changes thereto, in writing, to Client, and, if necessary, to meet with Client to review the Account's investment activity or to advise of changes in Advisor's investment strategy. 8. Reports to Client. Advisor shall provide to Client, and /or, as applicable, Client authorizes and directs Advisor to instruct Custodian on Client's behalf to provide to Client, trade confirmations, statements, reports, required regulatory notices and any item listed on attached Schedule A. By providing your e -mail address (Email Address: joseph. kloiber @ci.columbia- heights.mn.us _), you consent to receive all items listed on Schedule A electronically. If an Email Address is not provided you will receive items listed on Schedule A in paper form via U.S. Mail. Client also authorizes and directs Advisor to instruct Custodian on Client's behalf to provide Advisor all copies of all periodic statements and other reports for the Account that Custodian sends to Client. Advisor, however, does not assume responsibility for the accuracy of information furnished by Client or any other party. Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188 - 262. 796. 6164- EhlersInvestmentPartners.com Page 3 9. Advisor Fees. The compensation of Advisor shall be calculated and paid in accordance with the Schedule of Fees attached hereto. For the purposes of determining Advisor's fees, the Account's assets shall be valued as computed by Custodian at fair market value, in accordance with normal and customary industry standards deemed suitable by Custodian for this purpose. Advisor shall receive no soft dollar benefit (research or any form of compensation from a broker /dealer for directing trades to that broker /dealer) for any transaction placed on behalf of Client. Advisor will provide to Client an accounting for fees owed no later than the 10t' business day of each month for services billed for the previous month. Payments for services are due 30 days from invoice date. If Client has authorized Custodian to pay Advisor management fees from Client's custodial account this may be considered limited custody by Advisor for this sole purpose. 10. Transaction Procedures. Advisor shall arrange for the execution of securities transactions for the Account through Custodian. Transactions for the Account shall be effected independently of transactions for other clients of Advisor; provided that Advisor may (but is not obligated to) combine or "batch" transactions for Client and other clients in the same securities in order to obtain a better price or achieve other efficiencies. Client authorizes and directs Advisor to instruct all firms executing orders for Client to forward confirmations of those transactions to Custodian and Advisor. Advisor shall instruct the brokers and dealers that execute orders for the Account to send Client all transaction confirmations and that all transactions must be completed using delivery vs. payment (DVP). Advisor may give a copy of this Agreement to any broker, dealer or other party to a transaction for the Account, or Custodian as evidence of Advisor's authority to act for Client. Instructions of Advisor to Custodian shall be made in writing or, at the option of Advisor, shall be made orally and confirmed in writing as soon as practical thereafter; provided that all such instructions, written or oral, shall be issued only by persons designated from time to time by Advisor in a written instrument delivered to Custodian. Client shall provide, or instruct Custodian to provide, to Advisor such periodic reports concerning the status of the Account as Advisor may reasonably request. When placing order for the Account, subject to paragraph 12 of this Agreement, Advisor shall attempt to secure the best price and execution possible, commensurate with receiving research and other services (including quotation and information retrieval equipment) helpful to managing assets for clients. 11. Termination: Assignment. Subject to paragraph 30 of this Agreement, Client reserves the right to terminate this Agreement without cause at any time by giving Advisor written notice, by certified mail, at least thirty (30) calendar days prior to the date on which termination is to become effective. Advisor reserves the right to terminate this Agreement without cause at any time by giving Client written notice, by certified mail, at least one hundred twenty (120) calendar days prior to the date on which termination is to become effective. If there is just cause, Client may terminate the Agreement immediately upon written notice to Advisor, which notice shall contain a detailed description of such cause. Termination of this Agreement shall not affect (a) the validity of any action previously taken by Advisor under this Agreement; (b) liabilities or obligations of the parties from transactions initiated before termination of the Agreement (including any trades agreed to by Client, but not settled before the date on which termination is to become effective), or (c) Client's obligation to pay Advisor's fees to Advisor (pro -rated through the date of termination based on assets under management on the last statement prior to the notice of termination). This Agreement shall not be assignable by either parry. Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188 -262. 796. 6164- EhlersInvestmentPartners.com Page 4 12. Liability. Except as may otherwise be provided by law, Advisor shall not be liable to Client for (a) any loss that Client may suffer by reason of any investment decision made or other action taken or omitted in good faith by Advisor with that degree of care, skill, prudence, and diligence under the circumstances that a prudent person acting in a fiduciary capacity would use; b) any loss arising from Advisor's adherence to Client's written instructions or the Investment Policy; or (c) any act or failure to act by Custodian, any broker or dealer to which Advisor directs transactions for the Account, or by any other third party. The federal and state securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore nothing in this Agreement shall waive or limit any rights that Client may have under those laws. 13. Disclaimers and Limitations. Client's investments are subject to risks associated with investing in securities, including various market, currency, economic, political and business risks. Advisor does not guarantee the performance of Client's investments or guarantee that Advisor's investment advice or strategies shall be successful or that Client's investment objectives shall be met. In the event that Client directs Advisor to use a particular broker dealer, Client agrees and understands Advisor may not be authorized under those circumstances to negotiate commissions and may not be able to obtain volume discounts or best execution. In addition, under these circumstances a disparity in commission charges may exist between the commissions charged to Clients who direct Advisor to use a particular broker or dealer. 