1 Attachment A (Proposal)
April 19, 2023
Angela Courter
Director of Administrative Services
201 West Sierra Avenue
Cotati, CA 94931
Re: Proposal (Attachment A) for Investment Advisory Services to the City of Cotati Dear Ms. Courter:
Optum Investment Partners, LLC (“Optum”), is pleased to present this proposal (Attachment A) to the City of Cotati (“Client” or “District”) to provide investment advisory services related to the City’s surplus funds portfolio to achieve preservation of capital and maintain appropriate levels of liquidity at market yields.
Optum Investment Partners was formed for one reason. To serve you. Our president and CEO has been working in local government investments for over 18 years. He identified a huge disparity in the investment advisory industry. The larger agencies were offered more opportunities for services than smaller ones.
Smaller agencies have been virtually ignored even though it’s the smaller agencies that don’t have the staffing resources to manage the diverse set of responsibilities required.
I. BACKGROUND AND OBJECTIVE
OPTUM will provide specified professional investment advisory services consistent with California government code section 53600 as detailed in the scope of services section below. As a fiduciary to your District, Optum will place preservation of capital as our top priority, while ensuring appropriate levels of liquidity for day-to-day operations. We will seek to earn market yields once the first two priorities have been achieved.
II. SCOPE OF SERVICES
OPTUM proposes the following scope of work to assist Client with investment advisory services. Please note that the prospective assignment that OPTUM proposes to provide are advisory in nature. OPTUM will be making specific investment recommendations. None of OPTUM's staff will act in a capacity as an elected official, an appointed official, as staff, or serve in a "designated" position.
1. Provide investment advisory services for all surplus funds identified by Optum and Client in compliance with Government Code Section 53600 and other applicable government codes, local municipal codes, charters, and policies
2. Build a comprehensive cash-flow model to enhance liquidity management and increase the amount of funds invested in the investment portfolio
3. Investment Policy review and consulting
4. Provide general investment education to District Staff and Officials
5. Prepare reports of monthly/quarterly transactions
6. Monitor the credit of investment securities in the portfolio for compliance with District Investment Policy
7. Perform interest revenue projections as needed for analysis 2 8. If requested, deliver one virtual public presentation to a commission, special committee, or governing body (e.g. City Council, Board of Directors) of the District
9. As requested, assist with other compliance and audit review requirements as related to OPTUM services, and/or attend publicly noticed District meetings.
III. SCHEDULE AND REQUIRED DATA
Optum is prepared to commence work upon receipt of an executed Agreement. Client will promptly provide Optum with project data requested, including three (3) years of cash transaction detail.
Days 1-7
⮚ Kickoff meeting to discuss and confirm schedule
⮚ Custodial account setup
⮚ Broker/Dealer account setup
⮚ Pool(s) account(s) setup
Days 7-14
⮚ Portfolio recommendations
⮚ Trade execution with Client broker/dealer
IV. COMPENSATION/TERM
Consultant shall receive compensation, including authorized reimbursements, for Services rendered under this Agreement at the rates set forth below. Contract will be in force for an initial three (3) year, (5) month term, with the option to extend twice via one (1) year extension(s).
Investment Advisory Annual Fee Schedule
Contract Year Annual Fee Basis – Assets Under Management Year 1 Fiscal Year Ending
June 30, 2023
12 basis points Ending Monthly Custodial Bank Balance
and Collateral Accounts*
Year 2 Fiscal Year Ending
June 30, 2024
12 basis points Ending Monthly Custodial Bank Balance
and Collateral Accounts*
Year 3 Fiscal Year Ending
June 30, 2025
12 basis points Ending Monthly Custodial Bank Balance
and Collateral Accounts*
Year 4 Fiscal Year Ending
June 30, 2026
12 basis points Ending Monthly Custodial Bank Balance
and Collateral Accounts*
*Based on the ending monthly custodial bank balance, assets invested in certificates of deposit, and pooled account assets including cash and investments, as reported by the custodial bank, broker/dealers, other banks, and pooled account administrators. Optum will submit an invoice calculated monthly with a statement provided (Example: $10 million ending balance would be invoiced at $10 million * 0.0012% = $12,000/12 = $1,000 monthly).
To the extent alternative assignments are requested, compensation for requested Additional Tasks (defined below) will be based on hours spent at OPTUM’s billing rates as shown on “Exhibit 1.” V. NON-DISCRETIONARY
This contract does not grant discretionary power to Optum, or its representatives, and the contract will not be assigned by Optum without the consent of the Client. Optum must secure client permission prior to effecting securities transactions for the Client in the client’s broker-dealer account(s).
Exhibit 1
3 Optum Investment Partners, LLC.
2023 Public District Fee Schedule
Professional Services
President & CEO $350.00/hour
Senior Project Manager $250.00/hour
Project Analyst / Project Research $150.00/hour
Clerical Support $ 75.00/hour
● Additional Expenses
In addition to professional services (labor fees):
1) Out-of-pocket expenditures, such as travel and mileage, professional printing, and delivery charges for messenger and overnight packages will be charged at cost. 2) If Optum retains Third Party Vendor(s) for Client (with Client’s advance approval), fees and cost will be billed to Client at 1.1X (times) fees and costs. 3) Consultant’s attendance or participation at any public meeting, in addition to 1 included virtual meeting in scope of services, whether such participation is in person, digital, video and/or telephonic (e.g., City Council, Planning Commission, Public District Board, other) requested by Client and are beyond those specifically identified in the Scope of Work will be billed at the professional services (hourly) fees as shown on this “Exhibit 1.” ● Charges for Court/Deposition/Expert Witness-Related Appearances Court-related (non-preparation) activities, such as court appearances, depositions, mediation, arbitration, dispute resolution and other expert witness activities, will be charged at a court rate of 1.5 times scheduled rates, with a 4-hour minimum.
Rates shall remain in effect until December 31, 2023.