TO: Honorable Mayor & Members of the North Port Commission
FROM: Jonathan R. Lewis, ICMA-CM, City Manager
TITLE: First Amendment to Investment Advisory Agreement with PFM Asset Management LLC.
Recommended Action
Approve the First Amendment to Investment Advisory Agreement with PFM Asset Management LLC (PFM).
Background Information
Currently, the City of North Port has an Investment Advisory Agreement (Attachment 1), with PFM Asset Management LLC, formerly known as Public Financial Management, Inc. The agreement was entered into on January 8, 1996. PFM provides investment management services to the City, including evaluation, purchase, sale and reinvestment of the City's investment funds. PFM also meets with City staff quarterly to review the investment performance. Annually, PFM hosts an investment educational seminar that helps ensure that City staff are better educated on investments and the economy at no additional cost. The compensation in Section 3(a) of the agreement is listed as an annual fee of 10 basis points (0.10%), in monthly installments, based on daily net assets under management. Based on the long-standing relationship with the City, PFM is offering to have a tiered fee schedule (attachment 2) as outlined below:
Average Assets Under Management Fees
Initial $25 million 10 basis points (0.10%)
Next $25 million 8 basis points (0.08%)
Next $50 million 7 basis points (0.07%)
Above $100 million 6 basis points (0.06%)
The assets that the City has under management changes based on timing of both revenues and expenditures throughout each month. Therefore, the actual amount of savings is variable, but for illustrative purposes, a comparative schedule has been included in the agenda (attachment 3) showing the fees for the past fiscal year under both the current agreement and the proposed schedule. The savings under this amendment would have been $15,037.41 annually. The current year projected savings is approximate...
Click here for full text