14. Notices. Unless otherwise specified herein, all notices and instructions with respect to security transactions or any other matters contemplated by this Agreement shall be deemed duly given when received in writing by either party at the address set forth below its name on the signature page hereof or to such other addresses as such parties shall notify the other in writing and to Custodian at such address as it may specify to Advisor in writing, or at such other address or addresses as shall be specified. Advisor may rely upon any notice (written or faxed) that is signed by an authorized representative of Client. 15. Representations by Client Client represents and confirms that (a) this Agreement and the transactions contemplated hereby are authorized by the governing documents relating to the Account and that the terms hereof do not violate any obligation by which Client is bound, whether arising by contract, operation of law or otherwise, (b) this Agreement has been duly authorized by appropriate action and when executed and delivered shall be binding upon Client in accordance with its terms, (b) Client shall deliver to Advisor such evidence of such authority as Advisor may reasonably require, whether by way of a certified resolution or otherwise; and (c) the individual signing this Agreement on behalf of Client has been authorized to do so by appropriate action. Client undertakes to inform Advisor, as applicable, of any event which might affect the authority or property of this Agreement. 16. Representation by Advisor. The personnel of Advisor who shall be responsible for carrying out this Agreement are individuals experienced in the performance of the various functions contemplated by the Agreement and have not, within the last two years, been convicted of any crime, or pleaded nolo contendere or agreed to any consent decree with respect to any matter involving breach of trust or fiduciary duty or securities law violations. Advisor represents and warrants that (a) this Agreement has been duly authorized by appropriate action and when executed and delivered shall be binding upon Advisor in accordance with its terms, (b) Advisor shall deliver to Client such evidence of such authority as Client may reasonably require, whether by way of a certified resolution or otherwise; and (c) the individual signing this Agreement on behalf of Advisor has been authorized to do so by appropriate action. Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188 - 262. 796. 6164- EhlersInvestmentPartners.com Page 5 17. Construction and Severability. The provisions of this Agreement are severable. If any part of this Agreement is held to be invalid or unenforceable, such holding shall not affect the validity or enforceability of any other part of this Agreement so long as the remainder of the Agreement is reasonably capable of completions. 18. Applicable Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Wisconsin and laws, rules and regulations of Client. 19. Record Retention and Inspection. Advisor is required to maintain all records and documents relating to this agreement including the purchase, sale or exchange of the assets in the Account for sixty (60) months after the termination of the Agreement. During the term of this Agreement and during the sixty (60) months thereafter, Advisor must promptly provide to Client any records that comply with the terms of an open records request forwarded by Client to Advisor. Client or its designated representative has the right to inspect the records of Advisor during normal business hours with prior written notice to Advisor. 20. Entire Agreement; Prior Agreements. This Agreement represents the entire agreement between the parties with regard to the investment Advisory matters described herein and, except as otherwise noted herein, may not be modified or amended except by mutual written consent. This Agreement supersedes all prior understandings and agreements between Client and Advisor relating to the subject matter of this Agreement. 21. Confidential Relationship. All information and advice furnished by either party to the other hereunder, including their respective agents and employees, shall be treated as confidential and shall not be disclosed to third parties except as required by law. 22. Errors and Omissions Insurance. Advisor shall provide and maintain at its own expense during the term of this Agreement Errors and Omissions Insurance or Professional Liability Insurance covering the negligent acts, errors or omissions in the performance of professional services. Failure on the part of Advisor to produce or maintain the insurance shall constitute a material breach of contract upon which Client may immediately terminate this Agreement. 23. Inconsistency with Law; Waiver. If any provision of this Agreement is or should become inconsistent with any law or rule of any governmental or regulatory body having jurisdiction over the subject matter of this Agreement, the provision shall be deemed to be rescinded or modified in accordance with any such law or rule. In all other respects, this Agreement shall continue to remain in full force or effect. No waiver of a breach of any provision of this Agreement by either party shall constitute a waiver of any other breach of said provision of this Agreement. Failure of either party to enforce at any time, or from time -to -time, any provision of this Agreement shall not be construed as a waiver thereof. The remedies herein reserved shall be cumulative and additional to any other remedies in law or equity. No waiver shall be enforceable unless set forth in writing and signed by the party granting the waiver. 24. Changes and Amendments. No provision of this Agreement may be changed, altered, amended, or waived except by written instrument executed by the parties. 25. Changes to Advisor Key Personnel within Advisor. Advisor shall as soon as reasonably possible notify Client, in writing, of any changes in key personnel within its organization. Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188 - 262. 796. 6164- EhlersInvestmentPartners.com Page 6 26. Proxy Voting and Other Legal Notices. Advisor shall not be required to take any action or render any service with respect to the voting of proxies solicited by, or with respect to, the issuer or any securities held in the Account, nor shall it be obligated to render any advice or take any action on behalf of Client with respect to securities or other investments held in the Account, or the issuers thereof, which become the subject of any legal proceedings, including bankruptcy. 27. Services to Other Clients. It is understood that Advisor performs investment management services for other clients. Client agrees that Advisor may direct and take actions with respect to any activity of its other clients which may differ from the direction or the timing or nature of action taken with respect to the Account so long as it is Advisor's policy, to the extent practical, to allocate investment opportunities to the Account over a reasonable period of time on a fair and equitable basis relative to other clients. Advisor is not obligated to buy, sell or recommend for Client any security or other investment Advisor, its principals, affiliates or employees may buy, sell or recommend for its or their own account or for the account of any other client. This Agreement does not limit or restrict in any way Advisor, its principals, affiliates or employees, from buying, selling or trading in any security or other investments for its own accounts. 28. Assurance of Compliance with Appropriate Laws and Regulations at the Federal and State Level. Advisor hereby agrees and represents that it is in compliance with all federal and state laws as they relate to this Agreement. 29. Assurance of Compliance with Ethics Rules. Advisor hereby agrees and represents that it is in compliance with all ethics rules as they relate to this Agreement. 30. Rescission Upon Execution of this Agreement. Advisor acknowledges that, notwithstanding any other provision of this Agreement, Client shall have a unilateral right to rescind this Agreement without penalty by giving written notice of rescission to Advisor in accordance with this Agreement in such a manner that the notice shall have been received by Advisor within five (5) business days next following the execution of this Agreement. For purposes of this paragraph 30, the term "business day" shall mean Monday through Friday, excluding holidays. In the event Client rescinds this Agreement in accordance with this paragraph neither party shall have any obligation or liability to the other. Effective Date. The effective date of this Agreement is February 23, 2015 Agreed and Accepted this 23rd day of February , 2015 Ehlers Investment Partners, LLC N21 W23350 Ridgeview Parkway West; Suite 100 Waukesha, WI 53188 -1015 Joseph Kloiber By: Printed Name Finance Director /Treasurer Title Signature Kenneth J. Herdeman Printed Name 590 40'' Ave NE Columbia Heights, MN 55421 President Client Address, City, State, Zip Code Title Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188 - 262. 796. 6164- EhlerslnvestmentPartners.com Page 8 Effective Date. The effective date of this Agreement is February 23, 2015 . Agreed and Accepted this 23rd day of February , 2015 GLY of Columbia Hci lts Client Ehlers investment Partners, LLC N21 W23350 Ridgeview Parkway West, Suite 100 Waukesha, WI 53188 -1015 Joseph Kloiber Printed Name Finance Director/Treasurer Title 590 4e Ave NE Columbia Heights, MN 55421 Client Address, City, State, Zip Code Kenneth 1. Herdeman Printed Name President Title IPA Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, W1 53188 -262. 796. 6164- EhlerslnvestmentPartners.com Page 8 i Managing .Investments` for your Community" s Future Fee schedule for City of Columbia Heights ( "Client ") for services related to Investment Advisory Agreement dated 02/23/2015 between Client and Ehlers Investment Partners, LLC ( "Adviser "). Investment advisory fees shall be incurred for all assets under the management of Adviser. Investment advisory fees will be charged according to the schedule below based on average daily assets under management calculated on market value of said assets, payable monthly. Fees are all inclusive of other services provided by Adviser to the Client under an investment advisory engagement. (If Client has authorized Custodian to pay Advisor management fees from Client's custodial account this may be considered limited custody by Advisor for this sole purpose.) ASSETS UNDER MANAGEMENT Less than or equal to $4,999,999 at Next $5,000,000 up to $9,999,999 at Next $5,000,000 up to $14,999,999 at Next $5,000,000 up to $19,999,999 at Next $1 (above $19,999,999) and greater at ANNUALIZED RATE 0.150% 0.125% 0.100% 0.075% 0.050% Initial cash forecast services and investment recommendations are provided at no charge. Fees as described above apply to actual assets under management if /when investment plan(s) are implemented. Fee arrangements will be memorialized under the Investment Advisory Agreement. If Client engages Adviser to perform other services not related to cash forecasting or investment management, all services provided to Client by Adviser will be billed based on hours spent at the rate of $200.00 per hour, or an agreed -upon flat fee amount. Ehlers Investment Partners, LLC -N21 W23350 Ridgeview Pky West, Waukesha, WI 53188-262.796.6164 - EhlersInvestmentPartners.com Fonm BC 11 -2009 SL PURSUANT I. Broker Information 1. Name of Firm: Ehlers Investment Partners( Advisor /TD Am. Institutional nstodiaax)_ 2. Address: (Local) 3060 Centre Pointe Dr., Roseville, MN 55113 (National) N21W23350 Ridgeview Pkwy W Ste 100, Waukesha, WI 53188 3. Telephone Number: Local (651 ) 697 -8539 National (262) 796 -6164 4. Primary Representative/Manager /Partner in charge: Jack Fay, Municipal Investment Advisor (651) 697 -8539 Name and Title Telephone Number II. Statement of Investment Restrictions: To: Ehlers Investment Partners, LLC (name of broker) The investments of City of Columbia Heights (name of government entity) must complying with requiremeats of Minn. Stat §§ I I8A.04, 118A.05 and 118A.06. (sip d by iciai floral gov ent) (date) .