THE FLORIDA SCHOOL FOR THE DEAF AND THE BLIND REQUEST FOR PROPOSAL FOR INVESTMENT SERVICES FOR THE BOARD OF TRUSTEES ENDOWMENT FUND

Transcription

1 THE FLORIDA SCHOOL FOR THE DEAF AND THE BLIND REQUEST FOR PROPOSAL FOR INVESTMENT SERVICES FOR THE BOARD OF TRUSTEES ENDOWMENT FUND The Florida School for the Deaf and the Blind (FSDB) invites all qualified firms to submit proposals for investment services for the FSDB Board of Trustees Endowment Fund. FSDB, located at 207 North San Marco Avenue, Saint Augustine, Florida 32084, is an agency of the State of Florida governed by the Board of Trustees (Sec , Florida Statutes). The Board of Trustees Endowment Fund is exempt from income tax under section 501 (a) of the Internal Revenue Code as an organization described in section 501 (c) (3). The most qualified firm will be selected by the Board, and will be awarded an annually renewable contract for services. All responding firms must provide, in detail, the information required in ATTACHMENT I of this Request for Proposal. Responses to this Request for Proposal must include: 1. A letter written on firm letterhead with original signature of an owner or principal expressing the intent of the firm to respond to this Request for Proposal; 2. ATTACHMENT I with all requested detailed information; 3. A signed statement (may be on a separate page of firm letterhead or included in the cover letter) certifying that all information provided is true, correct and complete; and, 4. A total of fifteen (15) printed copies of items 1, 2 and 3, above, with original signatures, and one (1) electronic copy in PDF format on a nonreturnable USB flash drive Responses must be mailed or hand-delivered to: Director of Budgets and Grants Florida School for the Deaf and the Blind 207 North San Marco Ave. Saint Augustine, FL Responses must be received at the above address on or before the deadline which is 4:00 PM Eastern Daylight Savings Time on Friday, September 19, Responses received after the deadline will be marked LATE and will not be opened or included in the selection process. Electronic transmissions of responses and/or documents will not be accepted. All signatures must be original and manual. Use of facsimile signatures will result in disqualification of the response from the selection process. Responses will be opened in a public meeting to be held on Monday, September 22, 2014, at 2:00 PM, in Room #215, Moore Hall, 207 North San Marco Avenue, Saint Augustine, Florida. Persons 1 Page

2 wanting to attend this meeting must first obtain a FSDB Visitor s Pass from the FSDB Campus Police located at the FSDB main gate on Genopoly Street. Processing of a request for a Visitor s Pass may require 20 minutes or longer depending on the number of requests in the queue (firstcome, first-served). Attendees should allow extra time to avoid being late to the meeting. ATTACHMENT II describes the processes by which the responses will be screened and the choice of the best qualified firm will be made. ATTACHMENT III contains FSDB Operational Policy and Procedure 1.12, Use of Endowment Funds, which includes the Board s Endowment Investment Policy, as of May 30, Additional background information about FSDB may be found at and Florida Statutes, Section that may be found at Any person with a qualified disability requiring special accommodations at the meeting for opening responses must contact the Administrator of Business Services, (904) , at least five (5) working days prior to the meeting. If you are hearing or speech impaired, please contact the Administrator of Business Services by using the Florida Relay Service which can be reached at (TDD). The Florida School for the Deaf and the Blind reserves the right to reject any and all proposals or accept minor irregularities as decided by the panel, in the best interest of the FSDB Endowment Fund, the Board of Trustees and/or the State of Florida. Certified Minority Business Enterprises are encouraged to participate in the proposal process. CONTINGENCY NOTICE: All decisions made during the proceedings described herein, beginning with the Request for Proposal up to and including the awarding of an annually renewable contract to the selected firm, are subject to the approval of the FSDB Board of Trustees. All responding firms will be notified immediately of any changes to or cancellation of any processes or events described herein. Contact for questions: Director of Budgets and Grants (904) croziera@fsdb.k12.fl.us 2 Page

