CITY OF MONTPELIER REQUEST FOR PROPOSALS FOR PROFESSIONAL INVESTMENT ADVISORY SERVICES CITY OF MONTPELIER FINANCE OFFICE 39 Main Street - STE 6 Montpelier, Vermont 05602 1
CITY OF MONTPELIER, VERMONT REQUEST FOR PROPOSAL PROFESSIONAL INVESTMENT ADVISORY SERVICES The CITY OF MONTPELIER, VERMONT is requesting proposals from qualified, independent, Investment Advisors, licensed to practice in the State of Vermont, to provide investment advisory service for a portion of City investable funds. Specifications for the proposal are included in the sections below. I. Information Provided to Proposer A. General Information The City of Montpelier, Vermont has several funds that it manages. This request for proposals is specifically seeking an Investment Advisors to manage funds for the benefit the Montpelier Senior Activity Center (MSAC). The MSAC provides services to approximately 900 community members. The City funds for the MSAC are approximately $401,000. The Investment Committee anticipates that there will be future opportunities for Investment Advisors to respond to other funds to be managed from the City. B. Dates, Times and Locations DATE: FRIDAY, JANUARY 8, 2016 QUESTIONS DUE BY: FRIDAY, JANUARY 15, 2016 DATE OF RESPONSE OPENING: MONDAY, JANUARY 25, 2016 TIME OF RESPONSE OPENING: LOCATION OF RESPONSE OPENING: VT 4:00 P.M. 39 Main Street - STE 6, Montpelier, 2
C. Contact Name for Questions Before January 21, 2016 Sandra J. Gallup, Finance Director, City of Montpelier 39 Main Street STE 6 Montpelier, Vermont 05602 By Email: sgallup@montpelier-vt.org By Fax: 802-223-9529 After January 21, 2016 Tom Golonka, Investment Committee, City of Montpelier By Email: tgolonka@montpelier-vt.org D. Response Instructions All responses must be e-mailed to Sandy Pitonyak, City Manager's Office: spitonyak@montpelier-vt.org Telephone: 223-9502 RESPONSE E-MAILS MUST BE CLEARLY MARKED WITH THE SUBJECT LINE 'INVESTMENT COMMITTEE'. All responders are hereby notified that the responses must be in the Office of the Finance Director by the time of the response opening. Responders are cautioned that it is their responsibility to originate the sending of responses in sufficient time to ensure receipt by the Office of the Finance Director prior to the time of the response opening. Responses not in possession of the Office of the Finance Director at the time of the response opening will not be considered. The Office of the Finance Director may, for cause, change the date and/or time of the response opening. If a change is made, the Office of the Finance Director will make a reasonable effort to inform all responders. All responses will be publicly opened. Any interested party may attend the response opening. Response results may be requested in writing and are available once an award has been made. II. Executive Summary The Montpelier Investment Committee, acting on behalf of the Montpelier City Council, is seeking an Investment Advisor to manage funds for the benefit the Montpelier Senior Activity Center (MSAC). The investment objective is to preserve principle and maintain competitive risk-adjusted returns. 3
III. Minimum Responder Qualifications A. The Investment Advisor must meet all of the following minimum qualifications to be given further consideration. Failure to satisfy each of the minimum qualifications will result in the immediate rejection of the response. B. The proposed Investment Advisor must have at least five (5) years of experience managing funds. C. The Investment Advisor must be SEC-registered or exempt from registration with the nature of the exemption provided. IV. Scope of Services The City of Montpelier Investment Committee, acting on behalf of the City Council is seeking investment advisory services to manage funds for the benefit the Montpelier Senior Activity Center (MSAC). The City funds for the MSAC are approximately $401,000. The investment objective is to preserve principle and maintain competitive risk-adjusted returns. Attachment 1 to this RFP is the Senior Center Fund Addendum for City of Montpelier Investment Policy. This attachment provides more details of the investment objectives for the funds. Attachment 2 is questions relating to Environmental, Social and Governance issues in the investment advisory services. Please address your responses to these questions in the Description of Investment Advisory Services Section of the response. The selected Investment Advisor must have the capabilities to interact with City of Montpelier Investment Committee. The investment advisor shall act as a fiduciary to the City of Montpelier and discharge its duties solely in the best interest of the City. A. Documents, Reports and Other All documents, reports, computer software, paper and other materials ("Papers"), except for those generally available to the public, which are provided by the Investment Committee, and any copies of any such Papers that may be reproduced or otherwise procured and all information contained in such Papers, shall be deemed and shall remain property exclusively of the City and shall be available to the Investment Committee upon their request. No Papers may be reproduced or otherwise used by for purposes unrelated to the subsequent contract. 4
B. Conflicts of Interest and Independence Responders shall identify all existing or potential conflicts of interest that would prevent the responder from fully performing the tasks described in this RFP. Such disclosure will be a continuing requirement subsequent to award of a Contract and for the life of the Contract. In all matters relating to work required by the Investment Committee the responder shall remain free from personal and external impediments to independence, and verify their organization is independent and will maintain an independent attitude and appearance with respect to the services required. C. Insurance Coverage The Investment Advisor shall maintain an errors and omissions insurance policy, which provides a prudent amount of coverage for the negligent acts or omissions or intentional misconduct of any shareholder, employee or agents thereof. Proof oflnsurance shall be included in the RFP reply. IV. Responding and Contractual Requirements A. Additional Information The Investment Committee reserves the right to obtain clarification or additional information necessary to properly evaluate a proposal. Responders may be asked to give