5.
City Council Special Work Session
- Meeting Date:
- 10/23/2018
- From:
- Rick Tadder, Management Services Director
TITLE
Future Agenda Item Request (F.A.I.R): A request by Councilmember McCarthy to place on a future agenda a discussion about the possibility of amending the investment policy to further pursue Social Responsible Investing (SRI).
STAFF RECOMMENDED ACTION:
Staff and the City's investment managers, PFM Asset Management LLC, will present information on SRI. After the presentation, Council will discuss the F.A.I.R. and determine if four or more Councilmembers want to continue discussions at a future work session.
EXECUTIVE SUMMARY:
On December 19, 2017, Councilmember McCarthy introduced a F.A.I.R. to discuss the possibility of amending the investment policy to further pursue SRI. At that meeting, two or more Councilmembers agreed to continue the discussion. At the June 12, 2018 work session, Council agreed to have a presentation from an outside company to help educate what SRI means. The City's investment management firm will present on this topic and provide information on how this relates to the City's investments. Upon conclusion of the presentation, Council will discuss the F.A.I.R. and determine if four or more Councilmembers want to continue discussions at a future work session.
INFORMATION:
This meeting is to help educate Council about the topic of SRI. The City's investment manager, PFM Asset Management LLC, will be presenting information about SRI as well as showing how the policy change would affect the current investment strategy of corporate notes restricted to 10% in the Policy Manual and currently at 8% of the City portfolio.
In addition, staff met with Eric Souders of Ascendant Financial Solutions, Inc. to both learn more about what his perspective is of SRI as well as share the current city Investment Policy and to discuss the restrictions we have on investment opportunities. The information Mr. Souders shared was primarily around people and companies making decisions on investing in the equity of companies that fit their social goals and to not invest in those equities that go against the criteria they set forth. Upon sharing our Investment Policy with Mr. Souders, it was noted that equity investing is not available to the City due to state restrictions. We discussed that should the City consider adding socially responsible metrics to our policy.
The presentation will include an overview of our current investment objectives and the restrictions that the State of Arizona has on our investment opportunities. One key area of restriction to note is not having the ability to invest in equities of companies, which is the area one would have the highest impact of an SRI policy. The presentation will close with key points to consider if the City chooses to create a socially responsible portfolio. Upon conclusion of the presentation, Council will discuss the F.A.I.R. and determine if four or more Councilmembers want to continue discussions at a future work session.
In addition, staff met with Eric Souders of Ascendant Financial Solutions, Inc. to both learn more about what his perspective is of SRI as well as share the current city Investment Policy and to discuss the restrictions we have on investment opportunities. The information Mr. Souders shared was primarily around people and companies making decisions on investing in the equity of companies that fit their social goals and to not invest in those equities that go against the criteria they set forth. Upon sharing our Investment Policy with Mr. Souders, it was noted that equity investing is not available to the City due to state restrictions. We discussed that should the City consider adding socially responsible metrics to our policy.
The presentation will include an overview of our current investment objectives and the restrictions that the State of Arizona has on our investment opportunities. One key area of restriction to note is not having the ability to invest in equities of companies, which is the area one would have the highest impact of an SRI policy. The presentation will close with key points to consider if the City chooses to create a socially responsible portfolio. Upon conclusion of the presentation, Council will discuss the F.A.I.R. and determine if four or more Councilmembers want to continue discussions at a future work session.