Form No. SPEC-230A Revised: 03/13/2007 Page 1 of 5 City of Tacoma Finance Department, Treasury Division Investment Advisory Services RFP Specification No. FI15-0289F QUESTIONS and ANSWERS All interested parties had the opportunity to submit questions in writing by 3:00 p.m., June 2, 2015. The answers to the questions received are provided below and posted to the City’s website at www.TacomaPurchasing.org. This information IS NOT considered an addendum. Respondents should consider this information when submitting their proposals. Question 1: Why is the search being conducted? Answer 1: To contract with a financial services advisor to assist with the management of the City’s investment portfolio by providing non-discretionary management and advisory services and add value to the City’s investment portfolio and strategies by recommending sound investment opportunities in compliance with the City’s Investment Policy and objectives. Question 2: What is the size of the city’s investment portfolio? Answer 2: As of May 31, 2015, the City’s investment portfolio had a total par value of $983.7 million. Question 3: Does the plan currently utilize an investment advisor for the portfolio? If so, what is the name of that firm and will they be invited to rebid Answer 3: The City does not have an investment advisor. Question 4: Would you please provide your investment policy for this asset pool? Answer 4: Please see the attached investment policy. Question 5: Is there an Investment Policy for the “Investment Advisory Services” RFP? Answer 5: Please see the response to Question 4. Question 6: We believe that we are well-qualified to present a proposal to the City of Tacoma. We meet all of the requirements as outlined in Section 2, 2.02 Minimum Requirements, with the exception of a portion of point D. While we exceed the minimum for non-discretionary assets under management for public agencies and currently manage non-discretionary public sector accounts in the State of Washington, we do not manage $500 million of non-discretionary assets for public entities within the State. Would the City consider eliminating that particular requirement? Answer 6: An addendum has been issued and posted with the specification to clarify minimum requirements.
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Form No. SPEC-230A Revised: 03/13/2007 Page 1 of 5
City of Tacoma Finance Department, Treasury Division
Investment Advisory Services
RFP Specification No. FI15-0289F
QUESTIONS and ANSWERS All interested parties had the opportunity to submit questions in writing by 3:00 p.m., June 2, 2015. The answers to the questions received are provided below and posted to the City’s website at www.TacomaPurchasing.org. This information IS NOT considered an addendum. Respondents should consider this information when submitting their proposals. Question 1: Why is the search being conducted? Answer 1: To contract with a financial services advisor to assist with the management of the
City’s investment portfolio by providing non-discretionary management and advisory services and add value to the City’s investment portfolio and strategies by recommending sound investment opportunities in compliance with the City’s Investment Policy and objectives.
Question 2: What is the size of the city’s investment portfolio? Answer 2: As of May 31, 2015, the City’s investment portfolio had a total par value of $983.7
million. Question 3: Does the plan currently utilize an investment advisor for the portfolio? If
so, what is the name of that firm and will they be invited to rebid Answer 3: The City does not have an investment advisor. Question 4: Would you please provide your investment policy for this asset pool? Answer 4: Please see the attached investment policy. Question 5: Is there an Investment Policy for the “Investment Advisory Services” RFP? Answer 5: Please see the response to Question 4. Question 6: We believe that we are well-qualified to present a proposal to the City of
Tacoma. We meet all of the requirements as outlined in Section 2, 2.02 Minimum Requirements, with the exception of a portion of point D. While we exceed the minimum for non-discretionary assets under management for public agencies and currently manage non-discretionary public sector accounts in the State of Washington, we do not manage $500 million of non-discretionary assets for public entities within the State. Would the City consider eliminating that particular requirement?
Answer 6: An addendum has been issued and posted with the specification to clarify
minimum requirements.
Form No. SPEC-230A Revised: 03/13/2007 Page 2 of 5
Question 7: Lastly regarding the RFP is there a catalyst for it? Are they unhappy with the existing advisor?
Answer 7: Please see the response to Questions 1 and 3. Question 8: Is there a consultant currently providing the requested services? If so,
what is their fee? Answer 8: Please see the response to Question 1. Question 9: For Minimum Requirement C – please define “managing”. Could this be
interpreted as “advising”? Answer 9: “Managing” would include contractual, non-discretionary portfolio management,
including the execution of trades approved by the client/owner. Question 10: For Minimum Requirement D- please confirm whether the bidder needs to
have $2 billion in assets under management or $2 billion in assets under advisement.
Answer 10: Please see response to Question 9. Question 11: Requirement D, part 2, that states, “the advisor shall have… at least $500
million under non-discretionary management for public entities within the state of Washington.” While, we do not currently meet this minimum requirement for public funds in Washington State, we do currently provide consulting services to public entities in Oregon and California with assets under advisement of $43.4 billion, for these two states alone. Given this information, is it acceptable to the City for our firm to meet this minimum requirement?
Answer 11: Please see the response to Question 6. Question 12: In section 2.03, the Scope of Work references non-discretionary advisory
services. Could you please define ‘non-discretionary’? Would the portfolio managers and traders be able to execute securities with discretion?
Answer 12: The advisor will not be permitted to execute buy-sell transactions without
consultation and approval by the City. Question 13: We provide all of the services listed in Section 2.03 (page 10) of the RFP;
however, we note that the scope does not mention trade execution. We understand that, per the Project Scope on page 1 of the RFP, the City is looking for “non-discretionary management and advisory services.” We provide both non-discretionary advisement and non-discretionary management services. Our advisement clients do not have us execute trades while our management clients do. Is the City looking for its investment advisor to execute trades on the City’s behalf (“non-discretionary management”), or just provide strategic advice and trade ideas (“non-discretionary advisement”)?
