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Page 1 of 3 <br />Item #7 <br /> CITY COUNCIL AGENDA REPORT <br /> <br />June 18, 2024 <br />Finance <br /> <br />TITLE: APPROVE AN AGREEMENT WITH CHANDLER ASSET MANAGEMENT, INC. <br />FOR INVESTMENT MANAGEMENT SERVICES FOR THREE YEARS FROM <br />JULY 1, 2024 THROUGH JUNE 30, 2027 WITH THE NOT-TO-EXCEED <br />AGGREGATE TOTAL OF $218,000 OVER A THREE-YEAR TERM WITH AN <br />OPTION FOR TWO ADDITIONAL YEARS <br /> <br />SUMMARY <br />Staff recommends the City engage Chandler Asset Management to provide investment <br />management and advisory services. The goal of external management is to maximize the <br />return on investments while minimizing risk and prioritizing safety of principal and liquidity. <br />Professional investment management of public funds is a best practice which provides multiple <br />benefits to the City, including day-to-day monitoring of investments within the portfolio; daily <br />analysis of available market opportunities; re-balancing of the portfolio investments to take <br />advantage of higher interest investment options when available; daily credit monitoring of <br />investment instruments to safeguard the City's funds; security selection; and competitive <br />shopping of investments to obtain the best execution of trades. <br /> <br />Compliance will be monitored daily in accordance with the City’s investment policy and <br />Government Code and reported as part of the monthly reporting package. Portfolio outcomes <br />will be tracked and reported monthly, with a quarterly formal review of the investment program <br />for City staff. <br /> <br />RECOMMENDATION <br />The Audit Committee met on June 6, 2024 to review the proposed contract for investment <br />management services with Chandler Asset Management and recommended City Council <br />approval. Staff recommends the City Council: <br />• Approve an agreement with Chandler Asset Management for investment management <br />services for three years from July 1, 2024 through June 30, 2027 with the not-to-exceed <br />aggregate total of $218,000 over a three-year term with an option to extend for two <br />additional one-year extensions with satisfactory performance; and <br />• Authorize the City Manager to execute the initial three-year agreement and exercise two <br />optional one-year extensions provided upon satisfactory performance for the first three <br />years and the extension(s). <br /> <br /> <br />BACKGROUND <br />City staff has traditionally handled all investment responsibilities, making sure that each <br />investment decision is in full compliance with the City’s Investment Policy. Based on the <br />Federal Reserve’s unprecedented decision to keep the interest rate very low for a prolonged <br />period coming out of the Great Recession and again during the COVID-19 pandemic, <br />Page 61 of 248