HomeMy WebLinkAboutPACKET MAY 06 2014itICH VAI731 (:))*V0 JAT( NIII
BEA.11MON *
T • E • X • PA • S
REGULAR MEETING OF THE CITY COUNCIL
COUNCIL CHAMBERS MAY 6, 2014 1:30 P.M.
CONSENT AGENDA
Approval of minutes — April 29, 2014
Confirmation of committee appointments
A) Approve a resolution authorizing the City Manager or his designee to execute all
documents necessary, specifically a Memorandum of Understanding between the 373'd
Combat Sustainment Support Battalion and the City of Beaumont Police Department
B) Approve a resolution authorizing the City Manager to execute a lease agreement with the
Beaumont Independent School District for the City's continued maintenance of a parcel
of land fronting on College Street, between Neches and Trinity Streets
C) Approve a resolution approving a change order to the contract with Allco for the
construction of a new Tennis Clubhouse at the Athletic Complex
RIGH WITH OPPORTUNITY
1111EA►111�lcl
T - E• X• A• S
TO:
FROM:
PREPARED BY:
MEETING DATE:
City Council Agenda Item
City Council
Kyle Hayes, City Manager
Charles W. Jeffcoat, Assistant Chief of Police
May 6, 2014
0
REQUESTED ACTION: Consider a resolution authorizing the City Manager or his
designee to execute all documents necessary, specifically a
Memorandum of Understanding between the 373`d Combat
Sustainment Support Battalion and the City of Beaumont
Police Department.
BACKGROUND
This Memorandum of Understanding between the Beaumont Police Department and the 373`d
Combat Sustainment Support Battalion will be a written coordination to ensure a response from
local law enforcement to the Army's instrusion detection system or duress alarm activation in
their arms room. Random security checks will be made.
FUNDING SOURCE
Not Applicable.
RECOMMENDATION
Approval of resolution.
RESOLUTION NO.
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT:
THAT the City Manager, or his designee, be and they are hereby authorized to execute a
Memorandum of Understanding between the City of Beaumont and the 373rd Combat
Sustainment Support Battalion to ensure a response from local law enforcement to the
Army's intrusion detection system or duress alarm activation in their arms room.
2014.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 6th day of May,
- Mayor Becky Ames -
RICH WITH OPPORTUNITY
111C7A,[111C1
T - E• X• A• S
TO:
FROM:
MEETING DATE:
City Council Agenda Item
City Council
Kyle Hayes, City Manager
May 6, 2014
REQUESTED ACTION: Council consider a resolution authorizing the City Manager
to execute a lease agreement with the Beaumont
Independent School District for the City's continued
maintenance of a parcel of land fronting on College Street,
between Neches and Trinity Streets.
BACKGROUND
The Beaumont Independent School District owns a small, irregularly-shaped parcel of land
fronting on College Street, between Neches and Trinity Streets. The City has leased and
maintained the property for many years, where an Italian Memorial has been constructed. The
new lease will be for a five year period.
RECOMMENDATION
Approval of the resolution.
Beaumont Independent School District
April 21, 2014
Mr. Kyle Hayes
City Manager
P O Box 3827
Beaumont, Texas 77704-3827
Dear Mr. Hayes,
Enclosed you will find the lease renewal which was signed at the School
Board meeting April 17, 2014. Please sign and return one copy and keep
one copy for your files.
Thanks for your cooperation in this matter.
Sincerely,
hilip Br;: cks
Chief of Schools
Administration Building • 3395 Harrison Avenue • Beaumont, Texas 77706 • (409) 617-5000
Superintendent of Schools — Timothy B_ Chargois. Ed.D.
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 execute a five (5) year Lease
Agreement, with an option to extend in increments of five (5) years, with Beaumont
Independent School District (BISD;) for the continued maintenance of a parcel of land
fronting College Street, between Neches and Trinity Street, adjoining the College/Wall
Street Connecter project, at an annual rental fee of $10.00. The Lease Agreement is
substantially in the form attached hereto as Exhibit "A" and made a part hereof for all
purposes.
