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HomeMy WebLinkAboutCC 2012-01-23 AgendasADDENDUM TO AGENDA NORTH RICHLAND HILLS CITY COUNCIL WORK SESSION MEETING January 23, 2012 6:00 p.m. Notice is hereby given that the following agenda items have been added to the work session agenda for the City of North Richland Hills City Council meeting to be held on Monday, January 23, 2012 at 6:00 p.m. in the North Richland Hills City Council Workroom, 7301 Northeast Loop 820, North Richland Hills, Texas. B.2 Executive Session: Pursuant to Sec. 551.071, Texas Government Code to consult with its attorney about pending or contemplated litigation and a settlement offer. B.3 Executive Session: Pursuant to Section 551.072, Texas Government to deliberate the purchase, exchange, lease or value of real property in the central sector of the City. Certification I do hereby certify that the above public notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland Hills, Texas in co,•mpliance with Chapter 551, Texas Government Code on January 20, 2012 at p.m. City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours in advance of the meeting. Please contact the City Secretary's office at 817 - 427 -6060 for further information. CITY OF NORTH RICHLAND HILLS CITY COUNCIL WORK SESSION AGENDA NORTH RICHLAND HILLS CITY COUNCIL WORKROOM 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, January 23, 2012 6:00 P.M. A.0 Discuss Items from Regular City Council Meeting A.1 Trail Signage and Identification Project (15 Minutes) A.2 NRH Centre Construction and Operations Update (15 Minutes) B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.071, Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) State of Texas v. City of North Richland Hills (No. 2011 - 002840 -1); and 2) State of Texas v. City of North Richland Hills (No. 2011 - 000462 -1) C.0 Adjournment Certification I do hereby certify that the above notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland Hills Texas in compliance with Chapter 551, Texas Government Code on January 20, 2012 at i %'�Gr,�sdh- City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at 817 - 427 -6060 for further information. The City Council may confer privately with its attorney to seek legal advice on any matter listed on the agenda or on any matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551, Texas Government Code. NRH City Council Agenda — January 23, 2012 Page 1 of 4 CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA CITY HALL COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, January 23, 2012 7:00 P.M. Hard copies of the full City Council agenda information packet are accessible prior to every regularly scheduled Monday Council meeting according to the following locations and schedule: u City Hall on the day of the meeting Additionally, the agenda packet is available for download from the City's web site at www.nrhtx.com after 10 a.m. the day of every regularly scheduled Council meeting. A.0 Call to Order - Mayor Trevino A.1 Invocation - Councilman Sapp A.2 Pledge - Councilman Sapp A.3 Special Presentation(s) and Recognition(s) No items for this category. A.4 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. A.5 Removal of Item(s) from the Consent Agenda B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. NRH City Council Agenda — January 23, 2012 Page 2 of 4 B.1 Approval of Minutes of January 9, 2012 City Council Meeting B.2 PW 2012 -002 Revise the FY 2011/2012 Capital Projects Budget and Award RFB No. 12 -014 to J.R. Stelzer Co. in the Amount of $896,995 for the Bursey Elevated Tank Rehabilatation Project (UT1101) B.3 GN 2012 -007 Renewal of Independent Contractor Agreement for Resource Coordinator Services - Resolution No. 2012 -003 B.4 GN 2012 -008 Approve Investment Strategy and Investment Policy - Resolution No. 2012 -001 B.5 PU 2012 -004 Award Bid No. Q12 -001 for a Dump Truck to Southwest International in the amount of $98,797.00 C.0 PUBLIC HEARINGS C.1 GN 2012 -006 Public Hearing on and Enactment of Juvenile Curfew Ordinance - Ordinance No. 3182 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS E.1 PW 2012 -003 Revise the FY 2011/2012 Capital Projects Budget and Award RFB No. 12 -009 to Durable Specialties, Inc. in the Amount of $63,500.00 for the Construction of the Glenview Drive Street Lighting Project (ST1006) F.0 GENERAL ITEMS F.1 PU 2012 -008 Authorize the Purchase of Furniture and Equipment for the NRH Centre from multiple vendors in the amount of $108,320.21 F.2 GN 2012 -009 Calling May 12, 2012 City Council Election and Authorizing a Joint Election Agreement with other Tarrant County Political Subdivisions and Contract for Election Services with Tarrant County - Resolution No. 2012 -002 F.3 PU 2012 -005 Revise the FY 2011/2012 Capital Projects Budget and Authorize the Purchase of a Raft Conveyor System from TSM Houston, Inc. in the Amount of $247,151. F.4 PU 2012 -007 Award Bid # 12 -006 for Cotton Belt Trail Repairs Phase II to JDK Associates, Inc. in the Amount of $65,205.34 NRH City Council Agenda — January 23, 2012 Page 3 of 4 G.0 EXECUTIVE SESSION ITEMS G.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda H.0 INFORMATION AND REPORTS H.1 Announcements - Mayor Pro Tem Barth H.2 Adjournment All items on the agenda are for discussion and /or action. Certification I do hereby certify that the above notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland Hills, Texas in compliance with Chapter 551, Texas Government Code on January 20, 2012 at City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at 817 - 427 -6060 for further information. The City Council may confer privately with its attorney to seek legal advice on any matter listed on the agenda or on any matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551, Texas Government Code. NRH City Council Agenda — January 23, 2012 Page 4 of 4 City of North Richland Hills Work Session Work Session Meeting Agenda North Richland Hills City Hall City Council Workroom 7301 Northeast Loop 826 North Richland Hills, TX 76186 Monday, January 23, 2612 6:00 P.M. A.0 Discuss Items from Regular City Council Meeting A.1 Trail Signage and Identification Project (15 Minutes) A.2 NRH Centre Construction and Operations Update (15 Minutes) B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.0171, Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) State of Texas v. City of North Richland Hills (No. 2011- 002840 -1): and 2) State of Texas v. City of North Richland Hills (No. 2.011- 600462 -1) C.0 Adjournment M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.0 Discuss Items from Regular City Council Meeting M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.1 Trail Signage and Identification Project (15 Minutes) Presenter: Joe Pack, Senior Park Planner Summary: Joe Pack, senior park planner, will present an update and PowerPoint Presentation on the Trail Signage and Identification Project. General Description: The Parks Capital Improvement Budget includes funding for signage along the City's trail system. The signage provided under this program identifies each trail by name at the major trail - street intersections, provides for "You are Here" maps at selected locations and provides for one large sign with specific information about each trail at a selected location. The project budget also includes funding for the design and installation of 'l4 mile trail markers on the Cottonbelt Trail, JoAnn Johnson Trail, North Electric Trail and Walkers Creek Trail. The markers will give trail users an opportunity to record the number of miles traveled in any given direction and also allow trail users to identify their location on the trail for emergency personnel and other safety considerations. M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.2 NRH Centre Construction and Operations Update (15 Minutes) Presenter: Vickie Loftice, Managing Director Summary: Staff will provide a construction and operations update on the NRH Centre. General Description: Operations - The Operational component for the NRH Centre is progressing right along with construction and staff is gearing up for the grand opening and ribbon cutting on April 14, 2012. The first two full time staff members have been hired for the NRH Centre and include the Banquet & Hospitality Coordinator and the Assistant Manager. Positions are in the process of being posted for part time employees in guest service /front desk, fitness, drop -in Kids Club, building maintenance, aquatics and banquet and hospitality. A large format direct mailer advertising memberships and the amenities at the NRH Centre was mailed on Wednesday, January 4, 2012. The piece will be reaching 15,000 households this week. The large tri -fold brochure that is the premier piece for the center has been printed and delivered. Construction - Construction is progressing on schedule for an April 2012 completion. Site work in the Civic Plaza area (special event plaza) is progressing and installation of the irrigation system has begun. Inside the building, work on interior finishes is on the move. Work in Progress: • Tile in the locker rooms, restrooms, terrace lobby and stair • Paint throughout the building • Toilet partitions and locker installation • HVAC start -up in all areas • Decorative wood in the Grand Hall • Installation of kitchen equipment • Millwork cabinets and counters • Ceiling treatments and lighting • Rock wall in the pool • Preparation for all pool finishes • Audio video and access control throughout the building • Stone retaining, landscape walls and irrigation Upcoming Milestones: • Tile in Main Street and the pool party rooms • Wood floor in Senior area • Decorative ceiling treatments in Grand Hall • Grind and polish pool coping and deck • Climbing portion of rock wall in pool • Millwork in Main Street • Sidewalk between Library and NRH Centre • Irrigation work While construction continues, purchase and installation of furniture, fixtures and equipment is being coordinated, along with installation of the camera system, building intrusion system and access control system. Staff will present a brief Power Point presentation providing an overview of the status of the project. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.1 Executive Session: Pursuant to Section 551.071, Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) State of Texas v. City of North Richland Hills (No. 2011-002840-1); and 2) State of Texas v. City of North Richland Hills (No. 2011-000462-1) M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. C.0 Adjournment City of North Richland Hills Regular Session City Council Regular Meeting Agenda North Richland Hills City Hall Council Chambers 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, January 23, 2012 7:00 P.M. A.0 Call to Order - Mayor Trevino A.1 Invocation - Councilman Sapp A.2 Pledge - Councilman Sapp A.3 Special Presentation(s) and Recognition(s) No items for this category. A.4 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. A.5 Removal of Item(s) from the Consent Agenda B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. B.1 Approval of Minutes of January 9, 2012 City Council Meeting B.2 PW 2012 -002 Revise the FY 201112012 Capital Projects Budget and Award RFB No. 12 -014 to J.R. Stelzer Co. in the Amount of $896,995 for the Bursey Elevated Tank Rehabilatation Project (UT1101) B.3 GN 2012 -007 Renewal of Independent Contractor Agreement for Resource Coordinator Services - Resolution No. 2012 -003 B.4 GN 2612 -668 Approve Investment Strategy and Investment Policy - Resolution No. 2012 -061 B.5 PU 2612 -064 Award Bid No. Q12 -661 for a Dump Truck to Southwest International in the amount of $98,797.00 C.0 PUBLIC HEARINGS C.1 GN 2012 -006 Public Hearing on and Enactment of Juvenile Curfew Ordinance - Ordinance No. 3182 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS E.1 PW 2612 -063 Revise the FY 2011/2612 Capital Projects Budget and Award RFB No. 12 -009 to Durable Specialties, Inc. in the Amount of $63,500.00 for the Construction of the Glenview Drive Street Lighting Project (ST1006) F.0 GENERAL ITEMS F.1 PU 2012 -008 Authorize the Purchase of Furniture and Equipment for the NRH Centre from multiple vendors in the amount of $108,326.21 F.2 GN 2012 -009 Calling May 12, 2012 City Council Election and Authorizing a Joint Election Agreement with other Tarrant County Political Subdivisions and Contract for Election Services with Tarrant County - Resolution No. 2012 -002 F.3 PU 2012 -005 Revise the FY 2011/2612 Capital Projects Budget and Authorize the Purchase of a Raft Conveyor System from TSM Houston, Inc. in the Amount of $247,151. F.4 PU 2612 -067 Award Bid # 12 -006 for Cotton Belt Trail Repairs Phase II to JDK Associates, Inc. in the Amount of $65,205.34 G.0 EXECUTIVE SESSION ITEMS G.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda H.0 INFORMATION AND REPORTS H.1 Announcements - Mayor Pro Tem Barth H.2 Adjournment N RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.0 Call to Order - Mayor Trevino M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.1 Invocation - Councilman Sapp M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.2 Pledge - Councilman Sapp M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.3 Special Presentation(s) and Recognition(s) No items for this category. N RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.4 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. A.5 Removal of Item(s) from the Consent Agenda M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.1 Approval of Minutes of January 9, 2012 City Council Meeting Presenter: Patricia Hutson Recommendation: To approve the minutes of the January 9, 2012 City Council Meeting. MINUTES OF THE WORK SESSION AND REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 — JANUARY 9, 2012 WORK SESSION The City Council of the City of North Richland Hills, Texas met in work session on the 9th day of January 2012 at 6:00 p.m. in the City Council Workroom prior to the 7:00 p.m. regular Council meeting. Present: Oscar Trevino Tim Barth Tito Rodriguez Ken Sapp Tom Lombard David Whitson Scott Turnage Tim Welch Mayor Mayor Pro Tem, Council, Place 4 Council, Place 1 Council, Place 2 Council, Place 3 Council, Place 5 Council, Place 6 Council, Place 7 Staff Members: Mark Hindman City Manager Jared Miller Assistant City Manager Karen Bostic Assistant City Manager Jimmy Perdue Director of Public Safety Mike Curtis Managing Director Vickie Loftice Managing Director Patricia Hutson City Secretary Monica Solko Assistant City Secretary George Staples City Attorney Mary Peters Public Information Officer Kristin Weegar Assistant to City Manager John Pitstick Director of Planning & Development Larry Koonce Finance Director Craig Hulse Economic Development Director Thomas Powell Fleet Services Director Gregory VanNieuwenhuize Assistant Public Works Director Jimmy Cates Public Works Operations Manager Jamie Brockway Purchasing Manager Sean Hughes Emergency Management Coordinator Clayton Comstock Planner Call to Order Mayor Trevino called the work session to order at 6.00 p.m. A.0 Discuss Items from Regular City Council Meeting Agenda Item C.3 SUP 2011 -09 — Mayor Trevino questioned if Council could restrict the SUP to Express Oil Change. Mr. Staples advised the zoning was for the land use and that Council could place conditions on the SUP but could not limit the conditions to one owner. A.1 Trail Signage and Identification Project Mayor Trevino advised that because of possible time constraints this item will be delayed until after Executive Session. In the event there is a shortage of time following the Executive Session, the item will be moved to the next Council work session agenda. B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code to consult with city's attorney to seek advice about pending or contemplated litigation; or a settlement offer; or on a matter in which the duty of the attorney to the governing body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearlv conflicts with Chaoter 551 of the Texas Government Code B.2 Executive Session: Pursuant to Section 551.071, Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) State of Texas v. City of North Richland Hills (No. 2011 - 1702840 -1), and 2) State of Texas v. City of North Richland Hills (No. 2011- 000462 -1) B.3 Executive Session: Pursuant to Section 551.072, Texas Government to deliberate the purchase, exchange, lease or value of real property in the central sector of the City Mayor Trevino announced at 6:03 p.m. that the Council would convene into Executive Session as authorized by Chapter 551, Texas Government Code, pursuant to the following sections: 1) Section 551.071 to consult with city's attorney to seek advice about pending or contemplated litigation; or a settlement offer; or on a matter in which the duty of the attorney to the governing body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Texas Government Code 2) Section 551.071 to consult with Attorney regarding pending litigation on 1) State of Texas v. City of North Richland Hills (No. 2011- 002840 -1); and 2) State of Texas v. City of North Richland Hills (No. 2011- 000462 -1) and 3) Section 551.072 to deliberate the purchase, exchange, lease or value of real property in the central sector of the City. C.0 Adjournment Mayor Trevino reconvened the open meeting at 7:03 p.m. and announced Work Session Item A.1 would be discussed at the next regular work session meeting. Council adjourned to the regular Council meeting at 7:03 p.m. REGULAR COUNCIL MEETING A.0 CALL TO ORDER Mayor Trevino called the meeting to order January g, 2012 at 7:08 p.m. Present: Oscar Trevino Tim Barth Tito Rodriguez Ken Sapp Tom Lombard David Whitson Scott Turnage Tim Welch Staff Mark Hindman Jared Miller Karen Bostic Jimmy Perdue Mike Curtis Vickie Loftice Patricia Hutson Monica Solko George Staples ROLL CALL Mayor Mayor Pro Tem, Council, Place 4 Council, Place 1 Council, Place 2 Council, Place 3 Council, Place 5 Council, Place 6 Council, Place 7 City Manager Assistant City Manager Assistant City Manager Director of Public Safety Managing Director Managing Director City Secretary Assistant City Secretary Attorney A.1 INVOCATION Councilman Turnage gave the invocation. A.2 PLEDGE OF ALLEGIANCE Councilman Turnage led the pledge of allegiance. A.3 SPECIAL PRESENTATION(S) AND RECOGNITION(S) Keep NRH Beautiful Holiday Lighting Contest Winners presented by Councilman Whitson Keep NRH Beautiful Commission Chair Kathy Luppy and Councilman Whitson presented a certificate and gift certificate to the 2011 Holiday Lighting Contest winners. The winners were: None. None. AREA 1 Shara & Shannon Craft 3824 Diamond Loch West AREA 2 Kerrie Bourland 7300 Deville Drive AREA 3 Richard & Cynthia Ward 4920 Skylark Circle AREA 4 Cory Kuhn 7208 Jamaica Way AREA 5 Don & Betty Hill 8129 Winter Park Drive AREA 6 Javier Esquivel 7516 Chapman AREA 7 John & Joni Sears 8305 Thornbrook Court AREA 8 Thornton Cornell 7532 Bursey Road South AREA 9 Bud Enright 8117 Longtrail Drive A.4 CITIZENS PRESENTATION A.5 REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA 13.0 APPROVAL OF CONSENT AGENDA ITEMS APPROVED B.1 APPROVAL OF MINUTES OF DECEMBER 12, 2011 CITY COUNCIL MEETING B.2 PU 2012 -001 AUTHORIZE THE PURCHASE OF TURF EQUIPMENT FOR IRON HORSE GOLF COURSE AND THE PARKS DEPARTMENT IN THE AMOUNT OF $127,596.87 B.3 PU 2012 -402 AWARD BID NO. 12 -010 FOR SEWER AND WATER PIPE MATERIAL TO MULTIPLE VENDORS B.4 GN 2012 -001 APPROVE ORDINANCE REVISING CHAPTER 78, ARTICLE IV. SANITARY SEWER SYSTEM OF THE NORTH RICHLAND HILLS CODE OF ORDINANCES - ORDINANCE NO. 3177 B.5 GN 2012 -002 CONSIDER ACCEPTANCE OF A 2011 HOMELAND SECURITY GRANT #2011 -SR- 52356 -01 IN THE AMOUNT OF $1,689.27 FOR COMMUNITY EMERGENCY RESPONSE TEAM (CERT) TRAINING AND EQUIPMENT B.6 GN 2012 -005 CONSIDER APPROVAL OF AN AMENDMENT TO THE LITTLE BEAR CREEK SURFACE USE AGREEMENT WITH CHESAPEAKE EXPLORATION, LLC, PROVIDING FOR A.79 ACRE DRILL SITE AND AREA OF SURFACE OPERATIONS EXPANSION FROM 2.91 ACRES TO 3.70 ACRES B.7 GN 2012 -403 AMEND ARTICLE IV OF CHAPTER 58 - CODE OF ORDINANCES AUTHORIZING THE ACCEPTANCE OF FEES, FINES AND OTHER CHARGES BY CREDIT CARD AND SETTING PROCESSING FEES - ORDINANCE NO. 3181 B.8 PU 2012 -003 AWARD BID # 12 -013 FOR IRON HORSE GOLF COURSE SECTION C PUMP STATION IMPROVEMENTS TO C. GREEN SCAPING, LP IN THE AMOUNT OF $84,700.00 COUNCILMAN WELCH MOVED TO APPROVE THE CONSENT AGENDA. COUNCILMAN TURNAGE SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. PUBLIC HEARINGS CA ZC 2011 -06 PUBLIC HEARING AND CONSIDERATION OF A REQUEST FROM MICHAEL MORROW FOR A ZONING CHANGE FROM AG AGRICULTURAL TO R -1- S SPECIAL SINGLE FAMILY ON 7.69 ACRES IN THE RICHARDSON SURVEY AT 8801 KIRK LANE - ORDINANCE NO. 3179 PUBLIC HEARING CONTINUED TO FEBRUARY 13, 2012 Mayor Trevino opened the Public Hearing and announced Mr. Thad Brundrett, on behalf of Michael Morrow, had submitted a letter requesting a continuance to February 13, 2012. Mayor Trevino asked if there was anyone present who would like to speak in favor or opposition to the request at this time. There being no one wishing to speak, Mayor Trevino called for a motion on the applicant's continuance request. COUNCILMAN SAPP MOVED TO CONTINUE ZC 2011 -06 TO THE FEBRUARY 13, 2012 CITY COUNCIL MEETING. COUNCILMAN LOMBARD SECONDED THE MOTION. MOTION TO CONTINUE CARRIED 7 -0. Mayor Trevino announced the Public Hearing would be continued at the February 13, 2012 council meeting. Councilman Welch left the Council Meeting at 8.-03 p.m. C.2 ZC 2011 -12 PUBLIC HEARING AND CONSIDERATION OF A REQUEST FROM KEITH BERTELSEN FOR A ZONING CHANGE FROM R -1 SINGLE FAMILY AND C -1 COMMERCIAL TO CS COMMUNITY SERVICES ON LOTS 15 & 16, BLOCK 1, THOMPSON PARK ESTATES LOCATED ON 1.25 ACRES AT 6417 & 6425 PRECINCT LINE ROAD - ORDINANCE NO. 3178 ❑PPR["]vpn Mayor Trevino opened the public hearing and announced that Councilman Welch would be abstaining on Items C.2 and C.3. Councilman Welch is the Engineer of Record for this project. An affidavit of disqualification has been completed by Councilman Welch and filed with the City Secretary stating the nature of the interest is professional engineer for the said project. Mayor Trevino asked Council if they would combine the public hearings and discussion for items C.2 and C.3 and vote on each separately. Council concurred with combining the two items. Mayor Trevino opened the public hearing on items C.2 and C.3 and called on the applicant to come forward. James Harrison, 6313 Ferncreek Lane, Fort Worth, TX came forward. Mr. Harrison explained that he would like to be part of the Express Oil Change business after meeting with the corporate offices in Alabama. Mr. Harrison introduced Mr. John Davis with Express Oil. John Davis, 1880 S. Park Dr., Birmingham, Alabama. Mr. Davis presented a PowerPoint presentation with pictures of the future facility and spoke of the history of the Express Oil Change business. Mr. Davis explained that company was expanding to Texas and after reviewing properties in the metroplex the property in NRH was a perfect fit. Mr. Davis responded to questions from the Council. John Pitstick, Planning and Development Director, summarized both items. Item C.2 is a request from Keith Bertelsen (Owner) and Express Oil Change (Applicant) for a Zoning Change from "R -1" Residential and "C -1" Commercial to "CS" Community Services on Lots 15 & 16, Block 1, Thompson Park Estates, being 1.256 total acres of land located on the west side of Precinct Line Rd between Mid - Cities Blvd and Martin Dr. Item C.3 is a request from Express Oil Change for approval of a Special Use Permit for an "Automobile Lubrication Center" with limited automobile and light truck repair on a vacant 0.75 acre parcel of land located on the west side of Precinct Line Road between Mid - Cities Boulevard and Martin Drive. The Planning and Zoning Commission recommended approval of the zoning change (ZC 2611 -12) by a 5 -0 vote but recommended denial of the special use permit request (SUP 2011 -09) by a 4 -1 vote. Mayor Trevino called for anyone wishing to speak for or against the requests to come forward. Keith Bertelsen, 2600 Rosebud Lane, Richland Hills, TX owner came forward in favor of the requests. There being no one wishing to speak Mayor Trevino closed the Public Hearing and called for a motion for ZC 2011 -012. COUNCILMAN WHITSON MOVED TO APPROVE ZC 2011 -12; ORDINANCE NO. 3178. MAYOR PRO TEM BARTH SECONDED THE MOTION. MOTION TO APPROVE CARRIED 5 -1 -1; COUNCILMAN SAPP AGAINST AND COUNCILMAN WELCH ABSTAINING. Councilman Welch returned to the dais at 8:14 pm C.3 SUP 2011 -09 PUBLIC HEARING AND CONSIDERATION OF AN APPEAL REQUEST FROM HHH LUBE LLC FOR A SPECIAL USE PERMIT FOR AN AUTOMOBILE LUBRICATION CENTER WITH LIMITED REPAIR SERVICES AT 6417 PRECINCT LINE ROAD - ORDINANCE NO. 3180 DENIED This item was related to the previous item C.2 and the public hearing was opened and discussed in item C.2. Mayor Trevino called for the motion for SUP 2011 -09. COUNCILMAN LOMBARD MOVED TO DENY SUP 2011 -09; ORDINANCE No. 3180. COUNCILMAN TURNAGE SECONDED THE MOTION. MOTION TO DENY CARRIED 5 -1 -1; COUNCILMAN BARTH VOTING AGAINST; COUNCILMAN WELCH ABSTAINING. No items for this category. No items for this category. D.0 PLANNING & DEVELOPMENT EA PUBLIC WORKS FA GENERAL ITEMS F.1 GN 2012 -004 CONSIDER APPROVAL OF A LICENSE AGREEMENT AND A PUBLIC RIGHT -OF -WAY USE AGREEMENT (NATURAL GAS PIPELINE CROSSING) WITH TEXAS MIDSTREAM GAS SERVICES, L.L.C. FOR A 12 INCH GAS PIPELINE IN THE LITTLE BEAR CREEK CORRIDOR evvQnuPn John Pitstick, Director of Planning and Development, summarized the item. Council is being asked to approve two (2) agreements (a License Agreement and a Public Right - of -way Use Agreement) with Texas Midstream Gas Services (TMGS) which would allow the installation and operation of a 12 inch gas pipeline in the Little Bear Creek Corridor. This pipeline would connect the Little Bear gas well site (off of North Tarrant Parkway) with the Morrow - Stevens gas well site (off of Kirk Lane ).The license agreement with Texas Midstream is for a 20 year timeframe. License fees include $2.401 per square foot of permanent licensed area which includes a 20 foot easement for a length of a little more than 7,000 linear feet including properties within the Little Bear Creek park site, Little Bear Corridor land and Northfield Park. The license fees also include $1.05 per square foot for about 5.2 acres of temporary work space with a majority of the area in the open area southeast of the intersection of North Tarrant Parkway and Smithfield Road. The Right -of -Way Use Fees (per the City Code) to cross Smithfield Road and Cherokee Trail are $47.00 per linear foot. These agreements are non - exclusive license agreements allowing the city continued use of the property. Any approvals necessary from the U.S. Corps of Engineers, TxOOT and/or FEMA is the responsibility of TMGS. A $50,000 bond is required to guarantee all restoration of properties. A $5,000,000 general liability insurance policy is required and an indemnity statement is included in the agreement. Construction must begin within 120 days and the entire pipeline must be installed no later than 180 total days from the execution of the License Agreement. Staff is recommending approval of both the License Agreement and the Public Right -of- Way Use Agreement (Natural Gas Pipeline Crossing) with Texas Midstream Gas Services, L.L.C. for a 12 inch gas pipeline in the Little Bear Creek Corridor. COUNCILMAN WHITSON MOVED TO APPROVE GN 2012 -004. COUNCILMAN SAPP SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. G.0 EXECUTIVE SESSION ITEMS G.1 ACTION ON ANY ITEM DISCUSSED IN EXECUTIVE SESSION LISTED ON WORK SESSION AGENDA No action needed. H.0 INFORMATION AND REPORTS H. I ANNOUNCEMENTS Councilman Lombard made the following announcements. Join us at the NRH Public Library each Saturday for free family films. The movies are shown on the big screen in the Community Room starting at 2 p.m. Popcorn is provided. Families are invited to bring snacks, drinks and floor cushions. For more details, please call 817-427-6814. Iron Horse Golf Course is currently booking its pavilion and clubhouse for 2 012 weddings, graduation parties, retirement parties, receptions and more. To make a reservation for your next special event, call 817 -485 -6666. Kudos Korner - Delvin Hatley from the Municipal Court. A citizen wrote to express appreciation for Deputy City Marshall Delvin Hatley's assistance when she got a flat tire on Rufe Snow Drive. "He went out of his way to help me. He was kind, courteous and a blessing," she said. Not only did Delvin change the flat tire, he also made numerous calls to her family to notify them of her whereabouts. Delvin exemplifies public service and she was very grateful for the help that he provided. H.2 ADJOURNMENT Mayor Trevino adjourned the meeting at 8:29 p.m. Oscar Trevino — Mayor /_1 a 11 16 Patricia Hutson, City Secretary M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.2 PW 2012 -002 Revise the FY 2011/2012 Capital Projects Budget and Award RFB No. 12 -014 to J.R. Stelzer Co. in the Amount of $896,995 for the Bursey Elevated Tank RehabiIatation Project (UT1101) Presenter: Jimmy Cates Summary: Council is being asked to award Bid No. 12 -014 to J.R. Stelzer Co. for the rehabilitation of the elevated potable water storage tank located on Bursey Road and to revise the 2011 -2012 Capital Projects Budget for Project UT1101 for additional funding. General Description: The primary purpose of Project UT1101 is to continue to provide a safe water supply for the residents of North Richland Hills and to meet all Texas Commission on Environmental Quality (TCEQ) regulations for a public water system. To help achieve this purpose, Project UT1101 includes refurbishing the interior and exterior portions of the elevated 2 MG (million gallon) water tank. Internal structure repairs will be made to the inside of tank bowl and other deficiencies will be corrected that were found from a detailed structural inspection of the facility. The inside and outside of the tank bowl will receive a new paint coat that is expected to last 15 to 18 years. The construction on this project is expected to start in March of 2012 and be completed by the end of July of this year. The facility will be out of service during the construction period. Staff does not expect any interruptions of water services to the residents. Plans have been put in place to make sure that adequate water pressures and supplies will be maintained during the construction period. A total of four bid proposals were received for this project. 1. J.R. Stelzer Co. $896,995 2. Classic Protective Coatings, Inc. $1,16 0,198 3. TMI Coatings, Inc. $1,186,900 4. Utility Service Co., Inc. $1,188,600 Staff is recommending that J.R. Stelzer Co. be awarded the bid for the project based upon the references received on their past work performance and their low bid amount. J.R. Stelzer Co. has completed several water tank rehabilitation projects for the City of Plano and the City of Waterloo. Both cities stated that J.R. Stelzer is one of the best water tank rehab companies on the market and that they would hire them again for future projects. Additional funding is needed for the project. During the engineering design phase, a structural detailed and regulatory inspection was performed on the facility. The inspection revealed several structural deficiencies along with the riser ladders not meeting TCEQ regulations. Several of the tank bowl rafters need to be replaced along with the riser ladders to conform to new TCEQ regulations. Staff was not aware of these deficiencies when the project was submitted for inclusion in the Capital Projects Budget for 2011 -2012. The structural and regulatory deficiencies were added to the construction plans and has resulted an increase in scope and cost for the project. Council approved $750,000 in the 2011 -2012 Capital Projects Budget for Project UT1101. In order to award the bid to J. R. Stelzer Co., a budget revision to the 2011- 2012 Capital Projects Budget in an amount of $175,000 will be necessary. Sufficient funding is available in Utility Reserves. Project savings from other utility capital projects and available funds from utility projects for which construction has yet to begin will be used to offset this increase until such time that a formal budget amendment can be brought before Council. Recommendation: Staff is recommending that Council award Bid No. 12 -014 to J.R. Stelzer Co. in the amount of $896,995 for the rehabilitation of the elevated potable water storage tank located on Bursey Road and to revise the 2011 -2012 Capital Projects Budget for Project UT1101 for additional funding. UT1101 Bursey Elevated Tank Rehabilitation PROJECT OESCRIFTION 8 JLISTTFICAT14N The project will WMrst of refurbishing, tie inlenar and exterior poruomi ul the 2 MG (rTrllron gallons) 3ursay Road ainvated potable water Storage tank Internal structure repo rs will bt made along wi0i minor tegaits such as replacing the 24 Inch dtameler water access hatch and replacng mat ventilation structures to met the latest T9xas Commission on Envronmemal Quality (TCEC) riiguiauons. 1 ho protect vAlf also rnctude removing the existing chain link f mr-& and repiarinp 1 with an $ foot black drain Ilnk fence fapric. The primary purpase of Inls project is to prnvide a We water suppty and to meet all TCEO regulations uanrxrnng putatte water storage ranks. annually, staff cMduds defiriency asmssmennt for deterlaraflon an all water storage tanks in the City- This is done so deficienaes can be rdenufto and correctec before TCEC performs thek illspecttorI6 of the rester storage isms in the City- Correcting the aeficrenoes before an rnspeLtrorn IF performed by TC.FQ helps the City -.o maintain ti's Superior Water rating. S10 noticed duriN the recent assessment of teas tank that the tank t cyel is "it+ng fend ft paint It detehorating. Internal structural apparatuses are in need of repair (urterral roof pixes. access madders, sidoN21L plates, flcof ptatas, and riser pipes) Typically. elevated water storage tanxf need to be returbtshed and repair6d everf 10 fn 15 years to mart T(7=Q retg,alations This aierated 5tora•ae lark was refurtsiahcd in 1994 The spare and paint have tasted approunnatety 15 years, PROJECT STATUS Original 31@71172 Original 2011112 sun Deb ROVW" End fate Roviafan Professio"I Services Engineenng 311!2011 V'1 $2311 91112012 $Ili 12412 LandlROVd Acquisition Construciian 311r20112 3.'112012 t311r2o12 tv1r2012 Other 'R.EVIS40N EXPLA1iAT1f5N [Turing the design of thos projgM, a dwaim etructurai Inspeiotaln was aerfmrmed an the lark bsM. Several Structural dofVrinndim were found that require correction The defickomfies n4rrteri In the Inspection report nCJude detorinrati -d rafters inside the tank howt and rtk- replacement of a{ riser ladders to rrvs#t now TCECI regLtation5 Correc ion of the doflcloncioo v ill rocivire an dverrall cast increase to the proje471 FINANCIAL DATA IMPACT ON OPERATING BUDGET SO Irrpacl on nae'ating hudaet Annual Operating Impact 401112172 1 n1412a18 j— i11Si"d074 201&2DIe Total 1'rclected Su Std so so Adopted Ftovissd Total Budget Thru Pealed Baldget Thru Remaining Pretest 2011112 Revision 20 1IM2 Balance Coat Utility Fund Rasarves 5900.[ }7C1 S175 {7170 S 1.675.1}❑❑ s0 $1,075R1❑0 0 0 0 _ 0 ❑ ❑ 0 G 0 0 $1,075,000 0 $0 0, 51,075 -000 Total $900 -000 $176.0% Professional Servioos $G ;G so Engnneehngl0ewgn 130 -000 01 150,181 ❑ 15 ❑A❑t7 l_andrRJV Acqulstion C• G 0 0 0 Consiructicn 750.Lh7C, :75.❑1G 925,04❑ ❑ 9251] O Cah�*r Total — _ .$600.00!0 ' _ -- __i 176,004 !1,076,080 $0 $1,076,000 IMPACT ON OPERATING BUDGET SO Irrpacl on nae'ating hudaet Annual Operating Impact 401112172 1 n1412a18 j— i11Si"d074 201&2DIe Total 1'rclected Su Std so so '4 i F - — Bursey - - w - Elevated Tank Rehabilitation NQ TARRAN, ■ Bursey_ Elevated Tank -- _ Rehabilitation di . F�, * HAFFilli�l�il�Aliir�� ■�BIJRSEI� RD- -Z � J — 0 �a 'r° = i nn ti -A ES R a HIG�iTC}WER —.DR! LL: d AA+ M'CIP '�0 4' z 3 NORTH RICHLAND HILLS Project Locator Map M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.3 GN 2012 -047 Renewal of Independent Contractor Agreement for Resource Coordinator Services - Resolution No. 2012-003 Presenter: Jimmy Perdue Summary: Grant funding for the North Richland Hills Police Department's Community Resource Coordinator Program will expire February 4, 2012. A Resolution is needed to approve renewal of the Independent Contractor Agreement for Resource Coordinator Services. These services will be funded through the Special Investigations Fund. General Description: Since 2006, the Police Department's Community Resource Coordinator Program has been successfully promoting community -based resource options for single parents, parents with young children, families struggling with substance abuse, and, grandparents as parents. Funding for the program has been through a grant that is expiring February 2012. To allow consistent service through the remainder of FY 11112, an independent contractor agreement with Ms. Geny Ford, the Resource Coordinator, will be entered into for an additional year of services (a prorated term of eight months' service) on a part-time basis (20 hours per week). The scope of services for the Resource Coordinator includes performance of duties based on the job qualification document and any other applicable City policy. The part- time Resource Coordinator is compensated for services rendered at rate of $22,500 per year (or $14,796 for this prorated term) paid equally on a monthly schedule. The monies to fund this position will be funded through the Special Investigations Fund. The City of North Richland Hills will continue to provide all facilities, furniture, fixtures, equipment and supplies reasonably necessary for the performance of the administrative duties. Should the contract be terminated by the City of North Richland Hills, notice is not required. If the Resource Coordinator desires to terminate the contract with the City of North Richland Hills, a 30 -day notice is required. Recommendation: Approve Resolution No. 2012 -003 N RH RESOLUTION NO. 2012-003 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: WHEREAS, The City of North Richland Hills, Texas possesses legal authority to enter into contract with Geny Ford, Community Resource Coordinator for the Police Department. WHEREAS, The City Council of North Richland Hills finds it in the best interest of the citizens of North Richland Hills to continue the Community Resource Coordinator program for an additional year (prorated). WHEREAS, The aforementioned contract between the City of North Richland Hills and Geny Ford as the Community Resource Coordinator, will continue her current services, but on a part -time basis (20 hours per week) and for a term of eight months. WHEREAS, The City Council of North Richland Hills designates Public Safety Director Jimmy Perdue as the program manager. The program manager is given the authorization to accept, reject, alter or terminate the proposed contract on behalf of the City. NOW THEREFORE BE IT RESOLVED, that the City Council of North Richland Hills approves to enter into contract with Geny Ford for continuance of the Police Department's Community Resource Coordinator program. PASSED AND APPROVED this the 23rd day of January, 2012. Is] IWiig*]a►IQA9:1N101:1W_► L, I III: ll416'1 M Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary 1.1 �:tGl ►1 =1 IN-114 119111910 k51:1 � I III I =IHA I I wil George A. Staples, City Attorney F -11U =1917A =1I7:1�211OI0161 ►1021 �16 Jimmy Perdue, Public Safety Director INDEPENDENT CONTRACTOR AGREEMENT FOR RESOURCE COORDINATOR SERVICES THE STATE OF TEXAS § COUNTY OF TARRANT § This Independent Contractor Agreement for Resource Coordinator Services ( "Agreement ") is hereby made by and between the City of North Richland Hills, Texas, a home rule municipality located in Tarrant County, Texas ( "City "), and Genevieve Maurine Ford, an individual residing in Tarrant County, Texas ( "Resource Coordinator') to be effective as of the 4th day of February, 2012 ( "Effective Date"). For convenience, the City and the Resource Coordinator may be referred to collectively as "parties" and individually as a "party." NOW THEREFORE, for and in consideration of the mutual promises and covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: I. GENERAL PROVISIONS 1.1 Term. The term of this Agreement shall be eight months from the Effective Date which term shall automatically renew for successive one year terms unless this Agreement is terminated earlier by either party as provided in this Agreement. 