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BRANCH OFFICE CLERK OF THE CIRCUIT COURT BRANCH OFFICE
3117 OVERSEAS HIGHWAY MONROE COUNTY P.O. BOX 379
MARATHON, FLORIDA 33050 500 WHITEHEAD STREET PLANTATION KEY, FLORIDA 33070
TEL. 1305) 743.9036 KEY WEST, FLORIDA 33040 TEL. (305) 852-9253
TEL. 005) 294.4641
M E M O R A N D U M
To: Jim Matthews, Finance Director
From: Rosalie L. Connolly, Deputy Clerk
Subject: Public Financial Management, Inc.
Date: December 13, 1988
On December 6, 1988, the Board of County Commissioners approved
and authorized execution of an Investment Advisory Agreement bet-
ween the County and Public Financial Management, Inc. in connec-
tion with the investment of the proceeds of the 1988 Improvement
Bond Issue recently approved by the Board.
Attached is a copy of the subject Agreement for your records.
Rosalie L. C nolly
Deputy Clerk
Attachment
cc: Mayor Puto
Commissioner Lytton
County Administrator
County Attorney
File
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of the i♦day ofp�,TT88 by and between the
Monroe County, Florida (hereinafter the "Local Government Unit") and PUBLIC FINANCIAL
MANAGEMENT, INC., a Pennsylvania Corporation with an office in Harrisburg, Dauphin
County, Pennsylvania, (hereinafter "PFM" or the "Investment Advisor").
WITNESSETH
WHEREAS, the Local Government Unit has issued Improvement Revenue Bonds Series
1988 A & 1988 B, totaling approximately $7,500,000 for the purpose of funding capital
improvements projects; and
WHEREAS, the Local Government Unit intends to conduct a temporary investment
program with the proceeds of the issue pending their application to the construction program,
and
WHEREAS, the earnings from such temporary investments constitute a vital component
of the overall financial plan; and
WHEREAS, the Local Government Unit wishes to arrange for professional cash
management so as to maximize earnings from temporary investments; and
WHEREAS, the Local Government Unit desires to avail itself of the experience, sources
of information, advice, assistance and facilities available to PFM and to have PFM undertake
certain duties and responsibilities and to perform certain services on behalf of the Local
Government Unit as investment advisor, as provided herein; and
WHEREAS, investment of the Bond Proceeds is subject to the limitations of the Tax
Reform Code of 1986 as it relates to rebate of arbitrage earnings; and
WHEREAS, PFM is willing to provide such services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Services of Advisor.
PFM will provide investment management of the Local Government Unit Construction
Fund. In connection therewith, PFM will provide investment research and supervision of the
Local Government Unit's Construction Fund investments and conduct a continuous program of
investment, evaluation and when appropriate, sale and reinvestment of the Local Government
Unit's Construction Fund assets. PFM shall continuously monitor investment opportunities and
evaluate Construction Fund investments owned by the Local Government Unit or available to it.
PFM shall furnish the Local Government Unit with statistical information and reports with
respect to investments which the Local Government Unit Construction Fund may own. PFM
shall place all orders for the purchase, sale, loan or exchange of portfolio securities for the
Local Government Unit's Construction Fund account with brokers or dealers selected by PFM, and
to that end PFM is authorized as agent of the Local Government Unit to give instructions to the
depository designated by the Local Government Unit as its' custodian as to deliveries of
securities and payments of cash for the account of the Local Government Unit Construction Fund.
In connection with the selection of such brokers and dealers and the placing of such orders, PFM
is directed to seek for the Local Government Unit the most favorable execution and price. After
fulfilling this primary requirement of seeking the most favorable execution and price, PFM is
hereby expressly authorized to consider, subject to any applicable laws, rules and regulations,
whether statistical, research and other information or services have been furnished to PFM for
the Local Government Unit by such brokers or dealers. The depository designated by the Local
Government Unit shall have custody of cash, assets and securities of the Local Government Unit
Construction Fund. PFM shall not take possession of or act as custodian for the cash, securities or
other assets in the Construction Fund and shall have no responsibility in connection therewith.
Authorized investments shall include only those investments which may from time to time be
authorized by law for funds of the Local Government Unit.
