HomeMy WebLinkAbout04-04-2022 Investment Committee Minutes
MEETING MINUTES
INVESTMENT COMMITTEE
April 4, 2022 3:30 PM
Government Center-Room 1410 Administration Ste
1101 Carmichael Road, Hudson, Wisconsin
CALL TO ORDER
ROLL CALL
Attendee Name Organization Title Status Arrived
David Peterson St. Croix County Chair Present
Ken Witt St. Croix County County Administrator Present
Denise Anderson St. Croix County County Treasurer Present
Leah Simington St. Croix County Finance Director Present
APPROVAL OF MINUTES
No minutes to approve.
1. Investment Committee – Regular Meeting – June 30, 2020 10:30 AM
PUBLIC COMMENT
None
BUSINESS ITEMS
1. Consideration of Investment and Arbitrage Services with Ehlers
County Administrator Witt discussed arbitrage with the committee. Arbitrage is when
you borrow money and make more on the money than what you are paying. You then
have to report that money to federal government and pay it back. Ehlers has an
investment service and they offer a free arbitrage monitoring and auditing service. With
interest rates going up, the county could potentially get into an arbitrage situation.
Moved by Leah Simington and seconded by Supervisor Peterson. Motion carries 4-0.
RESULT: APPROVED [UNANIMOUS]
MOVER: Leah Simington, Finance Director
SECONDER: David Peterson, Chair
AYES: David Peterson, Ken Witt, Denise Anderson, Leah Simington
REQUEST FOR FUTURE AGENDA ITEMS
Request for updates on investments.
ANNOUNCEMENTS & CORRESPONDENCE
ADJOURN
Meeting adjourned at 3:46.
DATE OF NEXT MEETING
To be determined.
MEETING MINUTES
INVESTMENT COMMITTEE
June 30, 2020 10:30 AM
Room 1284-County Board Room
St. Croix County Government Center - Room 1284 -
Government Center - 1101 Carmichael Road, Hudson,
Wisconsin
CALL TO ORDER
ROLL CALL
Attendee Name Organization Title Status Arrived
Ken Witt St. Croix
County
Assistant County
Administrator
Present
Patrick
Thompson
St. Croix
County
County Administrator Present
David Peterson St. Croix
County
Chair Present
Denise Anderson St. Croix
County
County Treasurer Present
BUSINESS ITEMS
1. Consideration of Updated Investment Policy
Mr. Thompson moved to recommend amendment of investment policy to allow for
corporate securities. Seconded by Mr. Peterson. Motion carried 4-0.
RESULT: RECOMMENDED [UNANIMOUS]
MOVER: Patrick Thompson, County Administrator
AYES: Ken Witt, Patrick Thompson, David Peterson, Denise Anderson
REQUEST FOR FUTURE AGENDA ITEMS
ADJOURN
Meeting adjourned at 10:39 AM.
3.1
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Investment & Arbitrage
Advisory Services
5.1.a
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About Ehlers’ Investments
•SEC Registered Investment Adviser (est. 2007)
•More than $1.75 billion Assets Under Management
•165+ clients & 270+ Separately Managed Accounts
•Focus = Client-centric Fixed Income Solutions
Bond Proceeds &
Escrow Bidding
Agent
Investable Cash
Assets
Banking Services
Evals & RFPs
5.1.a
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•Your investment fiduciary
Duty of loyalty
Duty of care
Place your interests ahead
of our own
•Extension of your staff
•Always your partner
What is a Registered Investment Advisor?5.1.a
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Why Ehlers Investments & Arbitrage?
