Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Sandie Arnott, Treasurer - Tax Collector
Subject: Agreement with The Bank of New York Mellon Trust Company, National Association.
RECOMMENDATION:
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Adopt a resolution authorizing the execution of an agreement with The Bank of New York Mellon Trust Company, National Association (“BNY”) to provide custodial and securities lending services for the San Mateo County Investment Pool, for the term of August 1, 2025, through July 31, 2028, in an amount not to exceed $600,000.
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BACKGROUND:
The Treasurer - Tax Collector is charged with managing and protecting the County’s financial assets and acts as the banker for the County. The Treasurer - Tax Collector’s objective is to obtain enhanced, quality custodial and securities lending services that are efficient and technologically advanced with an institution that provides strength and stability at the most advantageous cost to the County, taxpayers, and pool participants.
DISCUSSION:
Towards the end of the current custodial and securities lending services contract with BNY, the Treasurer - Tax Collector determined that it was in the best interest of the County to issue a Request for Proposals (“RFP”) for custodial and securities lending services to ensure competitive pricing. An RFP was released on the OpenGov procurement portal on February 14, 2025, and closed on March 21, 2025.
At the conclusion of the RFP, a three-person committee was formed which comprised of subject matter experts from the Treasurer’s Office. Upon close evaluation of the submitted materials and evaluations based on the selection criteria, the committee determined BNY was the most qualified proposer to provide custodial and securities lending services. Favorable attributes for BNY were their high S&P institutional rating of A/A1, their extensive custodial and safekeeping experience, competitive pricing, lowest failure rates in the industry and, consistent with the department’s disaster preparedness plan, their custodial securities are held outside of California. In addition, because of the established relationship between the County and BNY, there will be no conversion issues.
A key contributor to fees paid to BNY for their services is the size of the County Investment Pool and the mutually agreed to Assets Under Management (AUM) rate, which for this upcoming agreement will be 0.15 basis points (“bps”).
The County Attorney has reviewed and approved the resolution and agreement as to form.
The Board is being asked to authorize the Treasurer - Tax Collector or designee to execute subsequent amendments which do not exceed an aggregate of $25,000.
PERFORMANCE MEASURE:
COMMUNITY IMPACT:
Entering into this custodial and securities lending services agreement can have significant positive equity impacts for the residents of San Mateo County by increasing government efficiency and transparency. This includes improving financial oversight, reducing errors, and enhancing trust in public finance management.
FISCAL IMPACT:
The appropriation for this Agreement has been included in the Treasurer’s FY 2025- 2026 Recommended Budget and will be included in future budget requests. The cost for custodial services will be approximately $200,000 per year, and not to exceed $600,000.00 for the three-year term.