TO: CITY COUNCIL
VIA: CITY ADMINISTRATOR
FROM: DIRECTOR OF FINANCE
DATE: JUNE 20, 2023
Placentia City Council
AGENDA REPORT
SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH KOSMONT TRANSACTIONS SERVICES, INC. FOR PROFESSIONAL FINANCIAL ADVISORY SERVICES FISCAL
IMPACT: EXPENSE: $36,000 ANNUAL FEE
BUDGETED: $36,000 IN FY 23-24 ADOPTED BUDGET (102020-6099) SUMMARY:
The City Treasurer is responsible for maintaining a prudent investment portfolio for the City's idle funds in accordance with the City's Investment Policy. With the increasing complexity of today's market, a professional fund advisor capable of successfully investing in diverse markets is more advantageous than managing the City's investments by staff generating a higher rate of return on the City's investments while adhering to the City's Investment Policy goals of safety, liquidity, and return. The City has engaged the services of Kosmont Transaction Services, Inc. since 2021 and they have provided excellent customer service, competitive rates and done an outstanding job of assisting the City Treasurer in managing the City's investments. City staff is recommending approving a new agreement with Kosmont Transaction Services, Inc. for a (3) three-year term through June 30, 2026.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Approve Professional Services Agreement with Kosmont Transaction Services, Inc. for Professional Financial Advisory Services; and
2. Authorize the City Administrator and/or his designee to execute all the necessary documents in a form approved by the City Attorney.
STRATEGIC PLAN STATEMENT:
This item is consistent with the City Council approved 5 -Year Strategic Goal #1 to Ensure Long - Term Fiscal Sustainability but is not tied to a specific Objective.
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June 20, 2023
City Council Agenda
June 20, 2023
DISCUSSION:
The City aggregates all funds not immediately required for disbursement in a pool, which is invested in various investment securities and vehicles. The City directly invests in securities issued by the U.S. Treasury, Agencies of the United States and other similarly conservative investments permitted by the City's Investment Policy.
Unlike some local governments, the City does not have a full-time dedicated staff resource, such as a Chief Investment Officer, to manage its investment portfolio. The City's elected City Treasurer, by charter, is the custodian of all public funds and is responsible for maintaining a good investment program based on a sophisticated cash flow analysis.
The City entered into a Professional Services agreement with Kosmont Transactions Services, Inc. in November 2021 for investment advisory services and has since built a synchronized and optimized cash flow and investment timing model that has improved the weighted average yield from 1.10% in February 2022 to 2.8% in February 2023.
The City has been very satisfied with its partnership with Kosmont Transactions Services, Inc. and recommends approval of a new agreement for investment advisory services.
FISCAL IMPACT
For Fiscal Year 2023-24 estimated expenses for these services are $36,000 which is the amount included in the FY 2023-24 Adopted Budget.
Prepared by:
Jennifer Lampman
Director of Finance
Reviewed and approved:
Damien R. Arrula
City Administrator
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Reviewed and approved by:
Kevin Larson
City Treasurer
Attachment:
Professional Services Agreement with Kosmont Transactions