•Only serve local governments, public agencies & special authorities
•Unique insight into best practices
Public sector focus
•Fiduciary responsibility to you alone
•Prioritized principles: safety, liquidity, yield, and compliance
Fiercely independent
•Transparent AUM fee structure
•Hourly or flat-rate fees for other services
Fee only pricing
•Clients rely on a cohesive team to navigate all facets of public finance
•Tailored investment and arbitrage solutions
Fully integrated services
5.1.a
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Fully Integrated Services 5.1.a
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Investment
policy
evaluation &
development
Cash flow
analysis &
forecasting
Investment
strategy
development &
implementation
Banking
relationship RFP
guidance &
evaluation
Arbitrage
monitoring &
reporting
Refunding &
defeasance
escrow
bidding
Investments & Treasury Management Services5.1.a
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Our Process 5.1.a
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Robust Reporting & Analysis 5.1.a
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Arbitrage Creation
5.1.a
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Arbitrage Monitoring
5.1.a
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Investment & Arbitrage Process Integration
The Arbitrage team is integrated seamlessly within the
Investment team to develop and execute prudent, cost-
effective arbitrage strategies. We use a proactive approach to:
Determine arbitrage responsibilities & risks before debt issuance
Balance investment & expenditure practices to seek optimal
earnings
Take full advantage of available exceptions, safe harbors &
elections for arbitrage reporting
Minimize compliance risk & rebate liability
5.1.a
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Our Team: Your Investment & Client Service Team
Brian Reilly, CFA
Investments President
breilly@ehlers-inc.com
651-697-8541
Ryan Miles, CPFIM
Managing Director
rmiles@ehlers-inc.com
651-697-8590
Tami Olszewski, CPFIM
Senior Investment Advisor
tolszewski@ehlers-inc.com
262-796-6189
Dawn Lawson, CCM
Senior Client Service Advisor
dlawson@ehlers-inc.com
262-796-6174
Cliff Janney
Client Service Advisor
breilly@ehlers-inc.com
651-697-8528
5.1.a
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Our Team: Your Trading Desk
Keith Schmitz
Investment Operations Manager
kschmitz@ehlers-inc.com
651-697-8543
James Hey
Fixed Income Trader
jhey@ehlers-inc.com
651-697-8575
Nha Nguyen
Public Finance Analyst
nnguyen@ehlers-inc.com
651-697-8517
Logan Schwartz
Investment Portfolio Analyst
lschwartz@ehlers-inc.com
651-697-8574
100+ years’ combined investments & treasury management experience
5.1.a
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Our Team: Your Arbitrage Compliance Solution
Stephen Broden
Managing Director
sbroden@ehlers-inc.com
651-697-8540
Joel Melstrom, CFA
Senior Arbitrage Consultant
jmelstrom@ehlers-inc.com
651-697-8594
Troy VanderPloeg, CPA
Senior Arbitrage Consultant
tvanderploeg@ehlers-inc.com
262-796-6164
30+ years’ combined arbitrage experience
5.1.a
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Ehlers’ Investment & Arbitrage Fees
•Comprehensive and Transparent fees based on average monthly assets under
management
Includes all finance committee or board meetings & travel expenses
Includes cash flow forecasting and compliance strategy planning
All terms memorialized in Investment & Arbitrage Advisory Agreement
Can establish flat fee structures for specific scopes of work
•We charge NO other management, check writing, ACH or wire fees. And No investment
mark-ups
5.1.a
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Delivering Client Value
Time savings for
highest & best use
of staff time
Service continuity
with Ehlers’
Municipal Advisor
& your team
Easy to use
reporting tools &
generation
Compliance
monitoring
Fiduciary
relationship
Cash flow
forecasting &
planning
5.1.a
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Ehlers is the joint marketing name of the following affiliated businesses (collectively, the “Affiliates”): Ehlers & Associates,Inc.
(“EA”), a municipal advisor registered with the Municipal Securities Rulemaking Board (“MSRB”) and the Securities and
Exchange Commission (“SEC”); Ehlers Investment Partners, LLC (“EIP”), an SEC registered investment adviser; and Bond Trust
Services Corporation (“BTS”), a holder of a limited banking charter issued by the State of Minnesota.