3 ATTACHMENT I INFORMATION REQUIRED FROM RESPONDING FIRM (Please respond with the item number and in the order shown below) 1. Name, address, telephone number and website of firm. 2. Name of contact person for the firm s response to the Request for Proposal, office address, telephone number, address and fax number. 3. Narrative about the history of the firm, including date of inception, ownership structure and number of employees. 4. Regulatory registrations, certifications, Qualified Public Depository status with the State of Florida, and memberships of the firm. 5. Describe in detail the number of clients and the average size of the firm s client portfolios. Also, describe the firm s experience (including number of years) and resources involved with public entity and not-for profit clients. 6. Narrative of the qualifications of persons that will be assigned to work with the FSDB Board of Trustees and its designated agents. Provide detailed resumes and indicate the level of responsibility of each person (professional staff only). Resumes are to include educational qualifications, professional certifications, regulatory registrations, memberships, awards received and previous work assignments that relate to this Request for Proposal. Additionally, resumes should note the number and size of accounts the persons are currently managing. 7. Details of business litigation or other legal proceedings in which the firm, or any officer or principal thereof, has been involved within the last five (5) years, including an explanation of the litigation or proceedings, the current status or the disposition. 8. Describe the levels of coverage for errors and omissions insurance and any other fiduciary or professional liability insurance. Attach an insurance certificate from each insurance company. 9. Narrative about the resources of the firm as follows: a. Investment assistant staff b. Internet or electronic access for viewing and/or printing reports c. Investment research d. Other 10. Narrative describing the firm s investment philosophy, diversification philosophy and historical measurement indices. 3 Page

4 11. Narrative about how the firm will address the Endowment Fund s Investment Policy in terms of target mixture of asset classes and investment types to produce a targeted annual return that exceeds the Policy s designated benchmarks. Include a comprehensive example of a proposed investment portfolio detailing the above classes, types and annual returns. 12. Narrative that describes the process for purchasing fixed income securities. 13. Describe the firm s policy and process for wire transfers of cash, cash withdrawals by check and any other option for transferring funds to FSDB s Endowment checking account. State the typical turn-around time for each method from the time a request for cash is received to the time it is sent. 14. Detail what asset classes are tracked in the firm s performance measuring/management system, including how many years of past performance data are on the system for each asset class. Include a sample of the performance report. 15. Samples of reports that will be supplied to FSDB for monthly, quarterly and annual evaluation including: a. Market value summary b. Portfolio summary c. Portfolio review d. Chronological transaction schedule e. Schedule of sales, maturities, and purchases f. Schedule of investments held in the portfolio showing acquisition cost, market value and unrealized gains or losses g. Schedule of capital gains or losses realized on sales h. Schedule of other charges and credits 16. Narrative about the proposed method for calculation of fees and describe the reporting method for documenting all costs and fees. Include a description of any load fees, transaction costs and other fees. 17. A statement to the effect that the firm will guarantee the same amount/rate of costs and fees for the term of the investment advisory agreement. 18. Description and amount of start-up charges and additional miscellaneous fees and charges. 19. Primary contact for the relationship as follows (must be one of the persons listed in 6 above): a. Name b. Title c. Office Street Address, City and State d. Phone number, fax number, and address e. Number of professional staff and support staff at this location 4 Page

5 20. Description of the process for performance evaluations of investment funds and managers. 21. Affirmative responses for the following: a. Commitment to act as a fiduciary for the Endowment Fund s invested assets. b. Commitment to provide the necessary resources to successfully advise the FSDB Board and manage the Endowment Fund s investments. c. Commitment to comply with the Board s Endowment Investment Policy. 22. Description of the firm s policy and willingness to meet the following expectations of the FSDB Board of Trustees (Board): a. The relationship manager must attend meetings of the Board and the Board s Investment Committee prepared to present an update about the performance of the Endowment s investment portfolio. (Note: Traditionally the Board meets approximately eight (8) times a year and the Board s Investment Committee meets approximately twice a year.) b. The relationship manager must recommend to the Board changes to its Investment Policy as the need arises. c. The firm and the relationship manager should support School events and programs and participate as time permits. 23. Description and schedule of the firm s proposed fee structure, assuming a $12 million investment portfolio and the firm s adherence to the Board of Trustees Investment Policy. Include a schedule of other proposed fees and costs. 24. Any other information that will be useful for the Board s selection panel including possible conflicts of interest. 5 Page

