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CITY COUNCIL AGENDA ITEM NO. 5


Meeting Date: May 13, 2008

Subject/Title: Adopt a Resolution increasing the amount authorized to be spent with Public Financial Management for the 2007/08 fiscal year by $15,000 for a total amount not-to-exceed $165,000.

Prepared by: Kerry Breen, Business Services Manager

Submitted by: Pamela Ehler, Director of Finance and Information Systems


RECOMMENDATION
Adopt a Resolution increasing the amount authorized to be spent with Public Financial Management for the 2007/08 fiscal year by $15,000 for a total amount not-to-exceed $165,000.

PREVIOUS ACTION
On February 13, 2007, by Resolution No. 2007-26 City Council approved an agreement with Public Financial Management ("PFM"), the City’s investment services company.

On July 24, 2007, by Resolution No. 2007-167 City Council approved a total not-to-exceed amount of $150,000 for PFM.

BACKGROUND
PFM charges the City based on the average total dollar value of the City’s investment portfolio under their management. Since the amount of fees paid by the City is dependant on the size of the investment portfolio, the existing contract with PFM does not specify a specific dollar amount to be charged. Rather, the contract calls for the fees to be calculated based on the total investments under management.

When staff brought the not-to-exceed amount of $150,000 for fiscal year 2007/08 to Council in July, staff believed that the City’s total investment portfolio was not likely to increase from the previous year when $147,174 in costs were charged back to the City.

The City’s balance under management with PFM, includes a pooling from multiple City sources including General Funds, Enterprises, Redevelopment and CIP. The average balance under management with PFM has increased from $151.3M to $155.9M over the past 6 months. As a result, there will be increased investment management expenses during this fiscal year. Staff is requesting approval of an additional $15,000 for investment management services with PFM, for a total not-to-exceed amount of $165,000.

FISCAL IMPACT
Staff anticipates spending up to an additional $15,000 on investment management services. These charges are distributed among the City’s Funds based on a proportionate share of their cash balances. No budget amendment is required and any additional costs will be paid through the existing 2007/08 Operating Budget.

Attachment:
Resolution


RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD INCREASING THE AMOUNT AUTHORIZED TO BE SPENT WITH PUBLIC FINANCIAL MANAGEMENT FOR THE 2007/08 YEAR BY $15,000 FOR A TOTAL AMOUNT NOT-TO-EXCEED $165,000

WHEREAS, On February 13, 2007, by Resolution No. 2007-26 City Council approved an agreement with Public Financial Management ("PFM"), the City’s investment services company; and

WHEREAS, On July 24, 2007, by Resolution No. 2007-167 City Council approved a total not-to-exceed amount of $150,000 for PFM; and

WHEREAS the City’s average investment balance under management with PFM has increased from $151.3M to $155.9M over the past 6 months.

WHEREAS, Staff is requesting approval of an additional $15,000 for investment management services with PFM, for a total not-to-exceed amount of $165,000.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby authorize an increase in the amount to be spent with Public Financial Management for the 2007/08 year by $15,000 for a total amount not-to exceed $165,000.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 13th day of May, 2008 by the following vote:
 
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