Item 28 - Award of Contract to Metropolitan West Securities Inc AGENDA REPORT SUMMARY -/ oF/.oW y
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TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Mana,
INITIATED BY: John D. Fitch, Assistant City Manager '
Peggy A. Stewart, Director of Administrative Servic se)
DATE: June 18, 1996
SUBJECT: Award of Contract to Metropolitan West Securities, Inc. For Investment
Management Services for the City
ABSTRACT
The City has solicited proposals for an investment management firm to provide
investment management services for the City's portfolio. Following evaluation of those
proposals, it is recommended that a contract be entered into with Metropolitan West
Securities, Inc. to provide investment management services to the City of Poway.
ENVIRONMENTAL REVIEW
Environmental review is not required for this agenda item according to CEQA guidelines.
FISCAL IMPACT
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Metropolitan West's fee is .05% of the portfolio. Based on our current $100,000,000
portfolio, this would amount to an annual fee of $50,000, which will be included in the
FY 1996-97 budget.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Notification has been sent to Metropolitan West Securities, Inc.
RECOMMENDATION
It is recommended that the City Council (1) approve the award of a contract to
Metropolitan West Securities, Inc. to provide investment management services to the
City and (2) direct staff to proceed with execution of the contract.
ACIION Approved staff recommendation. �4-0 with Mayor Higginson// absent.
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Marie Lofton, beputy City Clerk
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. AGENDA REPORT
CITY OF POW A Y
This report is included on the Consent Calendar. There will be no separate discussion of the report prior to approval by the
City Council unless members of the Council, staff or public request it to be removed from the Consent Calendar and
discussed separately. If you wish to have this report pulled for discussion, please fill out a slip indicating the report number
and give it to the City Clerk prior to the beginning of the City Council meeting.
TO:
FROM:
INITIATED BY:
Honorable Mayor and Members of the City Council
James L. Bowersox, City Man~ ~
John D. Fitch, Assistant City Manager~\
Peggy A. Stewart, Director of Administrative Services
DATE:
SUBJECT:
June 18, 1996
Award of Contract to Metropolitan West Securities, Inc. for
Investment Management Services for the City
BACKGROUND
As of April 30, 1996, the City's general investment portfolio was $68,981,004. In
addition, the City has $33,609,903 of bond proceeds in a separate investment
portfolio. The City currently manages its own investment portfolios.
In light of events of the past year with the Orange County Investment Pool and the
San Diego County Investment Pool, utilization of an investment management firm under
the direction of a City oversight committee is recommended as a prudent manner of
managing the City's funds. The speCific responsibilities would include managing the
City's investments on a daily basis pursuant to the specific investment policies
adopted by the City Council, providing monthly reports to a City financial oversight
committee on investment and earnings and compliance with City policy and government
code, maintaining accurate records of all investments, providing monthly reports,
and meeting regularly with staff to review performance of the portfolio.
FINDINGS
The City issued a request for proposal in March 1996, and we received eight
responses. Those responses were evaluated, and staff interviewed four firms which
were short-listed. Based on the evaluation, interviews, and reference checks, it is
recommended that a contract be awarded to Metropolitan West Securities, Inc. and
that staff be directed to enter into an agreement with them. Metropolitan West
submitted the lowest quote for fees which will be .05% of the total value of the
portfolio managed. Basfd upon a $100,000,000 portfolio, this would be approximately
$50,000 a year in management fees. This contract amount would be included in the FY
1996-97 finance budget scheduled for final adoption by the Council on June 28, 1996.
ACTION:
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Agenda Report
June 18, 1996
Page 2
It is recommended that the contract with Metropolitan West commence on July 1, 1996.
Furthermore, as directed by Council at the June 4, 1996 council meeting, one of the
first orders of business for Metropolitan West Securities will be the divestiture of
the Phillip Morris corporate notes currently held by the City of Poway.
ENVIRONMENTAL REVIEW
Environmental review is not required for this agenda item according to CEQA
guidelines.
FISCAL IMPACT
Metropolitan West's fee is .05% of the portfolio. Based on our current $100,000,000
portfolio, this would amount to an annual fee of $50,000, which will be included in
the FY 1996-97 budget.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Notification has been sent to Metropolitan West Securities, Inc.
RECOMMENDATION
It is recommended that the City Council (1) approve the award of a contract to
Metropolitan West Securities, Inc. to provide investment management services to the
City and (2) direct staff to proceed with execution of the contract.
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