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HomeMy WebLinkAboutPACKET JUN 14 2011 RICK WITR OPPORTUNITY BEAUMON* REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS JUNE 14,2011 1:30 P.M. CONSENT AGENDA * Approval of minutes—June 7,2011 * Confirmation of committee appointments A. Approve the City of Beaumont Investment Policy B. Authorize the settlement of the claim of Edgard Sequeira i A RICH WITH OPPORTUNITY I'Lo . � T • E • X • A • S City Council Agenda Item TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Laura Clark, Chief Financial Officer 02.� MEETING DATE: June 14, 2011 REQUESTED ACTION: Council consider a resolution approving the City of Beaumont Investment Policy. RECOMMENDATION The Administration requests a review of the City of Beaumont Investment Policy and approval as attached. BACKGROUND State law mandates the City Council review the Investment Policy and approve modifications, if any, to the policy on an annual basis. In April 2009, the City Council approved entering into an agreement with Valley View Consulting, LLC, for investment management services. As part of the contract, Valley View and City staff have performed an annual review of the City's investment policy. No material modifications have been proposed, although there is some minor clean up of wording and the addition of two institutions under the Broker/Dealer listing. The recommended revisions are highlighted in the attached policy. The Investment Policy was last amended on June 15, 2010. BUDGETARYIMPACT None. RESOLUTION NO. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City of Beaumont Investment Policy, substantially in the form attached hereto as Exhibit'A" has been reviewed and is hereby in all things adopted. All changes to the policy are reflected therein. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 14th day of June, 2011. - Mayor Becky Ames - B eaumont C 1 o RICH WITH OPPORTUNITY BEA,UMON* T • E • X • A • 8 Investment Policy Adopted Resolution of Proposed to City Council on ruite 15, 20 June 2011 EXHIBIT "A" City of Beaumont - Investment Policy Table of Contents I. Introduction................................................................................................................1 II. Scope............................................................................................................................1 III. Prudence.....................................................................................................................1 IV. Objectives....................................................................................................................1 A. Safety of Principal..........................................................................................2 B. Liquidity..........................................................................................................2 C. Yield................................................................................................................2 V. Delegation of Authority.............................................................................................2 VI. Ethics and Conflicts of Interest................................................................................3 VII. Training......................................................................................................................3 VIII. Selection of Financial Dealers,Institutions and Investments Pools .....................3 A. Broker/Dealers...............................................................................................4 B. Public Depositories.........................................................................................4 C. Investment Pools............................................................................................5 IX. Authorized and Suitable Investments......................................................................5 X. Marking to Market....................................................................................................7 XI. Collateralization.........................................................................................................7 XII. Safekeeping and Custody..........................................................................................8 XIII. Diversification..........................................................................................................89 XIV. Investment Strategies ................................................................................................9 ii A. Pooled Fund Groups .................................................................................... 10 B. Debt Service Funds ...................................................................................... 11 C. Debt Service Reserve Funds ........................................................................ 12 XV. Internal Control..................................................................................................... 12 XVI. Performance Standards ........................................................................................ 13 XVII. Reporting................................................................................................................ 13 XVIII. Investment Policy Adoption.................................................................................. 13 Exhibits Exhibit A-Approved List Broker/Dealers...........................................................................15 Exhibit B-Certification By Business Organization ...........................................................16 iii City of Beaumont Investment Policy 1. Introduction It is the policy of the City of Beaumont to invest public funds in a manner that will ensure that the investments are duly authorized, properly managed, adequately protected and fully collateralized. The City shall seek the optimum investment return with the maximum security while meeting daily cash needs and conforming to the City Charter, the Public Funds Investment Act (Chapter 2256, Government Code as amended) and all other state and local statutes governing the investment of public funds. II. Scope This Investment Policy applies to all financial assets of the City as accounted for in the City's Comprehensive Annual Financial Report. These include General, Special Revenue, Debt Service, Capital Projects, Enterprise, Internal Service, and Fidueiafy Funds. All are pooled for investment purposes except debt service and debt service reserve funds. Interest is allocated monthly to each find based on its individual cash balance. III. Prudence Investments shall be made with judgment and care,under prevailing circumstances,that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived. The "prudent person" standard shall be applied in the context of managing the total portfolio rather than a single investment providing that the decision was consistent with this Investment Policy. Investment Officers acting in accordance with written procedures and the Investment Policy and exercising due diligence shall be relieved of responsibility for an individual security's credit risk or market price changes provided that deviations from exceptions are reported in a timely fashion and appropriate action is taken to control adverse developments. IV. Objectives The primary objectives, in priority order, of the City's investment activities shall be preservation and safety of principal, liquidity,yield and public trust. 1 A. Saf&of RrimiW The City has as its foremost objective to ensure the safety of principal. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of eapital-principal in the overall portfolio. To attain this objective, diversification is required in order to eliminate an over-concentration of assets in one institution,maturity or type of investment. B. Liguicity The City's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements that might be reasonably anticipated. The portfolio shall be constructed so that investment maturities are matched with forecasted cash flow requirements and limited by investments with an active secondary market or convertible to cash with little or no penalty. C. Public Trust Investment Officers shall seek to act responsibly as custodians of the public trust. Investment Officers shall avoid any transaction that might impair public confidence in the City's,ability to govern effectively. D. Yield The City's investment portfolio shall be designed with the objective of attaining a rate of return that is consistent with risk limitations and cash flow characteristics of the City's investments. V. Delemtlon of Aut6orlty Authority to manage the City's investment program is derived from the City Charter (article VII, section 1-2). The Charter designates the City Manager as Director of Finance who shall have custody of all public funds, investments,bonds and notes of the City and be responsible for their safekeeping. The City Manager shall establish written procedures for the operation of the investment program consistent with this Investment Policy that include explicit delegation of authority to persons responsible for investment transactions. The City Manager shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager, the Chief Financial Officer, and the City Controller are currently approved as Investment Officers of the City. Each Investment Officer shall be 2 approved by resolution of City Council to invest the City's funds. Such approval of specific persons shall remain in effect until rescinded by the City Council or until termination of the person's employment by the City. Investment Officers shall not deposit, withdraw, transfer or manage the funds of the City in a manner that is not consistent with the "prudent person"standard as described in section III of this Policy. The City Council maintains the right to hire Investment Advisers to assist City staff in the investment of funds. Investment Advisers shall adhere to the spirit, philosophy and specific terms of this Policy and shall invest within the same objectives. The City Manager shall establish criteria to evaluate Investment Advisers, including: 1. Adherence to the City's policies and strategies; 2. Investment strategy recommendations within accepted risk constraints; 3. Responsiveness to the City's request for services and information; 4. Understanding of the inherent fiduciary responsibility of investing public funds; and 5. Similarity in philosophy and strategy with the City's objectives. Selected Investment Advisers must be registered under the Investment Advisers Act of 1940 or with the State Securities Board. A contract with an Investment Adviser may not be for a term longer than two years and any contract, renewal or extension must be approved by the City Council. VI. Ethics and Conflicts of Iaterest Investment Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Investment Officers shall disclose any personal business relationships with business organizations approved to conduct investment transactions with the City. They shall also disclose any specific individuals who seek to sell investments to the City and are related to the Investment Officer within the second degree by affinity or consanguinity, as determined under Chapter 573. Disclosure shall be filed with the Texas Ethics Commission and the City Council. VII. Training In order to ensure qualified and capable investment management, each Investment Officer shall attend at least ten (10) hours of training relating to investment responsibilities within 12 months after assuming such duties and shall continue to attend an investment training session consisting of at least ten (10) hours of instruction not less than once every two years thereafter. Training shall be in accordance with the 3 Public Funds Investment Act and include education in investment controls, security risks, strategy risks, market risks, and compliance with State statutes governing the investment of public funds. All training shall be conducted by an independent source that has been approved by City Council. The approved "independent sources" to provide such training are: the Government Treasurers Organization of Texas, the Government Finance Officers Association, the Government Finance Officers Association of Texas,the Texas Municipal League, and the University of North Texas. VIII. Selection of Broker/Dealers.Financial Iastitudions and Investment Pools Authorized investments shall only be purchased from those institutions selected and approved in accordance with this Policy. Any business organization which seeks to execute investment transactions with the City shall provide a written instrument certifying that they have received and thoroughly reviewed the City's Investment Policy and have implemented reasonable procedures and controls in an effort to preclude investment transactions that are not authorized by this Policy. The certification, as shown by example in Exhibit E, must be signed by a qualified representative of the business organization. Investment Officers shall not buy any securities from a firm or make deposits with a fluid, pool or financial institution that has not filed this instrument. Each time City Council approves a material revision to the Investment Policy, the cerdjkwion should be sent to the approved business organizations along with the newly revised Investment Policy. A. Broker/Dealers The City shall select broker/dealers by their ability to provide effective market access and may include "Primary Government Securities Dealers" or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 150-1 (uniform net capital rule). Broker/dealers selected must be members in good standing of the Financial Industry Regulatory Authority ("FINRA"), and be licensed by the State of Texas. Each broker/dealer will be reviewed by Investment Officers and a recommendation made for approval by City Council. An "approved broker/dealer list", as shown in Exhibit A, shall be maintained by the Investment Officers at all times and reviewed by the City Council on an annual basis. The City shall not enter into transactions with a broker/dealer until official City Council approval. B. Public Denositories/Financial Institutions 4 The City Council shall select a primary depository as required by law. The primary depository as authorized by the City Council shall meet all requirements of the state law concerning depositories for municipal funds (Chapter 105, Government Code). The primary depository shall be selected through the City's banking services procurement process, including a formal Request for Proposal (RFP) issued in compliance with applicable State law, and offers the most favorable terms and conditions for the handling of City funds. The City may also establish agreements with other financial institutions under separate contract for additional services that are necessary in the administration, collection, investment, and transfer of municipal funds. Such deposits will only be made after the financial institution has completed and returned the required written instruments and depository pledge agreements. No deposit shall be made except in a qualified public depository as established by State Law. C. Investment Pools Investment Officers may invest funds of the City through an eligible investment pool with specific approval by resolution of City Council and execution of a written agreement. To become eligible, investment pools must fast meet all requirements of State Law. They shall provide the City with an offering circular that contains specific and detailed information, investment transaction confirmations, and detailed monthly transaction and performance reports. Pools shall have advisory boards composed of qualified members representing participants and non-participants who do not have a business relationship with the pool. Before selection, pools shall be thoroughly reviewed and evaluated by Investment Officers. IX. Authorized and Suitable Investments Authorized investments for municipal governments in the state of Texas are set forth in the Public Funds Investment Act, as amended. Suitable investments for the City are limited to the following: 5 Direct Obligations of the United States or its agencies and instrumentalities that have a maximum stated maturity date of 5 years or less. Federal agencies and instrumentalities that do not carry the explicit U.S. Government guarantee must be continuously rated no lower than AAA/A-1 or an equivalent rating by at least one nationally recognized rating agency. Financial institution deposits placed with approved banks as described above (section VIII-B) which have a maximum stated maturity date of 5 years or less and are insured by the Federal Deposit Insurance Corporation, or their successors; or secured as described in section XI Collateralization. Additionally, the City may execute