Where an activity requires registration as a municipal advisor pursuant to Section 15B of the Exchange Act of 1934 (Financial
Management Planning and Debt Issuance & Management), such activity is or will be performed by EA; where an activity
requires registration as an investment adviser pursuant to the Investment Advisers Act of 1940 (Investments and Treasury
Management), such activity is or will be performed by EIP; and where an activity requires licensing as a bank pursuant to
applicable state law (paying agent services shown under Debt Issuance & Management), such activity is or will be performed
by BTS. Activities not requiring registration may be performed by any Affiliate.
This communication does not constitute an offer or solicitation for the purchase or sale of any investment (including without
limitation, any municipal financial product, municipal security, or other security) or agreement with respect to any investment
strategy or program. This communication is offered without charge to clients, friends, and prospective clients of the Affiliates
as a source of general information about the services Ehlers provides. This communication is neither advice nor a
recommendation by any Affiliate to any person with respect to any municipal financial product, municipal security, or other
security, as such terms are defined pursuant to Section 15B of the Exchange Act of 1934 and rules of the MSRB. This
communication does not constitute investment advice by any Affiliate that purports to meet the objectives or needs of any
person pursuant to the Investment Advisers Act of 1940 or applicable state law.
Important Disclosures 5.1.a
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March 28, 2022
Ken Witt, County Administrator
Leah Simington, Finance Director
St. Croix County
1101 Carmichael Rd
Hudson, WI 54016
RE: Ehlers’ Summary Proposal for Independent Investment & Arbitrage Advisory Services
Mr. Witt and Ms. Simington,
Thank you again for discussing with us St. Croix County’s needs regarding fulfilling its investment
and arbitrage functions in a prudent manner. We are pleased to present this proposal to provide
independent investment and arbitrage advisory services to St. Croix County (the “County”). We
believe our experience, exclusive focus on public sector investors and dedication to outstanding
client service provide a compelling relationship option for the County to consider.
For more than 60 years, Ehlers has partnered with public sector clients to build strong and
vibrant communities through financial planning, debt issuance and management, economic
development consulting, arbitrage, and investment advisory services.
We believe the following factors set us apart from other firms:
Public Sector Focus. Our only clients are governmental entities, agencies, school districts
and special authorities. Ehlers’ exclusive focus on the public sector uniquely positions us to
provide a level of service that is unsurpassed in the markets we serve. We have an
extensive understanding of our clients’ operations, statutory and policy considerations, and
federal regulations related to tax-exempt debt, which allows us to speak to best practices
and specifically tailor our advice to meet their needs and surpass their expectations.
Fiercely Independent. Ehlers’ fiduciary responsibility is to you and you alone. We will
always place your interests first, delivering investment advisory solutions that fulfill your
needs as cost-effectively as possible and provide maximum benefit to you. We adhere
strictly to the prioritized principles of safety, liquidity and yield. We have no investment
banking affiliation, no brokerage activities and do not maintain a securities inventory from
which we would engage in principal trading activities. Our interests are always aligned with
yours.
Fully integrated. Using a collaborative approach in advising our clients, Ehlers offers a fully
integrated suite of services designed to help clients navigate every facet of public finance,
including investments, treasury management consulting, arbitrage, financial management
planning, debt issuance and management, paying agent services and continuing disclosure.
We believe this approach delivers the greatest insight, highest value and the most
reasonable cost to our clients.
5.1.b
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Fee Only. Ehlers’ investment advisory fees are based solely on assets under management.
We receive no additional compensation or commission on securities or other transactions.
Further, we do not offer any proprietary pooled investment vehicle or other form of
liquidity product from which an administrative or other fee is derived. All client portfolios
are managed as separate accounts.
Comprehensive Investment & Arbitrage Scope of Services
The Ehlers Investment and Arbitrage Advisory service offering shall remain in place as noted in the
Investment Advisory Agreement as a month-to-month engagement. Ehlers proposes the full scope of
advisory services, to be negotiated accordingly by the County, as the County’s investment and
arbitrage advisor:
• Review the County’s investment policy and provide any recommendations for amendment.
• Establish any investment or cash management accounts, as requested and necessary.
