AGENDA CAPTION:
Title
Consider approval of Resolution 2025-138R, approving a contract with Meeder Public Funds Inc. for investment management services over a period of two years, with fees in the amount of three basis points (0.03%) of assets, to include securities and bonds under management in the custodial account; authorizing the City Manager, or her designee, to execute the contract on behalf of the city; and declaring an effective date.
Body
Meeting date: August 5, 2025
Department: Finance Department
Amount & Source of Funding
Funds Required: Based on Portfolio’s Managed Investments
Account Number: Multiple Accounts - 52230
Funds Available: Yes
Account Name: Professional Services
Fiscal Note:
Prior Council Action: No prior Council action; City internal staff has been managing the City’s investment portfolio previously.
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Background Information:
The City contracted with an investment management service firm, Patterson and Associates, through fiscal year 2012. The City chose not to renew the agreement because the low-interest rate environment at the time made it cost prohibitive. Since then, the City has had internal staff manage the investment accounts. Interest rates have changed significantly over the past few years, and the City would benefit from the expertise of an investment management firm.
On May 1, 2025, the City received five (5) proposals in response to Request for Proposals (RFP) 2025-100 for Investment Management Services. An evaluation committee comprised of City staff from the Finance Department thoroughly assessed each proposal and determined the most qualified and best value for contract award to be Meeder Public Funds, Inc., located in Austin, Texas.
The contract will assist and provide recommendations to city staff on managing the City’s investment portfolio to maximize interest earnings. They will also provide the following services:
• Market updates
• Cash flow analysis
• Compliance monitoring
• Required reporting
• Investment Policy Review
• Broker/Dealer Review
• Reconciliations
• Bank Consulting Services
This contract for Investment Management Services will be valid for an initial two-year period. Any renewal or extension of this contract must be approved by City Council. The two-year contract is for managing the City’s investment portfolio that is currently over $400,000,000. Meeder’s price proposal is 3 basis points (0.03%) of assets (securities/bonds) under management in a custodial account. In Fiscal Year 2024, interest revenue from securities and bonds totaled $7.3 million, which was a 4.84% rate of return.
As of March 2025, the current total of securities and bonds in the city’s portfolio is $225.2 million, which is an estimated annual contract cost of $67,560 at 3 basis points (0.03%). The amount of investments in securities and bonds fluctuates throughout the fiscal year based on property tax revenue, debt issuance proceeds, capital improvement projects, and market conditions. The annual cost will also fluctuate based on the securities and bonds held in the custodial account.
Council Committee, Board/Commission Action:
The Finance and Audit committee was informed of the RFP for selecting an investment management services firm at the May 27th meeting.
Alternatives:
1. Approve the contract for Meeder Public Funds
2. Do not approve the contract and internal staff continue managing the investment portfolio.
Recommendation:
City Council approve the 2-year contract with Meeder Public Funds for Investment Management Services in the amount of 3 basis points (0.03%) of assets (securities/bonds) under management in the custodial account.