1.2 Scope of Services. The City hereby retains the Resource Coordinator on a part-time basis to perform the duties and services as prescribed in this Agreement, Department policies, City policies, and the attached Job Qualification Document which is by this reference incorporated herein for all purposes. 1.3 Description of Services. The purpose of the program is to develop and implement an alternative community response system that will more efficiently connect community - based resources to citizens in need. The Community Resource Coordinator will receive and screen referrals for community resources from police officers, local school personnel and Child Protective Services, and connect those referrals with the resources available and appropriate to their need. They will also act as a liaison between the police department and MHMR personnel for the purpose of providing support and information related to mental health issues. This position will maintain work activity records detailing referral information and provide this data to the police department in a timely manner. 1.4 Compensation. As compensation for the services rendered by the part-time Resource Coordinator under this Agreement, the City shall pay the Resource Coordinator the sum of $14,796 for the eight month term. Such compensation shall be paid in 8 equal installments once monthly to be received on the last Friday of every month, provided that as a condition precedent to payment, the Resource Coordinator shall submit to the Chief of Police or designee 15 days preceding a payday an invoice for services rendered. The Resource Coordinator is not entitled to receive and is prohibited from accepting any compensation or other benefit from either the City or from any other person or entity in exchange for the Resource Coordinator's services rendered under this Agreement except as provided in this Agreement. The Resource Coordinator will work eighty (80) duty hours per month and due to the nature of the position, duty hours are flexible and may be comprised of day, night, or weekend hours. Holiday, vacation and/or sick leave are not considered for this position due to the part -time status. The Resource Coordinator is expected to provide her supervisor with an upcoming weekly work schedule stipulating office and outside work hours. Within ten (16) days of the end of the month, the Resource Coordinator will provide a detailed accounting of hours worked during the past month, to include dates, times and locations where the work was performed. 1.5 Performance Review. The Resource Coordinator's performance under this Agreement shall be subject to review by the Chief of Police or designee to determine compliance with the requirements of the terms of this Agreement. Upon request, the Resource Coordinator shall report to the Chief of Police or designee regarding his or her provision of services under this Agreement. The City shall not control the means and methods of the provision of the Resource Coordinator's services except to the extent necessary to cause the Resource Coordinator to come into compliance with the requirements of the terms of this Agreement and any specific provisions mandated by any applicable funding source(s). 1.6 City's Additional Duties. The City shall provide all facilities, furniture, fixtures, equipment and supplies reasonably necessary for the performance of the administrative duties. If the Resource Coordinator believes that additional furniture, fixtures, equipment or supplies are needed to facilitate the administrative duties, the Resource Coordinator must request in writing to the Department to provide such additional amenities. The Chief of Police or designee may provide such amenities if it is determined that such amenities are reasonably necessary for the performance of the administrative duties. 1.7 Termination. This Agreement may be terminated by the City for any reason without notice to the Resource Coordinator. The Resource Coordinator may terminate this Agreement for any reason with 30 days written notice to the City. In the event of termination, the City shall pay the Resource Coordinator all sums due under this Agreement through the effective date of termination. Nothing herein shall be interpreted to alter the independent contractor status of the Resource Coordinator or to deem the Resource Coordinator an employee of the city. 1.8 INDEMNIFICATION. THE RESOURCE COORDINATOR SHALL INDEMNIFY AND HOLD HARMLESS THE CITY, ITS AGENTS, OFFICIALS AND EMPLOYEES, FROM ANY AND ALL CLAIMS FOR BODILY INJURY, ILLNESS, DEATH, ECONOMIC LOSS, PERSONAL INJURY OR PROPERTY DAMAGE ARISING, IN WHOLE OR IN PART, FROM THE ACTIVITIES OF THE RESOURCE COORDINATOR UNDER THIS AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIMS ARISE, IN PART, OUT OF ANY NEGLIGENT ACT OR OMISSION COMMITTED BY ANY OFFICIALS, OFFICERS, OR EMPLOYEES OF THE CITY. THIS INDEMNIFICATION OBLIGATION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. II. MISCELLANEOUS PROVISIONS 2.1 No Waiver of Defenses. Notwithstanding any provision of this Agreement to the contrary, nothing contained in this Agreement shall be construed to limit or waive any affirmative defense of the City to any claim, including any defense based upon governmental or sovereign immunity of the City, statutory damage limits, or any immunity applicable to its officers, agents, servants or employees. 2.2 Independent Contractor /insurance. The Resource Coordinator agrees and understands that he or she is acting as an independent contractor, and that the City is not directing the manner of the work to be undertaken by the Resource Coordinator. The Resource Coordinator further agrees and understands that the City shall have no obligation to provide any insurance coverage for the Resource Coordinator's activities, but may choose to do so. In the event that the City's insurance provides any coverage for the Resource Coordinator's activities, the Resource Coordinator acknowledges that such coverage is for the benefit of the City, its agents, officials and employees only, and that the Resource Coordinator shall not be an insured there under. 2.3 Resource Coordinator's Warranties /Representations. The Resource Coordinator hereby warrants and represents that any and all information provided to the City regarding the Resource Coordinator's background and experience is true and correct. The Resource Coordinator acknowledges that the City's execution of this Agreement is made in reliance upon such information and that if any of such information is determined by the City to be inaccurate or untrue; this Agreement shall be subject to immediate termination by the City. 2.4 Criminal Background Check. The Resource Coordinator agrees to submit to a criminal background check which may be performed at least once during each term of this Agreement. The Resource Coordinator further agrees that if such background check reveals a felony or crime of moral turpitude, this Agreement will be subject to immediate termination. 2.5 Entire Agreement. This Agreement contains the entire agreement between the parties regarding the subject matter hereof and displaces any prior or contemporary written or oral agreements. 2.6 Assignment. This Agreement or any obligation contained herein may not be assigned by any party without the written consent of the other party. 2.7 Severability. If any term or provision of this Agreement is deemed by a court of competent jurisdiction to be illegal or unenforceable, this Agreement shall survive and shall be interpreted as if such illegal or unenforceable term or provision were not contained in this Agreement. 2.8 Amendment. This Agreement may not be modified or amended unless such modification or amendment is in writing and signed by both parties. 2.9 Governing Law and Venue. This Agreement shall be construed under and governed by, and in accordance with the substantive laws of the State of Texas, exclusive of its choice -of -law provisions. All obligations of the parties hereto, created by this Agreement are fully performable in Tarrant County, Texas. Venue of any suit or cause of action under this Agreement shall lie exclusively in Tarrant County, Texas. The parties waive any and all claims for attorney fees and there shall be no right to attorney fees from any action arising under this contract. 2.10 Notice. All notices required or permitted to be sent hereunder shall be delivered in person, by courier or overnight delivery service or by depositing same in the United States mail, return receipt requested. Such notices shall be deemed delivered on the date received and shall be delivered to the following address: If to the City: City of North Richland Hills Attn: Chief of Police 7301 Northeast Loop 820 North Richland Hills, Texas 76180 If to the Resource Coordinator: Either party may change their address for notice purposes by providing notice as required by this paragraph. 2.11 Background Check and Drug and Alcohol Use. Resource Coordinator represents that Resource Coordinator has no convictions for any felony or Class A or Class B misdemeanor, and, to the Resource Coordinator's knowledge, is not being investigated for any such offense. Resource Coordinator agrees to immediately provide notice to the City if Resource Coordinator is arrested, indicted, or otherwise accused of any such criminal conduct or in the event a warrant of arrest has been procured in the name of the Resource Coordinator. Resource Coordinator also acknowledges and agrees that the City has a paramount interest in maintaining the integrity of the program, and control of all City premises, and to that end, the City has established certain rules of conduct for all officers, employees, and contractors, which include a strict prohibition against use of alcohol or illegal drugs, the misuse of legal drugs, and the possession of firearms on City premises and otherwise when the Resource Coordinator is providing services to the City, and Resource Coordinator acknowledges and agrees that the City may conduct a criminal background check on Resource Coordinator periodically at the City's discretion. Resource Coordinator agrees to submit to a drug screen as part of this contract. 2.12 Rules of Construction. This Contract shall not be construed against the drafting party, but all other rules of contract construction shall apply. SIGNED TO BE EFFECTIVE ON THE EFFECTIVE DATE. CITY OF NORTH RICHLAND HILLS, TEXAS: By: Jimmy Perdue, Chief of Police The City of North Richland Hills Date: f -1 ;1 rl:Ze]v14 D1 -1a 1163;163 N IT! IF_1 I'll I N7 I *CM 0 91'E By. George Staples, City of Attorney The City of North Richland Hills Date: RESOURCE COORDINATOR: Print Name Date: M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.4 GN 2012 -008 Approve Investment Strategy and Investment Policy - Resolution No. 2012 -001 Presenter: Larry Koonce Summary The Public Funds Investment Act ( "PFIA ") requires that the City Council review and adopt the city's Investment Strategy and Investment Policy annually. Occasional legislative changes in the PFIA, as well as changes in the economic environment affecting investment decisions, require revisions to the Investment Strategy and Investment Policy. General Description: The City contracted with Public Financial Management, LLC ("PFM ") to provide Investment Advisory Services on October 1, 2009. PFM is providing on -going and annual review of the City's Investment Policy and Investment Strategy, ensuring the policy follows the guidelines of the Texas Government Code 2256, Public Funds Investment Act ( "PFIA"), as well as adhering to local policy. The annual review, as mandated by the PFIA, will occur each year before or after the city's new fiscal year begins. As well, any changes, edits or additions will always be guided by PFIA guidelines in the following order, Safety, Liquidity and Yield. The Investment Committee has reviewed these revisions and recommends adoption of the following revised Investment Strategy and Investment Policy. Significant changes, shown in red line type, are as follows: Investment Strategy • There are no changes to the Investment Strategy. Investment Policy On page 10, Section V, Authorized Investments, Sub - section 5. Per the new Texas Public Funds Investment Act statutes, Texas domiciled and branch requirement can be removed. Regular collateral requirements above FDIC limits still apply as normal. They must still be FDIC insured bank. • On page 13, Section VI, Investment Parameters, Subsection B. Investment Type, item (2) — PFM recommended to increase the U.S. Treasury Notes limit to 100% from 80 %. This would be more reflective of common Government Finance Officers Association ( "GFOA ") recommendations /guidelines. The weighted average days to maturity (WAM) will remain at 730 days. • On page 14, Section VII — Investment Procedures, Subsection B. Investment Transactions, it is recommended to include the registered investment advisor as appointed by the investment committee permission to execute transactions on behalf of the City, in the absence of other authorized investment officers. This helps to allow more efficient trade execution to take advantage of market opportunities as they become available. It is more reflective of the discretionary arrangement put in place at the renewal of the investment advisory agreement this past fall. Recommendation: Approve Resolution No. 2012 -001. N RH RESOLUTION NO. 2012-001 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: 1. The City of North Richland Hills acknowledges the high priority of providing the necessary guardianship of public funds in the municipal sector. The City Council expressly intends to set high fiscal standards, delegate treasury and investment duties to appropriate officials, and to review the actual performance at regular intervals. The City Council hereby intends to implement investment requirements set forth in Tex. Rev. Civ. Stat. Ann., Art. 4413 (34c) and 2258. 2. The City Council has reviewed and hereby adopts the City of North Richland Hills' Investment Policy January 23, 2012, including all revisions and changes required under state law or recommended by City staff. This Investment Policy replaces the investment policy dated January 24, 2011. The City Council has also reviewed and approved the City of North Richland Hills' Investment Strategy document, as prepared by the City's Investment Committee. PASSED AND APPROVED this the 23rd day of January, 2012. 031 was] ML,IQ A 11:IN[@]:lW- lki I NJ: III /_1a11 16 Patricia Hutson, City Secretary Oscar Trevino, Mayor APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney F-11 U =1937A =1 17-11: 2 11OX0161►10=1 �16 Larry Koonce, Director of Finance CITY OF NORTH RICHLAND HILLS 110kvj :&]0�ilml'klk 10:L■ll0MICYA JANUARY 23, 2012 "M" U 0 =1 y_Tol It is the policy of the City of North Richland Hills that, giving due regard to the safety and risk of investment, all available funds shall be invested in conformance with State and Federal Regulations, applicable Bond Resolution requirements, and the adopted Investment Policy and Investment Strategy. In accordance with the Public Funds Investment Act (Texas Government Code 10, Chapter 2255), the City of North Richland Hills' investment strategies shall address the following priorities (in order of importance): • Understanding the suitability of the investment to the financial requirements of the City • Preservation and safety of principal • Liquidity • Marketability of the investment prior to maturity ■ Diversification of the investment portfolio • Optimization of interest earnings Effective investment strategy development coordinates the primary objectives of the City of North Richland Hills' Investment Policy and cash management procedures to enhance interest earnings and reduce investment risk. Aggressive cash management will increase the available "investment period" and subsequently interest earnings. Maturity selections shall be based on cash flow and market conditions to take advantage of various interest rate cycles. The City's investment portfolio shall be designed and managed in a manner responsive to the public trust and consistent with the Investment Policy. The City's Funds shall be analyzed and invested according to the following major fund types- 1. Operating Funds II. Capital Improvement Funds III. Debt Service Funds IV. General Fund Balance Reserve V. Revenue Bond Reserves INVESTMENT STRATEGY In order to minimize risk of loss on a sale because of fluctuating market prices, investment maturities will not exceed the anticipated cash flow requirements of the funds. In general, the City will structure the investment portfolio so that investments mature to meet cash requirements for ongoing operations. From time to time, securities may be purchased at a 2 premium or traded for other securities to improve yield, maturity or credit risk. For these transactions, a loss may be incurred for accounting purposes to achieve optimal investment return, provided any of the following occurs with respect to the replacement security: A. The yield has been increased, or B. The maturity has been reduced or lengthened, or C. The quality of the investment has been improved. Investment guidelines by fund type are as follows: Operating Funds The City of North Richland Hills Operating Funds are as follows: • General Fund ■ Special Revenue Funds • Special Investigation Fund • Drainage Utility Fund • Crime Control and Prevention District Fund • Promotional Fund • Economic Development Fund • Donations Fund • Parks and Recreation Facilities Development Fund • Grant Fund • Gas Development Fund • Traffic Safety Fund • Enterprise Funds • Utility Fund • Aquatic Park Fund • Golf Course Fund • Internal Service Funds • Facilities /Construction Management Fund • Fleet Services Fund • Self- Insurance Fund • Information Services Fund • Capital Projects Funds • General CIP Fund • Permanent Street Maintenance Fund • Sidewalk Maintenance Fund ■ Component Units o Tax Increment Financing District 1 (TIF #1) 3 o Tax Increment Financing District 2 (TIF #2) 1) Suitability - Any investment eligible in the Investment Policy is suitable for the Operating Funds. 2) Safety of Principal - All investments shall be in high quality securities with no perceived default risk. The maximum allowable investment in commercial paper shall be limited to 10% of total Operating Fund investments. Market price fluctuations will occur. By managing the weighted average days to maturity for the operating fund portfolio to be less than 730 days and restricting the maximum allowable maturity to five years, the price volatility of the overall portfolio will be minimized. 3) Marketability -Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash requirement. Active electronically traded markets will define an efficient secondary market. 4) Liquidity -The Operating Funds require the greatest short-term liquidity of any of the fund types. Short -term constant dollar investment pools and money market mutual funds shall provide daily liquidity and may be utilized as a competitive yield alternative to fixed maturity investments. 5) Diversification - Investment maturities shall be staggered throughout the fiscal year to provide cash flow based on the anticipated operating needs of the City. Market cycle risk will be reduced by diversifying the appropriate maturity structure not to exceed the weighted average maturity allowed by the Investment Policy, and through diversification by market sector. 6) Field - Attaining a competitive market yield for comparable securities and portfolio restrictions is the desired objective. The City's portfolio shall be designed with the purpose of obtaining an optimized rate of return, through budgetary and economic cycles, commensurate with the investment risk, policy constraints, and cash flow requirements. II. Capital Improvement Funds The City of North Richland Hills Capital Improvement Funds are comprised of the monies available from the sale of debt and other sources to finance capital improvement projects. Bond proceeds are segregated from operating funds on the general ledger and in investment accounts for arbitrage compliance purposes. Capital Improvement Funds include all funding for the design and construction of capital projects, including streets, drainage facilities, utility adjustments, park improvements, and municipal buildings as well as the acquisition of capital assets. 1) Suitability - Any investment eligible in the Investment Policy is suitable for Capital Improvement Funds. 0 2) Safety of Principal - All investments shall be in high quality securities with no perceived default risk. The maximum allowable investment in commercial paper shall be limited to 10% of total Capital Improvement Fund investments. Market price fluctuations will occur. By managing the various Capital Improvement accounts in anticipation of cash flow requirements, the impact of market risk for the portfolio will be minimized. 3) Marketability -Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash requirement. Active electronically traded markets will define an efficient secondary market. 4) Liquidity - The City's funds used for construction and capital improvement programs have reasonably predictable draw down schedules. Therefore, investment maturities shall generally follow the anticipated cash flow requirements. Investment pools and money market mutual funds shall provide readily available funds generally equal to one month's anticipated cash flow needs, or a competitive 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 expenditure request. This investment structure is commonly referred to as a Flexible Repurchase Agreement. 5) Diversification - Market conditions and arbitrage regulations influence and limit the selection and the laddering of maturities of fixed rate investments for bond proceeds and other construction and capital improvement funds. When investing these types of funds, every effort will be made to at least meet the maximum allowed yield, and to select and ladder maturities to meet the cash flow needs of the funds. Maturities should not exceed the normal life of the underlying projects supported by the fund. 6) Yield - Achieving a positive spread to the applicable arbitrage yield is the desired objective for bond proceeds. The City's portfolio shall be designed with the purpose of obtaining an optimized rate of return, through budgetary and economic cycles, commensurate with the investment risk, policy constraints and cash flow requirements. III. Debt Service Funds The City's Debt Service funds include the General Debt Service Fund and the Sales Tax Revenue Debt Service Fund. The General Debt Service Fund is funded from ad valorem tax collections and transfers from various other funds. The Sales Tax Revenue Debt Service Fund is funded solely from transfers from the Park and Recreation Facilities Development Fund. 1) Suitability - Any investment listed as eligible in the Investment Policy is suitable for the Debt Service Funds. 5 2) Safety of Principal - All investments shall be in high quality securities with no perceived default risk. The maximum allowable investment in commercial paper shall be limited to 10% of total Debt Service Fund investments. Market price fluctuations will however occur. By limiting the Debt Service Funds Portfolio maturity dates to the next scheduled debt service payment, the market risk of the overall portfolio will be minimized. 3) Marketability - Securities with active and efficient secondary markets are not necessary as the event of an unanticipated cash requirement is not probable. 4) Liquidity - Debt service funds have predictable payment schedules. Therefore, investment maturities shall not exceed the anticipated cash flow requirements. Investment pools and money market mutual funds may provide a competitive yield alternative for time deposits and short-term fixed maturity investments. A singular repurchase agreement may be utilized if disbursements are allowed in the amount necessary to satisfy any expenditure request. This investment structure is commonly referred to as a Flexible Repurchase Agreement. 5) Diversification - Market conditions influence the attractiveness of fully extending maturities to the next unfunded payment date. At no time shall the debt service schedule be exceeded in an attempt to bolster yield. 6) Yield - Attaining a competitive market yield for comparable securities and portfolio restrictions is the desired objective. The City's portfolio shall be designed with the purpose of obtaining an optimized rate of return, through budgetary and economic cycles, commensurate with the investment risk, policy constraints and cash flow requirements. IV. General Fund Balance Reserve The City's objective regarding the General Fund Balance is to maintain a sufficient fund balance to operate the City for a period of sixty days or 15% of the following year's budgeted expenditures. The amount of funds to be invested in non- liquid other - than - overnight investments shall be limited to not more than 50% of this amount of the General Fund Balance. 1) Suitability - Any investment eligible in the Investment Policy is suitable for General Fund Balance Reserves. 2) Safety of Principal — Generally, the investment quality of all securities allowed as investments in the Operating Funds will be allowable in the General Fund Balance Reserve. All investments shall be in high quality securities with no perceived default risk. The maximum allowable investment in commercial paper shall be limited to 10% of total General Fund Balance Reserve investments. Market price fluctuations 0 will occur. Under no circumstance shall any investment from this portfolio cause the combined portfolio's weighted average maturity to exceed the maximum allowed by the Investment Policy. The maximum allowable maturity is restricted to three years. 3) Marketability -Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash requirement. Active electronically traded markets will define an efficient secondary market. 4) Liquidity - The Fund Balance Reserve requires the liquidity necessary to cover the City's expenditures in the event of a cash shortfall. Short-term constant dollar investment pools and money market mutual funds shall provide daily liquidity and may be utilized as a competitive yield alternative to time deposits and fixed maturity investments. 5) Diversification — Maturing investments shall be reinvested within the desired maturity to provide cash flow in the event that cash is needed for the operating needs of the City. Market cycle risk will be reduced by diversifying the appropriate maturity structure throughout three years and through diversification by market sector. 6) Yield - Attaining a competitive market yield for comparable securities and portfolio restrictions is the desired objective. The City's portfolio shall be designed with the purpose of obtaining an optimized rate of return, through budgetary and economic cycles, commensurate with the investment risk, policy constraints and cash flow requirements. V. Revenue Bond Reserves Debt service reserves are required by bond covenants for a particular revenue bond issue. 1) Suitability - Any investment eligible in the Investment Policy is suitable for Debt Service Fund Reserves. 2) Safety of Principal — Generally, the investment quality of all securities allowed as investments in the Operating Funds will be allowable in the Debt Service Fund Reserve. All investments shall be in high quality securities with no perceived default risk. The maximum allowable investment in commercial paper shall be limited to 10% of total Revenue Bond Reserve investments. Market price fluctuations will occur. Under no circumstance shall any investment from this portfolio cause the combined portfolio's weighted average maturity to exceed the maximum allowed by the Investment Policy. The maximum allowable maturity is restricted to three years. 3) Marketability -Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash requirement. Active electronically traded markets will define an efficient secondary market. By utilizing the yield advantages of fixed income securities, maximum yield should be attained while meeting cash 7 requirements. 4) Liquidity - The Debt Service Reserve Funds require the amount of liquidity necessary to convert securities into cash if needed for payment of debts on schedule. Short -term constant dollar investment pools and money market mutual funds shall provide liquidity and may be utilized as a competitive yield alternative to fixed maturity investments. 5) Diversification - Market cycle risk will be reduced by diversifying the appropriate maturity structure throughout three years and through diversification by market sector. 6) Yield - Attaining a competitive market yield for comparable security -types and portfolio restrictions is the desired objective. The City's portfolio shall be designed with the purpose of obtaining an optimized rate of return, through budgetary and economic cycles, commensurate with the investment risk, policy constraints and cash flow requirements. 0 I Molt A.''=] 191 kMolNO[a]:i0:1N 191:1WIW 111:1111&1 IIkl 1y1*3061ml'kr :1011E A JANUARY 23, 2012 TABLE OF CONTENTS Preface I. Purpose and Objectives 11. Scope III. Responsibility and Control IV. Investment Committee V. Suitable and Authorized Investments VI. Investment Parameters VII. Investment Procedures VIII. Custodial Credit Risk Management IX. Arbitrage X. Depositories XI. Investment Policy Adoption Page 1 3 5 6 8 9 12 13 15 17 17 18 APPENDICES Page A. City of Forth Richland Hills Ordinance Number 2479 21 B. Investment Bid Form 23 C. Security Information Worksheet 24 D. Broker /Dealer Rotation Procedures 25 E. Trading History by Broker 27 F. Broker /Dealer Questionnaire 29 G. Approved Securities Dealers 37 H. Primary Dealers 38 I. TBMA Master Repurchase Agreement 39 J. Public Funds Investment Act of 1997 51 K. Public Fund Collateral Act of 1993 85 L. Inter -local Agreements 99 M. Glossary 109 LAM: PREFACE "A public office is a public trust." Charles Sumner, 1872 If a public office is a public trust, then the trust must be administered properly. Public funds are acquired by governments largely through involuntary payments, particularly through taxation. In a modern democratic society, public officials are obligated to manage these funds in a disciplined manner. In most cases, laws govern the investment process. Laws alone however cannot compel public officials to a series of actions that assure the public's best interests. The actions of public officials responsible for investing public funds must be guided by knowledge, skills, systems, policies, procedures and confidence that can be described only as professional discipline. It is the policy of the City of North Richland Hills that, giving due regard to safety and risk of investments, all available funds shall be invested in conformance with these legal and administrative guidelines, and, to the maximum extent possible, at the highest rates obtainable at the time of the investment. Effective cash management is recognized as essential to good fiscal management. An aggressive cash management and investment policy will be pursued to take advantage of investment interest as viable and material revenue to all operating and capital funds. Investment income will be used in a manner that will best serve the interest of the City of North Richland Hills. The City's portfolio shall be designed and managed in a manner responsive to the public trust and consistent with state and local law. LAM: I. PURPOSE AND OBJECTIVES A. Purpose The purpose of this document is to set forth the specific investment policy and strategy guidelines for the City of North Richland Hills. All investment activity shall be consistent with Texas law as defined in Government Code 16, Chapter 2256, known as the Public Funds Investment Act (the Act), and local law. - safety of investments and City funds - preservation of capital and protection of principal - maintenance of sufficient liquidity to meet operating needs - diversification of investments to avoid unreasonable risks - public trust from prudent investment activities - optimization of investment income for the City's portfolio The City is required under the Public Funds Investment Act, Section 5, to adopt a formal written Investment Policy regarding the investment of its funds and funds under its control. This policy is to be adopted annually to meet the requirements of the Act, and has been revised periodically to comply with updated state requirements. The City of North Richland Hills' Ordinance Number 2679 (See Appendix A) states that all investment activities and procedures shall be governed by a written Investment Policy. The Investment Policy addresses the methods, procedures, and practices that must be exercised to ensure the effective and judicious management of the City's funds. B. Objectives The City shall manage and invest its cash with four primary objectives, listed in the order of priority: safety, liquidity, public trust, and yield, expressed as optimization of investment income. The safety of the principal invested always remains the primary objective. All investments shall be designed and managed in a manner responsive to the public trust and consistent with state and local law. An aggressive cash management program and investment policy will be pursued by the Investment Officer to take advantage of investment interest as viable and material revenue to all operating and capital funds. Cash management is defined as the process of managing monies in order to ensure maximum cash availability and maximum investment income on short-term investments of idle cash. The City's portfolio shall be designed and managed in a manner responsive to the public trust. Income from investments will be used in a manner that will best serve the interests of the City of North Richland Hills. 1. Safety Safety of invested principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit and interest rate risk. a. Credit Risk and Concentration of Credit Risk 3 The City will minimize credit risk, the risk of loss due to the failure of the issuer or backer of the investment, and concentration of credit risk, the risk of loss attributed to the magnitude of investment in a single issuer, by: (1) Limiting investments to the safest types of investments, (2) Pre - qualifying the financial institutions and broker /dealers with which the City will do business„ and (3) Diversifying the investment portfolio to minimize potential losses on individual issuers. b. Interest Rate Risk The City will manage the risk that the investment income and the market value of investments in the portfolio will fall due to changes in the general interest rates by: (1) Structuring the investment portfolio so that investments mature to meet cash requirements for ongoing operations. From time to time, securities may be purchased at a premium or traded for other securities to improve yield, maturity or credit risk. For these transactions, a loss may be incurred for accounting purposes to achieve optimal investment return, provided any of the following occurs with respect to the replacement security: A. The yield has been increased, or B. The maturity has been reduced or lengthened, or C. The quality of the investment has been improved. (2) Investing operating funds primarily in certificates of deposit, shorter - term securities, money market mutual funds, or local government investment pools functioning as money market mutual funds, (3) Diversifying maturities and staggering purchase dates to minimize the impact of market movements over time, and (4) Limiting the maximum weighted average maturity of the investment portfolio to 730 days. 2. Liquidity The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that investments mature concurrent with cash needs to meet anticipated demands. Because all possible cash demands cannot be anticipated, a portion of the portfolio will be invested in shares of money market mutual funds or local government investment pools that offer same -day liquidity. 