• Review the County’s existing portfolio and set investment objectives with County staff,
including (but not limited to) near- and long-term objectives that incorporate cash flow
requirements, diversification parameters, policy limitations, risk tolerance and portfolio
duration and average maturity measures. Provide recommendations, accordingly.
• Assist with establishment of custodial or other accounts for the benefit of the County.
• Input all client securities/investment holdings in Ehlers’ systems.
• Coordinate notification to any of the County’s third-party service providers of our
engagement as the County’s advisor of record.
• Prepare a comprehensive cash forecast.
• Provide for all trade execution on the County’s behalf, including managing settlement
procedures for all investment transactions. Maintain records for all cash and investment
transactions and provide reporting to the County for its own records.
• Act as the County’s agent to qualify trading counterparties, using industry-standard
due diligence.
• Act as the County’s agent with respect to its custodian and custodial account(s).
Provide reconciliations with custodial account balances for all accounts we manage.
• Provide GASB-compliant investment and other (performance, holdings, etc.) reporting to
the County no less frequently than monthly, as well as any required attestations to the
County’s auditor for which we are qualified to do so.
• Participate in meetings with County personnel, as requested, including in-person meetings.
• Participate in Committee and Board meetings to present information related to the
County’s investment portfolio and arbitrage compliance updates.
• Provide arbitrage spend down analysis during construction period in the form of a formal
arbitrage report.
• Additional arbitrage reporting, if any, following the construction period can be completed by
Ehlers arbitrage team under a separate contract negotiated directly with the County.
• Perform any compliance duties on behalf of the County, as needed.
• Other duties, as requested, and customary under our investment and arbitrage advisory
agreements.
5.1.b
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Ehlers would provide additional services/scopes of work under separate engage upon mutual
agreement of both parties billed through flat or hourly fee arrangements. These may include, but
are not limited to the following:
• Coordinate with any third-party(ies) with respect to regulatory examinations, i.e. IRS
examinations or audits of tax advantaged bonds.
• Evaluation of banking relationships/services or other treasury management providers.
• Assist with requests for proposals for banking or other treasury management services.
• Escrow portfolio bidding agent.
5.1.b
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Fees For Services
Ehlers proposes an assets under management fee for our scope of work as investment and
arbitrage advisor. Investment advisory fees shall be incurred for all assets under the management
of Adviser. Investment advisory fees shall be charged based on average daily assets under
management calculated on market value of said assets, payable and deducted monthly from
interest earnings.
10 basis points (0.10%) total fixed annualized rate
Assessed monthly at 0.00833% deducted from account
Based upon the current scope and timeline of project expenditures, timeliness of actual expense
payments, current market conditions, the County may achieve investment returns of $4 to $4.5
million dollars* over the life of the project.
*All income projections based upon current project schedule. Projected income based on currently available investment yields, subject to
change and availability-dependent upon investment rates available at time of execution as well as actual draw schedules. Income
projections could increase or decrease, depending on the pace of actual project expenditures.
Fees are all inclusive of other services provided by Adviser to the Client under an investment
advisory engagement. This fee shall be all-inclusive for all services rendered, including any
materials, time and travel.
This fee structure shall remain in place through December 31, 2025.
Please refer to our Investment Advisory Agreement for specific disclosures regarding conflicts,
including those associated with our fees and affiliations.
The primary contact for the engagement shall be Ryan Miles, Managing Director - Investments.
Ehlers’ personnel authorized to provide instructions on behalf of the County shall be assigned at
the time of engagement with notice provided to the Conty of those individuals.
We sincerely appreciate the opportunity to build on our relationship and look forward to further
discussing how we can best serve the County as your investment and arbitrage advisor. It would be
our pleasure to deliver immediate value to your community with the highest level of integrity.
Sincerely,
Ryan Miles, CIPFM Tami Olszewski, CIPFM Stephen Broden
Managing Director, Investments Senior Investment Advisor Managing Director, Arbitrage
5.1.b
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