OCEANSIDE — The city has contracted with an outside agency to manage its half-billion-dollar investment portfolio after failing to find a replacement treasury manager.
The new contract with Chandler Asset Management marks the first time the city has hired a third-party firm to manage its $500 million investment portfolio. Until recently, the city has traditionally hired a treasury manager to oversee its financial assets.
Following the resignation of Steve Hodges, the city’s most recent treasury manager, municipal officials went through a recruitment process to find a replacement. However, they were still looking for a suitable replacement.
Eventually, a panel of staff members, including Financial Services Director Jill Moya, Assistant City Manager Michael Gossman and elected Treasurer Victor Roy, chose Chandler Asset Management, one of 10 investment advisory firms that applied to a September request for proposals, to handle the investment portfolio.
Moya assured the City Council at its Dec. 21 meeting that treasury division staff, including herself and Roy, would have access to the investment portfolio to ensure everything is balanced and matched.
“We have full access to our custodial account that holds all of our investments,” Moya said. “We have always had that and will continue to have that … We’re giving Chandler access to make trades, but we aren’t giving up any access that we’ve had in the past.”
Roy, who hadn’t attended a council meeting in months since an investigation into alleged ethics violations was closed, emphasized that handing over control of the investment portfolio to a team of professionals rather than leaving it in the hands of one individual would benefit the city.
“One city person was responsible for keeping us in government compliance while maintaining a balanced investment portfolio,” Roy said. “Now, we will move forward into a new era with an independent asset management company with teams of professionals to make these day-to-day decisions. Thus it will no longer just be one person. This is a far better solution to our city’s investment needs, especially considering that we have a $500 million investment portfolio.”
The hiring of Chandler comes with a projected annual increase of $103,700 for the city, a cost potentially offset by revenue increases from portfolio management.
Mayor Esther Sanchez and Deputy Mayor Ryan Keim thanked Roy for attending the meeting. Keim has been pushing for the treasurer to participate in a meeting since Hodges’ allegations about Roy allegedly violating several conduct, and ethics codes came out over the summer.
In September, Roy was found to have violated some codes, including viewing inappropriate material at a public library. However, according to an outside investigator’s report, most allegations were not sustained or found to lack evidence.
Hodges also alleged that Roy made risky investments that cost the city millions, although as treasurer, Roy cannot make investments.