2014-28830 Reso RESOLUTION NO.' 2014-28830
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
CITY MANAGER TO REJECT ALL PROPOSALS RECEIVED, PURSUANT TO
REQUEST FOR PROPOSAL (RFP) NO. 2014-091-SW, FOR INVESTMENT
ADVISORY SERVICES, AND AUTHORIZING THE ADMINISTRATION TO
RELEASE AN INVITATION TO NEGOTIATE (ITN) FOR INVESTMENT
ADVISORY SERVICES.
WHEREAS, on May 21, 2014, the Mayor and City Commission approved Resolution No.
2014-28587 (the "Resolution") accepting the recommendation of the City Manager pertaining to
the ranking of proposals, pursuant to Request for Proposals (RFP) No. 2014-091-SW for
Investment Advisory Services, and authorized the Administration to enter into negotiations with
the top-ranked proposer, First Southwest and, should the Administration not be successful in
negotiating an agreement with the top-ranked proposer, authorized negotiations with the tied
second-ranked proposers, Davidson Fixed Income Management and Public Trust Advisors,
LLC; and
WHEREAS, following approval of the Resolution, the City's Finance Department
attempted to negotiate an agreement with the top-ranked proposer, First Southwest; and
WHEREAS, the parties were unable to come to mutual agreement with regard to the
fees to be paid by the City under the agreement; and
WHEREAS, p rior to initiating negotiations with the second-ranked proposers, it
became apparent that since the issuance of the RFP the amount of City investments to be
managed is expected to increase significantly; and
WHEREAS, this would significantly affect the City's ability to negotiate a cost-effective
agreement for investment advisor services under the current RFP; and
WHEREAS, the proposals received pursuant to the RFP did not consider that the
amount of the stated investments to be managed did not reflect the significant capital financing
now planned for FY2014/15, FY2015/16, and FY2016/17, which is expected to surpass one
billion dollars; and
WHEREAS, the Administration also believes it is important to provide an
opportunity for proposers, through a competitive solicitation process, to offer value added
services which could reduce City cost, or provide additional services and efficiencies to the
City given the now planned investments for FY2014/15, FY2015/16, and FY2016/17; and
WHEREAS, to that end, the Administration recommends terminating
negotiations and rejecting all proposals under the current RFP process and allow the
Administration to revise the scope of services to be included in a future solicitation to include
the City's planned investments, as well as incorporate an opportunity for proposers to provide
value added services to the City; and
WHEREAS, following the rejection of proposals and termination of the current
RFP process, the Administration recommends releasing a subsequent Invitation to Negotiate
(ITN), which will provide the City the opportunity to negotiate with multiple firms
simultaneously.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby
accept the recommendation of the City Manager to reject all proposals received, pursuant to
Request For Proposal (RFP) No. 2014-091-SW, for investment advisory services, and authorize
T Negotiate ITN for investment advisory services.
the Administration to release an Invitation o ry
PASSED AND ADOPTED this 19t`' day of November, 2014.
ATTEST:
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T:\AGENDA\2014\November\Procurement\RF O
9=NIInvestment Advisory Services Reject-RESOLUTION.doc
APPROVED AS TO
FORM&LANGUAGE
&FOR EXECUTION
XCCLityyAttoriKley Date
COMMISSION ITEM SUMMARY
Condensed Title:
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH,
FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER TO REJECT ALL
PROPOSALS RECEIVED, PURSUANT TO REQUEST FOR PROPOSAL (RFP) No. 2014-091-SW,
FOR INVESTMENT ADVISORY SERVICES, AND AUTHORIZING THE ADMINISTRATION TO
SUBSEQUENTLY RELEASE AN INVITATION TO NEGOTIATE (ITN) FOR INVESTMENT
ADVISORY SERVICES.
Key Intended Outcome Supported:
Ensure expenditure trends are sustainable over the long term.
Supporting Data (Surveys, Environmental Scan, etc
Item Summa /Recommendation:
On May 21, 2014, the Mayor and City Commission of the City of Miami Beach, Florida, approved
Resolution 2014-28587 (the "Resolution") accepting the recommendation of the City Manager
pertaining to the ranking of proposals, pursuant to Request for Proposals (RFP) No. 2014-091-SW for
Investment Advisory Services and authorizing the Administration to enter into negotiations with the
top-ranked firm, First Southwest; and should the Administration not be successful in negotiating an
agreement with the top-ranked proposer, authorizing negotiations with the second-ranked proposers
(tie), Davidson Fixed Income Management and Public Trust Advisors, LLC.
