Dana Point committee backs staff plan to allow CAMP pool after PFM presentation

The Dana Point Financial Review Committee voted Sept. 12 to direct city staff to prepare an updated investment policy that would allow the city to participate in the California Asset Management Program (CAMP), following a presentation from PFM Asset Management on pooled and separately managed investment options.

PFM presenters Leslie Murphy and Kyle Tanaka told the committee the firm manages both discretionary and advisory accounts for public agencies and emphasized a tailored approach based on the city’s cash-flow needs. "We put communication and client service first and foremost," Murphy said, describing PFM’s experience managing public-agency funds in California. PFM’s cash-flow model estimated the city has roughly $27 million in investable liquidity and projected, under current growth trends, that investable balances could approach $70 million by January 2025 (assuming a 15% liquidity cushion).

The presentation compared two main options: joining the CAMP pooled investment vehicle and creating a separately managed core portfolio. Tanaka described CAMP as a joint powers authority local government investment pool that maintains external reporting and liquidity standards; he cited a July fund size near $14.1 billion and a seven-day yield in the 5.4% range at the time of the presentation. "CAMP follows GASB 79," Tanaka said, explaining that the program maintains a stable net asset value and minimum daily and weekly liquidity requirements.

Murphy outlined a separately managed-account option in which securities would be held in custody in the city’s name; a sample 0–5 year laddered strategy showed a gross yield near 5.17%, with an estimated management fee of about 10 basis points that would reduce the net return. PFM noted the city’s June 30 portfolio totaled just shy of $64 million, with roughly 62% in cash/LAIF and about 38% in U.S. Treasury securities and an average market yield near 3.64%.

Staff recommended adding the CAMP pool option to the city’s investment policy rather than adopting PFM’s full suite of managed-account services immediately. Staff suggested an initial target allocation of about 25% to CAMP (on a roughly $60–64 million portfolio) and said the city manager — who also serves as city treasurer — would retain discretion to move funds between vehicles. Staff said the recommended policy change would be brought back to the Financial Review Committee in October for auditor review, then forwarded to City Council in November to permit opening a CAMP account and adopting the revised investment policy.

During committee discussion members asked about custody and transaction logistics; staff and PFM confirmed CAMP’s custodian is U.S. Bank and said transfers typically involve wires and routine staff time. The presenters explained that CAMP charges roughly 10 basis points off the pool’s assets (PFM characterized current fees nearer 9 basis points given asset scale) while LAIF’s administrative fees are minimal; PFM said the quoted yields are net of fees to make comparisons easier.

The committee moved and seconded a recommendation that staff draft a policy to participate in the California Asset Management Program and to engage PFM for related services. The roll call produced affirmative votes from voting members present; Member Frost had been noted absent earlier in the meeting. The motion passed and staff will return with a policy proposal as described.

Votes at a glance
- Approval of minutes from April 25, 2023 — motion made and seconded; members voted in the affirmative (passed).
- Motion directing staff to prepare an investment policy to participate in CAMP and engage PFM Asset Management — moved and seconded; motion passed (affirmative votes from members present; Member Frost absent).