2014.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 6th day of May,
- Mayor Becky Ames -
THE STATE OF TEXAS S
COUNTY OF JEFFERSON S
LEASE AGREEMENT
EXHIBIT A
WHEREAS, BEAUMONT INDEPENDENT SCHOOL DISTRICT (BISD) owns a
small, irregularly-shaped parcel of land in the College Square Block of the original town
site of Beaumont, Jefferson County, Texas, Travis Abstract No. 52, fronting on College
Street, between Neches and Trinity Streets, adjoining the College/Wall Street Connecter
project, which parcel is not presently needed for educational purposes, and
WHEREAS, THE CITY OF BEAUMONT, TEXAS (City) wishes to lease that
parcel from BISD for a landscaping project, as part of its continuing effort to beautify its
thoroughfares;
NOW, THEREFORE, pursuant to the authority granted to the undersigned by the
governing bodies of the respective political entities, BISD and City enter into the
following lease agreement referable to subject property:
1. Term. The initial term of this lease will be five (5) years from date of
execution. City may apply in writing to BISD for extensions of the lease in additional
increments of five (5) years.
2. Termination. Either party may terminate the lease agreement upon 120
days notice in writing to the other.
In the event of termination, City agrees to remove at its cost from subject
premises all improvements and to restore the site to its general condition as it was prior
to execution of this lease.
EXHIBIT "A"
3. Rental. City shall pay BISD an annual rental of
Ten Dollars ($10.00). due and payable in advance on the anniversary date of execution
of the lease agreement, which amount is deemed by the parties to be good and valuable
consideration.
4. Purpose and Uses. City intends to use subject premises as a
landscaping project, as part of its continuing effort to beautify its thoroughfares. City
may install fences, monuments, memorials, shrubs and other plantations, and such other
decorative fixtures as may be consistent with its thoroughfare beautification project.
City may not erect any permanent buildings or other structures on subject
premises without prior written approval of BISD.
5. Assumption of Risks of Liability. City assumes all risks of liability
associated with its leasing of subject premises, as set forth more specifically in the letter
to BISD from Kyle Hayes, its City Manager attached hereto and incorporated by
reference for all purposes.
6. Assignment. This lease agreement may not be assigned, or subject
premises sublet by City, without the prior written permission of BISD.
7. Insurance. City shall furnish to BISD a standard letter of assumption of
responsibility referable to the City's activities on or use of subject premises.
8. Notices. All notice requirements hereunder shall be deemed to have
been met if made by certified mail, return receipt requested, and addressed to:
a. Chief of Operations b. City Manager's Office
Beaumont I.S.D. City of Beaumont
3395 Harrison Ave. P O Box 3827
Beaumont, Tx. 77706 Beaumont, Tx. 77704
Executed in duplicate originals on the 21St day of April , 2014
BEAUMONT�I.S.D., LESSOR
/ t L
PW Brooks
Chief of Operations
CITY OF BEAUMONT, LESSEE
la
Kyle Hayes
City Manager
c
RICH WITH OPPORTUNITY
IIEA,111�ICIII*
T• E• X - A - S
TO:
City Council Agenda Item
City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Patrick Donart, Public Works Director
MEETING DATE: May 6, 2014
REQUESTED ACTION: Council consider a resolution approving a change order to
the contract with Allco for the construction of a new Tennis
Clubhouse at the Athletic Complex.
BACKGROUND
On December 17, 2013, City Council approved a contract to Allco for the construction of a new
tennis clubhouse. The 8,760 sq. ft. building includes 4,460 sq. ft. of interior space and 4,300 sq.
ft. of outdoor covered space. The building is being constructed on College Street south of the
existing tennis court's parking lot. The clubhouse is part of the tennis center's master plan that
includes four new covered courts and four new open courts in addition to the existing sixteen
courts in service.
Change Order No. 1 includes a revision to the electrical service including a new concrete
transformer pad and additional electrical and data in the clubhouse. Also included in the change
order is an additional hub drain for the countertop ice machine and hardware revisions to three
doors to meet Texas Department of Insurance code. An additional 5 days is being requested to
the contract time. If approved the contract time would end on September 1, 2014.
The amount requested for Change Order No. 1 is $32,656.72 and result in a 2.85% increase in
the total contract amount. The resultant total contract amount will become $1,177,356.72.
FUNDING SOURCE
Capital Program.
RECOMMENDATION
Approval of resolution.
CHANGE ORDER
PROJECT: City of Beaumont Athletic Complex CHANGE ORDER NO: 1
Tennis Clubhouse- Pro
Shop/Restroom Building
CONTRACTOR: Allco DATE: 04.29.14
P.O. Box 3827 ARCHITECT'S PROJECT # 12006
Beaumont, Texas 77704 CONTRACT DATE: 01.17.14
CONTRACT FOR: New Construction /Additions
The Contract is changed as follows:
1. Hardware Revisions to doors 117, 118, and 119 as requested ...................................... $1,014.30
**See attached documentation on Contractor's Change Proposal #1 **
2. Additional Work as shown on Drawings ME -1.0111, ME-2.OR1, ME -2.1R1, ME-4.OR1, ME -4.1R1, ME-6.OR1.
This Work includes a revised electrical service including a new concrete transformer pad, additional
electrical and data in the clubhouse, and an additional hub drain for the countertop ice
machine........................,...........................................................................................$31,642.42
**See attached documentation and below additional 5 calendar days on Contractor's Change Proposal #2**
Total Change Order ...................$32,656.72
Not valid until signed by the Owner, Architect, and Contractor.
The original Contract Sum was........................................................................................................ $1,144,700.00
Net change by previously authorized Change Orders.................................................................................... $0.00
The Contract Sum prior to this Change Order was......................................................................... $1,144,700.00
The Contract sum will be increased by this Change Order in the amount of .......................................$32,656.72
The new Contract Sum including this Change Order will be ............. .......................... ........ ...I........ $1,177,356.72
The Contract Time will be increased by five (05) days.
The date of Substantial Completion as of the date of this Change Order therefore is September 01, 2014.
NOTE: The summary does not reflect changes in the Contract Sum or Contract Time which have been authorized by
Construction Change Directive.
The LaBiche Architectural Group
799
Beat
In
Date
Allco
P.O. Box 3684
Beaumont, Texas 77704
By:
Date: �9
City of Beaumont
P.O. Box 3827
Beaumont, Texas 77704
Date:
RESOLUTION NO.
WHEREAS, on December 17, 2013, the City Council of the City of Beaumont,
Texas passed Resolution No. 13-284 awarding a contract in the amount of $1,144,700 to
Allco, Ltd., Beaumont, Texas, for the construction of a new Tennis Clubhouse at the
Athletic Complex; and,
WHEREAS, Change Order No. 1, in the amount of $32,656.72, is required to revise
the electrical service to include a new concrete transformer pad; additional electrical and
data in the clubhouse; an additional hub drain for the countertop ice machine; and, door
hardware revisions, thereby increasing the contract amount to $1,177,356.72;
NOW, THEREFORE, BE IT RESOLVED BY THE
CITY COUNCIL OF THE CITY OF BEAUMONT:
THAT the City Manager be and he is hereby authorized to execute Change Order
No. 1, in the amount of $32,656.72, thereby increasing the contract amount to
$1,177,356.72 for the construction of a new Tennis Clubhouse at the Athletic Complex.
2014.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 6th day of May
- Mayor Becky Ames -
RICO WITH OPPORTUNIrY
11EA,11M0N*,
T- E- X- A- S
REGULAR MEETING OF THE CITY COUNCIL
COUNCIL CHAMBERS MAY 6, 2014 1:30 P.M.
AGENDA
CALL TO ORDER
* Invocation Pledge Roll Call
* Presentations and Recognition
* Public Comment: Persons may speak on scheduled agenda items 1-2/Consent
Agenda
* Consent Agenda
GENERAL BUSINESS
1. Consider approving a resolution authorizing the award of a three-year contract to
Patriot Security, Inc., of Nederland, for Security Guard and Event Staff Services
2. Consider approving a resolution approving the City of Beaumont Investment
Policy
COMMENTS
* Councilmembers/City Manager comment on various matters
* Public Comment (Persons are limited to 3 minutes)
EXECUTIVE SESSION
* Consider matters related to contemplated or pending litigation in accordance with
Section 551.071 of the Government Code:
Robert "Bobby" Lorraine vs. City of Beaumont, "Texas; Cause No. 122490
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
May 6, 2014
Consider approving a resolution authorizing the award of a three-year contract to Patriot Security,
Inc., of Nederland, for Security Guard and Event Staff Services
RICH WITH OPPORTUNITY
11 I'L A
, [I I I C1 11',rk,
T • E • x • A • S City Council Agenda Item
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Laura Clark, Chief Financial Officer
MEETING DATE: May 6, 2014
REQUESTED ACTION: Council consider authorizing the award of a three-year
contract to Patriot Security, Inc., of Nederland, for Security
Guard and Event Staff Services.
BACKGROUND
Temporary staffing services are required by the Events Facilities Department for events held at
various locations including the Civic Center, Julie Rogers and Jefferson Theaters, and the Event
Centre. These temporary staff services include security guards, ushers, ticket takers, and
temporary staff supervisors that aid in equipment and property security as well as citizen safety
and enjoyment. Each event has a unique set of staffing requirements. Factors including location
and type of event being held, the size of the expected crowd and event promoter's specific needs
dictate the number of temporary staff positions to be filled as well as the number of hours to be
worked at each event. Security guards are also utilized at City Hall, the Health Department and
Municipal Court.
Bids were solicited from five (5) staffing and security companies. Two (2) companies responded
with bids indicating the hourly rate for typical staff positions. The quoted hourly rates were
applied to five (5) model events at various venues, as well as Security Guard positions within
City departments. The contract has an option of two (2) one (1) year extensions with annual
percentage increases of hourly rates based on the Consumer Price Index for all Urban Consumers
(CPI -U) for the Houston-Galveston-Brazoria areas. A bid tabulation of the results is attached.
FUNDING SOURCE
The cost of Security Guard and Event Staff services utilized within the Event Facilities
Department are reimbursed by event promoters. All other City Department usage is funded
through the General Fund or grant funds as budgeted by individual departments.
RECOMMENDATION
Approval of resolution.
RESOLUTION NO.
WHEREAS, bids were received for a three (3) year contract, with an option of two
(2) one (1) year extensions, for security guard and event staff services for the Event
Facilities Department; and,
WHEREAS, Patriot Security, Inc., of Nederland, Texas, submitted a bid for an
estimated annual amount of $290,494.74 as shown in Exhibit "A," attached hereto; and,
WHEREAS, City Council is of the opinion that the bid submitted by Patriot Security,
Inc., of Nederland, Texas, should be accepted;
NOW, THEREFORE, BE IT RESOLVED BY THE
CITY COUNCIL OF THE CITY OF BEAUMONT:
THAT the bid submitted by Patriot Security, Inc., of Nederland, Texas, for a three (3) year
contract, with an option of two (2) one (1) year extensions, for security guard and event
staff services for the Event Facilities Department in the amounts shown in Exhibit "A,"
attached hereto, for an estimated annual amount of $290,494.74, be accepted by the City
of Beaumont; and,
BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby
authorized to execute a contract with Patriot Security, Inc., of Nederland, Texas, for the
purposes described herein.
2014.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 6th day of May,
- Mayor Becky Ames -
EXHIBIT "A"
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May 6, 2014
Consider approving a resolution approving the City of Beaumont Investment Policy
RICH WITH OPPORTUNITY
11 I'L A
, [I 1�1 C1 11 (
T • E • x • A • s City Council Agenda Item
TO:
FROM:
PREPARED BY:
MEETING DATE:
REQUESTED ACTION:
BACKGROUND
City Council
Kyle Hayes, City Manager
Laura Clark, Chief Financial Officer
May 6, 2014
Council consider a resolution approving the City of
Beaumont Investment Policy.
State law mandates the City Council to review the Investment Policy and approve modifications,
if any. on an annual basis. The City has a contract with Valley View Consulting, LLC, for
investment management services, including oversight of the investment policy. Due to the
current earnings environment, the investment strategy has included laddering certificates of
deposits with staggered maturity dates. The attached policy proposes increasing the maximum
allowable maturity to three years from two years. This maturity will only be increased for funds
other than debt service and debt service reserve funds and where cash flow requirements allow
for it.
In addition the Broker/Dealer list is reorganized with Capital One being removed and
Oppenhiemer being added.
The City last made amendments to the investment policy on May 14, 2013.
FUNDING SOURCE
Not Applicable.
RECOMMENDATION
Administration recommends approval.
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.
2014.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 6th day of May,
- Mayor Becky Ames -
City of Beaumont
[IEA,UMOIIT
T - E• X• A• S
Investment Policy
Adopted by
City Council
May 14, 2013
EXHIBIT "A"
City of Beaumont - Investment Policy
Table of Contents
I. Introduction........................................................................................................... 1
II. Scope......................................................................................................................1
III. Prudence................................................................................................................1
IV. Objectives.............................................................................................................. I
A. Safety of Principal...................................................................................... 2
B. Liquidity .....................................................................................................2
C. Public Trust............................................................................................... 2
D. Vield............................................................................................................ 2
V. Delegation of Authority ......................................................................................... 2
VI. Ethics and Conflicts ofInterest............................................................................. 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. Competitive Environment...................................................................................... 7
XI. Collateralization....................................................................................................7
X11. Safekeeping and Custody....................................................................................... 8
XIII. Diversification....................................................................................................... 9
XIV. Investment Strategies........................................................................................... 9
`Field Code Changed
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
City of Beaumont
Investment Policy
Field Code Changed
1. Introduction Field Code Changed
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.
if. 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 Permanent
Funds. All are pooled for investment purposes except debt service and debt service
reserve funds, and the natural gas account. Interest is allocated monthly to each fund
based on its individual cash balance.
II1. 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
investment'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
safety of principal, liquidity, public trust, and yield.
A. Safety of principal
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 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, where appropriate.
B. Liquidity
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. Delegation of Authoritv
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 approved as
Investment Officers of the City. 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 Interest
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. The two-year period shall begin on the
first day of the City's fiscal year and consist of the two consecutive fiscal years after
that date.
Training shall be in accordance with the 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 Institutions 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 Exhibits, 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 fund, pool or financial institution
that has not filed this instrument or a similar statement that is acceptable to the City.
Each time City Council approves a material revision to the Investment Policy, the
certification 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
15C3-1 (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 the
Investment Officers and a recommendation will be made for approval by the City
Council.
An "approved broker/dealer list", as shown in Exhibit A, shall be maintained by
the Investment Officers at all times and approved 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 Depositories/Financial Institutions
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 Application
(RFA) 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 first 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 the
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:
♦ Direct Obligations of the United States or its agencies and instrumentalities that
have a maximum stated maturity date of 5 years or less.
♦ Financial institution deposits placed with approved financial institutions 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, and other forms of
deposit, in any manner authorized by the Public Funds Investment Act.