4 3. Public Trust All participants in the City's investment process shall seek to act responsibly as custodians of the public trust. Investment officers shall avoid any transaction that might impair public trust in the City's ability to govern effectively. 4. Yield (Optimization of Investment Income) The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. II. SCOPE This investment policy applies to all financial assets of the City of North Richland Hills in all current funds, any funds to be created in the future, and any other funds held in custody by the City, unless expressly prohibited by law or unless it is in contravention of any depository contract between the City and its depository bank. However, this policy does not apply to the assets administered for the benefit of the City by outside agencies. These funds are accounted for in the City's Comprehensive Annual Financial Report and include: Operating Funds • General Fund • Special Investigation Fund • Drainage Utility Fund • Crime Control and Prevention District Fund • Promotional Fund • Economic Development Fund • Donations Fund • Parks and Recreation Facilities Development Fund • Grant Fund • Gas Development Fund • Traffic Safety Fund • Utility Fund • Aquatic Park Fund • Golf Course Fund • Facilities /Construction Management Fund • Fleet Services Fund • Self- Insurance Fund • Information Services Fund • General CIP Fund • Permanent Street Maintenance Fund • Sidewalk Maintenance Fund • Tax Increment Financing District 1 (TIF #1) • Tax Increment Financing District 2 (TIF #2) Capital Improvement Funds 5 Debt Service Funds General Fund Balance Reserve Revenue Bond Reserves The City will consolidate cash balances from all funds with the exception of bond proceeds to optimize investment income. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. III. RESPONSIBILITY AND CONTROL A. Delegation of Authority This Investment Policy and the outlining of investment practices and authorities is compiled in accordance with the Public Funds Investment Act, which requires the adoption of rules governing investment policies and strategies and the designation of an Investment Officer, as well as City Ordinance Number 2079 which designates investment officers and provides prudent investment rules. Collateral requirements are created in accordance with the Public Funds Collateral Act (Texas Government Code 10, Chapter 2257). Ultimate responsibility and authority for all investment transactions and cash management reside with the City Manager and the City's Director of Finance. The Director of Finance is also responsible for considering the quality and capability of staff to be involved in investment management and procedures. The Director of Finance may delegate responsibility for the day to day investment activities to other qualified staff members. These staff members will be termed Investment Officers of the City. One of these Investment Officers will be designated the Primary Investment Officer by the Director of Finance to conduct daily investment activity and prepare required investment reports. Investment Officers will not conduct any investment or banking activities involving City funds until a resolution or ordinance giving them authority to do so has been approved by the City Council of the City of North Richland Hills. All participants in the investment process shall seek to act responsibly as custodians of public trust. B. Quality and Capability of Investment Management The City shall provide periodic training in investments for the designated Investment Officers and other investment personnel through courses and seminars offered by professional organizations, associations, and other independent sources approved by the Investment Committee in order to ensure the quality and capability of investment management in compliance with the Public Funds Investment Act. C. Training Requirements In accordance with the Public Funds Investment Act, all authorized Investment Officers shall attend an investment training session no less often than once every two years commencing on September 1, 1997 and shall receive not less than ten hours of instruction relating to investment responsibilities. A newly appointed Investment Officer must attend a training session of at least ten hours of instruction within twelve months F;,! of taking over or assuming duties. The two year period is determined based on the anniversary of the last ten hours of instruction received. The investment training session shall be provided by an independent source approved by the Investment Committee. For purposes of this policy, an "independent source" from which investment training shall be obtained shall include a professional organization, an institution of higher education, or any other sponsor other than a business organization that the City may engage in an investment transaction. D. Management and Internal Controls The Director of Finance is responsible for establishing and maintaining an internal control structure designed to ensure the City's assets are protected from loss, theft, or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Accordingly, the Director of Finance shall establish a process for annual independent review by an external auditor to assure compliance with policies and procedures. The internal controls shall address the following points: ■ Minimize risk of collusion ■ Separation of transactions authority from accounting and record keeping • Custodial safekeeping • Avoidance of physical delivery securities • Clear delegation of authority to subordinate staff members ■ Written confirmation for telephone (voice) transactions for investments and wire transfers ■ Development of a wire transfer agreement with the depository bank or third party custodian E. Prudence The standard of prudence to be applied by the Investment Officer shall be the "prudent investor" rule, which states: "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their awn affairs, not for speculation, but for investment, considering the probable safety of capital as well as the probable income to be derived." It should be noted that, in a diversified portfolio, occasional losses are inevitable and must be considered within the context of the overall portfolio's return. In determining whether an Investment Officer has exercised prudence with respect to an investment decision, the determination shall take into consideration the investment of all funds, or funds under the City's control, over which the Investment Officer had responsibility rather than a consideration as to the prudence of a single investment, and whether the investment decision was consistent with the written investment policy of the City. VA F. Indemnification The Investment Officer, acting in accordance with written procedures and exercising due diligence, shall not be held personally responsible for a specific security's credit risk or market price changes, provided that these deviations are reported in a timely manner and appropriate action is taken to control the effects of such adverse developments. The City shall provide for the defense and indemnification of any Investment Officer or Investment Committee member who is made party to any suit or proceeding, other than by actions of the City, or against wham a claim is asserted by reasons of their actions taken within the scope of their service as Investment Officers or appointed members of the Investment Committee. Such indemnity shall extend to judgments, fines, and amounts paid in settlement of any such claim, suit or proceeding, including any appeal thereof. This protection shall extend only to members who have acted in good faith and in a manner which they reasonably believe to be in, or not opposed to, the best interests of the City. G. Ethics and Conflicts of Interest City staff 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 the ability to make impartial investment decisions. City staff should disclose to the City Manager any material personal financial investments in financial institutions that conduct business with the City and they shall further disclose positions that could be related to the performance of the City's portfolio. City staff shall subordinate their personal financial transactions to those of the City, particularly with regard to the timing of purchases and sales. An Investment Officer of the City who has a personal business relationship, as defined by the Public Funds Investment Act of 1997, Section 2256.055 (i), with an organization seeking to sell an investment to the City shall file a statement disclosing that personal business interest. An Investment Officer who is related within the second degree of affinity or consanguinity to an individual seeking to sell an investment to the City shall file a statement disclosing that relationship. A disclosure statement required under this section must be filed with the Texas Ethics Commission and the governing body of the City. IV. INVESTMENT COMMITTEE An Investment Committee shall be established to assist in monitoring the performance and structure of the City's portfolio and approved brokers. Members of this committee shall include the Director of Finance (as Chairman) and the Assistant Director of Finance as permanent members. Additional members, numbering no less than three, will be appointed at the discretion of the Director of Finance. The Primary Investment Officer will report to and make recommendations to the Investment Committee, but will have no vote concerning investment policy or suitability of investments. Any matters presented to the committee requiring a vote of the members shall be passed or denied by a simple majority. The Investment Officer or any other member of the committee shall have the power to call meetings of the committee. The committee shall meet no less than quarterly. R, The Investment Committee shall perform the following functions: Approve the process of selecting authorized dealers, brokers, investment advisors, and safekeeping agents /custodians used by the City. 2. Review the City's general portfolio activity and performance for compliance to this policy and recommend any changes or amendments to this policy to the City Council. 3. Approve the Investment Strategy document, as prepared by the Investment Officer. This document is required by State law to be separate from the Investment Policy. The Investment Strategy will be a guide to the investment of all funds controlled by the City as described in Section II of the Investment Policy. The strategy is intended to adapt to changes in market conditions. 4. Advise the Investment Officer as to recommendations regarding investment strategy and portfolio performance. 5. Approve the purchase of any securities with maturities over three (3) years. 6. Immediately notify the Investment Officer of any information brought to their attention that materially affects the portfolio or the marketability of any investments purchased in accordance with the Investment Policy. 7. Oversee the activities of the persons designated to carry out investment transactions and inform the City Council of unaddressed concerns with the management of the City's investment portfolio. V. SUITABLE AND AUTHORIZED INVESTMENTS The City currently has a "buy and hold" portfolio strategy. Maturity dates are matched with cash flow requirements and investments are purchased with the intention of being held until maturity. However, investments may be liquidated prior to maturity for the following reasons- - An investment with declining credit may be liquidated early to minimize loss of Principal - Cash flow needs of the City require that the investment be liquidated City funds governed by this policy may be invested in the instruments described below, all of which are authorized by Chapter 2256 of Government Code 10 (Public Funds Investment Act), with further restrictions imposed by local ordinances. Investments of City funds in any instrument or security not authorized for investment under the Act and City ordinance is strictly prohibited. The City will not be required to liquidate an investment that becomes unauthorized, for reasons other than loss of rating, subsequent to its purchase. All prudent measures will be taken to liquidate an investment that is downgraded to less than the required minimum rating. A. Authorized Investments 1. Obligations of the United States, its agencies, and instrumentalities 2. Collateralized Mortgage Obligations ( "CMOs ") directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States 3. Direct Obligations of the State of Texas or its agencies 4. Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality of not less than A or its equivalent by a nationally recognized investment rating firm 5. GerFifica +ac of 99poci$ iccWari by a depository 0 nc+i41i$inn $h a$ hoc i +c main offica or a branch office the State of Texas The Certificates of deposit issued by a depository institution must be guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, and secured by obligations in a manner and amount as provided by law 6. Fully Collateralized Repurchase Agreements that are structured in compliance with the Public Funds Investment Act. A flexible repurchase agreement can be utilized for the investment of bond proceeds to meet projected cash outflows. Repurchase agreements must be: secured by obligations of the United States or its agencies and instrumentalities; pledged to the City or held in the City's name; deposited at the same time the investment is made; and have a defined termination date. Flexible repurchase agreements (Flex- Repos) must be purchased through a primary government securities dealer, as defined by the Federal Reserve, or financial institutions doing business in this state (see Appendix E for a current list of Primary Dealers). Flex -Repos may be utilized on new bond issues as deemed necessary and advantageous to the City. Repurchase Agreements will only be executed with counterparties that have signed a TBMA Tri -Party Repurchase Agreement with the City. A sample TBMA Tri -Party Repurchase Agreement is incorporated in this investment policy as Appendix F. 7. Mutual Funds a. No -load Money Market Mutual Funds are acceptable investments provided they are registered and regulated by the Securities and Exchange Commission, have a dollar- weighted average stated maturity of 90 days or less, maintain a stable net asset value of $1 per share, and provide the City with a prospectus and other information required by the Securities Exchange Act of 1934 or the Investment Company Act of 1940. b. No -load Mutual Funds are acceptable investments provided they are regulated by the Securities and Exchange Commission, have an average weighted maturity of less than two years, are invested exclusively in obligations as expressed in Section 2256, subchapter A, are continuously rated not less than AAA or it's equivalent by at least one nationally recognized credit rating agency, and conform to all requirements under the 10 Public Funds Investment Act relating to the eligibility of investment pools to receive and invest funds of investing entities. (See Appendix G for the complete requirements for authorized mutual funds under the Act.) 8. Investment Pools a. Investment pools must provide the Investment Officer with an offering circular or other similar disclosure instrument that contains specific and detailed information required by the Act. Additionally, the pool shall provide transaction confirmations, detailed monthly transaction summaries, and monthly performance reports to the Investment Officer. The specific requirements for authorized investment pools are detailed in the Public Funds Investment Act, Subchapter A, Section 2256.516 (Appendix G.) Authorized pools must maintain credit ratings no lower than AAA or AAAm or an equivalent rating by at least one nationally recognized rating service. Investment pools created to operate as a money market mutual fund must mark investments to market daily and maintain a net asset value of $1 per share with the market value per share between .995 and 1.005. b. In order to participate in an investment pool, the City Council must approve by resolution or ordinance a Participation Agreement or Inter -local Agreement to be executed with the State or Inter -local authority responsible for the investment pool. This agreement will specify the City's authorized representatives and the standard delivery instructions for fund transfers and information reports. (See Appendix I for approved inter -local agreements.) 9. Corporate Obligations — The authorized staff may invest in corporate obligations issued by financial institutions that participate in the FDIC's Temporary Liquidity Guarantee Program and are fully insured by the FDIC and are guaranteed by the full faith and credit of the United States Government. B. Unauthorized Investments The following investment instruments are specifically not authorized: Obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage- backed security collateral and pays no principal (Collateralized Mortgage Obligations (CMO) - derived Interest Only Strips), 2. Obligations whose payment represent the principal stream of cash flow from the underlying mortgage- backed security collateral and bears no interest (CMO- derived Principal Only Strips), 3. Collateralized Mortgage Obligations that have a stated final maturity date of greater than ten (10) years, 11 4. Collateralized Mortgage Obligations whose interest rates are determined by an index that adjusts opposite to the changes in a market index (Inverse Floaters), 5. Certificates of Deposit and other investments issued by Savings and Loans, 6. Share Certificates and other investments issued by Credit Unions, and 7. Guaranteed Investment Contracts. VI. INVESTMENT PARAMETERS A. Diversification Diversification of funds and investments must be accompanied by competitive bidding of all investments to assure diversification among securities dealers. Diversification is necessary to reduce the portfolio's credit and market risks, while helping the portfolio attain a market rate of return. The City shall seek to conduct its investment transactions with several competing, reputable investment security dealers and brokers to protect principal while optimizing interest opportunities. To assure diversification of financial institutions, business involving two party transactions (i.e. repurchase agreements) with any one investment broker should be limited to thirty percent (30 %) of the par value of the total portfolio for any reporting period. In this way, a bankruptcy, receivership, or legal action would not immobilize the City's ability to meet payroll, operating, or other expenses. It is the policy of the City to diversify its investment portfolio so that reliance on any one issuer or broker will not place an undue financial burden on the City. B. Investment Type Depositories for Municipal Funds (Chapter 105, Local Government Code), the Public Funds Investment Act (Chapter 10, Government Code), and City Ordinance Number 2079 authorize depositories and define allowable investment programs for municipal governments. It is the policy of the City to purchase only securities authorized by both the Public Funds Investment Act and Section V., subsection A., of the City's investment policy. Market risk shall be minimized by diversification of investment types. The following limits, by instrument, are established for the City's total portfolio: 12 1. Repurchase Agreements 50% 2. Certificates of Deposit 3. U.S. Treasury Notes /Bonds /Bills 30% 2Q% 100% 4. U.S. Agencies and Instrumentalities 75% 5. Commercial paper (indirectly through investment pools) 10% 5. State and Local Bonds and Notes 20% 7. Money Market Mutual Funds 80% 8. Mutual Funds 9. Investment Pools 15% 100% The maximum maturity of any given investment in the portfolio shall not exceed a final, stated maturity of 3 years from the date of purchase. Reductions in the size of the portfolio due to cash outflows may cause an investment type to exceed the maximum percentage allowed for that investment type. In such situations, securities will be sold to reduce the percentage to allowable levels only if no loss will be realized from the sale. If a loss will be realized, then the investment may be held to maturity. To allow for efficient and effective placement, a singular repurchase agreement can be utilized for the investment of bond proceeds, which exceeds the 50% limitation. VII. INVESTMENT PROCEDURES The City's portfolio shall be designed with the objective of obtaining a rate of return through budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow requirements. The risk - return relationship will be controlled through the investment parameters, operating requirements, and guiding policies of the City Council. Market value of all securities owned will be compared to current book value of those securities to determine portfolio performance on a quarterly basis. Safety of principal is the foremost objective of this investment policy. The City will practice competitive bidding when purchasing all investments to guarantee the highest rate of return for the desired maturity date. The right is reserved to reject the most financially favorable bid if it is potentially disruptive to the investment strategy or portfolio composition of the City. A. Approval of Broker /Dealers It is the policy of the City to purchase securities only from those institutions on the City's approved list of broker /dealers and banks. The Investment Committee shall at least annually, review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City. All securities dealers must be registered and certified with the Texas State Securities Commission, National Association of Security Dealers ("NASD") and Securities and Exchange Commission ( "SEC "). 13 These firms that request to become qualified bidders for securities transactions, including financial institutions, banks, money market mutual funds, and local government investment pools, will be required to provide a completed brokerldealer questionnaire that provides information regarding creditworthiness, experience, and reputation. Additional requirements include a certification stating that the firm has received, read, understood, and agreed to comply with the City's investment policy and implemented reasonable procedures and controls to preclude investment transactions that are not authorized by the City's investment policy. A blank brokerldealer questionnaire with certification is included in Appendix C. A current list of approved securities dealers and banks is included in Appendix D. This list may be revised by the Investment Committee as the City's investment needs change. The Investment Committee shall approve all broker /dealers and shall also have the ability to limit the number of authorized securities dealers /banks doing business with the City. All banks authorized to sell securities to the City will be Federal Reserve member banks and must be approved by the Investment Committee. No investments will be placed with Savings and Loan Institutions or Credit Unions. It is the policy of the City to purchase securities from those institutions on investment manager's approved list. The City authorizes the investment manager to engage in security transactions with brokerldealers on a carefully monitored brokerldealer list. The Investment Committee shall at least annually review the list of brokerldealers with investment manager. B. Investment Transactions It is the policy of the City of North Richland Hills to require competitive bidding for all individual security purchases and sales except for transactions with money market mutual funds and local government investment pools. A minimum of three bids must be obtained to ensure a competitive price for the transaction. All investment transactions must be approved by the Assistant Director of Finance, or the Director of Finance, or, in their absence, an authorized Investment Officer, or registered investment advisor as appointed by the investment committee with permission to execute transactions on behalf of the City. Appendix B contains the Investment Bid Form, Security Information Worksheet, Broker/Dealer Rotation Procedures, and Trading History by Broker worksheets necessary to provide documentation for all investment transactions. All securities purchased shall require delivery on the settlement date to the City or its third party accounts on a delivery versus payment ("DVP ") basis, with the exception of investment pools and mutual funds. By so doing, City funds are not released until the City has received, through the Federal Reserve wire, the securities purchased. C. Investment Reporting The Public Funds Investment Act and City Ordinance Number 2079 require the preparation of quarterly management reports and an annual report of all investment transactions of the City be presented to the City Council. The fourth quarter report for the fiscal year will be considered as the annual report. The Primary Investment Officer will prepare the required quarterly and annual reports for evaluating investment portfolio performance. The reports will be approved and signed by all members of the 14 Investment Committee. The reports will include the following information, as required by the Public Funds Investment Act: 1. A summary narrative of investment activity and portfolio performance over the Period 2. Size and composition of portfolio at the beginning and end of the reporting period 3. List all investments according to the fund for which they were purchased 4. Beginning and ending book and market value for all securities held 5. Beginning and ending book and market value for the total portfolio 6. All additions and changes to the market value during the period 7. State the compliance of the portfolio to the investment policy and the Public Funds Investment Act 8. Yield 9. Diversification of investments 10. Total sales, maturities, and purchases 11. Accrued interest 12. Performance compared to an established benchmark These quarterly reports should be used along with the annual report to fully evaluate and explain market trends and adjustment of investment strategies to manage market fluctuations. The annual report will show on a fiscal year basis the results of the overall investment strategy. The quarterly reports will conform to GAAP and be reviewed annually by the City's independent auditor, with results reported to the City Council. D. Marking to Market Market value of all securities in the portfolio will be determined on a quarterly basis. These values will be obtained from a reputable and independent source and disclosed to the governing body in the quarterly investment report. VIII. CUSTODIAL CREDIT RISK MANAGEMENT A. Safekeeping and Custodial Agreements The laws of the State of Texas and prudent treasury management require that all purchased securities shall be held in safekeeping by either the City, a City account in a third party financial institution, or the City's safekeeping account with its designated depository bank. All securities owned by the City shall be held by a third party safekeeping agent, or in the Federal Reserve Bank, except for certificates of deposit that have FDIC insurance 15 provided. For certificates of deposit with FDIC insurance, the City will hold the deposit receipt. Transfers of securities in safekeeping shall be processed with written confirmations. The confirmation will be used for documentation and retention purposes. One of the City's designated Investment Officers must approve release of collateral prior to its removal from the safekeeping account. B. Collateral Policy Consistent with the requirements of Texas law as defined in Government Code 15, Chapter 2257, known as the Public Funds Collateral Act, it is the policy of the City to require full collateralization of all City investments other than obligations of the United States and its agencies and instrumentalities. Collateral on investments shall be maintained by an appropriate third party safekeeping agent, as designated by the City. This policy also applies to any deposits held in an approved depository in excess of the amount protected by FDIC insurance. The City of North Richland Hills shall accept only the following securities as collateral: 1. FDIC insurance coverage 2. A bond, certificate of indebtedness, or Treasury Note of the United States, or other evidence of indebtedness of the United States that is guaranteed as to principal and interest by the United States 3. Obligations of the United States, its Agencies, and Instrumentalities 4. A bond of the State of Texas or of a county, city, or other political subdivision of the State of Texas having been rated as investment grade (investment rating no less than "A" or its equivalent) by a nationally recognized rating agency with a remaining maturity of ten (1 a) years or less Certificates of deposit plus accrued interest per non - depository bank do not need to be collateralized pursuant to this policy as long as FDIC insurance is provided. Certificates of Deposit, including accrued interest must be secured by approved collateral for the amount in excess of FDIC insurance coverage. Collateral is valued at current market plus interest accrued through the date of the valuation. Collateral shall be marked to market daily to determine if adequate collateral ization is being maintained. Repurchase agreement collateral must be maintained at the following levels, with respect to repurchase agreement par value plus accrued interest: Maturity of U. S. Treasury Other Collateral Securities Securities 1 year or less 101% 102% 1 year to 5 years 152% 145% T Over 5 years 193% 110% Collateral levels should be maintained during an investment transaction. The amount placed in the bank to cover the cost of a security purchase should be fully collateralized in the event the security fails to be delivered to the safekeeping agent. Collateralized investments often require substitution of collateral. Any broker or financial institution requesting substitution must contact the Primary Investment Officer, or in his absence any other authorized Investment Officer, for approval and settlement. The substituted collateral's value will be calculated and the substitution approved if its value is equal to or greater than the original collateral ization level. The Director of Finance, or an authorized designee, must give immediate notification of the decision to the bank or third party holding the collateral. Substitution is allowable for all transactions, but should be limited, if possible, to minimize potential administrative problems and transfer expense. The Director of Finance may limit substitution and assess appropriate fees if substitution becomes excessive or abusive. Collateral shall be audited at least annually by the City's independent audit firm, and may be audited by the City at any time during normal business hours of the safekeeping party. The financial institutions with which the City invests and/or maintains other deposits shall provide, as requested by the City, a listing of the City's certificates of deposit and other deposits at the institution and a listing of collateral pledged to the City marked to current market prices. The listing shall include total pledged securities with the fallowing information: Name Typeldescription CUSIP Par value Current market value Maturity date Moody's or Standard & Poor's rating (both if available) Under Chapter 2257, Public Funds Collateral Act, substitution and release of collateral must be approved by the governing body. City of North Richland Hills Ordinance Number 2979 Section 3 delegates the Investment Officers' overall responsibilities to ensure that investment objectives are accomplished, and therefore, the authority to release and substitute collateral as deemed necessary and reasonable within the guidelines of this policy. KWITETOINUIT-ITC-N The Tax Reform Act of 1985 (Title 25 U.S.C. Section 148) provides limitations on the City's yield from investing tax - exempt bond proceeds and debt service funds. These arbitrage rebate provisions require that the City compute earnings on investments from each issue of bonds on a periodic basis to determine if a rebate is required. To determine the City's arbitrage position, the City is required to calculate the actual yield earned on the investment of the funds and compare it to the yield that would have been earned if the funds had been invested at a rate equal to the yield on the bonds sold by the City. The rebate provisions state that periodically (not less than once every five years, and not later 17 than sixty days after maturity of the bonds), the City is required to pay the U.S. Treasury a rebate of any excess earnings. These restrictions require extreme precision in the monitoring and record keeping of investments, particularly in computing yields to ensure compliance. Failure to comply can dictate that the bonds become taxable, retroactively from the date of issuance. The City's investment position relative to the arbitrage restrictions is to continue pursuing the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It is a fiscally sound position to continue maximization of yield and to rebate excess earnings„ if necessary. X. DEPOSITORIES The Texas City Depository Act, Local Government Code Chapter 145, prescribes procedures for selection of a city depository designating that both general -law and home - rule cities are "authorized to receive applications (as depository) for the custody of city funds from any banking corporation, association, or individual banker doing business within the city." This clause indicates that cities are not required to designate one central depository. The City of North Richland Hills will, through a request for proposals process, designate one or more banks to serve as its primary depository(ies) to maximize investment capabilities and minimize banking cost. The depository designation does not limit investment activity to one financial institution. The consideration the City of North Richland Hills will use to execute a banking services contract will include: ■ Ability of Bank to perform and provide the required and requested services ■ Reputation of bidder and quality of services provided • Cost of banking services ■ Interest paid on interest bearing accounts and deposits • Earnings credit calculation on account balances ■ Completeness of proposal and agreement to points outlined in the request for proposals • Convenience of locations • Previous service relationship with the City • Financial strength and stability of institution Obtaining competitive proposals on the City's depository specifications will be the responsibility of the Director of Finance. Selection of the depository shall be based on the institutions offering the most favorable terms and conditions for the handling of City funds and the services available to the City. The maximum term for a depository contract under State law is five years. The City's contract shall not exceed five years. A performance review will be conducted at least once every six months by the Investment Committee to evaluate the working relationship between the City and the depository bank. Special banking needs may be contracted for by the City outside the depository contract if approved by City Council. If a depository does not meet the City's requirements in the banking services contract, iE the bank will be required to meet the requirements within ninety days or lose the depository contract. XI. INVESTMENT POLICY ADOPTION The investment policy shall be adopted by ordinance or resolution of the City Council. It is the City's intent to comply with state laws and regulations. The policy shall be reviewed annually by the Investment Committee and the City Council. City Ordinance Number 2079 states that policy revisions that require enactment due to updates of applicable state or federal laws may be authorized by the City Manager; however, other significant revisions must be approved by the City Council. 19 ►■ . 20 Appendix A ORDINANCE NO. 79 AN ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS PROVIDING FOR THE DESIGNATION OF INVESTMENT OFFICERS: PROVIDING FOR INVESTMENT RULES AND POLICIES: PROVIDING FOR MANAGEMENT REPORTS: REPEALING A PREVIOUS ORDINANCE: AND PROVIDING A SEVERABII_ITY CLAUSE Whereas, the City of North Richland Hills acknowledges the high priority of providing the necessary guardianship of public funds in the municipal sector; and Whereas, the City Council expressly intends to set high fiscal standards, delegate treasury and investment duties to appropriate officials, and to review the actual performance at regular intervals; and Whereas, the City Council hereby intends to implement investment requirements set forth in Tex. Rev. Civ. Stat. Ann., Art. 4413 (34c) and 2256, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS. Section 1. lme fffllftnLRUIO- That the following policies and guidelines be established as investment rules governing the investment of local funds: A. All City funds from various revenue sources shall be billed or requested as early as they are recognized, computed, and determined to be due to the City. B. Funds received by the City shall be deposited into the depository bank at the end of each business day or as early as practical operating circumstances will allow. C. All debts owed by the City shall be paid as of the date they come due and not before unless approval is given by the City Manager. D. Based on cash forecasts, all monies not required immediately to pay obligations shall be invested in an income producing instrument or account. E. All investment activities and procedures shall be governed by a written investment policy. The Investment Policy is attached to this ordinance. Revisions to the Investment Policy required by updates to state and federal laws may be authorized by the City Manager. Any other significant alterations to the Investment Policy must be approved by the City Council. Section 2. i v men � . The City's funds shall be invested in appropriate instruments in such a manner to ensure the safety of investments, retention of investment principal, maintenance of sufficient liquidity to cover operating needs, diversity of the portfolio, and maximization of yield. The preceding objectives are listed in order of priority. The City shall invest in instruments providing the highest rate of return, as long as such investments do not conflict with the other priorities of the City's investment portfolio or statutes of this state regulating investments of City funds. 