Loading...
HomeMy WebLinkAboutResolution 1996-065 RESOLUTION 96-65 " 00-133 (1()'96) " Texas Local Government Investment Pool Participation Agreement PREAMBLE This participation agreement (the "Agreement") is made and entered into by and between the Comptrol- ler of Public Accounts (the ComptroUer), acting by and on behalf of the Texas Treasury Safekeeping Trust Company (the Trust Company), Trustee of the Texas Local Government Investment Pool (TexPool), and City of North Richland Hills (the "Participant"). WHEREAS, the Participant may have been a party to an earlier participation agreement with the Texas State Treasurer (the Treasurer); WHEREAS, the Treasurers office was abolished on September 1, 1996 pursuant to Acts 1995, 74th Leg. SJ.R. No. 1 and the adoption of a constitutional amendment to Arúcle IV, § 1 of the Texas Constitution adopted by the voters on November 7, 1995; WHEREAS, the Participant and the Comptroller desire to enter into this Agreement to replace and supersede any prior participation agreement to properly reflect changes in the Public Funds Investment Act, the abolition of the Treasurer s office and other matters; WHEREAS, the Interlocal Cooperation Act, TEX. GOV'T CODE ANN. ch. 791 and TEX. GOY'T CODE ANN. ch. 2256 (the "Acts") provide for the creation of public funds investment pools to which any local government may del- egate, by contract, the authority to hold legal title as custodian and to make investments purchased with local investment funds; WHEREAS, the Trust Company is a limited purpose trust company authorized pursuant to TEX. GOY'T CODE ANN. § 404.103 to receive, transfer and disburse money and securities beionging to state agencies and local political subdivisions of the state and for which the Comptroller is the sole officer, director and shareholder; WHEREAS, TexPool is a public funds investment pool, which funds are invested in certain eligible investments as more fully described hereafter; WHEREAS, the Participant has detennined that it is authorized under the Acts and other applicable law to enter into this Agreement; and WHEREAS, in an effort to ensure the continued availability of an investment pool as a vehicle for investment of local government funds and simultaneously provide for potential enhancement in services and potential decreases in man- agement and administrative fees, Participant and Trust Company desire to provide in this Agreement for the Trust Company to obtain professional private management services and/or a potential assignment of the Trust Company s managerial obligations relative to TexPool. NOW THEREFORE, for and in consideration of the mutual promises, covenants and agreements herein con- tained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows: ARTICLE I. DEFINITIONS "Account" shall mean any account or accounts, including any sub accounts, established by the Participant in TexPool in accordance with this Agreement and the Operating Procedures (as defined herein), which Account represents an undivided beneficial ownership in TexPool. "Authorized Investments" shall mean those investments which are authorized by the Investment Act (as herein defined) for investment of public funds. "Authorized Representative(s) of the Participant" shall mean any individual who is authorized to execute documents and take such other necessary actions under this Agreement as evidenced by the duly enacted Resolution of the Participant. "Authorized Representative(s) of the Trust Company" shall mean any employee of the Comptroller who is designated in writing by the Comptroller to act as the authorized Trust Company representative for purposes of the Agreement and shall include employees of any private entity performing the obligations of the Comptroller under this Agreement. "Board" shall mean the advisory board provided for in the Investment Act (as defined below). "Investment Act" shall mean the Public Funds Investment Act, TEX. GOY'T CODE ANN, ch. 2256, as amended from time to time. "Investment Policy" shall mean the written TexPool Investment Policy, as amended from time to time, relating to the investment and management of funds in TexPool as established by the Trust Company consistent with the Investment Act. "Letter of Instructions" shall mean a written authorization and direction to the Trust Company signed by an Authorized Representative of the Participant. "Operating Procedures" shall mean the written procedures established by the Trust Company describing the management and operation ofTexPool, and providing for the establishment of, deposits to and withdrawals from the Accounts, as amended from time to time. "Participant" shall mean any entity authorized by the Acts to participate in a public funds investment pool that has ex- ecuted an Agreement pursuant to a Resolution. "Resolution" shall mean the resolution adopted by the governing body of a local governmental entity authorizing that entity participation in TexPool and designating persons to serve as Authorized Representatives of the Participant. ARTICLE II. GENERALAD~TRATION Section 2.01. TexPool Defined. (a) TexPool is a public funds investment pool created pursuant to the Acts. (b) Subject to Section 6.10, the Trust Company agrees to manage the Participant's Account in accordance with the Investment Act and the Investment Policy. Section 2.02. Board. (a) The Board is composed of members appointed pursuant to the requirements of the Investment Act. (b) The Board shall advise the Trust Company on the Investment Policy and on various other matters affecting TexPool, and shall approve fee increases. 