City of Northville, Michigan Request for Proposal Investment Management Services

Transcription

1 City of Northville, Michigan Request for Proposal Investment Management Services SUBMISSION OF PROPOSALS Proposals must be submitted in a sealed envelope labeled Investment Management Services Proposal to: Ms. Dianne Massa City Clerk 215 W. Main Street Northville, Michigan Proposals will be received until 10:00 a.m. local prevailing time on Thursday, May 31, No late proposals will be accepted or opened.

2 The City of Northville is soliciting proposals from interested firms for the provision of investment management services for the operating funds. The average daily balance of the invested assets is approximately $12,000,000.. The City of Northville is a home rule city, and the investment of City funds is guided by the applicable State statutes. The City has a population of approximately 6,000 and covers 2.2 square miles. It is a Council-Manager form of government. A copy of the City's Investment Policy is attached for your information. To be considered by the City, proposing investment advisors must meet the following: a. Minimum Qualifications i. Must be registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940 and be properly registered to provide investment advisory services in the state of Michigan. ii. Must have a minimum of ten (10) years of experience managing fixed income assets for public sector clients and other political subdivisions. iii. Must have experience managing portfolios of fixed income assets in excess of $10 million. iv. Must have assets under management (AUM) of at least $500 million. v. Must assign a portfolio manager to the City account with a minimum of ten (10) years of experience in providing investment and cash management services to public entities. vi. Must be familiar with all applicable Michigan state statutes with regard to qualified investments for public entities as well as the current municipal investing regulations (P.A. 20 as amended) vii. Must have errors & omissions and fidelity (crime) insurance coverage of at least $5 million. b. Scope of Services i. Manage approximately $12 million of operating funds (non-pension) in accordance with the City s investment parameters and in compliance with P.A. 20 as amended. ii. Execute securities purchases and/or sales with approved broker/dealers in accordance with the City s approved investment policy. iii. Provide monthly reports which include detailed portfolio holdings including accrued interest, amortized cost security ratings and market values, transaction details, principal and interest payments, earnings, and investment portfolio summary statistics. 2

3 iv. Provide quarterly investment reports including a description of market conditions, investment strategies employed, performance, and suggested changes to investment strategy. v. Review investment strategies and performance with City s Finance team on a quarterly basis. vi. Annually, review the investment policy and provide written comments and recommended changes. CRITERIA FOR SELECTION 1. Understanding of scope of assignment. 2. Experience and qualifications of firm and individuals assigned. 3. Recommended approach to management of the City's portfolio. 4. Familiarity with Federal arbitrage restrictions and state investment and reporting requirements. 5. Fees. TENTATIVE SELECTION TIMETABLE May 31, 2018 Sealed Proposals due by 10:00 a.m. EST May 31, 2018 June 12, 2018 Evaluation of Proposals June 18, 2018 June 22, 2018 Selected Firm Interviews, if necessary July 16, 2018 City Council considers selection of investment manager 3

4 FORMAT FOR PROPOSALS Please format your response to this RFP in the following manner: I. Organization A. Describe organization, date founded, ownership and other business affiliations (please provide number and location of affiliated offices). B. Describe your firm's revenue sources (e.g., investment management, institutional research, etc.) and comment on your firm's financial condition. C. Describe any SEC censure or litigation involving your organization at any time. D. Please disclose all conflicts of interest your organization has in serving as an investment consultant. E. Please disclose whether your firm has any financial or other affiliation with brokerage firms, banks, insurance companies, investment banking firms, or money management firms. If so, how does your firm protect against conflict of interest? F. Describe any mergers, acquisitions, and/or name changes which your organization had in the last ten years. Do you anticipate any near-term changes in your organization s basic ownership structure or any other significant changes in your organization? If so, please explain. G. Please provide a copy of your ADV Form, Part I and II. II. Personnel A. Identify the number of professionals employed by your firm, by classification. B. Provide biographical information on investment professionals that will be involved in the decision-making process for our portfolio. C. Please describe your firm's compensation policies for investment professionals. D. Specify the number of key professionals who have left or joined your firm during 2016, 2017, and

5 III. Assets Under Management A. Please provide the number and types of accounts, total asset value and composition of portfolios currently being managed. B. Provide the number of accounts whose portfolios consist of bond proceeds. C. Provide data on account/asset growth and other performance statistics over the past three years. IV. Philosophy/Approach A. Please describe your firm's investment philosophy for both general funds and for bond proceeds. B. Please describe the maturity concentration, quality and sectors of current accounts similar to the City. C. Do you have or would you recommend there be policy restrictions with respect to maturity, sector, quality and/or coupon? D. Describe your capabilities for tracking arbitrage in compliance with the Tax Act of 1986, including computer systems and experience. E. Describe your firm's decision-making process in terms of structure committees, membership, meeting frequency, responsibilities, integration of research ideas and portfolio management. F. Describe your research capabilities as they would pertain to the City's portfolio. V. Portfolio Management A. Are portfolio's managed by teams or one individual? B. What is the average number of accounts handled per manager? C. Primary client contact is delegated to which of your firm's professionals? D. How frequently do you recommend to meet with us? E. Describe procedures used to ensure that portfolios comply with client investment objectives, policies and bond resolutions. F. Do you have a preference on who the City utilizes as the custodian of the funds? 5

