RFP 13-156 FTN Fianancial Main Street Advisors

131 Pages·2013·3.31 MB·English

RFP 13-156

INVESTMENT ADVISORY SERVICES

Return in sealed envelope with Proposal
PROJECT INFORMATION

General Description
The intent of this Request for Proposals is to establish a Professional Services Agreement
contract with a responsible firm to furnish Investment Advisory Services in accordance with the
terms, conditions, and specifications contained herein.

Project Background
The Department of Finance and Administration recently completed an operational review of the
Treasury function of the City. One of the major findings of the review was that the Treasury unit
has no backup capability in investment management, which is a critical core function. As a
result, the review recommended that the City outsource portions of the investment management
function.

Description of the Investment Portfolio
The portfolio is comprised of operating funds of separate organizations (funds) within the City.
The investments are maintained in two safekeeping accounts at US Bank. One account is for the
City Health Care Trust and the other account is for all other City investments. Investment
reports are available at http://dfa.cityofboise.org/financial-management/investment-portfolio/.
The City’s investment policies are available on the internet at
http://dfa.cityofboise.org/financial-management/financial-policies/#.

Project Objectives Under this contract, the City’s objectives are to:
Maintain full control over investment purchases and sales through a non-discretionary
arrangement where the city approves individual transactions

• Continue to contract for independent 3rd party safekeeping and custody services.

• Maximize incremental income of its portfolio

• Provide for operation efficiency and information flow on the portfolio

• Improve investment capabilities.

Services to be Provided The selected consulting firm is expected to provide comprehensive
investment consulting and portfolio management services including:

• Assist the City with cash flow/maturity analysis
• Provide credit analysis of investment instruments in the City’s portfolio
• Provide monthly/quarterly/annual reports on all funds
• Evaluate market risk and develop strategies that minimize the impact on the City’s
portfolio
• Provide assurance of portfolio compliance with applicable policies and laws
• Establish appropriate performance benchmarks
• Review the City’s investment policy and recommend appropriate changes.
• Ensure City’s portfolio structure matches the City’s objectives.

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RFP 13-156
INVESTMENT ADVISORY SERVICES
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Mandatory Requirements

The City of Boise will accept proposals from firms that meet the minimum requirements listed
below.

A. The investment consulting firm must be a registered advisor under the Investment
Company Act of 1940.

B. The investment consulting firm must have provided for at least five (5) years as of
December 31, 2012, investment consulting services comparable to the duties contained in
this RFP to at least three (3) public or non-profit entities, each of which must have had at
least $70 million in current assets.

C. The investment consulting firm must be able to maintain a satisfactory data processing
interface with the City of Boise’s custodian, US Bank, on-line connection or other
electronic means, at the firm’s expense, for the purposes of compiling all required
reviews and reports.

D. The investment consulting firm must agree to disclose all potential, current conflicts of
interest as well as potential conflicts as they might occur, and annually disclose all
sources of revenue from sources and affiliations other than investment consulting.

E. The investment consulting firm must be directly responsible for the management of the
account, and all personnel responsible for working on the account must be employees of
the firm.

F. The investment consulting firm must not have, nor potentially have, a material conflict of
interest to include, but not limited to: the Mayor of the City of Boise, City Council
members, staff, actuary, auditor, investment managers, or other consultants.

G. The investment advisory firm’s investment practices and procedures must comply with
state law and the city’s written investment policy. The investment advisory firm will be
expected to perform to the Prudent Expert Standard.
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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City Background Information

The City of Boise is the third largest metropolitan area in the Pacific Northwest and the capital of
the State of Idaho. Boise is the hub of commerce, banking and government for the state. The City
encompasses approximately 64 square miles with a population of approximately 206,000. The
City employs approximately 1,450 full-time and 390 part-time staff, and is governed by a Mayor
and six Councilors. City Departments include: Airport, Arts & History, Finance &
Administration, Fire, Human Resources, Information Technology, Legal, Library, Mayor’s
Office, Parks & Recreation, Planning & Development, Police, and Public Works.

The City has an annual budget of over $350 million. City operations funding is derived primarily
from property taxes, user fees, grants, and contracts. The City’s investment portfolio is
approximately $150 million with $50 million managed for short term needs.