2 Section 2.03, General Administration. (a) The Trust Company shall establish and maintain the Investment Policy specifically identifying the Authorized Investments consistent with the Investment Act and the general policy and investment goals for TexPool. (b) The Trust Company shall establish and maintain the Operating Procedures, describing the management and operation ofTexPool and providing for procedures to be followed for the establishment of, deposits to, and withdrawals from the Accounts and such other matters as are necessary to carry out the intent of this Agree- ment. (c) The Trust Company shall have the power to take any action necessary to carry out the purposes of this Agree- ment, subject to applicable law and the terms of the Agreement. Section 2.04. Ownership Interest. Each Participant shall own an undivided beneficial interest in the assets of TexPool in an amount proportional to the total amount of such Participant's Accounts relative to the total amount of all Participants' Accounts in TcxPool, computed on a daily basis. Section 2.05 Independent Audit. TexPool is subject to annual review by an independent auditor consistent with the Investment Act. In addition, reviews of TexPool are required to be conducted by the State Auditor's Office and by the Internal Auditor of the Comptroller s Office, The Trust Company may obtain such legal, accounting, financial or other professional services as it deems necessary or appropriate to assist TexPool in meeting its goals and objectives. Section 2.06, Liability. Any liability of the Comptroller, the Comptroller's Office, the Trust Company, represen- tatives or agents of the Trust Company, any Comptroller employee, or any member of the Board for any loss, damage or claim, including losses from investments and transfers, to the Participant shall be limited to the full extent allowed by applicable laws. The Trust Company's responsibilities hereunder are limited to the management and investment of TexPool and the providing of reports and information herein required, ARTICLE m. PARTICIPATION REQUIREMENTS Section 3.01. The Participation Agreement. The Participant must execute this Agreement and provide a Resolu- tion authorizing participation in TexPool and designating persons to serve as Authorized Representatives of the Participant and any other documents as are required under, and substantially in the form prescribed by, the Operating Procedures before depositing any funds into TexPool. Section 3.02. Operating Procedures, (a) The Participant acknowledges receipt of a copy of the Operating Procedures. The Operating Procedures describe in detail the procedures required for the establishment of accounts, deposits to and withdrawals from TexPool, and related information. (b) The Operating Procedures may be modified by the Trust Company as appropriate to remain consistent with established banking practices and capabilities and when such modification is deemed necessary to improve the operation of TexPool. (c) The Participant hereby concurs with and agrees to abide by the Operating Procedures. ARTICLE Iv. INVESTMENTS Section 4.01. Investments. All monies held in TexPool shall be invested and reinvested by the Trust Company or Authorized Representatives of the Trust Company only in Authorized Investments in accordance with the Agreement, the Investment Policy and the Investment Act. Participant hereby concurs with any such investment so made by the Trust 3 Company. TexPool's available funds that are uninvested may be held at the Trust Company's account at the Federal Reserve Bank of Dallas or any designated custodian account. All investment assets and collateral will be in the possession of the Trust Company and held in its book-entry safekeeping account at the Federal Reserve Bank or any designated custodian account. Section 4.02. Failed Investment Transactions, In the extraordinary event that a purchase of securities results in a failed settlement, any resulting uninvested funds shall remain in the Trust Company's Federal Reserve Bank of Dallas account or any designated custodian account. If an alternative investment can be secured after the failure of the trade to settle, TexPool will receive all the income earnings, including but not limited to, any compensation from the purchaser failing in the trade and the interest income from the alternative investment. Section 4.03. Investment Earnings and Losses Allocation. All interest earnings in TexPool will be valued daily and credited to the Participant's Accounts monthly, on a pro rata allocation basis. All losses, if any, resulting from the investment of monies in TexPool shall also be allocated on a pro rata allocation basis. All earnings and losses wil1 be allocated to the Participants Accounts in accordance with generally accepted accounting procedures. Section 4.04. Commingling of Accounts. Participant agrees that monies deposited in TexPool may be com- mingled with all other monies held in TexPool for purposes of common investment and operational efficiency. However, each Participant will have separate Accounts on the books and records of TexPool, as further provided for in the Operating Procedures. ARTICLE V. FEES, EXPENSES AND REPORTS Section 5.01. Fees and Expenses. The Participant agrees to pay the amount set forth in the fee schedule. Partici- pant agrees that all fees shall be directly and automatically assessed and charged against the Participant's Accounts. The basic service fee shall be calculated as a reduction in the daily income earned, thus only the net income shall be credited to the Participant's Account. Fees for special services shall be charged to each Participant's account as they are incurred or performed. A schedule of fees shall be provided to the Participant annually. Each Participant will be notified thirty (30) days prior to the effective date of any change in the fee schedules. Section 