Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute a Professional Services Agreement for Investment Portfolio Management Services with PFM Asset Management LLC for a not-to-exceed amount of $110,000 annually
Staffreport
SUMMARY
In April 2025, Finance conducted a Request for Proposal (RFP) for investment management services with a start date of July 1, 2025. The City received three (3) proposals for review and consideration. Staff recommends engaging with PFM Asset Management for investment management services.
RECOMMENDATION
Staff recommends that the City Council approve the consultant services agreement (CSA) between the City of San Leandro and PFM Asset Management for investment services for a term of three-years with two (2) optional one-year extension for a not-to-exceed amount of $110,000 annually.
BACKGROUND & DISCUSSION
Since 2016, Chandler Asset Management has provided the following services related to the management of the City’s investment portfolio:
• Consulting with staff regarding the City’s cash flow needs, investment opportunities, and market conditions.
• Executing, confirming, and settling trades with the City’s safekeeping bank.
• Reviewing the City’s investment policy and confirming all regulatory updates.
• Monitoring creditworthiness of investments.
• Reporting monthly and quarterly and analyzing investment holdings and performance.
• Adhering to the City’s approved investment philosophy related to safety, liquidity, and yield.
On May 6, 2024, the City Council approved an amendment to the current consulting services agreement with Chandler Asset Management for investment management services of City funds. The current agreement is set to expire on June 30, 2025.
Government Finance Officers Association (GFOA) recommends that agencies perform on-going review of investment advisory services and perform regular review processes. In April 2025, the City conducted a competitive RFP for investment management services due to the expiration of the current consulting services agreement with Chandler Asset Management. The City received three (3) responses by the RFP submission deadline.
After a thorough review, staff recommends that the City engage with PFM Asset Management for investment management services.
While the Director of Finance is responsible for directing the City’s portfolio, PFM Asset Management assists in the investment management and diversification of the City’s portfolio, bringing in the professional expertise needed to keep the City’s investment portfolio within Council investment policies while maximize performance with the principles of maintaining safety and necessary liquidity to meet the City’s daily cash flow needs.
FISCAL IMPACT
The cost of services is based on the amount of funds being actively managed. PFM Asset Management charges six basis points (0.06%) per year on the first $100 million of assets under management, and five basis points (0.05%) per year on assets over $100 million. Based on this cost structure, the annual cost will be approximately $110,000. An allocation is included in the Finance Department General Fund budget for FYs 2025-2026 and 2026-2027.
BUDGET AUTHORITY
The FY 2025-2026 proposed budget includes sufficient funding to cover the costs associated with the investment management services agreement.
ATTACHMENTS
• Attachment A: Resolution Authorizing the City Manage to Execute an Agreement with PFM Asset Management for Investment Management Services
• Attachment B: CSA between the City of San Leandro and PFM Asset Management Exhibit A - Scope of Services & Exhibit B - Fee Schedule
PREPARED BY
Nicole Gonzales, Finance Director