SR-02-25-2014-3FCity Council (Meeting: February 25, 2014
Agenda Item: 31:
To: Mayor and City Council
From: Gigi Decavalles- Hughes, Director of Finance
Subject: Extend Contract for Investment Management Services for the Cemetery &
Mausoleum Perpetual Care Funds
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a third modification to Professional Services Agreement #9039 (CCS) with RNC
Genter Capital Management (RNC), a California -based company, to provide investment
management services of the Cemetery and Mausoleum Perpetual Care Funds. The
recommended modification will extend the term for an additional three months for a total
term of five years three months. Fees for this contract are determined as a percentage
of the value of the funds under management. Based on the current portfolio value, it is
estimated that fees for the contract extension period will be approximately $15,000.
Executive Summary
The City currently uses RNC for its investment management services of the Cemetery
and Mausoleum Perpetual Care Funds, The City's contract with RNC terminates on
March 23, 2014. Staff is in the process of conducting a Request for Proposal process
for investment management services. Extension of the current agreement's term is
necessary to ensure a prudent and efficient selection process as well as to allow
sufficient time for contract negotiation and transition to a new firm, if required. Fees for
this contract are determined as a percentage of the value of the funds under
management. Based on the current portfolio value, it is estimated that fees for the
contract extension period will be approximately $15,000.
Background
The City's current agreement with RNC was authorized by Council on February 24
2009. The agreement provides a term of three years followed by two options to extend
the agreement by one additional year each. The First Modification of the agreement
was executed in May 2012 extending the agreement to March 23, 2013. On March 12,
2013, the term of the agreement was extended to March 23, 2014.
1
Discussion
The City's current agreement with RNC terminates on March 23, 2014. Staff is in the
process of conducting a Request for Proposal process for investment management
services. Due to changes in the Council meeting schedule in March, the award of a
new contract would occur after the expiration of the current contract. To ensure a
prudent selection process and allow sufficient time for contract negotiation and to
transition to a new firm, if required, an extension of the current agreement is necessary.
Financial Impacts and Budget Actions
The current fee structure for investment management services will remain in effect
during the agreement extension period. Expenditures vary based on activity and
average approximately $14,000 - $16,000 per quarter. Therefore, the fees for the three
month extension period will be approximately $15,000.
Funds are available in the FY 2013 -14 budget in division 37641; the agreement will be
charged to account 37641.555060.
Prepared by: David Carr, Assistant City Treasurer
Approved:
Gigi Decavalles -H hes
Director of Finance
Oi
Forwarded to Council:
Rod Gould
City Manager
Reference:
Modified Contract No. 9685
(CCS)