21 Appendix A Section 3. si na ici Is. The City Council hereby designates the Investment Officers of the City to be the City Manager and Finance director. The City Manager and Finance Director will have the overall responsibility to ensure that investment objectives are accomplished and that the guidelines of the investment policy are followed. The Finance Director will designate staff members to administer the daily functions of managing the cash and investments of the City. These persons musk he authorized as investment officers by a Resolution of the City Council before they are delegated any investment duties. Section 4. erne t R s. At least quarterly the investment officers shall prepare El written report concerning the City's investment transactions for the preceding quarter. This report will describe in detail the investment position of the City at the end of each quarter. A report on investment activity for the fiscal year shall be presented as the report for the fourth quarter. The reports shall be signed by the City Manager, the Finance Director and all other authorized investment officers and presented to the City Council. Section 5. F,epeai of previous Otirinces. Ordinance No. 2076 is hereby repealed. Section 6.verability. Provisions of this ordinance shall be, and they are hereby, declared to be severable; and should any portion of it be declared to be invalid for any reason by a court of competent jurisdiction, such holding shall not affect the remaining portions thereof. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS on this the 9th day of October, 1995. ATTEST: Secretary APPROVE S TO FORM AND LEGALITY: Af may 22 APPROVED: Tommy Brown ayor 1 2 3 4 rz Appendix B NOPITTH KICH LAND H I L L S City of Choice INVESTMENT BID FORM Trade Date 1 Time: Purchase: Investment Account: Sell: Desired Security: Desired Par Value: Desired Maturity: Settlement Broker Security Maturity Coupon YTM YTC Call Date Date Comments Accepted K:\ ACCTIInvestments \Formsllnvestment Bid Form.xls 23 Appendix C M' ITT H IZ I t_. H LAND H I L L S City of Choice SECURITY INVESTMENT WORKSHEET NAME OF SECURITY: CUSIP #: COUPON 1 DISC RATE: YIELD TO MATURITYICALL: MATURITY /CALL DATE: PAR VALUE: TRADE DATE: SETTLEMENT DATE: PRINCIPAL: Prem/Dlsc ACCRUED INTEREST: $0.00 $ - PURCHASE PRICE: $0.00 SAFEKEEPING ACCT: 259091 NAME OF BROKER: TIME OF TRADE: ENTERED BY: FAX TO: BANK OF AMERICA SAFEKEEPING PHONE 1 -800 -657 -9529 FAX # 980 -233 -7446 APPROVED BY: K:I HCCTIInvestments\Forms\Security Information Worksheet.xls 24 Appendix D Broker /Dealer Rotation Procedures 1. Open the broker rotation file located at K: \ACCT11nvestments�Forrnslbroker rotation YYYY,xls (YYYY= numerical year). 2. Three brokers are selected on the basis of successful bids for the previous investment purchase and on rotation in alphabetical order within the group of approved brokers. For each investment purchase, bids are requester) from each of these three brokers: a. The successful bidder will remain in the bidding group for the next investment purchase. b. The two unsuccessful bidders will be rotated out of the bidding group for the next purchase. c. The next two brokers in alphabetical order will be rotated into the bidding group for the next investment purchase. 3. The three brokers selected for the bidding group are noted on the Investment Bid Form. Once bids are received from all three brokers and the successful bidder has been approved, the investment is purchased. 4. Using the completed and approved Investment Bid Form from the previous investment purchase as a source document, record the Yield to Maturity ( "YTM ") and/or Yield to Call ( "YTC ") percentage for each bid on the Trading History by Broker [Trading History-YTM] worksheet of this fife. Recording an entry in the row for a broker will automatically increase the Number of Times Selected value for that broker. However, in the case of a successful bid by a broker, the Number of Times Awarded Bid value will need to be manually updated. 5. For the successful bidder, format the cell containing the YTM/YTC percentage in bold text with a light green background. Copy the name of the successful broker to the light green highlighted box at the top left of the page. This indicates that they will be included in the next bidding group, 6. For the unsuccessful bidders, copy each bidders name to one of the two boxes below the green highlighted box with the successful bidder's name. This indicates that these two brokers will be rotated out of the bidding group for the next investment purchase, 7. In the spreadsheet column for the next investment purchase: a. Format the cells for the unsuccessful bidders with a tan color background. This shows they are excluded from the bidding group for the next investment purchase. 25 Appendix D b. For the successful bidder and the two brokers who follow the last unsuccessful broker in alphabetical order, leave the background of the cells clear. These will be the brokers included in the bidding group for the next investment purchase. c. For all remaining brokers who will not be included in the bidding group for the next investment purchase, format the cells with a tan color background. 8. Add footnotes to the Trading History by Broker as necessary. 9. Open the document K:\ ACCTIInvestments \Forms\Bidform.xls. On the rnewform] worksheet in this file, note the names and contact information of the selected bidding group of brokers in the appropriate space and save the document file. The contact information is found an the [Contact list] worksheet in this file. This file will be further updated with information concerning _purchase of the new investment at a later time. Q First Southwest Great Pacific Morgan - Keegan Firm City of North Richland Hills Trading History by Broker Appendix E FY 08 -09 Remains in bidding group for next investment purchase. Remains in bidding group for next investment purchase. Rotates into bidding group for next investment purchase. Number of Times 10130 11130 12131 Selected Awarded Bid 1 Duncan - Williams 0 0 2 First Empire 0 0 3 First Southwest 0 0 4 Great Pacific 0 0 5 Morgan - Keegan 0 0 6 Multi -Bank Securities 0 0 7 Seattle Northwest 0 0 8 Simmons First 0 0 9 Southwest Securities 0 0 10 Vining Sparks 0 0 11 Wells Fargo 0 0 12 BOA - CD 0 0 Investment purchased based on highest yield for the desired maturity Highest yield offered per broker Out of bidding group for this rotation 27 rn�a = i Appendix F fqltH City of North Richland Hills Broker /Dealer Questionnaire and Certification 1. Name of firm 2. Local address National address 3. Local telephone number National telephone number 4. Primary representative/manager/partner-in-charge Name Name Title Title Telephone # Telephone # 5. Is your firm a subsidiary of another firm? [ ] Yes [ ] No If yes, which firm? 6. Is firm a primary dealer in U.S. Government securities? [ ] Yes [ ] No If so, for how long has firm been a primary dealer? years 7. Is your firm an inventory dealer? [ ] Yes [ ] No Do you take a position in securities which you sell or buy? [ ] Yes [ ] No 8. What was your firm's total volume in U.S. Government and agency securities trading last year? Firm -wide $ Number of transactions Local office $ Number of transactions i�] k4RH Appendix F City of North Richland Hills Broker /Dealer Questionnaire 9. Which instruments are offered regularly by your local desk? [ ] T -bills [ ] Treasury notestbonds [ ] CNMAs [ ] FHLMCs [ ] BAs (domestic) [ ] Commercial paper [ ] Bank CDs [ ]S &LCDs Other Federal Agencies (please specify) Instrumentalities (please specify) 10. Identify all personnel who will be trading with or providing security quotes to North Richland Hills employees. Name Primary Alternate Alternate Title (Please attach resumes of the personnel listed above.) Telephone # 11. Which of the above personnel have the City of North Richland Hills' investment policy? 12. Are the firm and the account representative registered with the Texas State Securities Commission? [ ] Yes [ ] No If yes, for how long? years Representative iii] "RH Appendix F City of North Richland Hills Broker /Dealer Questionnaire 13. Please indicate which agents of your firm's local offices are currently licensed, certified, or registered and by whom. Agent Licensed or registered by 14. Please identify firm's public sector clients in our geographical area who are most comparable to North Richland Hills. Entity Contact Person Telephone # Client 15. Is firm a member of NASD? [ ] Yes [ ] No If not, why? 16. Please mark each regulatory agency by which firm is examined and/or to which firm is subject to agency rules and regulations: [ ] FDIC [ ] SEC [ ] NYSE [ ] Comptroller of currency [ ] Federal Reserve System Other regulatory or oversight agency: (Note: Multi -state firms need not include regulatory agencies which do not have jurisdiction over firm's activities in the State of Texas) 17. Have you obtained all required licenses to operate as a broker /dealer in the State of Texas? [ ] Yes [ ] No 31 "RH Appendix F City of North Richland Hills Broker /Dealer Questionnaire 18. To the best of your knowledge, has there been any "material" litigation, arbitration, or regulatory proceeding, either pending, adjudicated or settled, to which the firm has been subject within the last five (5) years that involved issues concerning the suitability of the sale or purchase of securities to an institutional client? If so, please describe each such matter briefly. For purposes of this question, proceedings are "material" if your independent accountant applying generally accepted accounting principles determines that such proceedings required disclosure in the firm's financial statements. 19. Have any of the employees listed in item ten (10) ever had sanctions imposed due to any of the activities noted in item eighteen (18)? Explain the outcome, case, and/or case citation in an attached explanation. 20. Please provide samples of research reports that your firm regularly provides to public - sector clients. 21. Explain the firm's normal custody and delivery process. Who audits these fiduciary systems? What reports, transactions, confirmations, and paper trail will North Richland Hills receive? 22. Enclose a complete schedule of fees and charges for various transactions. 32 "RH Appendix F City of North Richland Hills Broker /Dealer Questionnaire 23. Provide the firm's most recent certified, audited financial statements. In addition, for those dealers preparing and submitting financial statements to the following organizations, provide publicly available financial documents filed with these agencies for the most recent reporting period. National Association of Securities Dealers Securities and Exchange Commission New York Stock Exchange Federal Deposit Insurance Corporation 24. Has firm consistently complied with the Federal Reserve Bank's capital adequacy guidelines? As of this date, does firm comply with the guidelines? Has firm's capital position ever fallen short? By what factor (1.5X, 2X, etc.) does firm presently exceed the capital adequacy guidelines? Include certified documentation of firm's capital adequacy as measured by the Federal Reserve standards. 25. Describe the capital line and trading limits that supporttlimit the office that would conduct business with North Richland Hills. 26. If firm is not a bank, provide the following information regarding the firm's principal banking relationship. Bank Name Address Contact Telephone # Length of relationship 33 Appendix F "RHCity of North Richland Hills Broker /Dealer Questionnaire 27. Does firm participate in the SIPC insurance program? [ ] Yes [ ] No If not, please explain why. 28. What portfolio information do you require from your clients? 29. How many and what percentage of your transactions failed last month? Last year? 30. Describe the precautions taken by firm to protect the interests of the public when dealing with governmental agencies as investors. 34 fqltH — CERTIFICATION — Appendix F City of North Richland Hills Broker /Dealer Certification This certification is executed on behalf of the City of North Richland Hills (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(s) 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 Investor's entire portfolio or requires an interpretation of subjective standards. Qualified Representative of the Business Organization Signature: Name: Title: Date: 35 In City of North Richland Hills Approved Securities Dealers As of January 27, 2009 Securities Dealers Duncan - Williams, Inc. First Empire, Inc. First Southwest Company Great Pacific Securities Morgan, Keegan, & Company, Inc. Multi -Bank Securities, Inc. Seattle- Northwest Securities Corporation Simmons First Investment Group Southwest Securities Vining- Sparks IBG, LP Wells Fargo Brokerage Services, LLC Investment Pools TexPool LOGIC MBIA CLASS TexSTAR 37 Appendix G Appendix H City of North Richland Hills Primary Securities Dealers As of January 27, 2009 No primary dealers are currently approved. W Appendix Master Repurchase Agreement 5r..ptrmber 1996 Version Dated as of Bemeen: and 1, Applicability From time to tilde the parties hereto may enter into transactions 111 which ape. party '"Seller") agrees to transfer to the other ( "Buyer ") securities or other assets ( "Securities') against the transfer of funds by Buycr, with a SiMLLt all elous agree Me, t1T ley iil.:ye_r to transfer To ,seller Stich Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a "'Transaeticil" anrl, iarilesg nT}IPrwlse R- reed to w'rit.ing, shall be governed] by this Agreeni=., including any supplemental terms or conditions conMined in ,annex I hereto and in any other annexes idelitified herein or therein as apphcable heieunder. Z. Definitions (a) "Act of Insolvency ", with respect to any party, (i) the comnimccnlent by such party as debtor of any case or proceeding under ruiy barkrup[cy; insolvency, nz!organizaLiuu, liquidation, illonrtori- um, dissolution, del:nclucncy or similar laic, or such party seeking tino appointinent or election of a rereiver, conservgtor, trustee, custodian or similar official for such party or any slibsta -ttial part of its property, or the co_-iyening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appoinlnt.ent or election, (ii) thu cununeiioe- ment of any such case or promeding against such party, or auotlier seeki ng sucli an appoint- ment or election, or the filing against a party of an application for a protective decree under the provisinns of tbe es:uritit s Juvestor Protection Act of 1970, . wtich (A) Is c onsenterl to or riri` timely con tcst::d by such. party, (B) results in the entry of -,.in order for relief, such an appoint - rrlerlt or eleudorr, [lie issuance of such a protective decree or [tie entry of an order having a �iin- ilar• effect, or (C:) is not dismissed within 15 days, (iii) tine making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such parry of such party's inability to pay such party's debts as they hecoTne. Clue; (b) "Additional Purchased Securities, Securities provided by Seller to Buyer pursuati.t to Paragraph 4(a) hereof; 0 Appendix (r:] "Huye.r's Margin Aincunt ", with respect to any Transaction as of any' date, the amojint obtained by app' Icatlon of the Buyer's Margin Percentage to the Repurchase Price for such Transaction as of such date; (d) "Buyer's NIargin Pcrcen` age ", w It] i respect to any 'li-artsac:Lion as of any date, a percentage (which may be equal to the Scilcr's Margin Percentage) agreed to by Bayer and Seller or,- in the absi:rrce of any such agreement, the -oercentage obtained by the Market Value: of the Pi.i.rchased Securities on the Purchase Date by the Purchase Price on the Purchase Daie for such Transactinn; (e) "Confirmation ", rite meaning specified in Paragraph 3(b) hereof, (f) "Income ", with respect to any Security at any tune, any principal there;nf and all Interest, dividends or ollrer distributions thereon; (g) :`Margin Defir.•it ",. the means ;g specified. in Paragraph 4(aj heren. f; (h) "Margin a-ccss , the meaning specified in. Paragraph 4(b) hereof; tl) "Margin Notice lleadlirne ", the time agreed to by the parties in the relevant Confirmatinn, Annex T herein or otherwise as [lie deadline for giving notice requiring sane day satisfac tlon of margin ma'fnte.narrcc. nbligations as provided in Paragraph 4 hereof (or, in the absence of any such agrecnncnt, the deadline for srucli purposes esrablished : in accordance with rnarkei pracLice): (j) 'Market Value ", with respect to any Sccurides as of any da,.e, the Pr)ce fnr such Securities on such elate obtained frorn a generally recognized source agreed to by the parties or the most recent closi ng ]b irl quotation from such a source, plus accrued Income to the e_xlent not Ircluded therein (other than any Tncornr crFy[litrx] or transferred to, Ear, applted to [ire obli�adons of, Seller pursuant to Paragraph 5 hereof) as of such (Unless contrary to rrraricr.t practice for such Securities); (k) "Price Differentia.[ ". wizh respect to any Transaction as of any elate, the aggregaLe amounI obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for strclr Transaction on a 36D clay per year basis for the actual number of days dur- ing the period commencing on (and incliicling) the E uT -chase Date fur such Transaction and ending on (taut e_xcludingl the date of determina:lon (reduced by any amount of such Price T) Iffer-e.ntial previously paid by Seller to Buyer with respect to such Transaction); (1) "Pricing Rate' the per annurn percentage rate for determination of the Price Differcr'rtial; (in) "Prime Rate, the prime rare of U.S. comnz ae:rria] banks as lit iblished in The Nall Street Journal (car, if more than one such rate is pciUshed, the average of such rates); (n) "Purchase Date, the elate on which Purchased Securities a-re to be.. Lransferred by Seller to B uye r-; September 1996 blaster Repurchase Agreement all Appendix I (o) `Purchase Price ", (1) on th.P I'l, V inse Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (Ti) thereafter, except where Buycr and Seller agree oth- erwise, such price increased by the amount of any cash transferred by Huy,er to Seller pur- suant to Paragraph 4(b) 11ereof and decreased by the amount of any cash transferred by Seller to liriyer 1111TSUdnt to Paragraph 4(a) hereof or applied to reduce Sellers obligations under clause (ii) of Paragraph 5 hereof; (p) "1'iin.basec Securities ", the Securities transferred by Seller to Buyer in a Transaction here- under, and any Securities substituted therefor in accordance with Paragraph q hereof. The term "Purchased Securities" with tYSpeci. Lo any Transaction at any time also shall include AcIditional Puntrased Securittes.delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4 (b) hereof; (c) 'Repurchase Date ". the date on which Sellcr is to repurchase the Purchased Securities from Buyer, including any date cleterm[ne:d icy api li.ratimi of Lhe provisions of Paragmph 3(c) or 11 hereof; f;) 'Repurchase Price', the price at which Purchased Securities are to be transferred from Buyer to Seller upon termIT1,3 0TJ of a Transaction, Which will be determined in each case (inclurlir•g Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determiiiatlorr; (s) "Seller's Margin .mount", with respect to any Transaction as of any date, the amo a nt obtained by application of the :Seller's Margin Percentage to the Repurchase Price for such Transaction as of such state; (r) "Seller's Margin Percentage', with respect to any Trarsaction as of nriy ddte, ar percertage (which may he equal to the Buyers Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the PlimbAse Date by Lhe Purchase Price on the Purchase Date for such - Transaction, 3. Initiation; Confirmation; Termination (a) An agreement to enter Into a Transaction maybe made orally or in vvriting at the ini I.ia- tion of either Buyer or Seller. On the Purrbase Rate for the Tratisactiorr, the Purchased SeeurillFs shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller, (b) Ulxxi agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a Writren COTI 1-TH iHUTI 0f eacti Tmrsactlon (a "Confirrnatiun'). The Confirmation shall describe the 7archased Securities (including CUSIP number, if arty), identify Buyer and Seller and set forth (i) the Purchase Date, (i) the Purchase I't r:e, (vi) the Repurchase Date, unless the 'I ransZctimi is to be terminable on demand, (iv i the Pricing Rate. or Repurchase Price applicable :o the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this Agrr.r=- nerti, Ttje. CoT_If1miation, together with this Agreement, shall constitufie concluKive evidence of [lie _errns agreed between Buyer and. Seller with respect to the Transaction to which the Confirmation relates, unless with September 1996 hlaslei Repurchasc Agrecuient 41 Appendix I respect to Llie Cc,rrfirmation specific objection Is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this Agreement, this Agr>'enient shall prevail. (c) In the case of Transactions Lerrninable upon demand. such demand stall be made by Buyer or Seller, no later than such time as is customary in arrordarnce with rnarket prac- tice, by telephone or ott erwise on or prior to the business day on which such termination will be effective. On the date specified 1.n surh cle nand, or on the date fixed for Lerrnina- tien in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the PwTctimed Securi Lies and ally Income in respect thereof received by Buyer (and net previously credited or transferred to, or applied to the obligations of, Seller• pursuant to Paragraph. 5 hereuf) against the transfer of the Repurc- }rase Price Lo an account of Buyer. 4, Margin Maiiiteiiairce (a) If at any time the aggregate %,1arkeL Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than Cie. aggre- gate Buyer's Margin Amount for all such Transactions (a "Margin Deficit ") , then Buyer may by notice to Salter require.Scller in such Transactions, at Seller's option, to transfer trt Buyer cash or additional Securities reasonably acceptable to Buyer ( "Additional Purchased Securities "), so that the cash and aggregate lllMarket Val rae of the Purchased Securities, including any such A`rldittonal Purchased Securities, will thereupon equal or exceed such aggregate Buyer's Mamin Arno ant (decreased by [lie amouri I of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller) . (b) If at any time the aggregate Market value of all Furchased Sectiritieg subject to all Transactions in wIiiclr a par Licu ar party hereto is acting as Seller exceeds the aggregate Seller's Margin Aniount. for all such Transactions at stidi tirru� (a "[Margin Excess "), Lhert Seller may by notice to Buyer require Buyer in such Transactions, at Buyer's option, to transfer cash or Pwrhased Securities to Seller, so that the aggi gale Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller's Margin Amount (mere ased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer). (c) If any notice is given by Buycr or Seller under subparagraph (a) or (h) of t}ris Paragraphs. at or before the Margin Notice Deadline on any business clay, the party receiving such notice shall transfer cash or Additional Purchased Securities as provkded in'Lich subpara- graph no Iat>?r• than the close of business in the reievar t market on such day. If any such notice Is given after the Margin Notice Deadline, the Marty receivi ng such notice shall transfer sucli cash or Securities no later than the close of business in the relevant: market can the next business day following such notice. (di Any cash transferred pursuant to this Paragraph shall be attributed to suctr'liansactiurts as shall be. -agree d upon by Buyer and Seiler. Septcmber 1996 Master RepurvlttLSe Agreement 42 Appendix I (e) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective -rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or 111 kgin Exress, as the case -:nay lie, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transact ons (which amour_tor percenrage doll be agreed to by Ruyer grid Seller prior to enrering into any such Transactions). (f) Seller and Buyer may agree, with respect to any or all Transactions hereunder, chat the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Pal agraph to require the elimination of a Margin Deficit or a Margin F-Xcess, as the case may be, may he exercised whenever such a lt,'largin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outs landing under this agreement) 5. Income Paynaents Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Securities that is not ntberwise received by Seller, to the full extent I I would be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with respect to any Transaction (car, in the absence of any such agreem-em, as Buyer shall rea- sonably determine in irs.e.iscrction), on the date such Income is paid or distributed either (i) tra nsfer to or credi( to the account of Seller such Income with respect .to ar-n}, Purchased Securities sub cct tc such Transactinn n (1 1) with respecL Lo Income paid in cash. apply (lie Income payment or payments to reduce the amount, if any, to be rransfurrcd :o Buyer by Scllcr upon terrniriatinn of such `l'ransaction, Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent thar. such action would result irn the cre- ation of a Margin Deficit, carless prior thereto or sim- Lillarieously (herewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (R) if a,1 Event of Default wILh respec( to Seller has occurred and is then continuing at the time such Income is paid or distributed. G. Security Interest Although the parties. i nfe-l1d that all 'I'ransacLions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to Dave pledged to. Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Prrr..hased Securities with respecL to all Transactions hereunder and all Income thereon and other proceeds thereof. 7. Payment and Transfer Unless otherwise mutually agreed, all transfers or funds hereunder shall be in immediaLely available funds. All Securities transferred by one party hereto to the other party (t) shall be in suitahle. fnrtn. for transfer or shall be accompaniedby duly executed instrurnents of transfer or assignment in blank and such other documentation as the party receiving pogsessinn may reasonably request, (ii) shall be transferred on the book- entry sysrem of a Federal Reserve Bank, or (iii) shall be transferred by any other - method mutually acceptable to Seller and Buyer. September 1996 Master Repurchase AWeenient 43 Appendix I 8. Segregation of Purchased Securities To the extent requircd by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this Agreement. Segregation may be accomplished by appropriate identification on the books and records of the holler, including a f "nartcial or securities intermediary or a clearing corpo- ration. All of Seller's interest in the Purchased Securities shall pass to Buyer on the Purcltase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall pre elude Buyer from engaging in repurchase transactions with. the Purchased - Securities or other- wise selling, transferring; pledging or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligatic)ns to rrans-er Purchased Securities to Seller pur- suant to Paragraph 3, 4 or 11 hereof; or of Buyer's obligation to crcdit or pay Income to, or apply Income to the obligations of, Seller pu rsua rtt to Paragraph 5 hereof. Required Disclosure for Transactions In Which the Seller Retains Custody of the Purchased Securities Seller is not permitted to substitute other securities for thnse subject to this Agreement and therefore rnust keep Buyer's securities segregated at all times, unless in this Agreement Buyer grants Seller the right to substitute other securities, Tf Buyer grants the right to substitute, Loris means that Buyer's securities will likely be comming led with S elier's own securities during the tradi n g day. R uyer Is a Ov ised that during arty trading day iliat Buyer's securities are commingled with Seller's securities, they [wi:l] . +. [may] ** be subject to I ieis gr a nted by Seller to [its clearing bank]' [third parties]` and may be used-by Seller for deliveries on other secur"itics transactions. Mer_evcr the securities are contrriingled, Seller's agility to resegregate sui7.sriNitn securities for Buyer will be subject to Seller's ability to satisfy [the clear ing] * [any] ** lien or to obtain substitute.securittes• * Language to be used under 17 CIR (3403.41 ej if Seller is a governrnPnt. sf,r_terities broker c dealer nt. her than a financial institution. ** Language to be used under 17 CXR. f3403.5(d) if Seller is a. financial institution. 9, Substitution (a.) Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be trade by transfer To 81m-r of such other Securities arm transfer Lo Seller of such Purchased Securities. After substitution, the substituted Securities shall be decrncd to be Purchaser] Securities. ,b) In Transactions in which Seller retains custody of Purchaser) Securities, the parties expressly agree t }tat Buyer shall be deemed, for purposes of subparagrapt raj of this Paragraph, to have agreed to and accepted in this Agreement silbSti.ttation by Seller o other Securities for P)archased Securities; provided, however, thai such other Securities shall have a Market Value at least equal to the Market value of the Purchased Securities for which they are substituted. September 1996 Master Repurchase Agreement 44 Appendix I 1 U. Representations Each of Buyer and Seller represents and w+warraits to the other that (1) it is duly authorized to execute and deliver this Agreement, to enter into Transarr.ions c:ontempiatea hereunder and to perform its Obligations hcrc,under and has taken all necessary action to authorize such exe- cution, delivery and perfrsrxnance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the firm of an annex heretn or otherwise, in advance of any Transaction by the other party heretu, as agent for disclosed principal), (iii) the person signi-rrg this Agreement on its behalf is duly authorised TO do su on its behalf (or on behalf of any such disr.1c sed principal), (lv) it has obtained all authorizations of any governmental hotly required in connection with this Agreerrient and the Transactions hereunder and such autho- rizations arm in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not sriclate any law, ordinance, charter, by law o rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Late for any Transaction Buyer and Seller shall each be deemed Lo repeat all the foregoing representations irnade. by it. 11. Events of Deraiih In the event that (1) Suter fails to transfer or -Buyer fails to purchase Purchaser] Securities upon the applicable Purchase Date, (ii) Salter fails to repurchase or Buver fails to transfer Purchaser] Secu.rides upon the applicable Repurchase Date, (ill) Seller o:r Rrlyer fails to com- ply with Paragraph 4 hereof, (iv) Ruyer fails, after one business day's notice, to comply with Paragraph ; hereof, (v) an !pct of Insolvency occurs Nv th respect to Seller or Ruyer, (vi) any representation made by Seller or Royer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeater], or (vii) Seller or Envier shall admit to the other its inability to, or its intention not to, perform any of its oblig- ations hereunder (each an `EvenL of Default "): (a) The nnndefaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occtirrerice of an Act of Insolvency), declare an Event of I )efaulL qtr have occurred hereunder and, upon the exercise or cleerned exercise of such option, the Repurchase Tate frrr each `transaction hereunder shall, if it has not already nr•.c.m -red, be deemed immediately to occur (except that, in the event t1lar the Purchase Date for anyTransacrion has notyet occurred as of the date of such exercise or dccmcd exercise, such Transaction shall be deemed irnmecllately c:anceled). `fhe rwndefaulting party shall (except upnn the occurrence of an act of Insolvency) give notice to the defy ulti ng party of the exercise of such option as promptly as practi.rable. (b) In all `l'ransac[luns in which the defaulting party is acting as Seller, if the. nondpfa tilting party exercises or is deemed to have exercised [tie option referred to in subparagraph (a) of iris Paragrapfr, (I) the defaulting party's obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price Lherefor can the Repurchase Date deter - n-ii Tied irn accordance with subparagraph (a) of this Paragraph, shall thereupon 1)ecoTrie immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be. retained by the nondefaulting party and applied to the aggregate unpaid Repurchase Prices and any other amnunts owirig by [tie diaiaulttng party hereunder, and (iii) the defaulting party shall immedlatelyr deliver to the nondefaulimg party any Purchased Securities subject to such' Transactions then in t}hF defaulting party's posses - sion or control. September 19961 Mustcr Repurchase Agreement 45 Appendix I (c) In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting -party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and Mteresr in acrd entitlement to all Purchased Securities s :ihjec[ Lo such Transactions shall be deemed transferred to the riondefaulting party, and the defaulting party shall del Iver all such Purchased Securities to the nondcfaulting party. (d) If the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the no iidefa lilting party, without prior notice 10 the defaulting party, may; (1) as to Transactions in which the defaulting party is acting as Seller, (A) Immediately sell, in a rocognizdd market (or otherwise in a commercially reasonable manner) at such price nr prima as [tie nondefaLting party may reasonably deem satisfactory, any or ail Purchased Securities subject to such Transactions and apply the proceeds thereof W the aggregate unpaid Repurchase Prices and any other amounts nwing by the defaulting party hereunder or (13) in its soie discretion elect, In lieu of selling all or a portion of such Purchased Securities, to give the defaulting party cz'edil for such Purchased Securit_es in ari amount equal to the price therefor on such.date, Obtained from a generally recognized source or the most rr-c nt closing bid quotation from such a source, agalns[ [lie aggregate unpaid Repurchase Prices and any other amo °-alts owing by The decfaulting party bprmnder; and (11) as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized rnar•ket. (or otherwise in a commercially reasonable rnan- ner) at such price or prices as the nonde- faul[Ing party may reasonably deem saTisfac- tory, securities ('`replacement Securities") of the same class and arnnunr as any Purchased Securities that are not delivered by the defaulting party to the nondefault 1 n pare as required hereunder or (B) in its sole discretion elect, i In lieu of purchas- ing Replacement Securities, to be deerned to have purc7ased Replacement Securities at t {re twice therefor on such date, obtained from a genera lly recognized source or the most i -ecent closing offer quotation from such a source. Unlcss otherwise provided in Annex I, the parties acknowledge and agreF that (1) t}ie Securities subject to any Transaction hereunder me i1181r- rnents traded in a recognized marker; (2) 1 n the absence of a generally recognized source for prire.s or hid or offer quo - tatiuns for any Security, the nondefaulting parry may establish [he source therefor in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the ref evant. Ser irides) (e) As t❑ Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the lie ndefatilting party for any excess of the price paid (or deemed paid) by [tie nondefauhing party for Replacement Seca H1tes uver L. ie rep- aThase Price for the Purchased Seru:rities replaced, thereby and for any amounts payable by the defaulting party under .Paragraph 5 hereof or otherwise hereunder. (f) For purposes of tt'is Paragraph 11, the Repurchase Price for each'l'rarisactiun heir under in respect of which the defaulting party is ac ling as Buyer shall not increase above the 5eptcmher 1996 Master Repurchase Agreeineai 46 Appendix I arrtount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the nondefaulting party of the option referred to in s°ab- paragraph (a) of this Paragraph. (g) The defat tin g parry shall be 1 €able to the nondcfaulting party for () Ili 0, amount of all reasonable legal or ocher expenses incurred by the nondefaulting party in connection with or as a result of an Event of Default, (ii) damages _n an amount erlual to the cast (Including all fees, expenses and commissions) of entering Into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) and other loss, damage, cost or expense directly arising or resulting ftro-n the occurrence of an Event of Default in respect of a Transaction. (h) To the extent permit-red by applicable law, the defaulting party shall be liable to the non - defaulting party for interest on any amounts owl n by the rlefaLrlLing party lrereurrrier, fmrn the date the defaulting party becomes liable for such amounts hcrcundcr until such amounts art (i) paid in full by the defaulting party nr (1 1) satisfied in full by the exercise of the nondefaul[ing party's rights hereunder. Interest on any sum payable by the default ing party to the-nondefaulting party under this Paragraph 11(h) shall be at a rate equal to the greaLer Of ire Pricing Rate for the relevant Transaction or the Prime Rate. (i) The non defaulting party shall have, in addition to its rights here Linde i any righ Ts m1ler- wise avail=able to it under achy oLlrer agreement or applicable law. 12. Single Agreement Buyer and Seller acknowledge that; and have entered hereinto and will enter into each Transaction hereunder Inconsideration of and in reliauce upUn Llre fact traL, all'frarisactiuns hereunder constitute a single, business and contractual relationship and have. boen rmdc in consideration of each other..Arcorclingly, each of Buyer and Seller agrees (i) to perform all of Us obligations in respect of each Transaction herein der, and that a default 111 the perfnr- rnance of any such oUgations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off clairas and apply pruperty held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iti) that payments, deliveries and other transfers made by either of #hem in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries. and other transfers in respect of any other Transactions hereunder, and Lhe obligations to make any such payments, deliveries and other transfers may be applied against each Other and inetted. 