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Title:
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JOINT ITEM before the City Council and Redevelopment Agency: Approval of a Professional Services Agreement with MBIA Asset Management for Professional Review of the City’s/Agency’s Investment Policy, Practices and Procedures.
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City of Culver City, California
City Council and Redevelopment Agency Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council and Redevelopment Agency approve a
professional services agreement with MBIA Asset Management (MBIA) for
professional review of the City’s and Agency’s investment policies, practices and
procedures.
BACKGROUND:
During the April 2006 election, Culver City voters approved a change in the City
Charter where both the City Treasurer’s and City Clerk’s elected status will cease as
of April 9, 2008. Until that date, the elected City Treasurer remains responsible for
the investment of the City and Redevelopment Agency’s funds.
The City Council approved the creation of a Finance Department with a Chief
Financial Officer (CFO) as head of the department, to combine the functions
currently performed in the City Treasurer’s Office and the City Controller’s Office.
The Chief Financial Officer will assume the duties of the City Treasurer on April 9,
2008, which will include the investment activities for both the City and
Redevelopment Agency.
In preparation for this transition, the City Council and Redevelopment Agency Board
approved the release of a Request for Proposal (RFP) on December 17, 2007, for
the professional review of the City’s and Redevelopment Agency’s investment
policies, practices and procedures. The RFP was sent to seven (7) firms, and five
(5) of these firms responded with proposals.
Meeting Date: 2/4/08 Item Number: J-1
AGENDA ITEM: JOINT ITEM – Approval of a Professional Services Agreement
with MBIA Asset Management for Professional Review of the City’s and Agency’s
Investment Policies, Practices and Procedures.
Contact Person/Dept.: Mary V. Noller
Budget & Finance
Phone Number: (310) 253-6012
Fiscal Impact: Yes [ X ] No [ ] General Fund: Yes [ X ] No [ ]
Public Hearing: [ ] Action Item: [ ] Attachments: [ ]
Public Notification:
Master Notification List, 01/30/08; Mr. David W. Witthohn, Director, MBIA Asset
Management, 01/29/08
Department Approval:
Jeff Muir (01/28/08)
Sol Blumenfeld (01/28/08)
City Attorney Approval:
Carol Schwab (by H. Baker) (01/30/08)
Fiscal Impact Review:
Jeff Muir (01/30/08)
City Manager Approval:
Jerry B. Fulwood (01/30/2008) City of Culver City, California
City Council and Redevelopment Agency Agenda Item Report
The scope of services within the RFP includes review of the City’s and Agency’s
investment policies and general internal practices in placing investments;
identification of investment objectives; an historical portfolio performance review;
review of the City’s and Agency’s methods used to evaluate performance of the
portfolio and the effectiveness of the strategies currently in use; policy and
procedure recommendations; and identification of and present strategies to assure
that the City’s and Agency’s investment objectives are aligned with their policies and
procedures.
DISCUSSION:
The responding firms are listed below in order from lowest to highest proposed fee,
with one firm listed as “N/A:”
Firm Cost of Services
Fieldman Rolapp Financial Services $7,500
MBIA Asset Management $9,000
Chandler Asset Management $12,000
Davidson Fixed Income Management $25,000
Finance 500 N/A
The proposals were evaluated by staff, which included the City Manager, Assistant
City Manager, Chief Financial Officer, Budget Division Manager, and Sr.
Management Analyst. One proposal was deemed not to be responsive to the RFP,
and was not reviewed. Staff met with the City Council Audit Committee and
presented their recommendation.
Based on staff’s and the Audit Committee’s review of the proposals, it is
recommended that the City Council approve a professional services agreement with
MBIA in an amount not-to-exceed $9,000 for professional review services of the
City’s and Agency’s investment programs. The proposal submitted by MBIA was the
most qualified and responsive in meeting the needs of the City and Agency for this
service, and the reference checks of other agencies that have used MBIA were
extremely positive. MBIA was thorough in the responses to the RFP, and the firm’s
staff assigned to work with the City and Agency is experienced and knowledgeable
with public sector investment practices and requirements.
City of Culver City, California
City Council and Redevelopment Agency Agenda Item Report
FISCAL ANALYSIS:
Funding was approved in the fiscal 2007-08 City Council Audit Services Account
(10110000.6101000) for professional services related to various audit needs
associated with the Chief Financial Officer transition. The approval of this
professional services agreement fits the requirements to utilize this funding.
MOTION:
That the City Council:
1. Approve a professional services agreement with MBIA Asset Management in an
amount not-to-exceed $9,000; and
2. Authorize the City Attorney to review/prepare the necessary documents and
authorize the City Manager to execute those documents on behalf of the City.
That the Redevelopment Agency:
1. Approve a professional services agreement with MBIA Asset Management in an
amount not-to-exceed $9,000; and,
2. Authorize the Agency General Counsel to review/prepare the necessary
documents and authorize the Executive Director to execute those documents on
behalf of the Agency.