certificates of deposit through a depository institution that has its main office or a branch office in Texas that participates in the Certificate of Deposit Account Registry Service (CDARS), or similar program, and meets the requirements of Section 2256.009(b). Fully collateralized direct repurchase agreements with a defined termination date of 90 days or less which are secured by obligations of the United States or its agencies and instrumentalities and pledged with a third party other than an agent for the pledgor. Investment Officers may invest in repurchase agreements through an approved primary government securities dealer or an approved depository bank as described above (section VIII-A, B). Each issuer of repurchase agreements shall be required to sign a master repurchase agreement. For flexible repurchase agreements executed with bond proceeds, the defined termination date of 90 days or less may be waived to allow the term of the flexible repurchase agreement to more closely match the expected term of the bond project. aJ No load money market mutual funds registered with and regulated by the Securities and Exchange Commission whose investment objectives include the maintenance of a stable net asset value of$1 per share. Money market mutual funds must maintain a AAAm, or equivalent rating from at least one nationally recognized rating agency; and provide the City with a prospectus and other information required by the Securities and Exchange Act of 1934 and be specifically approved by City Council or purchased through the City's primary depository as an overnight investment tool. The City may not own more than 10%of the money market mutual fund's total assets. bz) Approved investment pools as described above (section VIII-C) which are continuously rated no lower than AAA, AAA-m or an equivalent rating by at least one nationally recognized rating agency . luv,�. tmeuts Not Authorized - The following investments are not authorized under this section: 6 a. Obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pay no principal; b. Obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest; c. Collateralized mortgage obligations that have a stated final maturity date of greater than ten years; and d. Collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. Prudent measures will be taken to liquidate an investment that is downgraded to less than the required minimum rating. The City is not required to liquidate investments that were authorized investments at the time of purchase. The purchase of stock is not an authorized investment for municipal governments. However, stock may be accepted as a donation, provided that it is held in accordance with the terms of the donation and sold as soon as it is advantageous to do so. Reinvestment of proceeds must be in accordance with authorized and suitable investments for the City as listed above. X. Marking to Market All securities and certificates of deposit will be purchased or sold after at least three (3) offers or bids are taken to verify that the City is receiving a fair market value or price for the investment. The market value shall continue to be monitored at least quarterly through on-line investment software to which the City subscribes, the Wall Street Journal, or some other independent market pricing source. The City shall not obtain market pricing from business organizations who may engage in investment transactions with the City. X1. Collateralization Collateralization will be required on all deposits, certificates of deposit and repurchase agreements. With the exception of deposits secured with irrevocable letters of credit at 100% of amount, the collateralization level shall be equal to at least one hundred two percent (102%) of the aggregate market value of the deposit or investment including accrued interest less an amount insured by the Federal Deposit Insurance Corporation. Evidence of the pledged collateral shall be documented by a tri-party custodial or a master repurchase agreement with the collateral pledged clearly listed in the agreement. Collateral shall be reviewed monthly to assure that the market value of the securities pledged equals or exceeds the related deposit or investment balance. 7 Collateral requirements shall be in accordance with both the Public Funds Investment Act and the Public Funds Collateral Act. Collateral underlying repurchase agreements is limited to direct obligations of the United States or its agencies and instrumentalities. The City shall accept a surety bond or the following investment securities as collateral on deposits and certificates of deposit: Direct obligations of the United States or its agencies and instrumentalities. Direct obligations of this state or its agencies and instrumentalities. Collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States and excluding those mortgage backed securities considered a high-risk mortgage security as described by Section 2257.0025 of the Government Code as well as those of the nature described by section 2256.009(b) of the Government Code. Other obligations that are guaranteed or backed by the full faith and credit of this state or the United States or their respective agencies and instrumentalities. Obligations of states, agencies, counties, cities and other political subdivisions rated not less than A or its equivalent. bz) Letters of credit issued by the United States or its agencies and instrumentalities. Financial institutions serving as depositories will be required to sign a depository agreement with the City. The collateralized deposit portfolio of the agreement shall define the City's rights to the collateral in case of default, bankruptcy or closing and shall establish a perfected security interest in compliance with Federal and State regulations, including: 1. The agreement must be in writing; 2. The agreement has to be executed by the Depository and the City contemporaneously with the acquisition of the asset: 3. The agreement must be approved by the Board of Directors or designated committee of the Depository and a copy of the meeting minutes must be delivered to the,City; and 4. The agreement must be part of the Depository's "Official Record" continuously since its execution. 8 i XII. Safekeeping and Custody Collateral shall be placed for safekeeping in a custodial account at the Federal Reserve Bank or at an institution not affiliated with a firm pledging collateral acceptable to the City. With the exception of the Federal Reserve, all safekeeping arrangements shall be in accordance with a tri-party custodial agreement that clearly defines the responsibilities of each party and outlines the steps to be taken in order for the City to gain access to the collateral in the event of a "failure". The custodial agreement shall be executed between the City, the firm pledging the collateral and the custodial institution. All safekeeping receipts shall be delivered to the City and all collateral (whether a pledge or substitution) shall be formally accepted and released by Investment Officers. All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery-versus-payment (DVP) basis. That is, funds shall not be wired or paid until verification has been made that the correct security was received by the safekeeping institution. Financial institution deposits, pool funds, and mutual funds are excluded from this requirement. The investment shall be held in the name of the City or on behalf of the City. XIII. Diversification The City will diversify its investments to eliminate an over-concentration of assets in any one security type or institution. Up to ninety percent (90%) par of the portfolio may be invested in direct obligations of the United States(U.S. Treasury Securities). 1�,) Up to seventy percent(70%) par of the portfolio may be invested in U.S. Agency or Instrumentalities. No more than thirty percent (30%) par of the portfolio may be invested with any one U.S. Agency or Instrumentality. Bz) No more than eighty percent (80%) par of the portfolio may be invested in certificates of deposit or repurchase agreements. Bz) Up to one hundred percent (100%) par of the portfolio may be invested in investment pools for liquidity purposes with no more than eighty percent (80%) par of the portfolio invested in any one pool. No more than fifty percent (50%) par of the portfolio may be invested in money market mutual funds. 