5.02. Reports. The Participant shall be provided a monthly statement within the first five (5) business days of the succeeding month. The monthly statement shall include a detailed listing of the balance in the Participant's Accounts as of the date of the statement; all account activity, including deposits and withdrawals; the daily and monthly yield information; and any special fees and expenses charged. Additionally, copies of the Participant's reports in physical or computer form will be maintained for a minimum of three prior fiscal years. All records shall be available for inspection at all reasonable hours of the business day and under reasonable conditions. Section 5.03. Confidentiality. The Trust Company and any private entity acting on behalf of the Trust Company for purposes of this Agreement will maintain the confidentiality of the Participant's Accounts, subject to the Public Infor- mation Act, TEX. GOV'T CODE ANN. ch. 552, as amended. 4 ARTICLE VI. MISCELLANEOUS Section 6.01. Notices. Any notices, Letters of Instructions or other information required or permitted to be given hereunder shall be submitted in writing and shall be deemed duly given when deposited in the U.S. mail postage prepaid or successfully transmitted via facsimile addressed to the parties as follows: To the Participant: Participant Name: Address: City, State, Zip: Telephone: To the Trust Company: Texas Treasury Safekeeping Trust Company Attn: TexPool P.O. Box 12608 Austin, Texas 78711- 2608 Telephone No. (512) 463-2950 FAX No. (512) 463-0823 City of North Richland Hills P.O. Box 820609 North Richland Hills, TX 76182-0609 817-581-5542 Fax: 817-656-7503 The Participant and the Trust Company agree to notify the other of any change affecting this information and agree that unless and until so notified, the other party shall be entitled to rely on the last information provided. Section 6.02. Taxpayer Identification Number. The Participant's taxpayer identification number assigned by the Internal Revenue Service is: 1-75-6005194-2 The Participant hereby agrees to notify the Trust Company of any change affecting this Taxpayer Identification number and agrees that unless and until so notified, the Trust Company shall be entitled to rely on same in providing any and all reports or other information necessary or required by the Federal tax laws as amended from time to time. Section 6.03. Severability. If any provision of this Agreement shall be held or deemed to be in fact illegal, inopera- tive or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatsoever. Section 6.04. Execution of Counterparts. This Agreement may be simultaneously executed in several separate counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 6,05. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Venue for any dispute under this Agreement shall be in Travis County, Texas. Section 6.06, Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions, articles or sections of this Agreement. Section 6.07. Amendments. (a) The Trust Company shall advise the Participant in writing of any amendments to this Agreement no less than 45 days prior to the effective date of such amendment. The Participant may ratify the proposed amendment of this Agreement by letter to the Trust Company. In the event the Participant elects not to ratify the amendment, the Participant may terminate this Agreement in accordance with Section 6.08. In the event the Participant fails to respond in writing to a notice of amendment prior to the effective date of such amendment, this Agreement shall be deemed amended, (b) The Trust Company may periodically revise the Operating Procedures from time to time as it deems necessary for the efficient operation of TexPool. The Participant wiJI be bound by any amendment to the Operating Procedures with respect to any transaction occurring subsequent to the time such amendment takes effect, provided, however, that no such amendment shall affect the Participant's right to cease to be a Participant. 5 Section 6.08. Termination. This Agreement may be terminated by either party hereto, with or without cause, by tendering 30 days prior written notice in the manner set forth in Section 6.01 hereof. Section 6.09. Term. Unless tenninated in accordance with Section 6.08. this Agreement shall be automatically renewed on each anniversary date hereof. Section 6.10. Assignment. The Trust Company may enter into an agreement with a third party investment man- ager to perform its obligations and services under this Agreement, provided that such third party investment manager shall manage TexPool according to the Investment Act, Investment Policy and in a manner consistent with that directed by the Trust Company. The Trust Company also shall have the right to assign its rights and obligations under the Agreement to a third party investment manager if the Trust Company determines that such assignment is in the best interest of the State and Participants. In the event a successor pool to TexPool is deemed by the Trust Company to be in the best interest of the State and the Participant, the Trust Company may take any action it deems necessary to assign its rights and benefits under any third party agreements and transfer the assets from TexPool to any successor pool. The Trust Company will provide advance written notice to Participant before any such assignment. In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the dates set forth below, and the Agreement shall be effective as of the latest such date. PARTICIPANT TEXAS TREASURY SAFEKEEPING TRUST COMPANY City of North Richland Hills ::, T:~';;7 ~~ By: Comptroller of Public Accounts By: :1~ßÞ~ ¥'v\l~ tJ· ÜJ\t~I~ Û~ ~~~1 Name: Title: Mayor TItle: Date: October 28, 1996 Date: 6