Submitted By: Marcella Hughes
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Presentation By: Peter Brill
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Department: Finance
STAFF RECOMMENDATION (Motion Ready):
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Approve one-year renewals of the contracts 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 aggregate expenditure of $180,000
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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 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 excellent service and a great price structure, the City desires to continue with these investment managers under a one-year renewal agreement. An analysis of manager fees indicates 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 the managers continue to outperform assigned benchmarks; these management firms are highly ranked amongst 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 the amendments to renew each investment manager agreement for one year. 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.
LEGAL REVIEW:
The amendments will be reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny