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
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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
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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.
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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
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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
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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
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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:
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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:
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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.
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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.
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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.
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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
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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
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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.
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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.
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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
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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)
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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 -