HomeMy WebLinkAbout2017-07-11 - AGENDA REPORTS - INVESTMENT MGMT SERVICES CONTR AWARD (2)Agenda Item: 14
CITY OF SANTA CLARITA
Q:° AGENDA REPORT
CONSENT CALENDAR
7,
CITY MANAGER APPROVAL: 1 j4 _ "
DATE: July 11, 2017
SUBJECT: INVESTMENT MANAGEMENT SERVICES CONTRACT AWARD
DEPARTMENT: Administrative Services
PRESENTER: Carmen Magana
RECOMMENDED ACTION
City Council:
1. Award a three-year investment management contract to PFM Asset Management LLC, and
authorize the City Manager or designee to execute up to two (2) additional one-year renewal
options beginning in year four, in an amount not to exceed $160,000 annually.
2. Authorize the City Manager or designee to execute the contract and associated documents
subject to City Attorney approval.
BACKGROUND
An investment advisor is utilized by the City of Santa Clarita (City) to strategically invest the
City's idle funds in a manner which will provide the maximum security with best investment
return, while meeting the daily cash flow demands of the City and conforming to all
state/province and local statutes governing the investment of public funds. A full-service
investment management firm provides value to the City because it has the resources necessary to
formulate investment strategies, manage risk, and capitalize on market opportunities in a timely,
reliable manner.
Chandler Asset Management (Chandler) has provided investment management services to the
City since 2006. The City conducted a procurement process and interviews to compare the
services and fees of other investment management firms to ensure the City performed its due
diligence. The top two other firms in the industry, PFM Asset Management LLC (PFM) and
Insight Investment (Insight), have demonstrated ability and capacity to address the City's current
investment portfolio size, which consists of over $200 million in assets.
PFM and Insight submitted proposals describing their experience, investment strategy, resources,
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current clients, and fee proposal to the City's Investment Committee. Chandler also submitted a
cost proposal for renewal of their contract. In addition, PFM and Insight provided references and
staff conducted a reference check.
Each firm was evaluated based on the following criteria: knowledge of the market, ability to
perform the job required, approach to managing the portfolio, usability of standard reports,
ability to create specialized reports, advisor responsiveness, frequency and quality of formal
investment updates, and cost. The City's Investment Committee determined, based on the criteria
evaluated, that PFM Asset Management LLC, is the best fit to provide quality investment
management services at a competitive cost for the City.
The cost will be based on the City's average monthly portfolio balance. Based on the City's
average monthly portfolio over the last fiscal year, costs of services are estimated at
approximately $125,000 annually, and will be offset by investment returns.
ALTERNATIVE ACTION
1. Do not award contract.
2. Other action as determined by the City Council.
FISCAL IMPACT
The cost of investment management services will be offset by investment returns.
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