TRANSMITTAL LETTER FOR BOARD MEETING OF NOVEMBER 17, 2022
COMMITTEE ON PROCUREMENT
Mr. Brian A. Perkovich, Executive Director
Title
Issue purchase order and enter into an agreement for Contract 22-RFP-09 Deferred Compensation Plan Investment Consulting Services with Innovest Portfolio Solutions, LLC in an amount not to exceed $146,818.00, Account 101-25000-612430, Requisition 1580379
Body
Dear Sir:
Authorization is requested to issue a purchase order and enter into an agreement with Innovest Portfolio Solutions, LLC (Innovest) to provide deferred compensation plan investment consulting services to the District’s plan for the period from January 1, 2023 through December 31, 2025.
On June 29, 2022, Request for Proposal Contract 22-RFP-09 Deferred Compensation Plan Investment Consulting Services was publicly advertised. Seven hundred fifty-six (756) firms were notified and twenty-seven (27) requested proposal documents. On July 29, 2022, the District received six (6) responsive proposals from the following vendors: Hyas Group, LLC; Innovest; Marquette Associates, Inc.; SageView Advisory Group, LLC; Segal Advisors, Inc.; and The 457 Consulting Group.
The proposals were evaluated by Chairman of the Committee on Finance and staff from the Human Resources Department, the Treasury Section, and the Procurement and Materials Management Department. The criteria for these evaluations were outlined in Request for Proposal Contract 22-RFP-09 and included: understanding of the services, approach to the work, technical competence of the firm and assigned consultants, financial stability, compliance with insurance requirements, submission of licenses/permits, and cost. Following the preliminary evaluation of the proposals, all six proposers were invited to a finalist interview.
Finalist interviews were held September 14-16, 2022. Interviews were conducted by the Treasurer; and Director of Human Resources, both members of the Deferred Compensation Committee. A solicitation was sent to the finalists on September 28, 2022, for an unqualified “best and final” offer. The “best and final” offers were submitted to the Director of Procurement and Materials Management on October 5, 2022.
Based on the evaluation of the proposals using the criteria described above and the pricing provided in the “best and final” offers, the Deferred Compensation Committee has recommended that a contract for deferred compensation investment consulting services be awarded to Innovest. Innovest advises over 220 clients with over $33 billion in total assets. Of these clients, nearly 100 are public sector plans, including five water and wastewater districts. They have a highly qualified team of investment consultants and research staff averaging 20 years of experience. Innovest is able to provide unbiased, independent investment recommendations by operating on a fee only model and not selling investment products of their own. They will serve as a co-fiduciary for the District deferred compensation plan. Fiduciary training will be provided to the committee as part of the services and fiduciary topics will be included in every investment meeting agenda. Innovest has strong fiduciary and governance expertise as demonstrated through their participation as an expert witness in more than 70 engagements involving fiduciary breach cases. Innovest will conduct a full review of the Investment Policy Statement for the plan at the inception of the contract and annually thereafter. They will conduct a share class review of all mutual funds included in the investment lineup and fee benchmarking on an annual basis. Innovest has extensive experience with plan administrator searches having conducted more than 125 searches for clients over the past five years and would assist the District with the entire on-boarding process should a new plan administrator be selected during the term of the contract. Innovest has a dedication to diversity, equity, and inclusion (DEI) visible through its development of committee education in this area and establishment of a DEI rating system for investment management firms. Finally, Innovest can provide reporting on the environmental, social, and governance (ESG) ratings of current mutual fund options in the investment lineup and can assist the District in exploring other ESG options in the marketplace.
The Diversity Section reviewed the request for proposal and determined that these types of services are typically performed by a single investment firm and do not provide practical or cost-effective opportunities for direct or indirect subcontracting. As such, Appendix A and Appendix V were not included in this contract.
In view of the foregoing, it is requested that the Director of Procurement and Materials Management be authorized to award a contract to Innovest in the amount of $146,818.00. The estimated annual expenditures are as follows: $47,500.00 in 2023, $48,925.00 in 2024, and $50,393.00 in 2025.
Funds will be requested in 2023, 2024 and 2025 in Account 101-25000-612430, and are contingent on the Board of Commissioners’ approval of the District’s budget for those years.
Recommended, Beverly K. Sanders, Director of Human Resources
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for November 17, 2022
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