San Diego’s Chandler Asset Management, Inc. was unanimously approved by the Oceanside City Council as the first outside company to manage Oceanside’s approximately $500 million investment portfolio.
Historically, the City has had a full-time employee as the Treasury Manager, responsible for managing the portfolio along with daily cash flow, banking, accounting and reporting.
Steve Hodges, the city’s former financial manager, resigned on November 1, following an unsuccessful recruitment effort to fill the position. As such, city officials investigated other options and recommended outsourcing the work to an outside investment manager.
Victor Roy, the city’s part-time elected treasurer, donned a Santa hat and a red bow tie for the first time at a city council meeting Wednesday to applaud the decision to outsource. did. The responsibility of the elected Treasurer was oversight, not direct control of the city’s funds, and Roy was openly at odds with Hodges over the investment.
“Today marks a historic milestone for the City of Oceanside,” Roy said. “This represents a major shift from internal control to external control by management companies.”
He said the external control would give the city greater scope and flexibility for investments, as well as greater security and liquidity.
Financial services director Jill Moya said employees in the city’s finance department will continue to monitor all balances in the portfolio on a regular basis.
“We’re not giving up the access we have now or had in the past,” says Moya.
Chandler’s fees are 0.04% on the first $450 million under administration, 0.03% on agreements over $450 million, or $500 million for a total of $195,000. Many are expected to recover from improved earnings and the retention of treasury managers.
Employed by 140 public agencies, including 66 cities in California, Chandler manages fixed income portfolios in compliance with state and federal law.