-. III. Statement of Additional Investment Restrictions: (fill in if applicable) Not applicable. Further be advised that (name of government entity) restricts its investments as provided: [ `m the attached Investment Policy [ ] in the attached resolution(s) of the governing body. City of Columbia Heights _ (name of government entity) will provide to the broker copies of any 8 the Additional Investment Restrictions identified herein. C,. n. (signed WOTe Of local grave (date) IV. Certification We agree to conduct your investment transactions in accordance with Minn. Stat §§ 118A.04, I I8A.05 and I I8A.06 and the provisions of any Additional Restrictions set forth in Section III above. (signed by authorizeXrepresentative of broker) (date) Prior to completing an initial transaction with a broker, and annually thereafter, this form must be completed. See instructions. AUTHORIZING A BROKERAGE 1 AMERITRADE INSTITUTIONAL 1 AN INVESTMENT ADVISORY EHLERS V r,• * WHEREAS, The City of Columbia Heights intends to establish custodial accounts with TD Ameritrade Institutional for cash and investment securities, and to contract with Ehlers Investment Partners for investment advice in regard to said accounts and securities; and WHEREAS, The City of Columbia Heights, TD Ameritrade Institutional, and Ehlers Investment Partners, each require certain clarification of the authority within the City of Columbia Heights in regard to such accounts and securities; THEREFORE, IT IS HEREBY RESOLVED, that the Finance Director and the City Manager of the City of Columbia Heights are hereby fully authorized and empowered to open a TD Ameritrade Institutional brokerage account, transfer, endorse, sell, assign, set over and deliver any and all shares of stocks, bonds, debentures, notes, evidences of indebtedness, or other securities now or hereafter standing in the name of or owned by this City, to purchase stocks, bonds, debentures, notes, evidences of indebtedness, and other securities, and to make, execute, and deliver, under the City seal of this City, any and all written instruments necessary or proper to effectuate the authority hereby conferred. BE IT FURTHER RESOLVED, that the Finance Director and the City Manager of the City of Columbia Heights are hereby fully authorized to make, execute, and deliver, under the City seal of this City, an investment advisory agreement with Ehlers Investment Partners. Passed this 23rd day of February, 2015 Offered by: Schmitt Seconded by: Williams Roll Call: AlI Ayes Mayor Gary Peterson 0 A '�� Katie Bruno, City Clerk/Council Secretary Reports provided to client Investment Account Statement, listing; • Period Covered • Account activity during period • Investment account holdings at end of covered period Account verification statements Trade confirmations Security safekeeping receipts Maturity/call notices Any other report, confirmation or receipt requested by client related to investment account activity or holdings Any filing, notice or report required by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority, Inc. (FINRA) or other regulatory body. Managing Investments for your Community's Future 3 060 Centre., Pointe, Drive f Roseville, ININ 55 13 3715 Bishops W. Suite 225 - Birookfield, !,Yl 53005 Olflce: (651) 697-3500 - Fax: (65 1) 697-8555 Office: (262) 796-6164 - Fax (262) 735-1810 'EHLERS INVESTMENT PARTNERS Managing Invesments f©r your Conrnruunit s' Future 11► ►��!x.Yl 11U - ► 1 i 1 � Principle 1 — Integrity Adviser shall offer and provide professional services with integrity. Adviser recognizes clients place Adviser in a position of trust and confidence. Integrity demands honesty and candor, which must not be subordinated to personal gain and advantage. Within the characteristic of integrity, allowance can be made for innocent error and legitimate difference of opinion; but integrity cannot co -exist with deceit or subordination of one's principles. Principle 2 — Objectivity Adviser shall be objective in providing professional services to clients. Objectivity requires intellectual honesty and impartiality. It is an essential quality for any professional. Adviser shall provide the highest level of work, maintain objectivity, and avoid subordination of his or her judgment that would violate this Code Principle 3 — Competence Adviser shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which Adviser is engaged. Adviser is competent only when they have attained and maintain an adequate level of knowledge and skill and applies that knowledge effectively in providing services to clients. Competence also includes the wisdom to recognize the limitations of that knowledge and when consultation or client referral is appropriate. In addition to assimilating the common body of knowledge required and acquiring the necessary experience, Adviser shall make a continuing commitment to learning and professional improvement. Principal 4 — Fairness Adviser shall perform professional services in a manner that is fair and reasonable to clients, principals, partners and employers and shall disclose any conflicts of interest in providing such ser vices. Fairness requires impartiality, intellectual honesty and disclosure of conflicts of interest. It involves a subordination of one's own feeling, prejudices and desires so as to achieve a proper balance of conflicting interests. Fairness is treating others in the same fashion that you would want to be treated and is an essential trait of any professional. Principal 5 — Confidentiality Adviser shall not disclose any confidential client information without the speck consent of the client unless in response to proper legal process, to defend against charges of wrongdoing by the Adviser or in connection with a civil dispute between Adviser and client. A client, by seeking the services of Adviser, creates a relationship of trust and confidence with Adviser. This type of relationship can only be built and maintained with the understanding that information supplied to Adviser or other information will remain confidential. In order to provide services effectively and to protect the client's privacy, Adviser shall safeguard the confidentiality of such information. Ehlers Investment Partners, LLC — N21 W23350 Ridgeview Parkway West, Suite 100, Waukesha, W1 53188-262-796-6164— www. ehl ersinvestmentpartneis. coin Principle 6 — Professionalism Adviser's conduct in all matters shall reflect credit upon the profession and the firm. Due to the importance of the professional services rendered by the Adviser, the confidential nature of the information