6 ATTACHMENT II PROCESS FOR SCREENING RESPONSES AND SELECTION OF BEST QUALIFIED FIRM INITIAL SCREENING AND QUALIFICATION OF RESPONSES (Monday, September 22, through Thursday, September 25, 2014) Each response will initially be screened by a review panel. Any response failing to meet any of the following criteria will be disqualified from further consideration: 1. Complete and professional response package with manually signed cover letter. 2. Basic qualifications such as certifications, registrations and licenses. 3. Experience of the firm and the proposed relationship manager(s) with municipal entity clients. 4. Affirmative responses to all commitments listed in Item #21 of ATTACHMENT I. After initial screening, the remaining responses will be reviewed by the review panel and graded on a scale of from 0 (lowest/worst) to 5 (highest/best) for each of the following attributes: 1. Commitment to the expectations of FSDB. 2. Quality of the sample reports. 3. Qualifications and experience of the firm and its professional staff. 4. Quality of the firm s investment philosophy, diversification policy and historical measurement indices. 5. Suitability of the firm s operational policies and procedures to the needs of the FSDB s daily operations. 6. Quality of the example portfolio and schedules. 7. Proposed fee structure and all other fees and costs. The greatest number of total points that can be received for each response is 35. The response with the highest total points will be assigned an overall rating of 10; the next lower, 9; the next, 8; and so on with the 11 th lower score and below receiving a rating of 0. The responses will be listed by firm name in order from highest to lowest and presented by the review panel to the Board of Trustees at their meeting on Friday, September 26, 2014, at a time to be announced, which will be open to the public. During the public meeting, the Board will select the firms to be placed on the Short List from the list of rated responses. The firms on the Short List will be invited to an interview with the Board or its designated committee. 2. Notification of Responding Firms Selected for the Short List (Monday, September 29, 2014) 6 Page

7 On Monday, September 29, 2014, all responding firms will be notified by of the finalists placed on the Short List by the Board of Trustees. Invitations for interviews will be issued to the firms on the Short List at the same time. 3. Interviews of Firms on the Short List (Thursday, October 30, 2014) Interviews with the invited firms will be held during a public meeting on Thursday, October 30, 2014, at times to be determined, in the Moore Hall Center for Leadership Development on the campus of FSDB. Any firm declining to be interviewed will be dropped from the Short List. Failure of any invited firm to appear in person on time for their scheduled interview will result in disqualification of the firm from participating in the interview process and from further consideration in the selection process. Interviews via telephone, video conference and any means other than in person will not be allowed. Each firm may send up to three representatives, one of whom must be the proposed relationship manager, to the interview. Each firm will be allowed 15 minutes to set up any equipment and materials prior to their interview. Then, each firm will be allowed 10 minutes for introductions, opening remarks and a short presentation, if the firm desires. The interview committee will then proceed with asking questions or for clarification of responses. Only one firm representative at a time may speak in response. The interview will take approximately 45 minutes. Each firm s interview will be rated by consensus of the interview committee using a scale from 0 (lowest/worst) to 10 (highest/best). The highest possible rating that may be awarded for an interview is 10. After all interviews are completed and rated by the interview committee, the chairperson will add each interview rating to the corresponding firm s written response rating to get a total overall score. The highest possible total overall score that may be awarded is 20 (10 from written response and 10 from interview). A written report signed by the chairperson of the interview committee will then be sent to the Board of Trustees and will include a list of each interviewed firm s total overall score and a recommendation as to which firm, if any, should be awarded the annually renewable contract. 4. Final Selection of Best Qualified Firm (Friday, October 31, 2014) At the public meeting on Friday, October 31, 2014, beginning at a time to be determined, the chairperson of the interview committee will formally present the committee s report. After considering the list of scores and the committee s recommendation, the Board will deliberate and may, by action, award the investment services contract to the firm which, in their judgment, is the best qualified. The Board may also decide to reject all scores and not award a contract. The decision of the FSDB Board of Trustees will be final. 5. Notification of Award of Contract (Monday, November 3, 2014) 7 Page

