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OCII authorizes treasurer to manage trustee-held funds under $35,000 MOU
Summary
The Office of Community Investment and Infrastructure voted June 16 to authorize an MOU with the City and County of San Francisco Treasurer-Tax Collectorto perform investment services for OCII funds held by third-party trustees, allocating up to $35,000 for FY2020—1.
The Office of Community Investment and Infrastructure voted Tuesday to authorize its executive director to enter into a memorandum of understanding with the City and County of San Francisco Treasurer-Tax Collectorto manage investment services for OCII funds held by third-party trustees.
The authorization, approved by a 3-0 vote with Vice Chair Rosales absent, covers up to $35,000 for fiscal year 2020–21, with future-year amounts subject to annual appropriation. The resolution number for the action is referenced in the record as 13-2020.
Deputy Director for Finance and Administration Brie Mahota said the MOU would allow the treasurer to receive OCII cash-flow schedules, direct trustee transactions, perform settlement accounting and conduct credit analysis under OCIIinvestment policy, which prioritizes safety, liquidity and then returns. Mahota said the $35,000 estimate for 2021 is based on a blended staff and systems rate of $171.78 per hour.
"We earned as of March '20 the fiscal year 19–20 about 1.9% on those funds," Mahota said, a return she said had generated roughly $6,000,000 so far that year.
Bob Schoff, the treasureroffice chief investment officer, cautioned that recent market changes mean future yields will likely be lower than the 1.9% seen over the prior 12 months. "We're probably somewherebetween 50 and 75 basis points at best," Schoff said, adding that final yield expectations depend on the funds' cash-flow calendars and allowable maturities.
Commissioner Brackett asked for clarification on prior management costs and the size of the funds under consideration; staff said these trustee-held funds have not previously been actively managed and are approximately $350,000,000 in aggregate. Brackett moved the authorization and Commissioner Scott seconded it.
The treasurer arrangement will operate under OCII's 2014 investment policy and within the permitted investments for each bond document, staff said.
Next steps outlined by staff include finalizing the MOU terms and implementing cash-flow coordination between OCII and the Treasurer-Tax Collector's office.