9 No more than thirty percent (3(r ) par of the portfolio may be invested with any one institution in certificates of deposit and/or repurchase agreements. XIV. Investment Strategies The City shall maintain a separate investment strategy for each of the three fund types represented in the portfolio. A. Pooled Fund Groins Suitability - Any investment eligible in the Investment Policy is suitable for Pooled Fund Groups. Safety of Principal - All investments shall be of high quality with no perceived default risk. Market price fluctuations will occur. However, managing the weighted average days to maturity of each fund's portfolio to less than 365 days and restricting the maximum allowable maturity to two years using the final stated maturity dates of each investment will minimize the price volatility of the portfolio. Marketability - Investments with active and efficient secondary markets are necessary in the event of an unanticipated cash flow requirement. Historical market "spreads" between the bid and offer prices of a particular security- type of less than a quarter of a percentage point will define an efficient secondary market. Liguidity —Pooled Fund Groups require the greatest short-term liquidity of any of the fund-types. Short-term investment pools and money market mutual funds will provide daily liquidity and may be utilized as a competitive yield alternative to fixed maturity investments. Diversification - Investment maturities should be staggered throughout the budget cycle to provide cash flow based on the anticipated operating needs of the City. Diversifying the appropriate maturity structure up to the two-year maximum will reduce interest rate risk. Yield - Attaining a competitive market yield for comparable investment- types and portfolio restrictions is the desired objective. The yield of an equally weighted, rolling three-month Treasury Bill portfolio will be the minimum yield objective. B. Debt Service Funds 10 SultabOy - Any investment eligible in the Investment Policy is suitable for Debt Service Funds. Safety of Principal - All investments shall be of high quality with no perceived default risk. Market price fluctuations will occur. However, by managing Debt Service Funds to not exceed the debt service payment schedule the market risk of the overall portfolio will be minimized. The stated final maturity date on investments purchased shall not exceed the debt service payment date unless excess funds are available. In that case, maximum maturities shall not exceed two(2)years from the date of purchase and the dollar weighted average maturity of the portfolio shall not exceed 365 days as is consistent with investment strategies for operating funds. Marketability - Investments with active and efficient secondary markets are not necessary as the event of an unanticipated cash flow requirement is not probable. Liajy - Debt Service Funds have predictable payment schedules. Therefore investment maturities should not exceed the anticipated cash flow requirements. Investments pools and money market mutual funds may provide a competitive yield alternative for short-term fixed maturity investments. A singular repurchase agreement may be utilized if disbursements are allowed in the amount necessary to satisfy any debt service payment. This investment structure is commonly referred to as a flexible repurchase agreement. Divenffiention - Market conditions influence the attractiveness of fully extending maturity to the next "unfunded" payment date. Generally, if investment rates are anticipated to decrease over time, the City is best served by locking in most investments. If the interest rates are potentially rising, then investing in shorter and larger amounts may provide advantage. At no time shall the debt service schedule be exceeded in an attempt to bolster yield. Y12M - Attaining a competitive market yield for comparable investment- types and portfolio restrictions is the desired objective. The yield of an equally weighted, rolling three-month Treasury Bill portfolio shall be the minimum yield objective. C. Debt Service Reserve Funds abilfty - Any investment eligible in the Investment Policy is suitable for Debt Service Reserve Funds. Bond resolution and loan documentation 11 constraints and insurance company restrictions may create specific considerations in addition to the Invest Policy. Safety of Principal - All investments shall be of high quality with no perceived default risk. Market price fluctuations will occur. However, by managing Debt Service Reserve Fund maturities to not exceed the call provisions of the borrowing will reduce the investment's market risk if the City's debt is redeemed and the Reserve Fund liquidated. No stated final investment maturity shall exceed the shorter of the final maturity of the borrowing or five years. Annual mark-to-market requirements or specific maturity and average life limitations within the borrowing's documentation will influence the attractiveness of market risk and influence maturity extension. Marketability- Investments with less active and efficient secondary markets are acceptable for Debt Service Reserve Funds. LJauidity — Debt Service Reserve Funds have no anticipated expenditures. The Funds are deposited to provide annual debt service payment protection to the City's debt holders. The funds are "returned" to the City at the final debt service payment. Market conditions and arbitrage regulation compliance determine the advantage of investment diversification and liquidity. Generally, if investment rates exceed the cost of borrowing, the City is best served by locking in investment maturities and reducing liquidity. If the borrowing cost cannot be exceeded, then concurrent market conditions will determine the attractiveness of locking in maturities or investing shorter and anticipating future increased yields. Diversification - Market conditions and the arbitrage regulations influence the attractiveness of staggering the maturity of fixed rate investments for Debt Service Reserve Funds. At no time shall the final debt service payment date of the bond issue be exceeded in an attempt to bolster yield. - Achieving a positive spread to the applicable borrowing cost is the desired objective. Debt Service Reserve Fund portfolio management shall operate within the limits of the Investment Policy's risk constraints. XV. Internal Control The City, in conjunction with its annual financial audit, shall perform a compliance audit of management controls on investments and adherence to the City's Investment Policy. 12 XVI. Performance Standards The City intends to pursue an active versus a passive portfolio management philosophy. That is, investments may be sold before they mature if market conditions present an opportunity for the City to benefit from the trade. The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles that is consistent with risk limitations and cash flow needs of the City. Given this strategy, the basis used by Investment Officers to determine whether market yields are being achieved shall be the average return on 90 day U.S. Treasury Bills. "Weighted average yield to maturity"shall be the portfolio performance measurement standard. XVII. Reporting Investment Officers shall submit a monthly report to City Council summarizing the results of the City's investment activity. This report shall include the status of the current portfolio position, performance, trading activity, interest earnings and collateral. A quarterly report shall be submitted to the City Manager, as Chief Executive Officer, and the City Council detailing investment transactions and performance for the reporting period in accordance with State law. The report shall be jointly prepared and signed by all Investment Officers. It shall include a summary statement prepared in compliance with generally accepted accounting principles for each fund type and a detailed listing that states the beginning market value, changes to the market value, ending market value and fully accrued interest for the period. In addition,Investment Officers shall report on adherence to the City's investment strategies as expressed in this Policy. In conjunction with the annual audit, the quarterly reports shall be formally reviewed by the City's independent auditor on an annual basis and the results of the review shall be reported to City Council. XVIII. Investment Policy Adoption The City's Investment Policy is hereby adopted by resolution of the City Council. The City Council shall review and approve the Policy on an annual basis. This Policy serves to satisfy the statutory requirement to define and adopt a formal investment policy. 