13. Notices and Other Carninunications Arty and ail notices, statements, demands or other commurications hereunde- may be given by a party to the other by mail, facsimile, telegraph, ruessenger Or odienvise to the address specified in Annex II hereto, or .so sent to such party at any other place specified in a notice of change of address hereafter received by the uLher. All notices, demands and requests hereun- der may be made orally, to be conf.rrned promptly in writing, or by other mmmrani:ratien as specified in the prmecLng sentence. September 1996 Master Repurchase Agreement 47 Appendix 1 14. Entire Agreement; Severahility This Agreement shall supersede any existing E-greeinents herxeen the parties containing get.i- e.ral terms and eondidons for repurchase transactions. Each provision and agreement herein shall he treated as separate andindepcncent fiorn any other provision or agreement he..-ein and shall be enforceable nohvitlrstanding Lhe unenforceability of.any such ot=her provision or agreement. 15. Non - assignability; Termination (a) The rights and obligations of the parties under this Agreerrte it anr: finder any Transaction Shall rrOr be assigned by either party without the prior written consent of the other party, and any such assigninent without the prior written consent Of [lie Oilier party shall 1) e null. an void. Sub Ject to the fore going; this Agreement and any Transactions shall be binding upon and shall inrire to the benefit of the parties and rhea, respective successors and assigns, '11 is Agreement may be terminated by either party upon giving written notice to the other, except that this Agreement shall; notwithstarding such notice, rernai.n applicable to any Transactions then outstanding, (h) Subparagraph (a) of Phis Paragraph 1.5 shall not preclude a party from assigning, charg- ing or otherwise dealing with all or any part of Irs interest in any sheer payable Lu it under Paragraph 11 hereof. 15. Governing Law This Agreement shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof. 17. No Waivers, Etc. No express or irnpliedwaiver of any Fvent of Default by ei[tier party shall constitute a waiver of any o Lher Event. of Default and no exercise of any remedy hereunder by any pa rty shall constitute a waiver of its right its exercise any uthur reinedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a depart7jre here - from shall be. effective unless and until such shall be in writing and duly executed by Loth of the parties hereto.'Nithout limitation on any of the foregoing, the. fallrirt. fn give a notice pur- suant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a I a ter dale. 18. Use of Employee Plan Assets (a) If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 ( "FRISA ") are intended to be used by either party hereto (tr_e "Plan Party ") in a Transaction, the Plan Party shall so notify [pre Other parry prior to the Transactinn. The Plan Marty shall represent in writing to the other party that the Transaction does not constitute a prohibited tr-ansar-tion under ERISA or is otherwise exempt therefrom, an the other party may proceed in reliance thereon but shall not be required so to proceed. September 1995 Niaster Repurchase Agreement ►; Appendix I (b) SubjecL lo (lie last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only If SE-11Er fiirnishes or has furnished Lo Bayer its most recut available aud_ted statement of its financial condition and its most recent subsequent unaudited statement of its tinancial condition. (c) By enterhig into aTransacrlon pursuam to this Rmgraph, Seller shall be deerned (t) to represent Lo Buyer that since the date of Seller's latest such financial statements, there has been no material adverse change in Seller's fi.na.ndial condition which Seller has not dis- closed Lo Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its flnanclal can dition as they are issued, so long as it is a Seller in any out - standing Transaction involving a Plan Party, 19. Intent (a) The parties recognize that each Transaction is a "repurchase agreement" as that term is defined in Section 10 1 of Title 11 of me llnited States [code, as arnerided (except insofar as the type of Securities subject to such Transaction or the term of such Transacrionn wauld dander such definition inapplicable), and a "securities contract" as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets s i.bjecL to such Transacton would renc:er such definition tnapplica- ble) . (b) It Is understood that either party's right to llquidata Secrrities delivered to It in connec- :Inn %�° Th Transactions hereunder or to exercise any other remedics pursuant to Paragraph 11 hereof is a contractual right to liquidate such'li-ansaction as described in Sections 555 and 559 of TiLle I1 of the United States Cade, as amended. (c) The parties agree. and acknowledge Lhat if a party hereto Is an "insured depository insti- tution," as such terra is defined in the federal Depos.lr- Tnsrirance Act, as arrierrde.d ( "FT)TA"' , Then each Transaction hereunder is a qualif,ed financial contract;' as that term is defined in FDIA and any rules, orders n policy staterrienIs tlteiuLuider (except insofar n the Type of assets subject to such Transaction would render such definition inapplica -- ble) . (d) It Is understood that this Agreement constltcites a "rieLLing contract" as defined in and sijbject to lisle IV of the Fe -deral Deposit Insurance Corporation Improvcmelnt Act of 1991 ( "FDICIA ") and each payment entitlement and payment obligation Linder any Tran,gaction hereunder shall: constitute a "covered contractual payment entitlement' or "covered contractual payment obligation . respectively, as defhiefd in and sut)jec:[ to FDI- :,'lA (excepL insofar as one or both of the parties is not a "financial institution" as that terns is defined in FDICIA) . 20. Disclosure Aelataing to Certain Federal Pi•cai.ectians The. parties acknovvler]ge. than. they have been advised that; (a) in the case of Transactlons in wbich nne of the parties is a broker or dealer registered with the Securities and Dxhange Commission ( "SEC ") under Section 15 of the Securities Exchange Act of 1934 (,.193.4 !pct"), the Securities [nveswr Proteclion Corporation has September 1996 Muster RLpurehase Agreement 49 Appendix I taken thF: position that Lhe provisions of the Securities Investor Protection Act of 1974 ( "SIPX) do not protect the other party with respect to any'Iiansactiun heretwder; (b) in the case of Transactions in which one of the partie-,s is a goverm-flent secuurities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPS, will not provide protection to the other party with respect to any ransacLlun hereunder; and (c) in the case of Transactions in which one of the parties is a financial institution, fonds held by the financial institution pursuant to a Transar.TJon hererander ana cwt a deposiL and therefore are rim instLred by the Federal Deposit Insurance Carporation or the National Credit Union Sharc Insurance Fund; a4 applIcahle. Name of Party] [Nam.e of Partfl Hy: Titie: Date: September 1996 Muster Rupurchasc Agrcement + By' -f irlP: Date: Appendix J r1I0l ►1 :4024 11TII=1124 1119010]W=1 CHAPTER 2256. PUBLIC FUNDS INVESTMENT SUBCHAPTER A. AUTHORIZED INVESTMENTS FOR GOVERNMENTAL ENTITIES �3��+*W1.11111 W-11: This chapter may be cited as the Public Funds Investment Act. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. �_T �+W-11- 1111Y#W=1;1124 11111IQL4 L�-3 In this chapter: (1) "Bond proceeds" means the proceeds from the sale of bonds, notes, and other obligations issued by an entity, and reserves and funds maintained by an entity for debt service purposes. (2) "Book value" means the original acquisition cost of an investment plus or minus the accrued amortization or accretion. (3) "Funds" means public funds in the custody of a state agency or local government that: (A) are not required by law to be deposited in the state treasury; and (B) the investing entity has authority to invest. (4) "Institution of higher education" has the meaning assigned by Section 61.003, Education Code. (5) "Investing entity" and "entity" mean an entity subject to this chapter and described by Section 2256.003. (6) "Investment pool" means an entity created under this code to invest public funds jointly on behalf of the entities that participate in the pool and whose investment objectives in order of priority are: 51 Appendix J (A) preservation and safety of principal; (B) liquidity; and (C) yield. (7) "Local government" means a municipality, a county, a school district, a district or authority created under Section 52(b )(1) or (2), Article III, or Section 59, Article XVI, Texas Constitution, a fresh water supply district, a hospital district, and any political subdivision, authority, public corporation, body politic, or instrumentality of the State of Texas, and any nonprofit corporation acting on behalf of any of those entities. (8) "Market value" means the current face or par value of an investment multiplied by the net selling price of the security as quoted by a recognized market pricing source quoted on the valuation date. (9) "Pooled fund group" means an internally created fund of an investing entity in which one or more institutional accounts of the investing entity are invested. (10) "Qualified representative" means a person who holds a position with a business organization, who is authorized to act on behalf of the business organization, and who is one of the following: (A) for a business organization doing business that is regulated by or registered with a securities commission, a person who is registered under the rules of the National Association of Securities Dealers; (B) for a state orfederal bank, a savings bank, or a state or federal credit union, a member of the loan committee for the bank or branch of the bank or a person authorized by corporate resolution to act on behalf of and bind the banking institution; 52 Appendix J (C) for an investment pool, the person authorized by the elected official or board with authority to administer the activities of the investment pool to sign the written instrument on behalf of the investment pool; or (D) for an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b -1 et seq.) or, if not subject to registration under that Act, registered with the State Securities Board, a person who is an officer or principal of the investment managementfirm. (11) "School district" means a public school district. (12) "Separately invested asset' means an account or fund of a state agency or local government that is not invested in a pooled fund group. (13) "State agency" means an office, department, commission, board, or other agency that is part of any branch of state government, an institution of higher education, and any nonprofit corporation acting on behalf of any of those entities. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1421, Sec. 1, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1454, Sec. 1, eff. Sept. 1, 1999. Sec. 2256.003. AUTHORITY TO INVEST FUNDS; ENTITIES SUBJECT TO THIS CHAPTER. (a) Each governing body of the following entities may purchase, sell, and invest its funds and funds under its control in investments authorized under this subchapter in compliance with investment policies approved by the governing body and according to the standard of care prescribed by Section 2256.006: (1) a local government; (2) a state agency; 53 Appendix J (3) a nonprofit corporation acting on behalf of a local government or a state agency; or (4) an investment pool acting on behalf of two or more local governments, state agencies, or a combination of those entities. (b) In the exercise of its powers under Subsection (a), the governing body of an investing entity may contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b -1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control. A contract made under authority of this subsection may not be for a term longer than two years. A renewal or extension of the contract must be made by the governing body of the investing entity by order, ordinance, or resolution. (c) This chapter does not prohibit an investing entity or investment officer from using the entity's employees or the services of a contractor of the entity to aid the investment officer in the execution of the officer's duties under this chapter. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1454, Sec. 2, eff. Sept. 1, 1999. �3 �+*4 D. filly., W=1, ; 14 160:114 k WO (a) This subchapter does not apply to: (1) a public retirement system as defined by Section 802.001; (2) state funds invested as authorized by Section 404.024; (3) an institution of higher education having total endowments of at least $95 million in book value on May 1, 1995; (4) funds invested by the Veterans' Land Board as authorized by Chapter 161, 162, or 164, Natural Resources Code; 54 Appendix J (5) registry funds deposited with the county or district clerk under Chapter 117, Local Government Code; or (6) a deferred compensation plan that qualifies under either Section 401(k) or 457 of the Internal Revenue Code of 1986 (26 U.S.C. Section 1 et seq.), as amended. (b) This subchapter does not apply to an investment donated to an investing entity for a particular purpose or under terms of use specified by the donor. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 505, Sec. 24, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1421, Sec. 2, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 8.21, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1454, Sec. 3, eff. Sept. 1, 1999. Sec. 2256.005. INVESTMENT POLICIES; INVESTMENT STRATEGIES; INVESTMENT OFFICER. (a) The governing body of an investing entity shall adopt by rule, order, ordinance, or resolution, as appropriate, a written investment policy regarding the investment of its funds and funds under its control. (b) The investment policies must: (1) be written; (2) primarily emphasize safety of principal and liquidity; (3) address investment diversification, yield, and maturity and the quality and capability of investment management, and (4) include: (A) a list of the types of authorized investments in which the investing entity's funds may be invested; 55 Appendix J (B) the maximum allowable stated maturity of any individual investment owned by the entity; (C) for pooled fund groups, the maximum dollar- weighted average maturity allowed based on the stated maturity date for the portfolio; (D) methods to monitor the market price of investments acquired with public funds; and (E) a requirement for settlement of all transactions, except investment pool funds and mutual funds, on a delivery versus payment basis. (c) The investment policies may provide that bidsfor certificates of deposit be solicited: (1) orally; (2) in writing; (3) electronically; or (4) in any combination of those methods. (d) As an integral part of an investment policy, the governing body shall adopt a separate written investment strategy for each of the funds or group of funds under its control. Each investment strategy must describe the investment objectives for the particular fund using the following priorities in order of importance: (1) understanding of the suitability of the investment to the financial requirements of the entity; (2) preservation and safety of principal; (3) liquidity; (4) marketability of the investment if the need arises to liquidate the investment before maturity; (5) diversification of the investment portfolio; and 1 Appendix J (6) yield. (e) The governing body of an investing entity shall review its investment policy and investment strategies not less than annually. The governing body shall adopt a written instrument by rule, order, ordinance, or resolution stating that it has reviewed the investment policy and investment strategies and that the written instrument so adopted shall record any changes made to either the investment policy or investment strategies. (f) Each investing entity shall designate, by rule, order, ordinance, or resolution, as appropriate, one or more officers or employees of the state agency, local government, or investment pool as investment officer to be responsible for the investment of its funds consistent with the investment policy adopted by the entity. If the governing body of an investing entity has contracted with another investing entity to invest its funds, the investment officer of the other investing entity is considered to be the investment officer of the first investing entity for purposes of this chapter. Authority granted to a person to invest an entity's funds is effective until rescinded by the investing entity, until the expiration of the officer's term or the termination of the person's employment by the investing entity, or if an investment managementfirm, until the expiration of the contract with the investing entity. In the administration of the duties of an investment officer, the person designated as investment officer shall exercise the judgment and care, under prevailing circumstances, that a prudent person would exercise in the management of the person's own affairs, but the governing body of the investing entity retains ultimate responsibility as fiduciaries of the assets of the entity. Unless authorized by law, a person may not deposit, withdraw, transfer, or manage in any other manner the funds of the investing entity. (g) Subsection (f) does not apply to a state agency, local government, or investment 57 Appendix J pool for which an officer of the entity is assigned by law the function of investing its funds. Text of subsec. (h) as amended by Acts 1997, 75th Leg., ch. 685, Sec. 1 (h) An officer or employee of a commission created under Chapter 391, Local Government Code, is ineligible to be an investment officer for the commission under Subsection (f) if the officer or employee is an investment officer designated under Subsection (f) for another local government. Text of subsec. (h) as amended by Acts 1997, 75th Leg., ch. 1421, Sec. 3 (h) An officer or employee of a commission created under Chapter 391, Local Government Code, is ineligible to be designated as an investment officer under Subsection (f) for any investing entity other than for that commission. (i) An investment officer of an entity who has a personal business relationship with a business organization offering to engage in an investment transaction with the entity shall file a statement disclosing that personal business interest. An investment officer who is related within the second degree by affinity or consanguinity, as determined under Chapter 573, to an individual seeking to sell an investment to the investment officer's entity shall file a statement disclosing that relationship. A statement required under this subsection must be filed with the Texas Ethics Commission and the governing body of the entity. For purposes of this subsection, an investment officer has a personal business relationship with a business organization if: (1) the investment officer owns 10 percent or more of the voting stock or shares of the business organization or owns $5,000 or more of the fair market value of the business organization; (2) funds received by the investment officer from the business organization I Appendix J exceed 10 percent of the investment officer's gross income for the previous year; or (3) the investment officer has acquired from the business organization during the previous year investments with a book value of $2,500 or more for the personal account of the investment officer. 0) The governing body of an investing entity may specify in its investment policy that any investment authorized by this chapter is not suitable. (k) A written copy of the investment policy shall be presented to any person offering to engage in an investment transaction with an investing entity or to an investment management firm under contract with an investing entity to invest or manage the entity's investment portfolio. For purposes of this subsection, a business organization includes investment pools and an investment management firm under contract with an investing entity to invest or manage the entity's investment portfolio. Nothing in this subsection relieves the investing entity of the responsibility for monitoring the investments made by the investing entity to determine that they are in compliance with the investment policy. The qualified representative of the business organization offering to engage in an investment transaction with an investing entity shall execute a written instrument in a form acceptable to the investing entity and the business organization substantially to the effect that the business organization has: (1) received and reviewed the investment policy of the entity; and (2) acknowledged that the business organization has implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the entity and the organization that are not authorized by the entity's investment policy, except to the extent that this authorization is 10 Appendix J dependent on an analysis of the makeup of the entity's entire portfolio or requires an interpretation of subjective investment standards. (1) The investment officer of an entity may not acquire or otherwise obtain any authorized investment described in the investment policy of the investing entity from a person who has not delivered to the entity the instrument required by Subsection (k). (m) An investing entity other than a state agency, in conjunction with its annual financial audit, shall perform a compliance audit of management controls on investments and adherence to the entity's established investment policies. (n) Except as provided by Subsection (o), at least once every two years a state agency shall arrange for a compliance audit of management controls on investments and adherence to the agency's established investment policies. The compliance audit shall be performed by the agency's internal auditor or by a private auditor employed in the manner provided by Section 321.020. Not later than January 1 of each even - numbered year a state agency shall report the results of the most recent audit performed under this subsection to the state auditor. Subject to a risk assessment and to the legislative audit committee's approval of including a review by the state auditor in the audit plan under Section 321.013, the state auditor may review information provided under this section. If review by the state auditor is approved by the legislative audit committee, the state auditor may, based on its review, require a state agency to also report to the state auditor other information the state auditor determines necessary to assess compliance with laws and policies applicable to state agency investments. A report under this subsection shall be prepared in a manner the state auditor prescribes. (o) The audit requirements of Subsection (n) do not apply to assets of a state agency that are invested by the comptroller under Section 404.024. 0 Appendix J Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 685, Sec. 1, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1421, Sec. 3, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1454, Sec. 4, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 785, Sec. 41, eff. Sept. 1, 2003. r=1 kq I 97AN eIe] ZOIA N =11 (a) 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. Investment of funds shall be governed by the following investment objectives, in order of priority: (1) preservation and safety of principal; (2) liquidity; and (3) yield. (b) In determining whether an investment officer has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration: (1) the investment of all funds, or funds under the entity's control, over which the officer had responsibility rather than a consideration as to the prudence of a single investment; and (2) whether the investment decision was consistent with the written investment policy of the entity. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Sec. 2256.007. INVESTMENT TRAINING; STATE AGENCY BOARD MEMBERS AND OFFICERS. 61 Appendix J person provided required training under this section during that calendar year. An individual's reporting requirements under this subsection are satisfied by a report of the individual's employer or the sponsoring or organizing entity of a training program or seminar. (e) This section does not apply to a district governed by Chapter 36 or 49, Water Code. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1421, Sec. 5, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1454, Sec. 6, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 69, Sec. 4, eff. May 14, 2001. Sec. 2256.009. AUTHORIZED INVESTMENTS: OBLIGATIONS OF, OR GUARANTEED BY GOVERNMENTAL ENTITIES. (a) Except as provided by Subsection (b), the following are authorized investments under this subchapter: (1) obligations, including letters of credit, of the United States or its agencies and instrumentalities; (2) direct obligations of this state or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, this state or the United States or their respective agencies and instrumentalities; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; and 62 Appendix J (a) Each member of the governing board of a state agency and its investment officer shall attend at least one training session relating to the person's responsibilities under this chapter within six months after taking office or assuming duties. (b) The Texas Higher Education Coordinating Board shall provide the training under this section. (c) Training under this section must include education in investment controls, security risks, strategy risks, market risks, diversification of investment portfolio, and compliance with this chapter. (d) An investment officer shall attend a training session not less than once in a two- year period and may receive training from any independent source approved by the governing body of the state agency. The investment officer shall prepare a report on this subchapter and deliver the report to the governing body of the state agency not later than the 180th day after the last day of each regular session of the legislature. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 73, Sec. 1, eff. May 9,1997; Acts 1997, 75th Leg., ch. 1421, Sec. 4, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1454, Sec. 5, eff. Sept. 1, 1999. Sec. 2256.008. INVESTMENT TRAINING; LOCAL GOVERNMENTS. (a) Except as provided by Subsections (b) and (e), the treasurer, the chief financial officer if the treasurer is not the chief financial officer, and the investment officer of a local government shall: (1) attend at least one training session from an independent source approved by the governing body of the local government or a designated investment committee advising the investment officer as provided for in the investment policy of the local government and containing at least 10 hours of instruction 63 Appendix J relating to the treasurer's or officer's responsibilities underthis subchapter within 12 months after taking office or assuming duties; and (2) except as provided by Subsections (b) and (e), attend an investment training session not less than once in a two -year period and receive not less than 10 hours of instruction relating to investment responsibilities under this subchapter from an independent source approved by the governing body of the local government or a designated investment committee advising the investment officer as provided for in the investment policy of the local government. (b) An investing entity created under authority of Section 52(b), Article III, or Section 59, Article XVI, Texas Constitution, that has contracted with an investment management firm under Section 2256.003(b) and has fewer than five full -time employees or an investing entity that has contracted with another investing entity to invest the entity's funds may satisfy the training requirement provided by Subsection (a) (2) by having an officer of the governing body attend four hours of appropriate instruction in a two -year period. The treasurer or chief financial officer of an investing entity created under authority of Section 52(b), Article 111, or Section 59, Article XV1, Texas Constitution, and that has fewer than five full -time employees is not required to attend training required by this section unless the person is also the investment officer of the entity. (c) Training under this section must include education in investment controls, security risks, strategy risks, market risks, diversification of investment portfolio, and compliance with this chapter. (d) Not later than December 31 each year, each individual, association, business, organization, governmental entity, or other person that provides training under this section shall report to the comptroller a list of the governmental entities for which the 64 Appendix J (6) bonds issued, assumed, or guaranteed by the State of Israel. (b) The following are not authorized investments under this section: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage- backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flowfrom the underlying mortgage- backed security collateral and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity date of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1454, Sec. 7, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 558, Sec. 1, eff. Sept. 1, 2001. Sec. 2256.010. AUTHORIZED INVESTMENTS: CERTIFICATES OF DEPOSIT AND (a) A certificate of deposit or share certificate is an authorized investment under this subchapter if the certificate is issued by a depository institution that has its main office or a branch office in this state and is: (1) guaranteed or insured by the Federal Deposit Insurance Corporation or its successor or the National Credit Union Share Insurance Fund or its successor; (2) secured by obligations that are described by Section 2256.009(a), including mortgage backed securities directly issued by a federal agency or instrumentality that have a market value of not less than the principal amount of the certificates, 65 Appendix J but excluding those mortgage backed securities of the nature described by Section 2256.009(b); or (3) secured in any other manner and amount provided by lawfor deposits of the investing entity. (b) In addition to the authority to invest funds in certificates of deposit under Subsection (a), an investment in certificates of deposit made in accordance with the following conditions is an authorized investment under this subchapter: (1) the funds are invested by an investing entity through a depository institution that has its main office or a branch office in this state and that is selected by the investing entity; (2) the depository institution selected by the investing entity under Subdivision (1) arranges for the deposit of the funds in certificates of deposit in one or more federally insured depository institutions, wherever located, for the account of the investing entity; (3) the full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality of the United States; (4) the depository institution selected by the investing entity under Subdivision (1) acts as custodian for the investing entity with respect to the certificates of deposit issued for the account of the investing entity; and (5) at the same time that the funds are deposited and the certificates of deposit are issued for the account of the investing entity, the depository institution selected by the investing entity under Subdivision (1) receives an amount of deposits from customers of other federally insured depository institutions, .. Appendix J wherever located, that is equal to or greater than the amount of the funds invested by the investing entity through the depository institution selected under Subdivision (1). Amended by Acts 1995, 74th Leg., ch. 32, Sec. 1, eff. April 28, 1995; Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1421, Sec. 6, eff. Sept. 1, 1997; Acts 2005, 79th Leg., ch. 128, Sec. 1, eff. Sept. 1, 2005. Sec. 2256.011. AUTHORIZED INVESTMENTS: REPURCHASE AGREEMENTS. (a) A fully collateralized repurchase agreement is an authorized investment under this subchapter if the repurchase agreement: (1) has a defined termination date; (2) is secured by obligations described by Section 2256.009(a )(1); and (3) requires the securities being purchased by the entity to be pledged to the entity, held in the entity's name, and deposited at the time the investment is made with the entity or with a third party selected and approved by the entity; and (4) is placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in this state. (b) In this section, "repurchase agreement" means a simultaneous agreement to buy, hold for a specified time, and sell back at a future date obligations described by Section 2256.009(a ) (1), at a market value at the time the funds are disbursed of not less than the principal amount of the funds disbursed. The term includes a direct security repurchase agreement and a reverse security repurchase agreement. (c) Notwithstanding any other law, the term of any reverse security repurchase agreement may not exceed 90 days after the date the reverse security repurchase 67 Appendix J agreement is delivered. (d) Money received by an entity under the terms of a reverse security repurchase agreement shall be used to acquire additional authorized investments, but the term of the authorized investments acquired must mature not later than the expiration date stated in the reverse security repurchase agreement. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Sec. 2256.0115. AUTHORIZED INVESTMENTS: SECURITIES LENDING =101c] XI ITJ (a) A securities lending program is an authorized investment under this subchapter if it meets the conditions provided by this section. (b) To qualify as an authorized investment under this subchapter: (1) the value of securities loaned under the program must be not less than 100 percent collateralized, including accrued income; (2) a loan made under the program must allow for termination at any time; (3) a loan made under the program must be secured by: (A) pledged securities described by Section 2256.009; (B) pledged irrevocable letters of credit issued by a bank that is: (i) organized and existing under the laws of the United States or any other state, and (ii) continuously rated by at least one nationally recognized investment rating firm at not less than A or its equivalent; or (C) cash invested in accordance with Section: (i) 2256.009; Appendix J (ii) 2256.013; (iii) 2256.014; or (iv) 2256.016; (4) the terms of a loan made under the program must require that the securities being held as collateral be: (A) pledged to the investing entity; (B) held in the investing entity's name, and (C) deposited at the time the investment is made with the entity or with a third party selected by or approved by the investing entity; (5) a loan made under the program must be placed through: (A) a primary government securities dealer, as defined by 5 C.F.R. Section 6801.102(f), as that regulation existed on September 1, 2003; or (B) a financial institution doing business in this state; and (6) an agreement to lend securities that is executed under this section must have a term of one year or less. Added by Acts 2003, 78th Leg., ch. 1227, Sec. 1, eff. Sept. 1, 2003. A bankers' acceptance is an authorized investment underthis subchapter if the bankers' acceptance: (1) has a stated maturity of 270 days or fewer from the date of its issuance; (2) will be, in accordance with its terms, liquidated in full at maturity; (3) is eligible for collateral for borrowing from a Federal Reserve Bank; and (4) is accepted by a bank organized and existing under the laws of the United States or any state, if the short -term obligations of the bank, or of a bank holding 05 Appendix J company of which the bank is the largest subsidiary, are rated not less than A -1 or P -1 or an equivalent rating by at least one nationally recognized credit rating agency. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. 1-- MW*4*M10 Will, INd: M NPFA=IQll2k,FA =13d M I424 IN &WO101MIMI: 1 ;101Fil0 ;M;I =10 Commercial paper is an authorized investment under this subchapter if the commercial paper: (1) has a stated maturity of 270 days or fewer from the date of its issuance; and (2) is rated not less than A -1 or P -1 or an equivalent rating by at least: (A) two nationally recognized credit rating agencies; or (B) one nationally recognized credit rating agency and isfully secured by an irrevocable letter of credit issued by a bank organized and existing under the laws of the United States or any state. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. (a) A no -load money market mutual fund is an authorized investment under this subchapter if the mutual fund: (1) is registered with and regulated by the Securities and Exchange Commission; (2) provides the investing entity with a prospectus and other information required by the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.) or the Investment Company Act of 1940 (15 U.S.C. Section 80a -1 et seq.); (3) has a dollar- weighted average stated maturity of 90 days or fewer; and (4) includes in its investment objectives the maintenance of a stable net asset ITS] Appendix J value of $1 for each share. (b) In addition to a no -load money market mutual fund permitted as an authorized investment in Subsection (a), a no -load mutual fund is an authorized investment under this subchapter if the mutual fund: (1) is registered with the Securities and Exchange Commission; (2) has an average weighted maturity of less than two years; (3) is invested exclusively in obligations approved by this subchapter; (4) is continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent; and (5) conforms to the requirements set forth in Sections 2256.016(b) and (c) relating to the eligibility of investment pools to receive and invest funds of investing entities. (c) An entity is not authorized by this section to: (1) invest in the aggregate more than 15 percent of its monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service, in mutual funds described in Subsection (b); (2) invest any portion of bond proceeds, reserves and funds held for debt service, in mutual funds described in Subsection (b); or (3) invest its funds or funds under its control, including bond proceeds and reserves and other funds held for debt service, in any one mutual fund described in Subsection (a) or (b) in an amount that exceeds 10 percent of the total assets of the mutual fund. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1421, Sec. 7, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1454, Sec. 8, eff. 71 Appendix J Sept. 1, 1999. Sec. 2256.015. AUTHORIZED INVESTMENTS: GUARANTEED INVESTMENT (a) A guaranteed investment contract is an authorized investment for bond proceeds under this subchapter if the guaranteed investment contract: (1) has a defined termination date; (2) is secured by obligations described by Section 2256.009(a )(1), excluding those obligations described by Section 2256.009(b), in an amount at least equal to the amount of bond proceeds invested under the contract; and (3) is pledged to the entity and deposited with the entity or with a third party selected and approved by the entity. (b) Bond proceeds, other than bond proceeds representing reserves and funds maintained for debt service purposes, may not be invested under this subchapter in a guaranteed investment contract with a term of longer than five years from the date of issuance of the bonds. (c) To be eligible as an authorized investment: (1) the governing body of the entity must specifically authorize guaranteed investment contracts as an eligible investment in the order, ordinance, or resolution authorizing the issuance of bonds; (2) the entity must receive bids from at least three separate providers with no material financial interest in the bonds from which proceeds were received; (3) the entity must purchase the highest yielding guaranteed investment contract for which a qualifying bid is received; (4) the price of the guaranteed investment contract must take into account the 72 Appendix J reasonably expected drawdown schedule for the bond proceeds to be invested; and (5) the provider must certify the administrative costs reasonably expected to be paid to third parties in connection with the guaranteed investment contract. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1421, Sec. 8, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1454, Sec. 9, 10, eff. Sept. 1, 1999. 1-- MW* 4* III I.M.X1jd:MNPFA= IQll'l ►A =13d ►I: I'IN&MIL4 1 ►A =13d M I: I'IN i101011M (a) An entity may invest its funds and funds under its control through an eligible investment pool if the governing body of the entity by rule, order, ordinance, or resolution, as appropriate, authorizes investment in the particular pool. An investment pool shall invest the funds it receives from entities in authorized investments permitted by this subchapter. (b) To be eligible to receive funds from and invest funds on behalf of an entity under this chapter, an investment pool must furnish to the investment officer or other authorized representative of the entity an offering circular or other similar disclosure instrument that contains, at a minimum, the following information: (1) the types of investments in which money is allowed to be invested; (2) the maximum average dollar- weighted maturity allowed, based on the stated maturity date, of the pool; (3) the maximum stated maturity date any investment security within the portfolio has; (4) the objectives of the pool; (5) the size of the pool; 73 Appendix J (6) the names of the members of the advisory board of the pool and the dates their terms expire; (7) the custodian bank that will safekeep the pool's assets; (8) whether the intent of the pool is to maintain a net asset value of one dollar and the risk of market price fluctuation; (9) whether the only source of payment is the assets of the pool at market value or whether there is a secondary source of payment, such as insurance or guarantees, and a description of the secondary source of payment; (10) the name and address of the independent auditor of the pool; (11) the requirements to be satisfied for an entity to deposit funds in and withdraw funds from the pool and any deadlines or other operating policies required for the entity to invest funds in and withdraw funds from the pool; and (12) the performance history of the pool, including yield, average dollar- weighted maturities, and expense ratios. (c) To maintain eligibility to receive funds from and invest funds on behalf of an entity under this chapter, an investment pool must furnish to the investment officer or other authorized representative of the entity: (1) investment transaction confirmations; and (2) a monthly report that contains, at a minimum, the following information: (A) the types and percentage breakdown of securities in which the pool is invested; (B) the current average dollar- weighted maturity, based on the stated maturity date, of the pool; (C) the current percentage of the pool's portfolio in investments that have 74 Appendix J stated maturities of more than one year; (D) the book value versus the market value of the pool's portfolio, using amortized cost valuation; (E) the size of the pool; (F) the number of participants in the pool; (C) the custodian bank that is safekeeping the assets of the pool; (H) a listing of daily transaction activity of the entity participating in the ... (1) the yield and expense ratio of the pool; (J) the portfolio managers of the pool; and (K) any changes or addenda to the offering circular. (d) An entity by contract may delegate to an investment pool the authority to hold legal title as custodian of investments purchased with its local funds. (e) In this section, "yield" shall be calculated in accordance with regulations governing the registration of open -end management investment companies underthe Investment Company Act of 1940, as promulgated from time to time by the federal Securities and Exchange Commission. (f) To be eligible to receive funds from and invest funds on behalf of an entity under this chapter, a public funds investment pool created to function as a money market mutual fund must mark its portfolio to market daily, and, to the extent reasonably possible, stabilize at a $1 net asset value. If the ratio of the market value of the portfolio divided by the book value of the portfolio is less than 0.995 or greater than 1.005, portfolio holdings shall be sold as necessary to maintain the ratio between 0.995 and 1.005. (g) To be eligible to receive funds from and invest funds on behalf of an entity under 75 Appendix J this chapter, a public funds investment pool must have an advisory board composed: (1) equally of participants in the pool and other persons who do not have a business relationship with the pool and are qualified to advise the pool, for a public funds investment pool created under Chapter 791 and managed by a state agency, or (2) of participants in the pool and other persons who do not have a business relationship with the pool and are qualified to advise the pool, for other investment pools. (h) To maintain eligibility to receive funds from and invest funds on behalf of an entity under this chapter, an investment pool must be continuously rated no lower than AAA or AAA -m or at an equivalent rating by at least one nationally recognized rating service. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1421, Sec. 9, eff. Sept. 1, 1997. Sec. 2256.017. EXISTING INVESTMENTS. An entity is not required to liquidate investments that were authorized investments at the time of purchase. Added by Acts 1995, 74th Leg., ch. 76, Sec. 5.46(a), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 1421, Sec. 10, eff. Sept. 1, 1997. �3 �+W-11.111F:A ;f= 11112 f=1124 1124 1►1 =311 iTil:424k9We I&I A public funds investment pool must be continuously rated no lower than AAA or AAA -m or at an equivalent rating by at least one nationally recognized rating service or no lower than investment grade by at least one nationally recognized rating service with a weighted average maturity no greater than 90 days. Appendix J Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 1421, Sec. 11, eff. Sept. 1, 1997. Sec. 2256.020. AUTHORIZED INVESTMENTS: INSTITUTIONS OF HIGHER :119l1Iy=A111[0724 1 In addition to the authorized investments permitted by this subchapter, an institution of higher education may purchase, sell, and invest its funds and funds under its control in the following: (1) cash management and fixed income funds sponsored by organizations exempt from federal income taxation under Section 501(f), Internal Revenue Code of 1986 (26 U.S.C. Section 501(%) (2) negotiable certificates of deposit issued by a bank that has a certificate of deposit rating of at least 1 or the equivalent by a nationally recognized credit rating agency or that is associated with a holding company having a commercial paper rating of at least A -1, P -1, or the equivalent by a nationally recognized credit rating agency; and (3) corporate bonds, debentures, or similar debt obligations rated by a nationally recognized investment rating firm in one of the two highest long -term rating categories, without regard to gradations within those categories. Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Sec. 2256.0201. AUTHORIZED INVESTMENTS: MUNICIPAL UTILITY. (a) A municipality that owns a municipal electric utility that is engaged in the distribution and sale of electric energy or natural gas to the public may enter into a hedging contract and related security and insurance agreements in relation to fuel oil, natural gas, and electric energy to protect against loss due to price fluctuations. A hedging transaction 77 Appendix J must comply with the regulations of the Commodity Futures Trading Commission and the Securities and Exchange Commission. If there is a conflict between the municipal charter of the municipality and this chapter, this chapter prevails. (b) A payment by a municipally owned electric or gas utility under a hedging contract or related agreement in relation to fuel supplies or fuel reserves is a fuel expense, and the utility may credit any amounts it receives under the contract or agreement against fuel expenses. (c) The governing body of a municipally owned electric or gas utility or the body vested with power to manage and operate the municipally owned electric or gas utility may set policy regarding hedging transactions. (d) In this section, "hedging" means the buying and selling of fuel oil, natural gas, and electric energy futures or options or similar contracts on those commodity futures as a protection against loss due to price fluctuation. Added by Acts 1999, 76th Leg., ch. 405, Sec. 48, eff. Sept. 1, 1999. Sec. 2256.0205. AUTHORIZED INVESTMENTS; DECOMMISSIONING TRUST. (a) In this section: (1) 'Decommissioning trust" means a trust created to provide the Nuclear Regulatory Commission assurance that funds will be available for decommissioning purposes as required under 10 C.F.R. Part 50 or other similar regulation. (2) "Funds" includes any money held in a decommissioning trust regardless of whether the money is considered to be public funds under this subchapter. (b) In addition to other investments authorized under this subchapter, a municipality that owns a municipal electric utility that is engaged in the distribution and sale of Appendix J electric energy or natural gas to the public may investfunds held in a decommissioning trust in any investment authorized by Subtitle B, Title 9, Property Code. Added by Acts 2005, 79th Leg., ch. 121, Sec. 1, eff. Sept. 1, 2005. Sec. 2256.021. EFFECT OF LOSS OF REQUIRED RATING. An investmentthat requires a minimum rating underthis subchapter does not qualify as an authorized investment during the period the investment does not have the minimum rating. An entity shall take all prudent measures that are consistent with its investment policy to liquidate an investment that does not have the minimum rating. Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Sec. 2256.022. EXPANSION OF INVESTMENT AUTHORITY. Expansion of investment authority granted by this chapter shall require a risk assessment by the state auditor or performed at the direction of the state auditor, subject to the legislative audit committee's approval of including the review in the audit plan under Section 321.013. Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 785, Sec. 42, eff. Sept. 1, 2003. 1-- rmW W* is YAM I24 1111 = 1024 ri l0LTIF =124 r=[H= IITII= 1124 119N = I101 ;4&1 (a) Not less than quarterly, the investment officer shall prepare and submit to the governing body of the entity a written report of investment transactions for all funds covered by this chapter for the preceding reporting period. (b) The report must: (1) describe in detail the investment position of the entity on the date of the report; (2) be prepared jointly by all investment officers of the entity; W_9 Appendix J (3) be signed by each investment officer of the entity; (4) contain a summary statement, prepared in compliance with generally accepted accounting principles, of each pooled fund group that states the: (A) beginning market value for the reporting period; (B) additions and changes to the market value during the period; (C) ending market value for the period; and (D) fully accrued interest for the reporting period; (5) state the book value and market value of each separately invested asset at the beginning and end of the reporting period by the type of asset and fund type invested; (6) state the maturity date of each separately invested asset that has a maturity date; (7) state the account or fund or pooled group fund in the state agency or local government for which each individual investment was acquired; and (8) state the compliance of the investment portfolio of the state agency or local government as it relates to: (A) the investment strategy expressed in the agency's or local government's investment policy; and (B) relevant provisions of this chapter. (c) The report shall be presented not less than quarterly to the governing body and the chief executive officer of the entity within a reasonable time after the end of the period. (d) If an entity invests in other than money market mutual funds, investment pools or accounts offered by its depository bank in the form of certificates of deposit, or money market accounts or similar accounts, the reports prepared by the investment officers :8 Appendix J under this section shall be formally reviewed at least annually by an independent auditor, and the result of the review shall be reported to the governing body by that auditor. Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 1421, Sec. 12, eff. Sept. 1, 1997. Sec. 2256.024. SUBCHAPTER CUMULATIVE. (a) The authority granted by this subchapter is in addition to that granted by other law. Except as provided by Subsection (b), this subchapter does not: (1) prohibit an investment specifically authorized by other law; or (2) authorize an investment specifically prohibited by other law. (b) Except with respect to those investing entities described in Subsection (c), a security described in Section 2256.009(b) is not an authorized investment for a state agency, a local government, or another investing entity, notwithstanding any other provision of this chapter or other law to the contrary. (c) Mortgage pass- through certificates and individual mortgage loans that may constitute an investment described in Section 2256.009(b) are authorized investments with respect to the housing bond programs operated by: (1) the Texas Department of Housing and Community Affairs or a nonprofit corporation created to act on its behalf; (2) an entity created under Chapter 392, Local Government Code; or (3) an entity created under Chapter 394, Local Government Code. Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. 3�Wa+�7= Y� �:11111* 011[ 0] 24 [O]IF_X1j9:N]:IrFA:19]= 3:t0]:/=11: 4 The governing body of an entity subject to this subchapter or the designated investment Appendix J committee of the entity shall, at least annually, review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the entity. Added by Acts 1997, 75th Leg., ch. 1421, Sec. 13, eff. Sept. 1, 1997. All investments made by entities must comply with this subchapter and all federal, state, and local statutes, rules, or regulations. Added by Acts 1997, 75th Leg., ch. 1421, Sec. 13, eff. Sept. 1, 1997. SUBCHAPTER B. MISCELLANEOUS PROVISIONS L�3 A=1I =101W0724 1[y11Jg1I1adX124 RIJ=11 � Any local government may use electronic means to transfer or invest all funds collected or controlled by the local government. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. Sec. 2256.052. PRIVATE AUDITOR. Notwithstanding any other law, a state agency shall employ a private auditor if authorized by the legislative audit committee either on the committee's initiative or on request of the governing body of the agency. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995. 1• � = ►'ILTil=1124 11 i*01W- -1x0111:l11l14321 :ly:l=l� -4=1■11 :Y&3r=►1=1 The comptroller or the disbursing officer of an agency that has the power to invest assets directly may pay for authorized securities purchased from or through a member in good standing of the National Association of Securities Dealers or from or through a national or state bank on receiving an invoice from the seller of the securities showing that the securities have been purchased by the board or agency and that the amount to Appendix J be paid for the securities is just, due, and unpaid. A purchase of securities may not be made at a price that exceeds the existing market value of the securities. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 8.67, eff. Sept. 1, 1997. A security purchased under this chapter may be delivered to the comptroller, a bank, or the board or agency investing its funds. The delivery shall be made under normal and recognized practices in the securities and banking industries, including the book entry procedure of the Federal Reserve Bank. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 8.68, eff. Sept. 1, 1997. l: Y��+ a+ �7= ��J• ��•] �l�l���i�l ��x��J: ���l��l�J :ty:l=l���•l= �'l��r=��� At the direction of the comptroller or the agency, a security purchased under this chapter may be deposited in trust with a bank or federal reserve bank or branch designated by the comptroller, whether in or outside the state. The deposit shall be held in the entity's name as evidenced by a trust receipt of the bank with which the securities are deposited. Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 8.69, eff. Sept. 1, 1997. W El r11011F51: 4024 1MI=Ikq 1119010]W=1 CHAPTER 2257. COLLATERAL FOR PUBLIC FUNDS SUBCHAPTER A. GENERAL PROVISIONS MWW-IFA1I11 W�:101 ;4 M 111 11111 =1 This chapter may be cited as the Public Funds Collateral Act. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. W =1;1 124 11111 M L4 Rj In this chapter: Appendix K (1) "Bank holding company" has the meaning assigned by Section 31.002(a), Finance Code. (2) "Control" has the meaning assigned by Section 31.002(a), Finance Code. (3) "Deposit of public funds" means public funds of a public entity that: (A) the comptroller does not manage under Chapter 404; and (B) are held as a demand or time deposit by a depository institution expressly authorized by law to accept a public entity's demand or time deposit. (4) "Eligible security" means: (A) a surety bond; (B) an investment security; (C) an ownership or beneficial interest in an investment security, other than an option contract to purchase or sell an investment security; (D) a fixed -rate collateralized mortgage obligation that has an expected weighted average life of 10 years or less and does not constitute a high- risk mortgage security; or FM Appendix K (E) a floating -rate collateralized mortgage obligation that does not constitute a high -risk mortgage security. (5) "Investment security" means: (A) an obligation that in the opinion of the attorney general of the United States is a general obligation of the United States and backed by its full faith and credit; (B) a general or special obligation issued by a public agency that is payable from taxes, revenues, or a combination of taxes and revenues; or (C) a security in which a public entity may invest under Subchapter A, Chapter 2256. (6) "Permitted institution" means: (A) a Federal Reserve Bank; (B) a clearing corporation, as defined by Section 8.102, Business & Commerce Code; (C) a bank eligible to be a custodian under Section 2257.041; or (D) a state or nationally chartered bank that is controlled by a bank holding company that controls a bank eligible to be a custodian under Section 2257.041. (7) "Public agency" means a state or a political or governmental entity, agency, instrumentality, or subdivision of a state, including a municipality, an institution of higher education, as defined by Section 61.003, Education Code, a junior college, a district created under Article XVI, Section 59, of the Texas Constitution, and a public hospital. :. Appendix K (8) "Public entity" means a public agency in this state, but does not include an institution of higher education, as defined by Section 61.003, Education Code. (9) "State agency" means a public entity that: (A) has authority that is not limited to a geographic portion of the state; and (B) was created by the constitution or a statute. (10) "Trust receipt" means evidence of receipt, identification, and recording, including: (A) a physical controlled trust receipt; or (B) a written or electronically transmitted advice of transaction. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.48(a), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 914, Sec. 5, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 254, Sec. 1, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 891, Sec. 3.22(4), eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1423, Sec. 8.70, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 7.63, eff. Sept. 1, 1999. I cc]: IMI N L�-1 :11111 M 101;4 11CUM =W =1011M IN VA (a) For purposes of this chapter, a fixed -rate collateralized mortgage obligation is a high -risk mortgage security if the security: (1) has an average life sensitivity with a weighted average life that: (A) extends by more than four years, assuming an immediate and sustained parallel shift in the yield curve of plus 300 basis points; or (B) shortens by more than six years, assuming an immediate and sustained parallel shift in the yield curve of minus 300 basis points; and x.•37 Appendix K (2) is price sensitive, that is, the estimated change in the price of the mortgage derivative product is more than 17 percent, because of an immediate and sustained parallel shift in the yield curve of plus or minus 300 basis points. (b) For purposes of this chapter, a floating -rate collateralized mortgage obligation is a high -risk mortgage security if the security: (1) bears an interest rate that is equal to the contractual cap on the instrument; or (2) is price sensitive; that is, the estimated change in the price of the mortgage derivative product is more than 17 percent, because of an immediate and sustained parallel shift in the yield curve of plus or minus 300 basis points. Added by Acts 1997, 75th Leg., ch. 254, Sec. 2, eff. Sept. 1, 1997. �3 �+*4 4A IDIM63: 02 11:11; 424 Mr= 1„ I ISM 14=1t01 1]=1;1 =1100=19I6101MI,:1124ICU %11ML4I PLANS. This chapter does not applyto funds that a public entity maintains or administers under a deferred compensation plan, the federal income tax treatment of which is governed by Section 401(k) or 457 of the Internal Revenue Code of 1986 (26 U.S.C. Sections 401(k) and 457). Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.004. CONFLICT WITH OTHER LAW. This chapter prevails over any other law relating to security for a deposit of public funds to the extent of any conflict. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.005. CONTRACT GOVERNS LEGAL ACTION. A legal action brought by or against a public entity that arises out of or in connection :: Appendix K with the duties of a depository, custodian, or permitted institution under this chapter must be brought and maintained as provided by the contract with the public entity. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. SUBCHAPTER B. DEPOSITORY; SECURITY FOR DEPOSIT OF PUBLIC FUNDS Sec. 2257.021. COLLATERAL REQUIRED. A deposit of public funds shall be secured by eligible security to the extent and in the manner required by this chapter. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. �3��+W-IFAIMFi1 iTi[�1�J (a) Except as provided by Subsection (b), the total value of eligible security to secure a deposit of public funds must be in an amount not less than the amount of the deposit of public funds: (1) increased by the amount of any accrued interest; and (2) reduced to the extent that the United States or an instrumentality of the United States insures the deposit. (b) The total value of eligible security described by Section 45.201(4 )(D), Education Code, to secure a deposit of public funds of a school district must be in an amount not less than 110 percent of the amount of the deposit as determined under Subsection (a). The total market value of the eligible security must be reported at least once each month to the school district. (c) The value of a surety bond is its face value. (d) The value of an investment security is its market value. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts :■ Appendix K 2003, 78th Leg., ch. 201, Sec. 46, eff. Sept. 1, 2003. Sec. 2257.023. COLLATERAL POLICY. (a) In accordance with a written policy approved by the governing body of the public entity, a public entity shall determine if an investment security is eligible to secure deposits of public funds. (b) The written policy may include: (1) the security of the institution that obtains or holds an investment security; (2) the substitution or release of an investment security; and (3) the method by which an investment security used to secure a deposit of public funds is valued. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. (a) A public entity may contract with a bank that has its main office or a branch office in this state to secure a deposit of public funds. (b) The contract may contain a term or condition relating to an investment security used as security for a deposit of public funds, including a term or condition relating to the: (1) possession of the collateral; (2) substitution or release of an investment security; (3) ownership of the investment securities of the bank used to secure a deposit of public funds; and (4) method by which an investment security used to secure a deposit of public funds is valued. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 344, Sec. 5.006, eff. Sept. 1, 1999. �1 Appendix K (a) A public entity's depository shall maintain a separate, accurate, and complete record relating to a pledged investment security, a deposit of public funds, and a transaction related to a pledged investment security. (b) The comptroller or the public entity may examine and verify at any reasonable time a pledged investment security or a record a depository maintains under this section. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.16, eff. Sept. 1, 1997. Sec. 2257.026. CHANGE IN AMOUNT OR ACTIVITY OF DEPOSITS OF PUBLIC 11J24 191-3 A public entity shall inform the depository for the public entity's deposit of public funds of a significant change in the amount or activity of those deposits within a reasonable time before the change occurs. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. SUBCHAPTER C. CUSTODIAN; PERMITTED INSTITUTION Sec. 2257.041. DEPOSIT OF SECURITIES WITH CUSTODIAN. (a) In addition to other authority granted by law, a depository for a public entity other than a state agency may depositwith a custodian a security pledged to secure a deposit of public funds. (b) At the request of the public entity, a depository for a public entity other than a state agency shall deposit with a custodian a security pledged to secure a deposit of public funds. (c) A depository for a state agency shall deposit with a custodian a security pledged to secure a deposit of public funds. The custodian and the state agency shall agree in Appendix K writing on the terms and conditions for securing a deposit of public funds. (d) A custodian must be approved by the public entity and be: (1) a state or national bank that: (A) is designated by the comptroller as a state depository; (B) has its main office or a branch office in this state; and (C) has a capital stock and permanent surplus of $5 million or more; (2) the Texas Treasury Safekeeping Trust Company; (3) a Federal Reserve Bank or a branch of a Federal Reserve Bank; or (4) a federal home loan bank. (e) A custodian holds in trust the securities to secure the deposit of public funds of the public entity in the depository pledging the securities. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 1010, Sec. 1, eff. June 17, 1995; Acts 1997, 75th Leg., ch. 891, Sec. 3.17, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 344, Sec. 5.007, eff. Sept. 1, Iii LO"0 01 (a) A custodian may deposit with a permitted institution an investment security the custodian holds under Section 2257.041. (b) If a deposit is made under Subsection (a): (1) the permitted institution shall hold the investment security to secure funds the public entity deposits in the depository that pledges the investment security; (2) the trust receipt the custodian issues under Section 2257.045 shall showthat the custodian has deposited the security in a permitted institution; and Appendix K (3) the permitted institution, on receipt of the investment security, shall immediately issue to the custodian an advice of transaction or other document that is evidence that the custodian deposited the security in the permitted institution. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.043. DEPOSITORY AS CUSTODIAN OR PERMITTED INSTITUTION. (a) A public entity other than a state agency may prohibit a depository or an entity of which the depository is a branch from being the custodian of or permitted institution for a security the depository pledges to secure a deposit of public funds. (b) A depository or an entity of which the depository is a branch may not be the custodian of or permitted institution for a security the depository pledges to secure a deposit of public funds by a state agency. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.044. CUSTODIAN AS BAILEE. (a) A custodian under this chapter or a custodian of a security pledged to an institution of higher education, as defined by Section 61.003, Education Code, whether acting alone or through a permitted institution, is for all purposes the bailee or agent of the public entity or institution depositing the public funds with the depository. (b) To the extent of any conflict, Subsection (a) prevails over Chapter 8 or 9, Business Ez?[ .u�1- - WT0 Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. On receipt of an investment security, a custodian shall: (1) immediately identify on its books and records, by book entry or another �k3 Appendix K method, the pledge of the security to the public entity; and (2) promptly issue and deliver to the appropriate public entity officer a trust receipt for the pledged security. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.046. BOOKS AND RECORDS OF CUSTODIAN; INSPECTION. (a) A public entity's custodian shall maintain a separate, accurate, and complete record relating to each pledged investment security and each transaction relating to a pledged investment security. (b) The comptroller or the public entity may examine and verify at any reasonable time a pledged investment security or a record a custodian maintains under this section. The public entity or its agent may inspect at anytime an investment security evidenced by a trust receipt. (c) The public entity's custodian shall file a collateral report with the comptroller in the manner and on the dates prescribed by the comptroller. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.18, eff. Sept. 1, 1997. Sec. 2257.047. BOOKS AND RECORDS OF PERMITTED INSTITUTION. (a) A permitted institution may apply book entry procedures when an investment security held by a custodian is deposited under Section 2257.042. (b) A permitted institution's records must at all times state the name of the custodian that deposits an investment security in the permitted institution. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.048. ATTACHMENT AND PERFECTION OF SECURITY INTEREST. (a) A security interest that arises out of a depository's pledge of a security to secure a V � Appendix K deposit of public funds by a public entity or an institution of higher education, as defined by Section 61.003, Education Code, is created, attaches, and is perfected for all purposes under state law from the time that the custodian identifies the pledge of the security on the custodian's books and records and issues the trust receipt. (b) A security interest in a pledged security remains perfected in the hands of a subsequent custodian or permitted institution. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. SUBCHAPTER D. AUDITS AND EXAMINATIONS; PENALTIES Sec. 2257.061. AUDITS AND EXAMINATIONS. As part of an audit or regulatory examination of a public entity's depository or custodian, the auditor or examiner shall: (1) examine and verify pledged investment securities and records maintained under Section 2257.025 or 2257.046; and (2) report any significant or material noncompliance with this chapter to the comptroller. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.19, eff. Sept. 1, 1997. Sec. 2257.062. PENALTIES. (a) The comptroller may revoke a depository's designation as a state depository for one year if, after notice and a hearing, the comptroller makes a written finding that the depository, while acting as either a depository or a custodian: (1) did not maintain reasonable compliance with this chapter; and (2) failed to remedy a violation of this chapter within a reasonable time after receiving written notice of the violation. Appendix K (b) The comptroller may permanently revoke a depository's designation as a state depository if the comptroller makes a written finding that the depository: (1) has not maintained reasonable compliance with this chapter; and (2) has acted in bad faith by not remedying a violation of this chapter. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.19, eff. Sept. 1, 1997. Sec. 2257.063. MITIGATING CIRCUMSTANCES. (a) The comptroller shall considerthe total circumstances relating to the performance of a depository or custodian when the comptroller makes a finding required by Section 2257.062, including the extent to which the noncompliance is minor, isolated, temporary, or nonrecurrent. (b) The comptroller may not find that a depository or custodian did not maintain reasonable compliance with this chapter if the noncompliance results from the public entity's failure to comply with Section 2257.026. (c) This section does not relieve a depository or custodian of the obligation to secure a deposit of public funds with eligible security in the amount and manner required by this chapter within a reasonable time after the public entity deposits the deposit of public funds with the depository. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.19, eff. Sept. 1, 1997. Sec. 2257.064. REINSTATEMENT. The comptroller may reinstate a depository's designation as a state depository if: (1) the comptroller determines that the depository has remedied all violations of this chapter; and V • Appendix K (2) the depository assures the comptroller to the comptroller's satisfaction that the depository will maintain reasonable compliance with this chapter. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.19, eff. Sept. 1, 1997. Sec. 2257.081. DEFINITION. In this subchapter, "exempt institution" means: (1) a public retirement system, as defined by Section 802.001; or (2) the permanent school fund, as described by Section 43.001, Education Code. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 6.31, eff. Sept. 1, 1997. An exempt institution is not required to have its funds fully insured or collateralized at al I times if: (1) the funds are held by: (A) a custodian of the institution's assets under a trust agreement; or (B) a person in connection with a transaction related to an investment; and (2) the governing body of the institution, in exercising its fiduciary responsibility, determines that the institution is adequately protected by using a trust agreement, special deposit, surety bond, substantial deposit insurance, or other method an exempt institution commonly uses to protect itself from liability. 77 Appendix K Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2257.083. INVESTMENT; SELECTION OF DEPOSITORY. This chapter does not: (1) prohibit an exempt institution from prudently investing in a certificate of deposit; or (2) restrict the selection of a depository by the governing body of an exempt institution in accordance with its fiduciary duty. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. V Appendix L RESflLLPI ON NO. 90 -04 UTIRFAS, the City of North Richland Hills is an agency or political subdivision of the State of Texas (the "Participant") and is empowered to delegate to a public, funds investment pool the authority to invest funds and to act as custodian of investments purchased with local investment funds; and WHEREAS, it is in the best interest of the Participant and its inhabitants to ingest local funds in investments that yield the highest possible rate of return while providing necessary safekeeping and protection of the principal; and WHEREAS, the Treasurer of the State of Texas acting by and through the Texas Treasury Safekeeping Trust Car�any (the "Trust comp ny") has created. "TexPool ", a public funds investment pool to effectuate the goals of providing investments at the highest possible yield and maintaining complete safety of the funds of the Participant, M-A%7 SORE, be it resolved as follows: 1. That the City of North Richland Bills establish an account in its name with the Trust Campany's Public Funds Investxy;�nt Pool "TexPool" for tho purpose of transmitting local fronds for investment by the Trust Cry in TexPool, 2. That the following individuals whose signatures appear below are officers or e=loyees of thc: Participant and are each hereby authorized to transmit funds to the Trust Company for investment in TexPocl and are each further authorized to withdraw funds from time to time, to issue letters of instruction, and to take all other actions deed necessary or appropriate for the investment of local funds: Signature: Title: Director of Finance Name= Jim Cook Title: .Asst. Director of Finance Signature: --,- Name: Camelia Fisher Title: Senior Staff Accountant Signature: 2Z-=4Z,,- -I- OR] Appendix L Resolution 96 -19 Local Government Investment Cooperative Resolution RESOLUTION APPROVING kND AMIORIZING EXECUFIOtti OF AN IINTERLOCAL AGREFRENT FOR PARnCIPAMN IN A PUBLIC FUNDS INVESTMENT COOPERATIVE ['= 'COOPERATIVE "), DESIGNATING THE 130ARD OF DIRECTORS OF THE COOPERATIVE AS AN AGENCY AND INSTRUMENTALITY TO SUPERVISE THE COOPERATIVE APPROVWG RqVESTMENT POLICIES OF THE COppERATIVE, EVVESTNIENT APPOINTING AUTHORIZED REPRE.S£NTA7TvF AND DESIGNATING OFFICERS WHE EAS, the Interlocal Cooperation Act, {Chapter 791 of the Texas Government Code, as amended (the 'Interlocal Act"), permits any "local govemmenC to contract with one or more other 'local governments" to perform 'governmental functions and services," including investment of public funds (as such phrases are defined in the Interlocal Act); WHEREAS, the Interlocal Act authorizes the contracting parties to any interlocal agreement to contract with agencies of the State of Texas, within tie meaning of Chapter 771 of the Government Cade, WHEREAS, the Act permits the contracting parties to any interlocal agreement to create an administrative agency to supervise the performance of such interlocal agreement and to employ personnel and engage in other administrative activities and provide other administrative services necessary to execute: the terms of such interivcai agreement WHEREAS. the Public Funds Investment Art, Chapter 2256 of the Texas Government Cade, as amended (the 'PFIA'), authorizes the entities described in ,Subsection (a) of the PFIA to invest their funds in an eligible public funds investment pool, and the intends to become and remain an eligible public funds investment pool, under the terms and conditions set forth in PFIA; WHEREAS, City ❑f North Richland dills (the 'Government Frctity ") desires to enter into that certain Interlocal Agreement (the "Agreement'), a copy of which is presented with this Resolution and is incorporated herein by reference, and to became a participant in a public funds investment pool created thereunder and under PFIA, to be known as Local Government Investment Cooperative (the 0Cooperative'); d WHEREAS, the Government Entity is a Government Entity as defined in the Agreement; and -t- Resniufiva 100 Appendix L the Cooperative to bPe Performed ,yoa bo rd tof L-ec ars�(the o -gam .)�'stratiQn of the administrative agency created under the Interlocal. Act; and d ], wl'sch shall be an K'IER.EAS, the Government Entity desires to designate the Board as its agency and instrumentality with authority to supervise performance of the Agreement, employ persanrel and engage in other administrative activities and provide other administrative services nay to execute the terms of the Agreement; WIIEF.EAS, each capitali term used in this Resolution and rct otherwise defined has the same meaning assigned to it in the Agreement; NOW, THE —P . ORE, BE IT RESOLVED: 1. The Agreement is hereby approved and adopted and, upon execution thereof by an Authorized Representative (defined below) and receipt of the Government Entity's application to join the Cooperative by the Administrator, shall become; a Participant in the Cooperative for the a Government iLahly funds therein from time to time in accordance with i d of investing its availai�le pawlutiu 2- The &acrd is hereby designated as an agency and instrumentality of the Government Entity, and the Board shall have the authority to supervise performance of the Agreement and the Cooperative, employ personnel and engage in other administrative activities and provide other administrative services necessary to execute the terms of the Agreement. 3. The inve=ent policies Of the Cooperative, as set forth in the document entitled [ nvestment Policies, as summarized inn the Information Statement, and as may be amended from time to time by the Board, are hereby adapted as investment policies of the Government Entity with respect to money invested in the Cooperative, and any existing investment policies of the Government Entity in conflict therewith shall not apply to investments in the Cooperative. 4. The following officers, Officials or employees of the Government Entity are hmby designated as 'Authorized Representatives" within the meaning of the Agreement, with full power and authority to: execute the Agreement, an application to join the Cooperative and any other documents required to become a Participant; deposit money to and withdraw money from the Government Entity's Cooperative account from time to time in accordance with the Agreement and the Information Statement; and take all other actions deemed necessary or appropriate for the investment of funds of the Government Entity: 101 _i_ Appendix L Signature: G Printed Name: Bret Starr Title: Accountant Signature: Printed Name: Jackie Theriot Title: Accounting Manager r Signature: Printed Name: Charles Harris Title: Finance Director In a=rdance with Cooperative procedures, an Authorized Representative shall promptly notify the Cooperative in writing of any changes in who is serving as Authorized Representatives. 5. In addition to the foregoing Authorized Represetttadves, each Investment Officer afthe Caoper&dve appointed by the Board from time to time i3 hereby designated as an investment officer of the Government Entity and, as such, shall have responsibility for investing Cite shave of Cooperative assets representing funds of the Government Entity. Each depository and custodian appointed by the Hurd from time to time are re hereby designated as a depository and custodian of the Government Entity for purposes of holding the sha of Cooperative assets representing fiends of the Government Entity, PASSED AND APPROVED this — 25 day of March , 19.2L. ATi M: By' e B Jeanette Rewis, City Secretary To: y Brown, -mayor Printed name and title Printed Name and Title SEAS, 102 Appendix L Additional Party Agreement The Government Entity of the State of Texas named below, acting by and through the undersigned Authorized Representative, hereby agrees to become a party to that eertain Interlocal Agreement to which this page is attached, and thereby become a participant in the Local Government investment Cooperative, subject to all of the terms and provisions of such Agreement. The undersigned hereby represents that it is a Government. Entity as defined in such Agreement. Executed this Lthday of March 1996 ACCEPTED: Local G ent Investment Cooperative By: ry LOG C Administrator PATRICK SHINKLB, V.P. Printers Name and Title IateriacaJ Agreemeut 103 City of T Name of Government Entity By: Authoriz epresentative Tommy Brown or Printed Name and Title -to- Appendix L Resolution No. 2001 -046 WHEREAS, pursuant to the requirements of the Public Funds Investment Act, Texas Government Code, Section 2256.001 et seq. (the "Act "), the City Council of the City of North Richland Hills has previously reviewed and adopted an investment policy that provides in part that the funds of the City of North Richland Hills will be invested in investments permitted by the Act in order to: (i) invest only in investments legally permitted under Texas law; (ii) minimize risk by managing portfolio investments so as to preserve principal and maintain a stable asset value; (iii) manage portfolio investmenls to ensure cash will be available as required to finance operations; and (iv) maximize current income to the degree consistent with legality, safety, and liquidity; and WHEREAS, the Act provides that funds under the control of the City of North Richland Hills may be invested through investment pools meeting the standards of Section 2256.016 of the Act and the City of North Richland Hills has reviewed the Information Statement, dated 313196, as supplemented on 1213119$ (the "Statement "), of Texas Cooperative Liquid Assets Securities System, an investment pool (the "Pool") administered by MBIA Municipal Investors Service Corporation, as the manager of the Pool (the "Manager ") and has determined that the investments proposed to be acquired by the Pcol are of a type permitted by the Act and consistent with the Policy will assist in achieving the goals set forth in the Policy; and WHEREAS, the City of North Richland Hills understands that the Pool is created through an instrument of trust, dated as of Jaruary 1, 1996, and amended as of November 20, 1997 (the "Trust Instrument "), which provides the terms on which the Pool will operate and the rights of the participants in the Pool who will be governed and sets for the responsibilities of the Manager, and of Bank One, Texas, N.A. as trustee (the "Trustee); NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: The form, terms and previsions of -the Trust Instrument, a draft of which was presented and reviewed at this meeting, be and the same are hereby approved and adopted; and that Larry Koonce, Director of Finance, heretofore appointed by the City of North Richland Hills pursuant to the Policy and the Act as its Investment Officer, be and he is hereby authorized and directed to execute and deliver to the Manager and the Trustee in the name and on behalf of the City of North Richland Hills, a Trust Instrument substantially in the form of the trust instrument reviewed and approved at this meeting, together with such changes as said officer may approve, such approval to be conclusively evidenced by the execution thereof; and be it further Resolved, that the investment program described in the Statement is hereby found and determined to be consistent with the Policy, and to preclude imprudent investment activities arising out of investment transactions conducted between the City of North Richland Hills and the Pools and be it further Resolved, that the City Council hereby officially finds and determines that the facts and recitations in the preamble of this Resolution are true and correct and adapts the preamble as part of the operative provisions of this Resolution; and be it further 104 Appendix L Resolved, that the City Council hereby finds and declares that written notice of the date, hour, place and subject of the meetin( at which this Resolution was adopted was pasted for the time required by law preceding this meeting, and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter thereof were discussed, considered and forma ly acted upon, all as required by Chapter 551, Texas Government Code, as amended, and the Act; and be it further Resolved, that the officers of the City of North Richland Hills, each is expressly authorized, empowered and directed from time to time to perform all acts and to execute, acknowledge, seal and deliver in the name and on behalf of the City of North Richland Hills all certificates; instruments and other documents as they may determine to be necessary or desirable to carry out the provisions of this Resolution and the Trust Instrument, such determination to be conclusively evidenced by the performance of such acts and the execution of any such documents; and be it further Resolved, that this Resolution shall take effect and be in full force upon and after its passage. PASS E❑ AN D APPROVED this 27th day of August 2001. APPROVED: Chi a� Patricia Ht5tson, City Secretary APPROV S TO LEGAL �r r f Rex McEntire, Attorney for the City APPROVED AS TO CONTENT- Larry Ko ce, Director of Finance 105 Appendix L Resolution No. 2003 -023 WHEREAS, pursuant to the requirements of the Public Funds Investment Act, Texas Government Code, Section 2256.001 et seq. (the "Act "), the City Council of the City of North Richland Hills has previously reviewed and adopted an investment policy that provides in part that the funds of the City of North Richland Hills will be invested in investments permitted by the Act in order to: (i) invest only in investments legally permitted under Texas law; 00 minimize risk by managing portfolio investments so as to preserve principal and maintain a stable asset value; Oil) manage portfolio investments to ensure Gash will be available as required to finance operations; and (iv) maximize current income to the degree consistent with legality, safety, and liquidity; and WHEREAS, the Act provides that funds under the control of the City of North Richland Hills may be invested through investment pools meeting the standards of Section 2256.0161 of the Act and the City of North Richland Hills has reviewed the Information Statement, dated 418/02 (the "Statement "), of Texas Short Term Asset Reserve Program ( "TexSTAR "), an investment pool (the "Pool) administered by First Southwest Asset Management, inc. and JPMorgan Fleming Asset Management (USA), Inc, as the managers of the Pool (the "Managers ") and has determined that the investments proposed to be acquired by the Pool are of a type permitted by the Act and consistent with the Policy will assist in achieving the goals set forth in the Policy; and WHEREAS, the City of North Richland Hills understands that the Pool is created under the authority of applicable Texas law, including the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, as amended (the "Interlocal Act "), and the investment Act and that the attached agreement (the "Agreement), upon enactment, serves as the agreement between the City and the Pool and provides the terms on which the Pool will operate and the rights of the participants in the Pool who will be governed and sets for the responsibilities of the Managers, and of JPMorgan Chase Bank. as custodian (the "Custodian "); NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: The form, terms and provisions of the Agreement, a draft of which was presented and reviewed at this meeting, be and the same are hereby approved and adopted; and that Larry Koonce, Director of Finance, heretofore appointed by the City of North Richland Hills pursuant to the Policy and the Act as its Investment Officer, be and he is hereby authorized and directed to execute and deliver to the Managers and the Custodian in the name and on behalf of the City of North Richland Hills, an Agreement substantially in the form of the agreement reviewed and approved at this meeting, together with such changes as said officer may approve, such approval to be conclusively evidenced by the execution thereof; and be it further Resolved, that the investment program described in the Statement is hereby found and determined to be consistent with the Policy, and to preclude imprudent Investment activities arising out of investment transactions conducted between the City of North Richland Hills and the Pool; and be it further Resolved, that the City Council hereby officially finds and determines that the facts and recitations in the preamble of this Resolution are true and correct and adopts the preamble as part of the operative provisions of this Resolution; and be it further 0 Appendix L Resolved, that the City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adapted was posted for the time required by law preceding thls meeting, and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter thereof were discussed, considered and formally acted upon, all as required by Chapter 551, Texas Government Code, as amended, and the Act; and he it further Resolved, that the officers of the City of North Richland Hills, each is expressly authorized, empowered and directed from time to time to perform all acts and to execute, acknowledge, seal and deliver in the name and on behalf of the City of North Richland Hills all certificates, instruments and other documents as they may determine to be necessary or desirable to carry out the provisions of this Resolution and the Agreement, such determination to be conclusively evidenced by the performance of such acts and the execution of any such documents; and be it further Resolved, that this Resolution shall take effect and be in full force upon and after its passage. PAS.SED.A�tD APPROVED this 24th day of February 2003. `uC `,rr''A cr •f ED: kL �} w a 1 ATTEST: -7��A�4� Patricia Hutson, City Secretary APPROV TO LEGALITY: George Stapes, ttorney for the City APPROVED AS TO CONTENT: Aar JKo---c, Director of Finance 107 rn�a = i Appendix M GLOSSARY OF COMMON TREASURY TERMINOLOGY Acented Interest: The accumulated interest due on a bond as of the last interest payment ma& by the issuer. Agency: A debt security issued by a federal or federally sponsored agency. Federal agencies arc backed by the full faith and credit of the U.S. Government. Federally sponsored agencies (FSAs) are backed by each particular agency with a market perception that there is an implicit government guarantee. An example of federal agency is the Government National Mortgage Association (Glti'MA). An example of a FSA is the Federal rational Mortgage Association (FNMA). Amortization: The systematic reduction of the amount owed on a debt issue through periodic payments of principal. Asked: The price at which securities are offered. Average Life: The average length of time that an issue of serial bonds and/or term bonds with a mandatary sinking fund feature is expected to be outstanding. Basis Point; A unit of measurement used in the valuation of fixed-income securities equal to 11140 of a percent of yield. E,g., "114" of 1 percent is equal to 25 basis points. Bid: The indicated price at which a buyer is willing to purchase a security or commodity. Book Value: The value at which a security is carried on the inventory lists or other financial records of an investor. The book value may differ significantly from the security's current value in the market, Broker: A broker brings buyers and sellers together for a comrnission paid by the initiator of the transaction or by both sides; he dues not position. In the money market, brokers are active in markets in which banks buy and sell money and in interdealer markets. Callable Bond: A bond issue in which all or part of its outstanding principal amount may be redeemed before maturity by the issuer under specified conditions. Call Price: The price at which an issuer may redeem a bond prior to maturity. The price is usually at a slight premium to the bond's original issue price to compensate the holder for loss of income and ownership. Call. Risk. The risk to a bondholder that a bond may be redeemed prior to maturity. Cash SaWPurchase: A transaction whicli calls for delivery and payment of securities on the same day that the transaction is initiated, Certificate of Deposit (CD): A tune deposit with a specific maturity evidenced by a certificate. Large - denomination CD"s are typically negotiable. 109 Appendix M Cohateralization: Process by which a borrower pledges securities, property, or other deposits for the purpose of securing the repayment of a loan and/or security. Commercial Paper: An unsecured short-term promissory note issued by corporations, with maturities ranging from 2 to 274 clays. Comprehensive Annual Financial Report (CAFR): The official annual report for the City of Nitsquite. It includes combined statements and basic financial statements for each nidiviclual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance- related legal and contractual provision, extensive introductory material, and a detailed statistical section. Convexity: A measure of a bond's price sensitivity to changing interest rates. A high convexity indieates greater sensitivity of a bond's price to interest rate changes. Coupon Rate: The annual rate of interest received by an investor from the issuer of certain types of fixed- income securities. Also known as the "interest rate" Credit Quality: The measurement of the financial strength of a bond issuer. This measurement helps an investor to understand an issuer's ability to make timely interest payments and repay the loan principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest rate paid by the issuer because the risk of default is lower. Credit quality ratings are provided by nationally recognized rating agencies. Credit Risk: The risk to an investor that an issuer will default in the payment of interest and "or principal on a security. Current Yield (Current Return): A yield calculation determined by dividing the annual interest received on a security by the current market price of that security, Dealer: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. Debenture: A bond secured only by the general credit of the issuer. Delivery versus Payment: There are two rnctbods of delivery of securities. delivery versus payment and delivery versus receipt(also called free). Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is the delivery of securities with an exchange of a signed receipt: for the securities. Derivative Security: Financial instrument created from, or whose value depends upon, one or more underlying assets or indexes of asset values. Discount: The amount by which the par value of a security exceeds the price paid for the security. Discount Securities: Non- interest bearing motley market instruments that arc issued at a diSCi7llnt anti redeemed at maturity for full face value, c.g., U.S. Treasury Bills. 110 AppendEx M Diversification: A process of investing assets among a range of security types by sector, maturity; and duality rating. Duration: A measure of the timing of'the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed - income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates. Fair Value: The amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Federal Funds (Fed Funds): Funds placed in Federal Reserve banks by depository institutions in excess of current reserve requirements. These depository institutions may lend fed hinds to each other overnight or ou a longer basis. They may also transfer funds among each other on a same -day basis through the Federal Reserve banking system. Fcd funds are considered to be immediately available funds. Federal Funds Rate: Interest rate charged by one institution lending federal funds to the other. Federal Credit Agencies: Agencies of the Federal govemment set up to supply credit to various classes of institutions and individuals, e.g. S &L's, small business firms, students, farriers, farm cooperatives, and exporters. Federal Deposit Insurance Corporation (FDIC: A federal agency that insures bank deposits, currently up to $100,000 per deposit. Federal Home Loan Banks (FHLB): The institutions that regulate and lend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Reserve Bangs vis -a -vis member commercial banks. Federal National Mortgage Association (FNMA): FNMA, like GNMA, was chartered under the Federal rational Mortgage Association Act in 1938.. FNMA is a federal corporation working under the auspices of tire, Department of Housing and Urban Development, H.U.D. It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder -owned corporation. The corporation's purchases include a variety of adjustable inortgages and second loans in addition to fixed-rate inoifgages. FIN-MA's securities are also highly liquid and are widely accepted. FNMA assumes acid guarantees that all security holders will receive timely payment of principal and interest. Federal Open Market Committee (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents, The President of the New York Federal Reserve Bank is a permanent member while the oilier Presidents serve on a rotating basis. The Committee periodically meets to set Federal Deserve guidelines regarding purchases and sales of Government Securities in the opal- market as a means of influencing the volume of bank credit and money. ill Appendix M Federal Reserve System; The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. Government National Mortgage Association (GN7MA or Ginnie Mae): Securities guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are hacked by FHA, VA or FMHM mortgages. The term pass through is often used to describe Ginnie Maes. Government Securities. An obligation of the U.S. government, backed by the full faith and credit of the government. These securities are regarded as the highest quality of investment securities available in the U.S. securities market. See "Treasury hills, Notes, and Bonds," Interest Rate: See "Coupon Rate." Interest Rate Risk: The risk associated with declines or rises in interest rates which cause an investment in a fixed- income security to increase or decrease in value. Internal Controls. An internal control structure designed to ensure that the assets of the entity are protected from loss, theft, or misuse. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognized that 1)the cost of a control should not exceed the benefits likely to be derived and 2) the valuation of costs and benefits requires estimates and judgments by management. Internal controls should address the following points: Control of collusion — Collusion is a situation where two or more employees are working iza conjunction to defraud their employer. Separation of transaction authority from accounting and record keeping — By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. Custodial safekeeping — Securities purchased from any bank or dealer including appropriate collateral (as defined by state law) shall be placed with an independent: third party for eustodial safekeeping. Inverted Yield Curve. A chart formation that illustrates long -term securities having lower yields than short -term securities. This configuration usually occurs during periods of high inflation coupled with low levels of confidence in the economy and a restrictive monetary policy_ investment Policy: A concise and clear statement of the objectives and parameters formulated by an investor or investment manager for a portfolio of investment securities. investment. -grade Obligations: An investment instrument suitable for purchase: by institutional investors under the prudent person rule. Investment -grade is restricted to those obligations rated BBB or higher by a rating agency. Liquidity: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. 112 Appendix M Local Government Investment Pool (LGIP): An investment by local governments in which their money is pooled as a method for managing local funds. Mark -to- market: The process whereby the hook value or collateral value of a security is adjusted to reflect its current market value. Market Risk: The risk that the value of a security will rise or decline as a result of changes in market conditions. Market Value: Current market price of a security. Master Repurchase Agreement; To protect investors, many public investors will request that repurchase agreements be preceded by a master repurchase agreement between the investor and the financial institution or dealer. The master agreement should define the nature of the transaction, identify the relationship between the parties, establish normal practices regarding ownership and custody of the collateral securities during the term of the investment, provide remedies in the case of default by either party and clarify issues of ownership. The master repurchase agreement protects the investor by eliminating the uncertainty of ownership and hence, allowing investors to liquidate collateral if a bank or dealer defaults during the term of the agreement. Maturity: The date on which payment of a financial obligation is due. The final stated maturity is the date on which the issuer must retire a bond and pay the face value to the bondholder. See "Weighted Average maturity." Money market: The market in which short -term dcbt instruments (bills, commercial paper, bankers' acceptances, etc.) are issued and traded. Money Market Mutual Fund: Mutual funds that invest solely in money market instruments. Mutual Fund: An investment company that pools money and can invest in a variety of securities, including fixed - income securities and money market instruments. Mutual funds are regulated by the Investment Company Act of 1940. National Association of Securities Dealers (NASD): A self regulatory organization (SRO) of 'brokers and dealers in the over - the - counter securities business. Its regulatory mandate includes authority over fir ns that distribute mutual fund shares as well as other securities. Net Asset Value.: The market value of one share of an investment company, such as a mutual fund. This figure is calculated by totaling a fund's assets which includes securities, cash, and any accrued earnings, subtracting this f om the fund's liabilities and dividing this total by the number of shares outstanding. This is calculated once a day based on the closing price for each security in the fund's portfolio. No Load Mutual Fund: A mutual fund which does not levy a sales charge on the purchase of its shares. 113 Appendix M Nominal Yield: the stated rate of interest that a bond pays its current owner, based on par value of the security, It is also known as the "coupon," coupon rate," or "interest rate." Offer- An indicated price at which market participants are , %pilling to sell a security or commodity. Also referred to as the "ask price." Open Market Operations: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open rnar�cet operations are the Federal Ruserve's most important and most flexible monetary policy tool, Parr: Face value or principal value of a bond, typically $1,000 pL--r bond. Portfolio: Collection of securities reld by an investor. Positive Yield Curve. A chart formation that illustrates short-term securities having lower yields than long -terra securities, Premium: The amount by which the price paid for a security exceeds the seemity's par value. Prime Rate: A preferred interest rate charged by commercial banks to their most creditworthy customers. Many interest rates are keyed to this rate. Primary Dealer: A group of government securities dealers that submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to it infonnal oversight. Primary dealers include Securities and Exchange Commission (SEC) registered securities broker- dealers, banks and a few unregulated firms. Principal: The face value or par value of a debt instrument. Also may refer to the amount of capital invested in a given security. Prospectus: A legal document that must be provided to any prospective purchaser of a new securities offering registered with the SEC. This can include information on the issuer, the issuer's business, the proposed rise of proceeds, the experience of the issuer's management, and certain certified financial statements. Prudent Person Rule: An investment standard outlining the fiduciary responsibilities of public funds investors relating to investment practices. Qualified Public DepositarieS: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem. taxes under the laws of the state, which has segregated for the l?erlefit of the commission eligible collateral having a value of not less than its maximum liability and which has beet) approved by the Public Deposit Protection Comanission to hold public deposits. 114 Appendix M Rate of Return: The yield obtainable on a security based on its purchase twice or its current market price. This may be the amortized yield to maturity on a bond or the current income return. Reinvestment Risk: The risk that a fixed income investor will be unable to reinvest income proceeds from a security holding at the same rate of return currently generated by that holding. Repurchase Agreement (RP or REPO): An agreement of one party to purchase securities at a specified price from a second party and a simultaneous agreement by the first party to resell the securities at a specified pricc to the second party on demand or at a specified date. Safekeeping: Holding of assets (e.g. securities) by a financial institution. SEC Rule: 1SC3 -1: See uniform net capital rule. Secondary Market: A market made for the purchase and sale of outstanding issues following the initial distribution. Securities & Exchange Commission: Agency created by Congress to protect investors in securities transactions by administering- securities legislation, Serial Bond: A bond issue, usually of a municipality, with various maturity dates scheduled at regular intervals until the entire issue is retired, Sinking Fund: Money accumulated on a regular basis in a separate custodial account that is usWd to redeem debt securities or preferred stock issues, Swap. Trading one asset for another. Term Bond: Bonds comprising a large part of all of a particular issue which cone clue in a single maturity. The issuer usually agrees to matte periodic payments into a sinking fund for mandatory redemption of term bonds before maturity. Total Return: The sum of all investment income plus changes in the capital value of the portfolio. For mutual funds, return on an investment is composed of share price appreciation plus any realized dividends or capital gains. This is calculated by taking the following components during a certain time period. (Price Appreciation) +(Dividends paid)r�-(Capital gains) =Total Return Treasury Bills: A non - interest bearing discount security issued by the US, Treasury to finance the national debt, Most bills are issued to mature in three months, six months or one year in ininirnum denominations of $10,000,00. The yields on bills are monitored closely in the money markets for signs of interest rate trends. Treasury Bond: bong -term I .S. Treasury securities having initial maturities of more than ten years, Treasury Notes: hiterinediate term coupon bearing U.S. Treasury securities having initial maturities from one to ten years. Currently, the longest outstanding maturity for such securities is 30 years. 115 Appendix M 'Uniform Net Capital Mule: Securities and Exchange Commission requirement that member firms as well as nonmember broker - dealers in securities maintain a maximum ration of indebtedness to liquid capital of 15 to 1: also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities. This is one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. Volatility: A degree of fluctuation in the price and valuation of securities. Volatility Risk Rating: A rating system to clearly indicate th❑ level of volatility and rather non - credit risks associated with securities and certain bond funds. The ratings for brand funds range from those that have extremely low sensitivity to changing market conditions and offer the greatest stability of the return ( "aaa" by S&P; "V -1" by Fitcli) to those that are highly sensitive with currently identifiable market volatility risk ( "ece" by S &P, "V -10" by Pitch). Weighted Average Maturity (WAM): The average maturity of all the securities that comprise a portfolio. According to SEC rule 2A-7, the WAM for SEC registered money market mutual funds may not exceed 90 days and no one security may have a maturity that exceeds 397 days. When Issued (WI): A conditional transaction in which an authorized new security has not been issued. All "when issued" transactions are settled when the actual security is issued. Yield: The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price of the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par n purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the Bond. Yield -to -call (YT C): The rate of return an investor earns from a band assuming the bond is redeemed (called) prior to its nominal maturity date. Yield. Curve -A graphic representation that depicts the relationship at a given point in time between yields and maturity for bonds that are identical in every way except maturity. A normal yield curve may be alternatively referred to a positive yield curve. Yield -to- maturity: The rate of return yielded by a debt security held to maturity when both interest payments and the investor's potential capital gain or 1093 are included in the calculation of return. Zero-coupon Securities: Security that is issued at a discount and makes no periodic interest payments. The .rate of return consists of a gradual accretion of the principal of the security and is payable at par upon maturity. 116 LAM: M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. B.5 PU 2012-004 Award Bid No. Q12 -001 for a Dump Truck to Southwest International in the amount of $98,797.00 Presenter: Thomas Powell Summary: Request Council approval to award Bid No. Q12 -001 for a dump truck to Southwest International Truck Inc. in the amount of $98,797.00. General Description: The CIP Major Capital Equipment Replacement Program was implemented using the recommendations obtained in independent studies conducted for the city by Peat Marwick in August 1986 and August 1993 which recommended a minimum ten (10) year replacement for capital equipment. At the ten (10) year interval the equipment is evaluated for replacement based on frequency of use, the number of like equipment in the fleet, equipment condition and the availability of parts and services. The dump truck being replaced is Public Works Unit 683 which is a 16 year old 1996 model with 98,300 miles. The new 2012 tandem axle truck with a 12 -yard capacity dump body will be equipped with an energy efficient clean burning diesel engine which meets the replacement guidelines for the Clean Fleet Vehicle Program. The City of North Richland Hills is a member of several inter -local groups and utilized existing contracts with Dealerships through the Local Government Purchasing Cooperative (BuyBoard contract 358 -10) to request quotes on the equipment needed. The Local Government Code states that purchases made through a cooperative purchasing agreement satisfy any state law that would require the City to solicit competitive bids. Vendor Manufacturer /Model Unit Price Southwest International International 7400 $98,797.00 Rush Truck Center Peterbilt 348 $103,224.00 Fleet Services and the Purchasing Department have evaluated all the bids and are recommending awarding to the low bidder. The Council approved the FY 2012 CIP Budget amount of $100,000 for this dump truck. The truck will be purchased with cash out of the fleet services fund. Recommendation: To award Bid No. Q12 -001 for a dump truck to Southwest International in the amount of $98,797.00. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. C.0 PUBLIC HEARINGS MKH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. C.1 GN 2012 -006 Public Hearing on and Enactment of Juvenile Curfew Ordinance - Ordinance No. 3182 Presenter: Andy Kancel Summary: On July 11, 1994 the North Richland Hills City Council unanimously passed Ordinance No. 1994 adopting a curfew for juveniles. On January 26, 2009, Ordinance No. 3038 was approved extending this legislation for three years. The North Richland Hills Police Department has found that Ordinance No. 1994 has had a positive effect on the safety of our youth and has reduced the probability that unsupervised juveniles will become involved in crimes during late night and early morning hours. General Description: Section 370.002 of the Local Government Code adopted by the 74th Legislature on May 31, 1995 requires that: (a) Before the third anniversary of the date of adoption of a juvenile curfew ordinance by a general -law municipality or a home -rule municipality or an order of a county commissioner's court, and every third year thereafter, the governing body of the general -law municipality or home -rule municipality or the commissioner's court of the county shall: (1) review the ordinance or order's effects on the community and on problems the ordinance or order was intended to remedy; (2) conduct public hearings on the need to continue the ordinance or order and (3) abolish, continue, or modify the ordinance or order. (b) Failure to act in accordance with subsections (a) (1 ) — (3) shall cause the ordinance or order to expire. Statistical information maintained by the Police Department has revealed that as a result of the past three -year extension, juvenile victimization during curfew hours has dropped 53% compared to the previous time period. Attached is Ordinance No. 3182 defining the curfew hours as 11:00 p.m. on any Sunday, Monday, Tuesday, Wednesday or Thursday until 6:00 a.m. of the following day and 12:01 a.m. until 6:00 a.m. on any Saturday or Sunday. Recommendation: Approve Ordinance No. 3182 M RH AN ORDINANCE CONTINUING ARTICLE II OF CHAPTER 50 OF THE NORTH RICHLAND HILLS CODE OF ORDINANCES; ESTABLISHING A MINORS CURFEW. WHEREAS, a minor's curfew has been in force within the City since 1994 which was reenacted in January of 2009; and, WHEREAS, §370.002, Texas Local Government Code, requires that before the third anniversary of the date of adoption of a juvenile curfew ordinance and every third year thereafter, the governing body of the City shall: (1) review the ordinance or order's effects on the community and on problems the ordinance or order was intended to remedy, (2) conduct public hearings on the need to continue the ordinance or order; and (3) abolish, continue, or modify the ordinance or order; and, WHEREAS, the City Council has now reviewed the effect of the ordinance on the community and on problems the ordinance was intended to remedy and conducted public hearings on the need to continue such ordinance; and WHEREAS, the City Council has found that there is a need for a minor's curfew and that it has served well to reduce the danger to minors themselves and to provide a means for making sure minors do not engage in behavior which is a danger to the community as well as to themselves; NOW THEREFORE: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: Article II of Chapter 50 of the North Richland Hills, Texas, Code of Ordinances is hereby continued. AND IT IS SO ORDAINED. PASSED AND APPROVED this 23rd day of January, 2012. '01E Was] M►IQ A 11: 1N 191:IW_1►1I1:III Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary 1_1 U, 191 71 =1 17:1�2 11911197: k51:1 r I III I XH1I I Ira George A. Staples, City Attorney APPROVED AS TO CONTENT: Jimmy Perdue, Director of Public Safety/Police Chief M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. E.0 PUBLIC WORKS M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. E.1 PW 2012 -003 Revise the FY 2011/2012 Capital Projects Budget and Award RFB No. 12-009 to Durable Specialties, Inc. in the Amount of $63,500.00 for the Construction of the Glenview Drive Street Lighting Project (ST1006) Presenter: Gregory Van Nieuwenhuize Summary: The City Council is being asked to award a construction contract for the CIP Project identified as "Glenview Drive Street Lighting (Honey Lane West to Diamond Loch)" in the Capital Projects Budget. General Description: On December 15, 2011, a bid opening was conducted for the Glenview Drive Street Lighting Project (the "Project "). The Project was included in the Capital Projects Budget so that the City's standard street lighting units that were previously installed along Glenview Drive (between Rufe Snow Drive and Honey Lane) could be continued further to the west. The FY 2011/2012 Capital Projects Budget indicates that Phase 1 of the Project would consist of replacing the street lighting units along Glenview Drive between Honey Lane and Diamond Loch Drive. In the future a Phase 2 would then be proposed to continue this street lighting along Glenview Drive to the Haltom City /North Richland Hills' city limits. In an effort to take advantage of the very competitive bid prices that the City has been receiving on infrastructure projects, staff had the Project's Bid Schedule set up so that the Project could be awarded based on 1) strictly a base bid (street lighting between Honey Lane and Diamond Loch), or 2) the base bid plus any or all of additional street lighting between Diamond Loch and the city limits. Essentially, because of economies of scale and the current bid climate, staff wanted to determine if construction of the future Phase 2 could be feasible now. The project received three (3) bids, which were opened during the December 15th bid opening. As previously indicated, the Project was set up with a Base Bid (Part A) and an Additive Alternate (Part B). The bids are provided on the following page: CONTRACTOR NAME BASE BID (PART A) ADDITIVE ALTERNATE (PART B) TOTAL BID Durable Specialties, Inc. $ 36,290.00 $ 27,210.00 $ 63,500.00 Independent Utility Construction, Inc. $ 38,393.75 $27,261 ' 90 $ 65,655.65 Groves Electrical Service, Inc. $ 47,559.49 $ 36,326.16 $ 83,885.65 Notice of the city's intent to bid was advertised in local newspapers, as required by State statute, and posted on the city's Website. Additionally, because this work is very specialized — and in the past it was not unusual for the City to receive only one bid for this type of work — staff notified 17 contractors who are known to bid on this type of project. The names of these 17 contractors were obtained from previous bidding experience, the project design engineer and the City of Fort Worth's street light installation contacts list. The project design engineer recommends awarding the contract to the lowest bidder: Durable Specialties, Inc., who has previously performed work similar to this for the city. On these previous projects, Durable Specialties has met the city's specifications for the work constructed and this work was completed on schedule. Durable Specialties most recently completed the traffic signal installation projects at the intersections of Davis Boulevard & Bursey Road, Precinct Line Road & Rumfield Road and Precinct Line Road & Amundson Drive. While the Project's construction account has adequate funding for the construction of street lighting units along Glenview Drive from Honey Lane to Diamond Loch (the base bid), a budget revision in the amount of $16,000 would need to be approved in order to continue the street light installation west to the city limits. Approving a budget revision now which authorizes this additional $16,600 for the installation of these remaining street lighting units with the current project will be considerably less expensive than the costs for additional engineering and installation of these remaining street lighting units as a separate project in a future Capital Projects Budget. This $16,000 can be obtained from the General Capital Projects — Miscellaneous Streets Savings Account. Project savings and available funds from street projects for which construction has yet to be complete will offset the increase until a formal budget amendment is approved. Recommendation: Revise the FY 2011/2012 Capital Projects Budget and Award RFB No. 12 -009 to Durable Specialties, Inc. in the Amount of $63,500.00 for the Construction of the Glenview Drive Street Lighting Project (ST1006) Enclosures: • Exhibit A: Glenview Drive Street Lighting — Budget Revision • Exhibit B: Glenview Drive Street Lighting — Project Location Map Exhibit A Glenview Drive Street Lighting — Budget Revision Street & Sidewalk Capital Projects Glenview Dr. Street Lighting (Honey Ln. West to Diamond Loch) ST1006 PROJECT DESCRIPTION & JUSTIFICATION This ,project will consist of replacing the existing street lighting units along Glenview Drive farm Honey Lane west to Diamond Loch Drive with the North Richland Hills standards street lighting units. These standard street lighting units currently exist along Glenview Drive from Rufe Snow Drive west to Haney Lane The City has received numerous requests to install the North Richland Hills standard lighting units in the corridor since the completion of the street lighting unit installation in the section of Rufe Snow west to Haney Lane. Note: It is anti cipated that one or two street light locations within this corridor will need additi onal easements granted in order to install the street light units in the appropriate locations. The reserves funding identified is from the 1994 Bond program project savings. PROJECT STATUS ORIGINAL 201112 ORIGINAL 2011112 START DATE I REVISION END DATE REVISION Professional Services Engineering 0112011 0312011 LandIROW Acquisition 0312011 0512011 Construction 0612011 0312012 1212011 0712012 Other REVISION EXPLANATION The additional funding is needed for lighting the remainder of the Glenview Drive corridor west (of the current project's end point) to the City's city limits. Authorizing the additional $16,000 now and installing these remaining street lighting units with the current project will be considerably less expensive than the costs for additional engineering and installation of these remaining street lighting units as a separate project in a future Capital Projects Budget. FINANCIAL DATA ADOPTED REVISED TOTAL BUDGETTHRU PROJECT BUD GET THRU REFRAINING PROJECT 2011112 REVISION 2011112 BALANCE COST FUNDING SOURCES 1994 Bond Program Project Reserves 561,000 $61,000 $61,000 Gen. Capital Project Misr. Street Savings 0 16,000 16,000 S16,000 D S0 0 SO D sin Total $61,000 $16,000 $77.000 so! 677.000 PROJECT EXPENDITURES Professional Services $0 $0 EngineeringlDasgn 20,800 (7700) 13,100 $13,100 LandIROW Acquisition 2,50D (2,500) D $0 Construction 37,700 26,200 63,900 $63,900 Other 0 $0 Total i 561,000 $16,0001 $77,000 I so $77,000 IMPACT ON OPERATING BUDGET ANNUAL OPERATING IMPACT 1 2011112 1 2012113 2013114 1 2D14/2015 201512016 TOTAL Projected I I I 1 $0 Exhibit 6 Glenview Drive Street Lighting — Project Location Map ■1 =■mn■ a i 1 a i ■ ■ ■ r G� n �p� r .1 CT I y CIRCLEVIEW - ©R --Cl TABOR ST BRIGHTON CT Fr m "OTT INGH ILL CT Z +�I SFaRKSHIRE CT n Fn ABERDEEN D b Q L \ARMONSON 0 m x O + a + a a rn z n aG ;Glenview Dr Street Lighting Phase 1 (Honey_Ln_to DiamondlLoch) I Glenview Dr Street Lighting Phase 1 (Honey Ln to Diamond Loch) N 7 S 0 M NORTH T FAI RICHLAND HILLS Project Locator Map n m ��NGZ n D m a i 1 a i ■ ■ ■ r G� n �p� r .1 CT I y CIRCLEVIEW - ©R --Cl TABOR ST BRIGHTON CT Fr m "OTT INGH ILL CT Z +�I SFaRKSHIRE CT n Fn ABERDEEN D b Q L \ARMONSON 0 m x O + a + a a rn z n aG ;Glenview Dr Street Lighting Phase 1 (Honey_Ln_to DiamondlLoch) I Glenview Dr Street Lighting Phase 1 (Honey Ln to Diamond Loch) N 7 S 0 M NORTH T FAI RICHLAND HILLS Project Locator Map M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. F.0 GENERAL ITEMS M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. F.1 PU 2012 -008 Authorize the Purchase of Furniture and Equipment for the NRH Centre from multiple vendors in the amount of $108,320.21 Presenter: Bill Thornton Summary: This item is to purchase and install new furniture and equipment including tables and chairs, a dance floor, and pre - school and child care room educational centers for the new NRH Centre. General Description: Construction of the NRH Centre is progressing with an expected April 2012 opening. While the purchase and installation of the furniture and equipment throughout the building is a separate component from the building construction, the installation of the furniture and equipment is coordinated to coincide with the completion of the construction. Interior design work associated with selection and procurement of furniture, fixtures and equipment throughout the building is included in our professional services contract with Brinkley Sargent Architects (BSA). A budget of $395,163 is allocated for the purchase and installation of new furniture. Council previously authorized $261,837.76 for the purchase of furniture throughout the public and office spaces in the building, leaving a remaining balance of $133,325.24 for the following furniture items not included in the earlier purchase. TxMAS Contract 11 -71050 & 9 -711 030 Wilson Office Interiors TxMAS Contract 4- 71111050 Business Interiors The Local Government Purcl Constructive Playthings Constructive Playthings NRH Request for Quote Wilson Office Interiors TriMark Gill Marketing Signature Flooring 11 Fabric chairs, 1 Task chair 8,369.75 320 Nesting Wood Chairs 73,888.40 lasing Cooperative (BuyBoard contract 328 -09) Preschool room 3,401.26 Babysitting room 2,823.19 8 Janus Et Cie bar stools 6,007.00 Portable bar 2,800.50 Dance Floor 11,030.11 108,320.21 The City of North Richland Hills is a member of several inter -local groups and utilized existing contracts through the State of Texas Multiple Award Schedule (TxMAS) and the Local Government Cooperative (BuyBoard) contracts to purchase furnishings for the new NRH Centre. The Local Government Code states that purchases made through cooperative purchasing agreement satisfy state law that would require the City to solicit competitive bids. The remaining items listed (bar stools, portable bar and the dance floor) were not on existing inter -local contracts available to the City. The NRH purchasing staff obtained quotes for these items and awarded the items to the lowest bidder offering the best value to the City. The remaining budgeted funds are reserved for specialty furnishings including massage tables, therapy tables and pool deck furniture. Recommendation: To Authorize the Purchase of Furniture and Equipment for the NRH Centre from multiple vendors in the amount of $108,320.21 M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. F.2 GN 2012 -009 Calling May 12, 2012 City Council Election and Authorizing a Joint Election Agreement with other Tarrant County Political Subdivisions and Contract for Election Services with Tarrant County - Resolution No. 2012 -002 Presenter: Patricia Hutson Summary: The City Council is required by the Texas Election Code to order the city's General Election of Officials. The approval of Resolution No. 2012 -002 will order the city's Election for May 12, 2012. The Resolution also authorizes the city to hold its election jointly with other Tarrant County entities and to contract with Tarrant County to administer the joint election. General Description: In accordance with State law, the city's General Election of Officials will be held on May 12, 2012. Resolution No. 2012 -002 orders the election to elect persons to the offices of Mayor and Council Places 2, 4, and 6 for two year terms of office. Candidate filing will begin on February 4 and will continue through March 5, 2012. The proposed resolution establishes election day voting locations, provides for the appointment of election officials, provides for early voting and election day procedures and authorizes a joint election agreement and contract for election services with Tarrant County. As in previous years, the city's election will be held jointly with other Tarrant County political entities holding an election with the city entering into a contract with Tarrant County to administer the joint election. The proposed resolution authorizes the Mayor to execute the contract with the county. The Tarrant County Elections Administrator has advised the contract will be finalized with participating entities after the March 5 filing deadline when it is known which entities will be holding an election. It is anticipated that the election contract will be similar to previous contracts with the county and will include the following provisions: • Tarrant County Elections Administrator will serve as the administrator of the Joint Election with each participating entity remaining responsible for decisions and actions as required by law. • Early voting will be conducted jointly with all participating entities beginning on April 30, 2012 and ending on May 8, 2012 at the locations and times established by the county. North Richland Hills voters may vote early at the Tarrant County Elections Center, 2700 Premier, the North Richland Hills Recreation Center or at any of the other joint early voting locations. • Early voting by personal appearance will be conducted exclusively on the county's eSlate Electronic Voting System. On Election Day, voters will have a choice between the eSlate electronic voting system or a paper ballot that is scanned using Tarrant County's EScan voting system. • Ballots that contain ballot content for more than one joint participant because of overlapping territory will be arranged in the following order: Independent School District, City, Water District(s), College District and other political subdivisions. • On Election Day, North Richland Hills voters will vote at their designated polling location — City Hall, Dan Echols Senior Center or Bursey Road Senior Center. • The Tarrant County Elections Administrator will release unofficial cumulative totals and precinct returns of the election as precincts report to the central and remote tabulating stations and the returns are tabulated. The unofficial cumulative totals and precinct returns will be released to the joint participants, candidates, press and general public by distribution of hard copies at the central counting station (2700 Premier Street, Fort Worth) and by posting to the county web site. On Election night, the county will not allow the release of the results printed on the tapes produced by the voting equipment to any participating entity at any of the remote collection sites or by phone from the individual polling locations. Each participating entity will receive their election results from either the county's central counting station or county website. • Election expenses will be allocated among the participating entities according to a formula based on the average cost per election day polling place (unit cost) as determined by adding together the overall expenses and dividing the expenses equally among the total number of polling places. Costs for polling locations will be pro -rated equally among the participants using the polling location. • The Elections Administrator will be the general custodian of the voted ballots and all records of the Joint Election. Because of the ongoing redistricting issues, Tarrant County is waiting for a ruling from the federal court before revising their county voting precincts. Because the city uses the county voting precincts, it may be necessary for Council to approve an amended resolution to amend voting precincts to correspond with any changes made by the County. In the event a run -off election should be needed, Resolution No. 2012 -002 sets June 16 as the run -off date and provides for early voting days and times. The terms of the contract with Tarrant County may be extended to the run -off election. Depending on further rulings from the courts, the run -off date and early voting days and times may also need to be adjusted. Recommendation: Approve Resolution No. 2012 -002 M RH RESOLUTION NO. 2012 -002 WHEREAS, the regular election for the City of North Richland Hills, as set forth by the Texas Election Code, is required to be held on May 12, 2012, at which time the voters will elect a Mayor and City Council Places 2, 4 and 6; and WHEREAS, in accordance with Section 271.€ 02 of the Texas Election Code, the City election will be conducted jointly with other political subdivisions in Tarrant County; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: THAT an election is hereby called to elect a Mayor and City Council Places 2, 4 and 6 to serve until May of 2014, or until their successors are duly elected and qualified. Such election shall take place on the 12th day of May, 2012, from 7:00 a.m. until 7:00 p.m. Section 2: Qualified persons may file as candidates by filing with the City Secretary between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, beginning February 4, 2012, and ending March 5, 2012. Each application for a place on the ballot shall be accompanied by either a filing fee of One Hundred Fifty ($150.00) Dollars payable to the City, or, in lieu of the filing fee, a Petition seeking the candidate's name to be placed on the ballot. Such Petition must be signed by at least one hundred fifty (150) qualified voters of the City. Forms for the Petition shall be furnished to potential candidates by the City Secretary. Section 3: The location of polling places for this joint election are designated pursuant to Section 271.003 of the Texas Election Code, and the Council finds that the following locations can most adequately and conveniently serve the voters in this election, and that these Locations will facilitate the orderly conduct of the election: PRECINCT VOTING LOCATION Precinct One (includes County voting precincts City Hall, 7301 Northeast Loop 820 3214, 3324, 3333, 3041, 3364 & 3366) Precinct Two (includes County voting precincts Dan Echols Senior Adult Center 3140, 3215, 3289, 3325, 3326, 3424, 3625, 6801 Glenview Drive 3631, 3633, 3634, 4620 & 4629) Precinct Three (includes County voting precincts Bursey Road Senior Adult Center 3063, 3049, 3177, 3209, 3365, 3367, 3387, 7301 Bursey Road 3507, 3527, 3543, & 3584) Section 4: Early voting will be held jointly with other political subdivisions in Tarrant County beginning on April 30, 2012 and will continue through May 8, 2012 at the main early voting polling place, Tarrant County Elections Center, 2700 Premier Street Fort Worth, Texas 76111 and at such other locations established by Tarrant County on the dates and times as follows or as may be amended by Tarrant County: Dates April 30 8:00 a.m May 1-4 8:00 a.m May 5 7:00 a.m May 6 11:00 a.r May 7 -8 7:00 a.m Times to 5:00 p.m. to 5:00 p.m. to 7:00 p.m. n. to 4:00 p.m . to 7:00 p.m. Section 5: All resident qualified electors of the City shall be permitted to vote at said election and, on the day of the election, such electors shall vote at the polling place designated for the Election Precinct in which they reside. Section 6: The election shall be conducted pursuant to the election laws of the State of Texas. Section 7: Should a runoff election be required following the canvass of the May 12, 2012 election, the Council hereby orders that a runoff election be held on Saturday, June 16, 2012. The polling place on election day for the runoff election shall be at the same polling places as those of the original election, and the hours of voting shall be between 7:00 a.m. and 7:00 p.m. Early voting by personal appearance shall be held at the same locations set out in Section 4 hereof on each day that is not a Saturday, Sunday, or an official State Holiday, beginning on Monday, June 4, 2012, and continuing through Tuesday, June 12, 2012 between the hours of 8:00 A.M. and 5:00 P.M. except June 9 and June 11 -12 when voting will be between the hours of 7:00 A.M. and 7:00 P.M. and June 10 when voting will be between the hours of 11:00 A.M. and 4:00 P.M. Section 8: Steve Raborn is hereby appointed to serve as the Early Voting Clerk and the Election Administrator's permanent county employees are appointed as deputy early voting clerks. The Tarrant County Election Administrator may appoint other deputy early voting clerks as necessary. The address of the Early Voting Clerk is 2700 Premier Street, P.O. Box 961011, Fort Worth 76161 -0011. All election officials shall be the officials appointed to such positions by Tarrant County and to the extent required by law, are hereby so appointed. Section 9: The Mayor is authorized to execute a joint election agreement and contract for election services with Tarrant County whereby Tarrant County will provide all material, supplies and personnel to hold the election contemplated hereby, including any runoff election which may be required, and will be responsible for coordinating, supervising and administering the joint election This resolution shall be construed with any action of the governing bodies of other Tarrant County political subdivisions providing for the conduct of a joint election as herein contemplated. f-1►IQ11rE- 'I&'le10*191WA413 PASSED AND APPROVED on the 23rd day of January, 2012. CITY OF NORTH RICHLAND HILLS ATTEST: Patricia Hutson, City Secretary Oscar Trevino, Mayor 1_ 1UU; 19l'F l=1R7 :1�111111197191Nd,1,1►I III I=[r7 -1IIVA George A. Staples, City Attorney M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. F.3 PU 2412 -005 Revise the FY 2011/2012 Capital Projects Budget and Authorize the Purchase of a Raft Conveyor System from TSM Houston, Inc. in the Amount of $247,151. Presenter: Vickie Loftice Summary: This item is to authorize the purchase of a three -part raft conveyor system adjacent to the Viper tower at NRH20. The conveyor system consists of a ground level loading conveyor, a vertical conveyor and a discharge /launch conveyor at the top of the tower. General Description: The Aquatic Park Capital Improvement Budget includes funding for a raft conveyor system for the recently completed Viper water slide. Requests for Proposals were sent to conveyor manufacturers for the design, fabrication and installation of an outdoor conveyor system which will transport the rafts from ground level near the landing pool to the top of the tower. Evaluation criteria for each responding firm was published with the criteria for submitting a "not to exceed" budget carrying the highest weight. Two proposals were received on November 17th, 2011 from TSM Houston, Inc. and Van Stone Conveyor, Inc. Based on the evaluation criteria, the selection committee recommended TSM Houston, Inc. as being the best value to the City of North Richland Hills. Staff has been working with TSM Houston in designing and pricing three options for a conveyor system that best meets our operational needs and the needs of our guests. Engineering for the footings, placement of the footings, and electrical work are services not typically provided by the conveyor contractor. The City will pay other vendors directly for these services. While staff did negotiate an option to bring the project within the established budget, this option is not preferred because it would require a manual load at the bottom of the conveyor system, and an additional lifeguard cost of $12,500 per year. The second option provided did not increase labor costs; however, it did not provide any long term savings and therefore is not being recommended. The option that staff is recommending is the safest option for both guests and staff and will save approximately $12,500 per year of operating expenses due to the reduced number of staff necessary to operate the ride. Currently, two lifeguards are required at the top of the slide tower and one at the bottom. This option will require one lifeguard at the top and one at the bottom for a net reduction of one lifeguard. This preferred option provides a conveyor belt launch system at the top of the tower and includes the ability to place a scale directly underneath the multi - person raft to ensure compliance with the 600 pound total weight limit before the raft is "launched ". A green light will indicate weight restriction compliance which then signals the lifeguard to hit a button to dispatch the raft down the slide. This method is safer for lifeguards operating the slide and will provide an additional thrill to our guests as they transition from the launch conveyor down a series of rollers and into the fiberglass flume. This option requires additional funding over the $200,000 adopted amount; however, because of the annual labor savings, it is the best option when evaluating the total cost of ownership over five years of operation. Funding is available for this revision within NRH20 cash reserves. Project savings and available funds from aquatic projects for which construction has yet to be complete will offset the increase until a formal budget amendment is approved. *Base Price $196,609 Launch Conveyor 5 0,542 (TSM Houston) $247,151 Other Vendors Engineering /Footings $ 25,000 Total Cost $272,151 *includes automated bottom conveyor and load cell (scale) TSM Houston is an experienced manufacturer of water park conveyor systems from Houston, Texas with an excellent reputation for quality and service. Recommendation: Revise the FY 2011/2012 Capital Projects Budget and Authorize the Purchase of a Raft Conveyor System from TSM Houston, Inc. in the Amount of $247,151. Aquatic Park Capital Projects New Attraction (2011) WPI002 PROJECT DESCRIPTION & J USTI FICATIO N This attraction, located in the southwest area of the facility near the AcceleratDr, is planned to he an "off the shelf' attraction customized for installation at NRH2O. The project revision is for the design and installation of a three -part raft raft conveyor system adjacent to the Viper waters Iide to transport the rafts from the run out pool to the top of the tower. The project includes a ground level loading conveyor, a vertical conveyer and a dischargellaunch conveyor at the top tower. This attraction will reach multiple audience demographics and will provide increased capa city for the park and additional experiences for guests. Each raft for the Viper raft is approximately 67" in diameter and while guests have expressed their enjoyment of the ride experience, they have also expressed frustration with carrying the large rafts up to the top of the tower. Carrying the rafts has been challenging for smaller riders and for some adults. This project will greatly increase the overall guest experience from the'Viper, and will reduce the time spent to maintain the rafts at the desired air pressure. PROJECT STATUS ORIGINAL 2011112 ORIGINAL 2011112 START DATE REVISION END DATE REVISION Professional S�Woes 1012009 1012009 1112011 1111011 Engineering Land /ROW Acquisition Construction 1112010 1112010 0412012 0412012 Other REVISION EXPLANATION Three options f: r designing the conveyor system were evaluated The selected option provides a conveyor launch system at the top of the tower and includes the ability to place a scale directly underneath the multi person raft to ensure compliance with the 600 pound total weight limit before the raft launches. This method which is safer for lifeguards and guests requires add Rion aI funding over the adopted amount, however, annual labor savings make this the best option. FINANCIAL DATA ADOPTED REVISED TOTAL BUDGETTNRU PROJECT BUDGETTNRU REMAINING PROJECT 2011112 REVISION 2011112 BALANCE COST FUN DINO SOURCES Certificates of Obligation $1,700,000 $1,700,000 51.700,000 Reserves 200,000 72,151 272,151 $272,151 ❑ $01 0 $01 0 $0 Total $1,900,000 $72,1511 $1,972,151 $0 S1.972,151 PROJECT EXPENDITURES Professional Services $187,000 $187.0011 $187,000 Engineering/Design 0 $0 Land/ROW Acquistion 0 $0 Construction 1,713,000 72,151 1,785,151 $1,785,151 Other 0 $0 Total $1,900,000 $72,151 $1,972,151 $0 $1,972,151 IMPACT ON OPERATING BUDGET Based on selecting option 3, an existing lifeguard would not be required, therefore reducing annual anticipated expenditures by $12,500 NNUALOPERATINGIMPACT I 2011M2 2012713 2013114 1 2014/2015 1 2015/2016 TOTAL lPrcierted (12,500)1 (12,500)1 (12,500)l 12,500 (12,500)l $62,500 41" M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. FA PU 2012 -007 Award Bid # 12 -006 for Cotton Belt Trail Repairs Phase II to JDK Associates, Inc. in the Amount of $65,205.34 Presenter: Vickie Loftice Summary: The City Council is being asked to award the contract for removing and replacing 108 concrete panel sections for Phase II repairs along the Cotton Belt Trail to JDK Associates, Inc. Phase I of the emergency repairs were completed in December. Phase II repairs will include replacement panels between Browning and Precinct Line Road. General Descrir)tion: The Cotton Belt Trail received damage by heavy tree trimming equipment related to a non -city contractor along the four -mile section of trail. Numerous small cracks began to appear after the tree trimming operations. The most severely damaged panels, with cracks greater than 1", were replaced in Phase I of the project in early December, between Eden Drive and Precinct Line Road. Phase II of the project will provide for the removal and replacement of damaged concrete panels from Browning to Precinct Line where moderate cracking (114" — 1") has occurred. Explorer Pipeline authorized the use of steel reinforced concrete in all areas not directly over their pipeline. Phase 11 will provide for the replacement of twenty - nine (29) 10' X 8' fiber - reinforced panels and seventy -nine (79) 10' X 10' steel - reinforced panels, representing approximately 73% of the replacement panels. Funding is available in the currently approved Capital Project Budget in the Park Infrastructure Improvements project account. A portion of the funding is being provided by the insurance company representing the contractor who damaged the trail. Notice of the City's intent to bid was advertised in the local newspaper as required by State Statute, and posted on the City's website. Notice of the City's intent to bid was sent to several vendors requesting them to participate in this bid process. Purchasing received 11 responses as follows: Vendor Total JDK Associates, Inc. $65,265.34 Signature Contracting Services $77,322.63 Axis Contracting, Inc. $79,460.00 Estrada Concrete Company, LLC $80,475.00 Sunbelt Industrial Services $80,936.50 C. Green Sca in , LP $85,118.00 Cole Construction $90,884.46 LDM Design & Construction $92,919.48 Humphrey & Morton Construction Company, Inc. $96,631.00 Mart, Inc. $153,576.60 R.D. Howard, LC $197,950.00 JDK Associates has successfully performed similar work for the City of Irving, completing two phases of their Campion Trail system at Twin Wells Park and the Valley Ranch Trail addition. After verifying references, staff directed JDK Associates to obtain the required insurance and right -of -way approval from DART's R.O.W. division which included additional endorsements and railroad protective polices as presented in the bid manual. JDK Associates has since satisfied DART's insurance requirements. Recommendation: To Award Bid # 12 -006 for Cotton Belt Trail Repairs Phase II to JDK Associates, Inc. in the Amount of $65,205.34. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. G.0 EXECUTIVE SESSION ITEMS M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. G.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. H.0 INFORMATION AND REPORTS M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. H.1 Announcements - Mayor Pro Tern Barth Announcements The City of North Richland Hills will host its annual Daddy - Daughter Valentine Dance on Saturday, February 4th. The cost is $8 per person. Tickets are on sale at the NRH Recreation Center. For more details, please call 817- 427 - 6600. Volunteers from AARP will be at the North Richland Hills Public Library each Monday and Thursday from February 2nd through April 16th to assist people with their tax returns. Taxpayers of all ages are eligible for this free service. Appointments are required. To make an appointment or get more information, please call the Library at 817- 427 -6814. Kudos Korner Every Council Meeting, we spotlight our employees for the great things they do. Tonight we spotlight. Terry Scherer and James Fowler of the Public Works Department — A resident recently expressed her thanks to Terry and James for their professionalism and kindness when checking a water leak on the New Year's Holiday. She wrote: "What could have been a rotten beginning to the new year turned out to be a great reminder that there are still people out there that take pride in their jobs and really do care about the members of their community. Way to go guys, we appreciate you!" M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 1 -23 -2012 Subject: Agenda Item No. H.2 Adjournment