Submitted By: Marcella Hughes
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Presentation By: Peter Brill
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Department: Finance
FORMAL TITLE:
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Five-year agreements with PFM Asset Management, LLC, Sawgrass Asset Management, LLC, and Seix Investment Advisors, LLC, for the provision of investment manager services for the City's treasury funds with an estimated annual expenditure of $180,000 per contract year
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
The City’s investment portfolio is diversely invested, with portions allocated to Truist Bank and local government investment pools; however, the core portfolio is managed by professional asset management firms. The City of Ocala contracts with three asset management firms to invest its treasury funds. To further diversify the investments, managers are separated by a determined area of expertise, maturity pools, and benchmarks as follows:
• PFM Asset Management, LLC - Pool I -- Short Term (1-3 years)
• Sawgrass Asset Management, LLC - Pool II -- Short/Intermediate (1-5 years)
• Seix Investment Advisors, LLC - Pool III -- Intermediate (1-10 years)
The City has contracted with the various investment managers since 2003. Due to the excellent service and competitive pricing structure, the City wishes to continue working with these investment managers. The Finance Department analyzed management fees, which indicated that the City's current fees are highly competitive compared to other managed portfolios of the same size. In today’s market environment, investment returns for managers continue to outperform assigned benchmarks; these management firms are highly ranked among their industry peers. The managers assist in crafting the City’s investment strategy, and each adheres to the requirements of the investment policy statement to safeguard City funds.
FINDINGS AND CONCLUSIONS:
The Investment Committee recommends approval of new five-year agreements that include optional two-year renewals for the investment managers, allowing them to continue efforts to protect and enhance the City’s investment portfolio. The City’s asset managers have proven portfolio preservation and safety records, competitive fees, and are highly ranked amongst industry peers.
FISCAL IMPACT:
Investment management fees are paid from account #805-361-000-000-13-36111 and are offset by investment interest earnings.
PROCUREMENT REVIEW:
These services were procured in compliance with the City’s Procurement Policy. Pursuant to Procurement Policy No. PRO-070(A)(5), financial services are not subject to competitive procurement requirements.
LEGAL REVIEW:
The Agreements will be reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny