C7I-Accept Recommendation Investment Advisory ServicesCOMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Of The MayorAnd City Commission Of The City Of Miami Beach, Florida, Accepting
The Recommendation Of The City Manager Pursuant To lnvitation To Negotiate (lTN) No. 2015'
081-LR For lnvestment Advisorv Services.
Intended Outcome
Ensure re trends are sustainable over the lonq term
Data (Survevs. EnvironmentalScan. etc: N/A
Item Summarv/Recommendation :
On November 19, 2014, the City Commission authorized the issuance of an lnvitation to Negotiate
(lTN) for lnvestment Advisory Services. The Administration issued ITN 2015-081-LR to seek
proposals from parties interested in providing the City with non-discretionary investment advisory
services to make recommendations for the City's investments in accordance with the City's
investment policy. The ITN was released on February 20,2015. A pre-proposal conference to
provide information to the proposers submitting a response was held on March 2,2015. On March
19,2015, the City received proposals from: Chandler Asset Management, lnc.; Davidson Fixed
lncome Management, lnc.; First Southwest Asset Management, LLC; PFM Asset Management
LLC; and Public Trust Advisors, LLC.
On May 22,2015, the Evaluation Committee appointed by the City Manager convened to consider
the responsive proposals received. The Committee was instructed to score and rank the proposals
received pursuant to the evaluation criteria established in the lTN. The results of the evaluation
committee process were presented to the City Manager for his recommendation to the City
Commission.
After reviewing the submission and the Evaluation Committee's rankings of proposals received, the
City Manager recommends that the Mayor and the City Commission, pursuant to lnvitation to
Negotiate (lTN) No. 201 5-081-LR, for lnvestment Advisory Services, authorize the Administration
to enter into negotiations with the top ranked proposer, Public Trust Advisors, LLC. ln the event
that the Administration is unable to negotiate a mutually agreeable agreement with Public Trust
Advisors, LLC, the City Manager recommends that the Mayor and City Commission authorize the
Administration to negotiate with other firms, in order of rank. Further, the City Manager
recommends the Mayor and City Clerk be authorized to execute an Agreement upon conclusion of
successfu I negotiations by the Ad min istration.
RECOMMENDATION
ADOPT THE RESOLUTION.
Financial lnformation :
Source of
Funds:
Amount Account
1 NA
2
OBPI
3
Tota!
Financial lmpact Summary: The fees for the lnvestment Advisors are an offset of the interest
earninqs on the investments.
Alex Denis, Extension 6641
AGEFNDA ITEIVI " ,*& MTAAAIBTACH DATE137
g MIAMIBEACH
€ity of Miomi Beoch, lZOO Convention Center Drive, Miomi Beoch, Florido 33139, www.miomibeochfl.gov
COMMISS MEMORANDUM
Mayor Philip Levine and Members
Jimmy L. Morales, City Manager
DATE: June 10,2015
SUBJECT: A RESOLUTION OF THE MA AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AC NG THE RECOMMENDATION OF THE CITY
MANAGER PERTAINING TO THE RANKING OF THE PROPOSALS RECEIVED,
PURSUANT TO INVITAT|ON TO NEGOTTATE NO. 2015-081-LR (THE !TN), FOR
INVESTMENT ADVISORY SERVICES; AND FURTHER AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON CONCLUSION
OF SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION.
ADM!NISTRATION RECOMM EN DATION
Adopt the Resolution.
FUNDING
The fees for the lnvestment Advisors are an offset of the interest earnings on the
investments. Below are the funds that the fees are charged to. The object codes is xxx-8000-
361110
General Fund: 011
General Obligation Bonds Funds: 38213831384
Storm Water Series 2011 Bond Fund: 431
Water & Sewer Bonds Series 2QO0: 424
Water & Sewer Bonds Series 20Q6: 423
Water & Sewer Bonds Series 2009: 420
Parking Bonds Series 2010: 486
South Pointe Fund: 379
RDA City Center Fund: 365
BACKGROUND
The City requires the services of an investment advisor to manage and recommend 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
lnvestment 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).
TO:
FROM:
the City
138
Commission Memorandum - ITN 2015-081-LR lnvestmentAdvisory Services
June 10,2015
Page2
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. ihe 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 aclount. The investmen]t 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 s"cuiity safekeeping. All City investments, except for swap agreements
must be held in an independent custodial account.
RFP PROCESS
On November 1g, 2014, the City Commission authorized the issuance of an lnvitation to
Negotiate (lTN) for lnvestment Advisory Services. The.Administration issued ITN 2015-08't-
LR to seek proposals from parties inierested in providing the City with non-discretionary
investment advisory services to make recommendations for the City's investments in
accordance with thoCity's investment policy. The ITN was released on February 20,2015' A
pre-proposal conference to provide information to the proposers submitting a response was
held'on'March 2,2015. On March 19,2015, the City received proposals from: Chandler Asset
Management, lnc.; Davidson Fixed lncome Management, lnc., First Southwest Asset
Manaiement, t-t-C; PFM Asset Management LLC; and Public Trust Advisors, LLC'
On April 14,2015, the City Manager appointed an Evaluation Committee (the "Committee")
consisting of the following individuals:
. Jim Goldsmith, Resident. Sanford Horowitz, Certified Public Accountant
. Julie Santamaria, RBC Capital Markets, FinancialAdvisor
. Allison Williams, City of Miami Beach, Chief Accountant
. John Woodruff, City of Miami Beach, Office of Budget and Performance lnitiatives
The Committee convened on May 22,2015 to consider the proposals received. Due to
scheduled vacation, Mr. Sanford Horowitz was unable to attend. The Committee was provided
an overview of the project, information relative to the City's Cone of Silence Ordinance and the
Government in the Sunshine Law. The Committee was also provided general information on
the scope of services, references, and a copy of each proposal. The Committee was
instructed to score and rank the proposal pursuant to the evaluation criteria established in the
ITN.
The evaluation process resulted in the following:
139
ITN 201 5.O8I.LR INVESTMENT ADVISORT
SERVICES
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lhandler As set Managefirsnt
72 4 72 4 76 4 72 5 17 4
Davidson Fixed hcone Managenent, lnc.
69 5 54 5 75 5 74 3 18 5
FirstSouthw est Asset Managenrent
83 3 75 3 79 3 73 4 13 3
PFM Asset l\ilanagenent, LLC
84 2 82 2 81 2 87 2 I 2
fublic Trusl Advisors, LLC
98 ,t 100 95 1 s5 1 4 1
Commission Memorandum - ITN 2015-081-LR lnvestmentAdvisory Services
June 10,2015
Page 3
A brief summary of the firms and their proposal is provided below for informational purposes.
The Public Trust Advisors, LLC (Public Trust) was established in 2011, but its team has a
long history of service to the City of Miami Beach as investment advisors and fiduciary for the
City's investment program from 2003 to 2012. Public Trust currently manages more than $9.3
billion in short term funds for more than 1,500 participants within their local government
investment pools and several separately managed accounts. Public Trust is an independent
manager registered with the Securities and Exchange Commission. Public Trust does not
receive any economic benefit, directly or indirectly from any third party for advice rendered to
its clients.
ln addition to reducing the fees (basis points per thousand) compared to the City's prior
contract, Public Trust Advisors, LLC, has proposed to pay the City's custodial charges, as well
as the cost of all arbitrage audits. Based on the City's current amount of investments, this will
save the City in excess of $100,000. As the amount of the City's portfolio grows, with
significant financing for the Convention Center, the costs for the custody services and
arbitrage audits will also grow and be paid by Public Trust Advisors, LLC.
MANAGER'S DUE DILIGENCE & RECOMMENDATION
After ra/tewng the submission and the Evaluation Committee's rankings of proposals
received, the City Manager recommends that the Mayor and the City Commission, pursuant to
lnvitation to Negotiate (lTN) No. 2015-081-LR, for lnvestment Advisory Services, authorize the
Administration to enter into negotiations with the top ranked proposer, Public Trust Advisors,
LLC. ln the event that the Administration is unable to negotiate a mutually agreeable
agreement with Public Trust Advisors, LLC, the City Manager recommends that the Mayor and
City Commission authorize the Administration to negotiate with other firms, in order of rank.
Further, the City Manager recommends the Mayor and City Clerk be authorized to execute an
Agreement upon conclusion of successful negotiations by the Administration.
140
Commission Memorandum - ITN 2015-081-LR lnvestment Advisory Services
June 10,2015
Page 4
CONCLUSION
f6e nOministration recommends that the Mayor and the City Commission, approve the
resolution accepting the recommendation of the City Manager, pursuant to lnvitation to
Negotiate (lTN) No. 2015-081-LR, for lnvestment Advisory services.
JLM/MT/PDW/AD
T:\AGENDA\2015\June 1O\ProcuremenNITN 2015-081-LR lnvostment Advisory Seruicos - Memo doc
141
RESOLUTION TO BE SUBMITTED
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