a verbal presentation. Failure of responder to address a request for additional information or clarification could result in rejection of that response. The Investment Committee reserves the right to accept or reject any and all responses, in whole or in part, with or without cause. The Investment Committee reserves the right to make an award without further discussion of the proposal submitted. The Investment Committee does not guarantee that an award will be made as a result of this RFP B. Incurred Expenses The cost of developing and submitting the proposal is entirely the responsibility of the responder. This includes costs to determine the nature of this engagement, preparation of the proposal, submitting the proposal, negotiating for the contract, and other costs associated with this RFP. C. Pricing The responder must be aware that the City wants the most effective combination of price, performance, and value possible. Pricing must be a firm flat fixed price or percentage of assets under management specified in basis points. There may be no best and final offer procedure. Therefore, the proposal shall be submitted on the most favorable terms that the responder can provide. 5
D. Revisions to Solicitation The Investment Committee reserves the right to modify requirements should a responder inquiry identify a change that is in the best interest of the City. Such modifications ( or amendments) to the RFP will be communicated to the responders via e-mail. E. Contract Duration The successful responder to this RFP can expect a contract with the City, for a term of one year, with the option of extending the Contract for successive periods. Any extension will require a contract amendment. V. Proposal Preparation This section sets forth the format that must be followed by responders in developing their response to this RFP. The instructio'ns provided and format requested for the response are designed to ensure a clear and complete understanding and comprehensive evaluation of each proposal. There is no intent to limit the content or to inhibit a presentation other than in the responder's favor. A. Proposal Acceptance The responder is encouraged to include additional information or data as may be appropriate or to offer alternate solutions. However, the responder should not exclude from their proposal any portion requested in this document. Proposals that vary materially from this prescribed format may be judged non-compliant and withdrawn from consideration. The responder must understand that the Investment Committee will view the degree of compliance with this section as an indication of the degree of cooperation to be expected from the responder in working with the Investment Committee after the contract is awarded. B. Outline of Proposal Contents a. Title page b. Cover letter c. Responder information d. References provided e. Description of investment advisory services f. Proposed fee schedule g. Proof of Insurance h. Example(s) of Financial Reporting Documentation to be provided to Investment Committee for investment monitoring. i. Additional information not specifically requested 6
VI. Responder Evaluation and Selection Criteria The Investment Committee will conduct a fair and impartial evaluation of the proposals received in response to this RFP. Fees and compensation will be an important factor in the evaluation of responses. However, the Investment Committee is not required to select the low-cost responder, but may select the response that demonstrates the "best value" overall, including proposed alternatives that meet the objectives ofthis RFP. The Investment Committee reserves the right to negotiate a change in any element of contract performance or cost identified in the RFP. The Investment Committee reserves the right to seek clarification of any proposal submitted, request oral presentations and to select the proposal considered to best promote the public interest. 7
ATTACHMENT 1 Senior Center Fund Addendum for City of Montpelier Investment Policy Drafted October 5, 2015 The Senior Center Finance Committee, Advisory Council and Staff members have weighed in on the following policy addendum to address the Senior Center fund. The objectives of the Senior Center Fund are: 1) To serve as the fund for financial gifts made specifically to the Senior Center (Montpelier Senior Activity Center) that are not solicited for or specified for operating expenses of the current fiscal year. 2) To support the Senior Center's ongoing annual operating budget with a low (such as 4%) spending rate. 3) To serve as a long-term investment fund for long-range needs of the senior center. 4) To provide financial support for a potential large capital project, such as a new facility, with strong community support and Council approval. Risk tolerance of the Senior Center Fund is requested to be low to moderate overall. For an amount of the fund principal that may be invested for a longer time, higher risk may be acceptable, and the eventual fund managers will advise the City, Investment Committee, and Senior Center stakeholders on allocations. 8
ATTACHMENT 2 1. Does your firm have a policy that incorporates Environmental, Social and Governance (ESG) issues into the investment decision making process? 2. What is your firm's position on the investor perspective that environmental, social and governance (ESG) factors are risk factors which can have a material impact on investment performance. Does your firm support the concept that companies can enhance value and long-term profitability by incorporating ESG factors into their strategic plans? 3. Does your firm prepare and issue, periodically, ESG/sustainability performance reports? Are such reports made available to clients? 4. Which ESG issues do you assess in company evaluation and how do you assess their relevance to the company's long-term business prospects? Examples include, but are not limited to, corporate governance structure, climate change, supply chain integrity, labor practices, and human resource management. 5. Will you be able to quantify and provide performance reports that address the following specific ESG goals? 6. Does your firm allocate resources, including an internal staff and/or external services, to review and evaluate sustainability reports of companies whose securities are held in client accounts and/or are potential investments under consideration? 9