6 VI. Fees A. Please include a copy of your firm's fee schedule. 1. Please indicate whether they include custodial fees. 2. Is there a minimum annual fee? B. Please provide a statement of fees for such additional services as arbitrage rebate related services C. Are fees charged when there is no activity in the account? VII. References A. Please provide three references, including length of time managing their assets, client name, address and phone number. Preferably Michigan municipalities of similar portfolio size. B. Please provide the number of clients gained and lost during the past three years. C. Please provide a Michigan client list. VIII. Performance Reporting A. Please describe how you typically report performance. B. Are you willing to develop reporting procedures in line with our needs and objectives (i.e., monthly, so as to conform with State reporting requirements to management and governing bodies.)? D. Are confirmation of investment transactions sent directly by the broker/dealer to the client? IX. Other Services A. Describe any other related services that may be helpful for the City to consider. X. Insurance Requirements The Investment Advisor shall not commence work under this contract until they have obtained the insurance required under this paragraph, and shall keep such insurance in force during the entire life of this contract. All coverage shall be with insurance companies licensed and admitted to do business in the State of Michigan 6

7 and acceptable to the City of Northville. The requirements below should not be interpreted to limit the liability of the Investment Advisor. All deductibles and SIR s are the responsibility of the Investment Advisor. The Investment Advisor shall procure and maintain the following insurance coverage: A. Worker s Compensation Insurance including Employers Liability Coverage, in accordance with all applicable statutes of the State of Michigan. B. Commercial General Liability Insurance on an Occurrence Basis with limits of liability not less than $1,000,000 per occurrence and aggregate. Coverage shall include the following extensions: (A) Contractual Liability; (B) Products and Completed Operations; (C) Independent Contractors Coverage; (D) Broad Form General Liability Extensions or equivalent, if not already included; C. Automobile Liability including Michigan No-Fault Coverages, with limits of liability not less than $1,000,000 per occurrence, combined single limit for Bodily Injury, and Property Damage. Coverage shall include all owned vehicles, all nonowned vehicles, and all hired vehicles. D. Professional Liability in an amount not less than $5,000,000 per occurrence and $5,000,000 aggregate. If this policy is claims made form, then the contractor shall be required to keep the policy in force, or purchase tail coverage, for a minimum of 3 (three) years after the termination of this contract. E. Additional Insured: Commercial General Liability and Automobile Liability, as described above, shall include an endorsement stating the following shall be Additional Insureds: The City of Northville, all elected and appointed officials, all employees and volunteers, all boards, commissions, and/or authorities and board members, including employees and volunteers thereof. It is understood and agreed by naming the City of Northville as additional insured, coverage afforded is considered to be primary and any other insurance the City of Northville may have in effect shall be considered secondary and/or excess. F. Cancellation Notice: All policies, as described above, shall include an endorsement stating that is it understood and agreed Thirty (30) days, Ten (10) days for nonpayment of premium, Advance Written Notice of Cancellation, Non-Renewal, 7

8 Reduction, and/or Material Change shall be sent to: (The City of Northville, City Clerk, 215 W. Main Street, Northville, MI 48167). G. Proof of Insurance Coverage: The Investment Advisor shall provide the City of Northville at the time that the contracts are returned by him/her for execution, a Certificate of Insurance as well as the required endorsements. In lieu of required endorsements, if applicable, a copy of the policy sections where coverage is provided for additional insured and cancellation notice would be acceptable. If any of the above coverages expire during the term of this contract, the Investment Advisor shall deliver renewal certificates and endorsements to the City of Northville at least ten (10) days prior to the expiration date. XI. Term The City intends to enter into a contract with the selected firm(s) for a three year term, with optional one-year renewals. The total contract term is not to exceed a maximum of ten (10) years and is subject to annual review and satisfactory negotiation of terms. XII. Questions Pre-submittal questions should be directed to Sandi Wiktorowski, Finance Director/Treasurer at swiktorowski@ci.northville.mi.us. Prior to RFP submission, every attempt will be made to distribute the questions and related answers to all interested parties via . Please be sure contact the Finance Director with your name and address if you intend to respond to this proposal so that you may receive this information. The City reserves the right to reject any and all proposals, or to make multiple appointments. 8