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Page 2 of 3 <br />investment choices based on the City’s primary goal of minimizing risk were limited. With the <br />Federal Reserve raising and keeping the federal funds rate between 5.25 percent and 5.50 <br />percent since July 2023 to control inflation, there are additional opportunities available in this <br />higher interest rate environment while still keeping the risk minimal. To utilize these <br />opportunities, and bring needed investment analytical and management resources, it was <br />determined the City would engage an outside investment services firm that can provide these <br />benefits. <br /> <br />DISCUSSION <br />A Request for Proposal (RFP) for investment management services was issued in the second <br />half of 2023; the City received responses from six firms. Staff evaluated each proposal in <br />accordance with the evaluation criteria, which included responsiveness; technical and relevant <br />experience; qualifications of staff and related resources available to handle all required tasks; <br />references from similar engagements; and other considerations. After reviewing all the <br />proposals, staff interviewed three final candidates in May 2024: <br />• Chandler Asset Management, Inc. (Chandler) <br />• PFM Asset Management, LLC. <br />• Meeder Public Funds, Inc. <br /> <br />After careful review, staff selected Chandler Asset Management to provide external investment <br />management services for the City. The relevant qualifications that led to the selection of <br />Chandler are: <br />• The company provided the most similar and neighboring clients as references. <br />• Management of over $35.4 billion in assets under management, with over $28.8 billion <br />for over 200 public agencies, including 70 cities in California. <br />• Demonstration of significant understanding of the City’s Investment Policy, portfolio <br />requirements and objectives, including observations of the investment policy and <br />analysis of the portfolio suggesting optimization of idle funds and improvements, such <br />as diversification from pools for future consideration. <br />• Provision of outstanding references, including testimonials of being service oriented, <br />providing assistance beyond contracted services, validated performance beyond the <br />benchmark while maintaining a lower risk than the benchmark. <br />• Robust reporting as well as education and training which will save City staff’s time and <br />provide continuity of care of the investment program through staff changes and various <br />market cycles. <br />• A high allocation to US Treasuries, which have the full backing of the US Government, <br />and federal agencies, which are issued by government-sponsored enterprises (GSEs) <br />and have the implied backing of the US Government in each of the two strategic <br />examples most frequently utilized by Chandler clients. Chandler has a robust credit <br />process to analyze the safety of all nongovernmental holdings within the portfolio. <br />• A long history of performing relevant cash flow analysis, assisting local governments <br />identify near- and long-term investment goals while ensuring adequate cash reserves to <br />fund near-term financial obligations. <br /> <br /> <br />Page 62 of 248