8 On Monday, November 3, public notification will be made, by public announcement, of the Board of Trustees decision to award or not award the investment services contract. If the decision is made to award a contract, the name of the winning firm will be included in the notice. 8 Page

9 ATTACHMENT III Use of Endowment Funds (Operational Policy and Procedure 1.12) I. Purpose/Scope of the Policy The Florida School for the Deaf and the Blind is a public school created in 1885 by the Florida Legislature to serve the needs of deaf and blind children in Florida. Part of the authority and responsibility given the Board of Trustees in the management of the School is the authority to receive gifts, donations, and bequests; to deposit those outside the State Treasury; and to use those for the benefit of the School and its students. These procedures are adopted by the Board to govern the management, investment, and expenditures of these gifts, donations, and bequests. This policy discusses the use of endowment funds in relation to: (A) general procedures, (B) spending policy, (C) expenditures, (D) organization and (E) investment policy. II. Detailed Policy Statement A. General Procedures The School shall establish an Endowment Fund where all gifts, donations, and bequests shall be deposited, invested, and otherwise administered. The School shall establish and maintain accurate accounting records by normal and acceptable standards, and at all times permit all accounting records to be opened for inspection and auditing by the Auditor General of the State of Florida. Further, all records of the Endowment Fund are public records and subject to state law governing such records. If the Board of Trustees accepts a gift, donation, or bequest that is subject to restrictions imposed by the donor, the School shall abide by those restrictions. Provided however, nothing herein obligates the School to accept a gift, donation, or bequest that is subject to restrictions if the Board, in the Board s sole discretion, determines the restrictions are not in the best interest of the School. B. Spending Policy Annually the Board of Trustees shall allocate a specific dollar amount to be expended from the Endowment Fund, to be known as the allocated amount. The allocated amount shall be no greater than five percent (5%) of the average of the twelve (12) trailing quarters of the value of the Fund on the last business day of each quarter. Funds expended for the 9 Page

10 purposes of providing scholarships may be carried forward from one fiscal year to the next. The Board may only allocate a greater amount after a super-majority vote of five (5) of the seven (7) board members. It is understood that restricted donations with a minimum of a $5,000 donation may be established for projects beyond the five percent spending policy of the Board, if approved by Administration, prior to accepting the donation. If there remains a portion of an annual allocated amount that is not expended, the Board may establish contingency funds to hold such unexpended allocations. Provided that such contingency funds shall not exceed $50,000 in the unrestricted endowment fund and $10,000 in the donor restricted Ludwig fund. Contingency funds may be expended for the care and sustenance of students and staff during times of emergency; to pay for a cost overrun, caused by unforeseen or unexpected circumstances, not exceeding ten (10) percent of a project s original budgeted amount; and to fund an unbudgeted project, not previously considered during the preparation of the annual budget, that is desirable for student welfare. None of the contingency funds shall be expended without approval of the President of the School. The President shall present a report of any expenditure of contingency funds to the Board of Trustees at its next meeting. In addition to the allocated amount, the operational expenses of the Endowment Fund and the Advancement Office shall be paid from the Endowment Fund. Operational Expenses shall include, but are not limited to, audit, investment, banking fees, salaries, equipment and supplies of the Endowment and Advancement Offices. Included within the Operational Expenses are marketing expenses for the school. These Operational Expenses shall not be computed as part of the allocated amount to be expended as noted in paragraph 4 above. The total of all Operational Expenses shall not exceed either: 3 (three) percent of the total value of the Endowment Fund as of the end of March (or February if March data is unavailable) of the prior fiscal year or 25 (twenty-five) percent of the total distributed allocation amount of the Endowment Fund for the current fiscal year. C. Expenditures When making expenditures from the Endowment Fund for the benefit of the School and its students, the Board shall, in its sole discretion, consider other known means and sources of funding that may be available. In making expenditures, the Board shall consider but is not limited to the following: Scholarships for students pursuing post-secondary educational programs. Assistance for students of the School. This assistance can take the form of grants or school based employment. Assistance to students for items not covered in the state budget appropriations. Payment of fees and expenses incurred by a student which are necessary for the student s academic success. Research and development of programs and devices to aid deaf and blind students. Student and staff improvement programs. Enrichment of extracurricular programs. Enrichment of dormitory life. 10 Page

