By Carlos Ferrand
The Audit, Budget and Finance Committee of the Alamo Colleges board of trustees on Tuesday recommended awarding an estimated $105,000 renewal contract to an investment advisory firm, First Southwest Asset Management Inc.
The recommendation goes to the full board at 6 p.m. Oct. 22 in Room 101 of Killen Center, 201 W. Sheridan.
First Southwest became the district’s investment adviser since 2008, providing consultation and evaluation of investment opportunities of surplus operating funds.
The current portfolio is about $150 million. There are no changes from the previous contract.
First Southwest is a diversified investment bank headquartered in Dallas. The contract guarantees First Southwest a flat fee of $40,000 with up to $65,000 more if consulting services are required for bond proceeds based on a $500 million portfolio.
Because the investment amount would increase, the firm would need to increase its services. In a Wednesday phone interview, district Treasurer Tracey Bedwell said no major bond proceeds are expected.
Alamo Colleges earned $100,000-$200,000 on investment opportunities in fiscal year 2013, she said.
Diane Snyder, vice chancellor for finance and administration, said, “They have been doing a great job for us. We did go test the market and we are coming back recommending that we re-engage.”
The purchase and contract administration department advertised for competitive sealed proposals in the San Antonio Express-News and La Prensa and sent out 120 notices to potential bidders.
Nine bids were received and three were disqualified for not providing verification of registration with the Texas State Securities Board.
Of the nine bids, First Southwest’s bid of $105,000 was the second lowest behind Patterson Capital Management’s bid of $76,000.
The highest bid was $460,000 from Wells Capital Management.
First Southwest was ranked No.1 overall because of quality of service.
Barclays Capital, Citigroup Global Markets and Wells Fargo Securities are three of 30 approved brokers that First Southwest uses when investing.
According to the minute order, First Southwest services include “the execution of securities purchases and sales, reporting and reviewing of Alamo Colleges investment policies and procedures for compliance with the public funds investment act governed by Texas Government code.”