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Burien council unanimously approves hiring Clearwater Advisors to manage city investments
Summary
The Burien City Council voted unanimously to authorize a contract with Clearwater Advisors LLC for investment advisory services; the firm proposed a fee of 9 basis points on the first $50 million (discounted in year one) and emphasized capital preservation, liquidity, and reporting safeguards.
The Burien City Council on June 1 unanimously approved Resolution 5-36 authorizing the Finance Director to enter a contract with Clearwater Advisors LLC to provide investment advisory services and help the city update its investment policy.
"We organize our business around three principles: capital preservation, liquidity, and then return," said Dan Bates, chief executive officer of Clearwater Advisors, during a presentation to council. Garrett Cuddihy, senior portfolio manager, noted the firm manages tailored portfolios for governments and would work with the city to build cash-flow forecasts and a customized, statutorily compliant strategy.
Council members pressed for details about fees, liquidity, and reporting. Cuddihy said the standard fee is 9 basis points (0.09%) on the first $50 million and 5 basis points thereafter; the firm offered a reduced fee in the first two years as an introductory discount. He said securities placed in the portfolio would be market-liquid and the firm would ladder maturities so a portion of the portfolio matures each month to meet cash needs. The firm recommended a separate custody bank and said it would not move client funds.
City staff said the additional earnings from a managed portfolio would be recorded as investment revenue and allocated across fund balances in accord with the city's fund accounting. The Finance Director told council staff will bring follow-up information to a July study session on how additional earnings would be treated in the budget process and how quarterly reporting will be shared with council and the public.
The council vote to approve the contract was unanimous. The resolution will allow staff to finalize contracting and begin the process of updating the city's investment policy and reporting dashboard for public transparency.