Please refer to the City’s website at www.cityofboise.org for more information.
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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BIDDER INFORMATION

Name of Business: FTN Financial Main Street Advisors LLC
Please print or type
Address: 10655 Park Run Drive, Suite 120
City: Las Vegas
State: NV Zip Code: 89144
Phone No.: [phone]
Federal Tax ID: 731719247
Signature:
Printed Name: Richard Phillips
E-Mail [email protected]
Title: President
Date: 6-21-13

Significant Local Economic Presence: Yes; X No

(Misstatement of local presence may result in disqualification of the bid or proposal by the City
Council).

Provide local address if different than mailing address.

Proposer Acknowledge Receipt of the Following Addenda:

Addendum # Date
1. 6-3-13
2. 6-5-13
3. 6-21-13
4.

The above signed proposes to provide services in accordance with the specifications for RFP 13-
156, INVESTMENT ADVISORY SERVICES, Boise Idaho and to bind themselves, on the
acceptance of this proposal, to enter into and execute a contract, of which this proposal, terms
and conditions, and specifications will be part.

The above signed acknowledges the rights reserved by the City to accept or reject any or all
proposals as may appear to be in the best interest of the City. The undersigned further agrees, if
awarded a contract, to execute and deliver the same to the City within five (5) working days after
receipt of an executed contract and to submit there with all required insurance certificates.

Proposal Guarantee

Number of days price will be guaranteed: 90

(Request minimum of 90 days)
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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PUBLIC AGENCY CLAUSE

Bid prices will be made available to other "Public Agencies", including agencies of the State of
Idaho, and as defined in Section 67-2327 of the Idaho Code, which reads: "Public Agency"
means any city or political subdivision of this state including, but not limited to counties; school
districts; highway districts; port authorities; instruments of counties; cities or any political
subdivision created under the laws of the State of Idaho. It will be the responsibility of the
"Public Agency" to independently contract with the vendor and/or comply with any other
applicable provisions of Idaho Code governing public contracts. Typically, other municipalities
buy from our agreement.

Accept Public Agency Clause? Yes X
No
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INVESTMENT ADVISORY SERVICES
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Please provide responses for the following items in clear, concise and well indexed format.

SECTION 1 - FIRM BACKGROUND AND ORGANIZATION (100 points)

Attached
Item Description
Y/N
1 Describe the organization, date founded, and ownership of your firm. Has your firm experienced a material change in Y
organizational structure, ownership or management during the past three years and, if so, please describe.
2 Describe any other business affiliations (e.g., subsidiaries, joint ventures, "soft dollar" arrangements with Y
brokers). Describe your firm's policy on soft dollars.
3 Describe the firm's sources of revenue, categorized by retail and institutional accounts. Y
4 Is your firm a registered investment advisor under the Investment Advisor's Act of 1940, as amended? Y
5 Describe any SEC, or FINRA censure or litigation involving your firm or its employees within the past three years. Y
6 Did you, or will you, pay a finder's fee to any third party for business related to this account? Y
Specify the recipients of any fee.
7 Outline the errors and omissions (professional liability) and fidelity bond coverage your firm carries. Provide a valid, Y
current Certificate of Insurance.
8 Identify the types of accounts primarily sought by your firm. Y

SECTION 2 - EXPERIENCE (100 points)

Attached
Item Description
Y/N
1 Describe your firm's experience in managing fixed income portfolios for public funds and governmental entities. Y
2 What is your firm's experience in developing policies and portfolio management guidelines for government portfolios? Y
3 Does your firm act as a broker or as a primary dealer in securities or receive any other form of additional compensation Y
(including soft dollars) for the client transactions aside from the direct fee paid by clients?
4 Provide the number and types of accounts, total asset value, and composition of portfolios currently being managed by Y
your firm.
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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SECTION 3 - PERSONNEL (100 points)

Attached
Item Description
Y/N
1 Identify and provide background information on the key person or personnel who take the most active role(s) in the Y
administration and management of the firm.
2 Identify the investment professionals (portfolio managers, analysts, and researchers) employed by your firm, by Y
classification, and specify the average number of accounts handled by portfolio managers. Are there any established
limits on number of accounts or assets under management?
3 Provide resumes and biographical information on key investment professionals that will be directly involved in the Y
decision-making process for the City’s portfolio. Include the number of years at your firm, total years of experience,
and professional licenses and designations. Include the number of accounts managed and any limits on this.
4 Describe your firm’s training and education efforts to keep portfolio managers informed of developments relevant to Y
government investment managers.
5 Has there been any turnover of professional staff in the firm in the last three years assigned to public sector clients? Y