11 Hospitality expenses for events such as workshops, meetings, and in-service programs that benefit students and staff. To support, honor, recognize, and enhance morale of employees of the School. To provide for compensation for a person engaged in lobbying activities in support of the School in the State of Florida. To provide funding for the administration of the Endowment Fund and the Development Office of the School. Eight persons shall be authorized to sign for any withdrawals of funds from Endowment Fund accounts. Five shall be primary signatories and three shall be alternate signatories. The five primary signatories are the: President, Administrator of Business Services, Administrator of Academic Programs, Administrator of Residential Services, and Administrator of Allied Health. The alternate signatories are the: Principal of the Deaf Department, Principal of the Blind/CET Department, and Executive Director of Parent Services Expenditures of more than one thousand dollars ($1000) from the Endowment Fund require the approval of two signatories, one of whom must be a primary signatory. Expenditures of one thousand dollars ($1000) or less require the approval of one primary signatory. Approval shall be evidenced by the manual signatures of the authorized signatories. D. Organization The Chairman of the Board of Trustees shall appoint an Investment Committee and its Chair. The Committee shall consist of five members, at least three of whom shall be Board members and the remaining two may be employees of the School. However, all committee members must be either a Board member or an employee of the School. Committee members shall serve a one year term, concurrent with the term of the Chairman of the Board of Trustees. The duty of the Committee shall be to oversee the management of the Endowment Fund and its assets and to report to the Board on these matters. It shall recommend to the Board the appointment of an Investment Consultant and one or more Investment Managers. The Investment Consultant shall manage the Endowment Fund and recommend changes in the investment strategy of the Fund. The Investment Consultant shall also be responsible for the day-to-day management of the Fund utilizing qualified Investment 11 Page

12 Managers. The Investment Managers shall be responsible for the investment of the assets of the Fund and shall have discretion as to individual asset selection. E. Investment Policy The Endowment Fund may only be invested in those investments authorized by s (1), (2)(d), (3), (4), and (9) and s Florida Statutes or in The Common Fund, an investment management fund exclusively for nonprofit educational institutions. Provided however, the Endowment Fund may from time to time, acquire and hold real property, either as a gift or through purchase, if deemed by the Board to be in the best interest of the School. The Investment Goals of the Endowment Fund are: To provide a critical extra margin of financial support to the School. To provide a reasonably stable and predictable allocated amount to facilitate budgeting and planning purposes. To protect and increase the value of the Endowment Fund. The Endowment Fund shall be invested in a both income producing assets and equities. The income component of the Fund may range between thirty-five (35) and fifty-five (55) percent of the current value of the Fund. The equity component of the Fund may range between forty-five (45) and sixty-five (65) percent of the current value of the Fund. The equity component of the fund shall consist of asset class allocations including Large Cap Value Equity, Large Cap Growth Equity, Small/Mid Cap Equity and International Equity. Large Cap Value and Growth Equity asset classes may each range between fifteen (15) and thirty five (35) percent of the current value of the Fund. Small/Mid Cap Equity may range between four (4) and fifteen (15) percent of the current value of the Fund. International Equity may range between two (2) and fifteen (15) percent of the current value of the Fund. This allocation will help to provide necessary diversification to reduce risk, provide long term growth, and produce income. When calculating the percentages of the Fund held in each component, to the extent assets under management by investment managers are held from time to time in cash or cash equivalents, such assets shall be considered part of the component (equity or fixed income) for which the investment manager has responsibility. The Investment Committee shall meet at least annually to review the performance of the Fund. The Fund (and in the discretion of the Investment Committee, subsets of the Fund based upon such variables as investment style and investment managers) shall be reviewed as follows: Performance over the previous quarter, and one, three, and five years. Greater weight shall be given the performance over the three and five year period. Any significant changes in management style. Any significant changes in management organization. 12 Page

