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The Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes the Director to approve DWSD Contract 6007647 with PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc., a piggyback off the Great Lakes Water Authority Requisition No. REQ-0002876, for financial asset management services, for an initial contract amount not-to-exceed $150,000.00 for a term of 3 years, with two 1-year renewal options at $50,000.00, for a total contract not-to-exceed amount of $250,000.00. This also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
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Agenda of January 21, 2026
Item No. 2026-2
Contract No.: 6007647
Contractor: PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc.
Address: 213 Market St., Harrisburg, PA, 17101
Initial Contract Amount: $150,000.00
Two Year Renewal Total Contract Amount: $250,000.00
Tentative Contract Term: 2/1/2026 - 11/2/2028, with two 1-year renewal options
TO: The Honorable
Board of Water Commissioners
City of Detroit, Michigan
FROM: Gary Brown, Director
Detroit Water and Sewerage Department
RE: Proposed DWSD Contract No. 6007647
Financial Asset Investment Services
PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc.
MOTION
Upon recommendation of Marqaicha Welch Procurement Manager, the Board of Water Commissioners for the City of Detroit, Water and Sewerage Department, authorizes the Director to approve DWSD Contract 6007647 with PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc., a piggyback off the Great Lakes Water Authority Requisition No. REQ-0002876, for financial asset management services, for an initial contract amount not-to-exceed $150,000.00 for a term of 3 years, with two 1-year renewal options at $50,000.00, for a total contract not-to-exceed amount of $250,000.00. This also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND / JUSTIFICATION
Utilizing a registered investment advisor is a cost effective and efficient approach to portfolio management. Investment advisors provide direct access to financial market data sources, technology and expertise. Contracting with an investment advisor will assist DWSD with setting up a portfolio with the intent to increase portfolio returns over time, aid with properly managing market risk and diversify portfolio holdings. The proposed contract also includes assistance with the preparation and presentation of investment reporting and other requested presentations to the audit committee and the BOWC. The fee for investment advisor services will be billed monthly based on the actual managed portfolio balance.
DWSD participated in and is now relying on Great Lakes Water Authority’s (GLWA) competitive solicitation process (RFP REQ-0002876) that resulted in a new contract with PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc. for financial investment services. The proposed DWSD contract will benefit from the scale of competitive pricing and same terms and conditions obtained through the GLWA solicitation process.
With PFM’s oversight, GLWA increased their investment income earnings from $4.4 million to $22.3 million over a two-year period by:
1. Negotiating and increasing bank earnings credit rates
2. Investing debt service and debt reserve funds
3. Transitioning balances in bank deposit accounts to higher yielding government money market and local government investment pools,
4. Investing funds in construction and trust accounts into longer term investment securities,
5. Developing quarterly investment report package
6. Identifying an appropriate portfolio strategy appropriate
As a large water system retailer, DWSD seeks to grow its portfolio and obtain services to increase returns on investments over the term of the contract period.
Services under the proposed contract include, but are not limited to:
1. Managing financial assets, including operating bond funds (non-pension), in accordance with DWSD's investment parameters and in compliance with Public Act 20 as amended. The portfolio should be managed in a fiduciary capacity.
2. Assisting DWSD in the execution of an investment strategy appropriate for each fund and establishing appropriate benchmarks.
3. Evaluating market risk and recommending strategies that minimize negative impact on the portfolio.
4. Reviewing cash flow projections developed by DWSD Staff to ensure investments are consistent with cash flow requirements and projections.
5. Providing investment research under supervision of the managed funds in the DWSD portfolio and conduct continuous program of investment, evaluation and when appropriate sale and reinvestment of portfolio assets.
6. Serving as a general resource to DWSD Staff for information, advice and training.
7. Executing securities purchases and/or sales with approved brokers/dealers at a price favorable to DWSD and in accordance with DWSD’s approved investment policy.
PROCUREMENT METHOD
Great Lakes Water Authority (GLWA) competitively solicited for financial asset management services via Request for Proposals (RFP) #REQ0002876A, and DWSD Finance participated on the GLWA evaluation committee. The contract resulting from the RFP was approved by the GLWA Board of Directors on 10/22/25. The term of the GLWA contract is through 11/2/2028, with two 1-year renewal options.
This procurement was requested through Requisition 542969, which was fully approved by Budget on 12/16/25. DWSD Procurement has confirmed that the vendor has agreed to the request to piggyback off the GLWA contract and that the DWSD work will not significantly change, alter or remove from their ability to provide services to GLWA. The DWSD contract will benefit from the same pricing, terms and conditions as the GLWA contract.
PFM’s clearances expire 2/28/26 and insurance is current. A formal contract document is being sent to the vendor for review and signature.
SUMMARY
A. Contract No. 6007647
B. Contract Term: 2/3/26-11/2/28 (with two 1-year renewal options)
C. Initial Contract Amount: $150,000.00
D. Renewal Contract Amount: $250,000.00
E. Funding Source: O&M Funds
F. GL Strings: 5720-20169-484131-617900-000207-10790-0000-000000 - 47% Water
5820-20180-494131-617900-000228-15805-0000-000000 - 53% Sewer
G. Projected Fiscal Year Spend:
FY 25: $50,000.00
FY 26: $50,000.00
FY 27: $50,000.00
FY 28: $50,000.00 (renewal option 1)
FY 29: $50,000.00 (renewal option 2)
This proposed contract was presented to the BOWC Finance Committee on January 13, 2026. Per DWSD procurement protocol, Mayoral Review will also be obtained.