collected and the level of trust clients, colleagues and employers impart on the Adviser, it is the responsibility of the Adviser to behave with dignity and courtesy to all those who use those services, provide information and generally seek the opinion and services of the Adviser. Principle 7 — Diligence Adviser shall act diligently in providing professional services. Diligence is the provision of services in a reasonably prompt and thorough manner. Diligence also includes proper planning for and supervision of the rendering of professional services. Ehlers Investment Partners, LLC — N21 W23350 Ridgeview Parkway West, Suite 100, Waukesha, WI 53188 — 262 - 796 -6164 — www. ehlersinvestmentpartners.corn Form ADV, Part 2A - Firm Brochure Item 1- Cover Page N21W23350 Ridgeview Parkway West, Suite 100 Waukesha, WI 53188 -1015 (651)697 -8532 www .ehlersinvestmentpartners.com September 2014 This brochure provides information about the qualifications and business practices of Ehlers Investment Partners, LLC. If you have any questions about the contents of this brochure, please contact David Holleran at (651) 697 -8532 or dholleran0ehlers- inc.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state authority. Ehlers Investment Partners, LLC is an investment advisory firm registered with the appropriate regulatory authority. Registration does not imply a certain level of skill or training. Additional information about of Ehlers Investment Partners, LLC also is available on the SEC's website at www.AdviserInfo.sec.gov. Item 2 - Material Changes The purpose of this Item 2 is to disclose material changes that have been made to this Brochure since the last annual update of this Brochure. The following changes have been made to this Brochure since its last annual update, dated June 2013: Item 10: Other Financial Industry Activities and Affiliations was amended to state the following: Ehlers is a wholly -owned subsidiary of Ehlers Companies. Officers of Ehlers Companies are members of the Board of Directors of Ehlers. Ehlers Companies are organized to support the financial advisory needs of municipal clients, and has three divisions which perform different services for its clients. The principal service is that of, Ehlers & Associates, a registered municipal advisor which is regulated by the Securities and Exchange Commission. Bond Trust Services Corporation holds a limited bank charter and provides paying agent services for clients that have outstanding debt. In addition to advisory services, Ehlers provides bidding agent services to municipal issuers undertaking an advanced refunding of outstanding debt. The bidding agent is responsible for obtaining bids on a portfolio of approved securities that meet the distribution requirement from the escrow account. Ehlers serves as bidding agent and is paid a fee for the services based on the size of the escrow portfolio. In all cases the fee is capped to not exceed $25,000 per escrow portfolio that is successfully purchased from a qualified bidder and delivered to the relevant escrow account. All bidding agent fees are paid directly to Ehlers from the Issuer of Debt. Ehlers & Associates refers its' clients that issuers debt to Ehlers for bidding agent services, and discloses to all clients that Ehlers is an affiliate of Ehlers & Associates. Items 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading and Item 12: Brokerage Practices were amended to more clearly explain the trading practices of the firm and the conflicts of interest inherent in those practices. Page 2 Item 3 - Table of Contents Page Item1 - Cover Page .............................................................................................................................. ..............................1 Item2 - Material Changes ................................................................................................................. ............................... 2 Item3 - Table of Contents ................................................................................................................ ............................... 3 Item4 - Advisory Business .............................................................................................................. ............................... 4 Item 5 - Fees and Compensation ................................................................................................... ............................... 4 Item 6 - Performance -Based Fees and Side -By -Side Management ................................. ............................... 5 Item7 - Types of Clients ................................................................................................................... ............................... 5 Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss ......................... ............................... 5 Item9 - Disciplinary Information ................................................................................................. ............................... 7 Item 10 - Other Financial Industry Activities and Affiliations .......................................... ............................... 7 Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading.... 7 Item12 - Brokerage Practices ........................................................................................................ ............................... 8 Item13 - Review of Accounts ......................................................................................................... ............................... 9 Item 14 - Client Referrals and Other Compensation ............................................................. ............................... 9 Item15 - Custody ................................................................................................................................. ............................... 9 Item16 - Investment Discretion .................................................................................................... ............................... 