Form No. SPEC-230A Revised: 03/13/2007 Page 3 of 5
Answer 13: The City would expect the advisor to execute trades on the City’s behalf, utilizing the City’s delivery instructions.
Question 14: Section 2.02 D (page 10) of the RFP states that the Advisor shall have at
least $500 million under non-discretionary management for public entities within the state of Washington. We currently provide non-discretionary advice and management for $5.1 billion in assets for public entities within the state of Washington. Does this meet your requirement?
Answer 14: Please see the response to Questions 6 and 11. Question 15: Section 3.01 (page 12) of the RFP states that submittals should not exceed
15 double-sided pages (30 pages total), excluding Title Page and Signature Page. Does this page limit also exclude a cover letter?
Answer 15: A cover letter will count toward the page total. Question 16: Section 3.01 (page 12) of the RFP states that the use of appendices and
attachments will count toward the page limit (except for sample reports per Section 3.02, Sub-Section G(3)). There are documents that we typically include in our submittals (which are not promotional in nature) such as our Form ADV and GIPS-Compliant Performance Composites. Are these also excluded from counting toward the page limit?
Answer 16: An addendum has been issued and posted with the specification to clarify
required disclosure items (such as Form ADV and GIPS-Compliant Performance Composites).
Question 17: Please provide the following items:
a. Current list of portfolio holdings in Excel for the Liquidity Tier and the Core Tier
b. The most recent monthly investment statement c. Most recent quarterly performance report d. Latest Investment Policy
Answer 17: Please see the attached investment policy. Question 18: Section 2.01, Sub-Section A (page 9) of the RFP states that the City is
looking for comprehensive reporting services for the entirety of its investment portfolio, including both the Liquidity Tier and the Core Tier. Please clarify what type of reporting would be required for the Liquidity Tier.
Answer 18: Performance reporting for the Liquidity Tier shall include the same information
provided for the Core Tier (detailed under Section E under “Scope of Work” in the RFP) WITH THE EXCEPTION that performance of the Liquidity Tier will be reported on a current return basis and utilize the Washington Local Government Investment Pool as its benchmark.
Form No. SPEC-230A Revised: 03/13/2007 Page 4 of 5
Question 19: In section 2.02 Part A Minimum Requirements, Advisor shall be a Registered Investment Advisor as defined and regulated by the SEC and registered in the state of Washington. We does have an RIA set up, however, it is not registered in the state of Washington. Is this grounds for disqualification? Since banks are regulated by various state and federal agencies, we are exempt from SEC registration, but have established an RIA registered in other states.
Answer 19: The City is seeking proposals from firms registered in the state of Washington.
Question 20: In section 2.02 Part D, the Advisor shall have a minimum $2B in assets
under management for public entities (I believe we do) with at least $500MM under non-discretionary management for public entities within the state of Washington which we do not have. Again, is this grounds for disqualification?
Answer 20: Please see the response to Questions 6, 11, and 14.
Question 21: Can you please provide the meeting schedule for the remainder of 2015? Answer 21: Meetings of the City’s Finance Committee are scheduled for 11:00 a.m. on
Monday, August 10, 2015, and 11:00 Monday, November 9, 2015.
Question 22: What is the impetus behind the issuance of this RFP? Answer 22: Please see the response to Question 1.
Question 23: Can you please advise as to who your current investment advisor is? Answer 23: N/A. Please see the response to Question 3.
Question 24: How long have you worked with your current advisor? Answer 24: N/A. Please see the response to Question 3.
Question 25: Is the board planning or discussing any new structural or investment
issues they might consider over the next several years? Answer 25: Modifications to the Investment Policy may be made following any changes in the
laws of the state of Washington related to permitted investments for public funds.
Question 26: How many searches did the plan conduct in 2013 and 2014? Answer 26: N/A
Question 27: When was the last recordkeeper/TPA search conducted? Answer 27: N/A
Form No. SPEC-230A Revised: 03/13/2007 Page 5 of 5
Question 28: Question #1: Minimum Requirement 2.02 A) – Will you accept a response from an advisor that is a bank and therefore exempt from having to register as an investment adviser with the U.S. Securities and Exchange Commission under Section 202(a)(11)(a) of the Investment Advisers Act of 1940?
Answer 28: The City is seeking proposals only from firms registered as an investment adviser
as detailed in the RFP. Question 29: Regarding the response to the RFP referenced, we understand that the City
of Tacoma is interested in sustainable business practices. Would the City prefer to have our ADV provided via the electronic version of the response ONLY, or would it be permissible to include a copy of the Form ADV (Part 1, Part 2A and Part 2B) along with the attachments requested (i.e. invoice and report samples)?
Answer 29: Please provide the ADV as an appendix in in the hard copies and the electronic
copy.
ICUS0016
Custody HoldingsBy Security - Totals By Security
Report ID
5/29/2015
ISIN Description CcyCtryInc LocStatus
Traded Shares/Par
SettledShares/Par
PendingReceive
Shares / Par
PendingDeliver
Shares/ParAmortized Face
TOTALUSD 1,495,000.0000 1,495,000.0000USUS005158UV08 ADA + CANYON CNTYS IDAH 4.015FEB16