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Jacksonville council approves two-year advisory agreement with Deep Blue Investment Advisors
Summary
The Jacksonville City Council authorized the city manager to enter a two-year agreement with Deep Blue Investment Advisors to provide discretionary portfolio management and reporting for municipal funds; council discussed fees, bond‑proceeds limits and risk before approving the contract unanimously.
Jacksonville — The Jacksonville City Council voted to allow the city manager to enter a two‑year agreement with Deep Blue Investment Advisors to provide investment advisory services for the city’s portfolio, the council approved unanimously during its April meeting.
The agreement authorizes Deep Blue to advise and make discretionary trades within the city’s portfolio subject to the Public Funds Investment Act and the city’s adopted investment policy, for an annual flat fee of $25,000. Staff said the firm would manage approximately $41,200,000 in funds under advisement, including about $22,000,000 in bond proceeds that are subject to arbitrage rules.
City staff framed the contract as both a time‑saving measure for a lean staff and an additional compliance and reporting layer. “They would not touch our money or have access to withdraw our money,” James, a city staff member, said when explaining the firm’s role in trade execution and portfolio rebalancing. He added Deep Blue would provide daily economic and investment analysis and reporting to support transparency to council and the public.
Council members asked whether the fee would be recouped by higher returns. One council member noted that, on $14,000,000 in investable funds, a half‑percentage point gain equals about $70,000 a year, which would exceed the $25,000 fee; staff said actual results depend on market conditions. Council discussion also focused on bond proceeds limits and the city’s protection against principal loss under the investment rules.
Under terms discussed, the initial term is two years, either party may terminate with 60 days’ written notice, andannual renewals would be subject to CPI increases. Staff said JEDCO was expected to enter a commensurate agreement and share part of the fee.
The motion to authorize the city manager to execute the agreement was made by Mayor Pro Tem Craig and seconded by Councilman Rob Goen. The council recorded the motion as carried by unanimous voice vote.
The council directed staff to continue monitoring performance and compliance and to return to the council if there are material changes in the firm’s performance or the city’s strategy.
