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Page 3 of 3 <br />EQUITY AND SUSTAINABILITY <br />Not applicable, as this item is a routine administrative matter of City business. <br /> <br />OUTREACH <br />The June 6, 2024, Audit Committee agenda was publicly noticed. No additional outreach was <br />conducted, as this item is a routine administrative matter of City business. <br /> <br />STRATEGIC PLAN ALIGNMENT <br />Not applicable, as this item is a routine administrative matter. <br /> <br />FISCAL IMPACT <br />Staff anticipates initially contracting out a portion of its portfolio at approximately $40.0 million- <br />$50.0 million, and this amount is expected to increase over time as more securities mature. <br />The investment management services for $40.0 million will cost nine basis points (0.09 <br />percent) annually, or $3,000 per month. Fee rates go down as the size of overall investment <br />dollars go up, per the fee schedule listed below. <br /> <br /> <br /> <br />At $40.0 million, the annual management service fee is estimated at $36,000. At $50.0 million, <br />the annual management service fee is estimated at $42,000. The FY 2024/25 General Fund <br />budget includes funding for investment management services. For the initial three-year <br />agreement, the aggregate not-to-exceed total is $218,000. For the five-year term, estimated <br />investment totals and associated management fees are as follows: <br /> <br /> <br /> <br />It is anticipated that over the long run, enhanced investment earnings should exceed <br />investment management fees incurred, while achieving safety and liquidity through careful <br />security selection, sector rotation, duration management, credit analysis, and efficient <br />execution of trades. <br /> <br />Prepared by: Submitted by: Approved by: <br /> <br />Chris Yi, Financial Services <br />Manager <br />Susan Hsieh, Director of Finance <br /> <br />Gerry Beaudin, City <br />Manager <br /> <br />Attachments: <br />1. PSA Draft Chandler Asset Management <br /> <br />Page 63 of 248