9 Item17 - Voting Client Securities ................................................................................................. .............................10 Item18 - Financial Information ..................................................................................................... .............................10 Page 3 Item 4 - Advisory Business Ehlers Investment Partners, LLC ( "Ehlers" or the "Firm ") was formed in January 2012 when Ehlers Companies bought the interests in BBE Community Investment Partners, LLC from Bankers' Bancorporation and renamed the firm Ehlers Investment Partners. BBE Community Investment Partners, LLC was formed in May 2007, to provide advisory, cash forecasting, treasury management consulting and investment administration to local governments, i.e., counties, cities, towns, villages, school districts and special districts. Ehlers Investment Partners continues to offer those same services. Ehlers Investment Partners, LLC is a wholly owned subsidiary of Ehlers Companies. Officers of Ehlers Companies are members of the Board of Directors of Ehlers Investment Partners, LLC. Ehlers asset management services are limited by state statutes that govern investments permitted by local governments and a client's investment policy. Ehlers may also provide general consulting services to clients, including but not limited to, treasury management consulting. Where Ehlers provides general consulting services, Ehlers will work with the client to prepare an appropriate summary of the specific project(s) to the extent necessary or advisable under the circumstances. Ehlers will honor any reasonable restrictions on investing in certain securities or types of securities imposed by the client in writing. As of June 30, 2014, Ehlers managed $302,21,1876 assets on a non - discretionary basis. Item 5 - Fees and Compensation Advisory Services For its services Ehlers invoices and receives investment advisory fees monthly, in arrears at the following annual rates, which are applied to the aggregate average daily net assets under management: Less than $5 million 0.250% Over $5 million, but less than $10 million 0.225% Over $10 million, but less than $15 million 0.200% Over $15 million, but less than $20 million 0.175% Over $20 million, but less than $25 million 0.150% More than $25 million 0.125% All fees are subject to negotiation at the discretion of the Ehlers. Consulting Ehlers charges, in arrears, a flat fee or an hourly fee, typically $200 per hour. for consulting services. Fees are payable when invoiced. All fees are subject to negotiation at the discretion of the Ehlers. Page 4 Payment of Fees At the client's discretion fees may be assessed and invoiced on an monthly basis or a one -time basis. Upon client's request, Ehlers may deduct fees from client assets. Trading and Other Costs Where clients may incur additional expense from brokerage -based activities, clients should be aware that all custodial and execution fees remain separate and distinct from those fees charged by Ehlers for its asset management services. For more information on Ehlers' Brokerage Practices, please refer to Item 12 of this Brochure. Termination of Agreement The investment advisory agreement and fee schedule was initially approved by the Board of Directors. Each agreement is reviewed annually. Each investment advisory agreement permits the client to terminate the agreement without cause at any time by giving Ehlers written notice at least thirty calendar days prior to the date on which termination is to become effective. In the event of termination, Ehlers will prorate is fees based on the actual number of days that the account was managed, and any fees due to Ehlers from the client will be invoiced or deducted from the client's account prior to termination. Item 6 - Performance -Based Fees and Side -By -Side Management Ehlers and any supervised person affiliated with Ehlers does not have any performance -based fee arrangements. "Side by Side Management" refers to a situation in which the same firm manages accounts that are billed based on a percentage of assets under management and at the same time manages other accounts for which fees are assessed on a performance fee basis. Ehlers has no performance -based fee accounts, it has no side -by -side management. Item 7 - Types of Clients Ehlers provides investment advisory, cash forecasting, treasury management consulting and investment administration services to local governments. Ehlers does not impose a minimum dollar of value of asses for starting or maintaining an account. Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss Ehlers primarily recommends fixed income investments. Ehlers uses Fundamental, Technical, and Quantitative methods for security analysis when formulating investment advice and managing assets. Fundamental Fundamental analysis is a general assessment based upon various factors including sale price, asset value, market structure, and history. Ehlers will analyze the financial condition, capabilities of management, earnings, new products and services, as well as the company's markets and position amongst its competitors in order to determine the recommendations made to clients. The primary Page 5 risk in using fundamental analysis is that while the overall health and position of a company may be good, market conditions may negatively impact the security. Technical and Quantitative Technical analysis employs the use of statistical models and quantitative methodologies to evaluate performance and value over a specified period of time. Technical analysis involves the analysis of past market data rather than specific company data in determining the recommendations made to clients, and may involve the use of charts to identify market patterns and trends which may be based on investor sentiment rather than the fundamentals of the company. The primary risk in using technical analysis is that spotting historical trends may not help to predict such trends in the future. Even if the trend will eventually reoccur, there is no guarantee that the firm will be able to accurately predict such a reoccurrence. Risk of Loss While Ehlers seeks to diversify clients' investment portfolios across various asset classes consistent with each client's investment policy statement in an effort to reduce risk of loss, all investment portfolios are subject to risks. Accordingly, there can be no assurance that client investment portfolios will be able to fully meet their investment objectives and goals, or that investments will not lose money. Investments in fixed income securities involves some risk of loss, below is a description of several of the principal risks that client investment portfolios face. Fixed Income Risks Ehlers may invest portions of client assets directly into fixed income instruments, such