13 EXHIBITS Exhibit A CITY OF BEAUMONT Approved List Broker/Dealers Business/Organization Broker/Dealers: JP Morgan Chase Securities Coastal Securities Duncan-Williams,Inc. Wells Fargo Brokerage Services, LLC Rice Financial Products Company Morgan Keegan& Company, Inc. Mutual Securities, Inc. Capital One Financial Corporation 15 Exhibit B City of Beaumont, Texas Certification By Business Organization This certification is executed on behalf of the City of Beaumont(the Investor)and (the Business Organization)pursuant to the Public Funds Investment Act, Chapter 2256,Texas Government Code(the Act)in connection with investment transactions conducted between the Investor and the Business Organization. The undersigned Qualified Representative of the Business Organization hereby certifies on behalf of the Business Organization that: 1. The undersigned is a Qualified Representative of the Business Organization offering to enter an investment transaction with the Investor as such terms are used in the Public Funds Investment Act, Chapter 2256, Texas Government Code and 2. The Qualified Representative of the Business Organization has received and reviewed the Investment Policy furnished by the Investor and 3. The Qualified Representative of the Business Organization has implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the Business Organization and the Investor that are not authorized by the Investor's Investment Policy, except to the extent that this authorization is dependent on an analysis of the makeup of the Investor's entire portfolio or requires and interpretation of subjective investment standards. (Firm) Qualified Representative of the Business Organization (Signature) (Name) (Title) (Date) 16 B RICH WITH OPPORTUNITY r C . T • E • x • A • S City Council Agenda Item TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Tyrone E. Cooper, City Attorne MEETING DATE: June 14, 2011 REQUESTED ACTION: Council consider a resolution authorizing the settlement of the claim of Edgard Sequeira. RECOMMENDATION Council approval of a resolution authorizing the settlement of the claim of Edgard Sequeira. BACKGROUND Council discussed the settlement of this claim in Executive Session on March 8, 2011. BUDGETARYIMPACT There are sufficient funds in the Liability Trust Fund to pay the sum of$10,750.00. RESOLUTION NO. WHEREAS, the claim of Edgard Sequeira has been discussed in an Executive Session properly called and held Tuesday, March 8, 2011; and, WHEREAS, the Council desires to authorize the settlement of the claim; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Attorney be and he is hereby authorized to settle the claim of Edgard Sequeira. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 14th day of June, 2011. - Mayor Becky Ames - AJCN WITS OPPORrvxitt BEAUMON* T * Z * X * A * S REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS JUNE 14,2011 1:30 P.M. AGENDA CALL TO ORDER * Invocation Pledge Roll Call * Presentations and Recognition * Public Comment: Persons may speak on scheduled agenda items 1-3/Consent Agenda * Consent Agenda GENERAL BUSINESS 1. Consider amending Section 2.03.075 of the Code of Ordinances related to the number of authorized positions in the Beaumont Police Department 2. Consider authorizing the City Manager to execute a depository agreement with Wells Fargo Bank for a term of two years with three annual options to renew 3. Consider approving a payment to Jefferson County for the renewal of an annual maintenance agreement with Motorola for support of the shared radio system that is used by EMS, Fire,Police and other city departments COMMENTS * Councilmembers/City Manager comment on various matters * Public Comment(Persons are limited to 3 minutes) Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services are requested to contact Mitchell Normand at 880-3777 three days prior to the meeting. 1 Consider amending Section 2.03.075 of the Code of Ordinances related to authorized positions in the Beaumont Police Department RICH WITH OPPORTUNITY r T • E • x • A • S City Council Agenda Item TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Frank C. Coffin, Chief of Police MEETING DATE: June 14, 2011 REQUESTED ACTION: Council consider amending Section 2.03.075 of the Code of Ordinances related to authorized positions in the Beaumont Police Department. RECOMMENDATION Administration recommends approval. BACKGROUND Over the past five years, the number of Lieutenant positions has fluctuated between 12 and 16. The Assistant Chief position was eliminated in 2009 so the Chief of Police would directly supervise the three Captains. There is a Captain over the Patrol Division,the Criminal Investigations Division and the Administrative Division. After a thorough review of the three divisions, it is recommended that there be 14 Lieutenant positions. The 14 Lieutenants will be assigned according to the attached information. It is also recommended that the number of authorized Grade II Sergeant positions be increased from 42 to 44 and the number of Grade I officer positions be decreased from 204 to 198. The total number of authorized positions in the Police Department would be reduced by two to 259. GRADE CLASSIFICATION CURRENT RECOMMENDED POSITIONS POSITIONS I Officers 204 198 II Sergeants 42 44 III Lieutenants 12 14 IV Captains 3 3 TOTAL 261 259 BUDGETARYIMPACT The proposed changes to the number of authorized positions would result in an annual added cost of approximately $15,000 at full staffing. There are currently 12 vacant Grade I positions and the department intends to fill six of them pending background checks. Beaumont Police Department Administrative Division Captain Jim Clay Lt. Karen Froman- Training and Personnel Lt. Charles Tyler- Internal Affairs and Records Lt. Mark Pierce - Crime Analysis, Budget, Emergency Management, Police Community Relations, Property and Evidence, and Community Oriented Policing. Criminal Investigations Division Captain Glenn Durst Vacant- Crimes Against Persons Lt. David Kiker- Crimes Against Property Lt. Chris Schuldt - Southeast Texas Auto Theft Task Force Vacant - Special Crimes (Juvenile and Sex Crimes) Lt. Bryan Skinner-Narcotics and Vice Field Operations Captain Wayne Jeffcoat Lt. Ken Spitzer- 1'Watch Lt. Roger Richmond - 2nd Watch Lt. Jeff Skinner- 3`d Watch Lt. Ky Brown- 4`'`Watch Lt. Ray Beck- Traffic Lt. Curtis Breaux - Street Crimes Unit, K-9 Unit, Resource Unit, and Animal Services Unite ORDINANCE NO. ENTITLED AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 2.03, DIVISION 2, SECTION 2.03.075 OF THE CODE OF ORDINANCES OF BEAUMONT TEXAS BY ADJUSTING THE NUMBER OF AUTHORIZED POSITIONS IN THE BEAUMONT POLICE DEPARTMENT; PROVIDING FOR SEVERABILITY AND PROVIDING FOR REPEAL. Section 1. That Chapter 2, Article 2.03, Division 2, Section 2.03.075, of the Code of Ordinances of the City of Beaumont be and the same is hereby amended to adjust the number of authorized positions in the Beaumont Police Department as shown below: GRADE CLASSIFICATION POSITIONS I Officers 204 I I Sergeants 42 III Lieutenants 12 IV Captains 3 TOTAL 261 Section 2. That if any section, subsection, sentence, clause or phrase of this ordinance, or the application of same to a particular set of persons or circumstances, should for any reason be held to be invalid, such invalidity shall not affect the remaining portions of this ordinance and, to such end, the various portions and provisions of this ordinance are declared to be severable. Section 3. All ordinances or parts of ordinances in conflict herewith, including conflicting portions of the City Budget, are repealed to the extent of the conflict only. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 14th day of June, 2011. - Mayor Becky Ames - 2 Consider authorizing the City Manager to execute a depository agreement with Wells Fargo Bank for a term of two years with three annual options to renew RICH WITH OPPORTUNITY 1'Em ► � T • E • X • A • S City Council Agenda Item TO: City Council FROM: Kyle Hayes, City Manager J(� PREPARED BY: Laura Clark, Chief Financial Officer� :_ MEETING DATE: June 14, 2011 REQUESTED ACTION: Council consider authorizing the City Manager to execute a depository agreement with Wells Fargo Bank,N.A. RECOMMENDATION Administration recommends Council authorize the City Manager to execute a depository agreement with Wells Fargo Bank,N.A., for a term of two (2) years with three (3) annual options to renew. BACKGROUND The current depository agreement with Capital One Bank, N.A., expires September 30, 2011, and all options to renew have been exhausted. The City has an agreement with Valley View Consulting, LLC (Valley View), for investment management and consulting services. One of the services provided under that agreement is to facilitate the process of selecting a primary depository bank. Valley View with assistance from the City, in accordance with the requirements set forth in Chapter 105 of the Texas Local Government Code has undergone the process of Bank Depository Service Request for Applications (RFA), including preparing the RFA, holding a pre-proposal meeting, analyzing the responses, and making a recommendation as to the best value for the City. All banks within the municipal boundaries were contacted and received RFAs. Four(4)banks responded including: Bank of America, Capital One Bank, JP Morgan Chase Bank, and Wells Fargo Bank. Attached is the report prepared by Valley View which outlines the RFA process, the criteria used to evaluate the responding banks, and the analysis process. After analyzing all responses, Wells Fargo Bank,N.A., was determined to be the best value to the City. Wells Fargo, along with all the responding banks, exhibited acceptable financial strength and the ability to provide the bank services necessary to meet the City's current and future service needs. Wells Fargo stands out in the area of fees and earnings. Each bank's potential earnings credit(earnings that can only be used to offset banking fees )was compared to the hard-dollar interest(normal interest earnings that can be credited to the City's account), to determine the balance needed to offset fees and what the potential earnings may be if excess balance was available. With Wells Fargo Bank, Depository Agreement Page 2 June 14, 2011 there are no fees with a minimum balance of$4 Million and the bank will pay interest on all deposit balances, including the minimum $4 Million used to offset fees. The City's recent monthly average bank balance approximates $7 Million. In addition, the City will receive an allowance up to $2,500 for supplies during the transition between banks, free daily armored car service from one location, free tamper evident deposit bags and deposit slips for the life of the contract. BUDGETARYIMPACT Any expenditures related to banking are budgeted in the Cash Management Division's operating budget. Vallee View Consulting, L.L.C. June 5, 2011 Ms. Laura Clark, Chief Financial Officer City of Beaumont 801 Main Street Beaumont, TX 77701 Dear Ms. Clark: Thank you for the opportunity to assist the City of Beaumont (the "City") with this Bank Depository Services Request for Applications (the "RFA")project. The objective of this engagement was to select a primary depository bank following the expiration of the current contract which ends September 30, 2011, with no remaining options for renewal. Procedure The primary depository bank process proceeded as follows: The project began with the establishment of a Calendar of Events to ensure that the required project steps were performed in a timely and sequential manner. The process for selecting a depository bank is governed by the State of Texas Local Government Codes: Chapter 105 Municipal Depository Act; Chapter 176 Conflict of Interest Act; Chapter 2256 Public Funds Investment Act; and Chapter 2257 Public Funds Collateral Act. In addition to complying with these State statutory requirements, it was necessary to understand and comply with the City's financial and purchasing policies and Investment Policy. The RFA procedure was conducted as follows: 1. Analyzed historical bank service usage and balance records. 2. Reviewed the minimum banking services and potential additional services. 3. Developed a list of potential financial institutions within municipal boundaries: a. Bank of America b. BBVA Compass Bank c. Capital One Bank(the incumbent) 2428 Carters Mill Road,Huddleston,VA 24104-4003 540.297.3419 Page 2 of 5 d. Community Bank of Texas e. JPMorgan Chase Bank f. MidSouth Bank g. Prosperity Bank h. Texas First Bank i. Third Coast Bank j. Wells Fargo Bank 4. Contacted the financial institutions to confirm distribution information, describe process, and identify the designated recipient. 5. Drafted the RFA for staff review and approval. 6. Advertised as required. 7. Distributed the RFAs to the identified and receptive financial institutions. 8. Contacted each financial institution to ensure RFA receipt, and to confirm the date and time of the pre-application conference and the deadline for receipt of applications. 9. Held a non-mandatory pre-application conference that was attended by representatives of: a. Bank of America b. BBVA Compass c. Capital One d. JPMorgan Chase Bank e. Prosperity Bank f. Wells Fargo 10. No additional RFA requests were received as a result of the advertisement. 11. By the deadline, four applications were received: a. Bank of America b. JPMorgan Chase Bank c. Capital One d. Wells Fargo This process provided a competitive environment with four banks responding and Wells Fargo providing two options. The evaluation of the applications was based on, but not limited to, the following criteria, in no particular order of priority: 1. Ability to perform and provide the required and requested services, 2. Reputation of proposer and quality of services, 3. Cost of Services, 4. Funds availability, 5. Interest paid on interest bearing accounts and deposits, 6. Earnings credit calculation on account balances, 7. Completeness of proposal and agreement to points in the RFA, 8. Convenience of locations, 9. Previous service relationship with the City, and 10. Financial strength and stability of the institution. 2428 Carters Mill Road,Huddleston,VA 24104-4003 540.297.3419 Page 3 of 5 Response Analysis The analysis began with an overall review of each bank's general financial strength and ability to provide the bank services necessary to meet the City's current and future service needs. Each of the responding banks exhibited acceptable financial strength and adequately passed the bank service test. Attached are the Bank RFA Financial and Detail Analyses. Fees Each bank's fee schedule was analyzed based on the City's banking service needs and estimated activity levels. The banks offered various waivers, credits and incentives. Where applicable, the value of such was used to reduce estimated two year and five year fees. There were other offers of scanners and supplies, the value of which were difficult to estimate and therefore not included. Wells Fargo #2 proposed waiver of all fees if the annual monthly average collected balance equaled or exceeded $4,000,000. The value of the waivers, credits and incentives are reflected in the Estimated 2 Year and 5 Year Fees in the following table: Est. Monthly Fees Est. 2 Year Fees Est. 5 Year Fees Wells Fargo #2 $4,262 $0 $0 Wells Fargo#1 $4,262 $99,795 $253,238 Capital One $5,211 $125,052 $312,630 JPMorgan Chase $6,510 $131,700 $366,042 Bank of America $7,728 $159,292 $437,508 Earnings The City recognized that in addition to bank service charges, the bank's desire to pay for bank balances augments a relationship. The City's recent monthly average bank balances approximate $7,000,000. Those balances fluctuate month-to-month and within individual months. Therefore, attractive bank-originated interest earning options are important. There are two potential earnings sources: soft-dollar earnings credit and hard-dollar interest. Earnings credit generates "earnings"that can only be used to offset banking fees. Earnings credit above the applicable fees is not paid to the City as interest. Hard-dollar interest is the normal type of earnings that can be used to pay service charges or may be credited to the City's accounts. Earnings above the applicable service charges are kept by the City. Earnings credit, hard-dollar interest, or a combination of the two, can be used to offset any services charges. In the analysis, each bank's potential earnings credit was compared to the hard-dollar interest. The better option was then optimized to offset the greatest amount of banking fees. Where appropriate, once the City's target compensating balance generated enough earnings credit to offset most fees, any excess balance was invested in that bank's most attractive hard-dollar interest earnings alternative. 2428 Carters Mill Road,Huddleston,VA 24104-4003 540.297.3419 Page 4 of 5 As an example, the JPMorgan Chase analysis is as follows: Fees Estimated Monthly Fees = (56,510) Two Year Accumulated Fees = (5156,228) Less Incentives = $24,529 Net Two Year Fees = ($131,700) Earnings Credit Earnings Credit Rate = 1.25% Target Compensating Balance= $5,265,000 Monthly Earnings Credit = $5,484 Two Year Earnings Credit= $131,625 Resulting Two Year Net Fees = (S75) Interest Earnings Interest Rate= Texas Managed Rate =0.15% Investable Balance= $7,000,000 - $5,265,000= $1,735,000 Two Year Interest Income = $5,205 Net Income (Cost) Two Year Interest Income—Net Fees= $5,205 —(575) _ $5,130 Compiling similar data for all of the proposing banks generates the following: Est. 2 Year Est. 5 Year Interest Net 2 Year Interest Net 5 Year Earnings Earnings (Cost) Earnings Earning (Cost) Wells Fargo#2 $36,400 $36,400 $91,000 $91,000 Wells Fargo#1 $36,400 $36,362 $91,000 $89,031 JPMorgan Chase $5,205 $5,130 $13,013 (523,967) Capital One $0 (536,852) $0 (592,130) Bank of America $0 ($54,292) $0 (S175,008) Note: Wells Fargo will pay interest on all deposit balances, including those required for compensating balance and will only charge 50%of any non-covered charges. Recommendation The proposed fees and earnings credit comparisons highlight the range of bank responses and confirm the competitive environment of the RFA process. Based on the criteria listed above, in our opinion, Wells Fargo #2 represents the "best value" to the City. The contract term is two years, commencing October 1, 2011, with three additional one-year extension options. 2428 Carters Mill Road,Huddleston,VA 241044003 540.297.3419 Page 5 of 5 Please contact Tom or me to discuss any questions or additional information needs. Thank you for this opportunity to serve the City. Sincerely, J/� William J Koch Valley View Consulting, L.L.C. 972.682.6900 (direct) Attachments 2428 Carters Mill Road,Huddleston,VA 24104-4003 540.297.3419 CITY OF BEAUMONT- Bank RFA Analysis- Financial Summary Wells Fargo fees waived Capital One option with$4 million 6/4/2011 (Incumbent) Bank of America JPMorganChase Wells Fargo minimum balance Monthly Service Fee Estimate (x'2 1 o) (7]'8) (6.510) (4.262) (4,202) Fees for Two Year Term 125.0 (I tii.1771 i I�6.'2S j Fees for Five Year Term ?12.630) a Pricing subject to Pricing subject to .Aote Disclaimers renegotiation at each renegotiation at each extension. extension. Up to$2,500 allowance Up to$2,500 allowance for supplies; Free daily for supplies; Free daily Refund three months fees; Refund three months fees, Armored Car Service Armored Car Service waive FDIC assessment up to$5,000 allowance from one location;Free from one location;Free Contract Incentives Tamper Evident Deposit Tamper Evident Deposit charges;up to$3,000 for supplies provided by allowance for supplies the bank bags for life of contract;4 bags for life of contract;4 desktop scanners @ no desktop scanners @ no charge;free deposit slips charge;free deposit slips for life of contract for life of contract Waived Fees 0 23,185 19,529 0 0 Conversion Costs 0 0 0 0 0 Other 0 3,000 5,000 2,500 2,500 Total Fees for Two Year Term less Incentives (12�.0�2) 131.700) (90.795) 0 Total Fees for Five Year Term less Incentives 31=.630) (437.>OR) ("60,042) ?3 3,2 38) 0 Option of fixed ECR rate s Credit Formula Internally Managed Rate; Premium Managed ECR; Managed Superior Rate Earnings no floor no floor of 1.25%,or 91-day T- with floor of 1.20% N/A Bill rate Earnings Credit Rate 0.70% 0.75% 1.25% 1.20% Estimated Compensation Bank Balance 7,000,000 7,000,000 5,265,000 4,155,000 4,000,000 Monthly Earnings Credit less Reserve 3,675 4,375 5,484 4,155 10%Reserve Requirement No Reserve Requirement No Reserve Requirement No Reserve Requirement No Reserve Requirement Earnings Credit for Two Year Term 88,200 105,000 131,625 99,720 Valley View Consulting,L.L.C. 1 CITY OF BEAUMONT- Bank RFA Analysis - Financial Summary Wells Fargo fees waived Capital One option with$4 million 6/4/2011 (Incumbent) Bank of America JPMorganChase Wells Fargo minimum balance Earnings Credit for Five Year Term 220,500 262,500 329,063 249,300 Net Fees for Two Year Term 06.,{>2) (7;) (7�) 0 Net Fees for Five Year Term (1)2,1,0) �.00 (30.080) i.9 i ) 0 Monthly Minimum Balance Needed to Offset Fees 9,920,000 10,615,000 5,265,000 4,155,000 4,000,000 Interest Income Estimate IB Checking Accounts IB Checking Accounts with no floor:first year @ with no floor:first year @ Managed Rate IB Premium interest rates on 3 month LIBOR;year 2 3 month LIBOR;year 2 Investment Option o PF Interest Checking Not Specified and after,will earn the and after,will earn the Accounts with.50/o floor accounts;no floor higher of Texas Managed higher of Texas Managed Rate currently 0.18%or Rate currently 0.18%or 85%of 3 month LIBOR 85%of 3 month LIBOR Interest Rate 0.50% 0.30% 0.15% 0.26% 0.26% Investment Balance 0 0 1,735,000 4M Two Year Investment Income 0 0 5,205 36,400 36,400 Five Year Investment Income 0 0 13,013 91,000 91,000 Two Year Net Income/(Cost) (36,852) (54,292) 5,130 36,362 36,400 Five Year Net Income/(Cost) (92,130) (175,008) (23,967) 89,031 91,000 Traditional Bank Balance 7,000,000 T-Bill Discount Rate 0.10% Fed Funds 0.20% Local Government Investment Pool 0.14% One Month LIBOR 0.20% Three Month LIBOR 0.26% Valley View Consulting,L.L.C. 2 CITY OF BEAUMONT BANK RFA ANALYSIS-DETAIL 6/4/2011 Capital One (Incumbent) Bank Of America JPMorgan Chase Wells Fargo RFP Responses 1 A.On-Line Banking Services(R) Yes Yes Yes Yes 2 B. Controlled Disbursement (R) Yes Yes Yes Yes 3 C.Zero Balance (R) Yes Yes Yes Yes 4 D.Positive Pay&Account Recon(R) Yes Yes Yes Yes 5 E.Retail Lockbox Processing(R) Yes Yes Yes Yes,recommends Wholetail Lockbox 6 F.Electronic Lockbox Processing Yes Yes Yes Yes 7 G.ACH Debit Blocking(R) Yes Yes Yes Yes 8 H. "Post No Checks" (R) Yes Yes Yes Yes 9 I.ACH Direct Debit(R) Yes Yes Yes Yes 10 J.Remote Deposit Capture(R) Yes Yes Yes Yes 11 K. Credit&Debit Card Payments Yes Yes Yes Yes 12 L. Safekeeping Services (R) Yes Yes Yes Yes 13 M.Online Payments Acceptance Yes Yes Yes Yes 14 N.Employee Check Cashing(R) Yes Yes Yes Yes 15 O.Returned Check Reprocessing(R) Yes Yes Yes Yes 16 P. Same Day Credit for Deposits by 4:00 PM(R) No,3:00 cutoff: 7:00 y cutoff 10:00 RDC Yes,&later at some yes RDC locations 17 Q.Night Depository Services(R) Yes Yes Yes Yes 18 R.Account Analysis(R) Yes Yes Yes Yes 19 S.Bank Statements No,may not include yes Yes Yes deposit slip images 20 T. Collateralization Yes Yes Yes Yes 21 U. Sweep Account Yes Yes Yes,but recommend Yes,but recommend HYSA I/B checking 22 V.Payment for Services Yes Yes Yes Yes 23 W.Account Settlement Yes Yes Yes Yes,Also offers annual settlement 24 X.Research Yes Yes Yes Yes 25 Y.Bank Errors Yes Yes Yes Yes Valley View Consulting,L.L.C. 1 Capital One (Incumbent) Bank Of America JPMorgan Chase Wells Fargo Collateral Requirements FRB;meets all requirements except BONY Mellon FRB BONY Mellon,with market valuation clarifications A. LOC @ 100%or Securities @ 102%and satisfy Intentionally Blank Agreed Agreed,with PFCA compliance details B.Independent safekeeping&security receipts Intentionally Blank Agreed,with reports Explanation of FRB Intentionally Blank in lieu of receipts custodial details Provided by the C.Monthly report of securities pledged Intentionally Blank Agreed National Collateral Intentionally Blank Management Group Governed by Tri- D. Substitutions&reductions of securities pledged Intentionally Blank Party Collateral Provided additional Intentionally Blank Management explanation Agreement E.Resolution of certification Intentionally Blank Agreed Intentionally Blank Intentionally Blank Investment Activities Yes Yes Yes Yes Overdraft Provisions Yes Yes,but exceptions Yes Yes,but exceptions Other Stipulations Take exception to Take exception to A.Notification of rules or regulations changes Intentionally Blank Agreed notification within 10 notification within 10 days days B.Wire transfer notifications Also through on-line Also through on-line Also through on-line Also through on-line system system system system C.Cancellation provisions in event of compliance Intentionally