Item 196/2025
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Patricia Song
Dept:
City Manager Dept: Finance
Date: 6/10/2025
Subject: Award a contract to Meeder Investment Management, Inc. for investment advisory services. (Action Item)
OBJECTIVE
For the City Council to award a contract to Meeder Public Funds, Inc., dba Meeder Investment Management, Inc. (Meeder) for investment advisory services.
BACKGROUND
In 2020, the City transitioned from managing its investment portfolio in -house to engaging an external investment advisor. Prior to this shift, the City’s investment options were limited primarily to Treasury bills and federal agency notes. Since partnering with an external advisor, the portfolio has become significantly more diversified.
2020 Portfolio Asset Allocation: 2025 Portfolio Asset Allocation:
As a result, the City’s investment portfolio has grown from $265.8 million in July 2 020 to $417.3 million as of April 30, 2025. The average weighted maturity has increased from 1.6 years to 2.2 years, and the weighted average yield has risen by 2.20%, from 1.63% to
3.83%.
Item 196/2025
Recognizing the value of professional portfolio management, the Ci ty intends to continue leveraging the expertise of an experienced investment advisory firm. The current five -year contract with Meeder is set to expire on June 30, 2025. In alignment with best practices, the City has issued a Request for Proposal (RFP) to identify the most qualified provider to meet its investment advisory service needs.
DISCUSSION
Request for Proposals (RFP) No. S-1357 for Investment Management Services was issued on February 14, 2025. By the submission deadline of March 31, 2025, the Ci ty received six proposals. A thorough evaluation was conducted by a three-member Finance team, assessing each proposal based on the firm’s qualifications, project team experience, proposed work plan, and cost.
Meeder received the highest score in all five evaluation categories among the six firms.
Below is a summary of the evaluation scores for all proposals received.
Meeder has been serving public agencies for over 30 years and currently manages more than $155 billion in public fund assets, including $25 billion on behalf of California public entities.
Over the past five years, Meeder has demonstrated a strong track record of enhancing the City’s investment performance, as well as that of other cities in Orange County.
Under the new contract, Meeder will provide a comprehensive range of services, including investment policy review, portfolio management, cash flow analysis, credit analysis, broker/dealer due diligence, and the preparation and presentation of investment reports.
Their investment strategies will incorporate all instruments permitted under applicable State statutes to best align with the City’s objectives. A detailed scope of services is included in Attachment A to the Consultant Agreement between the City and Meeder (Attachment 1).
The a greement establishes an initial three -year term beginning July 1, 2025, with two optional one-year extensions. The fee schedule, based on an actively managed portfolio of $348.0 million, is outlined below:
Meeder
Investment
Management
Chandler Asset
Management
US Bancorp
Asset
Management,
Inc.
Public Trust
Advisors
Insight
Investment
Garcia Hamilton
& Associates, LP
Rater 1 97 91 91 84 81 83
Rater 2 94 90 85 84 89 66
Rater 3 99 95 85 90 79 77
290 276 261 258 249 226
Item 196/2025
FINANCIAL IMPACT
The fees for investment advisory services will be incorporated into the Finance Department’s annual operating budget. Approximately 80% of the total cost will be allocated to the General Fund.
RECOMMENDATION
It is recommended that the City Council:
Approve and authorize City Manager, or designee, to execute a Consultant Agreement between the City of Garden Grove and Meeder Public Funds Inc., dba Meeder Investment Management, Inc. (Attachment 1).
ATTACHMENT(S)
Professional Agreement between the City of Garden Grove and Meeder Public Funds Inc., dba Meeder Investment Management, Inc.
Year 1
July 1, 2025 -
June 30, 2026
Year 2
July 1, 2026 -
June 30, 2027
Year 3
July 1, 2027 -
June 30, 2028
Year 4
July 1, 2028 -
June 30, 2029
Year 5
July 1, 2029 -
June 30, 2030
Managed Amount 348,000,000$ 348,000,000$ 348,000,000$ 348,000,000$ 348,000,000$ Basis Points 2.75 3.00 3.25 3.50 3.75
Total Fee 95,700$ 104,400$ 113,100$ 121,800$ 130,500$