as bonds and notes, or may invest in pooled investment funds that invest in bonds and notes. While investing in fixed income instruments, either directly or through pooled investment funds, is generally less volatile than investing in stock (equity) markets, fixed income investments nevertheless are subject to risks. These risks include, without limitation, interest rate risks (risks that changes in interest rates will devalue the investments), credit risks (risks of default by borrowers), or maturity risk (risks that bonds or notes will change value from the time of issuance to maturity). Credit and Default Risk Credit risk is the risk that the issuer of the debt obligation will be unable to make interest or principal payments on time. A decrease in an issuer's credit rating may cause a decline in the value of the debt obligations held. Liquidity Risk Liquidity risk is the risk that holdings which are considered to be illiquid may be difficult to value. Illiquid holdings also may be difficult to sell, both at the time or price desired. Interest Rate Risk The value of debt obligations will typically fluctuate with interest rate changes. These fluctuations can be greater for debt obligations with longer maturities. When interest rates rise, debt obligations will generally decline in value and you could lose money as a result. Periods of declining or low interest rates may negatively impact the Fund's yield. Market Risk Page 6 Prices of securities held by a client's portfolio may fall. As a result, client investments may decline in value and you could lose money. Item 9 - Disciplinary Information Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to a client's evaluation of Ehlers or the integrity of Ehlers management. Ehlers has no disciplinary events to report. Item 10 - Other Financial Industry Activities and Affiliations Ehlers is a wholly -owned subsidiary of Ehlers Companies. Officers of Ehlers Companies are members of the Board of Directors of Ehlers. Ehlers Companies are organized to support the financial advisory needs of municipal clients, and has three divisions which perform different services for its clients. The principal service is that of, Ehlers & Associates, a registered municipal advisor which is regulated by the Securities and Exchange Commission. Bond Trust Services Corporation holds a limited bank charter and provides paying agent services for clients that have outstanding debt. In addition to advisory services, Ehlers provides bidding agent services to municipal issuers undertaking an advanced refunding of outstanding debt. The bidding agent is responsible for obtaining bids on a portfolio of approved securities that meet the distribution requirement from the escrow account. Ehlers serves as bidding agent and is paid a fee for the services based on the size of the escrow portfolio. In all cases the fee is capped to not exceed $25,000 per escrow portfolio that is successfully purchased from a qualified bidder and delivered to the relevant escrow account. All bidding agent fees are paid directly to Ehlers from the Issuer of Debt. Ehlers & Associates refers its' clients that issuers debt to Ehlers for bidding agent services, and discloses to all clients that Ehlers is an affiliate of Ehlers & Associates. Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Pursuant to Rule 204A -1 of the Investment Advisers Act of 1940, Ehlers has adopted a Code of Ethics ( "the Code "). The Code governs personal securities trading and investment activity by the related persons of Ehlers. The Code of Ethics describes Ehlers fiduciary duties and obligations to clients. All related persons are expected to place the needs and interests of every client ahead of their own personal interests. Related persons are expected to avoid any type of behavior that conflicts, potentially conflicts with, or raises the appearance of any actual or potential conflict with the interests of our clients. In addition, all related persons are not to acquire any personal benefit or advantage as a result of the performance of their normal duties as they relate to clients. The Code sets forth policies and procedures to monitor and review the personal trading activities of related persons. From time to time, Ehlers persons may invest in the same securities recommended to clients. Under its Code, Ehlers adopted procedures designed to reduce or eliminate conflicts of interest that this could potentially cause. The Code's personal trading policies include procedures for limitations on personal securities transactions of related persons, reporting and review of such trading and pre - clearance of certain types of personal trading activities. These policies are designed to discourage and prohibit personal trading that would disadvantage clients. The Code also provides for disciplinary action as appropriate for violations. Page 7 In the event of any identified potential trading conflicts of interest, Ehlers' goal is to place client interests first. Consistent with the foregoing, maintains policies regarding participation in initial public offerings (IPOs) and private placements in order to comply with applicable laws and avoid conflicts with client transactions. If a related person wishes to participate in an IPO or invest in a private placement, he or she must submit a pre - clearance request and obtain the approval of the Chief Compliance Officer. Ehlers also collects and maintains records of securities holdings and transactions made by employees. Ehlers Chief Compliance Officer reviews the personal trading practices of its related persons to identify and resolve any potential or realized conflicts of interest. Item 12 - Brokerage Practices Ehlers participates in TD Ameritrade's institutional customer program, recommends that client accounts be held with TD Ameritrade and recommends that client transactions be placed through the custodian's broker - dealer. Ehlers maintains a fiduciary duty to seek best execution for client transactions. This does not solely mean the achievement of the best price on a given transaction. Rather, it is a collective consideration of factors concerning the trade in question. Such factors include the security being traded, the price of the trade, the speed of the execution, apparent conditions in the market, and the specific needs of the client. Not all advisers require the use of a particular broker - dealer. By accepting Ehlers recommendation, the client understands that the firm may be unable to achieve the most favorable execution, and this practice may cost the client more money. Based on the above criteria, Ehlers may not always pay the lowest commission or commission equivalent as specific transactions can involve specialized services on the part of the broker. This would justify higher commissions (or their equivalent) than other transactions requiring routine services. Most advisory transactions are fixed income investments. Prior to execution, Ehlers reviews the fixed income investment price against sources such as Bloomberg and dealer relationships to determine whether prices offered are reasonable and competitive. While the Firm does not have any formal soft dollar arrangements, the Firm receives benefits through its selection of TD Ameritrade for its execution of client transactions. Ehlers receives economic benefits through its participation in TD Ameritrade's institutional customer program. Benefits include the following (provided without cost or a discount): receipt of duplicate client statements and confirmations; research related products and tools; consulting services; access to a trading desk service Ehlers;); the ability to have advisory fees deducted from client accounts; access to an electronic communications network for client order entry and account information; access to mutual funds with no transaction fees and to certain institutional money managers; and discounts on compliance marketing, research, technology, and practice management products or services provided to Ehlers by third -party vendors. TD Ameritrade may also have paid for business consulting and professional services received by Ehlers. Some of the products and services made available by TD Ameritrade program may benefit the Firm but may not benefit client accounts. These products and services may assist Ehlers in managing and administering client accounts, including accounts not maintained at TD Ameritrade. The benefits received by TD Ameritrade do not depend on the amount of brokerage transactions directed to TD Ameritrade. As part of its fiduciary duties to clients, Ehlers endeavors at all times to put the interests of its clients first. Client should be aware, however, that the Page 8 receipt of economic benefits by Ehlers in and of itself creates a conflict of interest and may indirectly influence Ehlers' choice of TD Ameritrade for custody and brokerage practices. If Ehlers is directed by the client to direct trades to a specific broker - dealer other than the custodian typically used by the firm for trade execution, it must be noted that Ehlers ability to negotiate commissions (where applicable), obtain volume discounts or otherwise obtain best execution may not be as favorable as might otherwise be obtained. Item 13 - Review of Accounts Investment strategies and portfolio decisions are made by the President and Asset Manager in consultation with the client. The President and /or Asset Manager, clients and related persons meet at least quarterly to discuss strategies, the outlook for the securities markets and general economic conditions. The President currently reviews all client portfolios on a monthly basis to ensure strategies agreed upon by the client and the client's investment policy, are complied with. Cash forecasting, treasury management consulting and investment administration services clients do not receive periodic reviews, but reviews are available upon client request. The nature of the review would depend upon the client's request, and would be conducted by an investment analyst and reviewed by the lead investment advisor. Clients will receive monthly or quarterly statements directly from the custodian. Confirmation statements will be issued by the custodian for all trading activity. Ehlers provides monthly portfolio analysis and valuation that summarizes all portfolio activity, lists the securities in the portfolio and reports gains and losses at the end of the period. Item 14 - Client Referrals and Other Compensation As noted above, Ehlers may receive an economic benefit from TD Ameritrade in the form of support products and services it makes available to Ehlers and other independent investment advisors that have their clients maintain accounts at TD Ameritrade. These products and services, how they benefit our firm, and the related conflicts of interest are described in Item 12 - Brokerage Practices. The availability of TD Ameritrade products and services to Ehlers is based solely on our participation in the custodian's programs and not in the provision of any particular investment advice. Item 15 - Custody Client assets are held at a qualified custodian. Ehlers fees may be directly deducted from the client's account, as authorized in writing by the client. Ehlers is deemed to have custody of client assets solely because it deducts advisory fees from client accounts. Other than these client- authorized fee deductions, Ehlers does not maintain or accept custody of client funds or securities. Clients are urged to carefully review the account statement sent by the broker - dealer /custodian and to compare the account statement provided by the broker - dealer /custodian with any statements provided by Ehlers. Item 16 - Investment Discretion Ehlers does not maintain discretionary authority over client accounts. Page 9 Item 17 - Voting Client Securities As a policy and in accordance with its client agreement, Ehlers does not have, and will not accept, authority to vote client securities. Clients will receive their proxies or other solicitations directly from the custodian. Clients may contact Ehlers at (262)796 -6164 with questions about a particular proxy or solicitation. However, Ehlers does not typically research nor develop a firm opinion with regard to a particular proxy or solicitation. Item 18 - Financial Information Ehlers does not require nor solicit prepayment of more than $1,200 in fees per client, six months or Under Rule 206(4) -4 of the Investment Advisers Act of 1940, investment advisers are required to disclose certain information about their business practices that might serve as material to the client's decision in choosing an investment adviser. Ehlers does not require the pre- payment of any fees six months or more in advance of services or maintain any financial hardships or other conditions that might impair its ability to meet its contractual obligation to clients. Page 10