Blank Agreed Intentionally Blank Agreed issues D.Records open for review Intentionally Blank Agreed Intentionally Blank Agreed,with reasonable notice E.Rights to other bank accounts Intentionally Blank Agreed Intentionally Blank Agreed Reserves right to F.Right to terminate Intentionally Blank Agreed terminate tii ith 30 Agreed days notice Valley View Consulting,L.L.C. 2 Capital One Bank Of America JPMorgan Chase Wells Fargo (Incumbent) Yes, with possible Yes. \yith possible G.All fees fixed for the entire contract plus extensions Intentionally Blank exception to exception to Agreed extensions extensions Application Requirements Intentionally Blank Not included Intentionally Blank Intentionally Blank A.Copies,CD-ROM,&delivery No comment/ No comment/ No comment/ exception exception exception B.Deadline No comment/ No comment/ No comment/ exception exception exception C.Official Proposal Form No comment/ No comment/ No comment/ exception exception exception D.Right for additional information or meeting No comment/ No comment/ No comment/ exception exception exception E.Right to reject and accept No comment/ No comment/ No comment/ exception exception exception F.Qualification to serve No comment/ No comment/ No comment/ exception exception exception Included exception No comment/ No commend G.Bid bond for actions and exception exception omissions of City H.Transfer of funds No commend No commend No commend exception exception exception I.Cooperation with successor bank No commend No commend No commend exception exception exception J.Proposal opening No commend No commend No commend exception exception exception K.Questions No commend No commend No commend exception exception exception Miscellaneous A.Meeting Yes Yes Yes Yes No commend No commend No commend B.Contract requirements Acknowledged exception exception exception No commend No commend No commend C.Advertised Acknowledged exception exception exception Valley View Consulting,L.L.C. 3 Capital One (Incumbent) Bank Of America JPMorgan Chase Wells Fargo Required Schedules Provided,but shows Fee Schedule Provided required balance Provided Provided rather than extended cost Certificates of Deposit Yes,at time of Yes,at time of Yes,at time of Yes,at time of solicitation solicitation solicitation solicitation Overdrafts Provided Provided Provided Provided Delwynn Sherrill, Josh Rodriguez, Sr. Thomas Govan,SVP, SVP,client manager, Aimee Slott,VP, Govt Banker, Relationship Management relationship officer, 817.390.6840(others relationship officer, 225.381.2332 listed-none in 409.898.5100 relationship officer, 409.861.6370 Beaumont) Response Attachments 1.Account Analysis Provided Provided Provided Provided Provided for interest Provided for ECR Provided for ECR 2. Interest&Earnings Credit Rates Provided rate only rate only rate&HYSA 3. Sample Bank Depository Services Agreement Agreement to be Provided Provided Provided developed with City 4. Sample Collateral Agreement Provided Provided Provided Provided 5.Financial Statements Provided Provided Provided Provided 6. Security Measures Provided Provided Provided Provided 7.Technology Specifications Provided Provided Provided Provided 8. Sample Safekeeping Report Provided Provided Provided Provided 9. Sweep/Overnight Investment Provided Provided Provided Provided 10.Bank Business Continuation Provided Provided Provided Provided 11.References 5 provided;2 cities 5 provided;all cities 3 provided; 1 city Provided an extensive listing RFA Required Information Applicant Information Provided Provided Provided Provided Conflict of Interest Questionnaire Provided Provided Provided Provided Provided,with City Charter and General Conditions of Bidding Provided exceptions& Provided Provided clarifications Valley View Consulting,L.L.C. 4 Capital One (Incumbent) Bank Of America JPMorgan Chase Wells Fargo Other Considerations Implementation Credit Intentionally Blank Intentionally Blank Intentionally Blank Intentionally Blank Supply allowance Intentionally Blank 4�## 3 I Up to$2,500 � t'e�z; Monthly Service Charge Waiver Intentionally Blank Three 11s_ .` TWA Intentionally Blank Payment to City(alternate to waiver option) Intentionally Blank Intentionally Blank Intentionally Blank Intentionally Blank Discounts Intentionally Blank Intentionally Blank Intentionally Blank Intentionally Blank Offer free service Minimum balance requirement Intentionally Blank Intentionally Blank Intentionally Blank option with$4 million minimum deposit Other Incentives Intentionally Blank Waive FDIC 0*ps 0'"` Intentionally Blank FreB d�� aar; ryi Disclosures Intentionally Blank Proposal only valid Intentionally Blank Intentionally Blank for 90 days Expedited availability Availability Schedule Intentionally Blank Intentionally Blank Provided -next day collected balances List of Area Locations Intentionally Blank Intentionally Blank Intentionally Blank Provided Equipment Intentionally Blank Intentionally Blank Intentionally Blank 4 free Desktop check scanners Other Intentionally Blank Intentionally Blank Intentionally Blank Free Ethnography study Valley View Consulting,L.L.C. 5 RESOLUTION NO. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the proposal of Wells Fargo Bank, N.A. for banking services is hereby accepted and the City Manager be and he is hereby authorized to execute a depository agreement with Wells Fargo Bank, N.A. for the period commencing October 1, 2011 to September 30, 2013. The contract maybe renewed for three(3)additional one(1)year periods by mutual consent of both parties. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 14th day of June, 2011. - Mayor Becky Ames - 3 Consider approving a payment to Jefferson County for the renewal of an annual maintenance agreement with Motorola for support of the radio system used by EMS, Fire, Police and other city departments RICH WITH OPPORTUNITY 11EA,[1M0N* T • IE • X - A • s City Council Agenda Item TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Bart Bartkowiak, Chief Technology Officer QR MEETING DATE: June 14, 2011 REQUESTED ACTION: Council consider approval of a payment to Jefferson County for the renewal of an annual maintenance agreement with Motorola. RECOMMENDATION The administration recommends the payment of an invoice to Jefferson County for the renewal of an annual maintenance agreement with Motorola for support of the 800 MHz radio system in the amount of$172,913.70. BACKGROUND The 800 MHz radio system is used by EMS, Fire, Police and numerous other departments throughout the City for daily communications. The purchase is exempt from competitive bidding since it is available from only one (1) source having exclusive rights to maintain the radio infrastructure. The maintenance agreement provides for constant monitoring of the radio system and 911 dispatch centers as well as dispatching of repair personnel with replacement parts when required. The 800 MHz radio system is shared with Jefferson County, Hardin County, the cities of Groves, Nederland, Port Arthur and Port Neches, the Port of Beaumont and Lamar University's Police Department. The annual cost of the maintenance contract is divided among all agencies by the number of radios each agency has on the system. Total billing to the City of Beaumont was reduced by a credit for costs incurred supporting the system during the past year. BUDGETARY IMPACT Funding in the amount of $172,913.70 is available within the FY2011 budget in the General, Confiscated Goods, Water, Solid Waste and Fleet Funds. JEFFERSON COUNTY INVOICE 1149 PEARL 7TH FLOOR BEAUMONT, TX 77701 SERVICES PROVIDED FOR: City of Beaumont INVOICE DATE 6/6/11 Attn: Bart Bartkowiak INVOICE NUMBER 1101 801 Main Beaumont,Tx 77701 1 800 MHz Radio System Annual Cost 218,113.14 $218,113.14 5/1/2011 -4/30/2012. See attached for detail. 1 Credit for costs paid by City (45,199.44) ($45,199.44) 172,913.70 $172,913.70 Questions concerning this invoice? MAKE ALL CHECKS PAYABLE TO: PAY THIS Call: Mark Dubois JEFFERSON COUNTY AMOUNT (409)835-8734 1149 PEARL 7TH FLOOR BEAUMONT, TX 77701 RESOLUTION NO. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be and he is hereby authorized to approve payment of an invoice in the amount of $172,913.70 to Jefferson County for the renewal of an annual maintenance agreement with Motorola for support of the 800MHz radio system. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 14th day of June, 2011. - Mayor Becky Ames -