2. Compliance with Arbitrage and Rebate Requirements.
PFM shall conduct the investment management program in compliance with the
arbitrage and rebate requirements of the United States Treasury, currently described in Section
103(c) of the Internal Revenue Code and Section 1.103-15AT of the Code of Federal Regulations
and as supplemented by such other regulations or rulings as may from time to time be
promulgated. PFM shall place orders for the purchase or sale of securities at market prices as
determined in accordance with said regulations and rulings, and shall maintain records of all
such transactions which shall include documentation of the market price of each purchase and
sale, and shall prepare on behalf of the County all arbitrage and rebate reports required by the
U. S. Treasury and the Internal Revenue Code.
3. Compensation.
(a) For services provided by PFM pursuant to this Agreement, the Local
Government Unit shall pay PFM an annual fee, in monthly installments, based on the average
daily net assets of the Local Government Unit Construction Fund as follows:.15% of such assets.
amounts deposited with the State of Florida Board of Administration Local Governments
Surplus Trust Fund, if any, shall be deducted in calculating the average daily net assets of
which are subject to said fee for management.
(b) The Local Government Unit shall pay to PFM the amount payable pursuant to
this Agreement not later than on the 15th of the month following the month during which the
services for the payment of which the fee is payable were rendered. PFM shall furnish to the
Local Government Unit a Statement indicating the basis upon which the fee was calculated
(c) If PFM shall serve for less than the whole of any month, the compensation to
PFM shall be pro -rated.
(d) If and to the extent that the Local Government Unit shall request PFM to render
services for the Local Government Unit other than those to be rendered by PFM hereunder, such
additional services shall be compensated separately on terms to be agreed upon between PFM
and the Local Government Unit from time to time.
4. Expenses.
(a) PFM furnish at its own expense all necessary administrative services, office
space, equipment, clerical personnel, telephone and other communication facilities, investment
advisory facilities, and executive and supervisory personnel for managing the investments.
(b) Except as expressly provided otherwise herein, the Local Government Unit
shall pay all of its own expenses including, without limitation, taxes, commissions, fees and
expenses of the Local Government Unit's independent auditors and legal counsel, brokerage and
other expenses connected with the execution of portfolio security transactions, insurance
premiums, fees and expenses of the custodian for all services to the Local Government Unit
including safekeeping of funds and securities and the keeping of books and account.
5. Responsibility of PFM.
PFM assumes no responsibility hereunder other than to render the services called for
hereunder in good faith and shall not be responsible for any action of the Local Government
Unit in following or declining to follow any advice or recommendations of PFM.
6. Limitation on Liability.
PFM shall not be liable for any error or judgement or mistake of law, loss arising out of
any investment, or act or omission in the execution and management of the Local Government
Unit, except for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of a reckless disregard of its obligations and duties hereunder.
7. Freedom of Advisor.
Nothing in this agreement shall limit or restrict the right of PFM to engage in any
other business or to render services of any kind to any corporation, firm, individual, association
or government unit.
8. Term.
This Agreement shall be in force for a period of three years beginning on the date of
execution of this Agreement, unless cancelled by either part, upon thirty (30) days' prior
written notice. This Agreement may be terminated at any time without the payment of any
penalty by the Local Government Unit or by PFM, on not less than thirty (30) days' written
notice to the other party.
9. Nonassignability.
This Agreement shall not be assigned by either party without the approval of the
other party.
10. Books.
PFM shall maintain appropriate records of all its activities hereunder. PFM shall
provide the Local Government Unit with a monthly statement showing deposits, withdrawals,
purchases and sales (or maturities) of investments, earnings received, and the value of assets
held on the last business day of the month.
11. PFM's Disclosure Statement.
PFM warrants that it has delivered to the Local Government Unit, at least five business
days prior to the execution of this Agreement, PFM's current Securities and Exchange
Commission Form ADV, Part II (PFM's disclosure statement). The Local Government Unit
acknowledges receipt of such disclosure statement at least five business days prior to the
execution of this Agreement.
12. Modification.
This contract shall not be changed, modified, terminated or discharged in whole or in
part, except by an instrument in writing signed by both parties hereto, or their respective
successors or assigns.