Following approval of the Resolution by the City Commission, the City's Finance Department
attempted to negotiate an agreement with the top-ranked firm, First Southwest, but was unable to
come to final agreement. More specifically, the parties were unable to come to mutual agreement with
regard to the fees to be paid by the City under the agreement. Prior to initiating negotiations with the
second-ranked proposers, it became apparent that the amount of City investments to be managed is
expected to increase significantly since the RFP was released, which considerably changes the City's
ability to negotiate a cost-effective agreement for investment advisor services. The proposals received
pursuant to RFP 2014-091-SW did not consider that the amount of the stated investments to be
managed did not reflect the significant capital financing now planned for FY2014/15, FY2015/16, and
FY2016/17. During those years the investment to be managed is expected to surpass one billion
dollars.
The Administration believes it is important to provide an opportunity for proposers, through a
competitive solicitation process, to offer value added services which could reduce City cost, or provide
additional services and efficiencies to the City. To that end, the Administration recommends
terminating negotiations and rejecting all proposals. Further, the Administration recommends that the
scope of services to be included in a future solicitation be reviewed to include the City's current
investment reality, as well as incorporate an opportunity for proposers to provide value added services
to the City.
Instead of continuing under an RFP process, following the rejection of proposals and termination of
the current RFP, the Administration recommends releasing a subsequent Invitation to Negotiate (ITN),
which will provide the City the opportunity to negotiate with multiple firms simultaneously.
CITY MANAGER'S RECOMMENDATION
After considering and reviewing staffs recommendation, the City Manager recommends that the
Mayor and City Commission of the City of Miami Beach, Florida approve the Resolution rejecting all
proposals, pursuant to Request for Proposal (RFP) No. 2014-091-SW for Investment Advisory
Services and authorize the City Manager to release a subsequent Invitation to Negotiate (ITN) for
services following the review and revisions to the scope of services, which shall be part of the ITN.
Prior to release of the ITN, the Administration shall provide the City Commission a copy of the ITN
through a Letter to Commission (LTC).
RECOMMENDATION
Approve the Resolution
Advisory Board Recommendation:
N/A
Financial Information: N/A
City Clerk's Office Legislative Tracking:
Alex Denis, Ext#6641
Sign-Offs:
De artm Director A it r I City M
er
AD PD M JL
TAAGENDA\201 November\Procurement\RFP 2014-091-MF- InVEMent Advisory Services Reject-IU T ARY.doc
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City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members o the City C mission
FROM: Jimmy L. Morales, City Manager
DATE: November 19, 2014
SUBJECT: A RESOLUTION OF THE MAYOR A D CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF
THE CITY MANAGER TO REJECT ALL PROPOSALS RECEIVED,
PURSUANT TO REQUEST FOR PROPOSAL (RFP) No. 2014-091-SW,
FOR INVESTMENT ADVISORY SERVICES, AND AUTHORIZING THE
ADMINISTRATION TO SUBSEQUENTLY RELEASE AN INVITATION TO
NEGOTIATE (ITN) FOR INVESTMENT ADVISORY SERVICES.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
The City requires the services of an investment advisor to manage and direct the City's
investments. The investment advisor is to provide advice on the investment of excess
funds in accordance with the City's investment objectives as set forth in City of Miami
Beach's Investment Policy. The key objectives of the City's investment policy are safety
of capital, sufficient liquidity to meet requirements and attaining market—average rates of
return. Excess funds are defined as funds not required to meeting short term
expenditures of the City. Currently, funds available for investment consist of
approximately $522 million which include: $346 million from operating funds, $103
million from various bond proceeds, and $73 million from the Miami Beach
Redevelopment Agency (RDA).
The City expects its investment advisor to be highly experienced, a leader and innovator
in the management of investments, and able to provide comprehensive investment
advisory services. The firm selected as the investment advisor and its affiliates will be
restricted from selling to the City, or buying from the City, any securities to or from that
firm's own inventory or account. The investment advisor will also be restricted from
placing into the City's portfolio any securities for which it, or an affiliate, is the issuer.
Investment advisors will not provide custodial services or security safekeeping. All City
investments, except for swap agreements must be held in an independent custodial
account.
2
November 19,2014 City Commission Agenda
RFP 2014-091-SW for Investment Advisor Services
RFP PROCESS
To seek the required services, the City developed Request for Proposals (the "RFP")
No. 2014-091-SW for an Investment Advisory Services. On January 15, 2014, the
Mayor and City Commission approved the issuance of the RFP. The RFP was issued on
February 6, 2014, with an opening date of March 25, 2014. The solicitation was
advertised and notices were released to prospective proposers. The RFP resulted in
proposals from the following six (6) firms:
1. Cutwater Asset Management
2. Davidson Fixed Income Management
3. First Southwest
4. PFM Asset Management LLC
5. Public Trust Advisors, LLC
6. Russell Investments
On April 3, 2014, the City Manager via Letter to Commission (LTC) No. 111-2014
appointed an Evaluation Committee (the "Committee") consisting of the following
individuals:
• Jim Goldsmith, Resident
• Sanford Horwitz, Resident
• Georgie Echert, Finance Department, City of Miami Beach
• James Sutter, Internal Audit, City of Miami Beach
• Julie Santamaria, RBC Capital Markets
* Jim Goldsmith was unable to participate due to prior commitments he could not
reschedule.