13 Comparisons to selected benchmarks such as the Standard & Poors 500 and the Shearson Lehman Government/Corporate Bond Index and to peers with comparable investment styles. The allocation between income producing assets and equities. It is expected that the Fund will exceed the returns of the market indices and the median of those peers with comparable investment universes. From time to time, but no less than once a year, the Investment Committee shall rebalance the Endowment portfolio to the approved allocations by realigning assets between managers or allocating new deposits to specific managers to achieve the desired balance in the portfolio. The managers are expected to invest in readily marketable, high quality stocks, bonds, and cash equivalents. This precludes private placements, restricted stocks, and nominally or closely held public issues for which the market is severely restricted or thinly traded, or any investment which would jeopardize the tax-exempt status of the Endowment. Additionally, the following quality factors and limitations should be met: 1) Equities -The Endowment wishes to hold issues of high quality, marketable securities. Each equity manager must maintain an overall portfolio quality comparable to the applicable equal weighted Russell Index (large, mid, small, growth, value). Each equity manager must include a statement regarding their comparable overall portfolio quality within each quarterly report to the Committee. 2) Fixed Income -The portfolio may be invested in fixed income securities, as deemed prudent, including U.S. Government, agency obligations and corporate bonds. The average quality rating of bonds must be investment grade A or better, as judged by Moody's or S&P rating services. In any case, none of the fixed income securities should be below investment grade, Baa (Moody's) or BBB (S&P). Under no circumstances should the duration be longer than 125% of the Lehman Brothers Government/Credit Index. The Investment Committee does not want an excessively long fixed income portfolio subject to major interest rate risk. 3) Cash Equivalents -The quality ratings of short term paper purchased individually by the managers should be "P-I" by Moody s or "A-1" by Standard and Poor's. Diversified, commingled money market funds or Short-Term Investment Funds (STIF) which are registered with the Securities and Exchange Commission or are under the management of and supervision of the Custodian may also be utilized. 4) Prohibited Investments -In addition to the preceding general quality guidelines, the following categories of securities or security transactions are not permissible for investment without the Investment Committee's prior written approval: a) Short sales b) Put and Call Options c) Margin purchases or lending or borrowing money d) Letter stocks, private placements, or direct placements e) Restricted stocks, and nominally or closely held public issues for which the market IS severely restricted or thinly traded f) Commodities or futures, or options on futures 13 Page

14 g) Warrants h) Equity securities of any company which have a record of less than three years continuous operation, including the operation of any predecessor i) Foreign equity securities not listed on one of the major U.S. exchanges, including NASDAQ j) Bonds and cash equivalents denominated in foreign currencies or securities of foreign issuers including foreign financial institutions (American Depository Receipts or Canadian Issues denominated in U.S. dollars are allowed) k) Volatile derivative or synthetic instruments, specifically Interest Only Strips (IOs), Principal Only Strips (POs), Residuals, Accrual Bonds, Z Bonds, Accretion Bonds, Inverse Floaters, and any other derivative securities or strategies that do not comply with the basic investment objectives of this policy, which emphasizes the preservation of principal consistent with conservative asset growth. Specifically prohibited are securities whose characteristics as implemented by the manager include potentially high price volatility and whose returns are speculative or leveraged (when considered together with liquid/short term securities positions) or whose marketability may be severely limited l) Direct real estate or mortgage investments m) Securities of the investment manager, the custodian/trustee, their parent or subsidiaries (excluding Money Market Funds) n) Security loans IN WITNESS WHEREOF, the Trustees of the Florida School for the Deaf and the Blind have hereunto subscribed their names, in the City of St. Augustine, Florida, on this, the 30th day of May, If you need help with... Contact... Interpreting the policy Training Comptroller Comptroller III. Applicability and Authority This policy supersedes Use of Endowment Funds OPP 1.12, dated 05/20/2013. The Comptroller is the campus authority for this policy. This policy was reviewed and approved by FSDB President, Dr. Jeanne Glidden Prickett, on 05/30/2014. APPROVED: {Signature} 05/30/2014 Jeanne Glidden Prickett, EdD, President Date 14 Page

15 AUTHORITY: Florida Statutes LAW(s) IMPLEMENTED: Florida Statutes (4)(d) HISTORY: NEW: 12/04/1984 REVISED: 12/14/84, 12/9/93, 11/20/02, 1/19/07, 10/6/07, 11/10/08, 2/24/09, 12/11/09, 1/22/10, 10/17/2011, 5/20/13, 5/30/ Page