♦ Fully collateralized direct repurchase agreements with a defined termination date
of 90 days or less which are secured by cash or 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.
♦ 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 S1 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.
♦ 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 .
Investments Not Authorized - The following investments are not authorized under this
section:
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.
Not less than quarterly, the Investment Officers will monitor the credit rating for each
held investment that has a Public Fund Investment Act required minimum rating. Any
Authorized Investment that requires a minimum rating does not qualify during the
period the investment does not have the minimum rating. 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. Competitive Environment
It is the policy of the City to provide a competitive environment for all individual
security purchases and sales, financial institution deposits, and money market mutual
fund and local government investment pool selections. The Investment Officers shall
develop and maintain procedures for ensuring competition in the investment of the
City"s funds.
Xl. Collateralization
Collateralization will be required on all financial institution deposits 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 (t02%) 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 custodial or a master
repurchase agreement with the eligible collateral clearly listed in the agreement.
Collateral shall be reviewed at least monthly to assure that the market value of the
securities pledged equals or exceeds the related deposit or investment requirement.
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.
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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.
♦ 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.
♦ 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 portion 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
T. The agreement must be part of the Depository's "Official Record"
continuously since its execution.
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. .All safekeeping arrangements shall clearly define the responsibilities of each
party and outline 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, as
applicable. 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.
XII1. 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).
♦ 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.
♦ 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.
XIV. Investment Strategies
The City shall maintain a separate investment strategy for each of the fund types
represented in the portfolio.
A. Pooled Fund Groups
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
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less than 365 days and restricting the maximum allowable maturity to
threetwe 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.
Liquidity — Pooled Fund Groups require the greatest short-term liquidity of
any of the fund -types. Short-term financial institution deposits, 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 twothree-
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
Suitability — 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.
Marketability — Investments with active and efficient secondary markets are
not necessary as the event of an unanticipated cash flow requirement is not
probable.
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Li uidi — Debt Service Funds have predictable payment schedules.
Therefore investment maturities should not exceed the anticipated cash flow
requirements. Financial institution deposits, 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.
Diversification — 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.
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 shall be the
minimum yield objective.
C. Debt Service Reserve Funds
Suitability — Any investment eligible in the Investment Policy is suitable for
Debt Service Reserve Funds. Bond resolution and loan documentation
constraints and insurance company restrictions may create specific
considerations in addition to the Investment 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 generally 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.
Li uidi — 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.
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.
D. Natural Gas Account
Suitability — Any investment eligible in the Investment Policy is suitable for
the Natural Gas Account.
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 to less than 365 days and
restricting the maximum allowable maturity to threetwe 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.
Liquidity — Natural Gas Account funds require moderate short-term
liquidity. Short-term financial institution deposits, investment pools and
money market mutual funds will provide daily liquidity and may be utilized
as a competitive yield alternative to fixed maturity investments.
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Diversification — Investment maturities should be staggered throughout the
anticipated expenditure schedule. Diversifying the appropriate maturity
structure up to the Pwothree-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.
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.
XVI. Performance Standards
The City intends to pursue an active versus a passive portfolio management
philosophy. That is, investments may be sold or redeemed 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. "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 for each fund type and a detailed listing that states the
beginning 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.
13
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/Organizations
Broker/Dealers
Coastal Securities
Duncan-'A"illiams. Inc.
JP NIorcan Chase Securities
'Mutual Securities. Inc.
()-r�cnF��.n_�er c�_u_
-r_— _ -
Rice Financial Products Company
Raymond James
4--<rj tzr i :a �' f!['PO of+ t
Wclls Fargo Brokerage Services. I_LC
,C certificate of Deposit Purchase Pro r anl:
'�9ariaL�cmc,, i t.L
l5
Formatted:
Formatted:
Formatted:
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:
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
The Qualified Representative of the Business Organization has received and reviewed the
Investment Policy fumished by the Investor and
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)
17