SECTION 4 - ASSETS UNDER MANAGEMENT (200 points)

Attached
Item Description
Y/N
1 Summarize your institutional investment assets under management by category as shown below for your latest Y
reporting period
Type Governmental Non-Governmental
Operating/ Bond Funds $ $
Pension Funds $ $
Foundations $ $
Equity Funds $ $
Total $ $
2 Summarize your assets under management (institutional only) over the past five years and average assets per client. Y
3 Provide relevant performance statistics on a comparable portfolio and compare with industry averages or benchmarks Y
for the last one, three, five, ten year periods and/or since inception.
4 How many accounts have you gained in the last 12 months? How many accounts have been lost in the last 12 months Y
and why?
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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SECTION 5 - INVESTMENT MANAGEMENT APPROACH AND DISCIPLINE (200 points)

Attached
Item Description
Y/N
1 Briefly describe your firm's investment management philosophy, including your approach to managing governmental Y
portfolios.
2 How frequently do you formulate and review fixed income strategy? How is that carried out and who is involved? Y
3 What are the primary strategies for adding value to portfolios (e.g., market timing, credit research, trading)? Y
4 How are portfolios managed (e.g, by team, individual manager)? What is the back-up when the manager is away? Y
5 What oversight is provided to portfolio managers? Y
6 Describe your firm's in-house technical and research capabilities. Are outside sources used by the firm on a regular Y
basis? Describe your credit review process. Does your firm assign credit research to specialists?
7 What percentage of your research is conducted in-house? Describe your research capability. Y
8 What technical analysis (if any) do you use? Y
9 What role does interest-rate forecasting play in your portfolio management strategy? Y
10 How will you handle fluctuating cash flows and the cash forecasting process? Y
11 Describe the ongoing daily investment procedures proposed for the City of Boise including procedures for trades, Y
security choice, controls, etc., and how you will provide liquidity.
12 How frequently would you suggest your staff meet with the City’s staff? Who will attend these meetings? Y

SECTION 6 - REPORTING (200 points)

Attached
Item Description
Y/N
1 Describe the investment accounting and reporting system used by your firm. Y
2 Describe the frequency and format of reports that you would provide to City Staff.Attach a sample Y
3 What performance benchmarks would you suggest for this portfolio? Provide recommendations regarding performance Y
benchmarks for a portfolio similar to that of the government entity. What experience has the firm had in developing
benchmarks for public operating portfolios?
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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SECTION 7 - FEES (100 points)

Attached
Item Description
Y/N
1 Provide the complete fee schedule that would apply to this account. Are fees charged in arrears? Y
2 What additional expenses not covered through the fee structure will be expected in order to implement your investment Y
advisory services?

SECTION 8 - ADDITIONAL INFORMATION (100 points)

Attached
Item Description
Y/N
1 Briefly describe any additional feature, attributes, or conditions which the City should consider in selecting your firm. Y
Describe any other services your firm can provide.
2 Provide a copy of your firms most recent ADV Part II as on file with the SEC. Y
3 Provide any contract language your firm requests or requires to be included in a contract for this service. Y
4 Describe the firm’s business continuity plan, how often it is updated, and how it proposes to address the possibility of a Y
future significant business disruption while continuing to provide services to the City.
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RFP 13-156
INVESTMENT ADVISORY SERVICES
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REFERENCES
Proposers must provide at least three (3) current professional references from different
firms/organizations for which this type of service has been provided. References must be able to
verify Service Provider’s experience to comply with the requirements of this proposal. Failure to
provide references with similar scope, successfully performed projects may be grounds for
disqualification.

City of Redondo Beach, CA 415 Diamond Street [phone]
(Name) (Address) (Phone)
Frank Rowlen Redondo Beach, CA 90277
(Contact) (City/State) (Zip Code)

City of Sparks, NV 431 Prater Way [phone]
(Name) (Address) (Phone)
Jeff Cronk Sparks, NV 89431
(Contact) (City/State) (Zip Code)

Clark County Nevada Water Reclamation Dist. 5857 E. Flamingo Road [phone]
(Name) (Address) (Phone)
Bridgette McInally Las Vegas, NV 89122
(Contact) (City/State) (Zip Code)

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