The Evaluation Committee (the "Committee") convened on April 17, 2014, to consider
proposals received and interview the proposers. The Committee was provided with
information relative to the City's Cone of Silence and Government in the Sunshine Law,
general information on the scope of services, reference responses, and additional
pertinent information from all responsive proposers.
After proposer's presentations and interviews, the Committee discussed the proposers'
qualifications, experience, and competence, and further scored the proposers
accordingly. The Committee was instructed to score each proposal pursuant to the
evaluation criteria established in the RFP. The final rankings are as follows:
Low
Georgie Sanford Julie James Aggregate
Echert Horwitz Santamaria Sutter Totals/
Rank
First Southwest 96 1 84 (l) 90 (1) 93 (l) 4 (1)
Davidson Fixed Income 82 (3) 81 (2) 78 (3) 85 (2) 10 (2) tie
Management
Public Trust Advisors, LLC 86 (2) 75 (3) 84 2 83 (3) 10 (2) tie
PFM Asset Management LLC 79 (4) 66 (4) 71 4 80 (4) 16 (4)
Cutwater Asset Management 78 5 66 (4) 68 (5) 77 (5) 19 (5)
Russell Investments 62 (6) 40 (6) 56 (6) 59 (6) 24 (6)
3
November 19,2014 City Commission Agenda
RFP 2014-091-SW for Investment Advisor Services
On May 21, 2014, the Mayor and City Commission of the City of Miami Beach, Florida,
approved Resolution 2014-28587 (the "Resolution") accepting the recommendation of
the City Manager pertaining to the ranking of proposals, pursuant to Request for
Y 9 P 9 9 p p
Proposals (RFP) No. 2014-091-SW for Investment Advisory Services and authorizing
the Administration to enter into negotiations with the top-ranked firm, First Southwest;
and should the Administration not be successful in negotiating an agreement with the
top-ranked proposer, authorizing negotiations with the second-ranked proposers (tie),
Davidson Fixed Income Management and Public Trust Advisors, LLC.
Following approval of the Resolution by the City Commission, the City's Finance
Department attempted to negotiate an agreement with the top-ranked firm, First
Southwest, but was unable to come to final agreement. More specifically, the parties
were unable to come to mutual agreement with regard to the fees to be paid by the City
under the agreement. Prior to initiating negotiations with the second-ranked proposers,
it became apparent that the amount of City investments to be managed is expected to
increase significantly since the RFP was released, which considerably changes the
City's ability to negotiate a cost-effective agreement for investment advisor services. The
proposals received pursuant to RFP 2014-091-SW did not consider that the amount of
the stated investments to be managed did not reflect the significant capital financing now
planned for FY2014/15, FY2015/16, and FY2016/17. During those years the investment
to be managed is expected to surpass one billion dollars.
The Administration believes it is important to provide an opportunity for proposers,
through a competitive solicitation process, to offer value added services which could
reduce City cost, or provide additional services and efficiencies to the City. To that end,
the Administration recommends terminating negotiations and rejecting all proposals.
Further, the Administration recommends that the scope of services to be included in a
future solicitation be reviewed to include the City's current investment reality, as well as
incorporate an opportunity for proposers to provide value added services to the City.
Instead of continuing under an RFP process, following the rejection of proposals and
termination of the current RFP, the Administration recommends releasing a subsequent
Invitation to Negotiate (ITN), which will provide the City the opportunity to negotiate with
multiple firms simultaneously.
MANAGER'S DUE DILIGENCE & RECOMMENDATION
After considering and reviewing staff's recommendation, the City Manager recommends
that the Mayor and City Commission of the City of Miami Beach, Florida approve the
Resolution rejecting all proposals, pursuant to Request for Proposal (RFP) No. 2014-
091-SW for Investment Advisory Services and authorize the City Manager to release a
subsequent Invitation to Negotiate (ITN) for services following the review and revisions
to the scope of services, which shall be part of the ITN. Prior to release of the ITN, the
Administration will provide the City Commission a copy of the ITN through a Letter to
Commission (LTC).
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of
Miami Beach, Florida approve the Resolution rejecting all proposals received, pursuant
to Request for Proposal (RFP) No. 2014-091-SW for Investment Advisory Services and
authorize the City Manager to release a subsequent Invitation to Negotiate (ITN) for
services following the review and revisions to the scope of services, which shall be part
of the ITN.
JLM / MT/ PDW/AD
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