HomeMy WebLinkAbout10-29-2014 IOC Agenda PacketCITY OF SAN LUIS OBISPO
INVESTMENT OVERSIGHT COMMITTEE
SPECIAL MEETING AGENDA
October 29, 2014
10:00 AM
Council Hearing Room, 990 Palm Street
San Luis Obispo, California
MISSION: As set forth in the Investment Management Plan, this committee is responsible for
reviewing the City’s portfolio on an ongoing basis to determine compliance with the City’s
investment policies and for making recommendations to the City Treasurer (Director of Finance
and Information Technology) regarding investment management practices.
CALL TO ORDER: Finance & IT Director/Treasurer Padilla
ROLL CALL: Mayor Marx; City Manager Lichtig; Assistant City Manager Codron;
Finance & IT Director/Treasurer Padilla; Financial Operations Manager
Vilma Warner; Steve Barasch, public member.
OTHERS PRESENT: Al Eschenbach, Independent Auditor and ex-officio member
PUBLIC COMMENTS: At this time, the public is invited to address the Committee
concerning items not on the agenda but are of interest to the public and within the subject
matter jurisdiction of the Investment Advisory Committee. Time limit is three minutes. The
Committee may not discuss or take action on issues that are not on the agenda other than
to briefly respond to statements made or questions raised, or to ask staff to follow up on such
issues.
1. Receive and file the report on the responses received to the request for proposals for
investment advisor services and hear the sub-committee’s recommendation.
2. Adjournment
_________________________________________________________________________
Investment Oversight Committee Special Meeting Agenda for October 29, 2014 Page 2
The City of San Luis Obispo wishes to make all of its public meetings accessible to the
public. Upon request, this agenda will be made available in appropriate alternative formats to
persons with disabilities. Any person with a disability who requires a modification or
accommodation in order to participate in a meeting should direct such request to the City
Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible.
Telecommunications Device for the Deaf (805) 781-7107.
Any writings or documents provide to a majority of the Committee regarding any item on this
agenda will be made available for public inspection in the Administration Office located at 990
Palm Street, San Luis Obispo, during normal business hours.
City of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
Investment Oversight Committee October 29, 2014
PREPARED BY: Wayne Padilla, Finance and Information Technology Director
SUBJECT: REPORT ON THE RESPONSES RECEIVED TO THE REQUEST FOR
PROPOSALS FOR INVESTMENT ADVISOR SERVICES AND SUB-
COMMITTEE RECOMMENDATION
RECOMMENDATION:
Receive and file the report.
DISCUSSION
Background
On September 2nd, the City Council approved the release of an Investment Advisor Services
Request for Proposal document. In response to that document, four proposals were received by
the deadline. A sub-committee from the Investment Oversight Committee met on October 16th
to review each of the proposals and assist the Treasurer in reaching a recommendation on which
firm’s proposal should be accepted. The sub-committee consisted of the City Treasurer Wayne
Padilla, Assistant City Manager Michael Codron, Public Member Steve Barasch and Financial
Operations Manager Vilma Warner.
Proposals were received from Vellum, HGK, Public Financial Management (PFM), and
Chandler Asset Management. A link is provided at the end of this report to allow committee
members to view the proposals received.
Based on their review of the four proposals and follow-up discussions that took place during the
sub-committee meeting, the unanimous choice of the group was that Public Financial
Management (PFM) should be selected as the City’s next investment advisor. This
recommendation was made based on the demonstrated experience of the PFM staff who would
be assigned to the City’s account both as direct and indirect support to the investment
management process, their extensive experience managing investments for California cities and
other public agencies, and the fact that they operate their own trading desk and have substantial
resources at their disposal to provide investment advice to municipal agencies.
A check of the references provided by PFM shows that they are responsive to their clients’ needs
by providing timely market trend information and assist their clients by reviewing and updating
their investment policies as needed. As the former City Treasurer for the City of Modesto I
worked with them in managing the city’s investment portfolio of nearly $300 million and found
them to be responsive and very knowledgeable about the investment market when
recommending reinvestment options.
Report on Responses Received for RFP for Investment Advisor Services Page 2
FISCAL IMPACT
The cost of providing investment advisor services is typically determined by a fee charged for a
range of dollars invested. The following table shows the amounts proposed by each firm for a
portfolio totaling up to $100 million. The City currently has approximately $46 million in
investments that are managed by Chandler Asset Management.
Comparison of Proposed Pricing
Chandler PFM Vellum HGK
1st $25 million $25,000 $25,000 $100,000 $37,500
2nd $25 million $20,000 $20,000 $100,000 $25,000
Next $25 million $17,500 $17,500 $87,500 $20,000
Next $25 million $17,500 $17,500 $75,000 $20,000
Annual fee for $100 million investment $80,000 $80,000 $362,500 $102,500
Chandler Asset Management’s fee proposal is based on the amounts that are currently being
charged to manage the City’s investments.
LINK TO PROPOSALS:
Investment Advisor RFP Responses.html
G:\Finance Division\Revenue Division\Investment Reports\2014-15\10-29-14 Special Meeting\staff report1.docx