Outside firm hired to manage Oceanside treasury investments

Chandler Asset Management, Inc., of San Diego was unanimously approved by the Oceanside City Council Wednesday as the first outside firm to manage Oceanside’s roughly $500 million investment portfolio.

Historically, the city has had a full-time employee as treasury manager, who was responsible for managing the portfolio, along with daily cash flow, banking, accounting and reporting.

The city’s previous treasury manager, Steve Hodges, resigned Nov. 1, and recruiting efforts to fill the position were unsuccessful. So the city staff researched other options and recommended outsourcing the job to an external investment manager.

The city’s part-time elected treasurer, Victor Roy, attended his first City Council meeting in months Wednesday, wearing a Santa hat and a red bow tie, and praised the decision to outsource. The elected treasurer’s responsibility is oversight but not direct management of city funds, and Roy had publicly feuded with Hodges over investments.

“Today is a historic milestone in the city of Oceanside,” Roy said. “This represents a major shift from internal control to external control by a management company.”

External control will bring a better range and flexibility for the city’s investments, with more safety and liquidity, he said.

Financial Services Director Jill Moya said the city’s Treasury Division employees will continue to monitor all balances in the portfolio on a regular basis.

“We aren’t giving up any of the access that we currently have or that we’ve had in the past,” Moya said.

Chandler’s fee is 0.04 percent for the first $450 million under management, then 0.03 percent for assents over $450 million, or a total of $195,000 for $500 million. Much of that is expected to be recovered by improved earnings and not replacing the treasury manager.

Chandler is employed by 140 public agencies including 66 cities in California to manage fixed-income portfolios in conformance with state and federal laws.


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