City Council today approved a new intergovernmental agreement (IGA) between the Chicago City Treasurer’s Office (CTO) and the Public Building Commission (PBC) that will allow the CTO to provide financial management services with a goal of boosting PBC’s return on investment for its bond portfolio. Under the agreement, known as a shared services partnership, the CTO’s portfolio managers will oversee a portion of the PBC’s portfolio with the goal of a higher return on investments. The portfolio covered by the agreement consists of $38 million in bonds.
At this time, the PBC is without an asset allocation strategy to maximize its return on its investment portfolio. The IGA will enable the CTO to manage the day-to-day operations of the PBC’s investment portfolio, which will reduce costs and eliminate duplication while leveraging the office’s existing banking and trading relationships and investment expertise.
“The Treasurer’s Office is thrilled to begin a new partnership with the PBC that will help provide them with a cost-effective approach to investment management,” Treasurer Summers said. “Our successful relationship with the Chicago Park District has allowed the agency to focus on their core mission of enhancing the quality of life for Chicagoans while saving taxpayer dollars. These innovative partnerships mean increased resources for key services such as education and public safety. We look forward to providing the same level of investment expertise and support to the PBC and thank Mayor Emanuel for his support on this initiative.”
The CTO will collaborate with PBC and recommend an asset allocation strategy in accordance with applicable law, advise the PBC on cash flow needs and risk tolerance policy, prepare an investment plan to achieve PBC’s goals, advise the PBC on current market test and financial market conditions forecast and prepare performance reports of financial activity.
In April 2015, the Board of Commissioners of the PBC and Chicago City Treasurer Kurt Summers announced that an IGA had been approved through the CTO Advantage Program. The CTO has been working in the same capacity under a shared services partnership with the Chicago Park District since 2013. Since implementation, the shared services partnership has annually saved the Park District over $250,000 in management fees and other costs. Treasurer Summers first proposed launching CTO Advantage to expand the shared services program during his first 90 days in office.