Long Beach City College on Wednesday awarded a contract to a wealth management firm that will oversee the investment of $20 million that the college received last year from philanthropist MacKenzie Scott.
The LBCC board of trustees awarded the five-year contract to Graystone Consulting, a subsidiary of Morgan Stanley, to manage the funds for the college, which hopes the investment returns will be able to extend the life of the gift.
LBCC was one of hundreds of institutions to receive a gift from Scott. The college received a total of $30, million but trustees agreed to set aside $5 million for the LBCC Foundation to build up an endowment to benefit vulnerable students and another $5 million to fund grants and to other needs of the college.
The college started a search process earlier this year for a firm to manage the remaining $20 million. School officials hope that investing the money can garner somewhere between $350,000 and $1.4 million in capital gains annually. In return, Graystone will be paid up to $850,000 over the life of the contract.
While Scott’s gift had been a point of celebration for the college and it dedicated multiple public meetings, formed advisory groups and even solicited public opinion on how to spend the funds, the awarding of the contract was listed on the board’s consent calendar, which is typically reserved for routine items that can be approved with one vote and no discussion.
Trustee Sunny Zia asked for the contract to be removed from consent Wednesday to ask questions about the firm, including how the fees were decided on and why there wasn’t a presentation being given.
Superintendent-President Mike Munoz declined to answer questions about the contract, noting that Zia had been provided written responses earlier in the day. Munoz added that it was also not part of the trustees’ role to “get into the operations of the organization.”
Trustees are the governing body of the college and are tasked with numerous things like approving or denying contracts, approving the college’s annual budget and placing bond measures on the ballot.
In a statement, the college said that the decision to place the issue on the consent calendar was made because it was not a “board-driven process.”
“The procedure to select a firm, like any other consulting or management business that the College hires, was conducted in accordance with our district process,” Stacy Toda, a spokesperson for the college said in an email. “As this process is a district process and not a board-driven process the role of the trustee in the selection of this firm is limited in its scope.”
However, they did have the authority to deny the contract.
Now that the contract has been approved, college officials are expected to meet with Graystone to form a socially responsible investment plan.