13. Binding Effect
This Agreement shall bind any successors of the parties hereto and any assigns of the
Local Government Unit.
14. Applicable Law.
The provisions of this Agreement shall be construed and interpreted in accordance with
the laws of the State of Florida as at the time in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized representatives as of the date set forth in the first paragraph of
this Agreement.
WITNESS: PUBLIC FINANCIAL MANAGEMENT, INC.
---BY:
Managing Director
ATTESTTANNY L. KOLHAGE, Clerk MONROE COUNTY, FLORIDA
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IAA 1/Monroe Cty/week
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APPROWD AS TO POW
AN AL FICIElMC7
Qy
Attorneys Oft*
Public Financial Management, Inc.
Advisors in Capital Finance and Investment Management
1701 North Front Street Mailing Address:
Atlanta
New York
Harrisburg, Pennsylvania 17102 P.O. Box 11813
Buffalo
Orlando
717-232-2723 Harrisburg, Pennsylvania 17108
Fort Myers
Philadelphia
Marty Margolis, Managing Director
Harrisburg
San FranciscoMemphis
State College
November 21,1988
Mr. Dan Kolhage
Clerk of Court
MONROE COUNTY
500 Whitehead Street
Key West, FL 33040
Dear Mr. Kolhage:
At the request of Mr. Charles Mansen of your office we have made a number of changes in
our proposed investment advisory contract to make it clear that the only funds we will manage
are the construction funds.
Enclosed is a revised draft of the agreement.
Please call me if you have any questions on this.
Sincerely,
Marty Margolis
Managing Director
cc: Charles Mansen
W2 An Affiliate of Marine Midland Bank. N A
t
BRANCH OFFICE
3117 OVERSEAS HIGHWAY
MARATHON, FLORIDA 33050
TEL. 13051 743-9036
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3pannp I. Rotbage
CLERK OF THE CIRCUIT COURT
MONROE COUNTY
500 WHITEHEAD STREET
KEY WEST, FLORIDA 33040
TEL. (305) 294-4641
M E M O R A N D U M
TO: Mayor Puto and County Commissioners
FROM: Danny L. Kolhage, Clerk
DATE: November 30, 1988
RE: Contract with PFM
BRANCH OFFICE
P.O. BOX 379
PLANTATION KEY, FLORIDA 33070
TEL. (305) 852-9253
I am enclosing herewith copy of a proposed
investment advisory contract between Public Financial
Management, Inc. and Monroe County. The purpose of this
agreement is to obtain professional investment advisory ser-
vices from PFM in connection with the investment of the
proceeds of the 1988 Improvement Bond issue that was
recently approved by the Board.
In particular, PFM will provide my office with
advice and other investment services concerning the invest-
ment of the Construction Fund which will enable us to maxi-
mize the interest earnings on that fund while at the same
time providing for the availability of those funds as the
County begins the various capital improvement projects. PFM
will also provide those services as outlined in the attached
agreement.
The fee for services will be in the amount of
0.15% of the average daily net assets of the Construction
Fund. I am estimating that the total amount of the fee
would fall somewhere between $5,000 and $10,000 with the
amount to be determined by the rate of expenditure of the
funds on deposit in the Construction Fund. By reference to
thi analysis of the 1988 Improvement Revenue Bond issue that
was submitted by PFM dated November 22, 1988, you will see
that it is anticipated that, with the assistance of PFM, the
Memorandum
11-30-88
Page Two
Construction Fund should earn in excess of $500,000.
Therefore, I feel that the fees are more than justified for
the extent of the services that will be provided, and the
estimate of earnings that will be realized by the use of
those services.
Therefore, based on the above information, I
respectfully request your approval of the enclosed contract,
which I intend to have on the agenda for the December 6th
meeting. If you have any questions concerning this matter,
please do not hesitate to contact me.
Very truly yours
DANNY L KO HAGE
Clerk of Circuit Court and
Ex officio Clerk of the
Board of County Commissioners
DLK:dgc
cc: Mayor Mike Puto
Commissioner Jones
Commissioner Harvey
Commissioner Lytton
Commissioner Stormont
t